The Monetary Policy Committee’s decision to leave the Monetary Policy Rate (MPR) at 12 per cent, is in accordance to the expectations of many analysts in the financial market. There were a number of factors that contributed to the retention of the MPR at 12 per cent.
According to the committee, of the factors is the rebound in global economic activity strengthened in the first half of 2014; although at levels lower than previously projected. The tapered growth arose mainly from the emerging and developing economies owing to the rising real interest rates and geo-political crisis.
The Committee noted that the stance of monetary policy could diverge across regions over the medium term on account of variations in risks and other challenges confronting various economies. The US is expected to commence tightening by the second half of 2015 as inflation hits the long run target and unemployment rate falls to the threshold level.
The euro area and Japan are expected to continue with supportive monetary policy due to low inflation including threat of deflation in some countries, weak recovery, weakness in bank balance sheets, and strong demand for their bonds as a result of low sovereign risk.
After deliberations, the committee decided to retain the MPR at 12 per cent with a corridor of +/-200 basis points around the midpoint. It also retained the Liquidity Ratio at 30 per cent, the public sector Cash Reserve Requirement at 75.0 per cent; and also retained the private sector Cash Reserve Requirement at 15.0 per cent.
Channels Television’s guest is Dr Ayo Teriba, an economist. He spoke to Bolaji Akinwale on the significance of the MPC decision to the Nigerian economy.
The Bank Verification Number exercise was commissioned by the Bankers Committee as part of its financial inclusion strategies.
The exercise includes getting bank customers biometrics, with the use of fingerprints, and facial image, after which each customer will be given a bank verification number.
According to the committee, the essence of the project is for banks to know their customers better, while tracking their credit records and other details which will aid the operation of banks in general.
On this edition of Business Incorporated, CEO at the Nigeria Interbank Settlement System, Adebisi Shonubi, and the Head of the BVN project, Seyi Adenmosu, explain that the Bank Verification Number exercise is being rolled out in Lagos and Abuja, after which the initiative will be rolled out to other parts of the country by the end of the year.
They also explain the technical details of the exercise.
Nigeria’s economic development after 15 years of democracy has been described with mixed feelings. While some think the economy has done well, others think there are still a lot to be done.
However, the general consensus is that it’s better than going back to the days of the military.
A business lawyer and the former chairman, Section on Business Law of the Nigerian Bar Association, Mr George Etomi who was our guest on Business Incorporated, said a lot has been achieved in terms of the reforms in the various sectors of the economy, particularly the telecom sector.
He also believes that Nigeria still has a long way to go particularly in the area of infrastructure development.
He maintained that Nigeria’s economy will be better if both the leaders and the led play their role selflessly.
Global leaders at the World Economic Forum on Africa, held in Nigeria recently brought to the table ways by which they can improve the well-being of Africans through the provision of security, quality education, health care delivery and the enabling environment for businesses to thrive on the continent.
President Goodluck Jonathan said the war on terror is on in the country and that the federal government will ensure to bring back the school girls abducted by Boko Haram in Chibok, Borno State.
Also Chinese premier, Li Keqiang stated that China plans to invest billions of US dollars in Africa. And that will be without any political interference.
Several panel discussions were held during the World Economic Forum on Africa and they centred on investing in Africa, empowering young people, and promoting economic growth on the continent.
On this edition of Business Incorporated the M.D/C.E.O NLNG, Babs Omotowa aired his views on these developments, noting that it was evidence of the confidence the international community had in the country’s economy.
The Lagos State Commissioner for Finance, Mr Ayo Gbeleyi has assured indigenes that the monies borrowed by the State were being channeled into developmental projects.
Mr Gbeleyi who was our guest on Channels Television’s business programme, Business Incorporated, said the developmental projects in the state is the justification of the state being the most indebted state in the country.
He was speaking on the sideline of the just concluded Lagos Economic Summit which focused on how to achieve steady electricity supply for the people of Lagos.
With the theme, ‘Powering The Lagos Economy: Real Opportunities, Endless Possibilities,’ participants believed that the political elites must show the example and be more committed if the power sector must be revamped.
Former Minister of Finance, Dr Kalu Idika Kalu has advised the Central Bank Governor designate, Mr Godwin Emefiele to work in coordination with the Ministry of Finance, to achieve success in his tenure.
Dr. Kalu Idika Kalu spoke to business correspondent, Chimezie Obi-Iwuagwu, on Business Incorporated.
Reacting to the issue of the autonomy of the CBN, Dr Kalu Idika Kalu said that Nigeria, as a developing country, has not reached the stage where both the CBN and the Ministry of Finance can be independent.
He believes that Mr Emefiele would need to review the rules and regulations guiding the institution, understand the powers of the apex bank, and brush himself up in various macro-economic aggregates.
The Monetary Policy Committee (MPC) at its last meeting again retained the benchmark interest rate at 12%, but voted to increase cash reserve requirement on private sector deposits by 300 basis points to 15 per cent.
This is the 15th time the MPC is leaving the MPR at 12%.
The committee unanimously voted for the further tightening of monetary policy to consolidate recent gains, but members were divided on the instrument.
However, by a majority vote of 5 to 4, the committee took the decision to retain the rate at 125 and increase the Cash Reserve Ratio for private deposit to 15% from 12%.
The Chief Executive Officer, Economic Associates Dr Ayodele Teriba, who was a guest on Channels Television’s programme, Business Incorporated, does not seem to agree with those decisions, adding that he was not expecting further tightening of the monetary policy.
He maintains that stimulating the economy for growth should be the primary focus of the MPC.
Nigeria has just celebrated its 100 years of existence. However, many believe that what the country should be doing as a nation now, is to dispassionately and critically examine the journey so far and on an imaginary scale, count our successes, achievements, challenges and failures and think through which side weighs more.
The questions a lot of people have continued to ask; are; must we celebrate? Do we have success stories which should spur celebration or should this provide an opportunity to think through our challenges and possibly proffer solutions to them?
For some, should we celebrate just because of the number of years we have been together as a nation? Or should we celebrate because we have achieved quite a lot in terms of economic development?
The Chairman, Suru Group Limited, Mr Edward Akinlade is one person who believes that Nigeria has every reason to celebrate but thinks that governments at all levels still have a lot to do towards achieving economic development.
He was our guest on our business programme, Business Incorporated.