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We’ll inherit worst economy in Nigeria’s history – Osinbajo, Nigeria’s VP-elect

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ABUJA-The Vice President-elect, Prof. Yemi Osinbajo, has said the incoming Muhammadu Buhari-led government will inherit the worst economy ever in the history of the nation.

Prof. Yemi Osinbajo, Nigeria's VP-Elect

Prof. Yemi Osinbajo, Nigeria’s VP-Elect

Also, a former British Prime Minister, Tony Blair, has advised Buhari to take advantage of the country’s current level of public support for him to take hard decisions.

Osinbajo and Blair spoke during the opening of a two-day Policy Dialogue on the Implementation of the Agenda for Change, which began in Abuja on Wednesday.

Osinbajo put the nation’s local and international debt profile at US$60bn with a 2015 debt-serving bill of N953.6bn, representing 21 per cent of this year’s budget.

He noted that an estimated 110 million out of the nation’s over 170 million population, were living in extreme poverty while the largest chunk of the benefits of the nation’s wealth was going into the pockets of a small percentage of the population.

According to him, the nation’s dwindling oil revenues has made it difficult for 24 of Nigeria’s 36 states to pay salaries.

He said, “We are concerned that our economy is currently in perhaps its worst moment in history. Local and international debts stand at US$ 60bn.

“Our debt servicing bill for 2015 is N953.6bn, 21 per cent of our budget. On account of severely dwindled resources, over two-thirds of the states in Nigeria owe salaries.

“Federal institutions are not in much better shape. Today, the nation borrows to fund recurrent expenditure.”

Osinbajo said the manifesto of the All Progressives Congress “offers a vision of shared prosperity and socio-economic inclusion for all Nigerians that leaves no one behind in the pursuit of a prosperous and fulfilling life.”

According to him, the goal of the policy dialogue is to interrogate the positions and propositions before a wider audience and to launch a robust public conversation on policy directions and priorities that would help inform the incoming administration’s approach in the next four years.

He added that the “forum exemplifies the sort of consultative and consensual approach to policy-making that the APC and the new administration intend to model in office.”

The Vice President-elect also declared that the dialogue intended to explore a wide range of policy priorities including the diversification of the economy in the wake of dwindling oil revenues.

To achieve this, he said, the administration would engender job-led growth through the revitalisation of the agricultural sector in pursuit of job creation and food security, improving the regulatory frameworks in the most strategic sphere of economic activity.

Blair, who was represented by a former Secretary of State for Trade and Industry, Mr. Peter Mandelson, explained that with the current state of affairs, the task ahead of the incoming administration was indeed a daunting one.

Drawing from the experiences of the Labour Party in Britain, Blair said the first rule of governance “is be true to your word; be true to your mandate.”

He urged the Buhari-led administration not to be afraid to take hard decisions but said it must remain mindful of the timing of such decisions.

Blair also advised the administration not to attempt to do everything at once but to ensure that things were done with proper planning along with a commitment to deliver.

He said, “You will have more goodwill and moral authority to do the difficult things at the beginning of your term than at the end. President (Joko) Widodo of Indonesia was elected in July last year, with huge public support.

“One of the first things he did when he was inaugurated in October was to smash Indonesia’s hugely expensive and inefficient, yet popular fuel subsidy.

“A policy decision which had toppled a previous administration and consistently brought people out on the streets, he decided to do it straight away when he had the authority that was the time.”

This, Blair explained, cushioned the effect of the recent fall in oil prices in the world market on the Indonesian economy.

He also stressed the importance of communication which, he said, was vital in democracy because “it is both the means of convincing people and getting them to keep following you once you are elected.”

“Strategy without communication is like a car without headlights,” he added.

The British politician also stressed the need for the government to focus on priorities and ensure service delivery.

Blair also advised the administration to create a mechanism that would focus on its priorities even in the midst of other challenges.

Earlier in his welcome address, the Director, Policy Research and Strategy Directorate of the APC, Dr. Kayode Fayemi, had said, “The phase of policy conception is over and we are entering the phase of execution, governance and of providing tangible developmental deliverables.

“The challenge of translating ideas into policy and praxis now looms large.

“Given the degree of work that has been put in by the directorate and our well-documented national problems of policy implementation, the focus should now be on evolving an institutional framework to deliver the agenda for change.”

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Banking

CBN Denies Currency Devaluation

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CBN Pegs Interest Rate at 14%

 

The Central Bank of Nigeria (CBN) has refuted claims of devaluing the.

 

Earlier reports suggested that the CBN had devalued the Naira, lowering its exchange rate from N631 to the dollar, compared to the previous day’s rate of N461.60 at the Importers and Exporters (I&E) window.

 

However, the Central Bank of Nigeria (CBN) released a statement on Thursday through its Acting Head of Corporate Communications, Dr. Isa Abdulmumin, categorizing the report as false information.

 

In the statement titled ‘CBN Has Not Devalued The Naira’, he said the attention of the apex bank was drawn to the news report by an Abuja based newspaper edition of June 1, 2023, titled “CB Devalues Naira To 630/51”.

 

However, the CBN stated categorically that the news report was replete with outright FALSEHOODS and destabilizing innuendos, ‘reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market.’

 

“For the avoidance of doubt, the exchange rate at the Investors’ & Exporters (I&E) window traded this morning (June 1, 2023) at N465/USS1 and has been stable around this rate for a while.

 

“The public is hereby advised to ignore the news report by Daily Trust in its entirety, as it is speculative and calculated at causing panic in the market,” the CBN spokesman added.

 

He, therefore, advised media practitioners to verify their facts from the Central Bank of Nigeria before publishing in order not to misinform the public.

 

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Banking

BREAKING: CBN Increases Interest Rate By 0.5%

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CBN Pegs Interest Rate at 14%

 

The interest rate in Nigeria has been raised to 18.5 percent, up by 0.5 percent, from 18 percent where it was pegged in March 2023.

 

The Central Banks of Nigeria’s (CBN) Monetary Policy Committee (MPC) resolved to this effect at its third meeting of 2023 in Abuja, on Wednesday.

 

Governor, CBN, Godwin Emefiele, made the disclosure in the communiqué of the MPC’s meeting,  thereafter.

 

While engaging the media at the end of the two-day meeting, Emefiele, said the committee voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR.

 

In the view of the MPC, rising inflation rate is traceable to the high energy cost and challenges around the supply chain, among others, which lie outside the corridors of the CBN.

 

Emefiele said, “The current trend in price development would continue to be monitored by the bank with greater collaboration with fiscal authority to address the drivers of inflation.”

 

Biztellers reports that the CBN had effected six consecutive interest rate increases, which has seen the rate move from 11.5 percent in March 2022 to 18.5 percent in May 2023.

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Finance

Dangers Lurk As Nigerians Resort To Refurbished Gas Cylinders

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In Nigeria, people have been forced to come up with creative solutions to cope with the effects of inflation and the economic crisis.

 

These improvised strategies have not only helped individuals save money, but also enabled them to stay afloat during difficult times.

 

In a concerning development, the recent trend of boycotting the high cost of cooking gas cylinders in Nigeria may pose a greater risk to lives than it does in terms of saving money.

 

Economy&Lifestyle investigations have revealed that the soaring prices of gas cylinders have reached a point where it has become increasingly challenging for average households to afford them, let alone refill them with gas.

 

The situation is further exacerbated by the fact that the pump price of kerosene, which would typically serve as an alternative, has become prohibitively expensive.

 

Upon investigation, it was found that the prices of gas cylinders vary depending on their sizes. A 3kg gas cylinder is priced at N14,000, while a 5kg cylinder costs N16,000. The larger cylinders are even more costly, with a 6kg cylinder priced at N17,000 and a 12.5kg cylinder costing N19,000.

 

Additionally, the expense continues when it comes to filling these cylinders with cooking gas, as it costs N2,600 for a 3kg cylinder, N5,200 for a 6kg cylinder, N8,950 for a 10.5kg cylinder, and N10,650 for a 12.5kg cylinder.

 

Consequently, an average household that needs to replace a worn-out 5kg cylinder would have to come up with N20,250 to purchase a new cylinder and fill it with gas, which can be a difficult feat to achieve.

 

As a result, many people have resorted to refurbishing their old cylinders and trying to use them as best as they can. However, this approach poses a significant danger.

 

Mrs. Rukayat Adesoji, a trader, shared her experience regarding her gas cylinder, which had become rusted and could no longer stand upright since last month. Due to the exorbitant prices of purchasing new cylinders, she resorted to seeking the assistance of a welder.

 

The welder patched the legs of the cylinder, repainted it, and ever since then, she has been using the refurbished cylinder for her cooking needs.

 

She said ““My gas cylinder which was 6kg got rusted and no longer stands erect since last month. When I asked for the price, I was told it was N17, 500. I was discussing it with a friend who advised me to take it to a welder to paint it and construct a new stand. I heeded to her advice and at the end spent just N3, 000 to turn my cooking gas to a brand new.”

 

Apart from refurbishing cylinders, some people don’t even know when their cylinders will expire. Mrs. Mercy Opara, a hair stylist, falls in that category as she explained: “I am taking my gas cylinder to the welder to spray it for me. It just cost N1, 500.

 

“The cost of buying a new cylinder is high. I have been using my cylinder for over 7 years and I don’t even know the expiry date. I just pray God blesses me so that I can buy a new one. But this one I am managing will look neat after spraying it for another two years.”

 

Mr. Adekanbi Joseph, a wielder, said he paints cylinder and “To paint and rebuild a cylinder stand, I charge N4, 500. Many people come here to paint as a new cylinder is now very expensive to get.”

 

Highlighting the potential dangers of using refurbished cylinders, Mr. Benjamin Hope, the Chief Executive Officer of FKT Cooking gas and general goods, emphasized the risks involved.

 

He stated that even a brand new cylinder can pose a risk of explosion if the locks are not properly secured after use or if the cylinder filled with gas is moved from one location to another.

 

He said “A brand new cylinder can explode if the locks are not well keyed after using and if the cylinder filled with gas was moved from one place.

 

“There are many reasons for the high cost of gas cylinders in Nigeria. One is the cost of importation due to the exchange rate. Another is the increased migration from the use of kerosene to cooking gas which has necessitated increased demand for gas cylinders. You know that in such a case there will be increased importation of cylinders.”he added

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