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CBN Must Review 41 Items Restricted From FX Market

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The Organised Private Sector, OPS, yesterday, insisted that the Central Bank of Nigeria, CBN, must review its policy on the 41 items restricted from official foreign exchange market.

According to the group, the decision is hurting the manufacturing sector in such a way that could no longer be ignored, having led to the closure of many companies and relocation of others from Nigeria to Ghana and other neighbouring countries. It has also led to the refusal to repatriate over $10 billion held offshore by Nigerian businesses. These views were expressed by the Manufacturers Association of Nigeria, MAN; National Association of Small and Medium Enterprises, NASME, and the Lagos Chamber of Commerce and Industries, LCCI, at a ‘Stakeholders’ Dialogue on the Manufacturing Sector in Nigeria’, organised by NOIPolls and the Centre for the Study of the Economics of Africa, CSEA, in Abuja.

Generally, MAN, NASME, LCCI and NOIPolls stated that about 272 manufactures are either ailing or have closed shop over the last couple of months, while thousands of jobs are being cut on a daily basis.

According to Mr. Vincent Nwani, Director, Research and Advocacy, Lagos Chamber of Commerce and Industry (LCCI), the CBN announced the 41-item list without consulting the sector and that the chamber has made several representations to the apex bank without the desired results.

“We did press releases; we did stakeholders engagement; we engaged with the CBN at all levels, at least three times; we met the directors twice–up to the CBN Governors on this same matter of the 41 items- giving them examples of product-by-product. There must be an urgent review of the CBN’s policy on the restriction of access to foreign exchange placed on 41 items, as about16 of the total items in the list, serve as critical raw materials for intermediate goods produced in Nigeria, especially as the country lacks the capacity for optimal production of the items.”

Specifically, he said the ban on oil palm has led to the loss of about 100,000 jobs over the last couple of months, with major blue chip companies in Nigeria relocating to neighbouring countries; while the ban on glass and glassware has led to the loss of 80,000 jobs mainly in the pharmaceutical industry, as companies in this sector now find it difficult to package their products.

He said: “Local production of oil palm is put at about 600 metric tonnes annually, but the total demand of the country is put at about 1.8 million metric tonnes. Today, Presco Oil has orders of up to December 2017 to fill, it is presently hard pressed with demands. Listing oil palms among the restricted items meant that we have a shortfall of about 1.2 million metric tonnes.

“Some of the items placed on the restriction list by the CBN should be reinstated until the country develops the capacity to produce them locally. Some of the items need a period of between three and seven years for the country to develop self-sufficiency in their production. For instance, it takes a minimum of five years for oil palm to be planted and for harvest. The CBN should have given us more time. The manufacturing and industrial sectors lost about N1.4 trillion as a result of foreign issues, while about 780 raw materials needed by the sector were affected by the restrictions placed by the CBN.

“I have talked about palm oil, I have talked about glass and glassware, I have talked about rubber and rubber ware. Glass and glassware, rubber and rubber wares you need about a 3 year gestation period. The palm oil, we need 5 years gestation period before we can have the local capacity to be able to supply the 1.2 million metric tons that is in deficit as we speak. I will not be able to remember all the items off hand but we have the list and I can simply make it available.

“We have sent it to CBN before, they put up resistance about it and we are ready to send it again. You know the challenge the organized private sector had initially was that we were not able to understand the magnitude of this challenge.

“We are making this demand on the basis that we don’t have local capacity for the affected items on the list. Even if we are having scarcity of foreign exchange some of these lists need to be supplied and because of that, few of our members who have been able to earn export credit or export income in dollars have refused to bring it in or repatriate it. We have about $ 10 billion stuck in one country or the other earned by our members. Some of them are not manufacturers; some are agriculturists or merchants of different products. They cannot bring it in because the business confidence, the manufacturing confidence, industrial confidence is negative.

“Until we do something to boost this confidence all of this money will be stocked abroad. Even Nigerians that are living in the Diaspora that was able to bring in $ 23 billion in 2013. Last year we saw about 5 billion dollars, this year it is going to be less than 3 billion dollars. This is what negative confidence can do to an economy.”

Speaking in the same vein, Executive Secretary of NASME, Mr. Eke Ubiji, stated that recently, about 222 of its members have either collapsed or are ailing, while he blamed lack of access to credit, foreign exchange challenges, high interest rate, multiple taxation and poor infrastructure, among others, for their woes.

MAN

Also speaking, Mr. Ambrose Oruche, Director, Economics and Statistics of the Manufactures Association of Nigeria, MAN, lamented that the unavailability of productive inputs is the major challenge confronting manufacturers, stating that this was as a result of the restriction placed by the CBN on certain items.
According to him, the current operating environment in the country is harsh for many manufacturers to continue to operate, disclosing that some economic policies churned out by the Federal Government and the CBN are conflicting and are retarding the growth of the manufacturing sector.

He argued that the manufacturers were not consulted by the CBN and other regulators before the restrictions were placed on the items, noting that many of the products under foreign exchange restrictions are raw materials needed by manufacturers.

He said, “Presently, about 50 manufacturers have closed shop, while some have downsized.

Some manufacturers are still producing due to their love for this country. Government policy on cement should have adopted in this case.

“In the case of cement, Nigeria used to be a net importer of cement, but the government set up a policy over a five-year period, which made it possible for us to be a net exporter of the commodity.”

MPR

Mr. Oruche further faulted the decision of the CBN to increase the Monetary Policy Rate, MPR, to 14 per cent, stating that it has made it difficult for manufacturers to access funds to finance t heir operations. According to him, the fact that the economy is technically in recession, the CBN’s effort should have been directed towards expanding the economy rather than contracting it.

He also listed high interest rates, poor patronage of local manufactured products, poor supporting infrastructure, such as poor power supply, policy somersault and policy inconsistency, among others, as the challenges confronting manufacturers. To address the declining fortunes of the manufacturers, Mr. Oruche called for the resuscitation of domestic refining, as this would ensure that certain chemicals imported into the country, can now be sourced locally.

He also stated that attention should be paid to developing the infrastructure base of the economy and also on energy generation and distribution, while the Federal Government should also grant incentives and concessions to businesses.

The Chief Executive Officer of NOIPolls, Mr. Bell Ihua, said that the organization’s survey covered all six geopolitical zones of the country and that urgent actions were needed by the federal government to save the sector.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Appointments

Former Goldman Sachs Managing Director, Gurbhej Dhillon Joins Flutterwave as New the CTO

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Flutterwave, Africa’s leading payments technology company, today announced the appointment of former Goldman Sachs’ Managing Director, Gurbhej Dhillon as Chief Technology Officer (CTO).

Gurbhej joins at a key time for Flutterwave, following its recently completed Series D funding round, valuing the company at over USD 3 billion, and maintaining its rapid expansion.

As the new CTO, Gurbhej will be responsible for the further development of Flutterwave’s innovative technology platform which currently supports integrations with key technology partners like VISA, Mastercard, Discover Card Networks, and customers like Uber, Flywire, Booking.com etc. He will focus on improving the architecture and infrastructure, as well as providing leadership enabling other engineering and product leaders to create the best solutions that support business growth for customers.

Gurbhej joins Flutterwave from Marcus by Goldman Sachs, where he was the CTO and Head of Lending Engineering. He has extensive experience in enterprise application architecture across financial services and consumer businesses. At Marcus, he was responsible for launching platforms to significantly grow businesses while improving customer experience and established strategic partnerships with several Fortune 500 companies.

Prior to that, Gurbhej was CTO for Goldman Sachs’ Investment Banking Capital Markets team, responsible for the design, architecture, and build-out of strategic platforms that enabled clients to execute equity and debt product offerings.

Gurbhej is a great supporter of the Developer Community in Africa and admires the work they have done in recent times, building creative solutions at a world-class standard.

In his role as CTO of Africa’s leading technology company, Gurbhej hopes to support the Community to attain higher levels.

Olugbenga ‘GB’ Agboola, Founder and CEO of Flutterwave, said: “I look forward to working closely with Gurbhej as we continue to expand rapidly. With the needs of our customers constantly evolving, we remain focused on driving further innovation across the business and continuing to develop our cutting-edge technology platform that simplifies payments and connects the African market with the world. Gurbhej’s experience and deep expertise in developing financial technology platforms will be instrumental in Flutterwave’s further growth.”

Commenting on his appointment, Gurbhej Dhillon said: “I am delighted to be joining the Flutterwave team at such an exciting time for the company. As a leading financial technology company in Africa, Flutterwave is well-positioned to capitalise on the global trends in payment digitisation and continues to drive Africa’s digital transformation, creating further opportunities for customers and merchants alike. It is a very crowded market with lots of new entrants so it is vital that we as a company continually look to innovate our products and services, improve our existing architecture and create endless possibilities for everyone.”

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Merger and Acquisition

Bankman-Fried’s FTX Says no Talks to Acquire Robinhood

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Sam Bankman-Fried’s FTX crypto exchange said it is not in talks to acquire Robinhood Markets Inc, after a report on Monday claimed the exchange was exploring such a deal.

Bloomberg News reported on Monday FTX was discussing internally how to buy the app-based brokerage and that Robinhood had not received a formal takeover approach, citing people with knowledge of the matter.

“There are no active M&A conversations with Robinhood,” Bankman-Fried said in an emailed statement.”We are excited about Robinhood’s business prospects and potential ways we could partner with them.”

Robinhood declined to comment. The retail-trading platform’s shares were down 5% in extended trading after jumping over 14% on the report.

Last month, the founder and chief executive of FTX revealed a 7.6% stake in Robinhood but said he did not have any intention of taking control of the retail-trading platform.

Robinhood’s dual-class shares give its founders control of 64% of the voting shares outstanding, making it virtually impossible for takeovers without their support.

The popular trading platform has come under pressure this year as trading volumes ease from 2021’s frenetic pace – when retail investors used it to pump money into shares of so-called meme stocks such as GameStop and AMC Entertainment.

That slowdown, along with a sell-off in high-growth technology stocks, has driven a near 50% slump in Robinhood shares this year. The company had a market valuation of nearly $7 billion as of Friday’s closing price.

FTX’s U.S. arm announced in May it would launch a stock trading platform by the end of the summer. Last week, it acquired partner Embedded Financial Technologies for an undisclosed amount, which would add custody, execution and clearing services to its equity trading platform.

FTX and its billionaire founder Bankman-Fried have rescued other players during the crypto market’s recent crash. It provided crypto lender BlockFi with a $250 million revolving credit facility to help the firm avoid a liquidity crunch.

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Heavy Rains Help Ivory Coast Cocoa, But Some Farmers Fear Flooding

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Above-average rains last week in most of Ivory Coast’s cocoa regions were good for development of the next October-to-March main crop, but much more moisture could be damaging, farmers said on Monday.

The world’s top cocoa-producing country is in its rainy season from April to mid-November, with farmers reporting unusually heavy rains last week in the western region of Soubre, the southern regions of Agboville and Divo and the eastern region of Abengourou.

It was difficult to harvest pods on trees for the mid-crop, and also to dry and store beans after harvesting, farmers said.

“The rains were very strong. It’s hard to keep the beans in good condition,” said Alexandre Boni, who farms near Agboville, where 128.1 mm of rain fell, 70 mm above the five-year average.

“There is also a risk that some fields will be flooded,” he added.

Similar fears were voiced in Soubre and Abengourou, both of which had more than 99 mm of rain last week, 47.5 mm and 46.7 mm above their respective five-year averages.

In the west-central region of Daloa and in the central regions of Bongouanou and Yamoussoukro, where rains were also above average, farmers said they were happy because flowers were proliferating on trees for a strong start to the main crop in October.

“The weather is good. We could be getting a lot of cocoa from September,” said Amani N’Guessan, who farms near Yamoussoukro, where 71.8 mm fell last week, 44 mm above the average.

Weekly average temperatures ranged from 24.8 to 27.7 degrees Celsius.

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