Economy
FG Negotiating Free Trade Agreements
By Modupe Gbadeyanka
The Federal Government has noted that it was in the process of negotiating 21st century Nigerian free trade agreements with the goal of expanding market opportunities for Nigerian companies as well as looking into the ECOWAS Common External Tariff that has been quite controversial.
This disclosure was made by Minister of Industry, Trade & Investment, Dr Okechukwu Enelamah, during a press conference in Abuja on Thursday.
Dr Enelamah noted that that the Export Expansion Grant (EEG), which was suspended in 2014 following allegations of widespread abuse and the accumulation of significant liability on the Negotiable Duty Credit Certificate (NDCCs), is also expected to resume in 2017.
In addition, he said the minister is currently running a feasibility study for the development of six Special Economic Zones (SEZ’s) and securing funding in the Nigerian budget for the first development phase to be launched in 2017.
According to him, the Ministry is updating Nigeria’s trade policy priorities by working to correct imbalances in the country’s trade relationships and reversing negotiating failures. One of those items it is examining at the moment is the Economic Community of West Africa States (ECOWAS) CET.
The CET is a regional tariff structure for West Africa on the basis of which products are imported within the region.
It came into effect in 2015 with a transitional period of implementation to 2020. The challenge for the Nigerian economy is that manufacturers and industrialists have taken a strong position that the negotiation that resulted in the CET did not take into account the sensitive of the Nigerian industrial and manufacturing sector.
The pre-existing sensitivities have now been compounded with the onset of the recession and other vulnerabilities. Stakeholders have taken the position that the Nigerian economy would be damaged if the CET is implemented in 2020 and that the situation would be compounded if Nigeria signs the Economic Partnership Agreement (EPA) with the European Union.
He said as a consequence therefore, producers, manufacturers, industrialists and others have requested for the postponement and negotiation of the CET and for the EPA not to be signed. The government is thus, seriously working on these concerns.
On the EEG, the Minister said government intends to resume the scheme in 2017 because of its determination to expand the volume and value of Nigeria’s exports, diversifying export products and improving global competiveness of Nigerian exporters. The scheme will be included in the budget in order to manage the impact on government revenue and promote transparency.
On Industry, he said the aim is to broaden the scope and accelerate the growth of the Nigerian manufacturing & industrial businesses
The Minister said that approved liability on the Scheme for unused certificates which are either in the custody of exporters or awaiting issuance in the Federal Ministry of Finance, will be settled after the conduct of an audit to verify the actual amount due.
Following EEG suspension, Dr Enelamah had set up an Inter-Ministerial Committee to access the scheme holistically and make recommendations on its continued operation or otherwise and the framework for its continued operation.
The committee came up with far reaching recommendations and also made a presentation at the Economic Management Team (EMT) meeting of October 17, 2016, presided over by His Excellency, the Vice President of the Federal Republic of Nigeria, Prof. Yemi Osinbanjo, in which its recommendations were approved.
The Ministry had a meeting a couple of weeks ago with exporters and other stakeholders to discuss and exchange ideas once again on the matter.
On the SEZs, the Minister explained that his ministry was facilitating the setup of special economic zones throughout Nigeria. Specific goals include to help overcome the infrastructure disadvantages faced by local manufacturers, and promote the cluster effects gained by locating similar manufacturing businesses together.
Apart from the funding secured in the Budget for SEZs, other financial partners such as Afreximbank and EXIM bank of China have committed $1bn to the project.
On the investment front, he said the ministry is working with the Nigerian Investment Promotion Commission (NIPC) to enhance investments and reverse the overall decline of FDI inflows.
Key achievements include important Investment Promotion and Protection agreements signed with Singapore and UAE and Investment road shows undertaken in China, Germany, Singapore, Turkey, UAE, UK, and US.
Also investors such as GE, Nissan, Coca-Cola among others, have continued to express interest to expand investment in Nigeria.
On the Enabling Business Environment (EBE), he the stated that the Presidential Enabling Business Environment Council (PEBEC) has been created and monthly meetings have commenced to monitor results achieved.
On Industry, the aim is to broaden the scope and accelerate the growth of the Nigerian manufacturing & industrial businesses, with a special focus on agribusiness and agro allied industries. This includes for example auto assembly and component manufacturing, mining, sugar, food processing, textile and garments, palm oil, and leather.
He also said the ministry’s initiatives currently underway within the Nigerian Industrial Revolution Plan (NIRP) include: FG has approved the Nigerian Automotive Industry Development Plan (NAIDP). Secondly, a roadmap implementation has begun with sugar, tomato, textile and garments.
Also, he said in order to keep up with the rapidly transforming global economy, Nigeria’s digitalization has to be accelerated.
The ministry’s digitalization initiatives currently underway include: The establishment of the Smart Digital Nigeria Economy Project, as the baseline strategy for the digital-led growth of the Nigerian Economy.
Dr Enelamah said the ministry was working in partnership with the Bank of Industry (BoI) and other relevant government departments to support MSME’s through funding.
Specific MITI initiatives currently underway include: The GEM (Growth and Employment) initiative in collaboration with the World Bank. More specifically, The GEM initiative has identified 23 IDAs (Industrial Cluster Areas) to support MSME’s with capacity development and launch the ‘BIG platform’ funding initiative to provide funding and training for MSME’s.
Finally, giving an overview of the ministry’s vision, Dr Enelamah explained that there are three core pillars and five foundational enablers (necessary conditions to realise our plans) as follows:
3 Core Pillars:
– Implement the Nigerian Industrial Revolution Plan (NIRP)
– Support Micro, Small & Medium Enterprises (MSMEs)
– Support the Digitalization of the Nigerian economy
- 5 Foundational Enablers
– Establish an Enabling Business Environment (EBE)
– Develop Special Economic Zones (SEZ)
– Establish 21st Century trade/Free Trade agreements
– Attract domestic and foreign investments
– Institutionalize the Structural Reform Agenda (SRA)
By Dipo Olowookere
About 0.04 per cent was recovered on Friday from the loss recorded by the Nigerian Exchange (NGX) the previous due to profit-taking.
Yesterday, investors were in the market with renewed vigour, mopping up stocks trading at relatively cheaper prices.
According to data, the insurance counter gained 0.41 per cent, the banking sector appreciated by 0.38 per cent, and the consumer goods index grew by 0.14 per cent.
The gains achieved by these three sectors were enough to lift Customs Street at the close of business despite the 0.26 per cent decline printed by the industrial goods segment and the 0.14 per cent loss suffered by the energy industry. The commodity counter was flat during the session.
A total of 43 equities gained weight on the last trading day of this week, while 26 equities shed weight, indicating a positive market breadth index and strong investor sentiment.
Red Star Express increased its share price by 10.00 per cent to N13.20, NCR Nigeria grew by 9.97 per cent to N128.55, SCOA Nigeria inflated by 9.96 per cent to N14.90, Omatek appreciated by 9.94 per cent to N1.77, and Deap Capital expanded by 9.85 per cent to N4.46.
On the flip side, McNichols decreased by 8.81 per cent to N6.00, Legend Internet crumbled by 7.56 per cent to N5.50, Cornerstone Insurance crashed by 6.48 per cent to N6.35, C&I Leasing contracted by 6.29 per cent to N8.20, and Austin Laz slipped by 5.78 per cent to N3.75.
Yesterday, 539.9 million shares valued at N16.7 billion were transacted in 48,023 deals versus the 1.0 billion shares worth N31.6 billion executed in 51,227 deals in the preceding day, implying a shrink in the trading volume, value, and number of deals by 46.01 per cent, 47.15 per cent, and 6.26 per cent apiece.
Zenith Bank was the most active for the day with 54.6 million stocks sold for N3.8 billion, Jaiz Bank traded 41.5 million units worth N359.4 million, Secure Electronic Technology transacted 37.7 million units valued at N39.2 million, Access Holdings exchanged 30.5 million units for N699.2 million, and Lasaco Assurance transacted 27.2 million units worth N68.3 million.
When the market closed for the day, the All-Share Index (ASI) went up by 72.21 points to 166,129.50 points from 166,057.29 points and the market capitalisation gained N31 billion to N106.354 trillion from N106.323 trillion.
By Adedapo Adesanya
It was a positive ending for the Naira this week after it further appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, January 16 by N1.33 or 0.09 per cent to sell for N1,417.95/$1 compared with the previous day’s N1,419.28/$1.
The domestic currency also gained N2.41 against the Euro in the official market to close at N1,647.51/€1 versus the preceding session’s closing price of N1,649.92/€1, however, it suffered a N7.97 loss against the Pound Sterling in the same market window to trade at N1,901.32/£1, in contrast to Thursday’s closing price of N1,893.35/£1.
In the same vein, the Nigerian Naira depleted against the Dollar at the GTBank FX counter by N2 to quote at N1,427/$1 compared with the previous day’s N1,425/$1, but strengthened against the greenback at the black market yesterday by N5 to settle at N1,485/$1 versus the N1,490/$1 it was exchanged a day earlier.
Improved supply conditions helped keep the market within range as exporters’ and importers’ inflows in addition to non-bank corporate supply enhanced liquidity as the Central Bank of Nigeria (CBN) made no visible intervention.
Stronger external inflows from foreign portfolio investors (FPIs) and improving current account dynamics, continue to align with structural support in the wider economy.
Nigeria has seen projections of a stronger economic or gross domestic product (GDP) growth and lower inflation in 2026, with these forecasts citing improved macroeconomic fundamentals and reform impacts.
As for the cryptocurrency market, it was mixed following selloff in precious metals and lower US stocks appeared to be denting crypto sentiment.
Gold and silver, both of which also enjoyed big rallies earlier this week, tumbled 1.2 per cent and 5 per cent, respectively while key US stock indexes — the Nasdaq, S&P 500 and Dow Jones Industrial Average — all reversed from early gains to modest losses in Friday trade.
Dogecoin (DOGE) shrank by 2.2 per cent to $0.1370, Ripple (XRP) slipped by 0.8 per cent to $2.05, Ethereum (ETH) went down by 0.7 per cent to $3,228.56, and Bitcoin (BTC) slumped by 0.6 per cent to $95,086.80.
Conversely, Litecoin (LTC) appreciated by 3.2 per cent to $74.48, Solana (SOL) rose by 0.4 per cent to $143.70, Cardano (ADA) jumped by 0.2 per cent to $0.3942, and Binance Coin (BNB) increased by 0.1 per cent to $935.88, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
Oil prices settled higher amid lingering worries about a possible US military strike against Iran, a decision that may still occur over the weekend.
Brent crude settled at $64.13 a barrel after going up by 37 cents or 0.58 per cent and the US West Texas Intermediate (WTI) crude finished at $59.44 a barrel after it gained 25 cents or 0.42 per cent.
The US Navy’s aircraft carrier USS Abraham Lincoln was expected to arrive in the Persian Gulf next week after operating in the South China Sea.
Market analysts noted that it doesn’t seem likely anything will happen soon. However, the weekends have become the perfect time for actions so as not offset the markets.
The market had risen after protests flared up in Iran and US President Donald Trump signalled the potential for military strikes, but lost over 4 per cent on Thursday as the American president said Iran’s crackdown on the protesters was easing, allaying concerns of possible military action that could disrupt oil supplies.
Iran produces approximately 3.2 million barrels per day, accounting for roughly 4 per cent of global crude production, so it was not a coincidence that markets rallied sharply through Tuesday and Wednesday as President Trump canceled meetings with Iranian officials and posted that “help is on its way” to Iranian protesters, raising fears of potential US military strikes that sent prices surging toward multi-month highs.
Weighing against those fears are potential supply increases from Venezuela.
The Trump administration is exploring plans to swap heavy Venezuelan crude for US medium sour barrels that can actually go straight into Strategic Petroleum Reserve (SPR) caverns, since not all all oil belongs in the reserve.
According to Reuters, the Department of Energy is considering moving Venezuelan heavy crude into commercial storage at the Louisiana Offshore Oil Port, while US producers deliver medium sour crude into the SPR in exchange.
Analysts expect higher supply this year, potentially creating a ceiling for the geopolitical risk premium on prices.
Some investors covered short positions ahead of the three-day Martin Luther King holiday weekend in the US.
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