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TOP NEWS :::
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| L-R: Grace Ekpiwere, Minister of Science & Technology; Florence Seriki, MD, Omatek Ventures Plc; Francis Ogunye, director, Omatek and Sarah Adebisi Sosan, deputy governor, Lagos State, at the 21st Anniversary Celebration of Omatek and launch of its new brand identity held in Lagos recently. |
Banks Reject Shares as Collateral •...As market meltdown persists
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As a fallout of the persistent and unbridled loss of value by stocks listed on the Nigerian Stock Exchange (NSE), banks operating in the country are now unwilling to accept shares from those seeking facility as collateral for such facilities, BusinessWorld Intelligence can reveal.
Investors who tendered their share certificates as collaterals for facilities have had their hopes of raising funds through bank loans dashed as the banks turned down their requests due to what they referred to as “inappropriate cover”. Our investigations reveal that some investors have continued to experience rejection by three second generation banks known to be daring in granting facilities to customers.
Apart from turning back intending borrowers who want to use their shares as collateral, we gathered that banks are now at a loss as to what to do with the people they had granted facilities with their shares in the Central Securities Clearing System (CSCS) depository as cover. Because of foreclosure problems, the use of property as collateral which is the in-thing in other parts of the world is gradually being de-emphasised in favour of equity cover when Nigerian capital market was on all-seasons bull-run.
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COMMENT AND ANALYSIS ::: |
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Dangers of Inflation Targeting
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Olushola Ogunniyi
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Professor Chukwuma Soludo, governor, Central Bank of Nigeria (CBN), announced early this year at an elaborate ceremony in Abuja that as from January 2009, the CBN would adopt inflation targeting as a monetary policy strategy. What is inflation targeting? Wikipedia, the free internet encyclopaedia defines inflation targeting as an economic policy in which a central bank estimates and makes public a projected or “target” inflation rate and then attempts to steer actual inflation towards the target through the use of interest changes and other monetary tools. For example, if inflation appears to be above the target, the bank is likely to raise interest rates. Or if inflation appears to be below the target, the bank is likely to lower the interest rates. Inflation targeting was pioneered by New Zealand in 1990. Current head of US Federal Reserve Bank, Ben Bernanke is a strong advocate among other supporters.
CBN’s seeming success in inflation management is pushing it to do more. It claimed inflation targeting had been implicit and informal in its monetary policy strategy. So it wants to make it formal and explicit. Among the benefits of inflation targeting are high degree of transparency and accountability in the conduct of monetary policy; anchoring of overall inflation expectations that the inflation targeters believe brings about economic stability.
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Yar’Adua Administration: After One Year, What Next?
 Alexander Ekemenah
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Introduction
We have been greatly worried and alarmed in the last one year since the arrival of Mr Umaru Musa Yar’Adua as President in Aso Rock. First we were worried about his Seven-point Agenda, its strategic intent and focus and how the agenda can be realized. But we are more alarmed at the assemblage of his cabinet, his Ministers and advisers and the “brain content” they all have to offer. To be frank, one can see clearly that the Administration has short-changed itself by the kind of men and women that populate the Cabinet. It was definitely not the best material extraction from what the intellectual apparatus of the country has to offer. Events of the last one year have borne out these worries and alarms and/or concerns.
We are worried at two intersecting levels. The first is the global perception of the country arising from periodic summative evaluation reports by the representatives, agents, proxies and privies of foreign countries which have their embassies in Nigeria. One wonder about the kind of strategic analyses being made by the various embassies in the country – the strategic perceptions and analyses that inform and determine their attitudes and policies towards the Administration in the country as a whole in the present time. We are worried about the kind of intelligence information gathered or generated by the various embassies in the country,
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