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 Adedapo Adesanya
Trading activities ended in a stalemate on the floor of the NASD Over-the-Counter (OTC) Securities Exchange on Wednesday, with no single price gainer or a price loser at the close of business.
As a result of this development, the market capitalisation of the bourse remained intact at N1.03 trillion, as the NASD Unlisted Securities Index (NSI) also remained unchanged at 743.15 points.
The unlisted securities market closed flat in the midweek session amid low investor appetite for the market, as attention shifted to the fixed-income market, where the Central Bank of Nigeria (CBN) sold treasury bills at the primary market, with the stop rate over 14 per cent.
Data from the bourse showed that the volume of securities traded yesterday was abysmally low as it went down by 99.9 per cent to 8,299 units from the 20.1 million units transacted a day earlier.
Likewise, the value of shares traded during the session dropped to N1.2 million, 97.3 per cent lower than the N44.5 million posted in the preceding trading day.
These transactions were carried out yesterday in nine deals, 75 per cent lower than the 36 deals executed on Tuesday.
Geo-Fluids Plc remained the most traded stock by volume on a year-to-date basis with a turnover of 482.1 million units valued at N544.1 million, UBN Property Plc occupied second place with the sale of 365.8 units worth N309.5 million, while Industrial and General Insurance (IGI) Plc was in third place with the sale of 71.1 million units valued at N5.1 million.
Also, VFD Group Plc ended the session as the most traded stock by value on a year-to-date basis with a turnover of 7.3 million units worth N1.7 billion, Geo-Fluids Plc was in second place with a turnover of 482.1 million units worth N544.1 million, while UBN Property Plc was in third place with the sale of 365.8 million units valued at N309.5 million.
By Adedapo Adesanya
The Nigerian Naira appreciated against the US Dollar in the Peer-2-Peer (P2P) and the Investors and Exporters (I&E) windows of the foreign exchange market on Wednesday, March 30, but depreciated in the black market.
In the P2P segment, it gained N3 against its American counterpart to quote at N764/$1, in contrast to the N767/$1 it was traded on Tuesday as the demand for cryptos, which most traders in this category use the funds to buy, was relatively mild.
In the I&E window or the spot market, the Naira appreciated against the greenback yesterday by 51 Kobo or 0.11 per cent to settle at N461.24/$1 compared with the previous day’s N461.75/$1, according to data obtained from FMDQ Securities Exchange, with the forex turnover put at $74.31 million.
But in the parallel market, the domestic currency depreciated against the US Dollar in the midweek session by N4 to trade at N747/$1 versus Tuesday’s exchange rate of N743/$1.
Also, in the interbank window, the Naira lost N1.93 against the Pound Sterling to sell at N567.68/£1 versus Tuesday’s N565.52/£1, and against the Euro, it slid by N2.25 to at N499.21/€1 compared with the preceding day’s N496.66/€1.
Meanwhile, the digital currency market swayed to the bulls yesterday as most of the tokens tracked by Business Post ended in the green territory amid better-than-expected consumer confidence figures from the United States.
Data from the US Conference Board showed that its monthly survey rose to a reading of 104.2 basis points, better than the 101 mark expected, lifting Bitcoin (BTC) by 4.2 per cent to $28,519.76, as Ethereum (ETH) rose by 0.5 per cent to $1,788.52.
Solana (SOL) grew by 2.1 per cent to $21.08, Dogecoin (DOGE) gained 1.4 per cent to sell at $0.0751, Litecoin (LTC) increased by 0.6 per cent to $90.14, while Cardano (ADA) chalked up 0.5 per cent to quote at $0.3797.
However, Ripple (XRP) dropped 0.4 per cent to trade at $0.5336, Binance Coin (BNB) lost 0.2 per cent to settle at $313.02, and Binance USD (BUSD) and the US Dollar Tether (USDT) traded flat at $1.00 apiece.
By Adedapo Adesanya
Oil edged lower on Wednesday as investors took profits from two straight days of gains amid supply tightness, causing Brent crude to lose 37 cents or 0.5 per cent to trade at $78.28 a barrel, and the US West Texas Intermediate crude to shed 23 cents or 0.3 per cent to sell at $72.97 per barrel.
On the supply side, worries of tightness after an unexpected draw in US oil stockpiles and a halt to some Iraqi Kurdistan oil exports were partially offset by a smaller-than-expected output cut in Russia.
About 450,000 barrels per day of crude export were halted on Saturday from Iraq’s semi-autonomous northern Kurdistan region following an arbitration decision.
The shutdown followed an International Chamber of Commerce court ruling in favour of Iran in a case against Turkey that claimed that the latter should not have allowed for the flow of oil from Kurdistan to Ceyhan without the express approval of the Iraqi government.
Initially, Turkey said it would abide by the court’s decision, but this week, the Turkish Ministry of Energy and Natural Resources said in a statement that the court had in fact ruled that Iraq should compensate Turkey for violating an oil export deal the two countries had.
Also, it was reported that Russian oil production fell by around 300,000 barrels per day in the first three weeks of March, less than the targeted cuts of 500,000 barrels per day.
US crude oil stockpiles fell unexpectedly last week, the Energy Information Administration (EIA) said, as refineries ramped up operations after maintenance season and US imports fell to a two-year low.
The EIA reported a crude oil inventory draw of 7.5 million barrels for the week to March 21 compared with a relatively modest inventory build of 1.1 million barrels for the previous week.
At 473.7 million barrels, the EIA said, crude oil inventories are 6 per cent above the five-year average for this time of the year.
In fuels, meanwhile, the authority estimated a mixed inventory picture after last week’s major draws in both gasoline and middle distillates pushed oil prices higher.
Analysts also said that concerns over banking issues have subsided for now in temporarily relieving expectations for a recession.
Pressure came as the US Dollar edged higher against most major peers, pausing its recent declines. A stronger greenback hurts oil demand as crude becomes more expensive for buyers who hold foreign currencies.
