The decision of the Britons to exit the European Union has thrown global economy in turmoil with uncertainties as to its impacts on the Nigerian economy and the world at large.
It is not new that Nigeria holds significant economic position globally, and her comparative advantage is well value in the western world and beyond. While the majority of economists has emphasized the effect of Brexit on the Nigerian economy, it’s imperative to underscore Nigeria new position post-Brexit.
In May, the European Union approached Nigeria to increase her exports, rubber, cocoa and palm oil to the region after sensing potential Brexit, a request most economists frown at and insisted Nigeria needs technology to process her raw materials if diversification agenda most be actualized.
“It is simply wrong to continue to import finished products of our agricultural produces at higher cost, and yet complain of capital flight, high unemployment rate, high inflation rate and weak exports.”
It could also be recalled that in early June the European Union has asked Nigeria to sign the Economic Partnership Agreement with attractive offers, including a €6.5 billion (about N1.4tn) Development Programme to provide funding for projects linked to trade, industry, energy and transport infrastructure in the region.
But the president of the Manufacturers Association of Nigeria, Dr. Frank Jacobs, had advised against the partnership fearing that it might eventually turn Nigeria into a dumping ground for superior products from more advanced nations in the partnership.
While in 2011, the U.K. and Nigeria agreed on a joint mandate to increase trade between the two countries from £4 billion to £8 billion by 2014. The target was archived and projected to reach £20 billion by 2020 if the government remains proactive and support businesses.
Presently, both the European Union and the U.K. are struggling to further their business reach and economic allies as their economies continue to shrink by the day. But with China closer in striking a better deal with Nigeria than any of the two Europe giants, Nigeria is once again a competitive business destination, if the Nigerian government seized the opportunity.
However, to evolve from imports dependent economy to a more diversify economy Nigeria needs to position itself as an investment destination. This is why China deals standout, but the government has a role to play by reducing interest rates to stimulate real economic growth and create jobs, providing loan facilities to encourage local participation and genuine small and medium enterprises, security of lives and properties to attract foreign investors and formulate effective business policies.
As long as businesses are paying between 25 – 30 percent on business loans, FIRS and AMCON will continue to add to the unemployment rate by shutting down businesses for defaulting on payments. While, consumer spending and new job creation nosedive. Creating a negative business environment and further daunting whatever prospect the nation holds going forward.
Regardless of investment opportunities in the nation, no businesses or investors will invest in an economy with weak economic outlook and uncertainties, rather they will continue to do business without long-term prospect while the economy plummet.
Flour Mills of Nigeria Repays N51.64 Billion Series 2 Commercial Paper
Flour Mills of Nigeria Plc (FMN) has successfully repaid its N51.64 billion Series 2 Commercial Paper as revealed in a statement issued by the company.
This follows the earlier repayment of its N13.33 billion Series 1 Commercial Paper in August 2023.
Both the Series 1 and Series 2 Commercial Papers, totaling N64.97 billion, were initially issued on February 22, 2023, under FMN’s N200 billion Commercial Paper Programme.
The Series 1, with a yield of 13.0%, raised N13.3 billion, while the Series 2, with a yield of 14.0%, raised N51.64 billion.
FMN had launched its N200 billion Commercial Paper Programme on February 10, 2023, reflecting the company’s strategic financial planning.
The Group Chief Finance Officer, Mr. Anders Kristiansson, expressed satisfaction with the timely and successful repayment of the Series 2 Commercial Paper.
He emphasized FMN’s commitment to financial prudence and acknowledged the confidence placed in the organization by the investing public.
Kristiansson expressed gratitude to stakeholders for their continuous support, reiterating FMN’s dedication to delivering sustainable value and upholding the highest standards of corporate governance.
In addition to the successful repayment, FMN tapped into the market for its Series 3 Commercial Paper in June 2023, with subscriptions from banks and Pension Fund Administrators, contributing 39.7% and 40.8%, respectively.
The transaction was managed by FBNQuest Merchant Bank Limited as the Lead Arranger, with ChapelHill Denham Advisory Limited, FCMB Capital Limited, and United Capital PLC serving as Joint Arrangers.
African Airlines Projected to Cut Losses to $400m in 2024, Says IATA
The International Air Transport Association (IATA) has forecasted a reduction in losses for Nigerian and other African airlines from $500 million in 2023 to $400 million in 2024.
The Switzerland-based IATA made this projection while presenting the global airline industry outlook in Geneva, Switzerland, on Wednesday.
IATA’s Director-General, Willie Walsh, shared the outlook, stating that global airlines are expected to generate approximately $964 billion in revenue in the coming year.
The report indicated that airline industry net profits are anticipated to reach $25.7 billion in 2024, reflecting a slight improvement over the projected $23.3 billion net profit for 2023.
Despite the challenges faced by the aviation industry in recent years, IATA sees the $25.7 billion net profit in 2024 as a testament to aviation’s resilience.
Walsh acknowledged the impressive speed of recovery but emphasized that the net profit margin of 2.7% remains below industry expectations.
IATA estimates that around 4.7 billion people will travel in 2024, surpassing the pre-pandemic level of 4.5 billion recorded in 2019.
However, Walsh highlighted ongoing challenges, including regulatory burdens, fragmentation, high infrastructure costs, and a supply chain populated with uncertainties.
He emphasized the need for the industry to build a resilient future, given its significant contribution to global GDP and livelihoods.
Fuel prices are expected to average $113.8 per barrel in 2024, accounting for 31% of all operating costs, totaling $281 billion.
Walsh concluded by expressing optimism about more normal growth patterns for both passenger and cargo in the post-pandemic era.
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