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FG spent $1.68bn on food imports in nine months – CBN

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The Federal Government spent $1.68bn on food importation from January to September last year.

The Central Bank of Nigeria (CBN) disclosed this in a report on sectoral utilisation of foreign exchange for the third quarter of 2021.

According to the CBN, the government spent $163.60m, $197.73m, and $171.05m in January, February and March, respectively, while $156.30m, $135.72m and $213.58m were spent in April May and June, respectively.

The report revealed that $184.69m, 188.88m and 271.59m were spent in July, August and September, respectively.

During the Bankers’ Committee retreat in Lagos recently, the Governor of the Central Bank of Nigeria, Godwin Emefiele, said Nigeria could produce enough to feed its citizens.

He said the government was ensuring the diversification of the economy.

Emefiele said, “We believe that Nigeria can feed itself; Nigeria can produce what to eat. Everything needs to be done for us to move away from a situation where everything is imported.

“We need to get to a stage where we bring our manufacturing industries back to life again. For us to say that there is sustainable, inclusive growth in the country, we, as banks, working with government must do everything possible to diversify the Nigerian economy.

“We have to do everything possible to reduce the rate of unemployment in the country. We will do everything possible to reduce the rate of poverty in our country.”

According to him, if the country is able to diversify the economy, reduce unemployment and poverty, the level of insecurity in the country will reduce.

Emefiele said the banks had done a lot to support the economy and would still do more to catalyse the economy for growth.

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He said the banks would increase credit to the economy.

The CBN governor noted that there were companies that were ready to conduct credible business but did not have the capital.

“We will help in providing jobs and employment for Nigeria,” he said.

Emefiele said the CBN recently unveiled the ‘100 for 100’ policy on production and productivity to engender growth and employment.

According to him, under the programme, targeted credit of up to N5bn will be provided to 100 firms every 100 days, provided the firms are investing in greenfield projects.

He said the projects would be assessed based on their ability to generate significant employment opportunities in critical sectors for the economy, adding that eligible firms would be made to show evidence of their efforts to harness available local raw materials towards the realisation of their intended investment.

The CBN governor said the bank remained committed to supporting eligible firms with foreign exchange to import machinery and equipment.

He noted that routine audits would be conducted on firms that receive funding, to ensure that they are complying with the terms of the programme.

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BUSINESS

5G Deployment: Nigeria approves Microsoft’s agreement, migration of C-Band services

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The federal government has approved an Enterprise Licensing Agreement for Microsoft products and the clearing up of C-Band Spectrum in order to accelerate the deployment of 5G services in the country.

In a statement, the Ministry of Communications and Digital Economy, on Thursday, said the approval was given during the meeting of the Federal Executive Council (FEC) last Wednesday.

This agreement is part of the federal government’s effort towards keeping the cost of IT projects within sustainable levels, the statement, signed by the Technical Assistant to Pantami, Dr Femi Adeluyi, revealed.

He said the agreement would give the government access to discounted prices and other cost benefits, as well as reduce project duplication across Federal Public Institutions (FPIs).

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Bitcoin posts its worst quarter in more than a decade

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Bitcoin on Thursday posted its worst quarterly loss in more than a decade.

The world’s largest cryptocurrency has lost around 58% of its value in the second quarter of 2022, according to data from CryptoCompare. Bitcoin has fallen from $45,524 at the start of the quarter and was trading just below $19,000 on Thursday, the last day of the three-month period.

This is the worst quarterly performance for bitcoin since the third quarter of 2011 when it lost 68.2% of its value.

Bitcoin is down 39.8% in June and is on pace for the worst month ever dating back to 2010 when it became available on exchanges, Coin Metrics data shows.

Meanwhile, ether is down 69.3% in the second quarter and is on track for its worst quarter on record, dating back to its inception in 2015, according to Coin Metrics data.

Coin collapse, 3AC liquidation
Cryptocurrency prices have come under intense pressure this quarter amid rampant inflation which has caused central banks around the world to raise interest rates and led to a sell-off in risk assets, such as stocks and digital coins.

The crash in prices has also exposed issues with a several cryptocurrency companies and projects, particularly those in the lending space and firms that are highly leveraged.

A number of high profile issues have come to light during the quarter.

In May, the algorithmic stablecoin terraUSD collapsed along with its sister token luna. A stablecoin is a digital currency pegged to a real-world asset. TerraUSD was supposed to be pegged one-to-one with the U.S. dollar. Some stablecoins such as tether are backed by real assets like fiat currencies and government bonds. But terraUSD was governed by an algorithm which effectively failed.

Then In June, crypto lending firm Celsius paused withdrawals for its customers citing “extreme market conditions.”

Meanwhile, cryptocurrency exchange CoinFlex halted withdrawals for customers last week also citing “extreme market conditions.” But the company also claimed long-time crypto investor Roger Ver owes it $47 million after his account went into “negative equity.” Ver has denied that he owes CoinFlex money.

And the liquidity crisis has also hit prominent crypto hedge fund Three Arrows Capital which has fallen into liquidation, CNBC reported on Wednesday.

The latest downturn is being described as a new “crypto winter” and has also impacted growth and hiring at companies. Coinbase and BlockFi announced plans to lay off staff.

How does this cycle compare to the past?
Jacob Joseph, research analyst at CryptoCompare, notes that in the previous boom and bust cycle, bitcoin fell from a peak of $19,871 in the fourth quarter of 2017 to a low of $3,170 in the fourth quarter of 2018, suffering a drawdown of 8%.

Joseph said a similar fall of 82.2% was seen in 2014 when bitcoin fell from a high of $1,239 in the fourth quarter of 2013 to a low of $221 in the second quarter of 2015.

“This suggests that we could be in for a further drawdown period if the current poor macroeconomic conditions continue to persist,” Joseph told CNBC.

Other investors have expressed bearishness. In May, Guggenheim Chief Investment Officer Scott Minerd, said bitcoin could drop to $8,000. At the time, the cryptocurrency was trading at around $30,000, representing a 70% fall.

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European markets set to retreat as caution persists after worst quarter since 2020

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European markets are set to pull back on Friday after suffering their worst quarter since the onset of the Covid-19 pandemic, as inflation and interest rate hikes continue to weigh on sentiment.

Britain’s FTSE 100 is seen around 38 points lower at 7,131, Germany’s DAX is set to fall by around 123 points to 12,661 and France’s CAC 40 is expected to drop by around 54 points to 5,869.

The pan-European Stoxx 600 index closed the second quarter of the year on Thursday down 9% — the worst three-month period since the early stages of the pandemic in 2020 — and was down 16.6% year-to-date.

Global market sentiment remains gloomy as the war in Ukraine shows no sign of abating and inflationary pressures continue to mount, prompting central banks to embark on aggressive monetary policy tightening and exacerbating fears of a global economic slowdown.

Shares in Asia-Pacific were lower overnight with Japan’s Nikkei 225 leading losses in the region, after the Bank of Japan’s quarterly business sentiment survey posted a sharp decline in the April-June period.

However, China’s manufacturing activity expanded at its sharpest rate for 13 months in June, boosted by resurgent output after the easing of Covid-19 lockdown measures.

U.S. stock futures also retreated in early premarket trade after the S&P 500 closed out its worst first-half performance since 1970, dropping 20.6% year-to-date by Thursday’s close.

Back in Europe, Reuters reported Thursday that the European Central Bank will on Friday begin a process of buying bonds from southern European nations, including Italy, Spain, Portugal and Greece. The ECB will reportedly use the proceeds from maturing German, French and Dutch debt, in a bid to cap spreads between their respective borrowing costs.

On the data front, a flash euro zone June inflation reading is due Friday morning, along with manufacturing PMIs from Germany, France, Italy and Spain.

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