APA – Lagos (Nigeria)
The report that the Nigerian currency slumped to a new low of N1, 100 to the dollar in the parallel market is one of the trending stories in Nigerian newspapers on Thursday.
The Guardian reports that the rivalry between the Naira and United States of America dollar further went south yesterday as the Nigerian currency slumped to a new low of N1, 100, allowing the dollar to garner more strength against it in the parallel market.
Traders at the black market quoted between N1, 100 and N1, 110 for a dollar. On Tuesday, the exchange rate at the official Nigerian forex market fell to the lowest ever point when it traded for N848 to the dollar.
By implication, this development has further put pressure on the struggling economy, which would further ensure a hike in the cost of commodities, including food, goods, transportation, among others.
Meanwhile, the Central Bank of Nigeria (CBN) has directed banks to revalidate the Magnetic Ink Character Recognition (MICR) codeline details for correctness from November 1, 2023. The apex bank stated that this practice would be penalised in accordance with the Sanctions Grid.
The newspaper says that inadequacies of the Electoral Act 2022, like others before it, have emerged as the leeway for political aspirants to submit unverified credentials to contest for elections.
Based on the extant rules, only the political parties are empowered to conduct background checks on the credentials of their aspirants. By implication, neither the Independent National Electoral Commission (INEC) nor the security service agencies are saddled with the responsibility of background checks, including certificate verifications, in the pre-election processes.
Apparently peeved by the lacuna and routine brouhaha over certificate authenticity of some candidates, stakeholders have faulted the Electoral Act (2022) for not empowering INEC in confirming the originality of documents submitted by candidates.
In turn, they blamed political parties for not conducting thorough background checks on the certificates of their candidates and advocated tough sanctions for erring parties.
The narrative on how to prevent the country from further embarrassment over the genuineness of credentials of elected officers became necessary, following the litigation about the diploma certificate of Chicago State University (CSU) presented to INEC by President Bola Tinubu.
The presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar, who is challenging the victory of President Tinubu at the Supreme Court, insisted that the All Progressives Congress (APC) candidate presented forged CSU certificate to the INEC.
He also argued that the Tinubu, who attended the institution, was a female as indicated in some of the pre-admission forms he sighted, and obtained all necessary documents from the institution to advance his case. The documents have been submitted to the apex court last week.
Specifically, Section 29(5) of the Electoral Acts has it that, “Any aspirant who participated in the primaries of his political party who has reasonable grounds to believe that any information given by his political party’s candidate in the affidavit or any document submitted by that candidate in relation to his constitutional requirements to contest the election is false, may file a suit at the Federal High Court against that candidate seeking a declaration that the information contained in the affidavit is false.”
The Punch reports that an increasing number of Nigerian businesses are feeling the strain of the increasing costs of production, largely due to the removal of subsidies on petrol and diesel. As a result, the costs of petrol and diesel continue to climb, causing production expenses to surge. This unpleasant situation has become a cause of worry for some operators that their businesses might fold up if the government fails to intervene urgently.
President Bola Tinubu on the assumption of office on May 29, 2023, announced the removal of subsidy on petrol. Nigeria is highly dependent on both petrol and diesel because of its lack of stable electricity.
Access to electricity in the country is the lowest globally, with about 92 million Nigerians lacking access to power, the Energy Progress Report 2022 released by Tracking SDG 7 recently revealed.
The World Bank has also disclosed that businesses in Nigeria lose about $29bn annually because of the country’s unreliable access to electricity.
Many households and businesses in the country depend on petrol- and diesel-powered engines to keep their lights on and production running and any shift in the cost of either product negatively impacts the economy.
However, since the subsidy was removed, petrol prices have risen by 210.31 per cent year-on-year in June 2023 (a month after the removal of the subsidy) to N545.83 according to the National Bureau of Statistics. The price of diesel also rose by 11.18 per cent y-o-y to N815.83 per litre in June.
This increase in fuel prices (particularly petrol) in combination with persistently high inflation is expected to impoverish more Nigerians, weaken disposable income, and crash the demand for many products.
The World Bank recently stated that Nigeria has one of the highest inflation rates, and this pushed about four million people into poverty between January and May 2023.
The newspaper says that some experts have said that foreign investors may continue to avoid Nigeria into 2024 due to currency instability and other economic concerns, both internally and globally.
This projection was shared at the 2023 African Economic and Capital Markets Conference themed ‘From geopolitics to geoeconomics: Navigating uncertainties across Africa’ organised by Vetiva Capital Management Limited on Wednesday.
At the virtual conference, the Head of Research, at Vetiva Capital, Luke Ofojebe, did a review of the capital markets in the West African sub-region, during which he stated that the dominance of local investors may persist into the new year.
He said, “So far this year, the markets have been dominated by local investors as foreign investors are not looking at coming in due to currency instability. Looking at the performance of the market, we have seen declining margins as a result of high operating costs due to the removal of the fuel subsidy and high energy costs due to the hike in electricity tariffs leading to inflationary pressure.
“However, the hawkish stance of the Central Bank of Nigeria has resulted in higher interest income for banks. We expect this trend to continue into 2024 as the CBN is expected to sustain the fight against inflation.”
He added, “Also, we are now seeing that the US Federal Reserve will continue its rate hike into the first half of 2024, so we will see capital flight. Currency weakness is still a major concern. We will see a downward trend till the first half of 2024, until a dovish move from the US Fed in the second half of 2024, and then we may begin to see an appreciation.”
On ways to shore up the value of the naira, Ofojebe said, “If the government wants foreign investors to come into the market, it needs to solidify the source of forex receipts which is oil in this case. The government needs to ramp up oil production to about 1.8mbpd to strengthen the Naira.”
GIK/APA