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These industries drove business activities in September

The development indicates recovery as manufacturers continue to benefit from the ease of the lockdown.



Nigeria’s manufacturing sector contracts for 5th consecutive month – CBN , To test FX market, CBN pumps $50 million, CBN issues guidelines to Finance Institutions on establishment of Subsidiaries and SPVs, CBN injects $2.63 billion to defend naira in one month, CBN’s COVID-19 N50 billion targeted credit facility, CBN’s heterodox policies buoys credit growth, These industries drove business activities in September, Credit to Nigerian economy falls to N38.67 trillion as private stagnates at N30 trillion

Despite the fact that the Central Bank of Nigeria (CBN) declared last Wednesday that the nation’s Manufacturing Purchasing Managers’ Index (PMI) contracted at 46.9 index points, some industries still drove business activities in September.

The industries are Electrical equipment, up from 33.3 index points in August to 66.7 index points; Transportation equipment from 53.8 to 58.1; and Paper products from 44.4 to 50 within the same period.

Though, the Cement industry and non-metalic mineral products dropped from 64.4 to 58.1 and 66.0 to 50.6 index points respectively, the sub-sectors still contributed to the business activities recorded in September.

This was disclosed by the apex bank in its September PMI report released on Wednesday.

Nairametrics had earlier reported that manufacturing PMI for August stood at 48.5 index points, indicating contraction in the sector for the fourth consecutive month.

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READ: Can a lower MPR rate really prevent this recession?

Also, out of the 14 surveyed subsectors, 5 sub-sectors reported expansion (above 50 index points thresholds), while the others contracted.

Meanwhile, the production level index for the manufacturing sector indicated contraction in September 2020 for the fifth consecutive month, as well as Employment level and Raw material inventories.

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However, the manufacturing supplier delivery time index stood at 53.5 points in September 2020, indicating faster supplier delivery time for the fifth time.

(READ  MORE: Manufacturing: Momentum in activities slows in January)

Is the nation coming out of the woods?

Though CBN revealed that only 4 sub-sectors reported expansion in September, contrary to the 6 sub-sectors recorded in August, it is imperative to note that this is an improvement when compared to manufacturing activities in May and June, or the performance in July which saw 12 sub-sectors decline, with one reporting no change, while one expanded.

The impressive performance of cement and other sub-sectors, according to the manufacturing PMI report, is attributable to the expansion in production, new orders, employment, and raw materials’ inventories.

READ: CBN’s Manufacturing PMI up to 58.2 points in October 

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A cursory look at the financials of key players in the industrial goods sector showed that despite the increased cost of higher energy pricing and adverse COVID-19 impacts on transport and naira devaluation, key cement manufacturers still recorded increased topline, driven by demand surge from domestic cement sales.

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Back story: Nairametrics had reported on Wednesday that 9 subsectors reported contraction (below 50% threshold) in the reviewed month in the following order:

  • Petroleum & coal products
  • Primary metal
  • Furniture & related products
  • Printing & related support activities
  • Food, beverage & tobacco products
  • Textile, apparel, leather & footwear
  • Chemical & pharmaceutical products
  • Fabricated metal products and
  • Plastics & rubber products

READ: Can a lower MPR rate really prevent this recession?

The Non-manufacturing sector PMI stood at 41.9 points in September 2020, indicating contraction in nonmanufacturing PMI, for the sixth consecutive month.

In all, the development indicates recovery as manufacturers continue to benefit from the ease of the lockdown.

However, conditions within the domestic economy remain relatively tight, reflecting continued uncertainties as investors remain cautious of the lingering risk of the pandemic.

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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Why exchange rate disparity remains high despite CBN’s intervention

Despite the intervention measures by the CBN, why does the disparity between the official and black-market rates remain high?



The Nigerian economy has been faced with serious foreign exchange crisis since the first quarter of the year, with severe pressure on the nation’s foreign exchange market and external reserve. The local currency is under the grip of tough external pressure, characterized by internal foreign exchange shortages and consistently high black-market rates. This has led to a high disparity between the official exchange rate and black-market rate.

The undesired situation is attributable to the crash in crude oil prices, triggered by the coronavirus pandemic that has impacted negatively on the global economy. The plunging oil prices have increased the pressure on the naira, as about 90% of Nigeria’s foreign exchange earnings is from crude oil exports.

Bank of Africa analysts, Rukayat Yusuf and Andrew MacFarlane, in its Global Bank’s latest report on Nigeria’s forex unification and shortages, said that Nigeria’s current foreign exchange pressure is likely to gain momentum in 2021, as the economy and imports recovery will trigger a future adjustment of the nation’s currency to N430/$1 next year.

Recall that despite several initial denials by the Central Bank of Nigeria (CBN), in response to the devastating impact of the coronavirus pandemic and oil shocks; the apex bank on March 20, 2020, devalued the exchange rate from N307/$1 to N360/$1. This was followed with the suspension of sales of foreign currency to the Bureau De Change operators on March 27, 2020, in the face of depleting external reserves.

In a move viewed as attempts by the CBN to unify the exchange rate, the apex bank further devalued the naira on August 6, 2020, from N360/$1 to N380/$1 on the official window and closed the gap with the parallel market – which is the unofficial market. The huge exchange rate gap has made round-tripping very lucrative and encouraged hoarding amongst forex dealers.

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Goldman Sachs analysts had earlier predicted that the exchange rate will dip to N500 to $1 in the face of rising inflation and declining external reserves. The wide gap between the official and unofficial rates is seen by analysts as an indication of increasing pressure on the forex market and dollar shortages, which the CBN is trying to contain with several policies targeted at reducing the demand for the greenback, conserve the scarce foreign exchange, and help boost dollar supply in the market.

Some of these policies include:

  • Resumption of sales of dollars to the Bureau De Change Operators and mandating them to sell at not more than N386 to a dollar.
  • Removal of third parties from buying forex routed through Form M.
  • Clampdown on exporters who refuse to repatriate their export proceeds to Nigeria.
  • Restriction on forex allocation to importers of maize by the Deposit Money Banks (DMBs).

However, despite some of these measures by the CBN, the disparity between the official and black-market rates still remain as high as almost N70. So, the question is why the huge gap? Especially, with the resumption of dollar sales to the BDCs.

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Some analysts and stakeholders have complained that the measures are hurting business operations and pushed more demands to the parallel market. They believe it has encouraged hoarding and speculations to continue thriving; thereby, making it difficult to reduce the black-market rate.

What they are saying

While expressing his view on why the exchange rate disparity is still high, despite the resumption of dollar sales to BDCs; the President of Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadebe, said the impact of the resumption of sales of foreign exchange to BDCs is expected to be gradual.

Gwadebe said, “Firstly, the impact is gradual. You know there was a time when the dollar reached N500/$1. N474, N480 to a dollar was when there were other interventions in the market. As soon as the news of the resumption of sales to Bureau De Change broke, we witnessed the dollar going for as low as N420, N430 to a dollar. However, after taking off, the rate is now N460, which is the parallel market rate.

“Don’t forget there is a huge backlog and every other buyer – authorized or unauthorized, queued in the parallel market. So, the pressure is on the parallel market from manufacturers and existing investors. In fact, the most unfortunate behavior is hoarding and speculation.’’

The ABCON President noted that people hoard and speculate when liquidity is low in the retail sector of the market. He pointed out that, although the liquidity is gradual, the rebound is expected to continue gradually.

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Gwadebe said the role of the BDCs is to provide liquidity in the retail end of the market, which is what the CBN is empowering the BDCs to do and a key reason the rate has improved from the record high of about N480/$1.

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He noted that the resumption of sales of dollars to BDCs is discouraging frivolous demands, adding liquidity into the system, aiding return of confidence and stability in the market.

He reiterated that the BDCs remain the only threat to hoarding and speculation, while expressing satisfaction that the reserve is growing and will increase the confidence of investors.

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Crypto bounty: $1 million up for you

Harvest Finance has increased its bounty from $100,000 to $1 million for details of an unknown cyber hacker.



Fast-growing decentralized finance (DeFi) protocol, Harvest Finance, has increased its bounty from $100,000 to $1 million for details of an unknown cyber hacker – leading to the return of $24 million in siphoned funds taken recently.

What you should know

According to tweets seen on its official Twitter handle – Harvest Finance anonymous, Harvest is offering the bounty of $1M for “tracking down” the attacker and returning the funds.

At the moment, the attacker is known to:

  • understand flashloans
  • understand arbitrage and trading
  • understand the curve internal code
  • understand renBTC
  • understand opsec

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Why it’s happening

Harvest Finance’s bounty is coming on the back burner when it observed its protocol was apparently hacked, with the cyber hacker reportedly exploiting about $24 million from Harvest Finance pools and swapping for renBTC (rBTC).

  • Hence, Harvest Finance affirmed the hack, stating the protocol is “working actively on the issue of mitigating the economic attack on the Stablecoin and BTC pools.”
  • To protect users, we’ve pulled y pool and btc curve strategy funds to the vault.
  • At this point, all Stablecoin and BTC funds are in the vault (not deployed in a strategy). No other pools are affected.
  • To be specific: to protect users, 100% of Stablecoin and BTC curve strategy funds have been withdrawn from the strategy to the vault.

About Harvest

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Harvest, a new (DeFi) platform created on the Kava blockchain, plans to launch a product that will enable users to earn more on Bitcoin, XRP, Binance coin, and two other cryptos.

Harvest offers crypto users the platform to supply crypto assets for lending, and earn interest on them, as well as, use their crypto as security for borrowing; this is according to Brian Kerr, Kava’s co-founder and Chief Executive.

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Economy & Politics

WTO: US opposing consensus to declare Okonjo-Iweala as DG – Foreign Affairs Ministry

The Ministry announced Okonjo-Iweala has secured the support of the majority of the member nations but is being opposed by the US.



Ngozi Okonjo Iweala, World Bank, Davos, World Economic Forum, WTO accepts nomination of Okonjo-Iweala as DG despite opposition from Egypt,WTO:  Happy to be in final rounds of DG Campaign- Okonjo Iweala

The Ministry of Foreign Affairs announced in a statement that Nigeria’s candidate for Director-General of the World Trade Organization, Dr. Ngozi Okonjo-Iweala, has secured the support of the majority of the member-nations – but is yet to be declared and returned as the winner, as the United States is opposing the consensus.

This was announced in a statement by the Ministry on Thursday evening to inform the nation that the third and final round of the selection process of the WTO DG position was formally announced on Wednesday 28th October 2020.

What you should know

Nairametrics reported this week that Dr. Ngozi Okonjo-Iweala is close to being appointed as the new Director-General of the World Trade Organisation (WTO).

A group of ambassadors also known as “troika” had proposed Okonjo-Iweala to lead the WTO giving her a clear path to becoming the first woman to head the WTO since it started 25 years ago. The three ambassadors are thought to wield significant powers in determining what is a very “intricate and opaque” process.

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The U.S President, Donald Trump blocked the appointment of Ngozi Okonjo-Iweala as the WTO’s next DG on Wednesday, citing support for South Korea’s Yoo Myung-hee.

Dr. Okonjo-Iweala stated that she is positive despite hiccups in her bid to emerge as the next DG of the organization. She said, “Happy for the success & continued progress of our WTO DG bid. Very humbled to be declared the candidate with the largest, broadest support among members and most likely to attract consensus. We move on to the next step on Nov 9, despite hiccups. We’re keeping the positivity going.”

The Ministry of Foreign Affairs said in its statement that, “Dr. Ngozi Okonjo-Iweala has secured the support of the majority of the member countries, but is yet to be declared and returned the winner. This is because apart from winning the election, all 164 Member States of WTO were expected to adopt the winner by consensus. In accordance with the rile of the procedure of the WTO.”

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It is important to highlight that Dr. Okonjo-Iweala has secured cross-regional backing with only the United States opposing the consensus.

The Ministry added that a meeting would be held by the General Council of the WTO on the 9th of November 2020 to declare a final decision on the election process.

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