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Naira to sell at N415/$ as CBN sustains intervention – Gwadabe – NAN

The naira will trade at N415 to a dollar as the series of intervention by the Central Bank of Nigeria (CBN) are sustained, Alhaji Aminu Gwadabe has said.

Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON), told the News Agency of Nigeria (NAN) on Tuesday in Lagos that the new Forex policy had eliminated frivolous demand for dollar.

According to him, frivolous demand for dollar has been responsible for the weakness of the naira.

The ABCON chief said that CBN’s continued intervention at the Forex market would soon spell doom for speculators and currency hoarders.

“Currency speculators and hoarders would suffer more losses as the CBN injects more dollars to the interbank market.

“The sustained intervention by the CBN will technically take speculators out of business.

“My expectation is that if both volumes and applicable exchange rates are reviewed for the BDC sub-sector, the naira would be trading at N415 to a dollar,’’ Gwadabe said.

The ABCON chief said that the CBN had recorded a huge success because of its new policy, adding that the naira had continued to strengthen at the parallel market, exchanging at N435 to a dollar.

He told NAN that granting of more access to the BDCs at the International Money Transfer Services Operators (IMTSO) window would help to further strengthen the naira against the dollar.

NAN reports that the CBN has injected over 1.5 billion dollars since February when it started its intervention at the interbank market.
The apex bank said that its aim was to bring stability to the foreign exchange market and provide easy access of foreign currencies to businesses and individuals.

The CBN had on Monday injected additional 180 million dollars since February when it started its intervention to meet bids for wholesale auction and requests for invisibles such as medicals, school fees and personal travel allowances.

Nigerian central bank head urges cooperation on monetary, fiscal policy – Reuters

ABUJA, March 19 (Reuters) – Nigeria’s monetary and fiscal authorities must cooperate on their policies to help Africa’s largest economy to develop, the central bank governor said, according to his spokesman.

Central Bank Governor Godwin Emefiele made the comments at a two-day retreat for members of the bank’s Monetary Policy Committee and the ministers for finance, budget and investment. The closed-door meeting, which takes place about three times a year, ended on Saturday.

OPEC member Nigeria is in its first recession in 25 years, largely brought on by low oil prices. Crude oil sales account for about two-thirds of government revenue.

The central bank has faced criticism from investors for keeping Nigeria’s currency, the naira, at a rate some 30 percent above the black market, where entrepreneurs are forced to go for foreign exchange with the dollar scarce on official channels.

“Godwin Emefiele reiterated the need for the country’s monetary and fiscal authorities to collaborate and harmonize standpoints so as to develop the economy rapidly,” central bank spokesman Olalekan Ajayi said in an emailed statement on Sunday.

The finance ministry has previously said adjustments were needed to narrow the spread between exchanges rates on the official and black market. The central bank devalued the rate for retail customers in February after Nigeria’s top economic advisor body called for an urgent review.

The bank’s Monetary Policy Committee is due to meet on Monday and Tuesday to set interest rates. Twelve out of 13 economists polled by Reuters predicted that the bank would leave its benchmark interest rate unchanged at 14 percent on Tuesday .

(Reporting by Camillus Eboh and Alexis Akwagyiram, in Lagos, editing by Larry King)

 

Outside OPEC cuts, Libya and Nigeria still on slow oil recovery path – Reuters

* Libya output threatened by fighting over export sites 

* Nigeria’s militants calm, outlook still unpredictable 

* U.S. shale production, U.S. stock build a bigger threat

By Libby George and Ahmad Ghaddar

LONDON, March 14 (Reuters) – When OPEC reached a deal last year to cut oil output, the decision to exclude Nigeria and Libya from the restrictions was seen as a risk to the group’s efforts to curb a global crude glut.

An oil price rally has already stumbled since the deal, but Nigeria and Libya are not to blame. Output from both nations has slipped since December and violence in the two African states makes their ambitions to hike production look optimistic.

“The success of these cuts, debatable as they may be, will not hinge on Nigeria and Libya,” said ING analyst Hamza Khan.

OPEC members and non-OPEC producers agreed to cut output by 1.8 million bpd for six months from Jan. 1. OPEC has broadly cut the amount pledged, while others have not delivered in full.

After rallying above $58 a barrel in January, Brent has now slipped to around $51, under pressure from bulging U.S. inventories and rising U.S. shale production.

Since the OPEC deal, Libyan production has dipped to 615,000 barrels per day (bpd) from 630,000 bpd in December, as militias battle to control export sites in the east of the country. Libya was producing 1.6 million bpd in 2011. PRODN-LY

In Nigeria, militant attacks in the oil-producing Niger Delta have hobbled output, forcing the closure of the Trans Forcados Pipeline for all but a few weeks since February. Maintenance on the Shell-operated Bonga field has also weighed.

Nigerian output in March is now expected to be about 1.43 million bpd, down from 1.54 million bpd in December, after February’s brief rise to 1.65 million bpd. Nigeria is chasing a target of 2.2 million bpd, last achieved in 2012, according to Reuters calculations. PRODN-NG

Morgan Stanley forecasts Libyan production could rise to 900,000 bpd in the second half of 2017, while Nigeria could produce 1.6 million bpd in the same time frame. But the U.S. bank says unrest could undermine both those targets.

“It is possible that unplanned disruptions increase further,” Morgan Stanley said in a March 10 research note.

UNPREDICTABLE

Libya’s prospects look particularly unpredictable. Since Libyan leader Muammar Gaddafi was toppled in 2011, the North African nation has fractured as militias battle for power.

“With three rival governments, extremely weak state institutions, and an abundance of armed actors, Libya is anything but a stable and reliable producer,” Royal Bank of Canada analysts wrote in a note.

In Nigeria, industry sources have told Reuters that repairs are nearing completion on the Trans Forcados Pipeline, which could swiftly add 250,000 bpd to output.

But attacks have repeatedly put the pipeline out of action and could do so again if peace talks with militants seeking a bigger share of oil revenues fail.

Even if Nigeria and Libya deliver on production goals -adding a combined 550,000 bpd, based on the most optimistic forecasts – it will still pale compared to the challenge OPEC faces from U.S. shale oil producers, who are adding capacity.

Buoyed by the price revival since OPEC agreed cuts, U.S. shale firms are expected to add 79,000 bpd of extra production in March alone, reaching total output of 4.87 million bpd.

Meanwhile, rising U.S. inventories are overshadowing OPEC’s efforts, with the U.S. Energy Information Administration reporting a rise in the week to March 3 of 8.2 million barrels to a record 528.4 million barrels.

“Storage numbers out of the United States, that’s what would be keeping the bulls up at night,” said ING analyst Khan.

 

Nigerian vice president says he has Buhari’s approval for everything – Reuters

By Felix Onuah

ABUJA, March 13 (Reuters) – Nigerian Vice President Yemi Osinbajo said on Monday he had the approval of President Muhammadu Buhari for “practically everything”, after taking the reins as acting president during Buhari’s absence for medical treatment in Britain.

During the almost two-month absence, acting president Osinbajo drove policy changes, concluding an economic reform plan required for a World bank loan. The central bank devalued the naira for retail customers after a state body chaired by him called for an urgent review.

Top political posts in Nigeria are traditionally shared out to reflect the country’s geographic and religious divisions. Buhari is a northern Muslim, while Osinbajo is a pastor from the mainly Christian south.

Buhari, who returned to Nigeria on Friday, has written to parliament notifying lawmakers that he has resumed his presidential duties, his spokesman said on Monday.

“We just had a very long meeting … basically trying to bring the president up to speed as to some of the things we have done while he was away‎,” Osinbajo told reporters later in the day.

“By and large, practically everything I discuss fully with him and have his endorsement before we are able to go on and do anything at all.”

Buhari did not address the media after the meeting in his office. The president said on Friday he was feeling “much better” but wanted to rest over the weekend.

“His readiness for work is not in doubt at all,” Osinbajo said. “He is very well.”

During Buhari’s absence the acting president travelled several times to the commercial capital Lagos and the Niger Delta oil hub in an effort to calm tensions with militants attacking oil facilities. Buhari had been accused of neglecting the two regions.

Buhari, who first led the country from 1983 to 1985 after taking power in a military coup, was elected to power two years ago. Since then he has travelled to Britain several times to consult doctors. His illness has not been disclosed. (Writing by Alexis Akwagyiram and Ulf Laessing; Editing by Andrew Roche)

 

Osinbajo to continue as acting president – Buhari – AFP

Nigeria’s President Muhammadu Buhari on Friday said he will not resume power immediately and instead leave his deputy in charge after returning from nearly two months’ medical leave in Britain.

A Nigerian Air Force jet carrying the 74-year-old landed at the airport in the northern city of Kaduna at about 7:40 am (0640 GMT). He was then flown by helicopter to Abuja.

In the capital, the head of state, looking gaunt in a billowing black kaftan, stepped off the helicopter and walked across the tarmac to be greeted by Vice President Yemi Osinbajo.

He also met security chiefs and senior government officials before being driven away in a black official car to meet his cabinet and officials of his ruling All Progressives Congress party.

At the meeting, he did not give any indication of what illness he was suffering from but said “I have received, I think, the best of treatment I could receive.

“I couldn’t recall being so sick since I was a young man,” he added, referring to “blood transfusions, going to the laboratories and so on and so forth”.

But he said he was “pleased to be back”, although he disclosed that he may need “further follow-up within some weeks”.

Buhari’s return from London was announced on Thursday evening and he said he “came back towards the weekend, so that the vice president will continue and I will continue to rest”.

No timeline was given for how long Osinbajo, who was officially conferred powers as acting president, would be in charge.

Former military ruler Buhari flew to London on January 19, officially on holiday and to have what his office said were “routine medical check-ups” for an undisclosed condition.

But while he was away, aides had to counter persistent rumours online that he was seriously ill or even dead, despite photographs showing him meeting senior Nigerian politicians.

Earlier Friday he was shown in photographs looking painfully thin at a meeting with the most senior cleric in the Anglican communion, Archbishop of Canterbury Justin Welby.

Buhari had previously travelled to London in June last year to receive treatment for what was described as a persistent inner ear infection.

He left for London again in January but on the eve of his expected return on February 5, his office announced he had to extend his stay to receive medical test results.

The health of Nigeria’s president has become a sensitive issue following the 2010 death of president Umaru Musa Yar’Adua from a long-standing, but previously undisclosed, kidney complaint.

Yar’Adua’s initial illness and treatment in hospital abroad triggered months of political uncertainty. His deputy, Goodluck Jonathan, took over on Yar’Adua’s death.

Nigeria’s ailing President Buhari returns home – Reuters

* Buhari back in Nigeria after 7 weeks

* Former military ruler walks off plane unaided

* Details of medical condition still not clear

* Vice-President Osinbajo active as interim leader (Updates with Buhari meetings)

By Garba Mohammed

KADUNA, Nigeria, March 10 (Reuters) – Nigerian President Muhammadu Buhari returned home on Friday after nearly two months of medical leave in Britain during which his deputy, Yemi Osinbajo, stamped his authority on economic policy in Africa’s top oil producer.

Dressed in a black kaftan and Muslim prayer cap, the 74-year-old former military ruler walked stiffly but unaided from his plane after it landed at an air force base in the northern city of Kaduna.

After greeting a handful of provincial and military officials, he boarded a helicopter to Abuja for meetings with Osinbajo and his top military commanders, a government official said.

Buhari, who first came to power in a military coup in 1983, is a northern Muslim while Osinbajo is a lawyer from Nigeria’s predominantly Christian South, a political arrangement that reflects Nigeria’s broad geographic and religious divisions.

He left Abuja on Jan. 19 for 10 days of treatment in Britain but extended his stay on the advice of doctors.

Details of his condition have not been disclosed. In images released by his office this week, he looked painfully thin but was smiling as he greeted Archbishop of Canterbury Justin Welby in London.

Prior to his departure, Buhari made a point of conferring acting presidential powers on Osinbajo, seeking to allay concerns of a void at the helm of Africa’s biggest economy.

Osinbajo played a prominent and active role in Buhari’s absence, chairing cabinet meetings and finishing work on an economic reform plan needed to secure a World Bank loan to help plug a deficit caused by low oil revenues.

The central bank also devalued the naira for retail customers, suggesting a wider devaluation of the currency may be in the offing despite Buhari’s entrenched opposition to such a move.

The transparency over the temporary handover to Osinbajo stands in marked contrast to the secrecy and confusion that surrounded the illness of President Umaru Yar’Adua, who died in 2010 after a long period of medical treatment in Saudi Arabia. (Reporting by Garba Mohammed and Ulf Laessing; Writing by Ed Cropley; Editing by Dominic Evans)

 

Nigeria’s Buhari to return from UK medical leave on Friday – Reuters

By Felix Onuah

ABUJA, March 9 (Reuters) – Nigeria’s President Muhammadu Buhari will return to the West African nation on Friday after extended medical leave in Britain, the presidency said on Thursday.

Buhari, 74, left Abuja on Jan. 19 for treatment in Britain. He had originally planned to stay 10 days but stayed longer to rest after consulting his doctors.

Officials have refused to disclose his illness, triggering fierce speculation in Nigerian media and on social media.

“President Muhammadu Buhari is expected to return to the country tomorrow, Friday March 10, 2017,” the presidency said in a statement.

“President Buhari expresses appreciation to teeming Nigerians from across the country, and beyond, who had prayed fervently for him, and also sent their good wishes,” it added.

The statement gave no medical details.

The presidency had earlier on Thursday published pictures of a smiling Buhari meeting the Archbishop of Canterbury, Justin Welby, in Abuja House, part of the Nigerian High Commission in London.

No official pictures of Buhari’s meetings in London had been posted since Feb. 15.

The government had sought to allay concerns of a void at the helm of Africa’s biggest economy by stressing that Buhari had given Vice President Yemi Osinbajo full powers as acting president during his leave.

Osinbajo, a lawyer, held in Buhari’s absence cabinet meetings and finished work on an economic reform plan needed to secure a World Bank loan to help plug a deficit caused by low oil revenues.

The central bank also devalued the naira for retail customers two weeks ago. (Reporting by Felix Onuah and Ulf Laessing; Editing by Andrew Roche)

 

Fed govt unveils economic recovery plan, to raise VAT on luxury items – Today

The Federal Government on Tuesday finally released the Economic Recovery and Growth Plan, which raised the Value Added Tax rate on luxury items from the current five per cent to 15 per cent.

Through the increase in VAT rate on luxury items, which the document stated would commence in 2018, as well as improvement in Companies Income Tax, a total of N350bn is being projected to be generated annually.

The new plan comes after months of extensive consultation with stakeholders from both the private and public sectors of the economy.

The administration of former President Goodluck Jonathan had in 2014, while unveiling its austerity measures, identified some items that were to be taxed as luxury goods to include champagne, alcoholic beverages, private jets, luxury cars based on engine capacity, and yachts.

The President Muhammadu Buhari-led government said it would increase non-oil tax revenues by improving tax compliance and broadening the tax net by employing appropriate technology and tightening the tax code, as well as introducing tax on luxury items and other indirect taxes to capture a greater share of the non-formal economy.

It also announced plans to undertake major reforms in the budgeting for state-owned enterprises, which would include legislative amendments of the laws establishing many of the SOEs.

The government, according to the document, is targeting real Gross Domestic Product of N81.38tn by 2020.

The document, the content of which is expected to take the country out of recession, was released by the Ministry of Budget and National Planning and contains the economic blueprint of the government for the three-year period, 2017 to 2020.

“Continued dependence on crude oil exports as a primary source of foreign exchange earnings makes the Nigerian economy vulnerable to domestic and external shocks from the oil and gas sector.

“Indeed, although the oil and gas sector represents about 10 per cent of the total GDP, it still accounts for 94 per cent of export earnings and 62 per cent of government revenues. Diversification of the economy must therefore extend to finding other sources of revenue and foreign exchange earnings.

“Policy objectives (are) to improve overall Federal Government revenues by increasing revenues from oil production and targeting non-oil revenue sources. Increase the tax base by raising the VAT rate for luxury items from five to 15 per cent from 2018, while improving CIT and VAT compliance to raise N350bn annually.”

The plan envisages that by 2020, Nigeria would have made significant progress towards achieving structural economic change with a more diversified and inclusive economy.

Overall, the plan is expected to deliver on five key broad outcomes, which are a stable macroeconomic environment; agricultural transformation and food security; sufficiency in energy (power and petroleum products); improved transportation infrastructure; and industrialisation focusing on small and medium-scale enterprises.

An analysis of the document indicates that the real GDP is expected to increase from N69.4tn in 2017 to N72.7tn, N76.05tn and N81.38tn in 2018, 2019 and 2020, respectively.

The GDP growth rate, according to the document, is expected to rise from 2.2 per cent in 2017, to 4.8 per cent, 4.5 per cent and seven per cent in 2018, 2019 and 2020, respectively.

The document stated that “The ERGP has set a GDP growth target of 4.62 per cent average annual growth between now and 2020. From the estimated negative growth of -1.54 per cent recorded in 2016, the real GDP is projected to grow to 2.19 per cent in 2017 and 4.8 per cent in 2018, before peaking at 7.0 per cent in 2020.

“The sectors each play a different role in driving the GDP growth, with agriculture and industry having the most important roles, and services having an increasingly important role in the later stages of the plan.

“Given the ERGP’s strong focus on agriculture, it has set a GDP growth target for the agriculture sector of 5.0 per cent in 2017, rising to 8.4 per cent by 2020, for an average growth rate of 6.9 per cent across the period.”

The document added that that the recovery plan would enable the economy to increase the level of fresh jobs from 1.5 million in 2017 to 3.8 million, 4.3 million and 5.1 million in 2018, 2019 and 2020, respectively.

Unemployment rate, according to it, is expected to reduce from 16.32 per cent in 2017 to 14.51 per cent, 12.9 per cent, and 11.23 per cent in 2018, 2019 and 2020.

The Federal Government, as indicated in the growth plan, is targeting to increase the revenue from oil and non-oil sources from N4.94tn in 2017 to N4.96tn, N5.85tn and N6.12tn in 2018, 2019, 2020, respectively; while expenditure is pegged at N7.29tn, N7.22tn, N7.41tn and N7.65tn in that order.

Total government debts for the period are estimated at N19.3tn, N20.7tn, N20tn and N21.51tn, broken down into domestic debt of N12.43tn, N13.41tn, N13.92tn and N14.32tn; and foreign debt of N6.86tn, N7.29tn, N6.08tn and N7.18tn.

It added, “The combined efforts to grow both oil and non-oil revenues will result in an average annual growth of 12.8 per cent in government revenue until 2020. Efforts will focus on restructuring and rebalancing the revenue structure between oil and non-oil to increase the percentage share of more sustainable non-oil revenues relative to oil revenues.

“Total expenditure is projected to grow by around six per cent, with capital expenditure growing by 6.1 per cent. The fiscal deficit will be maintained within the legally acceptable level stipulated by the Fiscal Responsibility Act at an average of about 1.6 per cent of GDP, but declining to 1.1 per cent by 2020.”

“Fiscal financing will be restructured gradually in favour of foreign financing, while domestic financing is de-emphasized. Thus, while the proportionate share of foreign financing will increase from the current level of about 28 per cent to almost 72 per cent in 2020, that of domestic financing will decrease gradually from about 54 per cent in 2016 to about 26 per cent in 2020.”

During the period covering 2017 to 2020, the document stated that inflation rate was expected to drop from 15.74 per cent to 12.42 per cent, 13.39 per cent and 9.9 per cent, respectively.

Explaining how the economy will be revived, the document stated that the government would be implementing about 60 strategies to achieve its objectives.

Nigeria sees return to strong growth under recovery plan – Reuters

By Chijioke Ohuocha and Paul Carsten

LAGOS, March 7 (Reuters) – Nigeria expects the economy to climb out of recession and grow 2.19 percent this year, the budget ministry said on Tuesday, unveiling a reform plan that includes selling assets and hiking a luxury goods tax.

The new Economic Recovery and Growth Plan 2017-2020 says gross domestic product (GDP) is expected to grow an average of 4.62 percent a year until 2020, and hit 7 percent that year.

Africa’s biggest economy is in its first recession in a quarter of a century, brought on by low oil prices which have slashed government revenues, weakened its currency and caused inflation to rise.

The government released a much-awaited raft of measures to reform the economy and diversify it away from over-reliance on oil. International lenders including the World Bank have urged it to present such a plan before granting the country a budget support loan.

The plan aims to ramp up oil production to 2.5 million barrels per day and for Nigeria to become a net exporter of refined petroleum products by 2020.

Production in February was 1.65 million barrels per day, according to a Reuters survey of OPEC crude oil output. The country is currently reliant on imports of fuel, with limited domestic refining.

The goal is to increase export earnings and government revenues by an additional 800 billion naira ($2.63 billion) a year.

Under the plan, the government also expects to earn 35 billion naira ($115 million) from the sale of some national assets, including oil joint ventures, and reducing stakes in other oil and non-oil assets.

The central bank will aim to achieve a market-determined exchange rate regime, the plan said, as pressure mounts to let the naira currency float freely. That has been one of the World Bank’s requirements before it will grant a loan of at least $1 billion, sources have told Reuters.

Inflation is seen at 15.74 percent in 2017 and 12.42 percent next year. In January it hit 18.7 percent, its highest level in more than 11 years.

The government said it would review and possibly remove a ban on accessing foreign exchange for 41 goods and services.

Nigeria hopes to improve tax collection to raise 350 billion naira per annum, in part by boosting a luxury goods tax to 15 percent in 2018 from its current rate of 5 percent.

The goal is to increase the overall tax to GDP ratio to 15 percent from 6 percent between 2017 and 2020.

In the agriculture sector, Nigeria wants self-sufficiency in rice by 2018 and in wheat by 2019 or 2020, and hopes to be a net exporter of rice, cashew nuts, groundnuts, cassava and vegetable oil by 2020, according to the plan.

($1 = 304.5000 naira) (Editing by Mark Trevelyan)

 

Dollar shortages curb Nigerian private sector growth – central bank PMI – Reuters

LAGOS, March 1 (Reuters) – Nigerian private sector activity slowed in February as new orders and production levels fell due to a shortage of hard currency that made it difficult for companies to source raw materials, central bank business surveys showed on Wednesday.

The central bank’s purchasing managers index (PMI) of private-sector activity dropped to 45.4 points in February from 50.6 points in January, falling below the 50 point line that denotes increases in activity.

Nigeria has been running short of dollars as a result of lower global prices for oil, its major export, and the economy shrank last year for the first time in quarter of a century.

The central bank’s PMI index for manufacturers alone fell to 44.6 percent in February from 48.2 in January, while its non-manufacturing PMI declined for the 14th straight month to 44.5 in February.

The PMIs are one set of indicators watched by the central bank’s monetary policy committee when it sets interest rates.

Bankers say lenders have also slowed credit and tightened access to business and individuals to curb a rise in non-performing loans, all of which also puts a brake on business activity.

The PMI report said 14 out of 16 sub-sectors including transport equipment, fabricated metals, chemicals and pharmaceuticals reported declines in February. The food, beverage and tobacco product sectors all expanded, however. (Reporting by Chijioke Ohuocha; Editing by Hugh Lawson)