Naira faces downside risks, slumps to N760/$ at black market
Four days before the inauguration of a new administration, naira seems to have lost its long-standing N750/$ resistance as it dipped to N760/$ yesterday.
The market may have started pricing in uncertainty risk that comes with a change of national economic managers. Some dealers told The Guardian yesterday that there has been a surge in the demand for foreign exchange (FX) since the beginning of the week, though they could not justify the sudden spike.
But further market intelligence suggests a comeback of high-ticket transactions to the black market. Sources linked the surge to next week’s inaugurations across the country.
The Guardian, however, could not independently confirm that the large volume of transactions is coming from the political circle. Previously, past governors and lawmakers had allegedly fled the country with ill-gotten wealth immediately after the end of their tenures for fear of being arrested by anti-corruption agencies.
President Muhammadu Buhari will leave office on Monday alongside 44 ministers and retinue of aides who have held on to power in the past eight years.
Across the country, 18 governors will also hand over the batons of the political leadership of their states beginning next week as their successors take the oaths of office.
Members of the National Assembly and 36 parliaments will also be inaugurated days after the executives take over the reins of office. Some of the outgoing public officials (some of who are covered by the immunity clause), The Guardian was informed, are on the watch of the Economic and Financial Crimes Commission (EFCC).
A source privy to details of some of the investigations said the EFCC is reviewing dossiers of petitions, some of which may be politically motivated, and that some governors may have been under close watch.
“Whether there are petitions is not a question but how many of them are viable? If you understand the number of public officials that are leaving office soon, you will be surprised that there is so much jittery in the political space,” the source said.
Dating back to the pre-election era, the pages of newspapers are rife with accusations and counter-accusations of fraud and misappropriation of public resources. Different officials have also been involved in phony projects to have been conduits of siphoning state resources.
This is not the first time naira would lose its hold ahead of the inauguration. The 2015 foreign exchange rate crisis pre-dated the general elections but spiked weeks before the inauguration of the Buhari administration, raising concern about the correlation between dollar scarcity and the winding down of subsisting administration.
On Monday morning, naira traded around N735/$ but started loosening its hold at the close of the day. As of press time, it had lost close to four per cent week-to-date (WTD). Except for the growing demand ease, the local currency faces more downside risk
Fuel subsidy: Innoson unveils gas powered vehicles
Nigeria’s indigenous automobile company, Innoson Vehicle Manufacturing, IVM, has mass-produced varieties of Compressed Natural Gas, CNG, buses.
This according to the company serves as a suitable alternative for Nigerians following the rising price of petrol and diesel.
The showcase of the CNG vehicles took place at the company’s factory in Nnewi, Anambra State.
The vehicles range from trucks, mini-buses, ambulances, long buses, SUVs, and several others.
Speaking during the unveiling, the Chief Executive Officer, IVM, Dr. Innocent Chukwuma assured Nigerians of the safety of CNG Vehicles and the availability of various kinds of cars.
“We manufacture according to demand, and we manufactured these buses because there is a demand for them now. During the COVID-19 Pandemic, we produced more ambulances, so we are on the ground and ready to produce.
“CNG vehicles bring a solution to total dependence on one or two kinds of vehicles.
“The CNG vehicles are a solution, that’s why we produce them. We made space for CNG, LNG, and Fuel so that anyone available in an area can be used to drive the vehicles. Electric cars, biogas, and solar-powered vehicles are also produced in this factory.”
Similarly, the Governor of Anambra State, represented by the Commissioner for Industry, Anambra state, Mr. Christian Udechukwu stated that the state is gearing up to provide solutions to the challenges facing Nigerians because of the removal of subsidies.
In his words, “We are aware that Innoson has renewable technologies, CNG, LNG and Solar powered technologies that can contribute to the mass transport system in Nigeria and other national solutions”.
“The withdrawal of the subsidy has created a shock and the price of fuel has increased by almost 200% leading to restiveness in the Nigerian Labour Congress, the trade unions, and other Nigerians. The cost of transportation has risen apparently and one of the ways the government can alleviate that is by introducing mass transit systems that run on alternative energies as well as fuel. The more you have the ones that run on gas and solar, the greater the chances of a stable fuel price due to the existence of choices and Innoson offers that”.
He also added that local manufacturing and empowered industries are needed in Nigeria to boost the economy and shrink the national debt profile. All we need is for the industries and everyone else to look to local solutions and Innoson is one.”
The Head of Corporate Communications, IVM, Mr. Cornel Osigwe pointed out the advantages of Natural Gas Vehicles and the need to patronize local manufacturers. According to him, “Gas has high combustion rate than fuel. So generally, gas is more environmentally friendly. Nigerians are used to petrol cars but the abundance of natural gas has provided sustainable alternatives to all.
“Transportation is very crucial to economic development. Beyond the movement of people from one place to another, it also facilitates the quick and effective distribution of goods and services.
“At this stage in Nigeria’s development, better transportation options are the perfect solution to the rising dependence on petrol and diesel to meet the transportation needs of over 200 million persons.
“Innoson Vehicle Manufacturing, an indigenous car manufacturing company has produced hundreds of CNG-powered vehicles suitable for Nigerian and African Roads
Mobile subscriptions shrink by three million
Nigeria’s mobile subscriptions shrank by 3.49 million mobile subscriptions in the last three months, leaving a dent in the country’s march toward mobile inclusion for all.
Since mobile subscriptions hit an all-time high of 226.84 million in February of this year, it has been on a steady decline.
It first fell to 225.82 million in March, before slumping further to 223.34 million, according to new industry data from the Nigerian Communications Commission. This is also the first time since June 2021 that mobile subscriptions have fallen consistently.
In 2020 and 2021, a Federal Government policy to link SIMs to National Identification Numbers affected the mobile industry and caused a steep decline in mobile subscriptions. Since then, subscriptions have improved, and risen to record highs.
MTN Nigeria is the only telecommunication firm to have lost mobile subscriptions in the period under review, losing 4.03 million (from 92.71 million to 88.68 million), while retaining its spot as the largest mobile network operator in the country.
Other telcos had better fortunes, with Globacom marginally growing by 172,867 from 60.76 million to 60.93 million; Airtel added 31,705 new subscriptions and grew from 60.30 million to 60.33 million; and 9mobile witnessed the largest growth, adding 330,003 new subscriptions to hit 13.40 million from 13.07 million in the period under review.
Within the three months, teledensity (the number of active telephone connections per one hundred (100) inhabitants living within an area) fell to 117.17 per cent in April from 119.01 per cent in February.
In MTN’s first quarter report, MTN Nigeria’s Chief Executive Officer, Karl Toriola, noted that global macroeconomic factors, inflation, and cash shortages, among others, were affecting its consumers.
He said, “We continued to experience headwinds in our operating environment in the first quarter of 2023. The impacts of the ongoing global macroeconomic and geopolitical developments on energy, food, and general inflation were exacerbated locally by petrol and cash shortages experienced during the period. This placed additional pressure on economic activity, consumers, and businesses.”
Nigeria’s mobile population is the largest in Africa and the prior steady growth in the number of mobile subscriptions had been attributed to increased productivity and efficiency in other sectors
BREAKING: “Fuel Subsidy Is Gone” – Tinubu Declares After Inauguration
President Bola Tinubu has declared that fuel subsidy is now a thing of the past under his administration.
POLITICS NIGERIA reports that the president made the declaration during his inaugural speech at Eagle Square on Monday.
Furthermore, President Tinubu vowed to address concerns regarding multiple taxations, a move aimed at stimulating the economy and attracting investments.
Setting ambitious targets, the president articulated his administration’s goal of achieving a minimum Gross Domestic Profit growth rate of 6%.
Radiating unwavering confidence in the Nigerian people, Tinubu pledged to embrace the sacred mandate bestowed upon him, underscoring the nation’s exceptionalism and indomitable resolve to fulfil its destined path.
Despite enduring formidable challenges that would have tested the mettle of any nation, Tinubu extolled Nigeria’s resilience and urged the preservation and advancement of the progress made by preceding generations.
“We must never allow the sacrifices of our predecessors to be in vain,” affirmed Tinubu. “Instead, let us nurture their legacy and strive to forge a brighter and more prosperous reality for our beloved nation.”
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