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Economy: Saving for future use almost impossible – FCT residents

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1 year ago

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Some residents of the Federal Capital Territory (FCT) say that the current economic challenges have made saving money for future use almost impossible.

The residents, who spoke in separate interviews with the News Agency of Nigeria (NAN) on Sunday in Abuja, said that family essential needs coupled with high cost of purchase outweighed their wages.

Some respondents decried the situation, saying not much was left in their purses after the yuletide, while others said that they managed and saved a little in case of emergencies.

Mrs Precious Okere, a resident of Karu, said that the past two years had been so hard that she spent all future savings on food and other basic necessities.

“After paying rent, light bills, foodstuff and others, almost nothing is left because the prices of goods and services have greatly increased with almost 300 percent.

“Transportation cost is even the worst; then there are school fees for the children too.

“The situation has made it extremely difficult for a lot of us to save especially to meet up with needs at the beginning of the year after Christmas.

“Money doesn’t seem to be enough anymore because, just after you solve one issue, another is waiting; it is a terrible situation,” she said.

Okere noted that a lot of people, including herself, had resolved to cutting their costs to save the long list of unnecessary needs.

She, however, said while she and her family had adjusted on spending, savings was still relevant and key to solving unexpected situations.

Mr Bright Samuel, a teacher, said that he had not been able to save in the last one year because his take home pay was not enough to feed him and save at the same time.

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He said that the rate at which the economy kept getting inflated was not encouraging enough for those with little or no source of income to manage.

“Things are really expensive now; everything is on the high side.

“Some can hardly eat three times a day, others don’t even have a source of income and those with it are complaining it is not enough.

“Inflation is on the rise and economic development is moving slowly; it is tiring.

“Although, I advise people to save if they have enough or get the opportunity and if not, make do with what you have and live life one step at a time,” Samuel said.

Mrs Joy Bayo, a public servant, said that she still found the means to save up for the rainy day.

According to her, it has become imperative for government workers to find other genuine businesses to support their income.

This, she explained, would help support their wages at the end of the month and sustain their family needs.

She said that although, what she made from her side business was not much, it covered some debts and allowed her participate in monthly contributions.

“Although, I don’t save as much as in the previous years, I still get to do some contributions that allowed me pay off small debts and also contribute for foodstuff.

“I do this mostly because of my children so that when they want to get things for school, I can assist my husband.

“We need to support each other in times like this,” She said.

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Similarly, Mr Musa Makama, a photographer, said that he had to develop the habit of saving, alongside his wife, who is a civil servant, in order to meet up the demands of his family.

He explained that the money was usually saved to pay the house rent and the children school fees.

Makama added that costs for traveling and other luxuries, were not included in his savings.

“I used to spend money so much on clothes and shoes but at the moment I have to adjust because of increasing bills I have to pay.

“Any job I get, I calculate, save the profits away from the capital and spend the extra on what is essentially needed at home.

“I set a target for the year which I try to meet; this makes me limit excess spending and my wife contributes some percentage from her salary to the savings too.

“We have gradually adjusted to living within our means which is another way of saving and cutting costs,” Makama said. (NAN)

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Double-digit GDP growth necessary to achieve $1trn goal – UBA GMD

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6 hours ago

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April 15, 2025

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Group Managing Director, United Bank for Africa (UBA), Mr Oliver Alawuba, has said Nigeria requires a double-digit Gross Domestic Product (GDP) growth to achieve the projected one-trillion dollar economy target by 2030.

Alawuba made this remark on Monday in Abuja, at the ongoing 36th Edition of the Finance Correspondents and Business Editors Association of Nigeria Seminar, organised by the Central Bank of Nigeria (CBN).

The theme of the seminar is, “Playing the Global Game: Banking Recapitalisation Towards a One- Trillion Dollar Economy”.

He emphasised the necessity of institutional frameworks and government support for banks to invest in critical infrastructure that would foster accelerated growth of the Nigerian economy.

“We need to grow at double digits to get to one-trillion dollar in 2030. We need 10 per cent growth, which is achievable,” he said.

He noted that only 12 per cent of Nigeria’s GDP is represented by the total assets of banks, while other economies have over 70 per cent to 100 per cent.

According to him, this indicates a significant gap where banks can intervene and help mobilise deposits, resources, and capital, ensuring that other sectors benefit from the banking system.

“The plan so far is highly beneficial for the economy. Strong banks require strong profits. Strong banks are crucial for building the strong economy we desire.

“It’s important that banks remain profitable so they can build a very robust reserve to support the economy and the banks themselves.

“The opportunities in Nigeria are immense. Therefore, sustainability will not be a problem.

“This is because banks will now be able to raise, even with the capitalisation we have undertaken, sufficient capital to truly elevate this economy to the next level,” the managing director added.

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Alawuba also said the 50 per cent Cash Reserve Ratio (CRR) might be unsustainable for economic growth and urged its reduction, just as inflation rate was managed.

He highlighted the importance of security, financial inclusion and addressing infrastructure deficits in roads, ports and power.

He further stressed the need for tax incentives and a transition from a primary to a secondary economy to drive growth.

“We need an institutional framework and government support to invest in infrastructure and other areas to support the economy.

“A 50 per cent CRR is not sustainable if we are going to talk about the growth of the economy.

“I am happy that inflation is responding to the actions of the CBN.

“So, as the inflation rate comes down, we expect the CRR to come down,” he said. (NAN)

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GenCos Ask FG, Stakeholders To Pay N4trn Electricity Debt

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8 hours ago

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April 15, 2025

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The electricity power generation companies (GenCos) have warned that the over N4 trillion unpaid invoices owed by the federal government and stakeholders for electricity generated threatens their operations.

In a statement on Monday, signed by Sani Bello, chairman of board of trustees, Association of Power Generation Companies (APGC), the GenCos asked the federal government and key stakeholders to urgently address the issue.

According to the association, the issue is currently threatening the continued operation of their power generation plants.

“It is no more news that the power generation companies (GenCos) have continued to bear the brunt of the liquidity crisis in the Nigerian Electric Supply Industry (NESI),” the statement reads.

The association said they have made large-scale investments and have continued to demonstrate commitment by increasing capacities that align with their contract, spanning over 10 years.

The GenCos said expectations of being settled through external support such as “the World Bank PSRO has also been dampened due to other market participants’ inability to meet their respective distribution linked indicators (DLI), enshrined in the Power Sector Recovery Program (PSRP)”.

Moreso, they said the 2024 payment collection rate dropped below 30 percent, and “2025 is not any better, severely affecting GenCo’s ability to meet financial obligations”.

“Tax and Regulatory Challenges: High corporate income tax, concession fees, royalty charges, and new FRC compliance obligations are further straining GenCos’ revenue,” the GenCos said.

“Outstanding Payments: GenCos are currently owed about N4 trillion (N2 trillion for 2024 and N1.9 trillion in legacy debts). No possible solutions, including cash payments, financial instruments, and debt swaps, are in sight.

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“Budget Allocation Concerns: The 2025 government budget allocates only N900 billion, raising concerns about its adequacy to cover arrears and future payments.”

Furthermore, the group said that liquidity challenges are further worsened by the various policies introduced.

As a result of the policies, the association said “no one is under pressure to ensure GenCos invoices are fully settled”.

“The implication of this is that GenCos only get paid a portion of their invoices (9%, 11%) from whatever amount is left,” the association said.

The GenCos demanded immediate implementation of payment plans to settle all outstanding GenCos invoices.

“Reprioritization of payments under the waterfall arrangement to give full priority to a hundred percent payment of GenCos’ invoices as at when due. A clear financing plan to backstop the exposures in the NERC’s Supplementary Order to the MYTO and the DRO 2024,” the association said.

They also requested the provision of payment security backed by the World Bank and the African Development Bank (AfDB) to guarantee full payment to GenCos to enable them to meet their critical needs, ensuring adequate generation and expansion.

The GenCos urged the federal government to liberalise the market to create confidence and ensure the viability and creditworthiness of the power sector.

Also, the association demanded “full effectiveness of all market agreements, firm monitoring, and enforcement of the rules by the regulator on all market participants”.

In light of the severity of the issues, the GenCos requested that immediate action be taken to prevent national security challenges due to their failure to sustain Nigerians’ steady electricity generation.

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OPEC Cuts Global Oil Demand Forecast Over US Tariff Hike

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22 hours ago

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April 14, 2025

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On Monday, OPEC announced a slight reduction in its oil demand growth forecast, attributing the change to the effects of U.S. tariffs on the global economy.

In its monthly report, the Saudi-led organization now anticipates an increase in demand of 1.3 million barrels per day (bpd) for 2025, a decrease from the previously estimated 1.4 million bpd.

This “minor adjustment” was primarily influenced by data from the first quarter and the anticipated repercussions on oil demand stemming from the recently imposed U.S. tariffs.

OPEC projects that global oil demand will reach a total of 105.05 million bpd this year. Additionally, the organization has slightly revised its global economic growth forecast down to three percent.

The report noted, “While the global economy exhibited a consistent growth pattern at the start of the year, the short-term outlook is now faced with increased uncertainty due to the recent tariff-related developments.”

Last week, oil prices fell to a four-year low, dropping below $60 per barrel amidst concerns regarding the implications of President Donald Trump’s tariffs. However, prices saw a rebound on Monday, with Brent North Sea crude, the international benchmark, rising by 1.3% to $65.62 per barrel.

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