Presidency: Perpetrators of Barbarous Killings in S’east will Be Hounded by Security Forces

Presidency: Perpetrators of Barbarous Killings in S’east will Be Hounded by Security Forces

* Warns against hasty reaction to viral video

The Presidency has reacted to the alleged recent killings of non-indigenes in South-east zone with an assurance that the security agencies will go after the suspected killers.

While saying the incident is being investigated to determine its factuality, it also warned against any hasty reaction by the public to the viral cruel video of the said killings being circulated on social media.

The Presidency, in a release issued Wednesday by the Senior Special Assistant to the President on Media and Publicity, Mallam Garba Shehu, warned the perpetrators of the dastardly act to expect appropriate response from the military and security agencies. 

It also cautioned against any knee-jerk reactions, creation of panic, disruption of lives and livelihoods, or even retaliatory violence following the viral videos of the alleged killings of non-indigenes by the Eastern Security Network (ESN) and its mother terrorist group, the Indigenous People of Biafra (IPOB).

The release stated further: “While expert agencies are now verifying the factuality and veracity of the claims that accompany the horrid pictures being circulated, we call on all citizens to avoid hasty steps or conclusions that could exacerbate the situation, and on the contrary, keep to a line of conduct that will help the law to take its proper course.

“The Presidency also cautions the public against the indiscriminate sharing of posts on social media so as to deny vested interests who seek to divide us and create disturbance the chance to do so.

“In the issuance of his very strong condemnation of the wild, ‘barbarous and wanton killings of innocent people’ in the South-east as well as the other parts of the country, which he described as ‘deeply distressing’, President Muhammadu Buhari warned the perpetrators of the acts to expect tough response from the security forces.”

“On the need to tighten, MPC feels that tightening would help moderate the inflationary trade-off from the steady growth recovery so far. MPC also feels that tightening would help rein in inflation before it assumes a galloping trend, considering the progressive increase in headline inflation (m-o-m), particularly with the sharp 90 basis point increase in April 2022.”

Emefiele added, “Furthermore, MPC feels that tightening would narrow the negative real interest rate margin, improve market sentiment, and restore investor confidence.

“Equally, members believe tightening would moderate inflationary pressure pass-through to exchange rate depreciation and moderate the speed of capital flow reversal, provide incentives for foreign capital inflows, and sustain remittances.

“Lastly, tightening could moderate government domestic borrowing, as government debt servicing to revenue ratio increased significantly in recent times, threatening debt sustainability.”

He said MPC members expressed deep concern about the continued uptrend of inflationary pressure, despite the gradual improvement in output growth.

Emefiele said, “The committee noted that the current rise in inflation may be inimical to growth and, thus, hinder the full recovery of the economy. While the MPC identified several supply-side factors, which may be contributing to inflationary pressure, emerging evidence shows that money demand pressure is on the rise and is unlikely to abate until the 2023 general elections are concluded.

“The dilemma confronting the committee at this meeting, therefore, is how best to drive down domestic prices while continuing to support the fragile recovery.”

According to him, “After carefully reviewing the developments of the last two months and the outlook for both the domestic and global economies, as well as the benefits and downsides of each policy option, the committee decided to raise the Monetary Policy Rate (MPR) to rein in the current rise in inflation, as members were of the view that the continued uptrend would adversely affect growth.”

Analysts React to MPR Hike

Commenting on the MPR adjustment by the CBN, Investment Analyst, Ayodeji Ebo, noted that the rate hike came as a surprise considering the magnitude and a major drift from the previous stance of the CBN. According to him, raising MPR will not necessarily translate to increased foreign portfolio investments due to the foreign exchange challenges.

Ebo said, “This will lead to the high cost of borrowing for firms and the government. As a result, lead to a higher cost of production and a higher inflation rate. This will make the stock market less attractive, leading to a downtrend. Also, the fixed income market will be bearish in the interim, as traders try to minimise losses on their portfolios.”

Founder and Chief Executive of Centre for the Promotion of Private Enterprise (CPPE), an economic and business advocacy think tank, Dr. Muda Yusuf, explained that while the hike in MPR by 150 basis points to 13 per cent by the MPC was understandable, “whether this would significantly impact on the inflation is a different matter.”

Yusuf said, “Already, bank lending has been constrained by the high CRR (many operators in the sector claim that effective CRR is as high as 50 per cent or more for many banks), the discretionary debits by the apex bank, the 65 per cent Loan to Deposit Ratio (LDR) and liquidity ratio of 30 per cent. The lending situation in the economy is already very tight.

“The Nigerian economy is not a credit-driven economy, unlike what obtains in many advanced economies, which have much higher levels of financial inclusion, robust consumer credit framework and strong correlation between interest rate and aggregate demand.

“The level of financial inclusion in the Nigerian economy is still quite low, access to credit by households and MSMEs is still very challenging, and the informal sector accounts for close to 50 per cent of the economy.”

Yusuf added, “The transmission effects of monetary policy on the economy are, therefore, still very weak.   In the Nigerian context, price levels are not interest-sensitive.  Supply-side issues are much more profound drivers of inflation. What the recent rate hike means for the economy is that the cost of credit to the few beneficiaries of the bank credits will increase, which will impact their operating costs, prices of their products and profit margins.  Investors in the fixed income instruments may also benefit from the hike.  There would be some adverse effects on the equities market.”

Head, Financial Institutions Ratings at Agusto & Co, Mr. Ayokunle Olubunmi, said the hike was not surprising, considering the rising inflation as well as the tilting of members of the MPC in favour of a hike in rates in previous meetings.

According to Olubunmi, “If you have been following the communiqué of individual members, you would notice that gradually over the last couple of months, most members have moved from maintaining to an increase. At the last meeting, it was just a narrow decision for them to maintain it.

“It is not surprising and if looked at in the context of what is happening globally, interest rates are rising and one of the major ways the CBN can actually make Nigeria look a bit more competitive is for them to raise rates.

“Globally, inflation rate is also increasing and in Nigeria, while there are other factors that contribute to rising inflation, one of the ways of combating that is to also raise rates.

“Also, with electioneering, there would be a significant increase in money in circulation and one of the ways to try reduce the effect of that transmitting to higher inflation is to actually raise rates.”