• Nigerian e-commerce company wins $325 million investments

    03/Mar/2016 // 193 Viewers

     

    LAGOS, Nigeria (AP) — Africa's leading e-commerce platform Jumia says it has won funding of more than $325 million from French, German, South African and U.S. companies eager to invest in one of the continent's fastest-growing online economies.

    Parent company Africa Internet Group said the investment boosts its value to nearly $1.1 billion.

    The investment announced Thursday comes from U.S. investment bankers Goldman Sachs, French insurance multinational AXA, German startup Rocket Internet and a long-time backer, South African telecommunications giant MTN.

    Jumia was founded in Nigeria in 2012 to provide a platform for local African businesses to sell products online. It has expanded to 11 African countries while Africa Internet Group's activities have grown to include online taxis, travel, real estate, and job and food delivery marketplaces.


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  • Finally, Dr Ngozi Okonjo-Iweala breaks silence on Nigeria, economy

    03/Oct/2016 // 3180 Viewers

     


    PARIS, OCTOBER 3, 2016: (DGW) The immediate past Nigeria's Finance Minister, Dr Ngozi Okonjo-Iweala has finally opened up on Nigeria and the ongoing economic recession ravaging the country.

    The world class economist, policy maker on Economic Finance and Development in an interview with Al-Jazeera said in no uncertain terms that she loves Nigeria, the place of her nativity in spite of all odds.

    The former Finance Minister says Nigeria is doubtless the most interesting country in the world and hopefully, the country will find it way out of the ongoing recession.

    Her words:

    "Nigeria is still the most interesting country in the world. It is a vibrant country. I love it so much. I know it is going to come out of this recession one way or another"


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  • Naira collapses again before Buhari, see new exchange rate!

    04/Aug/2016 // 2624 Viewers

     

    The naira crashed again on Wednesday against the US dollars on the parallel market from N382 it had exchange the previous day, that is Tuesday to be precise.

    On Wednesday however, the Naira exchanged for  N390 to the dollar on the parallel market.

    A currency analyst, who preferred to remain anonymous, blamed the continuing slide of the nation’s currency on the parallel market to demand pressure.

    According to him, demand for FX for most of the 41 items that had been excluded from the interbank market was still being met with dollars bought from the parallel market.

    The source also attributed the development to the fact that banks that act as agents of international money transfer operators were yet to comply with a Central Bank of Nigeria (CBN) directive instructing them to sell foreign currency remittances to licensed bureau de change (BDC) operators.

    On the interbank market, on the other hand, the naira strengthened to N311.03 to the dollar yesterday, higher than the N316.83 to a dollar from the previous day.


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  • Why we import cheap goods from China - Igbo traders

    04/Dec/2016 // 628 Viewers

     

    As fake and counterfeit products continue to flood Nigerian markets, despite the presence of the regulatory and security agencies at the nation’s gateways, Igbo traders who have been accused of going to China to import fake products, say they go to the Asian country to import cheaper products and not fake.

    The traders told Sunday Telegraph in separate interviews at the weekend that their effort is to ensure that they import goods that are affordable to the millions of poor Nigerians, while the expensive ones are always there for the rich.

    Most of the traders stated that before they discovered the Chinese market, most products imported to Nigeria were made in Great Britain and other European countries, “but unknown to many of us, most of the goods were produced in Asia, including China; but the final packaging was normally done in Britain before exporting to Nigeria with added cost.

    Chief Hyacinth Uzoeshi, electronics appliances importer based in Alaba International Market, Lagos, said unlike what people think, “Our discovery of the Chinese manufacturers brought down the cost of goods in the market and made it affordable to millions of Nigerians.

    There is high level of poverty in the country, so as a trader, I look for products majority of the middle and low income people can afford. If you enter the market today to buy umbrella, you will find the ones sold at N500 as well as those that go for N2500.

    If you are a businessman, you will find out that the turnover on the N500 umbrella is higher and profit margin is equally higher.” He stated that the N500 umbrella is not fake, but not of the same quality with one of N2500.

    “That does not imply that the cheap umbrella is fake or substandard; it is just a function of price.” He further said, “If you go to the market to buy shoes, you can find shoes of N5, 000, N10, 000, N50, 000, N100, 000 and above.

    What we are doing is to ensure that it is not only the rich that can afford everything, we look for things that are affordable. Standard is the business of SON, ours is to comply with the set standard,” he said.

    Chief Uzoeshi, who is the Managing Director of Zimax Electronics Limited, admitted, however, that the Chinese produce fake and substandard products on demand.

    “It is a big challenge to traders; because we are required by the Standard Organisation of Nigeria (SON) to produce our SONCAP certificate before our goods leave the port. The documents are also one of the requirements for you to to clear your goods at the ports.

    So, the fake products are either coming in through our ports when the regulators compromise or through unapproved border routes. It is a problem which only the Federal Government can solve, using its security agencies and regulatory institutions.” He said those importing fake and counterfeit products are not genuine traders.

    “They are the get rich quick people who exploit the inadequacies of our system. They are ungodly,” he said. Legal Adviser to a group of 24 tomato importers, Mr. Ikenna Amaechi, in reaction to the allegation that they are importing fake, substandard and cancercausing tomato paste from China and India, said that the allegation is misleading and lacking in substance.

    According to him, the importers have submitted their products to the House of Representatives Committee on Healthcare Service, Drug and Narcotics for laboratory analysis.

    However, Chief Martins Egbeyiugo, electrical appliances importer and former Chairman of Electrical Dealers Association of Nigeria (EDAN), said he is aware that every businessman sets out to maximize profit, including looking for cheaper products.

    But the onus is on the regulatory authorities to set standards which the importers or the manufacturers should comply with. He said though his association has put measures in place to ensure that customers get value for their money, customers must also note that the price also determines quality. “But what is paramount is standard,” he added.

    The Chairman of the Fancy and Furniture Dealers Association (FFDA), Emeka Mozoba, who is also the President, Alaba International Amalgamated Traders Association, admitted that, Nigerian market is flooded with fake and substandard goods, but noted that no genuine trader worth his onion will go to China and tell them to make fake or substandard products for him to sell in the Nigerian market.

    He blamed the scourge on smuggling and corruption, saying those who bring in those dangerous goods are not the regular traders in the market “because we have a taskforce in place which is saddled with the responsibility of ensuring that customers are not defrauded by any trader, either by selling fake or substandard products or cheating.

    “Where any case of fake or substandard product is reported to us, it is thoroughly investigated and if anyone is found culpable, such is not only made to pay for the right product for the customer, but he is further sanctioned by the association. Such sanctions do not exclude expulsion from the market.”

    He said, “If SON respects the SONCAP and its officials do not compromise along the line, fake and substandard products in our markets will be reduced by 50 per cent.

    The remaining 50 per cent comes in through our porous borders, through smuggling. The Nigerian Customs Service has to ensure that our borders are water-tight against smuggling.

    “For your information, the activities of smugglers is threatening our source of livelihood. But for the drastic fall in the exchange rate of the naira, you would have seen that the rate of trafficking goods across our borders is very alarming. Anything can enter the country, including arms and ammunition.”

    He warned that unless the Nigerian borders are properly manned to prevent smuggling, the country will never have control over what is imported “fake and substandard products will remain with us.”

    Sunday Telegraph learnt that SON, as part of its continuous efforts to protect Nigerian consumers from unsafe and/or substandard products, has introduced an off-shore ‘SON Conformity Assessment Programme’ (SONCAP) since September 2005.

    The programme is to ensure that regulated imports comply with the approved technical and other specifications acceptable in Nigeria. But this seems not to have stopped the influx of fake products into the country.

    It is against this backdground that the new Director General of SON, Osita Aboloma, said the agency will redouble its enforcement efforts, adding that, SON will more than ever before, ensure that no importer circumvents SON “While SON will continue to inspect products and issue SONCAP certificate to those that meet standard at the point of export, we will redouble our oversight functions at our ports, markets and importers’ warehouses.

    This is because it is obvious that some of the importers manage to beat the checks by our agents abroad. “Despite our efforts, importers of fake and substandard products find a way to avoid the inspection abroad, thereby breach the set standards.

    I started visiting the ports and border stations to forge a common synergy with sister agencies to ensure that those fake products do not enter our country again. “I also believe that if we are at the ports, it will be easier for us to ensure that all consignments that do not meet standard are seized right in the port and taken to where we will destroy them,” he said.

    Meanwhile the National Public Relations Officer (PRO), Nigeria Customs Service (NCS), Wale Adeniyi, has said that the Service invites SON, NAFDAC and NDLEA when necessary during examination of cargo, saying, normally, the bodies issue certificate of examination to the consignee before the Service allows the consignment to exit the ports, adding that, NCS does not allow any good out of the port without ensuring that the regulatory agency that has interest in it okays it.

    “NCS does not approve any consignment without SONCAP and whenever there is cargo examination, SON and other regulatory agencies are invited, if the goods fall under their regulatory function,” he said.

    Credit: Sunday Telegraph


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  • Fitch: Nigeria's Oil Response Has Downside Fiscal, Growth Risks

    04/Feb/2016 // 230 Viewers

     

    LONDON, February 04 (Fitch) - The Nigerian authorities' recent economic policy announcements show the response to the oil price shock is coalescing around state-led development to boost economic growth and import substitution to blunt the effects of declining oil receipts, Fitch Ratings says. It is yet to be seen whether the associated measures will promote growth while containing fiscal pressures, but we believe there are a number of downside risks.

    The emerging economic policy under President Muhammadu Buhari includes an increase in public spending and state-directed investment, revenue-side reforms, and accommodative monetary policy. December's mildly expansionary 2016 budget envisages spending of NGN6trn (USD30bn), up from NGN4.6trn in the 2015 budget, including a 30% increase in capital spending.

    Read Also: Nigeria's foreign reserves crash to its lowest since 2005

    The government aims to finance additional spending through revenue-side reforms, including improved tax collection and public finance management, and by increasing external financing. The fall in oil prices below the USD38/b level assumed in the 2016 budget has increased the need for external financing, and the government recently announced it is looking to the World Bank and African Development Bank for additional lending and is exploring a Eurobond issuance sometime in 1H16.

    The Central Bank of Nigeria (CBN), took a large role in implementing economic policy during last year's six-month wait for cabinet appointments. It introduced exchange controls and restrictions on foreign currency and resisted pressure for further naira devaluation. The CBN cut benchmark rates by 200bp in November and reduced the cash reserve ratio for commercial banks.

    The CBN has continued to restrict access to FX in 2016, limiting dollar sales to Bureau de Change operators. It has maintained its support of the naira rather than risk the inflationary impact of devaluation. Overall, these policies present downside risks to Nigeria's sovereign credit profile, although there are various mitigating factors: Increased borrowing and higher interest payments would add to pressure on the fiscal position. But public debt is low, and the government is unlikely to fully execute its spending plans. Capital expenditure, for example, has constituted only about 20% of total federal government spending in recent years and is estimated to have dropped to about 13% for 2015.

    Underspending would reduce the negative impact on the public finances, but also the boost to growth. The government has indicated that it will use low energy prices to begin phasing out fuel subsidies in 2016, which would partly contain the deterioration in the public finances. Unorthodox or unpredictable FX policy makes raising external financing more difficult, deterring both private investors and possibly multilaterals. The persistent spread between the retail and official interbank exchange rate indicates unmet demand for dollars in the Nigerian economy.

    We think the drag on growth from the Nigerian private sector's inability to access sufficient hard currency will outweigh the benefits of planned fiscal stimulus, and that the CBN will struggle to defend the naira indefinitely. Erosion of fiscal and external buffers and policy uncertainty drove our revision of the Outlook on Nigeria's 'BB-' sovereign rating to Negative in March 2015, which we affirmed in September. An economic policy response that contained fiscal pressures, kept debt levels manageable and carried out planned reforms would be positive for the rating.

    An inadequate response that failed to carry out growth-enhancing reforms and put debt levels on an unsustainable path would have a negative effect on the rating.

    Contact: Jermaine Leonard Director Sovereigns +852 2263 9830 Fitch (Hong Kong) Limited 19/F Man Yee Building 68 Des Voeux Road Central Hong Kong Jan Friederich Senior Director Sovereigns +852 2263 9910 Mark Brown Senior Director Fitch Wire +44 20 3530 1588 Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com

     

    Reuters


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  • Nigeria's Economy: 3.78% growth expected in 2016 from 2.97% in 2015

    04/Feb/2016 // 232 Viewers

     

     
    PARIS, FEBRUARY 4, 2016: (DGW) - Despite the crash in oil prices Nigeria's economy is expected to grow by as much as 3.78% from 2.97%, the National Bureau  of Statistics said on Thursday.
     
    An upward movement of 5.47% is also expected through to 2019 as a result of investment in infrastructure to support oil and non-oil sectors.
     
    Said the report from the bureau, '' Output in the oil and non-oil sectors are expected to perform marginally better relative to 2015''.
     
    Nigeria, Africa's largest economy has been battling to survive the slump in oil prices amid a weakened naira by up to 35% below the official level on the black market.
     
    Be that as it may President Muhammadu Buhari has consistently refused to bow to pressures from every quarter to devalue the naira which is likely to continue through 2016 occasioned by the sudden drop in foreign reserves to $28.2 billion the lowest ever recorded since 2005.


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  • Again, Naira remains 'stable' but outrageously high (See rate onTuesday)

    04/Jan/2017 // 1154 Viewers

     

    PARIS, JANUARY 4, 2016: (DGW) Reports coming in from Nigeria say the Naira against every speculation that it would depreciate further at the end of 2016 actually did not for it remain at N490 on the parallel market while the Pound Sterling and the Euro also closed at N585 and N505 respectively.

    At the Bureau De Change window, the dollar exchanged at N399, the Central Bank of Nigeria-controlled rate, while the Pound Sterling and the Euro traded at N598 and N510 respectively.

    Trading at the interbank market saw the dollar closed at N305.
    Traders at the market said that Forex scarcity was still having its toll on the market.

    NAN reports that in spite of the $ billion backlog of Forex cleared by the CBN, the Naira has remained within N490 to a dollar.
    Meanwhile, Alhaji Aminu Gwadabe, the President, Association of Bureau De Change Operators of Nigeria, said that the figure was a far cry from the monthly Forex demand in the country.

    Gwadabe said: “The $1 billion inflow is far less than what the economy consumes. The entire FX market is over 20 billion dollars monthly.
    “The cleared backlog of the CBN are funds that came through the FMDQ OTC foreign investment that came into the economy over time and the CBN has no option than to redeem it, to close the increasing gap of investors’ confidence.”


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  • Unemployment rate rises to 33.6% in Q3 - NBS

    04/Jan/2017 // 248 Viewers

     

    The magnitude of employment in the Nigerian economy has not been sufficient or adequate to meet the ever-growing labour market, thus leading to continuous rise in the level of unemployment in the country, National Bureau of Statistics (NBS) has said. 

    In the 2016 second and third quarters of job creation survey, NBS noted that unemployment and underemployment stood at 13.9 per cent and 33.6 per cent respectively. 

    The survey threw up the fact that “with the Nigerian labour force population rising by a five-year average of over 2.6 million annually, the economy needs to generate the same level of jobs annually just to hold the unemployment rate at the current level of 13.9 per cent.” A recent population projection for Nigeria jointly issued by National Population Commission (NPC) and NBS put the number of Nigerians within working ages of 15 and 64 at 106,257,431 in 2016. 

    “In the second quarter of 2016, the total number of new (net) employment recorded in the economy was 155,444, this was a 95.6 per cent  increase when compared with the preceding quarter and a 10.0 per cent increase when compared to the second quarter of 2015. 

    “As it has been the case in previous quarters, the informal sector accounted for the largest share of new jobs, recording 67.9 per cent (105,543). 

    “This was followed by the formal sector, which accounted for 35.5 per cent (55,124) of new jobs in quarter 2 of 2016. Public sector, for the third consecutive quarter, recorded a negative growth in employment, with a figure of -5,223. 

    “In the third quarter of 2016, the total number of jobs generated rose to 187,226 from the 155,444 generated in quarter two, representing an increase of 20.4 per cent quarter on quarter, but a decline of 60.6 per cent year on year. 

    “The formal sector recorded 49,587 jobs, representing 26.5per cent share of new jobs in the third quarter,” the survey disclosed. 

    The informal sector recorded a larger share of new jobs in quarter three when compared to the previous quarter, reporting a figure of 144,651 jobs, which represents 77.3 per cent of new jobs in quarter three. However, the public sector again recorded a negative growth in employment, with a figure of -7,012 in quarter three. 

    “The reported negative growth in public sector job numbers over the last year has not been entirely surprising, as many state governments across the country have struggled to pay salaries, hence restricting the number of new intakes and, in some instances, placing a complete embargo on new employment into the public service.” 

    According to NBS, despite negative economic growth since 2016, the net jobs created still remained positive on the whole in both the formal and informal sectors meaning more jobs were being created despite job losses, especially informal low paying jobs. It added that positive net formal jobs in both second and third quarters of the year were driven by the human health and social services sectors, as well as agriculture and accommodation and food services, which accounted for about 90 per ent and was responsible for keeping net jobs created positive in both quarters. 

    “This reflects the current economic realities with only a few businesses still growing and employing, while many others are shedding jobs.''

    Between January and end September, 3.7million people entered the labour force with net jobs of 422,135 created within that period, giving a shortfall of 3.2million for Qquarter one to quarter three in 2016. 

    This has resulted in a rise in the combined unemployment and underemployment levels from 29.2 per cent (10.4 per cent for unemployment alone) at the beginning of 2016 to 33.6 per ent (13.9 per cent for unemployment alone) by end of quarter three 2016.


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  • Investors flee as renowned Prof. of Economics makes another dangerous prediction for Nigeria's economy

    04/Nov/2016 // 1153 Viewers

     

    PARIS, NOVEMBER 4, 2016: (DGW) A professor of Economics, Innocent Eleazu has given another dangerous prediction for the ailing Nigerian economy warning that as things stand, the economy runs the risk of sliding further into depression Federal Government fails to find and apply the right solution to the problem.

    Eleazu speaking to newsmen in Aba, the commercial hub of Abia State, urged state governors to pay their workers’ salaries, look inwards to develop the mineral and agricultural resources in their states to encourage spending among civil servants and increase local production as a means of improving their Internally Generated Revenue (IGR).

    According to him, the economic solution many people are proffering in solving the problem of recession is not what should be done in order to come out of the economic quagmire.

    He warned that further borrowing could further deepen the situation.

    The professor who was due to deliver a lecture in Aba titled, “Recession in a Mono Economy: Challenges, Consequences” on November 15, said he feared that Nigeria does not have the foreign reserve to fall back to should the economy go into depression.
     
    Eleazu debunked the notion that the current recession was caused by the Buhari administration, saying that the economy started depleting about four years ago.

    He said that the only solution was the diversification of the economy, as did the United States of America (USA) when they faced a similar situation between 2007 and 2009.

    “Since the end of the Second World War, USA has had 12 recessions, the hardest and most severe was the one in 2011 which ended in 2012. In all, they learned from the recessions and came out better.

    “In our own case, we have to truly go back to land, get the grassroots farmers well mobilised, not the political or civil servants farmers. Government should not be involved beyond this level because no government agricultural policy has worked over the years”.

    He also urged government to assist entrepreneurs and artisans in order to increase productivity.

    The economist said he was sceptical about Nigeria’s borrowing from the International Monetary Fund (IMF) to solve the present economic problem, stressing that such steps would increase the debt profile of the country.

    He said, “Since some people in the country are richer than Nigeria, the Federal Government should raise the needed funds internally instead of external borrowing with its attendant high interest rates”.

    Prof Eleazu who claimed that he was one of the economists in USA the Democrat party used their input to evaluate their economic policies, however regretted that policy makers in Nigeria have not made use of reports experts submitted during the ousted President Jonathan’s regime which he said if implemented, would help to turn the economy around.

    “In 2007, the past administration in the country invited me to Abuja and gave me the task of exploring the talents in the youth. After a thorough research, I submitted my report on May 29, 2007, but nothing was done on that till this moment,” he said.


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  • Breaking: Naira crashes further into this unbelievable amount, check out new rate, manufacturers, importers frustrated

    05/Aug/2016 // 1236 Viewers

     

    The naira plunged to 400 against the dollar at the parallel market on Thursday as shortage of foreign exchange continued to have negative effects on economic activities in the country.

    The local currency had closed at 390 against the greenback on Wednesday.

    The shortage of forex at the interbank and the black market has continued to weigh on the value of the naira.
     
    After closing at around 378 against the dollar for most part of last week, the naira dropped to 380 on Friday before falling to 382 on Monday.

    The currency closed at 315.06 to the United States dollar at the interbank market on Thursday.

    Economic and financial analysts have linked the wide depreciation in the value of the naira against the dollar at the parallel market to huge demand for forex by holidaymakers seeking to travel abroad.

    However, some experts said the huge demand for forex at the parallel market was beyond the normal summer rush.

    They linked the development to the activities of speculators and significant demand by manufacturers and importers whose demand was not being met at the interbank market.

    Currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said, “The issue still has to do with inadequate forex supply. As far as you continue to have some 41 items banned from the interbank market, importers and manufacturers of those items will continue to seek for forex at the parallel market.

    “This is part of the reason you are having pressure at the parallel market.”

    According to Ezun, the global plunge in oil prices has affected the capacity of the Central Bank of Nigeria to defend the naira.

    “If the price of oil should go up, more forex will come in and you will see that things will change,” he added.

    A Professor of Economics at the Olabisi Onabanjo University, Ago-Iwoye, Sherrifdeen Tella, said the huge demand for dollars could be due to the activities of genuine manufacturers and importers seeking forex for production and business purposes, or corrupt people who had stolen state funds.

    Tella said, “The naira is falling at the parallel market because there is scarcity at the interbank market. This fall could be due to the activities of genuine manufacturers or some people you cannot identify. These are people who have stored naira somewhere and are seeking to convert them to dollars. They use every chance they have to buy dollars. What the CBN may need to do is to neutralise that money by changing the colour of the N500 and N1,000 notes.

    “If the naira keeps falling at the parallel market, then we should prepare for further increase in the prices of goods and services. And this will continue to give us more trouble as a nation.”

    The National President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, said the fall in the naira value could be linked to the activities of speculators.

    He said the demand was spurious, saying it was not coming from genuine sources.

    “The demand is spurious; the challenge is that there is no liquidity in the market. If you ask any of the parallel market operators calling N400 per dollar to bring the dollar that you want to buy it, they don’t have,” Ezun said.

    The Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said that if the naira continued to fall at the parallel market, the country would need to brace for higher rate of inflation and further contraction in economic growth.

    It was learnt on Thursday that the Deposit Money Banks had started selling forex to the Bureau De Change operators in line with the CBN directive.

    Banking sources confirmed that the sale begun on Thursday.

    The ABCON president, Gwadabe, also confirmed the development.

    “The banks started selling to us today, we will be debited tomorrow and then receive the forex. We thank the CBN and the banks. This move will help to close the gap between the exchange rates at the parallel market and interbank market,” he stated.


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