Businesses face higher costs on CBN’s rate hike

Nigeria’s first interest rate hike in six years will increase the borrowing costs of businesses in the short-term and may fail to address surging inflation in isolation. The Central Bank of Nigeria (CBN), on Tuesday, joined global central banks in raising in raising benchmark interest rates to curtail rising inflation and stimulate foreign portfolio inflows (FPI).

The rate was raised by 150 basis points to 13 percent.

The implication of this is that the cost of borrowing by businesses, from manufacturers to small and medium-scale firms, will increase as banks reprice their assets and loans, according to analysts.

First interest-rate hike in 6yrs to worsen FG’s finances

Nigeria, which spent nearly all of its revenues on interest payments to creditors last year, will now pay more to borrow from local investors after the Central Bank of Nigeria (CBN) hiked benchmark interest rates for the first time since August 2016 on Tuesday.

Naira gains after CBN rate hike

The naira on Tuesday strengthened against the dollar at the official market after the Central Bank of Nigeria (CBN) increased its benchmark interest rate for the first time since August 2016. After trading on Tuesday, the naira closed at N419.00 per dollar, compared to N420.33/$ on Monday, according to data from the FMDQ Group.

The naira also strengthened against the dollar at the parallel market, popularly called the black market, as it gained N2 or 0.33 percent to close at N608 per dollar from N610 the previous day, traders told BusinessDay.

Bank stocks set to gain from 13% interest rate

Banks are perhaps the biggest winners of the Central Bank of Nigeria (CBN)’s move on Tuesday to hike interest rates for the first time in six years. With the CBN raising interest rates by 150 basis points to 13 percent to combat accelerating inflation, the yield on on government securities, which banks hold a good chunk of, is expected to rise, increasing their profitability and boosting investor sentiment towards their stocks.

The de-listing of Nigeria from emerging markets by JP Morgan

The US-based international lender and financial services holding company, JP Morgan Chase & Co., recently de-listed Nigeria from its emerging market sovereign list. The action was owed to the failure of the Nigerian National Petroleum Corporation (NNPC) to remit three months’ oil revenue receipt to the Federal Government.

This recent occurrence follows Nigeria’s inability to take advantage of rising global oil and gas prices, given its status as a major producer of these essential commodities.

However, this is not the first time that Nigeria will run out of luck in maintaining its emerging market economy status with this multinational banking and financial services company

AIB-N stops investigation into NAF crash

The Accident Investigation Bureau, Nigeria (AIB-N) has stopped further investigations into the Nigerian Air Force on the crash that claimed the lives of 11 military personnel including Ibrahim Attahiru, a serving Chief of Army Staff, in May 2021. Akin Olateru, Commissioner/CEO of AIB, AIB-N, in a question and answer session at the release of the three reports, regretted that since the agency submitted its interim report on the crash which claimed the life of Ibrahim Attahiru, Nigeria’s former chief of army staff in Kaduna State on September 21, 2021, the bureau was unable to continue its investigation into the crash.

Olateru, however, explained that the accident was a military one, which doesn’t compel AIB-N to make the outcome of its investigation public.

African brands’ value recovers $50bn on digital transformation

Digital transformation has helped top brands in Africa to achieve recovery in their aggregate brand value, a new report by South Africa (SA) based Brand Finance Africa, a brand valuation consultancy states. The 150 top African brands surveyed in the report saw their valuation increase by 25.3percent to $50.1..

JAMB remits ₦27 billion to FG in five years

The Joint Admissions and Matriculation Board (JAMB), says it has remitted N27.2 billion to the federal government’s coffers from 2017 till date. Ishaq Oloyede, JAMB Registrar, while giving a breakdown of remittances, in Abuja, said a total of N9.7 billion was used for capital projects in the same period. He said.

Nigeria’s rising inflation poses threat to consumer spending – Fitch

Nigeria’s rising inflation rate could be a key risk to consumer spending in 2022, as it may reduce purchasing power, limiting spending on essentials, a recent report by Fitch Solutions states. The report titled ‘Elevated Inflation Will Weigh on Consumer Spending’ predicts real household spending to grow by 3.6 percent in 2022, a slight deceleration from the estimated 3.7 percent growth in 2021.

“The Ukraine-Russia conflict has significantly impacted the global supply prices of key commodities, such as oil and gas, fertiliser, wheat, corn and barley. The commodity price increases are already feeding through into higher consumer prices and will continue to over the year,” the report noted.

Rising consumer prices have the potential to erode purchasing power and inhibit discretionary spending.

Gasoline Prices Are Set to Spike This Week – OIR 240522

 The combination of physical tightness and robust demand is keeping oil prices near the $110 mark. This week, gasoline prices are likely to garner plenty of attention as inventories continue to drop and US drivers gear up for Memorial Day weekend travel. Source Tom Kool of Oilprice Read More

 

BoE Climate Stress Test Finds Impact Will Fall on Bank Customers

Banks and insurers are likely to be able to withstand the impact of climate change, in many cases by making their customers bear the costs, the Bank of England found in its first climate stress test. Source Central Banking Read More

 

Agusto & Co: Nigeria’s Debt Rose Steeply by 226% to N39.56trn in 7 years

In a report, analysts at Agusto & Co. summed Nigeria’s debt burden since the beginning of President Muhammadu Buhari’s administration to have risen by 226 per cent to N39.56 trillion as at December 2021, a massive leap from N12.5 trillion in June 2015. Source THISDAYLIVE Read More

 

SEC: We’ll Intensify Efforts on Identity Management for Capital Market

The Securities and Exchange Commission (SEC) says the identity management system currently being developed by the capital market will tackle the lingering identification issues. Source TheCable Read More

 

NIBSS e-Banking Transactions Declined in April

Electronic transactions through the use of Point-of-Sale terminals (POS) electronic bills payment platform as well as funds transfers through the Nigeria Inter Bank Settlement System (NIBSS) Instant Payment channel reduced in April compared to March this year. Source THISDAYLIVE Read More

 

Fed Govt Okays Tax Reliefs, Other Incentives for Tech Startups

The approval was given by the Federal Executive Council (FEC) to further harness the country’s digital innovation and entrepreneurship ecosystem, during its meeting following the presentation of a memo by the Minister of Communications and Digital Economy, Prof Isa Pantami. Source The Nation Read More

 

MTN, Google, Microsoft Empower MSMEs With Digital Skills

MTN Foundation, Google and Microsoft have partnered to empower 3000 young entrepreneurs of between 18 and 35 who own or manage a Micro, Small, and Medium Enterprise (MSME) for at least two years. Source The Nation Read More