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How CBN Contributed To Rising Inflation – Ex CBN Deputy

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Kingsley Moghalu, the former Deputy Governor of the Central Bank of Nigeria (CBN), has attributed the country’s inflation to the ongoing practice of the apex bank financing the federal government’s deficits.

 

According to Moghalu, as long as the government continues to rely on ways and means to address its deficits, inflation will persistently increase.

 

He further emphasized that inflation is not solely defined as an excessive amount of money pursuing a limited number of goods, but also involves a cost-push element.

 

Kingsley Moghalu, a political economist and former presidential aspirant made this known  during an interview with ARISE TV.

 

Recall hat in the first 10 months of 2022, the Federal Government of Nigeria borrowed a total of N6.3 trillion from the Central Bank of Nigeria (CBN) through the practice of ways and means advances.

 

Additionally, in May 2023, the Senate approved a CBN loan amounting to N22.7 trillion, which had been utilized by the executive arm of the government.

 

In May 2023, the Nigerian Senate made amendments to the CBN Act, specifically increasing the borrowing threshold for the federal government through ways and means.

 

The amendment raised the threshold from 5 to 15 percent, allowing the government greater flexibility in accessing funds through this mechanism.

 

Moghalu highlighted that amidst the removal of petrol subsidy and the floatation of the naira, the inflationary impact is the most significant and immediate threat.

 

He said “So, inflation in Nigeria is going to just continue to shoot up in the immediate time, that is a fact.

 

“This becomes a challenge because in order to attract capital, when you have a very stiff rise in inflation, most times you need to keep interest rates high for a while, but Nigeria’s economy is very funny, it doesn’t always follow the textbooks.”

 

Moghalu said there were many reasons for the continuous surge despite raising interest rates.

 

According to the economist, what is causing this current round of inflation is “not the standard definition of inflation of too much money chasing too few goods only, there is also a cost-push factor.

 

Moghalu said, “Also, the central bank itself was contributing to inflation through the monetary phenomenon of illegal financing of the federal government’s massive deficits to the tune of N23 trillion, in ways and means lending”.

 

“Of course, you’re contributing to inflation with one hand you say you’re fighting inflation with the other hand. Why was the ways and means lending so high? It is because you have a government that could not manage its fiscal books and there you have the fiscal period of the price ladder being also relevant in addition to the quantity theory of money and how they play out in the market that causes inflation.”

 

In support of his argument, the former Deputy Governor of the Central Bank of Nigeria stressed the importance of the apex bank’s independence from government influence in effectively managing inflation.

 

According to him, maintaining the autonomy of the central bank is crucial to ensuring sound monetary policies and mitigating inflationary pressures.

 

He added “If the federal government is far more responsible, and disciplined with the budget and with spending, it will help the central bank to manage inflation, but then the federal government is just spending or borrowing like a drunken sailor, and then the central bank alone has to manage the inflationary consequences. It becomes very difficult.”

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Lagos Pastor Suspends Offering Collection

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A pastor in Lagos has become the focus of public interest after a video surfaced showing him declaring the suspension of offering collections during church services.

Speaking in English and Yoruba, the pastor explained that the decision was prompted by the prevailing circumstances in the country.

He assured his congregation that foregoing offerings wouldn’t lead to financial struggles for pastors, expressing confidence in their reliance on divine providence.

The pastor’s message received enthusiastic applause from the church members, and he urged fellow clergy across the nation to consider a similar approach.

He said “Don’t collect offerings today, for now because of the situation in this country. For now, we are pending the offering.

“All pastors should notice that pending the situation of this country, we should stop the collection of offerings. The reason is that a church member can come to church spending N1000 as a fare, and still give an offering and may trek back home.

“Am I making sense? Not giving an offering doesn’t mean the pastor would starve, if truly he was called. But for now, till the fuel pump price will fall, in our church…we are not collecting offerings for.

“Come and serve your God and go home. Until the price of petrol comes down. It is not easy. You are going to work tomorrow, you don’t know, maybe the transport fare to Mushin would be N500 or N700.

“For all pastors, stop collecting offerings. There’s one thing I want to say, stop collecting offerings for now. Stop collecting offerings for now.”he added

 

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Dangote Cement Workers Abducted In Edo

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Gunmen believed to be kidnappers have reportedly abducted an unspecified number of employees from the Dangote Cement Company Plc in Okpella, Etsako West local government area of Edo state.

The incident occurred on Monday when the workers were traveling back to Okpella town in a staff bus after work.

According to an anonymous source from Okpella community, the gunmen ambushed the bus, emerged from the bush, halted the vehicle at gunpoint, and then took the workers into the bush.

The source added “Yes, we heard of it, they said they were in a Coaster bus coming to Okpella after work when they were kidnapped by gunmen. But, we don’t know the numbers of the workers that have been kidnapped.”

Confirmation from police authorities regarding the incident was unavailable as calls and messages to the State Commissioner of Police and the Command’s spokesperson went unanswered.

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NNPC/First E&P JV Empowers NGOs With N53.4m

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As part of its Corporate Social Responsibility (CSR) initiatives, the Nigerian National Petroleum Company Limited (NNPC Ltd) and First Exploration & Production Limited (First E&P) joint venture (JV) has donated the sum of N53 million to non-governmental organizations (NGOs) in Nigeria.

Under the JV’s Impact First Initiative, the donation, targeted towards enhancing societal welfare, would address areas such as good healthcare and well-being, quality education as well as economic growth within the nation.

Speaking during the cheque presentation ceremony, NNPC Ltd’s Chief Upstream Investment Officer (CUIO), NNPC Upstream Investment Management Services (NUIMS), Mr. Bala Wunti, expressed gratitude to First E & P for initiating the laudable programme.

Represented by the Deputy Manager, External Relations, NUIMS, Mrs. Edith Lawson, Wunti highlighted NNPC Ltd’s belief in the power of CSR, stressing that the Company remains committed to working with its partners to impact the lives of the less-privileged.

Wunti said under the initiative, projects and programmes executed include the provision of classrooms, ICT Centres, laboratories and other infrastructural intervention projects, scholarships, quiz competitions, skill acquisitions, and economic empowerment, a testimony to NNPC’s dedication to fostering sustainable development in Nigeria.

Wunti described First E & P’s foresight and leadership as commendable, adding that the partner has spearheaded the initiative towards meaningful change that will ensure a better future for all Nigerians.

Among the beneficiaries of the donation were the Irede Foundation, which provides custom-made artificial limbs to child amputees aged 0-18 and Human Development Initiative (HDI), which focuses on tackling fundamental issues of poverty, injustice, neglect, deprivation, and equality among vulnerable people.

Others were the OISA Foundation, which transforms lives through interventions in the education and healthcare sectors; Cerebral Palsy Center, which renders support to families with children with cerebral palsy as well as the Niola Cancer Care Foundation, which organises awareness talks and screens communities for colon cancer.

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