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Displaying items by tag: Nigeria's gross domestic product (GDP)

Labour broking, working hours and minimum wages are hot potatoes in South Africa but the country is not alone in grappling with them. From Angola, Kenya and Nigeria to Tanzania, the United Arab Emirates (UAE) and Israel, employers are dealing with many of the same employment challenges as in South Africa – along with some twists unique to the jurisdictions they operate in. This is the view of Lusanda Raphulu, partner at Pan-African law firm Bowmans, after moderating one of the sessions at the 2018 Africa/ Middle East Client Conference of the Employment Law Alliance (ELA).
 
When it comes to the latest employment law trends, there are striking similarities across much of Africa and the Middle East.
 
Take the question of working hours which, it turns out, is highly topical in Israel and the UAE at the moment.
 
Laws cast in stone stand in the way of flexible hours
 
In the UAE, a major challenge for many employers is the extremely low oil price, which is hitting business hard. One obvious cost-cutting method is for employers to implement more flexible working arrangements. This is easier said than done as the labour laws that were written in 1980 are far from flexible.
 
Many employers who can no longer afford to have all their employees working full time would like to introduce part-time work or shifts. However, the law in the UAE prohibits anyone from working more than eight hours a day, and part-time work is not an option for foreign workers (making up the majority of the workforce) who must have the sponsorship of one, full-time employer. There is no easy way around this, with penalties for breaching the employment regulations including fines, imprisonment or deportation. The only way to introduce flexible working arrangements is to obtain direct approval from the Ministry of Labour, a difficult and lengthy process that can take eight or nine months to complete.
The situation is similar in some ways in Israel (whose labour laws were written in 1951), where the working week was recently reduced from 43 hours to 42 hours, without any cuts in pay, under a collective agreement between unions and employers.
 
One of the difficulties with this change is that numerous employees in Israel are paid by the hour and the complexities of adapting reduced working hours for hourly paid workers were not fully taken into account. This is a practical consideration that has had perplexed employers knocking on the door of law firms, seeking advice.
Still, in a country whose employees work significantly longer hours than their counterparts in Europe and the United States, a shorter working week is considered a welcome step towards better work-life balance.
 
Time off for breastfeeding stirs controversy in Kenya
 
Kenya is also grappling with the practical consequences of a change in employment laws, this time requiring employers to give nursing mother’s time off during the working day to breastfeed their babies. This has generated a discussion among politicians, lawyers, the media and celebrities with some commentators praising the government for its commitment to maternal and infant health and others expressing grave reservations about the practicalities and added burden on employers.
 
Another controversial labour issue in Kenya currently is the minimum wage, which differs in urban and rural areas and recently increased by about 5%. Commentators feel that the increase could have serious implications for certain industries, especially the private security industry. It has become the norm in Kenya for homes and businesses, especially those of national and international companies, to be guarded 24 hours a day but this is only possible while wages are low – a dilemma that highlights the tension between protecting workers’ rights and minimising job losses caused by cost cutting.
 
The risks and costs of using labour brokers
 
Meanwhile, in Nigeria and Tanzania, a labour law issue preoccupying many employers, not to mention the labour courts, is labour broking and specifically the issue of who the employer is.
 
In Nigeria, this used to be a straightforward matter. For many years, the broker was the employer. That has no longer been the case since the National Industrial Court of Nigeria ruled that a sacked worker who went to court had two employers, the labour broker and the end-user.
 
Since there is a significant gap between what employers and labour brokers pay, this could have expensive implications for employers. Experts suggest a rule of thumb for employers trying to keep their costs down in Nigeria is to keep their distance from day-to-day matters affecting labour-broking employees. This way labour brokers, and not employers, are the ones managing the employees, which reduces the risks for employers.
Although Tanzania does not yet have labour-broking regulations, the position is similar: the entity that has day-to-day control of the employees is considered to be the employer. The risk of the same employee receiving benefits from two employers has prompted some of Tanzania’s largest institutions to move away from labour broking and to start hiring people themselves, even though this is complicated and could virtually double their employee costs.
 
One country where the law is cut and dried on labour broking is Angola. Employers in that country are discouraged from using the services of labour brokers unless this is temporary and strictly for short periods. Since 2016, the maximum period for hiring temporary workers has been two years. After two years, the employer must hire the person directly and cannot get around this by replacing him or her with someone else as the law prohibits such replacement.
 
All in all, the discussions at the ELA conference showed that South Africa is far from alone in dealing with employment law challenges such as labour broking, minimum wages and the like. Other countries are in much the same boat and perhaps even navigating more challenging waters than South Africa’s currents.
 
Credit: CNBCAfrica
Published in Opinion & Analysis
Analysts predict further losses on bargain hunting
At the end of yesterday’s transactions on the equity sector of the Nigerian Stock Exchange, the NSE All-share index and market capitalization depreciated by 2.74 per cent to close the week at 37,862.53 and N13.716 trillion respectively.
  
Similarly, all other indices finished lower with the exception of the NSE Insurance Index that appreciated by 3.55 per cent, while the NSE ASeM Index closed flat.Meanwhile, a total turnover of 1.097 billion shares worth N15.471 billion were recorded  in 16,288 deals by investors on the floor of the Exchange in contrast to a total of 1.738 billion shares valued at N18.462 billion that was exchanged hands in 14,790 deals during the preceding week.
  
The drop in tutnover may, however be attributed to the one day holiday declared on Monday June 18th,  2018 to commemorate the Eid-al-Fitr celebrations.Specifically, the financial services industry (measured by volume) led the activity chart with 816.547 million shares valued at N9.425 billion traded in 9,263 deals; thus contributing 74.44% to the total equity turnover volume .
  
The consumer goods industry followed with 76.361 million shares worth N2.992 billion in 2,545 deals. The third place was occupied by the oil and gas industry with a turnover of 51.600 million shares worth N594.590 million in 1,744 deals.Trading in the top three equities namely – United Bank for Africa Plc, Zenith International Bank Plc and FBN Holdings Plc (measured by volume) accounted for 325.580 million shares worth N4.854 billion in 3,381 deals, contributing 29.68% to the total equity turnover volume.
  
Analysts at vetiva Reseatch said: “Sentiment this week was largely bearish, characterized by huge losses in select large caps. Though there is still some room for further losses, we foresee bargain hunting at week open as investors take position on depressed stocks.”
  
Further breakdown of last weeks trading showed that  a total of 61 units of Exchange Traded Products (ETPs) valued at N899.80 executed in seven deals last week, compared with a total of 62,392 units valued at N1.004 million that was transacted last week in 13 deals.
  
A total of 370 units of Federal Government valued at N371,261.96 were traded this week in 3 deals, compared with a total of 9,850 units valued at N9.999 million transacted last week in 10 deals.
  
25 equities appreciated in price during the week, lower than 40 in the previous week. 44 equities depreciated in price, higher than 28 equities of the previous week, while 100 equities remained unchanged lower than 101  equities recorded in the preceding week.
 
Credit: Sunday Times
Published in Opinion & Analysis

I&E Window transacts $900m, as reserves stagnate at $47.6 billion
There was near excess in the quantity of money in circulation last week, save for the increased mop up exercise by the Central Bank of Nigeria (CBN), following the repayments of N66.7 billion and N377.6 billion worth of Treasury Bills (T-Bills) and Open Market Operations.

The movement in system liquidity during the week had risen in two of the four trading days, resulting to 3.7 per cent rise in the quantity of money in circulation to N842 billion compared to N812.1 billion in the preceding week.Consequently, the two most popular traded instruments among banks- Open Buy Back and the Overnight rates, trended southwards by 0.7 percentage points (ppts) and 0.5ppts to 2.8 per cent and 3.6 per cent respectively.

During the rollover of the instruments, investors showed apathy for short tenored bills, as they asked for higher rates, causing an under-allotment to reduce cost for government, which subsequently left a sizable quantity of money in circulation till the weekend.Analysts at Afrinvest Securities Limited said this week, despite the absence of maturing bills, except N183.3 billion worth of OMO maturities, the apex bank will sustain its trend of liquidity mop ups and money market rates could trend higher.

Similarly, at the foreign exchange market, the naira remained stable, defying the influence of speculations ahead of the biannual meeting of the Organisation of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, at the weekend, which increased oil production by one million barrels per day.

The decision, which is expected to influence global oil price, would further affect Nigeria’s external reserves that have remained stagnant in weeks at $47.6 billion, as crude oil accounts for a large proportion of the nation’s foreign exchange earnings.

Specifically, the reserves have stagnated in the last three weeks, with an earlier back and forth movement, as reports showed that Nigerian crude oil cargoes from the June programme took long before they were cleared, as demand was not strong enough and differentials were too high to spark much buying of July barrels.During the week, the Central Bank of Nigeria (CBN) continued its weekly intervention, offering $210 million through the Wholesale SMIS window to maintain stability, as well as sustain liquidity in the foreign exchange market.

Consequently, the CBN spot rate appreciated five kobo when measured week-on-week to N305.80 per dollar from N305.85 per dollar in the previous week, while at the parallel market, the naira traded flat for the second consecutive week at N362 per dollar.

In the same vein, the local unit, at the Investors and Exporters’ (I&E) forex Window, appreciated seven kobo week-on-week to N361/$ from N361.07/$ in the previous week.On the activity level, transactions improved by 15.1 per cent at the autonomous window, as investors exchanged about $900 million against $800 million recorded the previous week.

Source: The Guardian

Published in Bank & Finance
Investors looking for a haven amid the rout in emerging markets over the past two months would have found one in Nigeria’s domestic debt.
 
Naira bonds issued by the government have returned 8.4 percent in dollar terms this year, the most in the Bloomberg Barclays Global EM Local Currency Index, which includes 25 countries from Argentina to Turkey. And it’s the only local-currency debt not to have made losses this quarter.
 
Nigeria's local bonds have outperformed peers since March
 
Note: Average total return for government local debt in dollar terms
 
Franklin Templeton Investments and BlackRock Inc. are among global money managers that are bullish on Nigerian securities, enticed by average yields of 13.4 percent, which, while down from almost 17 percent in August, are still among the highest in the world.
 
They’re also confident the OPEC member will be able to keep the naira stable, thanks in part to oil prices having climbed around 60 percent in the past year. The naira’s barely budged since a devaluation last year, and held its own as other emerging currencies began to tumble in April. The Abuja-based central bank is keen to keep it that way, at least until February’s elections.
 
South: Bloomberg News
Published in News Economy
As part of efforts to grow stronger economic ties between Nigeria and Germany, the delegation of German Industry and Commerce in Nigeria in collaboration with Nigeria-German Business Association and the German-African Business Association (Afrika-Verein der deutschen Wirtschaft) hopes to explore new investment opportunities at this year’s forum.
According to the organisers, the investment forum which kicked-off yesterday with the theme; “Leveraging partnership for economic growth”, will provide opportunities for Nigerian and German businesses to network, exchange information and establish business contacts.
 
Speaking at the German-Nigeria business forum, the Governor of Lagos state, Akinwunmi Ambode represented by the Commissioner for Commerce, Industry and Cooperatives, Lagos, Olayinka Oladunjoye assured investors of stable political environment, improvement in power supply, security in the state, among others.
 
Ambode said his government is currently focusing on the development of critical business sectors such as agriculture and food processing, provision of equipment to farmers, promotion of agricultural value chains, and expansion of fish production.He further revealed that 1000MW of power out of the proposed 4000MW will be available this year, stressing that it will reduce dependence on gas from the Niger delta as he also called on investors to take advantage of the Lagos State free trade zone which is open to all nationals and countries of the world.
 
“Without doubt, Lagos state is a commercial and industrial state in Nigeria with the population of 24.8 million and at annual population growth rate of 3.2 per cent, immigration rate of six persons per hour, 25 per cent active youth population between 15 and 25 years. Lagos State is the fifth largest economy in Africa having a gross domestic product of $136 billion and accounting for almost third per cent of the country’s GDP. Therefore as an economic giant of Africa, Lagos state will continue to design and administer policies and initiatives that will help attract investment to Nigeria”, he added.
 
A delegate, Delegation of German Industry and Commerce in Nigeria, Dr. Marc Lucassen said the aim of the forum was to promote economic prosperity between Nigeria and German, create more business opportunities and provide excellent relationship between both countries.The Ambassador of Germany to Nigeria, Dr. Bernhard Schlagheck called on the Federal Government of Nigeria to provide adequate security for investors as economic stability is imperative in any economy. He also implored the government to ensure free and fair election in the country.
 
The Executive Secretary/CEO Nigeria Investment Promotion Council (NIPC), Yewande Sadiku during her presentation described Africa as the most attractive investment destination in the world, stating that the population speaks to market and potential consumers as Africa is the only continent designated in 2050 to grow more than double in size, while Nigeria will grow more than five per cent a year.
 
She urged investors to believe Africa and Nigeria’s attractiveness will improve in the future, stating that statistics shows 66 per cent believe attractiveness has improved over the past year in Africa, while 81 per cent believe the attractiveness will improve over the next few years.According to her, part of the nation’s growth plan is to diversify the economy and a lot of growth seen has been driven by the non-oil sector.
 
South: The Guardian
Published in Business
Lucky Amiwero, President of National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), and the Managing Director, Eyis Resources Limited
 
The Federal Government has been urged to immediately step up its reforms strategy on import and export processes to help reverse the current poor ranking by Trading Across Borders (TAB).
 
TAB, in its latest rankings, put Nigeria at 183rd position out of the 190 countries it rated on Ease of Doing Business (EODB).
 
In the ranking, Nigeria took the last position, while Mali, 85th position, was rated first among the 17 West African countries considered in the report.
 
President, National Council of Managing Directors of Customs Licensed Customs Agents (NCMDLCA), Lucky Amiwero, in a letter to the Presidency, dated June 10, 2018, said Nigeria’s poor ranking on ease of doing business has brought to the fore the need to urgently institute reforms to address the challenges on import, export and transit regulatory procedures.
 
Amiwero, who is also the Managing Director, Eyis Resources, said Nigeria’s import, export, regulatory and transit procedures are encumbered with lengthy, cumbersome procedures.
 
This, he said, is associated with unnecessary delays, high transaction cost and increase of cargo dwell time, which makes our port the most expensive in the globe based on verifiable information.
 
In the letter obtained by The Guardian, he said the reform should be targeted at implementing an integrated set policies and procedures that is globally accepted, which would ensure effective trade facilitation by the reduction of transaction cost, cargo dwell time and ensure safety and security of the processes.
 
“The poor rating of Nigeria can be seen from the identified challenges associated with the Import-Export, regulatory and transit procedures that is encumbered with lengthy and cumbersome procedure, which resulted to our present ranking of 183 from 190 countries.
 
“There is the urgent need to constitute a committee of trade procedure Experts, reform specialist and professional, as Task force to address the challenges urgently,” he stated.
 
Amiwero further recommended that the Federal Government should look into the issues of collapsed scanners, re-evaluate them to know the update and update the scanners for easy cargo examination.
 
He harped on the strict implementation and enforcement of the executive order in the seaport as stipulated in the Port Related offences, (Amendment) Act 61 of 1999.
 
Meanwhile, the Managing Director, Nigerian Ports Authority (NPA) Hadiza Bala Usman had recently threatened to seek the intervention of the Vice President Prof. Yemi Osinbajo on the non-compliance by some government agencies to the presidential order on Ease of Doing Business at the nation’s seaports.
 
Usman’s reaction is coming in the wake of complaints by some stakeholders that the level of compliance to the presidential order by some government agencies, one year after the order was issued has left much to be desired.
 
She said the way some government agents float the order has limited its positive impact and the Federal Government.
 
While assuring that the Authority would continue to fulfil its own part of the order she lamented that the organisation has the limitation of compelling other agencies to do what they are supposed to do under the presidential directives.
 
Source: The Guardian
Published in Business
The Central Bank of Nigeria (CBN) has authorized the use of Renminbi (RMB) instead of dollar by Nigerians to import some specific goods from China to achieve maximum benefit in the recent $2.5 billion currency swap pact signed by both countries.
 
This was disclosed at a press briefing organised by the apex bank at the end of the Bankers Committee meeting held in Lagos yesterday.
 
According the committee, importers of Chinese equipment, machineries and goods are expected to obtain invoices in RMB instead of dollar for settlement which would ultimately cut down transaction cost and make importation cheaper for Nigerians playing in that market segment.
 
The committee said the arrangement would go a long way to strengthen the nation’s external reserve which is currently put at $48 billion.
 
Specifically, a member of the Bankers’ Committee and the Chief Executive, Stanbic IBTC Bank, Demola Sogunle, said: “CBN and the Bankers Committee are to start encouraging importers to receive invoices in Renminbi instead of dollars.
 
One of the incentives will be that a percentage spread will be given to any importer that is bringing a Renminbi invoice for settlement instead of bringing a dollar invoice.
 
If you bring Renminbi invoice, the benefit is that it is going to be cheaper for the importer in coming to CBN to get foreign currency which, in this case, will be Renminbi.
 
“The importer will actually bring lesser amount of naira.
 
If he goes ahead to buy with the same supplier based in China and collect invoice in dollars, it will cost the importer slightly more in terms of the naira amount he will use to get the foreign currency.
 
“We have got almost $48 billion in external reserve, because we trade a lot with China.
 
If we are able to continue to bring in machinery and equipment, without depleting our dollar reserve, the external reserve will not be under threat.
 
So with the Renminbi in place instead of dollar, based on this swap deal, we are in a very good position. So importers are encouraged to bring in invoices in Renimbi instead of dollars. “
 
Source: The Guardian
Published in Bank & Finance
There's no way the transformational agenda and Industrialization history of Akwa Ibom State will be written without the name Udom Gabriel Emmanuel not boldly inscribed in gold. In just three years at the helm of affairs of the State, Governor Udom Emmanuel has come to symbolize industry, enterprise, resourcefulness, and ingenuity.
The remarkable transformation of the state from a hitherto civil service state to an emerging industrial hub is a testament to this administration's resolve and determination to leave a positive footprint in the sands of time.
 
On assuming office in May 29, 2015, the Governor made a promise to make his administration a gift to the citizens of the state by opening up the state to industrial growth and development, expand the economic activities within the state and create an enabling environment for investors to troop in and discover the hidden potentials the state has to offer to the outside world. 
 
Three years down the line, we've all witnessed the manifestation of this promises in different forms. It's only safe to say that from all indications, the Udom Emmanuel led administration has lived up to and even surpassed all expectations.
 
Agriculture is a leading sector of the economy of Nigeria and of the different states in the country. Agriculture supports over 75% of the population of Akwa Ibom. In the rural areas, the economy is agro-based. Akwa Ibom state is a hub for various agricultural products such as palm oil, cassava, yam, cocoyam, plantain, maize, rice, rubber, and many varieties of fish and other seafood.
 
The current administration came into power in a year where a majority of Nigerians experienced food shortages due to a multiplicity of factors ranging from a bad harvest year, and a dwindling purchasing power occasioned by the depreciating value of the Naira. Being a proactive government, the Udom administration quickly swung into action and declared a state of emergency in the agricultural sector. It saw the need to boost agricultural output to provide enough food for the teeming population of its citizenry and even for export. This led to an agricultural revolution across the state, a revolution that today has led to a significant improvement in food supply across the state.
 
Today, the state now boasts of the production of tomatoes, cucumber, and other cash crops for export. Also, with the Akwa Prime Hatchery and Poultry, located at Mbiaya, Uruan, the state is now poised to revolutionise the production and export of eggs and other dairy products. The Akwa Prime Hatchery produces 10,000-day old chickens per week.
 
To also diversify the economy of the state to wean Nigeria from reliance on oil, the Akwa Ibom State Government has also registered 4,920 rice farmers in the state who are producing rice for local consumption and sales to other parts of Nigeria and the West African Coast. The state is also boosting its comparative advantage in growing Cassava with the cultivation of at least 1,450 hectares of Cassava Plantation in 5 local governments. This is a seed multiplication scheme to provide free cassava stems to farmers in the three senatorial districts of the state. 
 
Animal production and husbandry is also part of the overall agricultural policy of the Udom Emmanuel led-administration. The government is working with the Carlos Farms, a Mexican group that is investing in massive commercial farms – both crops and animal production in Nigeria to develop ranches for Cow Production and processing of Cow Milk for dairy companies.
 
Cocoa is a commercial crop that the state has comparative production advantage. Governor Udom's administration has trained 450 youths in new methods of planting cocoa and other extension services to cocoa farmers in the state. There has been the establishment of Special Cocoa Maintenance Scheme (SCMS) for the training of farmers and youths on pruning/shade management, under brushing, and tree care by fumigation, to ensure the improvement of yields from 300 kilograms/hectare to 2000kg/ha over three years period. The government has undertaken the Zoning and mapping of the cocoa-producing communities in the State, and sensitization of cocoa farmers in the 24 cocoa producing local government areas in the State.
 
Furthermore, there has been the importation of 1000 bags of special cocoa fertilizer from Ghana for optimal yield. These 1000 bags were delivered to cocoa farmers in September 2016.
 
The foresight of Governor Udom has resulted in the procurement and establishment of 11,000 Hectare Coconut Plantation and Refinery Project in the state. This project is in partnership with VKS construction Nigeria Ltd. With 2 million stands of coconut planted, the plantation is the largest in the world and will feed raw materials to the coconut refinery. At full capacity, the refinery would process 300,000 coconuts per day. Virgin coconut oil is now a hot cake in the international market and would bring in much needed foreign exchange to Akwa Ibom and improve the economy of the state.
 
Other achievements in the Agric sector include:
 
•The Re-introduction of second planting season for enhanced food production and sufficiency 
 
•Refurbishment and upgrading of three 10mt/day cassava processing factories in the three Senatorial Districts of the state. 
 
• Extension of technical advisory services to about 350 sh farms in the State, as well as the cultivation of 300 hectares of cassava under the FADAMA III+ Financing Programme.
 
Currently, the state can boast of an enhanced food production capacity to feed its people and also for export. With all the investments in Agriculture, Akwa Ibom is poised to become the food basket of the South-south region and a major food hub in Nigeria, all thanks to the wonderful initiatives and Industrialization drive of the Udom-led administration.
 
#UDOMTouchingLives
Published in Agriculture
Wednesday, 22 November 2017 07:54

Nigeria says GDP up 1.40 pct in Q3

Nigeria's gross domestic product (GDP) rose by 1.40 percent year-on-year in real terms in the third quarter of 2017, according to official data released this week.

A report, released by the National Bureau of Statistics, showed the second consecutive positive growth since the economy exited recession in the second quarter, with the oil, agriculture and industrial sectors leading the charge. The growth was 3.74 percentage points higher than the rate recorded in the corresponding quarter of 2016, which was -2.34 percent.

The rate was also 0.68 percentage points higher that that recorded in the preceding quarter, which was revised to 0.72 percent from 0.55 percent. Nigeria exited recession in September. It was the worst recession in more than two decades.

Reacting to the latest growth in GDP figures, the government on Monday described it as "a clear indication of the ongoing progress being recorded by the Nigerian economy."

A statement by Laolu Akande, a presidential spokesman, said the government was working to ensure inclusive growth and always committed through the active pursuit of a raft of policy initiatives. Economic adviser to Nigerian president Adeyemi Dipeolu said the GDP growth had reinforced the exit of the nation's economy from recession.

Nigeria's foreign exchange reserves, he noted, had risen to nearly 34 billion U.S. dollars while the stock market and purchasing managers' indices had also been positive. In addition, the exchange rate of country's local currency naira has stabilized while inflation has declined to 15.91 percent, from 18.7 in January 2017.

"While inflation is not declining as fast as desirable, it is approaching the estimated target of 15.74 percent for the year.
"Agricultural growth was 3.06 percent in the third quarter of 2017, maintaining the positive growth of the sector even when there was a slowdown in the rest of the economy," Dipeolu said, adding the industrial sector grew at 8.83 percent mostly due to mining and quarrying.

The sector of Nigeria's mainstay, oil, has been growing very strongly partly as a result of policy actions aimed to restore growth in the sector. The presidential adviser said the service sector was yet to recover but should soon begin to be positively affected by the improvements in the real economy and the effects of the dedicated and focused capital spending on infrastructure by the government.

The overall picture that emerges is that the economy is on the path of recovery, he said. As inflation goes down, and with the steady implementation of the government's economic growth plan, real growth may soon be realized across all sectors in a mutually reinforcing manner, observers say.

 

Source: Xinhua

Published in Economy
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