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Blurb

Tomatoes, pepper prices crash across major markets, as local rice continues to ease-off 

The prices of several food items once again witnessed a significant drop. According to the latest Household Survey, prices of tomatoes and pepper crashed significantly, while the prices of local rice, yam and other items continue to ease off.

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Tomatoes, pepper prices crash across major markets, as local rice continues to ease-off

It appears Nigerians are in for good times in the new year, as the latest Household Survey conducted by Nairametrics Research Team showed that the prices of some food items witnessed a significant drop.

The Survey revealed that while the prices of tomatoes and pepper crashed significantly, the prices of local rice, yam and other items also witnessed a drop but not as low as their vegetable counterpart.

For instance, a big basket of round shaped tomatoes currently sells for an average of N5,000 compared to N8,000 recorded in December, which represents a 37.5% decrease.

[READ MORE: ‘Stony rice’ flood Lagos Markets as prices drop across board)

Also, the price of a bag of pepper dropped again to N8,000 from N10,000 indicating a 20% decrease. Similarly, the price of locally made rice continues to ease off as it sells for an average of N20,750 from an initial average of N21,000 in December. Meanwhile, the price of imported rice rose slightly.

The survey covers major items that increased in price, items that witnessed reductions in prices, items that maintained initial prices, special items and market insight.

Prices of Tomatoes yam, Prices of major food items continue to rise in major markets as border closure remains 

Items that witnessed reductions in prices

  • The price of a big basket of tomatoes that was sold for an average of N8,000 in December, now sells within the range of N4,000 and N5,000, while medium-sized baskets of round shaped tomatoes now cost an average of N3,500, a 30% reduction from N5,000 recorded in December.
  • A large bag of pepper dropped to N8,000 from N10,000, while a small bag costs N6,000 compared to N8,000 reported in December.
  • Locally made rice brands (Mama’s Pride and Mama Gold) sell for an average of N20,750 from an initial average of N21,000 in December.
  • Also, the price of a big sized tuber of yam reduced significantly to an average of N813, a 5.8% decrease compared to N863 recorded in December.
  • A small sized tuber of yam also sells for an average of N600, a 2.04% reduction from an initial average of N613.
  • A 50kg bag of white Garri now sells for an average of N6,125 from N6,200 recorded two weeks ago.
  • A crate of eggs that was initially sold for an average of N1,000 now sells for an average of N975, representing a 2.5% reduction within two weeks.

border security Tomatoes Price

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Items that increased in price

  • The price of a 50kg bag of Caprice rose to an average of N26,167 from N25,750 recorded in December, representing 1.19% increase.
  • A 5-litre gallon of local vegetable oil costs an average of N2,325 compared to N2,250 being sold two weeks ago.
  • Refilling of a 12.5kg cylinder of gas increased to an average of N4,000 from an initial average of N3,975, indicating 0.63% increase.
  • Also, refilling a 5kg  gas cylinder now costs an average of N1,725 from N1,688 recorded a fortnight ago.

Items that maintained initial prices

  • A 50kg bag of Royal Stallion rice still costs an average of N27,000.
  • The prices of all brands of beans remain unchanged as a big bag of brown beans still costs an average of N23,500; a 50kg bag of white beans costs N21,250, and Oloyin costs an average of N13,000.
  • Big baskets of Irish Potatoes sell for an average of N22,000, while sweet potatoes of the same size cost N4,500.
  • The price of locally made palm oil still remains on the high since it nosedived in December at N2,125 (5 litres) and N11,125 (25 litres).

local, Rice will be abundant this Christmas, RFAN says

Special Items/markets

The prices of frozen foods dropped after the hike recorded following the closure of the country’s land border.  Slates of chicken lap and Orobo chicken now cost an average of N12,000 compared to N14,000 recorded in December. Also, a carton of full Chicken reduced to N13,000 from N14,000, while turkey now costs an average of N14,000.

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Mile 12 market recorded a massive influx of onions. Despite this, the price of a big bag of new onions increased to N26,000 from N24,000 recorded in December, while a bag of dry onions maintains an average of N28,000.

The price of a bag of yellow maize remains unchanged at an average of N14,000 at Mile 12 and Mushin markets. Also, a bag of white maize varied across the markets as it costs an average of N16,000 at Mile 12 market and N15,000 at Mushin market.

Market Insight

The significant drop witnessed in the price of round shaped tomatoes was attributed to massive harvest recorded in the farms due to the harmattan period in December. This was according to a major tomato seller interviewed at Mile 12 market.

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Jubril said, “Harmattan weather is actually favourable to the harvest of tomatoes, as we now witness an increase in the supply of tomatoes, hereby driving the price down in January.”

Lastly, several brands of locally-made rice continue to compete for market dominance, as Nairametrics Research Team discovered new brands of locally made rice across the various markets in Lagos state. Some new brands cited by the team include Solar rice, Moringa, Tiamin rice, BML rice, Confluence rice, Royal Naija and Rose classic rice.

ItemsBrandUnitMUSHIN (09/01/2020)DALEKO (09/01/2020)OYINGBO (09/01/2020)MILE 12 (09/01/2020)Average MUSHIN (19/12/2019)DALEKO (19/12/2019)OYINGBO (19/12/2019)MILE 12 (19/12/2019)Average
Bag of RiceBasmati5kgNANANANANANANANANANA
Bag of RiceMama Gold10kgNA4000NANA4000NANANANANA
Bag of RiceRoyal Stallion50Kg27000NA27000NA2700027000NA27000NA27000
Bag of RiceRice Master10kgNA4000NA45004250NANANANANA
Bag of RiceMama Gold50kg21000200002100021000207502150020500210002100021000
Bag of RiceCaprice50kg2650027000NA2500026166.66666666726500NANA2500025750
Bag of RiceMama's Pride50kg21000200002100021000207502150020500210002100021000
Bag of RiceFalcon25kgNANANANANANANANANANA
Bag of BeansOloyin50kg13000120001300014000130001300012000130001400013000
Bag of BeansWhite50kg22000200002200021000212502200020000220002100021250
Bag of BeansBrown>50kg24000220002400024000235002400022000240002400023500
Tuber of YamAbuja1 Big Size Tuber850800800800812.5900800900850862.5
Tuber of YamAbuja1 Medium Size Tuber650550600600600650550650600612.5
Carton of NoodlesIndomie305g (Belle full)2900290029002900290029002900290029002900
Carton of NoodlesIndomie200g (Hungry man)3200320032003200320032003200320032003200
Carton of NoodlesChikki100g2000220021002100210020002200210021002100
Carton of NoodlesMinimie70g1500150015001500150015001500150015001500
Carton of NoodlesGolden Penny70g1400140014001400140014001400140014001400
Bag of GarriIjebu80kg6000680070007000670060006800700070006700
Bag of GarriWhite50kg6000600065006000612560006000650063006200
Bag of GarriYellow50kg6000650065007000650060006500650070006500
Basket of PotatoSweetBig Basket4500450045004500
Basket of PotatoSweetSmall Basket700700700700
Basket of PotatosweetSmallest Basket200200200200
Basket of PotatoIrishBiggest Basket22000220002200022000
Basket of PotatoIrishMedium Basket2000200020002000
Basket of PotatoIrishSmall Basket1500150015001500
Packet of PastaGolden Penny500g4300440043004200430043004400430042004300
Packet of PastaDangote500g4000400040004100402540004000400041004025
Packet of PastaPower (1 pc)500g220220220200215220220220200215
Packet of PastaBonita (1 pc)500g220200200210207.5220200200210207.5
Gallon of Palm OilLocal5 Litres2200200023002000212522002000230020002125
Gallon of Palm OilLocal25 Litres11500110001150010500111251150011000115001050011125
Gallon of Vegetable OilLocal5 Litres2300230024002300232523002100240022002250
Gallon of Vegetable OilLocal25 Litres14000125001350012500131251400012500135001250013125
Gallon of Vegetable OilKings5 Litres3000300030003000300030003000300030003000
Gallon of Vegetable OilWesson5 Litres3900390039003900390039003900390039003900
Gallon of Vegetable OilMamador3.8 Litres25002450250024002462.525002450250024002462.5
Gallon of Vegetable OilPower3 Litres1800180018001800180018001800180018001800
Bunch of PlaintainPlaintain1 Big Bunch400400350400387.5400400350400387.5
Bag of FlourDangote50kg11200112001120011500112751120011200112001150011275
Bag of FlourHoney well50Kg11500112001120011200112751150011200112001120011275
Bag of FlourMama Gold50kg11500113001100011300112751150011300110001130011275
Bag of SugarDangote50kg3500320034003200332535003200340032003325
MilkPeak Powdered (Tin)400g12501200120012001212.512501200120012001212.5
Milkpeak Powdered(Tin)900g2400240024002300237524002400240023002375
MilkPeak milk (Refill)500g10501000100010001012.510501000100010001012.5
MilkDano Powdered (Tin)500g1000100010001000100010001000100010001000
MilkDano Powdered(Tin)900g2000200020002000200020002000200020002000
MilkDano (Refill)500g850800800800812.5850800800800812.5
MilkThreeCrown (Refill)380g720700750700717.5720700750700717.5
MilkLoya Powdered (Tin)400g10001000100010501012.510001000100010501012.5
MilkLoya (Refill)400g850800850800825850800850800825
MilkCoast (Refill)500g750750750750750750750750750750
Cocoa BeveragesMilo (Tin)500g10001100105010001037.510001100105010001037.5
Cocoa BeveragesMilo (Tin)900g2000210021002100207520002100210021002075
Cocoa BeveragesMilo Refill500g900900900900900900900900900900
Cocoa BeveragesBournvita Refill500g950900950900925950900950900925
Cocoa BeveragesBournvita (Plastic)900g2000200020002000200020002000200020002000
Cocoa BeveragesOvaltine Refill500g800800850850825800800850850825
Cocoa BeveragesOvaltine(Plastic)500g1100110010001100107511001100100011001075
CoffeeNescafe Classic50g600600600600600600600600600600
TeaLipton Yellow label52g310290300300300310290300300300
TeaTop tea52g300300300300300300300300300300
SugarSt' Loius Sugar(Cube) 500g400380400450407.5400380400450407.5
SugarGolden Penny Sugar (cube)500g350300350300325350300350300325
BreadVal-U1 loaf300300300300300300300300300300
BreadButterfield1 loaf300300300300300300300300300300
EggN/ACrate9501000950100097510001000100010001000
Bottled Water (Refill)CwayRefill600600650600612.5600600650600612.5
Juice5 Alive1 litre600550550600575600550550600575
JuiceChivita1 litre600550600550575600550600550575
GasRefilling12.5kg4000400040004000400040004000400039003975
GasRefilling5kg1700170018001700172517001650170017001687.5
TomatoesBig Basketround shaped5000500080008000
Medium Basketround shaped3500350050005000
Small Basketround shaped2500250035003500
Big BasketOval ShapedNANANANA
Small BasketOval ShapedNANANANA
FishKote (Horse Mackerel)1 kg500450470490477.5500450470490477.5
FishTitus (Mackerel)1 kg500450500490485500450500490485

About Nairametrics Food Price Survey

The Nairametrics Food Price Watch is a bi-weekly household market survey that covers the prices of major food items, with emphasis on five major markets in Lagos – Mushin Market, Daleko Market, Oyingbo Market, Idi-Oro Market and Mile 12.

Nairametrics Research team tracks, collates, maintains and manages a rich database of macro-economic and micro-economic data from Nigeria and Africa. Our analysts share some of the data collated on Nairametrics, using formats such as docs, tables and charts etc. The team also publishes research based analysis as articles on a regular basis.

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    Blurb

    Central Banks Digital Currencies (CBDCs) – a Gift or a Curse?

    Should we expect a CBN announcement on e-Naira soon?

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    China recently became the first MAJOR economy to create its Central Bank Digital Currency (CBDC).

    Specifically, China’s CBDC has gone from the testing phase to actual implementation. Such that the digital yuan is now ready for use in regular transactions. The expectations are that by the time athletes gather for the upcoming Winter Olympics, visitors to the country can pay for a wide range of goods and services using the Digital Yuan. (Think about using government digital currency to settle Hotel and Restaurant bills, Taxi rides, etc.).

    Across the world, Central Banks are racing to implement Central Bank Digital Currency (CBDC). The latest BIS 2021 survey identified that 86% of Central banks are engaged in developing a CBDC.

    In this article, we ask the question: What exactly are Central Bank Digital Currencies (CBDCs), and why are so many central banks are working towards their implementation?

    READ: Very few nations permitted to issue their Crypto – IMF

    What is a Central Bank Digital Currency (CBDC)?

    Specifically, CBDCs are legal tenders issued by a country’s central bank which will only ever be available in digital format AND will be acceptable from day one for payments of goods and services once implemented.

    Fund settlement will be facilitated by the issuing Central bank who may / may not choose to partner with an approved list of institutional counterparties. The Bank of International Settlements (BIS) has a more technical definition here.

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    READ: U.S Central Bank leader says no rush into crypto dollar

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    For the avoidance of doubt, CBDCs are neither the same as Electronic Funds Transfers (EFTs) nor are they Cryptocurrencies. Despite many similarities such as contactless settlement between counterparties, key differences are that Central Bank Digital currencies are legal tender AND represent a direct claim on a central bank by end-users.

    • So, if you are one of those people who likes to “spray” very crispy notes at Owambe… better be prepared as with digital currency, you will never see any physical notes to “spray”.

    READ: Leader of world’s most powerful central bank says Crypto unreliable for wealth preservation

    Which countries have CBDCs on the horizon?

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    The latest BIS 2021 survey of 65 central banks identified that 86% of Central Banks are engaged in developing digital currencies. Out of which 60% of central banks have begun research work whilst 14% of central banks are already in the pilot and proof of concept phase.

    For a list of countries at various stages of CBDCs implementation, you can click here and here or view the image below.

    READ: U.S. dollar share of global currency reserves rose to 61.9% in Q1 2020 – IMF

    How will the CBDCs work?

    For now, each Central Bank is determining its own scope and CBDC functionality as there is no standard global framework regarding infrastructure requirements and functionality scope (e.g. some central banks simply want to focus on domestic payments whilst others want both domestic and international payments focus).

    However, having said that, the underlying workflow will likely be similar across the world, in the sense that workflow will include solutions on distribution and utilization.

    READ: Computers might steal Satoshi Nakamoto’s Bitcoin fortune

    • Distribution: Central Banks will create the digital currency and permit a list of commercial banks to access to the central payment network for onward distribution to end customers. Given that CBDCs are digital, the Central Banks will be able to track exactly who is holding how much of their currency and how exactly their currency is being spent.
    • Utilization: End-users will have a tool (e.g. digital wallets) to help them be aware of their CBDCs balances. Further, these wallets can be presented (i.e. scanned) at participating locations for transaction settlements (think QR codes on a phone app).

    In other words, as a CBDC end-user, you only need access to the internet and electricity for spending. Intermediaries such as SWIFT will be bypassed. (You can read more about how the digital yuan will work here).

    READ: Former Access Bank CEO, Aigboje Aig-Imoukhuede, launches new book, Leaving the Tarmac: Buying a Bank in Africa

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    Why are so many Central Banks rushing into CBDCs?

    Firstly, faster cross-border trade settlements / International Trade ambitions:

    The widely accepted use of CBDCs will facilitate faster cross-border settlements between participating counterparties. Regardless of your location, there will be less need to convert from local currencies into reserve currencies such as USD, GBP, EUR, and vice versa via financial intermediaries.

    Additionally, for a country such as China which has long sought to expand its global reach in international trade, the digital yuan provides mouth-watering opportunities.

    • As a simple example, for international trade facilitation, end-users of smartphones built by Chinese-owned phone companies can potentially be enabled to access the Digital-Yuan, and that digital yuan can be spent with Chinese-owned firms across the world. These payment transactions can take place on the People’s Bank of China (PBOC) controlled network and bypass any existing financial intermediary (you can read more about digital yuan opportunities here).

    Secondly, from a domestic perspective, CBDCs will be a potential game-changing macro-economic tool.

    For countries not interested in global trade dominance, digital currencies offer Central banks an exciting opportunity to transform monetary policies. Specifically with regards to financial relationships and money transmission mechanisms (too much grammar but we have all heard of stimulus and intervention funds!!)

    Under the current state, when a Central Bank wants to increase or decrease money going into the hands of consumers, it does so via a range of tools (i.e. alter interest rates, set reserve ratios, buy/sell short-term instruments, etc.). Unfortunately, this current approach has some limitations which include:

    • Transmission mechanisms: Despite all the tools available to Central Banks, they ultimately rely on financial intermediaries (i.e. banks). Existing monetary policy tools simply aim to influence commercial banks to increase or decrease the amount of money/funds available for onward lending to end consumers.
    • These tools, as well as, associated end-user responses may not often work as fast as Central Banks would like. As an example, most bank customers will tell you that loan application processes can be extremely cumbersome and sometimes subjective.
    • Also, think about folks in remote areas who truly need credit for their business expansion but are not financially included or are not able to complete the plethora of loan application forms or are missing IDs for authentication, etc.
    • All these limitations create latency challenges for Central Banks looking to influence macroeconomic indicators quickly.
    • Monitoring: Under the current approach, it is cumbersome for Central Banks to continually track existing money in circulation and utilization purposes. Think about CBN intervention funds and how difficult it is for the CBN to know exactly how its intervention funds are being spent once the funds are disbursed to applicants.

    Fortunately, with digital currencies, given that they leave digital footprints, Economic Surveillance is facilitated (i.e. Central banks can monitor exactly who owns how much and what it is being used for); arguably giving Central Banks an opportunity to better direct funds to parts of the economy requiring support.

    Thirdly, Technology advances driving the growth of the Digital Economy and lowering operating cost dynamics.

    • The unrelenting growth of the Digital Economy: The use of physical cash continues to decline driven by the exponential growth of contactless services such as e-commerce (Amazon, Alibaba, eBay), contactless interaction (Zoom, Facebook-Portal, Google-Nest), etc.
    • Global eCommerce is now projected to be over 25% of total retail sales across the world and the US estimates that Digital Economy accounted for 6.9% of 2017 GDP which made it the seventh (7th) largest component of GDP and still growing.
    • Given that no one needs physical cash for transactions in the digital economy, Central banks are warming up to the need to implement CBDCs for transactions in this emerging digital economy.
    • Changing unit cost dynamics: From a central bank perspective, there are significant costs incurred for maintaining oversight of existing payments and settlement systems. Furthermore, there are additional costs for creating cash, transporting, storing, and securing existing stock of physical cash. As existing systems become outdated and population growth continues apace, there will be an inflection point for when it will simply be cheaper to create digital currencies to drive financial inclusion. Especially as cloud computing processing capacity continues to expand at a cheaper unit cost.

    Are there risks/issues to be concerned about with Digital Currencies?

    The answer is yes, whilst there are benefits, there are also some risks and concerns such as the risk of excessive Economic Surveillance, Privacy concerns, ease of implementing, and Negative Interest (aka financial wealth tax).

    Economic Surveillance can easily be a double-edged sword especially in the hands of an authoritarian regime, as an increased level of economic oversight can easily lead to financial repression or targeting opponents. However, just like with CCTVs, the risk of misuse cannot be a unilateral reason to discredit the opportunities available with CBDCs. (You can read more about concerns here)

    So, what about Nigeria?

    The Central Bank of Nigeria (CBN) was not included in the BIS 2021 survey, additionally, the CBN has not formally outlined its position on whether it plans to implement a Central Bank Digital Currency in the future (e-Naira).

    However in February 2021, (as part of its explanation of its regulatory directive on Cryptocurrencies), the CBN acknowledged the emerging trend of Central Banks’ ability to issue legal tender digital currencies.

    Nairametrics founder, Ugodre mentioned on his Twitter Spaces show “OnTheMoney” that a senior official at the CBN informed him that the Apex bank was seriously considering digital currency and had put together a team to explore its possibilities.

    So, should Nigerians expect an e-Naira soon?

    Firstly, with regards to innovation, the Nigerian payments landscape continues to evolve rapidly as the CBN drives innovation as part of its National Financial Inclusion Strategy (NFIS). Thus far, this strategy has resulted in the deployment of new products in the Nigerian payments space such as Money Market Operators (MMOs), Payment Solutions Service Providers (PSSPs), Agent/Super Agents, Payment Service Banks (PSBs), etc.

    Furthermore, the CBN is keen to leverage its regulatory sandbox for more innovations and has very recently in 2021 issued new guidelines on open banking, as well as, QR codes.

    Consequently, having a digital Naira should not be ruled out as an additional tool to drive financial inclusion in Nigeria,

    Secondly, based on industry statistics, Nigerians are quick to adopt technology that facilitates convenience at minimal cost to end-users.

    • Specifically, CBN payments statistics reports show that the use of cash and ATMs in Nigeria continues to decline rapidly. The latest annual report shows Cash/ATM usage has declined from 18% of transactions in 2015 to 6% of transactions in 2019. In other words, 93% of activity was done electronically (across platforms NIP, REMITA, MMO, etc).
    • Furthermore, NCC reports show high penetration rates for mobile technology with over 195 million active mobile phone subscribers (95% penetration) and 150 million internet subscribers (73% penetration rate).

    These reports lend credence to the perception that Nigerians are quick adopters of new technology where the technology enhances convenience at minimal cost to end-users.

    Consequently, a digital Naira will likely have high adoption rates to the extent that end-users do not expect to incur additional onerous charges.

    Finally, from a CBN perspective, we already know that the APEX bank prefers direct interventions as part of its macroeconomic toolkit. Arguably having a digital Naira (e-Naira) allows the CBN to better facilitate direct transmission to target beneficiaries in key sectors, whilst monitoring the use of the funds disbursed, and expedite recovery when funds are due for repayment.

    So, should we expect a CBN announcement on e-Naira soon? Your guess is as good as mine.

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    Blurb

    Why SEC should support democratization of sale of foreign securities

    In the spirit of progressive engagement and dialogue, many voices now suggest that the SEC take a fresh look at its latest position.

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    The directive of the Nigerian Securities and Exchange Commission (SEC), issued 8th of April 2021, has been met with consternation and a straightforward (but hopefully simplistic) interpretation that; “the government is out to stifle innovators, again.”

    These perspectives aren’t unfounded, as innovators of all shades have taken a heavy beating lately due to a number of direct government policies or interpretations of these policies – irrespective of how well-intentioned these policies may be. On the contrary, micro-investment platforms deserve a fair shot within Nigeria’s capital market.

    This is especially true considering that the recent regulatory fervour coincides with a period where the innovation ecosystem is recording new milestones and gaining traction, solving problems for users in all walks of life, democratizing wealth creation, and creating high-value jobs, all of which Nigeria desperately needs.

    READ: Crypto market surges above $2 trillion, as Bitcoin stages a huge comeback above $60,500

    In the last six months alone, Nigerian startups have gained the confidence of some of the best investors locally and globally, leading to never-before-seen innovations, acquisitions, and investments into the economy. This promotes interest in the Nigerian innovation ecosystem from foreign market actors and increases its relevance as a high-value job creator. Some now wonder if our regulators want more or less of this positive momentum.

    This latest notice from the SEC warned Capital Market Operators (CMOs) to desist from selling securities not quoted or registered, as only registered securities in Nigeria can be issued, sold, or offered for sale. Ostensibly, the directive requires CMOs registered with the SEC to offer only securities listed on any exchange in Nigeria to the public.

    READ: XRP posts a big bang, as legal tussle with SEC lingers

    The challenge here is that High Net worth Nigerians (HNIs) have always had access to foreign securities offered or acquired through registered CMOs for the apparent benefit of the upside available in markets such as the United States. This should be democratized to allow Nigerians with smaller incomes to have access to valuable global stocks within fair rules, and this is what the likes of Trove, Chaka, Bamboo, and Risevest have done. In fact, this democratization should be applauded as one of the outputs of a thriving innovation ecosystem that provides practical
    palliatives for the stifling inflation and erosion of value we have all experienced as Nigerians.

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    After all, what is suitable for Dangote should also be good for Musa, who earns NGN50,000.00, and thanks to any of the apps mentioned above, can today invest in shares of Dangote sugar while also adding a quarter of a Google stock to his portfolio every month. This “magic” of innovation is a poverty alleviator that should be encouraged and nurtured while ensuring that the public is protected from any harmful financial practices.

    READ: Flour Mills shares surge by 6.9%, lifting the miller’s capitalization by N8.2 billion

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    It is important to acknowledge at this point that the SEC has been a positively progressive regulator, generally engaging its public fairly. The issuance of the guidelines for crowdfunding and accommodation of FinTechs within the capital market was encompassing and engaged stakeholders of all hues. This should be commended. The SEC’s position classifying crypto as an asset class is also fair, refreshing, and proactive. We need more of this and not less.

    At a time when we are exploring how the Nigerian capital markets can become a viable option for listing tech startups, this latest body language of the SEC, and the Nigerian government as a whole can be further misinterpreted.

    In the spirit of progressive engagement and dialogue, many voices now suggest that the SEC take a fresh look at its latest position, as these innovations are widespread, publicly accepted, and valuable. Furthermore, these innovations support some of the registered and regulated CMOs by offering white-label solutions that are accelerating the ability of these legacy CMOs to better serve their HNI customer base, with local and foreign securities. The emergence of these innovative micro-investing platforms has triggered investments into local Nigerian securities in multiple folds. The volumes these innovative platforms channel into Nigerian stocks are arguably the most significant development in Nigeria’s capital market in a decade.

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    By virtue of the existence of these innovators, their combined strength has introduced over 150,000 new market participants who are primarily millennials: a majority of whom purchased their first set of stocks through these platforms. Before now, they had no active interaction with the capital market. These new entrants are now trading in excess of NGN10,000,000,000 (Ten Billion Naira) monthly through these apps. Note that a good chunk of the highlighted trade volume is routed through local CMOs to purchase Nigerian securities on the Nigerian Stock Exchange(NSE). Long term, these innovations would also serve as a channel to offer Nigerian guarantees to a global audience which would be a massive positive for the economy.

    The quest for diversification of portfolios to include foreign securities can only be good overall. It underscores the global trend in cross-border trade in securities as disintermediated by technology and the need to enhance portfolios’ value globally.

    Rather than curbing the practice of offering Nigerian and international stocks in a basket, this micro-investing trend should be allowed to flourish within reasonable regulatory frameworks. These platforms make investments attractive, easier, and affordable. Micro investing will curb the menace of pyramid and Ponzi schemes while introducing a new generation into Nigeria’s securities market in parallel with their appetite for global securities. Regardless of what we decide, the world has gotten smaller, and information that enables people to easily seek the best economic outcomes is readily available. While other nations gain from micro-investing, shouldn’t our people do too?

    The ultimate beneficiary of increased wealth for Nigerians is the Nigerian economy. Rather than shutting Nigerians off from the rest of the world, we should be accelerating global access for our millions of people; hence this is the time for dialogue, not shutdowns.

     

    Kola Aina is the Founding Partner at Ventures Platform and writes from Lagos, Nigeria.

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