From Magnus Eze, Abuja The Nigeria Labour Congress (NLC), Friday, invaded the corporate headquarters of telecommunication company, MTN Nigeria and the Abuja Environmental Protection Board (AEPB) to protest anti labour practices. The workers took the action as part of activities to support and celebrate the World Decent Work Day, marked worldwide. Issues of decent work,…
Stories by Omodele Adigun
Ubs wealth management ‘s chief investment office(cio) nas launched africa-cradle of diversity, a new report on the continent’s economic prospects and challenges.
The report highlights that of the 64 nations, the IMF projects to have averaged real GDP growth of more than four per cent in the next five years, more than half are in Africa.
As Africa’s largest country both in terms of GDP and population, Nigeria offers enormous potential for the nation’s domestic market, according to the report’s findings. The UN expects Nigeria’s population to reach up to one billion people by 2100, offering unusual potential for growth. At the same time, population growth presents a significant challenge in terms of job creation for new labor market entrants and the nation’s geographic limitations, considering Nigeria’s territory is approximately the size of Texas.
In addition, UBS CIO research shows that indicators relating to governance and ease of doing business are clearly weaker than for peers, thus underpinning the need for reforms as foreseen in Nigeria’s Economic Recovery and Growth Plan.
Decisive factors outlined in the report include efforts to broaden the country’s tax base and to diversify its economy. Nigeria’s revenue base heavily relies on oil-related activities, which exposes the nation’s fiscal balance to energy price shocks and volatility risks.
Nigeria is Africa’s largest oil exporter and while commodity exports remain a major growth driver in many African countries, their importance is slowly declining as domestic demand plays an expanding role in sustaining growth. Some of the continent’s fastest growing economies are concentrated in non-resource-rich countries like Côte d’Ivoire, Senegal, Kenya and Ethiopia, which are expected to grow between 6% and 8% in the next few years.
The report points out that the manufacturing industry is probably one of the most overlooked sectors in Africa, despite the continent’s potential to become the world’s next low-cost manufacturing hub and a leading global player in resource-intensive manufacturing.
Competitive labor costs, abundance of raw materials, convenient transit locations for export and large markets for local consumption position many African countries well to replace Asian competitors as attractive locations to produce goods and draw manufacturing foreign direct investment.
In the short term, further progress toward the liberalization of the Nigerian currency’s exchange rate will have a decisive impact on the inflow of such investment.
Ali Janoudi, Head of Central and Eastern Europe, Middle East and Africa, France and Belgium International at UBS Wealth Management, said: “We see tremendous potential for Nigeria’s economy, which is Africa’s largest, but in order to achieve its potential, current reform programs must be implemented and in some instances, accelerated. The current climate of higher energy prices and relative domestic stability indicate now is the right time to act.”
Michael Bolliger, Head of Emerging Market Asset Allocation at UBS Wealth Management’s CIO, said: “In the near term, oil will remain an important source of income for Nigeria. However, the impressive growth rates of non-resource-rich countries in Africa clearly indicate that development beyond oil is the way forward.”
CBN injects another $250m into forex market
The Central Bank of Nigeria (CBN), in its relentless effort to keep the inter-bank foreign exchange market liquid, on Monday, intervened with another sum of $250 million.
A breakdown of Monday’s intervention indicates that the wholesale sector was offered $100 million, just as the Small and Medium Enterprises (SMEs) window received a boost of $80 million. Those requiring foreign exchange to address needs such as Business/Personal Travel Allowances, school tuition, medicals, etc. were allotted the total sum of $70 million.
The apex bank’s acting Director in charge of Corporate Communications, Isaac Okorafor, who disclosed this, reiterated that the interventions had ensured stability in the market, even as he stressed that the CBN remained committed to maintaining transparency in the market.
According to him, CBN had taken measures to check the activities of speculators and shield the currency from attacks, while also maintaining the international value of the Naira.
While assuring that authorized dealers had enough funds to meet the foreign exchange needs of customers, Okorafor urged all to adhere to the extant guidelines on the sale of forex in the Nigerian Forex market. He therefore advised those in genuine need of forex to continue to approach their respective banks for purchase. He said the Bank remained very optimistic that the Nigerian currency will fare strongly against other notable currencies around the world.
On the convergence target of the bank between the forex rates at the inter-bank and the Bureau de Change (BDC), he said the goal would be attained if all stakeholders played by the rules.
The CBN last week assured customers of adequate foreign exchange in the market, dispelling fears of a scarcity in the Nigerian forex market. Meanwhile, the naira exchanged at the Bureau de Change segment of the market at the rate of N365/$1.