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Nigeria’s inflation rate is expected to rise to about 11.4 per cent for the rest of this year till mid-2019, the Central Bank of Nigeria has said.

The CBN Governor, Godwin Emefiel*e, disclosed this while speaking on Nigeria’s outlook and policy thrust for 2019.

He said, “Inflation expectations are rising on the backdrop of anticipated politically related liquidity injections. For the rest of 2018 and towards mid-2019, Nigeria’s rate of inflation is projected to rise slightly to about 11.4 per cent and then moderate thereafter.”

The consumer price index, which measures inflation decreased to 11.26 per cent (year-on-year) in October2018, according to latest report by the National Bureau of Statistics on its ‘CPI and inflation report October 2018’.

The statistics revealed that this was a 0.02 per cent points lower than the rate recorded in September 2018 (11.28 per cent).

While speaking on the exchange rate, he said that although the CBN had so far managed to maintain exchange rate stability, the current capital flow reversals from emerging markets were expected to continue to exert considerable pressure on market rates.

This pressure, he added, could be amplified by the forthcoming elections, especially as the political marketplace heats up.

He said notwithstanding those pressures, the CBN was determined to maintain its stable exchange rate policy stance over the next few months, given the relatively high level of reserves.

“Gross stability is projected in the foreign exchange market given increased oil-related inflows and contained import bill. I would like to make it categorically clear that sustaining a stable exchange rate is of overriding importance to us even as we continue to put measures in place to shore up reserves,” he said.

While speaking on the balance of payments, he said it was expected to remain positive in the short term, and that oil prices continue to recover, adding that it was expected that the current account balance would strengthen even further.

“This will be supported by improved non-oil performance as diversification efforts begin to yield results to reduce undue imports,” he added.

Emefiele also said that the apex bank would explore the possibility of leveraging technology to enhance credit to critical sectors of the economy, especially agriculture and manufacturing.

 

Source: Punch

Strengthening mechanism for increased internal revenue generation is critical to the expected increased revenue in the non-oil sector, Yue Man Lee, World Bank Senior Economist, has said.
 
Lee said this on Tuesday in a paper she presented at the ongoing 3-day National Council on Finance and Economic Development conference, holding in Kaduna.
 
The paper was entitled “Strengthening States Revenue Performance through Transparency and Open Government.’’
 
Lee observed that Nigeria’s revenues were very low due to contraction in oil revenues and the stagnancy in the non-oil revenues which she attributed to the absence of stable tax policy reforms and weak tax administration.
 
She said that with no improvement in revenue collection, total spending would decline; debt would increase while fiscal space would shrink.
 
The expert noted that the government could not deliver on its social and development agenda without it increasing total public spending.
 
According to her, the only mechanism to increase government expenditure in a sustainable way is to triple total revenue through mobilising non-oil revenue.
 
“However, Nigerian tax perception survey shows low tax compliance due to weak transparency and accountability.
 
“Corporate income tax is less than six per cent of registered taxpayers, personal income tax shrinks to two per cent, while compliance in the case of VAT varies between 15 and 40 per cent.
 
“This is worrisome because low tax compliance reduces states revenues and strengthening revenue and increasing expenditure efficiency needs to be underpinned by an increase in transparency and accountability.”
 
Lee, however, said that the Nigerian states could increase transparency and accountability to strengthen IGR through harmonisation of revenue collection and automation of tax payment.
 
“Kwara and Kaduna States are good example of states where such reforms were initiated with a significant increase in IGR,” she said.
 
Meanwhile, the Accountant-General of the Federation, Ahmed Idris, said that automated collection and management of non-oil revenue was critical to increasing its performance in revenue generation and sustenance.
 
 
(NAN)
 
JOHANNESBURG - The rand rose for a fourth straight session on Friday to end the week nearly 3% firmer, benefiting from political chaos in Britain and a revival of risk appetite linked to a thawing of United States (US)-Sino trade tensions.
 
Stocks ended slightly lower, with British American Tobacco taking the most off the benchmark index after the United States announced sweeping restrictions on flavoured tobacco products.
 
At 1530 GMT, the rand was 1.09% firmer at 14.0300.
 
Most of the gains were posted after the dollar wobbled as two Federal Reserve officials cautioned in separate television interviews about slowing global economic growth, raising doubts about the number of future US rate increases.
 
The rally followed Thursday’s strong gains, particularly against the pound, as Prime Minister Theresa May battled to salvage a draft Brexit deal.
 
Growing bets that the South African Reserve Bank (Sarb) may raise rates at its policy meeting on Thursday supported the already attractive carry yield offered by the rand.
 
It outpaced most other emerging currencies against the dollar on the day.
 
In a Reuters poll taken this week, 16 of 26 economists said the SARB would keep its repo rate at 6.50% while the rest forecast a 25 basis-point hike.
 
Bonds also rose, with the yield on the benchmark 2026 paper down 4.5 basis points at 9.115%.
 
On the bourse, the benchmark Top-40 index was down 0.17% at 45,851 and the broader All-share index lost 0.1% to 52,095.
 
BAT slumped 6% to R495.67, tracking falls in its London-listed shares. On Thursday the US Food and Drug Administration announced restrictions on flavoured tobacco products, including electronic cigarettes, in an effort to prevent a new generation of nicotine addicts.
 
Investment house Reinet Investment was also under pressure, falling 6.7% to R215.58 after the company reported a drop in net asset value, a key profitability measure for investment companies.
 
 
Source: The Routers
Zimbabwe has invited bids for the state-owned airline as President Emmerson Mnangagwa’s government pushes ahead with a drive to privatise and end state funding to loss-making firms, Air Zimbabwe’s administrator said on Monday.
 
Air Zimbabwe, which owes foreign and domestic creditors more than $300 million, was in October placed into administration to try and revive its fortunes.
 
The troubled airline is among dozens of state-owned firms, known locally as parastatals, that are set to be partially or fully privatised in the next nine months as the government seeks to cut its fiscal deficit seen at 11 percent of GDP this year.
 
Air Zimbabwe administrator, Reggie Saruchera said in a notice published in media on Monday that potential investors should make their bids before November 23 after paying a non-refundable deposit of 20,000 dollars.
 
Ms Saruchera did not indicate whether investors would be allowed to tender for partial or total shareholding in Air Zimbabwe. He was not immediately reachable for comment.
 
Only three of Air Zimbabwe’s planes are operational, with another three grounded, which has forced it to abandon international routes.
 
 
(Reuters/NAN)
 
The Central Bank of Nigeria (CBN) has said Nigeria is leading other Africa nations and one of the top five (5) globally in remittances inflows.
 
CBN Governor, Godwin Emefiele, who made this known, however, did not mention the exact amount of inflow but simply said Nigerians in the diaspora and other African nationals sent $72 billion home last year.
 
Emefiele, who was represented at a workshop on Remittance Household Surveys by the Director, Statistics Department of the apex bank, Mohammed Tumala, on Tuesday in Abuja, also said, while quoting a World Bank report that Nigeria was one of the top five countries of the world which received about $613 billion in remittances in 2017.
 
Although, the World Bank had in the same report disclosed that Nigeria received a total of N22 billion remittances inflows in 2017.
 
In his address, the CBN boss said remittances inflows contribute substantially to foreign exchange earnings and household finances in most developing countries.
 
“Money sent home by migrant workers is among the major financial inflows to developing countries and in some cases, it exceeds international aids and grants.
 
“According to the World Bank, global remittances have risen gradually over the years to about $613 billion in 2017, of which $72 billion was received by African countries. As a recipient country, Nigeria tops African countries and is also ranked among the top five globally,” he said.
 
Emefiele added that Nigeria had taken steps to attract more remittances inflow into the nation to further develop the Nigerian economy.
 
The steps aimed at attracting Nigerians in diaspora to remit funds home, Emefiele said, include the floating of a $300 million diaspora bond by the federal government.
 
He also added that the introduction of electronic Certificate of Capital Importation to Nigerians abroad and the country’s membership of the International Association of Money Transfer Networks were parts of measures to encourage Nigerians outside the country to remit monies home.
 
Emefiele said the former statistics on remittances inflows in the country were based on bank records and staff estimates, which according to him is a “methodology with limitations.”
 
“We think that a large chunk of migrants’ remittances pass through informal channels and are thus, unrecorded.
 
“Nigeria is yet to conduct a household based remittances survey to provide scientific estimates of these informal inflows.
 
“In addition, data from banking records also come with some discrepancies due to classification challenges on the part of reporting,” he added.
 
 
Source: The Ripples
The Nigerian manufacturing sector has reported an expansion for the nineteenth consecutive month in October, latest data from the Central Bank of Nigeria (CBN) have shown.
 
The Purchasing Managers’ Index (PMI), a barometer of the economic health of manufacturing and services sectors, grew by 0.6 index points to 56.8 index points in October, its fastest pace this year.
 
According to the data released on Wednesday, of the 14 sub-sectors captured in the survey, 13 reported growth in the review month.
 
The sub-sectors comprise of electrical equipment; petroleum & coal products; printing & related support activities; cement; chemical & pharmaceutical products; textile, apparel, leather & footwear; and furniture & related products.
 
Others include transportation equipment; plastics & rubber products; food, beverage & tobacco products; fabricated metal products; nonmetallic mineral products; and paper products.
 
However, only the primary metal sub-sector recorded a decline in the review month.
 
The CBN data show that the production level index for the manufacturing sector grew for the twentieth consecutive month in October to 58.9 points from 58.4 points in September.
 
Similarly, the new orders index grew for the nineteenth consecutive month to 56.8 points, indicating an increase in new orders in the review month.
 
The manufacturing supplier delivery time index grew faster to 56.4 points, while the sector’s inventories index also grew for the nineteenth consecutive month to 56.2 points, the index grew at a faster rate when compared to its level in the previous month.
 
In spite of these, the employment level index, which recorded 54.8 points, grew at a weaker pace in October.
 
The composite PMI for the non-manufacturing sector grew at 57.0 points in October 2018, indicating expansion in the non-manufacturing PMI for the eighteenth consecutive month.
 
Business activity, new orders, employment, inventory in the non-manufacturing sector all grew at a slower rate, recording 58.3 points, 56.4 points, 55.7 points and 57.6 points in October as against 58.1 points, 55.8 points, 55.4 points and 56.8 points recorded in the preceding month, respectively.
 
 
Source: The Ripples

A pilot project to test the strength and purity of recreational drugs was launched in Berlin on Thursday, a spokeswoman said.

Recreational drugs are chemical substances taken for enjoyment, or leisure purposes, rather than for medical reasons.

They can lead to addiction, to health and social problems and to crime; most are illegal.

The “drug-checking’’ project aims to provide one official location where drugs such as ecstasy can be chemically analysed, according to the spokeswoman for the Berlin Senate Department for Health, Care and Equality.

The city’s administration has been considering such a move for some time to protect clubbers from tainted or particularly powerful drugs.

According to the health administration, the aim is to obtain as much accurate information as possible about the ingredients in the drugs and their dosages and to publicise the results.

The project will receive $34,000 (30,000 euros) of funding in 2018 and 120,000 euros in 2019.

It is being run by organisations in Berlin working in the areas of drugs and addiction.

However, there remain some legal issues to iron out before the project is rolled out.

Because of the legal situation in Germany, Berlin needs special permission from the Federal Institute for Medicines and Medical Products.

In other countries like Switzerland, drug-checking has been around for years.

There, online warnings are issued when high-dose pills are in circulation, for example.

A survey commissioned by the Berlin Senate showed that partygoers in Berlin are widely using drugs such as cannabis, amphetamines and ecstasy.

Nigeria has ranked fourth among other African nations in the list of Foreign Direct Investment (FDI) Projects to Africa, as the United States, the single largest country investing into the continent, remained confident in the market.
 
The nation, with a total of 64 FDI projects in 2017, was ranked behind countries like South Africa with 96 FDI projects; Morocco, 96 projects; and Kenya, 67 projects occupying the first, second and third position respectively.
 
This was contained in the 2018 Africa Attractiveness report released by EY on Monday titled, “Turning tides.” The report provides an analysis of FDI Investment into Africa over the past ten years.
 
According to the report, the number of FDI projects into Nigeria increased from 51 projects in 2016 to 64 projects in 2017, accounting for 9 percent share of the entire investment into the continent for the review year.
 
In view of this, the nation rose a step higher from the fifth investment destination in Africa in 2016 to the fourth in 2017.
 
The report shows that the performance was largely driven by increase in the number of projects invested by U.S. companies into the country, launching 22 projects against 10 in the previous year, just as South African, Chinese and UK investors also increased their FDI activity into Nigeria.
 
According to the World Bank, Nigeria was among 10 economies globally with the strongest improvement in their business environment last year. The country jumped 24 places on the Ease of Doing Business index.
 
FDI projects into Africa rebounded from their lowest level in ten years in 2017 as the continent recorded a growth of 6.2 percent to 718 inward investment projects compared with 676 projects recorded in 2016.
 
The report attributed the growth to interest in “next generation” sectors such as manufacturing, infrastructure and power generation.
 
“Foreign investors committed to 718 FDI projects in Africa in 2017, a 6% increase from 2016. This brings us back to 2014 levels of FDI projects, but considerably below the 10-year average,” it read.
 
East Africa emerged Africa’s major FDI hub for the first time as the region recorded 82 percent growth in the number of FDI projects compared with 2016. Countries in the region with the strongest gains include Ethiopia, Kenya and Zimbabwe.
 
 
Source: The Ripples
Following expected shortfall in Nigeria's independent revenue and recoveries, fiscal deficit in the 2018 budget is likely to widen by about 132 percent, according to a report by Afrinvest West Africa.
 
This implies the nation may have to increase its borrowing to meet up some of its spending obligations for the 2018 fiscal year, even as concerns over the nation’s rising debt profile heightened.
 
Data from the Debt Management Office reveals that Nigeria’s external debt profile rose by 114 percent from N10.32 trillion in June 30, 2015 to N22.08 trillion as of June 30, 2018.
 
In the ‘Nigerian Banking Sector Report’ by the Lagos-based investment banking firm, which was launched on Monday in Abuja, government’s independent revenue and recoveries, accounting for 40.5 percent of total projected revenues in the 2018 budget was predicted to underperform by 40 percent.
 
The company said the projection, which was premised on political distractions caused by election campaigns ahead of the 2019 polls, might widen fiscal deficit up to 3.5 percent of nominal Gross Domestic Product (GDP.
 
On June 20, President Muhammadu Buhari signed the 2018 Appropriation Act into law. The budget with an estimate of N9.12 trillion has N2.87 trillion allocated for capital expenditure and N3.51 trillion for recurrent (non-debt) expenditure.
 
A breakdown of the budget shows that a total of N2.01 trillion was estimated to be spent on debt servicing, deficit was put at N1.95 trillion, while statutory transfer and sinking fund were allocated N530 billion and N190 billion, respectively.
 
The budget was expected to be funded by N2.99 trillion to be generated from oil revenue and N31.25 billion from Nigeria Liquefied Natural Gas (NLNG) dividend.
 
Revenue from minerals and mining was projected at N1.17 billion; N1.25 trillion from non-oil revenue of which N658.55 billion will be generated from Companies Income Tax (CIT); N207.51 billion from Value Added Tax (VAT); N324.86 from the Nigerian Customs Service (NCS), while N57.87 billion was expected to come from Federation Account levies.
 
Furthermore, the government projected N847.95 billion from independent revenue, while N374 billion was expected from domestic recoveries, assets and fines, and N138.44 billion from other federal government recoveries.
 
Tax amnesty income was put at N87.84 billion; unspent balance in previous fiscal year, N250 billion, and signature bonus was to generate and N114.30 billion.
 
But according to the report, while the revenue projection from oil was achievable owing to increased oil prices in the internationals market, that of independent revenue and recoveries remained undoubtful.
 
“The Federal Government plans to generate 41.6 percent of its revenues from oil and the remainder from taxes, independent revenue and recoveries, which account for 40.5 percent of total projected revenues and have historically underperformed.
 
“Given these considerations as well as political distractions, we estimate a significant underperformance in revenues by 40 percent.
 
“Hence, we estimate the fiscal deficit to expand to N4.4 trillion above budget estimate of N1.9 trillion, representing 3.5 percent of nominal GDP, well above the three percent threshold prescribed by the Fiscal Responsibility Act,” the report read in part.
 
 
Source: The Ripples

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