Nigeria increased its capital imports in the first half of 2023 by borrowing $1.21 billion from abroad.
This is because, according to a report from the National Bureau of Statistics on Nigeria Capital Importation, 28 states failed to draw any foreign investments during the period under consideration. Total capital imports fell by 30.42% annually in the first half of 2023, from $3.11 billion in the same period of 2022 to $2.16 billion in 2023.
Nigeria is increasingly dependent on foreign loans to increase capital imports as problems like insecurity and a challenging business climate continue to hinder foreign direct investments into the nation.
Foreign loans increased from $1.03 billion in the same time of 2022 to $1.21 billion in the first half of 2023, an increase of 17.43%.
According to the NBS, other investments accounted for 81.28 percent ($837.34 million) of the total capital imported in Q2 2023, followed by portfolio investments with 10.37 percent ($106.85 million) and foreign direct investments with 8.35 percent ($86.03 million).
The production sector saw the largest inflow with $605.04 million, accounting for 58.73 percent of all capital imported in Q2 2023. The banking sector came in second with $194.58 million, accounting for 18.89 percent, and shares came in third with $68.63 million, accounting for 6.66 percent.
The only states that attracted foreign investors were Lagos, Abuja, Adamawa, Akwa Ibom, Anambra, Ekiti, Niger, Ogun, and Ondo.
The World Bank recently reported a decline in foreign direct investment into Nigeria as a result of low foreign exchange availability, security worries, and other structural issues.
Akpan Ekpo, an economics lecturer at the University of Uyo, recently told The PUNCH that international investors are crisis-averse and that the country’s current insecurity crisis has diminished investor confidence.
The states didn’t draw any investments for obvious reasons, according to Ekpo. When your location lacks security, there is no way you can draw in international investment. They won’t show up.
Forex crisis: CBN increases dollar supply, reverses cement restriction, and lifts 42 items
The Central Bank of Nigeria has stated that it is increasing dollar availability in the foreign currency market, while also lifting a prohibition on 43 commodities that were previously ineligible for FX in the official market.
Following criticism from international organizations and experts, the naira fell below $1,050/$ on the parallel market on Thursday.
Dailyupdates previously reported that, despite unifying exchange rates, the CBN maintained the status quo on the 43 non-eligible commodities barred from the forex market introduced by former governor Godwin Emefiele.
Between 2016 and 2022, Nigerians imported at least nine commodities worth N18.12 trillion from the CBN’s FX prohibition list.
Items such as crude palm oil, vegetable products, animal products, meat, vegetable fats and oil, steel products, rubber, plastic, clothes, and textiles were imported from various countries, according to an analysis of Nigerian Foreign Trade reports from 2016 to 2022.
According to a different source, despite the CBN’s inability to provide cash for banned commodities, Nigerians imported five items totaling N543 billion in the first quarter of 2023.
However, various economic experts and organizations have consistently urged the CBN to lift the currency limitations.
Citigroup stated earlier this week that if the nation wanted to address the problems with the forex market, the CBN’s limits on foreign exchange provisions for 43 products had to be lifted.
Credit expert Ayso van Eysinga stated this in the CEEMEA Frontier Credit Market Commentary after visiting Nigeria.
Van Eysinga noted that it was necessary to loosen limitations on the 43 goods in addition to resolving the backlog of FX demand.
Additionally, the World Bank encouraged the CBN to abandon its forex limitation policy in its Nigeria Development Update (June 2023). This, according to the report, would supplement efforts to lower inflation through a carefully planned combination of monetary, fiscal, and trade initiatives.
CBN’s licensed company intends to address the FX liquidity situation
The Central Bank of Nigeria, Sebastian BDC, and Keystone Bank are working together with Nairagram, an authorized international money transfer operator, to address the country’s foreign exchange liquidity crisis.
According to a statement the business issued our correspondent on Tuesday, this was the case.
The company intends to launch an international payment service project to improve financial connectivity, claims the statement.
According to the statement, “This service addresses FX liquidity challenges in the country by streamlining and improving the process of sending money from Nigeria globally, thereby promoting financial empowerment for Nigerians. It was developed in collaboration with the Central Bank of Nigeria and in partnership with Sebastian BDC and Keystone Bank.
“This new international payment service represents Nairagram’s constant dedication to innovation that strengthens family ties, promotes community, and fuels wealth development through hassle-free remittance abroad.
More than merely a money transfer service is represented by it. It stands for the company’s dedication to African success stories that strengthen African economies, cross international boundaries, and open doors for financial inclusion.
A seamless transfer of funds from Nigeria to Ghana, Senegal, Gambia, Kenya, Cameroon, Ivory Coast, Mozambique, Tanzania, Uganda, Zambia, Zimbabwe, Guinea Conakry, Rwanda, Congo DRC, Burkina Faso, Mali, Benin, Togo, Gabon, and Ethiopia is anticipated thanks to the international payment service.
The statement said, “Nairagram empowers people to have a beneficial impact across boundaries by providing a direct and dependable relationship between senders and recipients. Therefore, this development, in collaboration with the CBN, marks a significant advancement in Nairagram’s objective to offer cutting-edge and smooth financial solutions suited to the specific requirements of Nigerians.
“The new international payment service for the Nigerian market promises to revolutionize the money transfer industry, both within and outside of Africa.”
The service would soon be made available in the USA, UK, UAE, and Turkey, it was also revealed.
Olayemi Cardoso, the new governor of the Central Bank of Nigeria, stated at the screening session for senators that he would prioritize paying off the central bank’s backlog of unpaid foreign exchange obligations in the near future in an effort to end the nation’s FX problem.
NLC meets with governments to discuss fuel subsidy remedies
Weeks after President Bola Tinubu eliminated the fuel subsidy, some state chapters of the Nigeria Labour Congress have started talks with their respective state governments about how to mitigate the effects of the subsidy removal.
This occurred as organized labor made a national commitment to uphold the strict adherence to state-level agreements.
The source claims that during his inaugural speech at Eagle Square in Abuja, Tinubu declared that the fuel subsidy era was over and that further payments were no longer warranted in light of the 2023 budget’s lack of a fuel subsidy provision.
The Federal Government has been requested by organized labor to provide palliative measures to lessen the impact of the removal of subsidies on workers met with representatives of the Federal Government and organized labor.
Our correspondent checked on Monday and found that the committee has five weeks to submit its report.
According to information obtained by our correspondent, some state chapters of the NLC intend to meet with state governors to discuss strategies for mitigating the effects of the subsidy.
Several state governments, including those in Kwara, Edo, and Taraba, among others, have already announced special interventions for citizens; however, no regular interventions for workers have been announced.
Pascal Iheme, the state chairman of the NLC in Abia State, confirmed to our correspondent during an interview that the state NLC would meet with Governor Alex Otti on Wednesday.
On Wednesday, we will meet with the state governor. We’ll talk about the minimum wage’s implementation as well as the subsidy issue. We will meet on Wednesday, and you will hear about the updates.
Our correspondent in Ekiti State discovered that the state NLC had written to Governor Biodun Oyebanji regarding the situation.
Olatunde Kolapo, the NLC’s Ekiti State Chairman, continued, “We were supposed to meet last week, but we weren’t there. This week, we will meet with the governor, and hopefully by the end of the week, we will announce our official position.
It’s crucial to understand that we will require the national body’s template in order for it to assist us in our negotiations with the state government.
Buba Wadumayi, the NLC’s secretary in Taraba State, told our correspondent that the state’s NLC was anticipating a meeting with the state’s leadership.
“At the moment, we are not in contact with the new governor. However, we had a number of meetings with the former governor prior to his resignation, with a focus on the minimum wage in particular.
“We also desire a meeting with the new governor. He previously scheduled a visit with us as a courtesy, but due to delays and heavy workloads, we were unable to meet with him.
All signs point to the fact that he is prepared and eager to work. We are looking forward to meeting with him because he has already begun working to ensure that past-due pensions owed by the previous administration are paid, Wadumayi said.
Terungwa Igbe, the state NLC chairman in Benue State, informed our correspondent that after talks between the national secretariat of the NLC and the federal government, the labor union would meet with the state government.
He declared, “We will adopt and present to our state government what they discuss. Therefore, we won’t meet until after the negotiations are over.
The national organized labor has pledged to make sure that state governments abide by the agreements reached during negotiations between the federal government and the organized labor.
According to Tommy Etim, national vice president of the Trade Union Congress, “We will ensure that we monitor and enforce compliance by state governors.”
Bank borrowing from the CBN increases, increasing by 140% to N10.35 trillion.
There are signs that as borrowings from the apex bank increase, Nigerian banks are becoming more and more dependent on the Central Bank of Nigeria (CBN) for liquidity.
According to CBN data obtained by Vanguard, the banks borrowed N10.35 trillion from the CBN’s Standing Lending Facility (SLF) during the first half of 2023, H1’23, which ended last weekend. This represents a staggering 140 percent year-over-year (YoY) increase from N4.3 trillion during the same period of 2022, H1’22.
According to the data, the first quarter figure of N4.95 trillion already exceeded the half-year figure for 2022, and subsequent borrowing increased the reliance by another 5.05 percent to N5.4 trillion in the second quarter of 23.
The information also reveals that bank deposits in the SDF, the apex bank’s standing deposit facility, declined by 2.0% in the second quarter of 23 to N898.25 billion from N1.36 trillion in the first.
The two quarters’ combined effects, however, resulted in a 34 percent increase in the banks’ SDF balances with the CBN during the first half of ’23.
The increase in bank borrowings from the SLF is a result of the economy’s ongoing increase in currency in circulation (CIC) and currency outside of banks.
The CBN’s currency redesign measures between Q4’22 and Q1’23 had increased bank liquidity significantly, while CIC saw a sharp decline.
However, the liquidity movement changed direction after the policy was suspended in Q1 of 23.
But according to Mrs. Aishah Ahmad, a member of the Monetary Policy Committee (MPC), in the CBN Communique No. 148 of the 291st Meeting of the MPC with members’ personal statements held in May 2023, the banking industry soundness indicators are still strong as of April 2023, with capital adequacy ratio at 12.8%, non-performing loans ratio at 4.4% (down from 5.3% in April 2022), and liquidity ratio at 45.3% (above the
The results of the stress tests revealed that the industry’s liquidity and solvency positions could withstand mild to moderate shocks in the short to medium term, she continued.
Mark Zuckerberg and Elon Musk concur to hold a cage match.
Elon Musk and Mark Zuckerberg, two of the most well-known technology billionaires in the world, have agreed to square off in a cage match.
Mr. Musk declared that he was “up for a cage fight” with Mr. Zuckerberg in a statement on the social media site Twitter.
A screenshot of Mr. Musk’s tweet with the message “send me location” was subsequently tweeted by Mr. Zuckerberg, the CEO of Facebook and Instagram parent firm Meta.
“The tale stands on its own,”
The comment from Mr. Zuckerberg was then met with Mr. Musk’s response, “Vegas Octagon.”
The Ultimate Fighting Championship (UFC) fights take place on a competition mat inside of a fenced-in arena called The Octagon. Based in Las Vegas, Nevada, the UFC.
Later this month, Mr. Musk, who will be 52, also tweeted: “I have this great move that I call “The Walrus,” where I just lie on top of my opponent and do nothing.”
Later, he posted a few walrus videos, maybe indicating that his challenge to Mr. Zuckerberg wasn’t fully serious.
As he added in another tweet, “I almost never work out, except for picking up my kids & throwing them in the air.”
In the meantime, Mr. Zuckerberg, 39, has been practicing mixed martial arts (MMA) and has lately triumphed in jiu-jitsu competitions.
The BBC approached Twitter for comment but received no response.
The debate over who would win the fight has gone widespread on social media, with fans posting memes and spoof advertisements for the match.
Seyi Taylor, a business consultant, tweeted, for instance, “Choose your fighter” along with images of the two tech executives.