Economy
Nigeria, UK Seek Stronger Ties as Trade Value Hits £5.5bn
By Adedapo Adesanya
The governments of Nigeria and the United Kingdom have disclosed that the trade value between the two countries in 2022 stood at £5.5 billion.
This was disclosed in a statement jointly signed by the Minister of Industry, Trade and Investment, Mr Adeniyi Adebayo, and UK Trade Envoy to Nigeria, Mrs Helen Grant, at the 8th ministerial meeting of the United Kingdom-Nigeria Economic Development Forum (EDF).
“Of this £5.5 billion, total UK exports to Nigeria amounted to £3.3 billion in the four quarters of 2022, while total UK imports from Nigeria amounted to £2.2 billion in the four quarters of Q2 2022,” it said.
The statement said that UK and Nigeria reaffirmed their commitment to deepen the trade relationship between both countries.
“It was a confirmation of their shared interest in pursuing an enhanced trade and investment partnership for increased engagement.
“UK and Nigeria agreed that the enhanced trade and investment partnership will offer an alternative high-profile mechanism to progress bilateral economic issues of mutual strategic importance.
“Under this, both sides will continue to work together to resolve market access issues and enhance economic cooperation,” the statement said.
It quoted the UK International Trade Secretary, Ms Kemi Badenoch, as saying, “Nigeria is Africa’s largest economy and I’m delighted to see our trade and investment links grow, already worth £5.5 billion.
“The successes of the EDF over the last four years have helped address crucial market access barriers and boosted our exchanges in key sectors such as legal and financial Services.
“I welcome the shared interest in exploring an enhanced trade and investment partnership between our nations that will open up new opportunities for UK and Nigerian business, create jobs, and future-proof our economies against a changing world.”
Ms Badenoch said that the UK recently inaugurated the Developing Countries Trading Scheme (DCTS) with enhanced preferences for Nigeria-UK Trade and Investment.
According to her, the new scheme which will come into effect in early 2023, will cut tariffs on hundreds of everyday products from developing countries.
Similarly, UK Trade Envoy to Nigeria, Mrs Helen Grant, said “the UK and Nigeria go far when we go together.
“We are supporting Nigeria on the path to becoming a higher-growth, more inclusive, and more sustainable economy as we move toward the 2023 elections.
“This is part of a wider push by the UK to drive a free trade, pro-growth agenda across the globe, using trade to drive prosperity and help eradicate poverty.
“A potential enhanced trade and investment partnership would include a series of commitments to tackle non-tariff market access barriers to deliver tangible results for businesses in both the UK and Nigeria,” she said.
“This will be welcome news to Nigerian exporters. It will equally extend tariff cuts to hundreds of more products exported from Nigeria and other developing countries, going further than the EU’s Generalised Scheme of Preferences.
“This is on top of the thousands of products, which Nigeria can already export to the UK duty-free,” she said.
On his part, Mr Adebayo said that it was important that what comes out of the working group builds upon its principles and strengthens its outcomes.
“I know that both Nigeria and the United Kingdom have exchanged policy papers detailing how they wish to proceed, and I look forward to feedback as both papers are reviewed.
“I have always held the strong conviction that there is no crisis without an accompanying opportunity and solution.
“Increased collaboration with Nigeria and other developing markets is needed to mitigate against both current and potential future supply-chain challenges.
“To this end, the introduction of the Developing Countries Trading Scheme (DCTS) is warmly welcomed.
“The reduction in tariffs on hundreds of everyday products should be a win for both Nigerian exporters and UK consumers who are able to access our products at a lower price,” he said.
The minister said that in 2021, UK exports to Nigeria in Dollar terms were $1.64 billion, and Nigerian exports to the UK were valued at $1.12 billion.
“Not too far apart. As we move into 2023, it will be good to see the DCTS grow these numbers,” he said.
Mr Adebayo said that increasing bilateral trade was key for both nations, and the agreement must strategically promote its increase.
“We must continue to work together to resolve market access issues and enhance economic cooperation.”
By Adedapo Adesanya
Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.
The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.
Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.
The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.
Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.
During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.
InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
By Adedapo Adesanya
The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.
The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.
Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.
Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.
As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.
However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.
As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.
With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.
Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.
Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
The oil market was up on Friday on increasing expectations the US Federal Reserve will cut interest rates next week, which could boost economic growth and energy demand.
Brent futures rose by 49 cents or 0.8 per cent to $63.75 per barrel and the US West Texas Intermediate (WTI) futures expanded by 41 cents or 0.7 per cent to $60.08 per barrel.
Investors digested a US inflation report and recalibrated expectations for the Federal Reserve to reduce rates at its December 9-10 meeting.
US consumer spending increased moderately in September after three straight months of solid gains, suggesting a loss of momentum in the economy at the end of the third quarter as a lackluster labor market and the rising cost of living curbed demand.
Traders have been pricing in an 87 per cent chance that the US central bank will lower borrowing costs by 25 basis points next week, according to CME Group’s FedWatch Tool.
Investors also focused on news from Russia and Venezuela to determine whether oil supplies from the two sanctioned members of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) will increase or decrease in the future.
The failure of US talks in Moscow to achieve any significant breakthrough over the war in Ukraine has helped to boost oil prices so far this week.
A loss of Venezuelan oil production in case of a US military intervention will materially impact global benchmark prices as the market will have to replace Venezuela’s heavy crude.
Venezuela is estimated to pump about 1.1 million barrels per day of crude oil at present, so if the US-Venezuela tension escalation into an invasion in the South American country, this volume of crude would be at risk.
Reuters reported that the Group of Seven countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban in a bid to reduce the oil revenue that helps finance Russia’s war in Ukraine.
Any deal that could lift sanctions on Russia, the world’s second-biggest crude producer after the US, could increase the amount of oil available to global markets, weakening prices.
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