14 Jun

Daily Watch – States to receive another bailout, Property market tanks

  • The FG has commenced plans to bail states out of economic crisis — for the second time since President Muhammadu Buhari took office last year. The ministry of finance, in a statement, said the second bailout will be based on a few conditions that must be met by the states. It stated that to receive the bailouts, states must first fulfil the conditions in the fiscal sustainability plan. Some of the conditions to be met by the states are publishing of audited financial statements and budgets, and inclusion of biometric and BVN payroll review to weed ghost workers while limiting recurrent expenditure. The states are expected to establish efficiency units to reduce overhead costs, privatise state-owned enterprises, domesticate fiscal responsibility act, and limit further bank loans.
  • The Vanguard is reporting that banks deposited ₦613 billion in idle funds with the CBN last week, indicating apathy for lending to each other in the interbank market. This is a 23 percent rise from ₦498 billion the previous week. Meanwhile, the CBN lending to banks, through its Standing Lending Facility rose sharply by 97.9 percent to ₦102.89 billion. This, according to Cowry Asset Management Company, indicates that banks with idle funds are unwilling to lend to banks in need of funds. Presently, the CBN pays 7 percent interest rate on deposit from banks, while it charges 14 percent on lending to banks. The interest rate paid by CBN on banks deposit is limited to a maximum of ₦7.5 billion in deposits per day.
  • The newly launched job portal of the FG, N-Power.gov.ng, has recorded over 400,000 successful registrations since it opened for submissions on Sunday, June 12, 2016, the Job Creation Unit in the Presidency says. The Jobs Scheme, known as ‘N-Power’, is one of the five initiatives of the Social Investment Programmes described by President Buhari in his Democracy Day Speech as “by far the most ambitious social protection programme” in Nigeria’s history. Unemployed Nigerians both graduate and non-graduates would be drawn from across the country on state-by-state basis in the final analysis. N-Power is expected to provide employment opportunities for 500,000 graduates as teachers, agriculture extension advisers, healthcare assistants, and civic and adult education instructors in communities across Nigeria. There will also be a pool of 100,000 software developers, hardware service professionals, animators, graphic artists, building services professionals, artisans and others.
  • The Daily Trust has conducted an investigation which shows that the economic downturn is taking its toll on the property market. According to the paper, there are many properties available for sale, but across the country, willing buyers are scarce. A real estate dealer who spoke to the paper connected the lack of buyers with the FG’s anti-corruption crusade. He also said that building completion rates had slowed because of a lack of finance, and lay-offs. This downturn in the property market, according to the paper, is also affecting rent paying tenants as many are seeking ways to reduce the amounts they have to pay in rent.