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Nigerian Central Bank authorities are calling for calm as citizens march in the streets protesting cash and fuel shortages days ahead of the February 10 deadline when the country will switch to redesigned currency.  Protesters asked authorities Friday to circulate the new notes or reverse the currency switch decision. President Muhammadu Buhari assured citizens Friday that the problem will be addressed in a matter of days.

Central Bank of Nigeria Governor Godwin Emefiele told reporters Saturday authorities are taking measures to ensure smooth flow of the cash swap and minimize inconvenience.

He said there are enough of the redesigned currency and reiterated that the deadline to exchange the old bills for the new ones will not be extended beyond February 10.

On Sunday, the CBN announced a 10-day extension from January 31 for citizens to exchange world currencies for the new 200-, 500-, and 1,000-naira bills

But across many states, citizens say the new cash is yet to circulate, bringing business to a halt.

The situation snowballed into protests Friday in Oyo, Delta, Osun and Lagos states. Angry mobs vandalized banks and gas stations.

Ogho Okiti, the managing director of BusinessDay Media Ltd. said the new policy, though profitable, is already showing signs of poor implementation.

“What I think is happening is that we’re seeing an evidence of poor execution of the policy,” said Okiti. “There’s the dimension of logistics, there’s dimension of restrictions, then the dimension of accessibility, even to make transfers online you’re not able to do that. So, it’s putting so much frustration and pressure on the system”.

Nigeria is also facing intensifying fuel shortages across the country due to a disruption in the product distribution chain caused by the activities of cross-border smugglers.

On Friday, Buhari called for calm and said he has met with officials to resolve the problem in a lasting manner.

Oyo state Governor Sheyi Makinde also addressed residents in a televised broadcast, condemning violence in the state’s capital of Ibadan.

“The violence that erupted in part of Ibadan today is condemnable and will not be tolerated,” said Makinde. “In response to this I’ve suspended all campaign activities, I’ve also met with the heads of security agencies in Oyo state to restore calm. Violence cannot and will not solve our problems”.  

But across many states, citizens say the new cash is yet to circulate and the old notes have been mostly withdrawn from circulation, making business transactions difficult.

“The protest was actually peaceful, but I guess some people … all these political thugs joined, that is why it actually became violent. The bank was actually damaged totally, because they burgled the ATM machine, sike ?? parts of the windows,” said Stephen Adekunle, an Oyo State Resident.

This is Nigeria’s first currency swap in 19 years. 

Authorities say the measure is already making an impact curbing crimes, counterfeiting and corruption, as well as recalling the excess cash stashed away back into the banking system.
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Indian business tycoon Gautam Adani is in the eye of a storm after a dramatic crash in the stocks of his companies.

Adani’s businesses have lost more than $100 billion after a U.S. investment firm, Hindenburg Research, alleged that the companies engaged in stock market manipulation and fraud. The Adani Group has called the allegations “nothing but a lie.”

The rout faced by the Adani conglomerate, which spans such key areas as ports, power generation, airports, mining, and renewable power, has raised fears of a potential loss of investor confidence in India’s growing economy. It has also triggered a political storm, with opposition parties demanding a probe into the accusations of malpractice against a business figure perceived to have close ties to Prime Minister Narendra Modi.

The spectacular rise of the Adani empire over the last decade has catapulted Gautam Adani into the realm of the world’s wealthiest people. He was ranked as the world’s third richest, and Asia’s richest man by Forbes, behind Bernard Arnault and Elon Musk until late January.

That ranking has tumbled since seven listed companies of the Adani group lost nearly half their market capitalization after Hindenburg raised doubts over the business practices of the conglomerate. In a report, it accused the group of artificially boosting share prices by funneling money into stocks through offshore tax havens. The report said the shares were overvalued and their prices had soared more than 800% in the past three years.

Hindenburg is a small investment firm known as a short seller on Wall Street. The firm looks for corporate wrongdoing and makes money if stock prices of the company fall.

Hindenburg said that the “brazen stock manipulation” and accounting fraud by Adani Group was “the largest con in corporate history.” It also said that “substantial debt” puts the group on a precarious financial footing.

In a 413-page response, the Adani Group called the report baseless and a “malicious combination of selective misinformation” and “stale, baseless and discredited allegations.” It said the charges were driven by “an ulterior motive” to allow the U.S. firm to make financial gains.

In a video message to investors Thursday, Adani said that the fundamentals of his group are “strong” and that its record on paying back debt was “impeccable.” The Adani Group called the report an attack on the “growth story and ambition of India.”

Hindenburg countered by saying, “India’s future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation.”

The controversy has turned a spotlight on the dizzying rise of the 60-year-old businessman, a college dropout from a middle-class family, who began as a commodities trader before expanding into infrastructure in the 1990s when he built a port in Gujarat state and made a foray into areas such as coal mining. Then came power plants, airports, roads and defense equipment, areas he said were in step with the country’s need for infrastructure. The group became one of the country’s top three conglomerates.

He has also made investments overseas — on Tuesday, even as the controversy raged, Adani stood with Israel’s Prime Minister Benjamin Netanyahu, as he took control of Israel’s Haifa port, acquired for $1.2 billion. In 2011 he bought a large coal mining operation in Australia. Other investments are lined up in Sri Lanka.

Adani hails from Gujarat state, which Modi headed as chief minister before arriving on the national stage in 2014. Critics point out that his dramatic expansion has coincided with Modi’s rule.

“From the time Modi was the chief minister of Gujarat, there were close ties with Adani at the personal level,” said Nilanjan Mukhopadhyay, a political analyst who has written a book on Modi. “However, I did not really look into their association at a business level.”

Adani has denied claims of any preferential treatment by Modi’s government. “These allegations are baseless,” Adani told India Today television saying that their shared origins made him an “easy target” for such claims. “The fact of the matter is that my professional success is not because of any individual leader.”

For the time being, the group faces a crisis of confidence despite a marginal rally in its companies’ stocks on Friday. Adani has scrapped a $2.5 billion share offering that opened after the release of the Hindenburg report, saying he was doing it to insulate investors from potential losses, but that it would not affect his business. The share issue had been seen as a key sign of investor confidence. Although it found support from institutional investors and wealthy Indians, small retail investors had largely shunned it.

Indian Finance Minister Nirmala Sitharaman has said that she did not expect the controversy around Adani’s business empire to affect investor confidence in India.

India remains a “very well-regulated financial market,” she told broadcaster News18 on Friday.

“One instance, however much talked about globally it may be, I would think is not going to be indicative of how well Indian financial markets are governed,” Sitharaman said. “I think the investor confidence which existed before shall continue even now.”

However, calls for a probe are growing amid questions about whether financial regulators had done enough scrutiny of the group. “The allegations made by Hindenburg need an enquiry at the level of the Supreme Court because the charges are serious,” economist Prasenjit Bose said.

The controversy has also turned into a political flashpoint. Parliament was adjourned Thursday and Friday as opposition lawmakers demanded an inquiry either by a joint parliamentary committee or one monitored by the Supreme Court into the allegations and have expressed concerns about exposure that Indian financial institutions have to the Adani Group.

Parliamentary Affairs Minister Pralhad Joshi, a member of Prime Minister Narendra Modi’s Bharatiya Janata Party, told reporters outside parliament on Friday that “we [the government] have no connection” with the Adani controversy.

Political analyst Mukhopadhyay said, “The Adani meltdown will only have a political impact if there is a negative fallout on the wider stock markets and Indian public financial institutions. Otherwise, it will blow over.”
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America’s employers added a robust 517,000 jobs in January, a surprisingly strong gain in the face of the Federal Reserve’s aggressive drive to slow growth and tame inflation with higher interest rates.

The unemployment rate dipped to 3.4%, a new half-century low.

Friday’s government report added to the picture of a resilient labor market, with low unemployment, relatively few layoffs and many job openings even as most economists foresee a recession nearing. Though good for workers, employers’ steady demand for labor has also helped accelerate wage growth and contributed to high inflation.

January’s job growth, which far exceeded December’s 269,000 gain, could raise doubts about whether inflation pressures will ease further in the months ahead. The Fed has raised its key rate eight times since March to try to contain inflation, which hit a four-decade high last year but has slowed since then.

Companies are still seeking more workers and are hanging tightly onto the ones they have. Putting aside some high-profile layoffs at big tech companies like Microsoft, Google, Amazon and others, most workers are enjoying an unusual level of job security even at a time when many economists foresee a recession approaching.

For all of 2022, the economy had added a sizzling average of 375,000 jobs a month. That was a pace vigorous enough to have contributed to the painful inflation Americans have endured, the worst such bout in 40 years. A tight job market tends to put upward pressure on wages, which, in turn, feed into inflation.

The Fed, hoping to cool the job market and the economy — and, as a consequence, inflation — has steadily raised borrowing rates, most recently on Wednesday. Year-over-year measures of consumer inflation have steadily eased since peaking at 9.1% in June. But at 6.5% in December, inflation remains far above the Fed’s 2% target, which is why the central bank’s policymakers have reiterated their intent to keep raising borrowing rates for at least a few more months.

The Fed is aiming to achieve a “soft landing” — a pullback in the economy that is just enough to tame high inflation without triggering a recession. The policymakers hope that employers can slow wage increases and inflationary pressures by reducing job openings but not necessarily by laying off many employees.

But the job market’s resilience isn’t making that hoped-for outcome any easier. On Wednesday, the Labor Department reported that employers posted 11 million job openings in December, an unexpected jump from 10.4 million in November and the largest number since July. There are now about two job vacancies, on average, for every unemployed American.

The Labor Department’s monthly count of layoffs has amounted to fewer than 1.5 million for 21 straight months. Until 2021, that figure had never dropped so low in records dating back two decades.

Yet another sign that workers are benefiting from unusual job security is the weekly number of people who apply for unemployment benefits. That figure is a proxy for layoffs, one that economists monitor for clues about where the job market might be headed. The government said Thursday that the number of jobless claims fell last week to its lowest level since April.

The pace of applications for unemployment aid has remained rock-bottom despite a steady stream of headline-making layoff announcements. Facebook parent Meta is cutting 11,000 jobs, Amazon 18,000, Microsoft 10,000, Google 12,000. Some economists suspect that many laid-off workers might not be showing up at the unemployment line because they can still find new jobs easily.
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Pakistan’s Prime Minister Shehbaz Sharif said Friday the government would have to agree to IMF bailout conditions that are “beyond imagination.”

An International Monetary Fund delegation landed in Pakistan on Tuesday for last-ditch talks to revive vital financial aid that has stalled for months.

The government has held out against tax rises and subsidy slashing demanded by the IMF, fearful of backlash ahead of elections due in October.

“I will not go into the details but will only say that our economic challenge is unimaginable. The conditions we will have to agree to with the IMF are beyond imagination. But we will have to agree with the conditions,” Sharif said in televised comments.

Pakistan’s economy is in dire straits, stricken by a balance of payments crisis as it attempts to service high levels of external debt, amid political chaos and deteriorating security.

The country’s central bank said Thursday its foreign exchange reserves had dropped again to $3.1 billion, which analysts said was enough for less than three weeks of imports.

Data on Wednesday showed year-on-year inflation had risen to a 48-year high, leaving Pakistanis struggling to afford basic food items.

Bowing to pressure

Ahead of the IMF visit, Islamabad began to bow to pressure with the prospect of national bankruptcy looming.

The government loosened controls on the rupee to rein in a rampant black market in U.S. dollars, a step that caused the currency to plunge to a record low. Artificially cheap petrol prices have also been hiked.

The world’s fifth-biggest population is no longer issuing letters of credit, except for essential food and medicines, causing a backlog of thousands of shipping containers at Karachi port stuffed with stock the country can no longer afford.

“Accepting IMF conditions will definitely increase prices, but Pakistan has no other choice,” analyst Abid Hasan told AFP. “Otherwise, there is a fear of a situation like Sri Lanka and Lebanon.”

Rejecting conditions and pushing Pakistan to the brink would have “political consequences” for the ruling parties, but so will agreeing to IMF measures raising the cost of living, he said.

Political chaos

The tumbling economy mirrors Pakistan’s political chaos, with former prime minister Imran Khan heaping pressure on the ruling coalition in his bid for early elections while his popularity remains high.

Khan, who was ousted last year in a no-confidence motion, negotiated a multibillion-dollar loan package from the IMF in 2019.

But he reneged on promises to cut subsidies and market interventions that had cushioned the cost-of-living crisis, causing the program to stall.

It is a common pattern in Pakistan, where most people live in rural poverty, with more than two dozen IMF deals brokered and then broken over the decades. 
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