“Sin” tax

E kaaro o, Ututu Oma, Barka da Safiya - Good morning, and a warm welcome to ThinkBusiness Nigeria, your Monday – Friday dose of commentary, contexts, and insights on business and economic news that matter to you.

Yesterday, the Lagos Chamber of Commerce and Industry had a very important International Business Conference at the Eko Hotels and Suites. Everyone that spoke, especially His Excellency, the Executive Governor of Enugu State, Dr. Peter Mbah, is betting on Nigeria. With great participation from the embassies, and critical examples from China and India, I said at the conference that 1978/9 and 1991 have become significant in the economic history of China and India, respectively, because of the extensive economic reforms they started in those years. I added that I hope 2023 can be that year for us also.

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Markets

• The benchmark NGX All-Share Index (ASI) moved up 338.96 (0.51%) points to close at 66,490.34, showing a week gain of 1.53%, 4-week gain of 3.58%, and an overall year-to-date gain of 29.73%. Flour Mills Nigeria led the gainers with 10% share price appreciation closing at NGN 33.00 per share, followed by Champion Breweries (+10%), National Salt Company (+9.96%) and Dangote Sugar Refinery (+9.95%).

• Oil prices edged higher on Tuesday as the US dollar slid, while investors debated the potential impact to energy supply and demand from Hurricane Idalia set to hit Florida this week. U.S. West Texas Intermediate futures rose US $1.07, or 1.3%, to US $81.17 a barrel while Brent crude futures were up by 91 cents, or 1.09%, to US $85.33 a barrel.

• Naira was down at both the I&E Window and on the streets. At the I&E exchange, Naira depreciated by 0.42%, closing N775.34 to the US dollar. On the streets, Naira was down by 1.43%, reaching N920 to the US dollar.

• U.S. natural gas futures slid about 1% on Tuesday with a major, demand-destroying hurricane expected to hit Florida on Wednesday and forecasts for less hot weather and lower gas use next week than previously expected.

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National Headlines

• “Sin” tax – Prices of sugar sweetened beverages (SSBs) is expected to rise as the Ministry of Health has signaled it will seek to raise the taxes on SSBs. The Ministry, as monitored in the Vanguard, has said it will double the current taxes on SSBs, raising it from 10% to 20% per litre. The argument is that it wants to promote healthy beverage choices and reduce the intake of processed sugar and soft drinks, while contributing to a healthier future for Nigerians.

• Seven States may be affected by Lagdo Dam release – The Cameroonian authorities have recently released the excess water in its Lagdo dam reservoir. The reservoir capacity has diminished tremendously, now about 20% of its original capacity in 2021. The release, however, have implications for Nigeria, especially States connected to River Benue – Adamawa, Taraba, Benue, Nasarawa, Kogi, Anambra, Enugu, Edo, Delta, Rivers, and Bayelsa. The federal government, through the National Emergency Management Authority (NEMA) is working with other relevant government agencies to minimize the impact on lives and properties. The last flooding in Nigeria was in October 2022.

Global Headlines

• Iphone 15 launch? – According to CNBC reports, Apple has shared invitations for September 12^th , expected to be the launch of its iphone 15 and some of its apple watches. The launch event will also be streamed live on the technology giant website. It has used pre-recorded videos for its launch since the Covid – 19 pandemic era of 2020.

This Week

• Germany’s August inflation rate is expected to be released on Wednesday 30^th August 2023. The Consumer Price Index in Germany increased by 0.30 percent from a month earlier in July of 2023, the same pace as in the previous month.