Nigerian interbank rate eases on matured T-bills repayment

Nigeria's overnight interbank lending rate held steady over the week at an average of 1 percent, traders said on Friday, after an injection of cash from retired matured treasury bills into the banking system by the central bank boosted liquidity.
Traders said about 257 billion naira ($1.29 billion) had been put into the system in matured open market operations bills on Thursday - the usual day for any intervention.
Lending rates at the interbank market had jumped to around 4.71 percent for overnight and 4.08 percent for secured open buy back on Wednesday after commercial lenders moved cash to the central bank to back their planned foreign exchange purchases.
Last Friday, the cost of borrowing among banks had closed at 1 percent overnight and 0.5 percent for OBB. The secured open buy back traded at 0.5 percent this Friday.
The central bank usually intervenes once a week in the official interbank foreign exchange market to provide dollars for eligible importers, while it requires commercial lenders to fund its naira account 48 hours ahead of the intervention.
The cycle usually leads to an increase in the lending rate mid-week, but as the central bank refunds surplus from forex cash deposits back to commercial lenders, rates decline.
The total commercial lenders' credit balance with the central bank stood at 591.76 billion naira on Friday, more than 376 billion naira last week and is expected to rise further at the close of business on Friday when refunds on surplus deposit for forex is reflected in their accounts.
Although the central bank sold 296.7 billion worth of 195-day OMO treasury bills on Friday at 7.75 percent in a bid to mop-up excess liquidity in the banking system, expectations of additional funds from budgetary allocations kept rate low, traders said.
"We see interbank lending rate stable around this present level next week by the time January budgetary allocations to government agencies are disbursed and refunds of cash backing for forex purchases hit the market," one trader said.
The interbank rate reflects the level of naira cash liquidity in the banking system.

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Ivory Coast, Ghana cocoa mid-crops to fall sharply

Ivory Coast and Ghana's cocoa mid-crops are expected to fall sharply this season due to dry weather and the impact of a severe Harmattan wind, the International Cocoa Organization (ICCO) and industry sources said this week.

Cocoa beans

The world's two top cocoa growers have been hit by a long Harmattan this year, a dusty wind that sweeps in from the Sahara and can sap soil moisture and reduce the size of cocoa beans.
"We do not expect the mid-crop harvest to be as high as last year in Ivory Coast when it was 514,000 tonnes," Jean-Marc Anga, Executive Director of inter-governmental body ICCO said in an interview on Thursday. "In Ghana, it's a similar situation."
Several other industry sources echoed Anga's view in interviews with Reuters this week.
"With these bad weather conditions going on for five months, our calculations give us a dip of about 100,000 tonnes," said an exporter, referring to a near 20 percent drop expected from Ivory Coast's 2014/15 mid-crop harvest.
For Ghana, where dry conditions have prevailed for longer than in its neighbour, the sources said they expected output to fall by around 35-45 percent from the mid-crop average of about 170,000 tonnes.
That would amount to a fall of about 100,000 tonnes.

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South African companies urged to invest at home to head off downgrade

The head of Liberty Holdings, South Africa's fourth-biggest insurer, urged local companies on Friday to invest at home to help the economy grow faster and stave off a sovereign credit rating downgrade.
Finance Minister Pravin Gordhan has said growth in Africa's most industrialised country will come in less than 1 percent this year - a pace rating agencies say might put the country's investment grade rating at risk.

A Shoprite mall in Nigeria

"Corporate South Africa needs to invest more. The way to ride a recession is by investing in the economy," Thabo Dloti, Chief Eecutive Officer of Liberty said after announcing that the company had posted a slight increase in annual profit.
South African companies, which according to the central bank are sitting on nearly 700 billion rand ($45 billion) in cash, are increasingly deploying their spare cash abroad.
Investment house Brait spent a total of $2.2 billion to buy two British companies - gym group Virgin Active in April and budget clothes retailer New Look in May.
Truworths International agreed to buy a majority stake in British shoe chain Office Retail Group for $385 million in November.
Liberty reported a 4 percent increase in annual profit, driven by growth in its corporate division and investment arm.
Liberty, a unit of South African lender Standard Bank, said normalised headline earnings per share inched up to 1,464.5 cents in the year to end-December, from 1,403.36 cents the previous year.
Normalised headline earnings, which exclude certain one-time items and take into account the impact of its black shareholder scheme, is Liberty's main performance measure.
The Treasury has said a credit downgrade to sub-investment grade, or "junk" status, could trigger a sharp reversal of capital flows and precipitate recession.
Ratings agencies have said they might cut South African debt to junk status after President Jacob Zuma changed finance ministers twice in less than a week in December, raising questions about Pretoria's commitment to prudent fiscal policy.
*First published by Reuters

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Ghana to keep tight grip on spending ahead of election -president

Ghana's government will not repeat mistakes made during the last election and will maintain strict fiscal discipline ahead of the 2016 vote, President John Mahama told parliament in an annual State of the Nation address on Thursday.
Mahama, who is seeking a second term, faces a tough battle against opposition leader Nana Akufo-Addo during presidential elections scheduled for November. Some economists are warning the government not to overspend in a bid to win victory.
During the previous election in 2012, hikes in civil service wages caused the deficit to mushroom, triggering a fiscal crisis that the government is still working to overcome with the aid of an International Monetary Fund programme.
That crisis, coupled with a fall in global commodity prices, has sharply slowed growth in Ghana. Its economy is based on exports of gold, cocoa and oil and for years it was considered one of Africa's most promising.
Power generation will likely be another critical election issue, after years of crippling blackouts that have hurt businesses and angered voters.
Mahama said Ghana has added power generation capacity more quickly in the past year than at any time in its history, but said it must act quickly to match demand growth and ensure sustainable power supply.

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Nigerian naira weakens on sudden surge in dollar demand

Nigeria's naira weakened against the dollar on the parallel market on Thursday as speculators took advantage of recent gains to mop up dollars, creating fresh scarcity.
The naira was quoted at 350 to the dollar on Thursday, weaker than its 300 per dollar close the previous day.
The naira remains flat around the 197.50 peg rate on the official interbank market, where the central bank introduced curbs last year on access to dollars as a sharp fall in the value of Nigeria's oil exports triggered an economic and fiscal crisis.
The currency of Africa's biggest economy rallied in the week to around 300 a dollar from a low of 400 a dollar after President Muhammadu Buhari on Saturday rejected the idea of devaluing the naira.
But the head of Nigeria's association of bureau de change operators, Aminu Gwadabe, said "hoarding and speculative activities have returned to the market, pushing down the naira's value again."
Another currency trader, Adamu Abdulahi, said demand for the dollar suddenly jumped on Thursday, causing the naira to weaken.
"Many people have been asking to buy the dollar today while not many people are coming to sell to us," Abdulahi said.

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A year on from Nigerian election victory, Buhari's reforms founder

Almost a year after winning an election on promises to fix Nigeria, Muhammadu Buhari's grand vision of reform is fading, with power centralised in his increasingly remote presidency and the bureaucracy in disarray.

President Buhari

After axing almost 50 top civil servants and 40 ambassadors and shaking up ministries in a bid to excise endemic graft, the 73-year-old former military ruler has even started cancelling some weekly cabinet meetings.
His aides said this was because under his predecessor, Goodluck Jonathan, the meeting had become a forum for ministers to hand out over-priced contracts to friends.
Critics say the effect has been to leave government rudderless while Africa's biggest economy flatlines.
Power is concentrated in Buhari's office, where files pile up on the desk of his chief of staff. Ministers appointed only in November - more than six months after Buhari's victory - are reluctant to make decisions, diplomats say.
Government insiders admit things may be getting worse before they get better, but say that is to be expected given the scale of the task in hand.
"Of course it's chaos. We're rebuilding a whole system. There is no depth in the bureaucracy," said a senior government source who asked not to be named.
Buhari is too often absent to provide enough personal guidance, according to his critics.
Since taking office in May, he has been on 26 overseas trips, visiting Saudi Arabia and Qatar this week, where officials say he hopes to drum up interest from investors.
His opponents complain that his external focus comes at the expense of the two pillars of the domestic economy - the oil-producing Niger Delta and Lagos, the sprawling megacity that serves as Nigeria's commercial capital.
He has visited neither as president.
NO BUDGET
Buhari has won plaudits from ordinary Nigerians for fighting graft as part of a crackdown on an elite whose wealth has grown for decades while most of the country's 170 million people remained in poverty.
The army under his command has also reconquered territory from the Boko Haram group in the north, though the jihadists still regularly stage suicide attacks.
But the ascetic general has not yet delivered on a promise to create jobs by ending reliance on oil. His civil service cull has cut avenues for graft but also created knowledge gaps, to the point that the government has so far been unable to produce a viable budget.
Buhari last week fired a senior budget official who had been appointed in August, after he helped to produce a draft which labelled car or computer purchases as capital expenditures, according to Nigerian research group Budgit.
One billion naira - more than $5 million at the official exchange rate - had been budgeted for office furniture alone.
"This was really depressing when we expected that this should be a total shift from the wasteful culture that we had had in the past," said Oluseun Onigbinde, founder of the group.
Buhari fired most of the top management at state oil firm NNPC but his replacements have struggled to get a grip on the massive and opaque entity, officials say. Some projects have been delayed as the newcomers struggle to locate the relevant files in the four NNPC towers.
With no regular meetings, ministers are still trying to figure out what they can achieve, officials say. Buhari merged several ministries but since a cabinet retreat in November, he has left them to drift.
Buhari's aides counter that the cabinet meets whenever there is something to decide, and that the government needs time to work out detailed plans - including funding - for such daunting tasks as road-building or the improvement of Nigeria's notoriously erratic power supply.
But a senior civil servant who asked not to be named said ministers struggled to get the attention of Buhari's office. "There is a proposal, a consultancy does a study but then the report gets ignored," he said.
Buhari asked Vice President Yemi Osinbajo to coordinate economic policy, but diplomats say he is being sidelined as the president personally handles all key issues, including a freeze of the naira exchange rate that is crippling investment.
That leaves businessmen wondering how the West African oil producer can survive its worst economic crisis for decades.
"Policy statements hang but there's no trickle down," said Prince Ike Ubaka, head of the All Farmers Association of Nigeria.
*First published bt Reuters

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Nigeria seeks to abolish visa requirement among D-8 countries

 Nigeria on Wednesday called for abolishing visa requirement among the members of the Developing Eight (D-8) Countries Organization for Economic Cooperation to ensure free movement of both people and trade.
Lai Mohammed, Nigeria's minister of information, culture and tourism, made the call when meeting with Seyed Ali-Mohammed, the D-8 secretary general, in Abuja on Wednesday.
Noting that free movement of people will guarantee free movement of trade, Mohammed urged D-8 members to make sure "there is no barrier in term of visa" among them.
The minister commended the D-8 organization's focus on tourism development, saying the provision of infrastructure is critical to the development of domestic tourism.
For his part, Ali-Mohammed reiterated his organization's determination to help its member states develop tourism and promote cooperation among them.
The D-8 countries include Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey. Enditem
*First published by Xinhua News Agency

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Amnesty Internationa says impunity fuels instability, conflict, human rights violations

Amnesty International, or AI, said on Wednesday in its annual report that impunity continues to fuel instability and conflict in Africa, which overshadows the tentative progress of human rights in the continent.
Adopting historic commitments such as Agenda 2063 of the African Union, or A.U., and the social and economic development of many African countries have been overshadowed by conflicts in Somalia, Nigeria and Central African Republic, which has resulted in thousands of deaths and millions others who were forced into displacement.
"East Africa saw a shameful rise in human rights violations in 2015. These were particularly marked around elections, which were marred by bans on protests and rallies, excessive use of force against demonstrators and arbitrary arrests of human rights defenders, journalists and members of the political opposition," East Africa, the Horn and the Great Lakes Director, Muthoni Wanyeki said.
"Some regional governments continued their regrettable diplomatic offensive against international justice and the International Criminal Court to ensure impunity for political leaders accused of international crimes. Impunity continues to fuel instability, conflict and human rights violations," Wanyeki added.
In this regard, AI denounced the South African government for not arresting Sudanese President Omar al-Bashir during his visit to that country in June to attend the A.U. summit.
The report insisted that violations of human rights in the continent are committed by both government forces and armed groups, and shed the light on violations by state armies which foster distrust of local populations, as has happened in Nigeria.
AI also emphasized state repression against dissidents, journalists, lawyers and judges, especially in countries like Angola, Swaziland and Zimbabwe.
Moreover, many African refugees and migrants faced intolerance, xenophobia, abuses and violations, while languishing in camps that do not offer access to water, food or medical care.

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South Africa's MTN withdraws case against Nigerian regulator - Reuters News

South African telecoms firm MTN Group has withdrawn its legal action against Nigeria's regulator over a $3.9 billion fine and paid $250 million towards a possible settlement, the company said in a statement on Wednesday.
Africa's leading telecoms firm was fined by the Nigerian Communications Commission in October for failing to disconnect unregistered SIM users, prompting weeks of lobbying to reduce the fine.
The original amount was based on fining the company $1,000 for every unregistered SIM card in use.
"MTN Nigeria has today made an agreed without prejudice good faith payment of 50 Billion Naira ($251.3 million) to the Federal Government of Nigeria on the basis that this will be applied towards a settlement, where one is eventually, hopefully arrived at, the company said.
MTN, which makes 37 percent of its sales in Nigeria, said it would withdraw its court challenge in an effort to reach an amicable settlement.
Shares in the company rose about 2 percent ay 1158 GMT to 130.37 rand.
*First published by Reuters

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Nigeria to raise 329.93 bln naira in treasury bills

Nigeria plans to raise 329.93 billion naira in treasury bills with maturities range between 3-month and 1-year at an auction on March 2, the central bank said on Wednesday.
The bank said it would issue 57.85 billion naira in the 3-month bill, 50 billion naira in the 6-month paper and 222.08 billion naira in the 1-year debt, using the Dutch Auction System.
Nigeria issues treasury bills to help manage banking system liquidity and provide cash flow for government business.

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Nigeria interbank rate eases on expected cash refund

Nigeria's overnight interbank lending rate dropped to an average of 1 percent on Friday from around 4.5 percent on Thursday as the market anticipated refunds of cash deposited by commercial lenders for foreign exchange purchases.
Traders said liquidity dropped sharply in the week and the cost of borrowing climbed after commercial lenders moved cash to their naira accounts with the central bank to enable them to take part in the weekly forex intervention on Thursday.
On Tuesday, banks deposited about 700 billion naira ($3.5 billion) to back their planned forex purchases, draining liquidity in the banking system and pushing the lending rate above 4 percent.
"The cost of funds dropped today (Friday) based on expectation that the central bank will refund a portion of cash deposited for forex intervention before the close of business," one dealer said.
The central bank usually intervenes once a week in the official interbank foreign exchange market to provide dollars for eligible importers, while it requires commercial lenders to fund its naira account 48 hours ahead of the intervention.
Traders said they were expecting around 450 billion-500 billion naira in refunds from the central bank, raising the level of cash credits in favour of commercial lenders and helping to hold down interbank lending.
The total commercial lenders' credit balance with the central bank stood at 376 billion naira at the start of trading on Friday, but is set to rise by Monday to reflect the refunds.
The secured Open Buy Back (OBB) traded at 0.5 percent on Friday, against 4 percent the previous day.
The interbank rate reflects the level of naira cash liquidity in the banking system.

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EDITORIAL:The compelling reasons for naira devaluation now

The nation currency, the naira hitch is week hit its record low at the parallel market, trading shy of 400 naira to one dollar by Friday.
The report showed that Nigerian currency is gradually going the way of the old Ghana cedi and Uganda shilling, which were worth less than the value of the paper they were printed upon.
Nigeria found itself in this critical situation today because of the mismanagement of the economy by the successive administrations that refused to project into the future and foresee a situation where crude oil will no longer sustain our appetite for importations of all goods. 

Today, crude oil price has fallen globally to around $28.85 per barrel, while our foreign exchange reserves have dropped to around $27.83 billion by February 12, their lowest level in more than 11 years.

Emefiele, CBN boss

Few years ago, Nigeria was earning an average of $114 per barrel of oil and instead of expanding our industrial base, build infrastructure and genuinely invest in the welfare of the citizens, our government was busy sharing the commonwealth among the elites to the detriment of all. Today, not only the nation’s currency that is going through tough time, the entire economy is in a state of comatose, inflation is gradually rising while everywhere you go, poverty is fast accelerating.
The major issue on the mouth of most Nigerians, surprisingly including the market women and ordinary Nigerians on the street is the exchange rate of the nation’s currency.
The debate has been either to devalue the naira or continue to maintain the culture of fix exchange rate, which allow the central bank to administratively determine the exchange rate of the naira rather than allow market forces. President Mohammadu Buhari has came out boldly to tell the whole world he was not ready to “kill the naira,” by this he meant he was not willing to succumb to the advice of the economists and foreign investors advocating that a more flexible exchange rate, determine by the forces of demand and supply should be allowed.
From both the President and CBN perspective, fixing the exchange rate will protect the interest of the common man and reduce the impact of imported inflation on the economy. It was argued that Nigeria sole export commodity, crude oil is determined in dollar, so to them it was a common sense that since we do not determine the price of crude oil, devaluation will not be in our favour.
Therefore, the central bank in its wisdom chose to fix the exchange rate at 197 naira to the dollar and decided to allocate the hard currency to sectors it deems fit require it. What we have is a class of privilege companies and individuals who have access to the foreign exchange reserves of the country at a subsidies rate while the rest are pushed to scramble for the crumbles at the parallel market.
Their argument was that those privileged ones who have access to the dollar on the official window would use the allocation to develop local capacity for productions of essential goods and service that will catapult the economy back to life.
However, at the current rate of 400 naira to the dollar in the black market as at Monday, the margin between the official window and the parallel market rates have widen to 203 naira on each dollar.
What this means is that if an eligible transaction on the official window sail through at 197 to a dollar with about $10 million purchased to import goods or raw material for manufacturing, the company or individual involved will think twice before actually carrying out the legitimate transaction.
By the time you multiply $10 million by 203 naira, what you get is 2.03 billion naira profit when such money is arbitraged. Common sense will tell us that the profit margin is so tempting that the person or company that is able to get such allocation from the official market would rather want to take the risk of arbitraging than to carry out the original purpose s/he or firm obtained the money from the official window. Giving the stress and other unstable factors in the economy today, most participants at the official interbank foreign exchange market would rather divert the money to the market and make cool profit in collaboration with some unscrupulous officials who will be happy to take a bite from the national cake.
The government should consider the implications of subsidizing the rich at the expense of the poor. By implications, the current exchange rate policy of the central bank of Nigeria (CBN) is more favourable to the elites than the so-called poor it was meant to protect.
Nigeria is bleeding and some blood sucking demons at the CBN are smiling to the bank, telling President Mohammadu Buhari that fixing the exchange rate is the best to support the poor.
The revelation that some directors of the CBN were conniving with bureau de change operators to defraud the nation should be enough signals to what is obtained at the regulatory bank. Merely profiting from the misfortune of the nation has always been the prerogative of the elites and those who have the privilege of been at the leadership of the economy management.
The first step toward rescuing Nigerians from the economic stagnation is to allow a free float exchange rate that will enable the naira to discover its true value or appropriate price. Let the government focus on developing the other neglected sectors of the economy and encourage local manufacturing of products that will have impact on the lives of the common man. Let the government diversify the economy in such manner that we can start promoting locally manufactured good for both export and local consumption.

Dollars

The short term pain of devaluation can not be compared with its long term gain. If the import become so expensive due to devaluation of the naira, then people can start looking inward for the alternative locally. Nations like China closed its door for importations of foreign good for many years before they finally opened up some years back, today the Asian country is a world power having developed local capacity that could overwhelm the entire world.
Let the elites that are always in need of the dollar pay the appropriate price for the commodity.
Government should with a matter of urgency sack the current governor of the central bank, Godwin Emefiele, he has outlived his usefulness in the management of the monetary policy. Rather than protecting the poor, his policy of administrative control of the exchange rate has brought more hardship to the ordinary Nigerians. Same way his introduction of maintenance fee on bank accounts of depositors has increased the exploitation of the ordinary Nigerians by the lazy armchair bankers.
Now banks are let loose on the common man with the introduction of arbitrary charges called maintenance fee, raking in millions of profit doing nothing.
It's time the Buhari administration redefine its economic policy, set up a team of experts that will holistically appraise our present economic situation as a nation and work out modalities for the way forward.
This is the only way Nigerians can truly believe the Buhari administration is meant to serve the cause of the common man and not the interest of the same elites that have consistently exploit weak economic policy to their best interest.

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South Africa's MTN shares slump 13 pct on profit warning

Shares in MTN Group slumped more than 13 percent on Friday, a day after the South African mobile company flagged it would report at least a 20 percent drop in annual profit.
Shortly after the market closed on Thursday, MTN said the expected fall in profit was due to underperformance in Nigeria, where it faces a $3.9 billion fine for failing to cut off more than 5 million SIM card users by the set date.
Africa's biggest mobile phone company said the profit warning did not include the penalty because it was still in talks with regulators about the final size of the penalty.
"There remains some uncertainty as to the final quantum (amount) of the Nigerian fine, should an out of court settlement be reached," the company said.
MTN was handed a $5.2 billion penalty in October, prompting weeks of lobbying that led to a 25 percent reduction to $3.9 billion but the company was still not prepared to pay the lower fine, which equates to more than twice MTN's annual average capital spending over the past five years.

*Firs published by Reuters

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Improving European markets boost Coca-Cola HBC

Soft drinks bottler Coca-Cola HBC's sales volumes in its established Western European markets rose last year for the first time in five years, it said on Friday, citing gains in Italy and Greece.
The European company, which bottles and sells Coca-Cola drinks in 28 countries including Russia, Ukraine and Nigeria, also forecast 2016 volume growth and substantial improvement in revenue per case, excluding foreign currency effects exchange, for all three of its market segments -- established, developing and emerging.
Credit Suisse analysts described the outlook as relatively upbeat and said that the bottler's 2015 earnings per share were 2 percent above expectations.
Shares in the company, which started life in Greece in 1969 but has moved its headquarters to Switzerland and its stock listing to London, rose 4 percent in morning trade.
Revenue for 2015 fell 2.5 percent to 6.35 billion euros ($7 billion). Foreign exchange rates reduced revenue by 5.1 percentage points, the company said, citing the weakening of currencies such as the Russian rouble.
Sales volume were up 2.6 percent and comparable earnings before interest and tax rose 11.4 percent to 473.2 million euros, with margins expanding by 100 basis points as price increases and lower input costs helped to offset the impact of weak currencies in many emerging markets.
The company said that its outlook is characterised by increased volatility and mixed prospects, with some markets likely to benefit from low oil prices in contrast to the likes of oil-exporting nations Russia and Nigeria.
Currency effects were forecast by the company to reduce earnings before interest and tax (EBIT) by 135 million euros for the full year.

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Nigeria sets up committee to advise on first sovereign sukuk

Nigeria has set up a government committee to advise on issuing the country's first sovereign sukuk, the Securities and Exchange Commission (SEC) said on Thursday, citing the need to explore alternative funding sources.
Africa's biggest economy plans to borrow as much as $5 billion to help fund a budget deficit worsened by the slump in oil prices that has slashed revenues and weakened the naira.
SEC spokesman Nalf Abdusalam said the new committee, including officials from the Debt Management Office (DMO), would advise on the amount to be raised, the timing and jurisdiction of the issue.
"Any time from the first week of March, the committee is expected to submit its report," he said.
Islamic banking assets globally now exceed $1 trillion and could reach $4 trillion by 2020, analysts say.
Nigeria has asked the African Development Bank for a $1 billion budget support loan and has held "explanatory talks" with the World Bank.
Issuance of a sovereign sukuk is part of a strategic plan developed by the DMO three years ago to develop alternative sources of funding and to establish a benchmark curve for corporates to follow.
In 2013, Nigeria's Osun State issued 10 billion naira ($62 million) of sukuk, but no other sukuk transactions have followed.
Nigeria is home to the largest Muslim population in sub-Saharan Africa, with about half of its 160 million people members of the Islamic faith. It is also home to one of Africa's fastest growing consumer and corporate banking sectors.
In January, the DMO and SEC agreed to work on a debut issuance of sovereign Islamic bonds (sukuk) before the end of the year.
*First published by Reuters

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Nigerian scholars laud strong Sino-Nigeria cooperation

Scholars in Nigeria on Thursday hailed the strong partnership existing between China and the West African country while calling for more opportunities to further progress the partnership.
The scholars, who delivered papers examining the mutual benefits so far enjoyed by both countries, gathered in Abuja to discuss the future of Sino-Nigeria cooperation.
In his address, director of the Center for China Studies Charles Onunaiju said the discussions at the event proved that China-Nigeria bilateral cooperation has even more prospects.
He urged Nigeria, Africa's most populous nation to continue to find a niche in Beijing's global development trajectory that seeks to foster inclusive prosperity, mutual benefits and peace dividends.
China's ambassador in Nigeria Gu Xiaojie said equality and mutual trust, unity and coordination in international affairs have served as the fulcrum of cooperation between the two countries since they launched bilateral relations in 1971.
"As good partners, the two countries always adhere to win-win cooperation and common development, thus bringing its benefits to our peoples; always attach great importance to people-to-people and cultural exchanges, thus making stronger the social and civil foundation for bilateral relations," the envoy said.
Over the years, Nigeria has become China's biggest engineering contract market. It has also become the Asian country's second largest export market and third largest trading partner in Africa. Enditem
*First published by Xinhua News Agency

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Ghana's cedi seen holding firm, Nigeria's naira on back foot

Ghana's cedi is seen holding firm in the coming week, buoyed by steady dollar sales by mining firms, while the Nigerian naira is expected to weaken in the parallel market on persistent greenback scarcity.
GHANA
Ghana's cedi is expected to hold firm on steady dollar sales by mining firms and offshore offers, analysts said.
After weakening nearly 4 percent in January on seasonal dollar demand from importers and speculative buyers, the cedi has been stable in recent weeks. It was quoted at 3.92 to the greenback at 0954 GMT on Thursday, compared with 3.96 the week before.
"Demand has not been as strong as you'd expect and supply of U.S. dollars to the market has been firm in the circumstances," analyst Joseph Biggles Amponsah of Dortis Research said.
NIGERIA
The Nigerian naira is expected to continue to fall on the parallel market as dollar scarcity persists, while the central bank's dollar ratio rule at its official interbank market will also put pressure on the currency.
The local currency was trading around 365 to the dollar on the parallel market, down 13.7 percent from last week's close of 321 a dollar. The naira remained fixed at 197 to the dollar on the interbank market.
Traders said the central bank only allocated between $150-$200 million weekly to importers, but this is considered a drop in the ocean compared with requests pilling up by commercial lenders seeking dollars for their customers.
"The way out of the present situation is for the central bank to relax some of its rule of forex, otherwise the naira will hit 400 naira soon," one trader said.
*First published by Reuters

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Nigeria auctions 142 bln naira treasury bills at lower yields

Nigeria sold 142.43 billion naira ($715.73 million) worth of three-month to one-year treasury bills on Wednesday, at lower returns than in its previous auction, the central bank said on Thursday.
The bank raised 32.43 billion naira of three-month paper at 4.85 percent, down from 4.95 percent at a sale on Feb. 3.
The bank sold 30 billion naira of six-month debt at 7.3 percent against 7.97 percent, while it sold 80 billion naira of one-year paper at 8.98 percent compared with 9.49 percent.
Total subscription rose to 513.71 billion naira from 400.82 billion naira at the previous auction.
The 3-month bills closed at 3.50 percent on the secondary market on Wednesday, the 6-month traded at 7.08 percent while the one year paper closed at 9.29 percent.
Africa's biggest economy issue treasury bills to banks and non-financial institutions to help ease government cash flow, manage banking system liquidity and curb inflation.

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Nigerian stocks down on profit booking, naira concerns

Nigerian stocks fell almost two percent on Wednesday, hit by a major decline in cement companies' shares, including Dangote Cement, which accounts for the third of local bourse capitalisation.

Stock brokers on NSE floor

The local bourse index dropped 1.81 percent to 24,070 points at 1248 GMT as investors took profits from previous gains on the stocks.
"Due to the rapid decline of the naira's value, some offshore investors are booking profit and selling down their holdings," one stock broker said.
Shares in Dangote Cement fell 4.11 percent, Ashaka cement was down 4 percent while Cement Company of Northern Nigeria dropped 8.89 percent to drag the index down.
Currency and stock markets have been hit hard by the persistent fall in crude oil, Nigeria's main export, triggering a fall in government revenues and the exit of foreign investors from the local bourse.
Nigerian currency was trading within a range of 352 and 360 a dollar on the parallel market on Wednesday, down to a new record low from a range 347 to 352 on Tuesday due to persistent dollar shortages amid control by the central bank.
The stock index, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, has declined by around 14.41 percent since January because of concerns over the naira's depreciation and the unwillingness of the West African country to adjust its exchange rate.

*First published by Reutes

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West Africa oil projects face yet longer delays than rivals as prices languish

Oil firms have put major projects in West Africa on hold because of low prices - as they have across the globe - but when the market finally picks up, development is likely to recover much more slowly in the region than elsewhere.
High costs bedevil the region, which includes established producers such as Nigeria and newer entrants like Ghana. Add to this long-standing problems of poor infrastructure, complex bureaucracy and politics, and West Africa may be well down the list for any investment revival.
A dive in oil prices since mid-2014 has forced international energy companies to postpone or cancel hundreds of billions of dollars in investment all over the world.
In West Africa it has made projects for Royal Dutch Shell and Tullow Oil uneconomic, and hurt regional economies that rely heavily on energy revenue.
Already, Gabon has cut its 2016 budget because of low oil income and Ghana is considering doing the same. African oil exporters further afield, such as Angola, are also feeling the pain.
"There is no doubt that the amount of capital expenditure over the next five years will be severely reduced," said Andrew Hayman, an Africa oil and gas project specialist at data provider DrillingInfo. "From the bigger producers like Nigeria and Angola to the smaller producers, the capital will just not be available."
According to the United Nations, overall foreign direct investment in Central and West Africa, which includes major oil and gas projects, fell 44 percent to $14.2 billion last year, greater than the 31 percent drop for Africa as a whole.
The number of oil and gas rigs in the region dropped by two thirds to 18 in December 2015 compared with the same month in 2014, according to U.S.-based oil service firm Baker Hughes, which conducts surveys on rig activity globally.
"Capital investors are getting cold feet about new investment," Hayman said. "Countries in West Africa will be lower down their list so investment will be longer coming back."
BIG COST PROBLEM
Africa holds 129 billion barrels of proven oil reserves, according to PricewaterhouseCoopers, or nearly 8 percent of the global total. Development varies widely from Nigeria, a prominent world player, to Gabon, which is struggling to maintain output from maturing fields.
There are bright spots. Senegal is beginning to establish offshore potential, with Kosmos Energy saying last month it had discovered a "significant" amount of natural gas off its Atlantic Coast.
But much of West Africa's oil and gas is offshore where drilling is expensive: sub-ocean wells can cost $100 million each and whole projects billions. Accordingly, many multinationals have cut offshore development.
Offshore projects made sense back in early 2014 when oil was above $100 a barrel but this week it is little more than $30. By contrast, in the United States, which has large shale oil deposits onshore whose geological make up is well known, wells can be drilled for a few million dollars.
These are the kind of projects that will be revived first whenever oil prices finally rebound. West African projects will need to be not only viable, but also compete with such production if they are to attract investment.
"There is a big cost problem in West Africa," said Gail Anderson of U.K.-based consultancy Wood Mackenzie. It reckons only a third of the $270 billion of oil projects in the planning stage in sub-Saharan Africa are viable when oil is below $50.
CUTTING BACK
On Feb. 4, Shell said it was delaying its Bonga South West project offshore Nigeria for at least another year as part of global cost cuts. Its final investment decision, first mooted for 2015 or 2016, will now not be made before 2017.
For Shell it makes sense to wait. Bonga South West involves the construction of a complex floating production and storage facility and the project's numbers were last crunched when oil was nearer $100.
"Bonga Southwest ... ought to be a good project," chief executive Ben van Beurden told analysts. But, he said, "we need to get to a point that we believe not only is the project affordable ... but also competitive."
Six days later, Africa-focused Tullow Oil said it was considering halting drilling of new wells offshore Ghana while prices remain depressed.
Tullow has already halved investment in West and Central Africa to $100 million per year. It could come down further, Tullow said last week, and possibly remain low into 2018 - a factor likely to hit production.
"Exploring today in this oil price environment is not something you should be doing," chief executive Aiden Heavey said. "It will be very difficult to get banking for any developments, so you focus on the assets that you have."
*First published by Reuters

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Nigerian naira hits record low of 345 vs dollar

Nigeria's naira weakened to a record 345 to the dollar on the parallel market on Monday, increasing pressure on the government to devalue the official exchange rate to narrow the gap and spare Nigerians from huge bills for imported goods.
The local currency eased 1.47 percent from Friday's close of 340 to the dollar, while the official rate remained at 197.50 to the dollar at the close of trading on Monday.

Dollars

Traders said the black market rate had slipped as Nigerians with school and medical bills to pay abroad anticipated the central bank would stop allocating currency for such payments. The bank has not denied or confirmed any such plans.
Tumbling global oil prices have battered Africa's top crude exporter, with foreign exchange reserves down to an 11-year low at $27.85 billion by Feb. 11.
Nigeria's government is concerned that further depreciation will hurt poor Nigerians, but the bank's refusal to revise the pegged exchange rate has widened a chasm between official rates and the parallel market.
"In my own view, the central bank should address the supply side of the market by allowing oil companies and banks to sell dollar to bureau de change operators as an immediate measure to reduce pressure on the naira," said Aminu Gwadabe, head of the Association of Bureau de Change Operators of Nigeria.
Last month, Nigeria's central bank halted dollar sales to non-bank foreign exchange operators and allowed commercial banks to accept dollar deposits, in a failed effort to shore up dwindling foreign reserves.
Nigeria earns around 90 percent of its foreign exchange earnings from crude oil exports, but mismanagement of its refineries means it must also import expensive refined fuel, eating deep into its reserves.

*First published by Reuters

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Nigeria's 'bad bank' AMCON seeks to sell Keystone Bank

Nigeria's state-backed "bad bank" AMCON said on Monday it was seeking prospective investors to buy Keystone Bank, the last of the nationalised banks yet to be sold.
The Asset Management Corporation of Nigeria (AMCON) said in a public notice it had decided to divest its 100 percent interest in the bank and ask prospective buyers to submit their bids by March 4.

AMCON appointed Citibank's local unit and FBN Capital as financial advisers to manage the process, asking prospective investors to submit bids, showing evidence of credibility and eligibility for the transaction.
Nigeria nationalised three lenders, Afribank, Spring Bank and Bank PHB in 2011, while AMCON then recapitalised them and changed their names to Mainstreet Bank, Enterprise Bank and Keystone Bank. Two of the banks have since been sold.
Based on audited account as of June last year, Keystone bank has a total assets of about 317.6 billion naira ($1.60 billion), equity of 18.9 billion naira and a loan portfolio of about 98.2 billion naira.
By Dec. 31, the Bank had 156 branches across the country with four subsidiaries, of which two are international, AMCON said in the notice.
Nigeria's Sterling Bank told Reuters on Friday it was aiming to buy one or two mid-sized commercial lenders as sharp falls in the value of the naira and increased regulatory pressure are forcing banks to recapitalise.
AMCON was set up in 2010 to absorb non-performing loans in exchange for government bonds, after the central bank injected $4 billion to rescue nine lenders from collapse seven years ago.

*First published by Reuters

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OPEC members increasingly keen to end oil glut -Nigeria oil minister

The mood inside the Organization of the Petroleum Exporting Countries (OPEC) is shifting from mistrust to a growing consensus that a decision must be reached on how to end the global oil price rout, Nigeria's oil minister told Reuters.

Kachiwku

Oil prices have slumped by more than 70 percent to near $30 a barrel over the past 18 months as OPEC, led by top producer Saudi Arabia, sought to drive higher-cost producers out of the market by refusing to cut production despite a supply glut.
The price crash has crippled some economies that depend heavily on oil sales for income, such as Nigeria and Venezuela, and even Saudi Arabia is shoring up its resources to withstand the painful revenue drop.
"There's increased conversation going on. I think when we met in December ... they (OPEC members) were hardly talking to one another. Everyone was protecting their own positional logic," Nigerian oil minister Emmanuel Ibe Kachiwku told Reuters in an interview.
"Now I think you have cross-logic ... they are looking at what are the deficiencies, what is the optimum."
Struggling oil producers have made repeated calls for an emergency OPEC meeting, but Kachikwu said that the timing had not been right. The cartel's next regular meeting is in June.
"We haven't been sure that if we held those (emergency) meetings that we could actually walk away with some consensus," Kachikwu said.
"A lot of barrels are tumbling out of the market from non-OPEC members, so the Saudi philosophy is obviously working. But it's not influencing the price higher, which means that whether we like it or not some barrels are coming in from ... members and non-members to cover whatever is dropping out."
IEA WARNING
The International Energy Agency said on Jan. 19 that oil markets could be oversupplied by as much as 1.5 million barrels per day in the first half of 2016 and warned that prices could decline further as Iran's emergence from economic sanctions brings more crude to the market.
OPEC has declined to trim output without help from non-members, which so far have refused to participate. Russia, the world's biggest oil producer, has played coy by floating the idea of a cut without saying whether it would participate.
In an attempt to find a compromise, Venezuela's oil minister recently proposed a freeze on new production to place a cap on the growing glut while not requiring countries to surrender market share.
Kachikwu said that he would meet his Qatari and Saudi counterparts next week to discuss the situation.
"Have we got to the point where we can say there is a definite strategy? In terms of production reduction or freezing, no, I don't think we have got there. But there is a lot of energy (behind the idea)," Kachikwu said.
"As you get closer to the statutory (OPEC) meeting dates ... you are going to see a lot more people get active in those conversations and try to find solutions."

*First published by Reuters

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IMF to start talks with Tunisia over new loan programme - official

A delegation from the International Monetary Fund will visit Tunisia on Thursday to begin talks on a new credit programme likely to be worth at least $1.7 billion, a Tunisian official said.
Tunisia is seeking to revive an economy that has struggled since the 2011 uprising that sparked the Arab Spring revolutions across North Africa, with deadly attacks last year by Islamist militants hitting the tourism industry on which it relies for jobs and revenue.
The country has been praised as an example of compromise politics and democratic transition since the overthrow of autocrat Zine El-Abidine Ben Ali. But protests across the country to demand work last month turned violent, underscoring the fragility of the economic progress.
The North African nation is about to get a loan of 500 million euros from the European Union to support the economy, and former colonial ruler France last month pledged 1 billion euros in aid over five years.
The new IMF programme will succeed a two-year deal totalling about $1.74 billion that was agreed in 2013 and extended last year by seven months to buy time for Tunisia to put banking and fiscal reforms in place.
Under the programme, Tunisia also agreed to follow certain economic polices, such as keeping its deficit under control and making the foreign exchange market more flexible.
*First published by Reuters

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Nigeria in talks with oil majors to repay debt, invest in refineries

Nigeria is in talks with oil majors and banks to raise capital for new drilling and to repay up to $4 billion in debt that the state oil firm has accumulated over years of mismanagement, the firm's head told Reuters.

Kachikwu

Emmanuel Ibe Kachikwu, who is also the minister of state for petroleum, said he wanted to increase output to up to 2.5 million barrels per day by the end of 2016. Currently, the OPEC member pumps 2.3 million bpd.
President Muhammadu Buhari has made reforming the oil sector a priority as a slump in oil prices hammers the economy. The former military ruler has fired the NNPC board and appointed Kachikwu to overhaul a company whose opaque structures have allowed corruption and oil theft to flourish.
Nigeria's oil and gas output has been relatively stagnant as big offshore projects have been held up by much-delayed government funding and uncertainty over fiscal terms.
Africa's biggest economy produces oil with foreign and local firms through production-sharing contracts and joint ventures (JVs) but investments have been held up because NNPC has been unable to pay its part: bills have been piling up since 2012.
Kachikwu said debt as of November stood at $3.5-$4 billion, which NNPC wanted to cut through deals such as a $1.2 billion multi-year drilling financing signed with Chevron in September.
"The target is that over 2017, we'll begin to look at zero," he said in an interview, referring to debt and the goal of ending the need for JVs to depend on NNPC cash.
NNPC was in talks with oil majors such as Italy's Eni and oil traders Vitol and Gunvor, seeking partnerships to revamp assets such as refineries after decades of neglect. Cash-strapped for years, it reported a loss of 267.14 billion naira ($1.3 billion) for 2015.
"My ideal would be to bring in third party capital, do a joint investment and management of the refineries and work out a pay-out process over 5 to 6 years basically on lifting of some portion of the finished products," Kachikwu said.
He added that the government would also advertise concessions for pipelines and depots next month.
RAISING FUNDS
NNPC was also looking into revamping joint ventures with local firms to boost productivity but this would depend on the Petroleum Industry Bill (PIB), a project to revamp the sector held up in parliament for years.
Kachikwu said NNPC was in talks with the Senate to speed up the process by splitting the PIB into three parts covering governance, taxation and business items such as oil block licensing.
NNPC would also restructure strategic alliance agreements held by Atlantic Energy to raise funds for oil blocks sold by Royal Dutch Shell.
The controversial deals were signed under the previous oil minister Diezani Alison-Madueke, who was briefly arrested in London last year on suspicion of corruption.
Former central bank governor Lamido Sanusi alleged that Atlantic's deals were one route through which tens of billions of dollars in oil revenues were diverted from state finances.
Kachikwu said NNPC expected to conclude a deal within two months for a new partner to pay up to $1.3 billion to take over the Atlantic agreements. The blocks were originally sold to indigenous oil companies by Shell.
"I'm saying to Atlantic, sorry, you're out because there's been a breach," he said. "Whoever comes in has to give a sign-in fee almost equivalent to what I've lost ... we'll have a massive increase in volume out of those fields, we're going to have 150,000 to 200,000 bpd from the current 40,000 to 50,000 bpd."
*First published by Reuters

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Nigerian interbank rate eases after liquidity rises

Nigeria's overnight interbank lending rate eased to an average of 0.75 percent on Friday from around 3 percent midweek after the central bank let cash flow into the market from matured treasury bills, traders said.
The central bank injected around 234 billion naira ($1.2 billion) in matured opened market operations (OMO) bills on Thursday and additional refunds on cash deposited by commercial lenders for foreign exchange purchases by Friday, increasing the liquidity in the banking system.

Emefiele, CBN Boss

The cost of borrowing between banks had climbed to 3 percent on Wednesday after the central bank directed commercial lenders to fund their naira accounts to enable them to take part in its forex intervention on Thursday.
The central bank intervenes once a week in the interbank foreign exchange market to provide dollar liquidity for some eligible importers.
The total commercial lenders' credit balance with the central bank is seen at around 700 billion naira on Friday because of refunds from the surplus cash deposited for forex purchases, compared with 314 billion naira last week.
The secured Open Buy Back (OBB) rate fell to 0.50 percent from 1 percent last week.
The interbank rate reflects the level of naira cash liquidity in the banking system.
"Interbank rates are seen oscillate between 1 percent and 3.5 percent next week on provisions for foreign exchange purchase and possible issuance of OMO bills by the central bank during the week," one dealer said.
*First published by Reuters

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Lagarde faces quadruple challenge at IMF

By Swaha Pattanaik

Lagarde IMF boss

Christine Lagarde's second term as manager of the International Monetary Fund will be no more relaxing than her first. The French national already navigated a near-implosion of the euro zone. Now her challenges are fourfold.
First, low oil prices are pushing the more fragile energy-producing countries into the IMF's arms. Lagarde said on Feb. 4 that help would be available if the likes of Nigeria and Azerbaijan needed it. At least such missions are well within the IMF's comfort zone. Second, a rout in emerging markets is spreading to developed ones. Rising borrowing costs add pressure to highly indebted countries, but the wisdom of prescribing endless rounds of austerity has been called into question since the financial crisis. New approaches may therefore be necessary.
Third comes unfinished business in Europe. The IMF won't lend Greece more money until its debt pile is slashed from 171 percent of GDP in the third quarter of 2015 to far more sustainable levels. However, it is supposed to monitor progress on austerity and reforms. Lagarde has also been pressing European countries to offer significant debt relief to Greece, the first advanced country to default on the IMF. More all-night summits could be on the cards before any of this is sorted out.
Then there is China. Lagarde banked credit with the world's second biggest economy after shepherding the yuan into the elite club of currencies that underpin the IMF's Special Drawing Rights. She now has to deal with the consequences. Lagarde has publicly said markets need more clarity about how China is managing its currency. Further gyrations in the yuan may force her to adopt a sterner line. Beijing can hardly be left to its own devices given its importance for the global economy. Yet since it won't need IMF financial assistance, the fund has little negotiating leverage.
Lagarde, a former lawyer, has already proven her talent as a diplomatic and indefatigable negotiator during the euro zone crisis. Big emerging economies backed her re-election, which suggests she has so far struck the right balance of offering advice without hectoring. These will be useful skills for her second term.
CONTEXT NEWS
Christine Lagarde has been nominated to a second term as the managing director of the International Monetary Fund, the IMF said in a statement on Feb. 11. The IMF said nominations for its top official had closed on Feb. 10 and that Lagarde was the only candidate nominated.
Reuters: IMF nominates Lagarde to a second term leading agency 

*First published by Reuters

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South Africa car industry faces tough 2016 as economy falters

South Africa's car sector, the country's largest manufacturing industry, faces a third successive year of declining sales as a weak economy and rising interest rates hit demand for vehicles, the head of its manufacturer' association said on Thursday.
After four successive years of growth in new vehicle sales from 2010 to 2013, total sales in 2014 fell 0.7 percent, followed by a 4.1 percent drop last year.

C-Class Mercedes

South Africa's central bank cut its economic growth forecast for this year to 0.9 percent from 1.5 percent, slightly above the 0.7 percent and 0.8 percent estimated by the International Monetary Fund and the Wold Bank respectively.
"The industry's outlook has become more pessimistic for 2016. The industry is looking at a rather unfavorable environment as far as economic growth is concerned," Nico Vermeulen, director of the National Association of Automobile Manufacturers of South Africa, told Reuters.
"2016, we think, will be an even more difficult year and we're now forecasting domestic vehicle sales declining by between 9 percent and 10 percent in volume terms to about 375,000 units, down from 412,826 sold in 2015."
Sales volumes grew by 20 percent-plus in the years when the economy grew at 5 percent or more, Vermeulen said, and that a decline looks inevitable with economic growth expected to be only 0.9 percent this year.
The automotive industry contributes 7.2 percent of South Africa's GDP, accounting for 3.8 trillion rand ($238 billion) in2014.
The likelihood of above-inflation price increases for new vehicles, as well as the prospect of further increases to interest rate after the central bank raised rates by 50 basis points in January, is expected to dampen domestic demand for new vehicles.
Vermuelen has higher hopes for exports, however. Assuming an improvement in the global economy, Vermeulen said car exports could rise by 12.5 percent this year, lifted by demand from Europe and United States.
He added that Mercedes Benz had resumed exports of the new C-Class model after parent company Daimlerrelaxed production conditions for its four C-Class plants around the world, while Toyota is launching a new Hilux model this month.
Exports to other African countries are declining, however, with increased customs duties in Nigeria and regulatory changes in Algeria denting prospects in two key markets, Vermeulen said.
Vermeulen said that imminent wage talks and the potential for strike action pose another threat.
"If South Africa cannot supply, that will go somewhere else. So if we become unreliable in terms of supplying global markets, that will definitely have implications for future models being allocated here," he said.

*First published by Reuters

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