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Finance

PenCom to diversify investment

By Guardian

The National Pension Commission (PenCom) is planning to diversify the investment portfolio of pension assets, and deepen investment channels to reap the benefits of COVID-19.

As the pension regulator, the Commission said it is also reviewing its policies with a view to boosting pension fund investments post-Covid-19.

The Commission said it was making wide range stakeholder engagements with focus on development of Capital Market products, which includes hedging tools that would serve as buffer to safeguard pension assets especially during volatile periods such as the current Covid-19 pandemic.

The Acting Director-General, PenCom, Aisha Dahir-Umar, said the Commission is accelerating ongoing efforts with respect to engaging government agencies, private sector participants, and multilateral development financial organisations in developing infrastructure and housing assets that meet requirements for pension fund investment.

PenCom, she said, was eager to encourage pension fund investments in infrastructure and housing without compromising the major objectives of pension fund investments, which are safety of the assets and maintenance of fair returns on investments.

“There are some opportunities for pension funds, given the long-term investment outlook. One of the likely fallouts of the COVID-19 pandemic is that prices of stocks may drop over the short to medium term.  This would provide an opportunity for long-term investments by pension funds.

“Fortunately, the multi-fund investment structure which the Commission introduced in 2019 provides further impetus towards long-term investments. This may be one of the likely fallouts of the COVID-19 pandemic. However, the expected rebound in the years ahead will provide adequate compensation.”

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https://guardian.ng/business-services/pencom-plans-investments-diversification-post-covid-19/

Naira recovers despite deals by currency speculators

By Nation

The Central Bank of Nigeria (CBN) and Association of Bureaux De Operators of Nigeria (ABCON) are fighting to restore the strength and integrity of the naira.

The action of CBN and ABCON has caused naira, for the first time in several weeks, made marginal recoveries at the Investors’ and Exporters’ (I&E) Forex window and parallel market.

Currency speculators make spurious demand for dollar with hope to make good returns from the rising gaps between official and parallel market rates.

But the apex bank and ABCON are promising the illicit forex traders heavy losses in the coming months as the market gains more liquidity through CBN’s interventions and planned resumption of dollar sales to Bureaux De Change (BDCs).

The BDCs were temporary excused from the market following the economic lockdown and need to protect their members from being infected by the coronavirus.

The naira has appreciated to N385.94 at the Investors and Exporters (I&E) window, which was N0.56 against the dollar when compared to the N386.50 to a dollar.

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Nigeria’s GDP grows by 1.87%

By Tanko Mohammed

The National Bureau of Statistics (NBS) has released a report indicating  that Nigeria’s Gross Domestic Product (GDP) grew by 1.87 per cent year-on-year in real terms in the first quarter (Q1) of 2020.

It explained that this performance was recorded against the backdrop of significant global disruptions resulting from the COVID-19 public health crisis.

It said there was a sharp fall in oil prices and restricted international trade adding that the performance recorded in Q1 represented a drop of –0.23 per cent points compared to Q1 2019 and –0.68 per cent points compared to Q4 2019, reflecting the earliest effects of the disruption, particularly on the non-oil economy.

According to the bureau, quarter on quarter, real GDP growth was –14.27 per cent, compared to 5.59 per cent recorded in the preceding quarter.

The NBS, however, stated that during the first quarter of 2020, an average daily oil production of 2.07 million barrels per day (MBPD) was recorded.

It added that the production level was higher than the 1.99million MBPD recorded in the same quarter of 2019 by 0.08 MBPD and the fourth quarter of 2019 by 0.06 MBPD.

“The oil sector recorded a real growth rate of 5.06 per cent year on year in Q1 2020, indicating an increase of 6.51 per cent points relative to the rate recorded in the corresponding quarter of 2019.

“However, growth decreased by -1.30 per cent points when compared to Q4 2019 which was 6.36 per cent.

“The non-oil sector grew by 1.55 per cent in real terms during the reference quarter Q2020. This was slower than -0.93 per cent points compared to the rate recorded during the same quarter of 2020 and -0.72 per cent points slower than the fourth quarter of 2019,” the NBS explained.

The bureau stated that the four sub-activities which make up the agriculture sector like crop production, livestock, forestry and fishing sectors grew by 22.47 per cent year on year in nominal terms in Q1, 2020.

It noted that this showed a decline of -0.11 per cent points from the same quarter in 2019.

France supports scrap of currency of West African ex-colonies

It is the end of an era in West Africa as France moves to scrap the currency used by its former colonies.

Inside Story23 May 2020 20:20 GMT France, Africa, Business & Economy, Poverty & Development

Eight West African countries will soon be using a new currency.

The old one may not have been well known, but for 75 years the CFA, as it is referred to in French, has been used as money from Senegal to Niger and most places in between.

But now, the French government has officially approved the end of the CFA franc.

That means France will cease to co-manage the West African currency. The Bank of France will no longer hold half of the currency’s reserves, and a replacement currency, the ECO, will be introduced.

But it will keep its exchange rate fixed to the euro.

France negotiated with its former colonies for three years before reaching the deal last year.

But is this genuine change or just a rebrand?

By Al Jazeera News

Source

https://www.aljazeera.com/programmes/insidestory/2020/05/france-breaking-colonial-africa-200523175458347.html

Mauritius gets AfDB’s $188m assistance

By Chris Ndibe

The African Development Bank (AfDB) has approved a €188 mllion euro loan to the Republic of Mauritius to finance a national budget.

The loan is also to support programme to respond to the COVID-19 pandemic, the Group’s Board of Directors.

The main aim of the Covid-19 Rapid Response Facility (CRF), established by the Mauritian Government, is to support the national response fighting the ongoing outbreak, and to mitigate the adverse economic and social effects of the disease.

The response is based on three pillars: to consolidate health systems; to protect livelihoods, income security and access to essential goods and services; and to build a resilient private sector as a prelude to the recovery of the economy.

Mauritius reported its first three cases of COVID-19 on 18 March 2020. On 6 April 2020, the number of locally-transmitted cases had reached 133 (54.5% of all reported cases), before reaching 332 cases by the end of April. The figure has not risen since then.

The CRF aims to bolster preparedness and support for vulnerable groups and the informal sector, while also funding social protection schemes, reducing job losses, and strengthening the resilience of micro, small and medium-sized enterprises (MSMEs).

While the most vulnerable will be the main beneficiaries of this programme, it will also cover workers in the informal sector, people facing layoffs as well as other vulnerable groups.