- Afreximbank Seeks Improved Intra-Africa Trade
For the umpteenth time, African Export-Import Bank (Afreximbank) has reiterated that active participation in intra-African trade will foster resilience in the region’s economies.
Already, the region’s biggest trade bank said the initial response to the call trade has made it possible for a number of African countries to record strong trade figures, amid persistent fall in commodity prices.
Afreximbank President, Dr. Benedict Oramah, in Addis Ababa, at the Africa Trade Facilitation Forum, organized by the African Union and the United Nations Economic Commission for Africa, said that a distinguishing feature of countries like Cote d’Ivoire, Ethiopia, Senegal, Rwanda, Morocco and Kenya, with economies growing at blistering paces, was their greater participation in intra-African trade.
Meanwhile, the bank has sealed a Dual Tenor-Dual Currency Syndicated Term Loan Facility, cumulatively worth $872 million, with strong support from its core relationship banks, for trade finance and general corporate purposes.
The deal, which involved 14 banks and 12 Initial Mandated Lead Arrangers and Bookrunners, saw the bank seal a $761 million and €105 million facilities.The 14 lenders that joined in the general syndication have been described as a balanced mixture of institutions from the Middle East, Europe and the Asia-Pacific region.
The Facility comprises a $316 million Tranche A1 and €105 million Tranche B, each with a tenor of two years, and a $445 million Tranche A2 with a tenor of three years.
Already, the margins of both the two and three-year tranches, at 130bp and 150bp respectively, represent the lowest levels that Afreximbank has paid for a syndicated loan.
“Kenya and Cote d’Ivoire’s intra-regional trade share of their respective total trade is 40 per cent and 32 per cent respectively. Intra-African trade has enabled the Kenyan shilling to remain reasonably stable when many others have been badly battered,” Oramah said.
For Nigeria, while the trade record made impressive rise in the third quarter, the directions of the transactions were dominated by Asia, Europe and United States, while Intra-African trade showed that imports were 3.6 per cent of the total.
Oramah said that intra-African trade had proven to be a buffer to external shocks and an instrument for structural transformation of commodity dependent African economies.
According to him, while Africa’s total trade in 2016 is expected to remain subdued, intra-African trade is expected to bounce back strongly to reach an estimated $180 billion, the same level attained in 2013, pushing its share of African trade to a new high of 19 per cent.
To this end, he said Afreximbank had introduced an Intra-African Trade Initiative under which it had committed to working with others to achieve more than 50 per cent growth in intra-African trade by raising the value from $170 billion in 2013 to $240 billion by 2021, a target of 22 per cent rise.
The bank was also aiming at formalising no less than 40 per cent of Africa’s informal cross-border trade.Noting that this is the time for trade facilitation and advocacy in accelerating intra-African trade, he warned that there is the need resolve issues of free movement and multiplicity of standards across the continent.
Tinubu Forms Economic Advisory Committee with Private Sector Titans
In a bid to address Nigeria’s economic challenges amidst soaring inflation and currency depreciation, President Bola Tinubu has announced the formation of an Economic Advisory Committee with influential figures from the private sector.
The decision follows a high-level meeting held at the State House in Abuja, where key stakeholders deliberated on strategies to stabilize the economy and mitigate the rising cost of living.
Among the notable members enlisted to the committee are Tony Elumelu, Chairman of United Bank for Africa, and Aliko Dangote, Chairman of Dangote Group, both distinguished figures in Nigeria’s business landscape.
The inclusion of these private sector titans underscores Tinubu’s commitment to engaging diverse perspectives and expertise in charting a path towards economic recovery.
Speaking on behalf of the federal government at the meeting, President Tinubu emphasized the imperative of collective efforts in revitalizing the economy and ensuring a brighter future for all Nigerians.
He underscored the importance of addressing pressing issues such as food security, job creation, and the stabilization of the exchange rate.
In response, Aliko Dangote expressed optimism about the committee’s potential to generate actionable recommendations that would foster economic growth and alleviate poverty across the nation.
Similarly, Tony Elumelu highlighted the significance of implementing effective policies to drive employment opportunities and enhance food security.
The committee’s mandate encompasses a broad spectrum of economic concerns, including currency stability, inflation management, and fiscal policy reforms.
As Nigeria grapples with the multifaceted challenges of a turbulent economy, the collaborative efforts of government and private sector stakeholders signal a proactive approach towards finding sustainable solutions and restoring confidence in the nation’s economic prospects.
Federal Government Halts Cooking Gas Export to Lower Local Prices
In a bid to stabilize domestic prices and meet rising demand for cooking gas within Nigeria, the Federal Government has announced a temporary halt on the exportation of Liquefied Petroleum Gas (LPG), commonly known as cooking gas.
This decision follows a significant surge in the cost of cooking gas, which has placed a strain on consumers across the country.
According to reports, the halt in LPG export aims to increase the availability of the commodity within Nigeria’s borders, thereby reducing its local price.
The move is part of broader efforts to address the challenges faced by consumers grappling with the high cost of living.
In recent years, the demand for cooking gas has steadily increased in Nigeria, driven by urbanization, population growth, and a shift towards cleaner energy sources.
However, despite being a major producer of LPG, Nigeria has struggled to meet its domestic demand due to insufficient local production and distribution infrastructure.
Data from the Nigerian Midstream Downstream Petroleum Regulatory Authority reveals that while the total consumption of cooking gas in Nigeria has been on the rise, the country has relied heavily on imports to bridge the supply gap.
The recent decision by the government underscores its commitment to prioritizing the domestic market and ensuring that Nigerians have access to affordable cooking gas.
Consumers have been grappling with escalating prices, with reports indicating a significant increase in the cost of refilling a 12.5kg cylinder of cooking gas in major cities like Abuja, Lagos, and Kano.
The decision to halt LPG exports signals a proactive measure by the government to mitigate the adverse effects of rising prices and alleviate the financial burden on households across the nation.
Manufacturing Sector Records 7.70% Quarter-on-Quarter Growth in Q4 2023
In the fourth quarter of 2023, Nigeria’s manufacturing sector grew by 7.70% year-on-year, according to the National Bureau of Statistics (NBS).
The surge in growth reflects a significant uptick from the preceding quarter and underscores the resilience of the manufacturing industry amid economic challenges.
This growth trajectory indicates positive momentum and signals potential opportunities for economic recovery and development.
The manufacturing sector, comprising thirteen key activities ranging from oil refining to motor vehicles and assembly, demonstrated notable dynamism across various subsectors.
This growth surge is attributed to increased production, enhanced operational efficiencies, and strategic investments across the manufacturing value chain.
Despite facing headwinds such as supply chain disruptions and regulatory uncertainties, the sector’s robust performance underscores its pivotal role in driving economic diversification, job creation, and industrialization efforts in Nigeria.
Moving forward, sustaining this growth momentum will require continued policy support, investment in infrastructure, and efforts to address key bottlenecks hindering the sector’s expansion.
By fostering an enabling business environment and promoting innovation and technology adoption, Nigeria’s manufacturing sector can further catalyze inclusive economic growth and contribute significantly to the nation’s development agenda.
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