The African Development Bank (AfDB) has disclosed that Nigeria is the largest contributor to West Africa’s wealth creation. The country makes about 75% contribution to regional Gross Domestic Product.
This was revealed by Mr. Ebrima Faal, the bank’s Senior Director for Nigeria who gave an interview to newsmen at the ongoing Annual Meetings of the bank in Malabo, Republic of Equatorial Guinea.
The annual gathering avails experts, businesses, think-tanks, civil society groups, governments, and the academia the opportunities to share their unpretentious assessments of regional integration efforts. They also use the occasion to chart a new course on critical issues regarding the development of Africa. This year’s theme is “Regional Integration for Africa’s Economic Prosperity”.
According to Faal, Nigeria’s trade policy is anchored on the Economic Community of West African States, as it maintains the coordinating role it plays in the region through the public sector and its active private sector.
Free Trade: On Nigeria’s attempt to integrate trade in West Africa, Faal stated that the country had performed relatively well in terms of free movement of goods and people, through the ratification of relevant ECOWAS instruments bordering on the free movement of persons, workers, and rights of establishments.
He further disclosed that Nigeria allows citizens who possess the valid travel documents from all other ECOWAS countries to enter its borders visa-free. However, the country had ceaselessly made strides in trade integration with various attempts to unify documentation and simplify processes that will enable free flow of trade across its borders.
“Nigeria has an active Export Promotion Council (NEPC), which champions implementation of the ECOWAS Trade Liberalisation Scheme, the main operational tool for promoting Free Trade in West Africa. However, there is still much to be done on the integration of its productive value chains, especially in the areas of agriculture and the manufacturing sector for exports.”
Collaboration with Ebonyi State: In the meantime, AfDB will collaborate with the Ebonyi State Government on the $70 million Ebonyi Ring Road project. The regional road project was approved by the Federal Executive Council in April 2019.
Faal emphasized that the road would open up the state for trade with Cameroon and other close neighbours. This is because the road crosses through the Enugu-Bamenda road corridor at two points, thus providing the residents in the zone easier access into Cameroon and other neighbouring states.
Bottom line: Mr Faal stated that the development bank would maintain its focus on improving the institutional framework for the management of projects in the region through capacity support.
Sell-off of shares by investors extend Flourmillers loss on NSE to N25 billion
Nigerian Flour millers on NSE suffer a decline as wary investors offload shares.
The sell-off of shares on the Nigerian Stock Exchange has triggered an N24.9 billion loss in the market capitalization of Flour Millers since the beginning of February, as wary investors offload.
It is important to note that the Nigerian Equity Market has been on the downward trend since the beginning of February, as wary investors sell off stakes in companies as the yields in the money market become attractive.
The results of this move led to a decline in the shares of companies listed on the Nigerian Stock Exchange, including a decline in the shares of Flour millers listed on the bourse.
A review of the performance of the stocks of these Flour millers on NSE revealed that the market capitalization of FLOUR MILLS, HONYFLOUR, and Northern Nigeria Flour Mills from the open of trade on February 1 till the close of trading activities on February 24 has declined from N154 billion to N129 billion.
How they have all performed
FlourMills has declined from N142.3 billion to N118.3 billion. However, the market cap of Honeywell Flour Mills has also declined, albeit marginally from N10.31 billion to N9.91 billion, while that of NNFM has declined from N1.72 billion to N1.25 billion. When added up, the three millers have lost N24.85 billion in market capitalization.
However, Flour Mills, the largest miller on NSE lost the most with N23.98 billion, as a percentage of market capitalization. Flour Mills is down by 16.85%.
At the end of trading activities on the floor of the Nigerian Stock Exchange, the shares of Flour Mills declined by 6.9% to close at N28.85 per share, as investors sell off 5,029,161 ordinary shares of the company worth N143,009,264.10.
Shares of Honeywell at the close of trading activities today declined by 1.6%, while shares of Northern Nigeria Flour Mills remained unchanged at N7.02 per share.
The Consumer good index to which the Flour millers belong has fallen by 6.1% year since the beginning of February, compared to the Nigerian Stock Exchange All Share Index -5.17%.
FG says Finance Bill 2020 will check inflation
The Finance Minister has stated that the reduction of import duties on vehicles will subsequently reduce transport fares and food prices.
The Federal Government has said that the Finance Bill 2020 was designed to reduce import duties on some commodities, including vehicles, thereby checking inflation.
This is as the Bill was part of measures to make transportation affordable, thereby reducing the cost of foodstuff across the country.
According to a report from the News Agency of Nigeria (NAN), this disclosure was made by the Minister of Finance, Budget and National Planning, Zainab Ahmed, while answering questions from State House correspondents in Abuja on Wednesday.
Ahmed explained that her Ministry advocated and got approval for a reduction in the import duties charged on vehicles precisely to check inflation trends.
What the Minister for Finance is saying
The Minister expressed concerns over the inflation rate in the country, saying inflation was high at 16.7% and still inching up gradually over the last couple of months.
Ahmed said, “When you look at the components that constitute inflation in our country, the largest contributor is food inflation and … if you decouple it, the largest contributor to food inflation is the cost of transport.
“We now look at how do we reduce the cost of transport because we can’t give every Nigerian money to pay for their transportation fares. We figured that one of the good ways to do it is to increase the acquisition of mass transit vehicles and to reduce the acquisition cost of vehicles and tractors that are used for productive purposes like agriculture.”
She expressed optimism that the reduction of the import duties on vehicles, when fully operational, would boost mass transit activities and subsequently reduce transport fares and food prices.
She said, “So the reason why we reduce those duties is to reduce the cost of transportation.
”So, once this implementation takes full effect, we are hoping that we’ll be able to see more tractors coming into the country, more mass transit buses coming to the country, reducing the cost of transportation as a result, and also having an impact on food prices.”
What you should know
- It can be recalled that as part of its bid to introduce tax incentives in the face of the economic downturn caused by the coronavirus pandemic, the Federal Government in November 2020, through the signed Finance Bill 2020, proposed the slash of import duties for tractors, buses and other motor vehicles from 35% to 10% and 0% to further help cushion the socio-economic conditions in the country.
- The Minister for Finance, Budget and National Planning had explained that the need to reduce food inflation figures through one of the causative factors of high production cost, which is transportation, inspired the bill.
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