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CBN will use conventional methods to tame inflation – Cardoso

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The Governor of the Central Bank of Nigeria, CBN, Mr Olayemi Cardoso has reiterated the determination of the Bank’s Monetary Policy Committee, MPC, to tame inflation through conventional methods.

A statement from the CBN’s Corporate Communications Department said Cardoso stated this in an interview with Bloomberg in London on Tuesday while sharing key insights on the current state of the market, focusing on the stability of the naira and inflation rates.

He noted a deceleration in the month-on-month inflation rates, highlighting it as a positive development, assuring that MPC members remained vigilant in monitoring inflation trends and ensuring a moderation of inflation numbers.

“MPC members will continue to monitor the trajectory and are determined to ensure that they put inflation under control,” he asserted.

While highlighting a period of stability following previous volatility in the foreign exchange market, he expressed optimism about the recent improvements in liquidity and return of confidence to the market.

He attributed the new development to increased liquidity and a calmer approach from market participants on both the buy and sell sides.

“In the past, people were panicking and front-loading their requests. Now, a lot of that has calmed down. There is no inclination to do thatbecause liquidity has returned to the market,” he said.

Mr. Cardoso also highlighted the significant achievement of merging disparate exchange rates into a more unified system, saying: “We had two different rates; right now, we more or less have one rate. And we believe that this is good. It allows companies to plan.”

He emphasised the importance of a predictable exchange rate for economic planning and investment, expressing confidence in the current market dynamics, where willing buyers and sellers operate freely.

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Tinubu Speaks on Civil Servants Collecting Salaries despite Relocation Abroad

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President Bola Tinubu has pledged to address the issue of civil servants who still receive salaries from the government despite relocating abroad.

The president, who was represented by the Secretary of the Government of the Federation, Sen. George Akume, made this known in Abuja on Saturday night at the conclusion of the 2024 Civil Service Week.

He commended the Head of Service for the moves being made so far to discover the erring workers but called for more consequences for those caught.

Recall the head of service disclosed some days before that 1618 civil servants with fake employment letters were also caught and dismissed.

President Tinubu said,

“During my recent visit to South Africa, I kept abreast of the week’s activities and was particularly struck by the revelations shared by the Head of the Civil Service regarding employees who had relocated abroad while drawing salaries without formally resigning. It is heartening to hear that measures have been taken to address this issue, but we must ensure those responsible are held accountable and restitution is made.”

He ordered that superiors of the civil servants must also be brought to book over the fraudulent action.

“The culprits must be made to refund the money they have fraudulently collected. Their supervisors and department heads must also be punished for aiding and abetting the fraud under their watch. The Nigerian Civil Service cannot just be a workplace where ‘anything is possible,’ where workers violate rules without the fear of punishment or repercussion. The civil service of any nation is too important for such misconduct to take root or be tolerated,” he added.

Also speaking, the Head of the Civil Service of the Federation, Dr. Folasade Yemi-Esan, called for excellence from workers.

She said,

“In underscoring the nexus between incentives and performance, it is pertinent to emphasize that the Civil Service must not be seen as a dumping ground for job seekers but must attract the best and the brightest who will contribute fresh ideas and demonstrate the determination and capability to drive national plans and solve our socio-economic problems.”

She further commended the federal government’s efforts in enhancing the welfare of civil servants.

“The Federal Government has also progressively made modest interventions for the improved welfare of civil servants in recent times. At this juncture, I wish to profoundly appreciate His Excellency, President Bola Ahmed Tinubu, GCFR, for demonstrating both the will and passion for improving the welfare of the workforce through the ₦35,000 provisional wage award for all treasury-paid Federal Government workers for six months and ongoing efforts to review the minimum wage,” she added.

Numerous civil servants carted home prizes on the awards night and pledged to do better as they were spurred on by the recognition for their hardwork.

 

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FG delists some workers from payroll

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The Federal Government has deleted at least 1,618 civil servants from the the Integration Personnel Payroll and Information System (IPPIS) in one year.

Head of Civil Service of the Federation, Dr. Folasade Yemi-Esan revealed that the workers were delisted for possessing illegal and fake employment letters.

Yemi-Esan spoke on Wednesday in Abuja, during a media parley organized as part of programmes marking the 2024 Civil Service Week.

She disclosed that through physical verification conducted by the Ministries, Departments and Agencies (MDAs) of Government, the once over-bloated federal civil service has now been brought down from over 100,000 to 69,308 who have been verified and are on the payroll.

Yemi-Esan revealed that apart from the ghost workers who were parading fake employment letters, there was also the issue of some civil servants who “japa” for greener pastures in overseas that were caught napping during the physical verification exercise.

According to her, some of them who came into the country for the verification exercise like one or two weeks after the exercise had been conducted under the pretext that they were not aware of the scheduled physical verification exercise, were graciously given two weeks to appear for the verification exercise.

The Head of Civil Service of the Federation, said instead of waiting for the two weeks in addition to the days they had already spent in Nigeria, “a lot of them tendered their resignation letters because no UK organization would afford to give two additional weeks in the country to perfect the verification process.

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Western multinationals fleeing Nigeria are being replaced by Asian and Turkish firms

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As US and Europe-based multinationals exit Nigeria, Asian and local companies are stepping in to fill the void.

Last week, London-based Diageo Plc sold its controlling stake in Guinness Nigeria Plc to Singapore’s Tolaram Group Inc. The Fouani Group, a local firm, operates a diaper and sanitary pad plant in a complex where Cincinnati-based Procter & Gamble Co. shuttered a $300 million facility making the same products.

According to Bloomberg, Lagos-based Fidson Healthcare Plc is expanding its manufacturing range after the UK’s GSK Plc closed its Nigerian distribution arm. Turkish diaper-maker Hayat Kimya AS has also established itself in Nigeria.

Nigeria, with a population of more than 200 million, is Africa’s most populous nation, in theory presenting a huge market for consumer goods. But rampant unemployment, widespread poverty and insecurity, a plummeting currency, sky-high inflation and decades of economic mismanagement have turned it into a graveyard for multinational consumer goods companies.

The naira has swung wildly in recent months and is 56% down against the dollar over the past year, the most of any African currency. That’s made it difficult for companies that import goods and service foreign debts to make a profit as they struggle to pass the necessary price increases to consumers. And while the central bank has now cleared a $7 billion backlog that companies were seeking to repatriate the difficulty in doing so in recent years made many businesses unsustainable.
The gaps in the market left by the departing multinationals present an opportunity for domestic companies and foreign firms that focus on sourcing raw materials in Nigeria and manufacturing locally, thereby avoiding the currency risk that has hounded some foreign companies out.

And while the departures show just how unattractive the Nigerian consumer market has become they also highlight the success of strategies of companies such as Hayat and Tolaram, which have each turned their brands into household names.

Localized Costs
For companies such as Tolaram, used to operating in challenging environments such as Indonesia, the answer has been to localize as many costs as possible. That’s helped it turn Indomie instant noodles into one of Nigeria’s most popular brands, and led it into joint ventures with US cereal and snack maker Kellanova and Danish dairy giant, Arla Foods.

“Brands can’t continue to operate the way they’re used to. You need to adapt to the market accordingly,” said Girish Sharma, an executive director at Tolaram. “There is hardly anything in Indomie that we import. We have our own flour milling, we have our own palm oil refining, we have our own packaging.”
Tolaram operates 24 “fully backwardly integrated” plants in Nigeria, meaning the company produces the raw materials they need, and is even setting up its own oil palm plantations, Sharma said in an earlier interview. GSK, by contrast, imported its products.

That doesn’t mean that local firms aren’t struggling.
“In theory, we think we can better manage the difficulties of doing business in Nigeria,” said Jide Ogundare, managing director of MBO Capital Management Ltd, which took over supermarkets run by Shoprite Holdings Ltd. when the South African company quit Nigeria in 2021. “In actual fact, we face the same challenges as the foreigners except that we can’t leave and go elsewhere.”

Still, despite the narrowing margins and reduced spending power, the weaker naira is making Nigerian manufacturing competitive.

“We’re exporting to some West African countries like Mali and to East Africa and our target is to export to another five to 10 countries by the end of next year,” said Imokha Ayebae, Fidson’s executive director.

Oil, Technology
The exodus of firms including Kimberly-Clark Corp., Sanofi SA and Bayer AG are hindering Nigerian President Bola Tinubu’s bid to breathe life into the struggling economy.

Microsoft Corp. in May said it would shut the engineering section of its Africa Development Center in Nigeria two years after it opened. Meanwhile, oil majors Shell Plc, Exxon Mobil Corp. and Eni SpA have all sold their onshore operations to local companies, denting confidence in the industry that accounts for most of Nigeria’s exports and leaving behind decades of environmental devastation.

By contrast, Tinubu’s spokesman said Tolaram’s $70 million purchase of the Guinness stake was a vote of confidence in the Nigerian economy.

“The multi pronged reforms and interventions being implemented on the economic and financial fronts would deliver sustained growth and enduring profitability,” Bayo Onanuga, special adviser to the president on information and strategy, said in a post on X.

For now the companies still invested aren’t seeing that uptick. South Africa’s Multichoice Group, the biggest satellite television provider in Nigeria, saw subscriber numbers fall 18% in the year to March saying that Nigerian customers “had to prioritize basic necessities over entertainment.” Revenue at Johannesburg-based MTN Group Ltd., which runs Nigeria’s biggest mobile phone network, fell 53% in the first quarter of the year when measured in its home currency.
But in challenging environments there is also opportunity, said Tolaram’s Sharma, who emphasized the company’s belief in Nigeria’s potential.

“If everything was good I don’t think Guinness would think of partnering with Tolaram. Now when they saw there’s adversity they chose to partner with us,” he said. “Nigeria has 200 million people. They have to eat, they have to drink. We don’t see why Nigeria should not be the country where we’ll continue to stay and continue to invest.”

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