Investors in the United States have been excited about the return since the Federal Reserve indicated last month that interest rates could rise sooner than previously thought. There are now signs that dollar bears are throwing in the towel as the US currency builds on its gains.

The data from the Commodity Futures Trading Commission that monitors the futures market jumped sharply this month. The net long position of speculative investors on the dollar index – which tracks the US currency against a basket of competitors – reached its highest level in more than a year with 11,257 contracts. A net long position indicates the difference between positive and negative bets.

CFTC figures also show that speculators – groups such as hedge funds that bet on currencies – are becoming more positive about the dollar’s outlook against the euro, the British pound and the yen.

While futures contracts make up only a small portion of the $ 6.6 tonne per day currency market, they provide an important and timely approach to investor sentiment.

The Economic Community of West Africa States has canvassed an increase in the Value Added Tax on luxury items including perfume, wine and other alcoholic beverages, fuelling speculations about inflation on the items.

According to ECOWAS, Nigeria remains the least VAT paying country in West Africa.

The ECOWAS Director of Domestic Tax, Tiemtore Salifou, made the submission on the sideline of a two-day regional seminar on problems of tax transition in West Africa which ended in Abuja on Friday.

He however suggested that the increase should be on products that would not impact negatively on poorer Nigerians.

While emphasising that there was no economic wisdom in Nigeria paying less VAT than Niger Republic, Salifou suggested VAT increase on items like hospitality industry, expensive perfumes and wines among other imported products.

He said, “There are some products we can increase VAT on without impacting on the lives of the normal Nigerians.

“I am talking about the hotels, perfumes, wines and certain products for the rich. I don’t think it will have any impact on the common people if government increases tax on them.”

He added that Nigeria should not put VAT on certain products that were very important to the common citizens.

Over 2.2 million Nigerian farmers are to receive about N12.3bn as agricultural subsidy from the Federal Government in coming weeks, it was gathered on Sunday.

Presidency officials confirmed that the President, Major General Muhammadu Buhari (rtd.), had already approved a N6.15bn agricultural subsidy for the first batch of 1.2 million farmers.

The Senior Special Assistant to the President on Agriculture, Andrew Kwasari, told our correspondent that the Nigeria Inter-Bank Settlement System had validated the first batch of beneficiaries.

He said the 1.2 farmers would start getting their alerts soon, adding that another batch of over one million beneficiaries would also receive about N6.15bn agricultural subsidy.

Kwasari said, “The President has approved subsidies for 1.2 million farmers in Batch A and the NIBSS has validated their bank accounts and BVN (Bank Verification Numbers) as farmers.

“We have another batch of over one million and NIPSS has also validated their details and it will be sent to Mr President for approval.

“NIBSS validates every BVN tied to any account and can tell you the owner of such accounts in this country.”

When asked the total amount of subsidy to be given to farmers, he stated that the funds would come in batches of about N6.15bn each.

He further noted that the Office of the Accountant-General of the Federation and the NIBSS had received the details of those to benefit from the subsidy scheme.

Kwasari said, “The first batch is N6.15bn and we are preparing Batch B and it may be up to that amount also.

“The file has moved from my office right now and it is with the Accountant-General of the Federation and NIBSS for payment.”

Kwasari further insisted that the Federal Government had captured over six million farmers across the country, stressing that the data of these operators were in his office.

“We’ve captured over six million and very soon, we will be giving direct subsidies to these registered farmers,” he stated.

The presidential aide urged farmers to deploy the funds judiciously for agricultural purposes when they start receiving the subsidies and pointed out that the government would monitor the activities.

The Nigeria’s external reserves lost $180m in two weeks, the latest figures obtained from the Central Bank of Nigeria showed on Sunday.

According to the figures, the reserves, which stood at $33.28bn on July 1, dropped to $33.09bn as of July 12 before gaining slightly to rise to $33.1bn on July 15.

The reserves lost $905.5m in June, after it fell to $33.32bn at the end of June 30 from $34.23bn on May 31.

The reserves stood at $34.88bn at the end of April 30, according to the CBN.

A member of the Monetary Policy Committee, Adeola Adenikinju, said at the last meeting that as a country, the excessive dependence on oil for revenue and foreign exchange sustenance was no longer tenable in the medium and long term.

He said, “We need to diversify the economic and revenue base of the economy to reduce our exposure to external shocks as well as prepare the economy for the global shift from fossil fuel to green economy.

“It should not be business as usual for our economic managers. The economy also needs a strong buffer to mitigate external volatility.”

Another member of the MPC, Ahmed Aliyu, said beyond the decline in oil prices was the growing paradigm shift from oil to a green economy which posed a threat to future oil demand.

The CBN report at the end of the MPC meeting showed that the share of fossil fuels was set to decline from the current 85 per cent of total primary energy demand in 2018 to between 20 and 65 per cent by 2050.

It said as such, crude oil demand was forecast to decline, led by the evolution of electric, hydrogen and biofuel-powered means of transport.

It stressed the need to diversify the Nigerian economy.

It said in addition to adopting new technologies that supported the agenda of the green economy, Nigeria’s developmental objectives should also focus on encouraging non-oil export promotion to improve the country’s trade balance and increase the accretion to external reserves.

Following lingering foreign exchange scarcity in the country, the telecommunications sector in Nigeria lost $10.8bn in the last five years to capital flight.

In its ‘National Policy for the Promotion of Indigenous Content in the Nigerian Telecommunications Sector,’ the Nigerian Communications Commission said the annual outflow of forex for the sector amounted to about $2.16bn.

The document said, “According to available statistics provided by the leadership of the Association of Telecommunications Companies of Nigeria, the annual outflow of foreign exchange for the telecommunications sector amounts to approximately $2.16bn.

“A breakdown of the forex spending is as follows: i. CAPEX programmes – $750m ii. Network software licensing – $250m iii. Management fees – $800m iv. Managed services (Tier 2 and 3 support) – $157m v. Miscellaneous (international circuits, roaming and terminations reconciliations etc.) – $200m.

“The statistics were based on the average annual reports of a sample of industry players in the telecommunications space over a five-year period. This is a significant portion of our average annual budget and it is critical that this trend is reversed.”

The Minister of Communications and Digital Economy, Isa Pantami, had in October 2020 said as part of efforts to promote indigenous content, the ministry had developed a policy for promoting indigenous content in the telecom sector to complement similar efforts that focused on the information technology sector.

“This is important to stem the tide of capital flight, among other things. A healthy digital economy requires a robust indigenous content policy to significantly reduce this,” he said.

The Chairman, Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, in a telephone interview with our correspondent, described the sector as being completely forex-dependent.

He said, “The industry needs a lot of foreign exchange. First in terms of payment for international traffic, which is done by way of foreign exchange. Also, in terms of software licences for the many applications that run on the various networks.

“They are procured overseas; hardware is also procured overseas. In terms of needs, these are services and facilities that are not necessarily available locally. For instance, we send traffic to international parties and have to pay for those services. Equipment is procured year in year out, both for maintenance and upgrade, which requires foreign exchange.

“The industry requires it for the services that we provide. I am not sure we have any other alternative than to continue to procure the services overseas.”

According to Adebayo, it is difficult for operators in the sector to access forex.

He said, “We would continue to appeal to the CBN, especially in areas that require critical need. Servicing foreign exchange obligations, it is important that the industry is able to access forex so that we are not indebted to foreign operators.”

“It is a problem, although we have been receiving help from the regulator and the CBN as best as they can assist. But the fact is we need to be on the priority list of forex availability, to enable us to service our international obligations in particular.”

With fluctuations in global crude oil prices, forex inflow into the country has reduced.

The Governor of the Central Bank of Nigeria, Godwin Emefiele, had recently said the drop in crude oil earnings and the associated reduction in foreign portfolio inflows had affected the supply of forex into Nigeria.