Connect with us


Foreign Investors Need Clarity on Forex Policy – NESG



Naira Appreciates as Manufacturers Lament Forex Scarcity
  • Foreign Investors Need Clarity on Forex Policy

The Nigerian Economic Summit Group, a private sector think-tank and policy advocacy group, has said clarity on the nation’s foreign exchange policy is necessary to lure back foreign portfolio investors into the country.

The Chairman of the Board, NESG, Mr. Kyari Bukar, stated this at a press briefing after the group’s 21st Annual General Meeting in Lagos.

“It is the lack of clarity on the foreign exchange policy that is making them (foreign investors) stay on the sidelines,” he said.

He said with the beginning of the convergence, the country might get to a point where it would become easier for foreign investment to come in.

Bukar said, “If they see that clarity, they will begin to bring in their money. With the foreign portfolio investors, there has to be absolute clarity in the sense that they can easily come in and go out at a market-determined rate rather than a rate that someone sets and could change overnight.

“The clarity is not emerging; there is an encouraging sign but the clarity is still not out there.”

Speaking about the group’s annual report and accounts for the year ended December 31, 2016, the chairman said the NESG experienced improved performance on its activities and revenue from membership in 2016.

He said on the financial side, revenue from membership dues increased by 19.2 per cent to N160.5m in 2016 from N134.6m in 2015, while net income declined by 23.5 per cent to N119.3m from N155.9m in 2015.

Bukar said, “2016 was a tough year for Nigeria. All major economic indicators performed woefully during the year. The economy experienced a negative growth of 1.5 per cent.”

He said the business environment encountered shocks arising majorly from the foreign exchange crisis, which had severe impact on operating cost, inflation and overall output.

He stated that the inability of the government to respond swiftly and appropriately to the economic challenges worsened the situation.

“For instance, the delayed passage of the 2016 budget and cloudy policy direction increased the level of uncertainty in the business environment. This also resulted in a decline in foreign direct investments, which closed below $1bn in the year,” Bukar said.

The NESG forecast that the Nigerian economy will experience a Gross Domestic Product growth rate of 0.6 per cent in 2017, according to him.

Bukar said, “This means economic activities will improve in the year. As stated in our macroeconomic outlook for 2017, we believe that any economic recovery achieved outside the scope of supporting the productive base of the economy will not be sustainable.

“Nigeria, therefore, must realise that looking inwards remains the sustainable way to create jobs and enhance foreign exchange earnings through the increase in net-exports.”

The Chief Executive Officer, NESG, Mr. ‘Laoye Jaiyeola, reiterated the NESG’s commitment to remain at the forefront of advocacy and intervention on all issues regarding the adoption of policies conducive for good governance and sustainable private sector-led economic development in 2017.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.


Afreximbank, AAAM to Drive Automotive Investment




Afreximbank, AAAM to Drive Automotive Investment

The African Export-Import Bank (Afreximbank) and the African Association of Automotive Manufacturers (AAAM) have entered into a Memorandum of Understanding (MoU) for the financing and promotion of the automotive industry in Africa.

President of Afreximbank, Prof. Benedict Oramah and President of AAAM/Managing Director of Nissan Africa, Mike Whitfield, signed the MoU in early February, according to a statement yesterday.

The deal formalised the basis for a partnership aimed at boosting regional automotive value chains and financing for the automotive industry while supporting the development of enabling policies, technical assistance, and capacity building initiatives.

Oramah, said, “the strategic partnership with AAAM will facilitate the implementation of the Bank’s Automotive programme which aims to catalyze the development of the automotive industry in Africa as the continent commences trade under the African Continental Free Trade Area (AfCFTA).”

Under the terms of the MoU, Afreximbank and AAAM will work together to foster the emergence of regional value chains with a focus on value-added manufacturing created through partnerships between global Original Equipment Manufacturers (OEM), suppliers, and local partners.

The two organisations plan to undertake comprehensive studies to map potential regional automotive value chains on the continent in regional economic clusters, in order to enable the manufacture of automotive components for supply to hub assemblers.

“To support the emergence of the African automotive industry, they will collaborate to provide financing to industry players along the whole automotive value chain. The potential interventions include lines of credit, direct financing, project financing, supply chain financing, guarantees, and equity financing, amongst others.

“The MoU also provides for them to support, in conjunction with the African Union Commission and the AfCFTA Secretariat, the development of coherent national, regional and continental automotive policies, and strategies.

“With an integrated market under the AfCFTA, abundant and cheap labour, natural resource wealth, and a growing middle class, African countries are increasingly turning their attention to support the emergence of their automotive industries.

“Therefore, the collaboration between Afreximbank and AAAM will be an opportunity to empower the aspirations of African countries towards re-focusing their economies on industrialisation and export manufacturing and fostering the emergence of regional value chains,” the statement added.

“The signing of the MoU with Afreximbank is an exciting milestone for the development of the automotive industry in Africa. At the 2020 digital Africa Auto Forum, the lack of affordable financing available for the automotive sector was identified as one of the key inhibiters for the growth and development of the automotive industry in Africa and having Afreximbank on board is a game changer and a hugely positive development,” CEO of AAAM, David Coffey said.

“It is wonderful to have a partner that is as committed as the AAAM to driving the development and growth of our sector on the continent; this collaboration will ensure genuine progress for our industry in Africa,” Coffey added.

Other areas covered by the MoU include working with the African Union and the African Organisation for Standardisation to harmonise automotive standards across the continent and developing an automotive focused training program for both the public and private sector.

Continue Reading


FG Warns Foreign Investors Against Enslaving Nigerians




FG Warns Foreign Investors Against Enslaving Nigerians

The Federal Government on Monday warned foreign investors against subjecting Nigerians working in their companies to industrial slavery.

The government said the warning became necessary following several complaints against foreign companies maltreating some of their staff.

The Chief Commissioner, Public Complaints Commission, Chile Igbawua, issued the warning during a courtesy call on him by a delegation of Pan Africa United Youth Developments Network who came to lay complaint against some foreign companies allegedly maltreating Nigerians working under them.

The PCC said that it would not allow only its state commissioners to handle the issues due to their magnitude as there had been so many complaints about the ways some of the foreign companies were treating their staff.

At the event, the leader of the delegation, Habib Muhammed, expressed concern over alleged injustice and irregularities perpetrated by some company on Nigeria youths whom they engaged as factory workers.

He called on the Federal Government to look into the alleged slavery and injustice meted on Nigerian youths.

While calling on the foreigners to obey the labour laws of Nigeria, Igbawua said, “Our resources cannot be used to enslave us again.”

He said, “We have labour laws in Nigeria for goodness sake and we also have industrial standards; people working in various industries are entitled to good working conditions and minimum conditions of service.”

He added that the law was clear on the issue of casualisation and should be implemented.

Continue Reading


Foreign Direct Investments into China Shot Up by 9% in 2020 to $163 Billion Against 49% US Decline




Foreign Direct Investments into China Shot Up by 9% in 2020 to $163 Billion Against 49% US Decline

China had the highest inflow of Foreign Direct Investments (FDI) globally in 2020, surpassing the US which took the lead in 2019.

According to the research data analyzed and published by Comprar Acciones, China’s inflow shot up by 9% to $163 billion up from $140 billion the previous year. Meanwhile, the US had a 49% drop from $251 billion in 2019 to $134 billion.

Based on data from the National Bureau of Statistics, China reported a 2.3% growth in GDP in 2020. It was the only major economy to record a positive growth rate during the year.

Chinese Stock Market Saw 18 Million New Investors in 2020

Global FDI took a hit in 2020, falling by 42% year-over-year (YoY) from $1.49 trillion in 2019 to $859 billion. The figure was 30% lower than the one reported during the 2009 financial crisis.

Developed countries saw the worst performance, sinking by a cumulative 69% YoY to $229 billion. For developing economies, there was a 12% decline of $616 billion. By the end of 2020, developing countries accounted for a 72% share of global FDI, the highest on record. India had the highest growth among top-rated economies, shooting up by 13%.

China bore the brunt of the pandemic much better than its peers, posting a 6.5% GDP growth in Q4 2020. During the year, there were 18.02 million new investors in its mainland stock market, raising the total to 177.77 million. Driving the surge in interest was the stellar performance of Chinese stocks in 2020.

The Shenzen Component grew by 38.7% in 2020, and the CSI 300 increased by 27.2%, compared to the S&P 500’s 16.26% growth. IPO activity also soared, with China and Hong Kong accounting for 40% of global IPO volume in 2020 according to Ernst & Young.

Continue Reading