Business
MAN Tasks CBN On Monetary Policy Failures To Curb Inflation
The Manufacturers Association of Nigeria (MAN) says that the Monetary Policy of the Central Bank of Nigeria (CBN) has failed to curb the rising inflation in the economy.
The Association, therefore, urges the apex bank to think outside the conventional monetary policy framework and take pragmatic steps to quell the inflationary pressure and reposition the economy.
Reacting today, to the CBN’s Monetary Policy Rate (MPR) which raised to 18.5 percent in May 2023 from 18 percent, MAN said : ” This MPR increase is the 7th in a trend and the inflation rate continues to rise despite the increases.
Segun Ajayi-Kadir, its Director-General, said that this is a clear indication that the policy tightening is not effective in curbing the inflationary pressures and more needed to be done.
What Should Be Done?
” It is evident that the continuous and consistent increase in MPR is not yielding the desired growth in the economy.
” The Nigerian economy remains fragile and bedeviled with numerous challenges that inhibit growth. Therefore, the monetary authority needs to pay closer attention to rethink the policy mix, bearing in mind the parlous state of the economy, especially the effect of a high MPR on the manufacturing sector and the economy.
The increase in MPR from 18% to 18.5% will certainly lead to an increase in lending rates and worsen the uncompetitiveness of the manufacturing sector.
The Association has been clamoring for single-digit lending rates to allow manufacturers access needed funds to boost the performance of the sector.
This increase, like the previous ones, is evidence that the CBN is either unperturbed about the plight of the productive sector or is unable to fathom out a more creative policy mix that would reflate the sector.
We are persuaded that monetary authority is oblivious of the fact that the failure of its tightening policy to address the inflationary pressure is because the hike in inflation is largely caused by a combination of familiar challenges, including low output which is attributed to instability of macroeconomic variables, inconsistent and lackluster fiscal policy regime, incoherent industrial policies, challenging and expensive operating environment, exploitative regulation, external shocks and poor exchange rate management.
Therefore, there is a need to address the identified root causes of inflation and refrain from intensifying policy choices that hamper the performance of the real sectors of the economy.
Interrelationship Among Interest Rate, Inflation Rate and Exchange Rate
The movements of interest rate, inflation rate and exchange rate have direct impact on investment, employment and output of any economy.
In the conventional monetary framework that was adopted by the CBN, increase in MPR should increase interest rate and by extension attract financial investment.
However, it will also increase the cost of borrowing, crowd out more investments in the real sector and lower the output of the manufacturing sector, ” said the Director-General.
Business
Governor Otti Commissions Ultimum Manufacturing Plant in Aba
Razzle beverages include Razzl Pamplemousse (a unique and special grapefruit flavour), Razzl Cola, Razzl Orange, and Razzl Lemon.
Ultimum Limited, the manufacturers of Razzl brand of carbonated soft drinks has commissioned its state-of-the-art beverage manufacturing plant in Aba, Abia State.
Razzle beverages include Razzl Pamplemousse (a unique and special grapefruit flavour), Razzl Cola, Razzl Orange, and Razzl Lemon.
Located in the Osisioma Industrial Layout, the new plant was commissioned by the Governor of Abia State, Dr. Alex Chioma Otti.
Otti described the investment as a clear signal of economic revival and growing investor confidence in Abia State.
“This investment confirms that we are creating the right conditions for businesses to grow, thrive, and succeed. Investors will always go where there is clarity, stability, and opportunity.
Our focus has been to build that environment, and today’s commissioning shows that the strategy is working,” he said.
The Chairman of Ultimum Limited and representative of the investor group, Mr. Whalen Kadji, emphasized the company’s long-term commitment to Aba and Nigeria.
“We did not come here by chance. We came because of the energy and entrepreneurial spirit of Aba. This city has always been a center of enterprise, and we believe strongly in its future.
This plant is more than an investment in beverages; it is an investment in people, in jobs, and in the growth of local industry. We are here for the long term, and this is just the beginning of what we intend to build here.”
The Managing Director of Ultimum Limited, Mr. Austin Ufomba, described the plant as a bold step in the company’s journey.
“Ultimum Limited started with a simple idea, to build world-class products right here in Africa,”he said.
Business
Oil price jumps to $106, stocks drop on uncertainty over US-Iran talks
Crude prices rallied more than three percent on Thursday, with Brent crude above $106 per barrel and WTI around $93.
Oil prices jumped and equities slid Thursday as hopes for a peace deal between the US and Iran wavered after Tehran rejected Washington’s bid to wind down the nearly four-week war.
Markets had been buoyed this week by US President Donald Trump’s announcement that strikes targeting Iran’s energy infrastructure would be postponed, adding that the two sides were in peace talks.
But uncertainty over the talks and the virtual closure of the Strait of Hormuz — through which around 20 percent of oil and liquefied natural gas passes — have cast a shadow over market sentiment.
“The market rollercoaster continues,” said Joshua Mahony, chief market analyst at Scope Markets.
Crude prices rallied more than three percent on Thursday, with Brent crude above $106 per barrel and WTI around $93.
( VANGUARD)
Photo: Ambassador Idaere Gogo Ogan
The Niger Delta Chamber of Commerce, Industry, Trade, Mines and Agriculture (NDCCITMA) has unveiled plans to attract up to five billion dollars structured investments to the oil-producing region in five years.
The Chairman of NDCCITMA, Ambassador Idaere Gogo Ogan, made the disclosure at a pre-summit conference ahead of the Niger Delta Economic and Investment Summit in Port Harcourt, Rivers State.
He said that the initiative would catalyse no fewer than 500,000 direct and indirect jobs as well as spur investments and create wealth.
He said the summit with the theme, “Driving Investment, Innovation, and Industrial Growth in the Niger Delta”, slated for Port Harcourt, would deliberate on investment mobilisation, enterprise growth, industrial expansion, and regional coordination.
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