Nigeria to raise 130 bln naira bonds on Jan. 18 -debt office – Reuters

LAGOS Jan 11 (Reuters) – Nigeria plans to auction 130 billion naira ($426 million) in local currency-denominated bonds on Jan. 18, its first debt sale this year, the Debt Management Office said on Wednesday.

The debt office said it would issue 40 billion naira apiece in bonds maturing in 2021 and 2036, and 50 billion naira of paper maturing in 2026, using the Dutch auction system.

Settlement for the bond sale is expected on the following day. All the bonds on offer are reopenings of previous issues.

Africa’s top crude producer and biggest economy issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.

Last week, it said it plans to issue 340 billion to 430 billion naira worth of bonds during the first quarter.

The government has proposed a 2017 budget deficit of 2.36 billion naira for this year, which it aims to fund by borrowing 1.254 trillion naira domestically and 1.067 trillion naira abroad.

($1 = 305 naira) (Reporting by Oludare Mayowa; Editing by Catherine Evans)


Nigeria retail currency traders set FX rate before cenbank meeting – Reuters

By Oludare Mayowa

LAGOS Jan 10 (Reuters) – Nigeria’s bureau de change operators set their first ever reference exchange rate for the naira at 399 to the dollar on Tuesday, saying they wanted to help reduce the gap with the official interbank rate.

The government has been pressing retail operators to narrow what it says is a damaging gulf between the naira’s official rate – currently at 305 to the dollar – and the parallel rate – as weak as 490 in recent days.

Bureau de Change association president Aminu Gwadabe, who is due to meet central bank officials later on Tuesday, said his members had agreed to set a weekly reference rate to improve liquidity and help rebuild investors’ confidence on the economy.

“Once liquidity improves, the wide margin between the parallel and official market rates will be bridged,” Gwadabe told reporters.

He said the naira’s outlook was “promising” as crude prices have started to rise. Low prices have dried up the oil income that makes up 70 percent of government revenues, cutting the dollar supply and pushing Africa’s largest economy into recession.

Retail currency operators account for less than 5 percent of total foreign currency trading in Nigeria. But with liquidity poor on the official market due to low oil revenues and the central bank left as the main dollar supplier, the bureau de changes have done more business.

Gwadabe said the body was seeking approval from the central bank to access dollars from exporters and has recommended suspension for some of its members for failing to submit documents on forex purchases from money transfer agents.

The naira lost a third of its official value against the dollar in 2016. (Writing by Chijioke Ohuocha)


W. Africa Crude-BPCL takes Nigerian, China snaps up Angolan – Reuters

LONDON Jan 9 (Reuters) – Chinese demand for Angolan crude continued apace, and another Indian refiner booked Nigerian oil via a tender, but other spot trading was relatively quiet.

* Outright prices for West African crude slipped along with benchmark dated Brent, which was trading 3 percent lower on word that OPEC member Iraq marked record exports from its southern Basra port in December despite an OPEC commitment to cut overall output.

* Angolan state oil company Sonangol has cut output by 78,000 barrels per day to (bpd) to 1.673 million bpd as part of an OPEC agreement to lower supply from Jan. 1, it said in a statement late on Friday.

* The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) oil labour union will stage a three-day strike at Chevron CVX.N and Exxon Mobil XOM.N fuel depots from Wednesday in a protest over sackings if talks with the government fail, union officials said on Monday.


* India’s BPCL took two cargoes of Nigerian crude, and a pending tender from IOC set to close this week could absorb more.

* The awards included Agbami, Akpo, Bonga and Bonny Light.

* Other buying interest was notably thin due in large part to unpredictable loading plans for several grades.

* There had been no fresh Bonny Light loading schedule issued since the closure of the Trans Niger Pipeline due to a fire on Jan. 3, and offers for the grade had also gone quiet.

* Offer levels for other grades were slipping due to the demand constraints. ExxonMobil had offered Qua Iboe as low as 80 cents above dated Brent.


* Chinese demand for Angolan crudes and other medium grades was robust, traders said, due in part to the narrow spread between Brent and Dubai crudes that made West African grades more attractive.

* China’s Unipec has snapped up several cargoes over the past two weeks, including Pazflor from ExxonMobil at dated Brent plus $1.20 per barrel, Nemba from Sonangol at around minus 60 cents along with cargoes of Dalia and Saxi.

* Traders said Cabinda was around 40 cents below dated Brent, Hungo minus $1.30 per barrel and Mondo at minus $1.20.


* Indian refiner BPCL had awarded its tender to buy February-loading crude oil to BP and Shell with cargoes of Agbami and Akpo, respectively.

* More details emerged on a tender awarded last week by fellow Indian refiner IOC. It purchased one VLCC from Shell and another from Total, including Bonga, Bonny Light, Akpo and Girassol.

* Vitol had won a tender from Perenco for Djeno crude oil loading in February, traders said. Djeno was trading at around dated minus $1.30 per barrel, but details on the tender were not immediately available.

* India’s IOC was running two tenders this week to buy oil, one for sweet crude and another for sour. (Reporting by Libby George; Editing by Ruth Pitchford)


Why China withholds $20b concession loan to Nigeria – Guardian

Presidency official blames negative economic growth

Multiple negative growth recorded in the economy in 2016 has been identified as one of the reasons the Chinese government withheld a $20 billion concession loan earlier promised Nigeria upon due verification, The Guardian has learnt.

A top Presidency source privy to the development told The Guardian that the Federal Government had been hopeful that the Chinese government would release the loan last year, given the relationship between the two countries, but expressed disappointment that the money was withheld.

The action of China may well be an indication of the loss of confidence in Nigeria’s credit worthiness by the global financial community. Analysts have predicted that the current economic downturn would dent the country’s credit worthiness. The situation has increased the concern over Federal Government’s ability to borrow the $30billion for infrastructure development, which the National Assembly has refused to approve.

According to the source, government immediately swung into action after the President’s return from a visit to China as well as the follow-up visit of the Budget and National Planning Minister, Udo Udoma, to immediately fulfill the conditions for accessing the loan.

“We were very hopeful that we would secure that loan and other levels of assistance from the Chinese government. This is not to say we have given up though. We had set up an inter-ministerial committee working closely with the Chinese government officials as well as the China Exim Bank experts. They may have their reasons, but we are determined to fulfill our end of the bargain, and the Federal Government has already appropriated large sums for payment of counterpart funds on key projects to enable us to commence work proper,” the source said.

In 2015, China had, at a summit of the Forum on China-Africa Cooperation (FOCAC) held in Johannesburg, South Africa, pledged a $60 billion assistance to countries on the continent, including Nigeria, to develop and grow their infrastructure and human development capacities.

The move was not surprising as China had remained the continent’s top trade partner for six consecutive years.

The Chinese government said $35 billion had been set aside for concessionary loans, out of which about $10 billion was to go into the China -Africa Fund for Production Capacity. About $5 billion each was earmarked as non-interest grants for China-Africa Development Fund, and special loan schemes for the development of Small and Medium-Scale Enterprises (SMEs) among qualified African countries. The funds were said to have been on ground for prompt disbursement.

The Federal Government had last year planned to raise a total of N2.2 trillion through external borrowings from China and other foreign finance institutions to fund the deficit in the 2016 budget, the implementation of which it said would continue till May 2017.

Unexpectedly, the nation’s Gross Domestic Product (GDP) – which measures the market value of all final goods and services produced in a period, suffered a steady decline from quarter to quarter in 2016, sending negative signals to investors and lowering Nigeria’s credit worthiness in the international financial market.

In the first quarter (Q1) of 2016, the Nigerian economy contracted by -0.36%, followed by further contraction by -2.06% in Q2, even as the slide continued in Q3 to -2.24%.

Hopeful that the concession loan and other categories of financial assistance from China would be approved early, President Muhammadu Buhari led a delegation to Beijing in April last year to make a strong case for the country.

This was, however, not to be, as the Chinese government was advised by its economic experts who visited Nigeria for physical assessments to exercise caution, citing the shrinking economy and falling value of the naira.

They also alluded to high risks in diverting the loan to projects not specified in the agreement and requested a direct monitoring of the projects, in addition to the need for full compilation of all current trade agreements between the two countries till date, The Guardian learnt.

A team of experts from China Exim Bank had also expressed fear of possible mismanagement of the funds and requested an overhaul of some of the priority areas presented by the Federal Government for closer study on their viability and sustainability.

The Chinese financial experts, it was further learnt, expressed reservations about some areas the Federal Government was keen on investing the loan, saying they did not fall in line with the FOCAC vision.

However, a ministry official, who pleaded anonymity, in a text massage response to The Guardian, said: “All appropriate loan prospecting options by the Federal Ministry of Finance are on course, and are undergoing normal process of negotiation,” without giving further details.

The National Assembly has refused to approve the $30 billion worth of loans until the executive provides details of what they are meant for, even as there are speculations that the refusal was more political than economic as the executive had opposed the provision for constituency projects in the budget.

Nigeria targets 2.6 million barrels per day refining capacity – Guardian

Nigeria may be on the path to becoming self-sufficient in the production of petroleum products, as the Federal Government expects to increase the country’s refining capacity from 445,000 barrels per day to 2.62 million barrels per day.

To achieve this, the Department of Petroleum Resources (DPR), has granted licences to 22 private firms to establish refineries, which are expected to produce 1.97 million barrels per day in the short, medium and long period.

If these refineries come on stream, the country is expected to save over $15 billion yearly from the importation of petroleum products, create jobs and meet the needs of industrial firms, which depend on by-products from refineries.

Already, nine companies have submitted bids for co-location of new refineries within the complexes of Nigeria’s three existing refineries in Kaduna, Warri and Port Harcourt, which are expected to increase the nation’s refining capacity from 445,000 barrels per day (bpd) to 650,000bpd.

DPR, in its yearly report on the oil and gas sector stated that the Federal Government hoped to achieve 50 per cent domestic refining capacity by 2020, through a combined policy of deregulation and rehabilitation of aging plants.

According to the agency, in line with this aspiration, DPR has already granted 25 Licenses to Establish (LTE) and five Approvals to Construct (ATC) refineries in Nigeria to qualified companies.

It stated that one of the 25 LTE holders, Dangote Oil Refinery Company (DORC) has progressed the refinery development project to the equipment fabrication stage.

DPR said that the DORC project is due to be commissioned in 2018 and would add 500,000 BPSD to the domestic refining capacity.

The agency stated: “The modular refinery model is now emerging as a credible solution to the dismal share of domestic refineries. The model is gaining credence due to its comparatively lower establishment and running costs. Compared to bigger refinery projects, the modular solution appeals more to the marginal upstream producers desiring maximisation of assets value through local refining of produced oil.

“So far, DPR has issued 22 LTE and three ATC, respectively for modular Refineries projects. The projects have cumulative potentials to boost the domestic refinery capacity by more than 671,000BPSD on completion.”

The DPR noted that Nigerian refineries are plagued with peculiar domestic challenges and are not able to produce at sub-optimal levels partly due to the increasingly aging plants.

It added that incessant disruption of crude oil and product pipelines have posed further challenges to operations.

DPR said that there is a yawning gap between domestic demand and output from the domestic refineries, clearly underscores the need for proactive policies to bridge the gaps.

The agency noted that the continued low domestic refining capacity especially poses a peculiar policy challenge, in view of expanding local market for petroleum products.

According to the DPR, growing the domestic refining capacity would reduce the dependence on foreign products, boost local content, generate new jobs and develop requisite competencies in the ancillary sectors. “It would also free the foreign exchange market from undue demand pressures of petroleum products imports,” it added.

The agency said the future of the domestic refinery sector would be greatly improved through policy consistency, secured crude oil supplies and improved infrastructure. “Government is committed to tackling all the associated challenges facing the effective development of the domestic refinery sub-sector by promoting the business-friendly environment that is capable of driving the growth that will ensure the emergence of Nigeria as a refining hub in Africa,” it added.

The Director-General of Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf urged the Federal Government to liberalise the downstream petroleum sector for unfettered private sector participation and investment, while ensuring that the refineries are operated as commercial business entities.

He said the approach should be subjected to appropriate regulatory framework that defines the role of NNPC, while a model that would allow for a level playing field for all operators including the NNPC should be adopted.

“We have concerns over lack of clarity on the deregulation and liberalization of the sector. This policy lacuna has put many investments in the sector at risk; while many other investment decisions have been put on hold.

Nigeria interbank lending rate eases on budget cash injections – Reuters

LAGOS Dec 16 (Reuters) – Nigeria’s overnight lending rate fell this week to around 3 percent on Friday from an average of 3.9 percent a week ago on expectations that budget cash will be injected into the banking system on Friday or Monday, traders said.

Nigeria, an OPEC member and Africa’s biggest economy, relies on crude oil sales for two-thirds of national income. All government revenue is shared among the country’s federal, state and local governments each month.

On Thursday Nigeria distributed 387 billion naira ($1.27 billion) revenue, among the three tiers of government. A portion belonging to state and local governments is passed through the banking system.

“Interbank rates are priced at 3 percent on the expectation that the budget allocation will be credited to the system on Friday or latest by Monday,” one senior currency dealer said.

Though Nigeria raised 147.48 billion naira ($484.33 million) worth of treasury bills and 69.2 billion naira in bonds maturing in five, 10 and 20 years’ time at auctions on Wednesday, the market remains liquid enough to support the prevailing rate, traders said.

Traders said the cost of borrowing among commercial lenders should stay flat in the coming days as banking activities slow ahead of the festive season and the year-end closure of financial year. ($1 = 304.50 naira) (Reporting by Oludare Mayowa; Editing by Alexis Akwagyiram/Mark Heinrich)


Osinbajo: Removing fuel subsidy helped us offset a burden of N15bn/month – The Cable

Vice-President Yemi Osinbajo says the fuel subsidy removal has offset a burden of not less than N15.4 billion monthly from the federal government.

Osinbajo said this in Abuja on Thursday at the 2016 presentation of scorecard of the ministry of petroleum resources and agreements signing ceremony for Joint Venture Cash Calls (JVC) exit.

Represented by Abubakar Malami, attorney-general of the federation and minister of justice, Osinbajo said that $15 billion would be injected into the sector.

“I am pleased to be the special guest of honour at the agreements signing ceremony for Joint Venture Cash Call exit and the announcement of $15 billion investments to be done in the sector,” he said.

“The oil and gas sector remains very critical to the stability and growth of our economy as it accounts for about 90 per cent of earnings.

“Amongst others, the downstream sector has been deregulated with the elimination of petroleum subsidy. This policy has removed from government, a burden of not less than N15.4 billion monthly.”

He said government had taken steps to raise the domestic refining capacity for petroleum products by repairing the existing refineries.

“We have also licensed modular refineries and support the development of private refineries one of which is a 650,000 barrel per day capacity.”

According to Osinbajo, one of the refineries is nearing completion, and when completed it will “restore our pipeline to facilitate crude and products transportation”.

He said that the Federal Executive Council (FEC) had approved new measures aimed at eliminating the burden of JVC and easing future payments in the upstream sector.

Ibe Kachikwu, minister of state for petroleum, who also spoke at the event, said when he took over the leadership of the ministry, the oil sector was losing N1.2 trillion every year and fuel scarcity was common.

”Today, we have a situation where refined petroleum consumption has gone down from an all-time high of 40 million litres a day to about 28 million litres a day,” he said.

“On cash call, the issue was how long the upstream was going to continue to bleed as investments were drying up and activities grinding to a halt.

“For the first time in 2017, you are going to see the Ministry driving an effort with the Department of Petroleum Resources to find leakage areas, essential to cover the gap in the 2017 budget.

“In the Niger Delta, we have brought the all-time low production of 1.3 million barrels per day (mbpd) to 1.8mbpd but for some minor incidents it would be closer to 2.1mbpd or 2.2mbpd.

“We set a zero militancy target in 2017 and we want anything that needs to be done should be done.”

Nigeria discloses $7.2 billion of unrecorded debts after audit – Reuters

By Chijioke Ohuocha

LAGOS Dec 13 (Reuters) – Nigeria’s government has found unrecorded debts of 2.2 trillion naira ($7.22 billion) left over from the previous administration, which turned up after an audit aimed at improving transparency, it said in a tweet.

“2.2 trillion unrecorded debt owed contractors/private sector found on federal government books, inherited from previous administration,” said the message posted on twitter.

The debts were owed to contractors, oil marketers, exporters and electricity distribution companies, Finance Minister Kemi Adeosun said on Sunday in a statement. They will be settled by issuing a 10-year promissory note, Adeosun said.

President Muhammadu Buhari, elected last year on a promise to end corruption and mismanagement, has vowed to restore financial “sanity” in Nigeria, accusing previous governments of throwing the rule books “to the dogs”.

The debts amount to 2.3 percent of Nigeria’s gross domestic product, analysts at Ecobank said. Nigeria has a debt-to-GDP ratio of 16.6 percent.

Nigeria is facing its worst economic crisis in 25 years, brought on by low oil prices, which have slashed government revenue, hammered its currency and caused chronic dollar shortages, frustrating businesses.

Investors may worry about the potential of more debt to emerge, with oil receipts and foreign inflows declining, which could push up Nigeria bond yields and increase the government’s cost of servicing its debt, analysts at Ecobank said.

Nigeria planned a record 6.06 trillion naira budget for this year, but it has struggled to fund it. It now plans to increase the 2016 amount by 20 percent for next year’s budget, to help lift the economy out of recession.

Nigeria last week named Citigroup, Standard Chartered Bank and Stanbic IBTC Bank to manage a planned $1 billion Eurobond sale and hopes to start the issuance process in January. ($1 = 304.50 naira) (Additional reporting by Alexis Akwagyiram, editing by Larry King)


Nigerians vent frustrations on President Buhari as costs soar – Reuters

* Mood among Christmas shoppers reflects wide disenchantment

* Recession, high inflation cut people’s spending power

* President prepares to submit record budget

By Alexis Akwagyiram

LAGOS, Dec 13 (Reuters) – With Christmas just weeks away, Dolapo Beckley was among a throng of shoppers haggling at a market in Nigeria’s commercial capital Lagos, where the prices of some goods have doubled in the last year.

Beckley voted for President Muhammadu Buhari in the election that swept him to power last year on promises to fix endemic mismanagement and corruption.

But 19 months into his term, public support is crumbling as people like the 34-year-old baker blame Buhari for Nigeria’s first recession in 25 years and a rise in inflation to an 11-year high of 18.3 percent.

“I do regret voting for Buhari. We wanted a better economy and things are turning upside down, even worse than the way it was before,” said Beckley, who was at the Lagos Island market to buy gifts for her children.

Buhari’s aides say the woes of Africa’s biggest economy stem from the previous government’s failure to set money aside in the years when Nigeria’s crude oil fetched over $100 a barrel, before the price plunged in late 2014. It now stands around $56.

The OPEC member relies on oil sales for two-thirds of state revenue, and Buhari has said his government is working to diversify the economy by boosting manufacturing and farming. On Wednesday he will submit a record budget worth 7.2 trillion naira ($23.6 billion) to lawmakers, drawing partly on foreign borrowing to pay for a boost in capital spending.

But in a country where the U.N. estimates that 70 percent of the 180 million inhabitants live on a dollar a day, anger at the state of the economy is tangible.

“We are no longer asking President Buhari to develop Nigeria,” states a message shared widely on social media. “At this point, we are only asking him to return Nigeria to the state it was before he became president.”

Despite a 40 percent devaluation of the naira currency in June, a shortage of dollars persists, and they fetch a premium of up to 40 percent on the black market. In Nigeria’s import-driven economy, this has pushed up the cost of everything from rice to spare machine parts.

“Everything has skyrocketed. It’s just too expensive for the masses,” said Victor Adinye, a civil servant at the Lagos market.

Surrounded by makeshift stalls, some adorned with tinsel, Beckley said she could only afford one piece of clothing to give each of her two children for Christmas. Last year they got four items each.

Even the Buhari government’s successes against the Islamist militants of Boko Haram have come at a cost. Its advances have revealed mass hunger in liberated areas, which the U.N. said could see 75,000 children starve to death in the coming months.

And a wave of arrests of former officials, part of a promised anti-corruption drive, has yet to yield any convictions.

“This is not the change we bargained for,” said Beckley.

Fellow shopper Ayo Omope, a 27-year-old make-up artist, said she was contemplating joining the thousands of Africans who leave each year to seek a better life in the United States or Europe because “there is no hope any more” in Nigeria. (Editing by Ulf Laessing and Mark Trevelyan)


7 Ways for Nigerians to make Extra Income in 2017

7 Ways for Nigerians to make Extra Income in 2017

The recession is still going strong and on top of that, there will expenses to be made during this December period leaving you feeling high and dry…your bank account anyway.

Family members will need you to “do them Christmas” especially if you go to your village or have anyone who depends on you i.e. family, domestic staff, that one coworker who always needs you to spot him N5K till the end of the month.

Come January 2017, it will be soaking garri and eating Indomie. Fear not, FxMallam’s knowledge base is beyond just forex matter. Here are 7 ways to earn extra Income in 2017.


  1. Ask your Oga at the top for a Raise – I acknowledge that this one has K leg i.e. goes against conventional wisdom during a recession. However if you know your worth and have any bargaining power, nothing says you can’t use it even right now. But as the ancient Greeks said, “KNOW THYSELF”, if you are a terrible employee or your job has a lot of competition, this is a no go area. There are several other options on the list.


  1. Sell your used stuff – Due to classified websites like OLX or even Facebook, there’s never been an easier time to sell things direct to other consumers. We all have clothes, shoes, bags, old phones, old tablets or iPads that we can sell for a bit more cash. No need hoarding it because well, you can get cash for it. One man’s junk is another man’s treasure…or woman’s.


  1. Create or Develop Online Content for Others – These days blogging isn’t limited to just professional blogs. Now companies are getting in on the action as a way to drive traffic to their websites. Banks, Insurance companies, clothing companies both home and abroad use freelance bloggers as part of their repertoire. Hone in your writing skills and do some research. You just might make yourself some forex as well.


  1. Blog – Don’t want blog for others? Then blog for yourself. Find content in demand but also content you are passionate about. The goal may not be to become the next Linda Ikeji. But we are talking about a little extra income. Any good at it and you’ll earn from Google AdSense. Become great? Then selling ads on your blog might give you more than just extra income.


  1. Become a Lesson Teacher – I had lesson teachers. Many of them were current University students. This is an excellent option to earn a little more scratch. I can assure you that there are parents in your neighborhood with kids who are looking for lesson teachers. And if there’s one industry that is recession proof in Nigeria, it is education. If you consider yourself book smart and can help a child get ahead, well, this might be the place to cash in.


  1. Drive for Uber – This might be out of the reach of some people because you need to own a car. However, if this is within your ability, Uber is an excellent option to make money on the weekends especially in Lagos. So rather than blow your hard earned income every weekend, consider making more.


  1. Rent out a room in your house or flat – Airbnb has made doing this very easy. In fact, there’s competition from other websites such as and Airbnb stands out because they try their best to vet both the home owners and renters. This is a way to make tens of thousands of naira every month.

Bonus: Make money on Fiverr – Last but certainly not the least is Fiverr. If you have a service to offer — from graphic design, editing, copywriting, blogging or writing CVs — you can sell it on The site was launched on the premise of offering to do tasks for $5, but now, sellers can now charge much more. It’s free to sign up, and sellers keep 80 percent of the purchase amount for services they sell. Do a great job and rank up quickly. Might I add, they pay in dollars!