BUSINESS
Naira Slumps Further, Exchanges N600/$ at Parallel Market
The naira, on Tuesday, weakened against the dollar to trade at N600 at the parallel market.
Bureaux De Change operators (BDCs), popularly known as ‘abokis’ who spoke in an interview, said the currency fell sharply on Monday.
The figure represents a 0.8 per cent drop compared to N595 a dollar it traded last week.
At the Importers and Exporters (I&E) window, the currency exchanged N415.
75, widening the margin to N184. 25.Abubakar, a BDC operator in Ikorodu, said that buying and selling prices stood at N595 and N600 per dollar.
The naira has continued to weaken in the parallel market due to increasing demand, falling external reserves, and low foreign exchange inflows into the coffers of Africa’s biggest economy.
In the last three weeks, the country’s external reserves dropped by $700 million to $38.72 billion as at May 13, according to figures obtained from the Central Bank of Nigeria.
Experts have also linked the situation to politics, as they believe politicians are mopping up dollars for election primaries this month.
A parallel market (street/black market) is characterised by noncompliant behaviour with an institutional set of rules.
The Central Bank of Nigeria (CBN) has often maintained that the parallel market is not the true reflection of the naira.
Recently, the US Federal Reserve raised interest rates by a half-percentage point to battle the country’s worst inflation in 40 years.
In March, the Fed hiked its benchmark borrowing rate for the first time since late 2018, upping it by a quarter-percentage-point.
Analysts say the rate hike could significantly hurt emerging economies like Nigeria — increase the cost of foreign borrowing, force foreign investors to pull out their funds, and cause further depreciation of the naira
Economy
Infrastructure Devt.: ICRC to Issue Approval Certificates Within 7 Days – DG
By Tony Obiechina, Abuja
The Infrastructure Concession Regulatory Commission (ICRC) says it will henceforth issue Outline Business Case (OBC) Certificate of Compliance and the Full Business Case (FBC) Certificate of Compliance within seven days.This follows the charge by President Bola Ahmed Tinubu to the Director General of the Commission, Dr Jobson Oseodion Ewalefoh “to accelerate investment in National Infrastructure through innovative mobilization of private-sector funding”.
President Tinubu also charged him to work assiduously to boost infrastructure development in Nigeria as part of the renewed hope agenda of the current administration.In view of the above, Dr Ewalefoh-led management team of the ICRC has streamlined the approval processes of the commission to issue its certificates of compliance within seven days. This will accelerate the turnaround time for approvals by the Commission.“In line with the charge of His Excellency, President Bola Ahmed Tinubu, GCFR, and following his Renewed Hope Agenda, we have streamlined and updated our approval processes to issue either of the Outline Business Case Certificate of Compliance (OBC) and the Full Business Case Certificate of Compliance (FBC) to Ministries, Departments and Agencies (MDAs) that meet the requirements within seven days.“This is part of efforts by the current administration to accelerate infrastructure development, bridge the infrastructure gaps and stimulate the economy through investment of private sector funds in Public Private Partnership endeavours.“By streamlining our processes, the Commission is in no way foregoing any of its stringent approval steps or key requirements, therefore, only business cases that are viable, bankable, offer value for money and meet all other requirements will be approved.“The ICRC cannot do it alone, therefore I implore all chief executives of MDAs to match our momentum and align with this charge of Mr. President to accelerate Infrastructure development and ensure that PPP projects are not stalled at any point but delivered within record time.“The Commission is ready to partner and collaborate with all MDAs to actualize this,” he said.In a statement by Ifeanyi NwokoActing Head, Media and Publicity on Monday the ICRC DG in August rolled out a six-point policy direction which among others, focused on accelerating PPP processes, boosting inter-agency collaboration and ensuring innovative financing.The ICRC was established to regulate Public Private Partnership (PPP) endeavours of the Federal government aimed at addressing Nigeria’s physical infrastructure deficit which hampers economic development.Economy
VAT revenue increases by 9% to N1.56 trillion in Q2 2024
By Tony Obiechina, Abuja
The federal government in the second quarter of 2024 generated a total of N1.56 trillion from Value Added Tax. This is a 9.11 percent increase from the N1.43 trillion in Q1 2024.
According to the National Bureau of Statistics report, local payments recorded were N792.
58 billion, foreign VAT payments were N395. 74 billion, while import VAT contributed N372. 95 billion in Q2 2024.“On a quarter-on-quarter basis, human health and social work activities recorded the highest growth rate with 98.44%, followed by agriculture, forestry and fishing with 70.26%, and water supply, sewerage, waste management and remediation activities with 59.
75%,” NBS reported.“On the other hand, activities of households as employers, undifferentiated goods and services producing activities of households for own use had the lowest growth rate with 46.84%, followed by Real estate activities with 42.59%.
“In terms of sectoral contributions, the top three largest shares in Q2 2024 were
manufacturing with 11.78%; information and communication with 9.02%; and Mining and quarrying with 8.79%.
“Nevertheless, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.00%, followed by activities of extraterritorial organisations and bodies with 0.01%; and Water supply, sewerage, waste management and remediation activities with and real estate services 0.04% each.
“However, on a year-on-year basis, VAT collections in Q2 2024 increased by 99.82% from Q2 2023.”
BUSINESS
Richway MfB Wins DBN’s Highest Impact on Start-ups Award
By Tony Obiechina, Abuja
Development Bank of Nigeria (DBN) has conferred its 2023 Award for Microfinance Bank with the Highest Impact on Start-Ups on Richway Microfinance Bank in recognition of its unwavering commitment to fostering entrepreneurship in the country.The award also attests to the micro lender’s dedication to empowering small businesses and driving economic growth through innovative financial solutions.
Since its inception, Richway Microfinance Bank has been at the forefront of providing accessible financial services to underserved communities. The bank’s focus on start-ups, particularly in the challenging economic landscape of Nigeria, has set it apart as a leader in the microfinance sector. By offering tailored loan products, savings and investments products with high returns, and business advisory services, Richway has enabled countless entrepreneurs and business owners to turn their ideas into thriving businesses.In 2023, the bank’s impact on start-ups was particularly profound. Through strategic partnerships and an in-depth understanding of the unique challenges faced by new businesses, Richway Microfinance Bank extended its reach, offering critical support to over 500 start-ups.These initiatives not only provided much-needed capital but also helped entrepreneurs and business owners build sustainable business models, manage risks, and scale their operations.Speaking on the award, the Managing Director of Richway MfB, Adenrele Oni, said the “DBN’s award represented a significant milestone for Richway in its sustained efforts to boost Nigeria’s economy and reflected the bank’s role in driving innovation and entrepreneurship, which are key drivers of Nigeria’s economic diversification efforts.”According to him, the award also underscores the importance of microfinance institutions in bridging the financial inclusion gap, particularly for small businesses that often struggle to access traditional banking services.While thanking the DBN’s management on the recognition of the micro lender’s support for MSMEs in 2023, Oni reiterated the bank’s commitment to continuing its mission of empowering entrepreneurs and contributing to Nigeria’s economic development.He assured: “As Richway Microfinance Bank celebrates this achievement; it remains focused on the future, with plans to expand its offerings and reach even more start-ups in the coming years.”