₦airaland Forum

The Central Bank of Nigeria, CBN, on Tuesday cushion the economy by injecting a total of $482.6 million into the foreign exchange market.

According to a statement released by its Acting Director, Corporate Communications, Mr Isaac Okorafor in Abuja, this was part of the measures promised by the apex bank to moderate the Naira's value and sustain forex liquidity.

The breakdown of the intervention shows $285.7 million was allocated to the retail Secondary Market Intervention Sales, while $100 million was offered in the Wholesale SMIS auction window.

The invisibles segment, consisting of Personal Travel Allowance, medicals, tuition fees and Basic Travel Allowance was allocated $45 million.

Speaking further, Okorafor expressed optimism that the CBN's objective to converge exchange rate across all forex segments would be achieved soon, and called on all stakeholders to play their respective roles in ensuring the smooth running of the foreign exchange policy.

In April, the economy rebounded slightly after data showed the consumer prices and the economy improved following a series of policies instituted by the CBN to speed up economic recovery and sustain its diversification agenda.

So far, the CBN has injected about $5 billion into the forex market.

The Naira traded at an average of N375 to a dollar in Abuja, Lagos, Kano and Port-Harcourt on Tuesday.

http://investorsking.com/cbn-injects-482-6m-into-forex-market-naira-gains/

Amoto94:
Link to the audio leak if any?

In one of Ojukwu's interviews, he said it was because Nigeria reneged on Aburi Accord that he released the audio copy.


https://www.youtube.com/watch?v=VJjB8LCstx8

and here is a link to full text of Aburi Accord as published by Philip Emeagwali

http://emeagwali.com/biafra/nigeria-biafra-civil-war-aburi-accord-ghana-official-records.html

Amoto94, I think Ojukwu released the Audio and it lasted for years not months.

TonyeBarcanista:
Has Democracy worked in Nigeria? YES... To some extent!!!

Democracy does not build roads nor put food on our table, it is simply a system that hand power over to the people to dictate their leadership. The kind of leaders chosen by the people[b] is not the fault nor to the credit of democracy but that of the people[/b].

When you keep electing bad leaders, when you keep taking N1000 from politicians to vote, when your vote is strictly for the man that is from your tribe or religion, when you look the other way while votes are inflated simply because it was perpetrated by the person you wish to win etc, you can't turn around to blame democracy. You have to blame YOURSELF not democracy as a system.

Then greediness, economic sabotage and uneven wealth distribution is not the fault of capitalism but that of the people, right?

Like every other system, democracy is not a perfect system. However, Nigeria is not practising true democracy, the people has largely been undermined while few elites decide the course of the country. It is wrong to blame the victims, people, that over the years have been incapacitated by high unemployment rate, high poverty rate, poor health facility, poor educational system and lack of basic amenities.

The people are the victims of the system modified by the elites. You can call it demo crazy.

After the cancelation of its flights worldwide due to computer glitch at the weekend, British Airways yesterday resumed flights to Nigeria and other destinations, as flight BA075 departed London Heathrow Airport at 12:09p.m. Nigerian time to Lagos.

BA website indicated that the flight departed from the Terminal 5 after one hour delay just as the British mega carrier announced that it would be willing to refund passengers who may want to terminate its scheduled flight with the airline.

Reports also indicated that the Nigeria’s Country Manager to British Airways, Kola Olayinka, confirmed the departure of the flight from Heathrow, saying the main focus of the airline was to make its Nigerian passengers comfortable as much as possible given the circumstances.

“It is true that our flight to Lagos is expected to arrive soon. All what we are trying to do from Nigeria here is to be sure our customers are fine. We are in touch with our passengers to feed them on the development as it unfolds. The situation is gradually returning to normal,” said Olayinka.

According to the airline’s website, following a worldwide British Airways’ IT system collapse last Saturday delays and cancellations of the airline’s flights were expected as it would take few days for the situation to come back to normal.

BA site advised that all British Airways passengers who were due to fly yesterday should check the status of their flights, via Heathrow.com, BA.com and British Airways’ Twitter account, prior to travelling to the airport.

Heathrow Airport also said all passengers whose flights were cancelled last Saturday should not travel to the airport Sunday unless they had already rebooked onto another flight.

Heathrow Airport has continued to provide additional customer service in the terminals to assist passengers affected in addition to providing passengers free water and snacks.

The airline said there was no evidence that its system was hacked while airline union leaders said obsolete parts and the airline’s cost cutting measures might have caused the glitch.

The airline said it was doing everything possible to restore flights but there would be obvious delays and cancellation.

Initially, when the incident happened last Saturday, it tried manual booking but this was very difficult considering the number of passengers that would be attended to.

It is also hoped that in few days the situation would return to normal as the airline seeks for permanent solution to the problem.

http://investorsking.com/ba-resumes-flights-nigeria-computer-glitch/

Amoto94:
Unless that terminal becomes fully operational I don't see us benefitting from this new agreed deal.

True but it should be operational by next month, I am sure Shell intentionally hold back because of today's meeting as it would have pushed our production level to almost 1.8 million barrel per day and alerted members like Iraq to our edge.

Amoto94:
What's the progress report on the trans-forcado pipeline repairs?

Shell is currently testing it. It should be on fully by June.

The Organization of the Petroleum Exporting Countries (OPEC) on Thursday agreed to extend oil production cuts for 9 months following the surge in the U.S. production level.

The accord is expected to be shared by non-OPEC producers later on Thursday, a move that will see the 1.8 million barrel per day supply cut last until the first quarter of 2018.

Speaking before the meeting in Vienna, Nigeria's Minister for State Oil, Emmanuel Ibe Kachikwu said: "If we stick to rules, we should look to a $50 floor." However, he said oil price of $60 seems optimistic.

On production volume, the minister said Nigeria's output level is still 1.5 million barrel per day on the average and below the 1.8 million barrel category as there are still a lot of maintenance to be done on disrupted pipelines in the Southern region of the country.

Responding to question on if Nigeria would join production cut, Saudi Arabia’s Energy Minister Khalid Al Falih said the Opec has taken into consideration Nigeria and Libya security situation and will continue to support the nations.

“We have said we will do whatever is necessary,” Mr. Falih said, adding that existing production curbs would, given time, prove “more than sufficient”.

This put to rest Iraq's suggestion that Nigeria should also cut production if the organization is looking to extend production cut.

Brent, the global oil marker, was down 58 cents at $53.37 a barrel, partly on disappointment the cuts were extended for 9 months rather than a full year.

However, Emmanuel Kachikwu said, "There may be an option to roll over for 3 months."

“This would further boost business confidence in the Nigerian market as it guarantees the sustainability of the ongoing CBN’s forex intervention, ” said Samed Olukoya, a foreign exchange research analyst at Investors King Ltd. Therefore, I would be expecting a surge in the foreign direct investment in the second quarter and an improvement in the Naira outlook going forward.”

http://investorsking.com/opec-agrees-to-9-months-oil-cut-extension/ mynd44

Amoto94:
This is not a good one at all, OP what are the necessary steps needed to reverse this ugly trend?

This was before new forex window was launched. Currently, the investors and exporters fx window has traded about $1.1 billion in volume, which is not included in the first quarter data.

Therefore, I am expecting the second quarter FDI to be higher than what we are seeing. Also, the ease of doing business being pursued by the FG will further lure investors to the country, especially once OPEC ascertain CBN intervention sustainability after today's meeting in Vienna.

The Nigerian weak business confidence continued to impede foreign direct investments in the country following the drop in the foreign investment inflow to its second lowest in 10 years.

Total Foreign investment recorded in the first quarter of the year stood at $908.27 million, according to the National Bureau of Statistics (NBS). This, represents a decline of $640.61 million or 41.36 percent when compared to the $1.55 billion recorded in the last quarter of 2016.

The decline in investment inflow was attributed to the fall in “other investment” and portfolio investments, mainly equity, which plunged from $176.44 million in the last quarter of 2016 to $101.99 million in the first quarter of 2017. Also, loans declined from $917.01 million to $369.28 million, and bonds which recorded $25.4 million by the end of the fourth quarter of 2016, did zero in the first quarter of 2017.

However, on a quarterly basis, the total value of capital imported in 2017 rose by 27.75 percent when compared with 2016 first quarter but 41.36 percent lower than the final quarter of 2016.

The report read in part, “Capital importation was particularly low in January, at $187.9m; this was only the fourth month since 2007 in which capital importation was less than $200m.”

“There was a high-profile sale of (bonds denoted in a non-local currency) during the quarter, but this has not yet appeared in the data; there is a lag between subscription and actual payment, and, therefore, it is possible that this will show up next quarter.

According to the report, despite the quarterly fall “other investment” remains the largest investment inflow in the first quarter of 2017, representing 42.20 percent of total investment inflow.

“The recent surge in investment inflow after the new investors and exporters forex window was launched in April will boost the FDI data in the second quarter,” said Samed Olukoya, a foreign exchange research analyst at Investors king Ltd. “While, positive OPEC consensus on Thursday is expected to bolster economic outlook as it would validate the CBN sustainability of the ongoing forex intervention,” he added.

http://investorsking.com/nigerias-foreign-investment-inflow-drops-to-908m/

The Federal Government on Wednesday approved a 29-member tripartite committee on a new minimum wage being clamoured for by the workers.

The Minister of Labour and Employment, Chris Ngige, disclosed this to State House correspondents at the end of the weekly meeting of the Federal Executive Council presided over by the Acting President, Prof. Yemi Osinbajo.

Ngige said the approval came after an extensive deliberation on the report of a technical committee on the issue, which he chaired.

“The matter needs to be thrashed out by all stakeholders, because already, employers under the umbrella of the Nigeria Employers’ Consultative Association have rejected the N56,000 minimum wage proposal,” the minister said.

The tripartite committee will be chaired by a seasoned technocrat appointed by the Federal Government, which will also nominate five of the members, while six state governors will also be members.

The Minister of Budget and National Planning, Udo Udoma, said the 2017 Appropriation Bill, which the National Assembly transmitted to the Executive last Friday, was still undergoing analysis.

Udoma explained that at the end of the analysis being carried out by all ministers, recommendations would be made to the President.

“When the budget is approved, we first analyse it, review it and then make our recommendations to the President. We are working hard, we are still in the analysing process and getting inputs from the ministers,” he said.

The minister described the Gross Domestic Product figures released by the National Bureau of Statistics on Tuesday as encouraging and an indication that the government’s interventions were working.

“This is the best figure released in four quarters and there is still enough time to make more efforts to stimulate the economy,” Udoma stated.

He said the government would continue with the implementation of the Economic Recovery and Growth Plan.

Udoma added, “We believe that the interventions we are making and the steps we are taking are in the right direction.

“The results that were released were for one quarter. There are still three quarters and we have enough time to do better; we will work hard to continue to stimulate the economy to meet our target.”

The Minister of Interior, Abdurahman Danbazzau, said Osinbajo directed that a proposal for the decongestion and expansion of prisons as well as the establishment of six ‘half-way houses’ across the country be presented to the National Economic Council for more inputs.

He noted that some of the prisons in the country were 100 years old, adding that deplorable prison conditions were worsened by the fact that 70 per cent of inmates were awaiting trial, while five per cent of the remainder were on death row.

http://investorsking.com/fg-okays-29-member-panel-on-n56000-minimum-wage-demand/

Nigeria’s indebtedness will climb to 24.1 per cent of its Gross Domestic Product by 2018, the International Monetary Fund has said.

The IMF, which stated this in its World Economic and Financial Surveys, also projected that by the end of 2017, the country’s current indebtedness would have reached 23.3 per cent of the GDP.

The country closed 2016 with a debt to GDP ratio of 18.6 per cent. By the end of 2015, Nigeria’s debt to GDP ratio stood at 12.1 per cent, according to the Bretton Wood institution.

Nigeria’s GDP for the year ended December 31, 2016 stood at N67.98tn, according to the National Bureau of Statistics.

Going by the projection of 24.1 per cent for 2018, it means that within three years, the nation’s debt to GDP ratio would have gone up by 100 per cent, from 12.1 per cent in 2015 to 24.1 per cent.

Although Nigeria’s debt to GDP ratio is considered among the lowest in Africa, some are worried about the spate of debt accumulation in recent years, while others are not happy with the quality and utilisation of debts by the nation.

The World Bank recently expressed concern over the debt payment to revenue ratio, saying that reduced revenue earnings might render the country’s debt unsustainable. A total of N1.84tn was provided for in the 2017 budget for debt servicing.

Senior Economist at the World Bank office in Nigeria, Yue Man Lee, said for the interest payment to be sustainable, the country either had to increase its revenues or work towards balancing the debt profile.

She said, “Nigeria’s debt to GDP ratio is relatively low. What is of concern is the ratio of interest payment to revenue. That is what is concerning. This reflects the fact that there has been a massive drop in revenues because of drop in oil revenues.

“There are two main strategies to reduce this debt burden. One is to increase the revenues. Here, in order not to be vulnerable to the volatility of the oil sector, the critical thing is to increase the non-oil revenues – the VAT, the income taxes and the excises outside of oil. This is something we have been discussing with the government about.”

Reduced earnings owing to the fall in prices in the international oil market have led to increased borrowing, with a projection of N2.35tn expected to be borrowed in the 2017 fiscal year. The 2016 budget projected a borrowing of N1.84tn for deficit financing.

Nigeria’s debt profile is dominated by local debts, which are characterised by high interest rates. Efforts are being made to secure more foreign loans and reduce the exposure of the Federal Government to the domestic debt market.

http://investorsking.com/nigerias-debt-to-climb-to-24-1-of-gdp-by-2018-imf/

jpphilips:
I really don't think you have any right to suggest to anybody what and not to meddle in, let me suppose you made a mistake with your opening line.
credit is one out of many factors of production, the question is; in the opportunity cost of all the factors of production that needs to addressed, who stays on top of the pyramid and who goes under? Make no mistakes, I am with you 100% that we need to do something about our cost of funds, where I vehemently disagree is prioritizing cost of funds over other factors of production.

Forex shortages led to high cost of imports and perhaps high taxes, those factors pushed up the prices of goods and services, that wasn't all, the increase in energy cost equally contributed to the problem the reason why our locally produced food crops are suffering high prices. Their reason today is cost of transportation, occasioned by high cost of spare parts and high cost of energy, you may compare the current prices of AGO and PMS with 2015.

Now, the prices are high, more money has to chase fewer and less value today and you expect the government to prioritize cost of funds under the circumstance? where is the wisdom?
The FG is doing something with Dangote to commence local production capacity of petroleum products, that will knock off about 21% demand in forex while we expect lower prices that will later push down transportation costs, you know that will stabilize food prices. In the 2016 and 2017 budget, Transmission (the only power infrastructure still left with the government) got good money for a face lift, don't you think that will improve power supply and drive down cost of production for the same folks you wanna advance lower credit?

I agree that all factors of production including capital need to be addressed however, this is not the time for it else those credits will transmit to non performing loans. won't you rather have an improved power sector before asking for credit for manufacturing? Won't you rather have improved road networks before asking for credit for Transport business?

In April, the CBN reported that total non performing loans of all Nigerian banks hit a whooping 2T naira, so what is the solution to that problem? according to you, advance them cheaper credits? who thinks like that?
The government will rather focus on those factors militating against startups before advancing credits to anyone. That is what I would do if were in their shoes, I don't know about you. lastly, robust government spending is already driving up inflation, you don't wanna advance credits at this point then mop it up when it gets out of control.

This is the problem I always have with you, your analysis is not always holistic. What is the percentage of imported goods to locally made goods in Nigeria? It is a known fact that over 90% of our products are imported including toothpick. Again, what is the percentage of transportation cost to the entire cost of production? Why are you mentioning energy cost when marketers have currently stopped the importation of fuel due to their inability to access forex? Is it not the same high exchange rate that is impeding cheap transportation and all other factors of production? Are transporters just changing parts or do they change parts every day? Is it not high cost of importing those parts that are still affecting that aspect of production?

For your information, other factors of production mean nothing in Nigeria. In fact, we have one of the cheapest labour in the world or when last did Nigeria companies increase salaries?

Everything in Nigeria is about cost (credit) and poor business practices by financial institutions, the majority of the non-performing loans you mentioned comes from oil sector after global oil prices plunged. Now, how does that translate to the entire economy if you are trying to diversify the economy?

The other businesses that defaulted on loans did because of high-interest and foreign exchange rates that hinder them from importing raw materials. Therefore, forcing them to default and subsequently fold up. These are less than 10 percent.

Again, the non-performing loans come from the oil sector. The current approach is for the non-oil sector that contributed 91.1 percent of our entire economy. Also, if non-performing loans are not from non-oil sector and yet access to cheap capital is hampering them from growth, why not grant them and revamp the entire economy through real investments? Diversification!

I don't know where you see robust govt spending that is driving inflation (cost-push inflation) that is moderating slower than previously expected. The 2017 budget has not been signed in May, some of the 2016 capital projects are still awaiting funding. Where is the robust? This is my last respond jare.

jpphilips:
You complain about inflation on one hand, on the other, you advocate for lower interest rates, pretty counterproductive!!
A lowered interest rate will drive inflation upwards because loads of people will have access to cheap credit, again the factors of production in Nigeria is at an all time low, there are no guarantees those loans won't end up as bad loans anyways.
No country in the world drives inflation with cheap credits, I can't think of any, you may help me out if you can.
Our recessive economy has no other fix if not robust government spending reflected in our ambitious budgets and huge borrowings towards capital expenditure, while that move is a necessary evil, you won't wanna complicate further cash flows by lowering interest rates.

People like you should not be meddling in things like this. You need to first understand what kind of inflation it is, for your information this is a cost push inflation, meaning a persistent rise in the prices of inputs (factors of production), and not a demand pull inflation that can be moderated by adjusting rates.

This simply means by controlling costs of production we can regulate our inflation. In Nigeria, a country that depends on importation for most of her supplies, her cost of production is directly proportional to her cost of imported goods. Therefore, to regulate prices, we must improve our foreign exchange rate by reducing demand through empowering local manufacturers via cheap loans to produce close substitute goods. This will not only ease scarcity but also reduce unemployment, boost wages, increase consumer spending and aid FG diversification agenda, while encouraging exports (foreign revenue generation). Hence, the CBN needs to lower interest rate and spend more to better empowered the masses to stimulate the economy from within, especially the manufacturing and agricultural sectors.

For your information, inflation is this high because costs of production are high and not because there is too much money chasing fewer goods (demand-pull inflation).

Again, the CBN keep rate this high to encourage capital importation and not to moderate consumer prices but with the new fx window that has done about $1.1 billion in trade volume since instituted a month ago. I am positive capital inflow will continue, especially with recovery in-sight by the second quarter.

The Africa’s largest economy contracted for a fifth consecutive quarter following the persistent fall in the global oil prices.

The economy contracted 0.52 percent in the first quarter of the year from a year ago, the National Bureau of Statistics reports on Tuesday in Abuja. This was more than the 0.3 percent projected by economists prior to the release.

Nigerian economy took a hit after global oil prices crashed in 2014. However, the situation was further compounded by the militants from the oil-rich Niger Delta that destroyed pipelines and halt production in the region, plunging output to an almost three-decade low.

Accordingly, the economy shrank 1.6 percent in 2016, making it the first full-year contraction in a quarter of a century. Also, the oil industry that has been aiding the economy over the years contracted 11.6 percent from a year earlier, adding to the prevalent unemployment rate and weak consumer spending.

While, the low liquidity of foreign exchange, especially the U.S. dollar, has pushed inflation rate to a record high. The Central Bank of Nigeria has continued to intervene in the foreign exchange market by constantly injecting forex to ease scarcity and ensure importers access forex at an affordable rate.

The consumer prices which measures inflation rate has started moderating, improving to 17.24 percent in April from 17.26 percent recorded in March.

Last month, the apex bank launched investors and exporters forex window to further ensure interested investors and businesses access foreign exchange at a market determined rates.

This, experts have said would help restore confidence in the market and attract desirable foreign investors that were initially worried about forex constraint in the country.

“The economy is on its way to full recovery,” said Samed Olukoya, a foreign exchange research analyst at Investors King Ltd. The new forex policy for exporters and OPEC’s proposed extension should help the government sustain the ongoing foreign exchange policy.”

The non-oil sector contributed the most to the economy, 91.1 percent. While oil sector contributed 8.9 percent to the economy.

http://investorsking.com/nigerias-economy-contracts-0-5-in-first-quarter/ mynd44

The Nigerian Naira plunged against the U.S. dollar on Monday, even after the Central Bank of Nigeria injected $205m into the foreign exchange market.

The local currency which appreciated to N375 against the U.S. dollar last week dropped to N381 on the parallel market on Monday.

In a statement issued by the CBN, the apex bank sold $100m to the wholesale segment of the market for both spots and forwards.

While, a $50m was released to the invisibles segment for basic travel allowance. The remaining $55m was appropriated to the Small and Medium-scale Enterprises segment.

Experts have encouraged the CBN to sustain the ongoing intervention program in order to further ease forex scarcity and moderate inflation rate.

"It is imperative the CBN sustain the intervention program," said Samed Olukoya, a foreign exchange research analyst at Investors King Ltd. Howver, the apex bank must start looking for a holistic exit strategy post-recession."

The newly introduced investors and exporters’ foreign exchange window had so far recorded a trade volume of $1.1 billion from both the autonomous windows and CBN, said the acting director, corporate communications, CBN, Mr. Isaac Okorafor.

According to the acting director, this was an indication of the appreciable level of confidence in the foreign exchange market by both the foreign investors and autonomous suppliers.

http://investorsking.com/naira-declines-against-dollar-despite-205m-offer/

The Federal Government on Monday approved a new interest rate spread on tax liabilities for the 2017 fiscal period.

A statement from the Federal Ministry of Finance said the new interest rate was approved by the Minister of Finance, Mrs. Kemi Adeosun.

The minister, according to the statement, said the new interest rate on unpaid tax would now be five per cent over the Central Bank of Nigeria’s Minimum Rediscount Rate for 2017.

The CBN Monetary Policy Rate currently stands at 14 per cent, thus implying that with the five per cent spread, tax defaulters would now have to pay an interest rate of 19 per cent on tax debts.

Adeosun, according to the statement, has directed the Executive Chairman of the Federal Inland Revenue Service to commence the implementation of the new interest rate on all unpaid taxes from July 1, this year.

She explained that Section 32(1b) of the Federal Inland Revenue Service (Establishment) Act, 2007 empowered her to approve the new interest rate.

Section 32 of the Act provides that unpaid taxes will attract interest at the prevailing minimum rediscount rate, which is now the Monetary Policy Rate of the CBN, in addition to a spread to be determined by the finance minister on unpaid naira denominated taxes.

Where an unpaid tax is denominated in foreign currencies, section 32 of the Act provides that the prevailing London Inter-Bank Offer Rate or the prevailing MPR of the CBN plus a spread to be determined by the minister will be imposed as the applicable interest charge.

Before now, the ascertainment of the interest rate in accordance with section 32 of the FIRSEA had resulted in varying interest rates because the MPR and the spread were periodically reviewed by the CBN throughout the fiscal year.

Given the uncertainty of the interest rate, when calculated in accordance with the provisions of the FIRSEA, the FIRS had over time applied between 20 per cent and 22 per cent, which is also the average bank lending rate, as the applicable interest rate.

But Adeosun said the review of the interest rates on unpaid taxes was one of the necessary measures adopted by the Federal Government to enhance tax compliance, minimise evasion and deter late payments.

The statement quoted her to have said, “Majority of Nigerian taxpayers (Pay-As-You-Earn) have taxes deducted automatically. However, those who do not and are required to file their taxes, like companies and business enterprises, must understand that there are financial consequences for late payments.

“We believe that this will support our efforts to ensure that people pay their taxes promptly, thus providing a sustainable source of revenue to the government to finance infrastructure and other projects.”

http://investorsking.com/defaulters-to-pay-19-interest-on-unpaid-taxes/

Amoto94:
It makes absolute sense for CBN to maintain the status quo since there's uncertainty in the international market due to the upcoming election in UK, Trump's presidency, and OPEC proposed meeting and lastly illiquiduity in FX.

It actually doesn't make sense to maintain current monetary policy rate. One, the CBN monetary policy has started stalling, meaning the pace of improvement of both the Naira and Price (inflation rate) are below intervention rate. Hence, the CBN needs to empower the masses to stimulate the economy by lowering borrowing cost and institute a complementary fiscal stimulus. The ease of doing business being pursued by the FG will amount to nothing without access to cheap capital, rather foreign investors and few others will take advantage of the policy.

Two, the uncertainty in the US have little to nothing to do with the Nigerian economy. In fact, any political conundrum in the US or call for impeachment like Green did last week will favour Nigeria and other OPEC members, this is because it's the Trump proposed tax cut and stance on climate change that shale producers are banking on going forward. Hence, global oil glut that is complicating OPEC policy.

Theresa May will win on June 8, so it has nothing to do with Nigeria. U.K. is already looking to deepen its relationship with Nigeria, but without good monetary and fiscal policy to encourage broad participation of Nigerians. It will mean little to nothing to the entire economy, U.K. won't sit around for Nigeria to get it right.

With the current investors and exporters forex window that seems to be working and oil above $50/barrel, the CBN can lower interest rate to 13 percent and still maintain capital importation. Instead of giving money to few individuals in the fixed income market.

Just because inflation rose above 4 percent in the US in 1974, president Nixon was almost impeached before he resigned. Here we have 17.24 percent and 14 percent interest rate in an emerging market with high unemployment rate and weak earnings. Yet, people think it's right to maintain the ongoing policy. I am tired of Nigerian experts/analysts joh.

As the Central Bank of Nigeria’s Monetary Policy begins its two-day bi-monthly meeting today in Abuja, economic experts and analysts have said the committee is expected to maintain the status quo by keeping the monetary policy instruments at the current levels.

The experts were of the opinion that the MPC would keep the lending rate (Monetary Policy Rate) at the current level of 14 per cent, while the Liquidity Ratio and Cash Reserve Ratio would be held at current levels by the committee.

“We expect the CBN to keep the MPR, CRR and other monetary policy rates at current levels, given the fact that the economy is just coming out of recession,” the Managing Director, Afrinvest West Africa, Mr. Ayodeji Ebo, said.

“The CBN foreign exchange policies are yielding results also, and there is a need to look at this before any review of the monetary policy instruments,” he added.

A currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said the committee would leave the rates as they were currently because there was no need to review them at a time the economy was trying to get its direction.

The National Bureau of Statistics has said the Consumer Price Index, which gauges inflation, increased by 17.24 per cent (year-on-year) though at a slower pace in April, translating to 0.02 percentage points reduction from the 17.26 per cent recorded in March.

According to the NBS, the decline in the headline CPI, which is occurring consecutively for three months, has exhibited effects of some easing in already high food and non-food prices, as well as favourable base effects over 2016 prices.

The Director, Union Capital Limited, Egie Akpata, noted that the overall inflationary trend was down and it seemed “the CBN strategy of constraining naira liquidity and flooding the market with US dollars is having a positive effect.”

“It will take a few more months of this sustained strategy before inflation is brought closer to the CBN target range,” he added.

Generally, he pointed out, inflation was falling a lot slower than predicted, even though “the rise in annual food inflation coupled with a few disease outbreaks affecting a number of key crops is worrying.”

“Unfortunately, the CBN strategy has resulted in extremely high risk free rates making it very difficult for liquidity and credit to flow to the private sector. If the GDP growth remains negative or very weak, the CBN would have to loosen liquidity and cut rates in the next few months so as to be seen as supporting the Federal Government’s effort to reflate the economy,” Akpata added.

http://investorsking.com/mpc-meets-today-cbn-may-hold-key-rates/

The West African gas pipeline has yet to recover from the impact of militant attacks on oil and gas facilities in the Niger Delta as gas flowing into it have been significantly curtailed.

The $1bn gas pipeline, operated by the West Africa Pipeline Company Limited, was built to supply natural gas from Nigeria to customers in Benin, Togo and Ghana.

Last year, Nigeria saw a resurgence of militant attacks in the Niger Delta that caused the nation’s production to plummet to a near 30-year low and disrupted gas supply to power plants.

The Managing Director, WAPCo, Mr. Walter Perez, told our correspondent that the company’s operation was severely affected by the militancy in the Niger Delta.

“Our business is still in place but the gas volumes have been significantly curtailed,” he said on the sidelines of the inauguration of the Ajido Community Health Centre in Badagry.

Perez noted that the continued shutdown of the Trans Forcados Pipeline had affected gas supply to the gas pipeline.

He said, “What we see is that the militancy is being addressed properly and that the volumes will come back.

“My understanding is that Forcados handles liquids that come from production of crude oil and so associated gas, as it is called, that has been connected to the facility, is not being available in the quantity that it was available prior to the militancy. Yes, it definitely affected our business, we believe. But we hope and pray that one day that will be a thing of the past.”

Commenting on the debt owed by Ghana for the supply of gas through the pipeline, the WAPCo MD said, “We are delivering gas now because we put arrangement in place for Ghana to prepay for the deliveries that they receive, and so that is working. We have every expectation that this will continue to work.

“There is a new government in Ghana, and so we are working with that government to understand what the situation is as we develop plans to retire the debt that they have accumulated.”

Ghana gets about 25 per cent of its power supply through gas from Nigeria, which flows through the pipeline via Benin and Togo. It has a deal with Nigeria to receive a contractual 120 million standard cubic feet of gas daily.

According to Perez, there is enough gas in Nigeria to supply all of Africa for a long time, with reserves of 187 trillion cubic feet of gas in the country.

He disclosed that WAPCo was considering “a pipeline enlargement whereby we will be reversing the flow on the West Africa gas pipeline.”

He also said, “When the pipeline was built, it was constructed so that the gas from Escravos and Utorogu (in Nigeria) can flow into our pipeline in a place called Itoki in Ogun State. Now, we envision that gas will enter the pipeline from many locations, the first of which is Takoradi (Ghana).

“One time, Takoradi was thought to be the major offtaker for the West Africa gas pipeline. At this point, in a year’s time, we will be reversing the flow from Takoradi to Tema using the West African gas pipeline. No one ever conceived that our asset will be used like this.”

Noting that gas would play a more prominent role in the world, Perez said, “You see liquefied natural gas being available almost everywhere. We are a gas pipeline company; we operate in four countries and the pipelines exist in the major load centres in each of the four countries.

“So, we think we are very well-positioned so that when the market grows, we will be able to meet the needs of the communities. I think gas is definitely a big part of the future for our economy.”

http://investorsking.com/gas-supply-from-nigeria-to-ghana-others-drops/

Since over 200,000 computers were hacked across 150 countries. The Cryptocurrency, Bitcoin, has continued to gain against the U.S. dollar.

Bitcoin gained as much as 4.3 percent on Friday to an all-time intraday high of $1,961.70, making it fifth-straight day of gains.

Experts have said the cryptocurrency which has doubled its value since the beginning of the year amid global uncertainty and growing interest in Asia, may be a bubble in the making, as bitcoin has broken key psychological levels without solid fundamentals to validate its upsurge.

“While activities of hackers have aided current rally, China cash flow policy had bolstered previous gains,” said Samed Olukoya, a foreign exchange research analyst at Investors King Ltd. “Therefore, it remains uncertain what the future holds for the unlikely to be accepted cryptocurrency by top global financial nations due to its negative perception — hackers’ payment medium for exploiting people.”

http://investorsking.com/bitcoin-rises-above-1900-for-the-first-time/

Amoto94:
Isn't this partly due to the global fall of the dollar due to uncertainty in Trump's administration?

No, that only affected free floated currencies and not tightly regulated currency like the Naira.

The Naira continued to gain against the dollar following the Central Bank of Nigeria (CBN) $457 million intervention on Monday.

The local currency on Thursday rose against the U.S dollar to N375 per dollar on the parallel market as the foreign exchange liquidity continued to increase.

Investigations revealed that the parallel market rate which most analysts had projected to remain at N385 to a dollar, improved to N375/$.

CBN’s Acting Director of Corporate Communications, Isaac Okorafor, had at the weekend reiterated the bank’s commitment to ensuring that there was enough supply of forex to genuine customers in pursuit of rates’ convergence.

http://investorsking.com/naira-gains-against-dollar-to-n375/

Segadem:
...all their wealth put together can not feed all Nigerians a day

How do you mean? $1 billion = N388 billion going by N388/$ exchange rate

200 million people = N388 billion/200 million = N1940 a day

Please note that we are not up to 200 million in population, and that is just $1 billion out of the $30 billion.

Oxfam International on Wednesday in Abuja unveiled its ‘Inequality in Nigeria’ report, which revealed the harsh economic reality in a country where 112 million citizens live in abject poverty, stating that the combined wealth of five of her richest citizens, put at about $29.9bn, could end extreme poverty in the nation.

Quoting Forbes, the agency listed the five richest Nigerians as Aliko Dangote, with a net worth $14.4bn; Mike Adenuga, $9.9bn; Femi Otedola, $1.85bn; Folorunsho Alakija, $1.55bn; and Abdulsamad Rabiu, $1.1bn.

According to Oxfam, the report exposes the large and growing gap between the country’s rich and poor, adding that it also reveals how the benefits of economic growth are captured by a few wealthy elite at the expense of ordinary Nigerians.

It said the richest man in Nigeria earned 8,000 times more in one day than a poor citizen would spend on basic needs in a year.

The report listed Nigeria as one of the few countries where the number of people living in poverty was on the increase despite the growth of the economy, adding that 69 per cent of citizens in the North-East states were living below the poverty line, compared to 49 per cent in the South-West.

The reported further stated that poor people were not benefiting from Nigeria’s wealth because of high level of corruption and the excessive influence that big businesses and some wealthy elite had over the government and policymaking.

It alleged that public office holders stole an estimated sum of $20tn from the treasury between 1960 and 2005, while multinational companies received tax incentives estimated at $2.9bn a year.

But rather than react to the issues raised in the report, the Minister of State for Budget and National Planning, Mrs. Zainab Ahmed, faulted the structure of the report, arguing that it failed to answer key questions that were typical of similar reports.

She also stated that the report failed to provide solutions to some of the problems it identified, adding that the document did not define key concepts such as poverty and who the elite were.

The minister, who was represented by the Director of International Cooperation in the ministry, Mr. Eloho Samuel, further argued that the recommendations in the report were too broad.

She said, “I was worried by the language, tone and style of the report, and this made me to ask what was at the back of the mind of the authors when the report was being written? Oxfam needs to tune the report and put in an element of diplomacy. The methodology used in the report also raises some questions.

“Is it for empirical or theoretical purpose? Oxfam needs to tell us in the report what it intends to achieve, what data was gathered, where it was gathered, the sample size and the uses of the data.”

The minister stated that positive developments and efforts of the Federal Government were not captured in the report and noted that similar reports often identify problems and proffer solutions.

Ahmed said, “When I looked at the report, I was worried about certain concepts such as ‘who are the elite?’ There was no definition of terms, such as elite and poverty. More worrisome is if the report falls into the hands of aggrieved individuals, how would they react?

“To us in Nigeria, when we find problems, we pray for the leaders. Let us think Nigeria, write Nigeria and behave like Nigerians.”

http://investorsking.com/dangote-adenuga-others-can-end-poverty-nigeria-oxfam/

praise1705:
really?

Yes, and She was part of the Benson and Hedges crew that sponsored Psquare debut album, last night.

The royalties and corporate taxes paid by Shell to the Nigerian government last year increased to $1.4bn from $1.1bn in 2015 on the back of the rise in crude oil prices, while the Shell Petroleum Development Company-operated joint ventures alone contributed $29bn to the federation’s purse between 2012 and 2016.

The royalties and taxes would have been higher but for the resurgence of militant attacks on oil and gas facilities in the Niger Delta that caused the nation’s production to plummet to a near 30-year low last year.

Shell-operated ventures in Nigeria recorded an output of 572,000 barrels of oil equivalent per day in 2016, down from 688,000 boepd in 2015.

The Country Chair, Shell Companies in Nigeria and Managing Director, SPDC, Mr. Osagie Okunbor, stated these at the presentation of the 2017 Shell Nigeria Briefing Notes.

Okunbor, who was represented by the Communications Manager, Shell Nigeria, Mrs. Sola Abulu, said, “Shell remains strongly committed to the development of Nigeria. Shell has been operating in Nigeria for more than 50 years.

“And it is not by chance that we have remained deeply committed to the development of Nigeria, her people and her economy by efficiently and responsibly producing oil and gas in onshore and offshore as well as distributing gas to industries and producing liquefied natural gas for export.”

Okunbor said the determination of Shell to support the monetisation of the nation’s huge gas resources led it to establish Shell Nigeria Gas in 1998, with current supply of gas to about 90 industrial customers in Ogun, Rivers and Abia states for power generation and processing by industries for the manufacture of domestic products.

He explained that the oil major paid special attention to the welfare of host communities, making Nigeria the second largest recipient of social investment spending in the Shell Group after the United States.

He said in a bid to involve more Nigerian contractors in its operations, the Shell Contractor Funding initiative was expanded with eight participating banks committing about $2.2bn to fund contract execution by indigenous companies working for Shell Companies in Nigeria.

According to Okunbor, since the programme’s creation in 2011, loans worth approximately $1bn have been awarded to 220 Small and Medium-Enterprises with no recorded defaults on repayment.

http://investorsking.com/nigeria-gets-29bn-from-shell-jvs-in-four-years/

Nigeria has been identified as one of the top five countries for growth acceleration for 2018. Other countries in the group include Kuwait, Oman, Kazakhstan and Tunisia.

The Global Chief Economist at Renaissance Capital, Charles Robertson, who made this forecast in a report titled: “Africa 2017,” urged investors to take advantage of the opportunities in these countries.

“These are some of the markets I think investors should be considering because of the growth acceleration story,” he explained.

According to Robertson, Nigeria still has a very positive demography, pointing out that the country’s working age population has been growing at 15 per cent over the past five years.

The global analysts observed: “Nigeria’s Ease of Doing Business is presently at 169th in the world. But I am promising you that it is going to get considerably better in the next 12 months. This government has actually started to reform.

“They have slashed the time to register a new business from 10 days to two days. I think as you get the Ease of Doing Business better, you should also see some improvement in corruption ranking. It is never going to be dramatic. We do know President Buhari has tried to make some difference.”

He also noted that there has been improvement in Nigeria’s legal system.

Robertson also argued that at its present rate, the naira exchange rate is expensive as the official rate. He called for a currency reform in Nigeria, arguing that, “currency pegs don’t work in countries with low per capita income. The naira is either too weak or too strong.”

Nigeria’s budget and forex reserves depend on the performance of crude oil. Oil has been on an upward trend in the last 12 months.

“But my view is that shale would keep it down. What I think drives oil is China. When China’s Gross Domestic Product (GDP) was booming, we had oil price shooting up, but when China’s GDP stopped rising last year, the oil price was down. There should be some recovery, I would argue, in the next few years. If there is one thing which worries me today, it is Chinese loan growth.

“I still think there is a story here which is working. The story is that the last time oil fell, which was in the 80s, GDP in Nigeria fell by over 10 per cent, not just once, but multiple times throughout the decade.

“But in the 90s, when oil prices were low, Nigeria was not even in recession. But this time, it fell by 1.5 per cent last year, which was a much better performance than in the past. The human capital has changed, not just in,” he said.

CBN Governor, Mr. Godwin Emefiele recently predicted that with economic policies put in place by the Nigerian government, the country should be out of recession by the third quarter of the year. Emefiele who assured that the CBN would continue with its intervention in the foreign exchange market, noted that interventions of the apex bank so far had been yielding positive results.

The legislature last week passed the 2017 Appropriation Bill for the year, with an increment of N143 billion to N7.441 trillion, from the executive’s proposal of N7.298, five months after President Muhammadu Buhari submitted the federal government’s spending bill. Faced with pressure from the public, which remained unrelenting for years, and in keeping with its promise this year to do so, the National Assembly, on Thursday, finally released a 33-page document detailing the line-by-line expenditure of its budget for 2017. The National Assembly’s budget was increased by N10 billion to N125 billion, from the N115 billion proposed by the executive.

Under its budget, N85.8 billion was assigned to total overhead costs, N23.7 billion for personnel costs and N14.9 billion for capital projects.

http://investorsking.com/nigeria-among-top-global-investment-destinations-for-2018/

Oil jumped to a three-week high on Monday following comments from both the Saudi Arabia and Russia to extend production cut until the first quarter of 2018.

The commodity which plunged to a 5-month low two weeks ago rose above $52 a barrel on Monday after energy ministers from the two top OPEC exporting nations said supply cuts should be extended for at least 9 months. Which is more than the 6 months stipulated in the accord signed in November 2016.

Brent crude gained 3.1 percent to trade at $52.46 to a barrel as at 1:56 pm Nigerian time, while West Texas Intermediate (WTI) rose 3.2 percent to $49.48.

However, experts have cautioned that relentless pressure from U.S. producers is likely to contain the new surge in prices.

“Every time oil tests that level…you see clients trading around it,” said James Butterfill, Head of Research and Investment Strategy at ETF Securities. “Every time it goes below that $50 a barrel level, it’s a buying opportunity and roughly when it hits about $50, we see a lot of selling at that point.”

Accordingly, the director of oil and gas at Cantor Fitzgerald Europe, Sam Wahab agreed that the growing U.S. production remains OPEC key issue.

“A further nine U.S. oil rigs were added last week, bringing the total count up to 712 – the most since April 2015. It is very likely this trend will continue at current oil prices,” Wahab added.

While oil has gained support from supply deal, inventories remain high globally. Keeping prices below $60 a barrel as first projected by the Saudi Arabia.

“Surge in production from both the Libya and Nigeria will likely necessitate equal cut from Russia and Saudi Arabia as both nations were exempted from production cut,” said Samed Olukoya, a foreign exchange research analyst at Investors King Ltd. “Therefore, for the proposed extension to be effective or taken serious by the market, other members must support the two giants, while OPEC state clearly its exit strategy rather than hoping demand will grow over time.”

OPEC and non-OPEC nations are to meet on May 25 in Vienna to decide policy. Egypt and Turkmenistan are invited to attend.

http://investorsking.com/oil-climbs-above-52-as-saudis-russia-favour-output-cut-extension/

wristbangle:
Boss how much is the forex rate FG pegged for foreign investors?

The new fx window for Investors and Exporters is not fixed, meaning foreign exchange rate is determined by market forces (buyers and sellers). Last week, it was N400/$ selling. However, you can check daily rate on FMDQ OTC website.

It was a record breaking week with the NSE ASI posting the largest singular gain of 3.18per cent , since 15th of June 2016.

Analysts at Cordros Capital Limited, an investment banking firm, said judging by market activity in the past three weeks, and more specifically, the spike in the number of deals and volume traded last week, “we sense improved investors, both local and foreign, appetite for risk assets on domestic bourse, following the: reduced apprehension in the macroeconomic environment; impressive 2016 full year and first quarter (Q1) performance of highly capitalised names, and increased confidence about the stability and liquidity of the foreign exchange (FX).

Apart from the ASI, that appreciated, all other indices finished higher during the week with the exception of the NSE ASeM Index that closed flat.

Daily Market Performance

The stock market opened for trading in the week on a positive note, sustaining its bullish trend, following high demand for fast moving consumer goods, insurance and banking stocks. Having gained 1.85 per cent last week, some level of profit taking was expected as trading resumed for the week yesterday. However, it appears investors are delaying their profit taking as bargain hunting remained high. Consequently, the NSE All-Share Index appreciated by 0.70 per cent to close at 26,418.33, while market capitalisation added N63.2 billion to close at N9.1 trillion.

Monday’s performance reduced the year-to-date decline to 1.70 per cent. The market recorded 26 price gainers, while 12 stocks depreciated. Although bellwether stocks such as Nestle Nigeria Plc, Nigerian Breweries Plc, Zenith Bank Plc, GTBank Plc were among the price gainers, Oando Plc led the chart with 10.0 per cent, trailed by Seven-Up Bottling Company Plc with 9.7 per cent. Continental Reinsurance Plc and AIICO Insurance Plc chalked up 9.4 per cent and 7.5 per cent respectively among others.

Conversely, Champion Breweries Plc led the price losers with 4.6 per cent, followed by Jaiz Bank Plc with a decline of 4.5 per cent. African Prudential Plc and Dangote Flour Mills Plc shed 3.3 per cent and 2.3 per cent in that order.

In terms of sectoral performance, all indices advanced except the NSE Industrial Goods Index that shed 0.02 per cent following price loss by Cement Company of Northern Nigeria(-1.9 per cent). The NSE Consumer Goods Index recorded the highest gain (+2.0) on account of buy sentiment in Nestle (+3.4 per cent), Seven-Up Bottling Company Plc (+9.7 per cent) and Nigerian Breweries Plc (+2.7 per cent). Similarly, the NSE Insurance Index went up by 1.8 per cent on the back of price appreciations in Continental (+9.4 per cent) and AIICO (+7.6 per cent) while the NSE Oil & Gas and NSE Banking indices appreciated 1.4 per cent and 0.4 per cent respectively.

Following continuous bull run, the market rallied to a year high on Tuesday after gaining for the eight consecutive days. Sustained demand lifted the NSE ASI by 1.28 per cent to close at year’s high of 26,756.21, while market capitalisation added N116.8 billion to be at N9.25 trillion. The gain was spurred mainly by demand for stocks such as Oando Plc, Access Bank Plc, FBN Holdings Plc, Guaranty Trust Bank Plc, Dangote Cement Plc, Nigerian Breweries Plc and Zenith Bank Plc.

According to analysts at Meristem Securities Limited, the increased investors’ appetite witnessed may be traced to the streams of positive news inflow as regards companies’ performance and economic recovery.

“Whilst we do not rule of some profit-taking activities at the end of the week, we reiterate that the current positive trend may persist,” they stated.

The bulls visited 34 stocks, while only six stocks played host to the bears. Just like Monday, Oando Plc led the price gainers with 10.1 per cent, trailed by Fidson Healthcare Plc with 9.5 per cent. Transcorp Plc chalked up 7.1 per cent just as May & Baker Nigeria Plc, Portland Paints and Products, Cement Company of Northern Nigeria Plc and Access Bank Plc appreciated by 5.9 per cent, 4.9 per cent, 4.8 per cent and 4.8 per cent in that order among others.

Conversely, Linkage Assurance Plc led the price losers with 3.7 per cent, followed by Dangote Sugar Refinery Plc with 3.5 per cent. Total Nigeria Plc shed 2.3 per cent, just as Lafarge Africa Plc and Seven-Up Bottling Company Plc depreciated by 2.2 per cent and 1.8 per cent respectively.

http://investorsking.com/stock-market-hits-9-month-high/

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