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CBN prepares for recession, reduces benchmark lending rate to 11.5%

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images 59 2 CBN prepares for recession, reduces benchmark lending rate to 11.5%

The Central Bank of Nigeria on Tuesday reduced the Monetary Policy Rate by 100 basis points from 12. 5 per cent to 11 . 5 per cent after its two- day Monetary Policy Committee meeting in Abuja.
The 10 members of the committee who were in attendance voted to retain the Cash Reserve Ratio and Liquidity Ratio at 27 .5 per cent and 30 per cent respectively .
The MPC adjusted the asymmetric corridor from +200 /- 500 basis points to +100 /- 700 basis points around the MPR .
The Central Bank Governor , Godwin Emefiele , disclosed these while presenting the communiqué after the meeting.
He said , “ At present , fiscal policy is constrained and so cannot , on its own, lift the economy out of contraction or recession given the paucity of funds arising from weak revenue base , current low crude oil prices , lack of fiscal buffers and high burden of debt services . ”
He said the committee expressed deep concern on the continued uptick in inflation for the twelfth consecutive month as headline inflation ( year – on – year ) rose to 13 . 22 per cent in August from 12 .82 per cent in July 2020.
“ The increase in headline inflation was largely driven by the persistent increase in the food component, which rose to 16 per cent in August 2020 from 15 .48 per cent in July 2020, ” he said .
Emefiele said the committee stressed the urgent need for a combination of broad – based monetary and fiscal policy measures to curb the rise in inflation and contraction in output growth .
Explaining further , he said , “ In the light of this , reducing MPR will signal to the Deposit Money Banks to lend more to stimulate growth , increase aggregate supply , which should dampen prices in the immediate term .”
Emefiele said , “ The MPC was, at this meeting , confronted by policy dilemma .
“ Whereas MPC believes in the primacy of its price and monetary stability mandate, it nevertheless was confronted with what policy direction to focus on, given the contraction in output growth during the second quarter of 2020, which may lead to a recession, if the third quarter of 2020 output growth numbers further show a contraction .
“ It is , therefore , of the view that , if a recession occurs in Q3 , the committee would be confronted with proposing policy options in a period of stagflation . ”
“ The committee also noted the rising public debt profile and urged the fiscal authority to strengthen its debt management strategy , explore other sources of revenue , as well as enhance efficiency in public expenditure ,” he added.
Financial experts, however, differ on the reduction in the MPR .
The Director – General , Lagos Chamber of Commerce and Industry , Dr Muda Yusuf , said , “ The adjustment of the MPR by 100 basis points from 12 .5 per cent to 11. 5 per cent by the MPC was a surprise .
“ My expectation was that the status quo would be maintained.
“ Rates were already generally low in the money market . In fact , concerns were being expressed about the fact the real savings and deposits rate were negative.
“ But , I do not believe it would have any material impact on lending rates .”
A former President , Association of National Accountants of Nigeria , Dr Sam Nzekwe , praised the CBN for the reduction in the lending rate.
He said , “ That is a good development and it shows they are beginning to listen to what we are saying because some of us have always said the interest rates should come down. ”
Professor of capital market , Nasarawa State University , Prof . Uche Uwaleke , said , “ I expected the MPC to maintain the status quo , to hold the rates because of the spike in inflation that we witnessed last month .”
He added that the inflationary pressure and the pump price of fuel which was recently increased would exert more pressure on inflation .

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Jakys berths 5,000 containers at terminal to ease Apapa gridlock

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images 78 1 Jakys berths 5,000 containers at terminal to ease Apapa gridlock

As part of efforts to reduce Apapa gridlock, Jakys Nigeria Limited has berthed 5,000 containers on a 32,000 square meters throuput terminal at Ijegun area of Satellite Town Lagos. Apart from decongesting the Lagos Ports, importers and exporters can now get their goods faster, instead of having them stay a day more and paying huge demurrage.

Already, the terminal is 90 per cent completed, and has commenced test running about eight months ago. Also, it has gradually started taking away the pressure from the ever busy Lagos port roads and bridges

The terminal is accessed by barges from any of the port terminals, while trucks come in through the roads to evacuate the containers around Satellite Town, Lagos.

The Managing Director and Chief Executive of Jakys Nigeria Limited, Sir Henry Muogho while conducting officials of Nigerian Ports Authority (NPA) on an inspection of the facility in Lagos last week, said 23,000 square meters of the terminal is already being utilised by barges, transferring loaded containers and taking off empty containers.

He told journalists that the terminal was leased to Mediterranean Shipping Company (MSC Shipping) and its logistics arm; Medlog for 5 years.

According to him, the terminal is a throughput terminal dedicated for only MSC containers, adding that no third party containers are allowed to come into the terminal.

He added: “Here is going to be like a throuput jetty, no third party containers are allowed to come in here, as you can see, it is only MSC containers that we have here, this means there is also a call up system for trucks to come in here.

“We have an MoU with the community that made us to build the roads, this was part of the lease agreement with MSC and Medlog.Trucks that are coming here would not be parking on the road, therefore, the nuisance value that we have at other ports and terminals, I don’t want to import them here. I also do not want to put the residents into confusion, that is why we say that there must be a call up system for trucks coming into the terminals, they come in numbers, when they are going back they go in tens.”

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Lekki Deep Sea Port: Work commences on 680m quay wall construction

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images 76 1 Lekki Deep Sea Port: Work commences on 680m quay wall construction

Lekki Port LFTZ Enterprise Limited (Lekki Port), the developer of the Lekki Deep Sea Port currently under construction at the Lagos Free Zone, Ibeju Lekki, has commenced construction of the 680meter long quay wall with the driving of the first pile.

Speaking at the flag-off ceremony held at the project site, the Chief Executive Officer of Lekki Port, Mr Ruogang Du, said that the commencement of piling of quay wall, which is a major phase of the construction, symbolises a significant step towards the timely delivery of the project.

He said despite the setback occasioned by the coronavirus pandemic, both the investors and the contractors have demonstrated admirable commitment to deliver the project as and when due, with construction now at full steam.

“Thank you very much for coming today to witness this solid step in delivering the Lekki Port. As we all know, the epidemic has harmed global economic development and personnel mobility everywhere. However, developers and investors in Lekki Port have not stopped moving forward. We are actively resuming construction and are striving to fulfil our commitment to officially open the port for operations in the first half of 2023. This is a commitment to Lagos and a commitment to Nigeria, and we will do our best to achieve it”, he said.

Also speaking, the Board Chairman, Lekki Port, Mr Biodun Dabiri, lauded the invaluable roles played by the project promoters and stakeholders including Tolaram, China Harbour Engineering Company, Lagos State Government, host communities and the Federal Government through the Nigerian Ports Authority.

He explained that the completion of the port would greatly assist in accommodating the rapid expansion of trade currently being witnessed across the West African region. “I want to thank all our shareholders for all the support and energy you have put into this project. I keep saying that it is an iconic project. From all indications, we are building history here. Some of the piles we are doing today will last for more than 100 years. With all the support from everyone that is here, I believe the port will be safely delivered on time”, Dabiri added.

The Chief Technical Officer, Lekki Port, Mr Steven Heukelom, explained that the construction of the quay wall marks a major milestone from a technical perspective, as it is what will ensure that the port is capable of handling multiple container vessels of various sizes at the same time.

Heukelom disclosed that during the Phase 1 of the project, the quay wall will be  680m long and can berth 2 Container Vessels each of up to 18,000 TEUs.

Continuing, he stated “that there will be a total of 857 steel piles on the Combi wall. The Container Terminal will be equipped with 7 Ship to Shore Cranes, 21 RTGs, and other modern rolling terminal equipment. The Combi Wall will have a diameter of 1.15m – 2.3m, a thickness of 23mm and between 28 – 41m deep”.

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Emirates Airlines boosts anti-trafficking initiative

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images 75 1 Emirates Airlines boosts anti-trafficking initiative

Emirates Airlines has lent its support to an anti- human trafficking inIitiative called ‘It’s a Penalty’, by airing the ‘What is Human Trafficking?’ film on all its ‘ice’ in-flight entertainment system throughout October.

Launched in collaboration with actor Liam Neeson, the film creates awareness about human trafficking so that suspected cases can be identified and reported, thereby protecting and preventing those at risk from becoming victims.

The airline said with the airing of the film its ‘ice’ inflight entertainment system on all flights from October, it hopes to shine a light on this global problem and help more people understand what human trafficking is. 

“Nigerian travellers can watch this film while on board. As one of the world’s largest connector of people and places, Emirates is committed to play its part to help stem this crime against humanity.

“Human trafficking involves the movement of persons within a country or across borders into conditions of exploitation against their will by means of force, threats, abduction, or deception. In 2017, the International Labour Organisation (ILO) estimated that there were 24.9 million people trafficked globally (equivalent to the population of Australia), of which 75per cent are women and children.

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