Nairametrics| The recent announcement of a new forex policy by the Central Bank of Nigeria has led to the biggest black market gain the Naira has experienced in a single year.
To many, this will seem to be good news especially as the gulf between the official exchange rate and the parallel market rates was cited as the major reason for low inflow of foreign direct investment (FDI).
However, if what analysts on Bloomberg are saying is anything to go by, international investors are still not keen on having the CBN float the naira. Bloomberg cited comments from analysts at JP Morgan and Rencap
Unlike the CBN that continues to maintain that the sharp fall in value of the Naira in the parallel market was caused by hoarding of dollars by currency speculators and is not representative of the true value of the Naira, foreign analysts actually believe that the Naira is worth less than the official rates touted by the CBN. Here are 3 evidences that these analysts point to in defense of their position.
- The multiplicity of exchange rates used in dealing with different users of forex by the CBN itself suggests to investors that the Naira may not actually be worth as much as is been suggested. For example, while a benchmark of N305/$1 was used for the 2017 budget, the CBN sold a dollar at N370 to business travelers and those requiring to pay school fees etc. Apart from these, the exchange rates for fuel importers, the interbank rate and exchange rate for Bureau de Change are all different leaving the Naira with about 6 different values in the same country.
- The drop on Nigeria’s Eurobond yields, which have reached their lowest (about 6%) since May 2015, suggest that the demand by investors to buy into the country’s economy, especially in the midst of increasing oil production and crude oil prices, is steadily growing. However, this is not the case for naira-denominated assets such as the Naira bonds which average 16.4%. This suggests that while investors want to get in on Nigeria’s economy, the Naira is still a no-go area. Foreign-denominated bonds are preferred.
- The same trend is noticed with equities. While Nigerian stocks are now the cheapest in Africa, the market capitalization of the dollar-based Global X MSCI Nigeria Exchange Traded Fund, listed in New York, has more than doubled in the last year to $35 million, a further suggestion that investors are keen on Nigerian stocks, just not in naira.
It appears, from what we can infer in this article, that what they want is a full float of the Naira.
FG to facilitate removal of tax on minimum wage, as NLC suspends strike
The FG has stated that it will work to facilitate the removal of tax on minimum wage.
The Nigerian Government says it is working to facilitate the removal of tax on minimum wage and also agreed to work with labour unions in the housing and gas schemes as the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) suspended the planned nationwide strike after a consultative meeting with the FG.
This was announced in a statement by the Nigerian government on Monday morning, following meetings held between FG and Labour unions on the 15th, 24th and 27th of September.
NOTICE ON RECENT ENGAGEMENT BETWEEN FGN AND ORGANIZED LABOUR:
The Federal Governmment and Organised Labour (NLC, TUC and others) held consultation meetings on September 15, 24 and 27, 2020.
Following the extensive deliberations, the following resolutions have been reached:
— Government of Nigeria (@NigeriaGov) September 28, 2020
Nairametrics reported earlier the NLC and the Trade Union Congress (TUC) have suspended the planned nationwide strike and protest that was to commence on Monday, September 28, 2020, over the recent hike in electricity tariff and petrol pump price.
In the agreement between the Federal Government and organized labour, the hike in electricity tariff is to be suspended for a period of 2 weeks, while the new pump price of petrol is to remain unchanged.
FG and Labour agreed to set up a technical committee on Electricity Tariff reforms. The terms of reference for the technical committee include;
- To examine the justification for the new policy on cost-reflective electricity tariff adjustments.
- To look at the different Electricity Distribution Companies (DISCOs) and their different electricity vis-à-vis NERC order and mandate.
- Examine and advice government on the issues that have hindered the deployment of the 6 million meters.
- To look into the NERC act under review with a view to expanding its representation to include organized labour.
In the recent statement, the FG said, “We will ensure delivery of 1 million CNG/LPG Autogas Conversion Kits, Storage Skids and Dispensing Units under the Nigeria Gas Expansion Programme, by December 2021. A Governance Structure for this project will be established, and will include Labour Representatives. FG will work to facilitate removal of tax on minimum wage… Ongoing FG Housing Initiatives will have 10 percent allocated to Nigerian workers.”
The FG also announced that it will provide Labour with 133 LPG-driven Mass Transit Buses immediately, which would be used in cities across the nation and would be extended to all LGAs before December 2021.
Baba Bajaj: Runs faster, lasts longer, covers 5500 kms on tough Nigerian roads
The rally took up the challenge of proving how credible the product and also engaged the stories of the riders.
For the first time ever, Nigeria experienced its own keke rally that kicked off on 7th August from the Stallion Auto Keke – Ijesha Showroom for Bajaj Kekes. The Stallion Bajaj Keke Rally has now completed a tough terrain of 5594 kms through 27 cities and 18 states in the West, East and North Central in less than 41 days. It consisted of a team of 5 experienced riders and the Stallion Bajaj officials and security agents. Collectively the convoy covered more than 26000 Kms without any product issues.
Managing Director for the business, Mr. Manish Rohtagi stated that “The Keke Rally really boasts on how the New Baba Bajaj is tough, strong, reliable, and well equipped for the Nigerian roads. Having covered almost more than 5000 kms the Kekes did not face any performance or maintenance challenges. It kept its brand promise of “Runs Faster, Lasts Longer” through every rider who was a part of this rally.”
The rally was flagged off from Lagos and covered states like Ogun, Oyo, Kwara, Kogi, Benue, Enugu, Ebonyi, Cross River, Akwa Ibom, Abia, Rivers, Anambra, Delta, Edo, Ondo, Ekiti, Osun, to prove the durability of Bajaj Keke. It even spread the message of urging people of Nigeria to be responsible in maintaining hygiene to curb the spread of Corona Virus. The Stallion Bajaj Keke Rally visited celebrated cultural and historic sites in each state highlighting and sharing the Nigerian culture of host communities. The journey to these sites brought forth the stories around it to encourage connecting the youth to their rich heritage.
The vision from this rally was not only to take up the challenge of proving how credible the product is but also engaging in the stories of these riders that will go on to make the brand what it is. The alliance of Stallion and Bajaj will continue to improve lives by going an extra mile providing rider-training facilities, scholarship programmes, mechanic empowerment programmes, ease in financing, ease of spare part availability and differentiated customer service through its existing footprints within the auto industry.
Bajaj Auto Ltd. is a world leader in the intra city vehicle space. Loved in 70 countries the brand stands for integrity, dedication, resourcefulness, and determination to succeed and empower. It is a well-known brand for its durability, speed and manuverability and is the pioneer brand of tricycles in Nigeria loved by millions. It’s a keke for the people engineered for a smooth journey and better livelihood.
After 22 years, NBS is set to commence National Business Sample Census
The National Business Sample Census is expected to commence on October 12 2020, and end on December 12 2020.
The National Bureau of Statistics, with the support of the World Bank, has commenced the process of implementing the 2020 National Business Sample Census (NBSC) in Nigeria. This is exactly two decades and two years after the last business census of establishments in the country.
This disclosure was stated in a circular signed by Ichedi, Sunday Joel, Head, Public Affairs & International Relations Unit, which was released by the Statistician-General of the Federation this morning.
The Survey which is coming after a similar one conducted twenty-two years ago (1997/98) is necessary, especially now that the current government is re-structuring the economy for faster growth through support to Small, Medium and large-scale enterprises, in order to increase their productivity.
The National Business Sample Census is expected to last two months from October 12 to December 12.
The main objectives of NBSC includes:
• To compile, frame, and develop instruments and concepts, establish standards and methodology for industrial and business surveys in Nigeria.
• To serve as a benchmark for updates of subsequent commercial and industrial sector statistics.
• To develop a national directory of commercial and industrial business establishments, with all their associated social and economic characteristics
• To provide the country with comprehensive and detailed information about the structure of the Nigerian economy.
The Census will cover all the thirty-six (36) states of the Federation and FCT, with establishments in all economic sectors involved in the exercise.
For the avoidance of doubt, the establishments to be covered should have a fixed structure and location, a separate shop with a different entrance, and enclosed from dwelling place (in the case of residential areas), shops should have locks and keys for a market setting. While kiosks and shops under the umbrella are not to be listed during the census.
All commercial and industrial businesses in each LGA will be identified and listed by the state. Name, location address, postal address, phone number, email address, year of commencement, number of activities engaged in, main type of activity, and others are questions that will be asked.
NBS enumerators with customized T-Shirts and Face Caps will visit your establishment, at any date within the stipulated period, to collect necessary information for the census. Please oblige them with the information, as your cooperation is germane towards the successful execution of the census exercise.
However, the Bureau wishes to assure you that any information given will be kept in absolute confidentiality, and will not be divulged to a third party.