- Freight Forwarders Urge FG to Float Naira
The National Association of Government Approved Freight Forwarders has urged the Federal Government to float the naira and remove the official exchange rate peg so that there will be enough supply of dollars for importers.
The Vice Chairman, NAGAFF, TinCan chapter, Mustapha Aboki, stated this, adding that the current forex policy of the government had worsened the situation at the ports and that it was time to review it.
He said, “The current forex policy should be reviewed because it is not working. The dollar rate is too high and because of that importers can no longer afford to do business. Most of them have abandoned the ports and are taking to selling goods in the shops.
“At the current dollar rate, no importer will want to put his money into the business because if he brings the goods, he will have to sell at very high price to meet up and if he does that, he will not find buyers.”
According to him, five years ago, when the dollar exchanged for less than N200, the ports were a beehive of activities, a departure from the current situation.
He said, “At that time, importers could get access to the dollars and go to the market. Not like now, very few people go to the market. That is why you see that the ports are very scanty.
“Most importers get their dollars through the parallel market and it is a little above N400 to a dollar now. If you import with that amount and come here, how much can you sell?”
When reminded that the government had been taking steps to see that dollar dropped, through frequent allocation of dollars to travellers and others, by the Central Bank of Nigeria, Aboki argued that the efforts were not yielding the desired result.
He said, “It is not enough. Even with the CBN intervention, the rate as it is now is above N400 to a dollar. That has not solved the problem. Nigeria is an import-dependent country. That is why people are suffering. In the market today, everything is being linked to the dollar, even the garri that is produced in Nigeria.
“Has the current policy helped us? The CBN knows that if it has not helped us, there is a need to review and float the naira.”
He suggested that the Finance Minister, Mrs. Kemi Adeosun, and the Minister of Transportation, Mr. Chibuike Amaechi, should visit the ports and witness what operators were going through.
“They are supposed to take a walk round the ports to see what is going on so that they can have firsthand information. This cannot be done by sending delegates because some of these delegates give them false and insufficient information when they report back to the people who sent them,” he stated.
COVID-19: Demand for Second Passport by High Net Worth Individuals Surges 50 Percent
The number of high net worth individuals looking for a second international passport in order to improve their global access rose by 50 percent year-on-year, according to the latest statement from the deVere Group.
The group said national lockdowns, borders and travel restrictions have helped boost enquiries for second passports, citizenships and overseas residencies this year.
deVere Group, an independent financial advisory firm, that manages over 100,000 clients globally said demand for its residency and citizen service skyrocketed in this highly unusual year.
Most of the enquiries were from high net worth individuals from the U.S., India, South Africa, Russia, the Middle East and East Asia “who are seeking alternative options in Europe and the Commonwealth.”
According to Nigel Green, the Founder and CEO of deVere Group, “Previously, a second passport, citizenship or residency were regarded by many as the ultimate luxury item; a status symbol like yachts, supercars and original artwork.
“While this still remains the case, there’s also been a shift due to the pandemic.
“Now, second citizenship or overseas residency are increasingly becoming not just a ‘nice to have accessory’ but a ‘must have.’
“Whether it be for personal reasons, such as to remain with loved ones overseas or be able to visit them, or for business reasons, a growing number of people are seeking ways to secure their freedom of movement as they have faced travel restrictions which are, typically, based on citizenship.”
He continues: “The pandemic has served as a major catalyst for demand which skyrocketed this year. It has focused minds to secure that second passport or elite residency.
“However, the appeal for is broader than just the global Covid-19 crisis.
“Increasingly people prefer the concept of being a global citizen, rather than being solely tied to the country of their birth.
“They too value the many associated benefits including visa-free travel, world-class education, optimal healthcare, political and economic stability, reduced tax liabilities and wider business and career opportunities.”
However, nations have different criteria for granting citizenship, including time spent in the country, the ability to prove the legal source of funds and zero criminal records.
For instance, Portugal’s residency program requires just two weeks every two years of residency to gain the benefits, including the right to live, work, study and open a business there, as well as travel across the 26 countries of Europe’s Schengen area.
“More and more nations are running citizenship-by-investment programs, in which applicants invest an amount of money in a sponsoring country typically in high-end, new-build real estate developments in exchange for permanent residency, citizenship, or both,” affirms James Minns, deVere’s Head of Residency & Citizenship.
“These programmes, which high-net-worth individuals regard as invaluable insurance, are typically based on property investments that start from 250,000 EUR.”
Nigel Green concludes: “These highly unusual times have fuelled the surge in demand for second passports.
“The pandemic has brought into sharp focus what really matters to people: family, freedom and security.”
Online Shopping Skyrockets Amidst COVID-19 Pandemic
Lagos, Tuesday 30 November 2020 – As we experience the first-ever Black Friday promotional phenomenon under lockdown, the dominance of online shopping platforms has become crystal clear.
To keep track of this development Nielsen Global Connect has conducted extensive research that includes an overarching view of the massive increase in online FMCG shopping and just how rapidly it evolved over the first six months of lockdown.
Nielsen Connect, Global Intelligence Unit, Executive Director Ailsa Wingfield comments; “Amidst the COVID-19 pandemic, online FMCG shopping usage has advanced by up to five years in just six short months. As a result, there has been a rapid increase in online shopping and usage with new users, frequency and preference having skyrocketed.
Preference of online as the most-used channel has also more than doubled.
Evidence of this results from the Nielsen New Shopper Normal Study which was conducted in May 2020 allowing for powerful insight into the effect of the COVID-19 lockdown on consumers, during an unprecedented time in our history.
The Nielsen study found that in terms of new Nigerian FMCG online shoppers, 29% had never shopped online. Sixty-seven per cent recently shopped online during the past week and 12% shopped most often online during the past week versus only 7% pre COVID-19. In terms of Frequency, 23% said they shopped online multiple times a week and 44% shopped once a week.
The best of both worlds
Nielsen’s consumer and retail measurement evidence therefore clearly shows a massive and ongoing move to online, but it must be pointed out that this is not in isolation when considering the overall shopping journey. In Nigeria, two-thirds of consumers (67%) say they are now using both online and offline channels with fewer exclusive brick & mortar shoppers at 33%.
Wingfield elaborates; “Overall, consumers are shopping and buying in a mixed reality. In many instances, online shopping options are a new addition to their existing store repertoire but most consumers indicate that they will maintain a combination of online and offline – which will lead to the rise of more omnichannel shopping journeys and experiences.”
Interestingly, this adoption is even more pronounced for ‘Constrained Consumers’ – those who have been impacted by job/income loss. These consumers are less likely to be exclusive Brick & Mortar shoppers as Omni shopping is even more important to help them make better and more frugal choices.
Wingfield adds; “The challenge for retailers is that consumers want equivalent experiences regardless of the environment in which they shop. These are categorised by a seamless experience where the retailer’s online, and bricks and mortar offerings, are connected and offer a similar and familiar shopping experience.”
Still more work to be done
In terms of the remaining obstacles for retailers to overcome and where online needs to work harder, the biggest concern for Nigerian shoppers is delivery which has emerged as the most important factor to get right. 42% of Nigerian consumers stated they wanted same/next-day delivery while 21% said they don’t want to wait when there are no slots available.
When it comes to Price & Promo perceptions, 57% of respondents said online prices had increased, while 22% perceived less online promotion and 17% said online was more expensive. That said, online price perceptions are currently more favourable than offline (brick and mortar) perceptions. They may also improve even further, following the heavy push by retailers of online-only Black Friday and year end seasonal promotions.
Looking to the future
Looking at how consumers’ newfound relationship with online shopping will evolve, Wingfield comments; “We saw that ‘necessity catalysts’ such as safety and precaution considerations and the availability of products initially drew consumers online, but there are still several obstacles to overcome. To sustain online FMCG traction, retailers and brands will need to focus on how they can solve consumers’ changing needs by differentiating their offerings in the Omni shopping journey.”
She goes on to suggest; “They will need to solve for overall satisfaction and experiences in the areas of time, convenience, availability and value based on consumers’ altered circumstances to truly differentiate themselves.”
Rising Operating Costs, Exchange Rates, Service Charge Increased Airfares by 100%
Price of air tickets rose by 100 percent across several routes as rising operating costs, high foreign exchange and surged in service charge forced airline operators to raise airfares.
Airlines attributed the increase to a series of price adjustments and the introduction of new fees by the Federal Airport Authority of Nigeria (FAAN). According to them, airline firms were given special concessions, which will continue to push price up and could hit an average of N100,000 for even the Lagos/Abuja route.
Speaking on the situation, Captain Ado Sanusi, the Managing Director of Aero Contractors, said airline companies could not access forex at the official rate while the FAAN had upped its fees.
He said “We were buying dollars at N360 and it went to N380 but you can’t get it for less than N480.
“We are paying VAT at 7.5 per cent. We are paying 15 per cent duty on our spare parts. The boarding passes, we pay 15 per cent duty on it.
“The passenger service charge has increased by FAAN. So, don’t look at one component but look at the total reason for the increase.
“Yes, there is an increase in demand but it is caused by the lack of aircraft and this lack of aircraft is caused by unavailability of spare parts which is also caused by dollar scarcity.”
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