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Naira bounces back, appreciates to N470/$ in the parallel market

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Naira Notes

 

 

The naira this morning reversed its two weeks loss to the dollar in the parallel market, appreciating by N20 to N470 per dollar.

 

The naira had earlier depreciated by N30 against the dollar, as the parallel market exchange rate rose sharply to N500 per dollar on Monday, November 30th from N470 per dollar on Friday, November 20th 2020.

 

But the new rules introduced by the Central Bank of Nigeria on Monday, November 30th, which allowed beneficiaries of diaspora remittances and foreign exchange transfers into domiciliary account, to collect the proceed in foreign currency cash, halted the dwindling fortunes of the naira.

 

As result the naira gained N10 against the dollar yesterday (Tuesday December 1st) as the parallel market exchange rate dropped to N490 per dollar from N500 per dollar on Monday.

 

This trend continued this morning, howbeit on a larger scale, as the parallel market exchange rate further dropped to N470 per dollar from N490 per dollar yesterday, translating to N20 appreciation for the dollar.

Lockdown: Small Scale Businesses incurred debts.

Thus, the naira had reversed the N30 loss against the dollar since November 20th, 2020.

 

The sharp appreciation of the naira according to Aminu Gwadabe, President Association of Bureaux De Change Operators of Nigeria (ABCON) shows the effectiveness of the new CBN rule receipt of diaspora remittances.

 

He said: “Certainly, those hoarding foreign exchange better sell now otherwise they will lick their wounds.”

 

Commenting further on how the new rule will impact dollar supply and the activities in the BDC subsector, Gwadabe said: “The monopoly of (banks) is broken and the policy will induce liquidity in the BDC subsector.

 

“It is true that the volume of diaspora remittances amidst COVID-19 19 is still huge. In fact, other countries like Kenya and Zimbabwe are recording higher diaspora remittances inflow as a result of skillful medical doctors abroad.

 

“Nigeria is expected to close the year with over $20 billion diaspora remittances despite the pandemic in 2020.

 

“The beneficiary is free to collect his proceeds in foreign cash currency and trade it in the BDC subsector which will lead to true price equilibrium in the market.”

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Business

Lubricants and Nigeria’s economy

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By Cosmas Chukwunonso Nwobi

Every engine depends on oil, which serves as the heat transfer medium and lubricant for moving parts. It stops wears and damages from happening because the moving parts won’t be rubbing against one another.

The primary consumers of engine oil in Nigeria are those who own cars, generators, enterprises, tricycles, and motorcycles. Diesel and gasoline engines both utilize various grades of engine oil. Diesel engine oil is used to maintain heavy vehicles (diesel vehicles), small and large generators, as well as passenger vehicles (light vehicles). Petrol engine oil is used to maintain passenger vehicles (light vehicles).

The overall annual requirement for lubricating oils across the globe is projected to be 50 billion liters, or 60 percent automotive and 40percent industrial. However, industrial lubricants account for more than 70% of total global gross revenues and profit margins.

According to projections, Nigeria, with a gross domestic product of N150 billion in 2013 and more than N450.37 billion by the end of Q1 2021, is the third-largest user of lubricating oils in Africa, consuming 700 million liters of the substance per year (or 1 percent of the global demand).

The aggregate profit margins of the blending plants were N45 billion in 2013 and N120 billion in the first quarter of 2021. Their total assets are projected to be worth N20 billion. This indicates that domestic production of lubricating oils meets 75 percent of the country’s total demand, with imports from specialist marketing companies providing the remaining 25percent.

You might also be interested to know that, over the projected period (2021-2026), the market for lubricants in Nigeria is anticipated to develop at a compound annual growth rate (CAGR) of 1.54%, reaching 300,399.52 kilo tons by 2026. which demonstrates that the market for automotive lubricants in Nigeria is anticipated to grow to $683 million by 2023.

This demonstrates that the significance of engine oil cannot be overemphasized and that lubricant production would be a very profitable business endeavor that would considerably boost Nigeria’s economy.

However, this industry was adversely affected by Nigeria’s slowing economic growth. The 2016 recession brought on by the sharp decline in global oil prices was the root cause of the downturn. Oil prices started the year at $36.76 a barrel and reached a high of $54.06 for the year. The lack of foreign exchange had a serious negative impact on the ability of various lubricants manufacturing companies to conduct business and imposed severe costs on key sectors of the country, which further cascaded into all areas of the economy. Given that many players in the industry imported large volumes of base oil and other raw materials needed to blend lubricants at the time, this meant that the shortage of foreign exchange affected all sectors of the economy.

However, the investment landscape is currently changing and Nigeria’s lubricant industry, if properly managed, will surely triple it’s current position in a few years to come. This is due to large oil marketers taking advantage of the lubricants market’s deregulation and lack of significant government intervention.

I commend the effort of the Nigerian Government so far in reducing import charges for Lubricant Blending plants firmly advocate for the need of a driving and I strongly advocate that more can be done in this area since Nigeria’s lubricant business has great prospects for investors. Should we succeed, early investors will also benefit from pioneer status and a five-year tax break.

I firmly believe that better consumer education, cooperation with transportation companies, increased consumer knowledge, and the provision of higher-quality lubricants at lower prices would help Nigeria’s lubricant manufacturers expand and make more money.

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Best choice Specialist Hospital Launches First Intensive Infant Phototherapy Machine In Kano

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_”A Beacon of Progress in Northern Nigeria!”_

In a groundbreaking move, Best Choice Hospital has taken a significant leap forward in pediatric care with the introduction of the Infant Phototherapy Unit, a groundbreaking technology designed to treat jaundice and prevent brain damage in newborns.

In a statement signed by Auwal Muhammad Lawal Group Managing Director of the Hospital noted that pioneering technology enables medical professionals to transfuse blood with unparalleled precision, safety significantly enhancing treatment outcomes for children.

…. Noted that the innovative machine boasts a remarkable 70% radiance output and features a standard phototherapeutic unit, eliminating the need for blood transfusions.

Auwal reiterated that introduction of this advanced state-of-art machine marks a significant milestone in Best Choice Hospital’s ongoing commitment to pediatric excellence.

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With its advanced capabilities, the Infant Phototherapy Unit can effectively treat jaundice in a targeted manner, providing a beacon of hope for families.

“We understand the distress and hardship that comes with pediatric medical conditions”

“That’s why we’ve invested on this to ease the burden on families and provide children with the best possible chance at a healthy life”. Said Lawal

As the first of its kind in Northern Nigeria, this cutting-edge technology offers a comprehensive treatment solution for infants, covering the entire body with its optimal wavelength.

Dr. Abdulmalik Saminu, a leading medical expert expresses optimism that the development reinforces Best Choice Hospital’s position as a leader in pediatric care, providing families with renewed hope and confidence in the treatment of their loved ones.

Saminu further conveyed heartfelt gratitude to the hospital’s proprietor for his tireless efforts in making this life-changing technology available.

With the Infant Phototherapy Unit, families no longer need to travel abroad for medical treatment, as Best Choice Hospital now offers world-class care right in their own backyard.

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Naira depreciates to N1,635 in parallel market

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The Naira yesterday depreciated to N1,635 per dollar in the parallel market from N1,625 per dollar last weekend.

However, the Naira yesterday appreciated to N1,585.77 per dollar in the Nigerian Autonomous Foreign Exchange Market, NAFEM.

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Data from FMDQ showed that the indicative exchange rate for NAFEM fell to N1,585.77 per dollar from N1,598.56 per dollar last weekend, indicating N12.79 appreciation for the naira. The volume of dollars traded (turnover) in the market declined by 58.8 percent to $71.18 million from $172.8 million traded last week Friday.

Consequently, the margin between the parallel market and NAFEM rate widened to N49.23 per dollar from N26.44 per dollar last weekend.

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