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Economy

Shippers, Agents Urge 70% Duty Review

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As we enter the last four months of the year, the Association of Nigerian Licensed Customs Agents shippers (ANLCA) has urged President Muhammadu Buhari to review the automotive policy, which imposes 70 per cent levy on imported vehicles, to stop cargo diversion to ports of neighbouring countries.

Since the enactment of the policy, Nigerians were yet to witness the mass production of made-in-Nigeria vehicles, the group said. The levy was introduced by the Jonathan administration to support the local industry.

ANLCA President Prince Olayiwola Shittu said the 35 per cent duty imposed on used vehicles is obnoxious, urging President Buhari said to shippers to review the policy. The policy, he said, had rendered the RoRo terminal useless because it had increased the costs of doing business and encouraged diversion of cargoes to neighbouring countries’ ports, thus, leading to loss in government’s revenue.

“The Federal Government needs to review the auto policy and make the port attractive for business. The maritime sector is confronted with many problems that need to be addressed to boost trade and generate employment,” he said.

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 experience in the global financial markets.

Economy

East Africa to get US$20 Million from OPEC Fund for SMEs 

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The OPEC Fund approves US$20m for SMEs in East Africa

The OPEC Fund for International Development (the OPEC Fund)  has signed a US$20 million term loan in favor of East African Development Bank (EADB). EADB will use the loan to support small- and medium-size enterprises (SMEs) and infrastructure projects in East Africa.

EADB is an important regional development institution for delivering key development objectives across the East Africa region. It enjoys a high level of commitment from member states Kenya, Uganda, Tanzania and Rwanda, as well a diverse shareholder base that includes multilateral and bilateral development institutions and international financial institutions.

SMEs account for more than half of EADB’s portfolio. They play an important part in development, driving economic growth and employment opportunities in East Africa and in developing countries more generally. The bank is expanding its resource mobilization activities to meet the growing financing needs of SMEs.

“We are very pleased to support private sector development in East Africa, which goes to the core of our mandate,” said OPEC Fund Director-General Dr Abdulhamid Alkhalifa. “We have partnered with EADB since 2001 and we appreciate the opportunity to strengthen our relationship. SMEs are critical to achieving progress toward Sustainable Development Goal (SDG) 8 on decent work and economic growth. Efficient infrastructure, as part of SDG 9, improves access to social services, reduces business and production costs, supports trade, and will ultimately provide East Africa with a more competitive business environment.”

Vivienne Yeda, the Director General of EADB, said: “We are pleased to receive a line of credit of US$20 million from the OPEC Fund dedicated to financing SMEs and infrastructure projects in EADB member countries. We appreciate the confidence placed in the EADB by the OPEC Fund. By financing SMEs, we expect to promote enterprises that generate employment opportunities, social economic development and consequently promote regional integration. The SME sector is a critical pillar for sustainable economic growth as it is the backbone of the EADB member countries’ economies.”

This is the third loan the OPEC Fund has provided to EADB in support of SMEs. In 2001, the organization approved US$10 million, followed by a further US$15 million in 2013.

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Economy

US Poll: Investors ‘Freaking’ Over Possible Contested Outcome of U.S. Election

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A disputed result in November’s U.S. presidential election is now the number one concern for investors – even ahead of a second wave of Covid-19 – according to a new global survey.

The poll carried out by deVere Group, one of the world’s largest independent financial advisory and fintech organisations, asked more than 700 clients ‘What is your biggest investment worry for the rest of 2020?’

A contested U.S. election was the number one (72%); the impact of a Covid-19 second wave (18%) and U.S.-China trade war (5%). The remaining 5% was made up of other geopolitical issues, including Brexit.

735 people resident in the UK, North America, Europe, Asia, Africa, Latin America and Australasia took part in the poll.

Of the poll’s findings, deVere Group CEO and founder, Nigel Green says: “Investors around the world are beginning to freak about the U.S. presidential election.

“But not about whether Trump or Biden wins, rather over the looming possibility of a disputed outcome.

“President Trump is already questioning the legitimacy of the election, heightening the chances of a contested result and an ensuing constitutional crisis in the world’s largest economy.

“It’s getting ugly and investors are, rightly, concerned that this will generate massive waves of volatility in the markets, not only in the U.S., but around the world.”

He continues: “Investors are telling us this is their biggest investment worry for the rest of 2020.

“It is likely that any election-triggered volatility will be highly impactful for may be only two or three weeks.

“As always, investors should remain in the market during this time.”

Rational investors, Mr Green believes, should be capitalising on any election turbulence.

“There are two key reasons why investors should be building up their portfolios in volatile times.

“First, are long-term benefits. There are many unknowns, but what we do know is that over the longer-term the performance of stock markets is fairly predictable: they go up.

“Indeed, for this reason, over a longer time horizon, investing in equities is almost universally recognised as one of the best ways people can accumulate wealth.

“By not topping up and diversifying portfolios in volatile periods, investors are pushing back the longer-term benefits they could be starting to reap.  Why forsake the long-term gains that would be generated on money invested now?”

“Second, the buying opportunities.  The see-sawing markets are a chance for investors to put new money into markets at lower prices.  A slump in the market means that there are high-quality equities available at more attractive prices.”

The deVere CEO concludes: “A contested outcome of the U.S. presidential election will almost inevitably send the stock markets into a temporary tailspin – and this is weighing on investors’ minds.

“I would argue, they should try and use the volatility to their financial advantage where possible and appropriate.”

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Economy

Inflation, Economic Uncertainties Push Price of Palm Oil up 40% in Enugu

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Price of Palm Oil rose by 40% in Enugu State

The rising cost of goods and services amid economic uncertainties has pushed the price of a key food ingredient in Nigeria, palm oil, up by around 40 percent in Enugu metropolis, according to a recent report by NAN.

The survey revealed that at Ogbete main market, Garki and Mayor markets, a 5 litre key of palm oil now sells for N2,350, up from N1,800 it was sold in August.

Similarly, the price of a 70cl bottle rose from N280 a few weeks ago to N400.

The survey also revealed that a 20-litre jerry-can of palm oil is now selling between N11,000 and N12,500 as against N9,000 and N9,500, depending on its processing pattern and grade.

Palm oil dealers, who spoke newsmen at the various major markets in the metropolis, attributed the increase to an off-season of the palm fruits for the year.

Mrs Oby Ofordile, a palm oil seller at Ogbete Main Market said that “the price of oil as at January was between N250 and N270 per 70cl bottle, while 20-litre went for between N9,000 and N9,500.

Ofordile noted that scarcity of palm oil fruits had led to low productivity, thereby leading to a hike in the price of the commodity.

According to Miss Onyeka Agu, another seller of palm oil at Ogbete Market, a 25-litre jerry-can in major markets in the metropolis goes for between N13,000 and N14,500 while in the villages, where the oil is produced, the price stands at N12,500.

Mrs Lucy Adindu, a palm oil seller at Garki Market, corroborated Ofodile’s views, hinging the price hike on palm fruits being out of season.

“The price of the commodity will come down when next harvest period sets in,” Adindu said.

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