ThinkBusiness Today - May 15th

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How long can you cook for? Two hours, six hours … ok, 10 hours? Any of those answers do not quite describe the record that Hilda Baci, a Nigerian Chef and current sensation is attempting to break. Started last Thursday, she is attempting to break the Guinness World Record (GWR) for the longest cooking marathon hours by an individual. As at the time of writing this, she has completed about 80 hours.

But really, the question is not how long one can cook for, but also how long can one stay awake, be on your feet, and cook many meals for?

See my analysis of this remarkable woman in the “Winning” section below.

Markets

• Tomorrow Tuesday 16^th May 2023, DMO will sell between N320 billion and N400 billion worth of FGN bonds. The Bonds are 13.98% FGN FEB 2028, 12.50% FGN APR 2032, 13.00% FGN JAN 2042 and 12.98% FGN MAR 2050.

Nigeria’s foreign exchange market and trapped funds

One of the clear implications of the foreign exchange squeeze in the country is the trapped funds of foreign airlines. These airlines have considerable Naira Cash, now estimated at equivalent of about US $800 million. Following the trapped cash, they have provided windows for Nigerians to buy tickets using their dollar or Sterling Cards, raising the costs of international tickets.

However, ThinkBusiness can now reveal that there are other groups with trapped funds. They are portfolio investors and Fast-Moving Consumer Goods (FMCG)s with international parent companies. For portfolio investors that have exited the capital market or sold some of their shares, many of them have not been able exit. For the FMCGs, they have been borrowing foreign currencies from parent companies for their inputs and raw materials. Some of the FMCGs now have billions of Naira in trapped funds.

Given the complexities of these trapped funds, it is difficult to estimate how much is currently trapped in the country, as some may have been converted into other uses until there is an opportunity for them to exit. That brings us to what is likely to happen to the data below. What will happen to the gap between the I & E window and the parallel exchange rates? How will a Tinubu presidency respond to the pressure on the Naira after May 29^th ?

Naira Exchange Rates with the US $ at the I & E and the Parallel Market

While the distortion and arbitrage opportunities provided in the gap between the I & E and the parallel market is not solely responsible for all the problems of trapped funds, it will remain intractable without resolving that gap.

The Nigeria Investment Promotion (NIPC) Act and the foreign exchange (monitoring and miscellaneous) Act guarantees foreign investors the unrestricted transferability of profits and capital repatriation. But this does not explain it all. Trapped funds mean they are willing to exit at the country’s prevailing exchange rate through authorized channels, but the supply is not available.

Why? There are many reasons, but the bottom line is the increasingly weakening and worsening macroeconomic environment that means, currently in Nigeria, investment flows are largely one-way traffic out of the country, including by domestic residents. So, what the Tinubu presidency must do from day one is to begin to rebuild confidence in the Nigeria economy through concrete and tangible evidence, and not the miserable joke of the last eight years.

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Global Headlines

• There is no agreement yet on the increase of the US $31.3 trillion debt ceiling of the US. Two strands of negotiations have emerged over the weekend. First, is how long before another negotiation on the debt ceiling. The President and the Democrats prefer a two-year window, which will mean after the next Presidential election. The second strand is the scale of fiscal cuts that can and should happen before the debt ceiling is increased. It is widely considered that a default on US debt that may happen if the debt ceiling is not increased is “unthinkable”. This is a largely political problem that will have implications for stock prices, borrowing costs, growth, and ultimately the status of the US dollar in the global economy. In similar circumstances in 2011, the stock market plummeted and Standard + Poors downgraded US credit rating for the first time in history.

• Finance leaders of the Group of Seven (G7) - US, UK, France, Japan, Canada, Germany, and Italy - advanced economies discussed over the weekend the need to make global supply chains more resilient by reducing over-reliance on China but failed to agree on how.

• Britain’s economy grew 0.1 percent Q1 2023, official data revealed Friday, as output continues to be hit by high inflation and strikes. This is the second quarterly consistent growth since the 0.1% decline in Q3’2022. Although the Bank of England forecasts the economy will grow 0.25% in 2023 as a whole - a weak expansion though an upgrade on its prediction earlier this year of a 0.5% contraction.

The Week Ahead

• The NBS is expected to release the CPI and Inflation Report April 2023 on today Monday, 15^th May 2023. Inflation in April is expected to trend higher and the major inflation triggers for April will be the planting season, which is reducing commodity supply. This is being compounded by a boost in aggregate demand (Easter and Ramadan celebrations) and an increase in liquidity.

• Invest In Africa Summit 2023 will hold 16^th May 2023 in Amsterdam, Netherlands. The summit is specifically to promote and facilitate investment and trade between Africa and Europe. The theme for 2023 Summit: is “Unlocking Digital Transformation, Investments and Trade Opportunities in Africa”.

• 21^st Africa Business Summit organized by London Business School Africa Club holds on Saturday 20 May 2023. The theme of the 20th Summit is “The Future is African”. The Summit will emphasize Africa’s major transformation in partnership with the rest of the world, opening up massive investment opportunities and providing innovative solutions.

• The African Development Bank's Asia External Representation Office (PEXT) and African Natural Resources Management and Investment Center (ECNR) will jointly host a policy dialogue on 16^th May 2023, A New Vision for Africa: Asia-Africa Cooperation on Natural Gas.

Winning - Hilda Baci

Nigerian Chef, Hilda Baci (Hilda Effiong Bassey), is attempting to break the Guinness World Record (GWR) for the longest cooking consecutive hours by an individual. As at the time of writing this, she has completed about 80 hours. I look forward to the great news that she made it late this morning.

The current world record of 87 hours, 45 minutes was set by and Indian Chef, Lata Tondon. She completed the task in 87 hours, 45 minutes in Rewa in the Northeastern part of Madhya Pradesh, 807km from Delhi, India in 2019.

Hilda is not new to winning. She won the maiden edition of the “Jollof faceoff” in August 2021. According to reports about her, the journey to this competition started five years ago. In preparation for it, she has lost 20kg and made lifestyle changes.

What are the lessons that are already obvious takeaways for our “winning”?

• She is attempting to do what no one has done before. Yes, someone currently has the record, but she wants to break that record.

• She is following her passion.

• She has prepared, prepared, and prepared for this.

• She is demonstrating enormous discipline.

• She is making me and other Nigerians proud.