Economy
Nigerian Economy is Truly Diversified—Ahmed
The federal government has expressed its commitment to continue to improve the diversification of the economy by steadily growing other sectors, particularly the commodities trading ecosystem.
The assurance was given by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, during the presentation of a Gold coin to her by the Lagos Futures and Commodities Exchange in Abuja over the weekend.
Mrs Ahmed expressed her pleasure at the presentation as she stated that it is one of the results of the federal government’s commitment to continuing to improve efforts at diversifying the economy.
“This is really pleasing for me because we have been trying to improve the diversification of the Nigerian economy. People say we need to diversify the economy, but the Nigerian economy is truly diversified.
“Our GDP today has a 6.4 per cent contribution from the oil and gas sector, so 94.6% of the Nigerian economy is from other sectors. One of the sectors that we have been trying to activate its full potential is the mining sector.
“The mining sector today is still very small, but that is on the side of the government. But in the private sector, and now I am glad in the states, there are very active mining activities that are taking place.
“Unfortunately, until now, we have not been getting the full value of the mining activities. Mining activities have been largely artisanal; there are a lot of participants that take out our minerals without reporting it, without government or even the miners getting full value for it,” she said.
The Minister stated that in a bid to get the full value of mining activities in the country, the President approved and set up the Presidential Gold Mining Scheme with the Solid Minerals Development Agency leading.
“They had set up a pilot that started from Kebbi State where they supported the artisanal miners to be able to practise better mining practices and also to off-take the minerals that they mine, and do some first-level refining. Then the Central Bank offtakes this and sends it out of the country for proper mining.
“The essence for us is to begin to hold our reserves in minerals like gold so that our reserves are not all in US dollars. We know what happens to US dollars and what can happen to them. We are beginning to have our reserves in gold,” Mrs Ahmed stated.
She disclosed that the scheme, even though it was started by the federal government, has seen refineries beginning to actually work in Nigeria, adding that there is one in Ilesha, Segilola, which was the first refinery that was licensed in Nigeria.
According to Mrs Ahmed, “This gold is now being mined in Nigeria, refined in Nigeria up to the point of producing billions and then off taken by the CBN and other organisations like the LCFE. They are also coming forward to facilitate the trading of gold in the commodities exchange in Nigeria. That’s what we want; we wanted to be able to activate the full circle. What was missing was the off taking; now, the off-take is being addressed, and this will help to drive demand.
“Once there is demand in the market end, the producers will be encouraged to produce more, there will be more employment, and we will begin to see more banks supporting this mining sector. Before now, the banks were not too interested in supporting the mining sector because of the long gestation period. The investment is actually worthwhile, and we will encourage these businesses to grow and produce more. I want to congratulate the LFCE for being the first of its kind in Nigeria to achieve this”.
The Minister congratulated the SEC for pushing the milestone and expressed the hope that more commodities exchanges will come up as a result. She, therefore, charged the SEC to enable these companies to be able to operate because it is needed in the market to drive the kind of volumes that Nigeria hopes to get.
In his remarks, the Director-General of the Securities and Exchange Commission (SEC), Mr Lamido Yuguda, commended the Minister and the federal government on their determination to bequeath a vibrant commodities sector.
He stated that, “LCFE is into a number of commodities, and gold is just one of them. They have worked hard in this gold sector. This gold is 100% Nigerian gold, mined and refined in Nigeria, and I am happy that we have your support in this. Thank you very much for making this possible; we appreciate all the guidance and support you have provided so far”.
Also speaking, the Managing Director of LCFE, Mr Akin Akeredolu-Ale, expressed appreciation to the SEC for all the regulatory support the commission has provided in recent times.
Mr Akeredolu-Ale stated that Nigeria is a commodities country but has a large potential that is untapped so far and solicited the support of the National Assembly in passing the Investments and Securities Bill, which e said will bring about massive development in the sector.
“I thank the SEC for pushing the Investments and Securities Bill because that is the legal and regulatory framework that is supposed to support the capital market and, by default, the commodities trading ecosystem.
“We are hoping that the bill is approved so that we are able to have a hold on the commodities space and the revenues that are slipping out of Nigeria. We need that bill passed to be able to function more effectively,” he added.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.69 per cent appreciation on Monday, January 13, as investors showed renewed interests in unlisted securities.
During the trading session, the NASD Unlisted Security Index (NSI) increased by 21.07 points to wrap the session at 3,095.00 points compared with the 3,073.93 points recorded in the previous session.
In the same vein, the value of the local alternative stock exchange went up by N7.22 billion to close at N1.061 trillion compared with last Friday’s N1.051 trillion.
Yesterday, FrieslandCampina Wamco Nigeria Plc recorded a growth of N3.78 to close at N42.00 per share versus N38.22 per share, Mixta Real Estate Plc improved by 20 Kobo to end at N2.35 per unit versus the preceding closing rate of N2.15 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to finish at 25 Kobo per share compared with the previous session’s 24 Kobo per share.
Conversely, Geo-Fluids Plc lost 29 Kobo to quote at N4.56 per unit compared with the preceding day’s N4.85 per unit, and Afriland Properties Plc slid by 75 kobo to end the session at N15.50 per share versus the preceding closing rate of N16.25 per share.
During the session, the volume of securities traded decreased by 27.2 per cent to 3.1 million units from 4.3 million units, the value of securities slumped by 81.5 per cent to N3.2 million from N17.2 million, and the number of deals expanded by 57.9 per cent to 30 deals from 19 deals.
At the close of trades, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 1.9 million units worth N74.2 million, followed by 11 Plc with 12,963 units valued at N3.2 million, and IGI Plc with 10.7 million units sold for N2.1 million.
Also, IGI Plc remained the most traded stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.9 million units valued at N74.2 million, and Acorn Petroleum Plc with 1.2 million units worth N1.9 million.
By Adedapo Adesanya
The Naira recorded a 0.38 per cent or N5.86 depreciation on the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, January 13 to close at N1,548.89/$1, in contrast to the preceding session’s N1,543.03/$1.
The local currency weakened further in the official market yesterday as the deadline to cut off Bureaux De Change (BDC) operators from the Electronic Foreign Exchange Matching System (EFEMS) built to enhance transparency in the FX system looms.
Recall that the Central Bank of Nigeria (CBN) in December opened a 42-day window to allow BDCs to buy FX worth $25,000 per week from the spot market.
However, the domestic currency appreciated against the Pound Sterling in the official market on Monday by N11.87 to trade at N1,877.43/£1 compared with last Friday’s N1,889.29/£1 and against the Euro, it improved its value by N4.94 to close at N1,578.87/€1, in contrast to the previous trading day’s N1,583.81/€1.
A look at the parallel market indicated that the Nigerian Naira slumped against the greenback yesterday by N5 to sell at N1,655/$1 compared with the preceding session’s N1,650/$1.
In the cryptocurrency market, large positive outcomes came even as risk assets weighed the possibility of US Federal Reserve rate cuts in the wake of Friday’s hotter-than-expected US jobs report.
The biggest gainer was recorded by Dogecoin (DOGE) as it rose by 3.9 per cent to sell at $0.3422, Bitcoin (BTC) grew by 0.9 per cent to trade at $94,843.98, Binance Coin (BNB) appreciated by 0.8 per cent to sell for $687.84, and Solana (SOL) recorded a 0.8 per cent growth to quote at $185.24.
Further, Ripple (XRP) increased its value by 0.7 per cent to close at $2.53, and Cardano jumped by 0.3 per cent to settle at $0.9469.
On the flip side, Ethereum (ETH) depreciated by 1.9 per cent to finish at $3,159.52, and Litecoin (LTC) went down by 0.9 per cent to close at $98.68, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
Oil prices rose on Monday as Chinese and Indian buyers sought new suppliers after the administration of President Joe Biden of the United States imposed toughest sanctions yet on Russian energy.
Last Friday, the US Treasury Department imposed sanctions on Gazprom Neft and Surgutneftegas, as well as 183 vessels that traded oil as part of Russia’s so-called “shadow fleet” of tankers. The move is expected to cost Russia billions of Dollars per month.
This pushed the price of Brent higher by $1.25 or 1.6 per cent yesterday to $81.01 per barrel and raised the US West Texas Intermediate (WTI) crude by $2.25 or 2.9 per cent to $78.82 a barrel.
As a result, Chinese and Indian refiners are seeking alternative fuel supplies as they adapt to the severe sanctions on Russian producers and tankers that are designed to curb the revenues of the world’s second-largest oil exporter.
The large sanction gives Ukraine and the US President-elect, Mr Donald Trump, leverage to reach a deal for peace in the almost three years war.
Market analysts note that these sanctions have the potential to take as much as 700,000 barrels per day of supply off the market, which would erase the surplus that we are expecting for this year.
On its part, Goldman Sachs estimated that vessels targeted by the new sanctions transported 1.7 million barrels per day of oil in 2024, or 25 per cent of Russia’s exports. The bank is increasingly expecting its projection for a Brent range of $70-$85 to trade.
The Vladimir Putin-led government said the sanctions risked destabilising global markets, and Russia would seek to counter them.
Many of the tankers named have been used to ship oil to India and China after previous Western sanctions. A price cap imposed by the Group of Seven countries in 2022 shifted trade in Russian oil from Europe to Asia. Some of the ships have also moved oil from Iran, which is also under sanctions.
Also, six European Union countries called on the European Commission to lower the price cap put on Russian oil by G7 countries, arguing it would reduce Russia’s revenue to continue the war while not causing a market shock.
However, weaker demand from major oil buyers, China, could have an impact on the tighter supply as data showed that China’s crude oil imports fell in 2024 for the first time in two decades outside of the COVID-19 pandemic.
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