Nigerian naira seen sustaining gains against US dollar

NIGERIA
   The naira could extend its gains against the greenback next week on expected dollar sales by the state-owned energy company NNPC and some major oil firms.

Nigerian currency

   At 1059 GMT, the local currency was trading at 158.95 to the dollar on the interbank market, little changed from its 158.85 close last Thursday.
    The naira has been well supported since last week by higher than expected volumes of dollars sold by energy companies and central bank measures to limit dollar cash sales by banks to bureaux de change.
   "With NNPC still expected to sell its usual month-end dollar sometime next week, we could see the naira trade flat and possibly gain when the NNPC funds come in," Citibank Nigeria wrote in a research note on Thursday.
   Nigeria's central bank will issue 99.83 billion naira ($628.38 million) in Treasury bills on Nov. 7.
   "We see more oil companies coming to the market next week and with expected dollar flows from some offshores buying Treasury bills, the naira should trade within 158.6-159," one dealer said.
       
   ZAMBIA
   The kwacha is expected to be on the back foot next week, dragged down by reduced dollar inflows and the country's recent credit rating downgrade.
   At 0942 GMT commercial banks quoted the currency of Africa's leading copper producer at 5.465 per dollar from a close of 5.300 on Wednesday last week.
   "The kwacha is likely to trade with a bearish tone with the key resistance level seen at 5.500," one trader said.
   Fitch on Monday downgraded Zambia's credit rating to B from B-plus due to the country's worsening government finances and expectations its budget deficit will remain high.
   
   KENYA
   Kenya's shilling <KES=> is expected to weaken in coming days after annual inflation slowed in October, reducing the chances of a rise in interest rates at a central bank policy meeting on November 6.
   The shilling slipped 0.3 percent to 85.30/50 per dollar by 0941 GMT on Thursday after government data showed year-on-year inflation fell to 7.76 percent in October from 8.29 in September.
   The currency was 0.8 percent lower than last Thursday's close of 84.70/80.
   "Traders are now discounting any chance of a rate increase when the MPC (monetary policy committee) meets," said Nahashon Mungai, a trader at Kenya Commercial Bank.
   
   UGANDA
   Uganda's shilling is likely to hold steady in the coming week after a dip in October inflation suggested the central bank was likely to maintain its key interest rate on November 4.
   At 1118 GMT commercial banks quoted the currency of east Africa's third largest economy at 2,523/2,528, slightly stronger than last Thursday's close of 2,528/2,533.
   "Broadly, I think the inflation print fit the central bank's expectations," said David Kamugisha, trader at Stanbic Bank.
   Data released by the statistics office on Thursday showed year-on-year headline inflation in the east African country slowed to 8.1 percent in October from a revised 8.4 percent in September, driven by a decline in food costs.
   
   TANZANIA
   Tanzania's shilling is expected to be relatively stable against the dollar in the coming days, underpinned by weak hard currency demand from the energy sector.
   Traders in Tanzania's commercial capital Dar es Salaam quoted the shilling at 1,601/1,611 to the dollar on Thursday, weaker than 1,599/1,609 a week ago.
    "The shilling has been flat this week and we expect it to trade in the same levels next week, largely supported by a slowdown in dollar purchases by oil importers," said Emmanuel Mwasanguti, a dealer at CRDB Bank.
   Market participants said they expect the shilling to trade in a tight 1,600-1,610 range over the coming days.
   The Bank of Tanzania said on its website it traded $33.5 million on the interbank foreign exchange market over the past week.
   
 

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Sub-Saharan Africa to grow 6 pct next year - IMF

Sub-Saharan Africa's economic growth is expected to increase to 6 percent in 2014, from 5 percent this year, supported by investment in infrastructure and production capacity, the International Monetary Fund (IMF) said on Thursday.

Okonjo-Iweala, Nigeria finmin

The IMF had predicted in May that the region would grow 5.7 percent this year and 6.1 percent in 2014.
It said the slight downward revisions were due mainly to weaker global economic conditions, while budget delays in oil producer Angola and oil theft in Africa's top crude exporter Nigeria also hurt growth.
Inflation on the continent is expected to be less than 6 percent next year, its third year of decline due to benign prospects for food prices and the continuation of prudent monetary policies, the IMF said.
"Countries like Kenya and Uganda were in high double digit inflation and are now in single digits, and a lot of it has to do with the conduct of monetary policy," IMF Africa director Antoinette Sayeh told Reuters after the report's launch in Nigeria's commercial capital, Lagos.
The fund expects growth to pick up next year.
"The improvement relative to 2013 reflects higher global growth, especially in Europe, and other expected favourable domestic conditions," the IMF said in its regional report, giving Nigeria's electricity reforms and hopes of improved oil output there as an example.
"The main factor behind the continuing underlying growth in most of the region is ... strong domestic demand, especially associated with investment in infrastructure."
   
   VULNERABILITY
Despite the strong growth outlook, the region remains vulnerable to lower commodity prices and a slowdown in developed and emerging economies, the report said.
The strongest growth will be felt in mineral-exporting and low-income countries, the IMF said, with examples such as the Democratic Republic of Congo, Mozambique and Sierra Leone.
Africa's top economy South Africa is expected to grow 2 percent this year and 2.9 percent in the next, as it lags the broader region due to the relative maturity of its industrial, extractive and services sectors.
South Africa has suffered this year from industrial strikes, slowing private investment and disposable income growth and weakening consumer confidence, the IMF said.    
The World Bank sees growth of 5.3 percent for sub-Saharan Africa in 2014, underpinned by strong private and public investment.
The IMF gave similar policy prescriptions to previous reports. It recommended African nations allow their currencies to fall if they were being pressured by low commodity prices or capital outflows rather than propping them up too much.
Some nations, such as Nigeria, intervened to prop up currencies after portfolio outflows surged between May and August.
"We certainly don't dispute there are occasions when there is undue volatility that needs to be dealt with," Sayeh said. However, she added: "Exchange rate flexibility is important ... for countries like Nigeria."
The IMF also said that African economies were more vulnerable to volatile portfolio flows than ever before.
It suggested "capital flow measures", meaning restrictions on capital coming in or out, should only be used to combat volatility as a last resort, after addressing imbalances in things such as interest rates had been tried.
"You could adopt measures ... so you have less of the footloose short term money and a bit more of the longer term," fund deputy director Abebe Selassie told Reuters. "But it's not something you want to use in the first instance."
The fund also suggested they work to improve the ease of doing business and the collection of economic statistics.

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Nigeria forex reserves fall 1.4 pct to $45.14 bln by oct. 24

Nigeria's foreign exchange reserves  declined 1.4 percent month-on-month to $45.14 billion by Oct. 24, but were up 6.7 percent from the same period last year, central bank data showed on Thursday.    
 The foreign exchange reserves of Africa's top crude exporter and second biggest economy stood at $45.78 billion a month earlier.
  The reserves were higher than the $42.31 billion a year ago.

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ConocoPhillips expects $8.9 bln from oil asset sales

ConocoPhillips expects about $8.9 billion in proceeds from the sale of assets in Kazakhstan, Algeria and Nigeria and reported a better-than-expected quarterly profit due to higher oil and gas prices.

ConocoPhillips' office

ConocoPhillips and other U.S. oil companies are selling assets abroad to cut exposure to political risk and conflict, focusing instead on the domestic shale boom and more profitable oilfields at home.
The main black spot cited by ConocoPhillips in its third-quarter results on Thursday was disruption in Libya, which led the company to reduce its full-year production forecast.
The company said it expects full-year production from continuing operations to be in a range of 1.505 million to 1.515 million barrels of oil equivalent (boe) per day.
It had earlier forecast output in 2013 to be 1.515 million to 1.530 million boe per day.
ConocoPhillips said third-quarter profit rose 39 percent due mainly to higher oil and natural gas prices, as well as the sale of the undeveloped Clyden oil sands in Canada and assets in Trinidad and Tobago.
The company has also sold its stake in the massive Kashagan deposit in Kazakhstan's portion of the Caspian Sea, and moved to sell its interests in Nigeria and Algeria.
ConocoPhillips did not say when it expected to realize the proceeds of these sales.
Net income rose to $2.5 billion, or $2 per share, in the third quarter from $1.8 billion, or $1.46 per share, a year earlier.
Excluding one-time items, the company earned $1.47 per share, compared with average analysts estimates of $1.45.

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AfDB plans $130 mln in local currency bonds in Nigeria, Zambia

The African Development Bank (AfDB) expects to issue a total of $130 million in local currency bonds in Nigeria and Zambia within the next few months, a senior bank official said on Thursday.
The bank's local currency issuances, first started in 1998, are aimed at building domestic capital markets across the continent and improving financial liquidity in some of the world's fastest-growing economies.
"The idea is to complete the Nigerian and Zambian issuance in the coming months and then start the process in Kenya and Tanzania," Olivier Eweck, the AfDB's head of local currency funding, told Reuters on the sidelines of an African capital markets conference.
 The bank plans to issue around $100 million worth of local currency debt in Nigeria and around $30 million in Zambia, Eweck said, adding that the issuances were linked to infrastructure and financial services projects.
 The AfDB and the World Bank's private sector arm, the International Finance Corporation, have been pushing local currency issuance in Africa, with the IFC in September raising 150 million Zambian kwacha at a yield of 15 percent in its first issuance.
Eweck said domestic investors will get preference when the debt is issued.
"We are also there to develop the local market, meaning that even if there is 200 percent foreign demand and there is still demand from the local market, they will have priority over our issuance," he said.
According to the AfDB's website, the bank's local currency loan portfolio was established more than 20 years ago and  now totals more than $2.4 billion.
Eweck said this could easily double in the future with potential local currency bonds being eyed in Mozambique, Botswana and Morocco.
"We are going to do it in phases and the idea is to do two to three issuances per year," he said.

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Nigerian naira gains on oil firms' dollar sales

Nigeria's naira  firmed against the dollar on the interbank market on Wednesday, supported by energy companies selling dollars and an increase in greenback supply from the central bank.

Naira and dollar in exchange

The local unit closed at 158.8 to the dollar, firmer than the 159.4 it closed at the previous day.
Traders said the local unit of Chevron sold $18.9 million to some lenders, Eni sold $5 million, while Shell sold an undisclosed amount to banks.
The naira has been well supported since the start of last week by higher than expected volumes of dollars sold by energy companies and central bank measures to limit dollar cash sales by banks to bureau de change.
Most oil companies operating in Africa's top crude oil exporter sell dollars on monthly cycle to obtain naira to fund their domestic obligations.
The central bank offered $400 million at its Retail Dutch Auction System on Wednesday, more than the $300 million it had sold since the reintroduction of the retail auction earlier this month.
"We see the naira trading within the present range in the near term and it could edge lower towards the 159 level by Friday as some importers could take advantage of cheap dollars," one dealer said.

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Jostle for Nigeria's central bank top job hots up

*Top contenders: -Aig-Imoukhuede, -Atedo, -Majekodunmi, -Lemo, -Moghalu

Atedo

Moghalu

The race to replace Lamido Sanusi as the next Central Bank of Nigeria (CBN) may have started clearly seven months ahead of his voluntarily retirement from the post come June 2014, as interested individual intensified lobby for the plump job.

Sanusi

Sanusi had indicated few months ago he was not interested in coming back for another five years tenor at the expiry of his current tour of duty at the apex bank. The statement which many analysts said was a cleaver way of preempting the president from denying him a return ticket and save him any humiliation arising thereafter, has generated so much interest among the banking community and those who have long been eying his job.

Initial indication was that Peterside Atedo, from River State and a current chairman of Stanbic IBTC Bank, and the outgoing chief executive of Access Bank, Aigboje Aig-Imoukhuede are the two top contenders to the job. However, the numbers of those who are interested in the job has since swell up and with intense lobby to get the ears of the president for the job.

Majekodunmi

Latest information showed that two of the present deputy governors at the apex bank, Kingsley Moghalu and Tunde Lemo are seriously putting their papers together to convince the president of their capability to run the affairs of the bank after their boss.

Infact, Sanusi is said to be tipping one his deputies as his favorite successor, but the ultimate decision is now left for the president to either listen to him or choose his own man for the job.

Aig-Imoukhuede

Another outsider who is said to be interested in the job is former chief executive of defunct Reliance Bank, and immediate past chief of staff to a former governor of Ogun State, Dr Abayomi Majekodunmi.

Though, some analysts believed it was too early for an intense jostling for the top job, but many of the interested individuals are not willing to leave any stone unturned to sway decision on their sides.

However, it was learnt that the president seems to be more disposed toward Aig-Imoukhuede candidature because of his closeness to the power that be and his perceived loyalty to government policy. Other factors in favour of the outgoing chief executive of Access Bank include the fact that he is from the south-south region, the same region the president belong. He is also said to have the ear of the first lady, Dame Patience Jonathan.

Lemo

However, other people from the region are pushing for the candidature of Peterside, who they claimed is more pro-Jonathan than Aig-Imoukhuede. Those who are pushing for Peterside are claiming his candidature will attract less criticism because of his minimal shareholding at Stanbic IBTC, unlike Aig-Imoukhuede whose interest in Access Bank is seen as a disadvantage. 

“The president is disposed to giving the job to someone from his region as most of his aides are citing the examples of Chief Olusegun Obasanjo who gave the job to Joseph Sanusi when he has the opportunity to choose in 1999, while late president Musa Yar’dua gave it to the present occupier of the position, Lamido Sanusi from the North,” a presidency source said.

Both Lemo and Majekodunmi are banking on their qualifications as insiders in the banking industry and the fact that the job has always been rotated between north, east and west. It was Charles Soludo a south easterner that held forth before Sanusi, who is from the north took over in 2009, it was expected that this time it will be the turn of a candidate from the west to assume control of the apex bank, a source said.

Beyond the listed contenders, a last minute entrant into the race is the chief executive of Diamond Bank, Alex Otti, he is said to have a closer affinity with the first lady.

President Jonathan is said to be keeping his choice close to his chest and may spring surprise at the end of the day, depending on what he consider the opportunity cost to his reelection bids.

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Nigerian central bank lowers inflation target

Nigeria's central bank now wants inflation in a range between 6-9 percent, its governor Lamido Sanusi told Reuters on Wednesday, lowering the regulator's previous target of simply keeping it under 10 percent.

CBN Gov, Sanusi

Inflation in Africa's top oil exporter fell to a fresh five-year low of 8 percent in September and Sanusi said he expects it to finish the year below that level.
Interest rates in the continent's second largest economy have been on hold at 12 percent for the last two years and despite lower prices a rate cut is not on the horizon.
"Subdued inflation will continue ... I do not think there is a chance of a rate cut in the near future," Sanusi told Reuters television at the World Islamic Economic Forum.
He added that the central bank had a longer term goal of reducing inflation to 5 percent, without giving a time frame.
Sanusi's tight monetary stance has often been aimed at supporting the under pressure naira currency. Last month, the central bank imposed new measures to tackle money laundering it says is causing a spike in demand for U.S. dollars that is weakening the naira.
Corruption in the build-up to Nigeria's 2015 election is partly responsible for the huge increase in demand for dollars, Sanusi says, limiting the likelihood of any loosening in policy before the nationwide vote.

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Nigeria’s NNPC say output hit by pipeline attacks

Nigeria's crude production has been averaging between 2.2mn b/d and 2.3mn b/d since February, below a target of 2.5mn b/d for this year, because of pipeline vandalism and oil theft, state-owned NNPC has said.

NNPC CEO, Yakubu

Criminal gangs have targeted oil and gas pipelines across Nigeria this year, including the Shell operated Trans Niger Pipeline and the Nembe creek trunk line.
Shell has declared force majeure several times this year on Bonny Light crude exports and on gas supplies to the 22mn t/y Nigeria LNG plant on Bonny island.
"When the artery conveying crude oil to the terminals is hit, this reduces our production volume by 150,000 b/d and for the period that the line is down and that accounts for the drop in crude production," said NNPC group managing director Andrew Yakubu.
Crude oil theft and pipeline vandalism had become a "menace", Yakubu said.
Nigeria is Africa's largest oil exporter. The government has urged international help in clamping down on the refining of stolen Nigerian crude overseas.

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