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Week Ahead: Digesting Implications of the FOMC, EMU and Tokyo August CPI, and China’s PMI

The
most important outcome of the last week’s flurry of central bank meetings was
the median forecast of Fed officials for 50 bp less in cuts next year…

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The most important outcome of the last week's flurry of central bank meetings was the median forecast of Fed officials for 50 bp less in cuts next year than it had anticipated in June as it revised up its growth forecasts for this year and next. The prospect for higher rates for pushed equities lower. Sterling and the Swiss franc were the weakest currencies in the G10 last week, falling by a little more than 1.1%. Both central banks did not hike rates to the surprise of many. Norway more than Sweden held out the possibility of another hike in Q4, while the Riksbank's decision hedge a quarter of its reserves, which seems like intervention, failed to give krona much of a boost, rising about 0.25% against the euro. The Bank of Canada stood pat earlier this month, but stronger economic data saw a nearly doubling to the perceived odds of a Bank of Canada rate hike next month to a little less than 50%.

Japanese officials are threatening intervention but the "higher for longer" signal by the Federal Reserve and the rise in US 10-year yields suggests the yen's weakness is fundamentally driven. Federal Reserve Chair Powell said at least a half-of-a-dozen times the press conference "proceed carefully" but this applies to Japan, as well. If intervention requires the sales of Treasuries (last September and October, Japan's holdings of Treasuries fell by about $130 bln) that could push up US interest rates, which could encourage others to buy dollars. One takeaway from last year's experience is to intervene when one believes US rates are near a high. Higher US rates make some carry trades more attractive, and this adds the weight on the Chinese yuan. The impact of the numerous measures that have been announced are likely to begin percolating and the September PMI may reflect it. The base effect warns of a sharp drop in the eurozone's September CPI due on September 29. Tokyo's September headline and core CPI measures are expected to continue to soften. In the US, the CPI has already delivered the inflation signal, the headline ticked up, but the core likely softened.

 

United States:  We are in between the FOMC meeting and the next employment report. The deceleration of the labor market is expected be continuing and the early estimates are coming in around 150k (vs. 187k in August). If true, it would the second-lowest nonfarm payroll growth since the start of 2021 but could be consistent with a tick lower in the unemployment rate. The market will look past the distortions caused by the labor strikes. In the week ahead, house prices, new home sales (both are expected to have softened) and durable goods orders (second consecutive decline is expected) will be reported. Without the decline in transportation orders (see Boeing), a small increase is possible, may draw some attention. But the main interest will be on the personal income and consumption data. The rise in personal income may have doubled from the 0.2% increase in July. The 0.4% gain would match this year's average through July, the same as the first seven months of 2022. Consumption is likely to have downshifted. After increasing by 0.8% in July, the most since January, the median forecast is for a 0.5% increase, which is still strong. This year's monthly average through July is 0.6%, slightly off last year's pace. Consumption expenditures have been outstripping income, which is translated into lower savings but that may have changed a little in August. 

Although the Fed targets the headline PCE deflator, the CPI is stealing most of its thunder. The headline deflator is seen rising by 0.4% for a 3.4% year-over-year increase (from 3.3%). The core deflator is projected to have increased by 0.2%. That would allow the year-over-year rate to ease to 3.8%-3.9%, which would be the lowest since Q3 21. The way that officials could signal a desire to look past the impact of higher energy prices, which acts as a tax consumption, would be to focus even more on the core rate. Meanwhile, time is running out for the US Congress to pass the appropriations bills or there will be a partial government shutdown. This coupled with the (broadening) UAW strike, the resumption of student debt servicing, the higher energy prices, and the tightening of lending conditions set the stage for a significant economic slowdown in Q4.

The Dollar Index is near the year's high set in March near 105.90. It looks poised to take it out, which would target the 107.20 area, the (50%) retracement of the decline since last September's multiyear high around 114.75. The momentum indicators are stretched, which is hardly surprising given that the Dollar Index has risen for 10 consecutive weeks. Still, the five- and 20-day moving average are still moving higher. Last week's low, set prior to the FOMC decision was almost 104.65. It may take a close below there to signal an end of this run-up. Initial support may be seen in the 105.20-30 area. 

China:  In an unusual calendar twist, China's Caixin PMI will be released before the official one (September 29 vs. September 30). Still, the sequence is not so important and the composites (51.7 vs. 51.3 for the Caixin and official measures, respectively, in July). It seems quite fashionable in the Anglo-American press to frame China's economic challenges in structural terms. And indeed, there does seem to be some structural elements. However, market participants seem to often emphasize structural drivers and under-estimate cyclical forces. Beijing may not be addressing its structural challenges (at the risk of oversimplifying, over-reliance on debt-fueled infrastructure investment and real estate), but it seeking to boost cyclical growth through various channels. These include lower rates, credit easing, encouraging more spending by local governments, allowing re-negotiations of existing mortgages, and lower down payment requirements. 

Chinese officials have been able to moderate the yuan's decline. Here in Q3, it is off by about 0.6%, which is less than all the G10 currencies but the Norwegian krone, and all but a handful of emerging market currencies. Still, while the policy divergence is large and the dollar is remains broadly stronger, Beijing faces an uphill battle. The dollar settled on weekly basis this year only once CNY7.30, and it was narrowly averted last week (CNY7.2990). The JP Morgan Emerging Market Currency Index is off nearly 3.5% this quarter. Note that Chinese markets are closed for national holidays for the first week in October. 

Eurozone: Some hawks at the European Central Bank want the markets to still believe that the tightening cycle is not over but the market is having little to do with it. The swaps market has a little more than a 20% chance of a hike discounted in Q4 and begins showing a bias toward a cut in Q2 24. It is fully discounted in early Q3 24. The most important data point before the end of the month is the preliminary September CPI. It and October report will likely make the case by the hawk even less tenable. In September 2022, the eurozone's CPI rose by 1.2% (and 1.5% October). These drop out of the 12-month comparisons, and this is going to produce a sharp deceleration in the year-over-year rate. August's 5.3% pace could fall below 4%, and possibly a little above 3.5% before firming in November and December.

The euro has found a (temporary?) foothold above $1.0610, which corresponds to the (38.2%) retracement of the rally from the September 2022 low near $0.9535. A break could spur a return the March low around $1.0500 and the year's low set in January, a little lower (~$1.0485). The euro has fallen for 10 consecutive weeks since the mid-July peak of about $1.1275. The single currency has not traded above the 20-day moving average this month. It is found now slightly below $1.0740. 

Japan: Even though Japan reports on the labor market, retail sales, and industrial output, it may be difficult to convince the market that the world's third-largest economy is not contracting in Q3. Japan's retail sales are not a good gauge of consumption. Consider that in July household spending fell 5.0% year-over-year (-4.2% in June), while retail sales rose 6.8% (5.6% in June). Retail sales are reported in nominal terms (value not volume) and focus on retail goods. The broader measure of household spending includes services and is in real terms (adjusted for inflation). The Bank of Japan left policy on hold last week and Governor Ueda seemed to dampen hope that he had inspired about an exit from negative interest rates before the end of the year. 

The key data point next week is Tokyo's September CPI. Like the CPI gives valuable insight into the US PCE deflator, Tokyo's CPI is a good gauge of the national measure that is reported a few weeks later. While the headline and core rates have peaked, the risk is still on the upside with the measure that exclude fresh food and energy. In the three months through August, the headline rate has risen at 2.4% annualized rate and the core by 2.8%. However, excluding fresh food and energy rose at 4% annualized pace. In August, Tokyo reported that fresh food prices had risen by 4% year-over-year and food prices in general were up 8.2%. Next week, Prime Minister Kishida is expected to begin providing details of the priorities of the supplemental budget that will likely be formally announced next week. Lastly, early on October 1, the Q3 Tankan Survey will be released. A small improvement in sentiment among the large companies is expected while response from small businesses is likely to remain poor (in slightly negative territory). 

Japanese officials have been threating intervention for several weeks in the face of the 1) the broad dollar rally and 2) rising US interest rates. The falling yen is not as supportive for Japanese equities, and in the week ending September 15, foreign investors sold the most Japanese shares in four years. The rolling 30-day correlation has turned negative, which, while not precedented, of course, is not the usual relationship. The market is cautious, but it is pushing ahead. The weekly close above JPY148 was the highest since last October. The greenback has risen for three consecutive weeks against the yen and seven of the past eight weeks. It closed firmly near JPY148.40. The secondary high after last year's peak was near JPY148.85, and after that, there is little in front of the psychologically important JPY150. 

UK: It is a relatively light week for high-frequency market moving data from the UK. Nationwide's house price index and lending (and mortgage figures), money supply, and consumer credit typically have negligible impact. Revisions to Q2 GDP (0.2% quarter-over-quarter) have been superseded by the recent news that the economy contracted by 0.5% in July. It is, though, the one-year anniversary of the crisis that led to the end of Truss's short tenure as prime minister and sterling's record-low (~$1.0350, September 26). Since then, sterling is the strongest of the G10 currencies, net-net appreciating almost 16% (the euro is in second with about an 11.3% gain). Recall Truss was pushing for tax cuts and increased defense spending that would have left a GBP60 bln deficit by the middle of the decade, according to the Financial Times estimates. Interest rates surged on the prospect the large unfunded deficits. Capital went on strike. Truss was toppled by her own party and fiscal orthodoxy was supposed to return. Yet, the budget deficit for the fiscal year that ended in March was about GBP120.7 bln, up from GBP112.1 bln in the previous fiscal year. The deficit in first four months of the current fiscal year is around GBP53.3 bln compared with almost GBP39.7 bln in the April-July period last year. 

Sterling held below the 200-day moving average ($1.2435) last Monday and Tuesday, before the week's big events. It was offered after the FOMC meeting and fell to almost $1.2430. It was tagged for the better part of a cent on the BOE's decision to hold rates and saw a low $1.2240. It made a marginal new low, slightly above $1.2230 ahead of the weekend and sterling closed near its lows. While there may be support around $1.2200, the larger head and shoulders pattern, which we have been tracking, has an objective near $1.20, and the (38.2%) retracement is around $1.2075.

Canada: The market extended the Canadian dollar's decline after it was unannounced that unexpectedly Canada's GDP contracted in Q2 (-0.2%) on September 1. However, the data since then suggests it was a bit of a fluke that overstated the weakness of the Canadian economy. The August employment report was stronger than expected and aggregate hours worked increased. The IVEY PMI snapped a four-month decline in August to match its best level since April (53.5). The July trade deficit was smaller than expected (CAD990 mln). July retail sales rose by 0.3% after a rising by 0.1% in both May and June. Excluding autos, retail sales rose 1.0%, twice the median forecast in Bloomberg' survey. August CPI surprised on the upside, rising by 0.4% on the month (also, twice the median forecast in Bloomberg's survey) and the year-over-year rate rose to 4.0% from 3.3% in July. The underlying core measures and their three-month moving average, which Bank of Canada Governor Macklem referenced, rose as well. The highlight in the coming week is the July monthly GDP. After contracting by 0.2% in June, the Canadian economy likely grew again in July. The takeaway is that swaps market has moved to discount a little more than an 70% chance of a hike in Q4, with a little less than a 50% chance it is delivered next month.

This adjustment in rate expectations dovetails with the recent recovery in the Canadian dollar. The Canadian dollar rose for the third week in the past four, following a six-week slump. So far, this month, the Canadian dollar's nearly 0.20% gain leads the G10 currencies. After peaking near CAD1.3700 on September 7, the US dollar was sold to almost CAD1.3380 the day before the FOMC meeting concluded. It subsequently bounced to CAD1.3525, a little shy of the (50%) retracement of the leg down, before returning to CAD1.3425 after Canada's retail sales report ahead of the weekend. Still, the greenback recovered to make new session highs near CAD1.3500. The close, though was little changed near CAD1.3480. There appears to be scope into the CAD1.3550-75 area.  

Australia:  Australia reports the August monthly CPI and retail sales ahead of the central bank meeting on October 3. It will be the first policy meeting under the new Governor Michele Bullock. The monthly CPI peaked at the end of last year at 8.4% and it stood at 4.9% in July. The downtrend is expected to have continued in August. July retail sales were boosted by the FIFA Women's World Cup and likely fell in August. Elsewhere, we note that the labor dispute at Chevron's liquified natural gas plants has been resolved. Rising mortgage rates are being felt as three-year fixed rates are beginning to float with a large switch seen this month. The market sees practically no chance of a hike at Bullock's first meeting but is not convinced that the RBA is finished and sees a window of opportunity for the last hike in the cycle to be delivered in Q1 24. The Australian dollar has forged a range between around $0.6360 and $0.6525. The range was nearly covered Wednesday-Thursday last week (~$0.6385-$0.6510). Expect the range to hold, until it doesn't. Unlike in the euro and sterling, the next speculative position in the futures market, is net short the Aussie., which changes the potential dynamics. 

Mexico: Mexico reports the August trade and employment figures next week ahead of the central bank meeting on September 28. Many argue that the peso's rally to its best levels since 2015 is producing an overvalued currency. Yet, the richness of the peso is not fueling a deterioration of the external balance. Through July, Mexico has reported a trade deficit of $7.22 bln. In the first seven months of 2022, the trade deficit was slightly more than $19 bln. Moreover, leaving aside portfolio and direct investment inflows, worker remittances alone are sufficient to cover the trade deficit. In the January through July period, worker remittances into Mexico are nearly $36 bln, almost a 10% increase from the same period a year ago. Mexico's unemployment rate appears to have put in a cyclical low near 2.4% in March. In July it was slightly above 3.1%. Last year, it averaged almost 3.3%. Banxico has indicated it is on hold for a protracted period. Brazil and Chile have cut rates twice as they begin their easing cycle. The first cut by Banxico has been pushed from Q4 23 to Q1 24, according to the swaps market. 

The US dollar traded briefly below MXN17.0 before the FOMC meeting concluded and rallied to MXN17.25 the following day. Sellers pounced on the greenback sending it back to MXN17.10. However, the risk-off mood that prevailed before the weekend helped lift the dollar, which settled near MXN17.2200. Early last week the five-day moving average crossed back below the 20-day moving average. The macro forces that have driven the peso almost 14% higher this year against the dollar appear to remain intact. Also, as Brazil, Chile, and other countries in the region cut interest rates, Mexico's yields become relatively more attractive. Consider, for example, at the start of the year, Chile's overnight rate was 75 bp more than Mexico and now it is 175 bp below.  Still, a move above MXN17.27 could see MXN17.35-45.  


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International

Tesla Japanese rivals debut concept vehicles in latest challenge

Japanese automakers will unveil their latest all-electric concept vehicles at Japan Mobility Show 2023 in Tokyo.

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Most Japanese automakers have been slow to enter the all-electric vehicle market, which doesn't bother Tesla's CEO Elon Musk one bit. The lack of a serious challenge by the Japanese auto industry, including in the luxury market, has allowed Tesla  (TSLA) - Get Free Report to dominate deliveries in the global market by hundreds of thousands of vehicles.

Toyota currently only offers one all-electric vehicle, the bZ4X, which retails for about $42,000 and has a 252-mile range. The company's luxury affiliate Lexus does not have an EV on the market yet.

Related: Mounting financial woes force rival of Tesla and BYD into bankruptcy

Subaru's only contribution to the EV industry is the Solterra SUV, which retails for about $45,000 and has a 220-mile range.

Nissan, on the other hand, was an innovator in the EV industry with its launch of the Leaf in 2010. The vehicle was the first mass-produced electric vehicle in the world and the top selling EV on the market in its first four years. However, the company's luxury brand Infiniti may not have an EV on the market until 2026.  

Some of the leading Japanese luxury automakers, led by Nissan's Infiniti, Toyota's Lexus and Subaru, will reveal their latest battery electric vehicle concepts at the Japan Mobility Show 2023 in Tokyo beginning Oct. 24. The show will be open to the general public from Oct. 28 through Nov. 5 after a couple of press and special invitation days.

Subaru Sport Mobility Concept sportscar model.

Subaru

Subaru reveals electric sportscar concept

Subaru  (FUJHY) - Get Free Report said it will showcase the company's vision of future mobility and communicate its efforts to strengthen its bond with society, as company president Atsushi Osaki on Oct. 25 unveils the Subaru Sport Mobility Concept sportscar model at the show.

"This concept model expresses the enjoyment that Subaru offers in the age of electrification, embodying the pleasure of going anywhere, anytime, and driving at will in everyday to extraordinary environments. Driving with peace of mind allows us to embark on exciting new adventures. This is a battery electric vehicle (BEV) concept that evokes the evolution of the Subaru Sport values," the company said in an Oct. 10 statement.

Subaru's other all-electric showcase at the show will be its first all-electric vehicle, the Solterra ET-HS SUV.

Toyota  (TM) - Get Free Report also arrives at the show for an Oct. 25 unveiling of its Lexus lineup of battery electric vehicle concept models, as part of its goal to transform into an all-electric brand by 2035. Lexus is expected to debut a sports car that it has teased for a year, as well as a sports hatchback, Electrek reported.

After viewing the Lexus concept models, guests are invited to try out the company's "Lexus Electrified VR Experience" virtual reality driving simulators, the company said in an Oct. 11 statement. The exhibit will allow visitors to experience a future world of driving where electrification and artificial intelligence technologies help cater to individual customer needs and connect with society. Guests have the opportunity to fully engage in a VR-exclusive setting, enabling them to encounter the personalized driving experience and enhanced lifestyle that Lexus delivers.

Infiniti unveils its Vision Qe Concept vehicle. 

Nissan

Infiniti unveils its first electric vehicle 

Nissan's  (NSANY) - Get Free Report luxury brand Infiniti on Oct. 24 will debut its first all-electric model, a new concept Vision Qe electric vehicle at the Japan Mobility Show that it expects to be ready to sell to the public in 2026.  Infiniti will also showcase other new models at the show as well. 

The newly designed Infiniti EV sedan is expected to have a longer wheel base with shorter overhang, new headlight and taillight design, single light strip across the width and a rear resembling a Porsche. The company has said it plans to produce its first electric vehicle at its Canton, Miss., factory, along with a new crossover EV.

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Government

The Myth Of The Invincible Dollar

The Myth Of The Invincible Dollar

Authored by Michael Maharrey via SchiffGold.com,

I write a lot about the national debt.

And most people…

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The Myth Of The Invincible Dollar

Authored by Michael Maharrey via SchiffGold.com,

I write a lot about the national debt.

And most people don’t care.

That’s because there’s a widespread belief that the dollar is invincible.

It isn’t...

The prevailing attitude is that the US government can borrow and spend indefinitely. After all, it hasn’t caused a problem so far. But a long fuse can burn for a long time before it finally reaches the powder keg.

I don’t know how long we have before the debt bomb explodes, but I do know we get closer and closer every day. And sadly, very few people care enough to address the problem.

The recent government shutdown drama is a case in point.

A stopgap spending deal swept the shutdown threat out of the headlines, but it’s still there lurking in the shadows of the halls of Congress. If lawmakers don’t figure something out by Nov. 17, the government will be forced to shut down.

There isn’t much talk about a shutdown right now, but when people do discuss the possibility, they almost always focus on the mythical crisis that shuttering the federal government might cause. That sidesteps the real problem — out of control government spending.

Conventional wisdom is that Congress needs to do whatever it takes to avoid a shutdown. If that means maintaining spending at current levels or even increasing spending, so be it. The handful of intransigent members of Congress who want to hold out for spending cuts are always cast as the bad guys in this kabuki theater.  As economist Daniel Lacalle put it in a recent article published by Mises Wire, “The narrative seems to be that governments and the public sector should never have to implement responsible budget decisions, and spending must continue indefinitely.”

But the whole government shutdown charade is merely the symptom of a much deeper problem. The US government is over $33 trillion in debt. In fact, the Biden administration managed to add half a trillion dollars to the debt in just 20 days.

It’s hard to overstate just how bad the US government’s fiscal situation has become. We have a trifecta of surging debt, massive deficits, and declining federal revenue, and the federal government’s spending addiction is at the root of the problem. Lacalle summed it up this way.

The problem in the United States is not the government shutdown but the irresponsible and reckless deficit spending that administrations continue to impose regardless of economic conditions.”

In August alone, the Biden administration spent over $527 billion. In fact, the federal government has been spending an average of half a trillion dollars every single month.

And there is no end in sight. There is no political will to substantially cut spending. Meanwhile, the federal government is always looking for new reasons to spend even more money. With war raging in the Middle East, there is already a proposal to send aid to Israel and possibly add more aid to Ukraine to that deal.

As Peter Schiff said in a recent podcast, the US can’t afford peace, much less war.

Lacalle summarizes the current fiscal condition of the United States government. It’s not a pretty picture.

In the Biden administration’s own projections, the accumulated deficit between 2023 and 2032 would be over 14 trillion US dollars, assuming that there would be no recession or employment decline. Public debt has risen above 33 trillion US dollars, and the budget deficit in a period of growth and strong job creation is over 1.7 trillion US dollars. As of August 2023, it costs $808 billion to maintain the debt, which is 15% of the total federal spending, according to the U.S. Treasury. Interest rates are rising at the same time as the government rejects all budget constraints. This is a monetary timebomb.”

And as Lacalle pointed out, the government keeps spending no matter what’s happening in the economy. According to government people and their academic support staff, there is never a good time to cut spending.

When the economy grows and there is almost full employment, governments announce more spending because it is ‘time to borrow,’ as Krugman wrote. When the economy is in recession, governments say that they need to spend even more to save the economy. In the process, government size in the economy increases, and record tax receipts are fully consumed in no time because expenditures always exceed revenues.”

The constant borrowing and spending is fueled by the myth that borrowing doesn’t really matter, and the rise in popularity of Modern Monetary Theory (MMT) put that myth on steroids.

MMTrs claim that spending doesn’t matter. As Lacalle notes, they even go as far as to claim that the world could “run out of dollars” if the federal government took significant steps to rein in deficit spending causing a “monetary meltdown.”

It is so ludicrous that it should not even have to be discussed. The world does not run out of dollars if the United States government cuts its imbalances. Global dollar liquidity is a result of central bank swaps between monetary institutions. There is no such thing as a global dollar liquidity crisis because of a United States surplus, as we saw when it happened in 2001. Furthermore, the idea that the dollar supply is created only by government deficit spending is insane. This distorted view of the economy places government debt at the center of growth instead of private investment. It tries to convince you that a deficit is always positive and that the only creation of currency must come from unproductive spending, not from productive investment credit growth. Obviously, it is wrong.”

But no matter how loudly contrarians sound the warning, people in the mainstream continue to shrug their shoulders at the mounting debt and ever-growing deficits. They seem to believe that since it hasn’t mattered yet, it won’t matter ever.

The dollar’s status as the global reserve currency enables the US government to get away with a lot. As Lacalle explains, global demand for dollars is still high. The dollar index (DXY) is rising because the monetary imbalances of other nations are larger than the United States’ challenges.

This has lulled Americans into a false sense of security. A lot of Americans, including most in positions of power, seem to think the US can do whatever it wants when it comes to borrowing and spending.

Lacalle makes a sobering point — “All empires believe that their currency will be eternally demanded, until it stops. ”

When confidence in the currency collapses, the impact is sudden and unsurmountable. Global citizens may start to accept other independent currencies or gold-backed securities, and the myth of eternal U.S. debt demand vanishes. Unfortunately, governments are always willing to push the limits of fiscal responsibility because another administration will face the problem. The United States’ rising debt and deficit irresponsibility means more taxes, less growth, and more inflation in the future. Government debt is not a gift of reserves for the private sector; it is a burden of economic problems for future generations. Sound money can only come from fiscal responsibility. Currently, we have none.”

The bottom line is the dollar is not invincible.

The fuse is burning.

Tyler Durden Sun, 10/15/2023 - 07:00

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International

Nigerian gov supports AI initiatives with $290K in grants

The recently introduced Nigeria Artificial Intelligence Research Scheme is designed to facilitate the widespread utilization of AI to drive economic advancement.

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The recently introduced Nigeria Artificial Intelligence Research Scheme is designed to facilitate the widespread utilization of AI to drive economic advancement.

The Nigerian Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, revealed on Friday, Oct.13, that the Federal Government intends to grant a sum of $6,444 (5 million naira) each to 45 artificial intelligence (AI) focused startups and researchers. This figure makes a total of $289,980 (225 million naira) being given out for the purpose of AI.

This information was disclosed by the minister in a post on X. The recently introduced Nigeria Artificial Intelligence Research Scheme is designed to facilitate the widespread utilization of Artificial Intelligence to drive economic advancement.

As outlined on the scheme's official website, the focal areas encompass Agriculture, Education and Workforce, Finance, Governance, Healthcare, Utility and Sustainability. To be eligible for the grant, applicants are required to form a consortium, comprising a startup or tech company, a researcher from a Nigerian university, or a foreign researcher, as stated by the Ministry.

Applicants should present a research proposal in line with the Federal Ministry of Communications, Innovation and Digital Economy's AI focus areas. Furthermore, they must provide a comprehensive project proposal that highlights the project's potential economic impact in Nigeria.

In addition, a proven track record of excellence in research or entrepreneurship is a requirement. Finally, applicants are expected to publish at least one peer-reviewed article within one year of grant receipt.

In August, the Nigerian government extended an invitation to scientists of Nigerian heritage, as well as globally renowned experts who have worked within the Nigerian market, to collaborate in the formulation of its National Artificial Intelligence Strategy.

Related: China sets stricter rules for training generative AI models

The application period commences on Oct.13, 2023, and concludes on Nov. 15, 2023. All submissions should be made through the specified online platform. The Ministry has indicated that a panel of AI specialists will assess the proposals. Those who make it to the shortlist will receive email notifications and be invited for interviews.

Magazine: ‘AI has killed the industry’: EasyTranslate boss on adapting to change

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