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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

European Union Proposes ‘Getaway Corridor’ Project to Combat Illicit Trafficking

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Author: Cynthia Ikebudu.

In a bid to tackle the rampant issue of illicit trafficking and smuggling across borders, the European Union (EU) unveiled a groundbreaking initiative aimed at enhancing law enforcement and trade facilitation at the Nigeria Customs Service Headquarters in Abuja on 16 April 2024.

The project, titled “Getaway Corridor,” according to EU representatives Louis Jacques Blondiau and Thierry Thimon, is set to cover ten countries, including Nigeria, with the goal of curbing illicit activities on the borders and suppressing smuggling operations.

Louis Jacques Blondiau, the leader of the group, emphasised that the Getaway Corridor project entails the development of a road infrastructure network designed to serve as a gateway for combating anti-smuggling activities while promoting trade facilitation. According to him, “each participating country will designate a specific zone for the project’s execution, which will involve four key phases: identification, implementation, evaluation, and project ownership, ensuring alignment with local needs and priorities.”

During the meeting, the Comptroller-General of Customs (CGC), Bashir Adewale Adeniyi, commended the EU’s initiative, acknowledging its potential to significantly enhance the effectiveness of law enforcement efforts in Nigeria. He pledged the full support of the Nigeria Customs Service and other relevant agencies in ensuring the successful execution of the project.

“The proposed Getaway Corridor project marks a significant step towards strengthening international cooperation in combating illicit flows and promoting trade security within the region. With the commitment of both the EU and Nigerian authorities, it is poised to make a meaningful impact in curbing illegal activities and fostering sustainable development,” the CGC stated.

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Customs Corner

Customs Mourns Fallen Personnel in Katsina, Reaffirms Unwavering Commitment Towards Border Security

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Author: Muhammad Bashir.

The Nigeria Customs Service (NCS) on Wednesday, April 17, 2024, expressed deep sorrow in announcing the tragic passing of Customs Assistant II Auwal Haruna, who died in an unfortunate incident that occurred at the Gamji Makaho checkpoint in Dankama area of Katsina State.

According to a statement issued to newsmen and signed by the National Public Relations Officer, Chief Superintendent of Customs (CSC), Abdullahi Maiwada, said the sad incident was triggered when a team of Customs officers attached to Katsina Area Command attempted to intercept a convoy of over fifty vehicles transporting goods suspected to be smuggled outside the Country.

CSC Maiwada, in the statement, noted, “Haruna and his fellow officers exhibited remarkable courage in their duty to thwart these audacious economic saboteurs. Their actions sparked a confrontation with an enraged mob who viciously attacked and fatally assaulted CA II Auwal Haruna.”

He narrated that the late Customs Officer has since been laid to rest according to Islamic rites in his hometown, Kayawa, under the Dutsi Local Government Area of Katsina State.

The Comptroller-General of Customs, Bashir Adewale Adeniyi MFR, and the entire NCS management team extended heartfelt condolences to the family of CA II Auwal Haruna.

He also vehemently condemned the disheartening act of violence that led to his untimely demise and assures a comprehensive investigation into this tragic incident to ensure justice is served.

The CGC, who underscored the perilous challenges officers face in their daily mission to safeguard the nation’s borders under his stewardship, assured that the Service stands firmly united with the fallen officer’s family during this period of profound grief.

“The NCS remains steadfast in its efforts to combat illegal activities such as smuggling, prioritising Nigeria’s border integrity while ensuring the safety of citizens and dedicated customs personnel.” the statement said.

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Customs Corner

Customs TCIP Command Records 139% Target Surplus for 2024 1st Quarter

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Author: Vivian Daniel.

The Nigeria Customs Service Tincan Island Area Command, Lagos, has unveiled its extraordinary achievements, having recorded significant revenue generation for the 1st Quarter of 2024.

In a press statement signed on Monday, 15 April 2024, by Ngozi Okwara, the Command Public Relations Officer, on behalf of the Customs Area Controller, Comptroller Dera Nnadi, revealed that the command’s first-quarter revenue goal for 2024 increased by 139%, amounting to a difference of ₦177,079,358,035.36, compared to the same period in 2023.

According to the statement, the Command recorded a total collection of ₦303,937,547,265.47 in the first quarter of 2024, as opposed to ₦126,858,189,231.31 recorded in the same period of 2023.

For the export activities of the Command, in terms of volume (MT) and value (FOB), export trade also witnessed exponential growth within the same period under review. Comparatively, the tonnage of goods exported via TCIP increased from 145,906.33 MT in 2023 to 251,679.89 MT in 2024, representing an increase of 95.3%.

Likewise, there was an over 300% increase in the FOB value of exports, rising from ₦80,993,580,710 to ₦287,792,767,415.00 between Q1 2023 and Q1 2024, respectively.

In his remarks, Comptroller Dera Nnadi congratulated officers, men, and stakeholders of the command for embracing service delivery and teamwork, surpassing the first-quarter revenue target of 2024. He acknowledged the efforts of all units within the Area Command in achieving these results.

“I challenge you to come up with modalities and new strategies to meet the revenue target for April and the months ahead despite the series of holidays the country has embarked upon,” the CAC emphasised.

“Stakeholders should be highly esteemed and treated with respect, but with due diligence to identify compliant and non-compliant traders,” he noted.

The Customs Area Controller emphasised that the Command’s enforcement and anti-smuggling unit has not relented in its effort to combat smuggling and all forms of criminality. According to him, the NCS, being the lead agency at the ports, has coordinated several 100% physical examinations under his supervision, ensuring compliance with international trade regulations.

“The anti-smuggling activities of the Command recorded a total seizure of 57 packets of heroin weighing 56.390kg with a street value of ₦902,240,000.00; 3,612 packets of Colorado Indica weighing 956.772kg with a street value of ₦4,055,400,000.00. All the seized illicit drugs have been handed over to the relevant sister agencies,” he added.

The statement also highlighted some stakeholders’ activities of the Area Command, including hosting various sessions of Stakeholders’ forums for Shipping Companies, Terminal Operators, Freight Forwarders, and Security Agencies, both physically and virtually, aimed at enhancing communication channels and minimising revenue loss.

The CAC equally notified stakeholders of the Command’s challenges and the efforts were put in place to overcome them, especially regarding goods released from terminals within the port premises.

“I have the honour to inform you that irrespective of the challenges observed, the Area Command has not relented in its efforts to achieve its aim. The Time Release Study (TRS) aims to enhance efficiency and effectiveness within Customs Operations by assessing the time it takes for goods to be released from terminals within the port premises. This will be unveiled with time, yet be assured that there is progress,” he stated.

In efforts to create a level playing field for importers and stakeholders by decongesting the ports, the Area Controller encouraged stakeholders to strategize for the formation of new terminals. He noted that activities have commenced at the terminals.

The CAC appreciated the support and leadership of the Comptroller-General of Customs, Bashir Adewale Adeniyi, towards consolidating the capacity of the Service through innovation and creativity.

“We continue to express our profound appreciation for the support and clear sense of direction from the Comptroller General of Customs, and his management team for their relentless efforts towards strengthening the Service’s capacity and introducing innovative methods to perform its statutory responsibilities in line with international best practices,” he extolled.

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