Dollar, stocks fall on Trump woes – Reuters

U.S. stocks and the dollar fell on Monday while Asian markets struggled as President Donald Trump’s failure on healthcare reform raised questions about his ability to push through tax cuts and fiscal spending to boost the economy.

Reuters reported that Trump’s inability to get enough support from his own Republican party to “repeal and replace” the Obamacare health insurance reforms, a major campaign promise, also spurred a rush to safety assets such as gold and the Japanese yen.

U.S. stock index futures fell 0.7 percent to a six-week low in heavy volume, suggesting a weaker start on Wall Street later in the day.

So-called “Trumpflation trades” — betting on an extended recovery in the U.S. and global economies and related assets such as commodities — came under heavy selling pressure.

“Markets have had a good run recently and this is a good opportunity for profit taking across counters,” said Alex Wong, a fund manager at Ample Capital Ltd. in Hong Kong, with about $130 million under management.

But Wong said the selloff is likely to be limited as cashed-up investors waited on the sidelines.

MSCI’s broadest index of Asia-Pacific shares outside Japan was broadly flat after posting its first weekly decline last week in three weeks.

Japan’s Nikkei fell 1.5 percent as the yen rebounded in the face of renewed U.S. dollar weakness.

Rising U.S. policy uncertainty also raised concerns that a recent pick-up in global business and consumer sentiment, particularly in Asia, would start to fade.

In terms of relative valuations, U.S. stocks are trading well above their historical averages while Asia stocks are still broadly in line despite a recent bounce.

“Any big pull back in markets would be an opportunity for long term investment in a region where potential is still intact,” said Nicholas Yeo, head of China/Hong Kong equities at Aberdeen Asset Management in Hong Kong, part of a team that manages $374 billion in assets as of end-December 2016.

The dollar fell to a near two-month low against a basket of currencies.

The dollar index was down 0.3 percent at 99.287  its lowest since Feb. 2.

It had risen to a 14-year high near 104.00 early in January when expectations for significant stimulus under the Trump presidency were at their peak.

“There isn’t much going for the dollar right now and the market will be bracing for its further decline.” said Shin Kadota, senior strategist at Barclays in Tokyo.

Fresh off the defeat on U.S. healthcare legislation on Friday, the White House warned rebellious conservative lawmakers on Sunday that they should get behind Trump’s agenda or he may bypass them on future legislative fights, including tax reform.

The Republican head of the tax-writing committee in the House of Representatives said he hoped to move a tax bill through his panel this spring.

The euro was 0.45 percent higher at $1.0847 EUR= following a rise to $1.0849, its strongest early December.

U.S. Treasury yields were trading near one-month lows with ten-year bonds trading near 2.36 percent, its lowest levels since Feb. 28.

Shanghai Futures Exchange copper slid by 0.7 percent to 46,680 yuan ($6,785) a tonne while Australia’s benchmark metals and mining index declined as much as 1.7 pct, its lowest since March 14.

Oil prices were broadly flat as investor concerns lingered that OPEC-led supply cuts were not yet reducing record U.S. crude inventories.

U.S. crude was trading slightly higher at $48.15 per barrel.

Safe-haven gold perked up, rising to $1,253 an ounce.

Pressure grows on Nigeria’s central bank governor – Reuters

By Ulf Laessing, Karin Strohecker and Sujata Rao

LAGOS/LONDON, March 27 (Reuters) – Earlier this year, an open letter in the Nigerian media from a group of businessmen attacked the “shameful” record of central bank governor Godwin Emefiele and demanded that he should go.

With Africa’s largest economy in recession for the first time in 25 years, the letter reflects growing anger directed at Emefiele, whose insistence on keeping the naira artificially high is believed to have worsened Nigeria’s oil-price induced slump.

Three years into his tenure, the flak is flying around the 55-year-old career banker once admiringly described by colleagues as a discreet man who gives little away.

The advertisement, which appeared in several newspapers and online news portals, is the most prominent expression so far of widespread discontent with the government’s naira policy among senior figures from the worlds of business and investment.

“Whatever hard-won reforms we had, (the benefit) has been undone in the past two years by (Emefiele),” one of the signatories, accountant Feyi Fawehinmi, told Reuters. Another ad is being planned, he said.

Emefiele imposed currency restrictions in 2015, defying bankers’ advice to float the naira and raise interest rates as some other oil exporters had done. Investors fled as the once promising emerging market was ejected from key bond indexes.

Economists and investors say they have given up seeking any clues from Emefiele, who once read out a 32-page statement on interest rates without referring to the issue uppermost on his audience’s mind – the frozen naira.

They are scathing about Emefiele, citing policies that have choked off the flow of dollars to official channels, fuelled a naira black market and ravaged domestic industry.

“Emefiele is responsible for the currency mismanagement. If someone achieves to beat down a currency like that, then a foreign investor like me can’t support that,” Lutz Roehmeyer, director at Landesbank Berlin Investment, told Reuters.

“Absolutely no one trusts or believes that this central bank is still able to fix this,” he said, describing the forex policy sarcastically as a “masterstroke” that destroyed the economy.

STRONG CURRENCY

That policy accords with President Muhammadu Buhari’s desire for a strong currency.

A 74-year-old former military ruler, Buhari has reminisced publicly about the 1980s when the naira traded at 1.3 per dollar, apparently viewing currency strength as a matter of national pride.

But Kingsley Moghalu, a former central bank deputy governor, says that does not absolve Emefiele of blame.

“Of course, there are many concerns that the bank is not being run in an independent manner in terms of policy … But we all know that one of the burdens central bankers always have to carry is to do the right thing even if it is not popular,” said Moghalu, who teaches now at Tufts University.

“So I don’t care what excuse you give, what explanation you give – the result is what we are looking at.”

Emefiele recently eased his grip on naira rates by offering dollars to different users and there are now at least five exchange rates. Moghalu called the multiple rates “a perfect recipe for corruption”.

The central bank says a “managed float” is needed to offset low oil prices. It did not respond to requests for comment for this article and Emefiele declined interview requests.

Ordinary Nigerians are suffering widespread shortages of consumer goods, while factory closures, due to lack of raw materials and machinery, have caused job losses.

Nigeria’s economy is heavily import dependent. By not making dollars available on a transparent basis, the central bank drives importers to the black market. As a result, inflation has rocketed but there are also shortages of imported goods.

The only winners from this policy are the few who obtain dollars they can sell on the black market, while everyone else is a loser. Prices for rice, Nigeria’s staple food, have doubled in the two years since the policy came in.

“What are the measures take by the central bank to rescue our currency (sic). Please, Nigerians are crying,” read a comment posted on the central bank’s Facebook page on Feb. 13 as the naira black market rate fell below 500 per dollar.

To console such citizens, Emefiele has suggested his import curbs are rejuvenating domestic industry. In a March 11 speech, he rejected devaluation.

It was “an opportunity to change the economy’s structure, resuscitate local manufacturing and expand job creation,” the speech, posted on the central bank website, said.

But while Emefiele has cited domestic tomato processing as a beneficiary of the import curbs, one new plant has shut, unable to import machinery or tomatoes.

At a meeting of Nigeria’s top economic advisory body to discuss the currency – Emefiele said everything was “under control” and called for “patience”, according to a deputy state governor who attended the session.

He has also told reporters the naira will move in a 304-305 range, describing it as “a sort of floating market”.

SURVIVAL

Emefiele, who ran one of Nigeria’s biggest banks, Zenith, between 2010 and 2014, was appointed by then President Goodluck Jonathan. He replaced Lamido Sanusi who irked authorities by exposing a $20 billion scam at state oil firm NNPC.

After Buhari won the 2015 election, many expected Emefiele to join the list of Jonathan appointees who were fired. But the view now is that Emefiele suits Buhari, playing to the president’s desire for a strong currency.

One Nigeria-based banker said Emefiele remains in his job because he carries out Buhari’s wishes. A former government economic policymaker said the central bank chief’s relations with his deputy governors were poor but he felt he could ignore them because he had Buhari’s backing.

Neither Emefiele nor the central bank press office replied to request for comment on these allegations.

But he has some defenders, and while Buhari is in office, political analysts believe Emefiele will also remain in post. Buhari, however, has been scaling down his schedule since he returned from extended sick leave and is expected to have more medical treatment in London next month.

By crushing imports, Emefiele has balanced Nigeria’s current account and boosted hard currency reserves. Inflation may be starting to slow.

This month, Vanguard, one of Nigeria’s biggest dailies, named Emefiele “Personality of the Year”. The paper praised his “long-term strategy for strengthening the Nigerian economy” and efforts to build non-oil industry.

WHERE IS EMEFIELE ?

Emefiele has reduced public engagements and has not given interviews to foreign media in over a year. He did not attend a Nigerian investment roadshow this year, sending a deputy instead.

Perhaps that was down to his experience at last summer’s roadshow in London.

One investor at that meeting recalled Emefiele telling fund managers and analysts the naira was solid and there was no issue with the foreign exchange market. For that he was angrily berated by some investors present.

Most investors will want to see more than a floating naira before they return to Nigeria, said John Bates, a strategist at PineBridge Investments. A key question may be whether Emefiele completes his tenure, which runs until 2019.

“They need to find credible speakers. There is an element of mistrust in the market, and I am referring to the central bank and the presidency,” Bates said. (Editing by Giles Elgood)

 

Nigeria sets new naira rate in attempt to lure consumers away from black market – Reuters

By Oludare Mayowa and Chijioke Ohuocha

LAGOS, March 27 (Reuters) – Nigeria set a new naira exchange rate on Monday for consumers with certain foreign expenses and stepped up dollar sales on the official market to narrow the spread with the black market.

Analysts doubted whether the moves would draw investors back to the suffering economy.

Nigeria has at least five exchange rates — the official one, the black market, a rate for Muslim pilgrims going to Saudi Arabia, a retail rate set by licensed exchange bureaux and a rate for foreign travel, school and medical fees.

It was this last that was changed — to 360 naira to the dollar, a four percent rise since the last rate was set.

Nigeria is battling a currency crisis brought on by low oil prices, which has tipped its economy into a recession, hammered its dollar reserves and created chronic dollar shortages, frustrating businesses and individuals.

The central bank, opposed to a free naira float, has been selling the U.S. currency on the official currency market to try to narrow the spread with the black market rate, which was at 390 last Friday, albeit down from 520 to the dollar a month ago.

On Monday it also sold dollars on the official market and said its supervisors would visit lenders to ensure compliance with the new retail rate.

The bank auctioned $1.5 million and offered $100 million on the forward market to boost liquidity. However, it sold naira on the spot market at 306.30, 21 percent weaker than the black market.

“Investors are clear that what they want is a properly functioning FX regime where … new FX shortages are not threatened. The new system does not currently meet those requirements, even if FX sales have increased,” said Razia Khan, Africa chief economist at Standard Chartered Bank.

The central bank also barred lenders from reselling foreign currency to retail exchange bureaux to curb speculation.

Aminu Gwadabe, head of Nigeria exchange bureaux, told Reuters his members had incurred currency losses of 130 million naira based on the rate differential after the central bank sold $25 million to them at 381 naira last week.

Gwadabe said that exchange bureaus may boycott central bank sales this week, adding that the regulator must review the multiplicity of rates on the currency market.

“The multiple currency system currently in place makes it difficult to ascertain how much pressure the naira is still under, and this also complicates pricing for investors,” said Cobus de Hart, senior economist at NKC in Johannesburg.

“We remain sceptical in relation to the central bank’s current approach,” he said, adding that lower oil prices, a slowly rising foreign reserves and currency forwards due to mature, may soon test the bank. (Additional reporting by Paul Carsten in Abuja; Writing by Chijioke Ohuocha; Editing by Jeremy Gaunt)

 

No more 375! You can now get dollars N360/$1 across banks – The Cable

The Central Bank of Nigeria (CBN) says banks will no longer trade the naira at N375 per dollar for invisibles, such as school fees, medical bills and travel allowances.

CBN, on Monday morning, said Nigerians can now get the dollar at 360 across all commercial banks within the country.

“The CBN to sell forex to banks at N357/$1, while banks will sell to their customers at N360/$1 for invisibles (BTA, medicals, fees, etc),” the apex bank said on Monday.

“CBN directs banks to post new rates in the banking halls of their branches immediately. CBN examiners to visit banks to ensure the new rates are implemented.

“CBN prohibits banks from selling forex funds meant for invisibles to BDCs”

Previously, the bank was selling between 315 and 360, for visible and invisibles transactions, and permitting banks to sell at no more than 375 per dollar on invisible transactions.

The CBN on Friday, March 24, concluded transactions of $100 million earlier offered at the interbank market to meet customers’ demands.

Of the $100 million offered by CBN, authorized dealers were only able to pick $81.347 million after an initial bid for $91 million.

Isaac Okorafor, the CBN spokesperson, attributed the inability of authorized dealers to pick up the entire $100 million to increasing dollar supply and sense of apprehension among dealers who anticipate a further crash in the rate of the dollar.

The policy suite being implemented by the CBN is aimed creating a convergence between parallel market and official rates of foreign exchange.

Pace of reform slows as Nigeria’s ailing Buhari slims his schedule – Reuters

By Alexis Akwagyiram and Felix Onuah

ABUJA, March 27 (Reuters) – A lingering illness has led President Muhammadu Buhari to reduce his working day to a few hours since he returned from medical leave, slowing down the pace of economic reforms advanced in his absence, diplomats and government sources said.

The Nigerian leader is spending between one and four hours a day in his office to conserve his energy levels, three diplomats and presidency sources said, deepening concerns he is too unwell to orchestrate reforms to the recession-hit OPEC economy.

Buhari has long been criticised by households and investors for his slow response to low global oil prices, which sent the naira currency tumbling and the broader economy into a tailspin.

When he travelled for treatment, his deputy embarked on initial steps to turn around Africa’s largest economy before handing back the reins upon Buhari’s return seven weeks later.

“Things are slowing down, particularly on the economic front, which is a concern,” said one Western diplomat.

One official inside the president’s office said the 74-year-old was due to return to Britain for further treatment in April. The presidency has not revealed the nature of Buhari’s illness.

Buhari’s two spokesmen declined comment on his medical needs or reduced working hours.

A post on the Twitter feed of spokesman Garba Shehu said Buhari had been working from home, even after most civil servants had left their offices.

Buhari’s health will be in focus this week, when the International Monetary Fund is due to urge swift reforms – a verdict that risks derailing Abuja’s hopes of securing $1.4 billion in international loans.

However, even some government insiders appear to be in the dark over the president’s health and his reform plans.

“Everyone is trying to read Buhari’s body language now he is back,” said an adviser to the government, who did not want to be named.

REAL REFORM?

Buhari was in London between late January and early March for treatment.

Business leaders and diplomats have said that during his absence, the presidency acted with an energy rarely seen in the two years since his election. Civil servants said they were working longer hours and handling heftier workloads.

The central bank devalued the naira for retail customers, a move seen as testing the waters for a wider devaluation that Buhari has so far resisted.

Vice President Yemi Osinbajo also oversaw the release of an economic reform plan required for a World Bank loan to help plug a forecast record deficit this year and finance infrastructure projects.

Even so, political observers and economists at the time questioned whether he was acting with Buhari’s consent and had the authority to enact long-term reforms.

John Ashbourne, Africa economist at Capital Economics in London, said Buhari’s return had opened up “the possibility for important decisions to be made”.

“It was never likely that Osinbajo was going to really change directions during his time at the helm,” said Ashbourne.

Two diplomats said, however, that Osinbajo has now been authorised by Buhari to hold talks with leaders in the restive Niger Delta region to quell unrest that has choked crude production, in a sign some newfound momentum may be retained.

The coming weeks may help signal how confident creditors are that Nigeria can haul its economy out recession. Finance ministry officials are preparing for further talks with the World Bank over a loan of at least $1 billion, and with the African Development Bank (AfDB) for a $400 million package.

($1 = 307.0000 naira) (Additional reporting by Paul Carsten; Editing by Ulf Laessing and Richard Lough)

 

Nigeria sets naira rate for foreign school and medical fees – Reuters

By Paul Carsten and Oludare Mayowa

ABUJA/LAGOS, March 27 (Reuters) – Nigeria’s central bank on Monday said it will sell the dollar to consumers needing to pay foreign school and medical fees at 360 naira after the local currency firmed sharply on the black market.

It amount to an increase of arund 4 percent since it was last set.

Nigeria has at least five exchange rates — the black market, the official one, a rate for Muslim pilgrims going to Saudi Arabia, one for school and medical fees abroad, and a retail rate set by licensed exchange bureaus.

The central bank has been selling the U.S. currency on the official currency market to try to narrow the spread with the black market rate, which was at 390 last Friday, albeit down from 520 to the dollar a month ago.

On Monday the bank said it will sell dollars at 357 to lenders to resell to customers at a 3 naira margin for foreign school fees, medical bills and travels.

On the official market, the bank has also been weakening the naira to converge rates, traders say, but it has not provided a target rate. The naira was quoted at 315 on the interbank market.

The central bank said its supervisors would visit lenders to ensure compliance with the new retail rate and barred them from reselling foreign currency to retail exchange bureaux.
Aminu Gwadabe, head of Nigeria exchange bureaus, told Reuters his members had incurred currency losses of 130 million naira based on the rate differential after the central bank sold $25 million to them at 381 naira last week.

He said on Monday that exchange bureaus may boycott central bank sales this week, adding that the regulator must review the multiplicity of rates on the currency market.
(Additional reporting and writing by; Chijioke Ohuocha; Editing by Jeremy Gaunt)

Bureaux De Change At Risk As Naira Gains More Muscle – The Nation

Business seems bad for Bureaux De Change (BDCs) — no thanks to the naira’s new strength that has hit them with heavy losses.

The naira has strengthened below N381 to the dollar, the rate at which BDCs buy International Money Transfer Operators (IMTOS) cash from the Central Bank of Nigeria (CBN).

The naira exchanged at N375 to the dollar in the parallel market at the weekend.

It is tipped to gain more within the week as the CBN sustains dollar interventions in the interbank market.

About $1.5 billion has been injected into the interbank market since February when the interventions started.

Association of Bureaux De Change Operators of Nigeria (ABCON) President Aminu Gwadabe, who hinted of some BDCs likely closure after losing N130 million within the week, said the losses came from the disparity in applicable exchange rates among players in the market. He, therefore, called for rates harmonisation to give all players a level playing field.

According to him, the public has refused to buy foreign exchange from BDCs for invisibles, such as medicals, school fees, and personal and business travel allowances, at a rate above N375 to the dollar.

Commercial banks are selling the dollar for invisibles at N375. The parallel market rate closed at N380 last week. The BDCs, Gwadabe said, were at the receiving end of the market because they bought dollars at N381 and sold at N399, which is far higher than even the parallel market rate.

“All the banks’ selling rates are higher than even the purchasing rates of BDCs, let alone our selling rates. No one is presently buying from the BDCs. I managed to sell only $4,000 last week at N385, how are we going to survive?”, he asked.

“The development has been communicated to the CBN and relevant agencies for intervention and the CBN is giving it its attention. If the scenario is not reversed immediately, the CBN licensed BDCs of over 3,000 with 30,000 workers will be technically edged out of the market,” he said.

Continuing, Gwadabe urged the CBN to provide a level-playing field for all operators, because they are all operating within same market, and selling the same product.

Gwadabe said once the BDCs are no longer in the foreign exchange business, currency speculators will take over the market and that will not be good for the naira.

Stakeholders hope that the sustenance of the CBN’s efforts at the interbank market will further drive down the value of the dollar.

The naira has appreciated by 13 per cent in the parallel market in the last one week. The currency traded at N440 last Monday. It closed at N380 to the dollar at the weekend.

Experts have praised the CBN for its intervention at the foreign exchange market. They urged the apex bank to eliminate the multiple rates in the market.

As the naira continues to appreciate, experts say it is necessary for the CBN to adjust applicable rates in various segments of the market in the overall interest of the economy.

The CBN said yesterday that the dollar would be weakening further this week as it plans yet another round of interventions in the interbank market. It plans to pump in more dollars into the interbank market to meet the demands of wholesale and retail customers as well as strengthen the value of the naira against other international currencies.

The planned move by the CBN, sources say, will further firm up the naira against other currencies as the exchange rates of the greenback and the United Kingdom Pound Sterling continue to move southwards.

The Euro and the Pound exchanged at the parallel market at the weekend at N405 and N475. The figures will further nosedive this week, according to experts.

The Acting Director, Corporate Communications Department, CBN, Isaac Okorafor, confirmed the plan to inject more foreign exchange into the market.

CBN’s planned interventions may crash dollar further – Punch

Oyetunji Abioye

The United States dollar may record further loss this week as indications have emerged that the Central Bank of Nigeria is planning to carry out more interventions in the interbank market.

It was learnt on Sunday that the CBN had concluded an arrangement to pump more foreign exchange into the interbank space to meet the demands of genuine wholesale and retail customers.

This, CBN sources said, was aimed at strengthening the value of the naira against other international currencies, especially the greenback.

The naira has been recording significant gains against the US dollar, United Kingdom pound sterling and euro in recent weeks.

The local unit crashed at the parallel market from 520/dollar recorded over one month ago to 385/dollar on Friday.

Retail currency dealers said on Sunday that the dollar, euro and the pound was going for N375, N405 and N475, respectively, over the weekend.

They said the foreign currencies might go southwards further against the naira if the CBN pumped in more forex into the interbank space.

The Acting Director, Corporate Communications, CBN, Mr. Isaac Okorafor, said the regulator was planning to inject more forex into the market this week.

The CBN, he said, was committed to sustaining the tempo of liquidity in the interbank market for the sake of different categories of genuine end-users.

He, therefore, urged authentic prospective customers to freely approach their respective banks with relevant requirements to apply for the purchase of foreign exchange, assuring that the banks had adequate supplies to meet genuine needs.

Okorafor also warned forex dealers against engaging in acts capable of disrupting the smooth operations of the forex market, stressing that the CBN would penalise any organisation found guilty of bending the rules.

The CBN has so far injected over $1bn into the forex market in the past one month as it steps up efforts to stabilise the naira.

During the last intervention, the CBN offered $100m for sale to authorised dealers but only $82m was bought.

It is yet unclear if the CBN is ready to crash the dollar below the current rate sold to end-users seeking forex for personal travel allowance, medical bills and school fees.

Some analysts believe the regulator may not be ready to make such move at the moment.

External debt servicing gulps $1.62bn in five years – Punch

Amid attempts by the country to borrow more from external sources, Nigeria has in the past five years spent $1.62bn to service its external debts that include loans secured for what turned out to be white elephant projects, EVEREST AMAEFULE writes.

In the past five years, Nigeria has spent $1.62bn for servicing of external loans contracted by both the federal and state governments.

A breakdown of statistics obtained from the Debt Management Office showed that the country paid $293,003,540 for external debt servicing in 2012. The following year, the amount stood at $297,329,300.

In 2014, a total of $346,723,290 was paid to external creditors. The amount came down slightly in 2015 to $331,059,850, but moved up a bit to $353,093,540 last year.

Nigeria’s external debt stood at $6,527,070,000 on December 31, 2012. However, over the past five years, it has grown to $11,406,028,000.

This means that within the period of five years, the country’s external loan commitment has grown by 74.75 per cent.

If the service fee of $1.62bn in the past five years is checked against the principal at the peak of the debt, $11.41bn in 2016, it means that 14.21 per cent of the total has been paid in debt servicing obligations.

In 2016, 44 per cent of the debt service commitments were for multilateral loans. These include loans secured from the World Bank Group, the African Development Bank Group, Arab Bank for Economic Development in Africa, the European Development Fund, and the Islamic Development Bank.

Eighteen per cent of the amount for debt servicing was paid to bilateral agencies, including the EXIM Bank of China, French Development Agency, Japan International Cooperation Agency, EXIM Bank of India, and Kreditanstalt fur wiederaufbua.

Commercial loans consumed 26 per cent of the debt servicing commitments, while oil warrants and agency fees were responsible for the rest nine per cent.

What observers may not know is that some of the foreign loans for which the nation has been servicing were obtained for ill-conceived projects, some of which are not yet completed or have been abandoned, while the impact of others cannot be felt on the economy.

One of such white elephant projects is the National Rural Telephony Project. The project was conceived in 2001 to extend telephony services to 218 of the 774 Local Government Areas in the country.

By the time the contract for the project was awarded in 2005, the digital mobile services championed by the Global System for Mobile Communication service providers was already making waves across the country.

The contract was awarded to two Chinese firms, ZTE and Alcatel Shanghai Bell, while a $200m loan for its execution was secured from the China EXIM Bank. The implementation of the project lingered beyond the given timeframe as a result of several issues and payment of counterpart funding.

The project was said to have been poorly implemented in some locations, while in a few others, it was not implemented at all as a result of difficulties in securing project sites.

By the time the project was completed around 2007, it was clear that the government did not have a model for its management. When it eventually decided to give out the project as a concession and divided into six operations according to the geopolitical zones in the country, six firms emerged victorious.

However, that was the beginning of another controversy with letters being exchanged between the Ministry of Information and Communication, the Attorney General of the Federation, the Bureau of Public Procurement and the Infrastructure Concession and Regulatory Commission.

The consequence of the bureaucratic bottleneck is that 17 years after it was conceived, the NRTP has not been put into use and Nigeria is repaying principal for the loan borrowed for the project as well as the interest.

Another project for which a loan was secured from China is the Nigeria National Public Security Communication System. A total of $399.5m was secured from the China EXIM Bank and the contract was awarded to ZTE. The Federal Government paid a counterpart funding of $70.5m.

The project is meant to install cameras and monitoring stations in three cities of the federation and to give the police a technological capacity for monitoring and prevention of crimes. Some of the installations for the controversial project have since been vandalised.

For the Abuja Light Rail Project, the Federal Government secured $500m from the China EXIM Bank. The project has yet to be completed, that is if it has not been abandoned.

For the Nigeria Communications Satellite, a loan of $200m was secured from the China EXIM Bank. The satellite constructed by a Chinese firm was put in the orbit in May 2007.

However, the communications satellite failed in the orbit on November 8, 2008. Another satellite known as NigComSat-1R was launched into the orbit on December 19, 2011 as a replacement for the first, which developed a power problem in the orbit.

The utilisation and contribution of the satellite to the economy remain controversial as authorities in the satellite firm say that the company needs at least two more satellites to run profitably.

World Bank loans, on the other hand, are difficult to evaluate as the group concentrates on poverty alleviation projects such as in agriculture.

As Nigeria bids to secure more foreign loans, experts say the importance of the citizens monitoring the projects they are to be committed to cannot be overemphasised.

Curb illegal currency transactions at borders – BDCs tell security agencies – NAN

Bureau De Change Operators have called on security agencies to curb illegal currency transactions at Nigerian borders to sustain the recent appreciation of the Naira against other foreign currencies.

Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON), made the call in an interview with the News Agency of Nigeria (NAN) on Sunday in Lagos.

Gwadabe said that recent surveillance of the nation’s boarders by combined teams of security agencies helped to reduce frivolous demand for the dollar by 80 per cent.

According to him, the reduction in the frivolous demands of the dollar accounts for the magnificent strength of the naira at the foreign exchange market.

“I urge both the regulators and the relevant security agencies to continue to keep faith with their surveillance efforts on illegal transactions for a quicker rates convergence and true value of the Naira,’’ he said.

Gwadabe said the inability of banks to clear the 100 million dollars offered by CBN on Friday and the return of about 19 million dollars unutilized funds, testified to the elimination of frivolous demand in the system.

“This also shows that the BDCs are better positioned in networking, convenient and more effective than the conventional banks in the elimination of rates disparity.

“The BDCs have helped the CBN to achieve this objective from 2006 to date.

“The CBN should quickly look into the review of applicable exchange rates and volumes for the BDC subsector to ensure speedy rates convergence and true value of the Naira,’’ Gwadabe said.

Financial experts are of the opinion that unless the CBN eliminates multiple exchange rates in the market, its efforts at rates convergence and the sustenance of the gains recorded by the Naira could be reversed.