- Nigeria’s External Reserves Decline by $460m in Two Months
Nigeria’s external reserves continued to decline in the last two months despite a claim of improved capital inflows through the I&E forex window.
The latest data from the Central Bank of Nigeria (CBN) showed external reserves declined from over $45.18 billion recorded in June 2019 to $44.72 billion as of August 6th, 2019. This represents a decline of $460 million and suggested that the weak demands for Nigerian oil in the global market might have started weighing on the foreign reserves.
In June, the reserves rose to $45.18 billion, the highest in the last two months but declined by almost $170 million to $45 billion on July 25th before plunging by another $290 million to $44.72 billion.
Apart from the weak global demand for Nigerian crude oil, oil price plunged below $60 a barrel on Wednesday to $57.31 following president Trump decision to seized Venezuelan government assets in the USA, one of the world’s key oil producers.
The move increased global risk and uncertainty as investors in the energy sector pulled back, especially knowing the US and China are still not getting anywhere with the trade agreement.
However, with oil now trading below the Federal Government’s $60 per barrel benchmarked in the 2019 budget, the budget deficit will surge or CBN will have to source for an alternative to bridge the difference in projected funding.
This may not be unconnected with CBN recent policy to restrict milk importers from accessing forex from the apex bank to ease about $1.2 billion to $1.5 billion pressure on the foreign reserves, the amount spent on milk importation yearly.
It should also be recalled that the CBN had previously restricted palm oil importers from approaching the apex bank for foreign exchange in May, citing needs to conserve the foreign reserves and stimulate local production.
The current global events are pointing to a cautious central bank struggling to sustain its ability to intervene in the foreign exchange market in order to maintain Naira stability despite claiming that investors exchanged $35 billion through the I&E forex window in the last two years.
With oil price now trading below the 2019 budget benchmark, the apex bank would have to restrict more items from official windows. A move that could once again widen foreign exchange rates, especially in the black market and automatically increased consumer prices of import-dependent products.
FG Launches New N25bn Youth Fund to Address Some of the Concerns Raised by #EndSARS Protesters
FG Introduces N25 Billion Youth Fund
The Federal Government has introduced a new N25 billion youth fund to address some of the issues raised by the Nigerian youths who took to the street to demand good governance, among others.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, disclosed this at a stakeholder meeting held with the Deputy Governor of Kaduna State, Dr. Hadiza Balarabe, in Kaduna.
Ahmed said the fund would be increased from N25 billion to N75 billion within three years to ensure new job creation for the youths.
The meeting was constituted as part of the directive of President Muhammadu Buhari to ministers and governors to dialogue with stakeholders on some of the concerns raised by #EndSARS protesters.
The finance minister said the aim was to support the Nigerian youths to actualise their innovative and entrepreneurial minds in business and general development of the nation.
On her part, Balarabe said the essence of the meeting was to brainstorm on how to tackle security challenges faced during the #EndSARS protests.
Dr Mohammad Abubakar, the Minister of Environment, who was also at the meeting, reiterated Federal Government’s commitment to people-friendly policies and reforms.
Kwara to Support Looted Businesses With N500 Million
Kwara State to Fund Looted Businesses With N500 Million
Kwara State has joined the list of states supporting businesses that were looted and vandalised by hoodlums masquerading as #EndSARS protesters.
Mr. AbdulRahman AbdulRazaq, the Governor of Kwara State, during a visit to the Kwara Mall and Agro Mall on Saturday said the state will support affected businesses with N500 million, adding that the funding is to reduce the negative impact of the looting on the state economy.
On Sunday, in a statement issued by the governor’s Chief Press Secretary, Rafiu Ajakaye, the Governor said the vandalism and looting may bring several businesses to their knees and lead to massive job loss with an increase in poverty rate.
He said, in order to avoid this, “We are setting up a N500 million fund for those that were affected to access.”
“The application form is live and active on the state government’s website and can now be filled by interested parties. We are going to get them back as soon as possible,” he assured.
The governor, who described the situation as a mindless looting of people’s businesses, said there can be no justification for such criminal behavour in our society and commiserated with affected owners.
Speaking on accusation of hoarding of palliatives, the Governor said the palliatives were donated by Private sector led CACOVID to specific vulnerable households and were being distributed gradually across the state.
“What happened was bareface stealing and some people are playing politics with it. This is not the time to play politics. It is a time for all hands to be on deck. It is not just Kwara they wanted to burn down. They wanted to burn the whole country down. I urge all of us to stand up and resist that,” he said.
“We engaged the #EndSARS youth in Kwara and it worked out for us. They were not violent. They had a five-point agenda which the federal government has agreed to and has started implementing. In Kwara State, we have also set up a judicial panel of inquiry to look into the allegation of Police abuse. I also visited Police barracks to see how we can improve the welfare of the Police in the state.
“While the hoodlums were looting (on Friday), I was holding a meeting with executives and members of the National Association of Kwara State Students and National Association of Nigeria Students, Kwara axis. It shows students and youths were not part of the looting. Those involved were just hoodlums and thieves,” he said.
IMF to Review Nigeria’s Growth Forecast Amid Destruction of Businesses, Properties
IMF Says it May Review Nigeria’s Growth Amid Recent Development in the Country
Following the destruction of businesses and properties that trailed the #EndSARS protest, the International Monetary Fund (IMF) has said it may review the nation’s growth forecast in view of the new development in the country.
Abebe Selassie, the Director, African Department, International Monetary Fund, made the statement while responding to questions during a virtual IMF press conference on the economic outlook of Sub-Saharan Africa on Thursday.
According to him, the protest is difficult given that Lagos is a very important economic hub and contributes to the overall Nigeria activities.
Selassie said, “On the growth projections in Nigeria, I mean, these protests happened of course, after we had closed, after the period where the data we looked at in making the growth projections for this economic outlook.
“And much will depend really on how these protests evolve.
“Lagos of course, is a very important economic hub and contributes quite a bit of economic activity to overall Nigeria activities.
“So, if these persist and are showing significant effects on economic data, we will internalise them in due course.”
He further explained that the nation’s economy had been a difficult one in the last four years ever since oil prices plunged in 2015-16.
He said, “I think this is exactly why we have been on the record in Nigeria about how really critical it is to get all of the policy induced barriers out of the way to facilitate stronger economic growth.
“For the government to do more to raise revenues through the area of non-oil resources to be able to invest in health education which would, you know, allow people to be more successful at getting jobs but also improve the economy’s potential.
“So, I think that development agenda that Nigeria has, I think, has to be tackled with gusto and vigor so that the millions of jobs that the country needs can be created.”
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