CBN Resumes FX Sales To BDCs At N1021-$, Dangote Diesel At N940 A Litre +More |Business Incorporated

CBN Resumes FX Sales To BDCs At N1021-$, Dangote Diesel At N940 A Litre +More |Business Incorporated

[Music]
hello and welcome to business
Incorporated live on channels television
here’s what’s coming up in the next 55
minutes diesel prices drop further dang
Refinery sells at 940 naar per liter for
customers buying at least 5 million
[Music]
lit and Kenya secondhand clothed imports
from China uh Rise by 86% in the first
quarter of
2024 an introduction of Zig a short for
Zimbabwe gold has led to a 99.95% fall
in the Zimbabwe Stock Exchange oil share
index
[Music]
and it’s great to have you join us I’m L
Williams let’s get to um the stories
that set to your agenda now and most of
the markets we track here starting with
all Market we see all prices gained um
after stronger economic data out of
Europe as investors also weigh the
potential Fallout from any fresh us
sanctions on Iran’s oil export with
tensions remaining High um that’s in the
Middle East and we’re seeing um green on
the screen there for uh Brent um up
about 0.23% $87 27 a barrel getting back
closer to that
$90 uh Mark there that’s for Brent and
WTI also looking forward to that $85 um
mark up 0.27% so we’re seeing um
positive sentiment today you know
yesterday we see we did see uh the oil
markets actually uh dropped so we’re
seeing you know release of the US um GDP
uh uh gross domestic uh product numbers
that’s for uh coming on Thursday and
we’re going to see how that’s going to
drive sentiment everyone wants to know
when is the US Fair going to cut rates
you know in 2024 is there even going to
be a rate cut you know at this point so
looking forward to that um GDP number
from the US let’s look at Metals market
now um gold prices fell today that’s
lowest in more than two weeks on easing
concerns of an escalation in the Middle
East as investors book um profits at
this time but it’s had a wants to run
you know at at this point talking about
um the safe haven metal that’s gold
$2,310 I remember when I was reporting
about
$1,600 per ounce um that was uh sometime
early last year but this quite a big
rally there we’re seen for gold silver
has not left out down 1.74%
$26.77 per ounce and padium that’s down
about 1%
0.95 uh
$106 per ounce holding on to that $1,000
level who knows if that’s um going to
give way at some point let’s get to some
other stories now the Lagos Chamber of
Commerce and industry along with other
stakeholders in the real sector of ped
csy visit to the vice president Ibrahim
shatima to share their perspective on
macroeconomic issues as it borders on
their operations as well as the impact
of subsidy removal and ongoing reforms
the president of lcci Mr Gabriel deos
who the delegation believes that it was
a fruitful meeting that has the promise
of bringing new ideas shared into the
running of the
economy the fundamental changes that
have come with the removal of subsidy
the unification of the currency has
opened up a lot of
opportunities which we believe that the
government can fast track with a couple
of of policy and measures that we have
discussed with the vice president and we
have profiled some solutions which can
be implemented and we have been assured
by the vice president that a couple of
these are practical they are doable and
he intends to consult with his uh with
the president and and work with us on to
chat the piece of uh implementation the
vice president that assured us that we
will continue this conversation to on
how best to implement these policies
across various sectors of the economy
agriculture oil and gas manufacturing
and then the very important information
and communication technology industry
which is creating a lot of jobs for
young
people all right and yeah we did say
that D petroleum refiner has again
announced a further reduction in the
price of both Diesel and Aviation foil
uh fuel that’s to 940 and 980 per lit
you know respectively and uh this coming
on the wake of its widely celebrated
price reduction we did get that price
reduction of 1,000 Nair per liter so
this is a further drop and 940 NAA
that’s applicable to customers buying uh
5 million L and above from the refinery
while the price of 970 for Aviation
fields for customers buying 1 million L
and above so there we have it another uh
another uh crash there for the uh price
of diesel definitely uh I believe that’s
good for you know manufacturers and
Nigerians at this time but let’s get to
our first conversation now according to
the Ministry of Finance the World Bank
will in June 2024 consider and give
final approval to Nigeria’s
2.25 uh billion doll loan requests the
loan comprises about a $1.5 billion Loan
in development policy um financing and
another 7 50 million in program for
result financing well let’s um drill
down more on niger’s debt level joining
us now is Mr namin wizu coill managing
partner at commercial Partners joining
me via Zoom great to have you on the
show good afternoon good afternoon great
to be here thank you fantastic so before
we get into that we’re seeing uh the D
Refinery again um impacting you know the
price of diesel at this time is now
1,000 Nar per liter um how you seing
this and definitely looks like a good
news for
manufacturers I mean definitely I mean
not just for manufacturers but for I
mean Nigerians as a whole because it’s
going to directly impact inflation um
you have most middle class homes that
have Diesel run generators middle class
to High um to the high end end of the SE
of
the individuals rights all have diesel
generators at home so if you look at
that you’re going to say well all these
people are going to have to pay less
money for diesel or to power their homes
considering you know how poor power
supply has been so manufacturing sector
of inflation coming down for homes for
offices people who all use dies
generators definitely going to be a big
plus for them right how low do you think
this prices you know can go do you think
at some point might be looking at 500
naar per lit at this rate
well I mean we have to remember that the
prices are sort of indexed to what’s
happening globally with regards to C
prices so for it to get to l means Cod
prices would have to also come down PR
aggressively
alongside a major strengthening further
strengthening of currency I don’t see
the currency strengthening that much to
let us get to say
A500 per liter that means you’re talking
about currency getting to maybe about
500 Nara or 600 Nara to a dollar I’m not
sure we see that happen this year also
not sure it’s advisable for that to
happen because you must have start to
have huge pressure on the currency all
over again all right definitely but
let’s switch gears now yeah we’ve been
talking about you know the um what we
got last from uh over the weekend from
the IMF World Bank um meetings and um
definitely it was it was quite a busy
one and um yeah yeah we we we found out
from the federal government that we’re
getting another loan and we chasing at
this time but it’s been described as
free launch just about 1% interest rate
why do you think um the World Bank is um
giving Nigeria this loan at such a low
rate well I mean that’s what conal
financing is all about you can get this
kind of race commercially and you have
the World Bank trying to assist certain
economies if you look at the reforms
that we’ve undertaken looking at um even
World Bank and IMF mentioned it in their
reports that came out recently I mean
they’re happy with the way things have
gone happy with the monetary policy and
decision taken by government you know
reduction in things like fro subsidy
increase in taxes you know increase in
exchange rates so all of that basically
points towards uh some improvements
expected improvements in the economy and
yes I mean you would look at it as
pre-launch 1% with a 40-year repayment
period 10 year moratorium I mean it’s
fantastic it allows you manage your
repayment schedule and um I mean at 1%
interest rate that’s definitely can’t
get it anywhere else yeah definitely
quite uh quite cheap financing there but
what do you think this money will be
spent on you know it still has to be
paid back at the end of the day yes uh I
mean ideally you should spend money to
either you know Buster your budgetary
allocations or you use it uh to invest
in something that ensures you get
returns that would outstrip what you’re
paying in interest and also ensure that
you can pay back uh the principal amount
borrowed right so if you look at uh the
long day 10 of the loan that definitely
means that you should be looking at
putting in infrastructure so roads or
increasing power I mean imagine what
improving power supply to in Nigeria by
say about 40 50% would do for for the
economy if you have that amount of
increase in power supply then you will
be able to increase manufacturing output
at a lower rate and also Aid them in
exporting which invariably would lead to
you know more dollar revenues coming
into the economy and makes it easier for
the government to pay back so major
infrastructure um type Investments that
will ensure you grip the benefits that
will allow you repay um this loan I mean
not to use it to pay down effects
obligations because that doesn’t
necessarily bring you the kind of reward
we’re talking
about and looking at you know debt
levels in um Africa we know debt is a a
major issue you know right now for major
African economies you know but asid
taking on you know more loans you know
at this time to you know help support
the budget what other sources can the
federal government you know look at at
this time or even look at developing you
know right
now yeah I mean it’s interesting you
mention Deb and you talk about debt in
Africa as a whole we’ve seeing a few
African countries Deport on their debt
their Euro bonds of recent it’s going
happen with Ghana Zambia Ethiopia so
that tells you that one needs to really
be careful with regards to you know
death
sustainability but if you look at us in
terms of other sources government can
develop I mean we know that Nigeria’s
made main stay has been cral we know
that government is pushing to try and
get us to about 2 million barels per day
from about the 13 or thereabout or 1.2
million bars per day that we’re at that
means they need to first of all t
Security but we also need to focus on
not just through alone but begin to
diversify the economy one thing we need
to look at you know part of what I
mentioned earlier was to help or Aid the
manufacturing sector to help improve
exports same thing with agriculture we
need to try and focus on things that we
can export and that would help us bring
in or grow the forign reserves and also
look at um not just exporting raw
materials but things that we’ve added
value to I mean this has been said in
time past you have cocoa and how much
money do you make exporting cocoa versus
exporting chocolate for instance by the
time you go from cocoa to Chocolate you
must have Mak an additional 40 or 50% in
terms of returns so it makes more sense
to export products that you added value
to than just the raw materials loone so
definitely looking at uh public private
Partnerships you know or even selling
underutilized or non- strategic assets
like we’ve seen happen in Egypt can help
you bring in you know uh more revenues
to the government look at refineries
that have been struggling to maintain so
government can always look at selling
some of them to improve to reduce the
drug uh that you have on government
finances and then have people who can
come in manage them optimize value and
start to export um you know finished
petrum products the same way we expect
dang refinary to do right and talking
about that Egypt deal with United Arab
Emirates develop a prime stretch of its
Mediterranean Coast you know that’s
bringing about $35 billion you know in
investment into um Egypt in the next um
a couple of months or so but how can
Nigeria replicate this exact deal you
know at this
time well I mean talking about Egypt is
a fantastic deal I would say uh I mean
they’ve gone into some partnership with
Abu Dhabi serving world for so I mean we
basically say that Egypt more or less
has a big brother so I mean it would be
great if Nigeria for instance could get
a big brother who would pay us $24
billion to you know for development
rights which is what you’ve seen in
Egypt so for us I mean we start to look
at progress bit of progress made we’ve
seen some commitments but we need to
start seeing those commitments get
actualized we’ve looked at I mean the 10
billion steel investment expected from
India we have a pending agreement you
know discussed with Qatar you know
things like that are important those are
the kind of things that can help
stimulate Nigeria has a huge Coastline
for instance if Egypt is being paid you
know for rights to develop their own
Coastline on the med Mediteranean what
stops Nigeria from being able to offer
same you know for instance or what stops
us from um being able to offer things
like National T and cod people who can
come and help us develop um that side of
the economy and help with the
entertainment sector so I think we have
to look at Large Scale type things large
scale type developments that will
stimulate economic growth you know
create jobs and also attract Investments
uh one thing that is key is not to have
the previous mistakes we’ve seen with
prior governments where people end up
going to C Nigeria signs an agreement
they re the agreement you ends up in
court so look at the P Pani D type
transaction right yes we ruled as a
fraud but we should never even have been
in that kind of scenario in the first
place so we need to have agreements
properly reviewed so that once we sign
we know it’s in the best interest of the
country and not going to have another um
another executive coming and try to
reverse it you can imagine Egypt for
instance being coming down 5 10 years
down the line say they’re reversing this
$24 billion deal and what kind of
repercussions you would have so we need
to be able to do same give investors
confidence to comeing to Nigeria assure
them that whatever they sign will be
honored by subsequent governments and
you know try and create a fantastic
ening environment for them right
definitely we’ seen the president quite
busy going around the world trying to
get um all those investors in and tame
some of their nerves at this time well
thank you so much it was great having
your perspective Mr Nam dzu co-managing
partner at a commercial Partners thank
you so much you’re welcome all right
we’ll take a break now when we come back
we head straight to the markets do stay
with us this is business
[Music]
Incorporated welcome back well it’s it’s
time to get a sense of how your money is
performing at intraday in the local boss
and major markets around the world that
we track and we have Willie bong with
the details at this time hi Will yes so
the markets are would I say they’re a
bit uh cautious or they’re down with the
rain you know it’s quite rainy days
today so everyone is taking a nap I
think you know they’re not just out of
that sleepy mode yet so the market is
still very sleepy we’re seeing some Reds
pockets of Reds here and there mostly
Reds but I hope that by the close of
business they they would have been inv
go to bed when the rain’s falling yes
possibly so that’s what we’re seeing so
but we’re going to be checking in with
the markets I’m discussing with L the
markets are red mostly red at in today
sentiments are I say mostly negative but
we hoping to see that red I mean the
green pick up much later at the close of
business we see Nigeria ngx down at in
as the time we picked it up it was
marginally down
0.03% South Africa was the only gainer
in the green as intad day also 0.03%
marginally up elsewhere we see egfs e
gx30 the Egypt egx30 is down
0.44% that’s not very good and that and
looking at what analysts are saying
regarding that stock market say it’s
going to face a corrective movement
towards 26,000 points and that movement
Market participants consider it to be
logical now the egx declined 1.67%
during Monday’s session now speaking of
Monday’s session we see Kenya down uh in
the Monday’s session in red territory
and that is no brainer we’re hoping that
that market rebounds because we see that
shielding declining and is really
affecting the stock market in that
country well let’s check in with it on
trading at the fixed income Market we
have Caleb alimi is a chief Pro is a
chief dealer at providers Bank he joins
us on the show Good afternoon Caleb it’s
good to have you on the program good
afternoon will thank you for having me
uh let’s kick off with system liquidity
let’s see what’s going on there we know
it’s tight how tight are we talking
about and how it’s impacting sentiments
in the F income Market believe you will
share that with
us uh first and foremost the market has
been very tight like you rightly
mentioned on Monday we opened a negative
one about 1 trillion uh today it’s
improved slightly to about 880 billion
so just about minus 900 billion in the
of system liquidity that has impacted
markets you know with bearish sentiments
we’ve seen quite a bit of sell interest
across the curve we’ve seen the sell
interest on Treasure bills especially
between the maturities and the June
maturities are short dated maturities
you know the implication of the negative
um negative system liquidity that banks
are funding at a very expensive rate uh
overnight you know among themselves at
around
3.75% you know that’s quite expensive
and so what you would do is to you know
free up whatever assets that you have
the closer the maturity the better for
you to you know sell it off and that’s
what we’re seeing we’re seeing very
sentiment unsure data treasury bills me
maturities and
maturities um now there’s going to be
NTB auction you’ve just talked about
some short dated bonds now which which
is happening tomorrow which is Wednesday
we about 142 billion nir water of papers
will be on offer what are rate
expectations Caleb considering the tide
system liquidity what are we looking at
here a few things uh part of the things
we expect ordinarily liquidity remains
tight we’re going to see we expect
yields to or discount rates to you know
print a little higher we’ve seen that on
the 9 1 day and the 182 day paper those
ones are pretty sticky and pretty stable
the last 91 day Clos at 16.24 and the
182 days closed at 177% while the one
year closed at um 20.7% however given
where system liquidity is and what on
offer we expect that uh the 91 days and
the 182 days May remain constant but the
one year could you know track upwards
closer to 21% or slightly over that
depending on how uh desperate um
investors are or if liquidity sort of
like improves before the end of today
there is expectations that you know
there could be the F allocations could
be paid into the market today or at
least tomorrow that would also you know
impact liquidity and it will then uh
determine how you know people will be at
the auction uh now just speaking of
liquidity speaking of you know gains and
we well it’s more like declines now it’s
looking like the world’s best performing
currency uh which which is the NAA which
was the best performing currency in
April is taking a breeder from his
monthlong rally as we seen the dollar
strengthening and sending chills down
the spines of Emerging Markets from
Nigeria as well and the naira is seem to
be moving from about 1,50 n from last
week close to about 1,250 n this week
what’s driving this what are the major
drivers and like you mentioned it’s the
best performing currency and because it
is best performing is why we’re seeing
what we call take profit you know the n
strengthened about 30% over the last
what almost a month it’s only natural
for the people that provided that uh
liquidity to take some profit take for
example many of the fpis came into the
market around 16 17 and then the Nar
strengthen to about ,100 1,150 or
thereabouts look at that spread between
where they came into the market and
where the market is currently you know
they’ve already made 30% within two
months you know I think every smart
Trader knows what to do is to take
profit rather than wait for the markets
to take take out all of that profit so
that’s what’s happening it’s simply um
foreign portfolio investors repatriating
some of the funds they brought in so
we’re seen all prices dipping and this
is you know bustering the dollar because
the dollar is really strengthening
because the FED might not be cutting rat
anytime soon do you think this is going
to be a sustained pattern do you see the
n i mean the naira devaluing or
declining further in the near term
interes CBN continues to you know
intervene at the market at different
times you know today we understand
they’re selling to uh bdcs you know and
they will probably come to the inter
Market at some point even though you
know the governor said they don’t want
to be the highest supplier of dollars to
the market they’ll continue to find ways
to stimulate foreign investors this is
why we think interest rates in the fixed
income space will remain elevated just
so that they can attract you know um
more dollar portfolio investors so with
that sort of Supply coming into the
market we don’t think the will
depreciate tooo much it could continue
to lose some value and then at some
point it will become attractive for
entry again for more portfolio investors
especially as our interest rates on our
you know government SECU remain elevated
okay still speaking of the government
and the plans to you know attract more
for Forex into the market see is
planning it’s maing Forex foreign
currency denominated Bond issuance in
the month of June as right around the
corner what makes this debut Forex Bond
scheduled for the second quarter
different from the regular hero bonds
I’m sure would would like to know what
the difference is and what you know
interest it holds for
investors all right so so first off Euro
bonds are what dollar denominated bonds
but they’re issued outside your country
which means Nigeria issues raises an
instrument in dollars and it trades it
in in outside its country maybe in
London or in New York those are Euro
bonds however if Nigeria issues a dollar
denominated bonds that is traded locally
maybe on the ngx on fmdq or on other
platforms locally that becomes a Forex
Bond you know and that is what this bond
is about it’s the first of its kind
being that it to be a dollar Bond but
issued locally here in Nigeria the
federal government is targeting you know
Dum balances of many Nigerians you know
by offering an attractive means of
investment for them to you know plug all
those ID balances so to say and that’s
why that’s what makes this Bond
different from the Euro Bond and that’s
what makes it unique and that’s why it’s
a first of its kind as
well so what instruments are investors
currently trading at and what end of the
curve as we speak right now as we speak
what are they trading short end mostly
um the the what what banks are trying to
do right now is create liquidity um on
the other side other investors are
positioning for the primary auction
tomorrow many of them are interested in
the oneye paper because that’s where you
get the best yield pick up right so the
yields are been around 26 27% for a long
time we’re expected to still hover
around that space so that’s where
investors are looking
however for banks trying to create
liquidity many of us are trading the
short end of the C the main maturity
just to create liquidity for our
obligations okay thank you so much KB
Alim Chief dealer providors bank for
sharing your thoughts on business in
corporate it’s good to always have you
thank you will now let’s look at the
Middle East markets where major equities
traded with positive sentiments that
intro the Abu Dhabi was up 0.05% we see
Dubai also up at inaday 0.2% still
within the region Saudi and qari indexes
traded up over half a percent we see
0.54% and 0.51% now let’s look at the US
markets where we see stock futures and
higher you know in Pre in pre-market
trade in early trade today the S&P
snapped The Six Day losing streak
boosted by Rebound in tech stocks we see
the S&P 0.08% up dgon is up 0.07% Nasdaq
futures 0.14% up now we’re seeing this
markets really boosting and we seeing
Tesla also going to be issuing I mean
report’s earnings today and investors
are going to be seeing what’s going to
be coming out from that stock because
the stock price is already down more
than 40% as as we speak and we’ll just
look at Asia markets right now and see
very quickly what’s happening in the
Asian market nay 25 in Japan is up 0.3%
it’s closed trade for Tuesday very well
in the green the cby in South Korea is
down 0.24% hang Tech index that’s in
outside China shows is 1.92% of near 2%
up we see mainland China Shanghai
composite let’s look at that quickly is
down
0.74% and we see the S&P ASX 200 in
Australia
0.45% up markets are not doing badly in
that region especially from Tex G the
gains from Mondays um in the tech sector
on rebound on Wall Street investors are
assessing this flash business activity
and they’re just you know buying into
the stock so L with all this happening
in this market right now it’s kind of
like this is the right time you talked
about Tesla if this is the right time
for investors to come into Tesla I think
this might be the right time because
speaking from what analysts are saying
we discussing earlier yes for the year
so this is probably the right moment to
get into Tesla and you know but you
don’t want to catch a falling knife at
this point can’t find you don’t know
where the bottom will be at this point
no risk no gain L exactly and yeah
Justin Caleb actually confirmed that
while we’re talking to him that the CBN
is ring Forex sales to bdcs
at21 n you know per dollar you at this
time because we’ve already been getting
complaints you know from friends around
me talking about the N is weakening
again is weaking again but I guess this
will put them to rest yes defin and we
selling at
1,21 coming in with that surprise today
all right thank you so much will there
for giving us the details uh from the
markets all right let’s um get a sense
of what’s happening in Europe now we see
German engineering that for decades
that’s um used to be um shorthand for
high quality in machine building uh
whether it was turbines to autos and
still today engineering is one of the
main drivers of the German economy this
week everyone with stake in German
engineering is meeting at the Hanover m
one of the world’s largest trade shows
for the sector let’s talk to L Halton
now um L with DW what’s your first
impression you know of this show
thanks for having me L it’s actually
quite impressive how the trade show has
changed over the years like you said
this event used to be all about big
machines turbines and such it was all
about how to build them and how big they
can be built and today it’s all about
how to build them cleaner and more
sustainable the green energy transition
is playing a major role in Handover as
is AI of course that is maybe the number
one topic these days and it’s also
something that Chancellor Olaf Schultz
tried out when he opened the event at
the booth of German industrial giant
seens he tried to interact with a
robotic arm operated by Ai and that went
just about as well as you would imagine
Schulz wanted the machine to go faster
he said it a few times and nothing
happened well eventually the thing sped
up a bit but it was all a bit
underwhelming let’s hope this won’t
become a symbol for this year’s event or
even worse for how Germany will Faire in
that sector in future all right how is
Germany doing an AI and and Engineering
these
days well engineering is still a solid
business here it’s bringing in around
250 billion EUR in revenues that’s
actually up from 200 billion in 2020 so
at first glance all is Peachy but
actually analysts are expecting a
decline this year and the question is
always of course are we keeping up with
other countries Chancellor Schultz seems
to know this and he says he wants to
work towards the country investing more
in research and development including by
changing the rules on how the German uh
retirement fund Works Schultz wants the
government to be allowed to invest
monies in that fund on the open market
uh that’s more risky than traditional
investment in government bonds of course
but it could bring a better return on
investment and it could also direct more
money to startups and other businesses
who might need funding he also wants to
motivate Germany’s most wealthy people
to invest more actively don’t know
exactly how he wants to do that but it
would obviously be a great opportunity
for them as well as for the industry
especially small and Innovative
companies in the fields of tech in
general but also AI in particular can
have a hard time sometimes having access
to the capital they need and any
Improvement here would certainly help
and what are investors looking at in
today’s markets in
well here in Germany we’re in the midst
of earning season and that as the Ducks
had some weaker days it was doing a bit
better yesterday to start of the week
and it’s heading closer to 18,000 points
again now why is this important because
18,000 points is a pretty lofty level
for the German stock market index it is
based on the Assumption by many analyst
that the country’s top 40 companies
those that are listed in the Dax will
make more money into 2024 really than
ever before record profits record share
price the problem is so far many
companies haven’t quite delivered what
was expected software and cloud
computing giant sap actually did deliver
last night but some investors generally
see the market on Shaky Ground anyway
all right thank you so much as last Hal
to give those the details from Europe we
take a quick break now while we come
back we head straight to the Commodities
market update
all right let’s look at the Commodities
markets space now we see rice a widely
consumed staple uh constitutes about 8%
of food basket uh for the CPI and is
also significantly consumed during um
celebrations well in a bag of 50 kg rice
uh that Trad about 98,000 December 2023
recently in April see the price per bag
that’s dropped to around
88,000 Nair and we’ve heard about you
know further drops you know in some
parts joining us now is Tera Kuma
manager economic research at FDC great
to have you on the
show Good afternoon thank you very much
for having me right so we’re talking
about um prices of diesel you know
coming down now we’re looking at Rice
I’ve seen a trend um going on uh right
now do you think this is sustainable for
Rice thank you very much and what you
read is is correct in December 2023 rice
was around
98,000 now we have about
88,000 that was about 10.2% drop of of a
bag of
rice yeah the argument might be that
factors affecting the price of rice will
be local production level or or global
market conditions but let’s let’s take a
a a a micro Zoom to what happening in in
the
market recently we we noticed that there
have been a shift in consumption of rice
to Noodles consumption by the the Young
Generation and one will be wondering
what is the ti is is no a subtitute for
for Rise what is leading to those things
noodles is easier to to to
prepare it’s an end product because you
don’t need to consume noodles with with
any commodity and you also it’s more
convenient for for mothers the children
are not concerned about the price but
the mothers working mothers are more
concerned about their time so it’s
quicker to prepare so but but in R you
compare that to Rice it takes longer
time to prepare and rice has it’s a it’s
a joint product with things like tomato
and pepper and other stuff that you need
to combine to consume your R so in that
case there been an increase in in
tomatoes pepper and other things you
combin with rice the increase in the
price of those things is likely going to
affect the the demand for right so these
are joint product so as the price of one
commodity increases then we like going
to see the the the the deand for the for
the compliment product so this is what
is likely going to happen to so in the
near future we we are seeing a shift
from the consumption of rice to Noodles
if that continues then the price of R is
obviously going to to stay low and
and so I guess this is because demand is
dropping I guess because demand is
dropping that’s why we’re seeing the
price of rice that’s according to what
you just um told me but we know Nigeria
is the third highest importer of M rice
in the World Imported about 2 million
metric tons um of rice into the country
why is Nigeria still you know depending
on imported
rice yeah as of data available to
us local production of rice in N about
57% so we have a huge gap of 43% so
where do that Gap come from where does
it come from they we need to fill up
that Gap the the population of Nigeria
is going faster than what we prod
how do we F the nation what it means is
that we producing less than what we
consume so what happened in the last 5
years under the previous administration
when the borders were closed the borders
were not shocked what happened was that
it was more expensive to import rice so
the cost of importing rice into the
country was transferred to the final
final consum but now that the borders
are
open we’re going to be seeing
drop in oil in in the in the price of of
rice because the market is not open the
cost of importation will not reduce the
issue here is that with the Border
opening there will be high competition
because rice is not available in the
market
that one we ask is the local the local
producers are they ready they have the
competitor ability to compete with
Global Market players in in right
production
like
India Vietnam China and the rest if when
the Border was was sh was closed against
importation of rice if these local
producers don’t have the capacity to to
compete with foreign
investors Global producers who have low
average cost by production there’s going
to be a a problem in the economy the the
price of R will come
but local producers will be affected
because if they can’t compete favorably
with their Global competitors then
becomes a problem to domestic producers
okay all right we’ll keep tracking the
price um there to see if we can see a
further drop I’m going forward thank you
so much ter Kuma managing manager
economic research at Financial
derivatives company thank you thank you
for having me all right let’s get a
check on out the stories now we see the
quantity of secondhand clothes imported
from China
into Kenya that’s their main source of
popular lowcost um used clothing that’s
jumped about
86% in the first quarter of this year
signaling increased um demand data from
Chinese authorities shows that the
country exported about
31,000 um tons of secondhand clothing
and accessories to Kenya between January
and March 2024 uh valued about
22.73
million and South Africans are paying
significantly more on their bonds and to
service their debts due to the South
African Reserve bank’s interest rate
hikes uh this is the view of the
economist Professor Bon dumisa who told
the business Des that South Africa’s
High interest rates can be avoided in
November 2021 the sb’s monetary policy
committee initiated its current um
hiking cycle in a response to concerning
optic in a country’s inflation rates
take a
listen I P
align myself with the sentiments
expressed by Dr rulu
baa on the issue of the many rorate
hikes that the South African Reserve
Banks um monetary policy
committee imposed on us when they raised
the repor rate
from
3.5% in November in October
2021 to its
highest
[Music]
8.25% by
May
2023 some of those repor rate hikes
could have been avoided because they
were totally unnecessary in fact they
were
counterproductive because the repor rate
hikes or interest rate hikes were meant
to be used to
discourage
widespread credit purchasing because
widespread credit
purchasing is
inflationary so when people are buying a
lot of things using
credit that increases the prices because
there’s higher demand for those goods
When there’s less money to pay for them
so the best way then to discourage that
tendency is by increasing the repo rate
or interest rates and then people buy
less on
credit but it was not the case in many
of the in many of the instances where
the rep rate was increased in South
Africa over the past three years
because our our raer rates were
increased because
of the attack on Ukraine by Russia
amongst other
things pushed up the prices of brand
crude oil it moved from below 858 us per
barrel too close to $140 Us
barrel and that had the negative
consequence of pushing up our fuel
prices in South Africa and those prices
went up not because people were buying
more on credit but because the of the in
Sky roting International brand crude oil
prices
all right now let’s um head on to
another conversation we see the
e-commerce um industry in Africa’s
forecast is surpass half a billion um
users by 2025 which will have a a steady
177% compound annual growth rate of
online um consumers let’s um drill in on
those numbers now um join us is W Adisa
chief operations um officer at Omni
retail great to have you the
show nice to be here L right right quite
a quite an interesting forecast there
we’re seeing for the um e-commerce um
users but how’s the e-commerce space
fairing you know at this time you know
with countries dealing with you know
High inflation and and High Cost of
Living interesting question um it’s um
it depends um there quite a um there’s
opportunities um the the the issues
itself brings brings opportunities for
us um because what we do uh as you know
is We Stand between manufacturers
and uh retailers and ensure that both
parties get greatest um value from from
that relationship uh and so at this
point in time with the um retailers
requiring more support with retailers
requiring access to credit with
retailers requiring to work more closely
with with manufacturers uh it’s it’s a
perfect time uh for the B2B uh
e-commerce players to to to you know to
to to to to play in the market it’s it’s
it’s it’s a great time all right talk to
me about um the climate you know some
afcan countries as a business climate
we’ve seen you know some e-commerce
platforms you know exit uh Nigeria you
know a couple of years now but what do
you think you know is a problem why why
are they not you know able to scale you
know in some countries in Africa so so
so look it’s it’s basically about the
business model you you you you operate
with um so the different players have
come into the space operating in
different ways uh some players have been
very um asset heavy you know coming into
the space buying Vans um you know
renting warehouses and B basically um
you know spending a lot of money um our
approach has been a bit different we’ve
been very asset liked uh and the reason
why is the retail space itself is a low
margin space and it’s you’ve got to
build your business in a manner in a way
that um you are able to partner and take
advantage of the existing players so we
call ourselves a network of networks um
because we you know whether it be
warehousing or it be last mile delivery
or even in lending because we do do that
even in lending to retailers to um buy
more products we partner with
established uh Banks uh dfis we partner
with established uh with people who want
to do who have Vans want to do
deliveries we partner with people who
have um you know warehousing space and
are looking to plug into our ecosystem
to generate value for themselves and so
I think that is that’s really what’s
been happening you know prior like a
year ago when there was a lot of capital
chasing um opportunities um you could um
you could afford to be not as efficient
um and so what has happened is is a lot
of the players who have exited um
because of their model we’re not as
capital efficient as you know when with
when when the external environment
changed and so that’s I think is really
the reason why but for us we’ve been
profitable since uh I think end of last
year like November so we think our model
makes sense we think it’s the right one
for for Africa if you can if you can do
this in N I think you can do it anywhere
in continent right quite interesting
less Capital chasing opportunities at
this time thank you so much it was great
having you share your thoughts here as W
ad chief operations officer at Omni
retail thank you so much thank you very
much l it was it was it was uh a
pleasure to be here thank you all right
now let’s um head straight to other
markets now’s get a sense of what’s
happening in the crypto Market we did
see Bitcoin you know trying to get back
up to levels I seen before but now we’re
seeing $
66,1 188 and that’s for bit coin some
green on the screen at this time but
it’s mostly red uh right now we see ton
there deep in red Solana still in green
um territory so um most of those uh
cryptocurrencies that we saw you know
give up some of that profit we’re seeing
them you know try to inch back up you
know at this time um let’s get to our
first uh conversation um now we have FEI
um Adu now he’s a CEO uh founder of
bechain Africa joining me via Zoom great
to have you on the show
thank you very much l how you doing
today I’m doing great um we’re seeing uh
most you know countries at this time
know struggle when it comes to you know
the currency market we’ve seen Zimbabwe
coming up with gold back you know
currency we’ve seen Nigeria we’ve seen
The Nair actually you know appreciate at
this time but we’ve seen um some
cryptocurrency exchanges being blamed
for um speculation you know against most
of the currencies so how do you balance
this yeah are the cryptocurrency
exchanges really the
problem um definitely not the problem
right um a lot of the crypto exchanges
are just service providers they are
providing a platform for people to do
business exchange their cryptocurrencies
or Bitcoin and usdt for for naira and
this doesn’t just happen in in Nigeria
alone because you know um for example
binance that has really been taking the
Heats operates in a lot of countries
hundreds of countries around the world
so Nigeria is just one of them and they
have a large user base in Nigeria but um
I think that
it’s actually a misplaced priority
trying to blame a particular company for
the downfall of our naira you know
Nigeria is actually an import driven
economy right 0% of the things we use in
Nigeria imported so if we’re going to
blame binance then there’s no basis that
to which why the executives are going to
be detained um for me that is um um
being to ignorance that’s what I’m going
to say being to ignorant I think that
the government should look out for how
binance and all those crypto exchanges
should register in Nigeria and create
jobs you know and of course they can tax
these companies I think that’s actually
a smart way to handle these issues if
the naira is devaluing of course it
means that our Imports are far greater
than our exports thank you all right but
but at this time we do know you know
regulation is a major problem when it
comes to you know cryptocurrency market
and most of these exchanges we know some
of them do not um play you know
according to uh the rules you know some
of them you know most of the platforms
are being used for illegal
you know purposes at this time but what
kind of Regulation do you think we
should be exploring you know right now
when it comes to you know this crypto
exchanges okay like see bance is already
start in the US um I think it’s also reg
start in some other countries as well
but I don’t think there is anything like
binance Nigeria limited or anything at
all you know so the first thing to
regulate a particular Market is to make
sure that there are proper registrations
with the corporate Affairs commission
that is step one then when you reg start
here they should have face office here
right so that if there’s any discrepancy
between the government and the private
you know sector they can have some
deliberations and everything can be
trashed out immediately I don’t think
the approach used by the government to
track down and clamp down all crypto
exchange exactly the problem because you
can see today the naira is actually
going back to almost 1,300 naira so it
is not you know the the blames being
passed upon the crypto exchanges I think
the policy makers especially the
coordinating minister of the economy Mr
W Ed needs to look out for a um a
scenario where by we can have you know
discussions you know with this private
sector players you know sometimes it is
not because the even the platform knows
about some of all these bad deals right
but whatever happens Nigerians are still
going to use cryptocurrency whether they
like it or not right it has come to stay
so the government has to look at ways
whereby they can come to sit down with
the private sector players and the
service providers and say okay yeah we
want to regulate this particular
environment now can we have a particular
dialogue and see how we can you know
move this forward rather than trying to
clam down I think Nigeria can easily
make more money from profits um taxing
this companies I’m telling to leave the
country all right I’m talking about the
Nira we’ve seen the Central Bank
intervening at this time selling to BC’s
about 1,21 n so I guess markets might be
expecting the N to strengthen you know
at this side but thank you so much thank
youu CEO founder bjain Africa thank you
so much that’s a time we have right now
all right that’s the show today remember
you can visit Channel tv.com for more
updates I’m L Williams from mini team
right here channels HQ it’s bye for now
[Music]

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