ThinkBusiness Today - May 2nd

E kaaro o, Ututu Oma, Barka da Safiya – Good morning, and welcome to ThinkBusiness Nigeria.

As you return to work and markets open, do you wonder if Nigerians enjoy more public holidays than many other places? So far in 2023, Nigeria has had six public holidays, with seven more to go. Combined, we have 13 public holidays in the year, about an average of one a month. Let me provide ammunition for both sides of the argument – consider that Mexico and Taiwan both have 9 holidays a year, while Belgium, Estonia, and Ireland have 10, but Sri Lanka have 25, Myanmar, 32 and Nepal, 35. So, it is not such a bad idea to be in the middle.

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Markets

• Crude oil prices fell by 1.14% to US$79.15 the first day of a new month starting the week with a downside on expectations of another rate hike by the US Fed, combined with weaker-than-expected economic data from China to erase previous gains.

• The Naira remains flat at I & E Window due to non-trading activities on Monday but strengthened by 0.45% at the parallel market as Naira closes N735.67/US $

• Natural Gas price declined 4.18% on Monday on record output and forecasts for milder weather and brought the year-to-date to - 43.7%, far from its peak in November 2022. Milder weather conditions are helping households and businesses reduce demand for heating, and complemented efforts by households and businesses to cut their energy usage – and bills.

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National Headlines

• As I mentioned in yesterday’s newsletter, workers day debate did not disappoint – welfare conditions. Surprisingly though, Daily Post reported that the President of the Nigeria Labour Congress (NLC), the largely weakened umbrella organization of Nigeria workers, Joe Ajaero, argued for a raise in retirement age of civil servants to 65 years or after 40 years of service. He argued that core civil servants’ retirement age should be adjusted in line with that of Judges (70) and university lecturers (65) as stipulated in the Retirement Age Harmonisation Act of 2012. While workers in France recently protested increase in retirement age, Nigerian workers are fighting for same. Contradictory? No. In France, they know their retirement benefits are secured but Nigerian civil servants have realised that retirements often mean a licence to poverty.

• Following the developments shared yesterday regarding the diplomatic standoff affecting the evacuation of many Nigerians stranded in Sudan, Vanguard reported that there is now progress. The border has now been opened for the evacuation of Nigerians from Wadi Halfa, 926km north of Khatourm, Sudan.

• More than electric buses. The Lagos State government recently acquired electric buses to support public transportation in Lagos. The scheme is in partnership with Oando Clean Energy Ltd, a subsidiary of Oando, one of Nigeria’s integrated energy companies, with focus on clean and sustainable energy. On the face of it, it is great news, and it is progress. But it is also difficult to shake of the feeling that this is like flying before crawling. Since the establishment of BRT buses, it is still grossly limited, there is no concrete evidence of domestic input sustainability, and the electric buses may not deliver lower cost per passenger. Only time will tell.

Global Headlines

• As expected, there is now progress on the information I shared on yesterday’s newsletter concerning First Republic bank in the US . JP Morgan has now acquired First Republic, the embattled mid-sized bank. The collapse of First Republic makes it the third US bank to collapse in two months, following the collapse of SVB and Signature banks in March. There are few concerns now. First is that the banking crisis is raising growth concerns – that is, it may lead to recession. Two, does this snowball into full-blown banking crisis? Jacob Manoukian, JP Morgan’s US Head of Investment Strategy believes we are not seeing a repeat of the 2008 crisis, for three reasons – policy makers have the tools to deal with the crisis, banks are stronger, and the economy is in much different space. I believe we all hope he is right.

• The situation in Sudan is worsening by the day. As foreign nationals in the country are scrambling and making frantic efforts to leave, mainly through Egypt, Sudanese nationals are caught in deteriorating deadly situations. They are caught in the battle for power between the country’s most powerful military forces – Sudan Armed Forces (SAF), led by General Abdel Fattah al – Burhan and paramilitary Rapid Support Forces (RSF), led by General Mohamed Hamden Dagalo. Currently, diplomatic efforts at resolving the crisis are thin, given this is another phase of a 20-year war that has metamorphosed in different shapes and dimensions.

• General Motors Co. on Monday said it had cut several hundred full-time contract workers over the weekend including at its engineering hub in suburban Detroit, the latest effort by the U.S. automaker to streamline operations. The contractors losing their jobs were within global product development at locations such as the company’s Warren Tech Center. The Wall Street Journal reported the job cuts earlier.

News Analysis - Why the lingering ban on Nigeria’s fish exports to the US?

Do you like your dry fish? Yes, those in the US, especially of Nigerian descent would have loved to enjoy some of the delicacies too, but, according to reports by BusinessDay (See https://businessday.ng/agriculture/article/high-feed-costs-export-ban-rattle-nigerian-fish-farmers/), Nigeria’s Catfish farmers not only face high costs of feeds, but are also not able to supply to the US market.

Following the inability of the Nigerian government to meet two important criteria for catfish importation into the US, the Food Safety and Inspection Service of the US Department of Agriculture (USDA) placed a ban on the importation of Nigeria’s catfish in March 2018.

Prior to the ban, the US authorities wanted the Nigerian government to provide information on processing, and fully address information requested in the Self Reporting Tool (SRT) required for any food exporting nation into the US before the ban took effect. The SRT is a questionnaire that United State Food Safety and Inspection Service (FSIS) uses to help assess whether a country’s food safety inspection system meets standards set by the US. The government not only failed to meet the deadline but have failed to meet the requirements in over five years.

See additional stories: https://businessday.ng/agriculture/article/nigerias-drag-on-us-fish-export-ban-questions-fgs-diversification plan/#:~:text=Currently,%20Nigeria%20exports%20about%20100,the%20industry%20since%20the%20ban.

https://www.premiumtimesng.com/news/more-news/430804-exporters-lament-u-s-ban-on-nigerias-catfish.html?tztc=1

The SRT document obtained from the United State Department of Agriculture stated clearly that, for any country to be eligible to export meat, poultry, fish or egg products to the United States, certain standards must be met. The requirements are essentially in three elements – processing standards, traceability, and tests.

This industry challenge that has cost the fish farmers in excess of N20 billion in exports is symptomatic of poor, weak, and disinterested institutions that are critical and required to support export, grow foreign exchange income and boost Nigeria’s international competitiveness.

The Week Ahead

• The NBS is expected to release the State Disaggregated Mining and Quarrying Data (2022) on Friday.

• This weekend, the coronation of their Majesties King Charles III and Queen Camilla will take place Saturday 6 May in London. King Charles, formerly known as the Prince of Wales, became king on the death of his mother Queen Elizabeth II on 8 September. Nigeria, as part of the commonwealth family, is still connected to the throne. Lightheartedly, Tiwa Savage, one of Nigeria’s truly global music global stars, will perform at one of the concerts celebrating the coronation on Sunday 7 May.