Countries in the West African sub-region with flexible exchange rate regimes such as Nigeria and Ghana are likely to see their currencies (naira and the cedi) appreciate in 2018 and 2019 due largely to anticipated higher global commodity and crude oil prices, the African Development Bank (AfDB) has stated.
The bank made this forecast in its 2018 African economic outlook released yesterday.
According to the AFDB: “West Africa has two dominant exchange rate regimes: flexible and pegged. Anglophone countries generally have flexible regimes, while francophone countries tend to have pegged regimes. In the anglophone countries (except Sierra Leone and Guinea), exchange rate volatility has been greater. In Ghana and Nigeria, currency fell considerably between 2014 and 2016, largely due to global declines in commodity and crude oil prices.
“But the flexible currencies are expected to appreciate in 2018 and 2019 because of anticipated higher global commodity and crude oil prices, combined with prudent monetary and fiscal policies.”
The AfDB pointed out that in spite of their dependence on primary commodities, exchange rates in many francophone countries have remained fairly stable due to the fact the CFA franc is pegged to the euro.
“CFA (Communauté financière d’Afrique) franc economies—Benin, Burkina Faso, Guinea- Bissau, Côte d’Ivoire, Mali, Niger, Senegal, and Togo—were cushioned by an appreciating euro, despite regional dependence on primary commodities,” the Bank stated.
In addition, the AfDB report forecasts that while there will be a slight decline in inflation in the West African Sub region for this year and 2019, the rate will remain in double digits as a result of exchange rate depreciation.
The Bank stated: “From 2014 to 2017, average inflation in West Africa rose from 8.2 percent to 13.3 per cent, while average inflation in Africa rose from 7.4 percent to 13 percent. West African inflation is projected to decline moderately but stay in double digits—11.6 percent in 2018 and 11.0 percent in 2019.
“The high inflation projections reflect unfavorable macroeconomic developments in key economies such as Nigeria, with 2017 inflation estimated at 16.8 percent, Ghana at 17.5 percent, and Sierra Leone at 19.3 percent. Inflationary pressure came from exchange rate depreciation and domestic imbalances during declines in commodity prices and global demand.”
Pointing out that West Africa’s economy depends on just a few countries such as Nigeria which the Bank said accounts for over 70 percent of regional GDP, “and if Ghana, Côte d’Ivoire, and Senegal are included, the total adds up to 90 percent,” the AfDB added : “The region’s economic prosperity depends on developing these economies, and conversely, it would be harmed by adverse shocks to them, particularly to Nigeria.”
Besides, it stated: “In 2017, regional growth rebounded, averaging about 2.5 percent. In 2018, it is projected to increase to 3.6 percent, and in 2019 to 3.8 percent, Nigeria’s projected performance drives these trends, too.
“The other major economies in the region, Côte d’Ivoire and Ghana (in that order), together contributed about 11 percent of the total regional GDP in 2017, and their projected growth in 2018–19 will reinforce Nigeria’s recovery. The positive outlook for the region is premised on oil price recovery and oil production increases for Nigeria and Ghana, and on strong agricultural performance.”
Benin snatches N300bn roro revenue from Nigeria
Cotonou Port has snatched 50 per cent of revenue being generated from Roll-on Roll- off import at the Nigerian port, the Port and Terminal Multi-services Limited (PTML), operator of Nigerian Roll-on Roll-off terminal at Tincan Port, has said. The amount translates to N300 billion from the N600 billion provided by the National Automotive Council (NAC). According to the council, Nigeria imports 400,000 units of used vehicles valued at N600 billion annually. Of the figure, it was learnt that less than 10, 000 units of new vehicles were imported into the country in the last one year. According to a figure provided by Toyota Nigeria Limited (TNL), about 350 units of new vehicles came through the port in the first quarter of 2017.
The Managing Director of PTML, Mr. Ascanio Russo, who complained that the Federal Government’s auto policy was not adding value to Nigerian economy, said that 50 per cent of the country’s roro imports have been diverted to the neighbnouring port. He noted that the sister company, Grimaldi Lines, has the records of vehicles it shipped to the neighbouring port. It was gathered that the Nigerian port terminal is currently filled with damaged and flood ravaged vehicles from Europe and United States, while luxury vehicles were being diverted to Benin port.
The policy, which attracts 70 per cent levy, was introduced in 2014 to encourage local manufacturing of vehicles and to discourage importation of used cars into country. According to Russo, four years after the auto policy was introduced, Nigerians are yet to ride the much expected made in Nigeria vehicles. He noted that average Nigerian could not afford to pay N10 million for new cars.
The managing director said that roro imports in the country had gone down, leaving an empty space at the terminal. Russo said: “We have Grimaldi lines in different countries and we operate in Cotonou. We have the records of what is going there; I can tell you that over 50 per cent of vehicles which belongs to Nigerians are discharged in Cotonou Port because it is expensive to clear in Nigeria.” Also, Director General of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, said that since the policy was introduced, there had been an increase in the price of vehicles by between 100 to 400 per cent.
Yusuf noted that the increase in duties on imported vehicles introduced four years ago to encourage investment in local assembly plants had failed. He explained that inflation had made a new car of 1.8 litre engine capacity to cost as high as N18 million, while a two-litre engine capacity costs N20 million, three-litre new Japanese car costs N30 million, a 30-seater bus costs N45 million and 18-seater bus costs N29 million.
Before now, Customs duties paid for the categories of vehicle include cars, 30 per cent; buses, 15 per cent; trucks, 30 per cent; while completely knocked down vehicles attract five per cent. Other taxes are Comprehensive Import Supervision Scheme (CISS), one per cent; National Automotive Council, two per cent; VAT, five per cent and ECOWAS Trade Liberalisation Scheme (ETLS).
Yobe plans verification for retirees
The Government of Yobe State is mapping out arrangement to verify workers, who retired from January 2018 till date to enable it pay the appropriate retirement benefits. Disclosing this in a statement, Director-General, Press Affairs to the Governor, Abdullahi Bego, also revealed that the Governor, Ibrahim Gaidam, approved the payment of N670.73 million gratuities to 364 retirees and civil servants that died in the course of service.
He said Gaidam approved N670.73 million as gratuity payments to a total of 364 civil servants who have retired from the services of the state government. According to him, the approval covers the civil servants who have retired (or died) between August and December 2017.It could be recalled that in early January 2018, the governor had approved N1, 097, 896, 058.43 as gratuities to 631 workers who have retired from the services of the state government between January and July 2017.
AIB re-analyses crashes with resuscitated $5.8m lab
Nigeria, through the Accident Investigation Bureau (AIB), has resumed the downloading and analysis of black boxes of aircraft involved in accident in the country. This is seen as a positive development as the agency would save foreign resources that would have been used to take the important equipment to the U.S. or UK for the exercise.
The $5.8 million unserviceable Flight Safety Laboratory equipment at the Nnamdi Azikiwe International Airport (NAIA), Abuja, which was resuscitated last year, was put into use for the analysis of Dana MD 83 airplane that skidded off the runway while landing at the Port Harcourt International Airport, Omagwa, Rivers State, on February 21, 2018. The laboratories were equally used to decode and analyse the Gulfstream accident in Abuja and that of Delta that happened recently.
The laboratory was designed to download information from Flight Data Recorder (FDR) and Cockpit Voice Recorder (CVR) among others, which are necessary requirements for a thorough and accurate accident investigation.
The facility was used to download the flight recorders of Associated Airlines’ aircraft crash of October 2013 with the assistance of the manufacturers of the laboratory despite the fact that the agency had not effected full payment.
However, since the single usage in 2013, the facility had not been put to proper use due to lack of personnel to manage the laboratory. There were also challenges from the manufacturer’s end. The summary of the matter is that the laboratory was not working when the Commissioner, AIB, Akin Olateru, took over leadership of the agency, January last year. Speaking to New Telegraph at the weekend, Olateru, an aircraft engineer, said lack of funds almost hampered activities at the agency when he was appointed last year to head the agency.
He disclosed that AIB does not charge for anything it does unlike the Nigerian Civil Aviation Authority (NCAA), Federal Airports Authority of Nigeria (FAAN), Nigerian Airspace Management Agency (NAMA), Nigerian Meteorological Agency (NIMET) and the Nigerian College of Aviation Technology (NCAT)that charge for their services. Olateru further disclosed that under United Nations charter, AIB is not allowed to charge for its services, forcing the agency to be creative in funding its projects.
Worried by the situation of the agency, Minister of State for Aviation, Hadi Sirika, caused FAAN to cede five per cent of its revenue to AIB from its Passengers Service Charge (PSC). “In terms of funding, this is where I really thank the minister of state for aviation, the National Assembly for their extreme support to make sure AIB delivers on its core mandate and that, we have achieved with their support,” he added. Speaking on common factor of human error or human factor that usually lead to air fatality, the AIB chief said majority of crashes usually happened as a result of human errors. “Human beings all over the world are the most complex machine on earth. Anything that has got to do with human is bound to fail someday. This is why there is nowhere in the world that is not accident prone.
There is no airline today that you can say that does not have serious incident. There is no perfect system anywhere, but all we can do as a nation, responsible people and responsible agency is to ensure we step up the game in human factor.
“Human factor has been identified as the cause of accidents all over the world to and it is recommended that operators, service providers invest in that training to avoid or minimise human factor,” he said. Asked if the age of aircraft operating in the country’s airspace is responsible for the frequent incidents recorded in recent times, Olateru noted that age of aircraft had got nothing to do with airworthiness of the airplane.
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