- Prioritise FX Allocation to Local Manufacturers
A group known as Association of Agricultural Products and Equipment Manufacturers (AAPEM) has stressed the need for the prioritisation of forex allocation to indigenous manufacturers by banks and other authorised dealers.
According to this group, made up of indigenous agro processors and equipment assemblers, the practice of providing FX to foreign firms at the expense of indigenous manufacturers must stop, adding that relevant government ministries, departments and agencies had not shown sufficient will and grit to support indigenous players. The group made this call yesterday at a press briefing held in Lagos.
The Central Bank of Nigeria (CBN) had in August directed commercial banks and other authorised dealers in the FX market to ensure that they channel 60 per cent of total FX purchases from all sources (interbank inclusive) to end users strictly for the purpose of importation of raw materials, plant and machinery. The central bank had said it took the decision following its review of returns on the disbursement of FX and observed that a negligible proportion of FX sales were being channeled towards the importation of raw materials for the manufacturing sector.
But the Secretary-General of the group, Mr. Farouk Abdullahi, said government’s ministries, departments and agencies (MDAs) had not supported local farmers, thereby frustrating manufacturers who needed farm output as raw materials. He blamed this on the way FX had been allocated in recent times, saying that the situation was not good for indigenous players.
“If you rely on a foreigner, the day he will say ‘no’ to you, you will be in trouble, because he knows you cannot feed yourself. We need to be self-sufficient, but there must be support from the CBN and other government agencies,” Abdullahi, who is also a lawyer, said.
“We call on the federal government to start with more support to farmers, provide very cheap fertilizers, insecticides, herbicides, among others,” he said.
He also said tomatoes in the northern part of the country were sold at ridiculously cheap prices because nobody was willing to buy, adding that Nigerians must patronise made-in-Nigeria products.
“If we don’t buy made-in-Nigeria products, nobody will buy it. This is what civilised nations do,” he said.
On his part, the President and CEO of Erisco Foods Limited, Mr. Eric Odinaka Umeofia, said indigenous manufacturers had made up their minds to stand up against injustices from government agencies.
Umeofia alleged that government ministries, particularly the Ministry of Industry, Trade and Investment, NAFDAC and the central bank had not shown enough confidence in indigenous manufacturers.
“We need foreigners as much as we need indigenous manufacturers. But what we are saying is that there should be fairness. Some foreigners come in here as investors but end up collaborating with unscrupulous persons to sabotage our economy,” he stated.
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.
OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.
Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”
Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.
Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.
Experts have started predicting $75 a barrel by April.
“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”
Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin
Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges
Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.
The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.
The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.
“We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.
Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.
Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.
In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.
The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.
Oil Prices Extend Gains to $64.32 Ahead of OPEC+ Meeting
Oil Prices Rise to $64.32 Amid Expected Output Extension
Oil prices extended gains during the early hours of Thursday trading session amid the possibility that OPEC+ producers might not increase output at a key meeting scheduled for later in the day and the drop in U.S refining.
Brent crude oil, against which Nigeria oil is priced, gained 0.4 percent or 27 cents to $64.32 per barrel as at 7:32 am Nigerian time on Thursday. While the U.S West Texas Intermediate gained 19 cents or 0.3 percent to $61.47 a barrel.
“Prices hinge on Russia’s and Saudi Arabia’s preference to add more crude oil production,” said Stephen Innes, global market strategist at Axi. “Perhaps more interesting is the lack of U.S. shale response to the higher crude oil prices, which is favourable for higher prices.”
The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, are looking to extend production cuts into April against expected output increase due to the fragile state of the global oil market.
Oil traders and businesses had been expecting the oil cartel to ease production by around 500,000 barrels per day since January 2021 but because of the coronavirus risk and rising global uncertainties, OPEC+ was forced to role-over production cuts until March. Experts now expect that this could be extended to April given the global situation.
“OPEC+ is currently meeting to discuss its current supply agreement. This raised the spectre of a rollover in supply cuts, which also buoyed the market,” ANZ said in a report.
Meanwhile, U.S crude oil inventories rose by more than a record 21 million barrels last week as refining plunged to a record-low amid Texas weather that knocked out power from homes.
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