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Nigeria Week Ahead: CBN Rate Decision, Inflation & Oil in Focus

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By Lukman Otunuga, Senior Research Analyst at FXTM,

The combination of mounting geopolitical risk and Fed rate expectations rocked global financial markets last week. Volatility is likely to intensify over the next few days as investors not only focus on these key themes but top-tier economic reports from across the globe among other high-risk events.

In Nigeria, the CBN’s recent removal of FX restrictions on 43 items sparked some optimism as dollar supply surged. This development offered an opportunity for the Naira to fight and was also welcomed by the IMF which acknowledged the series of reforms aimed at fixing Nigeria’s economy.

Nevertheless, inflation remains piping hot in Africa’s largest economy while interest rates are currently at their highest levels since the monetary policy rate was adopted in 2006. It is worth keeping in mind that, the inflation menace continues to draw strength from the removal of fuel subsidies, devaluation of the official Naira and security issues in food production regions. Given how inflation is projected to jump in September to 27.1%, the CBN is likely to raise interest rates at its policy meeting this week for the fifth consecutive time. This vicious cycle of rising inflation and interest rates certainly presents a risk to Nigeria’s fragile economy. The question is whether the central bank will move ahead with a 25bp hike or opt for a larger move to tame inflation.

Volatile week ahead for USD?

Dollar volatility could be the name of the game this week due to key US economic data and speeches by a host of Fed officials.

After receiving a boost from stronger-than-expected US inflation data, dollar bulls could switch into higher gear if the incoming economic releases support the case for another Fed hike in 2023. The US Empire manufacturing will be in focus on Monday, with key US retail sales and industrial production figures published on Tuesday and US initial jobless claims on Thursday. These reports will be complemented by speeches from various Fed officials including Fed chair Jerome Powell.

If US economic data miss expectations and Fed officials reiterate their dovish remarks, this could hit the dollar as bets rise over the Fed pausing hikes for the rest of 2023. A strong set of economic releases may fuel speculation around the Fed raising rates one more time this year – boosting the dollar as a result.

Commodity Spotlight – Oil

Oil prices ended last week gaining over 7% thanks to mounting geopolitical risks.

The global commodity has the potential to extend gains due to escalating tensions in the Middle East, home to almost a third of global oil supply. Bulls are likely to draw additional strength from the U.S. tightening its sanctions against Russian crude exports. Supply concerns remain rife with growing concerns over the conflict between Israel and Hamas spreading through the region, resulting in major disruptions in an already tight market.

While oil is likely to remain supported by supply-side factors, the demand side of the equation may create headwinds down the road – especially when factoring global recession fears. Looking at the technical picture, Brent bulls have a steep hill to climb before heading anywhere near $100. But the daily close above $90 last Friday could be the first signs of bulls reclaiming lost territory.


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

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Under my Watch, NBC will Follow Due Process- New DG

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Charles Ebuebu, new director general, National Broadcasting Commission (NBC), has promised to follow due process in the regulation of broadcast stations in the country.

Under my Watch, NBC will Follow Due Process- New DG

The new NBC boss made this known in an exclusive interview with Channels Television on Monday after a meeting with Dr John Momoh, chairman, Channels Media Group.

Ebuebu, who replaced Balarabe Illelah as director-general of NBC last October following his appointment by President Bola Tinubu, promised to end any arbitrary sanction on media stations in the country while not sparing consistent wrongs by defaulters.

He said the NBC Code will be reviewed to facilitate an enabling industry that allows operators thrive.

Ebuebu said, “There are two sides to a coin: one one hand, there is a perception that the NBC has been overreaching in the applications of sanctions. It’s been said that we did not follow due process and all of that.

“Basically, the takeaway for me is that, it has been an arbitrary process. Now, part of my training as a lawyer is the fact that we will definietly put together a transparent process. I don’t want to particular details. It’s still in process but I can assure you (that) there is going to be a change in that perception, it’s going to be transparent so much so people will be allowed to speak, they will be allowed to defend themselves.

“The issues will be analysed based on the code. We are going to have a code review where all inputs will be taken in and that will address that perception.

“Now, on the other side of it, it’s sort of strange to have a policeman who cannot issue a fine. of course, the case is in court and I can talk about its legality or otherwise.”


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How New UK Funding for Tech Entrepreneurs will Boost Livelihoods in Developing Countries

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Andrew Mitchell, UK’s Development Minister has announced new UK funding for innovative mobile phone technology will help change lives in developing countries around the world.

He noted that harnessing AI technology to provide real-time agricultural advice to farmers in Nigeria and pay-as-you-go solar powered fridges are just some of the ways UK-funded mobile technology is improving livelihoods globally.

At a speech at Mobile World Congress last week, Minister Mitchell announced the UK is providing £37.3 million of new support for the Mobile for Development Programme, to help more people access mobile and digital technologies to find new opportunities and boost their livelihoods.

The programme, which the UK funds in partnership with UK-based mobile industry association GSMA and the private sector, has already benefitted more than 94 million people and focuses on women and girls, climate change mitigation, adaptation and resilience and scaling up innovative solutions.

Minister for Development and Africa, Andrew Mitchell said: “Mobile technology has the potential to revolutionise the lives of the poor by helping tackle the effects of climate change, creating jobs and boosting opportunities for women.

“The Mobile for Development programme has already benefitted more than 100 million people, and the UK’s new announcement aims to up the ambition, reaching 110 million additional people, including 60 million women.

“Together the worlds of development and mobile tech giants can be a powerful force to unlock opportunities and prosperity and meet the UN Global Goals.”

UK funding has previously helped scale up a digital hub in Pakistan, BaKhabar Kissan (BKK), which provides accurate weather forecasting data to farmers to help them make critical farming decisions such as the timing of seed sowing, irrigation, and fertilisation. With the help of this programme, BKK has almost doubled users from 6.6 million to 12.4 million.

Another innovative business, Ensibuuko, is providing digital skills training to help community saving groups in rural Uganda keep up with the latest digital products and services where previously they relied on paper record-keeping. Since gaining funding, Ensibuuko has benefited over 236,000 members of rural savings groups, 60% of whom are women, providing them with digital skills training.

John Giusti, President of the GSMA Mobile for Development Foundation, said:”For more than a decade, the FCDO and the GSMA Mobile for Development Foundation have worked closely in partnership to drive socio-economic and climate impact for the most underserved populations through digital innovation, and to date our partnership has improved the lives of more than 127 million people.

“Today’s renewal of our partnership will further amplify our joint impact by leveraging the power of digital and emerging technologies to support innovation, improve access to opportunities for women, and tackle the effects of climate change for the most vulnerable.”

With the increase in climate crises around the world, the need for new solutions to help vulnerable countries adapt is growing and mobile technology can make a big difference to people’s lives.

At Mobile World Congress, GSMA also announced the grantees for its Climate Resilience and Adaptation Fund which is funded by the UK’s Foreign, Commonwealth and Development Office. This fund is designed to test and scale up new technology to combat the effects of climate change in countries throughout Africa and Asia.

Some of the projects being funded include one using AI-powered satellite imagery to help smallholder farmers increase their yields and another to reduce food waste via an online grocery platform.


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Omniverse Summit 2024: Climate Action Africa Reiterates Commitment to Climate Innovation Agenda

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Climate Action Africa (CAA), a leading social enterprise focused on environmental sustainability, reaffirmed its commitment to fostering an inclusive climate action ecosystem at the ongoing Omniverse Summit 2024.

Alice Eze, Chief Operating Officer of Climate Action Africa and Olatubosun Alake and Commissioner, Innovation, Science and Technology, Lagos State at the Omniverse Summit 2024 that held in Lagos, Nigeria.

Co-founded by Innovation Support Network (ISN Hubs) with support from GIZ/Digital Transformation Center Nigeria (GIZ/DTC Nigeria), the Omniverse serves as a meeting point for diverse stakeholders across sectors, including development partners, public entities, regulatory agencies, academia, startups, finance professionals, media, and the creative industries.

As a key participant at the four-day event, Climate Action Africa has reaffirmed its commitment to being at the forefront of driving climate innovation for a sustainable future. The organization emphasized the need to integrate environmental sustainability models, technology, and community-driven innovation to address climate change challenges.

Emphasizing the pivotal role of innovation in identifying and scaling solutions to address the imminent climate crisis in Nigeria and Africa as a whole, Alice Eze, Chief Operating Officer of Climate Action Africa, said: “Our participation at The Omniverse Summit 2024 reflects our conviction that fostering innovation is crucial in discovering and amplifying solutions to address the imminent climate crisis, not only in Africa but also globally.”

Climate Action Africa’s participation includes thought-provoking discussions on offering climate-resilient solutions, engaging exhibitions, active involvement in deal room discussions, and cultivating strategic partnerships towards the upcoming Climate Action Africa Forum 2024, among others.

Climate Action Africa remains dedicated to engaging with critical stakeholders and advocating for a multi-stakeholder approach to addressing climate change challenges. The organization’s presence at The Omniverse Summit 2024 reflects its commitment to this collaborative approach, which is essential for knowledge exchange and shared solutions to navigate the complex climate challenges facing the African continent and its communities.

L-R: Alice Eze, Chief Operating Officer of Climate Action Africa and Olatubosun Alake, Commissioner, Innovation, Science and Technology, Lagos State at the Omniverse Summit 2024 that was held in Lagos, Nigeria.

 

 


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