The monetary policy committee of the CBN has kept the monetary policy rate at 13.5 percent. Nine members voted to hold the MPR, which measures interest rate to help fight inflation. The asymmetric corridor was retained at +200/-500 basis points around the MPR, cash reserve ratio (CRR) at 22.5 percent and liquidity ratio at 30 percent. CBN governor, Godwin Emefiele, also said that a hold will help the committee better understand the momentum of growth. The committee is of the opinion that increasing the cost of credit will further diminish investment flow and have a negative impact on output growth. He added that holding will help the committee evaluate the impact of interventions to support lending to the priority sectors of the economy. Emefiele, on the growth outlook for the economy, expects some fragility in Q2 with improved output for the rest of the year. The MPC feels that growth is hinged on the effective implementation of the ERGP, a supportive monetary policy, enhanced flow of credit to the real sector, sustained stability of the exchange rate and improved fiscal buffers amongst others, Emefiele said. The CBN unexpectedly cut its key rate in March this year, the first reduction in three years, to help boost economic growth.
Insurance companies in Nigeria are now faced with an imminent race to raise capital as the National Insurance Commission, the sector regulator, announced the increase of the minimum paid-up share capital of insurance and reinsurance firms by 200 percent. According to a circular, the regulator said life insurance underwriting firms, which currently have a minimum paid up share capital of ₦2 billion, will compulsorily shore up their capital to ₦8 billion. Insurance firms underwriting general business, by the new paid-up share capital regime, are mandated to shore up their capital from ₦3 billion to ₦10 billion. Composite insurance firms are expected to raise their capital from the current ₦5 billion level to ₦18 billion as reinsurance companies will move up from the current minimum capital of ₦10 billion to ₦20 billion. The regulator said the new requirements will take effect from the commencement date of the circular for new applications, while existing insurance and reinsurance companies are required to fully comply no later than 30 June, 2020. The circular was signed by Pius Agboola, Director, Policy and Regulation Directorate for Commissioner for Insurance. In July 2018, NAICOM announced an increase in the capital base of insurance companies but suspended it. At the time it introduced a tier system where Life insurance firms were supposed to have three capitalisation tiers. Tier one companies were required to have ₦6 billion as capital. Tier two life insurance firms ₦3 billion, while tier 3 firms were to remain at ₦2 billion.
The World Bank has given Nigeria about 30 years to repay the $350 million the country borrowed from it to fund the expansion of access and supply of electricity to rural communities, educational institutions and underserved micro, small and medium enterprises under the Nigerian Electrification Project (NEP). According to Thisday, Nigeria would, however, get an initial five years’ grace on the repayment of the loan, which was approved in June 2017, by the Bank, to be disbursed through it International Development Association credit window. The Rural Electrification Agency will manage the NEP and leverage private sector investments in solar mini grids and standalone solar systems to provide electricity to about 2.5 million people and 70,000 MSMEs, the fact sheet on the loan read. It will also fund the provision of reliable electricity to seven universities and two teaching hospitals under the Energising Education Programme. The programme is expected to help increase access to electricity services for households, public educational institutions, and underserved micro, small and medium enterprises, said the fact sheet in its description.
The Executive Vice Chairman, Nigerian Communications Commission, Umar Danbatta, has confirmed that MTN Nigeria paid a total sum of ₦235 billion out of the ₦330 billion fine imposed on the mobile telecommunications operator in August 2015 by industry regulatory agency over MTN’s inability to disconnect improperly registered SIM cards. The NCC had in October 2015 imposed a fine of ₦1.04 trillion on MTN for irregular registration of 5.2 million subscribers. The fine was later reduced to ₦330 billion after prolonged negotiation with both the regulatory agency and the FG. A public listing was one of the conditions agreed with MTN before the FG agreed to reduce the penalty to ₦330 billion. The government also agreed that the firm spread the payment of the fine in tranches over a period of three years.