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BUSINESS ROUNDUP: FOREX experiences shortage; Naira weakens to 450/dollar; See other stories that made our pick

BUSINESS ROUNDUP: Nigeria to disconnect Togo and Benin; China displaces America. See other stories that made our pick

Hello, and welcome to Business Roundup this week. Here, we bring you highlights of events that happened during the week -from the capital market, mainstream business activities while not forgetting the tech/economy build up.

Here are the Headlines:

  • Ex-US envoy says Nigeria experiencing shortage in FOREX
  • Naira falls to N455/dollar as liquidity trouble keeps market under stranglehold
  • Inflation may worsen as total currency in circulation hits 3-month high
  • VAT generation hits N339bn in Q1 with 54% rise in collection from agric products.

Summary:

John Campbell, a former United States Ambassador to Nigeria has explained why Nigeria is experiencing a shortage of Foreign Exchange as countries around the world grapple with the effects of the COVID-19 pandemic.

In a piece by Campbell published on the website of the Council on Foreign Relations, a US nonprofit think-tank, on Saturday, the diplomat said that Nigeria is experiencing a shortage of Foreign Exchange due to the fall in international oil prices. Read more

Traders in the black market segment of the Nigerian foreign exchange (forex) market are battling the most severe crunch so far this year as the recovery of the currency business slows following easing of lockdown in the country.

The dollar shortage crisis, triggered by the movement restrictions and embargo on trade stemming from the virus outbreak, joins lack of forex proceeds coming from global crude oil crash to make activities in the market difficult. Read more

Inflationary pressure on the Naira might strengthen in the short term as the total currency in circulation enlarged from N2.29 trillion at the end of March to N2.3 trillion at 30th April, its highest in three months.

Read also: BUSINESS ROUNDUP: Food gulps 22.8tn in 10 years; Naira depreciates to N445 per dollar; See other stories that made our pick

This translates to N11.38 billion growth going by the data gleaned from the Central Bank of Nigeria (CBN) website Thursday. The total circulated currency in the country had dipped by N61 billion from N2.24 trillion at the end of January to N2.18 trillion at the same period in February. Read more

Fiscal authorities in Nigeria amassed Value Added Tax (VAT) revenue totalling N338.94 billion in the first quarter of this year, reflecting a 9.87 per cent leap over the figure recorded a quarter earlier, which was N308.48 billion, the statistics office said on Thursday.

Government’s VAT collection on Agricultural and Plantations stood at around N973.268 million, representing the 4th biggest rise out of the 28 sectors reported at 53.89% and raising concerns about the skyrocketing prices of food items that have plagued the country for months. Read more

On NSE ROUNDUP: 44% plunge in trade volume implies buoyancy is still way ahead

The size of trade during the week, which ended Friday, was worrisomely low, partly occasioned by the necessity to trade away from the Nigerian Stock Exchange (NSE) building in the aftermath of the coronavirus outbreak.

Trade volume crumbled by 44.3%, relative to last week’s figure. Put differently, the remote trading model deployed by the equity market’s hierarchy has not come to the rescue even though it has helped business in some way.

The market recorded gains at the Monday and Tuesday sessions, losses on Wednesday and Thursday while Friday’s trade closed flat. Read more

Thanks for joining the roundup this week. See you next week for another serving of Business Roundup. Don’t forget, for the latest news and updates from around the globe, keep reading Ripples Nigeria.

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