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Is Printing Money Potent To Economic Survival?

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Is Printing Money Potent To Economic Survival?

Edo governor, Godwin Obaseki, at the state transition committee stakeholders engagement, which was held on Thursday, April 8, 2021, disclosed that the Federal Government printed N60 billion last month (March 2021).

According to Obaseki, the money was printed on the order of President Muhammadu Buhari as part of federal allocation to states.

The Edo governor made this disclosure as he lamented the deteriorating condition of the Nigerian economy, saying things have changed, and the economy is no longer what it used to be.

His words: “Nigeria has changed. The economy of Nigeria is not the same again whether we like it or not. Since the civil war, we have been managing, saying money is not our problem as long as we are pumping crude oil every day.

“So we have run a very strange economy and a strange presidential system where the local, state, and federal government, at the end of the month, go and earn a salary. We are the only country in the world that does that.

“When we got FAAC for March, the federal government printed an additional N50-N60 billion to top-up for us to share.

“This April, we will go to Abuja and share. By the end of this year, our total borrowings are going to be within N15-N16 trillion. Imagine a family that is just borrowing without any means to pay back and nobody is looking at that, everybody is looking at 2023, everybody is blaming Mr. President as if he is a magician.”

What you should know

While the federal government disbursed printed money in billions of naira to states as federal allocation, it is important to take into cognisance that there are intricacies for such action.

As it is in the case of Nigeria, Newsrand understands that printing more money would not necessarily increase a country’s economic output –  it only increases the amount of cash circulating in the economy. If more money is printed, consumers are able to demand more goods, but if firms still have the same amount of goods, they will respond by putting up prices. In a simplified model, printing money will just cause inflation.

Why printing money makes no economic sense

Governments borrow by selling government bonds to the private sector. People buy from the government because they assume a government bond is a safe investment. However, this assumes that inflation will remain low, and below are the consequences:

  • If governments print money to pay off the national debt, inflation could rise. And an increase in inflation would reduce the value of bonds. 
  • If inflation increases, people will not want to hold bonds because their value is falling. Therefore, the government will find it difficult to sell bonds to finance the national debt. They will have to pay higher interest rates to attract investors.
  • If the government print too much money and inflation get out of hand, investors will not trust the government and it will be hard for the government to borrow anything at all.
  • Therefore, printing money could create more problems than it solves.

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Business

Millionaires Emerge in UBA Savings Promo as 10 Customers win N1m Each

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United Bank for Africa (UBA) Plc, has rewarded 10 of its loyal customers with a total sum of  N10m in the quarterly draws

Pan African financial institution, United Bank for Africa (UBA) Plc, has rewarded 10 of its loyal customers with a total sum of  N10m in the quarterly draws of the ongoing UBA Savings Promo.

This promo, which is held every quarter, is intended to appreciate loyal customers of the bank, who have stayed with the bank over the years,  and offers fresh opportunities for potential and intending customers to join the growing number of UBA millionaires who have in the past benefitted from several Promo.

The virtual and transparent electronic draw which was held on Friday was transmitted live via zoom and the Facebook platform in strict compliance with social distancing rules as directed by the Federal and Lagos State Government.

READ ALSO: UBA CEO, 2 Others Resign From NESG Board, Here’s Why

UBA’s Head Personal Banking, Osita Ede, who addressed participants just before the draws, said there is no better time to give back and delight customers than this challenging economic period where people need all the support, they can get to make life more meaningful.

He said, “As a bank, UBA has been rewarding customers, we have been doing this for several years now; from the Wise Savers Promo, Bumper Draws, and now this. We have been doing this to touch lives and to show appreciation to our customers to tell them we are grateful for their business. This is also an opportunity to reward them for their loyalty to the bank.

Ede added that the promo is also a way of encouraging savings in a bid towards promoting financial inclusion, as statistics show that a lot of Nigerians are still largely underbanked.

“Our key objective is to encourage our customers to save regularly. We are here to support them and encourage them to save and ultimately grow as well, because we are aware that they are invaluable to all that we do;” Ede explained.

A representative of the National Regulatory Commission, Peace Ibadie, who witnessed the draws, congratulated the 10 winners and commended the bank for its efforts at rewarding loyal customers especially in the tough economic and business environment.

Congratulations to all the winners, I am glad to be a part of this; UBA is always transparent in their promos and we can fully attest to this. It is important that the bank is also actively encouraging the savings culture. Again, I say congratulations,” she said.

READ ALSO: UBA Poised To Change The Face Of E-Banking With New Mobile App

The winners who cut across all the zones of the country are Emeka Onyemauche; Ezeigbokwe Oluebube Purity; Omoniyi A Jaiyeola; Olawale Omotayo Idowu; Zaharadeen Yandaki Umar; Aliyu Yaro Bakari; Samuel Enan Esua; Joseph Eze; Deborah Folusho Adebayo and Lucia Chinyere Adim.

When contacted via their mobile phone, the winners expressed their gratitude to the bank as they said the winnings will go a long way in meeting their pressing needs especially in these trying times.

One of the winners, Samuel Enan Esan, who was delighted at the news that he just won N1m, was full of praises. “Thank you UBA,” he stated.

Aliyu Yaro Bakari. who was extremely excited at the news, said, “Oh I am very happy, UBA is the best, you are the best, thank you very much,” he remarked when he learnt he was also one of the beneficiaries of N1m.

To qualify for the promo, new and existing customers of the bank are expected to make a one-time deposit of at least N30,000; before each draw date. Savings account holders eligible for this draw include Target, Bumper, Next Gen, Savings, Teens & Kiddies.

Apart from the savings promo which is held every three months, the bank also has the UBA Bumper Promo which is held monthly, where the first three winning customers are rewarded with N2m, Rent for a year at N1.2m and N500,000 respectively; with 20 others winning N100,000 each as consolation prices.

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than twenty million customers, across 1,000 business offices and customer touch points, in 20 African countries. With presence in New York, London and Paris, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.

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Business

Ramadan: SMEs Lament Decline In Sales

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Ramadan: SMEs Lament Decline In Sales
Image used for illustrative purpose

It took the Ramadan period for Josephine Oluwole, a wine store owner, to discover that the majority of her customers are Muslims. She made the discovery after experiencing that decline in sales since the start of Ramadan.

Oluwole, in a chat with Newsrand, said her sales dropped considerably low and has since been struggling to make sales from her alcohol brands, as demands have shifted towards non-alcoholic products.

According to her, bottled water and soft drinks have become her best selling products during this period, relegating Whiskey, Vodka, and other premium brands that topped sales pre-Ramadan.

“Ramadan has really affected sales because the demand for alcoholic drinks is very low compare to other previous months. Like I said earlier, demands on alcoholic drinks are very low because most of my customers are Muslims, they won’t drink either buy for someone. The products on-demand now are non-alcoholic wine, beverages, and water and this is because all those don’t contain alcohol,” she stated.

Read Also: RAMADAN: Pray For Peace In Nigeria- Gov. Sanwo-Olu Appeals

Commenting on how she has managed the business since Ramadan, Oluwole who opened her wine store due to her inability to secure a job in the private sector, said she has devised new ways to keep her business functional, but her profitability is nothing compared to what she’s used to.

“I tried as much as possible to double the quantity of the beverages and water I sell. For instance, before Ramadan, I can buy 5packs of Chivita and 20 bags of water which doesn’t last till 5days most time, but now I have doubled the bags of water I buy like the beverages because people tend to buy that more than the alcoholic drink,” she added.

Oluwole is however not the only small business owner affected by the holy period. One Christian Eze, a caterer, also lamented that her sales have been low, as her customer base has depleted since the fast started.

She now sells mostly to non-Muslims, as the fast compels Muslims to eat as late as 7:00 pm, and as early as 5:00 am.

“Sales have dropped, but I understand why. It happens every year. Once Ramadan ends, I’m sure they would start patronising me again,” he expressed belief.

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Business

International Container Terminal: We Have No Relationship With Dangote

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International Container Terminal: We Have No Relationship With Dangote

Port management company, International Container Terminal Services, has refuted the report that it’s owned by business magnate, Aliko Dangote.

Refuting a report credited to Sahara Reporters that it’s owned by Dangote, the port management firm, in a statement signed by its Senior Vice President, Hans-Ole, Madsen, said there’s no form of relationship between them as the report claimed.

The statement read: “We would like to clarify that International Container Services Inc. (ICTSI) is a Philippine publicly listed independent company engaged in operations in 33 ports on 6 continents. ICTSI ranks as a top-ten port operator in the world While advising that details of the company’s ownership can be found on its website the Madsen restated.

“ICTSI is not owned or in any way affiliated with the Dangote Group of companies.”

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