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Nigeria Records First Trade Deficit With UK in Seven Years

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Institute of Chartered Shipbrokers
  • Nigeria Records First Trade Deficit With UK in Seven Years

The negative growth of the economy and low crude oil output has weakened Nigeria’s international trade with most of its partners, particularly the United Kingdom, IFE OGUNFUWA writes

Nigeria has recorded its first trade deficit with the United Kingdom since 2009, with merchandise imports from the former colonial master in 2016 exceeding shipments of Nigerian merchandise to it.

An analysis of international trade data from the National Bureau of Statistics showed that Nigeria imported N362.87bn worth of goods from the UK and exported N300.66bn to the European country last year, recording a negative trade balance or net export of N62.21bn.

The value of imports from the UK to Nigeria grew by 28 per cent year-on-year from N283.76bn, while export to the UK from Nigeria shrank by 28 per cent from N414.85bn in 2015.

Analysts said this was a reflection of the state of foreign trade in the country in 2016, in which imports out performed exports by N290.13bn as a result of the plunging revenue from crude oil exports.

The country imported products worth N8.82tn and exported merchandise valued at N8.53tn.

“The terms of trade worsened in a way that the volume of exported products dropped significantly,” the Managing Director/Chief Executive Officer, Cowry Assets Management Limited, Mr. Johnson Chukwu, said.

Before 2016, the data showed that Nigeria had recorded trade surpluses with the United Kingdom for six consecutive years, with the highest positive balance of trade of N1.11tn in 2012.

The statistics indicated a trade surplus of N4.91bn in 2010, which expanded to N970.42bn in 2011 and peaked at N1.11tn in 2012.

In 2013, the NBS data indicated that the balance of trade between both countries shrank to N362.87bn; grew to N535.63bn in 2014 and further reduced to N131.09bn in 2015.

Despite the shortfall in export by Nigeria to the European country in the year under review, the UK remained one of Nigeria’s top 10 export destinations.

Further analysis showed that Nigeria’s trade with Europe as a whole in 2016 also resulted in a negative balance of trade of N1.05tn as against a trade surplus of N1.31tn in 2015.

Explaining the factors responsible for the negative balance of trade, Chukwu said the global fall in oil prices and shrinking volume of crude oil produced had adversely affected the value of Nigeria’s export to the UK.

He stated, “Nigeria’s export to the UK is majorly crude oil. If you observe, in the last quarter of last year, the country started recording negative trade balances. Even if we still exported the same volume of crude to the UK, the price had dropped drastically; therefore, the value of our export was quite low.

“It was principally due to low prices of crude oil last year. In the case of Nigeria, we had double whammy; the price of crude went down and the volume dropped because of heightened militancy in the Niger Delta. These two factors are why the trade balances with most of our trading partners became negative and the overall balance of trade was negative in 2016.”

The Forcados export terminal, through which one of Nigeria’s largest crude oil grades is being exported, was shut down around February last year for more than a year after militants’ attacked the oil pipeline.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had said that between January and June 2016, over 1,000 incidents of vandalism were recorded and resulting in a loss of 109 million litres of petroleum products and 560,000 barrels of crude oil, with the country producing 1.5 million barrels per day as against the 2.2 million bpd targeted in the budget.

According to the Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, the UK may not be buying much of Nigeria’s crude oil again because about 80 per cent of the country’s export to it was oil.

“If there was any country that was buying our oil before and for any reason stopped buying our oil, it will immediately show in our balance of trade. The UK may be buying elsewhere as against buying from Nigeria. Because the oil price and output dropped, our capacity to export was also affected,” he stated.

Nigerian importers and exporters had entertained fears that the referendum by the UK on whether to remain or leave the European Union would impact their business interests, with many delaying their international trade business decisions due to uncertainties of Brexit’s effect on existing trade policies.

However, the British High Commissioner to Nigeria, Paul Arkwright, had last year assured Nigerians that the Brexit would not change the existing bilateral trade relationship between the two countries.

He, however, emphasised that there would be no attempt by the UK to remain inside the EU or re-join the continent as there would be no second referendum.

The envoy gave an assurance that investment in Nigeria by British companies and cultural links between the two countries would not waver.

He urged Nigerians to strengthen trade and investment ties between both countries by taking advantage of the Brexit to attract British business interests divesting from other regions to Nigeria.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market.

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Fate of Bristow Pilots, Engineers To Be Decided on Thursday

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Bristow Helicopters

Pilots and Engineers of Bristow To Know Their Fate Next Week

Bristow pilots and engineers whose appointments were terminated would have to wait till next week to know their fate as the negotiation between the National Association of Aircraft Pilots and Engineers and the Federal Ministry Labour and Employment has been shifted to Thursday.

Capt. Yakubu Dukas, the National Vice President of National Association of Aircraft Pilots and Engineers, confirmed this on Friday.

On Tuesday, Bristow Helicopter announced it would sack 100 pilots and engineers, hinging its decision on plans to restructure the company’s finances amid the COVID-19 pandemic.

But on Wednesday, NAAPE issued two weeks ultimatum to the company, demanding for reversal of such action at a time families are struggling with COVID-19 crisis.

On Friday, the Nigeria Labour Congress also issued two weeks warning to the companies, demanding the affected staff be recalled or they will have to deal with a nationwide action from NLC.

He said, “Both parties are to return to status quo. We are to report back next week Thursday to continue the negotiation.

“If both of you are returning to the negotiation table, it would be something that is favourable. The members will be happy to move out of the picketing and continue their work.

“The meeting went well. We met with the Ministry of Labour to reverse the status quo. Whoever they made redundant is null and void and they would revert to status quo.

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Buhari Signs Bill to Make Registration of SMEs Affordable and Easier

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Corporate Affairs Commission

Buhari Signs New Bill to Make SMEs Registration Affordable

President Muhammadu Buhari on Friday signed a new bill to make the registration of Small and Medium Enterprises (SMEs) easier and affordable.

Femi Adesina, the Special Adviser to the President on Media and Publicity, disclosed this in a statement made available to media on Friday.

In the statement titled “After 30 years, President Buhari signs amended Companies and Allied Matters Bill,” the Senior Special Adviser said Buhari has signed the Companies and Allied Matters Bill, 2020 into law.

It read, “President Muhammadu Buhari Friday in Abuja assented to the Companies and Allied Matters Bill, 2020 recently passed by the National Assembly.

“The President’s action on this important piece of legislation, therefore, repealed and replaced the extant Companies and Allied Matters Act, 1990, introducing after 30 years, several corporate legal innovations geared toward enhancing ease of doing business in the country.

“Such innovations include: filing fee reductions and other reforms to make it easier and cheaper for small and medium-sized enterprises to register and reform their businesses in Nigeria;

“Allowing corporate promoters of companies to establish private companies with a single member or shareholder, and creating limited liability partnerships and limited partnerships to give investors and business people alternative forms of carrying out their business in an efficient and flexible way.”

“Innovating processes and procedures to ease the operations of companies, such as introducing Statements of Compliance; replacing ‘authorised share capital’ with minimum share capital to reduce costs of incorporating companies; and providing for electronic filing, electronic share transfers, e-meetings as well as remote general meetings for private companies in response to the disruptions to close contact physical meetings due to the COVID-19 pandemic;

“Requiring the disclosure of persons with significant control of companies in a register of beneficial owners to enhance corporate accountability and transparency; and

“Enhancing the minority shareholder protection and engagement; introducing enhanced business rescue reforms for insolvent companies; and permitting the merger of Incorporated Trustees for associations that share similar aims and objectives.

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Nigeria Railway Corporation Realises N3.1bn in 2019

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Railway Projects

NRC Generates N3.09 Billion in 2019

The Nigeria Railway Corporation (NRC) has said it realised N3.09 billion from railway services in 2019.

In a statement issued by the corporation, N1.5 billion of the total amount was generated from the Abuja-Kaduna rail service, according Fidet Okhiria, the Managing Director, NRC, who was quoted in the statement.

In the statement signed by Taiye Elebiyo-Edeni, the Media Assistant to the Minister of Transportation, the Abuja-Kaduna rail line realised N130 million per month in the year under the reveiw.

“The Abuja-Kaduna railway generated over N130m monthly as revenue,” Okhiria stated.

Okhiria explained that, that particular rail line has been able to breakeven, adding that the revenue from Abuja-Kaduna rail line was used to service other railway stations in the Northern region.

Maiduguri station, which is presently not functioning was named as one of the stations financed with the revenue realised from Abuja-Kaduna rail line.

“N90m was spent on running cost and payment of staff at the Maiduguri station, which could not operate for now due to insecurity in the state.”

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