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Finance Minister Blames Inflation on Naira Printing Spree

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Wale Edun

Nigeria’s Finance Minister and Coordinating Minister of Economy, Wale Edun, has attributed the country’s prevailing inflation crisis to an excessive naira printing spree conducted by the Central Bank of Nigeria (CBN) under the administration of former President Muhammadu Buhari.

During an engagement with the Senate Committee on Finance, Edun disclosed that from 2015 to 2023, approximately N22.7 trillion was printed through Ways and Means overdraft for the Federal Government.

Edun underscored that the extensive printing of the Nigerian currency occurred without accompanying productive activities, exacerbating the inflationary pressure currently faced by the nation.

He emphasized that the reckless printing of money without commensurate productivity was the primary factor driving the high inflation rates in Nigeria.

The revelation follows the Senate’s recent decision to probe the N30 trillion Ways and Means overdraft obtained and utilized by the Buhari administration, highlighting concerns over the lack of transparency regarding the utilization of the funds.

The Finance Minister’s testimony underscores the urgent need for a comprehensive investigation into the circumstances surrounding the substantial overdraft, as the details of its expenditure have not been fully disclosed to the National Assembly.

Edun stressed the detrimental effects of eight years of printing money without corresponding productivity, which have manifested in the current inflationary crisis, adversely impacting the country’s economy and populace.

The Senate Committee’s engagement with the Finance Minister reflects a concerted effort to address the root causes of Nigeria’s economic challenges and institute measures to mitigate future risks.

Edun’s acknowledgment of the inflation’s origins sets the stage for a thorough examination of fiscal policies and practices aimed at restoring economic stability and fostering sustainable growth in Nigeria.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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UBA Director Aisha Hassan-Baba Invests NGN30.63 Million in Bank Shares

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Aisha Hassan-Baba, an Independent Non-Executive Director of the United Bank for Africa Plc (UBA), has invested NGN30.63 million in the purchase of shares.

According to a disclosure by UBA, Hassan-Baba purchased 1,401,769 ordinary shares at NGN21.85 per share on June 27, 2024.

This acquisition was conducted on the Lagos Nigerian Exchange (NGX), solidifying her stake in the financial institution.

Aisha Hassan-Baba, who holds the prestigious title of Officer of the Order of the Niger (OON), has been a part of UBA’s board, contributing her extensive experience and expertise in guiding the bank’s strategic direction.

Her decision to increase her shareholding is viewed as a testament to her belief in UBA’s growth and profitability.

UBA, with its wide reach across Africa and beyond, has been a cornerstone of financial services in the region.

The Group Company Secretary and Legal Counsel, Bili A. Odum, confirmed the transaction in a press release published on the Nigerian Exchange Group website.

This move by Hassan-Baba comes at a time when UBA continues to expand its operations and innovate its services to meet the evolving needs of its customers.

The bank’s strategic initiatives, coupled with its solid financial performance, have positioned it as a leading financial institution in Africa.

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Finance

CBN Aims for $39 Billion in Diaspora Remittances by 2025, Says Governor Cardoso

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Money Transfer - Investors King

The Central Bank of Nigeria (CBN) has announced plans to double diaspora remittance flows to $39 billion by 2025.

CBN Governor Olayemi Cardoso unveiled this plan during the BusinessDay CEO Forum, themed ‘Leadership in Tough Economic Times,’ held on Thursday.

Governor Cardoso said diaspora remittances play a critical role in Nigeria’s economy, therefore, it is necessary to address the challenges within the financial sector.

“As a result of the challenges we have faced, one of the things we’ve done on the monetary side is to recognize that diaspora remittances are very key,” he stated.

“We set up a committee during the last World Bank meetings in Washington, inviting international money transfer operators from all over the world to engage with us on this issue.”

Cardoso said collaboration and innovative strategies are important to achieve this goal.

“At the end of that meeting, we concluded that based on the dialogue we had, we are committed to doubling the remittance flow within a year,” he said. “If we can replicate this success in other areas, we will reach our desired financial stability.”

In 2023, Nigeria received $19.5 billion in international remittances, according to the World Bank, marking a 2.5 percent decline from the previous year.

Despite this drop, remittances accounted for 35 percent of total inflows into Sub-Saharan Africa, underscoring their significance.

The CBN’s plan aims to boost this figure substantially, providing much-needed support to the Nigerian economy.

Governor Cardoso’s announcement has been met with optimism by financial experts and stakeholders.

The increased inflow of remittances is expected to alleviate foreign exchange shortages, support the naira, and enhance overall economic stability.

However, achieving this target will require addressing systemic issues within the remittance process, including reducing transaction costs and improving the efficiency of money transfer services.

“We are creating a more favorable environment for remittance flows,” Cardoso explained. “This involves regulatory reforms, incentivizing the use of official channels, and leveraging technology to make transfers easier and more secure.”

The CBN’s initiative aligns with broader efforts to diversify Nigeria’s economy and reduce its dependence on oil revenues. By harnessing the financial contributions of the Nigerian diaspora, the country aims to build a more resilient and inclusive economic framework.

As the CBN moves forward with its plan, the success of this initiative will depend on continued collaboration with international partners, transparent policies, and the active participation of the Nigerian diaspora community.

Governor Cardoso remains confident that with these measures in place, Nigeria can achieve its ambitious remittance target and pave the way for sustained economic growth.

“The goal is clear,” Cardoso concluded. “By doubling diaspora remittances, we are not only supporting our economy but also strengthening the bond between Nigeria and its global citizens. Together, we can achieve remarkable progress and ensure a brighter future for all Nigerians.”

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Finance

Debt Disputes with Energy Suppliers Cast Shadow on Ghana’s Economic Progress

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Ghana one cedi - Investors King

Ghana’s economic recovery faces significant hurdles as the nation grapples with a $2.2 billion dispute over arrears with its electricity suppliers.

Despite recent progress in restructuring its external debt, ongoing conflicts with independent power producers (IPPs) threaten to derail the country’s financial stability and economic growth.

Finance Minister Mohammed Amin Adam recently disclosed that Ghana owes $1 billion to its power producers, with agreements in place to restructure a significant portion of this debt.

However, Elikplim Apetorgbor, CEO of the Independent Power Generators, Ghana, countered this claim, stating that the actual debt, including interest on delayed payments, exchange rate losses, and idle capacity charges, amounts to $2.2 billion.

“We don’t simply count our monthly invoices and deduct what payments have been made,” Apetorgbor emphasized. “Any debt deal must include all associated costs to reflect the true amount owed.”

The government has reportedly reached agreements with five out of seven IPPs. However, deals with Chinese-owned Sunon Asogli Power Ghana Ltd. and a unit of Istanbul-based Karpowership remain unresolved. Apetorgbor highlighted that the debt to Sunon-Asogli alone exceeds $800 million.

Finance Minister Adam, during a press conference on July 1, asserted that Apetorgbor’s figures do not represent the entire industry.

“The CEO may be doing his own thing,” Adam stated. “We have seven IPPs, and we’ve reached agreements with five of them. That is very positive for our country.”

The Finance Ministry declined to comment further on the matter.

The power sector debt has led to intermittent power cuts, hampering economic activities. This has been particularly detrimental as Ghana strives to restructure its debts following a default in 2022, which necessitated a $3 billion bailout from the International Monetary Fund (IMF).

Ghana’s installed electricity capacity stands at 5,639 megawatts, yet the nation struggles to meet its peak demand of 3,618 megawatts.

Persistent power outages threaten to stall economic growth, which, despite quickening to 4.7% in the first quarter of 2024 from 3.8% in the previous quarter, remains below historical trends.

“It’s taking long for economic growth to rebound to its historical trend of around 6%,” remarked Godfred Bokpin, a finance professor at the University of Ghana. “The power cuts are a significant factor holding back our economic potential.”

The debt crisis has also put pressure on the state-owned Electricity Company of Ghana Ltd. (ECG), which has struggled to cover its monthly bills.

Kodzo Yaotse from the Africa Centre for Energy Policy noted, “When power is given to ECG for sale, they’re only able to recover 45%. That’s not healthy because it’s out of this revenue that the entire value chain is paid.”

Ghana’s debt restructuring plan, part of the IMF bailout conditions, requires reducing the debt burden to 55% of gross domestic product from the current 90%.

This necessitates not only restructuring obligations with power producers but also addressing other financial commitments.

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