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economy

Nigeria’s Current Business Performance in the Negative – NESG

by Robert Ipogah October 28, 2024

written by Robert Ipogah

CEM REPORT, BUSINESS | Nigerian foremost Think-Tank body, the Nigerian Economic Summit Group has declared in its maiden edition of the Business Confidence Monitor (BCM) that the Nigerian business environment is currently operating in the negative.

Almost every operating indicator has been thrown into negative by the policies recently introduced by the current Government having stifled demand and increased cost of doing business.

NESG declares; “The country’s business operating environment is largely negative, as underlying business and economic challenges have amplified significantly. As a result, most businesses faced significant hurdles, limiting their growth performance”.

According to the report, the current business performance index measured from January to September 2024 came to -11.13, indicating a decline in business activities compared with the same period of 2023. The figure indicates a mild negative business performance among businesses due to tightening state of economic activities and reduced demand conditions.

The negative business operating conditions cut across all sectors of the economy. The weakest performance is notable in the Agriculture sector (-22.22), followed by Trade (-13.21) and Manufacturing (-6.07). Non-manufacturing (-5.21) and Services (-2.58) had the least negative business conditions.

The business system is confronted by numerous obstacles. The main obstacles according to the report were high prices (-26.14), limited access to credit (-21.14), constrained cash flow (-1.02), poor demand condition (-29.73), the elevated cost of business (+47.64) and reduced production activities (-14.70).

The biggest challenges faced by the Nigerian business system within the period under review are Limited availability of foreign exchange, inadequate power supply, limited access to finance and insecurity. These issues though have been there, have been aggravated in recent time following liberalization of the exchange market, removal of energy subsidy which has raised cost of fuel and electricity and the unending raising of interest rate in a bid to tackle inflation.

Insecurity on its part became a major obstacle to agricultural production for over 6 years. This explains why the Agriculture sector recorded the weakest performance at -22.22 according to the BCM reading.

However, there is a positive optimism in the future performance of the Nigerian business conditions. The BCM revealed a positive index of +26.86, indicating moderate optimistic expectations of business performance improvement.

Optimistic expectations are driven by the anticipated higher business activities from an uptick in investment, export performance, demand conditions, cashflows and employment.

The Services sector with +2.54 showed the least optimistic, and the Non-manufacturing sector is the most optimistic (+30.54) about the future.

October 28, 2024 0 comment

Economy

Nigeria Loses N13.2 Trillion to Dual Exchange Rate Regime, World Bank Reveals

by Genesis Essien October 22, 2024

written by Genesis Essien

Nigeria’s long-standing practice of subsidizing foreign exchange has come under intense scrutiny, with the World Bank’s latest report shedding light on its staggering financial implications. The international lender has revealed that the country’s dual exchange rate system resulted in a staggering N13.2 trillion loss between 2021 and 2023.

The dual exchange rate system, characterized by an official rate and a parallel market rate, created a significant disparity that eroded government revenue. This policy, intended to stabilize the naira and support specific sectors of the economy, inadvertently inflicted substantial financial harm.

Toll on the Treasury

The World Bank’s report delves into the specific costs associated with this policy:

2021: N2 trillion

2022: N6.2 trillion

2023: N5 trillion

These losses were primarily driven by the significant difference between the official and parallel market exchange rates. As government revenue, such as oil and customs duties, was converted at the official rate, the treasury suffered substantial losses.

The Impact on Revenue Streams

The report delves into the specific areas affected by the dual exchange rate regime, including:

Oil and Gas Revenue: Significant revenue losses were incurred due to the disparity between the official and parallel market rates.

Import and Export Duties: The fluctuation in exchange rates impacted customs revenue collection.

VAT: The imposition of VAT on imported goods, particularly those priced in foreign currency, further exacerbated revenue losses.

Company Tax: The dual exchange rate regime affected the tax liabilities of businesses, especially those with significant foreign currency transactions.

Government-Owned Companies: State-owned enterprises, such as NNPC, FAAN, NPA, and NIMASA, experienced reduced revenue due to the exchange rate differential.

The End of Subsidy Era

In a significant policy shift, Finance Minister Wale Edun announced the termination of both fuel and foreign exchange subsidies. This decision, aligned with the World Bank’s recommendations, marks a crucial step towards fiscal sustainability. Edun emphasized the detrimental impact of these subsidies on the economy, necessitating their elimination.

Manufacturers Remain Pessimistic Amid Insecurity, High Costs

A Missed Opportunity

The World Bank’s report highlights the missed opportunities arising from the dual exchange rate regime. The N13.2 trillion lost could have been channeled towards critical sectors such as healthcare, education, and infrastructure, benefiting the entire nation. However, the policy, while intended to support specific segments of the economy, ultimately resulted in a significant drain on public resources.

The World Bank strongly advocates for a unified exchange rate as a crucial step towards economic stability and growth. By eliminating the distortions caused by the dual exchange rate regime, Nigeria can unlock its full economic potential.

Alex Sienart, the World Bank’s lead economist for Nigeria, emphasized the positive impact of the recent policy changes, particularly the removal of the foreign exchange subsidy. He noted that the government’s fiscal position has improved significantly in the first half of 2024, primarily driven by increased revenue.

As Nigeria embarks on a new economic chapter, the lessons learned from the past can inform future policy decisions. By embracing sound economic principles and prioritizing fiscal discipline, the country can achieve sustainable growth and prosperity for all.

October 22, 2024 0 comment

Top Global News

Egypt Inflation Surges Again, Central Bank Faces Pressure

by Genesis Essien September 10, 2024

written by Genesis Essien

Egypt’s annual urban consumer price inflation rate unexpectedly climbed to 26.2% in August from 25.7% in July, according to data released by the Central Agency for Mobilization and Statistics (CAPMAS) on Tuesday. The month-on-month price increase was also more pronounced, jumping by 2.1% compared to a 0.4% rise in July.

The acceleration in inflation was primarily driven by a surge in food prices, which rose by 1.8% in August after a slight decline in July. Year-on-year, food prices were 29.0% higher, reflecting the ongoing strain on household budgets.

Several factors contributed to the uptick in inflation. Higher summer produce prices, coupled with recent increases in fuel costs (10-15%) and public transportation fares (25-33%), pushed prices upward. Additionally, a 21-31% hike in electricity tariffs, partially implemented in August, further exacerbated inflationary pressures.

While inflation had been gradually declining from its peak of 38.0% in September, the latest data indicates a potential setback in the country’s efforts to stabilize prices. This resurgence poses significant challenges for the Central Bank of Egypt, which has been grappling with inflationary pressures for over a year.

Central Bank’s Dilemma

The central bank has been aggressively raising interest rates to combat inflation and support the Egyptian pound. In July, the bank increased its real overnight borrowing rate to 27.25%, marking the first positive real rate since January 2022. This move was aimed at discouraging borrowing and attracting foreign capital, thereby strengthening the currency and reducing inflationary pressures.

However, the latest inflation data suggests that the central bank may need to adopt even more stringent measures. Analysts are speculating that a further interest rate hike could be on the horizon to curb demand and contain inflationary expectations.

Economic Impact and Social Unrest

Rising inflation has far-reaching implications for Egypt’s economy and society. It erodes the purchasing power of consumers, making it difficult for households to afford basic necessities. Businesses also face challenges as rising costs can reduce profit margins and lead to job losses.

Moreover, high inflation can exacerbate social unrest and political instability. When people struggle to make ends meet, they may become more likely to engage in protests and other forms of social discontent.

Government’s Response

The Egyptian government has been taking steps to address the inflationary pressures. These measures include subsidies for essential goods, such as bread and fuel, as well as targeted social safety nets to support vulnerable populations.

However, the government’s ability to contain inflation is constrained by limited resources and the ongoing global economic challenges. The ongoing conflict in Ukraine, for example, has driven up the prices of food and energy, further exacerbating inflationary pressures in Egypt.

Outlook

The outlook for Egypt’s economy remains uncertain. While the government and central bank are taking steps to address the inflationary crisis, the challenges are significant. The country’s ability to navigate these headwinds will depend on its ability to implement effective policies and attract foreign investment.

As the situation continues to evolve, it is crucial for policymakers to closely monitor inflation trends and adjust their strategies accordingly. Failure to do so could have serious consequences for Egypt’s economic stability and social well-being.

September 10, 2024 0 comment

Economy

PMI Remains Below 50, Indicative of a Stagnant Private Sector in August

by Genesis Essien September 3, 2024

written by Genesis Essien

The Nigerian private sector continued to struggle in August, according to the latest Stanbic IBTC Bank Purchasing Managers Index (PMI) released on Monday. While the headline PMI rose slightly from 49.2 in July to 49.9 in August, it remained below the 50.0 no-change mark, signaling a stagnation in overall operating conditions.

Business Activity Continues to Decline

The report revealed a fractional decline in business activity for the second consecutive month. Although some companies reported increased output due to a renewed expansion in sales, others noted weak demand amid rising cost pressures. The manufacturing and wholesale & retail sectors witnessed growth, while agriculture and services contracted.

Rising Input Costs

Companies continued to grapple with soaring input costs, with the rate of inflation accelerating since July. The increase in purchase prices was primarily driven by higher costs for materials, particularly animal feed and paper, as well as logistics and transportation expenses due to rising fuel prices. The weaker USD/NGN exchange rate also contributed to inflationary pressures.

Increased Selling Prices

In response to higher input costs, firms increased their selling prices at a faster pace. Just under half of all respondents indicated a rise in charges, reflecting the pass-through of higher costs to customers. This led to a quickening of output price inflation to a five-month high in August.

Employment Growth Continues

Despite the challenging economic conditions, employment levels continued to increase in August, extending the current sequence of job creation to four months. The latest rise in staffing levels was the fastest since last November, although modest.

Backlogs of Work Depleted

The combination of rising staffing levels and muted new order inflows allowed firms to deplete their backlogs of work at a faster pace. This was the joint-fastest rate since June 2022.

Negative Business Sentiment

Despite the slight improvement in the PMI, business sentiment remained among the least optimistic since the survey began. The rising cost of living, coupled with the challenges posed by the weak economy, contributed to the negative outlook.

Expert Analysis

Muyiwa Oni, Head of Equity Research West Africa at Stanbic IBTC Bank, emphasized the challenges facing the Nigerian private sector. He noted that the stagnation in overall operating conditions was in line with the trend in business activity and highlighted the weak demand and rising cost pressures.

Oni also pointed out that the increase in employment levels was a positive sign, but the overall economic outlook remained uncertain. The continued rise in input costs and the pass-through of these costs to customers were significant concerns.

If You Ask Me

The August PMI data paints a mixed picture of the Nigerian private sector. While there were some positive signs, such as the continued growth in employment, the overall economic conditions remained challenging. Rising input costs, weak demand, and negative business sentiment continue to pose significant hurdles for businesses in Nigeria.

As the country navigates these economic challenges, policymakers and businesses will need to closely monitor the situation and implement strategies to foster growth and improve the overall business environment.

September 3, 2024 0 comment

Economy

Tinubu Takes Action: New Committee to Tackle Nigeria’s Economic Risks

by Genesis Essien August 31, 2024

written by Genesis Essien

In a decisive move to fortify the nation’s economic standing, President Bola Tinubu has established a high-level committee dedicated to tackling the multifaceted risks facing Nigeria. This announcement, made at the Chartered Risk Management Institute (CRMI) annual conference in Lagos, underscores the new administration’s commitment to proactive economic risk management in governance.

Olasupo Olusi, Managing Director/Chief Executive Officer of the Bank of Industry and recipient of an honorary fellowship at the CRMI event, revealed the committee’s formation.

“I am delighted to say that His Excellency, President Bola Tinubu, who understands the importance of risk management and its implications for our economy at large, has recently set up a committee to look into ways we can manage risks, credit risks better,” stated Dr. Olusi.

He further emphasized the urgency of the task at hand, noting, “He [President Tinubu] gave us a mandate to report back to him within the next four weeks.”

A New Era of Risk Management in Nigeria

This significant development comes amidst growing recognition of the critical role risk management plays in fostering economic stability and sustainable growth. The CRMI conference, themed “Emerging Crisis in Africa: Way Forward,” served as a timely platform to address these pressing concerns.

Ezekiel Oseni, President/Chairman of Council at CRMI, highlighted the institute’s proactive approach to embedding risk management within Nigeria’s governance framework.

“One of the key initiatives of the institute is sponsoring a bill at the National Assembly, as I promised last year. The bill has already passed its first reading,” Oseni announced.

This landmark legislation, if passed, would mandate every ministry, department, and agency to establish a dedicated risk management function, signaling a paradigm shift in how Nigeria approaches potential threats.

Collaboration Key to Mitigating African Risks

The conference also witnessed a landmark agreement aimed at strengthening risk management capabilities across the African continent. The signing of a Memorandum of Understanding (MOU) will pave the way for the establishment of the Federation of African Risk Management Associations (FARMA). This collaborative initiative, with representation from risk institutes in South Africa, Cote D’Ivoire, Morocco, Senegal, Benin Republic, and Kenya, underscores the shared commitment to bolstering risk resilience across Africa.

Oseni emphasized the need for broad support to ensure FARMA’s success: “We call on the governments of all African countries, African Union, and multilateral agencies like AfDB, Afreximbank and Pan-African organisations to support this great cause.”

He further commended institutions like the African Development Bank (AfDB) for their efforts in establishing a pan-African credit rating agency, a crucial step in strengthening financial stability across the continent.

Navigating Risks in the Age of Artificial Intelligence

In his keynote address, Lagos State Deputy Governor, Dr. Obafemi Hamzat, provided a sobering assessment of the complex risk landscape facing Nigeria and the wider continent. He highlighted the devastating impact of insecurity, stating, “Taking a broad view of risk management from a governance point of view, insecurity has plagued the landscape, creating turmoil, instability, and forced migration leading to internal displacement of persons, among many other social indicators.”

Hamzat stressed the government’s responsibility in ensuring the safety and security of its citizens, emphasizing the need for decisive action while carefully considering inherent risks. He further drew attention to the emerging challenges posed by rapid technological advancements, particularly in the realm of artificial intelligence (AI).

“By and large, the greater risks in decision-making by government have been in the economic growth and development of our society, particularly with the growing influence of the use of artificial intelligence and robotics,” he cautioned.

Recognizing the potential for data vulnerability in an increasingly digitized world, Dr. Hamzat underscored the need for robust legislation to protect sensitive information from misuse. He acknowledged the role of technology in fostering transparency and accountability, emphasizing the need for balance in harnessing its power for good.

CRMI Recognizes Leaders in Risk Management

The CRMI conference culminated in the awarding of honorary fellowships to individuals recognized for their outstanding contributions to risk management and their respective fields. Alongside Dr. Olusi, recipients included:

Dr. Obafemi Hamzat: Deputy Governor of Lagos State

Olayemi Cardoso: Governor of the Central Bank of Nigeria

Zaccheus Adedeji: Executive Chairman of the Federal Inland Revenue Service

Professor Charles Anosike: Director-General of Meteorological Agency

Dr. Emomotimi Agama: Director-General of the Securities and Exchange Commission

Dr. Adaora Umeoji: Group Managing Director of Zenith Bank

Dr. Roosevelt Ogbonna: Chief Executive Officer of Access Bank

Dr. Nneka Oyeali-Ikpe: Chief Executive Officer of Fidelity Bank

The formation of President Tinubu’s risk management committee, coupled with CRMI’s proactive initiatives and the establishment of FARMA, signals a concerted effort to prioritize risk mitigation as a cornerstone of sustainable economic development in Nigeria and

August 31, 2024 0 comment

Business

CIBN Conference: State of Nigerian Economy in Focus

by Robert Ipogah August 23, 2024

written by Robert Ipogah

At this economically challenging time when Nigeria yearns for all encompassing contribution from credible organizations and individuals, the Chartered Institute of Bankers of Nigeria, CIBN has once again taken the lead to chart a better course.

Economic growth and development is the central focus of the Institute’s 2024 edition of the Annual Banking and Finance Conference. This is in consistence with the Institute’s tradition of being at the forefront in quest for economic stability and national development.

This years CIBN Banking and Finance Conference scheduled to hold from 10 – 11 of September, 2024 at the Hilton Hotel, Abuja, is themed; “Accelerated Economic Growth and Development: The State of the Play and the way forward”.

CIBN Banking and Finance Conference 2024

In a world media briefing held Thursday at the Banker’s house, the Chairman, Consultative Committee for the conference, Dr Oliver Alawuba, Group Managing Director at UBA, said that the “discussions at the conference will focus on the African and indeed Nigerian economic landscape, examining key growth drivers and coming up with strategies for sustainable growth and development.

Bola Ahmed Tinubu, President of Nigeria and President Joseph Boakai of Liberia will be present at the conference. Goodwill messages will be delivered by the Central Bank Governor, Olayemi Cardoso along with other eminent scholars across Africa.

According to Dr Alawuba, some of the key topics to occupy discussions at the strong business sections during the conference are, how to unlock possibilities through artificial intelligence, how to diversify Nigerian export base and addressing issues of FX. These issues will be dissected by experts, not only in the business but also in policy making.

Dr Alawuba specifically emphasized the focus of the dinner that will be held to close the conference. This he said will hold interaction about the youth aimed at turning the current ‘japa’ syndrome to ‘japa da’. “We want to showcase Nigerian youths that have done very well”. Senator Asuquo Ekpeyoung, the youngest Senator and Prof Aisha Maikudi, the youngest Vice Chancellor will be in attendance to lead interaction at the dinner.

Olanrewaju Speaks on LEGACY

In his welcome address, President and Chairman of Council of CIBN, Prof Pius Deji Olanrewaju articulated the agenda of his administration with the acronym ‘LEGACY’. Prof Olanrewaju hopes to Lead an innovative financial system while building Ethics and professionalism. He plans to promote Gender, generational and geographical balance while focusing on Accelerating institutional values and building Competence in the Nigerian banking industry. Very importantly, he hopes to advance Youth and entrepreneurial engagements in his tenure.

He assured stakeholders, banking professionals and indeed every Nigerian a very robust conference.

August 23, 2024 0 comment

Economy

Dangote Refinery Poised to Transform Nigeria’s Economy and End Forex Woes, Says S&P Global

by Genesis Essien July 9, 2024

written by Genesis Essien

Nigeria’s foreign exchange woes and reliance on imported refined fuels could soon be a thing of the past, according to a recent assessment by S&P Global, with the imminent full operation of the Dangote Oil Refinery and Petrochemicals company.

The optimism stems from a visit by S&P Global to the Dangote Oil Refinery and Petrochemicals company, located in Ibeju-Lekki, Lagos. The 650,000 barrels per day (bpd) refinery, touted as the largest single-train refinery complex in the world, is expected to significantly impact Nigeria’s economic landscape.

Transforming Nigeria from Importer to Exporter

S&P Global analysts, led by Director and Lead Analyst, Sovereign and International Public Finance Ratings, Ravi Bhatia, were impressed by the refinery’s capabilities. Bhatia noted that the facility would transform Nigeria into a net exporter of petroleum products, a significant shift for a country that currently exports crude oil but relies heavily on imports for refined fuels.

“This will be positive for the economy in the medium term,” Bhatia remarked after an extensive tour of the refinery. “It is a very impressive facility, able to process 650,000 barrels a day, when in full capacity.”

Boosting Revenue and Saving Foreign Exchange

The refinery’s impact is expected to be multifaceted. Increased domestic refining capacity is anticipated to generate additional revenue for the country. More importantly, it is projected to alleviate the pressure on Nigeria’s foreign exchange reserves, currently strained by dependence on imported fuels.

Despite being a major crude oil exporter, Nigeria lacks sufficient refining capacity, forcing it to import refined fuels like gasoline and diesel. The Dangote Refinery, Bhatia noted, has the potential to bridge this gap and transform Nigeria’s position in the global oil market.

“Nigeria is a big exporter of crude but has issues with importing refined fuels,” Bhatia explained. “So, there is a gap in the market where crude can be refined in Nigeria, save money that way, and potentially save some foreign exchange.”

Dangote Refinery Makes History

Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited (DIL), echoed the positive outlook. He emphasized the refinery’s potential to create a ripple effect of economic benefits.

He explained that the $20 billion refinery is designed to harness Africa’s abundant crude oil resources to produce high-quality refined products locally. This approach, Edwin believes, will create a virtuous cycle of industrial development, job creation, and economic prosperity for Nigeria

“By harnessing Africa’s abundant crude oil resources to produce refined products locally, the company aims to catalyse a virtuous cycle of industrial development, job creation, and economic prosperity,” Edwin stated.

Another noteworthy aspect of the Dangote Refinery is its status as a completely Nigerian-owned and operated project. Edwin highlighted the fact that a Nigerian company designed, constructed, and serves as the EPC (Engineering, Procurement, and Construction) contractor for the world’s largest single-train refinery complex.

“The refinery can produce the best quality products in the world, Euro V grade,” Edwin said with pride. “It is one of the most energy-efficient refineries and it is highly environmentally friendly. The largest single train refinery in the world is 100 percent designed, engineered, and constructed by a Nigerian company as EPC contractor.”

High-Quality Products and Advanced Technology

The refinery boasts not only its processing capacity but also the quality of its output. Products are designed to meet Euro V specifications, US EPA norms, and African Refiners and Distribution Association (ARDA) standards, adhering to stringent international environmental standards.

The facility also incorporates advanced technology, including a state-of-the-art Central Control Unit for smooth automation.

The S&P Global team commended Dangote Industries Limited President Aliko Dangote for his commitment to innovation and quality control.

Production to Begin Soon, Meeting Domestic Needs and Export Potential

Exciting news for Nigerians is the imminent commencement of production at the Dangote Refinery. Edwin revealed that the company will begin producing premium motor spirit (PMS), also known as petrol, this July. The refinery, boasting a capacity to meet 100% of Nigeria’s demand for petrol, diesel, kerosene, and aviation jet fuel, will also have a surplus for export, generating additional revenue for the nation.

Currently operating at 350,000 bpd capacity, the refinery is projected to ramp up production to at least 500,000 bpd by July/August. This will see the commencement of refining petrol and ultra-low sulfur diesel.

The refinery is designed to process a wide range of crude oil sources, including various African and Middle Eastern crudes, US Light Oil, and adheres to stringent environmental regulations.

If You Ask Me

Nigeria’s current situation of exporting crude oil and importing refined products is a paradox the Dangote Refinery aims to rectify. Prior to the refinery’s operation, the country relied on imports exceeding 50 million litres of petrol daily to meet domestic needs.

The Dangote Refinery’s arrival signifies a potential turning point for Nigeria’s economy. With its ability to not only meet domestic demand for refined products but also generate a surplus for export, the refinery holds the promise of a more prosperous future for the nation.

July 9, 2024 0 comment

Economy Top Global News

Nigeria Imposes New Expatriate Levy

by Genesis Essien March 1, 2024

written by Genesis Essien

CEM REPORT, MIGRATION | Nigeria has introduced a new mandatory annual expatriate levy for organizations employing expatriate workers, aiming to encourage the development of local talent and improve employment opportunities for Nigerians. This move comes at a time when the country is grappling with economic challenges and seeking to foster sustainable growth.

President Bola Tinubu, while launching the initiative, emphasized the dual objectives of the EEL: “The goal is to close wage gaps between expatriates and the Nigerian labour force while increasing employment opportunities for qualified Nigerians in foreign companies in the country.”

The policy, however, has raised concerns about its potential impact on foreign investment. President Tinubu addressed these concerns, stating, “The scheme should not be used as an impediment nor as a stick wielded to deter foreign investors.”

Enforcement and Potential Impacts of the Expatriate Levy:

The EEL applies to employees working in Nigeria for at least 183 days per year. Non-compliance with the levy can result in hefty fines of up to three years’ worth of the levy and imprisonment for individuals and organizations, including those failing to provide accurate information. The Nigerian Immigration Service, in partnership with the government and a private firm, will be responsible for enforcing the program.

Expert Opinions and Looking Forward:

Economist Abubakar Abdullahi believes the EEL will benefit the nation, stating, “I believe Nigeria stands to benefit from this levy as more companies will start looking inwards as there are qualified Nigerians from all sectors.” However, the long-term impact of the policy on foreign investment and overall economic growth remains to be seen.

The introduction of the EEL marks a significant step for Nigeria in its quest for self-reliance and fostering local talent. As the policy unfolds, it will be crucial to monitor its effectiveness in creating employment opportunities for Nigerians while ensuring it maintains a welcoming environment for foreign investment, fostering a sustainable path for the nation’s future.

The State of Nigeria’s Workforce and Economy:

Nigeria, Africa’s largest economy, boasts a population exceeding 200 million. Despite this large workforce, the country faces challenges in addressing unemployment and fostering economic development. According to local media reports citing data from the interior ministry, over 150,000 expatriates work in Nigeria, primarily in sectors like oil and gas, construction, telecommunications, and hospitality.

The country is currently experiencing its worst economic crisis in decades, marked by widespread hardship and growing public discontent. This context likely fuels the government’s desire to promote job creation for its citizens.

What is the Expatriate Employment Levy (EEL)?

The EEL requires companies to pay an annual fee for employing expatriates. The fee varies depending on the position: $15,000 for directors and $10,000 for other employees. This policy aims to incentivize companies to prioritize hiring qualified Nigerians, while simultaneously generating revenue for the government.

March 1, 2024 0 comment

Economy

Only 5% of Nigerians Hold Over ₦500,000 – Edun

by Genesis Essien February 26, 2024

written by Genesis Essien

Government Plans to Bridge the Gap with Reforms and Cash Transfers

A recent statement by Nigeria’s Finance Minister, Wale Edun, has shed light on the significant wealth disparity in the country.

During an interview with Channels TV, he revealed that only an estimated 5% of Nigerians have more than ₦500,000 in their bank accounts. This statistic highlights the stark economic realities faced by millions of Nigerians, where a vast majority struggle to make ends meet.

Government Aims to Rectify Imbalances in the economy

Minister Edun emphasized that the government is committed to addressing these economic imbalances. He explained that the current reforms aim to rectify the situation where “liquidity in the economy that is not tied to production or supply of goods and services” has disproportionately benefited a small elite group. These reforms, he stated, are designed to “mop up” this excess liquidity and ensure that government revenue is directed towards the treasury.

Palliative Measures and Support Programs

Recognizing the challenges faced by ordinary Nigerians, the government has announced several measures to alleviate poverty and address the high cost of living. President Tinubu’s administration plans to distribute a palliative package of ₦25,000 to 15 million households over the next three months. This translates to ₦75,000 per household. Of what good this will be in a nation where inflation in on a steady rise is yet to be highlighted.

Furthermore, the government plans to provide grants to artisans, traders, and small business owners to boost their livelihoods.

Ensuring Transparency and Targeting

Minister Edun acknowledged concerns about transparency and targeting in such programs. He assured the public that the system for these intervention programs and payments has been revamped to ensure the funds reach the intended beneficiaries. This includes requiring beneficiaries to have a NIN (National Identification Number), BVN (Bank Verification Number), or access to a mobile money account. These measures aim to prevent fraud and ensure that the support reaches those who need it most.

Road Ahead

The revelation of Nigeria’s wealth disparity highlights the need for urgent action to address economic inequality. The government’s proposed reforms and support programs offer a potential step towards a more equitable and inclusive economy.

While these initiatives represent positive steps towards bridging the wealth gap, challenges remain. Implementing such large-scale programs effectively requires robust infrastructure, efficient administration, and minimal corruption. Additionally, addressing the root causes of poverty, such as limited job opportunities and inadequate access to education and healthcare, needs continued focus.

Despite the challenges, the government’s commitment to tackling economic inequality is commendable. By ensuring transparency, accountability, and effective implementation of these programs, Nigeria can move towards a more equitable and prosperous future for all its citizens.

February 26, 2024 0 comment

Business

CIBN Commends Senate Committee for Efforts Toward Economic Growth

by Robert Ipogah February 16, 2024

written by Robert Ipogah

CEM REPORT, FINANCE | The Chartered Institute of Bankers of Nigeria (CIBN) has commended the Chairman, Senate Committee on Banking, Insurance and Other Financial Institutions, Sen. Adetokunbo Abiru for his role in ensuring economic growth.

President and Chairman of Council of CIBN, Dr. Ken Opara, disclosed this on Thursday when he led a team from the institute on a dialogue with the leadership and members of the committee.

Opara commended the committee for the support it is giving to the institute towards the review of Extant Laws in the financial sector. He said the team’s visit was meant to seek the Senator’s assistance in the passage of the proposed CIBN Act Bill and share thoughts on key issues and initiatives affecting the banking and finance industry.

He said, “We commend the Institute for being sensitive to the economic situation which necessitated your invitation of the Governor of CBN for a brief over the state of the economy. The engagements you had and the issues you raised such as Inflation, FX, IMTO and the clarification on the 43 banned items are all issues of interest to the banking public.

“We also commend you on the proactive steps taken by this Committee to comprehensively review the extant laws within the financial services sector, aimed at fostering economic sustainability and growth. We applaud the Committee for the review of the 2024 budget of all Ministries, Departments and Agencies (MDAs) under the supervisory purview of the Committee. We also commend you for the continuous initiatives emplaced to ensure that MDAs under the supervisory purview of the Committee are properly run in line with sound Corporate Governance principles”.

The institute also commended the committee for justifying the existence of the Asset Management Corporation of Nigeria (AMCON) despite the challenges confronting the agency. This was to ensure that the objectives of setting up the AMCON by the Federal Government in 2010 were achieved.

Collaborations by CIBN

While speaking on contributions of the Institute to the Banking Industry, Opara said the institute has embarked on several key initiatives in its effort to support the industry and the economy at large. “Some of the initiatives include, Strategic intervention in industry related issues i.e, “Japa” issue with the introduction of Human Capital Retention Fund. This has given rise to the Banking School project which will commence later.

He added that the institute also collaborated with Afreximbank to run Certification Programme in the area of Trade as well as collaboration with PAPSS.

He stressed that there is collaboration with the National Board of Technical Education (NBTE) to review the Curriculum of banking and Finance for Polytechnics as well as collaboration with NUC for the Universities Legacy Project across the six geo-political zones.

In order to align the CIBN Act 2007 with current day realities in Banking and Finance landscape, the Institute embarked on a holistic review of the Act to cater to the innovations in the banking and finance industry.

“As a key stakeholder and contributor to the Institute’s success thus far, we wish to share with you the following significant improvements that have been made to the Act, for the benefit of the industry and the Nigerian Economy at large”.

CIBN keen to expansion of coverage

Opara also added that the institute is keen towards expansion of the Institute’s name to include ‘Finance” to conform to the Institute’s coverage and best practice: “Chartered Institute of Banking and Financial Services”. -Section 1 to cover institutions under the regulation of CBN, especially non-conventional banks.

He said the expansion of the Institute’s coverage will enable the Institute foster ethics, maintain professional standards and build capacity in the ever novel/modern banking practice, e.g. FinTechs will have an enabling environment to provide financial services through the use of digital and modern technology.

The institute, he said has plan to introduce Microfinance Certified Members, Certified Mortgage members, and Other Certified members as part of the membership of the Institute as well as eligibility for such certification. The Microfinance and Mortgage certifications currently exist but were not codified in the Act.

February 16, 2024 0 comment

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December 7, 2024

economy

Toll on the Treasury

The Impact on Revenue Streams

The End of Subsidy Era

A Missed Opportunity

Central Bank’s Dilemma

Economic Impact and Social Unrest

Government’s Response

Outlook

Business Activity Continues to Decline

Rising Input Costs

Increased Selling Prices

Employment Growth Continues

Backlogs of Work Depleted

Negative Business Sentiment

Expert Analysis

If You Ask Me

A New Era of Risk Management in Nigeria

Collaboration Key to Mitigating African Risks

Navigating Risks in the Age of Artificial Intelligence

CRMI Recognizes Leaders in Risk Management

CIBN Banking and Finance Conference 2024

Olanrewaju Speaks on LEGACY

Transforming Nigeria from Importer to Exporter

Boosting Revenue and Saving Foreign Exchange

Dangote Refinery Makes History

High-Quality Products and Advanced Technology

Production to Begin Soon, Meeting Domestic Needs and Export Potential

If You Ask Me

Enforcement and Potential Impacts of the Expatriate Levy:

Expert Opinions and Looking Forward:

The State of Nigeria’s Workforce and Economy:

What is the Expatriate Employment Levy (EEL)?

Collaborations by CIBN

CIBN keen to expansion of coverage

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