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“Why I support higher interest rates in Nigeria” – Cardoso

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Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has emphasized the necessity of maintaining higher interest rates to address the persistent inflation issues plaguing the Nigerian economy.

The governor made this comment in his statement in the recently released ‘Personal Statement’ of the Monetary Policy Committee (MPC) members at the MPC meeting held between May 20 and 21, 2024.

The personal statements help show the decision-making of committee members responsible for monetary policy in the country. It also highlights their voting patterns.

Cardoso stated that tighter monetary policy accompanied by higher interest rates was at their disposal to solve the challenges of high inflation.

Cardoso also mentioned that while inflation had accelerated sharply at the beginning of 2024, there had been a noticeable deceleration in the past three months.

Despite this, he pointed out that year-on-year inflation still saw a slight increase in April.

He outlined several factors contributing to the inflationary pressures, including potential upward revisions of the minimum wage, adjustments in electricity tariffs, higher fuel prices, low agricultural output due to insecurity, elevated consumption during festive seasons, and the pass-through effects of exchange rate depreciation.

These factors, he stressed, would continue to be closely monitored to prevent a reversal of the disinflation progress achieved thus far.

Cardoso explained that the MPC was faced with two primary policy options; either retaining the current rates or tightening further to sustain the disinflation trend. 

He acknowledged that there were valid arguments for holding the policy rates, such as moderating borrowing costs for the government and private sector, alleviating challenging economic conditions, and reflecting the positive results of previous tightening rounds. 

However, Cardoso also presented compelling reasons for further tightening.  

Because inflation will rise if they “rest” on higher rates 

“There is no evidence that the downward trend in month-on-month inflation rate is sustainable and would eventually manifest in downward trend in headline inflation. More so, considering the various upside risks to price development from both the global and domestic economies, there is sufficient reason to be concerned about the continued uptick in inflation if we rest on our oars at this critical point.”  

Because higher interest rates will help attract FPIs 

“Furthermore, tightening will help to sustain the current momentum of capital inflows into the economy and provide necessary support for the currency in the near term. It is important to highlight that lingering high interest rates in advanced economies present a real dilemma for emerging market economies seeking to attract capital inflows, and we must ensure that interest rate differentials remain sufficiently competitive by achieving positive real rates in the short term. “  

Because a higher interest rate is the only major tool they have 

“We must also not lose sight of the fact that inflation is the major problem. A tighter monetary policy stance with the accompanying higher interest rates is policy tools we have at our disposal to solve the problem from a  monetary angle, even as we admit that there are structural issues that must also be addressed alongside by various stakeholders.” 

Ultimately, Cardoso expressed his conviction to align with other MPC members in voting for further tightening. 

His personal statement read: “After careful consideration, I was convinced to align with other members of the Monetary Policy Committee to vote for further tightening of the stance of policy. I, therefore, voted to increase MPR by 150 basis points from 24.75%to 26.25% .” 

Cardoso’s advocacy for higher interest rates reflects a determined approach to combating inflation and ensuring economic stability but acknowledges both the monetary and structural challenges that need to be addressed in Nigeria’s economic landscape. 

After its meeting, the MPC increased the benchmark interest rate by 150 basis points to 26.25% from 24.75%. It also retained the Cash Reserve Ratio (CRR) of Deposit Money Banks (DMBs) at 45% and put the Asymmetric corridor around the MPR at +100 and –300 basis points. The bank further set the liquidity ratio of banks at 30%.

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Court remands businessman Akintoye Akindele over $35m contract fraud

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The federal high court in Abuja has remanded Akintoye Akindele, chief executive officer (CEO) of Duport Midstream Company Limited, at the Kuje correctional centre.

On Tuesday, Akindele was arraigned by the Economic and Financial Crimes Commission (EFCC) on a four-count charge bordering on money laundering and contract fraud.

The anti-graft agency accused Akindele of allegedly collecting $35 million from the Nigerian Content Development and Monitoring Board (NCDMB) to build a 2,000 barrel-per-day refinery, jetty, gas plant, data centre, and tank farm at Okpoama community in Brass LGA of Bayelsa state.

The EFCC alleged that Akindele received the funds through the bank account of Atlantic International Refinery and Petrochemical Limited and funneled the monies into four of his companies and bureau de change outlets.

The companies are Platform Capital Investment Partners, Duport Midstream Company Ltd., Puisance Afrique Dynamics Ltd., Adamantine Petrochemical & Refinery Ltd.

“That you, Akindele Akintoye, and Platform Capital Investment Partners Limited, between December 2020 and February 2021, within the jurisdiction of this Honourable Court, indirectly retained the sum of $16,006,000 (Sixteen Million, Six Thousand United States Dollars), being part of the funds dishonestly converted from the money paid by the NCDMB to Atlantic International Refinery and Petrochemical Limited as investment, knowing the said sum constituted proceeds of unlawful activity, thereby committing an offence contrary to Section 15(2)(d) of the Money Laundering (Prohibition) Act, 2011 (as amended by Act No. 1 of 2012) and punishable under Section 15(3) of the same Act,” one of the counts reads.

The defendant pleaded not guilty to all the charges.

After the ‘not guilty’ plea, Ekele Iheanacho, counsel to the EFCC, asked the court to remand Akindele in the custody of the correctional centre and seek a trial date.

However, Emmanuel Esadio, counsel to the defendant, told the court that a bail application has been filed and served on the prosecutor.

In his response, Nwite said it will take a 48-hour period for the bail application to be considered.

Esadio requested that his client be remanded in the custody of the anti-graft agency.

However, Iheanacho opposed the request, arguing that the EFCC lacked adequate facilities.

The EFCC counsel said the defendant had demonstrated untrustworthiness by collecting his international passport and claiming that it is in the court’s custody.

“The defendant cannot be trusted. He has shown tendencies that suggest he may commit another crime,” Iheanacho said.

“Additionally, there is no medical evidence before the court to support claims of ill health.”

The trial judge remanded the defendant at Kuje correctional centre and adjourned the case to December 31, 2024.

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Kwara NLC seeks 50% tax reduction for workers

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Kwara State Council of the Nigeria Labour Congress has appealed to Governor AbdulRahman AbdulRazaq to grant a 50 per cent downward review of the new tax policy of the state government for workers in the state.

It also appealed to the governor to extend tax holidays for employees in the state public service for another three months as done almost three months ago given the current hardship citizens are grappling with.

The state NLC Chairman, Muritala Olayinka, made the plea in a statement he signed and made available to Journalists in Ilorin on Tuesday.

Olayinka praised AbdulRazaq for prioritising the welfare of workers and pensioners with prompt and regular payment of salaries and allowances, describing it as a clear departure from that of the past administration in the state.

He noted that the governor has brought his leadership quality to bear with the execution of critical infrastructural projects that enhance the standard of living of the citizenry

While praying for good health and wisdom for AbdulRazaq to succeed in office, the NLC chairman reaffirmed the resolve of the organized labour to work with the present administration to achieve more milestones.

“On behalf of the entire membership of the Nigeria Labour Congress (NLC), Kwara State Chapter, I extend our profound gratitude for your exceptional leadership and unwavering commitment to the development of Kwara State and its people.

“Your Excellency’s dedication to workers’ welfare has not gone unnoticed. From the prompt payment of salaries and pensions to the execution of critical infrastructural projects that enhance the quality of life for all Kwarans, your administration has demonstrated an exemplary understanding of the challenges faced by the workforce and the general populace.

“We especially commend your continued efforts in improving healthcare, education, and social amenities, which are vital to ensuring the well-being and productivity of the people. Your inclusive governance and accessibility as a leader have set a standard worth emulating.

“As partners in progress, we reaffirm our support and cooperation in working with your administration to achieve more milestones for our beloved state.

“Once again, we appreciate Your Excellency’s tireless efforts and pray for your continued wisdom, good health and success as you steer Kwara State towards greater heights”, Olayinka said.

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NCAA sanctions five airlines over flight cancellations, missing luggage

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The Nigeria Civil Aviation Authority (NCAA) has initiated enforcement action against five airlines, comprising two international and three domestic operators, for violating Part 19 of NCAA Regulations of 2023.

NCAA said the violations include failure to refund passengers within the stipulated timeframe, non-responsiveness to authority’s directives, incidents of missing and manhandled luggage, short-landed baggage, and issues relating to flight delays and cancellations.

Michael Achimugu, NCAA’s director of public affairs and consumer protection, confirmed it to TheCable on Tuesday.

Although Achimugu did not reveal the names of the sanctioned airlines, he explained that while airlines are not always at fault for flight disruptions, NCAA regulations mandate specific actions they must take during such instances.

He said failure to adhere to the directives results in varying levels of penalties.

The director noted the surge in passenger complaints about delays and cancellations during the festive season, attributing some disruptions to harmattan-related poor visibility.

“We all know that this is harmattan season, so there is poor visibility. Flights must get cancelled. This is force majeure, and the airlines do not owe passengers anything in those instances. The enforcement we are initiating today is on cases where the airline is deemed to have been at fault. More will come,” Achimugu said.

He added that the NCAA would summon the chief executive officers (CEOs) of all airlines this week for a meeting to address flight disruptions and regulatory breaches.

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Bodex F. Hungbo, SPMIIM is a multiple award-winning Nigerian Digital Media Practitioner, Digital Strategist, PR consultant, Brand and Event Expert, Tv Presenter, Tier-A Blogger/Influencer, and a top cobbler in Nigeria.

She has widespread experiences across different professions and skills, which includes experiences in; Marketing, Media, Broadcasting, Brand and Event Management, Administration and Management with prior stints at MTN, NAPIMS-NNPC, GLOBAL FLEET OIL AND GAS, LTV, Silverbird and a host of others

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