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OPINION: CBN retains 14% interest rates, IMF downgrades growth

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Lukman Otunuga, Research Analyst at FXTM, comments on CBN leaves rates unchanged as IMF downgrades growth

In a widely expected move, the Central Bank of Nigeria (CBN) has left interest rates unchanged at 14% for January.

Signs of rising inflationary pressures are likely to fuel speculation over the central bank tightening monetary policy, especially as government spending increases ahead of the presidential elections. With rising inflation in Nigeria seen threatening the Naira exchange and economic stability, the CBN may be forced to act quicker than expected. 

However, with the IMF lowering Nigeria’s growth projection for 2019 to 2% due to a change in oil’s outlook and weakening global expansion, the CBN may now be in a tricky position.

While a rate hike will tame inflationary pressures, it may end up impacting growth by discouraging consumer borrowing and businesses to reduce investments.

Will Nigeria’s economy expand by 2.28% in 2019 as the CBN predicts or closer to the IMF’s 2% projection?

While it is widely known that Nigeria remains on a mission to diversify away from oil reliance, the nation’s short-medium term outlook hangs on oil’s performance.

Risk sentiment hit by IMF pessimism

A wave of risk aversion swept across financial markets today with global equities retreating as pessimism over global growth sapped risk sentiment.

The International Monetary Fund’s recent gloomy global growth outlook left a bitter aftertaste while Brexit-related uncertainty and a prolonged US government shutdown drained investor confidence.

With investors clearly keeping a safe distance from riskier assets amid the general gloom, Asian stocks closed in the red territory while European shares traded modestly lower.

The declines witnessed across global stocks continue to highlight how fragile market sentiment remains. With geopolitical risk factors and global growth fears seen stimulating risk aversion, Wall Street is likely to open in a depressed fashion this afternoon.

UK jobs data offers temporary distraction from Brexit

The British Pound edged higher earlier today after encouraging jobs data offered investors a short-term distraction away from the Brexit chaos and political drama in Westminster.

With wage growth in the UK hitting a new 10-year high at 3.4% and employment growing more than expected in the three months to November, this certainly suggests that the labour markets remain resilient despite Brexit.

However, this strong jobs data is destined to be overshadowed by Brexit developments.

In the latest episode to the Brexit saga, Theresa May has unveiled her ‘Plan B’ to Parliament. With MP’s describing ‘Plan A’ as ‘Plan B’ in disguise, nothing new has been brought to the table.

Will the Prime Minister’s Brexit ‘Plan B’ be able to win the Commons over at the Parliamentary debate and vote on January 29th?

This is a question on the mind of many investors. Whatever the outcome of the vote, it will play a role in how or if the UK departs from the European Union.

Commodity spotlight – Gold

Gold bounced back from multi-week lows on Tuesday as concerns over slowing global growth sent investors rushing to safe-haven assets.

Geopolitical risks in the form of Brexit drama, US-China trade developments, and a government shutdown in the United States boosted the metal’s allure with prices trading around $1,283 as of writing. Gold is likely to receive further support from growing speculation over the US Federal Reserve taking a pause on rate hikes this year.

In regards to the technical picture, Gold remains in a bullish channel on the daily charts.

There have been consistently higher highs and higher lows with the MACD pointing to the upside.

An intraday breakout above $1,286 is likely to open a path towards $1,295 and $1,300, respectively.

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EFCC Chairman Tasks Nigerian Youths Against Crimes And Fraudulent Acts

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The Chairman of Economic Finance Crime Commission (EFCC), Ola Olukoyede, has stressed the need for Nigerian Youth to see themselves as agents of positive change that have a lot to contribute to the socioeconomic development of the Nation.

Speaking at the 2nd edition of a Leadership Trainings Programme in Abuja, Olukoyede, who was represented by the Head Enlightenment and Re-orientation unit, (EFCC), Aisha Mohammed, said the commission’s dream is to see the youth contribute meaningfully to the society, emphasizing on the need to work together in bringing positive change to society.

The Economic and Financial Crimes Commission Boss declared the readiness of his agency to work with all Stakeholders, including the youth towards changing the narrative and reposition the country to greater exploit.
Also speaking, the representative of the Executive Secretary of Tertiary Education Trust Fund (TETFUND), Sonny Echono, appealed to the youths is to eschew social vices that could deter their full potential in life.

Other speakers at the event, including the Chairperson, Zero Tolerance for Social Immoralities Initiative (ZEITI) Africa, Rasak Jeje called on all stakeholders to join hands in collective pursuit of empowering new generation of leaders to curb the rising tides of social Vice among Nigerian youths.

The Chairperson, Zero Tolerance for Social Immoralities Initiative (ZEITI) Africa, Rasak Jeje made the call while addressing journalists at the 2nd edition of it Leadership Trainings Programme in Abuja on Thursday.
He said the training was aimed to intimate students leaders with knowledge and insights that will help them drive positive change and become exemplary leaders in their respective spheres.

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AISA Has Refunded The Fees Paid By Yahaya Bello To EFCC

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The Economic and Financial Crimes Commission (EFCC) says the American International School Abuja (AISA) has refunded the fees paid by the immediate past governor of Kogi state, Yahaya Bello, for his children attending the school.

In response to a letter addressed to the Lagos zonal commander of the EFCC, the school said $845,852 was paid in tuition “since the 7th of September 2021 to date”.

AISA said the sum to be refunded is $760,910 because it had deducted educational services already rendered.

“Please forward to us an official written request, with the authentic banking details of the EFCC, for the refund of the above-mentioned funds as previously indicated as part of your investigation into the alleged money laundering activities by the Bello family.

Since the 7th September 2021 to date, $845,852.84 (Eight Hundred and Forty-Five Thousand, Eight Hundred and Fifty Two US Dollars and eighty four cents) in tuition and other fees has been deposited into our Bank account.

We have calculated the net amount to be transferred and refunded to the State, after deducting the educational services rendered as $760,910.84. (Seven Hundred and Sixty Thousand, Nine Hundred and Ten US Dollars and Eighty Four cents).

No further additional fees are expected in respect of tuition as the students’ fees have now been settled until they graduate from ASIA.”

In a chat with The Cable, the spokesperson of the EFCC, Dele Oyewale, confirmed that the school has refunded the money.

‘’The money has been paid into public account,” Dele Oyewale was quoted as saying

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Godwin Emefiele Disobeyed Direction Of Law With Intent To Harm The Public, He Printed ₦684.5M Using ₦18.9B Says EFCC in fresh charge

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The Economic and Financial Crimes Commission has filed a fresh charge at the High Court of the Federal Capital Territory against the embattled former governor of the Central Bank of Nigeria, Godwin Emefiele.

EFCC in the charge accused Emefiele of approving the printing of N684,590,000 at the rate of N18.96 billion.

EFCC also alleged that Emefiele broke the law with intent to harm the public during his implementation of the naira swap policy of the administration of former President Muhammadu Buhari.

The anti-graft agency also accused Emefiele of unlawfully approving the withdrawal of N124.8 billion from the Consolidated Revenue Fund of the Federation.

EFCC’s top prosecutor, Rotimi Oyedepo, SAN revealed that Emefiele will be arraigned on a new four-count charge before Justice Hamza Muazu

Counts one to four of the charge, read,

“STATEMENT OF OFFENCE: Public Servant disobeying direction of law with intent to cause injury to the public contrary to and punishable under Section 123 of the Penal Code Law, Cap. 89 Laws of the Federation, 1990.

“PARTICULARS OF THE OFFENCE: That you GODWIN IFEANYI EMEFIELE between the 19th day of October 2022 and 5th March 2023 in Abuja, knowingly disobeyed the direction of Section 19 of the CBN Act, 2007, by approving the printing of N375,520,000.00 pieces of colour swapped N1, 000, at the total cost of N11,052, 068,062 without the recommendation of the Board of Central Bank and the strict approval of the President, Federal Republic of Nigeria which conduct of yours caused injury to the public and you thereby committed an offence.”

This and three other charges were stated against him. They read;

“COUNT 2: “That you, GODWIN IFEANYI EMEFIELE, between the 19th of October 2022 and 5th March 2023 in Abuja, knowingly disobeyed the direction of Section 19 of the Central Bank of Nigeria Act, 2007, by approving the printing of 172,000,000 pieces of colour swapped N500 (Five Hundred Naira) Notes, at the total cost of N4, 471,066,040 without the recommendation of the Board of Central Bank and the strict approval of the President, Federal Republic of Nigeria which conduct of yours caused injury to the public and you thereby committed an offence.

“COUNT 3: “That you GODWIN IFEANYI EMEFIELE between the 19th day of October 2022 and 5th March 2023 in Abuja, knowingly disobeyed the direction of Section 19 of the CBN Act, 2007, by approving the printing of 137,070,000 pieces of colour swapped N200 (Two Hundred Naira) Note, at the total cost of N3, 441, 005, 280 without the recommendation of the Board of Central Bank and the strict approval of the President, Federal Republic of Nigeria which conduct of yours caused injury to the public and you thereby committed an offence.”

“COUNT 4: “That you, GODWIN IFEANYI EMEFIELE, on or about the 7th day of October 2020, in Abuja, within the jurisdiction of this Honorable Court, knowingly disobeyed the direction of Section 80 of the Constitution of the Federal Republic of Nigeria, 1999 (As Amended), by approving the withdrawal of the total sum of N124, 860, 227, 865.16 from the Consolidated Revenue Fund of the Federation in a manner not prescribed by the National Assembly, which conduct of yours caused injury to the public and you thereby committed an offence.”

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