The Nation Newspaper

Category: Industry

  • ‘Africa spends $35b on food importation yearly’

    The International Fund for Agricultural Development (IFAD) has said Africa spends $35 billion on food importation yearly.

    IFAD made this known in a statement to reporters in Abuja. The statement quoted its President Mr. Kanayo Nwanze as saying this at the opening of a three-day ‘African Union-European Union Conference of Ministers of Agriculture’.

    The conference tagged: ‘Investing in a food secure future’ was convened by the Government of The Netherlands to discuss how to deepen cooperation between Africa and Europe to mutually invest in food and nutrition security.

    Nwanze said investing more in Africa’s rural areas will stem the flow of economic migrants and minimise the acts of desperation that makes the continent’s newspaper headlines.

    His words: “People are leaving the rural areas of Africa because they can’t find jobs or feed their families and the ripple effects are felt here in Europe. The irony is that Africa spends $35 billion a year on food importation; it is time to stop creating jobs in other countries and redirect that investment to their own agricultural transformation.”

    Nwanze added that Africa had enormous potentials and contained half of the world’s uncultivated land suitable for growing food crops, and that only five per cent of it was irrigated.

    The IFAD president said Africa could easily double its productivity in the next five years simply by making better use of its existing farmland.

    He explained that this could turn farming into a sustainable and profitable business and lift millions of rural Africans out of poverty.

    Nwanze added that lifting millions out of poverty would make migration a choice rather than a necessity.

  • ‘Hospitality industry in Lagos can generate over N846b yearly’

    ‘Hospitality industry in Lagos can generate over N846b yearly’

    The Managing Director/Chief Executive Officer, International Maximum Resources & Chemical Industries Ltd., Prince Madugba Raphael Chiadikobi, says Nigeria can leverage the untapped opportunities in the tourism/hospitality industry to diversify its economy. In this interview with Assistant Editor CHIKODI OKEREOCHA, the industrialist, ex-banker and hotelier says hospitality is lucrative, with Lagos alone capable of generating over $3 billion (about N846 billion) yearly, if the government puts the right things in place. According to him, there is a need to fix power, which is a pain in operators’ necks, and also reexamine some Central Bank of Nigeria (CBN) policies. 

    How would you assess the economy so far?

    To be honest with you, we are making progress in one area: security. There is no business that can thrive when there is crisis. The moment you are able to sort out the issue of security, more people will have the confidence to invest. But if there is no security you won’t dare. That is the area I can give our President and his team a pass mark. But when you come to the issue of food security, it also boils down to security, because most of the agricultural products come from up north and when there is no peace there, they will not come. Most food items are very expensive now, particularly tomatoes.

    How are operators in the hospitality industry coping with the scarcity and high price of tomatoes?  

    It’s a very bad situation. If you are making a sauce before with N2,000, you are going to make it with N4,000 now. If we served you a meal at probably N1,000 or N1,500 before and you come now and we say it’s N3,000 you will flare up. That is natural. But the reality on ground is that the government is not helping issues. The first thing I told you when you came in was that we woke up this morning to buy Automotive Gas Oil (AGO) or diesel at N180 per litre. How can you survive under this? So, if the government can get the energy sector right, leave the rest to us. If the energy sector is fixed, our problems are half-solved. Why it is not difficult, from my own perspective,is this: What is the source that we are using to generate this power? They say it is gas. And they are still flaring this gas till tomorrow, wasting it. What stops the government from building the turbines where these gases are, so that nobody will go and cut the pipe that is directing it to the power plants? That is one point. Then, we have more than eight states in Nigeria that can produce coal. What stops them from building turbines and using coal to fire them and generate electricity?

    How does the energy crisis affect operators in the hospitality industry?

    Terribly! It affects us much more than any other sector. In the banking sector, their generators will be on from probably 7.00 am  till 10.00 pm and they power down. The ATMs operate with solar. But the hospitality business is 24/7, you don’t power down. Even if it is one guest you have, he expects you to put on the light for him. So, it’s affecting us in every area; it affects our margin. Even the noise pollution alone, if not that we are using sound-proof generator; we have three generators, two are sound-proof, one is basic. The cost implication is very high, and sooner or later most of us that claim that we will give you light 24/7 will have to adjust. This is because where you bought 50 litres before probably for N6,000 we buy now it N9,000.

    Some people are calling for a review of the power sector privatisation. Do you think this is the way to go? 

    For me, it was a wrong step to privatise it in the first place. Government should have taken total control of the power sector, improve it, and then ask the citizens to pay. We are paying, but we are not getting electricity. Where I leave in Ogudu I have not experienced power  for three days, but I pay bills. Here, since yesterday, we have not seen light. So, it was a wrong step in the first place. Previous governments never planned for the rainy day. That is one of the credits I am giving to the current president because he is trying to diversify to solid minerals and agriculture, although, Return on Investment (RoI) on agriculture takes longer time. The profit is not all that fantabulous.

    How can tourism/hospitality industry contribute to economic diversification? 

    Hospitality business is a very lucrative business when things are done right. So, the government should look into it very well. In Nigeria we celebrate mediocrity more than merit. That is one of the problems we have in this country. As big as Apapa is, the only five star hotel here is Rockview. As I talk with you after that Rockview we are next to them. This is not my own assessment, but of people who have been dealing with them that came here within these two months of our test run.

    How much can the government can generate from this sector if some of these issues you highlighted are resolved?

    I cannot give you an exact figure, but within Lagos, from our own feasibility study, it’s more than $3 billion (about N846 billion) annually. This is based on the feasibility study by the firm we commissioned to do feasibility study for us.

    As a former banker, how would you assess CBN’s policies?

    The CBN policies, especially the one on foreign exchange (forex) is very oppressive and draconic in the sense that most of us that have children abroad we cannot send money to them. Not all of us are politicians and not all of us are living on stolen funds. I was calling my bank this morning that please I need to buy about $3,000 for my children; that I want to pay their rents because the month has ended, they were asking me all kinds of questions. So, the policy is very draconic in the sense that a CBN ought to just give the directive, formulate policies and allow the system to run. Like the Bible will say, let the chaff and the wheat be growing together and at the right time they will be separated. By tightening everything you are killing businesses and when there is no business to be done, the next thing is unemployment, anarchy and crime. When Sanusi was there; I so much liked his policies, honestly. Sanusi as I said was one of the best CBN governors Nigeria ever produced.

    Why do you say so?

    As an experienced banker, I was questioning people in the bank. For instance, which sectors in Nigeria were supporting all those billions net profits banks were declaring? Those were purely engineered balances, only on paper. As at 2005 when Soludo said all banks should recapitalise to N25 billion,  most of them did not capitalise, all they did was to credit shares, ask their members of staff to fill the forms that they have bought them or even given them soft loans. But when Sanusi came, he was an insider; he knew what they were doing. So, when he was telling people that a first generation bank was having problem, people never believed him. I told people that second generation bank went to the capital market in that 2005 at N10.90, almost N11. Within six months after raising the so-called N25 billion, they even claimed they raised N35 billion. Then, they went back to the market and hiked their share to N17, N25 and I said this was a lie. When they went public the first time it was sold at N10.90. I bought 100,000 unit shares. In fairness to them, two second generation bank are the only banks that are giving good returns to their shareholders. Others are balderdash. As big as one first generation bank is, it’s rubbish. I got my dividend yesterday. I have about ninety something thousand. They gave me N7,000 dividend, and these are the shares they sold N37 per unit in 2007. So, operators in the system were not honest ab initio and any foundation built on falsehood one day will crash. So, what Sanusi did was to try to clean up the system for which people castigated him that he came to witch-hunt. Today, a bank sacked 1, 040 members of staff. Last time, it was a third generation bank, about 300. So, I don’t know where we are heading to.

    Why did you veer into hospitality business after 19 years in banking?

    I was in the bank for 19 solid years, and during that time I was nursing the ambition to go into the tourism/hospitality industry. I was asking myself after bank what next? I started from the paint industry. I have a paint factory at Ogba, Lagos. We produce domestic and industrial paints and paints used for vehicles. The paints industry wasn’t all that moving properly so, I veered into another arm of the business by bringing in chemicals. That one later began to have problem as well because of the adulteration of chemicals. The China market may be a bit profitable, but the problem is that they have fake and substandard quality compared to the European market. I travelled to England with my children in 2005. I lodged in one hotel in Paddington, Central London and I loved the design and I felt I could replicate that in Nigeria. That was the motivation. You know it’s difficult to do business in Nigeria. The environment is not friendly, the government is not friendly. If you want to begin any business in Nigeria you must have nine lives to survive; it all depends on your determination, the zeal and energy you put into it.

    When did you leave banking?

    I left banking 11 years ago, precisely on May 31, 2005. While I was still in the bank, I had the paints industry. My paints industry started in 1999. So, I was working and earning salaries and investing it in the paints industry in the hope that whenever I leave I won’t start from ground zero; so that I will see where to hang because experience has shown that when a salary earner leaves employment and jumps into business the first one or two businesses he will do he may have problems because he is not used to that environment.

    What has been the response so far?

    In Apapa here, what you have mostly are brothels. This is the GRA side. Here we have a swimming pool, as deep as nine meters. When you lodge in any of our rooms, we make sure that you are comfortable. In other hotels, they just give you towels and tissue papers that is all. But here, no matter the room you’ve taken, in as much as you are parting with value to us, we provide you with the same items and even go further to give you dettol to show that we appreciate your patronage. Our rooms are very fantastic, expansive and affordable; we did not economise space. Compared with neighbours here, our standard room is their big room; they charge N15,000 per night while we charge an introductory price of N7,000 for the same room size. The one they take between N15,000 and N20,000 we take N10,000. We have 33 rooms.

  • Industrialist makes case for tile manufacturers

    The tile industry is capable of producing quality tiles both for the Nigerian market and for export, if the Federal Government can address the challenges facing manufacturers, the Chief Executive Officer of Mallinson and Partners Limited, producers of quality tiles, Mr. Mallinson Ukatu, has said.

    He said some of the major challenges impeding the competitiveness of indigenous tile manufacturers include lack of stable electricity supply, high cost of funds, which hovers around 22 per cent; prizing of gas in foreign currency in a market that is 90 per cent naira –controlled; and Nigerians’ penchant for imported products at the detriment of made-in-Nigeria goods.

    Ukatu whose company is also involved in the manufacturing of building materials and plastic products, said steady electricity supply is vital for industrial production and growth. He said reliable electricity supply will reduce the financial burden imposed on tile manufacturers because of the high cost of alternative sources of power to carry out production.

    “If the government supports the tile industry with stable power supply, the heavy reliance on generators, which results in high cost of production will stop, the industrialist told The Nation, adding that it will also rub off positively on manufacturers’ margin.

    While calling for the government’s support in energy supply, he noted that at present, manufacturers are using natural gas to power their in-house generators. He also expressed shock that government charges gas in foreign currency in a market that is 90 per cent naira –controlled.

    Ukatu, therefore, urged the  government to subsidize gas in order to encourage local tile production. He also called on government to “stop charging gas in dollars.”

    While noting that the tile industry is growing, he also said government should encourage made-in-Nigeria goods. “Goods produced in Nigeria are stepping up in terms of qualities,” he pointed out, noting for instance, that in the wire industry, Nigerian wires are of higher quality than the imported ones.

    To buttress his point that made-in-Nigeria goods have come of age in terms of quality, Ukatu said: “You cannot manufacture products of low quality standards when you are aware that Standards Organisation of Nigeria (SON) will inspect the standards and quality of what you are doing every fortnightly.”

    He, however, commended the Bank of Industry (BoI) for giving its best to grow the industries by bringing in machineries to support manufacturers. “If you are unable to get BoI’s assistance, how will you start your factory with the current bank interest rate of 22 per cent?” he asked, pointing out that if interest is not single digit, manufacturers will not make any headway.

    “For first time comers in the industry, it is not easy to penetrate the market at 22 per cent interest rate. I funded my company with my personal money as a pilot plant. On the second expansion I did, I also used my money. It is on the second phase that we got government’s support through BoI. Accessing these loans has been very good,” he said.

    The industrialist noted that partly because of BoI’s support and partly because of the increasing needs of the market and the quest to attain a leadership position in the industry, his company has moved from trading in tiles to manufacturing.

  • Value addition, organic farming’ll boost non-oil products, says NEPC

    Value addition, organic farming’ll boost non-oil products, says NEPC

    The Nigerian Export Promotion Council (NEPC) has said value addition and organic farming are possible strategies that can boost non-oil products export.

    NEPC’s Trade Promotion Advisor and Export Assistant in Benin Mr. Macpherson Fred-Ileogben, who made this known in Benin, the Edo State capital, said the strategies were necessary to enable exporters know how to make their products acceptable in foreign markets and earn more value for them.

    He said the government was looking at diversifying resource generation from oil to non-oil products. “The government is also promoting the exportation of non-oil products because it is a way to boost foreign exchange earnings, conserve the foreign reserve and create jobs,” he stated.

    Fred-Ileogben advised exporters and would-be ones to key into this policy and generate more foreign exchange for the country and strengthen the valve of the naira. He said value chain addition was, therefore, imperative to making non-oil exports more competitive and acceptable in the international market.

    “On the average, our products are up to standard, but we have to do more so that they can compete well at the international market. The country needs to do more in the aspect of infrastructure, such as improving power, processing facilities, access roads and rail transportation to ease conversion of raw materials into semi-finished or finished goods for exportation,” the NEPC trade advisor said.

    According to him, most semi-finished or finished products attract more value at the international market than products in their raw forms. “If you are taking anything outside the country, we expect that the standard and packaging should be acceptable abroad. If the standard is good, it will earn you good value for your product, but if otherwise, it could be rejected,” he pointed out.

    While adding that worse still, the exporter will bear the cost of returning it back to the country, Fred-Ileogben advised farmers to adopt the emerging international trend in organic farming. This, according to him, involves concentrating more on the use of organic materials, such as farm manures, crop rotation and planting on the right soil and at the right time.

    His words: “We are encouraging farmers to shift from subsistence farming to commercial farming for purposes of exportation. As they do so, they should also do more of organic farming as the prolonged use of inorganic fertilisers has adverse health effects on both the plants and humans.”

    The NEPC trade advisor, however, noted that the major challenges confronting small and medium scale exporters in some parts of the country were the lack of access to finance and lack of access to international market.

  • ‘Marketable titles ‘ll stimulate industrialisation’

    The fortunes of Small and Medium Enterprises (SMEs) can change if government policies encourage marketable titles, the Chairman, Nigeria Institution of Estate Surveyors & Valuers (NIESV), Lagos chapter, Mr. Offiong Samuel Ukpong, has said.

    Speaking with The Nation in his office, he said most operators are unable to raise the initial working capital for their businesses though they have landed properties which are not marketable.

    Ukpong said: “Banks will want secured marketable title if you want facility from them, but unfortunately the process and price of getting it is too cumbersome for both individuals and entrepreneurs.”

    Calling for the decentralisation of title perfection, he said there is the need for a seamless process to save indigenous entrepreneurs from going under as a result of paucity of fund.

    The NIESV chairman regretted that this has also led to economic depression, with multinationals also defaulting in normal business agreements.

    According to him, a marketable title is used to fast-track businesses as it is traceable, legally recognisable and reliable, and can be used to obtain loan.

    He said the economy would have been saved a great deal from recession if people had been able to trade their property titles.

    Ukpong also regretted that rather than the government stimulating the operating economy to grow the SMEs, they strangulate them by introducing multiple taxation through duplication of regulatory agencies.

    The Central Bank of Nigeria (CBN) announced the N220 billion intervention fund for SMEs, but several of them claimed not to have been able to access it due to the stringent measures released by the apex bank.

    Ukpong argued that the resilience of Nigerian business men is such that they can raise their initial fund or even as much as their working capital with little encouragement from the government.

    He further called for the rejuvenation and revamping of critical infrastructure such as energy, water and motorable roads, insisting that since SMEs are the engine growth of the economy, failing to stimulate the sector is a disservice to the nation.

  • Unemployment summit holds September

    Arrangements have been concluded to hold the Worldstage Economic Summit (WES) 2016, in Lagos, from September 7- 8, 2016, to address Nigeria’s unemployment challenges.

    According to the President/CEO, World Stage Limited, organisers of the summit, Mr Segun Adeleye, “the alarming rate of unemployment in Nigeria was not only of great concern to government, but also to the private sector and other critical stakeholders in the economy on job creation.

    With about 22.4 million Nigerians unemployed or underemployed, out of the 76.9 million labour force, he said some people see it as an indictment on the educational system that seems to be churning out ‘unemployable graduates,’ while others see it as an economic deficiency, with economy having a limitation of the labour force it can sustain by its productivity.

    Adeleye said Nigeria’s unemployment rate of 10.4 per cent represents about 14 per cent of global unemployment in fourth quarter 2015, and is the seventh highest in the world with only Kenya, Congo and Djibouti having worse rates in Africa.

    “This should be embarrassing when compared with countries such as Qatar (0.2 per cent) unemployment rate, Cambodia (0.3 per cent), Belarus (0.5 per cent), Thailand (0.8 per cent), Benin (1.0 per cent), Madagascar (1.2 per cent), Laos (1.40 per cent) and Guinea Bissau (1.80 per cen),” he said.

    He said the statistics that job loss in Nigeria dropped by only 1.29 per cent in Q4 2015 at a period when oil price crashed by 65 per cent could only show that there are other inherent factors outside oil that shape the labour market, which will be reviewed at the event.

  • Nigerian Gas Association gets new officers

    Nigerian Gas Association gets new officers

    The Chief Executive Officer of Frontier Oil Limited, Dada Thomas, has been elected the President of the Nigerian Gas Association (NGA).

    Dada, an engineer, who was the first Vice President of the association, emerged president at an election held as part of the association’s 17th Annual General Meeting (AGM) in Lagos, last week.

    Also elected to lead the  association along with Dada in the next two years are: First Vice President, Mr. Babatunde Bakare; Second Vice President, Mrs. Audrey Joe-Ezigbo; Financial Secretary, Alawode Taiwo Olusesan; Publicity Secretary, Frank Uzuegbulem.

    Others are Deputy Secretary General, Mofoluso Ajayi; Legal Adviser, Odey Simon Adamade and Secretary General Mrs. Ibimina Abiodun.

    Dada is a graduate of Loughborough University of Technology, United Kingdom, and also a registered engineer in Nigeria and Alberta, Canada with over 37 years of experience in the oil and gas industry.

    In 2001, after many years of working with Shell Petroleum Development Company, he started the Frontier Oil Limited to deliver oil and gas fields profitably and responsibly for the benefit of all stakeholders, using cost effective technology, innovative solutions and motivated and talented staff.

    Frontier Oil Limited is the developer of the largest indigenous independent Non-Associated Gas Greenfield Project in Sub-Saharan Africa. Its Uquo Gas Facility produces the gas that is supplied by Accugas to the Ibom and Calabar Alaoji power plants.

    NGA is the professional body responsible for the promotion and protection of the interests of the gas industry in Nigeria. Formed in 1999, the NGA’s initial membership came from the primary gas production and utilisation companies in Nigeria.

  • Agric products, others get boost, says SON chief

    Agric products, others get boost, says SON chief

    Nigerian agricultural and allied products now have a major boost in regional and international markets following a  harmonisation of standards exercise by the Africa Regional Organisation for Standardisation (ARSO).

    Thi is coming against the background of calls to make the continent’s agricultural sector competitive at globally.

    At a ARSO General Assembly, Tanzania, the Director-General of the Standards Organisation of Nigeria (SON), Dr. Paul Angya, a member of ARSO, said the next step would be for the nation to prioritise its agricultural sector by making standards available to it.

    This, he said, would prepare our agricultural products to meet the standards stipulated by the association.

    Angya said Small and Medium Enterprises (SMEs) must realise the importance of standards application to their businesses, saying that the sector also has a vital role to play in ensuring that the nation’s non-oil exports are exportable.

    The SON boss said Nigeria had been applauded for its role in ARSO’s development, adding that the nation’s contributions were in the areas of technical work and policy administration.

    Angya said:  “SMEs must realise the importance of standards’ application to their own personal enterprises, the capacity of standards to improve their productivity and their profits. We have embarked on massive sensitisation and education. We have also engaged in training the SMEs.

    “We have trained them in standards application, management systems and they have realised that application of these standards will improve their overall profit margin. That is why they are coming in groups to join the band wagon of SON.”

    He said SON had discussed with institutions about supporting Shea butter producers and that the agency would inform the SMEs about the approval of the project.

    Also, an expert on Technical Barriers to Trade (TBT) of the ACP TBT programme of the European Union, Mrs. Idinakide Eva, said the programme was not only for women development, but also for the development and facilitation of trade.

    She noted that the programme had three dimensions, which include supporting quality infrastructure, supporting the private sector and disseminating information to support the development of relevant data uploading on the website of ARSO.

    Chairman, Senate Committee on Industries, Ebonyi North, Senator Sam Egwu, said he had been better informed about the SON, urging Nigerians to adhere to standards.

    He said the Senate recently approved a bill to make it mandatory for all government procurements to be locally sourced to conserve the nation’s hard-earned foreign exchange and boost locally made products.

    According to him, there is need to understand the importance of SON as it obtains in other parts of the world.

    Meanwhile, the European Union (EU), through its expert on Technical Barriers to Trade (TBT) of the ACP TBT programme, has stated plans to equip Nigerian women with the requisite skills and support to boost Shea butter production.

  • Visa reforms to boost FDI, says Immigration boss

    The Comptroller-General, Nigerian Immigration Service, Muhammad Babandede, has said the ongoing visa reforms of the Federal Government will not only aid the ease of doing business in Nigeria, but also encourage Foreign Direct Investment (FDI) into the country.

    He stated this during the week while receiving the Turkish Ambassador,  CakilHakan, at the Immigration Headquarters in Abuja.

    Babandede called on Turkish businessmen and other foreign investors to take advantage of the visa-at-port-of-entry facility, also known as visa-on-arrival, to do business in Nigeria.

    A statement signed by NIS Public Relations Officer Ekpedeme King Babandede explained that the visa   issued at the country’s international airports, was introduced by the Federal Government as part of the measures to boost FDI.

    According to Babandede, “in order to encourage ease of doing business in Nigeria, the Immigration Act 2015 has given the CGI the powers to issue such visas to investors, frequently travelled business persons of international repute, executive directors of multinational companies, members of government delegations as well as holders of United Nations (UN), African Union (AU) and Economic Community of West African States (ECOWAS) Laissez-Passer”.

    The Act, the CGI explained, also empowers him to issue Permanent Residence Visas to foreign nationals, who according to him, are married to Nigerians and to foreign investors, who have imported an annual minimum threshold of capital over a period of time.

    Babandede said the agency intends to use the Visa reforms expeditiously and transparently in line with President Muhammadu Buhari’s stance on public accountability, adding that he has constituted a committee to clearly articulate the visa reforms to enable the service sensitise the public appropriately.

    Earlier, the Turkish Ambassador, CakilHakan, lauded the cordial relationship between Nigeria and his country.

    He said Nigeria was the first country in Africa to host a Turkish Mission and that about 25,000 Nigerians arrived Istanbul in 2015, out of which 18,000 were issued online visas.

  • ‘Brexit ’ll not affect Nigeria’s economy’

    The outcome of Britain’s exit from the European Union (EU) may have triggered some measure of uncertainty and anxiety in the global economy, but its impacts on the Nigerian economy will not be profiund, the Lagos Chamber of Commerce & Industry (LCCI), has said.

    LCCI Director-General Mr. Muda Yusuf said Britain accounts for only 4.4 per cent of Nigerian global trade, while the EU accounts for 38.8 per cent. He argued that it is, therefore, unlikely that Brexit will have a material impact on Nigeria’s balance of trade.

    Yusuf said if anything, the trade between Nigeria and Britain would further improve on account of the likely depreciation of the British pounds and the affinity with Britain within the context of the Commonwealth.

    He also reiterated the fact that Nigeria is yet to sign the EU Economic Partnership Agreement (EPA), which also reduces Nigeria’s exposure to shocks from the EU economy, especially from a trade perspective.

    On the effect on Diaspora remittance, the LCCI boss said the current sentiments in Britain are to adopt tougher stance on immigration issues. According to him, with over one million Nigerians in the United Kingdom (U.K.), Nigeria is also a major recipient of Diaspora remittances in Africa.

    He, therefore, said the unfolding scenario might have some adverse implications for remittances by Nigerians in the United Kingdom (U.K.). “This will happen from the perspectives of tougher immigration regulations and enforcement as well as the likely slowdown of the British economy,” Yusuf said.

    While emphasising that the impact of Brexit on the Nigerian economy is unlikely to be profound, he said besides, negotiations will still take the next two years.

    “Most of the current responses are driven by uncertainties and expectations, which will fizzle out in the not too distant future, he said.

    The LCCI DG, however, said the British economy, which is worth $3 trillion, is the fifth largest in the world and the second largest within the EU, which makes it a major component of both the global economy and that of the EU.

    “Naturally, therefore, shocks to the British economy will have some transmission effects on the global economy. This perhaps informed the immediate responses of global and domestic financial markets,” he said.

    He added that this dimension of the impact is unlikely to endure as they are responses driven by expectations and uncertainties.

    He also suggested that the British economy will suffer some setbacks arising from the resultant weakening of investors’ confidence within the economy.

    “Brexit implies that investors within the British economy will no longer have free access to the EU market of over $16 trillion and a market size of over 500 million people,” he added.

    He said this would reflect in the strength of the currency as there is a relationship between the strength of the currency and the robustness of an economy.