General News
Nigeria Week Ahead: PMI’s, Trade Balance and NFP in Focus
By Lukman Otunuga, Senior Research Analyst at FXTM,
In a move that caught many by surprise, the Central Bank of Nigeria (CBN) pulled the trigger on lower interest rates for the first time since March 2019.
The decision, which was in line with the strategy adopted by many central banks may stimulate economic growth ahead of a potential economic recession triggered by lower oil prices and the coronavirus pandemic. Although Africa’s largest economy was able to expand 1.87% during the first quarter of 2020, fears remain elevated over the economy descending into a recession this year.
On the bright side, markets remain hopeful that the worst of the coronavirus pandemic is over with economies reopening across the globe. While economic data is expected to paint a gloomy picture over the coming months, there is a strong sense of hope that stability will return by 2021. It now becomes a question of whether the CBN and government exhausted all their tools to mitigate the negative impacts of the coronavirus to economic growth and stability.
On the data front, the manufacturing PMI sank to 42.4 in May which was its steepest pace of contraction in manufacturing activity since August 2016. Non-manufacturing plunged to 25.3 during the same month, pointing to the sharpest monthly contraction in services since July 2014. Confidence over the economy may be shaken in the near term as economic data paints a very gloomy picture. Investors will direct their attention towards the latest trade balance figures on Wednesday and inflation data next week.
Outside of Nigeria, there will be a strong focus on the possible OPEC meeting, European Central Bank policy meeting and US jobs report on Friday. Given how Oil accounts for a handsome chunk of Nigeria’s export earnings and government revenues, the outcome of the OPEC meeting and potential impacts it will have on Oil prices will be felt in Nigeria. Other key themes driving global sentiment will revolve around US-China trade tensions, Brexit and lingering concerns over slowing global growth.
Federal government has temporarily suspended the controversial annual dues imposed on public interest enterprises by the Financial Reporting Council (FRC) after fierce opposition from businesses.
Jumoke Oduwole, minister, Industry, Trade, and Investment, announced the decision during a Ministerial Consultative Meeting in Abuja on Wednesday.
The move follows mounting pressure from private sector groups, including the Nigeria Employers’ Consultative Association (NECA) and the Manufacturers Association of Nigeria (MAN), who slammed the Financial Reporting Council (Amendment) Act 2023 for burdening companies with excessive fees.
The Act mandates cumulative annual charges for non-listed entities and imposes a harsh 10% monthly penalty on unpaid dues, compounding until full payment, a provision that sparked widespread backlash.
At the meeting, major industry players like NECA, MAN, the Nigerian Association of Chambers of Commerce (NACCIMA), oil producers, and telecom operators warned that the fees would cripple businesses already struggling in a tough economy.
Oduwole clarified the suspension, stating, “The government has decided to direct the Financial Reporting Council to pause in the implementation of the new annual dues. You know that I am a lawyer, and a suspension request by the organised private sector would be in contravention of legislation duly passed by the National Assembly. A pause is an administrative process simply to review, in line with what we discussed today.”
She assured stakeholders that the halt would last no longer than 60 days, with a technical working group—including FRC officials and private sector representatives—set up to reassess the policy.
“We are a listening administration. The private sector has requested a range from three months to an indefinite suspension. We are not going to do that. So, at the most, 60 days is in my estimate. We are going to set up a technical working group comprised of the FRC and the organised private sector who have formally written in, and this will be reviewed,” Oduwole emphasized.
The Standards Organisation of Nigeria (SON) says it is intensifying efforts to standardise locally manufactured products, including Made-in-Aba brands, in order to enhance both local and international acceptance.
Aharanwa Chuks, Director of Region (South East), SON, communicated this in an interview with the News Agency of Nigeria (NAN) on Wednesday in Abuja.
Chuks said through the Mandatory Conformity Assessment Programme (MANCAP), SON ensured that all Nigerian-made products conformed to the relevant Nigerian Industrial Standards (NIS).
According to him, MANCAP involves direct engagement with manufacturers to certify that their products meet established quality benchmarks.
“This process includes inspecting production facilities, sampling products and testing them against NIS requirements.
“Successful compliance results in the issuance of the MANCAP certification, signifying adherence to quality standards.
“In Aba, SON has been proactive in educating manufacturers about standardization.’’
The director said SON also conducted stakeholder interactions; gathering manufacturers from various sectors to provide guidance on producing goods that met both local and international standards.
“For instance, leather manufacturers in Aba have been sensitized on standardization practices to enhance the global competitiveness of their products.
“Manufacturers are encouraged to collaborate with SON to obtain MANCAP certification, ensuring their products are not only marketable within Nigeria but also competitive internationally.
“This initiative aims to boost consumer confidence and promote the acceptance of Made-in-Aba products globally,” Chuks said.
Operatives of the Economic and Financial Crimes Commission (EFCC), has busted a Ponzi Scheme Academy and arrested 133 suspects in Abuja.
They were arrested at the Compensation Layout in Gwagwalada area of the Federal Capital Territory, FCT, Abuja, following actionable intelligence on the existence of the Academy.
The Academy, named Q University (a.k.a Q-Net) is in the business of recruiting gullible young Nigerians who are trained to recruit more gullible citizens into the scheme with the promise of getting unrealistic profit returns.
The suspects are enrolled into a training codenamed: “Special Training for New Generation Billionaire” and brainwashed to believe that they would graduate into the league of billionaires.
They got into the training by obtaining a form the promoters called “Independent Representative Application Form” with promotional slogans such as: “I’m a Champion” “I’m Unstoppable”, “I’m Infinity”, among others.
The EFCC carried out the operation in collaboration with officers and men of 176 Guards Battalion, Nigerian Army.
Items recovered from the suspects include phones, computers and other electronic gadgets.
They will be charged to court as soon as investigations are concluded.
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