Naira appreciates as Buhari pledges zero tolerance for corruption

DigitalSENSE Business News

  

The president-elect in the just concluded 2015presidentialelection in Nigeria, General Muhammadu Buhari (retired) has said that there will be zero tolerance for corruption as far as his administration will be concerned, that the evil of corruption is worse than the evil of Boko Haram terrorism even as Naira began an upward climb.

Investigations by DigitalSENSE Business News indicated that in December of 20­14, long before the controversial postponement of the 2015 elections on the 7th of February 2015, the International Monetary Fund (IMF) had already forecasted the slow growth rate of the Nigerian economy to about 5 per cent. This, the IMF said, would be due to falling oil prices, which would invariably cut revenues, spending and the effect of capital outflows.

Global rating agency Fitch Ratings more or less sounded out the same forecast when it reviewed Nigeria’s growth (or, rather, a decline) forecast from 6.4per cent to 5.2 per cent. Seemingly working with the Fitch numbers, Nigeria’s Ministry of Finance also did a downward review of the country’s growth forecast from 6.4 per cent to 5.5per cent. While oil accounts for some 15per cent of Nigeria’s Africa topping GDP, it makes up as much as 80per cent of government’s revenues. The bulk of the projections was based on the falling oil prices. One factor that was later taken into consideration in all of these was that Nigeria had become an unpredictable political climate. This was not helped by the February postponement of the elections.

According to Mr. Norbert Bielderman, Managing Director of the Nigerian Aviation Handling Company (NAHCO),DigitalSENSE Business News gathered,estimated the worth of the postponement at over $2bn “as cost and investor loss of confidence for existing and new foreign direct investment that may have found its destination to other countries.” In today’s naira terms, that is a loss of about N420 billion.

Indeed, when the U.S. Secretary of State, Senator John Kerry saidpolitical interference with the Independent National Electoral Commission was unacceptable the international community watched closely as the Nigerian government prepared for elections on the newly scheduled dates. He was indirectly informing the business community about Nigeria’s “politicalfluidity” while also warning the Nigerian government about direct consequences in case of another postponement.

Another plot was the rumour that the President intended to remove the chairman of INEC, Prof. Attahiru Jega. Ekiti governor, Ayodele Fayose, was spearheading the move even as his party, the PDP, said the governor was acting on his own. The President also said he had no plans to remove Jega.

This apparent political uncertainty was the reason why “after the elections” seemed to be the most popular phrase in Nigeria then. Public and private organisations were withholding their resources both for new and older projects, wanting to see what happens “during” and “after” the elections. Everyone was waiting for the elections to be over before making major moves in Nigeria.

Investors’ confidence in Nigeria was understandably not at its highest right then. One would not need rating agencies to know that further “political interference” in the electoral process would strike another blow at investors’ interest, with Nigeria’s growth numbers further taking a plunge. The economic cost would be unprecedented. The political cost would be devastating.

And now the great turnaround as the election took place in an atmosphere of freedom with the president conceding defeat."I thank all Nigerians once again for the great opportunity I was given to lead this country, and assure you that I will continue to do my best at the helm of national affairs until the end of my tenure," Jonathan said."I promised the country free and fair elections. I have kept my word."

DigitalSENSE Business Newsgathered that the peaceful election was certainly the game changer following the announcement of the president-elect on Wednesday. The NSE All-Share Index went up by 2,635.32 basis points or 8.30 per cent from 34,380.14 to 31,744.82 basis points. Similarly, the market capitalisation of the listed equities appreciated by N903 billion from N11.621 trillion to N10.718 trillion. Market breadth remained positive with 65 gainers and three losers.

Operators in the Nigerian financial market were optimistic that, the market would bounce back with a comfortable lead by Gen Buhari, a disciplinarian that has promised to reshape the national economy as they set agenda for a new economy by the incoming government.

While it was business as usual at the money market and the interbank end of the foreign exchange market, the value of the Naira got a boost at the black market where it sold between N209 and 210 to a dollar.

A black market currency dealer said that the value of the Naira had been on an upward swing since Tuesday when signs that Gen Buhari would win at the polls emerged. “I however cannot say if the election results is the one affecting the dollar or something else, but I just know that dollar has been falling”, he stated.

The Nigerian capital market gained 8.30 per cent its single biggest daily gain this year, wiping off the negative Year to Date (YTD) performance, after the INEC declaration. In the first quarter, the capital market indicators lost 8.40 per cent as a result of the uncertainty surrounding election and poor macro-economic factors. Market capitalisation of the listed equities under the period went down by N76 billion to close at N10.718 trillion, while the NSE All-Share Index fell by 8.40 per cent to close at 31,744.82 on March 31,

Capital market analysts said the one day gain is the highest that has ever been witnessed in the history of the Nigerian stock market. Analysts at APT Securities and Funds Limited, stated that “we believe that positive rally of the situation is attributable to the peaceful conduct of the Presidential election and the Statesmanship of the incumbent President in accepting defeat and congratulating the President-elect, General Muhammadu Buhari. This has to a great extent assuaged the fears of foreign investors about the capital market as they are taking position by snapping up shares across the board.”

Buhari, 72, will be sworn in on May 29. He will take the helm at a critical time, as Nigeria grapples with the violent militant group Boko Haram, serious economic woes and corruption.
Analysts and investors who expected Nigeria’s presidential election to erupt in chaos are celebrating the peaceful victory of opposition leader Muhammadu Buhari and the excitement is evident in the country’s stock market.

“Financial markets have welcomed the result,” wrote Capital Economics Africa analyst John Ashbourne in a note Tuesday, adding that as poll results continued to roll in from around the country on Monday, the Nigeria All Share Index gained 2.1 percent and the yield on Nigeria’s 2021 eurobond fell by almost 20 basis points, its lowest level this year.

Until now, investors had been particularly wary of the outlook for Nigeria — Africa’s largest economy and the world’s No. 4 oil producer, fueled by crude reserves in the Niger Delta. But global benchmark oil prices have fallen more than 50 percent in recent months, taking Nigeria’s currency with them and leaving a gaping hole in government revenues. The World Bank recently revised its prediction for the country’s economic growth in 2015 down from 6.3 percent to 5.5 per cent.
The All Share Index was down last month and the country's currency, the Naira, took a record tumble in the run-up to election. Many observers expected increased anxiety at a time of increasing security concerns related to Boko Haram violence in the northeast.

However, this weekend's election process was peaceful, despite a handful of protest and 41 deaths due to Boko Haram attacks. It was a vast improvement over the 2011 election, which led to violence that killed at least 800 people.

While Buhari is still an unknown quantity in terms of his fiscal and monetary strategy, many Nigerians are optimistic about his anti-corruption promises and are eager to move on from policies favoured by the incumbent Jonathan. Stocks in competing countries such as South Africa and Kenya gained roughly 90 percent since 2010, when Nigeria’s gain was just 11 percent under Jonathan’s leadership.

Most important to Nigerians is that Naira appreciated during the first week of April and their prayers is that that growth is sustained to make life better for Nigerian investors.

Cyriacus Nnaji/GEE

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Pix: INEC Chairman, Prof. Attahiru Jega

Working against tide of global warming

NaijaAgroNet 

As we enter the last month of the first quarter of 2015, an alarm was recently raised by scientists from the United Nations-affiliated Intergovernmental Panel on Climate Change (IPCC) over the anticipated effect of climate change in the East African region of the continent.

IPCC counseled that an estimated millions of people in East African nations should be ready for intense weather events-related as a result of climate change.

Defined as a whether due to natural variability or as a result of human activity, climate change to some experts means any change in climate over time, which could be ascribed to a change of climate either directly or indirectly to human activity but alters the composition of the global atmosphere with an increase in natural climate variability observed over comparable period of time, according to 2001 impacts, adaptation and vulnerability Working Group II to the third assessment report of IPCC.

But experts at New Mexico Solar Energy Association (NMSEA) pointed out that global warming is the increase of earth's average surface temperature due to effect of greenhouse gases, such as carbon dioxide emissions from burning fossil fuels or from deforestation, which trap heat that would otherwise escape from earth.

Global warming, NaijaAgroNet reports, will have catastrophic effects such as accelerating sea level rise, droughts, floods, storms and heat waves, which invariably impacts on some of the world's poorest and most vulnerable people, disrupting food production, and threatening essential important species, habitats and ecosystems.

IPCC experts, NaijaAgroNet reports equally said that global warming is no longer an issue of argument because since the 1950s a lot of the observed changes have been dramatic.

An official representing the director, Inter-Governmental Authority on Development (IGAD) Climate Prediction and Applications Center (ICPAC), Guled Artan said the challenges on east Africa due to climate change are grave.

“The problem in East Africa is serious. When there’s rain, the rain will be more intense, so there will be floods. The dry spells will be wider, so there will be more droughts. That’s the risk so, increased likelihood of floods, increased likelihood of drought; and two extremes:  too much water, too little water,” Artan said.

However, in the bid to create more knowledge base on this global warming and climate change, the National Environmental Agency (NEA) has concluded a two-day training on the Global Information System (GIS), a climate change project (PARCC) at Baobab Hotel, The Gambia, reports NaijaAgroNet.

The aim of the project, NaijaAgroNet learnt, is to assess the vulnerability of protected areas in West Africa and impact of climate change in view of enhancing resilience by developing strategies and tools to improve effectiveness management in climate change. 

The training held with the JEF-fund project was executed by UNEP-WCMC in partnership with (IUCN PACO) and has been in operation since 2010. This project covers five core countries in West Africa, namely The Gambia, Mali, Sierra Leone, Chad, Togo, Bukina Faso, Cote D’Ivoire and Ghana as beneficiaries.

"It is indisputable that conservation is the key in sustainable development, especially in our environment that has not been constantly and properly managed. It is interesting to know that research has shown that more than 13 percent of the global land surface is designated as ‘protected area,’" Minister Jarju stated.

As said by Jarju, governments of ECOWAS are aware that region contains a high level of biodiversity and endemic species across multiple areas, having been projected to experience extreme climate change in the future.

Stressing that the government of The Gambia, for instance, was fully aware of the achievements that PARCC project registered in the past year, and these achievements include preparation of a report on projected impacts of climate change on biodiversity in West Africa Protected Area in which impact on reptiles, birds, mammal has been highlighted.

California Governor Mr. Jerry Brown had in the wake of drought bedeviling the state, said that climate-change deniers should wake up, because with the weather and what it's happening in California, climate change is not a deception.

For experts at ‘Building Nigeria's Response to Climate Change’ a non-governmental organization, noted that in Nigeria, this means that some stable ecosystems such as the Sahel Savanna may become vulnerable because warming will reinforce existing patterns of water scarcity and increasing the risk of drought in Nigeria and indeed most countries in West Africa. As well, the country’s aquatic ecosystems, wetlands and other habitats will create overwhelming problems for an already impoverished populace.

Although industry observers there are compelling scientific evidences, governments and businesses have responded very slowly. Despite the fact that even if nations in the region fulfill live up to their promises and pledges in international conventions, the world will still face between 2.6 and 4 ºC of warming.

As work at various part of the continent towards reduction of emissions, Africans must simultaneously begin to adapt to the increasing impacts of climate change.

+Remmy Nweke (ITRealms) 

 

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AAKNet says USD2bn flowing across Africa for environmental adaptation by 2020

NaijaAgroNet:

The Africa Adaptation Knowledge Network (AAKNet) has estimated USD 2 billion is flowing across the continent for adaptation through a variety of sources, reports NaijaAgroNet.

This is coming as AAKNet predicts that an estimated 15 billion United States dollars will be committed for cost of emission by year 2020.

AAKNet in a its latest issue of Africa Adaptation Newsletter made available to NaijaAgroNet, with the theme: Africa Adaptation Gap Report 2: Bridging the Gap – Mobilising Resources, noted that the first Africa Adaptation Gap Report demonstrated how delaying action would result in exponentially rising costs down the road, the second report now turns to possible solutions to respond to this urgency.

NaijaAgroNet recalls that past global emissions already commit Africa to adaptation costs of USD 7-15 billion per year by 2020.

The report, NaijaAgroNet gathered, builds on the United Nations Environment Programme (UNEP) 2014 emissions gap report that showed global emission-reduction efforts are not yet at the level of what is required to put the world on track to hold global warming below 2°C.

Equally, NaijaAgroNet reports that by 2050, Africa’s adaptation costs could rise to USD 50 billion per year for a scenario holding global warming below 2°C, and up to USD 100 billion per year by 2050, if the world does not manage to turn away from the current path that could lead to more than 4°C warming by 2100.

To take a step back: this is not just a question of money, millions of people and their livelihoods are at stake. Africa’s population would be at an increasing risk of undernourishment due to increasing food demand and the detrimental effects of climate change on agriculture on the continent.

A warming of 2˚C globally, AAKNet pointed out, would put over 50 per cent of the African continent’s population at risk of undernourishment.

“Yet, right now, we are heading to 4˚C of warming,” AAKNet stated.

Further, NaijaAgroNet learnt that the report findings showed that sea level could rise by a metre above present-day levels, putting millions of people at risk of flooding in the large coastal cities across the continent.

“These are the striking impacts of climate change risk reversing Africa’s economic and development gains,” AAKNet warned.

+Naija AgroNet 
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FAO: Sugar induces decline in food price index

 NaijaAgroNet

 

 The Food and Agriculture Organization (FAO) Food Price Index has continued to decline in March by1.5 per cent from February and 18.7 percent (40 points) below its level a year earlier, NaijaAgroNet reports.

The FAO food price is a trade-weighted index that tracks prices of five major food commodity groups on international markets, namely cereals, meat, dairy products, vegetable oils and sugar.

NaijaAgroNet also reports that a sharp fall in the price index for sugar which reached its lowest level since February 2009 together with dipping prices for vegetable oils, cereals and meat, more than offset a rise in dairy prices and contributed to the lower index, which in March averaged 173.8 points.

The index, NaijaAgroNet gathered has been on a downward path since April 2014.

The FAO noted that the Sugar Price Index averaged 187.9 points in March, down a sharp 9.2 percent from February. Stressing this was mainly due to improved crop prospects but also the continued weakening of the Brazilian currency against the US dollar, which is supportive to exports, NaijaAgroNet learnt.

The cereal output estimate for 2014, on other hand, rose to 2 544 million tonnes mainly due to a larger than anticipated maize harvest in the European Union, which confirmed that the global cereal output in 2014 would outstrip the 2013 record by 1 per cent.

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Mechanised farming solution to food insecurity says Ellen Sirleaf

NaijaAgroNet:

Mechanised farming has been identified as the solution to food insecurity in Liberia, according to President Ellen Johnson Sirleaf, reports NaijaAgroNet.

In a nation-wide address recently in Liberia and monitored by NaijaAgroNet, President Sirleaf noted that it is only through large scale mechanized farming operations and agro- industrial operations which focuses on emerging small and medium size entities is the only way Liberia can attain food security.

She observed that Liberia as an agrarian nation must increasingly shift to agriculture to ensure that the nation moves away from the old system of enclave extractive industries.

“We must aim at a higher potential for import and export diversification through stimulation of production in a select few of our traditional tree crops such as rubber, oil palm and cocoa, she said.

NaijaAgroNet also learnt that she reminded Liberians that the private sector must become the driving force of the economy with Liberia’s entrepreneurs playing their rightful role, adding, that this can only be achieved with the support of citizens by promoting and buying products made in Liberia as well as through the payment of rightful taxes.

President Sirleaf then pledged her government’s commitment in doing its part in establishing a peaceful and easy business environment by reducing the bureaucratic hurdles and at the same time ensuring that tax regimes are fair and allow businesses to expand.

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pix: President Ellen Johnson Sirleaf

Cassava is foodstuff, industrial raw material

NaijaAgroNet:

Cassava has been identified as crucial to food security for millions of Africans, and now the shrub’s potential for industrial purposes is being considered, says a professor at the school of molecular and cell biology,Wits University South Africa. Prof. Chrissie Rey, reports NaijaAgroNet.

Speaking on the versatility of the crop, Prof. Rey said its used in several products including flour, paper, textiles, food additives and animal feed.

"The main thrust of cassava in South Africa is for industrial purposes and the use of biotechnology to improve the crop for agro-processing," noted Prof. Rey who has been studying the shrub since the 1980s.

According to Rey,other countries on the continent have always been interested in cassava for food security but all cassava-growing countries are getting interested in its industrial potential.

Rey says herinterest on studying the plant was because its roots are a valuable source of starch. "The need for root-based starch will rise in the next 50 years. Cassava is a potentially valuable crop and the South African government is interested in exploring that potential for small-scale and commercial farmers," she says.

The crop is also used to produce bio-ethanol, which is used in small stoves instead of paraffin. The bio-ethanol produced from cassava is cleaner for the environment, she pointed out.

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Pix: Cassava tubers