A quarterly survey report titled Inflation Attitudes Survey Report for Q3 2019 released by the Central Bank of Nigeria (CBN) has shown that Nigerians would rather have a lower interest rates than lower inflation.
The Survey report which was released on Tuesday, measured Households’ perception/expectations of price changes in the past one year/next one year, Households’ perception/expectations of interest rate changes in the past one year/next one year, Households’ opinions on the impact of interest rate changes in households and on the Nigerian economy, Households’ perception of the impact of interest rate changes on prices in the short and medium-term, and Households’ assessment of CBN’s role in controlling inflation.
The survey was conducted in 2,070 households that were randomly selected across Nigeria, with a response rate of 98.3%.
When respondents were asked what would happen to the Nigerian economy if prices started to rise faster than they are now, 52.9% believed that economy will grow weaker, 6.4% said it will grow stronger, while 19.5% thinks there will be little difference. 21.2% did not respond.
This suggests that Nigerians prefer stability in prices. This supported the notion that inflation constrains economic growth.
On price changes over the next one, majority of the respondents think inflation will rise by 2.7%.
The survey showed that 47.6% of the surveyed households knew nothing about interest rates.
Out of the remaining 52.4%, 28.2% believed interest had risen in the last 12 months.
On expected change on interest rates for bank loans and savings, 21.4% think rates will rise, while 14.7% believed that rates will fall. However, 63.9% of the respondents were indifferent or had no idea.
On whether if it would be best for the economy if interest rates fall or rise, 37.9% indicated that a fall in interest rates will favour the economy. 6.5% opted for a rise in rates, 14.6% were indifferent. However, a large percentage (40.6%) had no idea.
This indicates that while some Nigerians would prefer a fall in interest rate, the majority have no idea on interest rates.
Interest rates vs inflation
When asked whether they will prefer a high-interest rate or high inflation, 33.7% preferred a rise in prices (high inflation), 22.5% preferred higher interest rates, while 43.4% had no idea.
This suggests, when given a trade-off, Nigerians will prefer higher interest rates to higher inflation. This is also suggestive of support for bank’s price stability objective.
Governor Udom Emmanuel has presented a budget proposal of N597, 800billion for the 2020 fiscal year to Akwa Ibom State House of Assembly.
A breakdown of the budget estimate as presented at the chambers of the state assembly in Uyo on Wednesday indicates that capital expenditure has N369, 642b, recurrent expenditure is estimated to take N111,225b, while N116,933 has been estimated for consolidated revenue fund charges.
The 2020 budget which indicates a shortfall from the 2019 budget with its approved provision of N672,985, is according to the governor,predicated on an oil benchmark of $55 per barrel at a production rate of N2.18 million barrels per day, and with an estimated exchange rate of 305/USS, in line with the national budget benchmark projection.
Mr Emmanuel said the 2020 budget christened “A budget of industralization for poverty alleviation Phase II” has a total projected revenue estimated of N381,556b as against the approved provision of N374,758b for 2019.
A breakdown of this further indicates that Internally Generated Revenue (IGR) -N52.556 billion, Statutory Allocation – N 52.000 billion,.Derivation Fund -N255.000 billion, Retained Revenue from Parastatals -N2.000 billion, Value Added Tax (VAT) -N 20.000 billion, total.- N381.556 billion
Emmanuel said the 2020 budget is further anchored on his Eight-Point policy thrust which rests squarely on his initial Five-Point Agenda that shaped his First Term in office to wit; Job Creation, Poverty Alleviation, Wealth Creation, Economic and Political Inclusion, and Infrastructural Consolidation and Expansion for continuous transformation of the State into an industrialized entity.”
“We are committed to complete all our ongoing projects and other star projects in our completion agenda”, he assured.
The Speaker, Akwa Ibom State House of Assembly, Mr Aniekan Bassey applauded governor Udom Emmanuel for the purposeful implementation of the 2019 budget and pledged to ensure a speedy consideration and passage of the 2020 appropriation budget.
He however charged the various Ministries, Departments and Agencies (MDGs) to ensure they provide all the necessary supporting budget data and stick to the time table that will be announced by the house for their appearance.
On his part, the leader of the state Assembly Udo Kierian Akpan said the Governor has been able to bring about accountability in governance and promised that he and his colleagues will continue to support his efforts in service.
President Cyril Ramaphosa has vowed to rebuild South Africans’ confidence in the economy, based not merely on hope or expectation of change, but on concrete things.
South Africans want concrete things that can make a difference in the economy and real actions that “move the needle,” the president said in his first weekly message “From the Desk of the President,” a new platform through which the president said, “I will discuss some of the issues that interest and concern South Africans, and talk about the work we are doing in government to tackle these issues.”
After a decade of low growth and deepening poverty, people are looking for signs of progress in tackling the many challenges confronting the country, the president said.
This year the economy will record growth lower than expected, with the government’s finances being stretched and several industries looking at retrenching workers, he said. South Africa’s GDP growth forecast for 2019 has been revised by the National Treasury to 1.5 percent, from an estimated 1.7 percent in 2018. “Much of the confidence that the country had 20 months ago has dissipated as the reality of the problems we face became clearer,” he added.
The important issue is that the government should move in a determined way to effect change while remaining irrevocably committed to rooting out state capture, corruption and malfeasance, Ramaphosa said. South Africans want to change the narrative of doubt to a narrative of opportunity not through clever spin, but through action, he added. As part of efforts to rebuild confidence, funds have been redirected to stimulate economic activity in areas where the majority of South Africans live, Ramaphosa said.
These include finance to support black commercial farmers, the revitalization of industrial parks in townships and the establishment of a Township Economy Fund.The government is also increasing the value of goods and services it procures from small business and cooperatives, Ramaphosa said.Much work is underway to improve the ease and reduce the cost of doing business, as are efforts to restructure state-owned enterprises and ensure that they perform better in meeting the country’s needs, the president said.
South Africa is taking firm action to grow the economy and create jobs, he said.Building on the stimulus and recovery plan, the government will finalize a clear economic growth strategy within the next few weeks, the president promised.”I am certain that with the active involvement of all sectors of society, this will be achieved,” Ramaphosa said.
Nigeria’s Gross Domestic Product (GDP) declined by 0.16 per cent in the second quarter of 2019, the National Bureau of Statistics (NBS) said on Tuesday.
The NBS also revealed that the GDP grew by 1.94 per cent in real terms within the same period.
According to the report, if compared to the second quarter of 2018, which recorded a growth of 1.50 per cent, the growth observed in Q2 2019 indicates an increase of 0.44 per cent.
However, when compared to 2.10 per cent recorded in the first quarter of 2019, the Q2 2019 real growth rate indicates a decline of 0.16 per cent.
“During the quarter, aggregate GDP stood at N34,944,151.61 million in nominal terms, an increase of 13.83% over the performance in the second quarter of 2018 and 9.8% over the preceding quarter,” the report noted.
The NBS said that the performance observed in Q2 2019 follows an equally strong first-quarter performance, and was likely aided by stability in oil output as well as the successful political transition.
Overall, a total of 15 activities grew faster in Q2 2019 relative to last year, while 13 activities had higher growth rates relative to the preceding quarter.
On a half-year basis, real growth in the first half of 2019 stood at 2.02 per cent, higher than in 2018 which was 1.69 per cent.
Further analysis on the quarter on quarter shows that the real GDP increased by 2.85 per cent compared to a decline of –13.69 per cent in the preceding period.
Japan said on Friday its economy had slowed in the April-to-June quarter amid escalating trade tensions between China and the United States.
The economy expanded at an annualized rate of 1.8 per cent for the third straight quarter of growth, slowing from the 2.8-per-cent expansion in the first three-month period, the Cabinet Office said in a statement.
The reading beat the 0.4-per-cent growth forecast by analysts polled by the Nikkei Business Daily.
The country’s 10-day holiday during the imperial succession in May helped boost consumption, analysts said.
Private consumption rose 0.6 per cent quarter-on-quarter, compared with a 0.1-per-cent increase in the January-to-March period,
Corporate investment climbed 1.5 per cent, following a 0.4-per-cent rise in the previous quarter.
The office also reported exports edged down 0.1 per cent in the April-to-June period, compared with a 2-per-cent contraction in the first quarter of this year.
Imports grew 1.6 per cent in the second quarter after shrinking 4.3 per cent in the previous period.
The consumer price index, (CPI) which measures inflation increased by 11.22 percent (year-on-year) in June 2019.
This is 0.18 percent points lower than the rate recorded in May 2019 (11.40) percent.
This was contained in a report released on Monday by the National Bureau of Statistics.
The Federal Executive Council (FEC) on Monday approved the rate of 0.2 per cent as the new import levy of Cost, Insurance and Freight (CIF) on goods coming into Nigeria.
The Minister of Finance, Mrs Zainab Ahmed, disclosed this while addressing the State House correspondents after the FEC meeting presided over by Vice President Yemi Osinbajo at the Presidential Villa.
She said, however, there were exemptions to the new levy.
“Council approval a rate of 0.2 per cent as the new import levy of CIF that will be charged on imports coming to Nigeria but with some exceptions.
“The exceptions include goods originating from outside the territory of member countries that are coming into the country for consumption.
“It also includes goods that are coming for aid and also it includes goods that are originating from non-member countries but are imported through specific financing agreement that ask for such kind of exemptions.
“It also exempts goods that have been ordered and are under importation process before the scheme is announced into effect.
According to her, the purpose of the new levy is to enable African Union (AU) members pay on a sustainable basis, their subscription to the AU.
Ahmed said that Nigeria knowing that what would accrue from the new levy would be more than what was required as subscription to the AU, that the balance would be put in a special account.
She said that the special account would be used to finance subscriptions in multilateral organisations such as the World Bank, African Development Bank (AfDB), the Islamic Development Bank, and institutions like that.
The minister said that if there was any excess left from that revenue pool, it would be used to finance the budget.
She said the second approval was for the setting up of the Steering Committee to be chaired by the vice president for the design and implementation of a National Single Window.
“The National Single Window is a web portal that will be able to integrate all the government agencies that are implementers in the port system or trading in the port system.
“The trading platform will enable better efficiency of port operations; also, we are projecting that it will significantly increase government revenue.
“The third approval is for the extension of the Central Bank of Nigeria (CBN) intervention that will be used to continue to support the power sector particularly, the generation arm of the power sector.
“This is based on a commitment that we signed into as a country where we gave seven guarantees to the Generating Companies (GenCos) to bridge any gap that they may have after the Nigerian Bulk Electricity Trading (NBET) Plc has settled them,” she said.
On his part, the Minister of Budget and National Planning, Sen. Udo Udoma, said he briefed the FEC on the first quarter of Gross Domestic Product (GDP) performance numbers released by the National Bureau of Statistics (NBS), a parastatal under his ministry.
He said that the GDP indicated continuing economic growth.
According to him, the economy recorded a real GDP growth of 2.01 per cent in the first quarter of 2019.
Udoma said that the growth reflected the strongest first quarter performance in GDP since 2015—a development which he said pleased the council.
“FEC is most encouraged that the economy continues to be driven by the non oil sector which affects most of our population.
“Also, Agriculture grew by 3.17 per cent and this represents the strongest growth in agriculture since the first quarter of 2017.
“FEC is also pleased to note that are improvements in other economic indicators such as the inflation rate which tend to be high during the election period but it has been stable.
“Our trade balance has also remained healthy during the period while our exchange rate to the dollar has also been stable notwithstanding the elections, there has been stability,” he said
The minister said that the council believed that the dividend arising from the peaceful elections and the re-election of President Muhammadu Buhari would lead to a further boost in economic growth.
He said that the country would expect faster growth rate as the incoming cabinet would continue to intensify work on the implementation of the Economic Recovery and Growth Plan.