Economy
AfDB Woos Indian Investors for Africa’s Development
By Adedapo Adesanya
The African Development Bank (AfDB) has assured Indian investors considering Africa that the groundwork has been laid to accelerate the continent’s development.
The regional lender, at a virtual conference hosted by the Confederation of Indian Industry (CII) and its partners, called for Indo-African partnerships to go beyond government-to-government cooperation and extend it to private sector participation in order to speed up development.
The Conference on Innovative Financing Mechanisms for Doing Business with Africa took place on July 30, 2020, and attracted more than 600 participants from over 45 countries.
Besides Africa and India, there were also participants from the Middle East, Europe, and Asia, representing businesses, governments, financial institutions, and business promotion agencies.
At the conference, the Acting Senior Vice President and CFO of the Bank, Mrs Bajabulile Swazi Tshabalala, highlighted the business potential in Africa, noting that the continent had great prospects for investors, with a growing consumer market that Indian firms cannot afford to miss.
“The positive outlook for Africa is reinforced by the establishment of the African Continental Free Trade Area (AfCFTA) which seeks to deepen regional integration across the continent and allow the free movement of people and trade across borders,” Mrs Tshabalala said.
Mrs Tshabalala said there was a tremendous opportunity for Indian industry to work together with the bank in sectors such as power generation and transmission, energy, agricultural transformation, healthcare and pharmaceuticals, technology, transportation, and industrialization.
The bank is seeking to expand the number of bankable projects in Africa and has set aside $100 million for project preparation activities in low-income countries. It is also keen to mobilize greater private sector participation in these projects from all countries, she added.
Also speaking, Mr Akhilesh Mishra, India’s Additional Secretary in the Ministry of External Affairs, urged the private sector to consider investing in youth and startups because those sectors have enormous potential for employment generation.
He noted that, aside from the long-term funding traditionally provided as official development assistance, African countries will require more targeted short-term financing.
Buttressing the point, Mr David Rasquinha, Managing Director of the Export-Import Bank of India, underscored the need to expand Indian financial inflows to Africa by expanding the Indian banking network.
He said India and Africa could work together in areas such as healthcare and pharmaceuticals, the financial sector and infrastructure development.
Ms Nana Spio-Garbrah, the chief financing analyst from AfDB’s syndications, co-financing and client solutions department, spoke on the Bank’s capacity to mitigate risk for foreign investors, especially during this era of COVID-19.
Ms Spio-Garbrah also talked about the Bank’s Partial Risk Guarantee (PRG) and Partial Credit Guarantee (PCG), which has been upgraded to meet client needs better. She mentioned the Bank’s syndication services, particularly the A/B loan product, which allows B-lenders to benefit from the Bank’s Preferred Creditor Status.
She also mentioned the Co-Guarantee Platform – a new cooperative of four risk mitigation providers and the African Union, which collectively pools their capacities to de-risk African projects.
AfDB and India have a long-standing strategic partnership dating back almost 40 years to 1982 when India first joined the African Development Fund (ADF), the concessional arm of the Bank Group and in 1983, the country became a shareholder of the Bank.
By Adedapo Adesanya
The Naira depreciated against the United States Dollar by 0.21 per cent or N2.89 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, June 17, to N1,360.07/$1 from Tuesday’s closing rate of N1,357.18/$1.
In the same vein, the Nigerian Naira weakened against the Pound Sterling in the official market during the session by N4.42 to trade at N1,824.81/£1 versus the preceding session’s N1,820.39/£1, and lost N4.19 on the Euro to sell at N1,577.96/€1 compared with the previous day’s N1,573.79/€1.
However, at the GTBank segment, the local currency gained N1 against the greenback yesterday to exchange at N1,372/$1 versus N1,373/$1, and at the parallel market, it remained unchanged at N1,385/$1 at midweek.
The Naira’s performance comes amid tight inflows from exporters, non-bank corporates, and foreign investors, evidenced by the slow movement of the country’s gross external reserves level of $50.505 billion, despite muted inflows from oil sales after a recent drop in prices.
There have been reduced FX market interventions by the Central Bank of Nigeria (CBN) as it maintains its stance to keep the local unit stable enough to retain foreign investments.
The Nigerian government also dismissed a report suggesting that it was considering new taxes on telecommunications services and petroleum products, which would have spooked investors.
The federal government said that the reports misrepresented recommendations contained in the International Monetary Fund (IMF) Article IV Consultation Report on Nigeria, explaining that the recommendations were advisory and do not constitute government policy or binding obligations on Nigeria.
In the cryptocurrency market, prices were negative as traders and investors shrugged off a signed Iran peace deal that lifted stocks, after the Federal Reserve held interest rates but made clear it is more worried about inflation than growth.
Under the new Chair, Mr Kevin Warsh, the Federal Reserve left rates unchanged at 3.5 per cent to 3.75 per cent, in line with expectations, but its updated projections pointed to higher inflation and a slower pace of future rate cuts, and some officials floated the possibility that rates may still need to rise.
Cardano (ADA) slid 4.5 per cent to trade at $0.1731, Ripple (XRP) went down by 4.2 per cent to $1.16, Ethereum (ETH) shrank by 3.5 per cent to $1,727.55, Solana (SOL) lost 3.4 per cent to sell $71.05, Dogecoin (DOGE) also fell by 3.4 per cent to $0.0843, Binance Coin (BNB) slumped by 3.1 per cent to $587.53, and Bitcoin (BTC) crashed by 2.6 per cent to $63,892.28, while TRON (TRX) gained 0.7 per cent to finish at $0.3201, with the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closing flat at $1.00 each.
By Dipo Olowookere
Customs Street further depleted by 0.49 per cent on Wednesday as a result of sustained profit-taking in the financial services industry.
Data showed that the insurance space lost 2.29 per cent, and the banking counter depreciated by 1.04 per cent. However, the energy index gained 0.03 per cent, and the consumer goods segment grew by 0.01 per cent, while the industrial goods sector remained unchanged.
When the Nigerian Exchange (NGX) Limited closed for business at 4 pm yesterday, the All-Share Index (ASI) was down by 1,182.08 points to 240,802.72 points from 241,984.80 points, and the market capitalisation decreased by N759 billion to N154.445 trillion from N155.204 trillion.
Business Post reports that the market breadth index was negative after finishing with 13 price gainers and 51 price losers, indicating weak investor sentiment as a result of the sell-offs.
Geregu Power lost 10.00 per cent to trade at N1,019.30, Okomu Oil declined by 9.97 per cent to N1,418.00, Red Star Express shed 9.95 per cent to close at N27.60, International Energy Insurance dropped 9.90 per cent to quote at N5.19, and Legend Internet slipped by 9.48 per cent to N5.25.
Conversely, Neimeth gained 9.47 per cent to settle at N9.25, Cornerstone Insurance appreciated by 9.26 per cent to N5.90, SUNU Assurances expanded by 3.91 per cent to N3.72, UPDC grew by 2.82 per cent to N3.65, and GTCO chalked up 2.38 per cent to close at N129.00.
A total of 663.0 million equities valued at N40.0 billion exchanged hands in 51,143 deals during the session compared with the 535.5 million equities worth N36.8 billion traded in 55,123 deals a day earlier, representing a shortfall in the number of deals by 7.22 per cent, and a surge in the trading volume and value by 23.81 per cent and 8.70 per cent, respectively.
Yesterday, Access Holdings led the activity chart after transacting 130.3 million shares for N3.1 billion, Jaiz Bank traded 114.9 million stocks valued at N1.1 billion, Sterling Holdings exchanged 31.1 million equities worth N237.2 million, International Breweries sold 22.1 million shares for N247.6 million, and Linkage Assurance traded 17.0 million stocks for N27.7 million.
By Adedapo Adesanya
The oil market gained nearly 1 per cent on Wednesday after US President Donald Trump said the new ceasefire agreement with Iran was not final and the Iran war could resume.
Brent crude futures appreciated by 59 cents or 0.75 per cent to trade at $79.55 a barrel, and the US West Texas Intermediate (WTI) crude futures rose 74 cents or 0.97 per cent to $76.79 per barrel.
President Trump said yesterday that a memorandum of understanding with Iran was not final, and that he could resume a bombing campaign if he did not like it or if Iran did not “behave”.
The US and Iran on Sunday said they had agreed on terms to end the war and reopen the Strait of Hormuz. Though not officially published, the widely reported draft grants the Islamic Republic the right to sell its oil on global markets immediately, alongside the prospect of significant further economic relief, indicating “Iran has emerged from the conflict in a stronger strategic position.
The provision for waiving sanctions on Iranian oil sales takes effect once the agreement is signed this week and also covers services including banking, transportation and insurance to facilitate the sales.
The details of the interim deal to end the war began to emerge on Tuesday, with US President Donald Trump saying it will rule out a nuclear weapon for Iran.
The deal would extend a tenuous ceasefire announced in April by another 60 days and reopen the Strait of Hormuz, which Iran has effectively blocked since the US and Israel first attacked Iran.
Iran effectively shut the Strait after the US and Israel launched attacks on Iran on February 28. The US military blockaded Iranian oil from coming out of the Strait of Hormuz, through which 20 per cent of the world’s oil and liquefied natural gas normally flows.
The US Energy Information Administration (EIA) said on Wednesday that US crude oil inventories fell for a 10th straight week last week as demand surged, pushing total stockpiles to their lowest level since 1985, as the Iran war continued to upend global energy markets.
In its first look at 2027, the International Energy Agency (IEA) said the oil market will enter a significant supply overhang, with global supply set to surge by 8 million barrels per day and demand rising by just 2 million.
In the near term, the agency said the Iran-US deal should provide an opportunity to replenish depleted inventories or build new strategic reserves.
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