Nigeria's economic shifts and global ties

Samuel Okocha here, your curator and editor of 234Digest. It's 7:39 pm in Nigeria as I hit send on this newsletter, and I hope it finds you well. Though we missed the Sunday deep dive, I'm making up for it with this comprehensive dispatch. I'm excited to announce that 234Digest will now be delivered three times a week—twice between Monday and Friday, and a fuller edition with a deeper dive on Sundays.

This new schedule allows for more consistent and predictable dispatches while I balance other commitments, including a daily podcast currently in development. I'm thrilled to maintain this momentum and look forward to seeing how things unfold.

Word for word

Today’s briefs

Nigeria's tax reform faces resistance

President Bola Tinubu is standing firm on his tax reform agenda, refusing to withdraw four tax bills sent to lawmakers despite opposition from state governors. The National Economic Council, which includes governors and the central bank, has called for more consultation on the proposed legislation. The president believes the ongoing legislative process provides an opportunity for necessary changes without withdrawing the bills.

Access bank expands to Hong Kong

In related economic movements, Access Bank, Nigeria's largest lender by assets, is opening a new branch in Hong Kong as part of its Asian expansion strategy. This move aims to capitalize on trade flows between Africa, China, and the broader region. The bank's international arm will support its growing African footprint.

Nigeria's Dangote refinery reshapes petroleum trading

Meanwhile, Vitol Group, Trafigura Group, and BP Plc have emerged as the dominant buyers of fuels from Nigeria’s new Dangote oil refinery near Lagos. The refinery, which began ramping up production in mid-2024, is expected to process up to 650,000 barrels a day of crude into products including gasoline and diesel. This capacity far exceeds any single plant in Europe or Africa, reshaping petroleum trading in both regions.

Food insecurity on the rise

Amidst these developments, economic challenges are compounding issues of food insecurity. A joint report by the Nigerian government and the United Nations warns that over 30 million people in Nigeria are expected to face food insecurity next year, a one-third increase from 2023. Record-high inflation and rising food and transportation costs are driving this trend. In response, the government has begun distributing cash handouts to vulnerable families.

Forex amnesty programme launched

In an attempt to stabilize the naira, Nigeria has introduced an amnesty programme to encourage individuals to repatriate foreign currency held outside banks. The nine-month scheme offers a confidential channel for reintegrating legitimate foreign-currency funds without subjecting participants to tax audits or asset expropriation. This move aims to support the naira, which has been Africa's second-worst performing currency against the dollar this year.

Nigerian army chief Taoreed Lagbaja passes on

In a somber note, Nigerian Chief of Army Staff Taoreed Lagbaja passed away on Tuesday night in Lagos following a period of illness. Lagbaja, 56, served 37 years in the Nigerian army. President Bola Tinubu expressed condolences and praised Lagbaja's dedication to the nation.

Nigeria's national grid suffers another collapse

To cap off this week's news, Nigeria's national grid experienced a partial collapse on Tuesday, marking the ninth such incident this year. The Transmission Company of Nigeria (TCN) reported that the grid was destabilized by a series of line and generator trips. While power was restored in some regions, including the capital Abuja, outages continued in other areas. TCN engineers are working to restore power to affected states.

Deeper dive: Nigeria's forex amnesty programme

Nigeria has launched a nine-month forex amnesty programme, aiming to lure foreign currency back into its banking system and prop up the struggling naira.

Why it matters: This move underscores the severity of Nigeria's currency crisis and the government's urgent need to boost forex liquidity.

The big picture: The naira has become Africa's second-worst performing currency against the dollar this year, plummeting to record lows.

• President Bola Tinubu's administration is scrambling to stabilize the economy and restore investor confidence.

• Dollar hoarding has become widespread as Nigerians seek to protect their wealth from the naira's decline.

How it works: The programme offers individuals a "secure, confidential channel" to repatriate foreign currency without facing tax audits or asset seizures. It

• It applies to legitimately earned foreign currency held both within and outside Nigeria

• The initiative runs from October 31, 2024, for nine months.

Between the lines: This amnesty is a tacit acknowledgment of the vast parallel forex market operating outside official channels. Success hinges

• Success hinges on bolstering trust in Nigeria’s financial system and convincing forex holders that repatriation is in their best interest.

What they're saying: "There will be no penalty, there will be no taxes, and there will be no questions," Finance Minister Wale Edun stated, emphasizing the programme's no-strings-attached approach.

The bottom line: While the amnesty programme is a bold move, its success remains uncertain. It represents a high-stakes gamble that could significantly influence Nigeria's economic trajectory and the Tinubu administration's reform agenda.

Quote of the day: "In the middle of difficulty lies opportunity." - Albert Einstein

Photo of the day

And that’s a wrap. Thank you for taking the time to read this week's edition of 234Digest. Your engagement and feedback are incredibly valuable as we navigate Nigeria's dynamic economic landscape together. Remember, 234Digest is now delivered officially three times a week, so stay tuned for more updates and in-depth analyses.

As always, I'm committed to bringing you the most relevant and insightful news. Until next time, all blessings.