- Hope Rises as Reserves Rebound to $25.8b in New Year
With persistent and gradual gains in the last three months, the nation’s foreign exchange (forex) reserves ended 2016 at $25.78 billion, after gaining $420 million in seven days.
The resurging reserves’ profile is raising the hopes for calm forex market activities in 2017, if the trend subsists, as it would curtail panic and speculative demands, which affect the naira value.
The rise in the stock of forex reserves had defied mounting pressure from demand and series of interventions through special auctions by the regulator in the last three months.
The last time the reserves were at this level was in the middle of August 2016, with average growth of about 2.8 per cent from the end of October till date.
At $25.78 billion, the reserves recorded about $1 billion increase, or 4.2 per cent rise month-on-month, up from $24.77 billion at the end of November, as marginal rise in the international oil prices and production remained relatively stable.
However, at the same level too, it declined by 11.7 per cent from $29.13 billion as at December 2015, due to fallen price of crude oil, which depleted Nigeria’s forex earnings’ capacity and huge demand by importers.
A combination of exchange rate stability at the interbank market, slight improvement in capital importation and the country’s management of the foreign exchange policy through the Central Bank of Nigeria (CBN), have contributed to the assessed reserves’ accretion.
Six months ago, the CBN inaugurated the flexible exchange rate policy as a measure to contain the declining value of the naira, as well as attract forex inflow.
As part of the measure, it also introduced the Forwards Market, where people can buy forex for future use at the current rate.
CBN has so far contracted over $3.8 billion and redeemed the maturing ones, even as it sold about $1 billion at the market last week to clear a backlog of dollar obligations in selected sectors.
The apex bank had recently urged banks to submit their backlog of dollar demand from fuel importers, airlines, raw materials and machinery for manufacturing firms and agricultural chemicals for the special forex intervention.
In November, CBN said it offered real sector operators- manufacturers and other strategic actors in the economy, access to about 7,792 requests for foreign exchange valued at over $867 million through the inter-bank window.
A summary of the forex utilisation for October 2016 indicated that the raw materials sector received the highest allotment, getting access to foreign exchange valued at $355.7 million or 40.99 per cent of the total value of Forex utilisation for the month put at $867.8 million.
The forex reserves have also recorded an increase of $1.46 billion in the last two months, from a low of $23.9 billion in October to $25.36 billion presently.
In the same period in November, the reserves recorded an increase of $589 million, after weeks of consistent and gradual gains, despite demand pressure, bringing it to $24.49 billion, up from $23.91 billion. That was a 2.5 per cent rise.
It also closed up a two-month decline to $247 million, after losing $836 million between September ($24.74) and October ($23.91).
Egypt Leads Nigeria, South Africa in Foreign Direct Investment
The United Nations Trade Association has Nigeria recorded a total of $2.6 billion in Foreign Direct Investment (FDI) in 2020, below the $3.3 billion posted in the preceeding year.
South Africa, Africa’s most industrialised nation, reported $2.5 billion during the same year, slightly below Africa’s largest economy and 50 percent below the $4.6 billion attracted a year earlier.
The report also noted that Africa recorded a total of $38 billion FDI in the same year, representing a 18 percent decline from the $46 billion posted in the corresponding year of 2019.
However, Egypt led Nigeria and South Africa with $5.5 billion FDI, an increase of 38 percent from the preceeding year.
The report read in part, “FDI flows to Africa declined by 18% to an estimated $38 billion, from $46 billion in 2019. Greenfield project announcements, an indication of future FDI trends, fell 63% to $28 billion, from $77 billion in 2019. The pandemic’s negative impact on FDI was amplified by low prices of and low demand for commodities.”
UNCTAD also noted that global foreign direct investment declined by 42 percent to an estimated $859 billion, down from $1.5 trillion in 2019.
“The decline was concentrated in developed countries, where FDI flows fell by 69 percent to an estimated $229 billion. Flows to Europe dried up completely to -4 billion (including large negative flows in several countries). A sharp decrease was also recorded in the United States (-49%) to $134 billion.”
FG to Partly Fund Six Rail Projects Connecting All Regions
The Federal Government will pay a total sum of N71 billion to partly fund six rail projects connecting all regions of the country.
In the report obtained from the Federal Ministry of Finance, Budget and National Planning, the six rail projects marked for development this year are Lagos-Kano rail line (ongoing), Calabar-Lagos (ongoing), and Ajaokuta-Itakpe-Aladja (Warri).
Others are the Port Harcourt-Maiduguri railway, the new Kano-Katsina-Jibiya-Maradi line in Niger Republic and the Abuja-Itakpe and Aladja-Warri Port and refinery/Warri new harbour.
The Buhari administration will also spend N15.1 billion on the development of safety and security of critical projects, airport certification, runway construction, terminal building, among others in the aviation sector in 2021.
Last week, Rotimi Amaechi, Minister of Transportation, said the Lagos-Kano line would be connected from the Ibadan end of the Lagos-Ibadan railway and would cost $5.3 billion.
“We are waiting for the Chinese government and bank to approve the $5.3bn to construct the Ibadan-Kano. What was approved a year ago was the contract,” the minister said.
He added, “The moment I announced that the Federal Government had awarded a contract of $5.3bn to CCECC (China Civil Engineering and Construction Corporation) to construct Ibadan-Kano, people assumed the money had come in; no.
“We have not got the money, which is a year after we applied for the loan. We have almost finished the one of Lagos-Ibadan. If we don’t get the loan now, we can’t commence.”
FG Launches E-ticketing Platform to Deepen Train Usage and Convenience
In a bid to improve the usage and enhance the convenience of train transport in Nigeria, the Federal Government on Thursday announced the launching of the Electronic Ticketing platform for the Kaduna-Abuja rail services.
The N900 million E-ticketing platform was introduced by the Minister of Transportation, Chibuike R. Amaechi, and the Nigerian Railway Corporation.
Amaechi said the new platform would improve efficiency, promote accountability, reduce leakage and enhance economic growth, as well as save time.
The E-ticketing platform was a Public-Private Partnership project done in conjunction with Secure ID Solutions, who provide and would manage the system for 10 years in an effort to recoup its investment before the Nigerian Railway Corporation take charge.
Kofo Akinkugbe, the Chief Executive Officer, Secure ID Solutions, said as the new E-platform issued 25,000 tickets after a successful pilot test on Thursday.
Potential Travelers can book via three ways:
1. Mobile app
3. POS or Cash at the station
A validator would be used to scan the ticket barcode to ascertain its authenticity before boarding.
Amaechi further announced that self-service ticket vending machines at various train stations would be introduced soon.
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