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Nigeria loses N138b to public holidays

By Chijioke Nelson
08 July 2016   |   4:05 am
The three-day public holiday declared by the Federal Government in an economy inching closer to recession, will cost the country N138 billion by the time activities resume today.
Fun seekers at the Millenium Park during the Eid-el-Fitr holiday celebration in Abuja on Thursday (7/716). PHOTO: NAN

Fun seekers at the Millenium Park during the Eid-el-Fitr holiday celebration in Abuja on Thursday, July 7, 2016. PHOTO: NAN

The three-day public holiday declared by the Federal Government in an economy inching closer to recession, will cost the country N138 billion by the time activities resume today.

Reason: There were scheduled treasury bills auction estimated at N94 billion, as well as N44 billion treasury bills maturity for the week, which the unusual straight three-day have put off.

The monetary policy measures were expected put liquidity into the system in the week, with the auction component helping to taper its effect on money market rates.

The treasury bills auctions and maturities are usually executed between Tuesdays and Thursdays, save for seeming special interventions on Fridays.

In the event the monetary policy measures are implemented today, the effect in the market rates would be minimal and driven by sentiments because the liquidity will not have trickled down to the market and volumes of interbank activities are usually moderate.

“So, the week just ran like a closed economy. It is as if everyone was just sleeping and not waking up at all. That is exactly how gains and losses and value addition to the economy also remained standstill. Friday’s transactions are usually cautious one due to speculations over the week ahead. The auctions on Friday will not make much meaning,” a financial market operator told The Guardian.

Last week, the treasury bills market saw renewed buying interest with the launch of the Naira-settled Over-The-Counter market, as the average rate declined on all the trading days of the week.

A decline in the rate of treasury bills shows confidence and an indication that traders are pricing the security with lesser risks attached, as well as the quantity of money in the market.

Average rate inched lower on Tuesday to 10.2 per cent as system liquidity improved owing to inflow of Federal Accounts Allocation Committee disbursement, from 10.7 per cent on Monday.

The sentiment continued till Friday, when average bills’ rate closed at 9.4 per cent, down 1.7 per cent week-on-week on the back of N115 billion Open Market Operations maturity inflow into the system by Thursday.

Similarly, the interbank lending rate, particularly the Overnight, fell to five per cent on Friday, compared with 15 percent a week earlier, as cash from maturing treasury bills and payments by government to its contractors, boosted liquidity.

According to Reuters, the increased cash flow left the money market with a N267.10 billion surplus balance on Friday, reversing the N300 billion shortfall a week earlier and pushing down the cost of borrowing among commercial lenders.

Many banks had approached the central bank’s discount window to borrow short-term cash last week to enable them meet obligations and ease liquidity pressures, traders said.

Traders said the expected release of capital spending by the federal government to re-inflate the economy should inject more cash into the money market in the coming days, which should impact positively on the interbank rate.

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10 Comments

  • Author’s gravatar

    That’s not all. Add the commission from stock exchange, fees from immigration, road safety etc. The country is just a joke

  • Author’s gravatar

    Nigeria Government economic policy is all about oil. With oil flowing, nothing else matters.

  • Author’s gravatar

    i thought you’d just look at the GDP at about $400Billion, which is like N12trillion. If we simply divide that by say 300 working days, we lost like $1.1 billion in one working day of inactivity, which is like N300billion. TBills can always be sold at a latter date

  • Author’s gravatar

    Buhari has completely engaged Nigerian motion on reverse. Just as INEC activities were inconclusive, the Sultanate’s sighting the moon was seemingly inconclusive and the Nigerian economy was inconsequential as the league of Imams kept partying for 72hours. The dance of an illiterate and Islamic extremist president

  • Author’s gravatar

    Is it public holiday that occasioned the loss? It is the moon that caused that. Tell me now, whose fault, the moon of course. I wander why the moon even came out, probably we would have been on holiday throughout the year yet drawing salaries for indolence. Nations without sure economic focus will always give meaningless holidays to show the level of mediocrity and loss of foresight needed for nation building and development.

  • Author’s gravatar

    The question is “was it really worth it to have the holiday run for three days?” Absolutely “NO”. If the moon was not sighted, we will still be in holiday? Do we really know what we want in this country? I just hope this government is not allowing ethnocentric sentiments override its vowed pledge to serve the interest of our fatherland.

  • Author’s gravatar

    The problem is a forced union that guarantees perpetual poverty to the country.
    As presently constituted this country is doomed.

  • Author’s gravatar

    The president and his cabinet should put favouring religion aside and put the interest of the nation in their heart.

  • Author’s gravatar

    I have long awaited this comment from CAN and its followers. Not to worry, so long as Friday is not a public holiday in Nigeria, Sundays would cease to be public holidays too. That way, we can all work six days a week and be very very productive.

  • Author’s gravatar

    New moon dates are available on the Internet such that moon-related festivals can be scheduled properly to avoid disruption of key economic activities. It’s archaic to require a physical sighting of a new moon crescent in our cloud-ridden part of the world; quite unlike the situation in the Middle East or North Africa where the near-absence of aerial humidity facilitates physical moon-sighting. Cheers!