We loove that you make an effort to open our emails every time you get a notification from us. It gets us excited that you want to learn something new.

It’s the first Saturday of the second half of the month, We trust you’re geared up for a better half of the year.

Let’s dive into the news for this week 😊


RUGA goes South

The Story

In a bid to stymie the tide of herdsmen/farmers clashes, the federal government launched RUGA (Ruga is a Hausa term that means cow settlement) settlement scheme. An initiative to allocate more grazing areas to herdsmen but it appears the scheme is going south.

What went wrong?

The Implementation. Initially the scheme was supposed to be optional but it didn’t seem so when it was announced. 

This made the Southerners interpret this scheme as a forceful attempt to take over their lands, so they rejected the scheme causing the federal government to halt the scheme.

The northern youths in response didn’t take the rejection well and issued a 30-day ultimatum to every southerner residing in the north to vacate unless RUGA is implemented.

What does the law say?

According to the Land Use Act, 1977, all land in a state is held by the state governor in trust for the people. With the exception of lands belonging to the Federal Government in each state, usually land related to areas the Federal Government has exclusive jurisdiction over, like railway land, interstate highways, seaports, etc. 

Questions arising

Here are a few questions raised by Dr Joe Abbah on the issue.

1. Has the Constitution changed or has the Land Use Act been repealed? If not, can the FGN unilaterally take land belonging to states to build Rural Grazing Areas? Or is it building them on its own land in the states?

2. Were the funds for the procurement of lands provided for in the 2019 Budget?

3. Are the settlements going to be built on FG or State land? If State, has the Governor allocated the land?

4. Are the RUGAs being built on FGN land in states where the state governor is not in support? If so, have any risk analyses been done to assess the potential for conflict within the host states?

5. What level of public consultation has there been on this issue?

Bottom line: While there might be some benefit in rolling out RUGA, the implementation is clearly faulty. (tweet this)

AfCFTA: It’s about time to join the others


The Story

The Federal Government of Nigeria announced that it will finally become a part of the African Continental Free Trade Agreement (AfCFTA) after one year of delay.

A bit about AfCTA

The African Continental Free Trade Agreement (AfCFTA) is a trade agreement between 52 African Union member states, with the goal of creating a single market. This would set the stage for free movement between these countries and a single-currency union.  This means African businesses, traders and consumers will no longer pay tariffs on about 90% of goods that they trade between African countries.

Why the change of mind? 

A panel set up by President Buhari in March to assess the agreement finally gave a go-ahead for Nigeria to sign it.

Why Nigeria’s participation matters

Nigeria is the largest market in Africa and the most populous country in Africa (~200 million citizens). Nigeria’s economy is a major contributor to Africa’s gross domestic product and economic growth with Lagos being one of the top ten largest economies in Africa.

This looks good but here’s what could go wrong

Less Nigerian Goods: We would see less of Buy-the-Naira to grow the Naira as goods from other countries would easily flow. 

More Made in Africa Goods: Some businesses might collude with Western and Asian businesses to bring in foreign goods and disguise them as African made, thereby defeating the aim of AfCFTA.

Broken Promises: African countries are known to not keep trade agreements, even ECOWAS countries do not allow trade between each other. For Example, Cement manufacturers in Nigeria can not and are not allowed to sell cement in Benin Republic, even though Nigeria and Benin Republic are both members of  Ecowas Trade Liberalisation Scheme (ETLS) – a scheme that should allow the free movement of goods without tariffs between ECOWAS members.

C’mon you can do better

What’s happening?

The Central Bank of Nigeria has ordered commercial banks to issue out more loans. Every commercial bank has to loan out up 60% of its customer’s deposits, with preference to SME, Mortgage, Retail and Consumer Lending.

The CBN is going to ensure this happens by punishing banks that fail to comply with this directive by increasing the compulsory amount they have to keep (Cash reserve ratio) with the CBN from 22.5% to 50%. This means 50% of a bank’s deposit will be sent to the CBN.

Why should I care?

On the plus side: The chances that you’d receive a loan from a Bank has just increased. 

Also, Companies with good cash flows and collateral have higher chances of obtaining loans too.

On the negative side: FinTech companies that specialise in doling out quick loans to consumers might start facing increasing competition from bigger commercial banks. 

Also, the main beneficiaries of CBN’s directive appear to be the informal sector of the economy. Unfortunately, most of the players have projects or funding requirements that are hardly bankable, either because of lack of adequate collateral or evidence of steady cash flows.

What we think: Banks are known to find their way around rules imposed by the CBN. Let’s see how this plays out, after all, you can lead a horse to water, but you can’t make it drink.😈 (tweet this)


The price of Chocolate is about to go up 

The Hindu

The story

When you control about 60% of the world’s supply of Cocoa you can just decide to increase the prices and it’d happen. Ghana and Ivory Coast announced they’ve decided to raise cocoa prices to a minimum price of $2,600 per ton of cocoa (about 10% above the global price) starting in the 2020/21 season. 

As per MorningBrew this move by the cocoa cartel could: 

  • Boost West African farmer incomes 
  • Limit child labour 
  • Give farmers a fairer cut of your “if it’s 80% cocoa it’s basically healthy” habit

Why it matters

This might affect the prices of Cocoa products such as Chocolates and Cholocate flavoured beverages.

Sudan Settles for a Deal

The Story

Sudan’s military and civilian leaders announced last week that they had reached an agreement to share power until elections, promising an end to the conflict has been going on since April.

Back Story: The uprising in Sudan began in December and brought down Sudan’s brutal dictator Omar al-Bashir, who ruled for 30 years, in April. Since then the army and the opposition have wrestled over the future of the country.

The way forward

The military and civilian groups will each nominate 5 members to the council, and will jointly nominate an 11th member, according to Al Jazeera.

A military general will lead the joint council for the first 21 months, then a civilian leader will lead for 18 months.


OPEC agrees to extend Oil Cuts to keep Oil price steady 

The Story

The Organization of the Petroleum Exporting Countries (OPEC) intergovernmental organization of 14 nations, agreed on Monday to maintain its limits on oil production until 2020

Zoom out: As per Finimize, At the moment demand for oil is declining: there is less economic growth which means less need for oil to make and transport stuff. Plus, the US is pumping out petroleum like nobody’s business – it’s now the world’s biggest producer

Why it matters

OPEC members can better plan their national spending since now roughly know what income to expect from Oil exportation, although oil’s price can quickly change.

Global Oil supply has been affected by US sanctions on Venezuela and Iran – the world’s sixth-largest oil producer – along with conflict in Libya. A higher oil price makes things more expensive for companies and countries that rely on oil or oil-based fuel, and increased production costs are often passed down to the consumer.

Boeing is giving out a lot 

The Story

Boeing plans to give $100 million to the families and communities impacted by two fatal 737 MAX crashes that happened earlier this year. However, this is just a fraction of what this incident is costing Boeing. 

What else is Boeing paying for?

Families of victims affected by the crash have filed multiple lawsuits against Boeing.

Boeing which believes it has learnt from its mistake is producing the Max at a reduced rate but the finished planes cannot be delivered, so they are being stored in Seattle. This is taking a toll on Boeing’s revenues. 

Many airlines have already cancelled thousands of flights and incurred significant costs related to storing and maintaining their grounded jets. They are expecting compensation from Boeing.

Christine Lagarde gets a new role

The Story

Christine Lagarde, the International Monetary Fund’s current leader, has been nominated to replace Mario Draghi as the next head of the European Central Bank (ECB). 

What does the European Central Bank do?

The European Central Bank, which has its headquarters in Frankfurt, sets monetary policy and supervises banking for the 19 countries that use the common European currency, the euro. 

How would she perform?

She should do fine, as she has deep experience managing a major multilateral lender like the European Central Bank. She has led the International Monetary Fund (IMF) since 2011, advising countries on the handling of their banking sectors in the aftermath of the global financial and eurozone crises. 

One more thing

As Quartz pointed out, If she’s confirmed, both the ECB and the US Federal Reserve—the world’s two most influential central banks—will be headed by lawyers, not economists. 

The US and Friends

Just as it’s almost impossible to go a week without__[Fill in the gap]__It’s almost impossible to go a week without saying something about the US. The US seems to be making progress in its relationships with other countries except one.

China: Trump and Chinese President Xi Jinping agreed at the G-20 Summit in Japan to take a step back from the trade war and continue negotiations, but no definitive end is in sight.

Iran: Iran has broken the limit on its stockpile of low-enriched uranium set by the nuclear deal, the first major breach of the 2015 agreement. Thanks to being frustrated by the US.

We would close this week with some Shower thoughts:

There is no real difference between being up for something and being down for something.

The word lol looks like someone drowning. lol

Mosquitos may think our blood types are different flavors of human.

When you were born, you were the youngest person on earth.

Cockroaches probably brag to their cockroach friends about surviving a human’s house. 🤔

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