Global index provider, FTSE Russell, has said Nigeria’s ongoing foreign exchange problem is a key motivator behind the downgrade of Nigerian Stock Exchange (NSE) from ‘Frontline’ to “Unclassified Market”, erasing the gains of the prior week.
The reclassification, set to take effect on September 18, 2023, prompted immediate selloffs that drove the All-Share Index down by 1.24 per cent to close at 67,296.18 points.
This resulted in the market’s year-to-date (YTD) returns tumbling to 31.11 per cent and wiping out N463.66 billion ($1.14bn) in market capitalisation, which closed at N36.83 trillion ($90.81bn).
Trade turnover also sagged relative to the previous session, down by a marginal 0.08 per cent. In total, 520.13 million shares worth N8.33 billion were exchanged in 9,914 transactions.
The downgrade and subsequent market reaction raise pressing questions about the sustainability of investment in Nigeria, particularly in its once-robust banking sector.
Investors and policymakers alike will likely be focused on how the country can stabilize its foreign exchange market and restore investor confidence in the wake of this critical development.
According to the UK-based financial institution, these issues have hindered the ability of institutional investors to repatriate trapped capital.
FTSE Russell in a statement expressed skepticism about the effectiveness of Nigeria’s recent foreign exchange reforms, including the adoption of a ‘willing seller, willing buyer’ policy at the Investor and exporter (I&E) foreign exchange window.
FTSE Russell noted little or no improvement in foreign exchange supply trends, a factor that continues to deter capital inflows from institutional investors.
The downgrade means Nigeria’s index status will be removed entirely from all five FTSE stock indices, effectively given a value of zero.
This significant move is likely to have repercussions for Nigeria’s visibility on the international investment landscape, making it more challenging for the country to attract foreign capital.
Author: Chike Ozohili
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NSE Downgrade Due To FX Woes, Says FTSE Russell
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Multiple Taxation Threatens Nigeria’s Economic Progress, Warns NCC
The Executive Commissioner for Stakeholder Management at the Nigerian Communications Commission (NCC), Adeleke Adewolu has emphasized the detrimental impact of multiple taxes on Nigeria’s economic growth.
Adewolu expressed concern about the presence of numerous taxes, often referred to as “nuisance taxes” by the World Bank, which are hindering the country’s development.
Speaking during a regional stakeholders’ workshop in Ibadan, Oyo State, he raised the question of how taxation, intended to foster economic growth, has become an obstacle to development. Adewolu stressed that taxation is a crucial instrument for sustainable and equitable growth.
He pointed out that the National Tax Policy of 2017 underscores the importance of eradicating multiple taxations across all levels of government and ensuring that taxes similar to those collected by one level of government are not introduced by another.
Adewolu assured stakeholders that the NCC is dedicated to addressing the issue of multiple taxations, which impedes national progress. He highlighted collaborative efforts between federal, state, and local governments to harmonize tax policies and eliminate redundant taxes. The commitment of President Bola Tinubu in signing Executive Orders and establishing the Committee on Fiscal Policy and Tax Reforms was mentioned as a positive step toward creating a more favorable investment environment for both domestic and foreign investors.
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Dangote Celebrates Africa’s Young Global Leaders
President of Dangote Group, Aliko Dangote has hailed the Forum of Young Global Leaders describing it as a platform to develop the next generation of African leaders.
According to Dangote, the philosophy of Forum of Young Global Leaders aligned with his vision for a continent whose people are healthier, better educated, and more empowered through enhanced opportunities for social change through strategic investments that improve health and wellbeing, promote quality education and broaden empowerment opportunities for individuals and communities.
The Young Global Leaders programme is an accelerator for a dynamic community of exceptional young people from all over the world with the vision, courage, and influence to drive positive change in the world.
Dangote, who said this at the YGL Africa fellowship meeting in Lekki, Lagos said the essence of his partnership with the Forum is to engage young African leaders from small and medium enterprises (SMEs) and non-business entities who might otherwise not be able to participate in the Forum’s Young Global Leaders Community.
The fellowship covers the cost of their participation at World Economic Forum and YGL-led events for 6 years for each Fellow.
Now in its 12th year, the Aliko Dangote (WEF Africa YGL) Fellows continue to represent the continent on the global stage and give back to their communities in a multiplicity of impactful ways.
Following the partnership with Dangote 12 years ago, the programme has included 15-20 young leaders from sub-Saharan Africa following a rigorous selection process. At any one time, the African YGL Community consists of around eighty active members, 75 per cent of whom are eligible for the Dangote Fellowship.
Speaking at the event, the Executive Director Dangote Industries, Fatima Aliko Dangote, expressed pride at the diversity and high proportion of female fellows in the 2023 Cohort, where the nine chosen YGLs represent the media/arts/entertainment, technology & innovation, health, and government sectors.
Managing Director/CEO of the Aliko Dangote Foundation (ADF), Zouera Youssoufou, thanked the billionaire businessman for his continuous support of the YGLs, and assured him that his investment is not in vain, as the young global leaders are achieving exploits in their respective fields and living up to the expectations of being true African future leaders.
He encouraged them to put in their best in their various fields and not be discouraged when setbacks occur, because those are to be expected. He encouraged them to continue raising their ambition for our continent because “Nothing is Impossible”.
Aliko Dangote YGL Alum and Executive Director ofa African Youth Initiative Network, Victor Ochen from Uganda, commended Dangote for the aggressive investment noting that the project is a reflection of his faith in the continent.
He further commended the billionaire businessman for his generosity in providing financial means for him to participate in forum events he otherwise would have been unable to do.
He said, “I am so happy with what Dangote is doing in Nigeria and Africa as a whole. This is a man that is investing in the youth through his foundation and employing tens of thousands of Africans, in his various plants. I am so humbled to be here, and to learn from the expertise of this man whom God has blessed our continent with…I thank Dangote for his generosity, which has provided many young African leaders, regardless of the country, the much-needed financial means to participate in YGL events. Without the support of ADF, our active participation would not have been possible.”
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Nigeria’s Equity Market Sheds N464bn Amid Profit-Taking
The nation’s equity market Monday opened the week bearish, shedding N464 billion. The downward trend followed profit-taking in the shares of GTCO, United Bank for Africa, Zenith, AccessCorp, Nascon, NGX group and others.
Market capitalisation of listed equities declined by 1.24 per cent to N36.831 trillion from N37.295 trillion reported the previous day. The NGX also depreciated by 847.16 basis points to 67296.18 points from 68143.34 points traded on Friday.
An analysis of the investment showed that Northern Nigeria Flour Mills Nigeria Plc led gainers table, appreciating by 9.96 per cent to N13.25 per unit, Oando Plc followed with a gain of 9.74 per cent to close at N8.45 per share, CWG increased by 9.0 per cent to close at N6.30 per share, NPF Micro Finance Bank added 8.20 per cent to close at N1.98 per share while RTBriscoe up by 7.32 per cent to close at N0.44 per unit.
On the contrary, ETranzact, Nascon and NSL Tech topped losers’ chart, dropping by 10 per cent each to close at N9.00, N52.20 and N0.27 per share respectively.
Dangote Sugar Refinery followed with a drop of 9.98 per cent to close at N57.75 per unit while Learn Africa declined by 9.86 per cent to close at N3.29 per unit.
Investors traded 520.133 million shares valued at N8.334 billion in 9914 deals against 483.489 million shares worth N8.340 billion in 6660 deals.
Transactions in the shares of United Bank for Africa led market activities with 75.932 million shares valued at N1.049 billion, AccessCorp followed with 57.668 million shares valued at N957.323 million, Transnational Corporation of Nigeria traded 53.724 million shares cost N331.528 million, Zenith Bank traded 43.128 million shares worth N1.523 billion while FBNHoldings exchanged 26.573 million shares valued at N480.793 million.
Zenith Bank declares N15.70bn as interim dividend to shareholders
Zenith Bank Plc has declared an interim dividend of N15.70 billion (representing N0.50 per share) to be paid to shareholders for the half year ended June 2023.
This was disclosed in the company’s corporate action announcement to the Nigerian Exchange Limited (NGX) on Monday.
The Board of Directors of the company proposed the payment of an interim dividend in the sum of N0.50kobo per ordinary share on the issued capital of 31,396,493,786 Ordinary Shares.
At its 32nd Annual General Meeting (AGM) in May, shareholders of the bank unanimously approved the proposed final dividend payment of NGN2.90 per share.
This brings the total dividend for the 2022 financial year to NGN3.20 per share, with a total value of NGN100.47 billion.
The board of Zenith Bank Plc had earlier announced a delay in the release of its 2023 Half-Year (HY) financial results due to post-audit issues.
According to the statement signed by the Company Secretary, Michael Osilama Otu, the delay in the publication of the Audited Interim Financial Statements for the Half Year ended June 30, 2023, is due to some outstanding post-audit issues.
The bank said the results will be delivered on or before September 14, 2023.
The statement reads: “Zenith Bank Plc (the Bank) wishes to notify its shareholders, the Nigerian Exchange Limited (the Exchange), and the investing public of a slight delay in the release of the Audited half-year financial reports by the Bank for the period ended June 2023.
“The delay is to enable the bank to attend to some outstanding post-audit issues in the course of approval of the financial statements.
“The Bank is, however, optimistic that the Audited half-year financial reports will be submitted to the Exchange on or before September 14, 2023, and regrets any inconveniences this delay might cause its esteemed stakeholders. -
Crude Export Earnings Hit N5.6trn In Q2 Amid Naira Float
There was a major improvement in export earnings in the second quarter of 2023, as a result of the floating of the naira which ensured earnings from crude oil exports swells. Crude oil receipts rose 8.5 per cent to N5.6 trillion. This represents 79.6 per cent of total exports.
“The improvement in export earnings was mainly spurred by crude oil receipts which rose 8.5 per cent quarter-on-quarter (q/q) to N5.6 trillion (about 79.6 per cent of total exports) though production level was unimpressive as per national Bureau for Statistics (NBS) data (down 19.2 per cent q/q to 1.22mbpd).
“Noteworthy, we suspect that the improvement in oil receipt was also impacted by exchange rate revaluation gain given that the Central Bank of Nigeria (CBN) switched from a hard-pegged exchange rate regime to a managed float in June 2023, causing the official conversion rate of oil proceeds to rise from N461/$ to over N650/$. Hence, nullifying the effect of lower crude oil price in the second quarter ($78.13/bbl.) relative to the first quarter ($81.11/bbl.).”, said analysts at Afrinvest.
Data from NBS showed that the value of Nigeria’s total trade (imports and exports combined) improved over the preceding quarter (up 5.8 per cent) but trailed the level attained in the corresponding period of 2022 by 7.6% to settle at N12.7 trillion.
For the third consecutive quarter, Nigeria recorded a positive trade balance amounting to N1.3 trillion in the second quarter, aided by the faster growth in export earnings (up 8.1 per cent q/q to N7.0 trillion) as against import expenses (up 3.0 per cent q/q to N5.7 trillion).
Similarly, non-crude oil and non-oil exports also grew 6.8 per cent and 5.6 per cent q/q to N1.4 trillion and N688.7 billion respectively.
“We attribute these gains to the recovery in the broader economy from the negative knock-on effect of pre-election jitters and poor implementation of the naira redesign policy in the first quarter (GDP expanded 2.5 per cent vs. 2.3 per cent in the first quarter)”, said Afrinvest.
It is important to highlight that Agricultural goods remain Nigeria’s largest source of non-oil export earnings (4.0 per cent of export share), while Manufacturing, Raw material goods, and Solid mineral goods trailed with 3.0 per cent, 2.1 per cent, and 0.5 per cent, respectively.
Cashew nuts (shelled and unshelled), sesame seeds, and cocoa beans combined accounted for 65.7 per cent of the total N278.4 billion Agric exports in the period – an indication that cash crop exports could be a major source of non-oil foreign exchange (forex) earnings for Nigeria if adequate investment is made on procuring modern farming equipment and insecurity is wholistically checked.
In terms of trade performance with other regions, the previous quarter’s trend was sustained as Nigeria booked a surplus with three of its five trading regions – America (N178.5 billion), Europe (N1.2 trillion), and Africa (N510.5 billion) – while a deficit was recorded in trade with Asia (N584.5 billion) and Oceania (N98 billion). In terms of destination, the Netherlands (11.2 per cent), the US (10.2 per cent), and Indonesia (7.8 per cent) were the top export hubs by share while China (22.2 per cent), the US (16.1 per cent) and Belgium (8.0 per cent) topped imports origin.
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BMW iX5 Hydrogen Completes Intensive Hot-Weather Testing
The vehicles in the BMW iX5 Hydrogen pilot fleet, which were launched in February this year, have completed an intensive round of hot-weather testing in the United Arab Emirates for the first time.
The car’s fuel cell drive system performed impressively in the face of temperatures rising to 45°C, as well as sand and dust, varying gradients and significant fluctuations in humidity.
The highly efficient fuel cell system, the two hydrogen tanks, the electric motor and the power battery teamed up with the central vehicle control unit to demonstrate their outstanding performance and state of readiness.
The Munich-based development team examined both the functionality of all the electric systems under the extreme conditions and the provision of the cooling power to enable the full performance of the vehicle. The vehicles were able to ensure the driving dynamics for which BMW is renowned.
Vehicles from the pilot fleet are currently in action in Europe, Japan, Korea, China, the USA and the Middle East. The aim is to shine a spotlight on the everyday usability of hydrogen-powered vehicles, and beyond that to gain important knowledge for the development of a potential series-produced model.
The BMW Group is using the pilot fleet to provide support on a regional level for the development of a refueling infrastructure which can be used with 700-bar refuelling technology across all categories of vehicle – from passenger cars and small vans to buses and heavy-duty commercial vehicles.
Synergies between different areas of application also offer important scope for developing a strong network of suppliers in hydrogen technology and reducing costs.
The BMW iX5 Hydrogen combines long-distance capability and short refueling stops with locally emission-free driving. Provided the relevant framework is in place, the hydrogen fuel cell technology has the potential to serve as another pillar in the BMW Group’s future drive system portfolio.
As part of its ongoing transformation, the BMW Group is applying a “technology-open” approach when it comes to drive systems. The company is therefore adapting to different customer requirements, infrastructure standards and political and regulatory landscapes in the various regions of the world.
This flexibility puts the BMW Group in the position to respond quickly to changing requirements in the markets in any situation and to present an attractive offer for as many customers as possible at all times.
The BMW iX5 Hydrogen has a fuel cell system generating output of 125 kW/170 hp and a highly integrated drive unit using fifth-generation BMW eDrive technology (the electric motor, transmission and power electronics are grouped together in a compact housing). The output of the overall drive system is 295 kW / 401 hp.
The hydrogen needed to power the fuel cell is stored in a pair of 700-bar tanks made from carbon-fibre-reinforced plastic (CFRP). Together, these tanks can hold around six kilograms of hydrogen. This storage capacity gives the BMW iX5 Hydrogen a range of 504 km (313 miles) in the WLTP cycle. -
Nigeria Lost $22.9bn To Gas Flares In 10 Years -NOSDRA
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) is to part the Nigeria Upstream Regulatory Commission ( NUPRC) and Nigerian Oil Spill Detection and Response Agency (NOSDRA) to boost revenue generation through proper management of gas flares in line with global best practice.
This is in a bid to arrest huge revenue losses recorded and enhance revenue generation into government coffers.
According to RMAFC Public Relations Officer, Christian Nwachukwu, RMAFC Chairman Mohammed Bello Shehu disclosed this during an interactive forum with delegations from NUPRC and NOSDRA recently in Abuja.
Bello noted that in view of the current government’s efforts to shore up the Nation’s revenue generation, the gas sector of the economy must be given adequate attention with NUPRC and NOSDRA as regulatory bodies in determining quality and quantities of gas production alongside adherence to environmental standards for host Communities.
Responding, the Director of Economic Regulation and Strategic planning of NUPRC, Mr. Babajide Fashino noted that Nigeria is at the fore front of managing gas flares in line with global best practices for economic growth and sustainability. This is done with the introduction of a metering system and calibration of the meters for accurate records of gas management.
According to Babajide, the introduction of such technologies has gone a long way in reducing gas flares gas flaring in Nigeria from 40 per cent to a mere 7 per cent.
Earlier, the Director of ICT in NOSDRA, Mrs. Margaret Adeshida underscored the need for proper monetisation of gas flares in Nigeria, noting that Nigeria flared more than 4.2 billion standard cubic feet of gas leading to the country’s loss of more than $14.6 billion revenue between 2012 and 2021.
This is in addition to $8.3 billion loss in penalty for the wastages.
Mohammed Shehu therefore called on all the relevant stakeholders in the management of the gas economy including the revenue monitoring Committee of the present administration to salvage the Country by coming together to work out proper strategies to convert the gas flare to economic use for enhancing revenue generation into the Federation Account.
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Diversify Export Earnings, Increase FDIs To Address Fx Liquidity Challenge -Uwaleke
Professor of Finance and Capital Market, Uche Uwaleke, has said that except the Federal Government diversify its export base and increased foreign direct investments (FDIs), the liquidity challenge in the forex market would persist.
Uwaleke, who gave the advice Monday in Abuja, added that the country’s weak economic indices would make it difficult for the government to implement the naira float.
In a bid to address the widening exchange rate gap, the federal government resorted to a managed float of the naira on the I&E Window. However, this policy has failed to halt the fall of the naira.
The exchange rate for a dollar to naira at the official window is N751.1 as of Monday, 11 September 2023, according to the data published by CBN. While at the parallel market, the naira exchanged for N925 to a dollar in Lagos.
Experts have said that with a larger part of Nigeria’s revenue still coming from oil, it would not be easy for the government to address supply side constraints in the FX due to the country’s inability to meet it’s OPEC quota.
“The only sustainable solution to deal with the liquidity challenge in the forex market is to have multiple streams of forex comprising export proceeds and foreign investments.
“Nigeria’s economy is not ready for a complete float of the naira due to weak economic fundamentals.
“Regrettably, over 90% of forex inflows still come from crude oil sales. A diversified export base is required to check volatility in a forex market where the exchange rate is determined by market forces. This is still lacking in Nigeria.
“On the demand side, I support the idea of curbing dangerous currency speculation by making the trading in forex outside the Banks and BDCs illegal. By doing so, the CBN can be in a position to monitor activities in the forex market,” he said.
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NANTS Unveils Modern Abattoir, Meat Factory In Abuja
The National Association of Nigerian Traders (NANTS) has inaugurated its state-of-the-art integrated abattoir and meat factory in Giri, located within the Gwagwalada Area Council of the Federal Capital Territory (FCT). This milestone was marked with a ceremony attended by prominent figures and representatives from various sectors.
Madam Massanje Toure-Litse, the Commissioner for Economic Affairs and Agriculture in ECOWAS, presided over the inauguration ceremony and expressed her enthusiasm for the project’s potential impact. She noted that this innovative endeavor would serve as a model to be replicated in other ECOWAS member countries. The ECOWAS commissioner emphasized the organization’s commitment to collaborating with NANTS to enhance regional livestock trade, thereby contributing to the economic development of the West African region.
Dr. Ken Ukaoha, the National President of NANTS, explained the primary objectives behind this ambitious project. He highlighted the urgent need for modernizing traditional methods of meat slaughtering and processing to meet stringent hygiene standards.
The high capital investment required to establish modern facilities had long been a hindrance to achieving this goal. However, NANTS, with support from ECOWAS-RAAF and the Swiss Development Cooperation (SDC), embarked on this project to establish a cutting-edge abattoir.
Ukaoha emphasized that the new abattoir would revolutionize the entire process of animal slaughtering, ensuring the sale of healthy meat to the public under meticulously hygienic conditions, prioritizing human health and safety.
This integrated concept, implemented by NANTS, not only focuses on humane animal slaughter but also incorporates mechanisms for profitable waste conversion and capacity building initiatives involving public abattoir butchers. It is estimated that the project will generate approximately 500 job opportunities and significantly boost economic activities within the FCT.
Moreover, the abattoir will serve as a training centre, imparting international best practices to butchers. Several state governments have already expressed interest in collaborating with NANTS to replicate similar projects in their regions.
Alhaji Abu Giri, Chairman of the Gwagwalada Area Council, commended NANTS for its visionary project, emphasizing its potential as a training and consultancy centre for local institutions like the University of Abuja. He pledged continued support from the council for initiatives that promote trade and economic development in the area.
Alhaji Musa Wakili, the Aguma of Giri, also hailed the project’s potential to empower youth within the community. He encouraged other associations to follow NANTS’ lead in pursuing similar economic development initiatives.
NANTS had previously organized a capacity-building program, providing training on integrated modern abattoir practices, standards, and meat health safety regulations for 40 prospective workers at the facility. This training aimed to ensure the highest standards of meat hygiene, handling, processing, preservation, packaging, and logistics.
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Nigeria Requires N21trn To Bridge Housing Deficit – FG
The Vice President, Kashim Shettima, has said that Nigeria requires N21 trillion to effectively bridge housing deficit, despite efforts across the three tiers of governments.
The vice president stated this on Sunday in Sokoto at the groundbreaking for the construction of a 500-unit housing estate by the State government.
Shettima, who commended Gov. Ahmed Aliyu for his efforts to address the housing needs of his people, noted that the housing deficit in Nigeria remained a huge challenge.
“Nigeria has a deficit of 28 million houses and we will need N21 trillion to meet our housing needs. This step taken by the Governor is highly commendable and worthy of emulation by other State governments.
“The governor has started well by completing the roads and flyovers he inherited,” he added.
Earlier, the governor explained that the housing estate would be for civil servants and would be sold to them when completed on an owner-occupier basis.
Aliyu said: “This is a project that was initiated by the former Governor of the State, Aliyu Wamakko but was later abandoned by the immediate past administration.
“But, we are determined to complete it for the benefit of our workers and the general public.”
Aliyu disclosed that the project located at Wamakko Local Government Area of the State will cost the State government N7.3 billion to complete.
The event, which was to mark the first 100 days in office by the administration was attended by Sen. Aliyu Wamakko and the Minister of Agriculture and Food Security, Sen. Abubakar Kyari.
Others were the Minister of State, Water Resources and Sanitation, Alhaji Bello Goronyo and former Deputy Governors of Sokoto, Mukhtari Shagari and Chiso Abdullahi-Dattijo, among others.