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Nigeria says working hard to resolve gasoline crisis

In a chat with Nigerians from all walks of life on Sunday evening during the stopover, the Vice President noted that the Federal Government was moving as quickly as it could to solve the fuel crisis and reduce the difficulties Nigerians were facing as a result.

How Jonathan’s officials, cousin shared 27bln proceeds of PHCN sale -EFCC

The Economic and Financial Crimes Commission (EFCC) has narrated how top government officials under the administration of former president Goodluck Jonathan shared 27 billion, part of the proceeds of the sale of Power Holding Company of Nigeria (PHCN) in 2014.

- Nigeria unemployment rate climbs up

Four out of every ten people in Nigeria's workforce were unemployed or underemployed by the end of September, National Bureau of Statistics (NBS) said on Friday.

Why is Jerusalem important, what makes Donald Trump's intervention so toxic

What is the status of Jerusalem? Israel set up its parliament in West Jerusalem when the state of Israel was proclaimed in 1948. The move followed the United Nations’ vote to partition Palestine on the basis of the British pledge known as the Balfour Declaration that paved the way for a homeland for the Jewish people.

- Nigeria's dollar reserves at $34.53 bln as of Nov. 24

Nigeria’s foreign exchange reserves stood at $34.53 billion as of Nov. 24, up nearly 3 percent from a month earlier, central bank data showed on Thursday. The bank did not provide a reason for the increase in reserves, which stood at $33.58 billion at the same date last month.

Friday, 29 August 2014

Nigeria interbank rates climb as central bank drains liquidity

Nigeria's interbank lending rates climbed 25 basis point to an average of 10.75 percent on Friday, after funding for forex purchase and issuance of treasury bills curbed market liquidity.
The central bank retired about 198 billion naira ($1.22 billion) of matured open market operations (OMO) bills on Thursday, but rolled over 179 billion naira as fresh issuance, dealers said.
Lenders have been unable to access their cash balance with the regulator for more than two months due to a system glitch.
"The market is seen inching up next week as the central bank is expected to issue new OMO bills to further drain liquidity," one dealer said.
The open buy-back climbed to 10.75 percent from 10.5 percent last week, 1.25 basis points below central bank's benchmark interest rate of 12 percent.
vernight placements also rose 50 basis point to 11 percent from 10.5 percent last week.

Nigeria interbank rates climb as central bank drains liquidity

Nigeria's interbank lending rates climbed 25 basis point to an average of 10.75 percent on Friday, after funding for forex purchase and issuance of treasury bills curbed market liquidity.
The central bank retired about 198 billion naira ($1.22 billion) of matured open market operations (OMO) bills on Thursday, but rolled over 179 billion naira as fresh issuance, dealers said.
Lenders have been unable to access their cash balance with the regulator for more than two months due to a system glitch.
"The market is seen inching up next week as the central bank is expected to issue new OMO bills to further drain liquidity," one dealer said.
The open buy-back climbed to 10.75 percent from 10.5 percent last week, 1.25 basis points below central bank's benchmark interest rate of 12 percent.
vernight placements also rose 50 basis point to 11 percent from 10.5 percent last week.

Africa needs to make agriculture create wealth not just food

Coffee plants
Nancy Njeri lugs a sack of fresh coffee berries to a hilltop factory from her small farm, which produces one of Kenya's main cash crops yet earns barely enough for her family of seven children.
"We are toiling hard and the coffee does not give us good returns," she said, after reaching the processing plant where the berries from her 200 coffee trees are de-husked and the extracted beans are graded and dried ready for roasting.
On big estates, one tree can produce 10-15 kg of coffee berries a year using fertilisers and other chemicals. But these are too costly for Njeri and other small-scale farmers. Their trees on the small plots in Kirinyaga County produce just 3-5 kg.
This means that with a little help, Njeri's earnings of equivalent to $300 to $500 a year could be doubled.
It is a story repeated across Africa, where export crops like coffee, tea, cotton and cocoa are often produced by smallholders whose incomes cannot both support families and pay for products to improve harvests. Many smallholders are reduced to growing food staples, adding to Africa's farming inefficiency.
"Africa has to move away from agriculture for food in the stomach to agriculture for wealth into the economy and into the pockets of farmers," said Martin Bwalya, the head of The Comprehensive Africa Agriculture Development Programme (CAADP), an African Union (AU) initiative.
Experts say that this needs action from governments and others to invest in research to produce higher-yielding crop varieties, improve marketing and add more value to produce instead of exporting raw commodities from which others profit.
Bwalya's CAADP has led a drive for change, but progress has been slow. Under a CAADP initiative, African presidents committed in 2003 to lift annual agriculture funding to 10 percent of their budgets.
More than a decade later and only eight of the AU's 54 nations have reached and maintained that goal, although some others are improving. Bwalya said 40 nations now devoted 5-6 percent of their budgets to farming, up from just 3 percent.
VALUE AT HOME
Investing more could yield significant returns. In Kenya, farming accounts for nearly a quarter of national output, a common figure across the continent. As agriculture is also a huge employer of Africa's roughly 1 billion people, supporting farms, which are mostly small, helps many people.
Edward George, the head of research for soft commodities at Ecobank in London, said farming was being held back by a failure to invest in crop processing and building local African demand.
Pointing to African cotton farmers, he said only 30 percent of their harvest was turned into yarn and textiles locally, with the rest exported in the form of lint bundles.
"It is possible there is a cotton farmer in Burkina Faso who is wearing a shirt made with the cotton that he grew, but the shirt was made in China," George said.
Developing local consumption of farm products in Africa could encourage more local industry, avoiding the fate of cocoa farms in Ghana and the Ivory Coast, who earn just 7-8 percent of the value of a chocolate bar made from their cocoa beans, he said.
It is a similar picture elsewhere. Kenya, Uganda and Rwanda, which are some of the continent's main coffee exporters, mostly send beans abroad but farmers and producers could earn more if value was added at home.
A standard 50-kg bag of top AA beans, a grading that relates to size, can earn up to $400 to $500 at the peak auction period. But farmers can earn that amount by roasting and packaging lower grade beans, which would be worth half the value of AA beans if sold unprocessed at auction.
Some farmers are doing that in Kenya, but it is a small portion and held back due to limited local consumption, although coffee shops serving a growing middle class are starting to spread in Nairobi, Kampala and Kigali.
"Only 4 percent of coffee is roasted locally while the rest is exported," said Matthew Mugo, managing director of Kenya's Gibsons Coffee at his outlet in downtown Nairobi.
FOCUS ON FARMING
Work is going on to boost agricultural productivity. The Alliance for a Green Revolution in Africa (AGRA), supported by the Bill and Melinda Gates Foundation, is researching improved seed varieties for African staples such as sorghum, cassava and millet, which have received less attention than crops like wheat and rice.
Such research is vital when AGRA says the continent's population is expanding 50 percent faster than food productivity. Africa's food deficit could reach 60 million tonnes or $14 billion by 2020, if action is not taken, it says.
But gains are uneven. Productivity has been among the fastest in Africa's most populous nation Nigeria, but has shrunk in politically troubled Zimbabwe.
Some governments are too wedded to grand infrastructure plans that fail to address particular farming needs, say experts. Morrison Rwakakamba, head of the Kampala-based think tank Agency for Transformation, says this is the case in Uganda.
"When they invest in, say roads or in health or the environment, they think somehow agriculture benefits," he said. "There has not been specific efforts to address issues unique to agriculture and that has been a problem."
For many authorities, it is a question of cost. In Kenya's Kirinyaga County, Governor Joseph Ndathi illustrated the funding challenge, saying only a third of the county's spending resources of 3.25 billion shillings ($36.79 million) for the year were available for development. Most would go on roads, schools and clinics.
Agriculture would receive a fraction, he said, even though 90 percent of the county's 560,000 people relied on farming for their livelihood.
The best-paid farmer in his county earned 70 shillings per kg of coffee this year, while better marketing and farming practices could lift that to 200 shillings, he said: "That is the surest and fastest form of development."
Kenyan Agriculture Minister Felix Koskei said the government was working to improve the use of technology and introduce better warehousing to lift productivity and cut losses. But he acknowledged farms could deliver more for the economy.

"(Agriculture) does not reach its full potential," he told Reuters, adding that developing efficient markets for local produce so farmers can get the right price for their goods is key. "The most important thing is markets."

Nigeria 2024 bond yield eases on JP Morgan index inclusion

Yields on Nigeria's 2024 bond shed 15 basis points to 11.89 percent on Friday, after JP Morgan added it to its Government Bond Index-Emerging Market (GBI-EM), attracting offshore funds, dealers said.
The 10-year benchmark bond opened for trade at 12.04 percent.
Last week JP Morgan said it add Nigeria's 2024 bond to its emerging market government bond index, in addition to five other bonds already listed, pushing its yield down 22 bps.[ID:nL5N0QR47I]
Since then, some investors have taken profits, dealers said.
The addition also lifted overall trading volumes on Friday to around 11.5 billion naira ($70 million) on Friday, compared with an average of around 8 billion to 9 billion naira, dealers said.
JP Morgan valued Nigeria's outstanding bond issues on its index at $13.75 billion.

Thursday, 28 August 2014

IMF says Ebola having 'acute' impact on W. African economies

A medical personnel attending to an ebola victim
The worst ever outbreak of the Ebola disease is likely to lead to "sharply" lower growth in Guinea, Liberia and Sierra Leone and raise financing needs in all three West African countries, an International Monetary Fund (IMF) spokesman said on Thursday.
At least 1,500 people have died of the deadly hemorrhagic virus since it was detected in the remote jungles of southeast Guinea in March and spread quickly to neighbouring Liberia and Sierra Leone. Five people have also died in Nigeria.
"The Ebola outbreak is having an acute macroeconomic and social impact on three already fragile countries in West Africa," IMF spokesman Gerry Rice told reporters.
A"We are actively working with all three countries to prepare a preliminary economic assessment of the impact of the Ebola crisis, and additional financing support that may be required."

High stakes for high reward? Real estate funds come to Africa

Providing decent accommodations in Africa
High stakes for high return, if you can stick it out for the long term - investors are buying into a boom in sub-Saharan African real estate.
Forecasts for 20 percent net annual returns from investing in shopping malls, office blocks or industrial complexes in countries from Zambia to Kenya is drawing in new investors, despite more immediate concerns in some countries about Ebola, terrorism or political stability.
Investors have already taken a liking to sub-Saharan African dollar debt, encouraging a record $10 billion in sovereign and corporate issuance last year and $5 billion so far this year, according to Thomson Reuters data.
But when even bonds from Kenya and Senegal offer yields of only five or six percent, enthusiastic risk-takers may choose to invest on the ground in Africa.
Momentum Global Investment Management is launching a $250 million sub-Saharan real estate fund later this year, focusing initially on shopping malls and office buildings in countries such as Mozambique and Rwanda.
The fund has a life of up to eight years, so it won't be a fast way to make a buck - but Momentum expects it to be lucrative.
"The number one reason (to invest) is return - 18-20 percent on an annual basis, if you are in for the full eight years," said David Lashbrook, head of Africa investment strategies at Momentum. "The investors we are looking at targeting are institutions who can be locked up for the whole eight years."
Estate development

As Africa's fast-growing population gains spending power and moves into the cities, demand for real estate will grow, fund managers say. Urbanisation and population growth will boost the number of people in cities globally by 2.5 billion over the next three decades, with much of that growth in Africa and Asia, a recent United Nations study said.
"The desire of the increasingly middle class to meet, socialise, shop and spend their leisure time in facilities or retail developments that are on a par with what you find around the world is not going to abate, it is going to continue," said David Morley, head of real estate at private equity firm Actis.
Actis has raised and invested nearly $500 million in two real estate funds, with markets including Nigeria, Zambia and Mozambique. Morley is also targeting annual returns of 20 percent or more, around 5 to 10 percentage points more than returns seen in similar mainstream emerging or developed funds.
WHY REAL ESTATE?
Building costs in many African countries are high, real estate specialists say, partly because many materials have to be imported. But potential rents are also high - at a monthly $25-30 per square metre for high-end office blocks in cities like Rwanda's capital Kigali or Ghana's capital Accra, compared with below $20 in Johannesburg.
There are currently eight Africa-focused unlisted real estate funds targeting $1.25 billion in capital, according to data provider Preqin.
Around 69 percent of capital raised for African real estate funds between 2009 and 2013 was focused on sub-Saharan Africa excluding South Africa, up from 40 percent from 2006 to 2009.
Private equity funds look to attract institutional investors and traditionally do offer higher returns, due to the risks of investing in unlisted companies which may be less transparent.
But Ghana and Nigeria already have real estate investment trusts (REITs) - similar to mutual funds - which can be listed on stock markets and make it easier for retail investors to access the sector. Kenyan legislation to allow REITs is expected to go through this year.
The REIT market worldwide totals more than $1 trillion, according to consultancy EY, in more than 30 countries. The market is less well-established in emerging markets, but countries such as Mexico and Brazil have REITs.
Stanlib is among fund managers looking to set up a Kenyan REIT. It already has a fund listed in Johannesburg, which focuses on listed African real estate in countries such as Botswana, Zimbabwe and Mauritius, as well as South Africa.
Keillen Ndlovu, head of listed property funds at Stanlib, said the 200 million rand ($18.71 million) fund had trebled in size this year and was accessible to retail investors.
Investors are focusing on commercial properties rather than residential due to a limited supply of private housing and the lack of mortgage markets in Africa.
"We are not at that stage, we have been shown quite a few residential projects, there might be a chance - we have seen a few mixed developments," said Lashbrook at Momentum.
"If you are building residential, in a lot of these countries there is no mortgage market."
Returns of 20 percent or more don't come without significant risks. Africa has been hitting the headlines for the Ebola outbreak in West Africa and attacks in investment favourites Nigeria and Kenya, including last year's attack by the al Shabaab Islamist group on Nairobi's Westgate shopping mall.
But real estate specialists say that while Ebola may devastate countries like Sierra Leone and Liberia, it is a short-term issue, whereas they seek long-term gains from property.
Sierra Leone, Liberia and Guinea also do not rank among the main sub-Saharan markets targeted for real-estate investment.
Terrorism may add to the building costs of shopping malls, due to security and insurance costs.
"There is a concern, that's one of the first questions that come in - you do get more political risk," Ndlovu said.
But terrorism risk is not unique to Africa, investors point out. A bigger issue is land security, with documentation varying widely from country to country, and within countries.
That adds to the risk of investing in residential property, although Stephen Bailey-Smith, head of Africa research at Standard Bank in London, who recently built a beach house in Ghana, says the residential sector will eventually open up to investors.
"If you go into any city in Africa, you can see the need for decent housing is infinite," he said.

Nigerian naira seen rangebound on oil firms dlr sales, offshore inflows

Naira and dollar
Nigeria's naira is seen rangebound against the dollar as more oil firms sell dollars and offshore investors buy local debt in the wake of Nigerian 2024 bonds being included in JP Morgan's Government Bond Index.
The naira was trading at 162.16 to the dollar at 1421 GMT, from 162.05 at Wednesday's close.
The 2024 bond is due to be added to JP Morgan's Government Bond Index-Emerging Markets (GBI-EM) on Aug. 29, potentially triggering more offshore interest.
"We expect flows from the multinational oil companies and potential inflows from offshore investors buying local currency debt," Citibank's local unit said in a note to clients.
Many energy companies operating in Africa's biggest economy buy local currency to meet domestic obligations. Traders said the additional dollar flows could also trigger higher demand from importers who would take advantage of the cheaper dollars to bring forward their obligations.

OPEC oil output rises in August as Libyan recovery holds

OPEC members flags
The Organisation of Petroleum Producing Countries (OPEC's) oil production has risen in August from July, a Reuters survey found on Thursday, as a recovery in Libyan supply held up and Angola and Iran boosted supplies, outweighing a further decline in Iraq.
The survey also found Saudi Arabia and other core Gulf OPEC producers kept output largely flat and have not cut back to prop up prices, which in August dipped to a 14-month low near $101 a barrel, or to make room for higher Libyan output.
Supply from the Organization of the Petroleum Exporting Countries has averaged 30.15 million barrels per day (bpd) in August, up from 30.06 million bpd in July, according to the survey based on shipping data and information from sources at oil companies, OPEC and consultants.
The 12-member OPEC pumps a third of the world's oil. In August, the largest increase has come from Libya, where supply is up by 100,000 bpd. Still, a linear recovery looks unlikely, analysts say, due to continued conflict.
"I think it will continue, but with setbacks and very slowly," said Carsten Fritsch, commodities analyst at Commerzbank in Frankfurt. "It will not be a one-way street."
For now, increases in Libya, Angola and Iran have put OPEC's output above the group's nominal target of 30 million bpd for a second month. Involuntary outages, such as in Libya, kept output below 30 million bpd in earlier months of the year.
Another sizeable increase has come from Angola, where four cargoes of CLOV crude, a new stream operated by Total, have loaded in August, compared with none in July.
Iranian output climbed in August following a few months of lower sales, the survey found, on higher exports. Iranian output and exports have risen since the start of the year, following a softening of Western sanctions on Iran over its nuclear work.
Top exporter Saudi Arabia, Kuwait and the United Arab Emirates, kept supply to market largely flat, industry sources said. In Saudi Arabia, high levels of domestic crude burning in power plants offset lower exports, they said.
Of the countries with falling output, the biggest drop of 140,000 bpd has come from Iraq because of a decline in oil exports from its southern terminals due to weather delays.
Iraqi oil officials say the southern fields have not been affected by fighting in other parts of the country. But violence has hit supply of Kirkuk crude from the north and shut down the Baiji refinery, keeping crude output below Iraq's potential.
OPEC is not scheduled to meet to review output policy until November and a dip in prices - Brent crude reached $101.07 on Aug. 19, a 14-month low - has not caused concern, according to delegates and ministers.
"The decline in crude prices is due to seasonal fluctuations and will not last," Iran's oil minister, Bijan Zanganeh, was quoted on Tuesday by Iranian news service Shana as saying.

Nigeria naira gains as oil firms sell dollars

The Nigerian naira firmed against the greenback on Wednesday, lifted by dollar sales from local units of foreign oil companies seeking to fund their month-end obligations.
The local unit closed at 162.05 naira to the U.S. dollar, stronger than Tuesday's close of 162.20 naira.
Dealers said the local units of ExxonMobil sold $50 million and Italy's Eni sold $5 million on Wednesday to boost dollar liquidity, in addition to Total and Chevron which both sold a combined $117 million on Tuesday.
"We expect the naira to stay within this range this week as more oil firms sell dollars," one dealer said, adding that the liquidity provided support for the naira at the 162 level.
Nigerian units of foreign oil firms usually buy the naira towards the end of the month to meet their local obligations.
Dealers also expect potential inflows from offshore investors buying local currency debt following news that Nigeria's 2024 bond will be added to JP Morgan's Government Bond Index-Emerging Markets (GBI-EM) on August 29.

Nigeria's Access Bank sees 20 pct loan growth in 2014



Nigeria's Access Bank expects loan growth of 20 percent in 2014, after a 17 percent rise in the first half, driven by increased lending to its corporate and investment banking customers, its chief executive said on Wednesday.
Access Bank's loan book stood at 811 billion naira ($5 billion) in 2013, up 33 percent from a year ago, CEO Herbert Wigwe, told a conference call presenting its half-year results.
"We would see some payoff from the state governments ... but it will be replaced by some private sector loans," Wigwe said, adding that he expected a slower growth of 15 percent for 2015.
Foreign currency loans accounted for 46 percent of total loans in the first-half, Wigwe said, adding he expected to grow the naira loan book in the second-half to boost interest income and reduce currency exposure.
Shares in Access Bank, which have risen 2.1 percent so far this year, climbed 2.04 percent to 10 naira each.
Wigwe said Access Bank was targeting a return on equity (ROE) of 20 percent this year, up from 18.3 percent in first half. ROE stood at 14.9 percent in 2013.
The top-tier lender on Monday said first-half pretax profit grew to 27.1 billion naira, up 3.85 percent from a year ago and declared an interim dividend of 0.25 naira each.

Nigerian cocoa grower's shipments halt over levy dispute

Cocoa pods
Cocoa shipments from Nigeria's second-largest grower Cross Rivers halted this week after merchants and the state government disagreed over the payment of an export levy, a trade body said.
Godwin Ukwu, spokesman for the Cocoa Association of Nigeria, said on Wednesday about 600 tonnes of cocoa due for export had been delayed since Monday after the local government refused to issue certificates to enable buyers ship the beans.
The state government last Friday directed merchants to pay 20 naira ($0.1235) per bag of cocoa (320 naira per tonne) in a levy to an account it listed in a letter seen by Reuters, before they can could get export documents.
"Cocoa has not moved since Monday because they (the government) have refused to give us excavation papers," Ukwu, whose association represents farmers, exporters and buyers, told Reuters by telephone.
"If we don't shut down tomorrow the warehouses will be filled ... and it will difficult for us to continue to buy because there would be no more storage space."
Officials from the state government were not immediately available to comment.
Cross Rivers is the second-largest grower in Nigeria with annual volumes of around 60,000 tonnes, in the world's fourth biggest cocoa producer. Cocoa exports from Cross Rivers are usually destined for Europe.
Ukwu said the levy was normally paid to the trade body without government involvement, which was why merchants had refused to pay.
He added that merchants planned to shut their warehouses in Ikom, one of the biggest producing areas, which had around 2,000 tonnes of cocoa beans, on Thursday due to the logjam, so as not to keep stockpiling products, until the impasse was resolved.



Last month, cocoa shipments from Cross Rivers were also halted due to a disagreement over a levy imposed by the state government on exporters who did not use the state port to ship their beans.

Monday, 25 August 2014

United Bank of Africa returns Elumelu as board chairman


Tony Elumelu
Chairman of Heirs Holdings and ex chief executive of United Bank for Africa Plc (UBA), Tony Elumelu has been appointed as the bank's chairman, replacing elsewhere occupier of the position ambassador Joe Keshi.
Elumelu retired as Group Managing Director and CEO of UBA in 2010, following the introduction by the Central Bank of Nigeria (CBN) of 10-year tenure limits for bank CEOs.
He had served as CEO of the UBA Group for 13 years, where he was responsible for the creation of today's UBA, a financial services institution with a reputation for innovation and the democratisation of banking services and now spans Africa, providing services to more than 10 million customers, across the continent and in London, Paris and New York.
Elumelu joined the rank of Jim Ovia, former CEO of Zenith Bank, who was also appointed board chairman of Zenith last month.
The re-entry of the duo to the banking industry, observes said has signaled a major reversal of the former governor Central Bank of Nigeria (CBN), Malam Lamido Sanusi's major policy to revamp the industry in the wake of the 2009 banking crisis.
Analysts said last night many of those who left the industry in line with the 10-year policy may be on their way back as board chairman in the coming days. Although, under the tenure limit, the chief executive could return to the bank after a period of three years as non executive director, however, observers the emergence of Godwin Emefiele as governor of the apex bank has paved the way for a major reversal Sanusi's policies. 
Elumelu founded Heirs Holdings in 2010, which holds stakes in a number of leading African businesses, including Nigeria's largest conglomerate by market capitalisation, Transcorp, as well as UBA shortly after he retired from the bank.
Widely regarded as one of the most influential business leaders in Africa, Elumelu has developed a reputation for identifying value and bringing a long term investment orientation and discipline to sectors critical to Africa's development, including financial services, power, oil and gas, agribusiness, real estate and hospitality. As the founder of the Tony Elumelu Foundation, an Africa-based and African-funded philanthropy, Elumelu is committed to the promotion of entrepreneurship in Africa, based on his championing of Africapitalism, the philosophy that the African private sector is the critical enabler of the continent's economic and social transformation.


Nigerian naira eases after dollar inflows disappoint

Nigeria's naira eased against the U.S. currency on Monday, with last week's move by JP Morgan to include the country's 10-year bond in one of its indexes failing to stimulate strong dollar inflows.
The local unit closed at 162.07 naira to the dollar, compared with Friday's close of 161.98 naira, the same level it closed on Thursday prior to JP Morgan's announcement.
The 2024 bond is due to be added to JP Morgan's Government Bond Index-Emerging Markets (GBI-EM) on Aug. 29, in addition to five other bonds already listed, potentially triggering more offshore interest.
But dealers said local bond trading was muted on Monday due to a holiday in Britain, where a number of foreign investors who trade Nigerian debt are based. Yields on the 2024 bond climbed to 11.99 percent, as against 11.92 percent on Friday.
Citibank said in a note it expected the naira to get support from potential oil company dollar sales and foreign portfolio inflows this week.
The local unit of Italian oil firm Eni sold $12 million on Monday, to start the month-end dollar sales.

Friday, 22 August 2014

Nigerian bonds seen rallying next week

Demand for Nigeria's bonds is seen rallying next week across the board from both local and offshore investors, driven by the planned inclusion of Africa’s biggest economy’s 2024 bond in JP Morgan’s Government Bond Index.
JP Morgan says its plans to include Nigeria's 2024 bond in its Government Bond Index-Emerging Markets (GBI-EM) to be issued on August 29, in addition to three other bonds already listed.
Traders said demand for the 2024 paper and other maturities has risen since Thursday when the news filtered into the market.
“Yields have gone down across the board because many investors, including offshore interest are taking position in the market,” one dealer said.
At 1443 GMT, the yield on the 2024 debt note was down 35 basis points to 11.93 percent compared with 12.28 percent it opened the market on Monday.
The yield on the 2034 paper also fell to 12.12 percent from 12.33 percent on Monday, while that on the 2022 paper dropped to 11.77 percent from 12.11 percent.
The yield on the 2017 paper fell to 11.08 percent from 11.36 percent.
"The market is expected to see further increase in demand for local debt, and yields will inch lower in the coming week," another dealer said.

Nigerian interbank rates fall on budget inflows, OMO maturities

Nigeria's interbank lending rates eased to an average of 10.5 percent on Friday, compared with 12 percent last week, driven by increased cash inflows from budgetary allocations and retirement of matured Open Market operations (OMO) bills.
Nigeria distributed revenue from oil exports among its three tiers of government - federal, state and local this week. Some 260 billion naira ($1.61 billion) making up the portion to states and local governments hit the money market this week.
Traders said an additional 135 billion naira in matured OMO bills was also repaid on Thursday, which further swelled liquidity in the market and drove down cost of borrowing.
The open buy-back (OBB) eased to 10.5 percent, from 11.75 percent last week, 1.5 basis points below the central bank's benchmark interest rate of 12 percent.
Overnight placements also fell to 10.5 percent from 12.25 percent last week.
"Rates will remain flat next week going by the level of liquidity in the market presently, unless the central bank embarks on an aggressive mopping up exercise," one dealer said.

Friday, 15 August 2014

Nigeria interbank rates up on NNPC cash recall

Nigeria's interbank lending rates climbed to an average of 12 percent on Friday, from 10.37 percent last week, following withdrawal of cash from banking system by the state-owned energy company NNPC during the week.
NNPC withdrew portion of its deposits with some lenders to its account with the central bank this week, after it sold about $400 million to some banks this week, draining liquidity from the system and raising on the cost of borrowing among banks.
The Nigerian energy firm, which accounts for the bulk of dollars traded on the interbank market, sold the greenback to some lenders this week, and withdrew the proceeds to its account with the central bank.
Traders said the liquidity level was down after the NNPC withdrawal, pushing up rates.
Traders said rates are seen climbing further next week because of expected further withdrawals by the NNPC, foreign exchange purchases and treasury bill auction.
The open buy-back (OBB) climbed to 11.75 percent from 10.25 percent last week, 25 basis points below the central bank's benchmark interest rate of 12 percent
Overnight placements also climbed to 12.25 percent compared with 10.5 percent last week.
Nigeria, which raised 100 billion naira ($617.28 million) in bonds this week, plans to raise another 70.46 billion naira worth in treasury bills of 3-month and 6-month maturities at an auction next Wednesday.

Nigeria to double cocoa output by 2015 from 2012 -cocoa body

Cocoa pods
Nigeria is on track to increase cocoa output to 500,000 tonnes next year after distribution of new, higher-yielding seeds, rejuvenation of old farms and improvements in agricultural practices, the government's Cocoa Research Institute said.
In 2012, the government of Africa's biggest economy announced plans to double output by 2015 from 250,000 tonnes in an effort to diversify exports away from oil.
Lelia Dongo, a director at the institute, said output was expected to rise to 400,000 tonnes in 2014 as the new varieties distributed several years ago have started to flower and after most farmers adopted practices such as pruning overgrown trees to increase pod formation.
Nigeria, which has been the world's fourth-biggest cocoa grower, aims for output of 1 million tonnes by 2018, Dongo told Reuters on Friday.
Dongo also said Nigeria was setting up a private sector-led cocoa board before the end of the year to regulate prices and to monitor standards and warehouses.
"We will get there in 2015; we could even do more than the 500,000 tonnes," Dongo said in an interview.
The new cocoa varieties yield 1,500 kg to 2,500 kg per hectare and start to flower within two years. That compares with 350 kg to 450 kg for the old seeds, which take up to five years to flower, she said.
"The target is actually 1 million tonnes by 2018," Dongo said.
Dongo said output had increased from previous levels of about 250,000 tonnes per year to 300,000 tonnes in 2012 and 350,000 tonnes in 2013, citing figures from Federal Produce Inspection Service, the government export agency.
"I got the new variety in 2012 ... and planted 800 seedlings, 700 survived," said Omotayo Adeniyi, a 34-year old farmer with two acres of land in Ondo State. He said his trees had started to flower.
Output from Ondo, Nigeria's biggest cocoa-growing state, is likely to rise by 15 to 20 percent this year to 90,000 tonnes, Samuel Oyebade, chairman of the state's cocoa revolution project, told Reuters. Ondo has been producing 75,000 tonnes annually.
Dongo said the institute had distributed around 380,000 planting pods, each with 30 to 40 seeds, to farmers in two years at subsidised rates, as well as fertilisers, agricultural chemicals and training to improve farming practices.
The new cocoa variety, which took eight years to develop, is more resistant to fungal black pod disease, she said, adding that the institute was also working on a drought-resistant variety that would become available within two to three years.
In Ivory Coast, the world's top cocoa grower, beans and product exports reached nearly 1.4 million tonnes by June 30 from the start of the season on Oct. 2, according to cocoa board data

Thursday, 14 August 2014

Nigeria raises 100 bln naira in bonds at higher yields

Nigeria sold 100 billion naira ($616.90 million) worth of bonds with maturities ranging between three and 20 years at auction on Wednesday, fetching higher yields than previously, the Debt Management Office said on Thursday.
The debt office said 15 billion naira of 3-year debt notes were sold, fetching 11.12 percent, higher than the 11 percent they got at the July auction, while 50 billion naira of 10-year debt was sold at 12.22 percent against 12.19 percent previously.
A total of 35 billion naira of the 20-year note was sold at 12.38 percent, compared with 12.14 percent at last month's auction.
All the debt notes were reopening of previous issues, while total demand fell to 174.01 billion naira against 263.91 billion naira last month.

Wednesday, 13 August 2014

Nigerian naira gains 0.19 pct on dlr sales by energy companies

Nigeria's naira currency gained 0.19 percent on the interbank market on Wednesday, driven by dollar sales by major energy companies, including state-owned NNPC.
The currency closed at 161.80 to the dollar, from 162.12 the previous day.
Chevron's unit sold $60.7 million, Nigerian Liquefied Natural Gas (NLNG) sold an unspecified amount and NNPC asked lenders to bid for its usual dollar sale, prompting gains in the naira's value.
Nigeria's currency touched a five-week low against the U.S. dollar on Thursday, on renewed dollar demand, but the currency recovered some lost ground this week after a unit of Royal Dutch Shell came twice into the market.
"We probably stay on sub-162 to the dollar for some time till any major demand for the dollar hits the market," one dealer said.
Traders said the local currency could gain slightly on Thursday. NNPC is responsible for a substantial proportion of the dollar flows in Africa's biggest economy.

Monday, 11 August 2014

Nigerian naira gains 0.18 pct on Shell dollar sales

Nigeria's naira currency gained 0.18 percent against the U.S dollar on the interbank market on Monday, supported by greenback sales by a unit of Royal Dutch Shell to some lenders.
The local currency closed at 162.40 to the dollar, firmer than the 162.70 it closed at on Friday.
Shell's local unit sold an undisclosed amount of dollars to some lenders, boosting dollar liquidity and easing pressure on the local currency.
Nigeria's currency touched a five-week low against the U.S. dollar on Thursday, on renewed dollar demand after a recent rally on the local currency.
Traders said some importers brought forward their obligations to take advantage of previous gains by the naira.
Another dealer said if the NNPC fail to sell dollar by Tuesday or Wednesday, the naira could lose some value again.

Friday, 8 August 2014

Nigerian interbank rates ease on OMO bill maturity

CBN gov, Emefiele
Nigeria's interbank lending rates eased to an average of 10.37 percent on Friday, from 11.12 percent last week, driven by retirement of matured Open Market Operation (OMO) bills of about 155 billion naira ($950 million) by the central bank.
Traders said the increased liquidity outweighed cash outflow from the system, helping to bring down cost of borrowing among banks.
But traders said rates are seen inching up next week with expected cash outflows for bond and foreign exchange purchases and lack of access by banks to their credit balance at the central bank.
Technical glitches at the central bank have prevented banks from accessing to their balances with the regulator in the last four weeks, putting most dealers in the dark about the volume of liquidity available in the market to trade with.
"We presently trade blindly because we don't have information on the level of liquidity in the market and this will particularly impact on the direction of rates next week," one dealer said.
The open buy-back (OBB) eased to 10.25 percent, from 11 percent last week, 1.75 basis points below the central bank's benchmark interest rate of 12 percent.
Overnight placements also fell to 10.50 percent against 11.25 percent last week.
Nigeria plans to raise 100 billion naira worth in bonds with maturities ranging between 3 years and 20 years at an auction next Wednesday.

Nigerian debt yields seen rising on tight liquidity

CBN Gov, Emefiele
Tight liquidity and banks' lack of access to their credit balance at Nigeria's central bank could dampen demand next week at a debt auction where yields are seen climbing marginally higher than at the previous auction.
Technical glitches at the central bank have denied banks' access to their balances with the regulator in the last four weeks, putting most dealers in the dark about the volume of liquidity available in the market to trade with.
Nigeria plans to raise 100 billion naira ($615.12 million) worth in bonds with maturities ranging between 3 years and 20 years at an auction next Wednesday.
At similar auction last month, the 3-year paper fetched 11 percent, 10-year paper attracted 12.19 percent, while the 20-year debt note fetched 12.14 percent.
Traders said they expected yields to inch up slightly to 11.05 percent on the 3-year paper and 12.20 percent on the 10- and 20-year paper due to expected weak demand and a lack of information to trade with.
"Liquidity has not been good, especially with the conduct of Open Market operations (OMO) by the central bank which soaked over 500 billion naira from the market and we expect this to be reflected at the auction next week," said one dealer with Stanbic IBTC.

Inventors struggle to protect patents in Africa

Telcoms tools
When Malagasy entrepreneur Andry Ravololonjatovo came up with the idea of a hi-tech translation service named after a local bird, the Drongo, he hesitated about registering the patent.
In many countries in Africa, protection of intellectual property (IP) is still patchy or undeveloped, and many innovators are put off by the onerous and expensive affair of registering their products.
Despite a wave of technological innovation washing over the continent, many inventors are working in secret, doing without peer feedback for fear of having their ideas pinched by copycats.
They are wary too of weak national court systems that are often largely ineffectual in enforcing IP rights.
"In the beginning, we thought of just operating without registering due to the arduous and costly process. In addition, protection is only guaranteed for 10 years," Drongo's founder Ravololonjatovo told Reuters.
Named after a black-feathered bird found in Madagascar that mimics the calls of other birds, Drongo is developing mobile applications for text translations in international languages like English and French. Ravololonjatovo hopes to widen that to software that recognises the oral Malagasy language.
"Thinking big, we anticipate what might happen someday as we grow globally, so we need some kind of protection," Ravololonjatovo said, adding it was precisely this that prompted him to register with local patent protection authorities.
Not surprisingly, the patchy data available on African patent and trademark registrations shows a concentration in the more developed economies, where technology and regulatory and financial frameworks are more firmly established.
Figures from the World Intellectual Property Organisation (WIPO) show that in 2013, there were 351 international applications from South Africa filed through its Patent Cooperating Treaty (PCT) system.
Morocco had 54 filings, Nigeria and Kenya had seven each. Africa accounted for about 500 PCT applications last year, less than 1 percent of more than 205,000 made globally, indicating patent protection is still embryonic on the fast-growing continent.
"NOT FOR THE UNINITIATED"
For IP lawyers working across Africa, challenges include infrastructure and systems problems that cause backlogs and delays when searching for, examining and issuing certificates.
Some countries such as Nigeria, Africa's biggest economy and oil producer and a favoured foreign investment target, are only now transforming their manual registries into digital format to create a timely and accurate online filing system.
Antiquated laws, which can sometimes mean trademarks not being recognised, are now also being reviewed in most states as investor interest blossoms for an African continent rising out of poverty and conflict.
But costs can be an obstacle for African innovators who may be struggling to raise funds.
For Drongo, its patent protection registration cost $400, a big amount for the small start-up. But the amount of paperwork required for the process and the time spent waiting for it to happen was even more frustrating, Ravololonjatovo said.
Trade mark applications in the more expensive territories range between $1,200-$1,700 while patents require between $1,400 and $1,900, according to Johannesburg-based law firm ENS, which represents clients across the continent.
But help is at hand. To encourage start-ups to register and protect their IP, Microsoft's 4Afrika initiative has begun a free service to help developers with the process and put lawyers at their disposal if they need to protect their patents.
Microsoft is experimenting with the programme in Kenya and hopes to also develop it elsewhere on the continent.
Gaelyn Scott, head of the IP department at ENS, said there were signs of greater respect being shown for patents in Kenya, Nigeria, Zimbabwe and Namibia. However, other states like Ethiopia, Mozambique and Angola were proving much more difficult when trying to protect inventors' rights.
"The practice of IP in Africa, the filing, maintenance and enforcement of rights, is not for the uninitiated," she said.
"CULTURE OF SECRECY"
Louis Otieno, a director with the Microsoft 4Afrika initiative, says tech developers at forums where he speaks are often reticent about sharing their ideas publicly, fearing they may be stolen and copied. They pull him aside after his speeches.
"There is a culture of secrecy, which is counterproductive in this day and age in developer work. You should feel confident that what you are developing is yours and have a way of proving it's yours," Otieno said.
Although most African countries have laws protecting inventions and intellectual property on their books, these are often not tested. There are also only a small number of judges and lawyers on the vast continent well versed with the sector.
Often, arguments before an African court or registry were followed by delays in handing down decisions that at times stretched into years, a huge frustration for plaintiffs.
ENS' Scott said most of the filings registering trademarks in Africa were by foreigners, who were more familiar with the IP protection concept and procedures from their own countries.
South Africa's IP office, for example, received 7,444 patent applications in 2012. Of these, 608 were filed by residents, the rest were by foreign applicants, according to WIPO statistics.
Otieno said an increase IP protection court cases being heard in Africa could spur more specialisation and expertise.
His advice to African entrepreneurs?
"You should not hide but tell everybody who cares to listen, 'See what I have created, use it but pay royalties to use it'".