23 Mar

Daily Watch – CBN reverses some actions, Nigeria to ban imports of ‘unhealthy foods’

  • In a reversal of actions from just four months ago, the CBN has unexpectedly tightened monetary policy. The CBN raised the benchmark rate (MPR) by a percentage point to 12 percent, amid worries that rising inflation pressures from a weaker naira and excess liquidity will spread more broadly in the economy. The cash reserve ratio was also increased to 22.5 percent. The CBN had in November 2015 eased MPR from 13 to 11 per cent to reflate the economy and boost critical growth sectors, but is now concerned that such previous efforts did not elicit the required response from the Deposit Money Banks which rather preferred to keep the monies in their vaults or at best advance loans to government, hence the surfeit of liquidity in the interbank market. This comes as banking sector Non Performing Loans have almost reached the 5 percent threshold as the economy continues to slow, making it practically difficult for debtors to repay their loans. The naira plunged to as low as N325 per dollar in the parallel market since the last policy meeting in January, which has led to elevated inflation expectations. Inflation rose by 11.4 percent in February on an annualised basis from 9.6 percent in January, well above the CBN’s targeted band of 6 to 9 percent, which may have triggered the move to hike after beginning an easing cycle. The liquidity surge from that monetary easing however failed to stimulate the economy, as banks shunned new lending.
  • The EFCC has arraigned the former NIMASA boss, Patrick Akpobolokemi, and eight others over an alleged N35 billion fraud. The arraignment had been continuously stalled due to the inability of the EFCC to arrest Government “Tompolo” Ekpemupolo. At the last court sitting, last month, Festus Keyamo, counsel to the EFCC, requested an adjournment to enable him separate the charges‎, leaving out Mr. Ekpemupolo who would face a separate charge when arrested. In the new charge, Mr. Akpobolokemi, Global West Vessel Ltd, Odimiri Electrical Ltd, Kime Engozu, Boloboere Property and Estate Ltd, Rex Elem, Destre Consult Ltd, Gregory Mbonu, and Captain Warredi Enisuoh‎ are accused of conspiracy to commit the fraud between 2012 and 2015. All the defendants pleaded not guilty.
  • Nigerian will decide on a ban of “food items which put the health of citizens at risk and discourage local production and sufficiency.” The Minister of Agriculture Mr Audu Ogbe, said that a decision would be made today on the importation of tomato paste and other products which he said had been certified unfit for consumption by the United Nations and NAFDAC. Ogbeh stressed that increasing cases of cancer, kidney failure and other chronic ailments among Nigerians were reasons enough to check the selfish interest of international partners and their local collaborators causing health risks in Nigeria.