Nigeria’s Buhari sends first message since taking sick leave on May 7 – Reuters

By Felix Onuah

ABUJA, June 26 (Reuters) – Nigerian President Muhammadu Buhari has delivered an audio message to mark the Islamic Eid al-Fitr holiday, a senior aide said on Monday, in his first public statement since he left for Britain on medical leave on May 7.

Buhari, a Muslim from the north of Nigeria, made the address, calling for peace and unity, in the Hausa language spoken widely in that part of the country.

Shaaban Sharada, the president’s special assistant on broadcast media, said he circulated the recording to local radio stations. In the tape, heard by Reuters, Buhari’s voice sounds weak.

Buhari urged Nigerians to “avoid reckless statements or actions against our fellow countrymen”, according to an English translation provided by the presidency. “We should all resolve to live in peace and unity in our great country,” he said.

Details of the president’s ailment have not been disclosed and he has not been seen or heard in public since leaving Nigeria, triggering speculation about his condition.

A thin-looking Buhari was last seen, on state television, welcoming a group of 82 girls released by Islamist Boko Haram militants, just hours before he flew to Britain.

Pictures of the 74-year-old president since then have not been released, unlike during a previous break for medical leave in January that lasted nearly two months when photographs of him with Nigerian politicians and visitors including the Archbishop of Canterbury were posted on the presidency’s Twitter feed.

Buhari put his deputy, Yemi Osinbajo, in temporary charge of the country when he left for Britain. (Additional reporting by Ardo Abdullahi in Bauchi; writing by Alexis Akwagyiram; editing by Mark Heinrich)

 

Nigerian interbank rate eases on cash refund on bills and forex – Reuters

By Oludare Mayowa

LAGOS, June 23 (Reuters) – Nigeria’s interbank rate eased to around eight percent on Friday from 15 percent last week after the central bank repaid 152.6 billion naira ($500.57 million) in matured debt and paid refunds to banks for their forex cash provisions.

Traders said they expect a further drop in the overnight rate to around five percent in the next few days if the government, as expected, releases its May budget allocations next week to its agencies.

“We are anticipating additional cash flow from budgetary allocations to government agencies,” one currency traders said.

Nigeria, which has Africa’s biggest economy, distributes revenue from its crude exports among its three tiers of government – federal, state and local. A portion of state and local government revenues passes through the banking system.

The country’s distributable revenues rose to 462.4 billion naira in May, up from 415.7 billion naira the previous month, due to higher proceeds from corporate taxes, a government statement said late on Thursday.

Traders said about 222 billion is expected to be credited to the banking system, which would help raise the volume of cash in the money market and help push down the cost of borrowing among commercial lenders.

The central bank issued 20 billion naira of 356-day treasury bills at 18.6 percent and 383 million naira of 167-day T-bills at 18 percent on Friday to reduce liquidity and curb speculation on the local currency.

Nigeria’s money market will resume trading on Wednesday after a two-day public holiday to mark Muslim festival of Eid-al-Fitr. ($1 = 304.85 naira) (Editing by Alexis Akwagyiram/Jermey Gaunt)

 

Nigeria’s investor and black market FX rates near convergence – Reuters

By Oludare Mayowa

LAGOS, June 23 (Reuters) – The rates at which Nigeria’s naira currency was traded in the investor foreign exchange window and black market on Friday came close to converging, traders said, as the central bank continued its bid to improve dollar liquidity in Africa’s biggest economy.

The OPEC member, which has at least six exchange rates, is grappling with a currency crisis caused by low oil prices, which created chronic dollar shortages. It wants to attract foreign investors and maintain a strong currency to ward off inflation.

The central bank created a new forex window in April to allow investors to trade the naira at market-determined rates in a move intended to improve dollar supply and attract foreign investors who fled Nigeria at the start of the currency crisis.

The naira was quoted at 368 to the dollar on the black market on Friday. In the investor window, the naira was quoted at 367.83 to the dollar at 1411 GMT.

“The convergence of rates, at least for a segment of the market, demonstrates the success of the central bank’s intervention, said Razia Khan, Africa chief economist at Standard Chartered Bank.

Khan said that by addressing the demand for dollars, the central bank had been able to reduce the extent to which the naira would have depreciated on the black market.

The local currency traded at about 520 to the dollar on the black market in February and at 400 in the forex window when it opened in April, before appreciating towards convergence in the past few months.

“The convergence … has provided the central bank another opportunity to put in place a sustainable reform of the market to enhance the value of the naira,” Aminu Gwadabe, president of the country’s Association of Bureaux De Change Operators, told Reuters.

Gwadabe said that the central bank has consistently been selling about $40,000 a week to each of its 3,250 members, improving dollar liquidity.

The bank last week said that the investor window had handled $2.2 billion of trade in the past seven weeks but had accounted for almost 30 percent of that trade itself as it worked to keep the window operating.

The central bank has sold more than $5 billion since it began its interventions in February, helping to restore confidence in the market.

(Editing by Alexis Akwagyiram and David Goodman)

 

OPEC breaks own record as compliance to oil deal hits 106% – The Cable

The Organisation of Petroleum Exporting Countries (OPEC) has beat its own oil cut compliance record, which stood at 104 percent as at April 2017.

According to the joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC), for the month of May 2017, OPEC and participating Non-OPEC producing countries recorded the highest conformity ever with their voluntary adjustments in production, achieving a level of 106%.

The JMMC was established following OPEC’s 171st ministerial conference decision of November 30 2016, and the subsequent Declaration of Cooperation made at the joint OPEC-Non-OPEC producing countries’ ministerial Meeting held on 10 December 2016 at which 11 non-OPEC oil producing countries cooperated with the 13 OPEC Member Countries in a concerted effort to accelerate the stabilization of the global oil market through voluntary adjustments in combined production of around 1.8 million barrels per day.

The resulting declaration, which came into effect on  January 1, 2017, is for six months, and is extendable for an additional six months, depending on the status of supply and demand, including global inventories.

The second joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on 25 May 2017, decided to extend the voluntary production adjustments for another nine months commencing 1 July 2017.

The JMMC expressed great satisfaction that overall conformity levels by OPEC and participating non-OPEC producing countries have steadily increased from January to May 2017, exceeding 100% in both April and May to reach its highest level since January 2017.

In May 2017, the OPEC and participating non-OPEC producing countries achieved a conformity level of 106 per cent, an increase of 4 percentage points over the April 2017 performance.

This is a convincing demonstration of the willingness of all participating countries to continue their cooperation until the set goal is achieved.

“The JMMC took note of the recent market development and expressed confidence that the oil market is moving in the right direction towards the achievement of the objectives of the Declaration of Cooperation, and further encouraged all participating countries to press on towards full conformity and maintain this level for the benefit of producers and consumers alike, as has been consistently advocated,” OPEC said via a statement.

The next JMMC Meeting is scheduled to be held in St. Petersburg, Russia, on July 24, 2017.

Naira remains stable this week in parallel market – Today

The ​N​aira ​on Thursday remained stable at N364 per dollar in the parallel market. ​There was no significant increase or decrease in the figure all week days.

The stability was attributed to weak demand for dollar and increased supply due to dollar sale to bureaux de change by the Central Bank of Nigeria (CBN​).

CBN had on Monday​ ​injected a total sum of $195m into the inter-bank forex market to meet the requests of customers in the various segments of the market.

A breakdown of the intervention revealed that the Bank offered the sum of $100 million to authorized dealers interbank wholesale window, while it allocated the sum of $50 million to the Small and Medium Enterprises (SMEs) window.

The invisibles segment was allocated the sum of $45 million to meet the needs of those who applied for Forex to settle Business/Personal Travel Allowances, school tuition, and medicals, etc.

Acting Director in charge of Corporate Communications, Isaac Okorafor, said the Bank would continue to ensure adherence to its forex policy by insisting on transparency of all stakeholders to guarantee stability in the market.

CBN made two major interventions in the inter-bank Forex market, last week, totalling $831.5 million, just as figures released by the ​a​pex ​b​ank indicated that it had boosted transactions at the Investors’ & Exporters’ (I&E) segment of the market to the tune of $2.2bn.

Also last week, the CBN, in a bid to tackle inflation, unveiled plans to mop up a total of N200.322 billion from the Nigerian banking system through a special Open Market Operation (OMO) at the rate of 16 per cent per annum.

Nigeria’s government revenues rise in May due to higher corporate tax proceeds – Reuters

ABUJA, June 22 (Reuters) – Nigeria’s distributable government revenues rose to 462.4 billion naira ($1.43 billion) in May from 415.7 billion naira in April due to higher proceeds from corporate taxes, a government statement said on Thursday.

Distributable revenue is government income that is shared at various levels of state including the federal government, state governments and local government councils.

The revenues were boosted by “significant increases in revenues from companies income tax,” said the statement issued by the accountant general.

But it said the rise was offset by a “slight drop in the average price of crude oil from $55.38 to $55.18 per barrel and a decrease in export volume by 1.023 million barrels, reduced oil revenue by $57.12 million”.

OPEC member Nigeria, which is in a recession largely caused by the fall in global crude prices since mid-2014 and attacks on energy facilities in its Niger Delta energy hub last year, relies on crude oil sales for two-thirds of its government revenue.

Attacks on energy facilities that cut oil production have halted since the start of the year with talks between the government and Delta community leaders to address the grievances of militants who want the oil hub to receive a greater share of the country’s energy wealth. ($1 = 324.1800 naira) (Reporting by Camillus Eboh in Abuja and Alexis Akwagyiram in Lagos; Editing by Lisa Shumaker)

 

CBN Warns against Abuse of the Naira – Thisday

Nume Ekeghe

The Central Bank of Nigeria (CBN) has urged members of the public to desist from ill handling of the nation’s currency, the naira.

The central bank stressed that the cost of maintaining the naira note was expensive, while also urging members of the informal sector to embrace the various e-payment options in the economy.

This call was made at the CBN’s ‘Promoting Financial Stability and Economic Development Fair,” in Lagos yesterday, which had a collective attendance of farmers, traders, SMEs and others from the informal sector.

The Assistant Director, Currency Operations Department, CBN, Mr. Benedict Maduagwu said thatthere are so many interventions by the CBN aimed at promoting the well-being and also in diversifying the economy.

“We have the Anchor Borrowers’ scheme which is a wonderful initiative. We also have the MSME intervention scheme of N220 billion which 60 percent is reserved for women. We also have the youth empowerment development program and we are also promoting cashless.

“The way currency is being handled, it is being abused and the cost is huge. As at 2005 to 2010, it was over N192 billion and as i speak it is more than that. So the effort in the cashless policy and also telling people on how to carry clean naira are all aimed at reduction of the huge cost in currency.”

He also added that this sensitisation fair would be a nationwide event, in order to enlighten members of the public on various reforms made by the central bank. This is expected to improve financial stability and economic development.

On his part, the Deputy Director, Trade and Exchange Department, Mr. Olu Vincent said: “This is a sensitisation to the public on what CBN has been doing federally over the past few years to stimulate the economy to produce a base for economic development since the volatility in the oil price market. This is to divert the economy from oil to non-oil export, which everyone is clamouring we should lay more emphasis on non-oil export.

“There have been various interventions that the central bank has put in place as part of the proactive measures of the bank in stimulating the growth of the economy. So what we doing basically this period is to sensitise the public about what the bank has been doing underground and also sensitise the public about their rights while relating with their banks.

“We are moving from oil to non-oil and the strength of the economy is actually in the agricultural sector and other SMEs.”

Investors cheer Nigeria currency shift, want more – Reuters

By Karin Strohecker

LONDON, June 22 (Reuters) – Nigeria’s recent tentative steps to free up its naira currency, particularly via a new trading window, have gone down well with some adventurous stock and bond investors who are cautiously returning to the markets they fled two years ago.

Once considered one of the most promising emerging markets, Nigeria was hammered when it introduced draconian foreign exchange restrictions to counter the effects of the 2014 oil price crash.

These will take years to unwind, some analysts fear, while others are concerned the new trading facility could come under pressure if oil prices were to take another tumble, or trade through it could slow if Nigeria’s currency reserves run low.

The much-criticised move starved the economy of dollars, throttled foreign investment and plunged Africa’s largest economy into recession for the first time in more than 25 years.

But authorities have since tried to normalise the currency market and alleviate dollar shortages, most recently via the “Investors & Exporters FX Window”, which allows investors and traders to swap nairas for dollars at market-determined rates.

The new window adds to a confusing array of exchange rates. But it does seem to be succeeding in luring back some foreign funds, especially as the economy should return to growth soon and inflation is finally slowing.

“It is a very good thing. Obviously having multiple exchange rates is not an optimum situation yet, but it is moving towards a more realistic exchange rate,” said Oliver Weeks, economist at hedge fund Emso Asset Management. “This certainly makes the country more interesting.”

Under the new system, in place since April, the opening and closing naira/dollar rates are determined by a poll of authorised bank dealers. The NAFEX or Nigerian Autonomous Foreign Exchange Rate Fixing is set around noon and serves as a benchmark for derivatives such as forwards and futures.

Weeks said Emso has used the new mechanism successfully several times in the past six weeks.

Since the window’s launch, foreigners have swapped some $2.2 billion through it, according to the central bank although London-based Exotix Capital said many of the deals were likely small as some people test the new system.

Data from Lagos-based FMDQ OTC Securities Exchange, which hosts the window, shows the naira NAFEX fix at nearly 369 per dollar, well below the official 305 rate the central bank had previously clung to.

Sola David-Borha, Chief Executive Africa Regions at Standard Bank – one of the authorised dealers in the new window – said the window was working “reasonably well” and there was definitely liquidity.

“But the most important thing is that the central bank is willing to engage, and there is constant engagement now with bankers, investors and other stakeholders,” David-Borha said.

STOCKS RACE UP

The Lagos stock market has climbed nearly a third in the past six weeks and trading volumes have more than doubled. Local bonds, some paying yields over 20 percent are also luring more foreign investors, local traders said

The new window has re-opened the doors to the carry trade in naira – one of the few such opportunities on the continent outside South Africa, said Yvette Babb, executive director for sub-Saharan Africa research and strategy at J.P Morgan.

Babb estimates foreign portfolio outflows from Nigeria were around $6 billion last year, but added:

“Depressed equity prices and high local currency yields in combination with the exchange rate adjustment is likely to give rise to further foreign portfolio inflows.”

But NAFEX still has plenty of critics. Above all, investors are worried by authorities’ failure to guarantee that the window will remain available in future, especially in the event of another sharp decline in oil prices.

Secondly, the central bank sold more than $4 billion from February to May to narrow the gap between the official and black market exchange rates. But with reserves of just over $30 billion, it is doubtful it can keep selling at such a pace.

“In the case of oil production coming down again, it is not clear that the currency will adjust and you could go back to a position where the market goes completely illiquid again,” Emso’s Weeks said.

And those betting that NAFEX heralds a swift and full-fledged naira liberalisation may be disappointed.

Although an exporter of oil, Nigeria’s reliance on imports for fuels such as gasoline is a drain on foreign exchange.

The government has pledged to end its reliance on oil product imports by 2019 – and the two are connected, Babb said.

“Markets are expecting more exchange rate liberalization in the next six months, but policymakers seem to be seeking convergence by 2019,” Babb added.

So more conservative investors are holding back. For instance Guy Tousso, portfolio manager for emerging markets fixed income at BNP Paribas Asset Management, is waiting for a functioning naira market to return but says it is inevitable.

“They are getting there, but it is a slow pace in Nigeria because the social impact will be negative. But I don’t think they have any choice.” (Additional reporting by Oludare Mayowa and Chijioke Ohuocha in Lagos; Editing by Hugh Lawson)

 

WEEKAHEAD-Nigerian naira is seen trading around the prevailing level

LUSAKA, June 22 (Reuters) – Zambia’s kwacha is likely to firm next week supported by companies converting hard currency to the local unit in order to pay salaries and other month-end obligations while the Ugandan shilling is expected to weaken following a rate cut.

ZAMBIA

At 0913 GMT, commercial banks quoted the currency of Africa’s second-largest copper producer at 9.2100 per dollar from 9.2000 per dollar a week ago.

“We are expecting to see a reasonable supply of the green currency for corporates’ month-end obligations,” BancABC, the local branch of Atlas Mara said in a note.

TANZANIA

The Tanzanian shilling is seen holding steady against the U.S. dollar in the days ahead, helped by increased inflows of hard currency from corporate sellers.

Commercial banks quoted the shilling at 2,232/2,242 to the dollar on Thursday, stronger than 2,234/2,244 a week ago.

“The shilling has been stable for some time now and we expect it to extend its stability over the coming week as corporates sell dollars to pay first half taxes,” said a trader at Commercial Bank of Africa Tanzania.

NIGERIA

Nigerian naira is seen trading around the prevailing level on both the black market and official interbank window as the central bank continue to inject more dollar liquidity to support the local currency.

The local currency was quoted flat at 365 to the dollar on the black market, trading at 305.85 per dollar on the official interbank window against 305.70 a dollar last week.

“The market seems to have reached a comfortable floor for now, except if the central bank decides to move the band, the naira will continue to trade at the prevailing level in the near term,” Aminu Gwadabe, head of currency retailer bureaus said.

Gwadabe said the central bank sold around $64.5 million to bureau de change operators on Tuesday and plans to sell another round of same amount on Thursday. This he said has kept the market liquid and provide some support for the naira.

GHANA

Ghana’s cedi could weaken marginally in the week ahead on increasing dollar demand by local businesses unless the central bank raises its interbank greenback sales, analysts said.

The unit was trading at 4.4200 per dollar by mid-morning on Thursday, compared with 4.4085 a week ago. “Demand pressures remain in the horizon and in the absence of any significant dollar inflows, the cedi could record further losses in the week ahead,” Joseph Biggles Amponsah, an analyst at Accra-based Dortis Research, said.

KENYA

The Kenyan shilling could weaken to dwindling inflows from charities and the agricultural sector amid increased demand from oil importers and multinational companies, traders said.

Commercial banks quoted the shilling at 103.55/75 per dollar, the same as last Thursday’s close.

“Supply side activity is still weak… any small ticket will push the dollar up,” said a trader from a commercial bank.

UGANDA

The Ugandan shilling is forecast to weaken as the central bank’s cutting of its benchmark rate by a percentage point to 10 percent undermines market confidence in the local currency.

Commercial banks quoted the shilling at 3,585/3,585, unchanged from last Thursday’s close.

“I think gradually we’ll see the shilling start to take a hit from the rate cut decision,” a trader at a leading commercial bank said. (Reporting by Chris Mfula, George Obulutsa, Oludare Mayowa, Kwasi Kpodo, John Ndiso and Elias Biryabarema; Compiled by Olwethu Boso; Editing by Pritha Sarkar)

 

We have paid N450bn debt we owe federal govt – NNPC – Today

The Nigerian National Petroleum Corporation (NNPC) has said it has paid a N450 billion debt it owed the Federal Government.

According to its April 2017 Monthly Financial and Operations Report, released yesterday, the NNPC said the last tranche of the sum was paid in March 2017, after paying N6.33 billion on a monthly basis over several months.

To this end, the NNPC said it transferred N95.56 billion into the Federation Account during the month under review from the net domestic crude oil and gas receipt, including gas receipts of N2.23 billion.

The Federation Accounts Allocation Committee (FAAC) had in September 2011, resolved that the NNPC should refund over N450 billion in 32 installments after the NNPC said it withheld the money that should have been paid into the Federation Account as stipulated by law.

Furthermore, the April 2017 financials noted that NNPC’s receipts from domestic crude oil and gas in the month of April stood at N142.09 billion, consisting of receipts of N2.23 billion from domestic gas sale and N139.86 billion from domestic crude oil.

The NNPC noted that of its total naira receipt, N46.54 billion was transferred to Joint Venture Cash Call, JVCC, being a first line charge and to guarantee continuous flow of revenue stream to Federation Account.

On the other hand, the report stated that the NNPC recorded total export proceeds of $142.12 million in April 2017 as receipt against $404.55 million in March 2017.

According to the report, contribution from crude oil amounted to $71.81 million, while gas and miscellaneous receipt stood at $70.29 million and $0.013 million respectively.

The report, however, stated that the NNPC remitted the total export proceeds receipt of $142.12 million to fund the JV cash call for the month of April 2017 to guarantee current and future production.

It further stated that total export crude oil & gas receipt for the period of April, 2016 to April 2017 stood at $2.50 billion.

Furthermore, the NNPC said it recorded operating revenue of N327.47 billion in the month of April, compared to N354.65 billion in March; while its operating expenditure stood at N326.88 billion, dropping from N360.19 billion recorded in March.

To this end, the report said: “The April 2017 report indicated a trading deficit of N5.27 billion, representing 6.20 per cent decrease in deficit compared to the previous month’s deficit of N5.62 billion.

“This decrease in the deficit is mainly attributed to the decrease in NPMC/NPSC/ML expenses relatively, although depleted by lower Nigerian Petroleum Development Company (NPDC) and revenue.”