Business
U.S. regulators urge banks to work with borrowers during shutdown
WASHINGTON – U.S. regulators on Wednesday urged banks to go easy on borrowers who are having trouble making payments on mortgages, student loans and other debt because of the federal government shutdown.
The government has been partially closed since funding ran out on October 1 and lawmakers failed to agree on a new budget deal. Safety workers and others deemed “essential” have been working without pay, while hundreds of thousands of others were sent home until their agencies re-open.
Some businesses that rely on revenue from tourists at national parks or that provide services to the government also are under strain as the closures drag into a second week.
Regulators including the Federal Reserve and the Consumer Financial Protection Bureau acknowledged that some of those employees may struggle to make payments and that banks should work with them to temporarily modify loan terms.
They said bank examiners would consider the unusual circumstances as they supervise lenders.
“Prudent workout arrangements that are consistent with safe-and-sound lending practices are generally in the long-term best interest of the financial institution, the borrower, and the economy,” the bank regulators said in a statement.
The agencies, which also included the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp and the National Credit Union Administration, sometimes make similar statements after natural disasters such as hurricanes.
The regulators also encouraged federal workers and others affected by the shutdown to contact their banks if they anticipate being unable to make certain payments.
– REUTERS
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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