Sign AfCTFA to make Nigeria economy more competitive, NACCIMA urges FG

The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has called on the Federal Government to immediately sign the Africa Continental Free Trade Area Agreement (AfCTFA) to make the economy more competitive.

The National President, Alaba Lawson, made the call at a press conference on Monday in Lagos.

He urged the Federal Government to take full advantage of the AfCFTA and eradicate non-tariff and regulatory barriers to international trade.

“While we continue to address the issues around the AfCFTA, we should sign the agreement now and set up an all-embracing implementation Committee in readiness for when it will finally take off.

“Nigeria was deeply involved in the negotiations from the beginning and indeed we chaired the process.

“Currently, while the AfCFTA is entering critical stages and negotiations are going on in priority sectors in member countries, our nation is dithering and still ruminating.

“Nigeria cannot afford to lose out in the opportunities inherent in a common African market. You cannot negotiate what you are not part of,” she said.

Addressing other economic issues, Lawson urged the Federal Government to do more to create a stable and enabling environment for businesses to thrive.

“Inflation rate has fallen for sixteen consecutive months, from 18.72 per cent in January 2017 to 11.61 per cent in May 2018.

“Although this is commendable, it is still double digit inflation and certainly not good enough,” said Lawson.

She reiterated the association’s commitment to capacity development and youth empowerment as well as improving the capacity of the Small and Medium Enterprises (SMEs).

“SMEs have been identified as a veritable platform that can provide jobs for millions of our young people, just like China did and was able to lift about three hundred million people out of poverty within a decade.

“We should provide incentives and access to capital for our SMEs to expand their productive capacities to let them thrive and make significant contributions to provision of employment to our people,” Lawson said.

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NSE: Market capitalisation increases by N39bn as Dangote, GTB, NASCON record gain

Transactions on the Nigerian Stock Exchange (NSE) resumed on Monday with a growth of 0.30 percent following a gain by Dangote Cement.

Dangote Cement topped the gainers’ chart, after investors responded positively to the release of its six months unaudited result for the period ended June 30.

Dangote Cement grew by N1.30 per to close at N236 per share, followed by Guaranty Trust Bank with 80k to close at N38.80, while NASCON appreciated by 55k to close at N20.80 per share.

CAP increased by 50k to close at N35, while Nigerian Breweries also garnered 50k to close at N108 per share.

Consequently, the All-Share Index improved by 108.52 points or 0.30 percent to close at 36,711.96 compared with 36,603.44 achieved on Friday.

Similarly, the market capitalisation which opened at N13.259 trillion increased by N39 billion or 0.30 percent to close at N13.298 trillion.

On the other hand, Forte Oil topped the losers’ chart for the day, dropping by N2.70 to close at N25.20 per share.

Oando trailed with a loss of 40k to close at N5.15, while UPL was down by 25k to close at N2.30 per share.

Stanbic IBTC also lost 25k to close at N48.55, while Dangote Flour depreciated by 20k to close at N8.90 per share.

In spite of the growth in crucial market indicators, the volume of shares transacted dropped by 66.72 percent, while value declined by 43.33 percent.

However, Medview Air was the toast of investors, trading 100 million shares worth N214 million.

Transcorp followed with an account of 16.15 million shares valued at N19.56 million, while Zenith International Bank sold 11.29 million shares worth N260.27 million.

GTBank exchanged 8.19 million shares valued at N315.85 million, while Access Bank traded 6.75 million shares worth N 67.51 million.

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Nigeria’s agricultural sector will hit N91trn by 2050 – FISON

The Fishery Society of Nigeria (FISON) says that the value of the country agricultural sector is estimated to reach over N91 trillion by 2050.

Bola Adekoya, First Vice-President of FISON made the disclosure at the Agricultural Value Chains (AVC) Stakeholder’s Capacity Development” workshop on Monday in Lagos.

The workshop was organised by Nigerian Incentive-Based Risk Sharing System for Agricultural lending (NIRSAL).

Adekoya said that the projection was good enough to attract more competent hands, especially the youth into the sector to stimulate economic growth and the wellbeing of the populace.

According to him, the populace is expected to be 250 million by 2050.

He said the sector growth figure was 10 times bigger than the 2018 Budget put at N9.12 trillion.

Adekoya added that cassava chips and pellets alone would have an estimated value of $1 billion and a growth prospect of 20 percent per annum.

He said that the sector huge growth prospect demanded increased investments to drive and actualise the potential of the sector.

Adekoya said that the sector currently contributed about 47 percent to the nation Gross Domestic Product (GDP) and over 10 percent to the export earnings.

Also, the Managing Director of NIRSAL, Aliyu Abdulhameed, said that the time was apt to tackle most of the identified challenges facing the agricultural sector.

He stressed the need to reverse the growth slide recorded in the last decade toward actualising the projected growth value.

Aliyu was represented by Olaiya Oladele, NIRSAL Lagos office Branch Coordinator.

The vice-president of FISON identified some of the challenges to include: low productivity, poor technology, poor agricultural practices, low research and development and under-financing of the agric value chain.

“These challenges led to the nursing of a great idea by the Central Bank of Nigeria (CBN), the Bankers Committee and the Federal Ministry of Agriculture to establish NIRSAL as the risk bearer.

He said the purpose was also to deal with all the inefficiencies in the value chain.

According to him, NIRSAL seeks to trigger agricultural industrialisation process through increased production and processing, to boost self-sufficiency andeconomic development.

He said that NIRSAL would de-risk agricultural business through five pillars:
Risk sharing facility, insurance, technical assistance facility, agribusiness rating mechanism and bank incentives mechanism.

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Grant tax waivers to manufactures to boost manufacturing sector, stakeholder urges FG

Constance Shareholders Association of Nigeria has urged the Federal Government to grant tax waiver to manufacturers to enhance the performance of the manufacturing sector.

The National President of the association, Shehu Mikail, made the call in an interview with journalists in Lagos.

He urged the government to reduce income tax paid by big enterprises from 30 percent to 20 percent.

He noted that the tax burden on some of the companies contributed to their dismal performance and subsequent delisting from the Nigerian Stock Exchange (NSE).

Mikail said the tax waiver was imperative due to the nation’s prevailing economic situation and infrastructure deficit that were threatening many sectors of the economy.

He noted that tax waiver was an acceptable international best practice that Nigeria could key into, especially for consumable goods, to shore up performance and boost economic growth.

“When tax rates are reduced, government also benefits from it because more money is ploughed back into the economy for reinvestment and expansion.

“It will also encourage the companies to give incentives in the form of price cuts to the end users of their products, thereby reducing the concerns of high cost of goods in the markets,” he said.

According to him, granting tax waiver will allow more companies stay afloat, create more jobs, reposition themselves to take giant strides in the supply process and export expansion.

“It will also attract more foreign companies to Nigeria; in the long run, the economy will benefit immensely from the tax waivers because the GDP contribution of manufacturing sector will improve significantly,” he said.

Mikail said the tax waiver would also boost competitiveness and position the real sector to benefit from the various trade agreements and opportunities in the country.

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Stakeholders say CBN’s MPC will retain lending rate benchmark

Some stakeholders have expressed optimism that the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) would retain the benchmark lending rate due to uncertainties in the global and domestic environment.

They stated this in various interviews journalists in Lagos on Monday, on expectations from 262nd MPC meeting currently holding in Abuja today and July 24.

They said that the MPC would leave the policy parameters unchanged due to uncertainties in the global and domestic economic environment.

Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, said the MPC would still leave the policy parameters unchanged due to economic uncertainties.

“Although inflation rate is trending down, the MPC will be more concerned about the risk of reversing the gains already achieved in the forex market if monetary policy is eased,” Uwaleke said.

He said another major consideration by MPC would be the fiscal injections that would accompany the implementation of the 2018 budget.

“Furthermore, the hike in interest rate in the US, uncertainties over Brexit negotiations and the US-China trade war and its likely impact on global demand will all be factored in,” Uwaleke added.

Also speaking, Sheriffdeen Tella, a professor from the department of Economics, Olabisi Onabanjo University Ago-Iwoye, Ogun said there was a likelihood of rate retention.

“The fear of spending via 2018 budget implementation and by politicians to start political mobilisation towards 2019 elections should make the MPC to be careful in cutting rates,” Tella said.

He said the interest hike in the US that was causing capital outflow noticed currently in the capital market could make the committee to raise the interest.

Tella, however, said raising the interest rate was not going to benefit the economy in the short to medium term as cheap credit was required to continue to grow the economy.

“This is a situation an earlier passage of the budget would have helped to prevent or resolve quickly but this was not so.

“The MPC cannot afford to tamper seriously with the rates either way for now,” he said.

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Saraki advocates for multidimensional policy for management Nigeria’s economy

The Senate President , Bukola Saraki has advocated for multidimensional system in the management of Nigeria's economy.

The number three citizen of the country made this intimation at the Second Capital Market Stakeholders’ Forum in Abuja, the nation’s capital on Monday.

“Nigeria, as we all know, is a unique entity with its peculiar economic requirements and challenges."

“We, therefore, cannot afford for the management of this economy to be linear but multi-dimensional in approach.”

Speaking through the Senate’s Minority Whip, Philip Aduda, Saraki admitted that the nation’s economy is fundamentally connected to the effectiveness of the capital market.

He lauded the Joint Committee on Capital Market and Financial Institutions of the National Assembly for organising the event aimed at reposing the confidence of investors.

Saraki stated, “The quality of minds at this forum both from the organized private sector and public sphere truly underscores the crucial role of the development and sustenance of the economy.

“Capital market as a catalyst for economic growth and development will be seeking to tap into the expertise of those here present, discuss pertinent issues, profer positive indices and reject retrogressive instrument.”

According to him, the National Assembly is committed in collaborating with relevant stakeholders in the capital market in charting a new course for the nation’s economy.

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Regulatory fillings: Shareholders calls for sanction of defaulting companies directors

Shareholders of quoted companies have asked regulators in the financial markets to impose sanctions on directors/top management of those companies that erred in their fillings instead of making the investors bear the brunt of  such failures.

The five companies which flouted the regulatory requirements and were fined in Q1’18 include Diamond Bank Plc (N1.1 million) Union Bank Nigeria Plc (N1.0million), Mutual Benefit Assurance Plc (N1.600 million), Great Nigeria Plc (N3.7 million) and Presco Plc (N300,000 ), all totaling N7.7 million as against eight companies which included Daar Communications Plc (N14.1 million), Great Nigeria Insurance Plc (N24.8 million ), Newrest ASL Plc (N2.4 million), Niger Insurance Plc (N16.1 million), Phama-Deko Plc (N1.6 million), Sovereign Trust Insurance Plc (N10.2 million), Staco Plc (N7.5 million), and Union Diagnostic & Clinical Services Plc (N3.9 million) that were fined in Q1’17, making a total N80.6 million

Oderinde Taiwo, National Coordinator, Proactive Shareholders Association of Nigeria, PROSAN, said: “It is good news that less companies missed their regulatory fillings. This shows that companies’ management are beginning to take their responsibilities serious. We hope to see improved adherence to the rules of the Exchange at the end of this financial year. For companies that still flout the rules, then the directors responsible for the filing should be held accountable and in that way they will sit up”

Bisi Bakare, Chairman, Pragmatic Shareholders Association of Nigeria, said, “In my opinion, those officers of the companies assigned to process returns should do the needful to avoid unnecessary penalties.

"A review of regulatory fine from regulators in the financial sector show that the Central Bank of Nigeria (CBN) fine is much higher than that of the NSE. So our regulatory authorities should know that the burden or consequences of penalty is borne by shareholders.

"This is because the aftermath is that topline and bottomline will definitely be affected and dividend proposed will decline and the working capital of these companies are also affected. On this note, I want our regulators, especially the CBN to temper justice with mercy, by looking at other ways to punish companies in such a manner that our investment will not be affected.

“The regulators in the banking, capital market and insurance sectors (CBN, SEC, NAICOM) should be up and doing in their responsibilities because most times it is when one regulator or the other do not complete their work on time that it affect prompt filling of results by companies to the NSE," he added.

In his opinion, Owolabi Peter, Chairman, Integrated Supreme Shareholders Association of Nigeria said the method used is not the best form of punishment, saying that the investors would be at the receiving end.

He said: “In as much that sanction is necessary to make the companies sit up, it is still not the best form of punishment. It is the shareholders’ investments that suffer most. Whether there is fine or not directors are paid their money. Also, the fee for these penalties from the CBN are too much, the least fee you get from the CBN is N50million for one offence, why that much, it is killing. An offence, no matter how big is too much for N50 million.

"This money is shareholders’ fund. I think regulators should rather sanction officers directly involved for failing in his or her responsibility. In that way they will sit up to avoid unnecessary penalty." he said.

However, Some of the insurance companies blamed non submission of results to the NSE as required by the Exchange’s post-listing rules, on the delay by the insurance industry chief regulator, National Insurance Commission, NAICOM, in approving their financial results.

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Inflation rate drops for the 17th consecutive time

The National Bureau of Statistics has released a descriptive data on inflation, showing that it has been on downward trajectory for the 17th consecutive time.

According to the data, (11.23% year on year in June 2018 compared to 11.61% in May 2018); Food inflation(12.98% from13.45%); Core(10.4% from 10.7%).

See the graphical display below:

 

 

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Our major goal is to make Nigeria’s business environment a global investment destination- Osinbajo

The Vice President, Yemi Osinbajo, has assured that the goal of President Muhammadu Buhari administration is to make Nigeria a major global investment destination.

He said this while addressing the Christ The Redeemers Fellowship International (CRFI) UAE Dubai Professional Business Summit tagged “Exploring Investment Opportunities in Nigeria and the UAE.”

Osinbajo added that the administration would continually improve and reform the country’s business environment to make it attractive to foreign investors.

He stressed that “our overarching goal is to make Nigeria a major global investment destination by continually improving our business environment.

“The improvements are not merely in numerical rankings, but in the stories and testimonies of business owners and entrepreneurs across the country.”

According to him, government is devoted to that particular pathway and it is a process which involves doing things differently, changing existing ways of doing things.

He noted that the process had been slow but it had grown quickly, especially in the past one and half years.

Osinbajo said “we expect that incremental changes will make a huge difference in the entire business environment as we go forward.”

He highlighted various reforms carried out in the infrastructure, business environment and economic diversification as demonstration of the administration’s commitment to promote foreign investments.

The vice president said that one of the most important economic policy decisions taken by President Muhammadu Buhari was to do all that was possible to improve Nigeria’s business environment and to attract investors on incremental basis.

He stated that “it became critical, especially as we urgently needed to reform our economy to focus on agriculture, manufacturing, services and other non-oil economic activity.

“This is the moment to explore the investment potential in the country, having lost such opportunity about a decade ago.”

He stated that with the International Monetary Fund’s recent upgrade of the economic outlook for sub-Saharan Africa and Nigeria’s exit from recession to positive growth, the trajectory was expected to play in that regional outlook, as the prospects were bright.

He said that the administration’s Economic Recovery and Growth Plan (ERGP) 2017-2020 was conceptualised to place the economy on the path to stronger, more sustainable and inclusive growth.

“In Q1 2018, the economy grew 1.95 percent and is projected to grow by up to three percent over this year, driven by stronger oil prices, stable production, increased non-oil output and foreign exchange availability.

“Inflation fell 16 consecutive months from 18.72 percent in January 2017 to 11.60 percent in May 2018.

“Foreign investment, new investment, rose from 908.2 million dollars in Q1 2017 to 4.1 billion dollars in Q3 2017 over 150 percent growth from Q1 2017.

“Total fresh capital inflow in 2017 was 12,228 dollars, 24 billion growth of 138.6 percent in 2017.

“With no restrictions on ownership and guaranteed 100 percent repatriation of invested funds, a stable foreign exchange market, combined with rising income levels, Nigeria’s external reserves rose to a four-year high of 47.8 billion dollars on May 14, 2018.

“Our fundamentals are looking good and the ERGP is being implemented to keep the economy on the path of sustainable economic growth and global competitiveness,’’ he noted.

Osinbajo hinted that major global players such as China had earmarked over 60 billion dollars worth of investments for Africa in 2018, a sizable portion of which would be directed at Nigeria.

He said opportunities existed in the technology, creative industry, hospitality, aviation, agriculture and almost all aspects of the economy and called on foreign business men to regard the country as an investment destination.

“I think it is worth repeating that the case for investing in Nigeria is a compelling one,’’ Osinbajo remarked.

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CBN kickstarts sale of Chinese Yuan

The Central Bank of Nigeria (CBN) has launched the sale of foreign exchange in Chinese Yuan (CNY) signalling the consummation of the Nigeria-China Currency Swap Agreement.

The CBN acting Director, Corporate Communications, Isaac Okorafor, said that the sale would be done through a combination of Spot and Short Tenored Forwards.

Okorafor added that the sale would be conducted through a Special Secondary Market Intervention Sales (SMIS) window.

He explained that the window would be dedicated to the payment of Renminbi Denominated Letters of Credit for raw materials, machinery and agriculture.

He said “due to the peculiarity of the exercise, CBN will not be applying the relevant provisions of its Revised Guidelines for the Operation of Inter-Bank Foreign Exchange Market, that is; the guidelines which direct that SMIS bids be submitted to CBN through Forex Primary Dealers.

“The CBN will also not be applying the guidelines which provide that Spot FX sold to any particular end-user shall not exceed 1 per cent of the overall available funds on offer at each SMIS session.”

On the bid period, Okorafor said authorised dealers were requested to submit their customers’ bids from 9 a.m. to 12 p.m. on weekdays.

He said that any bid received after the stipulated time would be disqualified.

On funding, he said that authorised dealers were to debit the customers’ accounts for the Naira equivalent of their bids.

He added that the CBN would debit authorised dealers’ current account on the day of intervention to the tune of the Naira equivalent of their bid request.

Okorafor explained that there would be no predetermined spread on the sale of CNY by authorised dealers to end-users under the Special SMIS-Retail window.

He said that authorised dealers would, however, be allowed to earn 50 kobo on the customers’ bids.

He advised customers who were not willing to accept the settlement terms not to participate in the Special SMIS – Retail.

He added that Forward Bids would be settled through a multiple-price book building process and would cut-off at a marginal rate to be disclosed after the conclusion of the Special SMIS Retail process.

He also urged customers who were not willing to accept the terms of the forward rate not to participate in the Special Chinese Yuan SMIS Intervention.

Okorafor said that the CBN reserved the right not to make a sale if it had the impression that the exercise did not provide effective price for the determination of the CNY to NGN exchange rate.

The Federal Government on April 27, signed a 2.5-billion-dollar Currency Swap Agreement with the People’s Bank of China.

The primary aim is to provide adequate local currency liquidity to Nigerian and Chinese industrialists and also assist both countries in their foreign exchange reserves management.

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