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European Businesses, EU Collaborate to Grow Nigeria’s Human Capital

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By Gloria Ikibah

The European Union businesses operating in Nigeria and the EU Delegation to Nigeria are stepping up collaboration towards helping to address the skills gap in the employment sector and leveraging the nation’s huge population of young people to drive economic prosperity.

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At a Stakeholders Conference hosted by European Business Chambers in Nigeria (Eurocham) in Lagos on Thursday, participants sought ways to raise the country’s stock of human capital and enhance employability and economic growth. The event was themed “Youths, Education, Employment and Skills”.

The EU Ambassador to Nigeria and ECOWAS, Ms Samuela Isopi, said Youth, Education, Employability and Skills (YEES!) are also a top concern and top priority for the European Union, both internally and in its cooperation with partner countries.

Ambassador Isopi, who is also the Honorary President of Eurocham Nigeria, described human capital as key to Nigeria’s development, and said the EU, its Members States and businesses recognised this in their engagements with the country.

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The European Union and Eurocham Nigeria are playing leading roles in the Nigeria Jubilee Fellowship Programme (NJFP), a collaborative initiative between the Nigerian Government and key stakeholders to build a reservoir of innovative and employable skills in the country, by placing smart young graduates in paid 1-year internships in companies across the country. The programme targets 100,000 youths over a five-year period.

“Demography has indeed the potential to help transform Nigeria; but it also poses challenges in terms of demand for quality education, skill development and employment”, Ambassador said.

With young people making up 70% of Nigeria’s population, the EU has prioritised the youth across all areas of its cooperation with the country. Under the Team Europe Initiative “Investing in Young Businesses in Africa” (IYBA) launched in Nigeria last year, the EU is rolling out a number of regional and national projects aimed at enhancing job creation for the youth, enhance their employability and entrepreneurship.

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Naijablitznews.com reports that the number of young Nigerians awarded scholarships under Erasmus+, the EU’s flagship programme for education, training and youth development, has quadrupled in the last four years, rising to over 200 in 2022 and making Nigeria the country with the second highest number of Erasmus+ scholarships worldwide.

Also recognising that youth empowerment is critical in the perspective of coming general elections, the EU has put the youth and their role in democratic governance first, through programmes aimed at mobilizing Nigerian youth to register and vote in the elections.

Nigeria’s former Minister of Education and ex-Vice President of the World Bank, Ms Obiageli Ezekwesili, who chairs The School of Politics, Policy and Governance (SPPG.org) was keynote speaker at the event.

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Lagos State Commissioner for Education, Ms Folashade Adefisayo; the CEO of Teach for Nigeria, Ms Folawe Omikunle; CEO of Siemens Energy, Mr Seun Suleiman; and the CEO of Spie Nigeria, Mr Guillaume Niarfeix; participated in a panel session on “Human Capital, a key factor of Success for Companies: How to Recruit, Train and Retain Talent to Secure Business Growth in a Challenging Environment”.

European companies have continued to play leading roles in Nigeria’s economy, providing jobs, creating values and contributing to the country’s economy in a positive, sustainable manner. While the European Union is the leading contributor to the Jubilee Fellowship fund, Eurocham member companies are notable destinations for the interns, with 16 of them already participating in the innovative programme.

All Eurocham member companies also have dedicated Management Trainees Programmes; participate actively in the NYSC scheme; and globally impact thousands of young Nigerian through their in-house development programmes.

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Naijablitznews.com reports that the EU is Nigeria’s biggest trading partner, with trade valued at about 29 billion euros a year and a balance, which is significantly in favour of Nigeria. The 27 Member States of the EU are also Nigeria’s largest foreign investor with total Foreign Direct Investments stock estimated at 23 billion euros.

Eurocham Nigeria was formed in 2018 to give a common voice to European businesses and together with the EU Delegation, serve as a platform for engaging with the Nigeria authorities on issues that impact on businesses. From 18 companies at inception, the membership of the chamber has increased to 35 and counting.

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Business

External reserves fell by $64m in January

lawmaker, CBN
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External reserves fell by $63.62m in January, figures obtained from the Central Bank of Nigeria have revealed.

The CBN revealed in its data on movement of foreign reserves that the external reserves which ended December 30, 2022 at $37.08bn fell to $37.01bn at the end of January 30, 2023.

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Nigeria’s external reserves fell by $3.43bn in 2022 after dropping from $40.52bn as of the end of December 31, 2021.

Cordros Securities stated in its January report on ‘MPC to favour smaller rate hikes in the short term’ noted that local currency weakness remained intact.

It stated that, “Foreign investors remain on the sidelines given the lack of FX reforms, higher global interest rates and weak macroeconomic narrative.

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“In addition, CBN’s FX supply to the different FX market segments remains significantly below pre-pandemic levels. Meanwhile, the demand for the greenback remains high as market players continue to source for FX to fulfil and clear their outstanding obligations.

Consequently, since the last policy meeting, the local currency depreciated by 3.4 per cent to N461.25/$ at the official market as of 18 January 2023.

“However, given that the FX reserves remain within the CBN’s comfort level, we expect the Committee to highlight the need for the apex bank to maintain its periodic FX interventions and intensify its call to the fiscal authorities to amplify their efforts in ensuring higher crude oil production over the short-to-medium term.

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“Accordingly, the Committee will likely reiterate that the CBN should address the pressures on the local currency by boosting the FX supply for productive activities.”

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Naira under serious pressure, Fitch Ratings warns

Fitch, Withdrawals, Governors, CBN, notes, new naira, Banks
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Global credit rating firm, Fitch Ratings has warned that Nigeria’s currency, the Naira is under serious pressure

Fitch in a report said this may further raise the possibility of a material devaluation following the presidential election in February 2023.

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The exchange rate between the naira and the US dollar traded for an average of N745/$1 on Wednesday, 1st February 2023, representing a 0.80 percent appreciation when compared to N751/$1 recorded in the previous trading session.

Similarly, the exchange rate at the cryptocurrency P2P exchange appreciated on Wednesday, 1st February 2023 to a minimum of N745.5/$1, from N752/$1 recorded on Tuesday’s trading session.

Meanwhile, the exchange rate at the investors and exporters (I&E) window closed at N461.5/$1, the same rate as recorded in the previous trading session.

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Fitch Ratings in a report, explained that the inability to reliably source United States (US) dollars on the official FX market has itself contributed to lower foreign portfolio investor (FPI) inflows, which will continue to put further pressure on US dollar availability.

Nigeria’s already-high structural inflation has been aggravated by global commodity price spikes, supply constraints and a weak naira, according to a Fitch Ratings note.

Nigeria’s headline inflation rate printed at 21.34 per cent in December 2022 after a 13 basis points slowdown from the previous month, causing inflation to reach a 17-year high.

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Analysts noted that Nigeria’s falling external reserves levels have contributed to US dollar shortages in the official FX market, as evidenced by the rapid depreciation of the Nigeria naira in the parallel market to NGN738/USD on 31 December.

Since then, the exchange rate at the open market has worsened to N750 per United States dollar in the open market where it is freely traded to users, while it traded at N462 at Investors, Exporters FX Window.

According to Fitch, the parallel market rate is therefore trading at a large discount to the official exchange rate, raising the possibility of a devaluation following the change in administration that will follow the presidential election in February 2023.

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Monetary policymakers, particularly in emerging markets, are challenged with marked pressure on their respective local currencies due to rising global interest rates and risk-off sentiments. Global investors rank the FX convergence of the naira in 2023 as a major policy shift that could incentivize investment flows.

Fitch expects US dollar scarcity to continue weighing on economic activity in 2023, compounding the effect of high inflation and rising interest rates on borrowers’ repayment capacity, while negatively affecting banks’ trade finance business and FC liquidity.

According to market participants, the CBN has accumulated a backlog of foreign currency demand from importers, estimated at about USD3 billion.

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In addition, the International Monetary Fund, IMF, hinted that there is an additional USD1.7 billion outstanding to foreign portfolio investors (FPIs), bringing the total backlog to almost USD5 billion.

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NNPC Takes Over Addax Petroleum Assets

NNPC
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The Nigerian National Petroleum Company (NNPC) Limited has taken over the assets of Addax Petroleum Development (Nigeria) Limited.

This is coming three months after the execution of the Addax Transfer, Settlement, and Exit Agreement (ATSEA) for the PSC Oil blocks, OMLs 123/124 & 126/137, operated by the company.

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NNPC Chief Corporate Communications Officer, Garba Deen Muhammad, in a statement on Tuesday, all closing obligations have been concluded and the Assets have been transferred to the Concessionaire, NNPC Limited.

“Consequently, NNPC has taken necessary steps to take over the assets and oversee a clean, amicable, and speedy exit for Addax Petroleum Ltd., operate the asset on interim basis as a first step and subsequently appoint a competent replacement PSC contractor while NNPC Limited continues to remain the Concessionaire of the assets in line with extant laws and regulations,” the statement partly read.

“Exit negotiations and formalities have been concluded and NNPC Ltd. in collaboration with the Office of the Attorney General of the Federation, NUPRC, NMDPRA, FIRS, EFCC, and the FCCPC have agreed on the clean and amicable exit for Addax by resolving all the PSC contractual issues, including litigations that culminated in the execution of a Transfer, Settlement, and Exit Agreement (TSEA) on the 1st of November 2022.”

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NNPC Ltd also announced the appointment of the Transition Team lead, Sagiru Jajere. NNPC Ltd said the much-needed investments will be deployed to the Assets while prudently conducting petroleum activities and creating value.

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