The Shippers Council of Niger has abandoned a Memorandum of Understanding (MoU) it signed with the Nigeria Shippers’ Council (NSC) to ship transit cargo through Nigeria, NSC Executive Secretary, Hassan Bello, has said.
 
The country however considered Ghana and Cotonou ports as alternative routes to ship its cargoes.
 
Bello disclosed this last Friday at a seminar organised by the Lagos Chamber of Commerce and Industry’s Freight Forwarders Group in Lagos.
 
According to him, Niger Republic found it easier to transit their cargoes through ports in Ghana and Cotonou rather than Nigeria.
 
Bello, who was represented by NSC Assistant Director of Enforcement and Compliance, Public Service Department, Akujobi Chukwuemeka, attributed the refusal of the operators to honour the agreement with the Nigerian agency to time wasting, insecurity and poor customer service.
 
“If it will take them two days to clear their consignment in Cotonou while it takes them two weeks to do that in Nigeria, they will choose Cotonou.
 
“So, they abandoned that agreement we had with them. If you go to Shippers Council, you will still see them there but they are not doing anything,” he said.
 
Bello said many importers preferred to clear their cargoes through ports of neighbouring countries because of the poor customer service delivery in the seaports.
 
“Do the ports provide good service and in a reliable manner? Is the service consistent? What of the safety of the cargoes, security of the shipment and the issues connected to documentation? How long does it take for documentation processes to be finalised in respect of clearance of cargo?
 
“So, when we talk of customer service, these are small ingredients that will make a customer rate the port as an efficient one. When all these things are not there, you cannot be talking about customer service,” Bello added.
 
The NSC Executive Secretary pointed out that it only takes few hours to discharge oversized cargo in other ports, while in Nigeria, it takes days because the operators would need to hire equipment to perform the duty, making customers spend more days.
 
Besides, he mentioned that the port charges in Nigeria are also high when compared to other ports, noting that this and the usual gridlock at seaports in the country could discourage most of the customers.
 
Source: The Ripples

The Central Bank of Nigeria (CBN) governor, Mr Godwin Emefiele, says maintaining stable exchange rate to avoid depreciation of the Naira is better than building foreign reserve buffers.

Emefiele told newsmen on Sunday that this was part of the outcome of the Nigerian delegation’s meetings with investors and institutions at the International Monetary Fund (IMF) and World Bank Group (WBG) Annual Meetings in Bali.

He said that all frontiers and developing markets have suffered not just depreciation, but had also lost reserves.

“We are very conscious of the need to build buffers but unfortunately I must say that we are in the period where it will be difficult to talk about building reserve buffers.

“We can only build reserve buffers if we want to hold on to the reserve and then allow the currency to go, and wherever it goes is something else.

“So it is a choice we have to make and at this time the choice for Nigeria is to maintain a stable exchange rate so that businesses can plan and we do not create problems in the banking system assets.”

According to him, like other emerging markets nations, Nigeria has also lost reserves but only marginally because it had managed to sustain stability in its foreign exchange market.

The CBN governor said that the IMF and the World Bank advised that nations should build country specific policies and fiscal and structural reforms that would boost economic growth.

Mrs Zainab Ahmed, Minister of Finance, said the World Bank’s Human Capital Development Index (HCI) ranking, which placed Nigeria low at 44 per cent on stunting, was disheartening and depressing.

She, however, said that the Federal Government saw the rating as a wake-up call.

“We admit that this pervasive action was due to long years of under-investment in human capital, which we have before now realised and for which we have been addressing.

“Apart from major policy actions, some decisive actions are being taken to address the situation.”

According to her, the delegation held meetings with the two rating agencies-Fitch and Moody’s and presented to them the summary and synopsis of the recent economic and financial developments in Nigeria.

She added that it was an opportunity for the rating agencies to be able to objectively evaluate Nigeria’s credit.

Ahmed said she also met the IMF Managing Director, Ms Christine Lagarde and discussed Nigeria’s economy in view of the 2019 general elections.

She assured Lagarde that the election year would not pose any threat to the nation’s economic prospects.

Mr Udoma Udo Udoma, Minister of Budget and National Planning, said that to improve HCI, the nation had improved budgetary allocation to health and education.

He said that allocation to education moved from N22.5 billion in 2015 to N102.9 billion in 2018.

He added that allocation to health was reviewed from N26.6 billion in 2015 to N86.49 billion in 2018.

He said also that N55.19 billion had been added to the health budget in 2018 through the National Health Act.

 

Source: PMNEWSNIGERIA

Shipping goods to Nigeria by sea from the United States can leave a big hole in your pocket.

Analysis on overseas cargo and freight costs by MoverDB, an online resource for international shipping, shows that the cost of shipping both 20-foot and 40-foot containers to Lagos ports from New York is the most expensive globally. The report covers the shipping costs from New York and Los Angeles to 47 port cities globally.

The high costs of shipping to Nigeria do not correlate with distance. For instance, shipping from New York to Nigeria is nearly double the cost of shipping to South Africa even though Nigeria is closer, by nautical miles, to New York compared to South Africa.

Port city20-foot container (from New York)40-foot container (from New York)
Zayed (United Arab Emirates) $1,723 $2,572
Haifa (Israel) 1729 2581
Montevideo (Uruguay) 1816 2711
Beirut (Lebanon) 1943 2900
Buenos Aires (Argentina) 1993 2975
Cape Town (South Africa) 2542 3795
Auckland (New Zealand) 2645 3949
Sydney (Australia) 2797 4175
Jeddah (Saudi Arabia) 3086 4606
Apapa, Lagos (Nigeria) 4982 7436

Much of the high costs of shipping to Nigeria is tied up in entrenched inefficiency at its local ports. For starters, Nigeria has very few functional ports even though its economy—Africa’s largest—continues to rely heavily on imports. The slow pace of inspections and offloading of shipping arrivals means that congestion and bottlenecks are nearly perpetual in Nigeria’s biggest port in Apapa, Lagos. The ports’ inefficiencies have for years enabled and incentivized corruption from official and unofficial middle men promising to clear goods for a “fee”.

Last year, in a bid to ease import and export flow, the government launched reforms at the ports. The government worked to clear the ports of local touts who extort bribes and also mandated that the Apapa port run 24-hour operations. Yet, despite a federal executive order, neither measure has been fully implemented, according to a regular user of the port.

While the shipping prices in MoverDB’s report are accurate as of early 2017, anecdotal evidence suggests the reality hasn’t changed much since the reforms were introduced. Indeed, inefficiencies at the ports remained primed to allow clearing agents continue to play a key role in processing goods for importers while likely in cahoots with local customs officers. ”You can try to clear your container yourself but the problem is that customs will frustrate you. You have to go through an agent.” says the regular user, who asked not to be named as he still has to work with officials at the port.

 

Source: Quartz Africa

The Federal Government of Nigeria has announced the issuance of a second tranche of N100 billion Sukuk Bond to finance road infrastructure across the country.

The approval for the second tranche followed the success and oversubscription of the first tranche, the Chief Executive Officer (CEO) of Metropolitan Skills, Ummahani Amin, said at a two-day training on Sukuk structurisation and management in Abuja.

The training was organised by the Metropolitan Skills Ltd. in partnership with the Ministry of Finance, and Standing Committee for Economic and Commercial Cooperation of the organisation of the Islamic Cooperation (COMCEC).

Recall that the Federal Government had in September 2017 issued the first N100 billion Sukuk Bond as part of capital raising for the construction of about 25 roads in the nation.

Amino said funds realised from the second tranche of the bond would also be channelled into the construction of roads across the six geo-political zones of the country.

He assured that just like the first tranche, this year’s tranche of N100 billion would be successful.

“We are doing the second tranche now because the first one was successful and over subscribed. N100 billion was involved in the first and the second is on the way.

“So we are looking at the same infrastructure, construction of roads across Nigeria and the six geopolitical zones. This has never happened in the history of Nigeria for infrastructure,” Amin said.

 

Source: The Ripples

The Central Bank of Nigeria (CBN) said it expects to maintain its tight monetary policy stance until the inflationary pressures ease towards it target band as it doesn’t see oil prices falling below $80 a barrel this year.
 
The Brent crude, against which Nigeria’s oil is priced, had hit its highest level of over $86 per barrel since November 2014 last Wednesday on the back of supply concerns in the international market ahead of United States (U.S.) sanctions on Iran’s oil sector expected to take effect next month.
 
So long as U.S. sanctions take effect on Iran in November, “I do not expect the price to close less than $80 this year,’’ CBN governor, Godwin Emefiele told reporters in London on Sunday.
 
The product, which serves as the nation’s major source of revenue, slumped from its 4-year highs during the week to close at $84.03 a barrel on Friday.
 
Rising oil prices will amount to increased revenue for the country as crude oil price in the 2018 Budget was benchmarked at $51 a barrel. This may cause an increment in capital release for the budget, resulting into excess liquidity and quickening inflation.
 
With CBN’s tight monetary policy position, interest rate among other policy rates at a relatively high levels will reduce liquidity in the Nigerian market and check demands, an intervention that would in turn moderate the macroeconomic variable.
 
The CBN continued to keep its interest rates on hold at a record high 14 percent since July 2016 to curtail inflationary pressures which had risen above its acceptable band of 6 percent to 9 percent for more than three years and accelerated in August for the first time in 19 months.
 
“The current state of tightening will continue until at least we see inflation attaining those levels that have been set” as a target, Emefiele said.
 
Emefiele said the apex bank would not relent in its intervention to support the exchange. “We will continue to intervene, we believe in a stable exchange rate regime,” he said.
 
Ripples Nigeria reports that the CBN had resisted several calls to allow the forces of demand and supply to determine the value of the Naira in the foreign exchange market. Rather, it fixed the exchange rate and continued support the local currency through its interventions.
 
These interventions, including foreign portfolio investors’ exit from emerging economies to take advantage of high yields U.S. as the US FED Reserve continued to raise its interest rate, plunged the nation’s external reserves to $43.92 billion as of October 4, 2018 from a high of $47.79 billion on July 5, 2018.
 
CBN’s spokesperson, Isaac Okoroafor, had last Wednesday affirmed that the current depletion in the nation’s foreign reserves was attributable to the two factors this media platform had pointed out.
 
While explaining that the major reason for Naira appreciation was due to the bank’s forex management strategy, which includes its support, Okoroafor had stated that, “the drop in our forex reserves is basically as a result of the capital flow reversals arising from rising interest rates in the United States.”
 
 
Source: Business Gist
The total value of bilateral trade between Nigeria and European Union Member States stood at £25.3 billion, an equivalence of about N8.9 trillion, in 2017.
 
The Deputy Head of Delegation, European Union (EU) to Nigeria and ECOWAS, Richard Young, disclosed this while addressing newsmen at the 7th EU-Nigerian Business Forum on Thursday in Lagos.
 
Young said the EU Delegation, EU member States and European companies active in Nigeria have established a European Business Organisation (EBO) aimed at strengthening the relationship with EU companies in Nigeria.
 
He said the organisation would represent the voice of European companies across various sectors of the Nigerian economy.
 
“The EBO Nigeria will also ensure a high-level policy dialogue with Nigerian authorities and organised private with the objective of improving the business and investment and fostering business and trade relations between the EU and Nigeria,” Young said.
 
The envoy noted that EU has also launched an External Investment Plan (EIP) to encourage investment in partner countries, including Nigeria, adding that the plan would strengthen its partnerships by promoting inclusive growth, job creation and also tackle some of the root causes of irregular job migration.
 
According to him, “The EIP is a new approach to supporting sustainable development through investment. It will improve the way in which scare public funds are used and how public authorities and private investors cooperate on investment projects.
 
“Through a new guarantee mechanism, the EIP will increase private investment in higher risk environments, facilitate private sector investments that otherwise would not be available.”
 
 
Source: The Ripples
The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, has expressed fear over a likelihood of rice shortage across the country next year, which may lead to a hike in the price of the staple food product.
 
Ogbeh said about 14 states are currently being affected with heavy flood, warning that there may be scarcity of rice in 2019 if adequate measures were not taken to replant in some major rice-producing states with severe cases of flood.
 
Ogbeh made this known while speaking at the inauguration of the National Agricultural Seed Council (NASC) Molecular Facility and the 2018 Seed Fair and Farmers’ Field Day in Abuja on Thursday.
 
“We have to find out a way to assist farmers, who were affected by the flood; places like Jigawa, Kebbi, Anambra and Kogi were majorly affected. Farmers lost everything they planted.
 
“There are different varieties of rice that are being produced at NASC like faro 66 and 67 which are flood tolerant. We hope to get them into the field in large quantity for farmers to plant in the near future.
 
“We are also hoping that as soon as the rain seized, we are encouraging farmers to replant so that the residual moisture on the soil plus irrigation can give us another crop by the end of December or early January. Otherwise, we will be in serious trouble for rice, millet, sorghum and maize next year,” the minister said.
 
Also speaking, NASC Director-General, Philip Ojo, said the event was to create awareness about improved seeds to farmers, adding that the agency has achieved some successes in the Nigerian Seed Industry.
 
“NASC collaborations with other stakeholders have started yielded positive results such as the NASC Molecular Facility that will soon be inaugurated.
 
“The facility which is funded by the Bill and Melinda Gates Foundation under the BASICS Programme will help in the development of the Cassava Seed System in the country and enhance productivity,” Ojo said.
 
 
Source: The Ripples
The World Bank has lowered its growth forecast for Nigeria’s economy in 2018 to 1.9 percent as the growth continued to downsize in the oil and agriculture sector.
 
The latest estimate is 0.2 percent points lower than 2.1 percent growth the global financial body earlier projected for the nation’s economy in April.
 
The world bank said its decision to cut Nigeria’s 2018 growth estimate was occasioned by the reduction in the production volume of crude oil, the country’s main source of revenue, and contraction in the agricultural sector of the economy which was largely driven by the herder-farmer clashes.
 
“In Nigeria, declining oil production and contraction in the agriculture sector partially offset a rebound in the services sector and dampened non-oil growth, all of which affected economic recovery.
 
“Nigeria’s recovery faltered in the first half of the year. Oil production fell, partly due to pipeline closures.
 
“The agriculture sector contracted, as conflict over land between farmers and herders disrupted crop production, partially offsetting a rebound in the services sector and dampening non-oil growth,” the bank stated.
 
According to the National Bureau of Statistics (NBS), the oil sector of the economy contracted by -3.95 percent in the second quarter of 2018 from a year earlier, while the non-oil sector grew by 2.05 percent in real terms during the reference quarter.
 
The drop in the oil sector impeded growth in the Nigerian economy to 1.50 percent in the quarter down from 1.95 percent recorded in the preceding quarter.
 
Available statistics from NBS shows that the nation’s agricultural sector grew by 1.19 percent from a year earlier in real terms in the second quarter of 2018, representing a decrease by –1.82 percent points from the corresponding period in 2017.
 
The data further shows that Nigeria’s average daily oil production volume dropped in Q2 2018 to 1.84 million barrels per day after recording an average production volume of two (2) million barrels per day in the previous quarter.
 
The contraction in the Crude oil and Gas sectors was attributable to some production issues which, according to the Minister of Budget and National Planning, Sen. Udoma Udo Udoma, were being addressed by the Nigerian National Petroleum Corporation (NNPC).
 
But the Minister of State for Petroleum, Ibe Kachikwu, had last month noted that the decision to raise or cut production volume would be largely dependent on the prices of crude in the international market.
 
This indicates that there may soon be a rebound in the country’s crude oil production volume as the Brent crude, against which Nigeria’s oil is priced, hit its highest level of $84 per barrel since November 2014 last Monday.
 
The development was occasioned by supply concerns in the international market ahead of United States sanctions on Iran’s oil sector expected to take effect from next month.
 
 
Source: Business linking

The Naira on Thursday appreciated marginally against the dollar at the Investors’ Window (I & E), exchanging at N363. 57, stronger than N363.94 posted on Wednesday.

The daily market turnover stood at 392.9 million dollars.

The Nigerian currency closed at N306.40 to the dollar at the official CBN window.

At the parallel market, the Naira closed at N359 to the dollar, while the Pound Sterling and the Euro closed at N478.30 and N420.

Trading at the Bureau De Change(BDC) segment saw the Naira close at N360 to the dollar, while the Pound Sterling and the Euro closed at N478.30 and N420.

Meanwhile, in spite of the continuous intervention by the Central Bank of Nigeria (CBN) at the foreign exchange market and the increase in the price of oil at the international market, the manufacturing sector witnessed slow growth in the month of September.

The manufacturing sector continued to expand in September, though at a slower pace, the latest CBN Manufacturing Purchasing Managers’ Index (PMI) report, shows.

It showed that the September Manufacturing PMI eased to 56.2 from 57.1 in August, indicating expansion in the manufacturing sector for the 18th consecutive month.

The report noted that “a composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally contracting.”

 

Source: PMNEWSNIGERIA

Sluggish expansion in Nigeria, Angola and South Africa – Africa’s three largest economies – is expected to dampen the growth prospects for Sub-Saharan Africa to 2.7 percent in 2018, according to the World Bank which has also warned of increasing public debt in the region.

The World Bank says it now expects Sub-Saharan Africa economies to grow by 2.7 percent in 2018, lower than the 3.1 percent it had projected for the subregion earlier in April.

The World Bank notes that Sub-Saharan African economies are still recovering from the s2015-2916 slowdown, but growth is still slower than expected.

“The slower pace of the recovery in Sub-Saharan Africa (0.4 percentage points lower than the April forecast) is explained by the sluggish expansion in the region’s three largest economies, Nigeria, Angola, and South Africa,” the World Bank said in the Africa Pulse published on Wednesday ahead of the Annual meetings of the International Monetary Fund (IMF) and World Bank scheduled to begin in Bali, Indonesia on Monday, October 8.

The estimated 2.7 percent average growth rate in the region is however, a slight increase from 2.3 percent recorded in 2017.

“The region’s economic recovery is in progress but at a slower pace than expected,” said Albert Zeufack, World Bank Chief Economist for Africa.

“To accelerate and sustain an inclusive growth momentum, policy makers must continue to focus on investments that foster human capital, reduce resource misallocation and boost productivity. Policymakers in the region must equip themselves to manage new risks arising from changes in the composition of capital flows and debt.”

According to the World Bank, Slow growth is partially a reflection of a less favorable external environment for the region.

Global trade and industrial activity lost momentum, as metals and agricultural prices fell due to concerns about trade tariffs and weakening demand prospects. While oil prices are likely to be on an upward trend into 2019, metals prices may remain subdued amid muted demand, particularly in China.

Also, Financial market pressures have intensified in some emerging markets and concern about their dollar-denominated debt has risen amid a stronger US dollar.

Besides, Lower oil production in Angola and Nigeria offset higher oil prices, and in South Africa, weak household consumption growth was compounded by a contraction in agriculture. Growth in the region – excluding Angola, Nigeria and South Africa – was steady.

The Bank further notes that Several oil exporters in Central Africa were helped by higher oil prices and an increase in oil production.

Economic activity remained solid in the fast-growing non-resource-rich countries, such as Côte d’Ivoire, Kenya, and Rwanda, supported by agricultural production and services on the production side, and household consumption and public investment on the demand side.

“Public debt remained high and continues to rise in some countries,” the World Bank further notes – amid heightened concerns that about 40 percent of low income countries in Sub-Saharan Africa region are already in debt distress or in high risk of debt crisis.

The IMF for instance worried that for low income countries, including Nigeria, governments have embarked on excessive borrowing to fund development, especially as incomes dwindled for commodity prices- and is now strongly advising on an aggressive tax mobilisation.

“Vulnerability to weaker currencies and rising interest rates associated with the changing composition of debt may put the region’s public debt sustainability further at risk,” the World Bank says in the latest report.

Other domestic risks include fiscal slippage, conflicts, and weather shocks. Consequently, policies and reforms are needed that can strengthen resilience to risks and raise medium-term potential growth.

This issue of Africa’s Pulse highlights sub-Saharan Africa’s lower labor productivity and potentials for improvement

“Reforms should include policies which encourage investments in non-resource sectors, generate jobs and improve the efficiency of firms and workers,” said Cesar Calderon, Lead Economist and Lead author of the report.

 

- Businessday

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