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‘CBN’s Forex Policy Killing Construction’

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Construction Experts
  • ‘CBN’s Forex Policy Killing Construction’

Except urgent measures are taken to encourage the use of local building materials, the construction industry will remain in doldrums, stakeholders have said.

They spoke at the ninth Annual Distinguished Lecture of the Nigerian Institute of Quantity Surveyors (NIQS), Lagos Chapter.

At the lecture themed: “Foreign exchange problems, prospects and solutions in Nigeria: Construction industry perspective,” participants called for the use of local building materials.

The guest lecturer, Henry Boyo, in his presentation, titled: “For the successful resolution of oppressive contradictions in Nigeria’s economy”, said: “It is appalling that the country has become so poor, despite her abundant human and material resources.”

He said the distress in the economy, based on available evidence, is a function of “too much money supply,” of the naira, and foreign currencies.

Boyo said the Central Bank of Nigeria’s (CBN’s) failure to manage an “irrepressibly” surplus naira supply has continued to stimulate a higher inflation rate for several years. This, he explained, has serious consequences on the purchasing power of the persons whose incomes are in naira.

He emphasised that the naira and the economy would remain stagnant as long as the CBN persistently auctions the dollar against the naira in a market that is suffocated by excess naira supply, created by the apex bank’s unilateral substitution of naira allocations for distributable dollar-denominated revenue.

“Thus, CBN’s forex interventions are, in fact, deliberate and a suicidal approach to gradually kill the naira, since the CBN would consciously sell its dollar stock for higher naira bids in such auctions. In this situation, the banks flourish, while the rest of the economy wrestles with deepening poverty,” Boyo said.

The Lagos NIQS Chairman, Mr. Bamidele Mafimidiwo, agrees with Boyo on the effect of foreign exchange (forex) on the industry.

He explained that the lingering forex problems had caused a huge disruption to businesses in the sector, a situation that has been compounded by the recession. This has grounded new construction projects, leaving builders and suppliers in difficult financial positions, he added.

To transform the economy and boost industrial activity, Mafimidiwo said there was the need to restructure the monetary framework.

“Construction, housing, infrastructure, manufacturing, mortgage and other business activities of tangible output represent the construction industry and today’s forum is to provide a platform to x-ray the industry vis-a-vis the meltdown effects and chart a way forward for the sector,” he said.

Yet, other stakeholders are convinced that the use of local materials for construction projects is the easiest way out of the scathing effect of forex on the sector. This position was shared by a former President of NIQS, Mr. Oluwasegun Ajanlekoko. He said with the use of local materials, importation would be reduced to the barest minimum.

“It is about time we stopped using blocks when it comes to affordable housing. We have large reservoir of clay and that is far cheaper, durable and more environment friendly. To solve the problems of exchange rate, we are appealing to CBN to give discretionary interest rates to those in the construction industry,’’ he said.

Similarly, Executive Director, UACN Property Development Company Plc (UPDC), Yemi Ejidiran, said the forex challenge affected Grade A and B residential projects. “The government should encourage production of most of our finishing materials locally. We also need to come up with efficient designs, as it is clear that banks are not ready to finance any real estate project,” he said.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Africa’s Richest Man, Aliko Dangote Ready to Sell Refinery to Nigerian Government

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Dangote refinery

Aliko Dangote, Africa’s wealthiest entrepreneur, has announced his willingness to sell his multibillion-dollar oil refinery to Nigeria’s state-owned energy company, NNPC Limited.

This decision comes amid a growing dispute with key partners and regulatory authorities.

The $19 billion refinery, which began operations last year, is a significant development for Nigeria, aiming to reduce the country’s reliance on imported fuel.

However, challenges in sourcing crude and ongoing disputes have hindered its full potential.

Dangote expressed frustration over allegations of monopolistic practices, stating that these accusations are unfounded.

“If they want to label me a monopolist, I am ready to let NNPC take over. It’s in the best interest of the country,” he said in a recent interview.

The refinery has faced difficulties with supply agreements, particularly with international crude producers demanding high premiums.

NNPC, initially a supportive partner, has delivered only a fraction of the crude needed since last year. This has forced Dangote to seek alternative suppliers from countries like Brazil and the US.

Despite the challenges, Dangote remains committed to contributing to Nigeria’s economy. “I’ve always believed in investing at home.

This refinery can resolve our fuel crisis,” he stated, urging other wealthy Nigerians to invest domestically rather than abroad.

Recently, the Nigerian Midstream and Downstream Petroleum Regulatory Authority accused Dangote’s refinery of producing substandard diesel.

In response, Dangote invited regulators and lawmakers to verify the quality of his products, which he claims surpass imported alternatives in purity.

Amidst these challenges, Dangote has halted plans to enter Nigeria’s steel industry, citing concerns over monopoly accusations.

“We need to focus on what’s best for the economy,” he explained, emphasizing the importance of fair competition and innovation.

As Nigeria navigates these complex issues, the potential sale of Dangote’s refinery to NNPC could reshape the nation’s energy landscape and secure its energy independence.

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Dangote Shelves Steel Project to Prevent Monopoly Allegations

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Aliko Dangote - Investors King

Aliko Dangote, chairman of Dangote Industries Limited, announced the company’s decision to halt plans to enter Nigeria’s steel industry.

The decision comes just two months after the conglomerate had initially unveiled its intentions to invest in the sector as part of efforts to expand the economy.

Addressing journalists at his refinery in Lagos, Dangote explained that the board’s decision was driven by concerns over potential accusations of creating a monopoly.

“We have decided against pursuing the steel business to avoid being labeled a monopoly,” Dangote stated.

He explained that the company’s operations focus on adding value by transforming local raw materials into finished products.

The industrialist dismissed claims that his group enjoys monopolistic advantages, pointing out that their business practices have always fostered a competitive environment.

“When we entered the cement market, Lafarge was the only player, yet no one accused them of being a monopoly,” he stated.

Dangote further encouraged other Nigerian investors to explore opportunities in the steel industry, suggesting that there are ample resources and space for new entrants.

“There are many Nigerians with the financial capacity to invest. They should seize this opportunity to contribute to our nation’s growth,” he urged.

The billionaire’s call to action extended to Nigerians living abroad, inviting them to invest in their homeland.

“Bring your resources back from Dubai and other parts of the world and invest in Nigeria,” he said, reinforcing his commitment to seeing the country’s economy thrive through diverse contributions.

This decision marks a strategic shift for Dangote Industries, focusing on dispelling monopoly myths and promoting a collaborative business landscape.

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Goya Foods Takes Legal Action to Assert ‘Goya Olive Oil’ Trademark Ownership

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Goya Foods

“Goya Olive Oil” trademark in Nigeria, Goya Foods Incorporated has initiated legal proceedings against the Registrar of Trademarks under the Federal Ministry of Trade and Investment.

The case, numbered FHC/ABJ/CS/883/2023, was brought before the Federal High Court in Abuja.

Goya Foods, a prominent producer and distributor of foods and beverages across the United States, Spanish-speaking countries, and Nigeria, seeks to enforce a longstanding consent judgment issued by the court in December 2006.

The judgment directed the Registrar to rectify the Trademarks Register to reflect Goya Foods Incorporated as the rightful owner of the “Goya Olive Oil” trademark, without any further formalities.

The lawsuit, exclusively revealed to sources, underscores Goya Foods’ determination to safeguard its intellectual property against alleged infringements.

According to court documents, Goya Foods obtained the consent judgment against Chikason Industries Limited, which was accused of marketing “Goya Olive Oil” in Nigeria, thus infringing on Goya Foods’ registered trademark.

Legal counsel for Goya Foods, Ade Adedeji, SAN, emphasized the necessity of rectifying the Trademarks Register to protect their trademark interests effectively.

Despite appeals to the Registrar, the requested rectification has not been implemented, prompting Goya Foods to escalate the matter through legal channels.

The case has been adjourned to September 27, 2024, for further proceedings, highlighting the complexity and significance of trademark disputes in the global marketplace.

Goya Foods remains committed to upholding its brand integrity and securing its proprietary interests amidst the evolving landscape of international trademark law.

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