Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says inflation is pushing Nigerians into different categories of poverty.

Cardoso said controlling inflation is in the best interest of Nigerians.

He spoke on Tuesday during a press briefing at the end of the monetary policy committee (MPC) meeting in Abuja.

The governor highlighted the significant impact of inflation on the economy, saying purchasing power has diminished and poverty levels have increased.

Cardoso stressed the importance of taming inflation for the average individual and the organised private sector, which faces its own consequences.

He also acknowledged the need for economic growth and the challenges posed by high interest rates imposed to control inflation and ensure the economy’s long-term stability.

“I think I will just say one or two things and these are some of the things that we discuss with the organised private sector that inflation really and truly is having a major impact on our economy,” Cardoso said.

“Purchasing power is getting eroded, people are being pushed into different categories of poverty, and it is in their own interest that we are able to tame the scourge of inflation. If not, the ramifications will also be for them.

“It is not on the average man alone, it will also be for them and we understand the need for growth and we also understand that it is relatively challenging when you have high interest rates.

“My belief is that it is so fundamental to the long-term future and stability of our economy, that inflation should be brought under control.”

According to Cardoso, these short-term pains will eventually benefit the economy and the manufacturing sector.

Speaking on the current economic situation, the CBN governor said the influx of liquidity into the system over a short period played a significant role.

He said the consequences of printing money through ways and means advances are being felt, leading to an out-of-control money supply trajectory.

Cardoso said in response to this, interest rates are being raised to manage the money supply and prevent further spikes.

On Tuesday, MPC raised the monetary policy rate (MPR), which benchmarks interest rates, to 26.75 percent — from 26.25 percent.

Last week, Nigeria’s inflation rate rose to 34.19 percent amid the surge in food prices.

Speaking further, Cardoso said MPC voted to hike the rate by 50 basis points to 26.75 percent, adjust the asymmetric corridor to +500 and -100 basis points around the MPR.

The committee retained the cash reserve ratio (CRR) at 45 percent, and liquidity ratio at 30 percent.

Some social media users have dug out old posts by Olusegun Dada, the special assistant to President Bola Tinubu on social media, in which he called for protests against former President Goodluck Jonathan.

Dada’s old posts started trending on social media, moments after he said protesters would face the “strongest resistance”.

Earlier on Tuesday, Dada, in a post on X, said protesters would meet fierce pushback from supporters of the president.

“Those who want to burn the country down under whatever guise will meet the strongest resistance of their lives,” Dada wrote.

“Not from security agencies, but from the silent majority that gave their mandate to President Bola Ahmed Tinubu for four years in the first instance. We are waiting.”

There have been reports of a planned youth-led nationwide protest over the rising cost of living and economic hardship.

The protest is reportedly slated for August 1 to 15. 

Several old X posts of Dada show that the presidential aide was in support of the protest against Jonathan’s administration.

In one of his posts in January 2012, Dada wrote,

“If u know any policeman, advise him not to take shooting orders from anyone. If anyone is shot during our protest, d killer dies! No”.

In another post in February 2014, he wrote,

“maybe we don’t need peaceful protests anymore”.

Dada’s old posts have elicited a plethora of reactions.

There was a rain of curses in Port Harcourt, Rivers State, as residents of the area discovered remains of an a-day-old baby in a manhole.

It was gathered that members of the Diobu vigilante group made the discovery in the early hours of Tuesday and that the dead baby was a boy.

A source disclosed that a dead baby was found in a manhole around Ekwe Street by Ikwerre Road, Mile 3 Diobu, Port Harcourt City Local Government Area.

Mr. Godstime Ihunwo, the Chief Security Officer of Nkpolu Orowurokwo working with Diobu vigilante said the community security team found the baby already dead during their patrol.

He said: “At the early hours of today, 23rd July 2024 at about 5 am, I and my team were on patrol. On getting to Ikwerre Road/Ekwe Street Mile 3 Diobu, Port Harcourt, we discovered that a newborn baby was dumped into a Manhole.

“We discovered that the baby was dead. It was a male. I quickly rushed down to Nkpolu Police Division to make an entry. I also contacted, Prince Wiro who is a human rights activist.”

Meantime, Prince Wiro, who is the National Coordinator of Centre for Basic Rights Protection And Accountability Campaign has condemned the action of the unidentified mother describing it as height of wickedness.

Wiro said: “It is sad that before the vigilante group discovered the infant male, he was already dead. The action of the mother of the child is a crime that is punishable under the Nigeria law.

“We use this opportunity to urge residents who may have useful information about the identity of the child’s mother to report to the Police for necessary action.” 

However, the Public Relations Officer of the State Police Command, Grace Iringe-Koko, a Superintendent of Police, has confirmed the incident.

Iringe-Koko said Police have contacted the relevant agency for possible evacuation of the dead body while investigations continue.

She urged residents with useful information on who may have dumped the baby to report to the nearest Police station.

Dr. Olisa Agbakoba has explained how the federal government’s proposed 50% windfall tax will negatively impact bank operations and its customers in Nigeria.

Dr. Agbakoba is the Senior Partner and Head of the Alternative Dispute Resolution (ADR) and Arbitration practice group at Olisa Agbakoba Legal (OAL), with expertise in Maritime and Blue Economy Law, Space Law, Environmental, Social and Governance (ESG) Law, Environmental Justice Law, Human Rights Law, among many others.

In an exclusive interview with Nairametrics, Agbakoba sheds light on how the proposed amendment to the Finance Act is ill-thought-out.

What’s your take on the federal government’s plan to tax banks 50% of profits realized from foreign exchange revaluation in 2023 through the proposed amended Finance Act?

So, I completely understand why the government is passing financial legislation because the government really needs revenue to drive its development agenda and to meet all the various expenses that it faces.

But I think the government ought to also understand that there are parameters that are very important to employ to gain not only the confidence of Nigerians but particularly the financial community.

The financial community is a lifeline and the oxygen of the Nigerian economy, and to create a policy that will be contrary to the interests of the financial community might be very precarious and could even backfire.

So, in that context, I would say that the proposed amendment to the Finance Act is completely ill-thought-out legislation.

There are different types of legislation. This particular legislation is known as penal legislation. You will observe that Section 33 of the intended amendment criminalizes failure to comply.

In Guardian Motors vs. the Attorney-General of the Federation, pursuant to a decree made by General Babangida, the Supreme Court laid out the principles under which legislation can be properly made.

I think this is one legislation that is beyond the scope of the National Assembly to enact. The National Assembly has no power to enact legislation that imposes penal sanctions on commercial transactions.

What does this proposed Finance Act imply for customers of Nigerian banks?

The first thing that will happen is that customers will bear the burden of the so-called windfall legislation.

Again, windfall legislation is generally seen as unacceptable to the commercial community. Even in the UK, where there was a proposal to pass windfall legislation in respect of oil profits that Shell and other oil companies were said to be making, there was an uproar.

When you pass windfall legislation taking 50% of somebody else’s earnings, that person will immediately transfer it to those closest to them.

It is obvious that those closest are Nigerians whose money is actually deposited.

So, the issue here is the realized profits. The law states that realized profits will be liable to windfall tax.

If banks make realized profits on accounts, they are likely to find ways to recover the windfall tax because the magnitude proposed by the federal government, 50%, is so huge that they will seek ways to recover it.

There’s no question about that.

If the purpose is to create wealth that the government can use to fund its services, there’s a likelihood that it could lead to inflation. It could be inflationary. It could exacerbate the very problem that the government thinks it is solving.

So, I would honestly urge the government to do two things: first, withdraw the legislation and consider other easier ways to generate revenue. I’ve discussed this several times.

The government can easily generate a lot of revenue without this unnecessary difficulty. One area where the government can generate revenue is the oil and gas sector. A lot of revenue can be generated simply by taking control of the country’s oil and gas resources.

I hope you are aware that Nigeria’s oil and gas resources have been handed over to the International Oil Companies (IOCs). Even Aliko Dangote is complaining.

Dangote is unable, despite having the world’s largest refinery in Lagos, to obtain crude because it is not in the interest of the IOCs to allow him access to crude.

The IOCs prefer the situation where they export crude and we import refined products. Therefore, it is not in their interest to change that. If the government were to stop this and address all the leakages in the oil and gas sector, they would make more money than what the so-called windfall legislation would bring.

And there are several other ways that the government can generate revenue in the maritime industry.

I have said time and again that a proactive government that understands how to generate revenue for Nigeria can easily generate N100 trillion.

So what is the purpose of this? It is ill-thought-out and I would urge them to really consider the negative impact it would have on the Nigerian economy.

The presidency believes the proposed windfall tax will help his government bring more infrastructural development to Nigeria. What do you think?

How? There are no details. They’re just saying it. How? That’s the question. The question I would ask is how? I mean, in principle, tax legislation will bring money into the government’s coffers, but you have to carefully examine the nature of the tax legislation.

Firstly, I’ve told you that windfall taxes tend to be viewed negatively by those on whom they are imposed. So when you impose a windfall tax on someone, they look for ways to pass it on to someone else. That’s number one. So, banks are likely to pass on the windfall tax, of 50% of their profits, to us as consumers. That’s one issue.

Secondly, assuming the windfall tax brings in N10 trillion, for example, there is nothing to suggest that because you have extra income, you will not have extra expenses higher interest rates or increased inflation.

So it’s not enough for the government to say, “We’re going to get more money from this.” If you get more money but the price of rice doubles, does that make sense?

So, I’m not sure how well thought out this legislation has been. Is it really going to be progressive legislation that benefits Nigerians in all aspects? Or is it just a case of the government saying, “We’re going to get money”? It’s not enough to say, “I’m going to get money.”

You have to look at the impact of that money. Is it going to be beneficial? In my view, this law won’t be beneficial because it will have all kinds of implications and it will probably be challenged on the grounds of unconstitutionality anyway.
[Nairametrics]