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Flooding: Food Shortages, Inflationary Pressure Sets In

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Consumer
  • Flooding: Food Shortages, Inflationary Pressure Sets In

The rise in the rate of inflation in the past months in Nigeria, as evaluated by analysts, is as a result of the flooding experienced especially in the northern states, where a higher percentage of food commodities are extracted; and this led to food shortage and an increased inflation.

According to a November 2018 report of the Financial Derivatives Company(FDC), a financial and economic advisory company, Nigeria’s inflation rate increased from 11.14 percent in July, to 11.23 in August and to a higher 11.28 percent in September.

As contained in the report, the inflation rate fell for eighteen (18) successive months until August 2018.

“This prompted some members of the committee to call for a tightening of monetary policy in September, in order to limit the amount of money in the economy and subdue demand pressures. Hence, the impact of the recent flooding has been severe on the economy”, the report stated.

Also stated in the report, is that the northern states experienced difficulty in response to the intense flooding as their revenue could not handle the situation effectively; unlike in the situation of their southern counterparts.

Also, the persistent Farmer-Herdsmen crisis have made effective food production quite challenging in the northern parts of the country, especially Benue, the food basket of the nation. Funds that would have previously been used to boost food production have been spent on ensuring adequate security.

Again, the report noted the need for the Federal Government to support northern states with an intervention fund, which would help the states maintain a lower flood incidence and pastoral crises, which brings about food shortage.

“This kind of intervention would be similar to the bailout funds the Federal Government made available to state governments struggling with salary payments and low levels of economic activity in 2015. Fourteen of the 27 states that benefited from the package were from the North. Kebbi, Katsina and Niger states were among the beneficiaries”.

“As state government finances remain limited, any reluctance or delay by the Federal Government to address the issue will ensure food shortages continue in the country. Consequently, it could further push up food prices and the inflation rate”. The report stated in part.

It is worthy to note that, the rate of inflation in Nigeria will keep increasing in subsequent months, if the Federal Government does not intervene adequately in the shortage of food caused by intense flooding and pastoral crisis.

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Finance

Access Bank in Talks to Acquire Cavmont Bank

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Access bank

Access Bank to Acquire Cavmont Bank in Zambia

Access Bank Plc on Wednesday announced that its wholly-owned subsidiary in Zambia, Access Bank Zambia Limited (Access Bank Zambia) is in talks to acquire Cavmont Bank Limited, a subsidiary of Cavmont Capital.

According to the statement signed by Mr. Sunday Ekwochi, Company Secretary, Access Bank and released on the Nigerian Stock Exchange website on Wednesday, the ongoing discussions is to acquire 100 percent of Cavmont Capital’s interest in Cavmont Bank.

However, the lender said “there can be no certainty that a transaction will be agreed, nor as to the terms of any such agreement.

“The completion of a transaction would be subject to formal regulatory approvals. Access Bank will be updating the market as appropriate and in accordance with its disclosure obligations.”

The lender, therefore, advised shareholders to exercise caution when dealing in Access Bank’s securities.

Investors King Ltd note: This announcement further threw more lights on the recent purchases of Access Bank’s shares by Herbert Wigwe, the Chief Executive Officer and Managing Director, Access Bank.

The CEO/MD purchased 7.532 million of Access Bank‘s shares in the last one month.

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Finance

Mohammed Umar is the New Acting Chairman of EFCC

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EFCC

Buhari Appoints Mohammed Umar as EFCC Acting Chairman

President Muhammadu Buhari has appointed, Mohammed Umar, the director of operations at the Economic and Financial Crimes Commission (EFCC), as the new Acting Chairman of the agency, according to the NAN.

A top official of the commission confirmed to NAN that Umar has taken charge of the agency following the suspension of Ibrahim Magu, the former acting Chairman.

Ibrahim Magu was suspended by the President on Tuesday following series of allegations bordering on frauds, financial misappropriations and abuse of power.

 

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Finance

CBN Spends $11.5bn in Q1 2020 to Support the Economy and Dwindling Naira

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CBN

CBN Injects $11.5bn Into the Economy in the First Quarter

The Central Bank of Nigeria (CBN) injected a combined $11.5 billion into the nation’s foreign exchange market to stabilise the economy and support the Naira value in the first quarter of the year.

According to the latest report from the apex bank, the central bank injected $2.96 billion into the nation’s forex market in the month of January. Another $3.39 billion was used to support the economy in February while $4.7 billion was supplied in the month of March, the very month the economy was locked and all operations grounded to curb the spread of COVID-19.

A further breakdown of the report revealed that the Investors and Exporters’ foreign exchange window, Small and Medium enterprises and Invisible segments received a total of $7.23 billion of the $11.5 billion, the Bureau De Change segment received $3.6 billion while the Interbank and WDAS/RDAS got the rest in the first quarter.

The report noted that the apex bank injected a total sum of $14.72 billion and $28.55 billion into the economy in 2018 and 2019, respectively.

Meanwhile, the central bank is yet to commence the sales of forex to the bureau de change following the March suspension.

But has commenced partial sales to all commercial banks for onward sales to parents and small businesses across the country.

Mr Isaac Okorafor, the Director, Corporate Communications, CBN, had said, “The CBN has also made complete arrangements to resume foreign exchange sales to the BDC segment of the market for business travels, personal travels and other designated retail uses, as soon as international flights resume.”

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