Weeky Nuggets

Saturday, September 5, 2020

Nigeria Resumes International Flights, Bars Some Airlines 

Nigeria resumed international flights of September 5 with the arrival of a Middle East Airlines flight from Lebanon.

Other airlines approved for Nigeria include British Airways, Delta Air, Qatar Airways, Emirates Airline and Ethiopian Airlines. Flights are allowed to come in from Ghana, Ivory Coast, Egypt, Kenya, and Turkey, according to statement by the Aviation Ministry on September 3.

Flights by some leading airlines such as Lufthansa, Air France, KLM and Etihad Airways were barred  because their host countries are not yet allowing commercial flights from Nigeria.

Similarly affected are RwandAir, Air Namibia, Royal Air Maroc and TAAG Angola.

Central Bank Lowers Base on Savings Interest Rates, Makes Them Negotiable

The Central Bank of Nigeria lowered the minimum interest rate payable on savings deposits by a third, while making them negotiable between banks and their customers.

Banks will now pay a minimum of 10 percent of the Monetary Policy Rate, the Central Bank of Nigeria said in a new circular signed by Bello Hassan,  its director of banking supervision, which takes effect from September 1.

With the MPC rate currently at 12.5 percent, the directive translates to a minimum interest rate of 1.5 percent a year. While giving the saver a chance to bargain for more, it also ends the previous rule that kept interest rate on savings at a minimum of 30 percent of the MPC rate.

The move is in line with the the central bank’s policy of “stimulating credit flow to the real sector,” Hassan said, noting the regulator’s satisfaction with “the recent declining trend in market rates.”

Banks Slash Interest Rates on Savings Aftee CBN Nod

Nigerian banks have moved swiftly to cut the interests paid on savings accounts following a central bank decision to lower the bar.

In a circular to banks on August 31, the Central Bank of Nigeria said a minimum of 10 percent of the Monetary Policy Rate will now be paid on savings deposits with effect from September 1. With the MPC rate currently at 12.5 percent, that brought down the minimum interest rate to 1.5 percent a year.

The financial houses have been quick to implement the singularly pro-bank measure by the regulator. Most of them wrote their customers by September 3 that interest on savings deposits have been scaled down accordingly from the previous range of about 5 percent.

“Effective September 1, 2020 and in line with current market realities, the interest rates on our Savings accounts and its variants have been adjusted,” Standard Chartered Bank told its customers in a September 3 email.

While rejecting recent hikes in electricity tariffs and fuel prices in a statement, the Nigerian Labour Congress, the country’s biggest trade union grouping, pointed to the decision to lower interests on savings as evidence of a multi-sided economic war on the people.

“To compound it, they also reduced the interest rate of savings, which affects mostly the poor and the vulnerable,” Ayuba Wabba, president of the congress, told reporters in Abuja.

Nigerians to Pay More for Energy as New Prices Take Effect

Nigerians will pay more for electricity in their homes and offices as well as fuel in their vehicles as higher prices approved by President Muhammadu Buhari came into effect from September 2.

While electricity tariff rates were increased by 50 percent, the price of a liter of petrol went up 5 percent to 151.6 naira. This represents another challenge for Nigerians in the management of their personal finance as disposable income for savings and investment are further crimped by these additional costs, in a year the coronavirus devastated the earnings of most citizens.

President Muhammadu Buhari’s government has been under pressure from power companies to jack up tariffs on the grounds that existing rates didn’t guarantee the recovery of their costs. The government also said it had used the opportunity presented by low crude oil prices due to Covid-19 to end subsidies that ensured uniform and relatively low fuel prices.

The authorities say some categories of consumers are exempt from the increased energy tariffs. These include those who use receive power less than 12 hours in a day or 50 kilowatts of power in a month.

Labour unions and civic groups have condemned the increases while demanding their immediate reversal by the government. Ayuba Wabba, president of the Nigerian Labour Congress, the umbrella coalition of Nigeria’s biggest trade unions, said said the leadership will consult for a response.

“The increase in the price of petroleum has happened now more than three times in three months, and only yesterday they hiked the tariff of electricity,” Wabba told reporters. “And to compound it they also reduced the interest rate of savings which affects mostly the poor and the vulnerable. Certainly we cannot guarantee industrial peace and harmony”