Business
Irish Central Bank Sees Start of Recovery
DUBLIN – Ireland’s central bank cautioned the government Wednesday against relaxing efforts to repair its finances now that they are no longer subjected to an international microscope.
The coalition government is once again tapping bond markets for funding after drawing down the last of its bailout loans from the European Union and International Monetary Fund in December.
Some analysts say the government will be tempted to relax fiscal measures for political gain now that it is free of the direct oversight entailed by the three-year bailout.
In its quarterly report on the economy, the central bank said Ireland has started to recover from the banking and fiscal crisis tied to a property bust more than six years ago. But the bank also said that with public debt still high, it would be premature to call the crisis history.
“Ireland needs to continue along the path of consolidation and reform that it has pursued for some years now to help ensure that the emerging economic recovery is sustainable,” the central bank said.
Ireland has promised more spending cuts and tax increases through 2015 to control its budget deficit. The government projects that its huge debts, accumulated during the bust, will be reduced in time as the Irish economy expands.
Citing weak export growth, the central bank said Wednesday that Ireland’s economy likely grew just 0.4% in 2013. In October it projected 0.5% full-year growth.
The bank raised its growth projection for this year to 2.1% from 2% and forecast the economy will expand 3.2% in 2015.
The government sees a range of recent indicators–higher employment, rising home prices, and tax revenue levels–as evidence that the country’s economy is recovering.
The coalition expects the economy to grow 2% this year, while the Economic and Social Research Institute, country’s influential think tank, and the Irish Business Employers’ Confederation, the country’s largest business group, forecast growth of up to 3%.
Following three years of sharp contraction between 2008 and 2010, Ireland’s economy grew 2.2% in 2011 and then stagnated over the last two years. With austerity weighing on domestic demand, Ireland has been relying on its huge exporting base to help dig itself out of the debt crisis.
The central bank projects that personal spending will expand modestly in 2014 for the first time in three years. But the bust continues to weigh on banks. The country’s surviving lenders are struggling with many loss-making and low-yielding loans. Households and businesses are struggling to pay down huge loans.
“The key issues revolve around the need for further progress in dealing with the resolution of impaired loans in order to put the system back on a sustained sound footing to be in a position to support recovery,” the central bank said.
– WALLSTREET JOURNAL
The World Bank has uncovered $32 million in unaccounted funds linked to a water infrastructure project in Nigeria, raising concerns about financial mismanagement in donor-funded initiatives.
The discovery was highlighted in the bank’s recently published FY2024 Sanctions System Annual Report, which revealed significant discrepancies in the project’s financial records.
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The missing funds were earmarked to bolster Nigeria’s water infrastructure, but irregularities in accounting prompted an investigation by the World Bank’s Integrity Vice Presidency (INT).
“INT followed up on risks identified regarding a project in Nigeria’s water sector and flagged to operations the risk, which was associated with $32 million of unaccounted funds,” the report noted.
In response, the World Bank engaged with key stakeholders, including the project’s task team leader, operations manager, and financial management specialist, to recover the funds and safeguard the project’s integrity.
As part of the resolution, the Central Bank of Nigeria has been requested to reimburse $22 million. Meanwhile, $6 million remains in the project’s account to cover ongoing operational costs.
The findings underscore the importance of transparency and robust financial oversight in large-scale infrastructure projects, particularly those funded by international institutions.
The Central Bank of Nigeria (CBN) has issued a stern warning to Deposit Money Banks (DMBs) over the illegal sale of mint Naira notes to currency hawkers.
The apex bank, in a circular signed by the Acting Director of Currency Operations, Mr. Solaja Olayemi, on Friday, emphasized that erring banks would face stringent penalties.
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As part of its efforts to curb the abuse of the national currency, the CBN announced plans to conduct nationwide checks to seize mint notes sold by hawkers.
Banks found to have released such notes will be required to pay a fine of 10% of the value of the affected cash withdrawn from the CBN on the date in question.
Subsequent violations will attract an additional penalty incrementally increased by 5%.
The CBN also reiterated its commitment to enforcing the Clean Notes Policy, warning that banks involved in hoarding, diversion, or any actions that disrupt efficient cash distribution would face appropriate sanctions.
With the festive season fast approaching, the apex bank urged DMBs to enhance internal controls to ensure transparent cash distribution.
It highlighted the need for proper utilization of Automated Teller Machines (ATMs) to ensure easy access to new notes by the public.
Furthermore, the CBN disclosed plans to intensify its mystery shopping and spot checks, working closely with law enforcement agencies to clamp down on any practices that undermine the integrity of the Naira.
Nigeria’s inflation rate surged to 33.88% in October 2024, up from 32.7% in September, according to the latest Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS) on Friday.
The month-on-month increase of 1.18 percentage points marks yet another strain on the nation’s economy, with transportation and food costs cited as the main drivers of inflation.
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Steep Year-on-Year Increase
Compared to October 2023, when the inflation rate stood at 27.33%, the October 2024 figure reflects a significant rise of 6.55 percentage points. This sustained upward trend highlights the worsening cost-of-living crisis for Nigerians.
Month-on-Month Breakdown
Inflation on a month-on-month basis also showed an uptick, rising to 2.64% in October 2024 from 2.52% in September. The faster rate of price increases further underscores the growing economic pressure on households.
Food Inflation Soars to 39.16%
Food inflation, a major component of the headline rate, reached 39.16% in October 2024, up from 31.52% in the same month last year.
The increase was driven by higher prices of staple items, including: Cereals and Tubers: Guinea Corn, Rice, Maize Grains, Yam, Water Yam, and Coco Yam. Oils and Fats: Palm Oil and Vegetable Oil. Beverages: Milo, Lipton, and Bourvita.
On a month-on-month basis, food inflation rose by 0.30 percentage points to 2.94% in October, up from 2.64% in September.
Price hikes in Palm Oil, Vegetable Oil, Fish, Meat, and Bread categories were major contributors.
Annual Food Inflation Hits 38.12%
The average annual food inflation rate over the past 12 months climbed to 38.12%, a sharp increase of 11.79 percentage points from the 26.33% recorded in October 2023.
The consistent rise in inflation, particularly food and transportation costs, continues to erode the purchasing power of Nigerians.
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