Tag Archives: Attract

Tight Monetary Policy Will Help Stabilise Naira, Attract Foreign Investors- World Bank

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The World Bank has sanctioned Nigeria’s tight monetary policy environment, saying it would help stabilise the naira, strengthen real interest rates, and encourage a return of international investment in the economy.

The Bank also stated that Nigeria’s exchange rate adjustment which was effected in June this year, coupled with the modest improvement in oil prices would help boost the country’s oil revenues in naira terms.

This, in turn, should enable the federal and state governments to meet their financial obligations, including the clearance of salary arrears, and help boost demand, the multilateral donor institution added.

The World Bank stated this in its latest ‘Africa’s Pulse”, the Bank’s twice-yearly analysis of issues shaping Africa’s economic future, for October 2016, which was released yesterday.
The Central Bank of Nigeria (CBN) ditched its 16-month-old peg on the naira in June and introduced a flexible exchange rate regime to allow the currency to trade freely on the interbank market.

But perennial dollar shortage in the economy appear to have frustrated the objective of the central bank as the gap between the interbank FX market and the parallel market has continued to widen.

For instance, while the spot rate of the naira on the interbank FX market closed at N305.31 to the dollar, the naira hit an all-time low of N480 to the dollar on the parallel market yesterday, compared with the N460 to the dollar from the previous day.
The CBN at its Monetary Policy Committee (MPC) a fortnight ago, maintained the benchmark Monetary Policy Rate (MPR) at 14 per cent.

Endorsing the tightening stance adopted by the CBN, the World Bank in the report stated that although the Nigerian economy was facing some challenges, “the economy is expected to rebound moderately in 2017 as the long-delayed expansionary budget begins to be implemented, oil prices stabilise, and oil production increases”.

Read More: thisdaylive

Fashola Renders Explanation For Tariff Hike

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The Minister of Power, Works and Housing, Mr Babatunde Fashola, says the new electrify tariff is the first major decision that will attract needed investment in the sector.

Fashola’s comment in Lagos on Monday came just as the Nigeria Labour Congress the Trade Union Congress and their allies held nationwide protest against the tariff hike of 45 per cent.

“The question on the lips of everybody is; why can’t we have power first before we pay?

“I wish we could do that, but if they understood that power business is funded from finance from banks. So, no bank is going to lend money to you if you can’t show a recovery price.

“That is the reason we can’t have power first before tariff. It has to be produced before we have it and it has to be paid for.

“The supplier of gas is not going to supply unless he sees his cash,” the Minister explained.

On the protest by the unions, Mr Fashola urged them not to start a new fight, saying “we don’t need one”.

“In any event, there are part of the employee of all these DISCOs and GENCOs that are still working, so let’s get to productivity. Let’s stop fighting (and) let’s produce.”

On the level of electricity supply which the unions are insisting must improve before a new tariff is issued, the Minister said that the capacity Nigeria had in January had never been reached before.

“In the last week of January, we recorded all time high generation of 5,000mw. Nigeria has never reached that level of generation (and) we need a lot more.

“But even with that 5,000mw, there is a lot of service work that needs to go on so that people can access the power.

“So not paying for power, you are disrupting the system; diverting lines, you are disrupting the system; vandalising pipes, you are disrupting the system, you are cheating the system, it is part of anti-corruption (and) everybody must pay for what he uses.”

Credit: ChannelsTv