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IMF raises alarm over rising inflation

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The International Monetary Fund, IMF, has raised alarm over the negative effects of high inflation on consumption of goods and services in the country, even as it downgraded its economic growth forecast for Nigeria to 2.9 percent from 3.3 percent.

However, the Fund also projected that the recent reforms by the Federal Government, namely, fuel subsidy removal and elimination of multiple exchange rates will lead to a stronger and more inclusive economic growth in the country, while calling for more interest rate hike to tame inflation.

The latest forecasts were contained in the IMF’s World Economic Outlook report, October 2023 released on the sidelines of the ongoing World Bank/IMF Annual Meetings in Marrakesh, Morocco.

The new forecast for Nigeria’s economic growth is 0.3 percentage point lower than the 3.2 per cent projected by the IMF in July. It is also 0.85 percentage points lower than the 3.75 per cent economic growth rate projected by the Federal Government in the 2023 budget.

Similarly, the IMF has reduced its economic growth forecast for sub-Saharan Africa to 3.3 per cent in 2023, down from the 3.3 per cent forecast made in July. But the IMF retained its growth forecast for the global economy at 3.0 percent.

“The global economy is limping along, not sprinting. According to our latest projections, world economic growth will slow from 3.5 percent in 2022 to 3 percent this year and 2.9 percent next year, a 0.1 percentage point downgrade for 2024 from July. This remains well below the historical average”, the IMF said.

Forecast for SSA, Nigeria

In its forecast for SSA and Nigeria, the IMF said: “In sub-Saharan Africa, growth is projected to decline to 3.3 percent in 2023 before picking up to 4.0 percent in 2024, with 0.2 percentage point and 0.1 percentage point downward revisions for 2023 and 2024, respectively, and with growth remaining below the historical average of 4.8 percent. The projected decline reflects, in a number of cases, worsening weather shocks, the global slowdown, and domestic supply issues.

In South Africa, growth is expected to decline from 1.9 percent in 2022 to 0.9 percent in 2023, with the decline reflecting power shortages, although with a 0.6 percentage point upward revision thanks to the intensity of power shortages in the second quarter of 2023 being lower than expected.

Head, World Economic Studies Division, IMF, Daniel Leigh stated this while speaking at a press briefing on the October WEO at the sidelines of the ongoing World Bank/IMF Annual Meetings in Marrakesh, Morocco.

He said: “For Nigeria in particular we have a growth forecast that goes from 3.3 per cent this year to 2.9 percent next year before going up to 3.1 in 2024 there is a downward revision for this year, partly this is because of the demonetization, the high inflation, the shocks to agriculture and hydrocarbon output. That is coming on top of all those external headwinds.

“Reduce fiscal deficit by 3% of GDP”, IMF charges Nigeria, others
“We also add that President Tinubu has moved quickly with important reforms including ending the fuel subsidies and unifying the official exchange rates. We welcome these initial bold reforms because we see them as paving the way towards stronger and inclusive growth.”

Calls for further interest rate hikes
Meanwhile, the IMF has called for more interest rate hikes in Nigeria and other countries to curb continuous rise in inflation.

Making the call in a special report, titled, “In pursuit of stronger growth and resilience”, the IMF noted that high inflation rate is the most immediate risk to economic growth in the African continent, the IMF called for further monetary tightening (interest rate hike) in Nigeria and other countries still experiencing high inflation rate.

In a bid to curb rising inflation rate, the Central Bank of Nigeria, CBN has raised its benchmark interest rate, the Monetary Policy Rate, eight times to 18.75 per cent in July from 11.5 per cent in April last year.

But the inflation rate has continued to rise, reaching 25.8 per cent in August this year, the highest in 10 years.

Consequently, the IMF advised the CBN that further monetary tightening is appropriate in view of persistent rise in the inflation rate.

The IMF said: “In many cases, inflation is still high, public finances are still precarious, and confidence is still subdued. If they were to persist, these elevated imbalances would make the continent much more vulnerable to shocks.

“To ensure a more stable and sustained recovery, it is important that country authorities in Africa guard against any premature monetary policy easing and remain committed to their fiscal consolidation plans.

“Monetary policy efforts should remain tightly focused on price stability. This Is not only a priority to address the continent’s cost-of-living crisis but would also strengthen the credibility of central banks and overall macroeconomic resilience.

“In Africa, as elsewhere, the ability of the authorities to contain inflation amid global shocks owes much to improvements in policy frameworks over the last two decades.

“In many economies, advances in central bank independence, inflation targeting frameworks, exchange rate flexibility, macro prudential regulation, and communication have all played critical roles. However, actions to build on this progress and improved credibility are essential, particularly in light of the test posed by recent inflationary shocks.”

Meanwhile some economy experts have appraised the IMF positions on Nigeria with some level of acceptance.

2.9% is a fair forecast – Olayinka

Speaking to Vanguard on the IMF economic growth forecast and rising inflation, Tajudeen Olayinka, analyst and CEO, Wyoming Capital and Partners, said: “I think 2.9% is a fair forecast of Nigeria’s GDP growth rate by IMF, given current challenges with people’s low purchasing power and supply side’s foreign exchange access constriction. It could take the economy the whole of 2024 to enjoy a semblance of stability, provided the government continues to run a comprehensive adjustment program. The previous regime of President Muhammadu Buhari left a deep hole in the economy.”

GDP may underperform forecast – Adonri

Also speaking, David Adonri, Analyst and Executive Vice Chairman, Highcap Securities Limited, said: “Even with rising inflation, it is unfortunate that Nigeria’s GDP may underperform the earlier forecast. The downgrade by the IMF from 3.3% to 2.9% may cast doubt on the efficacy of current reforms in the short term.

“In reality, exacerbation of inflation due to the reforms will certainly cause initial consumer resistance until the economy adjusts to the new price level. If the reforms are maintained and continue with iron determination, efficiency of markets will take the economy to an efficient level that will enhance growth, especially if fiscal enablers are provided to bridge supply gaps.

“The increased employment of the domestic factors, as long term benefits of the market based reforms, together with fiscal measures can then grow the economy to double digits. IMF review is sound but should not elicit much worry if reforms and fiscal enablers are brought to bear on the economy.”

We seem to agree with the position of IMF – Chiazor
Victor Chiazor, analyst and Head of Research and Investment at FSL Securities Limited, said: “The report by IMF reviewing Nigeria’s GDP growth rate down to 2.9% for 2023 from an initial 3.2% earlier projected for 2023 does not come as a surprise. The report hinged its review on rising inflation and drop in purchasing power of the consumer. Also its review took into consideration weaker oil output and gas production believing that revenues are expected to remain low. We seem to agree with the position of the IMF as we do not see any major rail winds that can drive the Nigerian economy higher for the remaining three months. The government still has a lot of fine tuning to do if it is to report increased output for the Nigerian economy for the year 2024 but as for the current year, we estimate the growth rate to be around three percent.”

The policies are not working- Jolapamo

Speaking on the development, Chairman, Board of Trustee, Nigerian Indigenous Shipping Association, NISA, Isaac Jolapamo, said that the government has done what it should by floating the Naira and removal of subsidy but these policies are working for reasons nobody can give.

Jolapamo said that it is in the time of crisis that some people make money and for that reason, these people will want the crisis to continue.

He said: “The policies are not working and I am sure they will come out with a more workable policy to help the economy grow.

“When you talk about the removal of subsidies and the floating of the Naira, these two policies should have worked to cushion the economic effects on Nigerians but they are not working because Nigeria is a special place.

“Like I said earlier, even when we do something legitimate, we always want to make it illegitimate because it is in chaos that some people thrive and it is very unfortunate and people enjoy doing it.”

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Aviation

DANA Incident :Tukur warns against stripping NCAA’s autonomy

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The Nigerian Government has suspended the operations of Dana Air. The order followed an incident involving a Dana Air plane at Lagos airport

Former Assistant General Secretary of Airline Operators of Nigeria (AON), Alhaji Mohammed Tukur
has warned against the danger of undermining the autonomy of the Nigeria Civil Aviation Authority, (NCAA).

Alhaji Tukur in a statement described the the grounding of all the fleet of the DANA by the Minister of Aviation and Aerospace, Barrister Festus Keyamo as a usurpation of the powers of the NCAA.

“The action of the Minister is like putting our civil aviation on a reverse to the era between the late eighties and the early time of the present democratic dispensation when President Obasanjo for no just course ordered the grounding of the entire Chanchangi fleet over Bellview crash.”

He noted that the development was a dangerous signal that must be repealed so that the civil aviation authority would not be relegated to an appendage of the Ministry.

The former AON scribe further described the grounding of DANA, an airline that just scaled through the economic audit of the NCAA as unfortunate stressing that it was also happening at the wake of the authority’s successful safety audit and FAA’s category one.

“It’s ironic for Keyamo who recently complained of high insurance rates and leasing costs faced by the Nigerian operators to come up with such hammer on DANA which gives an impression that our CAA lacks independence and oversight capability”.

Alhaji Tukur further observed that there was likely an aqua plain on the runway because of the rain saying that it was necessary to have waited for the investigators to come up with the plenary report while only the aircraft involved should have been grounded.

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 ‘Multichoice, a scam’ – Nigerians react to new prices for DStv, GOtv

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There has been growing concerns among Nigerians over the recent increase in subscription fees for Multichoice products, specifically

There has been growing concerns among Nigerians over the recent increase in subscription fees for Multichoice products, specifically Gotv and Dstv. Many Nigerians have expressed their dissatisfaction with the company’s decision to raise prices annually, claiming that it is becoming excessive and burdensome for consumers.

Multichoice on Wednesday jacked up the prices of its offerings in Nigeria four months after its last increment. The company reviewed prices in its packages across the board. The new prices will take effect from May 1, 2024.

With the latest price hike, the DStv Premium package increased from N29,500 to N37,000. Similarly, the DStv Compact+ went up from N19,800 to N25,000 while the Compact package increased from N12,500 to N15,700.

The Comfam package moved from N7,400 to N9,300. Yanga package moved up from 4,200 to N5,100 while Padi package increased from N2,950 to N3,600. HDPVR was increased from N4,000 to N5,000, the Access Fees package from N4,000 to N5,000, and XtraView moved from N4,000 to N5,000.

Meanwhile, the Gotv Supa+ package moved from N12,500 to N15,700, Supa package from N7,600 to N9,600, and Max package from N5,700 to N7,200.

While the Jolli package was jacked up from N3,950 to N4,850, the Jinja package moved from N2,700 to N3,300, and Smallie package from N1,300 to N1,575.

The company implemented an upward review of prices in December 2023, days after announcing a $72m loss in its financial statement for the third quarter of the year.

Checks on the company’s reviewed price list then showed a 20 per cent per cent hike in the company’s packages across the board.

In April 2023, the broadcasting company also announced an upward review of prices on its DStv and GOtv packages by 17 per cent.

This was confirmed in a text message sent to customers that the new rates will take effect on May 1, 2023.

The pay-tv firm said the price adjustment was due to the rising costs of business operations.

“Please note that from May 1, your monthly subscription (premium) will be N24,500. To retain your old price of N21,000 for up to 12 months ensure you are active by April 30,” the text message reads.

Also, in March 22, MultiChoice increased the prices of its DStv and GOtv packages.

Announcing the increase in a statement, the company said the rising costs of inflation and business operations led to the increment in the prices of the packages.

As a result, there have been calls for the government, represented by the National Assembly leaders, to intervene and possibly even ban the usage of Multichoice products in the country.

The rationale behind this move is to safeguard the interests of Nigerian consumers who are grappling with the escalating cost of living in the country. The situation has led to heightened tensions between the company and its customers, with many calling for a more equitable and transparent pricing model.

Businesses need to respond to the concerns of their customers, particularly in a highly competitive market such as the media and entertainment industry. Multichoice’s current pricing policy has been met with significant resistance from Nigerian consumers, and the company must take proactive steps to address these concerns. Failure to do so may result in a loss of customer loyalty, decreased revenue, and reputational damage.

The PAPERS speaks with some consumers about the latest Multichoice products prices.

A civil engineer, Mr. Albert Ihedioha said: “It is not their fault; our government gave them the audacity to be scamming us deliberately. The government is not doing enough to protect the citizen of this country from scamming company like Multichoice. What stops this company from operating pay-as-you-go?  As for me, I have stopped using my DStv, I will look into anther cable for cheaper rate, enough is enough for DStv.

Another consumer, Mr. Kazzem Olaonipekun who operates lounge business also speaks against the hike and called it ‘scam’.

“This is not acceptable, I want call on the government to checkmate this South African company, we can’t accept this. This is like a daylight robbery and scam, imagine the inflation, look at the price and how they have been consistently doing it for three years. These are the people running down our economy, president Tinubu must intervene to this act with urgency.”

Speaking in the same vein, Mrs. Nkechi Sinat, a bar owner in Owerri said it is over to the Nigeria government to call Multichoice to order.

She said: “The truth of the matter is that those who are supposed to checkmate them have taken bribes, and that is why they feel they can do anyhow in our own country. Can we go to South Africa to do such? The kind of leverages they have here, can we have it there? As for me and my family, no more GOtv or DStv, and I want to confirm to you that I am selling off my dish once the current subscription expires next week.”

Mr. Michael Ighodalo from Belgium questions the manner at which some companies operate in Nigeria which is different from the way they operate in their own countries.

Hear him: “In a democratic country like Nigeria, such nonsense should stop. I think the Senate needs to look into this, especially this time when people are facing hardship, Multichoice is not reasonable at all. Is that the way they behave in their own country? I am calling on every Nigerian to stand up and say NO to MULTICHOICE and its products. They should stop the extortion. We have other products in the country why can’t we patronize them and dump these Multichoice products?”

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NGX: Investors lose N673bn in five hours

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Investors in the Nigerian equities market endured another bearish session on Wednesday as they lost N673 billion at the end of trading.

Investors in the Nigerian equities market endured another bearish session on Wednesday as they lost N673 billion at the end of trading.

This followed the dip in the share value of MTNN, Transcorp Hotel, Oando and FBNH on the trading floor today.

After five hours of trading at the capital market, the equity capitalization decreased to N55.4 trillion from N56.1 trillion posted by the bourse on Tuesday.

Similarly, the All-Share Index (ASI) decreased to 98,121.30 from 99,311.54 achieved by the bourse the previous day.

The market breadth was positive as 20 stocks advanced, 19 declined, while 78 others remained unchanged in 7,907 deals.

Sunu Assurances Nigeria, Neimeth International Pharmaceutical, and The Initiate led other gainers with 10% growth each in share price to close at N1.21, N1.98, and N1.98 from their previous price of N1.10, N1.80, and N1.80 per share.

UPDC, CAP, and McNichol also increased their share prices by 9.90%, 9.90%, and 9.57% respectively.

On the flip side, MTN Nigeria Communications and Transcorp Hotels led other price decliners as they shed 10% each off their share prices to close at N201.60 and N87.93 from their previous N224.00 and N97.70 per share.

Oando, First Bank of Nigeria Holdings (FBNH), and Fidson Healthcare equally shed their share prices by 9.90%, 9.82%, and 9.75% respectively.

On the volume index, Guaranty Trust Holding Company traded 81.407 million shares valued at N2.9 billion in 444 deals followed by Zenith Bank which traded 46.156 million shares worth N1.69 billion in 650 deals.

United Bank for Africa (UBA) traded 41.600 million shares valued at N953.5 million in 717 deals.

On the value index, GTCO recorded the highest value for the day trading stocks worth N2.93 billion in 444 deals followed by Zenith Bank which traded equities worth N1.69 billion in 650 deals.

UBA traded stocks worth N953 million in 717 deals.

Source: RipplesNigeria

 

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FULL LIST: Multichoice hikes DStv, GOtv prices

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Broadcasting company Multichoice has jacked up the prices of its offerings in Nigeria four months after its last increment.

Broadcasting company Multichoice has jacked up the prices of its offerings in Nigeria four months after its last increment.

The company reviewed prices in its packages across the board. The new prices will take effect from May 1, 2024.

With the latest price hike, the DStv Premium package increased from N29,500 to N37,000. Similarly, the DStv Compact+ went up from N19,800 to N25,000 while the Compact package increased from N12,500 to N15,700.

The Comfam package moved from N7,400 to N9,300. Yanga package moved up from 4,200 to N5,100 while Padi package increased from N2,950 to N3,600. HDPVR was increased from N4,000 to N5,000, the Access Fees package from N4,000 to N5,000, and XtraView moved from N4,000 to N5,000.

Meanwhile, the Gotv Supa+ package moved from N12,500 to N15,700, Supa package from N7,600 to N9,600, and Max package from N5,700 to N7,200.

While the Jolli package was jacked up from N3,950 to N4,850, the Jinja package moved from N2,700 to N3,300, and Smallie package from N1,300 to N1,575.

The PAPERS reports that the company implemented an upward review of prices in December 2023, days after announcing a $72m loss in its financial statement for the third quarter of the year.

Checks on the company’s reviewed price list then showed a 20 per cent per cent hike in the company’s packages across the board.

 

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UBA branches sealed over alleged N14.3 million unpaid tax

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The Kaduna Internal Revenue Service, KADIRS, on Wednesday sealed the United Bank for Africa branches in the state metropolis over

The Kaduna Internal Revenue Service, KADIRS, on Wednesday sealed the United Bank for Africa branches in the state metropolis over alleged N14.3million unpaid tax.

Speaking to newsmen after the excercise, Aysha Ahmad, the KADIRS Board Secretary/Legal Adviser, said the enforcement was to ensure tax compliance in the whole state in respect of withholding taxes and money agents.

“We sent so many demand notices to them. We have asked them to pay the money but they refused, we are left with no other option but to enforce,” she said.

Mrs Ahmad added that the service wants voluntary compliance of tax payment, while lamenting that the defaulter had been recalcitrant.

She, however, said when the defaulters pay, the service would unseal the premises.

Speaking further, the board secretary said the the enforcement was part of a rocess to achieve the N120billion revenue target set by the Kaduna state government.

“To achieve a target, there is always a starting point. Sealing UBA branches in the state for tax default is our start. We are also going after all other defaulters to get what is due for the state government.

“We served them with demand notices . We have been communicating with their consultant and Headquarters. Infact, they even took us to court and the outcome was like a win-win situation at the tax appeal tribunal.

“The court gave us directives to review our assessment which we did and they did not still comply. It is on the reviewed assessment we are enforcing this morning,” she said.

Mrs Ahmad called on the people of the state to ensure voluntary tax compliance, describing it as a civic responsibility.

NAN

 

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MTN records highest number of subscribers porting to other networks

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Telecommunications giant, MTN, has recorded the highest number of subscribers porting out of its network since inception to December 2022.

Telecommunications giant, MTN, has recorded the highest number of subscribers porting out of its network since inception to December 2022.

This is according to the Nigerian Communications Commission in its newly published 2022 Subscriber/Network Data Annual Report.

The report represents the analysis of the Subscriber and Service Data – Porting Trend in Nigeria, from May 2013 to December 2022.

The analysis revealed that of the four major GSM operators in the country, 444,226 subscribers ported out of MTN to other network providers, as against Airtel, Glo and EMTS that respectively recorded 351,422; 277,527; and 190,724 customers porting out.

The analysis also revealed that EMTS recorded 676,944 port-ins, representing the highest number of subscribers porting into its network, followed by AIRTEL with 331,837; MTN with 181,301; and Glo with 105,746 port-ins.

A segment of the report titled, ‘C. subscriber & service data – porting trend in Nigeria as at December 2022’, highlighted the number of GSM porting activities across the four major network providers in the country.

It read, “Table 14 below shows the trend of Nigeria’s porting activities from inception (May, 2013 to December, 2022) for the four (4) major GSM Operators. The analysis illustrates that EMTS had the highest count of Port-in subscribers [676,944] while Airtel, MTN and Glo respectively recorded the following counts of port-in as follows [331,837]; [181,301] & [105,746].”

“Similarly, our analysis from May, 2013 to December, 2022, reveals that MTN had the highest number of subscribers that ported-out [444,226] to other networks while Airtel, Glo & EMTS are as follows [351,422]; [277,527] & [190,742] respectively.”

 

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