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Nigeria records over $1.5bn FDI in few days amid Naira gains

Published

1 month ago

March 30, 2024

Following recent gains in the country’s currency, the Naira, Nigeria’s Central Bank (CBN) has claimed that over $1.5bn came into the Nigerian economy over the past few days.

The claim is an indication that the CBN’s monetary policy efforts are beginning to yield results as the Naira continues to strengthen significantly against the US dollar in recent weeks, exchanging for as low as ₦1,200 during the week from a peak of about ₦1,800 per USD.

According to Ali, in the Autonomous Foreign Exchange market, the naira has also been making gains. On Friday, it was trading at N1,309/$1, down from N1,611/$1 in the second week of March 2024.

This information was released in a statement made available on Friday evening by Mrs. Sidi Ali, the acting director of the CBN’s corporate communications department. She pointed out that information the bank had access to suggested the inflows resulted from its deliberate efforts to stabilize the foreign currency market.

Some of the recent monetary policies include harmonising the nation’s currency rate in June last year, which led to the naira depreciating to more than 1,800/$ on the official market. Also earlier in the week on Monday, the CBN convened its 294th MPC meeting, during which it increased the benchmark interest rate by 2% to 24.75%. Before that, in February, it increased the loan rate by 4% to 22.75%.

On Wednesday, the bank also held an auction of N1.64 trillion in Treasury Bills, with stop rates for the 91-day, 182-day, and 364-day tenors of 16.24%, 17%, and 21.124%, respectively.

Ali also gave assurance that the Cardoso-led CBN would continue to be dedicated to maintaining market stability and the proper valuation of the Naira relative to other major currencies globally, even if he acknowledged that Thursday’s rate showed the naira was moving in the correct path.

There were concerns expressed over the decision to raise interest rates. However, the governor of the central bank maintained that the increase would only be temporary and that the goal was to stabilize the economy by bringing interest rates up to pace with the nation’s current inflation rate.

“While the increase in interest rate may have tendencies toward strangulating the economy, with the foreign exchange rate coming down, that also helps to moderate it overall.

“And as I said earlier, you would expect that this would not be too long drawn; at least I would hope so. We are getting towards a situation where the exchange rate is moderating, and we are expecting it to moderate and then it finds a level that, quite frankly, is sustainable. This would involve huge collaboration with the fiscal side because a lot of that cannot just rely on the monetary side alone,” the governor said.

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Nigeria gets $600 million investment from Danish firm Moller-Maersk

Published

18 hours ago

April 29, 2024

Ifeoluwa Dada

Nigeria’s presidency said on Sunday that President Bola Tinubu had secured an investment of $600 million from Danish shipping and logistics company, A.P. Moller-Maersk.

Nigerian ports will get more space for container shipping services as part of the deal by improving their facilities.

A presidential spokesman, Ajuri Ngelale, said in a statement that the decision was made by Mr Robert Maersk Uggla, Chairman of A.P. Moller-Maersk, during a meeting with President Tinubu on Sunday in Riyadh, Saudi Arabia, at the World Economic Forum Special Meeting on Global Collaboration, Growth, and Energy for Development.

”We have seen a significant opportunity for Nigeria to cater for larger container ships. Historically, most of the West African coasts are already served by smaller ships. Currently, we see an opportunity to deploy larger ships to Nigeria. To achieve this, we need to expand the port infrastructure, especially in Lagos, where we need a bigger hub for logistics services. The growth potential is hard to quantify,” Ngelale quoted Uggla as saying.

”We believe in Nigeria, and we will invest $600 million in existing facilities and make the ports accommodating for bigger ships.”

Tinubu, for his part, thanked the company for what it did for the Nigerian economy.

“We appreciate your business and the contribution you have made and continue to make to our country’s economy over time. We do not take our partners for granted. A bet on Nigeria is a winning bet. It is also a bet that rewards beyond what is obtainable elsewhere,” Tinubu said.

“More investment opportunities are available, and my government has worked on various reforms to encourage investments. We need to encourage more opportunities for revenue expansion and minimize trans-shipments from larger ships to smaller ships.”

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Nigeria: Bureaux De Change operators to harmonise retail FX market

Published

1 day ago

April 28, 2024

Ifeoluwa Dada

Amidst the volatility around the Nigerian currency and its foreign exchange market, the Association of Bureaux De Change Operators in the country has revealed plans for a unified retail end of the foreign currency market.

In a statement released on Saturday, the association said that the move would reduce volatility and improve regulatory compliance in that market sector.

The lack of dollars has had a huge effect on Nigeria. In the past few weeks, the naira has hit all-time lows, and the central bank has had to weaken the currency twice in less than a year and launched campaigns against currency racketeers as well as other policies like banning Binance and other crypto companies’ online sites through the Nigerian Communications Commission to stop what the government saw as ongoing manipulation of the foreign exchange market and the illegal flow of money.

Aminu Gwadabe, President of ABCON, said that the organization was putting plans in place to bring together market operators from different backgrounds. These plans included starting state groups to coordinate, integrate, and run a single market structure.

Gwadebe said that all BDC owners in Nigerian markets would be taken care of when it was done. He also talked about plans to improve its Business Process Platform, which used to be known as SAAZ Master.

He said, “Part of our vision for a united retail-end forex market includes activating geo-mapping and automated BDCs physical office verification exercise using the Remote Gravity Physical verification apps. This will enable forex buyers to locate BDCs offices for effective and seamless transactions easily.”

He said again that a strong retail end forex market would help the Central Bank of Nigeria reach its goal of real price discovery for the naira, as well as meet international obligations and national goals, make it easier for security agencies to monitor and supervise, and give BDC players a better view of the market.

Gwadabe says that the goal of a unified retail end forex market will help with the creation of market intelligence reports, improve the image of BDCs, other players, and market operators both locally and internationally, and create more jobs.

Gwadabe said that if this plan is carried out well, it will help the government make money through a digitalized retail end market and create a well-structured, open, and competitive platform to stop the threat of illegal platforms.

“With the world going digital, BDC operators under the ABCON leadership are committed to staying ahead of the competition by deploying time-tested technology to deliver effective services to foreign exchange end-users.

“Finally, we also condemned in its entity, the seeming reappearance of illegal economic behaviours in forex conversion and peer-to-peer trading that pose another recent surprise in naira volatility and I therefore want to warn that while surprises are the new normal, resilience is also the new skills,” Gwadebe explained.