Inflation climbs to 14.23%

The hike in food prices and other individual consumption across the country further increased the rate of inflation in Nigeria to 14. 23 per cent in October.

Figures released by the National Bureau of Statistics on Monday showed that the country ’ s inflation increased again in October , moving up by 0 . 52 per cent when compared to what was recorded in the preceding month.

This came as analysts stated that the continued closure of Nigeria ’ s borders and the persistent hike in petrol price , among others , further worsened the rate of inflation in Nigeria.

The NBS said , “ The Consumer Price Index , which measures inflation increased by 14 . 23 per cent ( year- on – year) in October 2020.

“ This is 0. 52 per cent points higher than the rate recorded in September 2020 (13 . 71 per cent ). ”

It was observed that increases were recorded in all Classification of Individual Consumption by Purpose divisions that yielded the headline index.

On a month- on – month basis , the headline index increased by 1. 54 per cent in October , representing 0. 06 per cent rate higher than the rate recorded in September ( 1. 48 per cent ).

The percentage change in the average composite CPI for the 12 – month period ending October over the average of the CPI for the previous 12 – month period was 12. 66 per cent.

This showed a 0 . 22 per cent point rise from 12 . 44 per cent recorded in September.

The urban inflation rate increased by 14. 81 per cent ( year- on – year) in October from 14 . 31 per cent recorded in September.

Rural inflation rate, on the other hand , increased by 13. 68 per cent in October from 13 . 14 per cent in September.

On a month- on – month basis , the urban index rose by 1. 6 per cent in October , up by 0. 04 from 1. 56 per cent recorded in September.

The rural index also rose by 1. 48 per cent in October 2020 , up by 0. 08 from the rate recorded in September (1 . 40 per cent ).

The corresponding 12 – month year- on – year average percentage change for the urban index was 13 . 29 per cent in October.

This was higher than 13 . 07 per cent reported in September , while the corresponding rural inflation rate in October was 12 . 09 per cent compared to 11 . 86 per cent recorded in September.

A professor of political economy and management expert , Pat Utomi , said Nigeria was in need of investments to rejig economic activities.

He said , “ Typically , what you do to bring down inflation , from the monetary policy point of view , is to reduce the money supply to the economy. However , we desperately need investments to resume economic activity.

“ Already , there is very little money reaching the investor . The investment to jumpstart growth is not taking place .

“ To make money expensive by hiking the interest rate ( which is a natural response to inflation ) will make matters worse . This is because it will discourage investment and we will get a really awkward situation.

“ The Nigerian economy will not grow until we have banks sensitive to development . For too long , banks have been profitable from lending to three or four people in the economy.

“ The banking industry has not supported real growth in the economy. Now, we have a situation where the supply chain has made products unavailable, pushing costs and therefore we have inflationary pressures . ”

Utomi said that the challenge of the moment was to ensure that whatever credit available goes to the productive sector and to crash the cost of governance.

He called for stimulus responses and more investments to create growth , saying Nigeria might go on the path of Venezuela.

The President of the Association of Capital Market Academics of Nigeria , Prof . Uche Uwaleke , stated that the rise in inflation was caused by many factors.

Uwaleke said , “ With the effect of COVID – 19 on the economy still lingering , especially from supply chain disruptions , it is no surprise that headline inflation has continued to rise.

“ This is with the NBS October number coming in at 14 . 23 per cent up from 13. 71 per cent the previous month.

“ Contributory factors include the continuous border closure , the increase in VAT and implementation of stamp duty.

“ The high exchange rate, especially in the parallel market , and the increase in the pump price of fuel also contributed because , according to the NBS, a major cause of core inflation came from increase in transport cost . ”

Uwaleke further noted that the rise in food inflation was worrisome , adding that this was despite the interventions of the Central Bank of Nigeria.

“ Consequently , government should focus on increasing food production by aggressively implementing the massive agricultural programme contained in the Economic Sustainability Plan , ” he said.


Naira plunges to 475 as dollar demand rises

The naira weakened further on Monday , trading at 475 to the United States dollar in the parallel market amid a rise in demand for the greenback.

The local currency , which has come under pressure in recent days , fell to 470 per dollar on Friday from 468 on Thursday . The naira was trading at 462 – 463 at the unofficial market at the start of this month.

In the Investors ’ and Exporters ’ forex window , the naira closed at 386 to a dollar on Monday , compared to 385 . 50 at which it opened , according to data from FMDQ Group.

The CBN has kept the official exchange rate at N 379 /$1 since August , when the naira was devalued for the second time this year from 360 per dollar . It was first devalued to 360 in March from 306.

The forex reserves fell to $ 35 . 60 bn as of November 13 , 2020 from $35 . 69 bn on October 28 , the latest data from the Central Bank of Nigeria showed.

Financial experts said foreign portfolio investment in the country had plummeted , adding that diaspora remittances had also declined significantly.

The MD / CEO , Financial Derivatives Company Limited , Mr Bismarck Rewane , had said earlier this month that the naira would weaken in the parallel market and likely depreciate to 470 – 475 against the dollar in November and December.

He said with oil prices still under pressure again, the supply of forex into the country would be further limited.

He said the resumption in international flights , trading and manufacturing activities will heighten forex demand pressures.

The Deputy Governor , Corporate Services Directorate , CBN Mr Edward Adamu, said the demand pressure in the forex market had remained elevated in the face of declining accretion to external reserves and declining private inflow.

He added that legitimate sources of forex demand , speculation and other frivolous demands had contributed to sustaining pressure on the naira exchange rate.

Bloomberg reported last Friday that the naira had lost all ground it gained after the regulator started weekly interventions , signaling the continuous existence of pent-up demand for the greenback.

The CBN resumed sale to licensed Bureau de Change operators in September after the Federal Government opened up international travel following the lifting of COVID – 19 restrictions .


CBN Accuses #EndSARS Campaigners Of Terrorism

The Federal Government was able to freeze the accounts of 20 #EndSARS campaigners after telling a Federal High Court in Abuja that the funds in their accounts might have been linked to terrorist activities.

This is according to a written address in support of a motion ex parte filed by the Central Bank of Nigeria.

The CBN had in the second week of October frozen 20 accounts and thereafter approached the court to seek an ex parte order to freeze the accounts.

In the case with suit number FHC/ABJ/CS/1384/2020, filed before Justice A. R. Mohammed, the CBN, however, made no mention of the fact that the 20 accounts were owned by persons involved in the #EndSARS protests, but told the court that the funds might have emanated from terrorist activities.

The written address read in part, “My lord, the nature of the transactions undertaken through the defendants’ accounts are of suspected terrorism financing in contravention of Section 13(1)(a)and(b) of the Terrorism (Prevention)(Amendment) Act, 2013 and Regulation 31(2)(a)and (3)(b) of the Central Bank of Nigeria Anti-Money Laundering/Combating the Financing of Terrorism Regulations, 2013.”

In a supporting affidavit deposed to by one Aondowase Jacob on behalf of the CBN, it was stated that the Head of the Economic Intelligence Unit of the Governor’s Department, CBN, Joseph Omayuku, had conducted an investigation on the accounts of the defendants and other individuals and entities held with certain banks in Nigeria.

According to the affidavit, the investigation showed that the owners of the accounts may have been involved in terrorist activities.

It added, “There is a grave allegation that the defendants are involved in suspected terrorism financing via their bank accounts in contravention of the provisions of extant laws and regulations.

“The aforesaid transactions undertaken by the defendants, using their bank accounts, can cause significant economic and security harm to the public and the Federal Republic of Nigeria if left unchecked.

“The applicant (CBN governor) is thus desirous to have the court empower him to direct the freezing of the 20 accounts listed on the annexure to this application and all other bank accounts held by the defendants.

“A freezing order of this honourable court in respect of the defendants’ accounts would also enable the investigation of the activities of the defendants to a logical conclusion with a view to reporting same to the Nigerian Financial Intelligence Unit.”

The apex bank said unless the order was granted, it would not be able to ensure that the money remained intact, while investigations were ongoing.

The 20 accounts frozen by the CBN are domiciled in Access Bank, Guaranty Trust Bank, Fidelity Bank, United Bank for Africa and Zenith Bank.

The accounts were said to have been flagged after they received money with the narration #EndSARS.

One of the frozen accounts, marked 0056412470 and domiciled in Access Bank, belongs to Bolatito Olorunrinu Oduala, an #EndSARS campaigner, who was appointed into the Lagos State judicial panel set up by Governor Babajide Sanwo-Olu.

Another frozen account marked 0033974485 and domiciled in Access Bank belongs to Bassey Israel, the medical team coordinator for the #EndSARS protests in Port Harcourt.

Similarly, an account marked 0054676984 domiciled in Access Bank belongs to Gatefield Nigeria Limited, which paid freelance journalists to cover the protests.

Justice Mohammed froze the accounts for 180 days subject to renewal, but said anyone who was not satisfied with the ruling was free to challenge it.