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FXTM Analysis: IMF’s Warning Weighs Heavily on Sentiment in Nigeria

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The improving sentiment towards the Nigerian economy was dealt a heavy blow in March following reports of the International Monetary Fund’s (IMF) warning of a potential economic collapse if the nation failed to move ahead with reforms.

Although at the start of the year the economic outlook was elevated on repeated occasion with even the World Bank predicting an encouraging growth for 2017, the pending report from the IMF which may be seen as a warning could create some headwinds as the nation attempt to secure international loans worth $1.4 billion. While global markets have acknowledged that the largest economy in Africa is in the process of a key fundamental transformation that may exceed all expectations, there still remains a threat of internal and external risks creating obstacles.

 Some optimism still exits over the economic growth recovery plan for 2017-2020 which displayed an encouraging outlook for the nation.

The four-year plan was built around achieving a healthy economic growth and sustainable development while the nation embarked on its quest to breaking away from oil reliance. With there being a very strong focus on the nation enhancing both public and private sector efficiency while also boosting overall productivity, the growth forecast of 7% by 2020 could become a reality if the protocol is followed.

Nigeria must do all it can to achieve a stable macroeconomic environment such as invest heavily in agriculture and bolster infrastructure investments to generate sustainable economic growth in the longer term.

Focusing on Nigeria’s macro fundamentals, economic data this quarter has been mixed with inflation cooling down for the first time in 15 months in February. While inflation has started to somewhat stabilize, the high unemployment remains a cause for concern which may become another stumbling block to stable economic growth.

The mixed economic data and lingering uncertainty still enshrouding Nigeria have encouraged the Central Bank of Nigeria to maintain a passive stance in its recent policy meeting. Although the sentiment towards the nation continues to display some early signs of improvement, long-term fears over decelerating economic growth still weigh heavily on sentiment.

While the Central Bank of Nigeria has intervened to somewhat quell the foreign exchange scarcity dilemma, the multiple exchanges is a damaging policy that even the IMF has urged the government to rectify.

Speaking of foreign exchange policies, the Naira currently trades around 390 on the parallel exchange after the Central Bank of Nigeria injected a mammoth $1.138 billion in the forex markets to meet bids for forwards.

While the repeated injections of Dollars in the foreign exchange may buoy the Naira, questions should be raised over the sustainability of this method. With the multiple exchanges still a major cause for concern that needs to be seriously dealt with, expectations remain heightened over the CBN taking further steps to fully bridge the gap in a sustainable way, ultimately creating one equilibrium currency exchange.

Although the Naira may be poised to appreciate further in the short term as the CBN continues to pump Dollars into the markets, the possibility of a currency devaluation in the future could expose the Naira to downside shocks.

Outside of Nigeria, the cautious attitude the Federal Reserve has adopted coupled with the renewed Trump jitters has exposed the Greenback to major downside risks. A vulnerable Dollar may pose some benefits to emerging markets with Nigeria on the list.

With the growing concerns over Trump’s economic policies punishing the Dollar, emerging market currencies may receive a boost as concerns ease of capital outflows.

With Trump already facing headwinds in the early stages of his presidency in enacting his policies, the threat of the protectionism becoming a reality may subside consequently reducing some pressures on emerging markets.

Looking at oil, prices were exposed to downside risks this quarter with WTI Crude tumbling towards $47 after optimism diminished over the effectiveness of OPEC’s supply cut agreement. The consistent buildup seen in U.S Crude stockpiles swiftly revived the oversupply fears while concerns over some OPEC members not fully respecting compliance cuts weighed heavily on sentiment.

Oil prices could be instore for further punishment moving forward with the bullish effect of last year’s unexpected production cut wearing off amid the global glut anxieties. A drop in oil prices may enforce further downside pressures on Nigeria which currently remains reliant on oil exports for a chunk of its government’s revenue.

As we enter the second quarter of the trading year, investors will be paying very close attention to economic data and if the nation is able to secure the $1.4 billion worth of international loans. The blueprints to a recovery are already in place and now actions must be taken to propel the nation away from recessionary levels.

With the IMF warning Nigeria that its economy needs urgent reforms with the government changing its exchange policy, the CBN may be prompted to intervene in an effort to create some stability while improving the chances of securing the critical loan needed.

On the foreign exchange side, although the combination of repeated interventions from the CBN and Dollar weakness may elevate the Naira, the long-term trajectory still tilts to the downside, especially when factoring a potential devaluation.

 


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Access Bank Unveils DiamondXtra Season 16, Dangles N200m, 3 SUVs

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The sixteenth season of DiamondXtra, a savings and reward account where customers of Access Bank are rewarded with several prizes, have been unveiled in Lagos.

Access Bank Unveils DiamondXtra Season 16, Dangles N200m, 3 SUVs

 L – R : Doris Okpara, Product Manager, DiamondXtra; Ngozi Igboanugo, Regional sales Manager Festac 1&2 & mainland Access Bank; Bolarinwa Animashaun, Regional Sales Director Lagos 2 Access Bank ; Emeka Ezikeugo, Diamondxtra N200,000 Onsite winner; and Adaeze Ume, Head Consumer liabilities, Access Bank during the launch of Diamondxtra Season 16 held at Alaba International Market Lagos yesterday.

The Season 16th of the special interest yielding hybrid account which allows deposit of both cash and third-party cheques has been upgraded as customers will win prizes to the value of N200 million and three SUVs, amongs other mouthwatering prizes.

Speaking at the unveiling in Alaba International Market, Lagos, Mr Bolarinwa Animashaun, regional sales director, Lagos, said the new season will bring more goodies to the customers as the bank has taken their interest at heart.

“In the last fifteen years, we have been able to ensure customer loyalty, reward committed customers over time and show that we are a bank that is ready to empower people and partner with people.

“If I take it into specific figures, we have rewarded 26,696 customers and we’ve given a total sum of N6.5 billion over the period.

This Season16is interesting, because, we have seen a lot of opportunities to expand into digital opportunities and this time around, we will be rewarding 15,786 customers, and 10,000 of them will be digitally rewarded.

“This is almost half of what we have done over the last 15 years. So that is what is making it special. We have takenit into the possibilities of how technology can expand our business and reward customers”.

The draws for the new season are going to be the same like the previous ones as it will be held in different regions.

“So, we start from the monthly draws, quarterly draws and the annual draws. What makes it extremely interesting this year is that we will be rewarding with up to N200 million in prizes and we have added some very interesting gifts. We will be given out three SUVs as part of the N200 million price for this year”, Animashaun added.

At the unveiling, Access Bank conducted onsite draws where 48 customers who have DiamondXtra accounts and were present at the unveiling won cash prizes ranging from N20,000 to N200,000.

Breakdown shows 40 customers won N20,000 each, five customers won N50,000, two customers won N100,000, while one customer went home with N200,000.

Among winners of the N20,000 prize was Mr Victor Edobor, who said he opened the DiamondXtra accounts 24-hours before the draws.

One of the two winners of the N100,000 prize, Mrs. Maureen Nneka Oforka, said she was surprised to have won at the well-attended event as that was her first time winning any prize.

She said, “I have never won any prize in my life. This is my first. I came here reluctantly and thank God, I am here and I am a winner of N100,000 which has already been paid into my account.

The grand prize winner of N200,000, Mr. Emeka Ezikeugo, a trader in Alaba, said. “I will forever be grateful to Access Bank for the prize as I was not expecting it. I thank the bank for showing leadership among its peers”.

To be part of the winning train and qualify for the DiamondXtra season 16 which is open to both new and existing customers, new customers are required to open a DiamondXtra savings account with just N5,000 by dialling *901*5# or walking into one of our branches to open the account.

However, the more multiples of N5,000 both new and old customers save, the higher their chances of winning at the monthly, quarterly and annual draws.

DiamondXtra is an interest yielding hybrid account which allows deposit of both cash and third party cheques. Hybrid means a combination of both savings and current account features. The DiamondXtra reward scheme has given away over N6.5 billion in cash and household items to over 15,000 loyal customers over the last 15years.  Please click HERE to learn more.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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Lafarge Africa Launches Girls-in-Tech Programme to Empower Women Innovators

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Recognising the underrepresentation of women in the technology sector, Lafarge Africa Plc, has launched the Girls in Tech Program, a pioneering initiative aimed at empowering young women in technology.

Meticulously crafted to bridge the gender gap in tech and empower 10 young females between the ages of 18-25 years from Lafarge Africa Host communities in Cross River State, the program is poised to make a significant impact in the region.

The Girls in Tech Program seeks to harness the unique talents of these young women and introduce them to the dynamic world of technology. By providing them with essential skills and opportunities, the initiative aspires to equip them to become self-reliant as well as problem solvers in society.

In collaboration with Aptech and Arena Multimedia,globally recognized leaders in technology incubation and opportunity, as well as The Bridge Leadership Foundation, the boot camp promises to be a transformative experience for the participating girls, who are eager to make their mark in the tech industry.

Speaking during the onboarding to flag-off in Calabar recently, the Plant Manager, Lafarge Africa Plc, Sotirios Valsamakis, who was represented by the Human Resources Business Partner, Lafarge Africa Plc; Barong Ita, revealed that the program was in line with the company’s commitment to diversity and inclusion.

She also added that the initiative is designed to ignite a spark of inspiration, hope, and possibilities in the heart of the selected girls across the host communities.

“As an organization, people are an integral part of our sustainability drive, and we are invested in building lasting progress by empowering members of our host communities. We also recognize the need for greater and greener diversity and inclusivity within the tech sector.”

Today’s event is not just about launching a program. It is about igniting a spark of inspiration, hope, and possibilities in the hearts of these young women. It is about challenging stereotypes.”

Also speaking at the event, the Cross Rivers State Commissioner for Science, Innovation & Technology, Justin Beshel represented by Edwin Adie, Technical Senior Advisor, Cross Rivers State Ministry of Science & Technology commended Lafarge Africa for the initiative adding that it is in line with the State government’s plan towards science, technology and innovation development.


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Hydrogen, CCHub Partner to Encourage Fintech Startup Success

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As the country faces economic challenges, the need for adaptive strategies in the fintech industry becomes paramount. In line with this, leading Fintech startup, Hydrogen Payment Services Limited (‘Hydrogen’), has teamed up with Co-creation Hub (‘CcHub’) to host an insightful event themed, ‘Adapting Fintech Business Models to Economic Climes’.

The event, set to take place on Thursday, April 18, 2024, from 12:00 WAT at the CcHub office in Sabo, Lagos, will delve deep into the intricacies of Nigeria’s economic challenges and how these influence the fintech ecosystem.

Participants will gain actionable insights on how to adapt fintech business models to volatile economic conditions by prioritising flexibility, agility, and customer-centricity.

This collaboration underscores the shared commitment of both entities to empower aspiring founders venturing into the Fintech space amidst economic uncertainties.

By leveraging their respective expertise and resources, Hydrogen and CcHub aim to equip emerging entrepreneurs with the knowledge, tools, and support needed to thrive in today’s dynamic economic conditions.

Emeka Awagu, Chief Technology Officer at Hydrogen, commented on the strategic partnership with CcHUB: “Our alliance with CcHUB amplifies our shared commitment to pioneering transformative solutions in Nigeria’s fintech sector.

“By leveraging Hydrogen’s technological expertise alongside CcHUB’s innovative approach, we are primed to set a new standard for fintech excellence and drive impactful change across the industry.”

The event will feature a distinguished panel of industry experts and thought leaders, including, Ina Alogwu, Group Director, Digital Transformation, ARM HoldCo; Emeka Awagu, Chief Technology Officer, Hydrogen, and Miracle Ezechi, Digital Marketing Manager, Hydrogen.

The panel discussion will be moderated to encourage an engaging and insightful conversation on the strategies and innovations required to thrive in Nigeria’s Fintech landscape amidst economic challenges.


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