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Inflation rises by 0.07% to 12.20%

The National Bureau of Statistics (NBS), says inflation rate in February 2020 increased by 0.07 per cent to 12.20 per cent from 12.13 per cent recorded in January.

It said this in its “Consumer Price Index (CPI), February 2020” report released on Tuesday in Abuja.

It added that CPI, which measures inflation increased by 12.20 per cent (year-on-year) in February 2020.

“Increases were recorded in all COICOP divisions that yielded the headline index.

“On month-on-month basis, the headline index increased by 0.79 per cent in February 2020, which is 0.08 per cent rate lower than the rate recorded in January (0.87) per cent.’’

The NBS said that the percentage change in the average composite CPI for the twelve months period ending February 2020 over the average of the CPI for the previous twelve months period was 11.54 per cent.

This, it said shows 0.08 per cent point from 11.46 per cent recorded in January.

It also said that the urban inflation rate increased by 12.85 per cent (year-on-year) in February from 12.78 per cent recorded in January.

The report added that the rural inflation rate increased by 11.61 per cent in February from 11.54 per cent in January.

According to the report, on a month-on-month basis, the urban index rose by 0.82 per cent in February, up by 0.10 from 0.92 per cent recorded in January.

The rural index also rose by 0.76 per cent in February, down by 0.07 from the rate recorded in January (0.83) per cent.

It said that the corresponding twelve-month year-on-year average percentage change for the urban index was 12.03 per cent in February.

“This is higher than 11.92 per cent reported in January, while the corresponding rural inflation rate in February is 11.09 per cent compared to 11.04 per cent recorded in January.’’

The NBS said that composite food index rose by 14.90 per cent in February compared to 14.85 per cent in January.

“This rise in the food index was caused by increases in prices of bread and cereals, fish, meat, vegetables, oils and fats.

“On month-on-month basis, the food sub-index increased by 0.87 per cent in February, down by 0.12 per cent points from 0.99 per cent recorded in January.’’

The bureau said “all items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 9.43 per cent in February, up by 0.08 per cent when compared with 9.35 per cent recorded in January.

“On month-on-month basis, the core sub-index increased by 0.73 per cent in February.

“This was down by 0.09 per cent when compared with 0.82 per cent recorded in January.

“The highest increases were recorded in prices of pharmaceutical products, non-durable household goods, catering services, passenger transport by air, and repair of furniture.

“Others are maintenance and repair of personal transport equipment, water supply, carpet and other floor coverings, major household appliances, dental services, hospital services and vehicle spare parts.’’

For states profile, the NBS said that in February, food inflation on a year-on-year basis was highest in Sokoto at 17.12 per cent, Plateau 16.99 per cent and Gombe 16.96 per cent

It added that Nasarawa was put at 13.50 per cent, while Bauchi and Katsina had 13.04 per cent and Bayelsa at 11.89 per cent recorded the slowest rise.

“On month-on-month basis however, February food inflation was highest in Benue 2.38 per cent, Osun 2.36 per cent and Rivers 1.77 per cent.

“Abuja, Anambra, Bauchi, Bayelsa, Katsina, Kebbi, Nasarawa, Ogun and Ondo states all recorded price deflation or negative inflation (general decrease in the general price level of food or a negative food inflation rate).’’

CPI measures the average change over time in prices of goods and services consumed by people for day-to-day living.

COVID-19: Outlook for global economy bleak

The Lagos Chamber of Commerce and Industry (LCCI) says the outlook for global economy appeared bleak, going by  the effects of the ongoing COVID-19 pandemic.

The LCCI’s  President, Mrs Toki Mabogunje, made the assertion at the LCCI’s Forum on Impact of Coronavirus on Nigerian Economy, in Lagos.

Mobogunje, represented by the Deputy Vice President of  LCCI, Mr Michael Olawale-Cole,  said that the COVID-19 outbreak which had dealt a severe blow to the global economy, if not curtailed, could result to global economic recession.

According to her, the disease has disrupted and is still disrupting businesses, economic and financial activities across the globe.

She commended the efforts of both the federal and the Lagos State governments at curtailing the spread of the virus.

“The COVID-19 outbreak has seen businesses shutting down operations, factories closing, schools on recess and conferences, sporting events, concerts and business meetings have all been suspended.

“Also, global equities and commodities markets have been severely affected.

“Oil prices have been hit hard due to drastic cut in global oil consumption, compounded by the ongoing price war between Saudi  Arabia and Russia.

“So far, on the confirmed case of the virus in Nigeria, the efforts of the federal government and the Lagos State government to curtail the spread of the disease is highly commendable,” she said.

Speaking at the event, Dr Ayo Teriba, Chief Executive Officer, Economic Associates, faulted the intervention measures by the Central Bank of Nigeria (CBN) to cushion the effect of COVID-19 on the Nigerian economy.

The governor of CBN, Mr Godwin Emefiele, had announced a further moratorium of one year on all principal repayments on the bank’s intervention facilities and interest rate reduction on such facilities from nine per cent to five  per cent for one year, effective March 1.

Teriba said that a system-wide intervention that ensured rates across board were reduced would have been a better option.

“It is not right to cut rates for only companies with direct link and dealings with the apex bank.

“A regulator is meant to protect the whole system and not just his own books,” he said.

The renowned economist stated that the current situation with the nation’s foreign reserve had left the country’s economy vulnerable due to oil prices volatility resulting from the pandemic.

He said that the current health challenges, with its political, economic, social and health effects, though temporary, may have permanent consequences, should the timeline of the pandemic be prolonged.

According to him, the duration of the adverse social and economic effects for Nigeria is dependent on how long the world can bring the pandemic sufficiently under control, for the restrictions of movement and public gathering to be lifted.

“The absence of vaccine, which has led to low oil prices that has threatened to derail the budget, devalue the Naira may end in recession.

“Temporary problems may have permanent consequences if they lead to bankruptcy, loss of jobs and wealth,” he said.

Also, Mr Ajibola Olomola, Partner, Tax, Regulatory & People Services, KPMG, in his remarks, encouraged more private sector investment in the area of health, to help curtail the spread of the pandemic.

He also called for increased investment in technology to optimise existing business processes.

“Due to the outbreak, many brick-and-mortar retail businesses, shopping malls and department stores have taken a considerable hit in China.

“On the other hand, emerging community shops and online shops are increasing their trading volume and attracting a mass of new customers.

“Companies should also experiment on the possibility of large-scale remote working conditions for employees and its impact of productivity,” he said.

The Commissioner for Health, Lagos State, Prof. Akinola Abayomi, who was represented by Dr Soji Ologun, said that the health, social and economic impact of recorded cases have been rapidly curtailed.

He sought the support of the Organised Private Sector (OPS) to beef up surveillance at the air, sea and land borders.

Nigeria inaugurates committee on fiscal sustainability

Mrs Zainab Ahmed, Minister of Finance, Budget and National Planning, has inaugurated a 17-member National Steering Committee for the States Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme-For-Results.

The minister inaugurated the committee in Abuja, charging members to consider the assignment as a call to national duty and ensure results were achieved within specified timelines.

Giving a history of the programme, Ahmed said it was introduced by the Federal Government in 2017 in collaboration with the World Bank to strengthen fiscal transparency, accountability and sustainability in the states.

“It is financed with the loan of 750 million dollars from the World Bank to support the states through the provision of performance-based grants for which 700 million dollars has been earmarked.

“The balance of 50 million dollars is for financing of technical assistance to enable the states achieve specified Disbursement Linked Indicators (DLIs) toward qualification for the grants.”

According to her, the DLIs are derived from the already established 22-point Fiscal Sustainability Plan (FSP) by the Federal Government and the Open Government Partnership (OGP) commitments.

She said it was aimed at strengthening the desired fiscal reforms at the sub-national levels, while participation in the programme was open to all states including the Federal Capital Territory (FCT).

Ahmed said that the committee’s responsibility was to review the status of disbursements to states and review the progress in the implementation of the programme.

It would also review the status of delivery of the capacity building programme across the states by implementing agencies and partners.

Mr Aliyu Ahmed, Permanent Secretary, Special Duties at the ministry, said that strengthened fiscal transparency would help build trust in government and enhance the monitoring of fiscal risks.

He added that it would also facilitate accountability in public resource management.

“In the same vein, a stronger accountability will significantly reduce the opportunities and incentive for corruption and abuse of public resources, thereby increasing the efficiency of public expenditures.”

Ahmed added that the level of achievement of the DLIs by a state determines the amount of grant to be disbursed to it.

Miss Yue Man Lee, Team Leader of SFTAS from the World Bank said it was the organisation’s largest state level programme, covering all 36 states.

She said that apart from benefitting and supporting the states, it was aimed at strengthening federal and states fiscal policy coordination.

Lee added that it would hopefully help to reduce the fiscal risks in difficult economic times by supporting states to implement the FSP.

“We hope that the states will take the opportunity through SFTAS to really strengthen their Public Finance Management (PFM) systems so that they will be self sustained beyond SFTAS.

“SFTAS has built on several projects that the bank has done at the state levels that provided the foundation for us to do a programme focused on results.

“We hope that SFTAS will serve as a model for future world bank engagements to the states.”

According to Lee, for the first year of the programme, 24 states met their eligibility criteria and participated in the programme.

She added that based on preliminary assessments, in the second year of the programme, 33 states would be participating.

The SFTAS team leader, however, said that the committee had a critical role in ensuring the success of the programme by providing strategic guidance and oversight.

“This should start with looking at the successes and learnings from the first annual performance assessment of the states by the Office of the Auditor-General as the independent verification agent,” she said.

Also speaking, Mr Anthony Ayine, the Auditor-General of the Federation (AuGF), who spoke on behalf of the committee, said fiscal discipline and accountability at the sub-national level was very important for the country.

“For us as the committee, we should look beyond the period of this programme and I want to appeal to the participating states for their cooperation and for us even beyond the programme to institutionalise the concept of the programme.

“If we can go beyond the grants that is to be given as reward for the result and the concept is sustained beyond the programme period, it will be a good thing.”

He, however, assured that the committee would put in everything to ensure the success of the programme.

Mr Mahmoud Isa-Dutse, Permanent Secretary, Ministry of Finance is the chairman of the committee, while members include Ms. Patience Oniha, Director-General, Debt Management Office (DMO) and Mr Yemi Kale, Statistician-General.

Others are Dr Mohammed Tumala, Director, Statistics Department, Central Bank of Nigeria (CBN) and Dr Abdul-Ganiyu Obatoyinbo, Administrator, Public Service Institute among others.