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IMF downgrades Nigeria’s economic growth by 0.3% for 2023, lauds Tinubu reforms

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The International Monetary Fund (IMF) has revised Nigeria’s economic growth downward by 0.3 percent. The ‘2023 World Economic Outlook’ report, released during the annual meetings in Marrakech, Morocco, attributes this downgrade to unstable crude oil production in Nigeria.

To be more specific, the outlook now projects Nigeria’s economic growth to drop from 3.3 percent in 2022 to 2.9 percent in 2023. There is a slight rebound expected in 2024, with growth projected at 3.1 percent. The IMF based these forecasts on the negative impact of high inflation on consumption. The 2023 projection has been lowered by 0.3 percent, mainly due to weaker oil and gas production, partially because of maintenance work.

In the broader context of sub-Saharan Africa, growth is anticipated at 3.3 percent in 2023, with an acceleration to 4.0 percent in 2024. However, both years have seen slight downgrades of 0.2 and 0.1 percent, respectively, compared to earlier predictions. This trajectory falls below the historical average of 4.8 percent, and the decline is attributed to factors like adverse weather shocks, a global economic slowdown, and domestic supply challenges, particularly within the electricity sector.

Globally, the growth rate is projected to decline from 3.5 percent in 2022 to 3.0 percent in 2023 and further to 2.9 percent in 2024. Meanwhile, emerging markets and developing economies are expected to experience a relatively modest decline in growth, moving from 4.1 percent in 2022 to 4.0 percent in both 2023 and 2024.

The report emphasizes the need for collaborative efforts across various areas and urges against further fragmentation in the global economic landscape, as it can lead to costly delays. Rebuilding confidence in multilateral frameworks is seen as crucial for a system based on established rules, which promote international cooperation, worldwide prosperity, and effective governance of emerging technologies like artificial intelligence.

The report highlights the importance of bolstering certainty in trade policies as a key focus of necessary reforms. A stable trade policy environment is essential to provide businesses, investors, and nations with a predictable framework that supports economic growth and fosters mutually beneficial international trade relationships.

Multilateral cooperation is deemed vital to address the interconnected challenges hindering global recovery. The report suggests that all countries should aim to limit geoeconomic fragmentation and restore trust in rules-based multilateral frameworks to enhance transparency, policy certainty, and shared global prosperity. It also emphasizes the need for a robust global financial safety net with a well-resourced IMF at its core.

Regarding Nigeria, Daniel Leigh, Division Chief of the Research Department at the IMF, attributes the economic downgrade to factors like demonetization, high inflation, shocks to agriculture and hydrocarbon output. He also acknowledges important reforms initiated by President Tinubu, including ending fuel subsidies and unifying the official exchange rate, as steps toward stronger and inclusive growth.

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Binance Addresses Unusual Currency Movement

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The cryptocurrency trading platform Binance has made adjustments to its trading operations to address an unusual movement in currency values. Despite reports suggesting that the Central Bank of Nigeria (CBN) and other government agencies ordered Binance to impose restrictions on Nigerian traders selling USDT, Binance has distanced itself from such claims. In a report published on Wednesday by the Binance Blog, the platform clarified that its peer-to-peer (P2P) product remains operational but with some adjustments.

Binance explained that to safeguard users and prevent potential abuse, their system automatically halts trading during periods of significant currency movement. They noted an instance of temporary suppression of prices that briefly reached their system limit late at night. Prompt adjustments were made to allow trading to continue seamlessly. The platform highlighted their stringent measures to protect users, such as real-time monitoring, immediate removal of non-compliant advertisements, and permanent exclusion of bad actors from utilizing the P2P product. Continuous market surveillance ensures the swift removal of abnormal prices, supported by a fixed security deposit.

Furthermore, Binance emphasized their collaboration with legislators and authorities to uphold transparency in cryptocurrency trading and its impact on financial markets. They underscored that foreign exchange rates are influenced by various complex factors beyond Binance’s control. Despite this, they reiterated their commitment to engaging with regulators, policymakers, and stakeholders to facilitate open and transparent dialogue about managing the evolving cryptocurrency and financial markets landscape.

Binance encouraged users and the community to disregard any unfounded fears or uncertainties and expressed gratitude for ongoing support as they navigate dynamic market conditions. They pledged to provide updates through official channels as necessary.

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Again, CBN Hikes Import Duty Rate To N1,493.23/$1

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Less than a day after reducing the rate, the Central Bank of Nigeria (CBN) increased the exchange rate used for calculating Customs duties at the country’s seaports by 1.4 percent on Saturday morning.

According to information from the official trade portal of the Nigeria Customs Service, the Customs duty rate has been adjusted upwards from N1,472.756 per dollar to N1,493.23 per dollar as of Saturday, February 17, 2024.

This adjustment represents a 1.4 percent rise in the Customs duty rate, resulting in an increase of N20.474 compared to the previous rate.

This move contradicts the directive from the House of Representatives, which called on the apex bank to maintain the Customs and excise duties exchange rate below N1,000 per dollar. The House proposed pegging the rate at N951.941 per dollar, believing that reducing the rate would stimulate activity in Nigerian ports, curb inflation, and enhance economic stability.

The decision to raise the Customs duty exchange rate means that importers will incur higher costs to clear their goods, as import duties are linked to the dollar.

The new rate aligns with the official CBN foreign exchange rate of N1,493.73 per dollar as of Saturday, February 15, 2024, as announced by Customs management.

Earlier this year, the Comptroller General of the Nigeria Customs Service (NCS), Adewale Adeniyi, stated that the Service would solely use the exchange rate from the official Central Bank window for clearing imported goods and would refrain from arbitrarily adjusting the exchange rate.

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Nigerian Customs intercept 15 trucks of food items in Sokoto

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The Nigeria Customs Service (NCS) in Sokoto State has seized 15 trucks transporting food items in an effort to combat smuggling, which has exacerbated the increasing prices of goods in the nation.

Abubakar Chafe, the spokesperson for the NCS Sokoto Command, informed the News Agency of Nigeria (NAN) on Saturday that the trucks were apprehended along the Gwadabawa-Illela road.

Chafe explained that the interceptions were prompted by the large quantity of agricultural produce being transported by the trucks.

He noted that the trucks are currently under the custody of the command, and an investigation has been launched to determine the owners and intended destinations of the food items.

The operation was conducted by a joint team comprising officers from the NCS Sokoto Command, the Federal Operation Unit, and the Intelligent Unit of the Service, according to Chafe.

He emphasized that the operation was necessary due to the ongoing inflation of food items in the country.

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