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FG Blames Governors For High Poverty Rate, Says ‘States Focus On Unnecessary Infrastructure’

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The federal government has blamed state governors for the high rate of poverty in the country.

Clem Agba, minister of state for budget and national planning, accused state governors of giving more thought to flyovers and airports than to improving conditions in rural areas.

He said this on Wednesday in Abuja while briefing state house correspondents on the outcome of the meeting of the federal executive council (FEC) presided over by President Muhammadu Buhari.

Agba said 72 percent of Nigeria’s poor citizens are found in the rural areas which have been abandoned by the governors.

He said governors prefer to function in the state capitals rather than build roads that will aid farmers in the rural communities to easily take their farm produce to the city.

According to the minister, the federal government’s social investment programmes have not been as successful as expected because of the lack of cooperation from the state governors.

“The governors are basically only functioning in their state capitals. And democracy that we preach about is delivering the greatest goods to the greatest number of people,” Agba said.

“And from our demographic, it shows that the greatest number of our people live in rural areas, but the governors are not working in the rural areas.

“Right now, 70 percent of our people live in rural areas. They produce 90 percent of what we eat and unfortunately 60 percent of what they produce does not get to the market due to post-harvest losses.

“When we talk about food prices, like I mentioned right now as driving inflation, prices of food at the farm gates are low. But when you now take it to the urban areas, you find out that the prices are high due to supply chain disruptions, lack of infrastructure to take them there.

“I think from the federal government side, we are doing our best. But we need to push that rather than governors continuing to compete to take loans to build airports that are not necessary where they have other airports so close to them.

“Or governors now competing to build flyovers all over the place and we applaud them, they should concentrate on building rural roads so that the farmers can at least get their products to the market.

“And you find that if they do that and with the new policy in the national development plan that talks about taking power to the rural areas, especially of out-grid power that can easily be put, you begin to attract industries to those areas for value-addition.”

Citing findings from the recently released multidimensional poverty report, Agba said Sokoto state has the highest number of poor people in Nigeria, followed by Bayelsa.

“The result clearly shows that 72 percent of poverty is in the rural areas. It also showed clearly, that Sokoto state is leading in poverty with 91 percent,” he said.

“But the surprising thing is Bayelsa being the second in terms of poverty rating in the country. So, you see the issue is not about availability of money. But it has to do with the application of money.”

Agba further said states were in charge of land for agriculture but failed to invest in them for the desired effect on their rural citizens.

He advised state governors not to concentrate on building infrastructure that does not impact the common man, but rather focus on initiatives that can pull the majority of the people out of poverty.

“Like I always say, if you look at Abraham Maslow’s hierarchy of needs, he says you have to take care of the basic needs of individuals first before you begin to talk about self-actualisation,” Agba added.

“So we need to take care of the issues of food, nutrition, housing and clothing for our people.

“Before we begin to think of how to go to the moon and begin to build flyovers and airports in the state capital, that is the missing link which we need to push so that we’ll be able to catalyse growth.”

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Foreign Reserves Hit Nine-Month High Amid Economic Optimism, Buildup Positive Multipliers

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Nigeria’s foreign exchange (forex) reserves, over the weekend, reached their highest level in nine months as expectations that the country’s ongoing fiscal and monetary authority reforms would support steady forex management and price stability grew.

After rising steadily for the previous month, total reserves increased by almost $209.9 million to conclude the weekend at $34.416 billion, the highest level in nine months. The previous record high, reached on June 20, 2023, was $34.449 billion.

The nation’s forex reserves have risen by $1.50 billion so far this year in a steady build-up that has eased volatility in the currency market and reinforced monetary reforms.The reserves had closed 2023 at $32.912 billion.

Experts agreed that the steady recovery in forex reserves has several positive implications for the economy.

“The naira will appreciate in the forex market. The exchange rate will stabilise. Inflation rate is most likely to moderate given the exchange rate pass-through to commodity prices,” President, Association of Capital Market Academics in Nigeria, Prof Uche Uwaleke, said.

Data by the Central Bank of Nigeria (CBN) indicated average crude oil price at $88.84 per barrel. Global reports showed that benchmark Brent crude rose by 3.2 percent to close weekend at about $84.71 per barrel.

With the lingering crises in Middle East and Eastern Europe amid elevated oil demand, most analysts expected crude oil price to remain substantially above Nigeria’s budget benchmark of $77.96 per barrel.

The International Energy Agency (IEA), in its latest report, increased its global crude oil demand projection for 2024 by 1.3 million barrels per day (mbpd) to 103.2mbpd. IEA estimated that extended output cuts by Organisation of the Petroleum Exporting Countries (OPEC) and its affiliates (OPEC+) would continue to moderate supply output, keeping off any major downside volatility.

OPEC+ members had two weeks ago extended their voluntary production cuts of 2.2mbpd into the second quarter of 2024, with expectation of further extension beyond the first half.

Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, last week indicated that the country’s oil production has risen to 1.65mbpd, from some 1.25mbpd in June 2023.

OPEC had recently reported that Nigeria’s crude oil production rose to 1.476 mbpd in February 2024, an increase of 47,000 barrels on 1.429 mbpd recorded in January 2024. The data was based on secondary market intelligence sources surveyed by the organisation.

“According to secondary sources, total OPEC-12 crude oil production averaged 26.57 mb/d in February 2024, 203 tb/d higher, mo- m. Crude oil output increased mainly in Libya and Nigeria, while production in IR Iran and Iraq decreased,” OPEC stated in its Monthly Oil Market Report.

The Federal Government’s N28.78 trillion 2024 budget is premised on 1.78mbpd daily oil production, $77.96 oil benchmark price, exchange rate of N800 per dollar and GDP growth rate of 3.88 percent.

Oil sector and currency management reforms are two of President Bola Tinubu’s administration’s economic blueprint. A multi-stakeholders reform agenda involving the Ministry of Finance, security services, Nigerian National Petroleum Company Limited and the CBN has seen a steady improvement in crude oil management and accountability.

In its latest macroeconomic assessment report, the International Monetary Fund (IMF) had sounded upbeat on the Nigeria’s macroeconomic reforms citing the improvement in oil production, ongoing efforts to boost food production and social welfare programmes among others.

Governor, Central Bank of Nigeria (CBN), Dr Olayemi Cardoso, has outlined that ongoing efforts to strengthen the country’s forex position would lead to increased stability in forex reserves and naira.

According to him, the collaboration with Ministry of Finance and the NNPCL to ensure that all forex inflows are returned to the CBN will greatly enhance forex flows and contribute to the accretion of reserves.

“The expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the CBN. This reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage. The resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investment, elevating Nigeria’s appeal to global investors.

“We are implementing a comprehensive strategy to improve liquidity in our forex markets in the short, medium, and long term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years,” Cardoso said.

He pointed out that the apex bank understands that upholding the integrity of financial markets is crucial for building confidence, thus it remains committed to decisively address any infractions and abuses.

He noted that in efforts to stabilise the exchange rate, the CBN prioritises transparency and a market environment that enables the fair determination of exchange rates, ensuring stability for businesses and individuals alike.

“We believe that the naira is currently undervalued and, coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term. This coordinated approach will contribute to a more balanced and stable exchange rate,” Cardoso said.

Finance and economy experts were unanimous that the buildup in external reserves was a good indication for the country’s currency management and macroeconomic stability.

Analysts expected that changes in forex management rules, steady improvement in crude oil production and upbeat in global oil price could help the country mitigate its volatile forex situation.

Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said the continuing increase in forex reserves will support government’s current efforts aimed at fostering liquidity and stability at the forex market.

“The increase is a positive signal for improved liquidity in the forex market. This should ultimately help to stabilize the exchange rate of the naira or even strengthen it against the dollar if the increase is steady and consistent,” Amolegbe said.

Uwaleke said any increase places the CBN in a stronger position to meet forex obligations as well as intervene in the forex market.

“If this development is sustained, we are likely to witness an appreciation of the naira in the forex market and more stability in the exchange rate following improved liquidity. This is one positive development capable of keeping away destructive speculators from the forex market,” Uwaleke said.

He explained that the increase could be due to increase in oil revenue as a result of the rise in crude oil price and the recent increase in crude oil production.

He added that the external reserves could also increase if the government has received any of the concessional loans it has negotiated with the World Bank.

Uwaleke however said Nigeria needs to curb excessive import dependence to support its forex recovery.

“It goes without saying that export- base diversification remains the only sustainable solution to the present forex crisis,” Uwaleke said.

According to him, to curb the demand pressure, government should compel a change in consumption behaviour by enacting a ‘Buy Nigeria law’ akin to the ‘Buy America Act’ of 1933 and recently the ‘Build America, Buy America Act’ of 2021.

“Also, Nigeria’s import data support revisiting and scaling up the CBN’s currency swap deal with the Peoples Bank of China. Given that the bulk of Nigeria’s imports are from China, it stands to reason, therefore, to explore ways of bypassing the dollars and settling these transactions in the Yuan. This was the idea behind the currency swap with China which was largely inadequate in size. In order to increase the stock of Yuan in our external reserves, Nigeria can issue panda bonds, which are bonds denominated in the Chinese Yuan and are considered cheaper than Eurobonds,” Uwaleke said.

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JUST IN: Troops Rescue 16 Persons Abducted By Bandits In Kaduna Community

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The Nigerian Army says its troops have rescued 16 residents abducted by bandits in Tantatu community in Kajuru LGA of Kaduna state.

On Sunday, bandits invaded the Tantatu community around 10 pm and looted food items and other materials from shops and homes.

At least 87 residents of the community were said to have been abducted during the attack.

The incident was the latest attack on Kajuru LGA.

On Saturday, 14 people were kidnapped by gunmen in Dogon Noma community, Kajuru LGA of Kaduna state.

Last Monday, bandits abducted 61 persons in Buda community under Kajuru LGA of Kaduna state.

On March 7, over 200 students and pupils were kidnapped after bandits attacked Government Secondary School Kuriga, Chikun LGA of the state.

In a statement on Monday, Onyema Nwachukwu, army spokesperson, said troops responded to the attack on the community on Sunday night.

Nwachukwu said the troops engaged the bandits in gun duels, which led to the rescue of the abducted persons.

“Responding to actionable intelligence, the troops on 17 March 2024 at about 10:30 pm swiftly tracked the insurgents who had earlier attacked the community in numbers and abducted some of the villagers as hostages,” the statement reads.

“On arriving at the scene of the incident, the troops tenaciously pursued the insurgents, engaging them in a ferocious exchange of fire and consequently rescuing 16 kidnapped victims.

“The troops are still exploiting the bushes in continuation of the search and rescue operations.”

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Seven CBN Directors Sacked, Twelve More To Go — Report

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Twelve more Central Bank of Nigeria (CBN) directors may have been scheduled for dismissal, it was learnt yesterday.

Reports on the planned sack of the senior personnel followed the termination of the appointments of seven directors by the apex bank last Friday.

Two of the affected directors were said to have accepted their fate. The five others are reportedly planning to take legal action against their employer for what they consider as unlawful termination of their career.

It was learnt that the two directors who have resigned to fate are under probe by officials of the Economic and Financial Crimes Commission (EFCC) having been implicated in the Jim Obaze Report.

Obaze was appointed as a Special Investigator by President Bola Ahmed Tinubu to scrutinize the activities of the CBN under the watch of its former Governor Godwin Emefiele.

The termination letters sent to the seven directors cited “reorganizational and human capital restructuring” as the reason for their dismissal, in line with the bank’s new strategic direction.

The letters stated that their “services would no longer be required with effect from Friday, 15th March 2024”. It directed them to hand over all bank properties in their possession to their department’s administrator immediately.

A source told The Nation that the five directors decided to challenge their termination because no wrongdoing had been linked to them.

“And they have not been implicated in any misconduct. One of the directors affected has just two years and two months left in service,” the source said.

A CBN source expressed concern over the lack of retirement benefits for the affected directors, especially considering their years of service and the absence of any charges or accusations against them.

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