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Nigeria Needs Radical Industrialisation, NECA Tells FG

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  • Nigeria Needs Radical Industrialisation, NECA Tells FG

The Nigeria Employers’ Consultative Association has urged the Federal Government to reassess its strategies and tailor its policies and reforms towards a radical industrialisation of the country.

The Director-General, NECA, Mr Timothy Olawale, made this call on Monday in statement released in Lagos, a copy of which was made available to our correspondent.

He said that this became necessary and urgent in view of the fact that Nigeria recently signed the African Continental Free Trade Agreement, and there was a need to make Nigeria the hub of economic activities in the West African sub-region.

He further noted that the country must benefit maximally from the AfCFTA, urging government to stimulate production rather than increase taxes.

Olawale said, “There is no better time for the government, to focus on a radical industrialisation of our country as a means of making it the hub of economic activities in the West African sub-region and also ensure Nigeria benefits maximally from the AfCFTA.

“We have consistently taken the lazy path of tax increases that stifle and further burden businesses rather than the ingenious way of promoting and stimulating production.”

The NECA boss added, “Government should demonstrate a bold attempt to industrialise the country and take it out of the woods by embracing a major policy shift from focus on taxation to production.

“What our economy requires now are radical far-reaching policies like the abolition of the Value Added Tax on real estate sales, financial services and domestic airline ticket sales, and abolishing capital gain tax on sales of shares and import duty on spare parts.

“Reduction of VAT on small traders to three per cent, abolition of import duty on machinery and raw materials, among many others. All these will directly stimulate production and create wealth for the nation and its citizenry.”

Olawale argued that production and productivity- induced policies focused on the rapid development of our industrial base was the only sustainable option for national development.

While he commended the government for the efforts made in the last four years to stimulate the economy and support the real sector, he, however, stated that the contradictions in the regulatory environment had consistently negated these efforts.

“If government can muster political will to take expected radical bold steps, Nigeria in no time might become the industrial hub of the African continent,” 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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Federal Government Unveils Plan to Boost Nigerian Automotive Industry with Local Manufacturing Drive

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In a bid to revitalize the Nigerian automotive industry and reduce dependency on imported auto parts, the Federal Government has unveiled an ambitious plan to kickstart local manufacturing initiatives.

Spearheaded by the Minister of Industry, Trade, and Investment, Doris Aniete, the initiative aims to stimulate growth in the sector by increasing the supply of locally produced components to the market by 40%.

Announcing the policy during a ministerial sectoral briefing to commemorate President Bola Tinubu’s first year in office, Aniete emphasized the importance of collaboration among manufacturers, dealers, regulatory bodies, and other stakeholders in the automotive ecosystem.

This collaborative effort, she stated, would be instrumental in addressing challenges, streamlining processes, and driving innovation within the industry.

For years, Nigeria has heavily relied on imports to meet the demand for vehicles and spare parts, with a significant portion of automotive components imported from abroad.

According to Luqman Mamudu, Chairman of the West Africa Automotive Show, Nigeria alone accounts for about 78.8% of automotive components imported to the region, amounting to approximately $4.2 billion annually out of the $6.2 billion spent by the region.

The newly developed framework aims to change this narrative by prioritizing the local production of critical automotive components such as tyres, batteries, brake pads, and more.

By fostering collaboration between stakeholders and incentivizing local manufacturing, the government seeks to create a more sustainable and self-reliant automotive industry.

Aniete highlighted the potential economic benefits of the initiative, citing significant foreign exchange savings through domestic production of parts.

She stressed that by reducing the need for imports, the country could conserve foreign exchange reserves and bolster its currency while simultaneously stimulating job creation and economic growth.

Furthermore, the government has attracted substantial investment capital amounting to $3.5 billion to develop a resurgence plan for the Nigerian Cotton, Textile, and Apparel Industry.

This initiative, undertaken in partnership with development partners and private sector players, aims to unlock the full potential of the sector and create additional opportunities for growth and employment.

In addition to these initiatives, the Ministry of Industry, Trade, and Investment disclosed plans to host the Lagos International Trade Fair, signaling a renewed commitment to reclaiming Nigeria’s position as a regional market powerhouse.

The revival of this trade fair, last hosted 14 years ago, is expected to amplify market linkages for manufacturers, suppliers, farmers, and traders nationwide, catalyzing economic activities across various sectors.

As transformative reforms unfold in the Nigerian automotive and textile industries, the government remains focused on unlocking equitable opportunities for farmers, miners, and entrepreneurs.

With stringent regulations and collaborative frameworks in place, Nigeria is poised to chart a new course towards sustainable economic development and self-reliance in key sectors.

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Dangote Oil Refinery Set for December Listing on Nigerian Stock Exchange

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The $20 billion Dangote Oil Refinery is poised to be listed on the Nigerian Stock Exchange (NSE) by December 2024, according to statements made by Aliko Dangote, Chairman of the Dangote Group.

Dangote, Africa’s richest man, expressed his enthusiasm for involving Nigerians, Africans, and other investors in what he described as a historic move.

Speaking to The Africa Report, he affirmed, “The listing, most likely, I won’t be surprised if we list (on the Nigerian Stock Exchange) by the end of this year. We will do that.”

This listing, expected to attract significant investor interest, could potentially add about N8 trillion to N10 trillion to the market capitalisation of the Nigerian Stock Exchange, as predicted by economy and capital market analyst Rotimi Fakayejo.

He said such a listing would not only distribute wealth but also attract foreign portfolio investment to the country, bolstering the economy with additional foreign exchange.

Fakayejo further elaborated on the potential impact of the Dangote refinery listing, stating, “It is also going to engender foreign portfolio investment. Such listing will affect individuals in the country and the stocks listed on the Nigerian exchange.”

David Adonri, Vice President of Highcap Securities Limited, echoed this sentiment, highlighting the significance of the listing for the Nigerian capital market.

He said the listing would provide Nigerians with the opportunity to share in the considerable wealth generated by the refinery.

However, uncertainties loom regarding the Dangote refinery’s crude oil supply chain. While Dangote confirmed the refinery’s decision to import crude oil from the United States due to fluctuating Nigerian oil production figures, Minister of State for Petroleum (Oil), Heineken Lokpobiri, denied knowledge of such imports.

Despite this discrepancy, Dangote defended the decision, stating, “We have tendered to buy some WTI oil from the US because the size of our refinery is very big, and we have to make sure that we secure the raw materials for our production.”

With the refinery set to attain a capacity of 500,000 barrels per day by July and reach its full capacity of 650,000 barrels per day by the end of the year, expectations are high for its transformative impact on Nigeria’s energy sector and broader economy.

The impending listing of the Dangote Oil Refinery represents a significant milestone in Nigeria’s quest for economic growth and diversification.

As stakeholders eagerly await further developments, the prospect of increased market capitalisation and enhanced investor participation holds promise for the country’s economic future.

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Retail Transactions on NGX Plummet by Nearly 55% in April

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Nigerian Exchange Group- Investors King

The retail transactions on the Nigerian Exchange Limited (NGX) declined by 54.89% in April to N100.77 billion from N223.37 billion in March.

This significant drop was revealed in the latest Domestic and Foreign Portfolio Investment Report released by the NGX.

The report highlighted that while retail transactions took a substantial hit, institutional transactions also saw a decrease, albeit less severe.

Institutional trading fell by 43.58% to N124.63 billion in April but still outperformed retail activity by a margin of 10%.

Overall, the total value of transactions executed by domestic investors continued to surpass those by foreign investors by approximately 30% in April.

However, the combined domestic transactions saw a steep decline of 49.27%, dropping from N444.28 billion in March to N225.40 billion in April.

Conversely, foreign transactions painted a more positive picture, increasing by 28.19% from N94.26 billion (approximately $70.83 million) in March to N120.83 billion (approximately $90.83 million) in April.

This surge in foreign investment activity provided a somewhat balanced view of the overall market dynamics.

Despite the month-on-month decrease, the total domestic and foreign portfolio transactions in Nigeria’s equity market amounted to N346.23 billion in April, marking a 35.71% decline compared to the N538.54 billion recorded in March.

However, the April figures still reflected a robust year-on-year growth of 81.07%, up from N191.21 billion in April of the previous year, indicating a positive trend in market activity over the longer term.

The report attributed the sharp decline in retail transactions to various market conditions and investor sentiments.

Analysts suggest that the decrease may be linked to economic uncertainties and a cautious approach adopted by retail investors in light of recent market volatilities.

Furthermore, the detailed analysis revealed that domestic investors were the primary drivers of the market, contributing N225.40 billion in April.

This trend underscores the continued dominance of local players in the Nigerian capital market.

Meanwhile, the NGX opened the new week on a slightly positive note, gaining 0.3% to reach 97,864.65 points after suffering three consecutive losses in the previous week.

The market’s year-to-date return improved marginally to 30.9% from the 30.5% recorded at the close of last week, suggesting a resilient market performance despite the recent fluctuations.

In related news, the NGX may sanction 47 companies over delayed audited reports, signaling a crackdown on non-compliance to maintain market integrity.

Also, the Federal Government listed N4.21 billion in April bonds on the NGX, contributing to the overall market activities.

While the drop in retail transactions is a cause for concern, market experts remain cautiously optimistic about the long-term prospects of the Nigerian Exchange.

They emphasize the need for strategic interventions to boost investor confidence and stabilize market activities in the coming months.

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