Monday April 21st, 2014
Monday April 21st, 2014
Latest

CBN as misguided Father Christmas

  /   in Rational Perspectives 12:00 am   /   Comments

The Central Bank of Nigeria head office  in Abuja.

In view of the apparently ‘boundless’ funds at the disposal of Nigeria’s Central Bank for its independent interventions, observers, including the National Assembly have frowned at the proprietary and the shrouded protocol surrounding the values and the choice of beneficiaries of the apex bank’s bonanza.

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Okonjo-Iweala perplexed by high interest rates

  /   in Rational Perspectives 12:00 am   /   Comments

*Finance Minister, Ngozi Okonjo-Iweala

“The first thing I have to say is that we have a central bank that is autonomous and it is the best practice to make these decisions. We may not be happy about it and I am bold to say we are not happy about high interest rates! As I said before, it is tough for our entrepreneurs to function. Even before the withdrawal of this liquidity, they were already charging over 20% interest rates and I think that is alarming. …we need to interrogate why. Structurally, what is the issue? And we are not willing to ask our banks that question.

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Heavens save us from our economic (mis)management team

  /   in Rational Perspectives 12:10 am   /   Comments

The Central Bank of Nigeria head office  in Abuja.

In recent times, one of the causes of malfunctions in the Nigerian financial system is the paradox of substantial government deposits in Deposit Money Banks (DMBs) and high government borrowings from the deposit money banks; as at June 13, 2013, the three tiers of government had N2.384tn in the DMBs out of which about 90% are in zero interest-bearing Current Accounts. To mop up the liquidity at 14% will cost N301.33bn, which is more than the annual budgets of most states….

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Nigera’s Economic Destiny: Trapped

  /   in Rational Perspectives 8:33 pm   /   Comments

metro-market

In a recent interactive section with the House of Representatives Committee on Banking and Currency, the Governor of the Central Bank, Lamido Sanusi, noted that if the plan to redesign naira notes last year was successful, “it would have made it impossible for counterfeiters to cook”. He further noted that best practice currency management is that “Within a period of 5 – 8 years, you redesign the currency, after which counterfeiters tend to catch up with you”.

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Naira: redesign, redenomination or revaluation?

  /   in Rational Perspectives 12:40 am   /   Comments

1000-naira-notes

In a recent interactive section with the House of Representatives Committee on Banking and Currency, the Governor of the Central Bank, Lamido Sanusi, noted that if the plan to redesign naira notes last year was successful, “it would have made it impossible for counterfeiters to cook”. He further noted that best practice currency management is that “Within a period of 5 – 8 years, you redesign the currency, after which counterfeiters tend to catch up with you”.

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How banks make free money from government funds, by CBN governor

  /   in Rational Perspectives 12:41 am   /   Comments

*File Photo

“First of all, you have got liquidity surplus in the banking industry; … there is over N1.3tn or so sitting in banks and belonging to government agencies. Now basically, they (these funds) are at zero percent interest and the banks are lending about N2tn to the government and charging 13 to 14%! Now, that is a very good business model, isn’t it? Give me your money for free and I lend it to you at 14%; so why would I go and lend to anyone?”

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Sanusi’s tall story on high interest rates

  /   in Rational Perspectives 12:40 am   /   Comments

CENTRAL Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi

Nigeria’s hope of early economic rejuvenation and growth may have been sadly foreclosed by Lamido Sanusi, in a recent presentation to the House Committee on Banking and Finance in Abuja, when he noted, in spite of the clarion demand by industrialists that “although the CBN has put in place several monitoring measures to ensure stability in the economy, it was not possible to guarantee the delivery of low interest rate, due to the harsh business environment in the country”.

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Euro and China loans: A nation’s folly

  /   in Rational Perspectives 12:00 am   /   Comments

Euro-currency

The recent $1bn Euro loan is reported to be part of the federal government’s $8bn medium term external borrowing plan, which has already received the approval of the National Assembly (NASS) and the Federal Executive Council according to the DMO’s DG, Abraham Nwankwo. Incidentally, the interest payable on the $1bn Eurobond is within the same range of 6.75% as the initial $500m Eurobond issued in 2011, and similar to rates, which distressed economies like Portugal and Greece currently pay.

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The man “Fashola” by Fashola

  /   in Rational Perspectives 12:10 am   /   Comments

Fashola

In the absence of the usual compliment of effusive media adverts, the special interview granted a select group of editors was probably the most public event in the recent celebration of Babatunde Raji Fashola’s (BRF) 50th birthday!

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£3,000 UK VISA BOND: Is government huffing and puffing?

  /   in Rational Perspectives 12:10 am   /   Comments

President Jonathan

Nigerians were recently agitated by the British government’s proposed demand for a £3000 bond as prerequisite for the issuance of a six-month visa for visitors from Nigeria, and five other Commonwealth countries to the United Kingdom.

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Noble public servants of yesteryears

  /   in Rational Perspectives 12:30 am   /   Comments

Chief H.I.D. Awolowo and her late husband Chief Obafemi Awolowo

In recent years, the aura of honour and respectability attached to employment in public service has regrettably faded and is now replaced by popular perception of greed, insensitivity, corruption and impunity. The stability and exciting career prospects in public service attracted the brightest and the best of our youths and the prevailing culture of discipline, integrity and commitment were supported by our traditional value for a good family name.

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GHOST workers and indulgent exorcists

  /   in Rational Perspectives 12:00 am   /   Comments

A Cross section of Workers Match Pasts, during the 2013 Workers Day Commemoration by The Lagos state Council of Nigeria Labour Congress and Trade Union Congress of Nigeria, Theme: 100 Year of Nationhood, The Challenges of National Development, held at Onikan Stadium, Lagos. Photo: Bunmi Azeez

The free encyclopedia defines a ghost, in traditional belief and fiction, as the soul or spirit of a deceased person or animal that can appear in visible form or other manifestation, to the living, who conversely, has flesh and blood, and can actually be touched. Thus, in the absence of physical form, ghosts do not have the normal human burden of satisfying the needs of hunger, thirst, shelter, etc, and therefore, have no reason to seek for jobs and earn a living!

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REFINERIES: Dangote to the rescue?

  /   in Rational Perspectives 12:10 am   /   Comments

A refinery

Nigerians may have heaved a huge sigh of relief with the media reports that Alhaji Aliko Dangote, Africa’s richest billionaire, has also waded into the murky waters of petrol refinery business in Nigeria.

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Protecting the dollar against the naira with CBN reserves

  /   in Rational Perspectives 12:00 am   /   Comments

1000-naira-notes

In the light of popular perception regarding the virtue of large reserves, it may seem incredible for anyone to suggest that the process of accumulating reserves by the Central Bank of Nigeria is in reality, actually the primary reason for a low value naira.

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CBN’S 12% MPR: No light in the tunnel

  /   in Rational Perspectives 12:05 am   /   Comments

*CBN Gov Lamido Sanusi

The Lagos Chamber of Commerce and Industry (LCCI) was lately reported to have decried as ill advised and insensitive, the retention of the Monetary Policy Rate (MPR) at 12%, by Central Bank’s Monetary Policy Committee (MPC).

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As vultures appalud imminent debt TRA

  /   in Rational Perspectives 12:05 am   /   Comments

CBN Governor, Sanusi Lamido Sanusi

Lately, the Federal Government’s enthusiasm for further national debt accumulation has become more strident, especially after the IMF’s suggestion that Nigeria is currently under-borrowed, and therefore recommended increasing the borrowing threshold of 20% of gross domestic product to about 56% of GDP.

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Why govt and banks are afraid of dollar certificates

  /   in Rational Perspectives 12:01 am   /   Comments

*File Photo

In the light of government’s reticence to our persistent recommendation for the adoption of dollar certificates for the payment of distributable dollar-derived revenue, a regular reader of this column has suggested reasons why certain stakeholders would oppose the proposition to fundamentally alter the payment system and thereby lift the irrepressible perennial burden of surplus cash and its attendant adverse collaterals such as inflation, high cost of funds, rising national debt, weaker exchange rate, rising unemployment, N2000bn annual fuel subsidy and deepening poverty nationwide!

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Unemployment, fuel prices and purchasing power of incomes the real challenges before labour

  /   in Rational Perspectives 12:17 am   /   Comments

President  Jonathan and Emeka Nwogu, Minister of Labour and Productivity. while at the  the background job seekers scramble for few job opportunities.

President Goodluck Jonathan, State Governors and members of the Legislature last week celebrated May Day with organized Labour, with the usual spectacle of march-pasts and copious speeches! Labour, on one hand, demanded for positive results in the areas of employment, security and corruption, so that the Nigerian economy can thrive and soar from the impact of such good Governance.

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Polymer Currency: Waste, Deceit & Commonsense

  /   in Rational Perspectives 12:07 am   /   Comments

naira money

The concept of moral hazard is defined as a situation where there is a tendency to take undue risk, because the costs are not borne by the party taking the risk.

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Amendment of 2007 CBN Act: Matters Arising

  /   in Rational Perspectives 12:17 am   /   Comments

*CBN Gov Lamido Sanusi

In the second quarter of 2012, the Legislature considered a bill for amending the existing 2007 CBN Act; the bill attracted a lot of media attention in response to the exuberant controversy surrounding it.

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CAN THE BANKS BE TRUSTED?

  /   in Rational Perspectives 12:02 am   /   Comments

Customers using the Internet Banking platform

The Bankers Committee,which comprises the Central Bank of Nigeria and Chief Executive Officers of the Money Deposit banks resolved at the end of their meeting last week, to remove ATM charges, and investigate alleged excessive charges imposed on customers and also agreed to increase lending, and reduce interest rates to Micro, Small and Medium Scale Enterprises (MSMEs).

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Latest

AMCON TACKLES IMF

  /   in Rational Perspectives 12:20 am   /   Comments

naira money

The International Monetary Fund (IMF) recently concluded its 2012 ‘Article IV Consultation’ on Nigeria. The IMF, as part of its recommendations, suggested the winding down of the operation of the Assets Management Corporation of Nigeria (AMCON). This recommendation was apparently predicated on the need to curb what it described as ‘moral hazards and fiscal risks’.

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Fuel subsidy as a function of illegal exchange rate manipulation

  /   in Rational Perspectives 12:01 am   /   Comments

Impact of Fuel Scarcity in Abuja and it environment. Photo by Gbemiga Olamikan

At a recent forum in Lagos, on Tuesday, 19/3/2013, President Goodluck Jonathan insisted that “we cannot continue to waste resources meant for a greater number of Nigerians to subsidize the affluent middle class, who are the main beneficiaries (of fuel subsidies)”.

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Why 68 million Nigerians do not have jobs

  /   in Rational Perspectives 12:10 am   /   Comments

File photo: Unemployed youths at Alausa, Ikeja

Today’s piece is sequel to Toyin Dawodu’s earlier article “Stable Electricity Still a Decade Away from Nigeria”. Toyin, a Nigerian in the Diaspora, is Managing Partner of Capital Investment Group in California, and also CEO of an outfit currently testing alternative and clean energy generation.

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The sensable path to economic prosperity

  /   in Rational Perspectives 12:33 am   /   Comments

naira5

This column has consistently maintained that the root cause of our economic paradox of increasing income, with unbridled unemployment rate, and deepening poverty will be found in the conscious and incorrect adoption of a faulty process for the infusion of our crude export dollar revenue into the economy.

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CBN’s unrelenting stranglehold on the economy!

  /   in Rational Perspectives 12:30 am   /   Comments

CBN governor, Sanusi

Lately, the Central Bank of Nigeria in a two-page Press Release, laboured to corroborate the Finance Ministry’s earlier clarifications on “the meaning, structure and management of the nation’s foreign reserves”. CBN defines external reserves, appropriately, as external assets held in foreign currencies by a country’s Central Bank for the “primary purpose of safeguarding the international value of the legal tender currency (i.e. the naira)”.

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Economy & reserves: Between the truth and government clarifications

  /   in Rational Perspectives 12:00 am   /   Comments

Minister of Finance, Dr Ngozi Okonjo-Iweala

In apparent response to the Action Congress’ admonition that the nation’s economy was “gradually grinding to a halt”, the Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, unexpectedly painted a brighter economic picture, and sought to clarify popular misconceptions on the issues of our external reserves and the alleged discrepancies between reported reserves balances of the Finance Ministry and the Central Bank of Nigeria (CBN). Regrettably, however, the canvassed positive indices of GDP growth and claims of fiscal prudence are not corroborated by the ugly reality on ground.

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Latest

Budget 2013 Stalemate

  /   in Rational Perspectives 12:05 am   /   Comments

File photo:  President Jonathan laying the Budget Proposal before the National Assembly members

There are media concerns on the potential adverse impact of delay on budget implementation and the possibility of the Legislature overriding presidential opposition to 2013 budget enactment.

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Super Eagles as the other Nigerian

  /   in Rational Perspectives 12:15 am   /   Comments

File photo: Nigerian players pose prior to the 2013 African Cup of Nations semi-final football match Mali vs Nigeria AFP PHOTO

Our governments have spent billions of naira over time to promote a positive image for Nigerians everywhere. Regrettably, the popular perception of the Nigerian character remains that of greed, self-interest and other such ingenious criminal escapades. The promoted brand of “Good People, Great Nation” never really took off, and it has become clear that neither catchy slogans nor sexy packaging can change public perception of what is intrinsically a bad product!

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Banking of public funds, corruption & double speak!

  /   in Rational Perspectives 12:00 am   /   Comments

*File Photo

The recognition of the abysmal depth of corruption in public office is probably shared by all discerning citizens of this country; consequently, some well-meaning Nigerians have prescribed the death penalty for anyone convicted of treasury looting! The obvious provocation of the recent slap-on-the-wrist punishment to a civil servant for stealing over N27bn of Police Pension Fund may have prompted the call for more severe penalty!

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Oby vs Government: The Pot and the Kettle

  /   in Rational Perspectives 12:05 am   /   Comments

N10.6trn controversy: Oby Ezekwesili

Public discourse recently focused on the charge by Dr. Obiageli Ezekwesili (Oby), a former Senior Assistant and Minister in Obasanjo’s administration, that the Yar’Adua/Jonathan Presidency had frittered away accumulated reserves of about $67bn since the change of baton in 2007.

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Central Bank’s lion-share of foreign reserves

  /   in Rational Perspectives 12:10 am   /   Comments

CBN

The Central Bank Director of Research, Charles Mordi, at the Save Nigeria Group (SNG) forum recently in Lagos, claimed that CBN owns $30bn out of the total reserve of about $43bn.

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