Transactions across various electronic payment channels rose marginally by 0.38 per cent to N21.27 trillion in May 2021, up from the N21.19 trillion recorded in April 2021.
Managing Director, Financial Derivatives Company Limited and a member of President Buhari’s Economic Advisory Council, Mr. Bismarck Rewane, gave the figure in a report titled: “Economic Policy: More Clarity and Less Ambivalence,” which he presented at the Lagos Business School’s executive breakfast session at the weekend.
The report showed that the value of transactions was flat due to the slow level of economic activities recorded last month.
It showed that while point of sales (PoS) transactions declined marginally to N503.96 billion in May, down from N507.86 billion the previous month; transactions via NIBSS Instant Payment climbed to N21.246 trillion, as against N21.191 trillion recorded the previous month.
According to the report, May was a month of mixed economic data as Nigeria’s first quarter (Q1) 2021 Gross Domestic Product grew 0.5 per cent (1.36% below Q1 2020).
It stated that the Q1 2021 data confirmed a slow growth and fragile economy, even as inflation showed a slight moderation to 18.12 per cent with food inflation down to 22.72 per cent.
Growth was not as broadly inclusive as policymakers expected, it stated.
It said the Central Bank of Nigeria (CBN) had adopted the NAFEX rate on its website, suggesting it is now the official rate. The development was an indication of a move towards convergence, it said.
“Forex transactions now strictly system-generated- not on mobile phones. This is a more transparent price discovery and settlement system,” it added.
The parallel market rate fell sharply to N501 to a dollar at the weekend.
This, the report attributed to panic buying, speculative trading, forex rationing, and front-loading of demand.
“Naira is approaching its fair value as multiple exchange rates converge. At N410.75/$ the currency is overvalued by 19.30 per cent. Convergence around the Investors and Exporters’ forex rate is expected to continue, to further reduce the parallel market premium
“Parallel market rate will oscillate between N470/$ N490/$ in July and the CBN is to adopt a crawling peg strategy in the third quarter of 2021.
“The Naira-4-Dollar promo is going to have a muted impact on external reserves in the near term and the CBN will continue to clear its forex demand backlog to foreign portfolio investors,” it added.
Also, it predicted that gross external reserves would likely fall to $32 billion, adding that a higher oil price ($70pb) will buoy the naira and reserves.
Additionally, it anticipated that headline inflation might increase in May as insecurity continues to disrupt the commodities supply chain.
The report estimated that treasury bills and interbank interest rates would continue to rise in June, as the 364-day Treasury bill rates were fast approaching 12 per cent per annum.
Commenting on recent development in the cryptocurrency market, it stated that there were mixed views on the desirability of the digital trading instrument.
“Conservatives describe cryptocurrency as worthless and a movement from rat poison square to delusion. The less risk-averse investors think the time of cryptocurrency has come and Nigerian crypto investors are mainly speculators and looking to bypass exchange rate control regulations,” it added.
According to the report, the global value of the total cryptocurrency market is over $2 trillion, up from $260 billion a year ago. It estimated that the value of Bitcoin in Nigeria is $200 million, stating that the downside risk of cryptocurrency is high volatility
The market is currently driven by sentiment and momentum, it noted, adding that a tweet by Elon Musk sent a bearish signal, crashing the price of Bitcoin recently.
This, it stated, raised concerns about cryptocurrency as a store of value, adding that China, just like Nigeria, has banned its financial institutions from facilitating crypto exchange.
In Africa, it projected that inflation in the continent would average 8.1 per cent in 2021, noting that inflation increased in three countries and reduced in three others.
The 2021 GDP growth rate, according to the International Monetary Fund, is estimated at 2.5 per cent, with an average growth of 3.16 per cent expected over the next three quarters
“Real GDP growth – directionally positive but nominally insignificant. It is sub-optimal to have a significant impact on poverty and unemployment levels,” it added.
UAE makes U-turn, reinstates ban on Nigerian flights
Less that 48 hours after announcing resumption of flights to Nigeria, Emirates, the UAE flag carrier, has again announced indefinite suspension of flights to Nigeria.
The UAE authorities had initially fixed Wednesday, June 23, 2021, for resumption of flights to Nigeria.
But in a statement on its website on Monday, the airline said, “In line with government directives, passenger flights to and from Nigeria (Lagos and Abuja) are suspended with effect from 21 June 2021 until further notice.”
The airline had on Saturday announced resumption of flights, which were suspended in March over diplomatic row on COVID-19 protocols.
The Dubai’s Supreme Committee of Crisis and Disaster Management had lifted the ban on Nigeria and also removed the rapid antigen test and said passengers from Nigeria would only be required to possess negative PCR test.
“We look forward to facilitating travel from these countries and supporting various travelers’ categories.
“We will resume carrying passengers from South Africa, Nigeria and India in accordance with these protocols from 23rd June,” Emirates had announced.
But it made U-turn on Monday with a new travel update indicating that Lagos and Abuja flights would no longer resume on Wednesday as earlier announced.
Emirates said, “Customers travelling to and from Lagos and Abuja will not be accepted for travel. Customers who have been to or connected through Nigeria in the last 14 days are not permitted to board from any other point to the UAE.
“We regret the inconvenience caused, and affected customers should contact their booking agent or Emirates call centre for rebooking. Emirates remains committed to Nigeria, and we look forward to resuming passenger services when conditions allow.”
CAC boss denies N6.54bn fraud allegation
The Corporate Affairs Commission (CAC) has denied claims of alleged N6.542 billion fraud and other allegations by the Nigeria Labour Congress (NLC).
The Registrar General/Chief Executive, Corporate Affairs Commission (CAC), Alhaji Garba Abubakar, has expressed the commission’s commitment to the anti-corruption war of the President Muhammadu Buhari’s administration, adding that it will not in any way be party to corrupt practices.
He said the CAC would continue to work hard to achieve the objectives for which it was established to the satisfaction of its customers and stakeholders.
Abubakar spoke against the backdrop of alleged abuse of power and financial impropriety among others leveled against the management by the CAC staff union under the aegis of the Amalgamated Union of Public Corporation , Civil Service Technical and Recreational Services Employees (AUPCTRE).
He vowed that the commission would not be distracted by mischief makers bent on running down the organisation.
The commission in a statement said contrary to the claims by the union, the registrar-general had declared his assets before the Code of Conduct Bureau (CCB) in accordance with provisions of the laws of the land, pointing out that it was laughable that the claimants were raising doubt over the content of asset declaration they are not privy to. “It behooves on them to establish any case of wrong declaration,” it stated.
On the alleged inflation of consultancy fees for tax reconciliation, the commission in a statement issued over the weekend by the Director of Public Affairs, CAC, Duke Ukaga, said the tax consultant was engaged long before the appointment of Abubakar, adding that the former’s fees was based on the percentage of savings made to the commission as contained in his engagement letter.
The commission said the consultant was able to renegotiate the commission’s tax liability, saving about N600 million in the process.
The commission, among other things, denied accusations of abuse of power, financial impropriety and commercialisation of promotion examination in the commission.
According to it, “The 2019 examination was held on October 10, 2020, at JAMB CBT Centres in Abuja, Kano and Lagos. A total of 394 staff members sat for the 2019 promotion examination.
“The result of the examination was published the same day at the commission’s website upon receipt from JAMB.
“At the end of the final collation, a total of 258 candidates were successful and promotion letters were issued to the staff upon approval by the board of the commission. It is highly mischievous for anybody to claim that the process was commercialised.”
The management further clarified that the allegations are “figment of imagination of the AUPCTRE who could still not accept the reality of losing checkup dues of over N2 million monthly from the commission following the stoppage of checkup dues deduction in respect of senior staff.”
Nigeria’s economy recovering from COVID-19 impact – IMF
International Monetary Fund (IMF) has announced that Nigeria’s economy is gradually recovering from the negative impact of COVID-19.
This is as it cautioned the federal government to keep reliance on CBN overdrafts for deficit financing within legal limits.
The Fund also urged the government continue to make efforts to strengthen budget planning and public finance management practices to allow for flexible financing
The IMF, in a statement at the end of its virtual meetings with the Nigerian authorities to discuss recent economic, financial developments and outlook, described the recent removal of the official exchange rate from the Central Bank of Nigeria (CBN) website as “encouraging”.
IMF mission, however, noted that both unemployment and inflation rates remain elevated.
The mission said following the sharp output contractions in the second and third quarters, gross domestic product (GDP) turned positive in Q4 2020 and growth reached 0.5 per cent year-on-year in Q1 2021 — supported by agriculture and services sectors.
“Nevertheless, the employment level continues to fall dramatically and, together with other socio-economic indicators, is far below pre-pandemic levels. Inflation slightly decelerated in May but remained elevated at 17.9 per cent, owing to high food price inflation,” the statement reads.
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