The Nigerian economy is in recession, figures released by the National Bureau of Statistics officially confirmed Wednesday.

Although various government officials, notably the Central Bank of Nigeria (CBN), Godwin Emefiele, and the Minister of Finance, Kemi Adeosun, had over a month ago said the economy was in “technical” recession, the official confirmation came with the release of the new figures.

The statistics bureau said the second quarter 2016 Gross Domestic Product (GDP) declined by -2.06 per cent.

Annual inflation rose to 17.1 percent in July from 16.5 percent in June, and food inflation rose to 15.8 percent from 15.3.

“The pace of the increase in the headline index was however weighed upon by a slower increase in three divisions, namely health, transport, and recreation and culture divisions,” the NBS said.

The statistics agency said the onset of the harvest season was yet to significantly impact on food prices, with food sub-index rising by 15.8 per cent (year-on-year basis) in July, about 0.5 per cent points lower from rates recorded the previous month.

Equally, the agency said energy prices accounted for the rise in inflation for the month, with energy and energy related prices recording some of the largest increases reflected in the core sub-index.

“In July, the core sub-index increased by 16.9% during the month, up by 0.7% points from rates recorded in June (16.2%).” the report said

“During the month, the highest increases were seen in the electricity, liquid fuel (kerosene), solid fuels, and fuels and lubricants for personal transport equipment’ groups.

Despite the figures confirming Nigeria’s worst economic recession in over a decade, the federal government on Wednesday said it remained optimistic of a turnaround.

In a reaction, the Presidency said although the gross domestic product (GDP) figures released by the NBS in its 2016 second quarter confirmed a temporary decline in the economy, it also indicated “an hopeful expectation in the country’s economic trajectory.”

A statement from the office of the Vice President, Yemi Osinbajo, said beside the growth in the agriculture and solid mineral sectors, the Nigerian economy was doing better than estimates by the International Monetary Fund (IMF).

The Vice President said with the present administration’s policies, there were clear indications the second half of the year would be even much better.

“The Buhari presidency will continue to work diligently on the economy and engage with all stakeholders to ensure that beneficial policy initiatives are actively pursued and the dividends delivered to the Nigerian people,” he said.

In his reaction to the NBS report, Special Adviser to the President on Economic Matters, Adeyemi Dipeolu said “The just recently released data from the National Bureau of Statistics showed that Gross Domestic Product declined by -2.06% in the second quarter of 2016 on a year-on-year basis.

“A close look at the data shows that this outcome was mostly due to a sharp contraction in the oil sector, due to huge losses of crude oil production as a result of vandalisation and sabotage.

“However, the rest of the Q2 data is beginning to tell a different story. There was growth in the agricultural and solid minerals sectors, which are the areas in which the Federal Government has placed particular priority.”

Mr.Dipeolu noted, agriculture grew by 4.53 per cent in the second quarter of 2016, compared with 3.09 per cent in the first quarter.

Besides, he said the metal ores sector showed similar performance, with coal mining, quarrying and other minerals also showing positive growth of over 2.5 per cent, while the share of investments in GDP increased to its highest levels since 2010, growing to about 17 per cent of GDP.

Although the manufacturing sector was yet truly out of the woods, the adviser said the sector was beginning to show signs of recovery, with the service sector similar improvement.

The inflation rate remains high but the good news is that the month-on-month rate of increase has fallen continuously over the past three months.

He noted the high unemployment rate, which she said was usually the case during growth slowdowns.

“The emerging picture, barring unforeseen shocks, is the areas given priority by the Federal Government, are beginning to respond with understandable time lags to policy initiatives,” Mr. Dipeolu said.

“Indeed, as the emphasis on capital expenditure begins to yield results and the investment/GDP numbers increase, the growth rate of the Nigerian economy is likely to improve further,” he said.

As these trends continue, he said the outlook for the rest of the year pointed at the Nigerian economy beating the IMF prediction of -1.8% for the full year 2016.

“The IMF had forecasted a growth of -1.8% for 2016. However, the economy is performing better than the IMF estimates so far. For the half year, it stands at -1.23% compared to an average of -1.80% expected on average by the IMF.”

A Research Analyst with FXTM, Lukman Otunuga, noted the 2.06 per cent contraction of the economy in the second quarter, saying the signs of an imminent slowdown were already visible with the Central Bank of Nigeria (CBN)’s foreign reserves falling to $19 billion.

“While Naira’s vulnerability was highly expected following the official floating foreign exchange policy, external risks, such as a resurgent dollar has accelerated the devaluation of the local currency, consequently pressuring the nation further.

“With inflation and unemployment hovering around worrying levels, the CBN has been placed under immense pressure to act, which may weigh on investor sentiment.

“While the news of Nigeria entering a recession may be painful, it should be no surprise as the incessant declines in oil prices have punished heavily oil export nations, with Nigeria being no exception,” Mr Otunuga said.

Facebook founder and CEO, Mark Zuckerberg, has said the "future of the world" will be built on the African continent.

Zuckerberg made the statement during his first Sub-Saharan visit to Africa in Lagos, Nigeria on Tuesday.

A small group of media were invited to a live-stream of the Nigerian event in Johannesburg on Wednesday.

"The thing that is striking [about Nigeria] is the entrepreneurial energy. I think when you're trying to build something, what matters the most is who wants it the most. This is where the future is going to be built," Zuckerberg said from Lagos.

He said that once the world woke up to the entrepreneurial energy coming from Africa, the continent would begin to change the world.

"You feel that here, as soon as you get off the plane and start talking to people, you feel that passion and entrepreneurial energy," Zuckerberg added.His surprise visit to Nigeria, Facebook's largest African market with over 18 million users, was to learn more about the country with a focus around entrepreneurship and web development.

"If you want to connect everyone in the world then making sure everyone has access to the internet is a really important thing," he said.

During his discussion with Nigerian media, Zuckerberg made mention of Facebook's key projects aimed at connecting developing communities to the internet.One such project, Free Basics aimed at providing people with access to basic services on their mobile phones in areas where internet access may not be as accessible as in more developed areas, is currently being brought to South Africans by Cell C.

"Whether you care about connecting people, friends and family or helping people startup businesses, the internet is one of the most fundamental parts of infrastructure that I think needs to exist," Zuckerberg said.

"Growing small businesses is an important part of communities. So far 60 million businesses have pages have been created on Facebook. We are giving people the same tools that only big companies would have had access to," he added.

Arusha — East African handicraft stakeholders are finalising negotiations with four International organisations to promote handicraft trade in the region.

The Netherlands Centre for the Promotion of Imports from Developing Countries, Trade Mark East Africa (TMEA), the World Fair Trade Organisation and the USAID East Africa Trade and Investment Hub will jointly promote handicrafts.

That will be done through trade fairs in an initiative known as Source East Africa.

East Africa's geographical location has made it a melting pot of different cultures, resulting in a rich diversity of crafts skills and products.

Trade in handicrafts can create jobs in rural and peri-urban areas and add value to local raw materials.

Besides generating money, handicrafts can contribute to import substitution by providing locally produced product alternatives to imported ones.

"We need to start recognising the handicrafts sector as a key economic sector in the region that requires comprehensive support so that it can unfold its full potential," the CBI programme manager for the Export Coaching Programme in East Africa, Heidy van der Ploeg, said.
 

According to UNESCO, the handicrafts sector is the second largest employer in the developing world behind agriculture. The global crafts sector is valued at $34 billion annually and 65 per cent of global handicrafts exports come from developing countries. "We are delighted to be part of this trade fair as its success and benefits will lead us closer to achieving our objective of increasing the region's global exports," said the chief executive officer for TMEA, Frank Matseart.

He said Source East Africa is an international business platform that will consequently result in the creation of more jobs in the region and especially for women who are a major stakeholder in the crafts sector. Besides the demand on the export market, there is also a growing regional and domestic demand for home décor, fashion accessories and gifts.

A growing tourism sector in the region offers the potential to sell products to tourists through souvenir and gift shops. Many hotels and lodges, besides sourcing products for their own in-house gift shops also look for interior decoration products to decorate their houses in a "local design style" to enhance the experience for their guests.

There is also a growing middle and upper class in the region that appreciates good quality handicrafts. There is also the corporate sector that often sources products from this sector either to decorate their offices or as gifts to customers, especially during the holiday season.

Mbanza Congo — Construction material prices increased in the last three weeks in Mbanza Congo, northern Zaire province, in what the residents decries that such situation hinders the fulfillment of their dreams of having own homes.

In a tour meant to sound out the prices of the construction materials in the local trade outlets on Monday, Angop learnt that a 50km cement bag is being sold at AKz 1600 against the previous 1400 in beginning of August.

A 3-meter zinc sheet stands at AKz 3,800 against the previous 3,000, while a 25 kg tin of paint worth 1200 Kwanzas, 200 more than the previous price.

The 12mm-steel bar went to AKz 2000 and AKz 1700 for 10mm steel bar, eight millimeters (1400), six millimeters (1000), a 14-cubic meter car load of sand (AKz 100 000), gravel (AKz 90, 000).

While Eskom said it remains committed to sign all of the remaining renewable energy independent power producer (REIPP) contracts under the current bid window, it reportedly backtracked on this pledge last week.

Eskom CEO Brian Molefe reportedly refused to sign an agreement for a government approved concentrated solar project with Acwa/Redstone in the Northern Cape last Wednesday. It was the second time he had refused to sign the agreement, signalling a move to disrupt the successful REIPP programme.

However, Eskom said this was not the case.

“Eskom has not decided to put on hold any renewable energy contracts,” said Eskom spokesperson Khulu Phasiwe on Monday in an emailed response.

“On the contrary, we have signed power purchase agreements with all successful bidders and we’re committed to sign all the remaining contracts under the current bid window 4.5 of the Department of Energy (DoE).

“All that Eskom has done was to write a letter to the DoE asking for clarity or a dialogue regarding the next contracting phase of independent power producers (IPPs) beyond bid window 4.5. That does not mean that a decision has been taken to abandon the IPPs.”

However, Business Day reported on Monday that by withholding this agreement Eskom had backtracked on its commitment to sign bid window 4.5 agreements and was therefore in defiance of government’s policy set by the DoE.

“Since July, (Eskom CEO Brian) Molefe and Eskom’s head of generation, Matshele Koko, have objected to the arrangement, as it means that they are obliged to buy power from independent producers, even when it is not required by the grid,” explained Business Day deputy editor Carol Paton on Monday.

“This is especially so with renewable energy, which is available only when the sun shines and the wind blows, and does not always coincide with peak-demand periods.”

Koko, Eskom’s group executive for generation, said in an opinion piece sent to Fin24 on Monday that over the next 20 years, R1.2trn in nominal terms is forecast to be spent on approximately 7 300 MW from co-generation, DoE peaker plants, renewables, the small renewable programme and bid windows 1 to 4.5.

“It is within this context that the chairman of Eskom (Ben Ngubane) has asked for a dialogue,” he explained. “He is merely exercising his fiduciary duties. Why is he being told to shut up? It is in the national interest to have this debate.

“Who stands to benefit when this debate is swept under the carpet? After all, the current expansion plan will bring unnecessary higher cost to consumers and will ultimately increase the cost of doing business in this country, impacting country competitiveness.”

Koko said the introduction of IPPs was partly based on the assumption that Eskom would only be able to build enough generating capacity by 2022.

“But through disciplined implementation of the plant maintenance programme, Eskom has been able to stabilise the power system, resulting in no load shedding in more than one year,” he explained.

“This turnaround is a game-changer. It will have a significant impact on the expedited IPP Bid Windows which are based on Eskom not being able to turn around its operations by 2022. It significantly improves the medium-term capacity outlook. Most importantly, it has a positive impact on the price that the consumer will pay for electricity going forward.”

The Constituency for Africa (CFA) today announced that His Excellency Hage Geingob, the President of the Republic of Namibia, will participate in CFA’s 2016 Ronald H. Brown African Affairs Series.

President Geingob will provide Keynote Remarks at CFA’s Roundtable on Increasing U.S.-Africa Trade and Investment, and will Co-Chair the U.S.-Africa Policy Forum, the signature event of this year’s Series. “As a leader among Africa’s many distinguished leaders, President Geingob will bring a much needed perspective to the Ronald H. Brown Series, particularly as we discuss strategies to strengthen U.S.-Africa relations. As for trade, Namibia’s beef recently qualified for export to the U.S. market, the first African country to do so. We are extremely excited to have President Geingob join us this year,” said Mr. Melvin P. Foote, President and Chief Executive Officer of CFA.

The theme of this year’s series is “Setting the US-Africa Agenda for the Next Administration”. Confirmed Co-Chairs for the series include His Excellency Hage Geingob, President of Namibia; Ambassador Andrew J. Young, former U.S. Ambassador to the United Nations and Mayor of Atlanta, GA; the Honorable Ronald V. Dellums, former Member of the U.S. House of Representatives and Mayor of Oakland, CA; Ambassador Jendayi E. Frazer, Adjunct Senior Fellow for Africa at the Council on Foreign Relations, and former U.S. Secretary of State for African Affairs; Mr. Denis-Christel Sassou Nguesso, Founder and President of the Foundation Perspectives d’Avenir in the Republic of Congo; Congresswoman Karen Bass; Mr. Mohammed Kachallah, Acting Director General at the Directorate of Technical Cooperation in Africa; Mr. Renato Almeida, Manager of International Government Affairs at Chevron; Mr. Raymond Dabney, President and CEO of the Cannabis Science Research Foundation; and Dr. Johnnetta B. Cole, Director of the National Museum of Africa Art.

Sponsors for the 2016 Ronald H. Brown African Affairs Series include the Directorate of Technical Cooperation in Africa, Foundation Perspectives d’Avenir, Chevron, Cannabis Science Research Foundation, the U.S. Agency for International Development, and Nixon Peabody LLP.

Government has been forced to reduce duty and surtax on some products imported from South Africa in response to concerns raised by that country over the restriction of imports under Statutory Instrument (SI) 64 of 2016.

Early this month, South Africa gave Zimbabwe two weeks to remove duty and surtax on 112 products after Zimbabwe had restricted the importation of 43 products under SI 64.

Sources told Standardbusiness last week that after Industry and Commerce minister Mike Bimha took the matter to Cabinet, a few concessions would be made.

The source said: “government will be falling back on trading protocols from the World Trade Organisation to avoid some of the stipulations in the Sadc Trade Protocol of 1996. South Africa also has restrictions of its own on what Zimbabwe can export to that country.”

Industry and Commerce deputy minister Chiratidzo Mabuwa last week said the government’s response to the request to reduce duty on the 112 products would be revealed at the Sadc regional meeting.

An extraordinary committee of ministers’ meeting was held last week on August 24.

“If the SI 64 of 2016 affected, for example the informal traders, it is government’s duty to come up with alternative means such as looking at (what could be done about) other products that are still permissible to bring in,” Mabuwa said.

“For example, we have the importation of palm oil, olive oil, fridge-free margarine, washing powder, so we can let it go now but as long as firms for these products are established here, we have to create a market for them. We go and do our due diligence, look at what is involved, go into the industries where economists do their work, come up with what the national demand is, and what it is that we can do and how can we produce it.”

SI 64 of 2006 came after a number of imports regulations — SI 6 of 2014, SI 126 of 2014, SI 18 of 2016, SI 19 of 2016 and SI 20 of 2016 — which were introduced to support local industries.

Some of the 43 restricted imports include coffee creamers (Cremora), camphor creams, white petroleum jellies and body creams.

“In 2016 we issued Statutory Instrument’s number 18, 19 and 20 looking specifically at issues but it is just that SI 64 is the fattest because it has 43 items that have been grouped together. If you look at it, we did not issue anything in 2015 which means we had a lot of representations from industry and we came up with these 43 items and it is not going to be the last one. We might come up with more depending on the representations,” Mabuwa said.

Buy Zimbabwe chief executive officer Munyaradzi Hwengwere said South Africa had in the past introduced the preferential trade arrangements on Zimbabwe’s textiles. He said South Africa imposed a 65% duty on textile products, a move which suffocated textile companies in Bulawayo.

Deputy Agriculture minister Paddy Zhanda said companies complaining about the effects of import restrictions should be “ignored”.

He said trading was not really free and was actually a “war” suggesting that Zimbabwe deals with the costs of the potential effects. However, Mabuwa disagreed saying there was need to honour trading agreements.

Zimbabwe National Chamber of Commerce president Davison Norupiri said although some companies had been affected, others had seen increases well above 30% capacity utilisation and increased productivity.

“We have got companies that have registered growth in terms of capacity utilisation [and] employment [creation] which is something we cherish as a chamber. The government also whet the appetite of those who want to invest in our country. We have also witnessed massive expansion on most of the oil companies in this country,” Norupiri said.

Zimbabwe is South Africa’s fifth biggest export market in Africa. In 2015, Zimbabwe imported goods and services worth $1,8 billion from South Africa, according to statistics from South Africa’s Department of Trade and Industry.

South African firms like trading with Zimbabwe due to the strong currency the country uses at a time when the South African rand has been volatile.

First National Bank (FNB) has become the first South African financial services company to launch its own branded Android-powered smartphones.

The FNB phones, which were unveiled on Tuesday in Cape Town, include the 'ConeXis X1' which costs R150 per month over a two year period. Meanwhile, FNB's 'ConeXis A1' is priced at R59 over a 24 month period.

FNB said the phones are also set to provide free banking services while they are designed by Chinese phone maker ZTE.

Kartik Mistry, FNB's head of smart devices said the company has applied "serious attention to detail in putting an entire smartphone package together."

Mistry further said that customers can "walk into a bank with brick in their pocket and walk out with a bank in their pocket."

FNB's move to launch its own smartphone brand comes after the company unveiled its own branded mobile network last year.

FNB Connect runs atop Cell C's network as a Mobile Virtual Network Operator (MVNO).

*Fin24 has been flown down to the launch event by FNB.

Source: Fin24

Authorities at the Ministry of Solid Minerals Development yesterday confirmed the discovery of world class nickel in Kaduna State, by an Australian mining syndicate.

Top officials at the ministry, who confirmed the development in separate telephone chats with LEADERSHIP, on Monday night, said a more comprehensive report would be made available by the Ministry today.

One of the sources, who craved anonymity as he was not authorised to speak on the matter, said: “Yes it is true. Nickel has been found in Nigeria, but we cannot say anything right now. But be rest assured that a comprehensive report on the matter will be made available by the Ministry today, or as soon as possible.”

Nickel is a silvery-white metal with a shiny surface common to most metals, and is ductile and capable of being drawn into thin wires. The name is said to come from the German word Kupfernickel, meaning “Old Nick’s copper,” a term used by German miners. It is also said to be one of three naturally occurring elements that is strongly magnetic. The other two are iron and cobalt, but nickel is less magnetic than either iron or cobalt.

Nickel is used in many forms, including electric guitar strings, magnets and rechargeable batteries. It is added to a very important metal, alloy-stainless steel, which has numerous applications. It is used in cookware, cutlery, kitchen appliances and various bronzes and brasses as well as coins among several others.

LEADERSHIP findings revealed that the top ten countries where the mineral is found in tonnage include the Philippines (73,000) , Russia (240,000), Canada (240,000), Australia (234,000), New Caledonia (190,000), Indonesia (170,000), Brazil (110,000) China (102,000), Colombia (73,000) and Cuba (57,000).

Following the discovery, Nigeria is set to join the league of the world’s largest producers as the find is said to offer potential for early cash flow. Nigeria’s current major source of nickel, scrap metals, currently yields an average 2.5 metric tons annually.

The discovery was first reported by an Australian national daily, The Australian, which reported that the private mining syndicate that made the discovery was led by Hugh Morgan, a mining industry veteran.

“The discovery is unusual because the nickel is found in small balls up to 3mm in diameter of a high purity in shallow soils in what could be the surface expression of a much bigger hard-rock nickel field.

“The nickel balls, rumoured to grade better than 90 per cent nickel, and thought to be a world first given their widespread distribution, offer the potential for early cash flow from a simple and low-cost screening operation to fund a full assessment of the find that has exploration circles buzzing,” The Australian reported.

Though the newspaper reported that details of the discovery were sketchy, it indicated that the discovery was on a border town in Kaduna State, close to Dangoma, a small farming settlement about 160 kilometres northeast of the Federal Capital Territory (FCT), Abuja.

According to the report, Minister of Solid Minerals Development, Dr Kayode Fayemi, is one of 13 African ministers of mines scheduled to attend this year’s three-day Africa Down Under mining conference at Perth’s Pan Pacific Hotel in September.

… Can Generate N5trn Annually From Mining – Fayemi

Meanwhile, Fayemi has said that the analysis conducted by major stakeholders in the solid minerals sector, the Association of Metal Exporters of Nigeria, indicates that Nigeria can generate at least N5 trillion annually from mining and exporting of its vast solid mineral deposits.

He stated this in his keynote address at the opening of the 5th International Mining Investment Conference/Exhibition on Nigeria, which started in Abuja yesterday, with the theme, ‘Connecting the Global Mining Industry to the Opportunities of the Solid Minerals Sector in Nigeria.’

The minister said: “Based on current data, Nigeria’s solid minerals sector only makes up about 0.34 per cent of gross domestic product (GDP).

“While that is significant, it is much smaller than its true potential as the vast majority of our mining assets have yet to be exploited.

“According to one of the major stakeholders in the solid minerals sector, the Association of Metal Exporters of Nigeria, we can generate at least N5 trillion annually from mining and exporting of its vast solid mineral deposits, with several multiplier effects on job creation, state development and social infrastructure that could position the solid minerals sector as the main catalyst for national development.”

Fayemi noted that should Nigeria successfully implement the proposed recommendations, growth is expected to return to the sector in the form of new exploration activity, operations and production from active mining, functional and expanded processing and refining capacity, and higher value-addition in exports.

“The net outcome will be the creation of thousands of direct jobs and potentially hundreds of thousands of indirect jobs. We anticipate contribution to mining GDP to exceed $25 billion by 2026 as industries are better able to use the output of the sector, substituting for imports,” he added.

The minister, however, lamented that the sector was faced with both internal and external challenges which include the lack of viable geosciences data and information, low industry participants, institutions and governance

On the external challenges, he said: “Asides the negative perceptions about the Nigerian investment environment is the turmoil besetting the global commodities market as key sources of demand that supported decent prices over the past two decades have steadily declined.

“This has put mines and mining houses under immense pressure which is reflected in the sharp decline in the share prices of major industry players such as Glencore, Anglo-American and Rio Tinto. “Naturally, as the prices of metals and their assets plunge, many of the top mining houses are pulling back from investment planning, shutting down mines and optimizing current operations. This greatly affects our prospects for new entrants into the Nigerian mining space.

He, however, stated that in spite of the abovementioned challenges, the sector was resolved to overcome them and fulfil its mandate.

“As things currently stand, in 2015, the sector contributed approximately 0.33 per cent to the GDP of the country. This contribution is a reversal from historically higher percentages (about 4-5 per cent in the 1960s-70s).

“Our policy goal is to return to a contribution level of 5 per cent -7 per cent over the next 10-15 years, and the recently approved Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP) is very supportive of this aspiration.

Also speaking the vice president, Prof Yemi Osinbanjo, who was represented by the special adviser to the president on Economic Matters, Dr Adeyemi Dipeolu, said: “The conference is important because it is coming at a time when the world is mired in economic crises, which requires a synergy of efforts to restore goals and normalcy.

“The administration of President Buhari has consistently advocated and pursued the formidable policy of diversifying the Nigerian economy from over reliance on crude oil with the current economic downturn. It had become imperative that we focus on areas of comparative advantage, like agriculture and solid minerals development.”

While urging the participants to bring up strategies of engagement, he assured that the federal government, through the Ministry of Solid Minerals Development, had developed a roadmap to provide the basis for some key initiatives which had been identified as crucial to the success of the sector.