General News
Higher US Interest Rates Burn through Nigeria’s Reserves
By Lukman Otunuga, Research Analyst at FXTM
Defending the Nigerian Naira against the mighty Dollar has come at a steep price to the central bank of Nigeria in the form of falling reserves.
Nigeria’s foreign exchange reserves have declined by roughly $2.1 billion in the last 30 days thanks to a broadly stronger Dollar and prospects of higher US interest rates. With the Fed expected to raise interest rates again in December, reserves are seen falling even further on the widening interest rate differentials between both central banks. If the Oil bull rally sputters and government revenues in Nigeria end up thinning, protecting the Naira could become increasingly complicated and strenuous for the central bank
Week ahead: Italian budget, ECB meeting & US GDP in focus
Asian shares were mostly higher this morning as Chinese indexes rallied more than 4% on verbal support from the country’s top officials.
Although the positive momentum from Asia has seeped into European markets, gains remain threatened by fragile risk sentiment. With investors bombarded by geopolitical factors such as trade tensions, Italy’s budget woes and Brexit-related uncertainty, caution is set to prevail this week. Global equity bulls still have an opportunity to re-enter the scene on the back of robust corporate earnings. However, expectations of higher US interest rates, global growth fears and geopolitical tensions all present downside risks to equity markets across the world.
Trade tensions sizzle in the background
US-China trade developments were back in focus following reports of White House economic advisor Larry Kudlow accusing Beijing of doing “nothing” to ease trade disputes ahead of a G20 meeting in Argentina next month.
This development has not only reduced optimism over the United States and China finding a middle ground on trade but raised prospects of the US next year boosting the tariffs on $200 billion of Chinese imports from 10% to 25%.
With a full-blown trade war between the world’s two largest economies presenting a significant threat to global growth and stability, sentiment is poised to remain fragile.
Markets eye Italy budget
Italy’s budget woes with the European Union enters a critical phase today as Rome faces a noon deadline to explain why it is in breach of EU fiscal rules. With the Italian government bracing for the EU to reject its 2019 budget on Tuesday, the Euro is likely to take a hit. Uncertainty in Italy remains one the major geopolitical factors weighing on global sentiment and denting investor confidence.
ECB meeting on Euro’s radar
All eyes will be on this week’s European Central Bank meeting which is expected to conclude with monetary policy left unchanged.
With no rate moves expected, investors should not be quick to label this meeting as a non-event. Given the growing uncertainty revolving around the political situation in Italy, there will be an extra focus on Mario Draghi’s press conference. It will be interesting to hear Draghi’s thoughts on the developments in Italy and possible impacts they may have on the Eurozone economy. If the central bank head strikes a cautious and dovish tone, the Euro will most likely depreciate.
Taking a look at the technical picture, the EURUSD is trading back above the 1.1520 level this morning on the back of Dollar weakness. Intraday bulls could push the currency pair towards 1.1580 in the near term.
Focus on US Q3 GDP growth
The main event risk in the United States this week will be the first reading of third quarter GDP data scheduled for release on Friday. US economic growth is expected to have expanded 3.3% during the third quarter of 2018, slower than the 4.2% achieved in Q2. An upside surprise on GDP growth has the potential to boost buying sentiment towards the Dollar and reinforce market expectations of higher US interest rates.
Zainab Salami, executive director and co-founder, MSwitch Creative Hub, on Sunday revealed that over 53% of young Nigerians aged 15-24 are jobless, emphasizing the urgent need for strategic interventions to tackle the crisis.
She emphasized MSwitch’s commitment to empowering young creatives and digital professionals by equipping them with the skills and opportunities needed for sustainable careers.
Salami disclosed this in Abuja during the MSwitch launch of the ‘Remote Job Initiative,’ a groundbreaking program in partnership with AfriLabs, aimed at positioning Nigeria as a global hub for digital excellence.
She emphasized that the initiative seeks to connect Nigerian talent with global employers, strengthening the country’s presence in the international digital economy.
She noted that the program aims to bridge the gap between talent and opportunity by equipping youth with essential skills, access to global employers, and state-of-the-art co-working spaces.
Salami said: “Over 53% of young Nigerians aged 15-24 are either unemployed or underemployed. This program will create 2,000 remote job opportunities for young creatives and tech professionals, enabling them to earn, grow, and contribute to the nation’s economy without leaving the country.
“Beyond job placement, this initiative is designed to equip young professionals with the tools and environment needed for long-term success.
“To support this, we are investing in infrastructure and establishing fully equipped co-working spaces with 24/7 electricity, high-speed internet, cutting-edge technology, and industry-standard tools to maximize productivity.”
In his remarks, Ajibola Odukoya, chief operating officer, AfriLabs, described the organization’s expansive footprint across Africa and its dedication to capacity building.
He emphasized that beyond training, the next step is placing Africans in gainful employment.
Odukoya said: “AfriLabs is the largest network of innovation and technology hubs in Africa. We operate in 53 countries, across 225 cities, with 500 physical locations, and have about 80 million people in our ecosystem.
“We have partnered with international businesses and generated a pool of over 200,000 job vacancies targeted at Africans of all ages, as long as they qualify. To solve infrastructure challenges associated with remote work in Africa, we are using our innovation hubs, such as MSwitch in Abuja, as dedicated workstations with world-class facilities to support productivity,” Odukoya added.
Uche Nnaji, Minister of Innovation, Science and Technology, has emphasized the crucial role of Science, Technology, and Innovation (ST&I) in tackling national challenges and fostering economic growth.
Speaking at the launch of the Sankore Project, a collaborative initiative between Nigeria and Ghana, Nnaji highlighted how ST&I can drive economic diversification, job creation, climate resilience, improved public health, food security, and sustainable energy development.
“The Sankore Project promises to deliver innovative solutions that will significantly enhance economic growth, improve public service delivery, and raise living standards across our region,” Nnaji stated.
He added that the initiative aligns with President Bola Ahmed Tinubu’s 8-point agenda, particularly in advancing technology, capacity building, and economic growth.
The project, supported by the UK’s International Development arm, is backed by an accountable grant delivery mechanism worth up to £1.9 million. It aims to strengthen ST&I systems in both Nigeria and Ghana through structured project delivery and rigorous monitoring of impacts.
Susan Mshana, Deputy Development Director at the British High Commission, explained that the funding, provided by the UK’s Foreign Commonwealth Development Office, will be executed in two work streams to reinforce science and technology partnerships between the UK, Nigeria, and Ghana.
Ghana’s Minister of Environment, Science, and Technology, Dr. Ibrahim Murtala Muhammed, underscored the importance of collaboration in Africa’s development, urging Nigeria to take a leadership role in the continent’s innovation landscape.
“Nigeria is a sleeping giant that needs to wake up, so the rest of Africa can wake up. This initiative provides an opportunity to drive innovation, create jobs, and collectively overcome shared challenges”, Muhammed said.
He further stressed the need to commercialize research output, urging stakeholders to shift from skepticism to practical application.
As both nations forge ahead with the Sankore Project, stakeholders express optimism that the partnership will catalyze scientific breakthroughs and sustainable development in the region.
Nigeria has plans to launch a $40 million fund to support early-stage tech startups, aiming to strengthen the country’s entrepreneurial ecosystem and reduce young companies’ reliance on private investors.
The fund will be equally financed by the Japan International Cooperation Agency (JICA) and the Nigeria Sovereign Investment Authority (NSIA), which manages the national sovereign wealth fund.
Kashifu Inuwa Abdullahi, director general, National Information Technology Development Agency (NITDA), confirmed the final agreement would be signed within the next month.
The initiative is part of Nigeria’s Startup Act, adopted in October 2022, which aims to create a favorable environment for startups through tax incentives and financial support.
The act established a 10 billion naira (approximately $8.6 million) annual fund to finance certified startups through seed funding, grants, or loans.
According to Disrupt Africa, Nigeria’s startup ecosystem attracted over $2 billion in investments between January 2015 and August 2022, positioning the country as Africa’s leader.
Companies like Flutterwave, Andela, and Opay achieved multi-billion-dollar valuations.
, fundraising dropped to $224 million in 2023, down from $531 million in 2022 and over $1 billion in 2021.
This decline highlights the need for government intervention to revitalize the tech ecosystem amid investor caution.
The new fund marks a significant step for Nigeria, which aims to foster local innovation.
Currently, 12,948 companies are registered as startups, benefiting from a three-year tax exemption. Low awareness of the law’s benefits has prompted the government to plan a nationwide information campaign.
By facilitating access to funding, the initiative could strengthen support for existing startups and stimulate new tech ventures, reinforcing Nigeria’s position as a leading hub for digital innovation in Africa.
NGO Blasts MultiChoice for Tariff Hike in Nigeria, Slash in South Africa
Tony Elumelu Foundation Grants $15m to 3,000 African Entrepreneurs
SEC Declares War on Capital Market Fraudsters
Telcos Mull Introduction of Different Tariff Plans for Different States
NESREA Urges Nigerians to Dispose Batteries Properly to Avoid Hazards
General News3 days agoNigeria, Kenya among Nations Running out of HIV Drugs – WHO
News3 days agoNAFDAC Destroys over N1 Trillion Fake Drugs in Anambra
Telecom3 days ago9mobile Denies Shutdown Rumours, Promises Improved Services
Telecom3 days agoTikTok and Truecaller Face NDPC Investigation Amid Data Protection Concerns
E-Business3 days agoVisa to Establish Data Centre in Nigeria to ‘Boost Digital Economy’
E-Financial3 days agoNigeria Still Open Crypto Business despite $80Bn Lawsuit against Binance – FG
News3 days agoBolt Shares the Spirit of Ramadan with Kano Drivers-Partners
General News3 days agoNigeria to Launch $40 Million Fund for Tech Startups