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Nigeria Exits Recession With 0.11% GDP Growth

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BREAKING: Nigeria Exits Recession With 0.11% GDP Growth

Nigeria, on Thursday, February 18, 2021, exited her recession after growing by 0.11 percent in the fourth of last year.

This comes after two consecutive quarters of negative growth which results in a recession.

“Nigeria’s gross domestic product (GDP) grew by 0.11 percent (year-on-year) in real terms in the fourth quarter of 2020, representing the first positive quarterly growth in the last three quarters,” the report from the Nigerian Bureau of Statics (NBS).

“Though weak, the positive growth reflects the gradual return of economic activities following the easing of restricted movements and limited local and international commercial activities in the preceding quarters.

“As a result, while the Q4 2020 growth rate was lower than growth rate recorded the previous year by –2.44 percentage points, it was higher by 3.74 percentage points compared to Q3 2020.

“On a quarter on quarter basis, real GDP growth was 9.68 percent indicating a second positive consecutive quarter on quarter real growth rate in 2020 after two negative quarters.

“Overall, in 2020, the annual growth of real GDP was estimated at –1.92 percent, a decline of –4.20 percentage points when compared to the 2.27 percent recorded in 2019.”

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Business

Osinbajo Kicks Against CBN’s Cryptocurrency Prohibition

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Osinbajo Kicks Against CBN's Cryptocurrency Prohibition

Vice President Yemi Osinbajo, has kicked against the prohibition of cryptocurrency by the Central Bank of Nigeria (CBN).

Osinbajo however said the cryptocurrency sector can be regulated.

Speaking at a CBN Bankers’ Forum, Osinbajo added that sooner than later, blockchain technology generally and cryptocurrencies, in particular, will challenge traditional banking, including reserve banking, in ways that cannot be imagined.

He, therefore, urged the central bank to figure how to regulate the system rather than try to prohibit it.

Osinbajo’s words: “There is need for regulation and not the prohibition of Cryptocurrency. On the very topical issue of blockchain technology, digital assets, and cryptocurrencies let me say two things.

“First is that there is no question that blockchain technology generally and cryptocurrencies, in particular, will in the coming years challenge traditional banking, including reserve banking, in ways that we cannot yet imagine so we need to be prepared for that seismic shift.

“And it may come sooner than later. Already remittance systems are being challenged. Blockchain technology will provide far cheaper options for the kind of fees being paid today for cross-border transfers.

“I am sure you are all aware of the challenge that the traditional SWIFT system is facing from new systems like Ripple which is based on the blockchain distributed ledger technology with its own crypto tokens. There are, of course, a whole range of digital assets spawned…….daily from blockchain technology.

“Decentralized finance, using smart contracts to create financial instruments, in place of central financial intermediaries such as banks or brokerages are set to challenge traditional finance.

“The likes of Nexo finance offer instant loans using cryptocurrency as collateral. Some reserve banks are investigating issuing their own digital currencies. Clearly, the future of money and finance, especially for traditional banking, must be as exciting as it is frightening.

“But as we have seen in many other sectors disruption makes room for efficiency and progress.

“Secondly, I fully appreciate the strong position of the CBN, SEC, and some of the anti-corruption agencies on the possible abuses of cryptocurrencies and their other well-articulated concerns. but I believe that their position should be the subject of further reflection.

“There is a role for regulation here. And it is in the place of both our monetary authorities and SEC to provide a robust regulatory regime that addresses these serious concerns without killing the goose that might lay the golden eggs.

“So, it should be thoughtful and knowledge-based regulation, not prohibition. The point I am making is that some of the exciting developments we see the call for prudence & care in adopting them, but we must act with knowledge and not fear.”

Newsrand had reported a few weeks ago that cryptocurrency is no longer allowed in the country.

Giving a stern warning over transactions relating to cryptocurrency, the CBN, in a memo addressed to Deposit Money Banks (DMBs) Non-Bank Financial Institutions (NBFIs), Other Financial Institutions (OFIs), and members of the public, ordered financial institutions across the country to report persons and entities transacting or operating in cryptocurrency exchanges.

Revealing why cryptocurrency was prohibited, the apex bank said amongst other reasons, digital assets promote illegality and its risks are high.

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Economy

We’re Committed To Buying, Promoting Made In Nigeria vehicles – FG

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We’re Committed To Buying, Promoting Made In Nigeria vehicles – FG
Zainab Ahmed, Minister of Finance

The Federal Government says it is committed to buying made in Nigeria products including locally made vehicles to boost the nation’s manufacturing sector and provide more job opportunities to Nigerians.

The Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed, disclosed this to State House correspondents at the maiden edition of the state House Briefing’, organized by the Presidential Communication Team.

The News Agency of Nigeria (NAN) reports that the briefings which will subsequently involve other cabinet members and some heads and Chief Executive Officers of critical agencies and organizations are meant to showcase the achievements of the Buhari-led administration.

Read Also: Minister To Nigerians: Prepare To Buy Petrol At Higher Price

The minister disclosed that the policy on buying made in Nigeria products would soon be deliberated upon by the Federal Executive Council (FEC) to ensure patronage by federal agencies, institutions and organizations patronize them especially vehicles.

Ahmed said the federal government would also engage State Governments and other relevant stakeholders to encourage them to patronize  Made in Nigeria products.

”So, we will be hoping to have a Federal Executive council approval to compel federal government agencies to buy made in Nigeria vehicles as much as is practicable.

”So, when the security agencies need a security vehicle that is a special design, and you don’t have it in Nigeria, we will still need to buy the ones that are outside.

”We are hoping to also engage the states and encourage them to take similar measures.

”It is important for us because we want to make sure the automotive industry survives and grows.

According to her, the Federal Ministry of Industry, Trade and Investment has just finished a review of automated policy, which has been running for seven years.

”I must say that the policy has not been reviewed before, so this is the first review that is being done and the essence of the review is to see whether it has achieved the designed targets.

”Once the ministry gets its approvals, then the review will be announced and perhaps there will be a refreshing of the measures that are contained in that policy,” the minister added.

On the issue of Chinese loans, Ahmed dismissed the assertion that the country was heavily indebted to China.

She stated that Nigeria’s external debt as of Feb. 25, 2021, was about 31 billion dollars, out of that the loans from China were N3.2 trillion.

The minister maintained that the figure (N3.2trillion) only represented about 10 percent of the total.

”So the first point is to say it is not as large or as huge as it’s being assumed.

”They are also concessional, so there is long term and the pricing is cheap,” she further explained. 

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Economy

Consolidate Recession Exit, Invest In Real Sector, Expert Urges FG

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Consolidate Recession Exit, Invest In Real Sector, Expert Urges FG

An Economist, Dr. Uju Ogubunka, has urged the Federal Government to invest more in the real sector, in order to grow GDP and consolidate on recession exit.

Ogubunka, who is a former Executive Secretary of the Chartered Institute of Bankers of Nigeria (CIBN), made the assertion in an interview with the News Agency of Nigeria (NAN) in Lagos on Wednesday.

NAN reports that the GDP growth returned to positive territory in Q4 ’20 with modest growth of 0.11 percent.

Read Also: How Nigeria Exited The Recession – Lai Mohammed

The quarter compares with a contraction of -3.62 percent the previous quarter and 2.55 percent in the year-earlier period.

According to him, supporting the real sector growth is more imperative, particularly now that the GDP has grown modestly.

He added the Federal Government should sustain the disbursement of the capital vote of the 2021 budget,  as at when due, to reposition the economy.

“Releasing capital expenditure in good time, to areas of infrastructure could grow the GDP, especially now that oil price has surged.

“Reconstructing more critical infrastructural development is one of the investments that will underscore economic growth,” he said.

He noted the Federal Government should expedite the moves to get the COVI-19  vaccines into the country, in order for the economy to return to normalcy.

“The quick delivery of the vaccines is key because it will strengthen our resolve to move on, despite its existence.

“Then the pandemic can be effectively managed and all aspects of the economy can grow again,” he said.

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