• Air France pilots call for French government to intervene in dispute

    07/Oct/2015 // 201 Viewers

    After the violent scuffles at a meeting between unions and Air France management on Monday, the union representing pilots has called for the French government to intervene in the dispute over the carrier's cost-cutting plans. The head of the SNPL union says the state should be represented in a fresh round of talks.


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  • BRIEF-NPF Microfinance Bank posts FY pre-tax profit of 689 mln naira versus 617 mln naira last year

    08/Apr/2016 // 176 Viewers

     

    April 8 (Reuters) - Npf Microfinance Bank Plc :

    * Fy pre-tax profit of 689 million naira versus 617 million naira last year

    * Fy gross earnings 2.593 billion naira versus 2.135 billion naira last year Source text for Eikon: Further company coverage:


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  • IMF Chief Christine Largarde's devaluation proposal flawed but Nigeria's economy could be in serious trouble

    08/Feb/2016 // 362 Viewers

     

    Nigeria's foreign reserves are feeling pain of both its reliance on oil for forex inflows and its attempts to arrest the slide in the Naira as oil prices tumble
     
    The IMF Chief Christine Largarde's view on Nigeria's economic diversification is misleading and can at best be described as a 'cosmetic assessment' in terms of revenue generation.— Ken UwotuLONDON, UNITED KINGDOM, February 8, 2016 /EINPresswire.com/ -- Nigeria's foreign reserves are feeling the pain of both its reliance on oil for forex inflows and its attempts to arrest the slide in the Naira as the price of oil continues to spiral downwards. The Central Bank of Nigeria has warned a recession is imminent if proactive steps are not taken to revive growth in key economic sectors as the country face its worst financial crisis in years. Nigeria’s economic growth in the past decade has not always been about oil but the government’s inability to tax services and agriculture industries has left it heavily reliant on revenue from oil.
     
    The fall in oil price has created some challenges for the government with the country's budget deficit expected to double to 2.2 trillion naira ($11bn, £7.4bn) this year. In a reaction to the global oil crisis President Muhammadu Buhari has stated his government would seek funding overseas of 900bn naira as well as 984bn naira domestically in an attempt to plug gaps in the budget.
     
    The International Monetary Fund (IMF) Managing Director, Mrs. Christine Largarde on her recent visit to Nigeria stated “The economy is well diversified; it is no longer dominated by agriculture and oil with services accounting for almost half of Gross Domestic Product (GDP), including a significant home-grown film industry and innovative start-ups from fashion to software development”. Mrs. Christine Largarde's view on Nigeria's economic diversification is misleading and can at best be described as a 'cosmetic assessment' in terms of revenue generation. The Nigerian government has failed to generate taxes from agriculture and services industries and according to the World Bank, Nigeria’s tax revenue is one of the lowest in the world today. Some would argue true diversification is measured by a country’s export volumes and the overall contributions of export revenue to a nation’s foreign reserves. Nigeria derives 90% of its foreign exchange from crude oil while all other sectors collectively contribute just 10%.
     
    The IMF has helped out a number of African nations in difficult times, it approved a $918 million bailout package for Ghana in April 2015 to restore debt sustainability and macroeconomic stability but it hasn’t always been a beacon of support in Africa; the IMF backed a structural adjustment program in Nigeria which failed to address a number of economic problems. Instead, external debt swelled, the fiscal gap widened and economic growth became far-fetched. It is therefore prudent for the Minister of Finance, Mrs Kemi Adeosun and the Nigerian government to take on board advice offered by international financial organisations but the Minister must review both the macroeconomic and microeconomic factors that affect Nigeria's economy before deciding on a fiscal policy and strategy to tackle the challenges facing the economy.
     
    Currency devaluation is intended to make exports become cheaper and more competitive to foreign buyers thereby providing a boost for domestic demand; higher level of exports should lead to an improvement in the current account deficit however, the devaluation of Nigeria's currency, the Naira may fail to deliver these benefits because revenue generated from Nigeria's exports is currently in decline with non-oil exports dropping significantly from $664 million in the second quarter of 2014 to $391 million during the corresponding period of 2015.
     
    The Nigerian government favours forex restriction over the devaluation of the Naira but the government may be forced to officially devalue the Naira if the price of oil continues to fall and the Central Bank of Nigeria can no longer justify using the country's fast depleting foreign reserves ($29.13 billion as of 29/12/2015) to continue propping up the Naira. The present restrictions on the autonomous foreign exchange market by the government should only be considered as a temporary measure as this approach may significantly affect Nigeria’s already dwindling export earnings.
     
    The Oil Petroleum Exporting Countries (OPEC) lead by Saudi Arabia is desperately trying to recover market shares from US Shale oil producers; this battle for dominance in the oil market has led to the drastic drop in oil prices. Africa's biggest economy Nigeria could be heading into uncharted territory as the price of oil has now dropped to $30.98/barrel, a price less than Nigeria's total cost of oil production at $31.6/barrel (source - OPEC). The national budget recently submitted to the Nigerian parliament by President Buhari is based on an oil price benchmark of $38 per barrel.
     
    Nigeria's budget shortfall of $11 billion has forced the government to source for emergency loans totaling $3.5 billion from the World Bank and the African Development Bank. The IMF and World Bank have long been advocates for the devaluation of the Naira and are mostly likely ask Nigeria to officially devalue its currency as a prerequisite for any emergency loans. Mrs. Kemi Adeosun, Nigeria's Finance Minister further clarified the government’s position on the issue of emergency loans; she states the government seeks loans at "concessionary rates" as low as 1.5 percent from international agencies to fund infrastructure projects before returning to the eurobond market. The Nigerian government is now in exploratory talks with China Exim Bank for a possible loan.
     
    The Nigerian government is likely to stand firm on its policy of attempting to spend its way out of its current economic crisis. The government intends to borrow money in the form of loans to try and plug the financial gaps in the 2016 budget with the hope oil prices will return to 'profitable levels' for the country in the near future however with the demand for oil in China slowing down and Iran set to pump 500,000 additional barrels of oil into the market a day, it is unlike oil prices will rise significantly in the short to medium term.
     
    Ken Uwotu 
    Political Analyst On Nigerian Affairs, London


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  • Naira crashes, trades at N250 against US Dollar

    09/Dec/2015 // 265 Viewers

     

    PARIS, DECEMBER 9, 2015: Reports reaching us Wednesday say Naira, the Nigerian domestic currency hit another record low against the US dollar. Naira traded N250 to $1 at the parallel market.

    Financial experts attribute this to steep  drop in Nigeria's foreign reserve probably caused by the dwindling oil prices. The British pound traded at N400 at the parallel market.

    Nigeria's Central Banks says the Naira crash has nothing to do with the dwindling foreign reserves insisting that the bank refused to make the dollar available to Bureau de Change operators, a source told our reporter in Lagos.

    However, the IMF and Nigerian financial experts  have been mounting pressure on the Buhari administration to further devalue the Naira in order to achieve equilibrum price against the dollar, but the president has consistently refused this.

     


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  • Forex Scarcity: Naira remains stable on the parallel market at an outrageous rate (See exchange rate on Friday)

    09/Dec/2016 // 788 Viewers

     

    PARIS, DECEMBER 9, 2016: (DGW) The Nigerian Naira , according to reports, remains stable on the parallel market on Friday exchanging for much as N485 to the US dollar.

    The Pound Sterling and the Euro closed at N602 and N515, respectively.
    At the interbank market, the Naira also remained stable at N305.50 to a dollar.

    Trading at the Bureau De Change (BDC) window saw the Naira sold at N399 to a dollar, CBN controlled rate, while the Pound Sterling and the Euro exchanged at N606 and N515, respectively.

    Traders at the market said that the scarcity of dollar persisted, leading to slow activities.


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  • Lamido Sanusi criticises Nigerian President Buhari's naira policy

    09/Feb/2016 // 272 Viewers

     

    Mr Sanusi said the drawbacks of the policy "far outweigh its dubious benefits", the Financial Times reports.
    President Muhammadu Buhari told the BBC last week that he was not convinced of the need to "murder" the naira.
     
    The falling oil price has put pressure on his currency policy.
    The authorities are keeping the official naira rate at around 200 to the US dollar, but the black market rate is closer to 300.
     
    The government relies on oil exports for vital foreign exchange and the declining price means there are fewer dollars in the country.
    "The government does not have the reserves to keep the exchange rate at its official level in the market," Mr Sanusi told the Financial Times.
    The policy has "never worked" wherever it has been tried, he added.
     
    But Mr Buhari told the BBC that he is yet to be convinced that he should allow the currency to be devalued.
    In an effort to sustain the policy, the government has imposed currency restrictions, and halted the importation of certain goods in order to stop dollars leaving the country.
    Mr Sanusi was the central bank governor from 2009 to 2014, when he was suspended by then-President Goodluck Jonathan following a row over corruption in the oil sector.
     
    He is now the emir of Kano, an influential religious post among Muslims in Nigeria.
     
    BBC


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  • Again, NIGERIA's external reserves show a decline of $3.22 billion compared with $29.06 billion in 2015 under BUHARI

    09/Jan/2017 // 298 Viewers

     

    The nation’s external reserves closed last year with a total balance of $25.84 billion - 30 December - showing a decline of $3.22 billion  compared with $29.06 billion it stood as at December 31, 2015.

    The figure from the Central Bank of Nigeria (CBN) indicates a 12.7 per cent decline year on year (y/y), but increased by 4.2 per cent month-on-month, up from $24.69 billion on November 28 to $25.781, due to a slight recovery in global oil prices.

    Despite demand pressure, the nation’s external reserves and the volume of money or other assets held by the apex bank recorded an increase of $642 million in one month, after weeks of consistent and gradual gains.

    These are in spite of a US$2.3 billion decline in average inflows of foreign exchange into the CBN every month over the last 26 months as revealed by the apex bank governor, Dr Godwin Emefiele.

    CBN had disclosed in its data on foreign exchange utilisation for October 2016, that it granted  access to about 7,792 requests for foreign exchange, valued at over $867 million through the inter-bank window to enable them source vital raw materials and spare parts for their respective industries.

    The accretion of Nigeria’s foreign exchange (forex) reserves, which started about two months ago, continued in the new year, as the data by the apex bank showed that reserves had grown to $26.094 billion, signifying a slow but steady improvement in the country’s current account balance.

    The present value of the reserves, derived mostly from the proceeds of crude oil sale, represents an appreciation by $2.137 billion or nine per cent, compared with $23.957 billion as of November  2016.

     


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  • Again, Naira depreciates on the parallel market, see exchange rate as of Wednesday

    09/Mar/2017 // 5589 Viewers

     

    The naira yesterday again depreciated sharply against dollar on the parallel market due to upsurge in demand for dollars importers travelling to China and the rest of the world.

    Vanguard reports  that the parallel market exchange rate rose from N448 per dollar on Tuesday to close at N465 per dollar at the close of business yesterday, indicating N17 depreciation.

    It was gathered that the market experienced upsurge in demand for dollars yesterday for end-users travelling to China for import business.
    A bureau de change Chief Executive who spoke on condition of anonymity said that the number of end-users travelling to China for business purposes  has been on the increase since the conclusion of the recent holiday season in China, adding these are the source of increased demand for dollars in the parallel market. He said that the situation is aggravated by the fact that most of the items to be imported are part of the 41 items excluded from the official foreign exchange market.

    He, however, expressed optimism that the demand pressure may subside this week in view of the expected dollar sales to BDCs by the Central Bank of Nigeria tomorrow, especially given the increase in number of BDCs accessing the dollar sales from around 2000 to 3000.

    The parallel market exchange rate had dropped from a high of N520 per dollar on February 20 to N448 per dollar on Tuesday in response to $1.12 billion supply into the foreign exchange market by the CBN.

    Since Monday February 20, 2017, when it announced new measures to boost dollar supply and forestall the declining fortunes of the naira in the parallel market, the CBN has intervened in the forex market six times as follows: Tuesday February 21, $417 million; Thursday February 23, $231 million; Monday February 27, $180 million; Friday March 3, $350 million, Monday March 6, N367 million; and on Tuesday with $100 million.


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  • Nigeria And The Emerging Economies

    10/Apr/2016 // 314 Viewers

    By Femi Fabiyi

    The buzz “Globalization” has redefined socio economic affairs in many developing and underdeveloped countries. Many countries are relishing robust trade deals in lieu of more liberal international economic laws, promoting less barriers and reduced tariffs in an effort to create real and valuable assets-based-opportunities, tailored towards growing economic and social wealth, particularly in the emerging markets. Many emerging market economies, including Nigeria have struggled to simulate the dynamics of the global concept, resulting in some cases - repressive and damaging socio economic policies. Below expectation economic performances from the BRIC countries, per their last 5years economic metrics, have provided deep insight into two different economic models that may have been employed by many other emerging markets – Nigeria, a case study. 

    On one part is the economy system driven solely on natural resources. And the other is the economy structure that is aligned with human capital.

    On a consistent note, Nigeria has been measured by experts as a country with enormous potentials, similar to some of the BRICs. But Nigeria economic growth deterrence lies in her inability to align its powerful human capital with its massive natural resources.

    The crash in the oil market becomes a wrench in many oil producing nation’s policies and economic strategies, making a long term fiscal and economic projections a notoriously delicate endeavor. The unprecedented situation complicates economic trajectory for emerging economies that rely heavily on petrodollar, creating a sense of urgency for oil nation managers to exert their leadership skills in resource management. 

    At the height of commodities boom, the emerging market economies ushered in various power brokers or political juggernauts, and they were, and still very close to the helms of their respective government affairs. They have steadily upended their influence in channeling state resources to meeting unguarded goals and objectives. In Nigeria, mafia-like groups took over key institutions, and run the systems with little or zero ethics. The Oligarchies are the gun powders of day to day business activities in Russia’s most lucrative markets, and the Odebrecht and Petrobras decides what goes into Brazil fiscal policies. Just as the promising emerging markets got clobbered with market uncertainties, the power brokers in Indian and China pulled together their think-tanks and unconventionally began to develop a workforce that is turning Asia market a force to reckon with. The Chinese stake holders spread their risks across all economic sectors – strong manufacturing sector, promotes financial prudency, introduce competitive educational systems, reinvigorate its service industry, and spend years constructing roads, bridges and residential houses for their middle class. Strategically, it also encourages disruptive technology in the area of Intellectual Property, and has maintained an era of trade surplus, helping its economy to continue to build a middle class workforce. Over the years, the smartest of the Indians have come together to reinvent India’s education system, building a competitive high-tech workforce and a branded medical service. India professionals in IT have reshaped global service industries, attracting more than 500 US off shore corporations. The West corporate inversions to China and India have helped both nations’ major stock indexes in positive territory. And both countries have performed far better than Brazil and Russia, whose economic growth model relied heavily on natural resources just like Nigeria.

    Assessing the efforts of Nigeria think-tanks or the smartest guys that found themselves at the corridor of affairs, it is appalling what seems to be on Nigerians score sheet. My research found that, unlike the Oligarchies, the Odebrecht and Petrobras who to some extent invested in other sectors of their respective local economies, Nigerian smartest politicians are predominantly found in off shore business activities, siphoning the little earned petrodollar premium back to the Western economy.

    Many of Nigeria mafias have invested their stolen monies in personal homes abroad (USA, Britain, Dubai, South Africa and a host of other countries). Why should a Nigerian based politician maintain a residential home in the USA? I honestly cannot find a reasonable answer to this question. For my readers who do not understand USA real estate market, here is a hypothetical case – A Nigerian based politician who owns a $1,000,000 house in America is expected to pay at least 2% of $1,000,000 in property taxes and between 1.5% and 2% of $1,000,000 for maintenance on a yearly bases. So, what sense does it make for a Nigeria politician to pull an average of $35,000 from the local economy every year and send it to America to help develop America cities and counties?

    Unlike the Chinese and Indian stake holders, Nigeria mafias are notorious of importing high end luxury cars and even private jets for recreational purposes. A personal friend calls his luxurious car “my toy”. Again, the question is, does this toy fit an environment where roads are very bad and unsafe? Remember, they will need hard earned community dollars to fix the slightest hiccup in the engineering of the car or private jet.
     
    I personally expected Nigerian high rollers to be loyal to their economy where returns on equity could be higher. But Nigeria mafias favors stocking their monies in the Western economies where equity returns has been very low. Investment in Bonds and Treasury instruments performed even worse in the West.
     
    Understandably, celebration of life and occasions are part of Nigerian culture, but the culture may be at stretch when our smart leaders are seen throwing scarce $$ bills in the air at parties. Interestingly, the new trend is even more worrisome - the urge for privately brewed imported drinks at ceremonies. This indicates another way of redefining the class structure in Nigeria society. It is imperative to note that this is happening in a country where unemployment has ballooned through the roof and middle class is pretty much on its knees.

    In consideration of Nigeria numerous challenges and the enormous opportunities within reach, I was hoping the smart politicians will show some sense of creativity by recycling the stolen money in Nigeria emerging economy such that, it at least add values to the system they have looted. May be a good way to begin to seek forgiveness for their deeds! 

    It cost China 4years and a sum of $1.5b to build a 26 mile bridge that is warranted for 100 years by Chinese workers. How about Nigeria politicians emulating such a fit by using the stolen monies to construct a toll-based highway from Lagos to Port Harcourt or from Port Harcourt to Kano? Not only will the concept provide them and their families a stream of perpetual income, it will also give an average motorist on these roads some sense of traffic relief.

    Recently, a group of international investors submitted a proposal for a massive solar energy power base in the desert of North Africa - an area that covers the borders of Algeria and Egypt. The financial outlay has not been officially finalized but I don’t think the project is beyond what our smart looters can join hands and execute in the interest of Nigeria economy. Nigerians will skip meals to pay for electricity – it will result in a win win endeavor. 

    Nigerian mafias will rather travel to India or the West for medical issues than to find solutions to our hospital problems in Nigeria. They prefer to rush their children to universities abroad than to upgrade our educational systems. They will rather look for ways to weaken naira than to give the Nigeria economy a boost. In spite of these anomalies, we still treat them like semi-god.

    Recent shortages in petroleum products and nation-wide electricity blackout have proven to the investment world that Nigeria is not ready to be a formidable player in the emerging economies. This is particularly sad because the economy situation in the country now is dire, and there is urgent need for a turn around. The government seems to show some calmness at time of desperation, where life of an average Nigerian is getting eroded by the day. Business is stagnant; manufacturers are either relocating outside the country or closing shops. The naira is losing value, inflation is off chat and the government is yet to demonstrate a path to resurrection. Nigerians home and abroad have banked a little hope on the news of recovered looted money, but what is been done with the money can only be imagined.  According to JP Morgan, more than $1billion has been moved from Nigeria equity market in 12 months to other emerging economies including Mexico, Indonesia and Turkey.

    The world has become so small and every country is looking for a piece of the pie. The challenges are real and its time for our big guys to measure up. A focused based emerging economy should be directing its resources to creating opportunities for its people, especially where the demographic is favorable and the people are determined. 

    The last time I sighted a cross-over carrier politician in his egoistic opulence, and his wife well decorated with a leash-like necklace, I questioned his smartness and why the political class have no respect for Nigerian lives, his answers were resentful – Nigerians don’t complain. He may be right; otherwise we will not have some of the governors out there running shows for their states. 

    It is important to note that, the West cares and love Nigeria. They will never desert us, knowing a failed Nigeria is their headache. They will however continue to allow our corrupt politicians to launder petrol money into their systems. They will target, and attract our young and the brightest if we choose to ignore them. They will equip them and embrace their knowledge. They will listen to their plights and suave them into changing allegiance. They will stay afar and watch as we continue to write and rewrite our depressing history. They will remain peace keepers through their numerous charity organizations and ensure no dissidents are allowed to disrupt the fragile tact between all the different ethnic groups. They pray one day, we learn from our mistakes and begin to explore our potentials. As the hope and aspiration lingers in the land of milk and honey, so is suffering and smiling. 

    *Femi Fabiyi is based in Connecticut, USA

    Email: femif826@gmail.com

     

     


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  • Why the Federal Government should listen to the World Bank on the removal of subsidy

    10/Dec/2015 // 232 Viewers

     

     

    The World Bank has advised President Muhammadu Buhari to remove the fuel subsidy amidst the current fuel scarcity plaguing the country.
     
    According to the World Bank Economic Report released on Tuesday, Nigeria has spent about N6.9 billion in the last five years to subsidise petroleum products making the removal of the subsidy imperative, when the price of oil is still under pressure thanks to the current storage squeeze.
     
    Buhari has stated that the government is yet to remove the subsidy because its impact on food and transportation which would affect both the employed and unemployed citizens in the country. However, a World Bank Lead Economist, John Litwack, said the removal of the fuel subsidy is best carried out at a time when oil price is at its lowest in order to maintain the retail pump price of N100 per litre.
     
    Between 2010 and 2014, Nigeria spent $35 billion on the fuel subsidy which denied the federal government the opportunity to accumulate revenue in the excess crude account which, in turn, could have reduced effect of the dwindling oil prices for the country. If the federal government fails to remove subsidy now, there is a high tendency for its cost to increase over time as rising domestic demand for petrol out paces growth in oil output or revenues.
     
    It is seemingly outrageous that the government spends about one-fourth of its budget on a fuel subsidy that is significantly greater than the entire executed federal capital budget as well as the combined spending on education and public health. “Nigeria currently needs fiscal consolidation since it is not earning because oil prices are down, it is pertinent, therefore, to cut down all expense lines… Fuel subsidy must go” said, the Emir of Kano and former Central Bank of Nigeria (CBN) Governor, Mallam Muhammad Sanusi.
     
    This subsidy was sustainable when the global price for oil was well above $100. But with the current price hovering around $37.89 – $38.09 per barrel and a debt service cost that is likely to increase to 35 percent of the country’s revenue in the next four years, the fuel subsidy can no longer be accommodated.
     
    While it appears that the president has tactically scrapped the kerosene subsidy in the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), which he presented to the National Assembly this week, the fuel subsidy is yet to be removed. More needs to be done in order to setup a well-designed framework which will allow for development in the gas sector.
     
    By Damilare Opeyemi


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