Global News: NVIDIA's big reveal
CBN and Nigeria's FX dilenma
NVIDIA on Monday announced a new generation of artificial intelligence chips and software for running artificial intelligence models. The announcement, made during NVIDIA’s developer’s conference in San Jose, comes as the chipmaker seeks to solidify its position as the go-to supplier for AI companies. NVIDIA’s share price is up five-fold and total sales have more than tripled since OpenAI’s ChatGPT kicked off the AI boom in late 2022. NVIDIA’s high-end server GPUs are essential for training and deploying large AI models. Companies like Microsoft and Meta have spent billions of dollars buying the chips. Read more here
Our thoughts
NVIDIA keeps making the right moves. With this new chip, things are about to get more interesting as it'll make AI systems smarter and more advanced, which means we might see some cool tech innovations in the near future. For this new AI chip, NVIDIA might have a challenge of keeping up with orders and competing with other chipmakers (like Cerebras, Groq, Intel, and AMD,Plus). Intel for eg, is building chip factories across America, there's also a fear of big tech companies like Google, Amazon, and Microsoft working on their own AI chips that could shake things up. The demand for chips is massive, from gaming to vehicles to AI, there's actually a need for more chip producers to bring down costs. NVIDIA has a head (and shoulders) start though!
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African News: Abu Dhabi and IMF backing gives Egypt a shot at economic turnaround
With a little help from its friends, Egypt appears to have turned a corner in its economic crisis. The unprecedented $35bn investment in the country’s Ras al-Hekma project by Abu Dhabi has, in a stroke, eradicated concerns over dwindling foreign currency reserves and assuage fears of a sovereign default. Read more here
Nigerian News: CBN clears remaining valid FX backlog| No more foreign trips | Court orders Binance to release Nigerian database
The Central Bank of Nigeria (CBN) has announced the complete clearance of the valid foreign exchange backlog. This significant achievement was shared by Mrs. Hakama Sidi Ali, the Bank’s Acting Director of Corporate Communications, highlighting a fulfilled promise by CBN Governor, Mr. Olayemi Cardoso, to tackle an inherited $7 billion in claims. Read more here
Nigeria's President Bola Tinubu will introduce a three-month ban on ministers and other government officials from going on publicly funded foreign trips. Mr Tinubu's chief of staff said the move was prompted by the president's "concerns about the rising cost of travel expenses" by public officials. The ban will take effect on 1 April. Read more here
A Federal High Court, Abuja has ordered Binance Holdings Limited to provide the Economic and Financial Crimes Commission (EFCC) with the comprehensive data or information of all persons from Nigeria trading on its platform. “That an order of this honourable court is hereby made directing the operators of Binance to provide the commission with comprehensive data/information relating to all persons from Nigeria trading on its platform,” the judge ordered. Read more here
Our thoughts
Despite whispers that airlines are yet to be paid in full, clearing the backlog of FX demand is a step in the right direction. Considering the fact that the FX market is now liberalized, we expect that this back log experience should never happen again . Why? With a liberalised market, everyone is free to buy at the going market rate, there's no incentive for CBN to hoard/ ration 'cheap USD' . All trades will be at market price on the day of execution. Buyers will also be forced to begin to hedge their exposures - bringing renewed business for FX desks in banks. Growing the market.
On foreign trips , ministers and Nigerian civil service....Did you see the picture flying over the internet of officials of a certain key division in the Nigerian Ministry of Finance going to London to host their own workshop? How really did they leave their office building, buypass hotels in Abuja, ignore resorts in Uyo and fly to London to see themselves!! Hehehe.
This ban is for 3months... let's see if its extended to cross summer holidays.
On Binance, this order is a little dicey. Whilst matters of national security should not be taken lightly, data privacy is a burning issue! If Binance shares this information, does it mean that any other foreign company can be asked/ arm twisted/ coerced to do same in the future? Especially since Binance is a platform and as with all tech platforms- can't 100% control the actions of its clients. Won't this be breaching their own data policy? Can't they be sued for that?
I suspect the two guys held in detention may be there for a long time.
Tip: Despite the noise in the news, keep your eyes on the ball, the FX narrative may just be changing before our eyes. If/ when it does, Nigeria is truly open for business!