{"id":1844,"date":"2017-03-13T04:05:35","date_gmt":"2017-03-13T04:05:35","guid":{"rendered":"https:\/\/amazingproperty.com.ng\/blog\/?p=1844"},"modified":"2017-03-13T04:05:35","modified_gmt":"2017-03-13T04:05:35","slug":"cost-business-high-cbn","status":"publish","type":"post","link":"https:\/\/amazingproperty.com.ng\/blog\/cost-business-high-cbn\/","title":{"rendered":"Why cost of  doing business is high \u2013 CBN"},"content":{"rendered":"<p>&nbsp;<\/p>\n<div>\n<p>The Central Bank of Nigeria, CBN, weekend stated why the cost of doing business in the country is very high, stressing that it is a component of many factors and not interest rate alone as generally perceived.<\/p>\n<p>The CBN further stated that the exclusion of 41 items is meant to conserve foreign exchange and encourage local production to boost the country\u2019s export\u00a0 earnings.<\/p>\n<p><!-- between content ad --><\/p>\n<p>Speaking at the Vanguard Awards, the CBN Governor, Godwin Emefiele said\u00a0 the policy had been used to achieve significant sufficiency in cement production, a product whose importation could have been costing the nation over US$3.2 billion.<\/p>\n<figure id=\"attachment_644381\" class=\"wp-caption alignnone\" style=\"width: 412px;\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-644381\" src=\"https:\/\/i0.wp.com\/d19lga30codh7.cloudfront.net\/wp-content\/uploads\/2016\/05\/Godwin-Emefiele4.jpg?resize=412%2C250\" sizes=\"auto, (max-width: 412px) 100vw, 412px\" srcset=\"http:\/\/d19lga30codh7.cloudfront.net\/wp-content\/uploads\/2016\/05\/Godwin-Emefiele4.jpg 412w, http:\/\/d19lga30codh7.cloudfront.net\/wp-content\/uploads\/2016\/05\/Godwin-Emefiele4-300x182.jpg 300w, http:\/\/d19lga30codh7.cloudfront.net\/wp-content\/uploads\/2016\/05\/Godwin-Emefiele4-58x35.jpg 58w, http:\/\/d19lga30codh7.cloudfront.net\/wp-content\/uploads\/2016\/05\/Godwin-Emefiele4-260x158.jpg 260w, http:\/\/d19lga30codh7.cloudfront.net\/wp-content\/uploads\/2016\/05\/Godwin-Emefiele4-200x121.jpg 200w\" alt=\"\" width=\"412\" height=\"250\" data-lazy-src=\"https:\/\/i0.wp.com\/d19lga30codh7.cloudfront.net\/wp-content\/plugins\/lazy-load\/images\/1x1.trans.gif\" \/><noscript><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-644381\" src=\"https:\/\/i0.wp.com\/d19lga30codh7.cloudfront.net\/wp-content\/uploads\/2016\/05\/Godwin-Emefiele4.jpg?resize=412%2C250\" alt=\"\" width=\"412\" height=\"250\" srcset=\"http:\/\/d19lga30codh7.cloudfront.net\/wp-content\/uploads\/2016\/05\/Godwin-Emefiele4.jpg 412w, http:\/\/d19lga30codh7.cloudfront.net\/wp-content\/uploads\/2016\/05\/Godwin-Emefiele4-300x182.jpg 300w, http:\/\/d19lga30codh7.cloudfront.net\/wp-content\/uploads\/2016\/05\/Godwin-Emefiele4-58x35.jpg 58w, http:\/\/d19lga30codh7.cloudfront.net\/wp-content\/uploads\/2016\/05\/Godwin-Emefiele4-260x158.jpg 260w, http:\/\/d19lga30codh7.cloudfront.net\/wp-content\/uploads\/2016\/05\/Godwin-Emefiele4-200x121.jpg 200w\" sizes=\"auto, (max-width: 412px) 100vw, 412px\"\/><\/noscript><figcaption class=\"wp-caption-text\">Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele<\/figcaption><\/figure>\n<p>His words: \u201cI sympathize with people when I hear the call on the CBN to reduce interest rates. I share their goal of a reduced single digit interest rate regime in Nigeria. But many people do not seem to understand that in times of high inflation, reducing interest rates make inflationary pressures much worse, with a second round effect of making economic growth even less possible.<\/p>\n<p>\u201cIt is also important to note that interest rates reflect both cost of capital as well as cost of doing business. If we can approximate cost of capital as the average saving interest rate, which is about six percent, what then accounts for lending rates at 25 per cent or more? It is cost of doing business. For example, a typical Nigerian bank must employ the services of policemen and other security people deployed constantly to protect its branches. The bank must also provide a significant amount for reliable electricity and broadband internet services to keep its systems running. These expenditures only further increase costs of doing business for <a href=\"https:\/\/amazingproperty.com.ng\/blog\/construction-loans-for-commercial-and-residential-builders\/\">lenders<\/a>, a cost they must pass on to borrowers.<\/p>\n<p>\u201cThis is why the CBN\u2019s fight to bring inflation down is strongly connected to our quest to ensure that lending rates also come down in due course.\u201d<\/p>\n<p><strong>Why high interest rate is bad <\/strong>\u2013 LCCI<\/p>\n<p>But the Director-General of the Lagos Chamber of Commerce and Industry, Muda Yusuf, articulated the agonies businesses and the entire economy are passing through as a result of high interest rate.<\/p>\n<p>He stated: \u201cWe have monetary policy effects on business confidence. The monetary policy regime has not been supportive of efforts to rescue the economy. First, on account of interest rates, it is ranging between 25-30 per cent. How can domestic investors invest profitably when you are having an interest rate of 25-30 per cent?<\/p>\n<p>\u201cThere are no incentives for domestic investors to even play significant roles, and these are the kind of things that shape economy and the investments people do. Because as they say, \u201can economy gets the kind of investments it deserves.\u201d It is the incentives, the policy that determines the kind of business people will do, and that is why there are so many disincentives for investors to go into real sector (Manufacturing, Agriculture, Solid minerals) investments because of the issue of cost of <a href=\"https:\/\/amazingproperty.com.ng\/blog\/get-quick-loan-for-real-estate-investment\/\">funds<\/a>.<\/p>\n<p>\u201cHow can you make any reasonable returns on investment at 30 per cent in agriculture, industry, property? Maybe it is buying and selling which is even very difficult now. So, monetary policy regimes have been big issue.<\/p>\n<p>\u201cThen, there is the challenge of the way government borrows. Government\u2019s borrowing has become a major problem for investors; government is borrowing at 18 per cent, 20 per cent; zero risks, how can the private sector compete? And that is why all funds in the economy now are going into treasury bills, they are going into federal government wallet, so that has made it very difficult for the private sector to play its role in the economy in terms of this rescue mission.<\/p>\n<p>\u201cAs it is now, there is no way you can compete with government in the financial market, even the banks, they would rather buy treasury bills and bonds than to give money to manufacturers.\u00a0\u00a0 That is the kind of investments disincentives or structure that the policy has created.\u201d<\/p>\n<p><strong>CBN continues intervention to save Naira<\/strong><\/p>\n<p>There were indications this week that the foreign exchange market may witness another round of sustained appreciation of the local currency, Naira, against world\u2019s major currencies at the parallel market segment, while narrowing the premium.<\/p>\n<p>See full story in Financial Vanguard (Pages 24&amp;25)<\/p>\n<\/div>\n<p>[ad_2]<\/p>\n<p><a href=\"http:\/\/www.vanguardngr.com\/2017\/03\/cost-business-high-cbn\/\"> link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; The Central Bank of Nigeria, CBN, weekend stated why the cost of doing business in &hellip; <a title=\"Why cost of  doing business is high \u2013 CBN\" class=\"hm-read-more\" href=\"https:\/\/amazingproperty.com.ng\/blog\/cost-business-high-cbn\/\"><span class=\"screen-reader-text\">Why cost of  doing business is high \u2013 CBN<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":1845,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_seo_schema_type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[4],"tags":[1403,339,341,340,1330,684,522,41],"class_list":["post-1844","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opportunities-in-new-markets","tag-buy","tag-cbn-governor","tag-cement-production","tag-central-bank-of-nigeria","tag-financial","tag-lagos","tag-nigeria","tag-property"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":7682,"url":"https:\/\/amazingproperty.com.ng\/blog\/nigerias-economic-expansion-persist-rapidly-in-december-cbn\/","url_meta":{"origin":1844,"position":0},"title":"Nigeria\u2019s economic expansion persist  rapidly in December \u2014 CBN","author":"Amazing Property","date":"January 4, 2018","format":false,"excerpt":"By Babajide Komolafe & Elizebeth Adegbesan The Central Bank of Nigeria, CBN yesterday released its Purchasing Managers Index (PMI) survey for December which indicated continuous rapid expansion of economic activities during the month. CBN Governor, Mr Godwin EmefieleThe report showed that the Manufacturing PMI and Non-Manufacturing PMI rose to the\u2026","rel":"","context":"In &quot;Opportunities In New Markets&quot;","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"Emefiele Cbn.jpg","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2018\/01\/emefiele-CBN.jpg?fit=412%2C250&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":6669,"url":"https:\/\/amazingproperty.com.ng\/blog\/credit-availability-rises-in-q317-cbn\/","url_meta":{"origin":1844,"position":1},"title":"Credit availability rises in Q3\u201917 \u2014 CBN","author":"Amazing Property","date":"October 19, 2017","format":false,"excerpt":"By Adaeze Okechukwu THE Central Bank of Nigeria, CBN, has disclosed that the availability of credit to the corporate and households sectors increased during the third quarter (Q3) of 2017, while projecting further increase in the last quarter of the year (Q4). Governor, Central Bank of Nigeria (CBN), Mr Godwin\u2026","rel":"","context":"In &quot;Opportunities In New Markets&quot;","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"Godwin Emefiele4.jpg","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/10\/Godwin-Emefiele4.jpg?fit=412%2C250&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":5798,"url":"https:\/\/amazingproperty.com.ng\/blog\/cbn-kicks-off-my-own-home-scheme-in-lagos\/","url_meta":{"origin":1844,"position":2},"title":"CBN kicks off \u2018My Own Home\u2019 scheme in Lagos","author":"Amazing Property","date":"August 21, 2017","format":false,"excerpt":"CBN building In a bid to promote increase access to housing finance and home ownership, the Central Bank of Nigeria (CBN) has launched its Nigerian Housing Finance Programme (NHFP) in Lagos area. The new scheme called \u201cMy Own Home\u201d, a Public-Private Partnership (PPP) arrangement is a targeted at providing mortgages,\u2026","rel":"","context":"In &quot;Opportunities In New Markets&quot;","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"CBN.jpg","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/08\/CBN.jpg?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/08\/CBN.jpg?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/08\/CBN.jpg?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/08\/CBN.jpg?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/08\/CBN.jpg?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":7215,"url":"https:\/\/amazingproperty.com.ng\/blog\/dickson-cbn-others-laud-mosilo-bayelsa-rice-outgrowers-scheme\/","url_meta":{"origin":1844,"position":3},"title":"Dickson, CBN, others laud Mosilo Bayelsa Rice Outgrowers Scheme","author":"Amazing Property","date":"November 25, 2017","format":false,"excerpt":"Bayelsa State governor, Seriake Dickson has commended the Chairman of Mosilo Group, Mr. Moses Siasia for initiating the Mosilo Bayelsa Rice Outgrowers Scheme, stressing that it will\u00a0 create jobs and make the state a major player in the rice farming and processing industry. The scheme, expected to create jobs for\u2026","rel":"","context":"In &quot;Opportunities In New Markets&quot;","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"Dickson Laud.jpg","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/11\/dickson-laud.jpg?fit=412%2C274&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":5140,"url":"https:\/\/amazingproperty.com.ng\/blog\/divergent-outlook-over-inflation-in-q3\/","url_meta":{"origin":1844,"position":4},"title":"Divergent outlook over inflation in Q3","author":"Amazing Property","date":"July 3, 2017","format":false,"excerpt":"[ad_1] By Babajide Komolafe BUSINESSES and consumers have differed in the expectations of the direction of the inflation rate in the third quarter of the year. Meanwhile there was consensus of optimism about further naira appreciation and improved macro-economic performance in the third quarter. These were highlights of the Business\u2026","rel":"","context":"In &quot;Opportunities In New Markets&quot;","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/07\/inflation.jpg?fit=400%2C270&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":4996,"url":"https:\/\/amazingproperty.com.ng\/blog\/cbn-picks-eight-microfinance-banks-for-fgs-my-own-home-scheme\/","url_meta":{"origin":1844,"position":5},"title":"CBN picks eight  microfinance banks for FG\u2019s \u2018My Own Home\u2019 scheme","author":"Amazing Property","date":"June 19, 2017","format":false,"excerpt":"The scheme, \u2018My Own Home\u2019 comes as an offshoot of the Nigeria Housing Finance Programme (NHFP) set up by the Federal Government and implemented\u00a0by the Central Bank of Nigeria (CBN) with the support of World Bank\u2019s $300 million loan.\u00a0 Brighter days may lie around in the corner for prospective homeowners,\u2026","rel":"","context":"In &quot;Opportunities In New Markets&quot;","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/06\/Lagos.jpg?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/06\/Lagos.jpg?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/06\/Lagos.jpg?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/06\/Lagos.jpg?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/06\/Lagos.jpg?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]}],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/03\/Godwin-Emefiele4.jpg?fit=412%2C250&ssl=1","_links":{"self":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts\/1844","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/comments?post=1844"}],"version-history":[{"count":0,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/posts\/1844\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/media\/1845"}],"wp:attachment":[{"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/media?parent=1844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/categories?post=1844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/amazingproperty.com.ng\/blog\/wp-json\/wp\/v2\/tags?post=1844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}