Nigeria, Others Seal Trade Deals Worth $42 Billion at IATF 2021

Moody’s Investors Service (Moody’s), a global rating agency has changed Nigeria’s credit rating outlook from negative to stable while affirming the long-term issuer credit rating at B2. The change in outlook is based on their view that the external position is likely to improve in the next few years. This improvement is due to the expected export earnings from higher oil prices. Key policy changes by the government and the expectation of the commencement of operations at the Dangote refinery in a few years from now should further ease FX pressures and improve overall dollar liquidity.

Nigeria and other African countries sealed trade-related investment deals worth $42.1 billion at the recently concluded second Intra-African Trade Fair (IATF 2021) held in Durban, South Africa. Organised by African Export-Import Bank (Afreximbank), the African Union (AU) and the African Continental Free Trade Area (AfCFTA) Secretariat. The Council noted that the value of trade and investment deals was the outcome of more than 500 business deals concluded during the fair.

The National Information and Technology Development Agency (NITDA) and Nigerian Export Promotion Council (NEPC) have forged an alliance that could enable Nigeria to benefit from the yearly $4.7 trillion exportation of digital services. This alliance is in line with the Digital Innovation and Entrepreneurship Pillar of the NITDA’s 2021-2024 Strategic Roadmap and Action Plan (SRAP) recently launched.

The Nigerian Communications Commission says it is set for the second trial of 5G in Nigeria. According to the commission, the trial which was scheduled to hold on the 2nd of December 2021 is necessary in order to validate the national policy on 5G for the digital economy. The commission added that the supervised trial would be conducted by Airtel Networks Limited and its Original Equipment Manufacturer (OEM). MTN Nigeria Communications had held the first 5G trial in Nigeria in 2019.

The Central Bank of Nigeria (CBN) has directed that banks are no longer allowed to process hard copies of Form A and Non-commercial Export (NCX) Form on the Trade Monitoring System (TMS) with a ₦5,000 processing charge also taking effect. In two circulars, the Apex bank informed authorised dealers, the Nigerian Customs Service (NCS), shipping lines, airlines, and the National Museum and Monuments that all forms would be processed electronically from now on.

Diaspora remittances into Nigeria increased by 15.6% QoQ to $9.22 billion in H1 2021, compared to $7.98 billion recorded in the second half of 2020. It also represents a marginal 2.2% increase compared to $9.02 billion recorded in the corresponding period of 2020. This is according to the review of Nigeria’s balance of payment account as released by the Central Bank of Nigeria (CBN). The increase follows the continuation of the Naira4dollar initiative by the Apex bank, which rewards recipients with ₦5 for every $1 they receive from licensed IMTOs and commercial banks.

The World Bank advised that a more predictable, transparent and flexible foreign exchange management system was crucial to attract and sustain private investment flows. While highlighting the role of the Central Bank of Nigeria in exchange rate stability, the World Bank said there had been intense pressure on the naira, with the CBN constantly raising the nominal official exchange rate.