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Tag: Nigerian economy

  • Nigerian Economy: Keystone Bank Chairman, Lady Chukwudozie canvasses for digital banking

    Nigerian Economy: Keystone Bank Chairman, Lady Chukwudozie canvasses for digital banking

    The Chairman of Keystone Bank PLC, Lady Ada Chukwudozie, has emphasised the need for innovation in the banking sector, to tackle the nation’s economy.

    During the bank’s annual end-of-year dinner party held in Lagos at the weekend, Lady Chukwudozie highlighted that digital transformation was one of the significant achievements the bank has accomplished the year 2024.

    Lady Chukwudozie said, “This year, we have navigated many challenges, but we have also seized countless opportunities. Our accomplishments have been significant, ranging from innovative advancements in digital banking to strengthening our relationships with our valued customers and stakeholders. While enhancing our reputation as a customer-focused institution.

    “This opportunity has provided me with the chance to join in building upon the solid foundation that has been laid. Tonight, I’d like to share some of the accomplishments that have made this year one to remember, all of which have been possible thanks to the strong partnerships we’ve built, and outline our vision for the future.

    “Under our leadership, Keystone Bank has made remarkable strides in several key areas – Digital Transformation, Market Expansion, Sustainability and Corporate Responsibility, Human Capital Development, amongst others.

    While stressing that, the bank has scored some milestones through its digital transformation, Lady Chukwudozie said, “the bank currently ranks very high in digital channels experience according to the KPMG Banking Industry Customer Experience Survey (BICX) 2023 across digital channels (USSD – 1st, Mobile App 3rd, Internet 2nd, ATM 2nd”.

    She said, “Keystone Bank ranked top three for customer journey phases covering account opening, transacting, product purchase, complaints resolution and relationship management. I believe the Bank can leverage its digital appeal to attract customers investors, and attain optimal commercial success as we journey into a new fiscal year”.

    Lady Chukwudozie, who also serves as the Chairman of the Manufacturers Association of Nigeria (MAN) for Anambra, Enugu, and Ebonyi Zone,
    mentioned that the bank planned to concentrate on expanding its digital offerings in the upcoming year.

    “As we move into the next year, we shall do so with a renewed sense of purpose and continued focus on strengthening our partnerships. The world around us is changing rapidly, and as a Bank, we shall remain agile and adaptive to the evolving market dynamics. Our strategy for the coming year will focus among others, expanding digital offerings; Sustainable Finance and Strengthening Partnerships,” she said.

    The Chairman appreciated the board, employees, stakeholders and customers for their unwavering support, which she noted has fueled the progress of the bank.

    “None of this would be possible without the unwavering support of our Board, executive leadership, and of course, you—our loyal employees/stakeholders. I want to particularly recognize the efforts of our staff, who have shown incredible resilience and dedication in the face of challenges. Your passion and drive are the lifeblood of Keystone Bank, and I do not doubt that together, we will continue to achieve greater things.

    “To our customers, thank you for your trust and loyalty. Our partnership with you is invaluable, and we are committed to continuously improving and providing you with the best financial solutions to meet your evolving needs,” Lady Chukwudozie added.

    The event was attended by Governor of Lagos State, Jide Sanwolu; his Zamfara State counterpart, Dauda Lawal; Benue Deputy Governor, Sam Ode; Labour Party Presidential Candidate, Mr. Peter Obi; former Governor of Sokoto State, Senator Aminu Tambuwal; President of MAN, Otunba Francis Meshioye; and former Minister of Interior, Capt. Emmanuel Iheanacho.

    Other dignitaries include, Emir of Zazzau, Ahmed Nuhu Bamalli CFR; Traditional Ruler of Ezinifite, Igwe Bob Eze; Publishers of Champion Newspaper, Mr & Mrs Uche Iheakanwa; Prince Chris Igwe, Chef Chidi Anyaegbu of Chisco Motors, Chief Martin Agbaso Ochudo of Igbo land, Elder & Barr. Mrs Ngozi Ekeoma, Mahmud Tukur, Nkiru Anumudu, Mrs Uredi, Captains of industries, amongst others.

  • Rising inflation plunges Nigerians further into Hardship

    Rising inflation plunges Nigerians further into Hardship

    Nigeria’s annual inflation rate has surged to an alarming 24.08 per cent in July, up from 22.79 per cent in the month of June, according to data released by the National Bureau of Statistics (NBS) on Tuesday.

    The NBS also reported that on a year-on-year basis, the headline inflation rate is a staggering 4.44 per cent points higher compared to the same period last year, where it stood at 19.64 per cent.

    ““This shows that the headline inflation rate (year-on-year basis) increased in July 2023 when compared to the same month in the preceding year (i.e., July 2022),” the NBS said.

    Of particular concern is the steep escalation in food prices, as the food inflation rate surged to 26.98 per cent in July, up from 25.25 per cent in June.

    This surge in food costs worse by the removal of fuel subsidy in May is hitting Nigerian families hard, leaving many struggling to afford basic necessities.

    President Bola Tinubu’s announcement of the removal of petrol subsidies during his May 29 inauguration was aimed at streamlining economic efficiency.

    However, this decision has inadvertently led to a wave of price hikes in transportation and across goods and services, significantly impacting the cost of living for Nigerians.

    Another policy that has played a role in the price surges is the Central Bank of Nigeria’s (CBN) decision to unify all segments of the foreign exchange (forex) market, with the aim of enhancing transparency and boosting investor confidence.

    TheNewsGuru.com (TNG) reports that the move has exerted pressure on the local currency and manufacturers, ultimately contributing to the price surge.

    In a bid to counter the rising inflation, the CBN took an unprecedented step by raising interest rates to levels not seen in nearly two decades.

    Recognizing the severity of the food price crisis, President Bola Tinubu declared a State of Emergency in July, aimed at addressing the urgent issue of food insecurity.

    The President further directed that all matters concerning food and water availability and affordability be brought under the jurisdiction of the National Security Council.

    In its inflation report on Tuesday, the NBS noted that factors contributing to the inflation surge include rising costs in various sectors, such as food and non-alcoholic beverages (12.47 percent), housing, water, electricity, gas, and other fuels (4.03 percent), clothing and footwear (1.84 percent), transport (1.57 percent), and more.

    The bureau said the rise in food inflation on a year-on-year basis was caused by increases in prices of oil and fat, bread and cereals, fish, potatoes, yam and other tubers, fruits, meat, vegetables, milk, cheese, and eggs.

    “On a month-on-month basis, the Food inflation rate in July 2023 was 3.45 per cent, this was 1.06 per cent higher compared to the rate recorded in June 2023 (2.40 per cent).

    “On a month-on-month basis, the report said the rise was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, fish, oil, and fat.

    “The average annual rate of food inflation for the twelve-month ending July 2023 over the previous twelve-month average was 24.46 per cent, which was a 5.71 per cent points increase from the average annual rate of change recorded in July 2022 (18.75 per cent),” it said.

    Recent findings from a survey conducted by a Lagos-based public perception consulting and strategic communication firm, CMC Connect LLP,  in partnership with Analysts Data Services and Resources (ADSR), indicate that 62 per cent of Nigerians believe the country is on a path of progress under President Tinubu’s leadership.

    The survey which was drawn from 1,714 participants across Nigeria’s six geopolitical zones, sought the opinions of citizens on the initial 60 days of President Tinubu’s administration, as well as expectations.

    However, two other separate polls conducted online indicated that a significant number of Nigerians did not share the optimism reflected in the CMC Connect LLP survey findings.

  • Analysis: Economic and business implications of fuel and FX subsidy removal

    Analysis: Economic and business implications of fuel and FX subsidy removal

    The removal of fuel subsidies and adoption of a more flexible exchange rate system had been significant policy considerations in Nigeria for many years, with the goal of improving efficiency, reducing fiscal pressures, attracting investments, and promoting economic growth.

    The Nigerian government in the past subsidized fuel to cushion the impact of fluctuating global oil prices and maintain social stability.

    Similarly, Foreign Exchange (FX) subsidies were implemented to provide favorable exchange rates for specific sectors or to support the importation of essential goods and services.

    These subsidies were aimed at maintaining price stability and supporting economic activities in key sectors, yet their sustainability and effectiveness remained subjects of debate and criticism.

    Subsidies on fuel were associated with issues such as smuggling, market distortions, corruption, and significant fiscal burdens on the government. Foreign exchange subsidies have also faced challenges due to limited forex reserves and the need for more market-driven exchange rate mechanisms.

    In a bold move, President Bola Tinubu swiftly announced the removal of fuel and FX subsidies after his inauguration on May 29th, attracting both applauds and criticisms, almost in equal measures.

    TheNewsGuru.com (TNG) reports that the removal of these subsidies is set to have far-reaching implications on Nigeria’s economy and business landscape, and highlights the following likely consequences that will shape the future:

    Decrease in Air and Noise Pollution

    Following the recent removal of subsidies on Premium Motor Spirit (PMS), the price per litre of this commodity has surged from N195 to N537. This significant increase in cost has brought about a notable shift in the usage of generators running on PMS.

    As a result, it is anticipated that there will be a decrease in both air and noise pollution, presenting a positive outlook for the environment and public health, particularly in major cities such as Lagos and Abuja where generator reliance is prevalent.

    Decongestion of roads

    With the soaring cost of purchasing a litre of PMS, many individuals have found it financially burdensome to continue using private vehicles for their daily commute.

    As a result, a significant number of workers are now compelled to prioritize cost over convenience and have made the conscious decision to abandon their personal vehicles and join the ranks of public transportation users.

    This shift in behaviour has brought about a tangible reduction in the number of private vehicles on the roads, alleviating the congestion that has long plagued major cities like Lagos and Abuja during peak hours.

    By embracing public transport as a more affordable alternative, commuters are not only able to mitigate the impact of the price hike on their budgets but also contribute to a more efficient and streamlined traffic flow, resulting in shorter travel times and improved road safety.

    Increase in the price of commodities

    The removal of fuel and FX subsidies accompanied by the subsequent increase in fuel prices, has a direct impact on the prices of commodities. The heightened importation and transportation costs, increased production expenses, and currency devaluation all play significant roles in driving inflationary pressures. As producers and suppliers adjust their pricing strategies to account for these added expenses, consumers ultimately bear the brunt of these adjustments through higher prices for goods and services.

    High exchange rate volatility

    Floating the naira may lead to high exchange rate volatility due to various factors such as market forces, speculation, external events, market sentiment, and limited central bank intervention. These factors contribute to frequent fluctuations in the value of the currency against other currencies, causing uncertainty and risks for businesses. Exchange rate volatility can impact import and export costs, investment decisions, and overall economic stability.

    Increase in export competitiveness

    When the currency is allowed to fluctuate based on market forces, it can result in a depreciation of the currency’s value. A weaker currency makes exports more affordable and competitive in foreign markets. This can potentially boost export volumes and revenues, benefiting businesses engaged in international trade. The increased competitiveness can help stimulate economic growth and improve the country’s balance of trade.

    Increase in capital flows and foreign investment

    By adopting a floating exchange rate system, Nigeria will be able to create a more flexible and market-driven exchange rate environment. This increased flexibility can attract foreign investors seeking opportunities.

    The ability to freely convert currencies and potentially benefit from exchange rate fluctuations can make the country more appealing for foreign investment. This influx of capital can contribute to economic growth, job creation, and the development of various sectors, reflecting confidence in the country’s economic prospects and policies.

    Speaking from Paris, France, President Bola Tinubu highlighted the importance of the removal of fuel subsidy and streamlining the exchange rate to attracting Foreign Direct Investment (FDI) to the country.

    Tinubu extended an invitation to prospective investors, urging them to seize the abundance of opportunities that await them in the vibrant Nigerian market and underlined the government’s unyielding commitment to fostering a propitious business environment that caters to the needs and aspirations of both local entrepreneurs and global investors alike.

    Increase in debt servicing

    the devaluation of the naira increases the cost of servicing foreign currency debt, leading to higher repayment burdens, and affecting the financial stability and ability to meet debt obligations.

    Decrease in wealth valuation

    The devaluation of the naira can result in a decrease in wealth valuation, particularly for individuals and entities holding assets dominated in foreign currencies. As a result, individuals and entities may experience a reduction in their net worth and financial standing.

    This decrease in wealth valuation can also have various implications, including potential changes in investment decisions, asset allocation strategies, and overall financial stability.

    In summary, while some challenges may arise, the removal of fuel and FX subsidies is expected to improve fiscal stability and pave the way for a stronger and more resilient economy.

     

  • NIMASA expresses determination, commitment to transforming maritime sector

    NIMASA expresses determination, commitment to transforming maritime sector

    The Nigerian Maritime Administration and Safety Agency (NIMASA), has expressed commitment to playing a leadership role that will ensure growth and development of the maritime sector.

    Hajiya Rakiya Lamai, Deputy Director, Shipping Development of NIMASA, made this known in Kaduna on Sunday, at the closing ceremony of the 44th Kaduna International Trade Fair.

    Newsmen reports that NIMASA has received an award for emerging the second runner up at the fair.

    Lamai, who noted that the theme of this year’s fair; “Promoting Value Addition for Sustainable Growth and Development”, was apt, appreciated the efforts of the Kaduna Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA) for the award.

    She noted that for emerging second runner up at the fair, it showed that NIMASA had not wasted its efforts or contributions towards the success of the fair.

    “We thank KADCCIMA for giving us the opportunity to participate, and for the award which is unprecedented,” she said.

    NAN also reports that NIMASA promised to exploit all the additional values of the maritime sector, by bringing it to bare, for sustainable growth and development of the Nigerian economy.

    The Director General (D-G) of the agency, Malam Bashir Jamoh, explained that Nigeria had a coastline of about 853km and about 10,000km of inland waterways, 12 nautical miles of territorial waters, 200 nautical miles of Exclusive Economic Zone.

    Jamoh, who was represented by the coordinator of the Abuja Zonal Office of the agency, Mr Zailani Attah, said that the maritime sector played a greater role in international trade and Nigeria’s import and export sectors.

    “It generates appreciable revenue and creates lots of jobs. It is critical to the supply chain of the Nigerian economy,” Attah said.

    While calling for more collaboration among stakeholders in realising a robust Maritime Sector interface, the DG announced that a zero tariff had been approved for brand new imported vessels.

    He disclosed that one and two years old vessels would pay minimal duty of between one to two per cent, as a means of boosting indigenous shipping through fiscal incentives.

    Jamoh further said that the agency would prioritise the integration of blue economy into the nation’s circular economic restoration and growth plan.

    “There is no better time to have a national carrier and develop the maritime industry than now, when the world is gradually looking away from fossil fuels.

    “Nigeria cannot be caught unawares; we need to look at ways of developing our shipping sector, which could earn the country even more than oil annually.

    “We had in 2021 deployed the modern technology, using the instrumentality of the Deep Blue Project to implement the first ‘S’ of the tripod, which is security, to stem the tide of piracy in the country’s waterways,” he said.

    He explained that the objective was to keep the waterways secure for all maritime activities to thrive, thereby positioning Nigeria’s economy on the path of rapid growth.

    “Statistics released by the International Maritime Bureau, shows piracy incidents in the Gulf of Guinea dropping from 81 in year 2020, to 34 in 2021, representing 58.02 per cent.”

    Jamoh further said the wreck removal exercise was another milestone in the incremental achievement of the ‘Triple S’ strategy of the current management of NIMASA, anchored on maritime safety security and shipping development.

    He added that in December 2021, they launched the third phase of Nigerian Seafarers Development Programme (NSDP), called NSDP Tera, sponsoring 200 cadets to different countries.

    He explained that the NSDP, aimed at addressing the dearth of trained and certified seafarers in the Nigerian maritime industry.

    NAN reports that the National Agency for Science and Engineering Infrastructure (NASENI), emerged 1st in this year’s fair, while Dangote Group clinched 2nd position.

  • Insurance industry shifting tech paradigm – FITC

    Insurance industry shifting tech paradigm – FITC

    Managing director/CEO FITC, Chizor Malize, has asserted that globally, the insurance landscape is undergoing a paradigm shift.

    She spoke during the 2022 NAICOM Board retreat themed: “Strengthening Board Resilience and Agility for Success” held in Abuja.

    Malize stated that digital is no longer a nice to have but a critical part of business strategy and sustainability. Thus, for the insurance industry to succeed in maintaining economic and social relevance, key players need to partner in offering innovative solutions for new and emerging risks.

    Speaking further, Malize noted the need for NAICOM to lead the drive for financial inclusion, leveraging Microinsurance, Takaful insurance, and so on, and to also drive industry innovation through tech-enabled insurance solutions, adaptable business models & products to provide insurance customers the opportunity to buy as they go.

    Malize, said financial inclusion can be enhanced through tech-enabled insurance solutions, adaptable business models and products that give customers the opportunity to buy as they go.

    She advised that digitisation of organizational operations is a must have for every right thinking business to drive strategy and sustainability.

    She said for businesses to succeed in maintaining economic and social relevance, key players needed to partner in offering innovative solutions for new and emerging risks.

    Other members at the event include Dr. Emmanuel Meribole Permanent Secretary, Service Policies & Strategies, Office of the Head of the Civil Service of the Federation (OHCSF); Engr. Ishaq Yahaya, representative of DG, Bureau of Public Procurement (BPP) and Director, Compliance, Certification & Monitoring; Malam Arabi, DG Bureau for Public Service Reforms, SGF; Mr. Aloy Igbojekwe, Managing Partner, De Hertz Consulting, and Mrs. Afolake Abubakar-Lawal, Managing Partner, Imperial Law Office Attorneys, facilitated meaningful deliberations around the retreat objectives, with great insights and experiences.

    The Commissioner for Insurance, Sunday Thomas, in setting the tone for the board retreat, stressed the need for acculturation of the board members into the public sector.

    Speaking on the need for improved service delivery imperatives, Permanent Secretary, Service Policies & Strategies, Office of the Head of the Civil Service of the Federation, Dr. Emmanuel Meribole emphasised the need for training and capacity development.

    He stated that the revised Public Service Rule makes a case for standardized trainings, as training and capacity development will provide more opportunities for enhanced and adequate service delivery.

    Addressing the roles and responsibilities of the board in procurement, Engr. Ishaq Yahaya, Director, Compliance, Certification & Monitoring, Bureau of Public Procurement revealed that procurement needs to be done with the expected level of compliance and appropriation.

    He also charged the board to ensure a robust knowledge of the Procurement Act and an understanding of their role in procurement to ensure a harmonious working relationship with management and to avoid contravening the provisions of the Procurement Act.

    Director-general, Bureau of Public Service Reforms (BPSR), Dr. Dasuki Arabi buttressed the need for boards to keep themselves abreast with the commission’s business and industry trends and to develop agility in their dealings.

    “When public service organisations become agile, it enables new ways of working across policy, regulatory and service delivery. Agility protects the government from disruption” he said.

    Managing Partner, Imperial Law Office Attorneys, Mrs. Afolake Abubakar-Lawal emphasised the need for board members to be active in the affairs of the board and the commission, and to not drop the ball on ethical conduct by equipping themselves with corporate governance knowledge and imbibing same.

    “Every board member is required to understand corporate governance guidelines and regulatory provisions, and their actions should be guided by these provisions,” she said.

    The board retreat was aimed at equipping the NAICOM board with the requisite knowledge needed to successfully navigate the increasingly complex and dynamic insurance landscape, the current and emerging business terrain, and its change dynamics, and provide an understanding of the global insurance industry trends and their implications for the board’s regulatory oversight role and supervisory practices.

    The board retreat brought to the fore valuable and critical recommendations and action points for the board, including the need for NAICOM to actively embrace insurtech, as technology is drastically shaping and reshaping insurance products and services and the regulation of insurance.

    The board retreat brought to the fore valuable and critical recommendations and action points for the board, including the need for NAICOM to actively embrace insurtech, as technology is drastically shaping and reshaping insurance products and services and the regulation of insurance.

    The board was therefore urged to innovatively rethink ways of leveraging technology as a tool for supervision and regulation. Another key takeout was the need for the NAICOM board to drive the introduction of a regulatory SandBox for the industry, as similar financial services sector regulators have done, so as to create a platform that brings together the regulator, insurtechs and other industry innovators to conduct trial tests on new products and services before implementing in the wider sector.

    This helps regulators make proactive informed decisions in responding with appropriate regulations while promoting competition and consumer protection. FITC has in recent years organised training programmes for regulators in Nigeria and outside Nigeria in building capacity for sandbox regulation.

  • Nigeria records N524.25bn fiscal deficit in one month

    Nigeria records N524.25bn fiscal deficit in one month

    Federal Government of Nigeria has recorded N524.25 billion fiscal deficit in the month of May, just as it recorded N643.09 billion in April 2022.

    The detail was contained in the Central Bank of Nigeria’s monthly economic report on fiscal sector development for the country.

    “The disproportionate reduction in expenditure and revenue outcomes resulted in a contraction in the overall fiscal deficit, during the period,” said the report.

    The report added, “Following the 14.0 per cent decline in government spending and 7.2 per cent fall in FGN retained revenue, the provisional fiscal deficit, at N524.25bn, was 18.5 per cent and 1.5 per cent below the level in April and the budget benchmark, respectively.”

    The extant fiscal framework to pursue macroeconomic stability remains the anchor of government’s fiscal operations, income generation, and the expansion of fiscal space to boost infrastructural development, among other objectives are also part of it.

    The federation and the Federal Government recorded shortfalls of 35.8 per cent and 7.2 per cent in May, 2022, relative to the respective monthly targets.

    However, the overall fiscal deficit of the FGN contracted by 1.5 per cent, relative to the target, driven, largely, by a 14.0 per cent drop in aggregate expenditure.

    Total public outstanding debt, at end March 2022, stood at N41.6tn or 18.8 per cent of GDP, and remained within the 40.0 per cent debt-GDP threshold.

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    The report stated that, “Provisional federally collected revenue in May dropped due to lower non-oil receipts. At N1.02tn, federation revenue fell below the levels in April and the monthly budget by 22.4 per cent and 35.8 per cent, respectively.

    “The decline was attributed to a 30.4 per cent shortfall in nonoil receipts, relative to the target.

    “In terms of share, non-oil revenue maintained its dominance in gross federation receipts, accounting for 54.1 per cent, while oil revenue constituted the balance of 45.9 per cent.”

    For Oil revenue, at N466.34bn, was above the level in April by 3.6 per cent, but fell short of the budget target by 41.1 per cent. The increase in oil revenue relative to April was attributed to increased earnings from domestic crude oil and gas sales, following the surge in crude oil price.

  • Only Kogi, Lagos, two others attracted investment in Q2 2022 – NBS

    Only Kogi, Lagos, two others attracted investment in Q2 2022 – NBS

    Out of the 36 states if Nigeria and the Federal Capital Territory FCT), only Kogi, Lagos, Abuja, Anambra, and Ekiti States recorded capital inflows in the second quarter of 2022.

    This is contained in a Foreign Direct Investment data released by Nigeria’s National Bureau of Statistics, NBS on Wednesday, a copy of which was made available to TheNewsGuru (TNG).

    The data means that 32 states failed to attract capital importation in the second quarter of 2022.

    The states that Cumulative capital inflows totalled $1.54bn with Lagos having the Lion Share of $1.05bn within the period under review, and is followed by Abuja at $453.95m; Anambra at $24.71m, Kogi at $2m, and Ekiti at $500,000.

    TNG reports that only six states, including Abuja, Anambra, Katsina, Lagos, Oyo, and Plateau attracted a total of $1.57bn as capital importation in the first quarter.

    For the ‘Nigerian Capital Importation’ report for Q2, 2022, the nation’s statistics body said, “The total value of capital importation into Nigeria in the second quarter of 2022 stood at $1.54bn from $875.62m in the corresponding quarter of 2021, showing an increase of 75.34 per cent.

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    “When compared to the preceding quarter, capital importation decreased by 2.40 per cent from $1.57bn. The largest amount of capital importation was received through Portfolio Investment, which accounted for 49.33 per cent ($757.32m). This was followed by Other Investment with 41.09 per cent ($630.87m) and Foreign Direct Investment accounted for 9.58 per cent ($147.16m) of total capital imported in Q2 2022.

    “Disaggregated by Sectors, capital importation into banking had the highest inflow of $646.36m amounting to 42.10 per cent of total capital imported in the second quarter of 2022. This was followed by capital imported into the production sector, valued at $233.99m (15.24m), and the financing sector with $197.31m (12.85 per cent).”

    Generally, capital importation into the nation has been on a steady decline.

    The United Kingdom ($781.05m) was the largest source of capital importation, followed by Singapore and the Republic of South Africa which brought in $138.58m and $122.26m respectively.

    “One thing about investment is that it is crisis shy. Investment doesn’t go to places where there are crisis. Why? Because investors want stability and predictability of their investments, particularly, having returns on their investments,” said an analyst.

    “When an economy is witnessing what we are witnessing currently, despite the investment potential of that kind of economy, investors will wait and see whether the factors that can guarantee predictable and sustainable investments will finally be available.”

    The Co-Managing Partner and Chief Executive Officer, Comercio Partners Asset Management, Tosin Oshunkoya, recently said foreign investors’ attraction to the Nigerian economy was waning.

    He said, “The ravaging trend of inflation across major developed economies has triggered hawkish policy responses such as interest rate hikes, which tend to spur capital repatriation from frontier economies such as Nigeria while discouraging foreign capital inflows into the local economy, particularly through foreign portfolio investments.”

    Also, the impact of global headwinds does not entirely absolve the local economy of blame, as persistent tightness in the currency market and unabated insecurity remained a fundamental threat to foreign investors in the review quarter.

  • Systematic reopening of the Nigerian economy by the PTF – Chido Nwakanma

    Systematic reopening of the Nigerian economy by the PTF – Chido Nwakanma

    By Chido Nwakanma

     

    Eight months later, the arteries of the economy are pumping once again. Airports have reopened, bringing in 5,000 to 7,000 passengers daily. Schools have resumed, as have formal and informal markets. Machines are humming again in hitherto shut factories.

     

    The full reopening of the economy after months of a lockdown that required careful management and phasing to reopen has brought relief. Nigerians are eager to get on with their lives. For the managers of the system, it was a delicate balancing act between health and economics. At times, it was akinto the famed chicken and egg scenario.

     

    Caution governed the Presidential Task Force on COVID-19 in the management of the closing and opening of the Nigerian economy in the wake of the global pandemic. It has involved monitoring of local incident statistics and case numbers, international comparison, and trend analysis. It has been sequential and systematic and, importantly, data driven.

     

    Many factors inform this extra caution. COVID-19 came into our shores through a visiting Italian businessman. It came against the backdrop of well-founded fears that Nigeria and other African countries could not cope with any widespread infection. Experts are currently trying to unravel how and why Africa escaped the feared doom.

     

    Across the country, citizens now move freely to do their businesses. It was not so beginning 29 March 2020 when the PTF led the health authorities to announce the first lockdown. It lasted 14 days during which the country banned interstate movements and imposed a curfew on Lagos and Ogun States as well as the Federal Capital Territory (FCT). The Federal Government ordered the full closure of all land borders and banned all large gatherings.

     

    The ban on large gatherings affected many sectors of the economy from entertainment to religion and others in-between. Schools shut down with the more technically proficient turning to online lessons. Cinemas, restaurants, event centres and stadia all shut down. The clampdown affected Lagos and Abuja the most for the simple reason that they had the most significant number of infections. Lagos has remained an epicentre of the incidence and spread of COVID19.

     

    PTF then followed with two other shutdowns of less severity. At each stage, it eased the measures for each shutdown in line with what the figures and trends stated. For instance, while Europe and America are currently in the throes of a second round of the COVID-19, Nigeria’s incident numbers have remained low. Health authorities in Nigeria worry about returnees for the Christmas period importing new cases into the country and the disregard of counsel on best practices to prevent infection by citizens in many cities across the country.

     

    Opening of the economy followed even more caution and recommendations in the thematic areas the PTF established as a guide. These are movement, industry, labour, and community activities. Schools reopened, followed by the NYSC Orientation Camps. It was a significant test of its caution on mass gatherings. As such, it followed the template of care and caution. Officials went round the states to certify the camps COVID-19 compliant. They then established COVID-19testing facilities in each of the centres as well as the management of possible cases. It then lifted restrictions on outdoor sporting activities, including football, in consultation with the Ministry of Sports and Youth Development.

     

    In recent times, PTF has increased the volume of its messaging on prevention practices. They include mandatory wearing of face masks in public settings, hand washing and sanitising routines, observing social distances of at least two metres between persons and limitations to the size of gatherings. No more than 20 people can stay together. The PTF has since relaxed the restrictions on worship places. Worship places were a particular concern because of sensitivities around religion, but the intervention agency walked the tightrope skilfully.

     

    Which comes first? The right to earn a living or the opportunity to stay alive in the first place? Many a citizen fretted about the denial of the right to work, worship and gather during the restrictions. Even in those periods, PTF allowed a window for the operations of banks, graduated opening of markets and shopping centres while exemptingagricultural produce, petroleum products, manufactured goods, and essential services from the restrictions on movements. Logistics plays a central role in the chain of goods and services in the country.

     

    With the international gateways now re-opened in select airports,Nigeria’s mandatory dual tests for incoming travellers is one of the strictest in the world. Courtesy of the PTF, the Nigerian Centre for Disease Control (NCDC) and the Federal Ministry of Health, persons arriving Nigeria via the airport gateways must do a COVID-19 CPR test five days before boarding their flight. They then do a confirmation test in Nigeria on Day 7 after arrival. The test represents one of the mitigation measures Nigeria has implemented to checkmate the spread (and importation) of COVID-19. Additionally, a recent travel advisory by NCDC has urged international travelers to suspend holiday plans to Nigeria unless deemed essential.

     

    Even so, records on 2 December 2020 showed Nigeria had 67, 960 cases of COVID-19. Deaths stood at 1,177 persons. Hospitals had discharged 63,839 COVID survivors. By that date, Nigeria had done 779,708 tests.

     

    The PTF has gradually unsealed the taps to allow the full blossoming of the economy. National Coordinator Dr Aliyu and the Chairman and Secretary to the Government of the Federation Mr Boss Mustapha continue to tread with caution even as they open up more and more of the economy.

  • Nigerian economy ‘steadily exiting recession’ — Bankers’ Committee

    The Bankers’ Committee of the Central Bank of Nigeria, CBN, on Thursday declared that the Nigerian economy was steadily pulling out of recession.

    The Committee gave the review at the end of its 331st meeting in Abuja.

    It said indices on non-oil sector growth in the second quarter of the year showed the economy could recover earlier than expected.

    The CBN’s Director of Banking Supervision, Ahmed Abdullahi, told reporters after the meeting that the apex bank in particular realized about $4 billion in May from the export and investors’ window it created in the foreign exchange market.

    Abdullahi, who was accompanied to the briefing by the Managing Director of Union Bank, Emeka Emuwa, said the fund was part of efforts by the banks to join forces with other key interest groups to accelerate the country’s economic recovery.

    He said the $4 billion was not only a reflection of the volume of trading through the export and investors’ window, but also the banks effort to rally support towards economic recovery.

    “It shows the banks have contributed massively to bring foreign direct investments, FDIs, into the market. We think things will be looking up. We are hopeful things are going in the right direction,” Mr. Abdullahi said.

    “Although the numbers are not yet out from the National Bureau of Statistics, NBS, the fact that major non-oil sectors have witnessed positive growth make analysts believe the economy could be out of recession by the second quarter of 2017,” he said.

    “We await the number from the NBS. But if one looks at the performance of the capital market and the stability in the foreign exchange market, one would see that a lot of progress has been made in getting the economy out of recession.

    Emuwa noted further that the committee was generally happy with the progress in the economy, saying the positive development was capable of generating a ripple effect on banking and other sectors of the economy.

    To further provide access to funding of small-scale agricultural activities, he said the board of the Agriculture and Small and Medium Enterprises Investment Fund was inaugurated, along with a project review committee, to facilitate the disbursement of N26 billion equity fund for agriculture and small businesses in the country.

    “Those interested in accessing funds or looking for equity to support their agriculture or small and medium enterprises, SMEs, should approach their banks now and apply to enable them conduct preliminary reviews before passing such requests to the project review committee,” he said.

    TheNewsGuru.com reports that the board consists of the Managing Directors of Guaranty Trust Bank, Access Bank, First Bank, Zenith and UBA, along with CBN Directors of Banking Supervision and Development Finance.

    The project review committee comprise the Managing Directors of FCMB, Unity, and Sterling banks.

    The Small and Medium Enterprises Equity Investment scheme is a voluntary initiative of the Bankers’ Committee as a response to the Federal Government’s concerns and policy measures to promote SMEs as vehicles for rapid industrialization, sustainable economic development, poverty alleviation and employment generation.

    The scheme requires all commercial banks in the country to provide ten percent of their profit after tax, PAT, for equity investment and promotion of small and medium enterprises.

    The provided fund would be invested in small and medium enterprises as the banking industry’s contribution to the Federal Government’s efforts towards stimulating economic growth, developing local technology and generating employment.

    The funding to be provided under the scheme will be in the form of equity investment in eligible enterprises.

    Indications are that the fund would be used to finance eligible bankable projects to support export of all import substitution products.

    Although banks are expected to give out the money to businesses as loans, they would however do so in the form of equity contributions to such companies for a maximum of 10 years.

    This means that rather than charge interest on such loans, the banks would be entitled to dividends during the period of their investments.

     

     

  • US Consul General unveils tech innovation for Nigerian gas industry

    In the face of dwindling oil revenue, the United States (US) Consul General, John Bray has unveiled a new technology known as ‘Synergy and Aruba’ he said will help oil and gas firms increase efficiency.

    At the public presentation of the technology product in Lagos, Bray said the US government is renewing its commitment to supporting trade and investment in Nigeria.

    “Nigeria presents tremendous long-term growth opportunities and the United States government remains committed to supporting American companies and local partners in deploying the US technology to help tackle some of the challenges the country is facing,” Bray said.

    According to a statement, Synergy and Aruba helps companies operating in the Nigerian oil and gas industry to increase the efficiency of operations, monitor people, manage resources, make real-time decisions, reduce risks, save costs, and increase flexibility, productivity and company bottom line.

    TheNewsGuru reports the technology, being introduced by the US government, is in collaboration with Hewlett Packard Enterprise Nigeria and its leading local partner, Manifold Computers.

    The Acting Commercial Counsellor of the US Mission, Mr. Paul Bergman, highlighted Hewlett Packard Enterprise’s long-term partnership with the American Commercial Service.

    He stressed that the US Commercial Service will continue to be at the forefront of promoting trade and investment between America and Nigeria through the development and execution of mutually beneficial international trade policies and promotion strategies.

    The Nigeria Managing Director of Hewlett Packard Enterprise, Mr. Chukwuma Okpaka, noted that the high performance computing technology solution meets the modern exigencies of the oil and gas industry in Nigeria.

    He said modelling and simulation applications would accelerate breakthroughs in oil and gas, science, medicine, technology, and energy sectors of the Nigerian economy.

    Bray encouraged Nigerian oil and gas industry players to avail themselves of the innovative technology with a view to harnessing Nigeria’s abundant resources, and improving their bottom-line to ultimately grow the economy.