Nigerian president’s China trip most successful in economic terms: expert

Nigerian President Muhammadu Buhari’s recent visit to China can be considered as the most successful and profitable given what he has gained in terms of economy, a Nigerian financial expert said Friday.

President Buhari in China
President Buhari in China

In an interview with Xinhua, Johnson Chukwu, chief executive officer of Cowry Asset Management Limited, a Nigerian financial advisory and research firm, said that while Buhari’s other foreign trips might have gained political attention, his trip to China has yielded fruitful results for Nigeria-China ties and regional cooperation in terms of economy.

The visit provided an opportunity for the Nigerian leader to seek development assistance, promote infrastructure development, and attract investment from the Asian country, the financial expert said.

China is Nigeria’s largest import partner, he said, adding that Nigeria has maintained a deep and strong relationship with China through many administrations.

Chukuwu said the currency swap deal on yuan transactions, signed by the Industrial and Commercial Bank of China Limited and the Central Bank of Nigeria, would help boost bilateral trade.

The currency swap agreement, he added, would allow Nigerian banks to issue letters of credit in yuan in place of the U.S. dollar.

“We have a lot of machinery and equipment from China apart from consumer goods,” he said, adding that the deal would help businessmen “have the access to another foreign currency — the yuan — to bring in the goods.”

According to the expert, about 22 percent of Nigeria’s exports will be settled in the yuan instead of the U.S dollar, which will “relieve the country of much pressure on foreign reserves at this time,” he added.

Currency swap with China will boost economy

Alhaji Ibrahim Yelwa, a bureau de change operator in Sokoto, says the recent currency swap agreement between Nigeria and China will boost bilateral trade between them.

Currency swap with China will boost economy
Currency swap with China will boost economy

 

Yelwa, the Chairman of Mailabo Bureau De Change, told newsmen in Sokoto on Saturday that the agreement came at the time when Nigeria’s economy was in dire need of diversification.

“The agreement between China and Nigeria means that the de facto currency — dollar — will no longer hold on the import and export deals between the two countries.

“The quest for dollar through our banks will definitely reduce as all transactions between Nigeria and China will be in Yuan instead of dollar,’’ he said.

He observed that oil sales from Nigeria to China would be settled in Chinese currency, stressing that access to Yuan would also be easier.

“The swap will eliminate challenges arising from transactions with the dollar and promote business flexibility between Nigerian and Chinese,’’ Yelwa explained.

According to him, the agreement will reduce trade imbalance between the two countries and create an enabling environment for trade by barter.

The News Agency of Nigeria ( NAN) reports that President Muhammadu Buhari and the Governor of Central Bank of Nigeria (CBN), Mr Godwin Emefiele signed the agreement with the Industrial and Commercial Bank of China Ltd. on April 12 in Beijing, China.

The agreement will allow Nigerian traders to transact business with Chinese currency instead of dollar.

With the agreement, Nigeria will become the clearinghouse for Yuan denominated transactions for the whole of Africa.

Govts, Insurers Watch As goods And Properties Burn In Nigerian Markets

Recent statistics released by the National Association of Nigerian Traders (NANTS) said 600 people were killed, 49 major markets burnt and over 10, 000 shops destroyed from the December 1, 2010, Minna, Niger State shopping complex fire, to the 26 March 2016 Birnin Kebbi Central Market fire incidents.

Govts, Insurers Watch As goods And Properties Burn In Nigerian Markets
Govts, Insurers Watch As goods And Properties Burn In Nigerian Markets

According to NANTS, this six-year period market fires saw over N3 trillion worth of goods and properties consumed by the fires.

Worst still, none of these losses was mitigated as none of the markets has any form of insurance. The fires left the traders devastated, traumatised and relied on governments, albeit unnecessary if they had insurance, to provide them support – the support that oftentimes don’t come. Even where it does, half is pilfered by government officials, a situation that would have been avoided if they had some insurance.

The president of NANTS, Barrister Kenneth Ukaoha, said at a press conference recently in Abuja that “apart from loss of lives recorded, goods and property worth over N3 trillion, none of the affected markets has insurance cover and only about 12 percent of the fire incidents attracted governments’ sympathy visits. Also, of the promises made by the visiting government officials, only about three percent were kept. Yet traders in Nigeria provide the nation’s second largest revenue base from import duties and sundry taxes/levies after oil,” Ukaoha said.

There is no statistics to suggest any market in Nigeria has insurance cover. The Nigeria Insurers Association (NIA) doesn’t have that record, neither has the National Bureau of Statistics (NBS).

Indeed, without functioning markets, a state would lack the necessary commercial activities associated with huge consumption possibilities required for growth. Thus a critical aspect of our economy is left vulnerable with little or no attention to make it less risky.

However, legally, no market should be without insurance in Nigeria as the Insurance Act 2003 has made insurance of markets and other public buildings compulsory, a provision that is not enforced by the insurance regulator, the National Insurance Commission (NAICOM), because it lacks the legal backing to do so.

The law enforcement agents and the Nigerian Fire Service which have the legal rights to enforce fire insurance have not done so.

Section 65(1) of the Insurance Act 2003 says “Every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood;

Although recently, the Commissioner for Insurance, Alhaji Mohammed Kari, disclosed that a major shift would soon occur in the enforcement of the several compulsory insurances in Nigeria.

He said the commission has written to the relevant authorities and something would happen soon. Indeed it will be exciting to see the reforms occur so some of the losses being currently experienced from fires, building collapse and deaths would be mitigated.

Speaking on the issue, the Director General Nigeria Insurers Association (NIA), Mr. Sunday Thomas, said he was not aware any market in Nigeria has insurance cover.

Speaking on the recent Kano Central Market fire which destroyed property estimated at about N2 trillion, he said “I’m not sure if the market has any insurance but I doubt if it does. But it would be disastrous if such a monument of a Kano market doesn’t have insurance.”

He agreed insurance awareness was still low but chided Nigerians for not seeing insurance as critical. “But I believe the market might have received some form of awareness on insurance in the past. Unfortunately, a lot of Nigerians are still seeing insurance as additional cost rather than a benefit to their businesses.

“But again, I think the state government should insure the structures in their markets. Mr. Tope Adaramola, Assistant Executive Secretary, Nigerian Council of Registered Insurance Brokers (NCRIB), said the Kano market fire was quite unfortunate and devastating.

“It is definitely a setback for the people affected as it has eroded the needed capital needed for their existence and increased the poverty rate in the country,” he said.

“Similarly, we are working closely with relevant institutions on micro insurance to capture the market,” he said.

But as it stands now, these efforts haven’t begun to yield results as Nigerian markets are not insured.

Nigeria: Govts, Insurers Watch As Nigerian Markets Burn

Recent statistics released by the National Association of Nigerian Traders (NANTS) said 600 people were killed, 49 major markets burnt and over 10, 000 shops destroyed from the December 1, 2010, Minna, Niger State shopping complex fire, to the 26 March 2016 Birnin Kebbi Central Market fire incidents.

Nigeria: Govts, Insurers Watch As Nigerian Markets Burn
Nigeria: Govts, Insurers Watch As Nigerian Markets Burn

 

According to NANTS, this six-year period market fires saw over N3 trillion worth of goods and properties consumed by the fires.

Worst still, none of these losses was mitigated as none of the markets has any form of insurance. The fires left the traders devastated, traumatised and relied on governments, albeit unnecessary if they had insurance, to provide them support – the support that oftentimes don’t come. Even where it does, half is pilfered by government officials, a situation that would have been avoided if they had some insurance.

The president of NANTS, Barrister Kenneth Ukaoha, said at a press conference recently in Abuja that “apart from loss of lives recorded, goods and property worth over N3 trillion, none of the affected markets has insurance cover and only about 12 percent of the fire incidents attracted governments’ sympathy visits. Also, of the promises made by the visiting government officials, only about three percent were kept. Yet traders in Nigeria provide the nation’s second largest revenue base from import duties and sundry taxes/levies after oil,” Ukaoha said.

There is no statistics to suggest any market in Nigeria has insurance cover. The Nigeria Insurers Association (NIA) doesn’t have that record, neither has the National Bureau of Statistics (NBS).

Indeed, without functioning markets, a state would lack the necessary commercial activities associated with huge consumption possibilities required for growth. Thus a critical aspect of our economy is left vulnerable with little or no attention to make it less risky.

However, legally, no market should be without insurance in Nigeria as the Insurance Act 2003 has made insurance of markets and other public buildings compulsory, a provision that is not enforced by the insurance regulator, the National Insurance Commission (NAICOM), because it lacks the legal backing to do so.

The law enforcement agents and the Nigerian Fire Service which have the legal rights to enforce fire insurance have not done so.

Section 65(1) of the Insurance Act 2003 says “Every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood;

Although recently, the Commissioner for Insurance, Alhaji Mohammed Kari, disclosed that a major shift would soon occur in the enforcement of the several compulsory insurances in Nigeria.

He said the commission has written to the relevant authorities and something would happen soon. Indeed it will be exciting to see the reforms occur so some of the losses being currently experienced from fires, building collapse and deaths would be mitigated.

Speaking on the issue, the Director General Nigeria Insurers Association (NIA), Mr. Sunday Thomas, said he was not aware any market in Nigeria has insurance cover.

Speaking on the recent Kano Central Market fire which destroyed property estimated at about N2 trillion, he said “I’m not sure if the market has any insurance but I doubt if it does. But it would be disastrous if such a monument of a Kano market doesn’t have insurance.”

He agreed insurance awareness was still low but chided Nigerians for not seeing insurance as critical. “But I believe the market might have received some form of awareness on insurance in the past. Unfortunately, a lot of Nigerians are still seeing insurance as additional cost rather than a benefit to their businesses.

“But again, I think the state government should insure the structures in their markets. Mr. Tope Adaramola, Assistant Executive Secretary, Nigerian Council of Registered Insurance Brokers (NCRIB), said the Kano market fire was quite unfortunate and devastating.

“It is definitely a setback for the people affected as it has eroded the needed capital needed for their existence and increased the poverty rate in the country,” he said.

“Similarly, we are working closely with relevant institutions on micro insurance to capture the market,” he said.

But as it stands now, these efforts haven’t begun to yield results as Nigerian markets are not insured.

IMF Seeks End to Presidency, National Assembly Budget Impasse

Minister of Finance, Mrs. Kemi Adeosun (right) and the President of the World Bank, Dr. Jim Yong Kim, during the G24 Ministers meeting at the 2016 Spring Meetings of the World Bank and IMF in Washington DC

IMF Seeks End to Presidency, National Assembly Budget Impasse
IMF Seeks End to Presidency, National Assembly Budget Impasse

•Senate bills whittle down CCB powers, bars CCT from criminal proceedings
Kunle Aderinokun, Chika Amanze-Nwachuku in Washington D.C. and Omololu Ogunmade in Abuja

The International Monetary Fund (IMF) on Thursday waded into the impasse between the executive arm of government and the National Assembly over the 2016 budget, advising the Nigerian government to resolve the issues surrounding the budget and have it assented to, just as it renewed the call for the Central Bank of Nigeria (CBN) to implement a flexible foreign exchange regime.

IMF Managing Director, Christine Lagarde, who spoke at the opening press briefing of the fund at the 2016 Spring Meetings of the IMF-World Bank in Washington D.C., also told the federal government to seek assistance from international institutions capable of helping the Nigerian economy overcome its current economic challenges.

“Our recommendation is that, first, Nigeria seek help from the international institutions that can best help. Second is that Nigeria is open-minded about using flexibility of the exchange rate in order to absorb some of the shocks; we believe that it’s more efficient than using a list of forex items that are barred from being imported into the country.
“And third, we believe that it’s really important that budget be completely decided and approved,” Lagarde said.

Lagarde noted that the IMF was ready to come to the aid of Nigeria to resolve its economic issues provided the federal government approaches it for such assistance, recalling that during her visit to the country in January this year, she pointedly told the government to de-emphasise reliance on oil revenue and to diversify the economy, especially with the lingering volatility of oil prices.

According to her, “The low price of oil is general but low price of oil as far as Nigeria is concerned is a critical issue. Sixty per cent of your exports and 80 per cent of your revenue or the other way round is actually oil dependent.
“So when there is a massive decline in the price of oil, those two also take a similar beating; it has a major impact on the country.”

She believed Nigeria was “full of energy, full of smart people” and could really transform some of its activities in other sectors of the economy including the agriculture sector.
In her opening remarks, she noted that “we expect global growth this year to be at 3.2 per cent and 3.5 per cent next year. This makes it harder to spread economic warmth to the citizens of the globe”.
“It is not enough to lift living standards, reduce debt and create sufficient opportunities for the nearly 200 million people around the world who are officially unemployed and looking for jobs.

“There is a risk that middle class families and the poor actually remain behind, which would embolden the voices of protectionism and fragmentation,” she said.
Earlier, Word Bank President, Mr. Jim Yong Kim, pointed out: “In the global economy, there are not many bright spots around the world. The United States is one among the developed countries and India is another among the middle-income countries.

“Growth remains weak in Europe and Japan and among emerging economies. Russia and Brazil are projected to post, again, negative growth.
“We just downgraded our global growth forecast this year from 2.9 per cent to 2.5 per cent. In this period of global economic slowdown, we’re also facing major global challenges: forced displacement, climate change, and pandemics.

“I want to stress that each of these three represent very clear downside risks to the global economy. We’re not working urgently and in new ways with partners to find solutions to these issues that affect all of us.”
Meanwhile, a bill seeking to whittle down the powers of the Code of Conduct Bureau (CCB) and Code of Conduct Tribunal (CCT) scaled its second reading on the floor of the Senate yesterday.

In the same vein, another bill seeking to delete CCT from the list of judicial institutions with the jurisdiction to adjudicate on criminal matters has been initiated in the Senate.
The first bill tagged, “Code of Conduct Act Cap C15 LFN 2004 (Amendment) Bill 2016”, was sponsored by Senator Peter Nwaboshi (Delta North).

Yesterday’s plenary was presided over by Deputy Senate President Ike Ekweremadu, as the Senate President, Bukola Saraki, stayed away.
In his lead debate, Nwaboshi said the bill was conceived to ensure that anyone who appeared before CCT is given a fair hearing.

“The amendment of Section 3 of the Code of Conduct Bureau and Tribunal Act is to give every public officer appearing before the bureau fair hearing as provided for under Section 36(2)(a) of the Constitution of the Federal Republic of Nigeria 1999,” he said.

The amendments proposed in the bill are as follows: “The functions of the Bureau shall be to: (a) receive assets declarations by officers in accordance with the provisions of this Act; (b) take and retain custody of such assets declarations; (c) examine the asset declarations and ensure that they comply with the requirements of this Act and of any law for the time being in force if otherwise the bureau shall invite the public officer concerned and take down his statement in writing; (d) receive complaints about non-compliance with or breach of this Act and where the Bureau having regard to any statement taken or to be taken after such subsequent complaint is made considers it necessary to do so, investigate the complaint and where appropriate refer such complaints to the Code of Conduct Tribunal established by Section 20 of this Act and the constitution in accordance with the provisions of Sections 20 to 25 of this Act.”

While all senators, who contributed to the debate hailed the amendment bill, describing it as timely, Senator Yahaya Abdullahi (Kebbi North) cautioned his colleagues against the amendment, describing the bill as ill-timed.

He said even though the amendment might be good, coming at the time Saraki is standing trial before CCT could generate a negative public backlash.
Specifically, he said the public could interpret the amendment as a desperate move to frustrate the ongoing trial of Saraki.

“I rise to raise a point of caution. I am against the timing of the amendment. We must look at the perception of the people. Nigerian people can interpret it to mean that we have something to hide.
“Nigerians will question why we are doing this now if not that our president is facing trial. That is what Nigerians will think. We need to be careful,” he warned.
But Ekweremadu quickly addressed Abdullahi’s concern, insisting that the bill had nothing to do with Saraki’s trial.

According to him, the bill was not proposed to be retroactive, noting that Saraki’s trial had already begun and hence, its passage could no longer influence the ongoing trial.
Ekweremadu further claimed that the move only showed that the Senate was not afraid to carry out its legislative functions.

When the bill was put to a voice vote, senators unanimously voted in favour of its passage and was subsequently referred to the Senate Committee on Ethics and Judiciary.

Also yesterday, Senator Isah Misau (Bauchi Central) sponsored another bill tagged, “”A Bill for an Act to Amend the Administration of Criminal Justice Act, 2015 and for Other Related Matters”.
The bill seeks to remove CCT from the list of courts saddled with powers to initiate criminal proceedings against accused persons.

Highlighting include: “The provisions of this Act shall not apply to a court martial and such other courts or tribunals not being courts created and listed under Section 6(5) of the Constitution of the Federal Republic of Nigeria, 1999 as amended.”

Nigeria: Stock Market Recoups N37 Billion

Lagos — The Nigerian Equities market resisted further downward pressure to close higher yesterday.

Nigeria: Stock Market Recoups N37 Billion
Nigeria: Stock Market Recoups N37 Billion

The trading on the Nigerian bourse recouped N37 billion on optimistic purchases equivalent to 0.44 per cent as against the slight 0.01 per cent fall recorded on Wednesday.

The Nigerian Stock Exchange (NSE) All Share Index also closed higher at 24,746.16 points as it added 108.25 basis points translated to 0.44 per cent growth.

Similarly, Volume and value of trades both appreciated by 67.2 per cent and 57.35 per cent respectively, away from 44.01 per cent and 11.57 per cent negative trend respectively they previously closed.

Transactions in the shares of Law Union and Rock Insurance Plc, United Bank for Africa and Guaranty Trust Bank topped the activity chart as most traded equities by volume.

The market breadth tilted to the bull’s camp with 37 gainers against 18 losers.

Nigeria considers selling Chinese Panda bonds -finance minister

Nigeria is considering selling Chinese Panda bonds to help finance the 2016 budget, its finance minister said on Saturday.

Nigeria considers selling Chinese Panda bonds -finance minister
Nigeria considers selling Chinese Panda bonds -finance minister

The OPEC member is also looking to sell Eurobonds apart from loans from multilateral agencies, Kemi Adeosun told Reuters and the Financial Times in an interview.

He said Nigeria was expecting to post budget deficits for the next two to three years.

MSCI could exclude Nigeria from Frontier Markets index

Index provider MSCI is seeking feedback from investors on the ease of access to the Nigerian equity market, a move that could lead to it being excluded from MSCI’s Frontier Markets index.

MSCI could exclude Nigeria from Frontier Markets index
MSCI could exclude Nigeria from Frontier Markets index

The consultation follows the introduction of restrictions on foreign currency trading, MSCI said in a statement issued late on Thursday, adding that it would announce its decision on or before April 29.

Nigeria, Africa’s biggest economy, is facing its worst crisis in decades as the falling price of oil has slashed revenues, prompting the central bank to peg the currency and introduce curbs to protect foreign exchange reserves, which have fallen to 11-year lows.

The International Monetary Fund has called on Nigeria to lift the curbs and let the naira currency reflect market forces more closely, as the restrictions have significantly affected the private sector.

MSCI said that ease of capital inflows and outflows was one of the key criteria in its market classification framework.

“Introduction of restrictive measures, such as capital or foreign exchange controls, which can lead to material deterioration of equity market accessibility, may result in the exclusion of such market from the MSCI Frontier Markets Indexes and a reclassification to Standalone Market status,” it warned.

Charles Robertson, global chief economist at Renaissance Capital, said the possibility that Nigeria might lose its place in the index had been a risk since it was excluded from key bond indices by JPMorgan and Barclays last year. “Now the risk has become acute,” he said.

Being excluded would create a higher hurdle to attracting future investments, as there would be no need for passive frontier market funds, which track the MSCI index, to hold Nigerian stocks. “With this news, Nigeria’s hopes of attracting private sector investors have been dealt another blow,” Robertson added.

Daniel Salter, head of equity strategy at Renaissance Capital, said that about $480 million of MSCI benchmarked money was in Nigeria, in both mutual funds and exchange traded funds. (Reporting by Claire Milhench Editing by Jeremy Gaunt.)

Naira Remains Static at N322 Per Dollar Two Days After Easter Break

naira

The Naira on Wednesday, March 30, maintained its exchange rate at N322 to a dollar. It also remained firm against the two other major currecies, the pound sterlin which exchanged at N448 and the \euro which sold for N355.

However, at the official interbank rate, N197, was exchange for a dollar.

Some traders at the parallel market lamented that the high exchange rate was discouraging to customers.

Meanwhile, the apex bank, in its last Monetary Policy Committee (MPC) meeting, said that excess liquidity in the banking system was contributing to the current pressure in the foreign exchange market.

CBN To Raise N219billion In Short-dated Treasury Bills

treasury-2

The federal government plans to raise N218.89 billion in short-dated treasury bills on April 7,

The Central Bank of Nigeria, CBN, on Wednesday, March 30, said yesterday.

The bank said it will sell N55.40 billion of three-month and N33.49 billion of six-month bills and N130 billion of one-year debt, using the Dutch auction system.

The results of the auction are expected to be released on Thursday. According to the central bank’s issuing calendar for treasury bills, the same amount of bills on offer will also be due for repayment the day of the auction.

Nigeria issues treasury bills as part of a borrowing plan to finance part of the government budget deficit, help manage liquidity in the banking system and curb inflationary growth.