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Naira expected to continue relatively stable

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Naira

Naira expected to continue relatively stable

The currency naira closed last week at a rate of N387 to $1 on the spot market, while the two-week currency futures traded at N389.84. The naira was quoted at N361 to $1 on the official market, which is backed by Nigeria’s central bank.

Specifically, the 1-month (+0.1% to N388.71/USD), 3-month (+0.4% to N392.70/USD), 6-month (+0.8% to N398.45/USD), and 1-year (+2.3% to N416.25/USD) contracts all appreciated against the (United States dollar.

However, at the currency futures market, the 5 years futures were quoted at N578.37 to $1, just off a record low of N584.11 recorded last week, as dollar scarcity for businesses and individuals in genuine need continued to raise concerns.

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Nigeria’s local currency has been hitting record lows on the parallel and over-the-counter spot markets since early March when the Central Bank of Nigeria (CBN) adjusted the value of the naira by 15%.

Victor Silas, an investment analyst spoke on the phone with Nairametrics, giving insight on future stability in the naira. He said:

“For the outlook on the naira in the coming week, I do not foresee significant changes to the current rate, considering sentiments at the I&E windows strengthening last week to N385.75/$ levels and the parallel market stable at 440/450 levels.

“There are no strong fundamentals to move those rates from current levels. I expect rates to be stable in the coming week.”

It can be recalled that some weeks ago, CBN resumed dollar sales to individuals and businesses with genuine needs, selling around $100 million per week, thereby helping to bring some stability to Nigeria’s local currency, though it is yet to resume selling to foreign-based investors. It had scrapped a planned auction due to lockdown measures to slow the COVID-19 pandemic.

A Forex dealer at a leading tier 1 bank talked about the fundamentals expected to happen at the spot market. He said:

“The CBN will sustain its interventions in various windows with probable injection of $80million to Invisibles and SME (Small Medium Enterprises) segment at $/₦383.75 while the CBN will conduct its Bi-weekly Retail SMIS Auction on Friday with stop rate at $/₦365 for 180-day forward.

“The scarcity of funds in the Investors’ and Exporters’ FX window will persist this week as the current depressed yield in the Fixed Income is unattractive to entice fresh inflows from foreign portfolio investors amidst significant convertibility risk and negative real return.

“Naira will trade at sub $/₦390 levels through-out the week.”

The CBN recently said that it would use all the monetary tools it had to rescue the Nigerian economy from the fallouts of the COVID-19 induced global economic strain, and stabilize the naira. It had also taken some concrete steps to tackle currency speculators.

Philip Anegbe, Team Lead, CardinalStone Research told Nairametrics what he expects of the naira:

“With the recent recovery in oil price and greater scope for more concessionary borrowing/debt reliefs, we now expect the CBN to reprice the naira to N400/$ at the I&E window by year end, with a trading band of N390/$ to N410/$.

“However, our fundamentally obtained fair value remains N440/$ even though the reality of CBN’s currency management makes a full tilt to market-driven pricing highly unlikely this year.”

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Customs Corner

Comptroller Chana Re-echoes Commitment to Implementing Government Policies in Kano Free Zone

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Author: Vivian Daniel.

The Customs Area Controller of Kano/Jigawa Command, Comptroller Dauda Chana, has reiterated the commitment of the Service to facilitate genuine trade without compromising government policy, especially as they affect special economic areas like the Kano Free Trade Zone.

This was conveyed in a press statement signed on 25 April 2024 by the Superintendent of Customs, Public Relations Officer of Kano/Jigawa Area Command, Saidu Nuraddeen.

The Customs Area Controller, Comptroller Dauda Chana, noted that the government revenue through the operations of the Kano Free Trade Zone is untrue and has strategically positioned Officers to ensure due diligence is carried out in the management of finished products within the zone or from any of the excise factories under its watch.

He stated that those who accused Officers and Men of the Nigeria Customs Service (NCS) of illegalities succeeded in displaying ignorance about the activities of the Service, especially in the areas of Duty, Import and Export processes and the laws guiding trade activities in the Free Trade Zones.

He further emphasised that the Kano/Jigawa Command recorded N613,369,204.81 between January and April 2024, as against N132,436,766.00 in 2023, which indicates an increase in revenue generation.

The CAC seized the opportunity to remind the general public that the Nigeria Export Processing Zones Authority (NEPZA) regulates the zone’s activities.

He added that unless there is an intention of exporting to Customs territory, NCS Officers do not interfere with the Zone as it ensures the prevention of smuggling and duty evasion within all its areas of jurisdiction. According to him, records are always taken for proper duty collection and calculation.

Comptroller Chana reminded that the NCS is not the only government organisation in the Zone while restating that the Command will stop at nothing to adhere strictly to the law and defined rules of engagement.

“In the Free Trade Zone, there are productions taking place, there are manufacturing taking place, and the end product of all these are finished products, and for these to go out, duties are paid.” The CAC noted.

“It is also good for the public to know that goods or raw materials locally sourced are duty-free as well as exportation,” he stated.

The CAC gave more insight into the processes involved during the clearance of goods while exonerating the Officers and Men of the Service of any allegations of connivance with business owners.

“Let it also be on record that the process of clearance involves many stages, and we even have a unit domiciled in every Command that checks after clearance of goods cleared for anomalies, so no officer can connive because the documents are all intact to show what transpired. This makes the allegation of compromise baseless,” he opined.

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Customs Corner

JBPT Sector 2 Records Seizures Worth N1.6 Billion Within Six Months

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Author: Abass Quadri.

The Joint Border Patrol Team (JBPT) Sector 2, Southwest Zone, has recorded seizures of illegal goods, with a Duty Paid Value of N1.6 billion.

Deputy Comptroller Mohammed Shuaibu in charge of JBPT Sector 2, availed the team’s activities under his stewardship in a press briefing held at Abeokuta on Wednesday, 24 April 2024.

The coordinator noted that the team’s area of responsibilities, which covers all six southwestern states, is mandated to “curbing anti-smuggling activities, channelling of procedures, and combating other cross border crimes that threaten Nigeria’s national and economic security.

“The sector wishes to announce the seizures of illegal goods, which include Cannabis Sativa, secondhand clothings, and means of conveyance smuggled into the country with a Duty Paid Value of N1,663,646,360 and petroleum products valued at N52,486,215 which were auctioned out due to their inflammable nature.”

According to him, the seized goods were recorded between November 2023 and April 2024, adding that “no fewer than 15 suspects were arrested with some charged to court and others prosecuted”.

Handing over the seized Cannabis Sativa at Ogun II Command to the representative of the National Drug Law Enforcement Agency (NDLEA), Deputy Commandant Narcotics Ogun state, Nnyigide Alexander, DC Shuaibu commended the dedication, doggedness and professionalism of officers involved in the interception of the substances which would have caused more security threat.

On revenue generation, the border drill coordinator stated that N36,318,727 was generated through the issuance of Demand Notices (DN) on vehicles and other goods improperly imported into the country.

Receiving the seized Cannabis Sativa, DC Alexander thanked Shuaibu for his hard work, adding that this synergy fulfils the existing Memorandum of Understanding (MOU) between NCS and NDLEA.

In his words, “I feel highly happy that we are doing what we call sister agency collaboration, which has led to the result we have here. I expect to see more in the future because I know they are capable.”

Similarly, DC Shuaibu, who was also on a working visit to Seme and Ogun 1, Idiroko Area Commands, also handed over seized Cannabis Sativa to representatives of the NDLEA at Seme.

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Customs Corner

Nigeria Customs Service Reaffirms Commitment to Gender Equality in Decision-Making

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Author: Bashir Muhammad.

The Nigeria Customs Service (NCS) has reiterated its dedication to promoting gender equality in decision-making processes as part of its efforts to combat gender discrimination and gender-based violence.

At a capacity-building workshop on gender inclusivity, co-organized by the World Customs Organization (WCO) and the NCS in Abuja on Monday, April 22, 2024, the Comptroller-General of Customs, Bashir Adewale Adeniyi, reaffirmed his commitment to fostering a gender-inclusive environment within the service.

Acting Deputy Comptroller-General of Customs, Caroline Niagwan, represented the CGC at the event, where she emphasised the need for clear policies and procedures to address gender discrimination, harassment, and biases within the NCS.

“Our aim is to create a workplace where everyone has equal opportunities to grow and contribute to the service’s success, regardless of gender,” the CGC said. “We are committed to addressing gender discrimination, harassment, and biases within our ranks, and we will work tirelessly to ensure that our policies and practices reflect this commitment.”

The workshop brought together customs officials, gender experts, and stakeholders to discuss strategies for promoting gender inclusivity and addressing gender-based violence in the workplace.

With this reaffirmed commitment, the NCS demonstrates its dedication to creating a more inclusive and equitable work environment where all employees can thrive and reach their full potential.

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