The Nation Newspaper

Tag: Naira

  • BREAKING: FG plans to delist naira from P2P platforms

    BREAKING: FG plans to delist naira from P2P platforms

    The federal government has declared that it will take the naira off of all peer-to-peer (P2P) exchanges.

    During a virtual conference with blockchain stakeholders on Monday, Emomotimi Agama, the Director General of the Securities and Exchange Commission, made this declaration.

    The goal of this resolution is to combat manipulation of the value of the local currency in the foreign exchange market.

    Read Also: Construction of coastal routes can strengthen naira – Works Minister

    In past months, the nation’s regulatory bodies have started looking into and closely examining cryptocurrency exchanges.

    Details shortly…

  • Naira rebounds, gains N28.15 against dollar

    Naira rebounds, gains N28.15 against dollar

    The Naira on Tuesday closed the month of April on a good footing as it gained N28.15 at the official market, trading at N1,390.96 to the dollar.

    Data from the official trading platform of the FMDQ Exchange, a platform that oversees the Nigerian Autonomous Foreign Exchange Market (NAFEM), revealed that the gain represented a 1.98 per cent appreciation for Naira.

    The percentage increase is significant when compared to the previous trading date on Monday, April 29.

    The local currency experienced about two weeks steady fall by exchanging at N1,419 to a dollar.

    Read Also: Senate plans action on naira

    The success story was replicated in the volume of currency traded, as the total daily turnover increased.

    The daily turnover stood at 225.36 million dollars on Tuesday up from 147.83 million dollars recorded on Monday.

    Meanwhile, at the Investor’s and Exporter’s (I&E) window, the Naira traded between N1,450 and N1,200 against the dollar.

    (NAN)

  • Senate plans action on naira

    Senate plans action on naira

    The Senate Committee on Finance has expressed worry over, “the instability and continuous depreciation of the naira.”

    In a statement issued on Sunday, the Chairman of the Committee, Senator Mohammed Sani Musa, said the committee is monitoring the situation and is committed to working with relevant stakeholders to implement effective policies and strategies to tackle the issue.

    He also explained that the committee “is exploring a range of policy options to mitigate the impact of naira depreciation and foster economic stability.”

    The statement partly reads: “The Nigerian economy is facing significant challenges, exacerbated by both internal and external factors. Despite efforts to stabilize and bolster economic growth, the numerous initiatives and bold but necessary steps and policy decisions taken by President Bola Ahmed Tinubu, the persistent depreciation of the naira against major foreign currencies has become a pressing concern.

    “The recent depreciation of the naira underscores the need for proactive measures to safeguard the stability and resilience of our currency. The Senate Committee on Finance is closely monitoring the situation and is committed to working collaboratively with relevant stakeholders to implement effective policies and strategies.

    “It is imperative that we address the root causes of Naira depreciation, including but not limited to fluctuations in global oil prices, fiscal deficits, and structural imbalances in the economy. Furthermore, we must continue to enhance transparency and accountability in our fiscal management processes to instill confidence in investors and promote sustainable economic growth.

    Read Also: Naira’s recent gains and the road ahead

    “In light of these challenges, the Senate Committee on Finance is exploring a range of policy options to mitigate the impact of naira depreciation and foster economic stability. This includes robust oversight of fiscal policies, engagement with key stakeholders, and the formulation of targeted interventions to support key sectors of the economy.

    “It is also the hope of the committee our economic managers will adhere strictly to the norms and standards set by this administration to ensure that we achieve the desired outcomes in taking Nigeria to its economic growth and prosperity. As we pledge to give Mr. President and his executive arm of government every opportunity and support in legislation to achieve the set goals.

    “As we navigate these uncertain times, I urge all Nigerians to remain vigilant and resilient. Together, we can overcome the challenges facing our economy and chart a path towards prosperity for all.”

  • Naira’s recent gains and the road ahead

    Naira’s recent gains and the road ahead

    • By Ezinwanne Onwuka

    The naira has made a remarkable recovery, gaining 34 percent since mid-March after losing 43 percent of its value against the US dollar in the first two and half months of 2024. The turnaround is shocking, I must say. As of February when the naira–USD exchange rate hit N1,600 while the naira–GBP rate was over N2,000, I feared that the former rate would also breach the N2,000 mark by the second quarter of this year. Alas! The naira bounced back, reflecting the spirit of resilience the country is known for.

    The exchange rate has been on a rollercoaster since Bola Tinubu’s administration unified it in June 2023. We have watched the naira trade at an all-time high of N1,932 to currently trading at N1,200 in the streets, with the official exchange rate trailing closely behind. This progress is driven by recent steps taken by the Olayemi Cardoso-led Central Bank of Nigeria, CBN, such as the lifting of foreign exchange restrictions on 43 previously banned essential items, a walkback on dollar sales to Bureau De Change agents, and a ban on cryptocurrency trading platforms. The CBN also raised borrowing rates by 400 basis points in February to 22.75 per cent, and by another 200 basis points to 24.75 per cent in March. Additionally, it cleared a backlog of overdue dollar-purchase agreements estimated at US$7 billion.

    From the foregoing, the CBN’s intent on exploring every possible action to stabilise the forex market, narrow the gap between the official and parallel market rates, and ultimately reduce exchange rate volatility is glaring. These measures are really paying off. Penultimate week, the CBN sold US$10,000 to each authorised BDC at a rate of N1,101/US$1, to sell to Nigerians at a rate not exceeding 1.5 per cent above the purchase price. That is, the BDCs are expected to sell at N1,171. The rate is the strongest level at which the CBN has sold the dollar to BDCs since February, when it first offered them at N1,301/US$1. By the second sale, the bank reduced the allocation by 50 per cent and sold the USD at a rate of N1,251/US$1.

    The CBN deserves credit for its swift intervention. The naira’s performance in recent weeks, which has seen it jump from the worst-performing currency to the best-performing currency globally, has offered a sigh of relief to many Nigerians after about eight tumultuous months of a cost-of-living crisis partly occasioned by the free fall of the currency. Mr. Cardoso has proved his finesse in economics in just eight months in office as CBN governor, ameliorating the damages wrought by embattled Godwin Emefiele, the immediate past CBN governor.

    Nigerians hope this gain endures; we cannot afford to be lulled into a false sense of security. The recent uptick in the naira’s value is a window of opportunity for the Nigerian government to implement strategic interventions aimed at economic stability and growth. The measures already taken by the CBN are akin to administering pain medication – they address the symptom, not the underlying disease. Hence, the road to a truly stable naira remains long. The current reprieve should not mask the underlying vulnerabilities of the Nigerian economy.

    The key to long-term stability lies in structural reforms, such as diversification. Diversifying the economy beyond oil is paramount. Our overdependence on oil exports makes the economy susceptible to fluctuations in global oil prices. A potential global economic slowdown or a dip in oil prices could quickly reverse the much-celebrated gains. It is time to give other sectors like agriculture and manufacturing, among others, a chance to shine. That way, a more robust, flexible, and durable economy will sprout.

    Read Also: Senate: Persistent depreciation of Naira worrisome

    Improving the ease of doing business in the country to attract both domestic and foreign investment is another way to sustain the strength of the naira. Measures such as less paperwork and fewer hoops to jump through, among various others will make Nigeria a more attractive place to do business. And more business means more jobs and more money flowing into the economy. Fortunately, we have a president who understands this and has, time and again, shown his commitment to making Nigeria “a destination of choice for local and foreign investments.” President Bola Tinubu believes he is not building a castle in the air because “we have taken the largest elephant out of the room with the removal of fuel subsidy, and multiple exchange rates are equally gone.”

    And let’s not forget about reducing our reliance on imports and creating a vibrant export sector to improve the country’s balance of trade. Another essential aspect involves prudent fiscal management. That means being careful with how the government spends money and making sure we are not racking up huge debts. Plus, the CBN must continue to implement sound monetary policies to keep inflation in check and the exchange rate steady.

    The official exchange rate of the naira to a US dollar stood at about N465.07/US$1 at the time Tinubu took over as Nigeria’s chief administrator in May, last year. If we are willing to roll up our sleeves and get to work, the current progress will not be temporary flickers but a springboard for long-term economic prosperity.

    • Ezinwanne writes via ezinwanne.dominion@gmail.com.
  • ‘No immediate profit to manufacturers from naira gains’

    ‘No immediate profit to manufacturers from naira gains’

    The appreciation of the naira would not bring immediate gains to manufacturers, as buyers held back on purchases, waiting for the currency to continue to strengthen, the Managing Director of Coleman Wires and Cables, Mr. George Onafowokan, has said.

    Onafowokan said this led to a waiting game, with speculators hoping to profit from the situation. He said although, Nigerians have now seen a naira devaluation in the last two weeks, he believes that the naira will appreciate and recover.

    The Coleman boss cited the government’s efforts to stabilize the economy, including the return of foreign portfolio investors with over 20 per cent interest rate on the Federal Government bond and treasury rates. Onafowokan, in an interview, also highlighted the rehabilitation of refineries and other initiatives that indicate Nigeria is open for business, not speculation.

    Read Also: Japa: How we lost multimillion naira to Ibadan-based travels agency – Victims

    The MD, however, emphasized the need for fiscal policies that support manufacturers. According to him, the Manufacturers Association of Nigeria (MAN) is pushing for policies to ensure manufacturers remain in business.

    When asked about the turning point, Onafowokan pointed to the recent market report showing the naira’s appreciation and the government’s efforts to restabilize the currency, which will help businesses regain their footing.

    In his view, the current situation is a result of speculation about the depletion of foreign reserves, which has led to misconstrued information and instability.

    He urged the government to implement policies that support manufacturers and encouraged them to tighten everything to balance the forex position.

    Onafowokan expressed optimism that the naira will appreciate more than N1, 000 and that manufacturers will reduce prices when the currency regains its strength in the market.

  • Naira trades at N1,234 per dollar

    Naira trades at N1,234 per dollar

    The naira exchanged yesterday at N1,234.49 to dollar at the official market. The closing rate represented  5.51 per cent depreciation at the beginning of the week.

    It exchanged at N1,250 to dollar at the parallel market.

    The local currency had of recent commenced rapid recovery, as volatility in the market dropped after the Central Bank of Nigeria (CBN) commenced dollar sales to bureau de change operators.

    The CBN recently directed that all authorized dealers to pay Personal and Business Travel, allowances (PTA/BTA) to their customers through electronic channels only, including debit or credit cards instead of cash.

     “In line with the Bank’s commitment to ensure transparency and stability in the foreign exchange market and avoid foreign exchange malpractices, All Authorized Dealer Banks shall henceforth effect payout of PTA/BTA through electronic channels only, including debit or credit cards. For the avoidance of doubt, payment of PTA/BTA by cash is no longer permitted,” the bank said.

    Read Also: Fleeing Binance chief Anjarwalla to be deported from Kenya

    Importers are finding it increasingly difficult to secure the necessary funds from the official FX market and black market.

    Legitimate needs driving the demand include Form A applications for Business Travel Allowance (BTA), Personal Travel Allowance (PTA), school fees, and medical fees. Small and Medium Enterprises (SMEs) are also grappling with the scarcity, as highlighted by the use of Form Q.

     “The problem is that dollars are scarce in the market. People are not bringing dollars and demand is so high that is why the price is going up,” a street trader said.

    Managing Director, Financial Derivatives Company Limited, Bismarck Rewane disclosed that cost pressures are likely to ease due to the naira’s rebound.

    Rewane, also an economist, said the naira had since February, appreciated significantly across the markets, fueled by sanitisation of the forex market, an increase in forex supply and a fall in the demand for dollars.

    The settlement of the $7 billion verified forex backlog of forward commitments have boosted confidence and improved the credibility of the Central Bank of Nigeria (CBN).

    “However, the pressing question remains, will the naira tumble again? The answer is No, if Nigeria continues to do the right things. Prospects for forex earnings are promising, with foreign portfolio investments on the rise. Nigeria’s key export commodities have also seen significant price surges, with cocoa trading at a record high of over $10,000 per tonne in the global market and oil prices exceeding $85pb as oil production reached an impressive 1.48mbpd in February 2024,” Rewane stated.

    The naira’s appreciation, he further stated, followed the Monetary Policy Committee (MPC) meeting on February 26 and 27, during which interest rates was increased sharply by 400 basis points (bps) to 22.75 per cent per annum.

    The MPC also met on March 24/25, agreeing to hike interest rates by 200bps to 24.75 per cent per annum to keep prices in check.

    “These moves, combined with the CBN house-cleaning exercise to mop up excess demand for dollars, signal that the apex bank intends to stay on the path of orthodoxy to positively anchor inflation and stabilize exchange rates. Consequently, though slowly, the naira is expected to sustain appreciation,” Rewane said.

  • Naira: Sachet water’s producers blame high diesel, production cost for price surge

    Naira: Sachet water’s producers blame high diesel, production cost for price surge

    The cost of sachet water, also known as “pure water,” is rising due to the increasing cost of production materials.

    Some producers in Lagos state claimed that diesel prices are not the cause of the increase and that it has nothing to do with the strengthening of the naira.

    Nigeria’s annual inflation rate soared to 33.2 percent, the highest since March 1996.

    The inflation rate was attributed to the sharp fall in the local currency coupled with the removal of fuel subsidy. Food inflation which accounts for the bulk nation’s inflation basket continued to climb and hit 40 percent last month, according to recent data released by the National Bureau of Statistics [NBS].

    Meanwhile, the naira has continued to appreciate to the relief of most Nigerians. In recent weeks, it has gained over 40 percent from the N1,900 it was in mid-February.

    As at the time of this filing, although the naira lost 2.4 percent against the dollar to settle at N1,169.99 at the NAFEM official window, according to a report by Afrinvest West Africa, it appreciated by 7.4 percent to close at N1,145 to dollar week-on-week at the parallel market.

    However, a representative of a major sachet water brand in the Isolo area of Lagos State, Ejike Madubueke told The Nation that many people assume that the domestically produced commodity should become more affordable as the naira appreciates against the dollar.

    He, however, said that the recent advances in the value of the naira relative to the dollar had no bearing on the high cost of pure water but rather the price of diesel and the skyrocketing cost of production materials.

    Madubueke argued that the only thing that might have a beneficial effect on the cost of local items would be a major decline in the price of diesel and overall production costs. If there was any correlation between the two, he maintained, the price of poultry foods like eggs should have likewise crashed but hasn’t.

    “Five bags of pure water is still N1,500, it has not come down. Has anything come down in this country?” Madubueke queried.

    “Egg is still N3,800 per crate. Most of these commodities, the hike in price, were actually not caused by the dollar; because eggs are not imported.

    “Most of these things are caused by high cost of production and transportation. The high cost of transportation is caused by diesel and fuel. So that’s it.

    Read Also: Naira: Concerns over fresh threat from Crypto traders

    Despite the announcement by the $20 billion Dangote Petroleum Refinery a few days ago to slash the price of diesel by 16.6 per cent to N1,000 per litre, from N1,200 per litre to assist in impacting Nigeria’s domestic economy, Madubueke claimed to have bought diesel on Monday morning at N1,430 per litre.

    He said: “This morning I bought diesel for N1,430. Even NNPC is selling N1,450. I didn’t buy from NNPC, I bought from Jesco.”

    Similar to Madubueke, Rashidi Idowu, a representative of a well-known pure water brand in the state’s Ikotun area, expressed dissatisfaction with the item’s unfaltering hike.

    The relatively high cost of diesel and raw materials for its production, he underlined, were the real reasons behind the increased price of pure water along with other local products.

    Idowu said: “Five bags of pure water is N1,500 while ten bags is N3,000. This price problem with Nigeria isn’t about dollar matters. Check out the hike in egg price, do they import eggs into the country?”

    He underlined that the reason prices of local commodities were still high was because people would necessarily sell based on the amount they have purchased, noting: “Nobody buys goods to sell at a loss.

    “The raw materials used in the production of pure water nylon aren’t made here in Nigeria but in China. Besides, the price of diesel is still high which affects not just production, going by the power situation in the country but also transportation; in getting the finished products to the end users.”

    On anticipating price reduction any time soon, Rashidi said, “I can’t comment on that because you know how the country is when the costs of goods go up, many do not pray for them to come down.”

    Subsequently veering into the topic of garri, he inquired as to whether the dollar rate was also to blame for the price surge, pointing out that a painted rubber costs more than N2,000.

    The Nation reports that sachet water has witnessed a continuous climb from N800 for five bags in 2023 to N1250 in January to early February 2024 to its current price of N1500 since late February till date.

    The Association of Table Waters Producers (ATWAP) during a press conference held in Lagos in February 2024, on the rising production cost of packaging materials and its effect in Nigeria, indicated that the cost of production materials may necessitate selling pure water sachets for N100 each.

    It highlighted various challenges they’ve been encountering, including the exorbitant prices of diesel, insufficient power supply, and elevated production costs.

    The association highlighted the financial constraints faced by water producers, with many relying on personal funds or loans to operate. They emphasised their reluctance to raise prices but stressed the need for adjustments due to the unsustainable cost environment.

    One of ATWAP representatives said: “Pure water is sold for N50 now, and it is even going up to N100 per one. At our own end, there’s nothing we can do. The cost of production is high.

    “As of last year December, we were buying materials (nylon) for N1,100 per KG. The 6 kg of nylon is now N3,600/N3,700. The cost of treatment is also high. The increment for these materials comes at 3 times in one week. It is also difficult for us to increase the price of water.”

    “We understand the burden on ordinary Nigerians, and we don’t want to see them paying more than N20 per sachet,” the representative added. “However, the rising cost of production, including diesel prices, has significantly impacted our operations.”

  • Naira: Concerns over fresh threat from Crypto traders

    Naira: Concerns over fresh threat from Crypto traders

    • Speculators count losses as naira rises against dollar
    • Naira will continue to appreciate against dollar – Shettima

    The Naira appears to be up against a fresh threat from two crypto exchange platforms, just six weeks after the clamp down on Binance operations in Nigeria. The national currency had slumped badly in the forex market in the weeks preceding the clamp down on Binance, exchanging for as much as N1,950 in mid-February.

    But soon afterwards, the Naira started to recover and was at a time N1,200 until the middle of last week when it lost some grounds to the dollar again.

    Observers blamed its earlier misfortune on alleged manipulation of the market by Binance and are citing the new crypto exchange platforms BYBIT and BITGET as the cause of the latest slip.

    But Vice President Kashim  Shettima declared yesterday in Abuja that the Naira would continue its upward mobility against the dollar.

    An investigation by The Nation also showed that many speculators who had invested in the dollar in the hope that the naira would go further down are now counting their losses. 

    On Monday last week, the Naira was N1,100 to a dollar at the black market. It depreciated to N1,148 by Tuesday and N1,169 on Friday. Observers believe this is on account of the operations of the peer to peer platforms and say government must step in to stop the naira slide.

    Following the recent recovery of the naira, the global investment banking, securities and investment management firm Goldman Sachs Group, Inc. rated it one of the best performing currencies around the globe.

    The firm had initially predicted a naira to dollar exchange rate of 1,200 by year-end 2024 but later said the Nigerian currency could exchange for 1000 to a dollar or even below provided the authorities are able to maintain the tempo of their economic reforms.

     This bullish forecast, it said, followed capital inflows and interest rate adjustments, aiding the naira recovery from substantial losses incurred due to two devaluations since June, following the government’s relaxation of currency controls.

    See more on the latest threat to the naira on Page 26.

    Naira’ll continue to appreciate against dollar, Shettima tells LCCI team

    But Vice President Shettima is optimistic that the naira is on course to regain its status as a currency to reckon with.

    “The naira went haywire and some people were celebrating. But inwardly, we were laughing at them because we knew that we have the leadership to reverse the trend,” the VP’s spokesman, Stanley Nkwocha, quoted him as telling his visitors.

    He added: “Asiwaju knows the game, and truly the naira is gaining and the difference will drop further.”

    Shettima said government’s decision to end fuel subsidy and unify the multiple exchange rate was necessary to address the challenges facing the country.

    On efforts to boost the power sector and generate jobs for youths, he said: “We are determined to ensure that we generate jobs for our youths.

    “Honestly, the President’s obsession is to live in a place of glory, to transform this country to a higher pedestal.

    “He wants to leave a legacy, one of qualitative leadership, because the hope of the black man, the hope of Africa rests with Nigeria.

    “I want to assure you that President Bola Ahmed Tinubu is one of you. He understands your ecosystem. In this government, you have an ally and a friend,” VP Shettima further noted.

    The LCCI delegation presented recommendations to the VP, including the need for more innovations to address insecurity and promote credit access, stimulate investment and support entrepreneurship.

    “This could include targeted interventions such as concessional lending facilities, loan guarantees and interest rate subsidies tailored to the needs of SMEs and key sectors of the economy like agriculture, manufacturing and power technology,” he added.

    Other members of the LCCI on the delegation included Chief John Odeyemi, Chief Dr. Nike Akande, Asiwaju (Dr.) M. Olawale-Cole, Prince Funayo Okeowo, Gwueke Ajaifa, Sir Ladi Smith, Abimbola Ola, Olufemi Bakare, Ayotunde Coker, Tolulope Adeleke, Stephen Alangbo, Dr Chinyere Almona and Mrs Temitope Akintunde.

    In a separate meeting, VP Shettima urged Nigerians to live peacefully among themselves and learn to accommodate each other.

    He made this appeal when a delegation from the Association of National Accountants of Nigeria (ANAN) led by its President, Dr. James Neminebor, paid him a visit at the Presidential Villa, Abuja.

    He emphasised the need for tolerance and togetherness, citing the example of Jos, which he described as a hospitable city with a diverse population.

    Read Also: Naira will continue to appreciate, Shettima assures

    He also asked the association to channel its request for land in Abuja through the Deputy Chief of Staff to the President, Office of the Vice President, to enable him to follow it up with the relevant authorities.

    He said: “No matter how long the night is, it must give way to the light of the dawn. The crisis we have in Jos will soon be over.

    “Jos is the most hospitable city in this country in terms of weather. If we can harness the potentials of Jos and the Plateau as a whole, I believe that we can transform this nation into a better place.

    “In one way or the other, we should learn how to accommodate each other; we should learn how to embrace one another. My SSA Media, Stanley Nkwocha, is a Jos boy.

    “Jos is ideal; Jos is not an ethnic identity. Some of the Hausas, the Fulanis, the Kanuris and the other ethnic groups living in Jos were born and bred in Jos. They don’t have any other place to call home.

    “The beauty of the Jos experience is that we have the generality of Nigerians called Northern Igbos. He (Nkwocha) is Igbo; Owelle Rochas Anayo Okorocha is a Northern Igbo. This gentleman (Nkwocha) speaks Hausa more than I do. We also have Sir Emeka Offor and so many of them.

    “I believe that we should learn to imbibe in Nigeria that culture of tolerance, of togetherness, because I will rather be a small fish in a big pawn than to be a big fish in a small pawn.

    “We are a kaleidoscope of colours. The sooner we realise it, the better,” he said.

    Earlier, ANAN President, Dr. Neminebor, told the VP that there was need to introduce a new value orientation where the issue of discipline will become a culture for Nigerians, even as the association recommended the setting up of Anti-corruption Recovery Investment and Management Commission to prevent the re-looting of recovered assets in the country.

    Currency speculators count losses as naira rises against dollar

    It was gathered that many speculators have lost money following the recent resurgence of the naira.

    Such speculators had invested massively in the dollar in the hope that naira would depreciate further.

    An investigation by our correspondent revealed that many of the currency hoarders who had envisaged that the value of the naira would depreciate further as low as N2,000 or more to $1 as anticipated in mid-February, have all being proven wrong as the nation’s legal tender has witnessed a rebound.

    Some black market operators reportedly lured some of their patrons to dollarise their cash as the naira, in their calculation, would depreciate further.

    However, the naira recorded a rebound even beyond the expectations of many, such that the gains of the naira have been the loss of many currency speculators who borrowed money to dollarise their assets. 

    Confirming this development, one of the BDC operators in Mushin, Lagos, who simply gave his name as Adamu, said: “Some BDC operators lured individuals to buy dollars when it was between N1700-N1800 to the dollar. But now that the naira has recorded a rebound, most of them are counting their losses, no doubt.

    “It’s very painful that they had to stake a lot of their hard earned money to do currency speculation.”

    Chukwudi Iwuchukwu, a financial lawyer, noted that some individuals who bought N10 million worth of dollars at the black market on February 24 suffered huge losses as the current value of their liquid asset is worth only half the sum.

    “If you bought N10 million worth of dollars at the black market on February 24, it’s currently worth about N5 million,” he said.

    Writing on his former X handle, A. Ayofe @abdullahayofel last Tuesday recounted the experience of one of the currency speculators who is now in debt as a result of his wrong investment decision.

    “Someone I know borrowed N18 million from a money lender to buy $10,000 at N1,800 to $1 in February to pay back N19 million in May (three months) when the dollar gets to say N2,000 or more.

    “Today, that N18 million is worth N11 million at N1,100 to $1. He is now looking for where to get extra N8 million to clear his debt as the three months is fast approaching.

    “He used his bungalow as collateral. The problem now is that before May, the money could further reduce to N9 million at N900 to $1, making it impossible to retrieve his house.”

    Dr. Aminu Gwadabe, the National President of Association of Bureaux de Change Operators of Nigeria (ABCON), said the otherwise awkward situation of the naira in the last few months has given way to optimism.

    He said: “It is really exciting and interesting as we witnessed profound and significant naira rebounds faster than expected.

    “It is a triumph of reality over behaviours that have no economic fundamentals.”

    Gwadabe said all those who lost their investable funds during this period have to accept their fate.

    “As regards the complaints of people borrowing money to speculate and make a margin, my take is that for any economic activity, there is reward and there is loss.

    “So it is a gamble where you either win or lose. They should move on and next time be careful in jumping into what they cannot control.”

    On the way forward, the ABCON boss appealed to the CBN and the fiscal authorities to proactively continue to induce confidence in the economy, strengthen stakeholders engagement, quick and fast responses including service delivery.

    “Other hanging fruits include harnessing proceeds of diaspora remittances to inject liquidity through the BDCS. There should also be concerted efforts from all agencies of government to de-risk non-oil exports products to have a paradigm shift in our sources of foreign exchange to boost our external buffers.”

    He added: “The excellent job of the security agencies in tackling corruption and money laundering should remain the cornerstone of this government. Above all, we must all as Nigerians have a change of mindset.”

  • Consumers groan as prices defy naira appreciation

    Consumers groan as prices defy naira appreciation

    • FCCPC engages market leaders to crash food prices

    The Federal Competition and Consumer Protection Commission (FCCPC) has commenced fact-finding engagements with traders associations and marketers with a view to identifying factors responsible for the continuous hike in food prices.

    Cost of living has remained relatively high across the country despite the recent appreciation of the naira and many Nigerians are wondering what could have been the cause.

    The Director Surveillance and Investigations of the Commission, Ms Boladale Adeyinka, said at Masaka village market, Karu Local Government Area, Nasarawa State on Friday that the agency was determined to establish the facts and then crash the prices of food.

    Adeyinka said the mission had already traced the major reasons for the high prices of food in the markets to transportation cost from the farm to the market and multiple taxation.

    Also identified are high cost of pesticides and the security challenge in the country.

    Adeyinka said the Commission would develop a concise report of all the multiple taxes and advise government on how to unlock, remove or reduce the taxes.

    “This is a fact-finding mission, investigative mission to gather information directly from the sources. The food price campaign continues,” she said.

    “We are here to find out from three levels of stakeholders market executives, sellers and consumers.

    “This is a big market for direct food supply from the farms to the market so we wanted to see the value chain interacting with cost variables.

    “We had a meeting with the market executives to find out if they are issuing levies, taxes, things that are added to the cost, starting from the farmer to the sellers,’’ she said.

    Chief Danlami Gimba, the General Chairman, Masaka Market, Karu, said that transportation was the major cause of the hike in food prices.

    Gimba appealed to government to reduce the price of petrol to help crash transportation cost which would help reduce the prices of food items.

    Some traders, who spoke during the engagement, said the prices of their goods had tripled from their suppliers hence the reason for the hike of prices on consumers.

    Mrs Naomi Zakari, a yam dealer at the market, said that one trip of yam containing 100 tubers that was sold to them in Benue State for N15, 000 was now being sold for N50,000.

    She said the suppliers had attributed the hike in price to the high cost of pesticides, fertilizers and transportation.

    Read Also: Naira will continue to appreciate, Shettima assures

    Zakaria, however, appealed to the Federal Government to reduce the price of fuel.

    Miss Faith Wakili, a seller of maize, said that even the dealers were also complaining of the hike in price, adding that hunger was ravaging many households.

    CNG frowns at high prices of goods amidst naira appreciation

    The Coalition of Northern Groups (CNG) yesterday expressed concern over the high prices of goods and services despite the recent appreciation of the naira.

    The coalition, in a statement by its National Coordinator, Comrade Jamilu Aliyu Charanchi, said subjecting Nigerians to unjustifiable high prices of commodities was not only uncalled for but unpatriotic.

    The CNG observed that naira has recorded a significant appreciation against the US dollar, with the exchange rate currently between N900 and N1,000 to a dollar, down from N1,900 to a dollar a few months ago.

    It said: “Regrettably, businesses have maintained their fleecing of Nigerians by refusing to adjust the prices to reflect the current market reality despite the recent appreciable gain by naira.

    “The CNG strongly condemns this unpatriotic act by businesses, which is causing untold hardship for Nigerians, particularly the vulnerable and low-income earners; describing it as totally unacceptable.”

    It asked the Federal Government to devise a means to ensure that businesses comply with the current exchange rate and adjust their prices accordingly for the benefit of Nigerians.

    It also accused some state governors of diverting public funds to engage in forex business to give the dollar an undue advantage over the naira.

    Ex-Ekiti gov Oni says ongoing economic reforms ‘ll yield good results

    Reviewing the situation in Imesi-Ile, Osun State on Friday, former governor of Ekiti State, Segun Oni said he foresaw an improvement in the economy soon.

    “We are seeing rays of light and I can say how bright it would be still depends on how unwavering the leadership is.

    “There is ray of light. The currency is appreciating. We know that Nigerians are basically opportunists; even when the currency gains more value against the dollar, people still want to sell to maximise their income.

    “But I am sure that will not be long because when people see that the gap between what is obtainable and what can be obtained is too high, people will flood the market with their own goods,” Oni said at the burial of Evangelist Dorcas Olugbemi.

    He advised the federal government to prevent any cartel from taking over the market space.

    He said: “The government should ensure that people don’t run cartels. So if it is free market economy we will all agree, no cartel should take over, because they will influence the market so that the market will not be free.

    “We can see rays of light. We don’t know whether it is the end of the tunnel, but we can see rays of light. We must be looking for a country where everybody will play by the rules.”

    Price monitoring in Jos, Abeokuta, Ilorin, Ibadan, Kano, Osogbo and Owerri yesterday showed that prices of many food items and other basic needs remained relatively beyond the means of the average Nigerian; the only exception being rice.

    A bag of rice that went up to N90,000 in some places a few months ago now goes for  about N62,000.

    In Jos, a measure of garri costs N800 while that of rice ranges between N1,700 and N2,000 and beans N1600.

    The prices of grains like maize, rice, millet, garri, beans and soghum keep rising. So also is the price of corn flakes known as dusa in Hausa. The price of a paint bucket of dusa has increased from N1,500 to N2,000.

    A bag of cement in Kano metropolitan city, which sold for N12,000 last February is now N8,000 although a contractor who ordered 50 bags got a discount of N500 and ended up paying N7,500 per bag.

    A 50kg bag of rice goes for N66,000.

    Prices of some foodstuffs have reduced marginally in Ibadan, the Oyo State capital, in the last two weeks following appreciation of the naira against the dollar.

    But prices of locally produced foods are rising.

    At Bodija Market, the price of a bag of rice has fallen from N83,000 in February to N62,000 at the weekend. Bodija Market is the central raw food market in Ibadan.

    Similarly, the price of groundnut oil has also fallen from N2,200 per litre to N1,300 within the last three weeks.

    However, the price of beans has increased from N2,200 per measure to N2,700 in the last two weeks.

    The price of spaghetti has also risen from N700 to N1,200 per pack in the last two weeks.

    Prices of yams are also going up marginally despite naira’s appreciation in the foreign exchange market against the US dollar.

    Different sizes of yam, packed in three or six tubers, have risen in price marginally. Depending on sizes, those that sold for N6,000 now sell for N8,000 while those that sold for N2,500 now sell for N3,500.

    In Ilorin a 50kg bag of imported parboiled rice, which sold for N80,000 about two weeks ago, currently goes for between N50,000 and N52,000.

    A breakdown of the price per kilogramme revealed that five kilos of rice sells for N4,700 only.

    A 100kg bag of beans, which used to go for N80,000 about three weeks ago now costs N120,000 while a 100kg of garri now sells for  N90,000, up from N50,000 and N60,000 a couple of weeks ago.

    A foodstuff seller, Felicia Ige, lamented that “garri and beans, which are our local stuffs, have continued to hit the rooftop in the state.

    The price of cement has come down from N10,500 to between N7000 and N7,500.”

    A bag of imported rice is going for N52,000  in Abeokuta as against N61,000 last week.

    A measure of beans goes for N2,000 (drum type), N2,200 (Oloyin wewe) and N2,500 (honey beans) while a measure of rice goes for N1,800.

    The price of rice ranges between N58,000 and N60,000 per bag in Osogbo, while a bag of garri costs N35,000 and that of elubo (cassava flour) is N240,000.

    The situation in Imo State is not different with a  bag of cement now costing  N7,500,a bag of rice ₦73,000 and garri ₦3,000 per paint bucket.

    “It’s becoming difficult to make ends meet,” said Mrs. Nneoma Okoro, a trader at the Owerri Main Market.

    “The prices of food and building materials are rising every day. We need the government to intervene and find a solution.”

  • Naira rally: why consumers aren’t seeing relief yet

    Naira rally: why consumers aren’t seeing relief yet

    By Chinedu George Nnawetanma

    SIR: Over the past few weeks, the naira has appreciated from a record low of around N1,900/dollar to N1,148/dollar as of April 12, prompting the US investment bank, Goldman Sachs, to pronounce it the best performing currency in the world in April.

    This has come as a relief to many Nigerians who have been battered by the negative effects of the seemingly perpetual and unstoppable depreciation of the naira against the dollar. One of the areas where Nigerians have felt the pangs of the weak local currency is in the prices of goods and services. Prices of everyday goods, including staple foods and household items, seemed to soar with every visit to the market. This also manifested in higher transportation costs, utility bills and other services.

    This synchronized rise in the prices of goods and services with the depreciation of the naira is largely a result of the country’s huge dependence on imported goods. A large chunk of all the products used in the country are imported, including many consumer and industrial goods like milk, sugar, petrol, vehicles and machinery. It is unsurprising then that the prices go up as the cost of importing them becomes higher. Even service providers, who do not directly sell imported goods, will be forced to hike their prices in such a scenario in order to remain profitable as they utilize one imported product or the other in their day-to-day operations. This creates a vicious cycle that fuels inflation.

    But, as many of you have wondered, why haven’t the prices of goods and services come down since the naira has strengthened steadily against the dollar and other major global currencies in the past few weeks? Well, this is related to a variety of factors, including price stickiness.

    Read Also; Tinubu’s economic reforms yielding results, says Alake

    Price stickiness occurs when businesses do not immediately bring down the prices of their goods and services because of the higher cost of their current inventory. Many of the products still in circulation today were imported or produced when the exchange rate of the naira to the dollar was very low. It is usually when they exhaust their old stock and purchase or manufacture new ones that the prices will adjust, all things being equal. That way, they do not unusually incur losses and cut into their profit margins by selling at a rate lower than the original cost price.

    Another factor that is keeping the prices of goods and services high is psychology, or the fear that the naira’s gain against the dollar is temporary and the currency will depreciate again in the near future. Simply put, if businesses expect the naira to weaken against the dollar anytime soon, they may be hesitant to lower the prices now. This waiting game can further delay the decrease in consumer prices.

    For businesses in the service industry that do not sell physical products, additional considerations like high operating cost can contribute to price stickiness. Many service providers rely on imported goods and equipment for their daily operations, from office supplies and cleaning materials to tech hardware. Wages and salaries adjusted upwards when the naira was weaker may also not be reduced even with the stronger naira. Reducing salaries is a delicate and controversial move that can dampen workers’ morale. Keeping the salaries and overhead costs high while reducing the prices of the services provided can squeeze the profit margins of these businesses.

    All in all, the effects of naira’s appreciation may take some time to trickle down to consumer prices due to some of the factors pointed out above. Businesses typically factor in not just the current exchange rate, but also their past purchases, the overall cost of production and future uncertainty. While a stronger naira is a welcome development, Nigerians might need to be patient for its full impact to be felt by consumers.

    • Chinedu George Nnawetanma.