Nigeria’s Inflation to Peak Around 18% by 2Q 2021: Goldman Sachs By Elisha Bala-Gbogbo

(Bloomberg) — Nigeria inflation expected to accelerate in coming months, peaking close to 18% year-on-year in Q2 2021,” Dylan Smith and Andrew Matheny, analysts at Goldman Sachs says in a research note.
Country inflation outlook raised to 13.7% for this year from 12.5% and 17.1% for 2021 from 11.5% previously.

“This has pushed transactions into the parallel market, where the exchange rate is significantly weaker. The removal of a long-standing official fuel subsidy in April has also contributed to inflation linked to import prices in recent months”
Long-term implications of rising inflation will depend on its persistence. But with inflation expectations rising, a central bank policy aimed at boosting credit growth, and FX availability still constrained, “there is a chance the shock proves persistent. In this case, a larger naira depreciation may be required to re-balance the economy” the analysts say. To contact the reporter on this story:
Elisha Bala-Gbogbo in Abuja at


Here’s what a central bank digital currency holds for Nigeria

The Bank of Japan and Bank of England are the latest financial institutions to openly say they are considering creating a digital currency, sending ripples across the cryptocurrency market.

The price of bitcoin has jumped since Monday afternoon when the news broke from around $9,100 to $9,363 on Wednesday.

The interest from both central banks reflects what is becoming a growing trend in which the apex banks around the world are scrambling to learn the most cryptocurrencies and blockchain have to offer and also position themselves for future disruptions. China is believed to have taken the lead in the race to release a central bank digital currency.

Apart from Japan and the UK, Banque de France is also reportedly conducting a series of experiments on blockchain which results could potentially change the way money works. Although the bank said no cryptocurrency would be included, the experiments would include participants such as Accenture, settlement giant Euroclear, the HSBC bank, French firm, Iznes, ethereum platform LiquidShare, little-known startup, ProsperUS, crypto bank Seba, and Forge, Societe Generale’s digital capital markets spinoff.

Over the coming days, the Banque de France will begin conducting experiments with each of the candidates, according to the statement, with some of the projects expected to take as long as multiple months.

CBDCs are also expected to gain even more converts when the G7 countries meet later this year. A Japanese new outlet, Kyodo reports that the G7 meetings later this year will include discussions about central bank digital currency (CBDC) to share knowledge. It claims the Japanese government made the suggestion and the United States responded positively.

Countries in Africa are not left out in the CBDC race. At the 23rd National Banking Conference held in Accra, Ghana, the Central Bank of Ghana said it was in talks with key industry stakeholders to launch a pilot CBDC project. Ghana is not the only country on the continent making this move, the South African Reserve Bank also said last year it was in talks with partners for the possible introduction of a native cryptocurrency.

Unsurprisingly, Nigeria has held off having any direct relationship with cryptocurrency. The CBN has in the past warned the banking public to stay away from digital assets. Despite its warnings, Nigeria continues to make the top countries in the world carrying out peer-to-peer cryptocurrency transactions as well as occupying the top position in search of bitcoin across the world. Analysts have said that the country is losing more from its stance against the cryptocurrency market.

“I will argue that central bank digital currency is one of the most important trends for the future of money and payments over the next decade,” Cuy Sheffield, head of Crypto Projects, Visa said in a tweet. “Regardless of anyone’s views of whether it is good or bad, the reality is that global interest in it is not going away.”

What is CBDC?

The relationship between central banks and the cryptocurrency market in time has in the past been anything but cordial as the former had always seen the latter as an existential threat to fiat currencies. But that point of view is starting to change, thanks to the concept of a digital currency for central banks.

However, central bank digital currency (CBDC) is not a cryptocurrency, at least not in the true sense. CBDC is actually the digital form of fiat money. For instance, the Central Bank of Nigeria (CBN) decides to create a digital form of the naira.

A Central Bank Digital Currency is backed by a government’s central bank, which means they hold the liability, not the commercial banks.

One major argument for a CBDC is that it would ensure that people have access to their legal tender if for any reason cash were not readily available.

Moreover, it aligns with the drive for a cashless economy which in the era of the COVID-19 pandemic has become widespread due to research that links cash handling to spread of the virus.

This, essentially, means the existence of two legal tenders, one residing online and the other physical. This could create a situation in which the overall seigniorage – profit made by a government by issuing currency – increases due to a larger quantity of money in circulation. On the other hand, both options being available can also lead to spike in costs to a central bank.

How it works

A CBDC unit is equivalent to a paper bill and can be used as a means of payment or a store of value and a unit of account. The same way a N100 naira note for instance has a unique serial number that identifies it, each CBDC unit will also be distinguishable to prevent imitation.

It would also work alongside other forms of regulated money such as cash, coins, and bonds but enjoy the same protective capabilities the blockchain provides.

Expectedly, it would be controlled solely by the central bank.

CBDC models

The International Monetary Fund (IMF) predicts that two models of CBDC will be dominant in the future. The models are the synthetic CBDC or sCBDC and the two-tiered CBDC currently being explored by various central banks, including the People’s Bank of China (PBOC).

According to the IMF, while the two-tiered model seems more ideal for central banks, the sCBDC model opens the door to the private sector. In view of the sCBDC model, the central bank would privately issue digital coins, denominated in the domestic unit but fully backed with central bank reserves.

The central bank would then license operators and carefully supervise them. In addition, legal structures would ensure that user funds, held as central bank reserves, would be isolated from the potential bankruptcy of sCBDC operators.

“Whatever route we take, we are in for changes in technology and payments. This is certainly an opportunity for the public and private sectors to get to know each other better, and to explore more efficient and effective ways to collaborate — not just domestically, but also across borders,” Tobias Adrian, Financial Counsellor and Director of the Monetary and Capital Markets Department, IMF, said.

by Frank Eleanya 


Here’s Why a Mobile Accounting App Can Improve Your Small Business

Are you an entrepreneur who is always on the go? A small business owner who travels for work? Or are you a travel enthusiast, but also really keen on growing a successful business? If this sounds like you, then adopting a mobile accounting app might be just the thing for you. After all, there must be a way to improve your business while on-the-go, without sacrificing the needs of your business or your clients.

If you’re in the same boat, then read on to discover a few reasons why (and how) your small business can benefit from adopting a mobile accounting app for your bookkeeping purposes.

A Sense of Immediacy

Small business owners are increasingly coveting the ability to work on their businesses from anywhere. Whether you’re a frequent traveler or simply don’t believe in a standard 9-5 workday, cloud-based accounting software works like a charm to help provide flexibility.

However, not all accounting platforms offer a companion accounting app. Moreover, not every accounting app out there is the right fit for your business.

Accounting software that has mobile accounting apps offers much greater mobility, flexibility, and therefore immediacy. In an age of instant gratification, forgetting to bring your books to Mexico or struggling to access your financial reports while out at dinner just doesn’t cut it anymore.

Serving your Clients Well Through the Payment Process

Knowing your clients’ needs are important: how else do you attract, maintain and retain customer loyalty?

But doing good work for your clients is only half the battle. In the accounting world, invoicing can be the hard part and is just as important.

Set up strong internal invoicing processes to not only help minimize rework but to demonstrate to your clients that they should be paying you on time and consistently.

Mobile accounting apps are designed to help you serve your clients from literally anywhere. As long as you have your smartphone, you have access to the important stuff. You can upload expense details on the fly, send a well-crafted invoice while you’re eating out, or access financial reports when an investor requests for them.

If your invoices are unprofessional and late, sent out in inconsistent manners, numbered incorrectly, or consists of calculating errors—how do you expect your clients to take payments seriously, or at all?

With your mobile accounting app, you also increase the likelihood of your ability to send invoices to your clients on-time—which directly translates to them doing the same for you. After all, respect is a two-way street.

Grow Technological Capabilities

Adopting accounting software is a big leap. Particularly when a mobile accounting app is thrown into the mix. But when used correctly, a small business owner can use it as a tool to improve their business.

Accounting software that offers the use of a mobile accounting app provides numerous benefits to entrepreneurs and small business owners who are in the pursuit of growing their business. Some of these include: providing a sense of immediacy, serving your clients through the payment process, and the ability to grow your technological capabilities.


Business Loan: Advantages and Disadvantages

Business loans serve as a powerful tool to help fund, launch, and grow a small business. As a small business owner, you may be looking to secure financing to maintain business operations, expand locations, invest in new equipment, or hire more employees. A business loan helps you achieve all this.

Not sure if a business loan is right for you? In this article, we break down the advantages and disadvantages of taking out a business loan, as well as questions to ask yourself if you’re still overwhelmed.

Advantages of Borrowing

Receive an influx of cash to grow your business
The easiest and most obvious way to gain major cash flow is to take out a business loan. If your business is at a stage where it’s ready to launch, expand, or grow its operations, business loans are a good choice. Compared to other funding options, you access a relatively large amount of capital for multiple purposes.

Maintain control of your business
Unlike borrowing equity (where business issues shares), taking out a business loan from the bank provides you full control over your business. Banks don’t get involved in any aspect of running your business, which means as a business owner—you retain full control and management over your company’s operations, while still reaping the benefits of extra cash.

Interest is tax-deductible
The words “tax-deductible” probably ring in your ears: it’s great news. Interest on your business bank loans is tax-deductible. This is particularly so with fixed-rate loans, in which the interest rate does not change throughout the course of your loan. This makes it much easier for small business owners to budget and plan for monthly loan payments!

Disadvantages of Borrowing

Tough to qualify
Unless you’re a small business owner with a considerable track record of valuable assets (i.e. real estate), then, unfortunately, it’s highly difficult to obtain business loans. Like applying for a mortgage, banks are extra careful with lending. They want to make sure that you can pay them back. Often, borrowers must provide the bank some sort of guarantee, such as having their personal assets seized in the event the business fails and is unable to repay all or part of a loan.

High-interest rates
Another disadvantage of small business loans is high-interest rates. In addition to that, often the amount a business qualifies for is also not enough to meet a company’s needs.

Borrowing money at a high-interest rate serves as a disservice for the business, as it often has to deal with the business loan and additional funding to cover funds not provided by the bank.

Questions to ask when considering a business loan
Borrowing money for your business comes with its pros and cons—as with any business decisions that involve money. If you are still unsure about whether a business loan is right for you, here are several questions to reflect on:

  • How much funding do I need?
  • What is the timeline in which I need the money?
  • Do I qualify for lender requirements?
  • And if so, how do I plan to spend the money?

9 Life-Changing Financial Tips Everyone Should Know Before 30

If you don’t tell your money where to go, you’ll be asking where your money went.

  1. Business owners make the most money in the long run…. That’s probably not surprising, but it comes with a high price. Usually, most business owners start off very slow. It takes years and years to build a truly profitable business, but once they get over that hump, the sky is the limit in regards to income. Keep the faith.
  2. People that work in sales have high earning potential… Medical sales, stock brokers, insurance brokers… pretty much any position that has the ability to earn commissions or bonuses can grow into a lucrative career over time. Even if a salesperson frequently switches jobs, typically they change to higher paying opportunities with greater payout potential as their careers mature.

The number one rule of budgeting: pay yourself first.

  1. Just because someone makes a lot of money, doesn’t mean they keep a lot of money. Let’s face the facts, if you make over $1 million per year but you spend over $1 million a year, then you are broke. I’m talking about everyday bills as well as expensive cars, designer clothes, jewelry, fancy dinners — there’s plenty of ways to give your money away. The number one rule of budgeting: pay yourself first. Just because you’re making a lot of money now doesn’t mean you always will. Automatically transfer the amount you want to save each pay period into to a separate account, and the needless stuff will weed itself out.
  2. Inheritance matters… Those blessed enough to be given a financial head start have an incredible advantage in making down payments on houses, starting businesses, or maxing out retirement contributions more quickly. Not coincidentally, this same group of people tend to have parents who have educated them on personal finance, and tend to be significantly more prepared to build wealth than the average person. This should be the ultimate goal for our children, but we must start taking steps now.

“If you don’t tell your money where to go, you’ll be asking where your money went.”

  1. People that don’t track their spending often end up in financial strain… Perhaps counter intuitively, those with higher bank account balances are usually looking at every little expense and challenging every fee on their account. They know precisely where every dollar goes. On the other side of the coin, those who do not have much money are typically less aware of how much they spend and are being charged. Keep an eye on your expenses!
  2. 401k investing is critical… All W-2 employees should definitely look into their company’s 401k program. Company’s often incentivize participation in 401k plans by annually matching some percentage of your contributions. People who max out their 401k accounts and IRAs have a much more realistic chance of retiring comfortably than those who don’t. This, over time, can be a game changer even for someone who does not have a relatively high income. Free money for doing right thing!
  3. Having a good credit score is invaluable… People with good credit have the ability to build wealth via increased purchasing power. Loans are much more expensive for folks with bad credit. Having a good credit score is akin to being a straight-A student in high school or having a great relationship with the Principal. You can get away with more and have a lot more freedom than the average student when you’ve built a rapport. A bad credit score will always slow you down when trying to build wealth because banks won’t be nearly as willing to loan you the money you need.

If you’re going to take a risk with credit, use it to try and make more money.

  1. Debt can make or break you…. Having a great credit score to borrow funds for cheap is one thing, but knowing how to properly manage the funds is another. In reality, debt should only be used to build wealth or gain some type of monetary return. Property, businesses, and personal education are all great examples of good debt. Sadly though, most people abuse debt by overspending with credit cards on things that offer no return that they typically can’t even afford in the first place. If you’re going to take a risk with credit, use it to try and make more money.
    Note: You can keep easy track of your score with apps like Credit Karma and Mint.
  2. Real Estate investing can be a great wealth builder… Owning a home is great, however owning an investment property is even better. Multiple streams of income are they key to building wealth. People that own investment properties are able to diversify their income and make mailbox money. On top of the opportunity for increased income, savvy investors can buy and flip homes in order to potentially see even larger returns. The choice is yours!
    Financial health is a building block of life and should be taken just as seriously as your physical health. I hope this will help you in any way possible!

Trey Parker, MBA