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President Tinubu’s Bold Reforms Ignite Excitement Among Foreign Investors

Foreign Investors Embrace President Tinubu’s Economic Reforms with Enthusiasm
Senior Banker Affirms Positive Sentiment Surrounding President Tinubu’s Reforms
Investors Delighted as Tinubu Puts Nigeria Back on the Global Investment Map




The ongoing economic reforms of President Bola Ahmed Tinubu have ignited a wave of excitement within the foreign investor community, signaling a remarkable shift in Nigeria’s position on the global stage.

“The excitement about the new president and his reforms is palpable,” stated a senior banker at a U.K.-based financial institution.

“I was in three cities in the United States last week to see clients and everybody was talking about Nigeria. “He has put Nigeria back at the top of the agenda, in a positive way,” the banker said.

Tinubu’s reforms have succeeded in placing Nigeria at the forefront of international attention, generating positive expectations for the country’s economic future.

Nigeria is on the lips of foreign investors again after nearly a decade of slipping under the radar.

Such is the rate at which President Tinubu has taken the world by surprise with bold reforms that looked impossible in the eight years prior to his assumption of Nigeria’s top office late last month.

Costly petrol subsidies were gone on his first day in office, paving the way for a tripling in petrol prices. He immediately embarked on “thorough house-cleaning of monetary policy” with the suspension of Godwin Emefiele as CBN governor followed by the deregulation of the foreign exchange market.

The reforms have brought pain to Nigerians who now spend three times more to fill their car tanks.

What Tinubu has achieved in weeks, his immediate predecessor, Muhammadu Buhari, could not in years. That leads to the first set of questions foreign investors have been asking about Nigeria in the past week.

“Why is the new president able to do these things and Buhari wasn’t and why is no one protesting,” one foreign investor asked.

Buhari had avoided these tough calls for fear of the social unrest they could spark in a country where poverty is rife and inflation is at a record-high.

Tinubu has, however, made light work of the difficult reforms and has done so while quelling protests that initially threatened to erupt as a result.

Taking away cheap fuel from people that had grown accustomed to the practice for many years was not going to happen without a fight.

Joe Ajaero, the Nigeria Labour Congress (NLC) president had called out his members to protest the subsidy removal riding on the confidence from 2012’s success when the government eventually backed off from an attempt to end the costly subsidy. But the story is scripted differently this time.

A counter-offensive from Tinubu began with a well-written legal paper that provided ammunition for a court action to stop the planned strike.

The paper had given solid grounds to see the position of NLC as illegal following a judgement by the Supreme Court in a similar case instituted in 2002.

In that case brought against the electricity workers which sought to stop the privatisation of state assets, the Supreme Court justices ruled on May 24, 2010, that the “right of the members of a trade union to assemble together and act as a trade union is not absolute and must be exercised within the ambit of Section 45 of the 1999 constitution which states that none of the fundamental rights guaranteed under the constitution shall invalidate “any law that is reasonably justifiable in a democratic society in the interest of defence, public safety, order, public morality or public health.”

In the counsel to the government, it was said that the removal of subsidy on petrol is a matter of government policy, and it does not in any way concern the basis for the existence of a trade union in Nigeria, therefore, the NLC cannot be at the forefront of discussions by the government as to how to manage the implementation of subsidy removal.

The conclusion was that the only credible parties to the discussion should be the tiers of government and especially the state governors who constitute the national economic council.

Tinubu also had to pull his political strings to ensure there was no going back on the petrol subsidy removal.

There were political machineries set up to challenge the call for the strike.

Governors, political leaders, friends, and allies of Tinubu moved quickly to douse the fire in their own states, and it soon became clear that even if the strike had commenced, it was going to be a near-total failure in the north.

The opposition parties could not also resist the fuel subsidy removal, as some of their governors had been in the room last year when a collective decision was made under the auspices of the NEC to define petrol subsidy as being harmful and unsustainable and proposed ways for removing it and dealing with the consequences of its removal.

Following this, a reform that had been stuck for at least eight years is beginning to occur in Nigeria with foreign investors talking about it.

“He’s clearly a deft politician and a smart man,” a former senior government official said. I tell people I get the sense he’s too rich and too old not to do the right thing.

“He has always had the capacity to bring people together: he had non-indigene commissioners in his cabinet and brokered the alliance that brought the north and the south to vote for Buhari,” the government official said.

The dust had not fully settled on the subsidy removal when Tinubu suspended Emefiele, the CBN governor. The acting governor immediately floated the naira, another reform that was stuck for eight years, and the stock market rallied to a 15-year high.

Foreign investors also wonder who the next CBN governor will be. Tinubu’s admittance of the need for monetary policy house cleaning gives some comfort to investors spooked by Nigeria’s unorthodox policies.

“We are certainly going in the right direction and it’s very exciting to see. If we continue like this, Nigeria will be unrecognisable in four years,” the CEO of a top Nigerian investment bank said.

At least three foreign banks wrote about Nigeria last week, the highest frequency since 2015.

Standard Chartered, JPMorgan and Goldman Sachs have all noted their positive surprise at the speed in the execution of reforms in Africa’s largest economy. They see even more surprises ahead.

“We believe there is room for incremental positive surprises with respect to reform depth and execution speed,” JP Morgan analysts said.

“We had high expectations for the new administration’s reform agenda, however, the speed of execution has proven to be a positive surprise,” the analysts said.

A lot of the talk in the foreign investor community is also around what happens next and what Tinubu’s cabinet will look like.

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

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FG Pays N169.4 Billion for Subsidy in August to Keep Pump Price at N620/Litre



Petrol - Investors King

Amidst President Bola Ahmed Tinubu’s repeated assurances of subsidy removal, it has come to light that the Federal Government disbursed N169.4 billion as subsidy payments in August to maintain the pump price of petrol at N620 per litre.

This revelation has raised eyebrows and ignited discussions about the future of fuel subsidies in Nigeria.

Investigation, backed by a document from the Federal Account Allocation Committee (FAAC), reveals that the Nigerian Liquefied Natural Gas (NLNG) paid $275 million as dividends to Nigeria through NNPC Limited. Out of this, NNPC Limited allocated $220 million (equivalent to N169.4 billion at N770/$) to cover the Petroleum Motor Spirit (PMS) subsidy, keeping it artificially low.

This move effectively indicates a resurrection of the subsidy system, which the government had promised to eliminate.

Under former President Buhari’s administration, Nigeria saw record-high spending on petrol subsidies. Reports from the Nigeria Extractive Industries Transparency Initiative (NEITI) show that subsidies cost N1.99 trillion from 2015 to 2020.

In 2021 alone, NNPC reported a subsidy cost of N1.57 trillion, with an additional N1.27 trillion from January to May 2022. The government had allocated N3 trillion in the budget to cover subsidy costs from June 2022 to June 2023, amounting to N7.83 trillion spent on subsidies during Buhari’s tenure.

Global oil market dynamics are further complicating the subsidy issue. Brent crude prices exceeded $95 per barrel, while the naira depreciated against the US dollar, undermining Nigeria’s pledge to remove petrol subsidies.

Despite higher international crude prices and exchange rate pressures, the government has held the pump price at N620/litre.

The situation has also strained petroleum marketers, who face rising international prices, a weakening naira, and government-mandated price caps. International petrol prices, exchange rates, and additional costs have collectively driven up the landing cost of PMS to about N728.64 per litre.

The government’s strategy to sustain the N620 per litre price involved a $3 billion crude repayment loan with Afrexim Bank to bolster the naira. However, this loan has reportedly stalled due to the withdrawal of other lenders.

While the government claims the subsidy is a temporary measure to ease the economic burden on Nigerians, experts argue that it highlights the need for a functional refinery and currency stability.

Without these factors in place, petrol prices will remain susceptible to fluctuations in global oil markets and exchange rates, potentially impacting the masses.

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The Federal Inland Revenue Service (FIRS) Reports Significant Growth in Nigeria’s Tax-to-GDP Ratio



Company Income Tax (CIT) - Investors King

The Federal Inland Revenue Service (FIRS) announced that it successfully increased Nigeria’s tax-to-Gross Domestic Product (GDP) ratio from 6.0 percent to 10.86 percent in 2022.

The revelation came during a sensitization program held yesterday in Lagos by the Director of Taxpayer Services at FIRS, Mrs. Saidatu Yero.

Mrs. Yero conveyed the agency’s commitment to further enhancing the nation’s tax-to-GDP ratio, with ambitious targets of 16.5 percent, aligning with the African average and subsequently aiming for 18 percent within the next three years.

Mrs. Yero proudly stated, “The FIRS Management has executed commendable reforms that have fundamentally transformed the landscape of tax administration in Nigeria, leading to a substantial increase in revenue collection for the government.”

The agency reported that its innovative measures have already culminated in the generation of N8.5 trillion as of September 14, 2023, demonstrating its unwavering commitment to achieving N12 trillion in revenue for the year 2023.

Elaborating further, Mrs. Yero said, “One of the primary objectives of the FIRS Management is to prioritize a ‘customer-centric’ approach, recognizing taxpayers as our key stakeholders within the tax ecosystem. To ensure that taxpayers comprehend their tax responsibilities and rights, it is imperative that we continuously inform, sensitize, engage, and educate them, facilitating their compliance without any hindrance.”

Addressing the event’s theme, “The Finance Act as an Innovation in the Nigerian Tax System,” Mr. Temitayo Orebajo, the Director of the Tax Policy and Advisory Department at FIRS, said that the 2023 Finance Act introduced substantial amendments to seven tax laws, four non-tax laws, and a total of 30 sections, signifying a significant leap forward in the country’s tax framework.

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Euro-Area Inflation Eases, Fueling Debate on ECB’s Rate Hike Course

Revised Data Shows Modest Slowdown, But ECB Officials Divided on Further Hikes



Forex Weekly Outlook November 7-11

In a surprising turn of events, revised data released today has revealed that inflation in the Eurozone moderated slightly in August, offering fresh fodder for the ongoing debate within the European Central Bank (ECB) on the necessity of further interest-rate hikes.

The latest figures show that consumer prices increased by 5.2% in August, down marginally from the initial reading of 5.3% while core inflation, excluding volatile elements like food and energy remained stable at 5.3%.

While the ECB recently raised the borrowing costs for the tenth consecutive time to 4%, the new data is reigniting discussions on whether this tightening cycle has concluded.

ECB Vice President Luis de Guindos, along with Madis Muller of Estonia and Peter Kazimir of Slovakia, have expressed their belief that the latest data supports the idea that no more interest-rate hikes are needed.

However, President Christine Lagarde has pushed back against such assumptions, and other hawkish officials from Austria, Latvia, and Slovenia argue that further moves may still be required to combat inflation effectively.

Economists, including Maeva Cousin of Bloomberg Economics, anticipate a marked deceleration in both headline and core inflation for September, potentially offering the ECB’s Governing Council the reassurance needed to assess whether the hiking cycle should indeed come to an end.

As Bank of France Governor Francois Villeroy de Galhau noted, the current rate is a “plateau,” and decisions will hinge on how inflation evolves as the economic “illness” diminishes.

In the face of these ongoing debates, patience remains key, with the ECB closely monitoring economic developments to determine the appropriate course of action for monetary policy.

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