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For third consecutive time, CBN hikes Monetary Policy Rate to 15.5%

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For third consecutive time, CBN hikes Monetary Policy Rate to 15.5%

The Monetary Policy Committee (MPC) of the CBN increased Monetary Policy Rate (MPR) from 14 per cent to 15.5 per cent on Tuesday to tame inflation.

The committee had increased the MPR by a total of 250 basis points at its last two meetings.

The MPR is the baseline interest rate in an economy; every other interest rate used within that economy is built on it.

CBN Governor, Mr. Godwin Emefiele, announced the new rate after the September bi-monthly MPC meeting in Abuja.

The newsmen report that this is the third consecutive hike of the MPR, the benchmark interest rate for the country’s financial market in 2022.

The MPC also raised Cash Reserve Ratio to 32.5 per cent from 27.5 per cent while holding other parameters constant.

The Asymmetric Corridor, thus, remains at +100/-700 basis points around the MPR, and the Liquidity Ratio remains at 30 per cent.

Asymmetric interest rate corridor is a new tool developed to increase the flexibility of monetary policy.

It provides the ability to make timely responses to external finance or risk sentiment shocks through active management of daily open market operations.

“The MPC noted with concern the continued aggressive movement in inflation, even after the rate hike at its meeting in May and July.

“It expressed its unrelenting resolve to restore price stability while providing the necessary support to strengthen the fragile recovery, Emefiele said.

Some experts had earlier projected that the CBN would increase the rates to rein in inflation.

Prof. Umhe Uwaleke, an economist, had said the MPC would increase the MPR again, by at least, 50 basis points.

Uwaleke, a Professor of Capital Market at Nasarawa State University, said that his projection was informed by rising inflation.

“Aside inflationary pressure and the need to tame it, the MPC would be considering current global monetary developments such as the hike in policy rates by central banks in developed countries.

“For example, the U.S. Federal Reserve recently increased the benchmark rate by 75 basis points, while the Bank of England increased by 50 basis points,’’ he had said.

Uwaleke said that monetary tightening by central banks of the U.S. and the UK continued to trigger capital outflows from Nigeria with negative implications on the exchange rate.

“The MPC would equally consider this as justification to increase the MPR,’’’ he said.

He, however, urged the MPC to hold the prevailing rates constant as tightening may not tame the inflationary trends.

“Be that as it may, if I were a member of the MPC, I would vote for a hold position.

In other words, I would advise that the policy rates be held.

“This is because the major drivers of inflation in Nigeria today are cost-push related rather than demand-pull.

“Furthermore, policy tightening may not really tame inflationary pressures that are stemming more from the high cost of energy and negative impact of insecurity on food output.

“Any hike in the rate at this time will hurt output growth through higher cost of lending to SMEs,’’ he said.

Dr. Tope Fasua, another economist, urged the MPC to retain the subsisting rates as past rate increases had not tamed inflation.

“I expect that they may further raise rates. My advice to the MPC would be that they hold rates.

“We have raised rates by 250 basis points in the last two meetings but inflation has surged further.

“This means that our own inflation is not tightly linked with interest rates and may recede in its own time.

“Ours is a bit of a carryover from the COVID-19 era of production shutdown and imported inflation because our economy is dependent on foreign ones battling inflation presently,’’ he explained.

According to Fasua, raising rates further will only be a continuation of punishment for local industries which borrow locally and are struggling to achieve previous levels of production post-Covid-19.

“Banks are always quick to raise lending rates anyway.

The CBN had to recently forced them to increase savings rates.

“Their margins are always so high, so the committee and the CBN must be careful about raising rates ad infinitum,’’ Fasua said.

 

Economy

YULETIDE Decorations: LASG To Divert Traffic At Ajose Adeogun

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YULETIDE Decorations,: LASG To Divert Traffic At Ajose Adeogun

The Lagos State Government will divert Traffic, away from a section of Ajose Adeogun Street in Victoria Island, for the mounting of end-of-the-year decoration, for a duration of three weekends starting from Saturday 19th October 2024.

The aforementioned exercise, according to Commissioner for Transportation, Oluwaseun Osiyemi,  will be carried out in three phases with each phase focusing on different sections of the street. 

To this end, the following alternative routes have been mapped out for motorists during the cause of the mounting; 

 During the First Phase which will cover Jubril Martins to Chicken Republic – (Saturday, 19th and Sunday, 20th October 2024)

Traffic inward Eko-Hotel Roundabout will be diverted to the other half (existing section) of Ajose Adeogun Street by VCP Hotel to form contra-flow traffic and exit at Eko-Hotel Roundabout to continue journeys.

Alternatively, Traffic inward to Eko-Hotel Roundabout from VCP Hotel will be diverted through Jubril Martins into Muri Okunola to link Patience Coker and access Ajose Adeogun Street to connect destinations.

During the Second Phase which will cover Molade Okoya Thomas to Mounis Bashorun section – (Saturday, 26th and Sunday, 27th October 2024). 

Traffic inward Ajose Adeogun Street from Eko-Hotel Roundabout will be diverted to a right turn into Molade Okoya Thomas to link Younis Bashorun to access Ajose Adeogun Street to continue journeys. 

During the Third phase of the project spanning 10 meters inward Ajose Adeogun (Saturday, 2nd November, 2024).

Motorists from Adetokunbo Ademola Street will maintain a lane movement for about 10 metres into Ajose Adeogun Street to connect their destinations, while Motorists inward Eko-Hotel Roundabout on Ajose Adeogun Street will maintain a lane movement for about 10 metres into Eko-Hotel Roundabout.

The Lagos State Commissioner for Transportation, Mr Oluwaseun Osiyemi while imploring Motorists to note the ease of movement plan assured that the State’s Traffic Management Authority will be on ground to manage vehicular activities along the corridor to minimise inconveniences.

The Commissioner therefore advised Motorists to be patient, as the Partial closure is part of the traffic management plans for the commencement of End of Year Decoration of Ajose Adeogun Street, Victoria Island, Lagos, by Zenith Bank PLC.

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Economy

NLC Kicks, Says Petrol Hike Will Further Deepen Poverty, Job Loss

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NLC kicks, Says Petrol Hike Will Further Deepen Poverty, Jobs Lost

The Nigeria Labour Congress (NLC) has kicked against the current petrol price hike, stressing that the latest increase in the pump price of petrol will further deepen poverty as production capacities dip.

The Congress added that the increase would lead to more job loss with multidimensional negative effects, and therefore, demanded its immediate reversal.

NLC’s position is contained in a statement signed by its President, Mr Joe Ajaero on Wednesday in Abuja, titled, “What next after increase in pump price?”.

The labour leader said the previous increases had not produced any good results, rather, people only got poorer.

He said the Congress was dismayed by the latest increase in the pump price of petrol without commensurate capacity of Nigerians or mitigatory measures.

“Even following the logic of market forces, we find it an aberration that a private company (NNPCL) is the one fixing prices and projecting itself as a hegemonic monopoly.

“We challenge the government to go to the drawing board and present us with a blueprint for inclusive economic growth and national development instead of this spasmodic ad hocism and palliative policy.

“It needs no stating the fact that the latest wave of increase has grossly altered the calculations of Nigerians once again at a time they were reluctantly coming to terms with their new realities,” he said.

It would be recalled that the Nigerian National Petroleum Company Limited (NNPCL) had raised the pump price of petrol by 14.8 per cent to N1,030 per litre from N897 across its retail outlets in the FCT.

Earlier in September, the NNPCL had increased the price of the product from N615 to N897.

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Economy

LASG Signs Mou For Green Line Mass Transit

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LASG Signs Mou For Green Line Mass Transit

…Assures that rail transit will seriously improve commuting within the metropolis

The Lagos State Government has signed a Memorandum of Understanding for the Green Line Rail Mass Transit Project which is to span the expanse of Lekki corridor within the state.

The Commissioner for Transportation, Mr. Oluwaseun Osiyemi highlighted this, in response to questions raised by the Lagos State House of Assembly Committee on Transportation, led by Hon. Temitope Adewale, the Chairman during a courtesy visit of the committee to the ministry.

The Transport Commissioner stated that the addition of the Green Line to the existing Blue Line which has transported over 2 million passengers since its inception and the Red Line which will convey 750,000 passengers daily at its kick-off, will significantly improve commuting within the state. He also said that the plan for the second phase of the Blue Line, Mile 2 to Okokomaiko is underway.

Mr. Osiyemi also disclosed that the Ministry was currently working on creating 2 Interchanges to ensure the interconnectivity of the modes especially in areas where all of the available modes exist (Road, Water and Rail), adding that the interconnectivity of the modes was deliberate to ensure that there is no lacuna in the implementations of these plans.

Speaking on the areas of concern raised about the Lekki-Epe Corridor and the impact of the refinery along the axis, the Commissioner elaborated on the modality of the E-call Up System.

He explained that 7 trailer parks are available to prevent trucks from loitering on the corridor as well as an RFID which will ensure compliance with the e-call-up system as it will expose any truck not scheduled to be at the port or parks.

He also revealed that plans are also underway to ensure containers are moved via water on barges in ten’s to further reduce the congestion on the corridor.

In affirmation, the Permanent Secretary, Mr. Olawale Musa explained that the number one hindrance to fully digitised enforcement is the lack of data.

He decried that many motorists especially commercial vehicles submit incorrect data to the Government due to the use of agents to procure vital vehicular and driver documentation hence the continued use of physical enforcement. 

He further stated that the Ministry has prioritized training of its enforcement and traffic management officers to ensure that they deliver on providing sanity on Lagos roads.

The Chairman House Committee on Transportation, Hon. Temitope Adewale applauded the Ministry for living up to its responsibility as the first on the THEMES+ Agenda, he enjoined the Ministry to provide a project status report to enable the House of Assembly to monitor and stay abreast of the plans of the ministry and as well support the projects in line with their functions as representatives of the people.

Expatiating on the development, the Deputy Director Public Affairs, Bolanle Ogunlola (Mrs.) noted the presence of other members, which included Hons. Afinni Olanrewaju, Slyvester Ogunkelu, Olootu Emmanuel and Kazeem. O, alongside other Officers from the Lagos State House of Assembly, as well as the Management of the Ministry of Transportation.

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