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Lagos Eyes $60M Investment, as Sanwo-Olu Signs Green Bond Market Agreement

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Lagos State becomes the first sub-national government to activate the framework for the unlocking of the $1 trillion Nigerian Green Bond Market Development Programme to finance key infrastructure projects.

On Tuesday, Governor Babajide Sanwo-Olu signed a Memorandum of Understanding (MoU) with FMDQ Group and Financial Sector Deepening (FSD) Africa, which are the programme’s implementing partners on the proposed N25 billion (over $60 million) financing.

The historic event, held at the State House in Marina, came less than 24 hours after Lagos was upgraded to AAA(nga) rating from AA+(nga) by Fitch International for the State’s good standing on debt sustainability and resilience.

Sanwo-Olu said the green bond programme, which is supported by the UK Agency for International Development (UK Aid), would raise the capacity of the State Government to deliver more key infrastructure and social projects that would keep Lagos on the path of prosperity.

Launched in 2018, the Green Bond Market Development Programme is to facilitate the development of a green bond market to support broader debt capital markets reforms that will impact the sovereign and non-sovereign bond markets in the country.

The programme is to empower State Governments to champion sustainable finance for development.

Sanwo-Olu said the MoU was the crucial first step being taken by Lagos towards creating viable financing options for future green and sustainability projects. The funding opportunity, he said, will advance the adoption of innovation and technologies to provide green jobs, thereby promoting economic and climate resiliency.

He said: “As a Government, we are committed to utilising our limited resources more efficiently to create a circular economy, which is a promising and viable alternative. Public spending and investments may not be enough to deliver our key objectives; therefore, the need to tap into more private investments for the transition to a zero-waste and circular economy, as well as achieving crucial items of the Sustainable Development Goals (SDGs).

“I strongly believe that the Green Bond programme will open the doors of deeply sustainable funds for infrastructure and social development for Lagos. Being the biggest player in the sub-national capital market, Lagos’ experience can open new doors for a lot of others. As a State, we embrace the transparency and commitment that comes with a Green Finance framework. We believe it sends an important signal to investors in the market about who we are: a State that is fiscally responsible, prudent and disciplined.”

Sanwo-Olu said Lagos’ credentials in investment sustainability made the State take the bold step to activate the framework to benefit from the programme.

He said the initiative would go a long way in ensuring that key deliverables in his administration’s T.H.E.M.E.S agenda are actualised while pledging that the State would continue to blaze the trail of leadership, financial accountability, innovation and sustainability.

Special Adviser to the Governor on SDGs and Investment, Solape Hammond, said the journey to get the framework approved started last year, disclosing that the MoU highlighted key projects to be delivered by the State Government to actualise economic sustainability.

She said the finance would be invested in green projects, adding the implementing partners had created a mechanism to ensure funds earmarked were disbursed judiciously.

Commissioner for Finance, Dr Rabiu Olowo, said Lagos had 20 years of experience in raising bonds, assuring implementing partners and capital market operators of the State’s commitment to the terms highlighted in the framework.

Chief Executive Officer of FMDQ Group, Bola Onadele, said Lagos had built a reputation and “incredible potential” for catalysing broad-based sustainable development, which explained the partners’ readiness to support the State in unlocking the capital to fund key projects.

He said: “ I have no doubt that the implementation of this MoU and the impact thereof will ensure that Lagos continues to set itself apart, support its developmental aspirations and highlight its sustainability efforts at the global green and sustainable financial ecosystem. We are excited about this opportunity to support the developmental aspirations of Lagos.”

Also, FSD Africa CEO, Mark Napier, saluted the Governor’s energy and his commitment towards providing infrastructure which future generations can rely on.

He said: “It’s truly a significant event that the economic powerhouse of Africa’s largest economy is signing the green bond investment and I can say this is leadership being demonstrated by the Lagos State Government. I expect other States to follow this path.”

The high point was the signing of the MoU by all parties under the supervision of the State Attorney General and Commissioner for Justice, Moyo Onigbanjo, SAN and witnessed by the British Deputy High Commissioner, Ben Llewelly-Jones.

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Economy

China and Brazil Move Away from US Dollar in New Trade Deal

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China and Brazil have struck a new trade deal that will allow them to trade in their own currencies, bypassing the need for the US dollar as an intermediary.

This agreement marks a significant move by China to reduce its reliance on the dollar and establishes the country as a formidable rival to the US in the global economy.

The deal was announced by the Brazilian government on Wednesday and will enable the two nations to conduct their financial transactions directly, using Chinese Yuan for Brazilian Real and vice versa.

Brazil’s biggest trading partner is China with bilateral trade worth a record USD 150.5 billion in 2022.

For Brazil, this deal represents a significant shift away from the traditional reliance on the US dollar as the world’s primary currency. According to the Brazilian Trade and Investment Promotion Agency, ApexBrasil, the agreement is expected to reduce costs and promote even greater bilateral trade.

The move away from the US dollar as an intermediary in international trade could have far-reaching implications for the global economy. Other countries may follow suit and start conducting their trade and financial transactions in their own currencies, potentially undermining the dollar’s position as the world’s primary currency.

This is not the first time that China has taken steps to reduce its dependence on the US dollar. In recent years, the country has been promoting the use of the yuan in international trade and investment, and has signed currency swap agreements with other countries to facilitate trade in their own currencies.

The shift away from the US dollar comes at a time of growing tensions between China and the US, with both countries engaged in a trade war and competing for global influence. As China seeks to establish itself as a major player in the global economy, this move is just one example of the country’s efforts to assert its economic power and challenge the dominance of the US.

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Economy

Nigeria’s External Reserves Receive $1 Billion Boost from Oil Sales and Exports

Nigeria’s external reserves grew by $1.063 billion within 24 hours on March 28, 2023 to $36.668 billion in a move suspected to be inflow from the proceed of crude oil and exports.

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Nigeria’s external reserves have received a significant boost of $1 billion from oil sales and exports, according to recent reports.

The increase resulted in a 0.11% appreciation in Naira value on Wednesday as the Naira to United States Dollar exchange rate moderated from N461.75 it closed on Tuesday to N451.24 at the Investors and Exporters (I&E) forex window.

However, despite the positive news, currency dealers maintained bids between N459.50 (low) and N462.13 (high) per dollar. At the parallel market, also known as the black market, the local currency traded at N744 per dollar on Wednesday.

Analysts at the FSDH research have predicted that the Nigerian Naira will continue to face pressure from high import costs and demand for foreign currency by businesses and individuals. However, they expect the Central Bank of Nigeria (CBN) to continue intervening in the FX market to contain the pace of depreciation.

Nigeria’s external reserves grew by $1.063 billion within 24 hours on March 28, 2023 to $36.668 billion in a move suspected to be inflow from the proceed of crude oil and exports.

The decline in external reserves from US$37.1 billion in January 2023 to US$36.1 billion on March 15, 2023, has been attributed to interventions in the FX markets and limited foreign exchange inflows. However, rising oil production in recent months raises the prospect of reserves accretion in the second half of 2023, according to analysts.

The scarcity of foreign currency in the official market coupled with a high exchange rate of N745/US$ in the parallel market continues to drive high input costs and imported inflation.

It remains to be seen how the country will navigate these challenges in the coming months.

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Rivers State Customs Service Generates Over N54 Billion in Q1 2023

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Nigeria Customs Service

The Nigeria Customs Service, Area 2 Command in Onne, Rivers State realised N54.992 billion in revenue in the first (Q1) of 2023. 

According to the Command Controller, Comptroller Baba Imam, this amount realised is part of the N336 billion revenue projected for 2023.

Imam revealed this information while addressing journalists in Onne, Eleme Local Government Area of Rivers State on Tuesday.

This represents an increase of N1.133 billion when compared to the amount generated in the first quarter of 2022.

Imam revealed that the command made several seizures, which he stated is a reflection of their commitment to facilitating only legitimate trade in accordance with extant laws.

The seizures included 24 containers carrying refined vegetable oil, two containers carrying 1,165 cartons of Analgin injection and fireworks, and one 20ft of machete that was detained on documentation grounds until an end-user certificate was provided.

The duty-paid value of the seized containers was N94,652,168.39 million, while the duty-paid value of the seized vegetable oil containers was N833,172,538.42.

Imam stated, “In revenue generation, the command was given a target of N336 billion as revenue target for 2023.

“As of today, the command has generated a total revenue of N54, 992,123, 687.15 billion which transits to 16.3 per cent of the target. When compared to the same period last year, the Command has an increase in revenue of N1,132, 925, 556.82bn.

“This figure was realized in spite of not having vessels berth in Onne Port for some time due to the election atmosphere. We look forward to a continuous rise in revenue generation in the coming months as we expect vessels to berth on our coastline within the next few weeks.”

Speaking further on the command’s anti-smuggling activities, he said within the past few weeks, there has been a lot of seizures.

“This is made visible with the display of a total number which comprises 26 seized containers and one detained container for violation or contraventions of various customs laws and breach of procedures as provided under the revised import prohibition guidelines Schedule 3 Article 4 of the Common External Tariff 2022-2026 as well as Section 46 paragraph (b), (d), (e), (f) and 169 of Customs and Excise Management.

“Twenty four containers laden with refined vegetable oil comprising a total of 24,860 gallons of 25 and 10 litres of La-Jonic vegetable oil. Also seized were other two containers laden with 1,165 cartons of Analgin injection and fireworks with other items.”

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