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Soludo foresees a higher recession in Nigeria

Soludo foresees a higher recession in Nigeria



Former Governor, Chukwuma Soludo of the Central Bank of Nigeria had on Monday said that the recommendations for Nigeria to sell its asset in other to raise fund, is dangerous and troubling.

These recommendations, which were made; by the National Economic Council (NEC), the Senate President Bukola Saraki and the Richest man in Africa, Aliko Dangote were dismissed by Mr. Soludo, who said that “The scheme will only be a win-win for government and its collaborators in the private sector whereas, Nigerians and their economy will be the losers.

According to Soludo, the recommendations are merely an advice, subject to a final approval by the President, Muhammadu Buhari, but he considers them as fundamental flaws, based on false foundation.

Fortnight ago, NEC at the end of their retreat urged the government to try the sale of assets; Nigerian Liqified Natural Gas (LNG), a four state owned refinery, Nigeria’s equity in Africa Finance Corporation, AFC and the airports.

He urged the government to reduce their equity holdings in upstream oil and gas joint venture operation, so as to build reserves for recovery, but this recommendation has equally attracted criticisms from the Nigeria Labour Congress and other concerned Nigerians, describing the recommendation’s backbone, as ‘Economic vampires’, which the government ought to take precautions against.

In the words of Mr. Soludo, “any sale of asset now, amounts to chasing pennies, when we are losing pounds, as such a quick auction of selling national asset can only benefit the few privileged, while its jeopardy on Nigeria, would be a historical mistake”, he said.

Mr. Soludo faulted the government, asking “if the policy of selling Nigeria’s asset is to get out of recession, what happens to the revenue Nigeria loses everyday in oil production and sales through disruptions in the Niger delta?

“If your objective of selling the assets is to build government reserves and budget revenue, then you are in haste to lose pounds and grab pennies” he added.

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Banks close down as recession increases

Banks close down as recession increases



Report has shown that due to Economic recession, a number of deposit banks in Nigeria will close its branches, so as to save the cost of salary payment.

Investigation made, yet revealed that banks are still on, to the laying-off of hundreds of staff between now and December, due to the recession.

This point became clearer 24 hours ago, after Unity Bank Plc sacked 300 more workers, other than the 220 mentioned last week.

According to report, it has been discovered that most banks could no longer vouch their existence as the analysis on cost showed that banks spent more on the salaries and overheads of workers, than their income.

According to some top bank executives who claimed anonymity, “we laid-off some staff members and we are yet to dismiss others, because so many banks are just existing with no essence; no income. Such branches might be closed before the end of this year” they said.

Mr. Johnson Chukwu, an exbanker and Chief Executive Officer, Cowry Asset Management Limited described the closure as an action ongoing in the bank sector especially in this period of Economic Recession, but it is very necessary for banks to notify the Central Bank before any closure.

It was also identified that the recessioin in the economy, which started based on non performing loans in the financial system, made deposit banks loose at least N17bn profit in the first quarter of this year.

In records of financial institution posted on the website of the Nigerian Stock Exchange, it was discovered that Ecobank, Transnational Incorporated, Guaranty trust Bank Plc, Unity Bank Plc and Diamond bank Plc recorded a combined decline of N17bn in their profits before their three months tax ended in March 31, 2016.

It was compared with the PBT of N30,52bn, N32,65bn, N4.26bn and N7.94bn which was recorded by the banks in the first quarter of last year. The combined PBT of the four banks dropped by N17bn of N75.4bn in the first quarter of last year to N58.4bn in the same period of 2016.

Mr. Ayodeji Ebo, An economic analyst and head, investment advisory, Afrinvest West Africa Limitedsaid that the declining profit in the Financial sector was a reflection to the challenges facing the Nigerian economy.

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