Global financial service firm JP Morgan has estimated Nigeria’s net foreign reserve to be around $3.7 billion.
The figure is far below the $33.8 billion as of August 17 on the Central Bank of Nigeria (CBN) website.
JP Morgan’s estimate is much lower than the net figure of $14 billion reported at the end of 2021.
The bank disclosed this in its latest report on Nigeria titled “Nigeria: Reform pause rather than fatigue”.
It noted that the lower-than-reported forex reserve is the result of larger currency swaps and borrowings against the forex reserve.
The global financial institution said: “Based on partial information from the audited financial accounts, we estimate that CBN’s net forex reserves were around $3.7 billion at the end of last year, from $14 billion at the end-2021.”
According to the bank, the assumptions followed an addition of $5 billion in International Monetary Fund Special Drawing Rights (SDR) to external reserves to arrive at total gross forex reserves of US$37.8 billion.
It added that by adjusting the gross external reserves with three key forex liability lines that include forex forwards ($6.84 billion), securities lending ($5.5 billion), and currency swaps ($21.3 billion).
It estimated currency swaps by backing out forex forwards and outstanding Over Counter (OTC) Futures balances from an overall aggregate published in the financial accounts.
The bank said the CBN still can withstand the pressure accompanying the low forex reserve especially, as profit from swap arrangements between the CBN and commercial banks, the rates will continue to rise.
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INFLATION: Manufacturers’ unsold goods up 45.4% to N272bn
Manufacturers Inventory of unsold finished products shot up significantly by 45.4 percent, Year-on-Year (YoY), in the first half of 2023 (H1’23) to N271.96 billion from N187.08 billion in the corresponding period of 2022 (H1’22) on account of escalating inflationary pressures.
The development also resulted in 3,567 job losses in the sector during the period.
The Manufacturers Association of Nigeria (MAN) stated this in its First Half of 2023 Economic Review made available to Vanguard, adding that the situation was compounded by the scarcity of naira in the first quarter of the year (Q1’23) and the aftermath of the subsidy removal by the federal government.
The report stated: “The inventory of unsold finished products in the manufacturing sector saw a significant increase to N271.96 billion during the first half of 2023, as compared to N187.08 billion recorded in the corresponding period of 2022. This indicates a substantial rise of N84.88 billion or 45.4 percent over this timeframe.
“This increase in inventory can be attributed to a weakened purchasing power of the consumers, brought about by diminishing real household income resulting from the ongoing escalation of inflationary pressures, compounded by the scarcity of naira in the first quarter of the year and the aftermath of the subsidy removal.”
Meanwhile, a total of 3,567 jobs were lost in the manufacturing sector in H1’23, representing an increase of 1,855 in job losses when compared with the 1709 job lost in the corresponding period in 2022 (H1’22), and an increase of 805 jobs lost when compared with 2708 jobs lost in H2’22.
Director General, MAN, Segun Ajayi-Kadir, attributed the increase in job losses to the unfriendly business environment and hastily implemented policies such as the fallout of the naira redesign leading to the scarcity of currency notes in the first quarter of the year.
“The decline in the number of jobs created in the sector during the period further highlighted the unfriendly business environment resulting from the hasty policies and residual effect of the currency redesign policy that led to naira crunch,” he added.
Google announces N75m grant for 15 Nigerian SMEs
Google has announced the opening of applications for its Hustle Academy SMB Fund.
According to the firm, its hustle academy, introduced in 2022, has graduated over 4,000 SMEs in Nigeria.
The Product Marketing Manager and the Hustle Academy Programme Lead at Google, Sinmisola Nojimu-Yusuf, added, “The Hustle Academy Fund provides SMBs with the resources and support they need to succeed. With equity-free funding, mentorship, and opportunities for increased visibility and networking, we are supporting SMBs to grow and thrive.
“We are committed to supporting the Nigerian entrepreneurial ecosystem, and the Hustle Academy Fund is a key part of that commitment.”
The firm noted that to be eligible for the fund, businesses must be Nigerian-founded, have operated within Nigeria for 1-5 years, and have a clear and scalable business plan.
FCCPC to summon Erisco Foods over Chioma Egodi’s arrest for Facebook post
The Federal Competition and Consumer Protection Commission (FCCPC) has said that it will issue a summon to Erisco Foods Limited over the arrest and detention of Chioma Egodi Jnr.
The Executive Vice Chairman/CEO of FCCPC, Barrister Babatunde Irukera, made this known on X (formerly Twitter) following the arrest of Egodi, who made a review of Erisco’s product.
“UPDATE: @fccpcnigeria operatives have confirmed arrest & transfer of the case to Abuja by the Police Force. She was no longer at the station on arrival,” Irukera posted.
“Working to determine exact current location & engaging Force HQ in Abuja. Summons being issued to @EriscoFoodsLtd immediately.”
The lady in question, Egodi Jnr, made a post on Facebook on September 17, 2023, where she said she tasted too much sugar in the tin tomato she bought, a product of Erisco Foods.
“I went to buy tin tomatoes yesterday (September 16) that I will use to make stew; I didn’t see Gino and Sonia, so I decided to buy this one,” she wrote.
“When I opened it, I decided to taste it omo! Sugar is just too much! Haaa biko let me know if you have used this Tin tomato before because this is an ike gwuru situation!”
The management of Erisco Foods Limited thereafter issued an official statement about the post Egodi made on Facebook about their product and also said they would take all necessary actions against any malicious attack on their reputation.
“The attention of Erisco Foods Limited has been drawn to a Facebook post by one Chioma Egodi Jnr on September 17, 2023, alleging that Nagtko Tomato Mix, one of the three tomato paste variants of Erisco Foods Limited, contains an unhealthy amount of sugar and therefore not fit for human consumption,” Erisco wrote.
UPDATE: @fccpcnigeria operatives have confirmed arrest & transfer of the case to Abuja by the Police Force. She was no longer at the station on arrival. Working to determine exact current location & engaging Force HQ in Abuja. Summons being issued to @EriscoFoodsLtd immediately. https://t.co/Y5nHCrDRZT
— Babatunde Irukera (@TundeIrukera) September 25, 2023
“While this claim is untrue and unfounded in its entirety, we wish to put on record that Erisco Foods Limited, from inception Is built on the vision and mission to manufacture and promote healthy, wholly Made-in-Nigeria tomato products with the commitment to feeding not only Nigerians but also Africans with healthy foods.
“Our Initial reaction was to ignore and disregard the post which was obviously intended to mistead our esteemed customers and discredit the image of Ensco Foods Limited, as previously instigated by some elements and syndicates who are uncomfortable with our increasing market dominance as a leading indigenous manufacturer of 100% natural tomato pastes. Considering, however, that Erisco Foods Limited has built a reputation as a credible organization committed to due process and the good of humanity, we have decided to bring the said publication to the attention of relevant authorities.
“In light of the above, we wish to reiterate that Erisco Foods Limited is solely committed to the production of healthy tomato products, including other products that have the full regulatory stamp and approval of NAFDAC and Standard Organization of Nigeria.
“While we recognize the rights of our consumers to make genuine observations about our products, we want to thank our esteemed customers for their continued patronage of Erisco Foods Limited. However, having built our reputation on healthy and quality products which have earned us both local and international awards, including the National Productivity Order of Merit Award, we will take all necessary actions against any malicious attack on our reputation.”
Egodi was arrested and whisked away to Abuja by the Police Force, as confirmed by the FCCPC boss, Irukera on X (formerly Twitter) on Monday.
“This has come to our attention @fccpcnigeria & we are engaged. Saw statement & deepening learning of the circumstances right now,” he posted.
“We have a team seeking to clarify arrest/detention status of the subject; & activating regulatory process to secure explanation from @EriscoFoodsLtd.”
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