31 Aug

Daily Watch – Lack of FX forces companies to look inwards, Zuckerberg-mania grips Nigeria

  • The scarcity of foreign exchange is helping companies which supply local raw materials to manufacturers raise margins and capacity, prompting domestic input preference numbers to see an upward movement, BusinessDay reports citing MAN data. According to the report, local input preference, which refers to the rate at which manufacturers use domestic inputs, has risen from 46.71 percent in 2014 to 51.88 percent in the 12 months ending in August 2015. MAN says the acute shortage of foreign exchange for the importation of raw material inputs and the fall in the value of the naira, prompted the association to encourage its members to look inwards for raw materials. The association says it expects the volumes and margins of raw materials sourced locally to surge further. The nation’s foreign exchange reserves increased by $595 million to hit a one-month high of $26.196 billion, new CBN data showed.
  • Facebook co-founder, Mark Zuckerberg visited the CoCreation Hub, Yaba, his first time in sub-Saharan Africa, and met with key players in the Nigerian tech ecosystem. According to TechCabal, Facebook has ramped up its interest in Nigeria in recent years, launching its Free Basics service in May, and Zuckerberg showed his support for the Jobberman team in a viral Facebook post. In addition, the Chan-Zuckerberg Initiative invested $24 million in Andela, Facebook’s developer workshop commences on Wednesday, and the social media network is reportedly partnering with Cool Link to launch Express Wifi in Lagos this week – capping up a busy Nigerian itinerary for the billionaire tech entrepreneur.
  • The CBN licensed 11 new international money transfer operators to handle transactions in the country’s foreign exchange market. The bank’s spokesperson, Isaac Okorafor, said the licensing was in furtherance of CBN’s effort to liberalise the market and ensure liquidity by making foreign exchange more readily available to low-end users. The new IMTOs, who are to operate in Nigeria in line with existing guidelines on international money transfer services include Trans-Fast Remittance LLC; Worldremit Limited; UAE Exchange Centre LLC; Wari Limited; Homesend SCRL; Small World Financial Services Group Limited; Weblink International Limited; Cashpot Limited; DT&T Corporation Limited; FIEM Group LLC DBA Ping Express and CP Express Limited.
  • A Chinese firm, China Railway Construction Corporation has received approval to handle the Kano light rail project at a sum of ₦589.8 billion ($1.85 billion), according to The Cable. Another light rail project by another Chinese firm, China Civil Engineering Construction Corporation in Lagos, is due to be completed in less than a year’s time. In an announcement on Monday, the CRCC said its directors had received a provisional letter of award from Nigeria for the Kano light rail project. The rail line, with a total length of 74.3 kilometres, is expected to accommodate trains which will travel at speeds of 100km/hr. The first phase of the project construction is billed to take two years, with the second phase of the four-line rail expected to be completed in 2020.
  • Digital mobile operators and telecommunications service providers spend about $2 billion (₦638 billion) annually on the importation of bandwidth and other related services, according to the National Space Research and Development Agency. The NASRDA director-general, Seidu Mohammed, who spoke at the National Space Dialogue in Abuja, said opportunities exist to develop local capacity and build a vibrant local satellite technology market which, in tandem with the nation’s space programme, could serve not only the country, but the rest of Africa.
  • The Transmission Company of Nigeria has said that it will open its books to external auditors to review for the first time in a decade. TCN, which recently reverted to the federal government’s management, admitted at a recent briefing in Abuja that it had not opened its operations to external audits in the last 10 years. The company says it has asked PwC Nigeria to undertake an external audit on its accounts. TCN’s finance director, Sonny Iroche said the audit would span between 2006 and 2014.