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Tag: Naira devaluation

  • CSO faults Sanusi over Naira devaluation 

    CSO faults Sanusi over Naira devaluation 

    Coalition of Civil Society Groups has faulted submission of the Emir of Kano‎, Sanusi Lamido calling for further devaluation of the Naira.

    The coalition said in a briefing Tuesday in Abuja that such decision was anti-poor and could impoverish ‎the masses.

    The former Central Bank of Nigeria CBN Governor ‎had maintained that devaluation of the Naira was necessary to save the nation’s economy aside from exploring non-oil sector of the economy.

    President of the coalition, Comrade Etuk Bassey said it was important for Nigerians to allow the present administration implement some of its monetary and economic policies before being criticised.

    Bassey said, “Should the Naira be devalued then it is a big slap on the face of millions of Nigerians that voted for a true change at the 2015 Presidential elections.

    “Though we do not expect a quick miracle in the face of our dwindling economy but we appreciate the measures already taking by the CBN to ensure that we bounce back on time. The Sanusi Lamido Sanusi devaluation theory is uncalled for and should be rejected by all well-meaning Nigerians.”

    However, the coalition urged the incumbent CBN ‎Governor, Godwin Emefiele and his teams to remain focused and continue with what they considered appropriate for the development of the economy.

    “The devaluation of Naira will further increase poverty and suffering in the land,” he added

  • No further devaluation of Naira – Buhari

    No further devaluation of Naira – Buhari

    President Muhammadu Buhari on Wednesday ruled out further devaluation of the naira, saying it is unhealthy for the economy to devalue the currency further.

    Nigeria has been hit hard by the fall of global crude prices, and the Central Bank has imposed increasingly strict foreign exchange rules to save the country reserves and avoid what would be the third devaluation in a year.

    [ad id=”403656″]The naira fell to as low as 242 per dollar on the parallel market in July, versus the official rate of 197.

    It has lost around 15 percent against the dollar over the past year with an official devaluation in November and a de facto one in February.

    “I don’t think it is healthy for us to have the naira devalued further,” Reuters quoted Buhari as saying in an interview with France 24.

    “That’s why we are getting the central bank to make modifications in terms of making foreign exchange available to essential services, industries, spare parts, essential raw materials and so on. But things like toothpicks and rice, Nigeria can produce enough of those,” he said.

    In June, the CBN restricted access to foreign exchange for the import of 41 items ranging from rice and toothpicks to steel products and glass.

    The stringent restrictions have not gone down well with investors, who have called for a relaxation.

  • MTN chief pushes for naira devaluation

    To attract the requisite foreign direct investment (FDI) for the implementation of the National Broadband Plan of the Federal Government, the Federal Government will need to further tinker with the value of the naira.

    MTN Senior Manager, Transmission Access Planning, Mr Olusegun Salami, who spoke at the weekend, said broadband penetration required huge FDI, which must be deployed in bridging the country’s digital divide.

    He said the issue with broadband penetration is how to make it available for everyone.

    Salami, who spoke during the quarterly seminar of the Nigeria Information Communications Technology Reporters Association (NITRA), with the theme Foreign Direct Investment-An impetus to achieving ubiquitous broadband penetration, said there was a huge funding gap to be filled. Only naira devaluation could do the magic, he said.

    He said in the next two years, there had to be significant investment in long-term evolution (LTE) or 4G to achieve up the target. ‘’The kind of phones that we need is those that are 3g and also LTE so that we can achieve the national broadband plan, he added.

    He said:  “We note that further devaluation of the naira will attract FDI. We commend the anti-corruption campaign of the Federal Government but need an efficient and effective judicial system for crime fighting.”

    Taking a retrospective look at the industry when it all started, he said: “We started with the 2G network in 2001 and today it is at 90 per cent of the population. In 2007, we introduced 3G and, today, it is at 60 per cent. It is the one that is truly giving us the true broadband experience, but it is still not the right capacity that we want; the one we want is LTE in wireless technology in which we will need spectrum, right regulatory frame work and more investments in the telecoms sector so that we can attain 100 per cent broadband penetration.

    He said: “There are two major ways of accessing broadband; it is either through fibre optics or wireless. The fibre optic is the one that we need physical cable to come to your door for you to have the internet connectivity, but, there is challenge to this because of the issue of right of will.

    “On wireless which is also referred to as mobile broad band, its effectiveness will be dependent on lowering of the price of smart phone which will increase broadband use in smart phone and stop the channel of feature phones, because smart phone will give you the right Internet access.

    “When we achieve low price in smart phone, it is going to turn on that credibility, because if the smart phone and the feature phone cost the same amount, people will buy the smart phone since it gives more enablement. In Nigeria, about 40 per cent of internet access is still being done through feature phones, while 30 per cent on desktop and only less than 30 per cent are on smart phones. We need to drive the feature phones out so that smart-phones will rise and 30 per cent broadband penetration will be a reality in 2018.

    “With the use of the internet, you do not have to consult anybody for common questions.Google will give you answers to your questions. Most people are changing their phones because they want to belong to the social network. With the smartphones you can reach people across the world from your bed, you can use the social media, watch movies, listen to news and do whatever you want to do on your device; these are the things that will drive the usage of the broadband, it will become a life style will put in people the desire of broadband.’’

    He said many people can do more now with their phones than going to cue in the bank or at the post office. “You can access health services, by communicating through your device with your doctor. You can also teach a child,by downloading an app to teach the child any subject. This also apples in agriculture; with one device you can target every area of human endeavour.  As a Small and Medium Enterprise (SME) start up, you do not need to have all; you just need a laptop, and you can keep all your company asset online; you can use the cloud as a storage device,” he added.

     

  • ‘Naira devaluation bad for businesses’

    ‘Naira devaluation bad for businesses’

    The effects of devaluation of the naira and falling oil price have permeated key sectors of the economy, including the PayTV industry. MultiChoice Nigeria Limited Managing Director John Ugbe speaks to COLLINS NWEZE on his company’s operations, the business environment and how naira devaluation is raising business cost.

    How will you describe the business environment and the economy?

    It is unique, in the sense that it is not like any other in the world. That’s what makes us Nigeria and makes those of us who live here Nigerians. And a lot of people would say the situation is very tough and rough. No, we don’t say that. We see it is unique. We believe that to be able to succeed in business here, you can’t be one of the briefcase carrying firms. We believe you have to be a Nigerian business like we have been. If the environment is unique in its way, the only way to succeed is to understand and know how to take advantage of the opportunities that the environment throws up.

    So, there’s a lot of traffic in Nigeria, especially in Lagos. This influenced our decision to launch a mobile TV- the first of its kind in Africa. So you have your TV screen in your hand, in your car and we were able to solve the problem where most people will be rushing to watch the Champions League by 7:45 pm and be stuck in traffic.

    That shows you we took the local environment into consideration. Did we try to stop the traffic? No. Did we try to move the matches? No. We couldn’t but we came up with a solution that was able to adapt to the lives of Nigerians. That’s how we have treated what people perceive as challenges in the local market. When we started out, you needed to have a very big dish, 2.4 meters. But we knew that couldn’t work too well in a local environment, we pioneered the launch of a satellite to cover Nigeria. We were able to reduce the size of the dish into smaller ones that are now prevalent everywhere you go.

    Does the Mobile TV service come with additional cost?

    No. If you are a premium subscriber with us, you get the Mobile TV at no additional cost. And now, we have got an application on the iPhone, android phones for the same principle: as a premium subscriber you get additional content on the move while using local data to connect.

    Tell us some specific challenges you face in this market?

    The challenges we face are the challenges everyone else faces. So, infrastructure could be better. I believe there are some initiatives now to improve power. You need power to be able to watch TV. So, I think there are a lot of changes going on with privatisation of power. I think we can see some positives coming out of it. So, as with everyone else, we hope that this becomes more positive and we can see an improvement in infrastructure and this can affect and grow the local economy. For us, we are very proud that for the first time, the impact of entertainment on the Gross Domestic Product (GDP) was identified and it was identified when Nigeria’s GDP became the largest in Africa.

    This is quite significant given that at over five per cent, we think that there’s an opportunity to grow that into 40 per cent especially with what is happening with oil price today. We need more of investment in entertainment industry and also more capacity building. That’s what we are at the forefront of doing.

    It is difficult to discuss business in Nigeria today without speaking on the impact of the falling oil price. Are there specific issues being faced by your industry because of oil price slide?

    Look, the oil price decline has put pressure on the naira. It is something that affects everyone who is in business. Obviously, we would have loved to have a much stronger naira because it gives us the opportunity to manage our cost better.

    What is the biggest challenge you are tackling in this industry?

    I can’t think of a bigger challenge. Like I said, it is capacity building. In the past, we couldn’t even find programmes to buy. They are available now. We move on to the next thing which is quality of programmes. There are lots of master classes, a lot of development of sound and lighting  that are going on.

    When we wanted to drive a lot of quality, our sister company, Africa Magic, came up with the African Magic viewers’ awards. Now we are rewarding excellence and this has led to producers striving harder to do better movies. When we started with content, everybody laughed at it, but now they are beginning to take it serious.

    I foresee a future where this industry will be bigger than Hollywood. There is more content being produced here. With much more content being produced here that are of better quality, we will have the opportunity to grow bigger than Hollywood. I think we try not to focus on challenges, we try to focus on how we can turn them around to becoming opportunities for all.

    What has led to the high acceptance level of MultiChoice Nigeria services within the local market?

    It is our ability to remain in business; not just remaining in business, but to keep providing entertainment. That’s primarily what we want to do, putting smiles on peoples’ faces. It is also a fact that as a Nigerian company, MultiChoice Nigeria has always understood the local market, remained innovative and evolved with services. It has always remained ahead of the curve to ensure that we know what people want and provide such services.

    When we started, there were lots of emphases on international content, but we believe that the best content will come out of Nigeria. And when we say the best content, I am referring to the music industry which we started supporting very early when Nigerian music was almost dead.

    We are the strong foundation for the TV Content Business, popularly known as Nollywood. We were also expanding to sports. Last weekend, I saw a  lot of people on Twitter talking about football match in Aba, which when you look back, you will ask when was the last time people talked  about a match in Aba? When you look at that, it comes from us investing very early in the sector. There is time for developing. We have to continuously adapt, trying to provide the best as far as entertainment is concerned.

    Are there some specific steps you have taken to develop this market, which you would want to mention?

    We have invested over N30 billion in developing content in Nigeria. I think that alone tells you how much we believe in this market.  It is our market. It is where we do business. It tells you we are in it long term. We are not into buying and selling. We are into working on backward integration.

    Where this content did not exist, we took the risk of investing and creating it. Even when nobody is sure that we are going to watch it. Now, we have these content being appreciated internationally. Nigerian artists are performing everywhere in the world. We are proud to be the foundation of it.

    Since these programmes are being watched globally, how do you recoup your investment?

    Our business has always been to be able to recoup our investment. Sometimes, through subscription locally, and also internationally through partnerships, we are able to sell some of these contents.

    But also, as a proud Nigerian, the benefits are not only monetary, but are being able to fly into an airport in Zambia and someone walks up to me and say, how you are sir. Or when someone speaks Igbo, Yoruba or a little bit of Hausa, you are almost shocked initially. But something comes to your mind: you are in this position for people to be able to see us.

    How will you describe the broadcast industry in the country and regulation?

    There is robust regulation. We have been at the forefront. We have always partnered with the National Broadcast Commission (NBC). We like partnering with regulators. We want to ensure there is proper capacity development, and to stay within the regulation. I think that has been critical for us. That’s why we have been able to remain in business.

    Are there areas you think that the NBC should improve on, in the interest of the sector?

    There is always room for improvement.  The industry itself always does a kind of self regulation. Broadcast is very strong and important for every nation. So, we have to be able to look inwards ourselves and help the regulator ourselves.

    You have embarked on some projects in line with your firm’s Corporate Social Responsibility. What motivated you to do such?

    We have always believed in investing in our communities. The MultiChoice Resource Centres are at the forefront of what we do as CSR. We go to public schools and instruct teachers on how to use audiovisuals to teach, install equipment and provide DSTV Learning Centres in those schools and help the students learn better. Recently, we went back to some of the schools, and we were able to meet some of the students who are now in the university, some of them in medical schools. We asked them what the impact was. It was great impact that one can learn, and be able to learn from what he sees. We have learning channels, which are very powerful on this channel and we have been able to bring that into the classroom for public schools.

    We are also very active in supporting the Sickle Cell Foundation, we have worked with the Lagos State Government, adopt a school, and a lot of other smaller initiatives that we do to support the communities where we do business.

    Your tariff was increased recently. Why did you take that decision at this time of economic hardship in the country?

    I think in as much as we want to remain responsible to our communities, societies, and also to our shareholders, one thing you see in PayTV is that the cost of your content keeps going up. For instance, when Manchester City Football Club in the United Kingdom signed a player at £49 million  from Liverpool and Man  City Fans are cheering, I say, you know at the end of the day, you are going to pay for this because the club needs to generate money somehow.

    And you know, one of the ways of generating money is TV rights and almost every year, you must be sure what TV rights will cost you. So, that’s just one example.

    Again, you will never hear that an actor is earning less than he was earning two years ago. No, he will always earn higher. Every new movie, actors are paid higher than they were paid, the last one. So, unfortunately, all these cost inputs grow overtime. It is just the reality that we will have to sometimes, or once in a while, increase those rates to be able to pay for those wonderful content and remain in business.

    Do you agree that your near monopoly status in the industry has influenced your tarrif increase even against the peoples’ wish?

    Well I don’t believe that. I have always asked people: how do you define monopoly?  We are not one and we are not even close to being one. We wouldn’t want to do anything that would damage our own business. Don’t forget we are into entertainment. So, I think the core thing is to be able to offer that service; to be able to continue to be in business, we have to be able to cover those costs.

    It is not an easy thing for us. And then we have the devaluation of the currency which also makes it even more difficult for us to do business.

    Don’t forget you have to pay your satellite costs and for contents. So, not only is that price increasing, but we also have a case now where we are spending more in naira in order to afford  the same thing we could afford last year.

    So, it’s quite a complex mix and we have to try as much as possible to absorb a lot of it, to be able to offer something that’s affordable. But also, what we have done over the years is that we made sure that we created different subscription bands. So, till today,  we still have  subscription that is for N1,000.

    So, for N1,000, you can still subscribe  for our GOTV service. We don’t take our service out of the reach of the average Nigerian.

    How much does it cost to buy content for the Nigerian market?

    I can’t give you that figure. It means telling my competitors how much to get content. Your content deals even with the local industry are confidential deals. So, I will be flouting that confidentiality if I put a figure to it. But what I can tell you is that we invest billions of naira every year including through our sister company, Africa Magic. They produce some content and I think that has really aided the growth of the Nollywood industry.

    Some people are thinking that the tariff in Nigeria is the highest in Africa. Can you give us insight into what happens elsewhere?

    It is not the highest. In as much as we always insist that this is MultiChoice Nigeria. So, I have to take my local environment, my cost of buying content into consideration to determine the pricing locally. However, I always challenge anybody who has told us we are the most expensive in the world or in Africa that we are not. I believe that with the advent of the internet, everybody can check that we are not. We are very well priced and that takes into consideration what we do locally.

    Take a look at the African Magic Channels and see how much of Nigerian contents are on it. That will show you clearly that we do buy a lot of contents locally. We have two major Nigerian languages having full 24 hours dedicated to them, at a big cost to us.

    Why can’t you let subscribers pay based on time used as done in the telecom sector?

    Unfortunately, like we have explained this in a couple of fora, our business is not the same as the telecom business. Telecoms are not selling you any content, you dial and make the calls, you originate them. You are the content. So, we unfortunately have to buy and broadcast. So, broadcast media is one to many. It is not a one to one communication.

    I don’t even know where to begin to bill you. But also, that’s how the entertainment industry works. If you buy a ticket to go and watch a football match and you decided to leave after a half time, do you get a refund?

    What you paid for is a football match. So, imagine how I would have to pay the man who makes a movie, how would I pay him for that movie if I tell him that in the middle of watching the movie, maybe half of the people stopped watching the movie. It makes buying content almost impossible because there is no agreed way I would get revenue and how I would end up paying for the cost.

    Tell us something more about the competition. What gives you an edge?

    We are always focusing on ourselves despite what the competition is doing. We have a long term plan for the business and even if it means investing ahead of the curve or forgoing profit at a certain point to develop the business. We focus on what we do. We try to do things much better than we did it in the past.

    We are really committed to Nigeria as a country. We look at Nigeria, we know we are here to stay and we started local content. I look forward to the day we would see people going back to wear an Enyimba T-shirt or Stationery Stores jersey because that’s where we want Nigerian football to go.

    We have eight outside broadcasting vans in this country. If I tell you how many people it takes to cover one football match, it would take a crew of sometimes 50 to 60 people travelling 10 hours on the road, staying days. That’s what it takes to cover one football match and we have to do that often.

    If Warri Wolves is playing we have to cover that, then we go and cover another one at Asaba. These are all being run by Nigerians. We have Nigerians trained, developed and this are people right now invited to cover games by Federation International Football Association (FIFA) and Confederation of African Football (CAF) around the continent.

    They are the best in the business. That’s not something you wake up in the morning and just hire people. It takes time to train and make sure you have the best. That is the  focus and it is what we believe in generally.

    What is your projection for the company in the next five years?

    I think it’s a very difficult one. What we see is growth. We see a bigger local content offering coming out of us. There will be lots of investment in football, basketball; we are taking on boxing now and few other sports. And then, we are looking at movies, there is a lot of commissioning going on. So, I see a lot of growth, not just from subscriber perspective, which we definitely believe and hope we will grow, but also content which we dish out to our subscribers.

     

     

  • Naira devaluation presents challenges, opportunities, says NSIA chief

    Naira devaluation presents challenges, opportunities, says NSIA chief

    • Says no dividends for shareholders

    The Managing Director, Nigerian Sovereign Investment Authority (NSIA), Mr. Uche Orji, has said the devaluation of the naira has presented the Sovereign Wealth Fund (SWF) with both challenges and opportunities.

    Speaking to reporters yesterday in Abuja on the financial year end activities of the NSIA, Orji said: “The recent devaluation of the naira presents both challenges and opportunities in the domestic market. From our position as investors, we have seen incredible buying opportunities and we expect the infrastructure fund to become increasingly active in the domestic market as we take advantage of short term price dislocations.”

    Using the dollar as its base currency, Orji said the success recorded in its financial year activities could be attributed to a long dollar currency position versus other currencies which the Authority hopes to sustain.

    He said the three tiers of government that are  shareholders of the Sovereign Wealth Fund will not get any dividends from the Nigerian Sovereign Investment Authority (NSIA) until 2017.

    This is despite the impressive financial year end results posted by the NSIA so far.

    Orji said by law, shareholders of the SWF are not entitled to any dividends until five years after it commenced business with profits.

    He noted that the NSIA was interested paying out dividends to Nigerians who are shareholders of the SWF but the law setting up the agency only permits that dividends be paid after five years of commencement of operations with profit across all three funds that the NSIA manages.

    He assured that Nigerians that the NSIA would love to continue making money again and prayed for the continued good performance of the Authority.

    The NSIA, Orji said, would convene its Governing Council meeting where it would meet with stakeholders of the fund, such as the governors, the vice president, the governor of the Central Bank of Nigeria (CBN), among others, to present the detailed financial reports of the Authority.

    Orji also said the NSIA has been upgraded in the international transparency index from ninth position to fourth place for making public its investment policy, charter, and posting quarterly financial performance on its website as well telling the world what it is investing in.

    On the outlook for this year, Orji said the authority’s key investment areas would include, power, agriculture, and social infrastructure. He however cautioned that the year remains volatile because of the vulnerabilities in the external environment.

    Orji stated that the vulnerabilities not withstanding and barring any unforeseen circumstances, the NSIA he said “would maintain its diversified strategy for the future generation and stabilisation funds.”

    The NSIA managing director used the forum to clear the air on the status of the execution of the second Niger River Bridge being handled by Julius Berger. Said he: “Am not aware they have halted work. Filing is ongoing; most of the dredging work has been completed. Work is ongoing but we have not reached financial closing yet. Hopefully, we will get there. So far, the money Federal Government has been committing there has been deployed to fund most of the work so far.

    “The environment is challenging. We are in partnership with Julius Berger on investment to the last four years and this is a massive project. It will take time. Second Niger Bridge is going to span almost 12 kilometres. The actual bridge itself is about 2km but the approach is about 10 kilometre on a marshy land.  There is no fundamental problem, but financing yes, there is a little challenge but it has not halted work”

  • Naira devaluation: Ground handling firms to hike tariff

    Naira devaluation: Ground handling firms to hike tariff

    The devaluation of the naira may force ground handling companies  to increase cargo tariff for both inbound and outbound goods at the Murtala Muhammed International Airport, Lagos, investigations have revealed.

    The decision to hike cargo tariff by the firms, it was learnt, is hinged in the rising value of the dollar, which is exchanging at the moment for between N210-N225 in the parallel market.

    Among the affected firms are, Nigerian Aviation Handling Company ( NAHCO) Aviance Plc, Skyways Aviation  Handling Company Limited (SAHCOL) and Precision Aviation Handling Company Limited ( PAHCOL).

    A source close to one of the firms, said the decision of the firms to increase cargo tariff, flowed from increasing costs of operations being experienced by the ground cargo handling companies, pointing out that such expenses are tied to increased costs of procuring spare parts, acquisition of operational equipment, as well as that of recurrent training overseas .”  They said that new equipment would be bought with the new exchange rate which is heavily tilted against the naira.

    Investigations also revealed that the ground handling companies now pay more for apron passes  which rate was recently increased by the Federal Airports Authority of Nigeria ( FAAN) from N50,000 to N150,000 at the Lagos Airport .

    The source hinted that ground handling companies are groaning under a huge charge regime as FAAN in Port Harcourt now charges over N250,000 per vehicle as apron pass, and in addition, that  major concessionaires are groaning under the yoke of exorbitant charges at the toll gates around the airports.

    It was learnt that the last time ground handling companies increased cargo tariff was about three  years  ago, and since then, the naira has been devalued by more than 150 per cent.

    Ever since, operators have been experiencing steady increment in operating costs , in some instances rising between 150 and 250 per cent .However, the spokesman of NAHCO Aviance,  Tayo Ajakaiye told The Nation that he  could not confirm any plans by ground operators  to increase cargo tariff, saying any plan to that effect, would be done after wide-range consultations with all stakeholders.

    Ajakaye said any information about increase in tariff now should be liken to mere conjecture, until all stakeholders have  been actively engaged.

    He said NAHCO Aviance is operating within industry approved charges, but however noted that ground handling companies are faced with rising operating costs , which have become obvious in the face of the rising exchange rate of the dollar against the local currency.

    He said if there are plans to increase such charges, NAHCO Aviance will carry out constructive industry engagement with relevant stakeholders  before implementing  such plans .

    But, spokesman of SAHCOL, Basil Agboarumi , said he is not aware of any plans by ground handling companies to raise cargo tariff.

    The General Manager, Corporate Communications, SAHCOL said : “ I am not aware of any plans to increase cargo tariff .”

    A source close to one of the firms, who asked not to be named, said : “The plan to increase cargo tariff has reached an advanced stage . This will become clearer this week. That may have informed plans to convoke a cargo summit to achieve stakeholders engagement, where issues concerning the need for operators to make sacrifices for the growth of the industry will be unveiled.”

    The Chief Commercial Officer,  Nahco Aviance, Seyi Adewale, in a statement last  week, said :  “ Air cargo is a major driver of  Nigeria’s economy and  a potential high earner of foreign exchange for the nation, given that earnings from oil exports are on a downward push. There are sacrifices to be made in the days ahead from our estimation and we could all agree to the sacrifices that must be made to assure safety, security and efficiency.

    The fall of naira against the dollar also is  a big issue.  It is now much more expensive to replace new equipment, or buy spare parts. It costs so much more to send staff for overseas training in equipment and applications.  New charges come up almost on daily basis at the airports. These are part of the reasons why ground handling companies want to increase cargo tariff,” he said.

    Last year, FAAN released new charges for airlines, ground handling companies, airline catering outfits in Lagos which were expected to pay N2,000 per square metre as opposed to the old rate of N1,500 per square metre , representing an increase of over 33.33 per cent.

    Ground handling companies, airlines and other service providers in Lagos are expected to pay N60,000 as opposed to  the old rate of N30,000 representing one hundred per cent increase. Also, operators in Lagos, are to pay N150,000 for apron pass as opposed to the old rate of N50,000. In Port Harcourt, ground handling companies , airlines and other operators are being charged N2,000 as ground rent per square metre as opposed to the old rate of N500 per square metre representing three hundred percent increase.

    For Apron pass in Port Harcourt, the affected companies are expected to pay N1.2 million as the new rate as opposed to N250, 000 representing over three hundred and eighty percent increase.

     

  • ‘Naira devaluation ‘ll affect cost of pharmaceutical products’

    ‘Naira devaluation ‘ll affect cost of pharmaceutical products’

    The devaluation of the  naira, following the slide in oil prices, will push up prices of pharmaceutical products, President, Enugu Chamber of Commerce, Industry, Mines and Agriculture (ECCIMA), Dr. Ifeanyi Okoye, has said.

    According to him, more than 98 per cent of raw materials used in the pharmaceutical industry are imported.

    “It’s a problem and we know where it came from. The nucleus of the problem actually is the fact that we have been operating as a mono economy, depending solely on oil. Because of that, as the price of oil started coming down, our naira started fumbling,” he said.

    Okoye, who is also Managing Director/Chief Executive Officer, Juhel Nigeria Limited, a pharmaceutical manufacturing firm, said this  affects the prices of goods people consume within the country.

    “The impact on the economy has to be there. So, the prices of drugs will definitely go up a bit,” he said.

    The ECCIMA chief said the continuous slide in the exchange rate of the naira against other major currencies, especially the dollar has pushed up prices of imported raw materials for drug manufacturing.

    Okoye, however, expressed optimism that the  economic situation would stabilise, a conviction he  based on the government’s  emphasis on economic diversification, he said would take care of this problem.

    “Nigeria, of course, has been trying to ensure that agriculture is not just about feeding ourselves but about exporting our agricultural products. And then the strategy of trying to make manufacturers stronger by making funds available at affordable cost is good. By the time these efforts at economic decentralisation go full circle the economy will become stronger,” he said.

    While emphasising that Nigeria must remove its sole interest in oil so that people can go into agriculture and manufacturing,the ECCIMA chief pointed out that when people go into agriculture, for instance, a lot of raw materials from agricultural products would be available.

    Similarly, going into manufacturing, he said, would drastically reduce importation “because most of the manufacturers in Nigeria will start using raw materials that are locally available, and this will definitely reduce the importation syndrome in Nigeria”.

  • Naira devaluation puts pressure on telcos

    Naira devaluation puts pressure on telcos

    The declining fortunes of the national economy which has forced the Central Bank of Nigeria (CBN) to devalue the naira by eight per cent is already taking its tolls on the operation of telcos in the country.

    The value of the naira has been on a roller-coaster dive, exchanging more than 180 to $1 causing stress to businesses with import-dependent inputs.

    Chief Executive Officer, MainOne Cable Company Nigeria Limited, Ms. Funke Opeke said both the telcos and the consumers have been unwittingly put under pressure arising from the currency devaluation.

    Opeke who was former Chief Technical Officer (CTO) of MTN Nigeria spoke on the sideline of a reception organised for judges and winners of the Etisalat Pan African Prize for Innovation in Lagos. She urged the Federal Governmentr  to put a sort of economic stimuli to ease the pressures arising from the policy.

    She said: “Well the declining value of the naira is definitely putting pressure on margins for telecoms operators. As you know, a lot of the technology inputs into the sector are imported; so they are dollar-denominated and most operators have entered into long term supply service contracts.”

    According to her, with these supply service contracts entered into on a long term basis and the “value of your naira receivables against the dollar not at par puts a lot of pressure”on the telcos.

    She said consumers will also feel the pinch of the inflationary trends as they would not have so much disposable capital to spend on telecommunications.

    “So, it is a two-sided equation. I think we are all hoping that there will be additional stimuli instituted by the government to try to advance the economy a little bit faster to stimulate spending in all the sectors aside from oil so that the economy can quickly recover,” she said.

    On whether a sustained unease on the economy could ultimately lead to an increase in telephone end user tariff, she said it was too early for any operator to contemplate that as all the telcos would even strive to avoid taking such step.

    She said: “I think its early days. Given where the industry is, everyone will like to avoid that (tariff increase) because in an environment where consumers are also under pressure, they can least afford those increases. But perhaps for us as Nigerians, it is also an opportunity to look at other areas where we can grow our economy and add value and provide services out of Nigeria on a global basis and to earn revenue and to earn foreign exchange. There are other economies in the world that have done that successfully and we really need to be more aggressive .in trying to push for new frontiers in our economy.”

  • Devaluation of Naira will not affect cement cost – FG

    Devaluation of Naira will not affect cement cost – FG

    The Federal Government said on Tuesday that the devaluation of the Nigerian currency will not increase the price of cement.

    The Minister of Finance and the Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, who disclosed this in her opening remarks at the Housing stakeholders’ consultative workshop on enabling land finance and concession for affordable housing delivery, also said the government is considering ways of developing local building materials that will be affordable to Nigerians.

    She said the government has started dialogue with the Dangote cement factory even before the announcement of the Naira devaluation.

    “Dangote cement will not increase the price of its cement as a result of stresses that we are experiencing in the economy, the price will be sustained for now, “Okonjo-Iweala said.

    The minister said Dangote has promised to sustain the new price, adding that it will help to reduce inflation in the cost of building materials.

    She described the housing sector as one with huge potentials and capacity to drive the nation’s economy.

    The Minister of Lands, Housing and Urban Development, Akon Eyakenyi, in her remarks said the workshop was organized as a pre-summit towards ensuring the success of the forthcoming Nigeria Housing and construction exposition slated for January 2015.

    She said the summit will provide excellent opportunity for key stakeholders and partners in the building and construction industry in Nigeria to brainstorm and agree on the concessions and waivers that will be provided by the private and public sectors to enable Nigerians have access to affordable housing.