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Nigerian entrepreneur, Joel Popoola, chosen to improve UK-Africa trade

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A Nigerian tech entrepreneur, Joel Popoola, has been selected to head up a task force aiming to improve trading ties between Africa and the United Kingdom.

Popoola, a digital democracy campaigner and creator of the Rate Your Leader app, is to lead a Special Interest Group for Africa established by the UK’s Institute of Directors – one of the world’s oldest and most prestigious business leader groups

Institute of Directors Africa Special Interest Group (IoD Africa SIG) will stimulate business opportunities, increase networking, and grow awareness of British businesses in Africa – and African businesses in Britain.

A launch event of the IoD Africa SIG is to be held in London on 19 May 2022 with all African diplomatic missions – and some heads of state – expected to attend.

Prior to the launch, a series of bi-monthly online roundtables will be held to discuss post-Covid and Brexit business opportunities for UK and African businesses.

The UK government has already negotiated eight free trade agreements with African countries and trading blocs since Brexit, creating tariff and duty-free trade between Britain and 30 African nations – this means significant opportunities for African consumers and companies, not least in the continent’s 24 Anglophone countries.

Britain currently has free trade agreements with Cameroon, Côte d’Ivoire, the Eastern and Southern African trade bloc (Mauritius, Seychelles and Zimbabwe), Egypt, Ghana, Morocco, Southern African Customs Union (Botswana, Eswatini, Lesotho, Namibia and South Africa), Mozambique, and Tunisia.

Popoola said: “One UK parliamentary report recently noted that UK-Africa trade has ‘flat-lined’ and accounts for just 2.5 per cent of all UK trade. But before Covid-19 the world’s five fastest-growing economies were all African, and regional leaders like South Africa and Nigeria are likely to become superpowers of the global economy as we move towards the second half of this century. More needs to be done on both sides to take advantage of the opportunities on offer.

“As one of the World’s most influential and established business leader forums – with royal endorsement dating back to 1906 – the Institute of Directors is the ideal forum to develop opportunities for UK-based firms who want to establish and grow new businesses in Africa and vice versa.

“As a proud African, and on a personal note, I hope the establishment of this Special Interest Group come to be seen as an important step to a free trade agreement between my nation, Nigeria, and the United Kingdom.”

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BUSINESS

Bitcoin falls 4% to near $35,000 mark

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Bitcoin dropped again on Saturday and was last down around 4 per cent for the day, hovering around the $35,000 level.

Bitcoin, the world’s biggest and best-known cryptocurrency, is now about half its $69,000 peak in November. It was last at $35,049, after falling as low as $34,000 and following a steep fall on Friday.

The currency has had wild price swings and has been hit as risk appetite has fallen on inflation fears and anticipation of a more aggressive pace of interest rate hikes from the U.S. Federal Reserve.

Other risk assets have fallen with stocks falling on Friday. The S&P 500 and Nasdaq recorded their biggest weekly percentage drops since the start of the pandemic in March 2020.

In a research note on Friday, Edward Moya, senior market analyst for the Americas at OANDA, said bitcoin was falling as “crypto traders de-risk portfolios following the bloodbath in stocks” and in advance of next week’s Federal Reserve policy meeting.

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Intel to invest $20 billion in U.S. chip-making facility

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Intel Corp said on Friday it would invest up to $100 billion to build potentially the world’s largest chip-making complex in Ohio, looking to boost capacity as a global shortage of semiconductors affects everything from smartphones to cars.

The move is part of Chief Executive Officer Pat Gelsinger’s strategy to restore Intel’s dominance in chip making and reduce America’s reliance on Asian manufacturing hubs, which have a tight hold on the market.

An initial $20 billion investment – the largest in Ohio’s history – on a 1,000-acre site in New Albany will create 3,000 jobs, Gelsinger said. That could grow to $100 billion with eight total fabrication plants and would be the largest investment on record in Ohio, he told Reuters.

Dubbed the silicon heartland, it could become “the largest semiconductor manufacturing location on the planet,” he said.

While chipmakers are scrambling to boost output, Intel’s plans for new factories will not alleviate the current supply crunch, because such complexes take years to build.

Gelsinger reiterated on Friday he expected the chip shortages to persist into 2023.

To dramatically increase chip production in the United States, the Biden administration aims to persuade Congress to approve $52 billion in subsidy funding. read more

U.S. House Speaker Nancy Pelosi said on Friday the House of Representatives would soon introduce a bill on competitiveness to help bolster semiconductor investment and supply chains. That would include the $52 billion funding.

U.S. President Joe Biden touted Intel’s investment on Friday at a White House event with Gelsinger and again made the case for congressional action.

“China is doing everything it can to take over the global market so they can try to out compete the rest of us,” Biden said.

U.S. Commerce Secretary Gina Raimondo said at the event the current semiconductor supply chain is “far too dependent on conditions and countries halfway around the world.”

Gelsinger said without government funding “we’re still going to start the Ohio site. It’s just not going to happen as fast and it’s not going to grow as big as quickly.”

THE CHIP FEAST AND FAMINE

Intel ceded the No. 1 semiconductor vendor spot to Samsung Electronics Co Ltd (005930.KS) in 2021, dropping to second with growth of just 0.5%, the lowest rate in the top 25, data from Gartner showed.

As part of its turnaround plan to become a major manufacturer of chips for outside customers, Intel broke ground on two factories in Arizona in September. The $20 billion plants will bring the total number of Intel factories at its campus in the Phoenix suburb of Chandler to six. read more

Gelsinger told Reuters he still hoped to announce another major manufacturing site in Europe in coming months.

It is not just Intel ramping up investments. Rivals Samsung Electronics and Taiwan Semiconductor Manufacturing Co or TSMC also have announced big investment plans in the U.S. And that’s raising questions about a glut in chips going forward.

“We still have years in front of us before we’re even having a semblance of supply demand balance,” said Gelsinger. “Ask yourself what portion of your life is not becoming more digital.”

“Yes, the industry is growing, and maybe the metaverse solves world hunger for the semiconductor industry. But there is a big bubble coming,” said Alan Priestley, an analyst at Gartner.

U.S.-CHINA TECH WAR

The U.S. build up comes as a tech war between the U.S. and China is causing a decoupling of certain technologies, such as chips. Companies looking to sell technologies to China are considering basing outside of the U.S. to avoid being snagged by U.S. export control rules. China is also investing heavily in its semiconductor manufacturing capacity.

While Gelsinger also touted the security and economic benefits of boosting U.S. chip production on Friday, Bloomberg reported in November that the Biden administration pushed back against a prior plan by the company to boost silicon wafer production in China over national security concerns.

Intel has drawn fire for its decision to delete references to Xinjiang from an annual letter to suppliers after the chipmaker faced a backlash in China for asking suppliers to avoid the sanctions-hit region.

When asked about it in a briefing last month, White House press secretary Jen Psaki said she could not comment on the company specifically, but said “American companies should never feel the need to apologize for standing up for fundamental human rights or opposing repression,” reiterating a call to industry to ensure that they are not sourcing products that involve forced labor from Xinjiang and urging companies to oppose China’s “weaponizing of its markets to stifle support for human rights.”

Intel’s Ohio investment is expected to attract partners and suppliers. Air Products (APD.N), Applied Materials (AMAT.O), LAM Research (LRCX.O) and Ultra Clean Technology have shown interest in establishing a presence in the region, Intel said.

Construction of the first two factories is expected to begin late in 2022 and production in 2025.

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Nigeria attracts $31.82bn from United States, five others in 33 months

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Capital inflows from the United Kingdom, the United States, South Africa, the United Arab Emirates, the Netherlands, and Mauritius hit $31.82bn in three years, according to data from the National Bureau of Statistics.

The NBS data showed that the six countries accounted for 83.32 per cent of the total capital of $38.18bn imported into Nigeria from over 100 countries from January 2019 to September 2021.

The UK accounted for the highest foreign inflow of $17.34bn, followed by the US ($5.79bn), South Africa ($3.99bn), UAE ($1.80bn), Netherlands ($1.68bn), and Mauritius ($1.09bn).

According to the NBS, capital importation data is obtained from the Central Bank of Nigeria and includes imported physical capital, such as equipment, and financial capital importation.

It added that capital importation comprises three main investment categories, namely foreign direct investment, foreign portfolio investment, and other investments.

It said FDI includes equity and other capital, while FPI includes equity, bonds, and money market instruments; ‘other investments’ include trade credits, loans, currency deposits, and other claims.

In 2019, Capital inflow from the six countries declined from $20.09bn in 2019 to $7.94bn in 2020. It stood at $3.78bn in the nine months to September 2021.

The Managing Director, Cowry Asset Management, Johnson Chukwu, attributed the drop in capital importation to the fall in FPI.

According to him, portfolio investors are probably discouraged to invest in the Nigerian market due to foreign exchange illiquidity.

He said, “The decline in capital importation has been consistent for the past three years, if you look at the data.

“In terms of portfolio investment, which is the major component, I think the issue is that foreign portfolio investors have likely stayed away from the Nigerian market because of foreign exchange illiquidity, as some of the funds that are trapped are yet to be accessed.”

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