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Cash scarcity caused 30% dip in cement demand— Manufacturers

Published

2 weeks ago

September 16, 2023

Nigerian manufacturers have revealed that demand for cement dropped by 30 per cent in the country during the period of its cash scarcity earlier this year.

The Manufacturers Association of Nigeria (MAN) in a ‘Special Focus’ of its Manufacturing CEOs Confidence Index, said the lack of access to cash during this period led to a 20 per cent drop in sale of consumer goods.

In its report, MAN insisted that the Central Bank of Nigeria did not need to aggressively pursue policy changes or hasten the country’s transition to a cashless economy.

With sale of consumer goods and cement falling by around 20% and 30%, respectively, the protracted crisis nearly bankrupted manufacturing enterprises.

Nigeria’s Central Bank, in November 2022, introduced new designs of the N200, N500, and N1,000 notes in an attempt to bring currency from outside the banking system into the banking system, thereby making monetary policy more effective in combating inflation. But the situation boomeranged with the shortage of cash and alleged hoarding of the old notes and unavailability of the new ones.

The report also highlighted the need for government intervention to stabilise the currency and create a more favourable business environment. It suggested measures such as providing access to affordable credit, improving infrastructure, and implementing policies that promote local production.

These steps would not only help manufacturing companies recover but also stimulate economic growth and job creation. It is crucial for policymakers to address these issues promptly to prevent further damage to the manufacturing sector and ensure a sustainable recovery.

The report read in part, “The substantial reduction in money velocity left opportunity for speculation and ignited the creation of a naira black market that compounded the woes of manufacturers already plagued by insufficient forex.

“The naira scarcity clearly wiped out numerous small and medium manufacturing businesses whose transactions were cash-based, especially those within the agro-allied industries who regularly deal with local farmers in remote towns where no formal banking is in sight. More unfortunately, the exorbitant POS charges on such cash constrained the operations of resilient manufacturing SMEs and worsened their cost of doing business.” the report concludes.

Related Topics:Cash scarcity Featured Nigeria

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Despite protests, TotalEnergies gets South Africa’s approval for offshore drilling

Published

4 hours ago

October 2, 2023

Ifeoluwa Dada

After turning down an appeal from more than a dozen people and lobbying organisations, South Africa’s environment ministry has approved TotalEnergies’ plans to drill for natural gas and oil offshore.

There have been a string of lawsuits seeking to stop energy companies from exploring new offshore discoveries at the foot of Africa, with a specific appeal to stop TotalEnergies from drilling in Blocks 5/6/7 off the coast of Cape Town.

The area in question is 10,000 square kilometres in size and is located offshore roughly between Cape Town and Cape Agulhas. It is 170 kilometres from the coast at its farthest point and 60 kilometres from the coast at its closest point. The water depth ranges from 700 metres to 3,200 metres.

Natural gas and crude oil production are quite limited in South Africa, and consequently, the bulk of South Africa’s crude oil is imported, as the country largely counts on its large coal resources.

The request is for the ministry to revoke the environmental authorization given to the French energy company by the Department of Mineral Resources and Energy in April, citing issues like marine noise, oil spills, climate change, and inadequate public consultation. But environment minister, Barbara Creecy on Monday dismissed the concerns in a 144-page ruling.

“I am therefore satisfied that the impacts of noise and light have been adequately assessed and mitigated to ensure low impacts on the receiving environment. As such this ground of appeal is dismissed,” Creecy said in the ruling.

VenturesNow

Nigeria sets $5bn investment target for its startups

Published

11 hours ago

October 2, 2023

Ifeoluwa Dada

Nigeria’s Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, has revealed a plan to increase investments into the country’s tech start-ups to $5 billion within five years.

Tijani, on Monday in a policy document titled, ‘Accelerating our Collective Prosperity through Technical Efficiency: A Strategic Plan for the Federal Ministry of Communications, Innovation & Digital Economy,’ announced the target.

Describing how the ministry would measure if its plan was working, Tijani said, “Increase capital raised by Nigerian tech startups 50 per cent year-on-year from ~$1bn/yr in 2022 to $5bn/yr in 2027.”

The minister emphasised that a strong digital economy required innovation, entrepreneurship, and access to capital in the current global technology landscape. According to him, the ministry’s main goal in this regard will be to promote the development and sustainability of startups, with a focus on those coming up with ground-breaking solutions for important economic sectors.

Tijani said, “Recognising the critical role of patient capital in the growth of startups, we are committed to increasing the local availability of patient capital. We intend to create an environment for startups to raise the funding they require to thrive locally and promote the domiciliation of startups within our nation.”

According to Tijani, “Digital transformation and innovation are fast becoming a catalyst for economic progress,” and the “intersection of a strong digital economy and our innovative and youthful population presents us with a unique opportunity to chart a course towards prosperity, inclusion, and global relevance.”

In his remarks on AI, the minister said that over the next 20 years, the technology would usher in a new era of technological and economic change. Tijani emphasised that Nigeria needed to develop a comprehensive national strategy to utilise AI’s potential responsibly and inclusively.

He said, “The implementation of the strategy amongst other things is expected to elevate Nigeria as a top 10 location for AI model training and talents globally. In addition, we will position Nigeria as a global leader in accelerating inclusivity in AI dataset.”

According to Africa: The Big Deal, Nigerian startups raised $1.2 billion in 2022 despite a funding shortage, while a Briter Bridges report says African startups raised $5.4 billion in 2022.