Presco Plc, a palm-oil processing firm listed on the Nigerian Stock Exchange, has signed a partnership deal with the Edo State Government to develop high yielding oil palm seeds in the state. The project is part of the Edo State Oil Palm Programme (ESOPP).
Details: Vandebeeck explained that the deal would enable his company to develop smallholder oil palm farms using technology. This, he said was why Presco was contracted as the company has a technology of multiplying seeds, called in-vitro culture.
Presco boss disclosed that the company plans to create a special company in Nigeria for the propagation and distribution of high yielding planting materials. He said that Edo was regarded as a first choice location because of its ease of doing business as well as friendly government policies and hospitality in the state.
Speaking on the partnership, Executive Governor, Edo State, Godwin Obaseki stated that the development of the high-yielding seeds was necessary to make the business more profitable for farmers as oil palm had a long gestation period.
“We want to collaborate in the area of research to have one of the world’s best planting materials. This is so that we can go back to where we used to be in terms of oil palm production in the world. Presco has a laboratory in Europe and they are thinking of expanding the laboratory here to Nigeria so that they can reproduce high-quality planting materials,” he said.
What you should know: The Governor, Central Bank of Nigeria, Godwin Emefiele, at the launch of the ESOPP, explained that the apex bank has committed N69 billion as part of efforts to revive the country’s oil palm industry. Obaseki stated that the partnership with Presco was in support of the CBN’s oil palm initiative amongst other reasons.
Nigeria’s foreign reserves hit $36.57 billion; Emefiele keeps his word on defending the naira
Nigeria’s foreign exchange reserves now stand at $36.57 billion, having increased sharply from $33.42 billion as of April 29, 2020.
The macro fundamentals surrounding Nigeria’s major export, including the recent jump in crude oil prices to about $40, seem to have helped Nigeria’s foreign reserve to rise at a steady pace.
According to the latest data obtained from the Central Bank of Nigeria (CBN), Nigeria’s foreign exchange reserves now stand at $36.57 billion, having increased sharply from $33.42 billion as of April 29, 2020. This shows a gain of $3.15 billion dollars in 33 days.
What you need to know about Nigeria’s foreign reserves
Foreign exchange reserves are financial assets held in reserve by CBN in foreign-dominated assets. These foreign financial dominated reserves are used to meet payment or debt obligations. They also influence monetary policies and include foreign-dominated currencies, foreign-dominated bonds, and other International backed securities.
This feat recorded above (rising FX reserves) has given the CBN Governor, Godwin Emefiele, more ammunition to defend the naira.
Also, the macro fundamental of Nigeria’s currency presently shows that Mr. Emefiele has kept his word on hitting currency speculators hard.
The naira has been stable in the short term, even though data obtained from Everdon Bureau de Change showed that the currency had failed to break the resistance price level of N450 to $1 in the last 6 days in Nigeria’s parallel market.
Weeks ago, the naira traded as high as N475 to $1. However, on Thursday morning it was sold at N446 to $, proving that Nigeria’s monetary captain is bent on stabilizing the currency for the long haul. Recall that the CBN Governor had warned currency speculators and hoarders to stop manipulating Nigeria’s exchange rates. He also recommended that Nigerians should stop patronizing black market currency operators. According to him, the rates they are buying the dollar from the black market are unrealistic.
In addition, Nigeria’s central bank recently re-started the weekly dollar sales of $100 million for small businesses and individuals who are in genuine need of foreign exchange.
Philip Anegbe, Team Lead at CardinalStone Research, had recently told Nairametrics that the pressure on the naira would ease off soon. He said:
“I believe some of the recent pressures on FX is driven by speculators’ panic responses to weakness in dollar earnings, the decline in FX inflow through the I and E window, and suspension of dollar sales to BDCs (Bureau De Change operators).
“The imminent resumption of BDC activities is therefore likely to slightly ease Naira pressures in the parallel markets, but we believe the underlying medium-term fundamental concerns facing the Naira still remain.”
U.S dollar gains, America sanctions Chinese Airlines from flying into the U.S.
Nigerians hoping for transactions via the U.S dollar to countries like France would have the need to pay fewer dollars to fulfill such transactions.
The American dollar was up on Thursday morning based on global investors returning to the safe-haven asset as America-China tensions strengthened exponentially.
The American Dollar Index that checks the U.S dollar against a basket of other major currencies such as (Japanese yen, Euro, British pounds sterling, Swedish krona, Canadian dollar, Swiss France) was up 0.21% to 99.46 by 5:30 am Nigerian local time.
The U.S dollar index also helps to track the strength of the U.S dollar in correlation to the biggest forex trading partners around the world.
What it means: Nigerians hoping to meet foreign exchange debt or payment obligations, transactions via the U.S dollar to countries like France, United Kingdom, Australia, Germany Japan, would have the need to pay fewer dollars to fulfill such transactions.
The political fundamentals among these major powers turned ugly as the U.S government suspended Chinese airlines’ flight from flying into the U.S coming to effect from June 16 after the Chinese barred U.S carriers from re-entering China.
Relations between the two countries soured after China’s approval of the enactment of national security laws in Hong Kong and Macau last month.
Hong Kong’s Legislative Council passed a national anthem bill, a precursor to the national security laws, earlier in the day.
According to a recent poll conducted by Reuters, the majority of currency experts believe that there was an elevated risk that the US-China tensions will renew safe-haven bets in the next 6 months, meaning the dollar could resume its bullish momentum in the mid-term.
The report from the poll concluded that:
“More than 70% of 57 currency analysts said the risk was “high” that the U.S.-China standoff would renew bets in favor of safe-haven currencies over the next six months.
“International rates to borrow dollars on cross-currency basis swaps, which were extremely high in mid-March, have hit low levels, with the latest euro-dollar three-month swaps rate suggesting it has become more costly to borrow the euro instead.”
Lagos discloses strategies to best manage revenue in COVID-19 era, reduces land use charge
Dr. Rabiu Olowo disclosed strategies adopted by the state to keep its finances intact and optimize the revenue potentials
The Lagos State Government has announced strategies adopted by the state to keep its finances intact and optimize the revenue potentials in the face of the devastating effect of the coronavirus pandemic on the economy.
This was disclosed by the Lagos State Commissioner for Finance, Dr. Rabiu Olowo, while presenting the scorecard of his ministry at the ministerial press briefing to make Governor Babajide Sanwo-Olu’s first year in office at Alausa, Ikeja.
Dr. Olowo said that Lagos state achieved a 106% performance with respect to revenue against the budget in the first quarter of 2020.
He said that, although the direct impact of the pandemic has led to a drop in the State’s internally generated revenue and Federal Allocation, potential decline of Foreign Direct Investment (FDI) and increased pressure on income and purchasing power of Lagosians, the present administration had in a swift response re-ordered the 2020 Budget and re-prioritized it’s Capital Expenditure to reflect current realities.
The review of the 2020 budget assumptions was due to the devastating effects of the coronavirus pandemic and the dwindling oil prices.
The Commissioner explained that, apart from the re-ordering of the 2020 budget, the government has also initiated and adopted some other strategies to manage the impact of the pandemic.
These strategies include the principal and Interest moratorium for Small and Medium Scale Enterprises (SMEs) with loans from the Lagos State Employment Trust Fund (LSETF); Extension of Tax Filling; management and control of dedicated funds for COVID-19 response; timely payment of hazard allowance and arrangement of Special Peril Insurance for frontline health workers and volunteers.
Dr. Olowo also said that the government had succeeded in restructuring all existing internal loan facilities previously at the rate of 18%-20% to 14%, bringing about huge savings on the State’s loan repayments, thereby increasing cash flows.
On Revenue Optimization, the Commissioner revealed a number of initiatives put in place in the last one year by the present administration such as F.O.R.C.E (Focus On Revenue Creation Everywhere), an initiative conceived to monitor, review and drive innovative revenue performance whilst providing revenue assurance and the deployment of E-Tax platform for tax operations and administration matters, aimed at improving convenience in the payment of taxes to promote compliance.
He also pointed out that the automation of the operations of Lagos State Lottery Board is among the improvements that will guarantee sustainable revenue optimization to aid the finance infrastructural projects that will improve the lives of Lagosians, create jobs, and stimulate the economy through government spending.
On Land Use Charge (LUC), Dr. Olowo stated that the LUC reform is necessary to accommodate the agitations of Lagosians and to reduce the financial pressure on citizens.
According to him, “As we are aware, in 2018, there was an increase in LUC rate and at the same time a revaluation of property; this twin-shock had a sporadic increase in LUC assessment. The soon to be revealed reform will among other things, reverse the rate to pre-2018 rate”.
He explained that the intention of the State government is to keep economic activities going, without necessarily causing any untold hardship that will further aggravate the present financial hardship confronting all sectors of the State’s economy.
The finance commissioner also recalled that Governor Babajide Sanwo-Olu had in January this year, signed the Issuance of N100bn Series III Bond (the largest Bond Issuance ever raised by any Sub-National entity in the country) under its N500 Billion Bond Issuance Programme, to assist the State meet its huge infrastructure needs in critical sectors across Health, Environment and Roads, among others.