There are two developments that can potentially shape the fortunes of the international trade dynamics in Nigeria in 2021, the emergence of Dr.Ngozi Okonjo-Iweala as the DG of the World Trade Organization (WTO), as well as the ratification of the AfCFTA agreement, expected to take off in January 2021.
This was disclosed in the special report of SB Morgen captioned “The Year Ahead, Light At the End of the Tunnel, What to Expect” in 2021, published by SBM Intel – an Africa focused geopolitical research and strategic communications consulting firm principally involved in addressing the critical need for political, social, economic and market data, and big data analytics.
According to the report…
- Okonjo-Iweala’s candidacy for WTO DG has received broad support across Africa, the EU, Latin America and Japan, but has faced pushback from the United States government.
- However, with a transition to the Biden-led US administration in the coming year, consensus will likely be reached for Okonjo Iweala’s appointment. Nigeria’s nominee landing the position would give the country’s international reputation a much-needed boost.
- The ratification of the AfCFTA agreement would signal a more positive stance towards free trade, though this appears to be an overly optimistic view.
- Currently, the Nigeria Customs Service maintains a 45-item list of banned imports, despite the country’s membership of the WTO and the implementation of the ECOWAS Common External Tariff. The list is unlikely to get shorter anytime soon. However, reopening the land borders would at least demonstrate a credible commitment to the letter and spirit of the free trade agreement.
Other key highlights of the report
- The Nigerian government will continue to struggle in 2021 due to poor revenue sources caused by slow global economic recovery from the coronavirus pandemic, which has kept oil prices low. The high cost of debt servicing will continue to eat away whatever revenue that comes in as non-oil revenue will be nowhere near enough to adequately cover-up.
- The desperation to drive investment into the country and unlock growth in the oil sector will make it highly imperative to pass the Petroleum Industry Bill (PIB) most likely in the second half of 2021. So far, so good, there have not been any strong oppositions to the draft from the industry, trade unions or any organized groups and interestingly, the National Assembly (especially, the senate) is very much aligned and allied with the Executive – indicating a good signal and omen in passing the bill, thus breaking a 13-year deadlock.
- With the available statistics, Nigeria is very likely to return to positive growth by Q4, 2021, thus exiting the recession. This development would be made possible and likely driven by slightly higher oil prices, as well as a reopening of borders which will reverse the decline of the trade sector, one of the largest employers of labour in the country.
- As Nigeria lacks the financial muscle to launch the economy back to the fast lane of growth, one would expect that productivity will continue to decline with resulting job losses in 2021.
- The CBN’s interventionist stance will accelerate in 2021 as the Presidency and Finance Minister have ceded their fiscal policy responsibilities to the CBN. The CBN is considering tampering with the MPR and CRR as well as the LDR. This is expected to ramp up extra-monetary interventions and expand its regulatory oversight over banking and other sectors closely tied to finance. No matter how the pendulum swings, the outcome will likely be sluggish and a painful economic growth.
- The impact of the AfCFTA will not be determined by government policies alone but also by how much the private sector leverages the abundant opportunities available in the free trade area in Africa.
- For Micro, Small and Medium Enterprises (MSMEs) – the core drivers of the Nigerian economy, policy uncertainty has remained an important determining factor in their decision to engage in international trade.
- MSMEs tend to have a lower capacity to accommodate risks because even small adverse events can lead to business failure.
- Considering that MSMEs are quite responsible for almost half of Nigeria’s Gross Domestic Product (GDP), any potential gains from the AfCFTA may not materialize unless the government clearly states and maintains a streamlined, consistent position in favour of free trade.
- According to the report, the borders may not be opened on 1st January 2021 as per the AfCFTA treaty, which would inevitably put pressure on Nigeria from both IMF and World Bank as part of the conditions for some of the loans granted her.
Lagos State seeks investors in aquatic and livestock agriculture value chain
The Commissioner revealed that the scheme was in line with the State’s five-year strategic agriculture roadmap.
The Lagos State Government announced it is seeking private sector collaboration for Agriculture sector value chain development in livestock feed mills, fisheries and red meat.
This was disclosed by the State Commissioner for Agriculture, Ms Abisola Olusanya, in a statement on Sunday in Lagos.
The Commissioner revealed that the scheme was in line with the State’s five-year strategic agriculture roadmap, as the State identified the 3 main sectors for value chain disruption.
She also added that investment in the sectors would also develop jobs for the industry and boost the State’s GDP growth, through Private Sector collaboration as Lagos residents consume over N5 trillion worth of food annually.
“The objective is to stimulate and encourage more public-private partnerships in the three value chains,” she said.
“When you consider this pool of transactions happening in Lagos, it shows that we are the market. For instance, we demand over 400,000 metric tons of fish on an annual basis.
“But our fishermen and our aquaculture farmers are only able to produce just about 174,000 metric tons with deficit of 200,000 metric tons,” she added.
She also disclosed that the state has 9,000 artisanal fishermen, and bringing more youths into the space will increase the level of fish and seafood being harnessed from our water bodies. Looking at the transactional value on an annual basis, the fisheries sector is worth well over N120billion according to her.
In case you missed it: Nigeria exported agricultural products worth N321.5 billion in 2020, representing a 19.16% increase when compared to N269.8 billion recorded in 2019 and a 6.27% increase compared to N302.28 billion recorded in 2018.
#DigitalSkillsTraining: FG announces conclusion of selection process
Only successful applicants that are contacted by the Ministry are to report at the training venue.
The Federal Government through the Ministry of Youth and Sports disclosed that the selection process for the upcoming Digital Skills Training has been concluded for the #DigitalSkillsTraining from April 11th to 30th, 2021.
This was disclosed in a statement by the Ministry of Youth and Sport on Sunday evening.
“The Federal Ministry of Youth and Sports Development wishes to inform the general public and all Nigerian Youths that the selection process has been concluded for successful applicants for the #DigitalSkillsTraining scheduled for April 11 to 30, 2021,” the statement said.
The Ministry added that only successful applicants that were contacted by the Ministry are to report at the training venue. Those who were not successful but arrive at the training would not be admitted.
“Upcoming #DigitalSkillsTraining Programmes of the Ministry will be widely publicized on youthandsport.gov.ng , on : noya.ng and on the Ministry’s social media handles,” the statement added.
What you should know
Recall that Nairametrics reported in November 2020, that the Ministry of Youths and Sports Development announced it will scale up its digital skills training to cover 500,000 youths across the country after securing funding under the COVID-19 stimulus budget.
Nairametrics | Company Earnings
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- Union Homes REIT proposes final dividend worth N465.03 million for shareholders.
- GT Bank Plc holds FY 2020 investors presentation.
- Cornerstone Insurance Plc notifies stakeholders of late submission of financial statements.
- NSE approves delisting of 11 Plc shares.
- Berger Paints Nigeria Plc reports a 67% decline in Profits in FY 2020.