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Forex reserves hit 6 months import cover

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With the country’s external reserves surging to $46.04billion at the end of the first quarter of this year, the Central Bank of Nigeria (CBN) now has the capacity to conveniently meet foreign exchange demand without worrying about the stability of the Naira for a period of six months, analysts at GTI Research have said. In a report obtained by New Telegraph, the experts stated that the significant increase in the foreign reserves was the most significant positive development that took place in the nation’s economy in the first quarter of 2018. They stated: “The biggest winner of all the positive activities that took place both in the domestic and external economic fronts within the period is the foreign reserves account.

The reserves account closed at $46.04 billion, representing a growth of 18.75% from $38.77 billion it opened the year. The account was significantly boosted by increased receipt from crude oil sales (oil revenues makes about 95% of the reserves account).“With the improved state of the reserves account, the CBN’s ability to support the naira in an adverse situation now stands at a healthy six months’ period.

This development can be traced to significant increase in oil output as a result of relative peace in the Niger-Delta region,” the analysts added. They also pointed out that the forex market was less pressured in the first quarter of 2018 compared to same period of 2017, noting that the Investors and Exporters’ (I&E) window, “ continued to dictate the route of major transactions block for the FX and was relatively volatile in the period as it undulated significantly but eventually closed at N360.03,representing a marginal appreciation of 0.08%.” Last week, the CBN Governor, Mr. Godwin Emefiele, had put the level of the forex reserves as at April 5 at $47.4billion.

The Governor, who made this disclosure at the at the 25th CBN seminar for Finance Correspondents and Business Editors in Uyo, Akwa Ibom State, also predicted that the reserves would soon hit the $50 billion mark. Emefiele, who was represented by Deputy Governor, Corporate Services at the apex bank, Mr. Edward Adamu, attributed the reserves accretion to policies introduced by the CBN which, according to him, helped the country to navigate its way out of economic recession.

Interestingly, analysts at GTI Research, citing the, “healthier foreign exchange reserve account”, predicted in their report that the Nigerian economy is on track to post an improved growth in the first quarter of 2018. Besides, they stated : “A purchasers’ managers Index (PMI) reading of 56.7 index points in the month of March, indicating that the manufacturing industry has fared relatively better in Q1 2018 as a result of lower inflationary environment.”

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Business

Group hires pioneer executive secretary

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Women in Successful Careers (WISCAR) have appointed Mrs. Fabia Ogunmekan as its pioneer executive secretary. WISCAR is a non-profit organisation focused on empowering and developing professional women to contribute to economic development and nation building in Nigeria and Africa. As the group’s executive secretary, Ogunmekanwouldoversee thedayto dayadministrationof WISCAR’sstrategyimplementationand programmes management. Prior to joining WISCAR, she served as alumni engagement manager at the Tony Elumelu Foundation.

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Insurance industry rebranding gains traction

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Efforts to rebrand the nation’s insurance sector have gained a renewed momentum as the estimated funds targeted for the project receive some boost. Indications emerged last week that the project, which has been shifted twice for lack of finance, is set to take off soon as a number of insurance companies have made financial contributions.

Giving an update on the programme last week in Lagos, the Director-General, Nigerian insurers Association, Mrs. Yetunde Ilori, said the industry was prepared now more than ever before to get the programme under way. Although she could not give specific date when it will commence, she, however, said it was certain that the industry was set to work with the consultant any moment from now to set the ball rolling.

While the contributions made so far by the underwriters is still being kept under wraps, it has, however, been revealed that the regulator, National Insurance Commission (NAICOM), has so far made a contribution of N40 million towards the project. According to available report, NAICOM contributed additional N20 million to the rebranding project, having earlier donated same amount in February. Although the Insurers’ Committee, which initiated the project about two years ago had estimated it to cost N300 million, the NIA director- general, however, said the exercise would be carried out based on whatever amount that can handle it without necessarily waiting for the committee’s estimation. Ilori had earlier clarified that the rebranding project would not be product based, but a general awareness campaign on benefits of insurance.

She noted that the campaign would be geared towards encouraging Nigerians to rely on insurance even as they make adventures, adding that the industry hopes to use the campaign to encourage Nigerians to pursue their visions vigorously with the assurance that insurers are always ready to support their dreams. Insurance operators had agreed to raise 50 per cent of the funds for the rebranding project from companies’ gross premium income, and the balance 50 per cent, shared evenly. The initiative, according to the committee, will be driven via social media, print and electronics, adding that greater attention will be on the social media due to the youth population.

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Benin snatches N300bn roro revenue from Nigeria

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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).

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