E-Financial
World Bank Urges CBN to Sustain Inflation Control Measures
Central Bank of Nigeria (CBN) must sustain efforts to tackle inflation, according to Sameer Matta, senior economist for Nigeria at World Bank.
Matta, spoke at the recent launch of the 2025 macroeconomic outlook of the Nigerian Economic Summit Group (NESG).
Nigeria’s inflation rose to 34.8 percent in December — up from 33.6 percent in November.
Speaking during a panel session at the event, Matta said the CBN must focus on taming inflation.
“I think what is critical in terms of inflation is to stay the course. I think that the central bank needs to continue to be focused on making sure that inflation is under control,” Matta said.
“Obviously, part of it is related to the supply side. What can be done to improve the yield on the agriculture side? What can be done to improve the link between rural and urban areas?
“There is the question of what can be done on the trade policy side. One would be to increase production locally, but that would take time.
“One of the things that can be done on the trade policy side is to think through which sectors could be targeted to allow some tariffs to be adjusted.”
Matta said the cost of not doing reforms is 2 percent of Nigeria’s gross domestic product (GDP) for fuel subsidy and 2 percent of GDP for foreign exchange (FX) subsidy.
“That’s five percent of GDP, and that is extremely high,” he said.
“I would liken these reforms to someone with a hard medical condition who had to make tough choices.
“Let’s not forget that at some point in Nigeria, the debt service to revenue was 100 percent; now, the good news is that we are around 50 percent, and that is a big decline.
“The cost of reforms comes mainly from high inflation, and in the case of Nigeria specifically, food inflation is impacted by FX and the fact that lots of agricultural products are impacted by the price of petrol.
“That means the impact of these reforms is being felt by the most vulnerable.
“It is very important that the government continues on the reforms on social protection but also accelerates the roll-out of these cash transfers. It is more important to finance them over the future.
“It will be very important to continue to encourage the authorities to scale up and accelerate these interventions, which are time-bound and targeted at those who are really impacted and done through a digital way to avoid any potential misuse in the future.”
Also speaking on inflation, Christian Ebeke, Nigeria’s country representative at the International Monetary Fund (IMF), reiterated the need for coordination between the fiscal and monetary authorities.
He said it is important that efforts to bring inflation down by the fiscal authorities are done in the “context of better coordination”.
“For example, one of the key decisions that took place last year was the commitment by both the central bank and the fiscal authorities to strengthen coordination,” Ebeke said.
“We didn’t see Ways and Means accrue again as we have seen in the past year in Nigeria, and it was welcome.
“This is something that should bring inflation down by tightening financial conditions but also by reducing money in circulation.
“The other important thing for the fiscal authorities to do is to tackle any distribution consequences of the reforms that have been implemented.
“Naira reforms or the completion of the fuel subsidy removal. We know that these key reforms in Nigeria will have redistributive consequences on the most vulnerable, and they may not be able to cope.
“Fiscal authorities have a key role to play because the transmission lag of fiscal policies is shorter compared to monetary policies.
“So, issues of social protection are very important. That is how fiscal policies can complement what the monetary authorities are doing.”
On the ways and means, Ebeke said Nigeria should not have been in that position.
“Cleaning up this big problem is taking time, and the persistent effect of the Ways and Means on inflation and, in general terms, on financial conditions,” he said.
“The CBN is trying to mop up liquidity. Just the practice of having deficit monetisation, as has been practiced in Nigeria for years, is now over.
“Again, big congratulations to both the CBN and the fiscal authorities for curbing that.
“Now, when it comes to the securitisation of these, central banks around the world have a memorandum of understanding with the fiscal authorities on this type of liability management.
“The securitisation has the benefit of spreading out the maturities. Also, this has been done transparently, so this is good.”
According to Ebeke, with the independence and fiscal prudence of the CBN, the country ought not to experience macroeconomic pressure, as well as the effect on the parallel exchange rate and inflation.
The exchange rate stabilised in the FX market as the Central Bank of Nigeria (CBN), defended the local currency with $360 million, stemming a negative tide from increased demand for the US dollar.
Olayemi Cardoso, Governor, Central Bank of Nigeria
According to Market Forces Africa, for most part of the week, the naira experienced heightened volatility due to an FX liquidity shortage in the official window, brought forward from the previous week.
This caused the exchange rate to wobble against the US dollar, but late picked up as inflows into the market improved.
On Friday, the naira rebounded against the dominant foreign currency, the US dollar, in last-minute transactions supported by a relatively higher liquidity supply by the monetary authority.
The exchange rate appreciated by about 2% to settle at N1,517.93 in the official market on Friday after persistent negative volatile.
Spot FX data from the regulator showed that the naira gained N29.89 on the day following FX sales to banks.
The market liquidity was also supported by additional inflows from foreign sources and reduced demand for foreign payments.
FX interventions and inflows from offshore clients and local corporations boosted volume of US dollar in the official window, AIICO Capital Limited dropped the hint in an investors note.
In the market, demand pressure persisted, leading to fluctuations in the US dollar to naira exchange rate for most of the week.
The CBN sold $188.10 million to banks, the last auction offered at the range of N1,532.00 to N1,540.00, bringing the total FX sales for the week to $360.00 million, according to investment banking firm TrustBanc Financial Group Limited.
Despite these interventions, demand outpaced supply, causing the naira to depreciate. By the end of the week, the market recorded improved liquidity, with trades ranging between N1,480 and N1,548.
Data from the CBN revealed that Nigeria’s external reserves increased by USD12.06 million to USD38.36 billion after 9 consecutive weeks of decline. In the forwards market, the naira rates decreased by 0.6% for a one-month contract to N1, 577.80.
The Securities and Exchange Commission (SEC) has cancelled the registration of Mainland Trust Limited, and suspended Centurion Registrars, following their failure to comply with regulatory directives.
The commission made the disclosure through circulars which were released at the weekend. The circular on Mainland Trust Limited read: “The Securities and Exchange Commission hereby notifies the general public that the registration of Mainland Trust Limited as a capital market operator has been cancelled with immediate effect.
“This cancellation order is made pursuant to the powers of the Commission under Section 38(4) of the Investments and Securities Act, 2007 and Rule 34(1)(e) of the SEC Consolidated Rules and Regulations 2013.
“The Commission’s decision is informed by the company’s failure to comply with regulatory directives and non-resolution of several complaints against it.
“All clients of Mainland Trust Limited are by this notice advised to contact the Central Securities Clearing Systems Plc (CSCS) for appropriate guidance on the transfer of their stocks to another stockbroker of their choice.”
SEC directed that the Nigerian Exchange Group (NGX), the Institute of Capital Market Registrars (ICMR), the Chartered Institute of Stockbrokers (CIS), the Central Securities Clearing System (CSCS) Plc and all capital market trade associations to discontinue capital market-related dealings with the company.
In the same vein, the SEC announced the suspension of Centurion Registrars Limited, its directors and sponsored individuals from capital market activities with immediate effect.
The SEC said the suspension order was made pursuant to the powers of the Commission under Section 38(4) & (5) of the Investments and Securities Act, 2007 and Rule 34(1)(e) of the SEC Consolidated Rules and Regulations 2013.
It explained that its decision was informed by the company’s failure to comply with regulatory directives and non-resolution of several complaints against it.
“All clients of Centurion Registrars Limited are advised to contact Africa Prudential Plc for appropriate guidance on the transfer of their portfolios to another Registrar of their choice.
“In addition, the Nigerian Exchange Group (NGX), the Institute of Capital Market Registrars (ICMR), the Chartered Institute of Stockbrokers (CIS), the Central Securities Clearing System (CSCS) Plc and all Capital Market Trade Association are directed to discontinue capital market related dealings with the company and its principal officers,” the circular stated.
The commission also disclosed that in furtherance of the commission’s unwavering commitment to the maintenance of zero tolerance for infractions in the Nigerian capital market and in line with its revised enforcement strategies, stakeholders and the general public are hereby informed that henceforth, the names of capital market operators (CMOs) found to have violated market laws/regulations would be published in the commission’s “name and shame” journal.
“The publication would be in addition to the sanctions/penalties for the respective infractions prescribed in the ISA 2007 and the SEC Rules and Regulations.
“This enforcement strategy underscores the Commission’s dedication to safeguarding the integrity and stability of the Nigerian capital market, protecting investors, and ensuring strict adherence to established rules and regulations.
“Stakeholders and CMOs are advised to be guided accordingly” the commission added.
FirstBank has formally denied allegations of fraud in an ongoing court case filed by customer Dr. Agbai Eke, describing the claims as “entirely unfounded and false.”
According to a statement from the bank, their internal investigation points to “unprofessional and unethical dealings” between Dr. Eke and a former bank employee.
FirstBank claims these individuals used a personal relationship to conduct unauthorised transactions without the bank’s knowledge or involvement.
The bank said it has reported the matter to law enforcement authorities for further investigation.
Officials noted that suspects have already provided statements to investigators.
FirstBank also declined to provide additional details, citing the ongoing court proceedings.
“We will refrain from further comments to allow the Court to dispassionately determine the issues before it,” the bank stated.
The case gained public attention following reports by Thisday Newspaper and Arise Television, as well as through a circulating video regarding the legal dispute.
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