For the first time since August 2023, the exchange rate dipped below the N900 to $1 mark on peer-to-peer (P2P) platforms, including Binance, indicating a robust turnaround for the Naira.
Data from the acclaimed Binance Crypto trading platform showed the exchange rate at an impressive N855 to $1. This development highlights the naira’s impressive recovery trajectory.
The black market, often regarded as an unofficial gauge of the currency’s vigour – has listed exchange rates ranging from N1000 to N1,100 for $1 in cash transactions.
Several black market dealers shared the sentiment that the naira’s rally might be linked to the recent influx of positive news reports, notably those highlighting the government’s progress in clearing forex backlogs.
A black market operator, requesting anonymity, mentioned that the market may be transitioning from ‘panic buying’ to ‘panic selling,’ a stark reversal of the previous trend.
On the official front, the Nigerian Autonomous Foreign Exchange Market (NAFEM) witnessed the Naira closing at an encouraging N776.14, marking its strongest finish since October 13th of the current year, a notable improvement from the preceding day’s close of N793.2.
The breakthrough below the N900 threshold on the p2p market is being celebrated as a considerable psychological triumph by Nigerian government officials and their surrogates on social media.
The Naira commenced the week trading at N1,110 last week Monday, experienced a slight dip to N1,180 on Tuesday, and then exhibited a positive trend on Wednesday and Thursday, closing at N1,175 and N1,125, respectively.
The most astounding surge occurred last Friday, with the Naira selling at N950/$.
Naira rebound may not be unconnected with augmented foreign exchange inflows, deft policy interventions by the Central Bank of Nigeria (CBN), and stringent measures against illegal financial activities.
It would be recalled that the CBN focused on Tier 2 Nigerian banks and international banks with over 75 to 80 per cent of the foreign exchange forward contracts obligations cleared.
Findings show that Citigroup ($72 million), Stanbic ($125 million), and Standard Chartered ($63 million) are among the companies that are receiving forex futures deliveries last week
The FG also stated that it expected to spend $10 billion to settle FX obligations, support the country’s FX market, and stabilize the naira.
Minister of Finance Wale Edun, said that forex liquidity will improve in the coming weeks.
He further highlighted that discussions with sovereign wealth funds willing to invest and provide advances along with investments are in advance phases.
A US multinational financial services firm, JP Morgan, on Wednesday projected that the naira would trade at N850/$ at the Investors’ and Exporters’ forex window before the end of 2023.
However, the US bank said the recent efforts to restore a flexible forex regime may be sustained given the willingness to accompany it with tighter monetary conditions.
Author: Chike Ozohili
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Naira Rallies Across Markets, Trades Below N900/$1 At P2P
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Fitch Applauds Tinubu’s Reforms, Affirms Stable Credit Ratings
Fitch Ratings has affirmed Nigeria’s long-term foreign currency credit default outlook at B, citing recent policies by President Tinubu as responsible for the stable outlook.
It also raised concerns over the proposed $10 billion forex loan which the government plans to use to offset forex backlogs and inject liquidity into the system.
This is from its latest rating outlook commentary on the Nigerian economy. The global credit ratings agency noted that reforms such as fuel subsidy removal and the new exchange rate framework were responsible for the stable outlook.
On the strengths and weaknesses of the Nigeria economy, the agency noted “Nigeria’s ‘B-‘rating is supported by a large economy, a developed and liquid domestic debt market, and large oil and gas reserves.
The rating is constrained by weak governance, structurally very low non-oil revenue, high hydrocarbon dependence, security challenges, high inflation, low net FX reserves, and ongoing weakness in the exchange-rate framework.”
Fitch raised concerns about the recent government announcement to secure $10 billion in foreign exchange, highlighting the absence of specific information, such as whether this amount encompasses World Bank budget support loans totaling $1.5 billion.
It stated, “we forecast a broadly flat current account surplus, averaging 0.5 per cent of Gross Domestic Product (GDP) in 2023-2024. There is a lack of detail on a recent government announcement to raise $10 billion of forex, including whether this includes World Bank budget support loans of $1.5 billion.
Following the sharp depreciation this year, Fitch assumes exchange-rate adjustments proceed more gradually in subsequent years.”
However, it said signs of backtracking on reforms such as “a lower degree of price discovery in the foreign exchange (forex) market than in late June” and recent revelation from the nation’s apex bank which suggests that foreign reserve is significantly lower than publicly acknowledged.
The agency also noted that the country’s public debt, excluding Central Bank of Nigeria loans, has a relatively extended average maturity of 9.7 years.
Beyond that, the agency said the scarcity of foreign exchange is hindering economic activities in the country and impeding the flow of foreign capital and the CBN’s net foreign exchange position is lower than understood according to its financial statement published in August.
Going further, the agency explained that Nigeria’s growth in 2024 will be spurred by an increase in crude oil production, a reduction in budget deficit freeing resources for capital expenditure, non-oil revenue growth, etc. But it highlighted Nigeria’s macro-economic challenges to include; high inflation which it projects to drop to 21.1% in 2024, and a high interest rate.
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Forex Deals: BUA Sponsoring Lies Against Our Brand – Dangote
The Management of Dangote Industries Limited (DIL) has refuted allegations that it engaged in illegal foreign exchange deals, warning those peddling the allegation of economic sabotage against the company to desist from such underhand practices.
It gave the warning following claims in some sponsored reports in the online media, suggesting that the company is being probed for alleged illegal foreign exchange deals and money laundering by the Special Investigator, Jim Obazee who is probing the Central Bank of Nigeria (CBN) under the leadership of the former CBN governor, Mr. Godwin Emefiele.
In a statement at the weekend, DIL described the allegation as “spurious and a rehash of a similar report peddled out of malice by a competitor, BUA Group, masquerading as a concerned Nigerian in 2016.”
Dangote recalled that the spurious and false story was started in 2016 and published in both BusinessDay and Leadership Newspapers, and accused the authors of the report of rejigging it to make it appear as authentic and a new development.
Dangote said: “It is saddening to note that this publication of Monday, March 14, 2016 in BusinessDay and Leadership newspapers where the author had alleged that about “$3billion foreign exchange sourced from the CBN were diverted to other Dangote companies outside Nigeria, a practice that encourages round tripping and effect money laundering since there is no proper documentation”.
DIL management explained that the same false report back “in 2016 was now being given a fresh false slant by one Ahmed Fahad purporting it to be a new petition directed to the attention of President Bola Ahmed Tinubu and Mr. Jim Obazee, the Special Investigator probing the CBN, and subsequently different blogs and social media platforms have been carrying variants of this arrant falsehood to the detriment of our corporate reputation.”
The statement said “attempt by the authors of this misleading allegation to give it a fresh life in the media is baffling as the two newspapers that were misguided into publishing it as advertorial then (2016) have since publicly apologised to the Management of Dangote Industries Limited in writing as well as retracted the advertorial in its entirety in their respective publications. Indeed, BusinessDay and Leadership Newspapers admitted that the advertorial was sponsored by Messrs. BUA Nigeria Limited.”
DIL re-emphasised that foreign exchange for its numerous projects were sourced strictly from Interbank Foreign Exchange market in compliance with the CBN approvals and that “Letters of Credit” were established for the construction of the various operational plants and for the purchase of heavy equipment and spares required for the take-off of the Dangote Cement plants.
“The terms and conditions for payments on the transactions were clearly spelt out in the Letters of Credit instruments and in line with the International Chamber of Commerce – Universal Customs & Practice for Documentation Credit – UCP 600. It is also crucial to note that the Letters of Credit in favour of Sinoma International Engineering Co Ltd (a Chinese Government owned company), being the major contractor who accounted for over 75 per cent of these expenditures were paid against the presentation of all relevant shipping documents. There was no single payment that was made through any Dubai company owned by us,” the statement noted.
DIL explained its forex dealings thus: “all FX purchased in respect of our African Projects expansion were fully utilised for what they were meant for. The projects for which the FX was utilised are visible for everyone to see. It is on record that some of these projects were commissioned by Nigerian top-ranking government officials and in attendance were Chief Executives of various banks, Captains of Industries and the Presidents of the host countries supported by their Senior Government Officials.”
The company further stated that funds invested in its expansion project across African countries are legitimate capital investments in those countries and the repatriation of FX in sum of $576 million so far has helped to boost foreign Exchange earnings in Nigeria and stabilise the FX Market.
Besides, DIL emphasised that it had “always funded the construction of her various plants from Interbank FX Market in line with the CBN directives and relevant periodic progress reports were submitted to the banks for onward submission to the Central Bank of Nigeria.”
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Unity Bank Records N38.2bn Gross Earnings In Q3
Retail lender, Unity Bank Plc has recorded gross earnings of N38 billion for the nine-month period ended September 30, 2023, with customer deposits appreciating by 5% to N344.4 billion within the period, indicating business growth and customer confidence in the Bank.
A review of the lender’s unaudited nine-month results released to the Nigerian Exchange Group Limited showed that the Bank continued to maintain its expansionary and customer-centric model with total loans and advances rising to N222.8 billion, even as interest and similar income stood at N33 billion, which underscores the Bank’s strategic focus to reinvigorate and sustain asset creation that will deliver returns to shareholders.
Other key highlights of the 9-month financials include the total assets which stood at N423.4 billion; net fee and income commission, N4.4 billion within the period. However, the recent FX regulation impacted the Bank’s bottom line, which can be reversed as the Naira appreciates.
Commenting on the result, the Managing Director/CEO of Unity Bank Plc, Mrs. Tomi Somefun said that the Bank is focusing on its efforts to recapitalize the institution, aggressively drive asset creation, innovate with products to compete favourably in new markets and relentlessly drive the pursuit of digital Banking innovation in order to shake off and completely reverse negative positions.
She stated that despite the tough operating environment, the deposit position continues to witness steady appreciation, which supports the business as the Bank drives initiatives to ramp up transactions as part of its strategy for the short and medium term.
“This also means that the Bank enjoys market confidence, which will enable the institution to thrive better in the months ahead with increased business conversion, profitability and growth needed to achieve sustainable returns,” she said.
Added to the above, Somefun also stated that “the Bank is seeing encouraging uptake in its digital Banking services and with expansion envisaged in the pursuit of enhanced retail franchise, fintech partnership, consumer banking and other innovative retail loans as well as diversification of portfolio investment, the outlook remains one of optimism’’.
Analysts expressed confidence that re-engaging the market in the short and medium term by deepening the retail end as part of the business strategy will drive more income streams to boost both market share and financial position in the days ahead.
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Blue Economy Top Agenda As Jamoh, Pauli Meet In Abuja
The Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Bashir Jamoh, has met with Professor Gunter Pauli to discuss how Nigeria can advance its Blue Economy.
Assistant Director, Public Relations, NIMASA Osagie Edward, in a statement said, the Abuja meeting is a follow up to the session the Minister of Marine and Blue Economy, Adegboyega Oyetola, had with Professor Pauli, where the need for the NIMASA DG to meet with experts like Gunter Pauli, was highlighted.
Jamoh noted that having Professor Pauli interphase with stakeholders of the new Ministry would definitely help develop viable policies for the smooth take-off of the Marine and Blue Economy Ministry.
“I had the opportunity to meet the man that formulated the global policies around Blue Economy, and we have discussed various ways to harness the resources in the Nigerian waters in a sustainable manner. He has expressed his willingness to work with the Ministry of Marine and Blue Economy to formulate policies that will help Nigerians begin to enjoy the gains of the establishment of the Ministry,” Jamoh said.
On his part, Prof Pauli said he is willing to assist the Nigerian government develop policies around the Blue Economy for the benefit of Nigerians.
Prof. Pauli, an economist and entrepreneur, created models of the Blue Economy, which is now a global concept.
He has worked with many countries to draw policies for their blue economies.
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Hazardous Weather: Be Cautious, NCAA Tells Pilots, Airline Operators
The Nigeria Civil Aviation Authority (NCAA) has advised Pilots and Airline Operators to exercise caution over hazardous weather in the dry season.
In a release, the Nigerian Meteorological Agency (NiMET) alerted the public on the possibility of deterioration in visibility due to observed dust haze propagated into Nigeria.
According to the statement, “Winds over 10m and 925hPha are favorable for Dust-Haze propagations into the Northern parts of the country. Stations in the source region, Niger (Goure, Zinder, Maine-Soroa, Diffa, N-Guigmi and 61091 and horizontal visibility between 800m and 6000m.
“These sources from Chad are expected to report poor horizontal visibility in the next 24hrs, based on available models” the statement read in part.
He said due to strong winds, the dust in suspension is expected to propagate to some states in the northern part of the country, which will further reduce horizontal visibility especially over Katsina, Kano, Nguru, Jigawa, Potiskum and Maiduguri in the next 24hours.
The Director General of NCAA, Captain Musa Nuhu said the information is intended to alert pilots about nature of weather associated with dry season in Nigeria ranging from light/moderate to severe dust haze and sometimes early morning fog which can sometimes reduce the horizontal visibility to below the aerodrome operating minima.
Nuhu said aerodrome visibility may fall below the prescribed operating minima and in severe conditions, dust haze can blot out runways, markers and airfield lightings over wide areas making visual navigation extremely difficult or impossible.
The NCAA boss explained that flights are bound to be delayed, diverted or cancelled where terminal visibility falls below the prescribed aerodrome operating minima.
The Agency’s helmsman urged pilots/flight crew members to obtain adequate departure, en-route and destination weather information and briefing from NIMET Aerodrome Meteorological Offices and Stations prior to flight operations and exercise maximum restraint whenever an adverse weather is observed.
He also advised operators to ensure that all necessary measures are put in place to cushion the effects of delay or cancellations on their passengers.
He also urges all passengers to exercise patience and understanding during this period as their safety is of utmost importance, Airline operators and stakeholders are also advised to avail themselves of weather reports for effective planning in their operations as violations would be viewed seriously.
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Local Equity Market Dips By N296bn
Trading activities on the floor of Nigerian Exchange (NGX) Thursday returned to bearish run, shedding N296 billion as depreciation in the share price of MTN Nigeria, and other 27 companies weigh down the market.
Market capitalisation of listed equities declined by 0.76 per cent to N38.481 trillion from N38.777 trillion reported on Wednesday.
The NGX All Share Index also depreciated by 539.48 basis points to 70042.28 points from 70581.76 points it closed the previous day.
The NGX trading result showed that Omatek led gainers table during the day with a gain of 10 per cent to close at N0.55 per share, Academy Press followed with a gain of 9.83 per cent to close at N1.90 per share, Tantalizer and Prestige insurance added 9.76 per cent each to close at N0.45 and N0.45 per share respectively.
Daar Communication increased by 8.70 per cent to close at N0.25 per share.
On the contrary, Chams Plc traded 9.84 per cent to close at N2.20 per unit, International Breweries trailed with a loss of 8.79 per cent to close at N4.15 per unit, RTBriscoe traded 8.51 per cent to close at N0.43 per share, Thomas Way declined by 8.42 per cent to close at N3.70 per share,
FBNHoldings dipped by 8.14 per cent to close at N18.05 per unit
Volume of transactions declined by 76.275 million, representing 12.68 per cent as investors traded 525.457 million shares valued at N6.088 billion in 8396 deals against 601.732 million shares valued at N11.016 billion exchanged hands the previous day in 7444 deals.
Trading in the shares of Japaul Gold recorded the highest volume of activities with 92.015 million shares valued at N124.950 million, Fidelity Bank followed with account of 67.032 million shares worth N557.364 million, United Bank for Africa exchanged 46.312 million shares valued at N971.341 million, FCMB traded 42.616 million shares cost N262.589 million while Chams Plc sold 30.951 million shares valued at N728.810 million.
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NGO Bemoans Current Scale Of Mini-Grids In Nigeria
The Nigeria Team Leader of International Centre for Energy, Environment and Development (ICEED), Ewah Eleri has expressed concern over the current scale of mini-grids in Nigeria.
Speaking at the just concluded high-level policy dialogue titled; Sustainability, Inclusiveness, and Governance of Mini-grids in Africa (SIGMA), Eleri pointed out that Nigeria requires at least one million five hundred new connections annually over the next decade to close the current electricity access gap.
According to him, “To meet the scale of the electricity access challenge, Nigeria needs to grow its electricity supply by seven times the current available electricity.
“In capacity terms, we need to expand our electricity supply to 42 gigawatts, almost ten times what is available today. A significant amount of this component must be represented by decentralized renewable energy options.
“It is important that we scale up the ambition for mini-grids in Nigeria to help in closing the current electricity access gap”, he concluded.
While presenting the key findings of the research project, Co-Investigator of the project in Nigeria and lecturer at the Centre for Petroleum, Energy Economics and Law at the University of Ibadan, Temilade Sesan, pointed out that Nigeria must re-evaluate the role of market forces and government in delivering electricity access through mini-grids.
According to Sesan, “Today, the technical, financial and environmental sustainability of mini-grid development in Nigeria is questionable adding that it is also uncertain that the benefits from the increasing interest in mini-grids are spread evenly, especially as it affects women.”
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Nigeria’s Equity Market Continues Upward Streak, Gains N739bn
Trading activities on the floor of Nigerian Exchange (NGX) started the month November on a bullish note, appreciating by N739 billion.
The increase in the shares price of Airtel Africa, FBNHoldings, Cadbury Nigeria Plc, Zenith Bank, Flour Mills Nigeria Plc, Presco, AccessCorp, GTCO Plc, Flour Mills Nigeria Plc and other 28 company lifted market activities pushing NSE index to cross 70 million mark.
Specifically, market capitalisation of listed equities appreciated by 1.94 per cent to N38.777 trillion from N38.038 trillion reported the previous day.
The NGX All Share Index also increased by 1345.57 basis points to 70581.76 points from 69236.16 points traded the previous day.
An analysis of the investment showed that Airtel Africa led gainers table in percentage terms, gaining 10 per cent to close at N2694.10 per share, Chams Plc and UPL followed with a gain of 9.91 per cent each to close at N2.44 per share and N2.33 per share respectively. NEM Insurance gained 9.90 per cent to close at N5.55 per unit, FBNHoldings added 9.78 per cent to close at N19.65 per share.
On the contrary, Caverton Business Solutions recorded the highest loss during the day, declining 7.74 per cent to close at N1.43 per share, Champion Breweries trialed with a loss of 6.85 per cent to close at N3.40 per share, C &I Leasing down by 6.41 per cent to N3.36 per unit. UPDC REIT fell by 2.70 per cent to close at 3.60 per share. Unilever Nigeria Plc declined by 2.44 per cent to close at N14.00.
Volume of trades increased by 118.463 million, representing 24.51 per cent growth as investors traded 601.732 million shares valued at N11.016 billion in 7444 deals against 483.269 million shares worth N6.044 billion exchanged hands the previous day in 8027 deals.
Transactions in the shares of United Bank for Africa led market activities with 163.561 million shares valued at N3.472 billion, FBNHoldings followed with 94.654 million shares valued at N1.841 billion, AccessCorp traded 36.693 million shares worth N641.992 million, Universal insurance exchanged 34.716 million shares cost N8.938 million while Japaul Gold exchanged 25.717 million shares valued at N33.114 million. -
Retain SSB Tax In 2024 Fiscal Policy, CSOs Tell FG
The national SSB Tax coalition, Gatefield Nigeria, National Action on Sugar Reduction, One Campaign amongst other Civil Society Organisations, have tasked the Federal Government to retain the SSB tax in the 2024 fiscal policy.
According to the coalition, it will ensure the purpose of the policy is achieved as well as ensure that the government benefits from its implementation.
The CSOs, who made the call at a meeting which also had in attendance representatives from the Ministry of Finance, Budget, and National Planning, Ministry of Education, National Orientation Agency and others also called for the establishment of an inter-agency Adhoc committee on SSB Tax that would harmonise the views of all stakeholders.
The recommendation was made in a communique at the just concluded National conference on Sugar Sweetened Beverages (SSB) Tax orgainsed by Corporate Accountability and Public Participation Africa (CAPPA) in collaboration with the Federal Ministry of Health and Social Welfare Wednesday in Abuja, further called on relevant stakeholders, including traditional and religious institutions, educational institutions, civil society organizations, the media, and healthcare professionals to actively engage in other to curb the SSB menace.
According to them, “the proceeds from the SSB tax should be earmarked to the health sector to support and strengthen public health systems in Nigeria.
“Stakeholders must commit to engaging central budget agencies to improve public healthcare and influence increased allocation to the healthcare sector.
“Need for the establishment of a monitoring, evaluation, and accountability framework to track the implementation and impact of the current SSB tax policy. This must be reviewed periodically.
“Need for complementary regulatory instruments like Front-of-Pack Labeling, restricting availability and marketing of SSBs in school environments among others to offer consumers more information about products.
“State authorities must strive to bring Nigerians into its social health insurance scheme to achieve universal healthcare coverage and the Federal Government and regulatory authorities must design and enforce penalties for companies that default on SSB tax obligations.”