Economy
Economists Evaluate Nigeria-China Currency Swap
Some Financial Economists have expressed great concerns on the minor influence that the Nigeria-China currency swap had on the country’s economy, three years after.
The experts this in Lagos on Friday that the volume of currency import so far traded, had not been significant, though a few swaps took place.
The pact which marked three years of implementation in April, was signed on April 27, 2018, to ease demand pressure on the country’s supply of foreign exchange.
The Chief Executive Officer of Arvo Finance, Mr Ayotunde Bally, said that the pact had not been fully utilised due to a decrease in the drawdown of the money input of the Chinese Yuan to the Central Bank of Nigeria.
“This pact which was aimed at creating a harmonious relationship between the two countries has not been utilised as it ought to be.
“Statistics has it that Nigeria- China bilateral trade which was around two billion dollars in 2002 is within the space of about 14 billion dollars in contemporary years.
“And yet, we cannot boast of about three billion dollars Yuan being utilised in such market transaction,’’ he said.
According to Bally, that has clearly displayed the negligence of the pact by most business importers.
He said the poor state of the pact was due to ignorance and the benefits of the pact to those who utilise it.
“Also, the deliberate avoidance of the pact by those who believe transactions are easier with dollars or some other methods like Bureau De Change among others.
“Even those who know about the pact but avoid it, indicating that it is not lucid and that the regulations and procedures are rigid to them,” he told NAN.
He advocated massive sensitisation on the usefulness of the pact to both the business individuals and the country at large.
Mr Johnson Chukwu, Founder of Cowry Asset Management Limited, also said that the pact recorded minimal benefit to the economy.
“If you look at our demand for foreign exchange particularly for imports, you will observe that we still have pressures coming from import demand.
“China is our biggest trading partner and our largest import market.
“We bought more products from China than any other country in the world. So, if the currency swap has been very significant, then the pressures we are witnessing on the balance of trade would have been abated.
“So, I do not think the volume of currency import has been significant.
“Certainly, there must have been a few swap that has taken place since then but it is clearly not significant because if it was, it would have reflected in our balance of trade,” Chukwu said.
According to him, China accounts for more than 25 per cent of our import; so we should not have a currency swap that delays immediate payments of our foreign reserves.
Also, Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research (CEPAR), University of Lagos, said that the swap deal had positive impact on the naira exchange rate with major currencies.
“The Nigeria-China currency swap deal, according to reports, has some positive impact on the stability of the naira exchange rate with major currencies.
“But, its effect is limited by the volume of trade between Nigeria and China.
“With decline in global productivity occasioned by the COVID-19 pandemic and other factors, the effect appears not to have achieved the originally intended objectives.
“Nigeria has been bedeviled by other economic challenges. The current sorry state of the country’s exchange rate is quite instructive in this regard,” Nwokoma said. (NAN)
The Nigerian Exchange Ltd. (NGX) continued its bullish trend on Wednesday, gaining N183 billion.
Accordingly, the market capitalisation, which opened at N59.532 trillion, gained N184 billion or 0.31 per cent to close at N59.715 trillion.
The All-Share Index also added 0.31 per cent or 303 points, to settle at 98,509.
68, against 98,206. 97 recorded on Tuesday.Consequently, the Year-To-Date (YTD) return increased to 31.
74 per cent.Gains in Aradel Holdings, Zenith Bank, United Bank For Africa(UBA), Oando Plc, Nigerian Breweries among other advanced equities drove the market performance up.
Market breadth closed positive with 34 gainers and 17 losers.
On the gainers’ chart, Africa Prudential, Conoil and RT Briscoe led by 10 per cent each to close at N14.30, N352 and N2.42 per share, respectively.
Golden Guinea Breweries followed by 9.95 per cent to close at N7.18, while NEM Insurance rose by 9.74 per cent to close at N10.70 per share.
On the other hand, Julius Berger led the losers’ chart by 10 per cent to close at N155.25, Secure Electronic Technology Plc trailed by 9.52 per cent to close at 57k per share.
Multiverse lost 7.63 per cent to close at N5.45, Haldane McCall dropped 6.07 per cent to close at N4.95 and Honeywell Flour shed 5.62 per cent to close at N4.70 per share.
Analysis of the market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 49.44 per cent.
A total of 320.10 million shares valued at N6.48 billion were exchanged in 7,943 deals, compared with 939.41 million shares valued at N12.81billion traded in 9,098 deals posted in the previous session.
Meanwhile, ETranzact led the activity chart in volume with 70.27 million shares, while Aradel led in value of deals worth N1.22 billion.(NAN)
The central parity rate of the Chinese currency renminbi, or the Yuan, weakened 22 pips to 7.1870 against the dollar on Monday.This is according to the China Foreign Exchange Trade System.In China’s spot foreign exchange market, the Yuan is allowed to rise or fall by two per cent from the central parity rate each trading day.
The central parity rate of the Yuan against the dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day. (Xinhua/NAN)
Arewa Youths Initiative for Energy Reforms (AYIFER), has urged Nigeria National Petroleum Corporation Limited (NNPCL) to do everything possible to bring Kaduna Refinery back into operation.
National Coordinator of the group, Mr Bashir Al’Amin, stated this in a statement issued on Friday in Abuja.
Al’Amin specifically called on the Chief Executive Officer of NNPCL, Mallam Mele Kyari, to do all within his powers to rejuvenate the refinery and bring it up to global standard.
He said that having delivered the Port Harcourt refinery, coupled with the establishment of Dangote Refinery in Lagos, attention should be shifted to Kaduna refinery for easy spread of petroleum products.
“We are calling on Malam Mele Kyari to expedite action on Kaduna refinery so we can be at par with other regions in the country.
“We equally beg the NNPCL to do professional work in rehabilitating the old refinery and deliver a standard and functional petrochemical refinery and not a blending plant.
“Kyari should resist any temptation that could make him do something that can jeopardise his good image,” he said.
Al’Amin said that since the extinction of groundnut pyramid and textiles in Kano State as well as PAN in Kaduna State and with the Kaduna refinery getting moribund, a lot of youths had lost their jobs.
According to him, all their hopes in the north are tied to the legacy refinery, expressing the hope that God would use Kyari to deliver it well and on time.
He said that the group was solidly behind NNPCL in prayer and would be ready to celebrate the company if its expectations were met. (NAN)
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