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Argentina to Ease Currency Controls After Devaluation

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NEW YORK – Argentina scrapped some of its currency controls a day after devaluing the peso as policy makers sought to stem a financial crisis and restore investor confidence by reversing measures that drove foreign reserves to a seven-year low.

Bonds fell and the cost to insure the South American nation’s debt against default soared to a three-month high as traders bet the move could backfire and lead to further dollar outflows. The peso dropped 1.9 percent to 8.0307 per dollar at 12:57 p.m. in Buenos Aires, extending its plunge this week to 18 percent, the worst selloff since a devaluation that followed the country’s record sovereign default in 2001.

The currency market overhaul is the latest, and boldest, measure tried by President Cristina Fernandez de Kirchner as she seeks to win back investors, regain access to international debt markets, shore up a faltering economy and curb inflation that soared to 28 percent last year. The increase to 23.8 percent in the annual cost to protect the nation’s debt against default makes it the most expensive in the world.

The easing of controls is an attempt to stem panic among Argentines, said Siobhan Morden, head of Latin America fixed income strategy at Jefferies Group LLC. “They are hoping it creates less panicky demand for dollars.”

She said the country needs to implement additional measures such as curbing money supply growth to make the foreign-exchange policy changes effective.

“Markets will give them a day or two,” Morden said. “But if there’s no follow-up, the prices trade lower again.”

Black Market

Cabinet Chief Jorge Capitanich, who was appointed in November to help reshape government policies, unveiled the currency market changes in Buenos Aires today.

Argentines will be able to buy dollars in proportion to their income, and a 35 percent redeemable tax on buying foreign currency will be cut to 20 percent, he said. Currently, Argentines are often denied requests to buy dollars from the central bank, fueling illegal street trading in which the peso has changed hands at as little as half the value. Policy makers are trying to close the gap between the two exchange rates.

“Our administered currency policy has reached an acceptable level of convergence for our economic objectives,” Capitanich said at the presidential palace.

After a surge in economic growth fueled by rising commodity export prices following the default, the government has implemented a series of unsustainable measures and is being forced to reverse tack, Nobel laureate economist Joseph Stiglitz said.

Forced Changes

“Reality will clearly force some changes: you have to live within your means, if your currency is going down, it means you’re going to be paying more for your imports,” Stiglitz, a Columbia University professor, said in an interview today on Bloomberg Television. “They will have to change their policies and the question is when and how.”

Fernandez’s policies of printing money to fund social spending on subsidies while freezing utility rates amid accelerating inflation are unraveling as the budget deficit widens and funding from the treasury and pension fund grows. Investment in South America’s second-largest economy has tumbled amid import controls and delays in approving company dividend repatriations.

The International Monetary Fund, which censured Argentina last year for misreporting inflation, predicts economic growth will slow to 2.8 percent this year, about half the 5.1 percent average across developing nations.

Yield Spread

The cost to insure Argentine debt against default for five years soared the most since August, climbing 1.94 percentage points to 23.76 percentage points, according to data compiled by Bloomberg.

The extra yield investors demand to buy Argentine bonds instead of U.S. Treasuries widened 16 basis points, or 0.16 percentage point, to 1,012 basis points, according to data compiled by JPMorgan Chase & Co. The peso’s plunge to a record low has made it the world’s worst performer this year.

“Those who wanted us to believe that the dollar was worth 1 peso now want us to believe that it’s worth 13,” Economy Minister Axel Kicillof said today.

Capital Flight

After winning re-election in 2011, Fernandez began to restrict access to foreign currency amid capital flight that surged to a record $21 billion that year. Since then, the government has implemented more than 30 measures to cut access, including taxes on credit card purchases and limits on online spending, that have failed to curb dollar demand.

Reserves have tumbled at a rate of $1.1 billion a month over the past year to a seven-year low of $29.3 billion. Energy imports increased 23 percent to $11.4 billion in 2013 while exports fell 24 percent to $5.3 billion.

Reserves have fallen about $18 billion since October 2011, when the government began to limit access to foreign currency.

In the first three quarters of 2013, the nation posted a current account deficit of $1.27 billion, the largest for that period since its economic crisis. Argentina’s trade surplus narrowed 27 percent to $9 billion in 2013 as fuel imports rose and soy prices dropped 28 percent, while producers withheld stocks of the oilseed waiting for the peso to weaken further.

The easing of restrictions may allow the government to stabilize currency imbalances and promote investment, former central bank president Mario Blejersaid in an interview in Davos.

“All measures that seek to reduce the chaos and intervention” in the currency market “would tend towards stabilizing the situation,” Blejer said. “A devaluation was needed because the exchange rate policy has been erratic in the past years.”

– BLOOMBERG

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Deregulation, Not License For Off-spec Products Blending – Dangote Refinery

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The Dangote Petroleum Refinery and Petrochemicals is of the view that deregulation should not be used as a justification for the importation of off-spec petroleum products or the undermining of Nigeria’s national interests.

This was contained in a statement on Tuesday by Dangote’s Group Chief Branding and Communications Officer, Anthony Chiejina.

The counsel came in response to remarks by Chief Executive Officer of Pinnacle Oil and Gas Limited, Robert Dickerman, on the importation and blending of petroleum products, which he framed within the context of a “deregulated commodity market.”

However, the Dangote Petroleum Refinery is of the view that his argument for a deregulated market could not obscure the serious implications of his actions, which, it claimed, not only threatened the integrity of Nigeria’s energy sector but also endangered the welfare of its citizens.

ALSO READ: Int’l Trading Coy Hires Blending Facility Next To Dangote Refinery, Hoping To Flood Nig With Substandard Products

While reiterating support for deregulation and industrialisation, the Dangote Refinery emphasised that the support must be grounded in a commitment to the sustainable growth of Nigeria’s economy, while shielding the people from exploitation.

The refinery made it clear that the health and safety of Nigerians should never be compromised in the pursuit of profit.

According to the statement, “The Dangote Petroleum Refinery and Petrochemicals Company has long been an advocate for deregulation and industrialisation in Nigeria, but our support is rooted in a commitment to the sustainable growth of the country’s economy and the protection of its people from any exploitation. Unlike Dickerman’s view, deregulation should not be a licence for the importation and distribution of off-spec products or the subversion of national interests.”

The company also noted that, as an American, Dickerman should be well aware of how his own country protects its industries. It pointed to several recent examples from the United States to underline the point.

For instance, U.S. President Joe Biden recently opposed the sale of U.S. Steel to Japan’s Nippon Steel, stressing the importance of maintaining strong American steel companies supported by American workers — an example of protectionism that prioritises national economic interests over short-term profit.

Similarly, the U.S. has taken action to restrict the use of Chinese-made cranes in its ports, citing national security concerns. The U.S. has also imposed a 100% tariff on electric vehicles and a 50% duty on medical equipment imported from China, further demonstrating its commitment to safeguarding domestic industries.

The U.S. has also ramped up efforts to boost its own production of computer chips and medical supplies, driven by national security concerns and the need for economic self-sufficiency. Furthermore, during his presidency, George W. Bush used anti-dumping laws to impose tariffs on a range of Chinese goods that were considered to be unfairly priced.

“It is therefore perplexing that Dickerman, with all his experience in the U.S. market, would advocate for the importation and blending of petroleum products to Nigeria under the claim of deregulation and a free market. The fact is that he had deceitfully approached us and pleaded that we extend the pipeline from our refinery to Pinnacle’s tank farms for the purpose of blending our high-quality products with their imported products and selling them to Nigerians. We categorically rejected his request to extend our pipeline to their tank farms for such devious purposes because it would be a betrayal of the Nigerian people’s trust. The health and safety of Nigerians cannot—and should not—be compromised for profit,” the statement added.

The company also raised concerns over Pinnacle Oil’s decision to lease its tank farms to a company without any retail outlets in Nigeria, questioning the strategic intent behind such actions, particularly given that the farms are located just 500 metres from Dangote’s refinery.

It expressed its vigilance regarding the coordinated efforts to undermine the Dangote Refinery, drawing parallels to the fate of refineries in Port Harcourt, Kaduna, and Warri.

Consequently, the Dangote Petroleum Refinery called on the government, patriotic Nigerians, and local businesses to remain steadfast in defending the country’s sovereignty and economic independence.

“The choice we face is between fostering industrialisation or allowing Nigeria to remain a dumping ground for inferior products while exporting jobs. For nearly three decades, cartels and their collaborators have sabotaged efforts to develop Nigeria’s refining capacity, keeping the country dependent on imported products. The time has come to end this cycle of exploitation and ensure that Nigeria’s energy sector works for the benefit of its people,” it added.

Reiterating belief that a strong, self-sufficient energy sector is vital for Nigeria’s economic growth, the Dangote Refinery affirmed that it will continue to advocate for policies and practices that protect both industries and the well-being of all Nigerians.

The company also expressed its support for healthy competition that drives innovation and quality, and looked forward to the upcoming commissioning of the four state-owned refineries, as promised by the NNPC Ltd.

“At Dangote Petroleum Refinery, we are committed to ensuring that Nigeria becomes self-reliant in petroleum production, and we welcome competition that drives innovation and quality. However, we will never allow the continued importation and blending of petroleum products, nor the deliberate destruction of our national economy. We believe that a strong, self-sufficient energy sector is vital to Nigeria’s economic growth, and we will continue to advocate for policies and practices that protect our industries and the well-being of all Nigerians.

“We eagerly anticipate the coming on stream of the Kaduna, Warri, and Port Harcourt refineries before the end of this year, as promised by the Group Chief Executive Officer (GCEO) of NNPCL, Mele Kyari. This milestone will not only end all baseless rumours of monopoly but also position Nigeria as a refining hub for petroleum products in Africa,” it concluded.

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How CNL Stays Focused On Candidates’ Comprehensive Testing Experience

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Chevron Nigeria Limited (CNL), operator of the joint venture between the Nigerian National Petroleum Company Limited (NNPC Ltd) and CNL, has expressed commitment to providing a seamless and inclusive experience for all applicants participating in the selection tests for its available job opportunities.

According to the General Manager, Policy, Government and Public Affairs, at CNL, Olusoga Oduselu, the company strategically achieves this by leveraging reputable organizations and technology.

Biztellers reports that the CNL retained Dragnet Solutions Limited (DSL), a provider of online assessment services with relevant expertise, to administer aptitude tests to candidates for its available job opportunities.

ALSO READ: Sustainability: Dangote Eyes Planting 10,000 Mangrove Trees In Nigeria 

Olusoga explained that the online assessments allow candidates to participate from various locations to save time and promote inclusivity for candidates who are constrained to participate in physical assessments.

He maintained that this strategy “provides equal opportunities for all candidates, including those with disabilities.”

According to Oduselu, the CNL was aware of some complaints of challenges by some candidates during their scheduled test period. To address these challenges, CNL engaged with DSL and deployed repeat tests for those who complained of technical hitches during the tests and those who could not participate in their scheduled tests.

“All isolated cases of system glitches have been addressed by our consultant, and the transparent, all-inclusive recruitment process continues. The applicants and our various stakeholders have commended this act of goodwill,” he stated.

The CNL’s recruitment process, including assessment, is transparent and fair and provides equal opportunity for all qualified candidates to compete for available job opportunities.

He added that the CNL assures its stakeholders that its recruitment process uses appropriate technology and complies with applicable laws and regulatory requirements.

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Content Creation Can Buy 4 Lamborghini’s – Comedian Josh2Funny Reveals

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Nigerian comedian and popular skit maker, Chibuike Josh Alfred, known by his stage name Josh2Funny, has shed light on the profitability of the content-creating industry.

In a recent interview with Echo Room, Josh2Funny highlighted the impressive financial potential that content creators can achieve, noting that it is possible for them to comfortably afford multiple luxury cars, including up to four Lamborghini vehicles.

Speaking candidly, Josh2Funny emphasised that content creation has become an extremely lucrative field due to the constant demand for fresh and engaging material. “If you want to buy four Lamborghini from content creation, you can buy it,” he said.

His remarks underscore the significant revenue opportunities available in the digital content landscape.

Josh2Funny explained that the continuous consumption of online content is what drives its profitability. “What do you think we are doing in the content-creating industry? Are we joking? You all are with your phones, when you’re in the bathroom, when you’re [using the restroom], you’re consuming our stuff. It’s like pure water,” he stated.

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The comedian further elaborated that businesses or industries that deliver products consumed on a daily basis often see the most substantial financial returns. Content creation, with its high rate of daily consumption by audiences worldwide, aligns perfectly with this model.

“People are out there, consuming our content every time,” he said, reinforcing the idea that the reach and influence of content creators have never been more extensive.

Josh2Funny’s insights reveal why the content-creating industry has become a lucrative career path for many in Nigeria and around the world. With the continuous growth of social media platforms and the public’s insatiable appetite for entertainment and relatable content, creators are finding new and innovative ways to monetize their craft.

This shift not only highlights the potential for significant financial gain but also showcases the evolving landscape of digital media, where influencers, comedians, and skit makers can turn creativity into a sustainable and highly rewarding business.

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