Economy
AfCFTA: Nigeria Will Increase Export Value to Africa—Awolowo
By Modupe Gbadeyanka
Next year, the much-anticipated African Continental Free Trade Area (AfCFTA) will commence and Nigeria is expected to use the platform to increase the value of its export to the continent.
In 2018, the export value of Nigeria to Africa totalled around $6.99 billion, while to the rest of the world stood at $45.92 billion, the CEO of the Nigeria Export Promotion Council (NEPC), Mr Segun Awolowo, said.
Speaking at the Ecobank Digital Series virtual Africa Trade Conference 2020, Mr Awolowo stated that Nigeria’s export is majorly crude oil and natural gas which constitute 91 per cent.
But he said with the activation of AfCFTA, the export value of the country, the largest economy in Africa, should rise exponentially.
According to him, efforts would be made to explore the market of 1.2 billion people and combined Gross Domestic Product (GDP) of $3 trillion Africa boasts of.
He said with these figures, there is huge potential for Nigeria to increase its export to Africa, noting that before now, the exports had been informal exports, but with platforms like Ecobank, it is going to be formal and add real value to the economy.
Mr Awolowo informed participants of the event that NEPC has identified areas of untapped potential for Nigeria in Africa such as fertilizer, ginger and sesame, as these are what other African countries are buying.
“Nigeria must, and can, live in a world where it no longer sells oil. Nigeria is working on key game changers in infrastructure in order to achieve this, especially in the area of ease of transportation and also in the area of incentives, export expansion grant like pre-shipment incentives and export development fund, which serve to prepare, facilitate and support exporters to the global market,” he stated.
Another speaker at the event, Mr Tei Konzi, who is the Commissioner, Trade, Customs and Free Movement at ECOWAS, explained that AfCFTA is a comprehensive trade agreement that seeks to create a single market for goods and services and free movement of persons through the progressive liberation of the market for goods and services and also contribute to the movement of capital to facilitate investment.
“We can bring these trades back to Africa and increase activity in the continent in agriculture, mining amongst others.
“We are yet to conclude our tariffs, but at the moment, ECOWAS trade more with outside countries than it does with African countries and this is why we are bent on making sure the AfCFTA succeeds,” Mr Konzi, who was represented by Mr Kolawole Sofola, the Acting Director, Trade ECOWAS, stated.
In his presentation, the CEO of Ecobank Transnational Incorporated (ETI), the parent firm of Ecobank, Mr Ade Ayeyemi, reiterated that African countries must adopt a continent-wide approach to business and also focus on wealth creation to be relevant in the global value chain.
For AfCFTA to become a reality, Mr Ayeyemi said there must be commitment and readiness for trade facilitation by the individual nations.
He noted that African governments must unequivocally commit to the agreement and their preparedness as individual nations with their implementation strategies, commitment to free movement-signing and ratification of the protocol on the free movement of people and country’s visa openness, readiness for trade facilitation – the quality of trade infrastructure and efficiency of ports/Customs, which is still work in progress in nearly all countries.
Mr Ayeyemi noted that Ecobank is fully committed to Africa as the foremost Pan-African Bank to Unequivocal support for the implementation of AfCFTA, readiness to use its unique pan-African platform to facilitate trade, payment and business and deployment of its strong Africa knowledge to support governments and businesses.
The Ecobank CEO emphasized that “no country is so poor that it has nothing to give and no country is so rich that it has nothing to receive. All of us must come together to become better.”
The Ecobank virtual Nigeria Africa Trade Conference 2020, which is part of the Ecobank Digital Series, is to showcase the bank’s unique intra-Africa trade solutions that enable settlements of international transactions and mitigation of payment risk while providing regional solutions to exporters.
Ecobank trade products and solutions are designed around two broad areas; Trade Finance and Trade Services. Trade Finance enables customers to benefit from adequate and well-mitigated credit facilitation in the area of Import finance, export finance, bill discounting, trade loans, distributor finance, payables and receivables finance, structured trade and commodity finance amongst others while trade services, offer our customers the advantage of speedy turnaround and error-free processing of their import letter of credits, import collections, avalised bills, customs bonds, export collections as well as their local purchase orders and payment invoices, via its electronic trade platforms OMNI e-Trade and OMNI eFSC (electronic financial supply chain.
By Adedapo Adesanya
The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, has said Nigeria may not run to the International Monetary Fund (IMF) for any loan.
He disclosed this in a chat with Arise Television on the sidelines of the ongoing World Economic Forum (WEF) in Davos, Switzerland.
The Minister affirmed that Nigeria has no reason to approach the global lender, adding that the nation is currently relying on relatively cheaper borrowing sources from the World Bank and the African Development Bank (AfDB).
He also argued that Nigeria does not have a balance of payments problem and therefore will not need the short-term financing intervention by the Bretton Wood institution.
“I can imagine the headlines if you saw a situation whereby you were saying Nigeria approaches the IMF for funding. But the reality is that, of course, as a developing country, requiring investment, funds for the government, and investment in key infrastructure to improve the enabling environment for business, we do need funds, and we have the need to borrow.
“We have relied on relatively cheap funding from the multilateral, from the World Bank, from AFDB, and the whole spectrum of funding has been used.”
He also said that the country will tap a range of instruments to help finance this year’s budget deficit and improve the economy.
“We have relied on Nigerian savings by convincing them of the macroeconomic plan of the president, and what it holds in terms of the prospects for growth of the economy and business, and improvement of the business environment.
“Of course, we have approached the Euro bond market, which is, of course, the commercial end of financing. So we’ve done that whole spectrum. When it comes to IMF financing, typically financing from the IMF is to help with short-term balance of payments issues and crises.
“In the case of Nigeria, we have a positive trade balance. We have a positive current account balance. Our reserves are growing. The Governor of the Central Bank recently announced that we had achieved upwards of $10 billion improvement and increase in the reserves.
“We need to use equity. We need to rely on crowding in the savings, particularly of the private sector in Nigeria and the private sector around the world in the form of foreign direct investment. We have to remember that at this time, we have had significant gains in terms of improving the economic environment,” Mr Edun stated.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose further by 0.33 per cent on Thursday, January 23, as appetite for unlisted stocks continued to grow.
During the trading session, the value of the bourse went up by N7.6 billion to N1.767 trillion from the N1.76 trillion it closed in the preceding session, as the NASD Unlisted Security Index (NSI) made an additional 10.33 points to wrap the trading day at 3,120.3 points compared with the 3,09.80 points recorded at the midweek session.
Business Post reports that the share price of Okitipupa Plc increased on Thursday by N4.35 to end the day at N47.90 per unit compared with the previous day’s N43.55 per unit, and Food Concepts Plc gained 14 Kobo to settle at N1.74 per share, in contrast to the preceding day’s N1.60 per share.
On the flip side, Impresit Bakolori Plc suffered a decline of 10 Kobo yesterday to trade at 95 Kobo per unit versus Wednesday’s closing price of N1.05 per unit.
When the exchange closed for the session, the volume of securities bought and sold by investors went up by 70,008 per cent to 407.4 million units from the 581,160 units transacted a day earlier.
Equally, the value of shares traded during the session jumped by 16,665.9 per cent to N391.2 million from the N2.3 million recorded at midweek, and the number of deals increased by 65 per cent to 30 deals from the 20 deals posted on Wednesday.
Impresit Bakolori Plc topped the activity chart as the most active stock by value (year-to-date) with 406.5 million units worth N386.1 million, followed by FrieslandCampina Wamco Nigeria Plc with 4.3 million units valued at N170.4 million, and Geo-Fluids Plc with 9.1 million units sold for N44.3 million.
However, Impresit Bakolori Plc snatched the top spot as most active stock by volume (year-to-date) with 406.5 million units worth N386.1 million, as Industrial and General Insurance (IGI) Plc dropped to second position for selling 26.3 million units sold for N6.3 million, and Geo-Fluids Plc occupied third with 9.2 million units valued at N44.3 million.
By Adedapo Adesanya
The Naira recovered about 0.26 per cent or N3.99 against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, January 23 after coming under pressure in recent times.
During the session, the exchange rate of the local currency to its American counterpart closed at N1,548.59/$1 in the official market compared with the previous day’s N1,552.58/$1.
Also, against the Pound Sterling, the domestic currency gained N3.32 yesterday to trade at N1,912.21/£1 compared with Wednesday’s value of N1,915.53/£1 and on the Euro, it improved by N3.82 to sell for N1,617.72/€1 versus N1,613.89/€1.
The forex market may be reacting positively to news that the Central Bank of Nigeria (CBN) would launch a FX Code, which will serve as a guideline to the banking industry to promote ethical conduct of Authorised Dealers in the Nigerian FX market, next week.
The code will further reduce speculative activities, eliminate market distortions, and give the CBN improved oversight capabilities to effectively regulate the market.
The bank noted that authorised dealers would subsequently conduct all FX transactions in the interbank FX market on the EFEMS approved by the apex bank where transactions will be reflected immediately.
However, in the black market segment, the Nigerian Naira lost N5 against the greenback during the session to quote at N1,665/$1, in contrast to midweek’s rate of N1,660/$1.
As for the cryptocurrency market, it was lively yesterday as attention is increasingly centered on potential policy developments under the government of President Donald Trump of the US.
On Thursday, President Trump signed an executive order to ban the digital dollar and promote crypto and AI innovation in the country.
Meanwhile, the US data released recently showed the “all tenant rent” index, which leads the shelter inflation in the Consumer Price Index (CPI), rose at a slower pace last quarter. That has raised hopes that the US Federal Reserve will walk back on its hawkish December rate forecasts.
These helped Ethereum (ETH) gain 5.4 per cent on Thursday to sell at $3,394.79, Solana (SOL) appreciated by 4.4 per cent to $260.86, Cardano (ADA) jumped by 2.9 per cent to $1.00, and Litecoin (LTC) expanded by 2.6 per cent to $116.78.
Further, Bitcoin (BTC) rose by 2.1 per cent to $1o4,978.31, Ripple (XRP) leapt by 0.7 per cent to $3.16, Dogecoin (DOGE) increased by 0.6 per cent to $0.3572, and Binance Coin (BNB) soared by 1.6 per cent to $710.31, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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