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Investors Trade Foreign Exchange Worth N24.93trn in 5 Months on Growing Demand

Following growing demand investors have in five months to May 31, 2022, traded Foreign Exchange (FX) worth N24.93 trillion as against N21.36 trillion traded in the same period of 2021 via the Investors & Exporters (I& E) window, indicating an increase of N3.57 trillion or 16.71 per cent.

This is according to the FMDQ Exchange Fixed Income and Currencies (FIC) monthly report, made available to newsmen in Lagos.

The FMDQ markets comprised of FX, Treasury Bills, Open Market Operation (OMO), CBN Special Bills, FGN & Other Bonds and money market.

The Central Bank of Nigeria (CBN) had in 2017 introduced the I&E window to further deepen the FX market and accommodate all obligations in the country.

The CBN had stressed that its purpose was to boost liquidity in the market and ensure timely execution and settlement for eligible transactions.

However, in 2021, the apex bank adopted the I&E as the official rate, stating that it would help boost investor confidence which has been lacking for some time.

According to the report, the average turnover trade by investors and exporters in the period under review is N4.99trillion as against N4.72 trillion in the prior year. 

The turnover of FX trade at its highest and lowest amounts was N7.29trillion and N4.06trillion in April and February 2022, respectively.

Comparing the highest and lowest amount of FX turnover traded in 2021, the FMDQ report had disclosed N5.11 trillion in April 2021 and N5.07trillion in March 2021, respectively. 

Meanwhile, the increasing total foreign exchange turnover at the FMDQ impacted on the Naira as it depreciated mostly in May 2022.

The report disclosed that Naira depreciated against the US Dollar, losing 0.38 per cent or N1 60 to close at an average of US Dollar/N419.15 in May 2022 from US Dollar/N417.55 recorded in April 2022.

The report noted that, “Further, exchange rate volatility increased in May 2022 compared to April 2022 as the Naira traded within an exchange rate range of US Dollar/N417.00-421.50 in May 2022 compared to US Dollar/N416.50-419.50 recorded in April 2022.”

The report further disclosed that turnover in FMDQ Markets increased by 1.98 per cent or N1.15 trillion to N78.25 trillion in five months of 2022 from N76.74 trillion in five months of 2021.   

According to the report for May 2022, the turnover in FMDQ markets for the month ended May 2022 was N15 39 trillion, representing a MoM decrease of 20.42 per cent or N3.95 trillion and YoY increase of 50.29 per cent or N5.15 trillion, respectively

The report stated that, OMO, CBN Special Bills and Foreign Exchange (transactions were the highest contributors to the FMDQ markets turnover in May 2022 jointly accounting for 63.03 per cent of the total FMDQ markets turnover.

For the spot market, the report disclosed that a total market turnover for all products traded in the spot market was 13.48 trillion in May 2022 representing a MoM decrease of 15.01 per cent or N2.38 trillion from the turnover recorded in April 2022

The FIC report for May said, 
“The M-o-M decrease in total spot market turnover was driven by the 27.66 or N1.05 trillion and 30.39per cent or N1.55 trillion decrease in FX market and money market turnover, respectively, which offset the 3.17 per cent or N0.22 trillion increase in fixed income market turnover in May 2022

“The M-o-M increase in FI market turnover was driven by the M-o-M increase in CBN Special Bills and T bills turnover by 134.97 or N1.65 trillion and 1.70 or N0.02 trillion, respectively. 

“Although, the turnover for OMO bills, FGN Bonds and Other Bonds decreased M-o-M by 37.34 per cent or N1.29 trillion, 12.74per cent or N0.15 trillion and 36.75 per cent or N0.01 trillion), respectively.”

Analysts have expressed that increasing business activities has played a critical role in the FX demand, stressing on the CBN sustained interventions that have reduced investors and foreign pressure.

Analyst at PAC Holdings, Mr. Wole Adeyeye attributed the growth recorded in the total foreign exchange turnover in the first two months to increasing business activities.

He said that the slow growth in business activities in the first five months of 2021 affected foreign exchange turnover traded, attributing it to uncertainty in the global economy. 

He said: “The restrictions had affected investors and exporters’ demand for FX in the first five months of 2022. The war between Russia/Ukraine affected capital inflow into the country and led to volatility in the foreign exchange market. 

“However, with the ease of movement in 2022, investors and exporters surge for FX from the FMDQ market increased and it reflected in the amounts.”

Analysts at Guaranty Trust Holding Company in a report titled, “Nigeria macro-economic: outlook for 2022,” explained that, “In the light of the gradual improvement in vaccination rates, a better understanding and management of the pandemic, strong oil prices and positive GDP growth albeit on the back of a lower base, the business environment made an impressive recovery from the weak pandemic-induced performance of 2020.” 

The Chief operating officer of InvestData Consulting Limited, Mr. Ambrose Omordion, also attributed the growth to increasing demand for FX, maintaining that global economy was expected to have expanded in 2022 but might be slowed down due to the crisis between Ukraine and Russia.

According Omordion, “The Nigeria economy has witnessed more business activities in the first five months of 2022 and demand for FX has increased significantly.”

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Ambassador Isopi

Isopi: €6bn EU-Nigeria Balance of Trade in Favour of Nigeria

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The European Union (EU) Ambassador to Nigeria, Ms. Samuela Isopi, has stated that the balance of trade between Nigeria and the EU reached €6 billion in 2021 in favour of Nigeria.

The Ambassador stated this during a press conference to announce its eight edition of the E U business forum scheduled to hold in Lagos.

According to her, the European Union as a Bloc is by far the largest trading partner of Nigeria with about €28 billion in 2021.

She said the oil and gas sector represents the bulk of the trade adding that Europe accounts for 20 per cent of the overall Nigerian trade with the rest of the world.

According to her, “This is an agenda that we are trying to develop further. Discussions are ongoing between the Nigerian government and the European Union on how to develop economic relations.”

She noted that the EU is the main investors to Nigeria, adding that plans are ongoing to quantify and measure EU’s contribution to Nigeria’s economic development in terms of job creation.

She said one of the tools to reducing migration is to create economic opportunities for the youths, pointing out that a country like Nigeria needs to diversify its economy away from oil to promote backward integration in its quest to boost local production.

“Our dialogue with the Nigerian government on migration issues is on course and getting better. We are also expecting a delegation from Brussels to discuss migration. We presented European External Strategy anchored on three pillars, which includes energy efficiency to reduce energy consumption, diversify suppliers and fast-tracking energy transition into renewables. In Africa we are looking at four countries namely Nigeria, Mozambique, Senegal and Angola, “she added.

She however tasked the Nigerian government to address its infrastructure and security challenges to boost gas export to Europe.

“We think there is a huge opportunity for Nigeria. The current international situation is creating a huge opportunity for Nigeria, but we need to address the challenges, “she advised.

Also speaking, the Team Leader, Green and Digital Economy, Ms. Inga Stefanowicz, said under its new programme and budget of the EU for the year 2021-2027, the EU would be working with the private sector to create employment opportunities, growth of SMEs.

“We are also looking for development of agriculture value chains in horticulture, aquaculture and livestock development under the Team Europe initiatives,” she added.

The Trade Counsellor, EU Delegation to Nigeria and ECOWAS, Mr. John Taylor, said the business forum has served as a strong platform for European and Nigerian businesses to engage with the Nigerian authorities towards improving the business environment.

“This year’s event themed, “Nigeria and the New Economy,” will focus on three key sectors, including backward integration policy of the Nigerian government; opportunities to increase gas exports to Europe; and new initiatives in the agricultural sector.

“While these sectors are not new, the potential in them remains largely untapped. During the 8th EU-Nigeria Business Forum, discussions will aim to identify the causes of these hindrances and explore how these opportunities can be unlocked for the mutual benefit of Nigeria and Europe,” he stressed.

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World-Trade-Organisation-WTO-logo

WTO Trade Barometer indicates Continued Services Trade Recovery Despite Ukraine Conflict

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World services trade continued to grow into the second quarter of 2022, indicating resilience to the conflict in Ukraine according to the World Trade Organisation Services Trade Barometer.

According to a WTO statement, the latest reading of 105.5 is firmly above the previous reading of 102.5 in September 2021 and comfortably over the baseline value of 100 for the index, signalling that services trade is likely to post sustained gains in the second quarter once official statistics for the period are available.

It stated that the Services Trade Barometer is outpacing the Goods Trade Barometer, which points to a possible shift in consumption patterns away from goods and back toward services as the COVID-19 pandemic eases.

It also stated that among the Services Trade Barometer’s component indices, the passenger air transport index (117.1) registered the strongest gain, contributing to the above-trend reading in the global index.

From the report, strong showings in the services Purchasing Managers’ Index (105.1) and information and communication technology services (104.2) also helped lift the services barometer reading. 

While it remains above trend, the financial services index (101.7) appears to have lost momentum recently, possibly due to sanctions on the Russian Federation in connection with the conflict in Ukraine. Other indices including container shipping (101.5) and construction (101.1) remain slightly above trend.

The statement adds: “Recent developments in services trade are illustrated by the Services Trade Activity Index, which provides an approximate measure of the real volume of world services trade accounting for changes in prices and exchange rates.”

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Ghana, Egypt, Eswatini in race for AfCFTA’s office

AfCFTA suffers setback as Benin Republic slams CFA9 million on Nigeria-bound transit cargoes

The African Continental Free Trade Agreement (AfCFTA), may have suffered setback over huge tariffs and checkpoints delaying smooth movement of transit cargoes along the West African corridor.

The AfCFTA is an ambitious trade pact to form the world’s largest free trade area by connecting almost 1.3bn people across the 54 African countries. The agreement aims to create a single market for goods and services in order to deepen the economic integration of Africa.

The AfCFTA aims to reduce tariffs among members and covers policy areas such as trade facilitation and services, as well as regulatory measures such as sanitary standards and technical barriers to trade.

The agreement was brokered by the African Union (AU) and was signed by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018. The only country still not to sign the agreement is Eritrea, which has a largely closed economy.

As of 10 February 2022, 41 of the 54 signatories had deposited their instruments of ratification with the chair of the African Union Commission, making them state parties to the agreement.

But, despite the ambiguous and inherent potentials in the agreement, it seems it has hit a snag as checkpoints, tariff hinder movement of goods and trade facilitation.

It was gathered that the imposition of the Cfa9 million levy was a result of a retaliatory policy by the Benin authorities to express their anger over Nigeria’s decision to shut its land borders against the West African neighbours.

Speaking, chairman of Association of Nigeria Licensed Customs Agents (ANLCA) at Seme Border, Mr Onyekachi Ojinma, lamented that transit goods are being asked to pay Cfa9million instead of 0.3percent they are supposed to pay on transit.

According to him, these goods are manufactured from ECOWAS region, not in Cotonou, they are not supposed to open that cargo but the Cotonou government would collect duty.

He said, “Now a Naira is equal to the CFA. After clearing cargoes with millions at Cotonou, on getting to Nigeria, you still have to pay millions to clear it again. Meanwhile, at Apapa port, it is not so. We are losing our importers,” he lamented.

He alleged that security agencies, especially Nigeria Police Officers have mounted not less than fifty check points between Agbara and Seme Border, a situation that has encouraged extortion.

Between Badagry and Seme Border, there are about fifty checkpoints. By the time cargoes are brought through the border, extortion must have killed the owner.

“The business here is not equally friendly, we are doing double clearing of cargoes, we pay duty at Cotonou Port, on getting to Nigeria, you will be required to pay the same duty that is being collected at Apapa port. This has never been our style of doing business before.

“We have been having meetings with the Seme Customs CAC over this multiple checkpoints, he said he was trying his best, and the heads of these other agencies are tagging him as enemy of progress.”

Also speaking, the chief executive officer, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said at the level of the Economic Community of West Africa States (ECOWAS), there have been any serious commitment to remove barriers to trade on the corridor.

According to him, trade are moving freely in the Eastern, Southern and Northern Africa than it is moving in Western Africa, thereby, ECOWAS head of government need to give more attention to issue of trade and promote the original purpose in which ECOWAS was created.

Yusuf said, “Have not seen any serious commitment to this AfCFTA among many of these countries, particularly in West Africa, have not seen much of this commitment because all the barriers that had existed before AfCFTA particularly non tariff barriers and those barriers are still there despite AfCFTA.

These problems have been on for close to a year now and this transit levy and all sort of levies on cargo that are passing through Benin Republic, and quite a number of stakeholders have complained about it and nothing has been done. At the level of ECOWAS, have not seen any serious commitment to remove barriers to trade, so all these small issues are still there.”

“So, apart from this cross-border issues, and our issue as a country, how much of readiness have we demonstrated to be part the AfCFTA in a way that profit us because trade is about competitiveness, and if you are not competitive then you have no business in international trade otherwise you just make yourself a dumping ground for other product.

“So there is no deliberate conscious effort to tap into it and as for me apart from signing the AfCFTA, have not seen any other thing that we have done seriously either in Nigeria or in any other countries to move forward with AfCTA. To me, we have not started taking advantage of it.”

“What need to be done is for all the countries particularly in ECOWAS because these barriers to trade is more pronounced in ECOWAS. Things are moving better in East Africa, Central Africa and Southern Africa and Northern Africa in terms of economic integration. The ECOWAS head of government need to give more attention to this issue of trade and promote the original purpose in which ECOWAS was created.”

The former director general, Lagos Chamber of Commerce and Industry (LCCI), said there are arbitrariness, lack of commitment, and respect for trade protocols in West Africa with ECOWAS doing little or nothing to address it.

He, however, disclosed further that when it is increasingly difficult to access a country’s market, they take retaliatory action and that may have occasioned Benin Republic’s action.

“They are more committed to political issue, coup and all of that. I am not saying they are not important but they are not demonstrating the right kind of commitment to this economy integration. We have the ECOWAS Trade Liberalisation Scheme (ETLS) and all the protocols are very clear once you are registered, you are suppose to move freely, but look at the charges and these cannot be administrative charges not only in the Benin Republic.”

“We also encounter security people even in our corridor here, you look and see how many checkpoints are there? Does that show any seriousness that we are committed to this trade? And when other people see that they can not access your market easily, they too just take retaliatory action in their country.

“So, what basis do have to complain? They will say ‘go to Nigeria and see how many check points that are there’, so, why are you complaining about our own? So there are too much arbitrariness, lack of commitment, respect for some of these protocols and ECOWAS does not seems to have power to sanction anybody,” he said.

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NEPC

NEPC: Export Trade Houses Will Boost Non-oil Market Share

The Nigerian Export Promotion Council (NEPC) has said that the adoption of Export Trade House (ETHs) will further drive the country’s non-oil export, increase market share and take maximum benefit of the African Continental Free Trade Area agreement (AfCFTA).

As a result, the Executive Director/ Chief Executive, NEPC, Dr. Ezra Yakusak, said the council intended to establish the ETHs in different centers around the world including Cairo, Egypt, Nairobi, Kenya and Johannesburg, South Africa.

Others are Hunan, China, Ottawa, Canada, Saudi Arabia and Lome, Togo.

Yakusak , during the advocacy programme on Export Trade House, which was organised by the council, said these trade houses are to cover export activities in the various regions of the world being targeted by Nigeria.

He said to this effect, the Export Trade House had been launched on March 21, 2022 in Sadat City in Cairo, Egypt adding that it is “expected to improve value addition on our export of products through cleaning, processing distribution and marketing”.

“This in turn will lead to economies of scale, international foothold in finding new customers and managing currency risks,” the NEPC boss stated.

He said the objectives of the trade houses are to enhance the visibility of made-in-Nigeria products outside the Nigerian shores, reduce the cost of logistics on the Nigerian Small and Medium Enterprises (SMEs, increase Nigeria share in the targeted markets, create employment for our teeming youths and to increase foreign exchange inflow into the Nigerian economy.

According to him, these would give an exporter an advantage over his counterparts.

Yakusak, further pointed out that, “It is therefore on the basis of the launch of the Cairo Export Trade House, that the Council is today organizing this advocacy programme to sensitize all relevant stakeholders on the existence of that facility.

He said: “The main objective is to sensitise the Nigerian business community on how they can leverage on the Export Trade House platform to enhance exports from Nigeria. We at NEPC firmly believe that our survival as a nation depends on non-oil.”

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kenya and zambia

Kenya And Zambia Agree To Remove Barriers Hindering Trade

President Kenyatta said his talks with Zambian President Hakainde Hichilema, who was visiting on Wednesday, focused on opportunities to build on strong ties of friendship as well as trade and economic ties, including removing obstacles to trade.

“In this context, we have agreed to address prevailing bottlenecks, including addressing some tariff and non-tariff barriers that prevent our people from enjoying the freedom of trade with each other,” said President Kenyatta.

The Kenyan leader spoke last night at a state banquet he and First Lady Margaret Kenyatta hosted in honor of Zambian President Hichilema at Government House in Nairobi.

President Kenyatta noted that he had also agreed with President Hichilema that the ministers responsible for trade from both countries will work together to expeditiously address outstanding tariff and non-tariff barriers to trade.

“So this visit (by President Hichilema) is nothing more than a visit to strengthen and enhance cooperation between our two countries as we seek to deepen that partnership for the mutual benefit of our respective peoples,” President Kenyatta said.

Noting that Kenya and Zambia were among the first two countries to sign and ratify the African Continental Free Trade Area (AfCFTA), President Kenyatta affirmed Kenya‘s commitment to work with Zambia and other African countries to improve ease of doing business.

“And I want to assure you that the Kenyan government will continue to work with its partners in Zambia and across the African continent to continually remove barriers to trade, continue to improve the ease of doing business, continue to open our borders to our brothers and sisters around the world. continent,” the president said.

He encouraged Zambian investors not only to make Kenya their preferred investment destination, but also to look to their Kenyan counterparts as their preferred investment partners.

For his part, President Hichilema agreed on the need for Kenya and Zambia to work together to eradicate barriers to trade and investment between the two countries.

He said the time has come for the two countries to trade directly with each other instead of going through a third party.

“…how strange that sometimes we (Zambia) trade goods from Kenya through Europe and vice versa. Really? Makes sense? Absolutely not. That’s what we want to fix.

“So, President Kenyatta, thank you for giving us this opportunity to continue on the path traveled by those who came before us. We know that he is doing it for the people of Kenya, the people of Zambia and for Africa,” President Hichilema said.

The Zambian leader emphasized the need to ensure signed agreements and MOUs are implemented as the two countries move to redefine the way they work with each other to reduce the cost of doing business with each other.

Presidential candidate Azimio La Umoja One-Kenya Raila Odinga, senior government officials and members of the diplomatic corps also attended the state banquet.

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Trade-fair

11th Nigeria int’l trade fair to stimulate increased productivity  

Organisers of the 11th International Trade Fair/Expo, on Thursday in Abuja, said that the event would provide an avenue to strengthen Nigeria’s productivity strength.  

The organisers said the fair which would commence June 21 and end August 23 in Abuja, must increase productivity to improve the value of naira.  

Described the Theme of the event, “Diversification as Catalyst to our National Development’’ as apt, Amb. Israel Edward, Chairman, Paradise Production, emphasised the need for Nigeria to move away from mono economy.  

He said that no fewer than 1000 participants from 24 countries were expected to attend the event.  

According to him, many inventors and manufacturers are coming to show the world that we can invent.  

“They will let the world know how we can actually depend on our own production and create things that ordinarily we thought we could not produce.  

“People will come and start buying from us and we will also have it.  

“The trade fair is going to pull a lot on intellects we have in this country and it will encourage people to start being creative and come out with their ingenuity,’’ Edward said  

On his part, the co-organiser of the event, Innocent Ogu, President, African Legacy International, said that the need to move the country from consumption to production economy necessitated the trade fair.  

According to him, “we are using this expo to give interest to all sectors of the economy, giving them the opportunity to drive the economy for national development.  

“It is expected that ministries, departments and agencies, the private sector as well as exhibitors are keying into the event to come and exhibit their products and day-to-day delivery of their services.  

“It is an avenue to showcase made-in-Nigeria products and our cultural heritage.  

“So, we are hoping that all aspects of the economy with farmers in the village, wood makers in the street, designers in the workshops, shoe makers in the factories will all be working towards the national economic growth.  

“We are using this trade fair to galvanise the production strength of the country to say that our economy can sustain our national development.  

“Our foreign visitors are coming to interface with our local producers so that our products can attract more attention and get the real value,’’ Ogu said.  

Similarly, Lawrence Nzenagu, National President, Association of Nigerian Inventors (ANI) said that the trade fair would serve as a platform for inventors to make positive impressions.  

Nzenagu, however, appealed to various state governments and the corporate bodies to support inventors with a view to promoting knowledge and creating employment and wealth.  

He said that made-in-Nigeria products were receiving global acceptance due to improved qualities thus the need to stimulate increased patronage.  

According to him, the trade fair will provide a platform for the inventors and artisans to deepen their market and improve the quality of the goods produced locally.  

He said, “The trade fair would be a celebration of success in the advancement of inventions and Nigerian made products”.  

Nigeria-Ports-Authority-Apapa-Terminal

6 ships with frozen fish expected at Lagos ports  

The Nigerian Ports Authority (NPA) on Thursday said that out of the 25 ships expected at Lagos ports, six were laden with frozen fish.  

It said that the remaining 19 ships expected at the port contain general cargo, truck, container, base oil, bulk sugar, butane gas, bulk wheat, automobile gasoline and petrol.  

The NPA in its daily Shipping Position said that the ships were expected to arrive at the Lagos Port Complex between June 9 and June 22.  

It said that 16 other ships were also discharging bulk wheat, general cargo, frozen fish, bulk sugar, container, petrol and bulk gypsum.  

The authority said three other ships had arrived the port and waiting to berth with petrol.  

tesla

Tesla opens first store in China’s Inner Mongolia  

Hohhot Tesla center, the U.S. electric car maker’s first store in North China’s Inner Mongolia Autonomous Region, has opened for business in the region’s capital city Hohhot.  

China Securities Journal cited a source with the company as saying another major step for Tesla, is that the company is eyeing the growing appetite for New Energy Vehicles (NEVs) in Inner Mongolia.  

It also said the company would respond quickly to local Tesla owners’ needs with direct-sale model and innovative service system.  

The source said that the next step is that the company would further develop and expand its network in Inner Mongolia to better assist owners during cross-city travels.  

Tesla has so far constructed eight super charging stations, 56 super chargers, 13 destination charging sites and 23 destination chargers in cities across Inner Mongolia, such as Hohhot, Baotou, and Erdos.  

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Algerian banks halt trading with Spain over Western Sahara spat  

Algeria’s banking association halted trade with Spain as of Thursday after the Spanish government sided with Morocco in a dispute over Western Sahara.  

Banking transfers for imports from or exports to Spain are now prohibited.  

However, natural gas imports would not be affected, Algerian President Abdelmadjid Tebboune said in a statement.  

Algeria is the most important exporter of natural gas to Spain.  

Spanish Foreign Minister José Manuel Albares on Thursday confirmed that gas deliveries would not be affected by Algeria’s decision.  

Speaking to reporters in Madrid, he said the government was planning to analyse the impact of the measure and then give a calm, constructive and firm response.  

Earlier, government spokesperson Félix Bolaños had expressed confidence that relations with Algeria would soon be restored through all diplomatic means.  

Spain had agreed in March that Western Sahara can be an autonomous province under Moroccan sovereignty, as desired by Morocco.  

Madrid also announced shortly afterwards that relations with Morocco were entering a “new phase,’’ building on mutual respect and securing the stability and territorial integrity of both countries.  

Western Sahara was a Spanish colony until 1975.  

When Spain pulled out, Morocco annexed part of the territory and has since controlled significant areas of the region, which was sparsely populated but rich in natural resources.  

However, the Frente Polisario movement, supported by Algeria, is in favour of establishing Western Sahara as an independent state.  

The movement frequently clashes with Moroccan troops.  

Morocco’s sovereignty over the area has not been internationally acknowledged.  

Spain’s decision also prompted Algeria to suspend a 20-year-old friendship agreement.  

The Algerian presidential office said that Spain’s decision was contributing to the deterioration of the situation in Western Sahara and the region as a whole. 

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