Yields on short-dated Nigerian debt seen higher

 Yields on short-dated Nigerian fixed-income assets are seen inching up next week as the central banks tightens liquidity to shore up the naira.
   The currency of Africa's top crude-oil producer has been under pressure following last week's suspension of central bank governor Lamido Sanusi. Offshore investors sold Nigerian debt and equities.
   Dealers said the central bank has issued around 130 billion naira ($787 million) in OMO (open market operations) securities on Thursday and Friday to further tighten liquidity, using higher yields to attract demand.
   "Yields on OMO bills have gone up to around 13.1 percent from 12 percent previously as the central bank increased the frequency of Treasury bill sales to mop up liquidity from the market," a trader with the United Bank for Africa said.
   On the other hand, bond yields are seen inching lower next week on renewed buying from local pension funds.
   The yield on the 7-year bond fell to 13.89 percent on Friday, down 86 basis points from a week ago. Three-year paper was trading around 13.83 percent from 13.9 percent.
   
   KENYA
   Yields on Kenyan Treasury bills on sale next week are expected to ease, driven by increased subscription rates and slowing inflation.
   The central bank will sell 9 billion shillings ($104 million) of 91-day, 182-day  and 364-day Treasury bills at auctions next week.
   At this week's sales, the weighted average yield on 91-day paper rose to 9.19 percent from 9.12 percent a week earlier.
   The yield on the 182-day Treasury bill edged up two basis points to 10.35 percent. Yield on the one-year instrument declined four basis points to 10.61 percent.
   Traders said the large amount of securities maturing meant there will be increased liquidity in the markets, which will lead to more aggressive bidding at the auction.
   "I think maturities are 16 billion shillings and they are only looking for 9 billion. I think we will see more demand thanks to what is being offered," Ignatius Chicha, head of trading at Citibank Kenya, said.
   "And also the fact that inflation came in lower, I think we will see the rates will come off slightly. I think the rates will still stay roughly around 9 to 10 percent."
   Kenya's year-on-year inflation rate slowed to 6.86 percent in February from 7.21 percent in January, the statistics office said on Friday.

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Nigerian interbank rates fall, seen up next week on CRR debit

Nigerian interbank lending rates eased slighty on Friday to an average of 10.75 percent, from 11 percent last week, traders said, but they are seen rising next week on a coming central bank debit to meet cash reserves requirements (CRR).

AG CBN Gov, Alade

About 220 billion naira ($1.33 billion) in matured Open Market Operations (OMO) was repaid by the central bank on Thursday, swelling liquidity in the banking system.
The cash balance that lenders hold at the central bank opened at a positive 446 billion naira on Friday, up from 340 billion naira last week.
The secured open buy back (OBB) rate eased to 10.5 percent, from 11 percent last week, 1.5 percentage points below central bank's benchmark rate of 12 percent.
Overnight placement fell to 10.75 percent, compared with 11 percent, while call money closed flat at 11 percent.
"The CRR for February is expected to be debited by Wednesday and if the central bank intensifies issuance of OMO debt notes next week, lending rates should be up to around 11-12 percent for overnight," one dealer said.
Nigeria's central bank last month raised CRR on public sector deposits to 75 percent, from 50 percent, in a bid to further support the ailing naira currency. The regulator is due to debit banks' account for the CRR on Wednesday next week.

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Nigeria orders 26 mln barrels of gasoline in Q1 -sources

Nigeria has granted licenses to more than 30 companies to import around 26 million barrels of gasoline, or around 3.1 million tonnes, in the first quarter of this year, down slightly from the previous quarter, industry sources said.

Nigeria's petroleum minister, Madueke

   Nigeria gave the largest allocation of 1.3 million tonnes to state oil company NNPC, according to a list of importers compiled from trade sources by Reuters.
   Nigeria is Africa's top oil producer but relies on gasoline imports because its refineries work at a fraction of capacity due to poor maintenance and old age.
   Africa's most populous nation and the continent's second largest economy is an increasingly attractive market for refiners because U.S. gasoline imports have dried up, with U.S.  production having risen due to the country's shale oil output.
   The gasoline import allocations were announced late in the quarter but importers will be allowed to bring in fuel up until the end of May, two industry sources told Reuters.
   The imports are lower than the 30 million barrels of gasoline allocated for the fourth quarter of last year, which followed a brief halt in imports due to a supply glut.
   Lagos-listed Oando  received the second biggest allocation in the first quarter of 120,000 tonnes, while Total's  local unit was awarded 60,000 tonnes and Folawiyo, in which global commodity merchant Glencore  is a minority stakeholder, won 90,000 tonnes.
   Officials from Nigeria's Petroleum Product Pricing  Regulatory Agency (PPPRA), the downstream regulator, were not immediately available for comment.
   Large trading houses such as Vitol, Trafigura and Mercuria were absent from the list, although Trafigura continues to supply Nigeria with fuel through a crude-for-product swap deal.
   
   FUEL QUEUES
   There have been long fuel queues in Abuja this week, which fuel suppliers say are caused by panic buying due to a rumour the government is about to hike the price of petrol, after President Goodluck Jonathan removed the head of PPPRA Reginald Stanley last week, replacing him with Farouk Ahmed.        
   The PPPRA said in a statement on Thursday there was no plan to raise the pump price.
   Fuel imports have a large economic impact in Nigeria because the government caps the pump price of gasoline at 60 cents per litre by using subsidies which have come under scrutiny in several corruption investigations.
   Nigeria spent roughly $6 billion on fuel subsidies last year, equivalent to a fifth of the federal budget.  
   Parliament and the finance ministry both probed Nigeria's fuel subsidy in 2012, in the aftermath of an aborted attempt to remove it - President Jonathan was forced in January of that year to reinstate it after a week of protests.
   The probes exposed a web of corruption and fraud by government officials and fuel marketers that cost the state billions of dollars, with much paid-for fuel never being ordered or being diverted to Nigeria's neighbours.
   Finance Minister Ngozi Okonjo-Iweala has since tried to bring more transparency to the scheme by withholding payments for claims until they are verified, and periodically publishing what Nigeria pays to fuel importers.
   Corruption in Nigeria's oil business was in focus again this month when internationally respected Central Bank Governor Lamido Sanusi was suspended by Jonathan, shortly after he gave evidence to a senate hearing which he says proves the state-oil firm failed to pay $20 billion into government accounts.

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Nigerian central bank intervenes for third time this week, naira falls

Nigeria's central bank intervened for the third time this week with dollar sales to try to support the naira on Thursday, but the local currency lost 0.24 percent on the day to hit 164.90 against the greenback, dealers said.
The naira closed at 164.50 per dollar on Wednesday.
The naira currency has lost 3.2 percent this year, hit by lower foreign capital flows and last week's suspension of Nigeria's central bank governor, a critic of the government's record on corruption.
"No amount of intervention can change the direction of the market because of the high levels of demand," one dealer said, adding that he was taking a short-term view on the naira.
"People know that intervention does not solve the fundamental issue of low inflows and declining reserves."
The central bank sold an undisclosed amount of dollars to banks on Thursday to calm forex market volatility after the currency hit 165.50 naira. But the move was outweighed by dollar demand, dealers said.

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Zambia GDP adds 25 percent after rebasing - stats office

Zambia's gross domestic product is now estimated to be over 25 percent bigger after a rebasing exercise that updated the base year from 1994 to 2010, the country's statistics office said on Thursday.
"According to the new benchmark estimates the GDP for 2010 is estimated at 97.2 billion kwacha( $16.7 billion). The new estimates are 25.2 percentage points higher than the old," acting Central Statistical Office director Goodson Sinyenga said.
The revisions stem from dramatic changes in the structure of the economy in Africa's leading copper producer.
Other African countries such as Nigeria are doing similar exercises to keep pace with the fast-changing nature of their rapidly urbanising economies.
"In 1994 the mining sector was almost non-performing but now the production has increased. In fact, new industries like mobile phone companies have come on board," Sinyenga said.
The new benchmark estimates also included a comprehensive estimation of the informal sector, he said.

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Ghana producer price inflation jumps to 23.3 pct in January

Ghana's annual producer price inflation rose sharply to 23.3 percent year-on-year in January from 15.3 percent in December mainly on utility price hikes and the decline of the local currency, the government statistician said on Wednesday.
The cedi has depreciated around 8 percent so far this year on excessive dollar demand by local firms and commerce operators for their imports.
"The continued weakness in the value of the cedi as we have witnessed in the past months took a heavy toll on manufacturing costs," Philomena Nyarko told a news conference.
She said the utility sector recorded the highest increase in prices, 55.3 percent, followed by manufacturing, which rose to 24.2 percent.
The monthly change in the producer price was 7.2 percent.
Producer price inflation is an advance indicator of consumer price inflation, which rose to a fresh three-year high of 13.8 percent in January.

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Ecobank CEO Tanoh has "failed", bank's top shareholder says

 Ecobank chief executive Thierry Tanoh has failed to raise any capital, bring stability or extract efficiencies, according to board member Daniel Matjila, who represents South Africa's Public Investment Corporation (PIC), the bank's largest shareholder.

Ecobank CEO, Tanoh

The PIC supports reconstituting Ecobank's board and would possibly support a change in chief executive, Matjila, the chief investment officer for PIC, told Reuters on Wednesday. Matjila sits on Ecobank's 12-member board.
Ecobank's shareholders are due to vote on March 3 on governance reforms that follow pressure on the bank over corporate governance. Top executives are divided over Tanoh and senior leaders have called for him to step down.
"Tanoh came in to stabilise, extract efficiencies, cut costs and all other things to extract value from the business. We believe he has failed to do so," Matjila said. "He hasn't raised even a single cent of capital ever since he came in."
"For us, we need to change and reconstitute the board to put the bank on a growth path, including possibly changing the CEO," Matjila said, who said that nonetheless the investment was doing well.
PIC holds 18.35 percent of Ecobank's shares, making it the biggest shareholder ahead of the Asset Management Corporation of Nigeria, which holds 8.09 percent.

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Ecobank board meeting blocked by court injunction

 A key Ecobank board meeting at the bank's headquarters in Togo on Tuesday was blocked by an injunction filed by an individual shareholder at a court in the capital Lome, bank officials said.

Nigeria's SEC DG, Oteh

The injunction appears to benefit chief executive Thierry Tanoh because it relieves pressure over a board meeting that could have considered his leadership in the wake of a letter from his top executives asking him to step down.
Ecobank, one of the largest financial institutions in sub-Saharan Africa, is attempting to reform its corporate governance after criticism from Nigeria's Securities and Exchange Commission.
A senior bank official said the shareholder filed the suit in a lower Togolese court, alleging it would be prejudicial to another 600,000 shareholders to hold the board meeting just a week before an emergency general meeting set for March 3.
"The situation is very fluid," said the official, who asked not to be named. The identity of the shareholder was not immediately available.
A source close to bank leaders said it was unlikely the meeting would take place on Wednesday as some board members had left Lome.
Ecobank's board has 12 members including chairman Andre Siaka, Tanoh and four other members of the Group Executive Committee that runs the bank.

Ecobank CEO, Tanoh

Those four members called on Feb. 13 in an email sent by deputy chief executive Albert Essien for Tanoh to step down to resolve what they said was a long-standing crisis of leadership.
Shareholders on March 3 are set to vote on governance reforms including establishing a seven-member interim board. All five group executive members sit on the current board but only Tanoh would be represented on the interim board.
Former Ecobank chairman Kolapo Lawson, who stepped down in October, told Reuters at the weekend that Tanoh's opponents wanted to use Tuesday's board to force a vote on the chief executive's tenure.
Two analysts said they were surprised that board business could be blocked by a lone shareholder's suit and saw it as a fresh sign of a leadership rift they said was dangerous to the bank.
"That (the blocked board meeting) is not positive in terms of the bank moving in the same direction .... All the infighting needs to be sorted out for the bank to move forward," said Brian Mugabe, an analyst with South Africa-based Imara Africa Securities.

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Nigeria's next central bank chief a steady hand, who'll keep out of politics

Nigeria's incoming central bank governor Godwin Emefiele is seen as a steady hand who will maintain tight monetary policy in the face of currency weakness and avoid his predecessor's controversial forays into politics.

President Jonathan

President Goodluck Jonathan swiftly nominated Emefiele as the next governor last week after suspending incumbent Lamido Sanusi, who had become an increasingly vocal critic of the government's record on corruption.
Sanusi, internationally respected for his commitment to reining in inflation, implementing a successful bailout of Nigerian banks in 2009 and cracking down on money laundering and corruption in the banking sector, had been due to step down in June. His early departure caused a panic selloff in financial markets, although currency and stocks are now stabilising.
Emefiele, who at 52 is the same age as Sanusi, boasts more than 20 years' experience in the banking sector. He is the managing director of Zenith Bank, Nigeria's third biggest, where he has built a well-capitalised and stable institution, banking sources say.

In-coming central bank governor. Emefiele

"He's done a solid job at Zenith and is likely to be a steady hand who will be calm, but markets are jittery right now, so he's got a challenge on his hands," a Nigerian banking source said, asking not to be named.
Emefiele's appointment still has to be confirmed by the Senate. His office at Zenith declined to comment and he was not immediately available to comment on his new post.
His biggest challenge will be protecting the naira, which has come under pressure over the past year on concerns that reduced U.S. monetary stimulus will crimp fund inflows to emerging markets. It slumped to a record low of 169.25 to the dollar in the wake of Sanusi's suspension and was trading at around 163.5 to the dollar on Tuesday, outside the bank's preferred 150-160/$ range.

Suspended central bank governor, Sanusi

Repeated intervention by the central bank to keep the naira within the band has run down foreign exchange reserves, and liquid reserves have declined by about $2.2 billion or 5.2 percent from $42.46 billion at the start of 2014.
That is about $45 million a day and raises the prospect that interest rates, which have been on hold at 12 percent since October 2011, may have to rise at some point this year to protect the currency.
"We expect he will maintain the current monetary policy tightening stance," Vetiva Capital said in a research note.
"In the short term, we believe the currency will remain under pressure which would require continuous monetary tightening - restraining loan growth within a high interest rate environment," it added.
   
   MAINTAINING INDEPENDENCE
   Analysts expect the new governor will be more discreet than Sanusi, who was often criticised by government officials for going far beyond his remit, happy to talk openly about anything from bloated government spending to the social problems which are feeding a bloody Islamist insurgency in northeast Nigeria.
   He won't dip into politics, given the manner of Sanusi's exit, analysts say, and was described by several banking sources as a conservative figure who appears confident in public but gives little away.
   Sanusi, who was suspended soon after opening up questions about corruption within the government, has said the biggest challenge his successor will face is keeping the central bank independent.
   President Jonathan says Sanusi's suspension was due to irregularities found in an audit of the central bank and that the regulator would remain independent.
Foreign investors hold around $7 billion in Nigerian fixed income assets, down from $9 billion in November, banking sources told Reuters. This is likely to dwindle further in the coming months, heaping pressure on the naira, they said.
   Bank of America Merrill Lynch downgraded its rating on Nigeria's external debt to underweight from market weight on Tuesday, adding that it expects the naira to weaken to 170 against the dollar this year, despite tight monetary policy.
   Yvonne Mhango, economist at Renaissance Capital, expects forex reserves to fall to $35 billion by the end of this year and thinks Emefiele will be forced to devalue the midpoint in the naira exchange band to 170/$ in July.
   "We believe he is likely to maintain a firm policy environment and would be inclined to tighten policy in the current environment of naira weakness," Mhango said.        
   Deputy governor Sarah Alade will be acting governor until Emefiele takes up his post in June, assuming Senate approval.

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