BU$IN€SS Nigeria’s inflation rate rises to 21.82% amid naira redesign policy

...food inflation increases to 24.32 percent

From

Abubakar Y Ojimaojo ABUJA

The consumer price index (CPI), which measures the rate of change in prices of goods and services, surged to 21.82 percent in January 2023, up from 21.34 percent in the previous month.

The inflation rate data is contained the latest consumer price index (CPI) report released on Wednesday by the National Bureau of Statistics (NBS).

According to the NBS, the January 2023 inflation rate showed an increase of 0.47 percent points when compared to that of December 2022.

However, on a year-on-year basis, the “headline inflation rate was 6.22 percent points higher compared to the rate recorded in January 2022, which was 15.60 percent”.

FG inaugurates dutyfree ‘shopping village’ for diplomats to promote economic growth

From Abubakar Y Ojimaojo, ABUJA

The federal government has inaugurated a diplomatic duty-free village in Abuja where diplomats can buy items and enjoy tax-free services in the country.

The village, according to the federal government, was established in compliance with the United Nations Vienna Convention on diplomatic relations which exempts diplomats from all duties and taxes, whether national, regional, or municipal.

Speaking at the inauguration on Tuesday, Zubairu Dada, minister of state, foreign affairs, said the facility would help in reducing the level of shipment by individual diplomats.

He described the facility as a one-stop shopping village that will take care of all the needs of the diplomats in Abuja, even as he assured them of their safety.

“No doubt, the services provided by the dutyfree facility will drastically reduce the volume of diplomatic shipments into the country,” the minister said.

“It is my hope that the services of the duty-free facility will further provide an additional platform and opportunity for members of the diplomatic community to enjoy this dividend stay in our country.

“I understand that the facility has different interesting and top-notch sections ranging from shopping centre, recreational services, spa, eye centre, restaurants, clinic, etc.

“This affirms that the federal government of Nigeria has so far demonstrated its commitment towards ensuring the success of the duty-free facility by giving the needed support for each operation.

“Which will by no small measure, contribute immensely to the economic growth of Nigeria.”

On her part, Zainab Ahmed, minister of finance and national planning, said the establishment of the facility was important to ensure coordination of imports for the diplomats.

She said the diplomatic immunities and privileges act of 1962 empowers the ministry of finance to exempt diplomats from all taxes including diplomats enjoying duty-free shopping facilities in several countries.

According to Ahmed, the village will have strict control or cessation of individual requests for waivers on imported items by diplomats which presently, is largely uncoordinated and originated.

Th minister said the duty-free facility will enable the government to maintain a database of products.

Also speaking, Uche Odozor, managing director of the village, said the village would improve diplomatic relations between Nigeria and representatives of other countries and multilateral institutions in the country.

Odozor also said it was fulfilling to see the unveiling of an edifice that started in 2010.

“This shows that the headline inflation rate (year-on-year basis) increased in the month of January 2023 when compared to the same month in the preceding year (i.e. January 2022)” NBS said.

“On a month-on-month basis, the percentage change in the all-items index in January 2023 was 1.87 percent, which was 0.15 percent points higher than the rate recorded in December 2022 (1.71 percent).”

This means that in the month of January 2023, on average, the general price level was 0.15 percent higher when compared to December 2022.

NBS said items (on a class basis) that contributed to the increase in the headline index include bread and cereal (21.67 percent), actual and imputed rent (7.74 percent), potatoes, yam and tuber (6.06 percent), vegetable (5.44 percent), and meat (4.78 percent).

The report added that food inflation rose to 24.32 percent in January 2023 on a yearon-year basis, showing a 7.19 percentage points higher compared to the rate recorded in January 2022 (17.13 percent).

The statistics body said the rise in food inflation was caused by increases in prices of bread and cereals, oil and fat, potatoes, yam and other tubers, fish, vegetable, fruits, meat, and food products.

“On a month-on-month basis, the food inflation rate in January 2023 was 2.08 percent. This was 0.20 percent points higher compared to the rate recorded in December 2022 (1.89 percent),” the report reads.

“This increase was attributed to increase in the prices of some food items like oil and fat, bread and cereals, fish, potatoes, yam and tubers.

“The average annual rate of food inflation for the 12 months ending January 2023 over the previous 12 months average was 21.53 percent, which was a 1.44 percentage points increase from the average annual rate of change recorded in January 2022 (20.09 percent).”

Meanwhile, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), had said the new currency redesign policy had led to a reduction in the country’s inflation rate since its introduction.

“The policy is typically expected to cause deflation in the market as less cash holding reduces currency outside banks and retards money circulation,” Emefiele had said.

The policy was introduced in October last year.

NGX seeks more government incentives to boost listings, tax revenue

From Abubakar Y Ojimaojo ABUJA

The Nigerian Exchange Limited (NGX) has advocated for more government incentives to motivate companies to list on the NGX.

The NGX’s CEO, Temi Popoola, who made the call during an interview, explained that exploring the capital market would help the government to boost revenue and stimulate the sustainable economic growth required to increase wealth and reduce poverty in Nigeria. He said:

“The reality is that because listed firms must adhere to regulatory requirements and corporate governance standards to maintain their listing on the Exchange, they are typically more consistent and reliable with their tax compliance. Consequently, the more companies we can get to list, the more revenue the government can make.”

Top priorities: Speaking on what the institution’s top priorities are for the year the CEO noted that the Exchange is looking to address some age-long issues bordering on new listings which will, in turn, deepen trade.

He recalled that in December 2022, the Securities Exchange Commission (SEC) approved NGX’s Technology Board rules which permit it to list fintech start-ups and tech companies on the Exchange.

“In order to push its digital transformation agenda, NGX had gone one step further and established an advisory panel on digital technology products. The Panel would give the Exchange a platform to communicate with the capital market community and the fintech ecosystem to enhance and increase NGX’s digital product offerings.

“We are interested in expanding beyond financial services, the construction industry and Telco. For instance, NGX admitted the first-Generation power company, Geregu Power Plc on the Exchange in 2022 and BUA foods which led to the deepening of the market and a fair representation of GDP. The Agric industry is one sector that has been often said to be underrepresented on the Exchange. As we move to get such listings, we are also looking for companies and sectors with low representation in order to promote a market with equal representation.”

In a bid to diversify, Popoola also mentioned an interest in exploring listings from free zone companies like the listing of the second tranche of the Lagos Free Zone N25 billion series 2 bonds, the first 20-year corporate infrastructure bond in Nigeria on the Exchange.

Whilst citing ongoing projects within the Lagos Free Zone which were projected to generate $461 billion in the next five decades, he added that NGX in partnership with regulators will be taking steps to accommodate more listings from free zones in 2023.

“Futuristically, we are looking at promoting financial literacy by exploring data dissemination through telco partnerships. We are also keen on aligning our activities to drive the UN SDGs and more importantly to promote the work we are doing in enabling a sustainable capital market ecosystem,” he said.