Nigerian interbank rate falls on budget, treasury bill funds

Nigeria's overnight interbank rate eased to an average of 3 percent on Friday from 5 percent last week after banking system liquidity rose thanks to the March distribution of oil revenues to government agencies and the maturation of treasury bills.

Emefiele, CBN gov

Africa's biggest economy, Nigeria distributes revenue from its crude exports among its three tiers of government - federal, states and local. A portion of state and local government revenues pass through the banking system.
Traders said that about 200 billion naira ($1.01 billion) in budget allocations were injected into the banking system on Monday, while 96.36 billion naira in matured treasury bills reached the system on Thursday, increasing liquidity and forcing down the cost of borrowing among commercial lenders.
The level of liquidity in the banking system was raised as well by additional cash inflow from a cash call payment to joint crude oil production partners by the government during the week.
Traders, however, said the central bank issued a series of treasury bills to mop up excess liquidity in the system, curbing inflation and reducing the negative impact on forex demand.
The central bank floated open market operations treasury bills worth 105.27 billion naira from the banking system twice in the week to get rid of excess liquidity. It also debited banks for cash reserves ratio of about 16.2 billion naira.
"Even with the cash withdrawals by the central bank through OMO auction and CRR debit, the market remains liquid and able to support lending activities at the 3 percent level next week," one dealer said.
Traders said the liquidity level stood at around 454 billion naira on Friday, compared with 232.85 billion naira last week.
The interbank rate, which reflects the level of naira cash liquidity in the banking system, is expected to remain broadly stable next week because of expected lower cash outflow from the system, traders said.

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Nigeria's forex reserves fall 2.68 percent to $27.14 bln in April -cenbank data

Nigeria's foreign exchange reserves fell by 2.68 percent to $27.14 billion as of April 27 from a month ago, when they were 27.87 billion, central bank data showed on Friday.
The reserves declined by 5.55 percent from $29.51 billion a year ago.
A plunge in oil prices has eaten into the foreign reserves of Africa's biggest economy, with the central bank adopting fixed exchange rate to protect further depletion of its reserves.

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Two-thirds of Nigerian states struggling to pay salaries - president Buhari

Nearly two-thirds of Nigeria's 36 states are struggling to pay civil servants' salaries despite receiving a government bailout, President Muhammadu Buhari's spokesman quoted him as saying on Thursday.
Nigeria, Africa's top oil exporter and biggest economy, has been hit hard by the fall in crude prices. Oil sales account for about 70 percent of government revenues.

President Buhari

Several states around the country raised money on the domestic bond market and from banks to fund infrastructure projects at the peak of oil prices, but as crude prices have plunged many have found themselves unable to pay bills or salaries.
Last year several received financial assistance from the central bank and Debt Management Office, as their combined debts including unpaid salaries climbed to around 658 billion naira ($3.3 bln).
Garba Shehu, the president's spokesman, said Buhari met with governors on Thursday at his residence in the capital, Abuja, to discuss the financial problems in their states.
He said Buhari had expressed "great concern" that "nearly two-thirds of states of the federation are still having difficulties with salary payments despite the bailout funds provided to them by the federal government".
"President Buhari also said that he will establish an inter-ministerial committee to study a fiscal restructuring plan for the federation, which was presented to him by the governors," said Shehu.
He added that Buhari said the committee would review the plan to improve the finances of state governments and make recommendations on how the proposals could be implemented.
On Monday the finance ministry said the government would allow states to defer deductions for loans in March so that they would have sufficient funds to pay salaries.

*First published by Reuters

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Lafarge Africa raising bond to repay $300 mln Nigeria loan

Lafarge Africa is marketing a 60 billion naira ($302 million) bond to refinance some dollar-denominated debt at United Company of Nigeria (UNICEM), which it bought last year.

Lafarge factory

Chief finance officer Anders Kristiansson told analysts on Thursday that there was strong interest for the bond and that book-building was expected to open in the second week of May.
The cement and clinker mixer said it had received approval from Nigeria's Securities and Exchange Commission (SEC) for a 100 billion naira bond, but will issue 60 billion naira for five-years.
"We are in the process of restructuring the UNICEM debt. We are in the middle of a roadshow," Kristiansson said. "We want to refinance the U.S. dollar borrowings that we have in UNICEM."
Lafarge Africa acquired control of Nigeria's third-largest cement manufacturer UNICEM last October after it bought a 30 percent stake it did not already own from rival Flour Mills for an undisclosed amount.
It reported first-quarter loss before tax of 2.22 billion naira on Thursday and said debt at UNICEM rose to 152.4 billion naira as of the first quarter, compared with 145 billion naira in the same period of last year.
The local unit of the world's biggest cement maker, LafargeHolcim, expects to use the proceeds of the 60 billion naira bond to repay some of UNICEM's borrowings, including a $300 million loan from the parent company, the CFO said.
Kristiansson said Lafarge Africa was paying an interest rate of between 16 to 18 percent on its domestic loans but was hoping to reduce it by about 4 to 5 percentage points with the bond issue. Final pricing will depend on what investors are willing to pay, he said.
*First published by Reuters

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Nigeria's Access Bank gets approval for 100 bln naira debt issue

Nigeria's Access Bank has obtained shareholders' approval to raise up to 100 billion naira from the debt market either through a public offering or a private placement, the lender said on Thursday.
Access Bank spokesperson Busola Osilaja said the bank had sought the approval as part of requirements to be able to raise funds at an opportune time. She said shareholders' voted in favour of the plans at a meeting on Wednesday.
Last year the top tier commercial lender raised 42 billion naira from existing shareholders to fund expansion and lending, less than the 53 billion naira it had planned due to weak equity markets.

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Nigeria's Lagos state completes $840 mln bond restructuring -governor

Nigeria's Lagos state government has restructured 167.5 billion naira ($840 million) of bonds, potentially saving at least 40 billion by paying off the debt more quickly, its governor said on Wednesday, without saying when payment would be made.

Nwankwo, DMO chief

Lagos, a megacity of 21 million people in the state of the same name, is Nigeria's commercial hub and generates about a third of its GDP.
The governor, Akinwunmi Ambode, said the restructuring was approved by the Securities and Exchange Commission (SEC) last week after an agreement was reached with bond creditors.
"The transaction will generate savings in excess of 40 billion naira ($201.01 million) for the state over the next five years," he tweeted.
The bonds are an 80-billion-naira seven-year bond maturing in 2019 and an 87.5-billion bond that was due to be repaid in 2020, the state government has said. Coupons on the bonds would remain unchanged at 14.5 percent and 13.5 percent respectively.
In a statement, Lagos state Finance Commissioner Akinkunmi Mustapha said the restructuring was done through domestic capital markets and "was approved by 99.6 per cent of the state's bondholders at an extraordinary general meeting a few weeks ago".
Nigeria's government approved a $200 million loan from a World Bank agency in January to develop infrastructure in Lagos state.
*First published by Reuters

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World Bank and Nigerian president discuss economic crisis, Abacha loot

The World Bank's managing director and Nigeria's president on Wednesday discussed how the multilateral lender could help Nigeria overcome its economic crisis and repatriate more than $300 million stolen by a former military ruler.

President Buhari

On her second day of meetings with Nigerian officials, World Bank Managing Director and Chief Operating Officer Sri Mulyani Indrawati held talks with President Muhammadu Buhari which centred around plans to stimulate the flagging economy with a record 6 trillion naira ($31 billion) budget.
The economic crisis in Africa's top oil exporter has been caused mainly by a sharp fall in crude prices eating into its oil revenues, which make up about 70 percent of national income.
Nigeria will have to borrow 1.8 trillion naira from abroad and at home to help fund the budget, which has been delayed by several months and wrangling with parliament, if it goes ahead.
Although Nigeria has held talks with the World Bank over a possible loan or credit facility in recent months, Indrawati did not address this when speaking to reporters after the meeting.
"We would like to know how we can help Nigeria to make the very important decisions, whether on micro economic policy and other sectoral policy, that will make this economy move forward to become a strong middle income country," she said.
Nigeria's economy, the largest in Africa, grew by 2.8 percent last year, its slowest pace since 1999.
Indrawati, who met Finance Minister Kemi Adeosun on Tuesday, said she and Buhari discussed the government's "commendable goals to improve tax collection and crackdown on corruption".
During the meeting, Buhari urged the World Bank to assist in the repatriation of $320 million stolen by former military leader Sani Abacha, which is being held by authorities in Switzerland, his office said in a statement.
One of the conditions given by Swiss Authorities for repatriation of the funds was that the money should be used for social welfare programmes, which is to be monitored by the World Bank.
"We are as concerned as the World Bank about accountability. If such repatriated funds have been misapplied in the past, I assure you that the same will not happen with us," said Buhari, who won an election last April on an anti-corruption ticket.
The statement added that $320 million was "a lot of money" which would "help to ease the current economic hardship facing the country".

*First published by Reuters

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Kenya Airways gets court order stopping planned strike

Kenya Airways secured on Wednesday a court order stopping a strike planned by the Kenya Airline Pilots Association (KALPA), which was set to start on Thursday.
Kenya Airways is one of the largest carriers in Africa, ferrying 10,000 passengers a day on a fleet of Boeing and Embraer planes.
The carrier, which is 26.7 percent owned by Air France, has been selling assets, including planes, and plans to lay off 600 people as it battles deep losses.
KALPA on Tuesday issued a two-day notice to the carrier saying its members would stop flying planes if Kenya Airways Chief Executive Mbuvi Ngunze did not resign immediately over what it called "questionable" turnaround measures.
In a ruling, the employment and labour relations court in Nairobi blocked KALPA from "calling, participating or engaging in any form of industrial action including strikes" and set a hearing date for the dispute on May 9.
KALPA did not respond immediately to a request for comment by Reuters.

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Ghana producer inflation dips to 14.3 pct in March, GDP at 4.9 pct in Q4 '15

Ghana's producer price inflation (PPI) fell to 14.3 percent year on year in March from an unrevised 14.5 percent the previous month, driven by a drop in utility prices, the statistics office said on Wednesday.
Utility prices were down by 0.5 percentage points from February but inflation in the sector remained at 43.4 percent, deputy government statistician Baah Wadieh said.

The high rate for utilities reflects a big increase in water and electricity tariffs imposed by the government towards the end of last year to meet conditions of the country's International Monetary Fund (IMF) aid programme and which have fed through to production costs in the wider economy.
PPI is a major component of consumer inflation, which rose to 19.2 percent in March from 18.5 percent in February.
The decrease in the all-industry inflation rate to 14.3 percent in March was largely attributable to the utilities and mining and quarrying sectors, Wadieh told a news conference.
Inflation, which for years has exceeded government targets, is one of the economic problems being addressed by the three-year IMF programme agreed a year ago.
Ghana exports gold, cocoa and oil but its GDP growth has slowed sharply in the past two years, hit by a global slump in commodity prices and wider economic problems that are likely to be a key factor at a presidential election in November.
Meanwhile, Ghana's provisional gross domestic product growth grew at 4.9 percent year-on-year in the fourth quarter of 2015, the statistics office said on Wednesday.
"Quarter on quarter seasonally adjusted GDP growth for fourth quarter was 1.3 percent ... compared to the 1.0 percent recorded in the third quarter of 2015," deputy government statistician Baah Wadieh told a news conference.
*First published by Reuters

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Nigerian cocoa farmers upbeat on crop outlook on weather

Late rain in Nigeria this year is helping cocoa trees to flower, raising hopes of a good harvest in the world's fourth biggest grower, after dry weather last year hurt output, farmers and analysts said.
Farmer Bojor Atangba has been spraying his trees to protect cocoa flowers from insects and clearing weeds to boost output since the rains started, adding that he wanted to produce enough to sell at record high prices in Nigeria.

Cocoa beans

"We're hopeful that the harvest this year will be better than last year," said Atangba, who owns a 15-hectare cocoa farm in the southeast producing region of Cross Rivers state.
A mix of rainfall and sunshine in the two main cocoa areas of Ondo state and Cross Rivers this year have helped pod formation but there are fears that too much rain may allow disease to spread, hurting bean quality, farmers say.
Farmers expect the late rains to affect bean weight for the mid-crop which could be around 270-280 grammes, compared with average weight of around 300 grammes.
Harvesting for the mid-crop could start around June or July, farmers say, as cocoa trees were still flowering in April. The late rains could see the main-crop extend to November.
Last year dry weather caused a poor harvest, forcing the Cocoa Association of Nigeria to cut its output forecast by 7 percent to 260,000 tonnes. However, the government expects cocoa output of up to 350,000 tonnes this year.
"The weather is very favourable. If it continues this way for the next couple of months, we would have a good harvest this year compared to last year," said cocoa analyst Robo Adhuse.
Adhuse said farmers in Ondo state were still receiving free seeds from the government to boost output. But they were waiting for promised policies aimed at the sector, whose growth is seen as vital to offset a slump in oil revenue, one year after President Muhammadu Buhari took office.
However, farmers have invested in inputs and agricultural practices, Adhuse said, because farmgate prices in Africa's biggest economy have been rising. They hit an all-time high of 900,000 naira per tonne this month against 450,000 naira a year ago, thanks also to a weaker naira.
Most raw beans are usually destined for Asia and Europe, with only a small portion consumed at home. Now high prices is putting domestic demand at risk as local processors, fighting for survival as working capital needs rise, store only what they can grind immediately, analysts say.
*First published by Reuters

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Nigerian interbank rate rises on decline liquidity

Nigeria's overnight interbank rate rose for the second consecutive week to an average of 6 percent on Friday, from 4.5 percent last week, amid a drop in commercial lenders liquidity level on payment for treasury bills purchases, but rate seen falling next week on budgetary disbursal.
Nigeria sold a total of 167.51 billion naira ($841.76 million) worth of debt with maturities ranging between three months and one year, while payment for the purchase is due on Friday.
Traders said the cost of borrowing among banks has declined progressively this week from last week's close after the central bank asked commercial lenders to make provisions for foreign exchange purchases on Wednesday, and the fact that no cash was flowing into the banking system.
Traders said liquidity level stood around 232.85 billion naira ($1.17 billion) on Thursday, down from 414 billion naira last week.
"We expect that rate will decline to around 2-2.5 percent level next week in anticipation of the disbursal of budget allocations to government agencies," one trader said.
Nigeria, Africa's biggest economy, distributes revenue from its crude exports among its three tiers of government -federal, states and local - portion of states and local governments are expected to hit the banking system on Monday.
Traders said about 199 billion to 200 billion naira is expected to be injected to the banking system next through budget allocation.
Traders said overnight lending was priced lower by fund takers because many of them had expected the injection of the budget cash on Friday, but resistance from major fund placers kept the rate at the prevailing level.
The interbank rate reflects the level of naira cash liquidity in the banking system.

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Yields on Nigeria's treasury bills rise across board at auction

Yields on Nigerian short-dated treasury bills rose significantly at an auction on Wednesday where the central bank sold a total of 167.51 billion naira ($841.76 million) worth of debt with maturities ranging between three months and one year.
The central bank said it sold 36.78 billion naira of 3-month paper at 7.88 percent yield, about 1.78 percentage points higher than at the last auction on April 6.
A total of 35 billion naira worth of the 6-month treasury bill was sold at 8.99 percent against 8.69 percent at the previous auction, while 95.73 billion naira of the 1-year treasury bill was sold at 10.24 percent compared with 9.48 percent previously.
Investors demanded a total of 253.19 billion naira against 445.86 billion subscription at the last auction.

*First published by Reuters

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Yields on Nigerian Treasury bills seen up at auction

Yields are expected to rise at Nigeria's local currency denominated treasury bills auction on Wednesday in tandem with a higher inflation figure for March and possible increase in interest rates by the central bank at its meeting next month.
Africa's biggest economy plans to raise 167.51 billion naira ($845 million) in treasury bills with maturities ranging between 3-month and 1-year today.

Dada, Anchoria chief

"The expectation is that yields will be higher following the March inflation figure and policy direction from the central bank governor about proposed higher benchmark rates," local unit of Citibank said in a note to clients on Wednesday.
Nigeria's annual inflation rose to a near four year high of 12.8 percent in March from 11.4 percent in February, driven by a rise in food prices.
Last month, the central bank rate-setting MPC raise its benchmark interest rate to 12 percent from 11 percent with indications that interest rate may be hike again at the next Monetary policy committee (MPC) meeting on May 24.
The central bank sold the 3-month bill at 6.10 percent at its last auction on April 6, the 6-month fetched 8.69 percent while the one year paper fetched 9.48 percent.
At the secondary market, the 3-month paper closed at 7.25 percent, 6-month traded at 8.99 percent while the 1-year bill closed at 10.46 percent.

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Nigeria opens tender seeking partners to revive its ailing refineries

Nigeria's state oil firm NNPC has launched bidding to find partners to overhaul its ailing refineries, it said in a tender published on Tuesday.
Africa's top oil producer has been trying to restart its refineries, which hardly produce any petrol due to decades of mismanagement and widespread graft. Motorists have been queuing for fuel for months across Nigeria.
Last month, NNPC head Emmanuel Ibe Kachikwu said the firm was in talks with Chevron , France's Total and Italy's to revamp the refineries but would also launch a separate tender in order to attract a maximum number of bids.
NNPC is seeking partners for joint ventures to "fund, rehabilitate and jointly" operate the 210,000-barrel-per-day Port Harcourt refinery, the 110,000-bpd Kaduna refinery and the 125,000-bpd Warri refinery, according to the tender which was published in newspapers.
Bidding will end on May 30.
Investors would be paid from proceeds from the sale of refined products, the tender said.
The revamp is part of reforms started by President Muhammadu Buhari Kachikwu last year to overhaul NNPC, whose opaque structures have allowed corruption and oil theft to flourish.
In February, Kachikwu told Reuters that NNPC was also in talks with oil companies and banks to raise capital for new drilling and to repay its debt.

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Nigerian interbank rate rise on cash flow to bond purchases

Nigeria's overnight interbank rate rose on Friday to around 4.5 percent from 3.5 percent last week, after commercial lenders made payments for local currency denominated bond purchases, which drained liquidity in the system.
Nigeria sold about 170 billion naira ($855.13 million) in long-tenor local currency bonds on Wednesday, while payment for the debt was due on Friday. The central bank also sold about 63.98 billion naira of 7-month treasury bills at 9 percent on Thursday to further curtail excess liquidity in the banking system.
However, 91.42 billion naira in matured treasury bills was retired on Thursday, resulting in net cash inflow of 27.44 billion naira into the system.
Traders said liquidity level stood around 414 billion naira on Thursday, compared with 401.7 billion naira last Friday, but the level is expected to have dropped after the payment for bonds and possible debit for cash reserves ratio (CRR) on Friday.
"We see further rise in the cost of borrowing among banks next week because of expected cash flows to treasury bills and forex purchases, while there would be no major cash inflow into the system," one dealer said.
Commercial lenders are expected to make provision for foreign exchange purchases by Tuesday, which will further drain liquidity from the system and push up interbank interest rate, traders said.

*First published by Reuters

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Eni to invest 20 bln euros in Africa in next four years - CEO

Italy's Eni plans to invest about 20 billion euros ($22.5 billion) in Africa over the next fours, mostly in oil and gas, the company's Chief Executive Officer Claudio Descalzi said on Friday.
"That represents about 60 percent of our investments" (over that period) he said in a presentation at the International Energy Agency in Paris.
Descalzi said Eni, which is involved in projects in 15 African countries, will also help boost and diversify the continent's energy mix through investments in renewables.
"In the long-term we are going to invest much more to develop the giant gas fields that we have found," he said.
Eni has made major gas discoveries especially in Mozambique and recently in Egypt that have increased its reserves, with more than 12 billion barrels of discoveries in the last 7 years, mostly in Africa.
Descalzi said despite these discoveries, abundant energy potential and Africa's steady economic growth, access to energy on the continent remained poor.
Africa's energy mix has remained unchanged over the past 10 years and is unsustainable, with biomass for cooking still the main source, Descalzi said.
"Africa has booming energy demand, but an unsustainable energy mix," he said, adding that countries on the continent needed to change it in favour of cleaner energies and renewables.
"The top priority should be to build an energy model that can support demographic growth. These are the main points we are discussing with different governments," Descalzi said.
Currently hydro power produces only 1 percent of electricity and renewables contribute just about 0.3 percent although there is a huge renewables potentials that is unexploited.
Descalzi said Africa's solar power potential was about 300,000 gigawatts (GW), wind about 7,000 GW, hydro about 283 GW and geothermal about 15 GW. He added that the continent held about 7 percent of worldwide gas reserves.
Eni has said it was ready to spend "hundreds of millions" of euros in developing solar power projects in Africa.
Descalzi also said on Friday that the company was focused on starting production at its giant offshore Zohr gas field in Egypt by end-2017, which once started, will give Egypt 100 percent energy security.
*First published by Reuters

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Ivory Coast cocoa farmers, supplies seen hit by price dispute

Cocoa exporters and grinders in Ivory Coast are withholding financing from suppliers amid a dispute over the pricing of mid-crop beans, threatening farmers' incomes and deliveries to ports, industry sources said.
Farmers and trading houses predict a 24 percent fall in the harvest this year because of a lack of rain and harsh winds that have diminished the size and quality of beans in the world's biggest cocoa producer.
Already this season, arrivals at Ivory Coast's ports have been hit by the poor crop quality. (
Now, exporters say they will not finance merchants to buy more beans because the cost has not fallen with the drop in quality, which is likely to hit farmers hard this season.
The Coffee and Cocoa Council (CCC) has kept the minimum price it sets for farmers unchanged at 1,000 CFA francs ($1.71) per kilogramme for the mid-crop harvest, which opened on April 1, a sum buyers say is too high.
"We asked for a discount because of the small beans. We said that the price is too high but no one listens," said the director of one Abidjan-based grinder. "So we decided that we wouldn't finance middlemen and we would buy nothing beyond 120 beans (per 100 grammes)."
The industry uses bean count - the number of beans per 100g of cocoa - to measure the size of cocoa beans, with a higher bean count indicating smaller bean size.
The CCC does not allow cocoa with a bean count over 120 to be exported in bean form, so local processors typically buy the bulk of the smaller mid-crop beans, which are more acidic and yield less butter.
But while prices have remain unchanged from the main crop, grinders say bean counts currently range from around 130 to 140, forcing them to purchase larger volumes for the same result. With no discount on mid-crop beans, they say they've seen their margins slashed.
Recent rain in the main cocoa-growing regions was too late to affect the development of pods on the trees, farmers said, seeing no improvement before July or August.
"We're not looking for quantity but for quality", said one trader. "If it's not possible to get 120, then we will wait."
As a result, only 5,000 tonnes of beans arrived at Abidjan and San Pedro's ports between Monday and Thursday compared with 22.000 tonnes over the whole of the same week last year.
According to exporters, the number of beans reaching ports could be halved from April to June versus last season, when 300,000 tonnes arrived.
*First published by Reuters

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Commodity slump pushes Africa back into IMF's embrace

Falling commodity prices have pushed several African countries back into the embrace of the International Monetary Fund, which has an opportunity to push for reforms and inject transparency into opaque economies.

Oil rig

Top of the list is Angola, Africa's second biggest crude producer and third largest economy, which has not borrowed from the IMF since 2009 and just a few years ago had the Fund all but turning a blind eye to missing billions.
It is hardly alone, with depressed prices for commodities ranging from oil to copper sapping the budgets of African governments and sending them to the IMF, the "lender of last resort" which typically imposes tough conditions for assistance.
Gas-rich Mozambique and gold and oil producer Ghana, hard hit by the sour commodity cycle, both inked financial arrangements with the IMF in 2015, their first in six years, according to the Fund's website.
Ghana's was a three-year, $918 million assistance deal signed as its fiscal and current account deficits ballooned.
Africa's second-largest copper producer, Zambia, started talks in March on an aid programme. Lusaka last signed a financial arrangement with the IMF in 2008.
And the region's most industrialised economy, South Africa, which is also a major producer of platinum, gold and coal, may be forced to turn to the IMF if its credit rating gets downgraded to junk.
China this week offered Nigeria a loan of $6 billion to fund infrastructure projects but Africa's top oil producer is still expected to also seek assistance from the IMF for the first time in almost two decades.
ANGOLA OIL BLUES
A lot of the attention is focused on Angola, which relies on oil for over 95 percent of foreign revenue and is emblematic of the IMF's involvement in the region.
"The IMF should use the leverage it has to extract serious concessions and tangible reforms from the government. The last time (between 2009 and 2012) it merely gave this authoritarian government a free ride without any quid pro quo," said Ricardo Soares de Oliveira, an Angola expert at Oxford University.
A 2011 IMF staff report found that $32 billion, equal to 25 percent of GDP, could be not be accounted for between 2007 and 2010, but barely chided the government.
"Bearing in mind the scale of the revenues that Angola has received in the 14 years since the end of its civil war, we are probably talking about half a trillion dollars. The IMF should be very cautious about who it lends money to and under what terms," Soares de Oliveira said.
Angola, which opened talks with the IMF this week, has said it will work with the Fund on reforms aimed at improving fiscal discipline, simplifying taxes and increasing public finance transparency.
Finance Minister Armando Manuel said last week that Angola was not seeking a rescue package from the IMF but the Fund said in a statement that it could lead to a three-year Extended Fund Facility, a lifeline for economies with serious balance of payments problems.
An EFF is significantly different than the Stand-By arrangement Luanda signed up for in 2009 as it has a stronger focus on structural reforms and could force Angola to begin cleaning up its act.
"Angola is coming back to the IMF but the global political climate has changed. There will be pressure on Angola on transparency," said Tara O'Connor, executive director of London-based Africa Risk Consulting.
Asked for comment about its dealing with Angola, an IMF spokesman directed Reuters to the Fund's statements on its talks.
During the recent boom times with oil fetching over $100 a barrel, Angola was able to keep the IMF at arm's length and sought oil-backed loans from China. But analysts say China, which has its own fiscal worries, has turned off the taps at a time when oil is closer to $40 a barrel.

And Angola has found itself with less crude to sell as more of its oil flows to China for debt repayment.




SEAL OF APPROVAL

Zimbabwe is also banging on the IMF's door, seeking its first loan from the Fund in almost two decades as it runs out of money with nowhere to turn, including ally China.

"The Chinese have become impatient with Zimbabwe because we owe them a lot of money and we keep agreeing to pay them and then failing to repay. They are tired of us now," said John Robertson, a Harare-based economist.

Borrowing from China, which critics say ties financial assistance in Africa to access to resources, is often an opaque process that gives other donors pause. By contrast, dealing with the IMF opens other doors.

"The IMF stamp of approval becomes very important. But the IMF should follow through with the reform demands. We have to reduce the size of the government," said Robertson.

President Robert Mugabe, 92 and in power since 1980, last month agreed to major reforms including compensation for evicted white farmers and a big reduction in public sector wages as the government tries to woo back international lenders.




BEARING FRUIT

African economies that have already taken the IMF route are already showing positive results. Ghana for example, with an IMF deal behind it, is looking to soon launch a Eurobond.

"What we do know is that countries like Ghana, that would have faced extremely challenging conditions in the absence of an IMF programme, have generally been better reformers," said Razia Khan, Africa chief economist for Standard Chartered Bank.

"It is largely on the basis of Ghana’s experience that markets have started to rally when other sovereigns even mention that they are seeking to negotiate a programme with the IMF. This suggests that for now investors are optimistic that it will bring about actual reforms," she said.

*First published by Reuters

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AFRICA-FX-Nigerian naira seen weakening on parallel market, Zambian Kwacha firm

Nigeria's naira will likely weaken to the dollar on the parallel market next week due to an anticipated increase of naira liquidity from the government, while greenback sales could strengthen the Zambian kwacha.
NIGERIA
The naira is seen falling marginally on the parallel market in anticipation of rising naira liquidity from budgetary allocations to government agencies, but will remain unchanged on the official interbank market.

Dollars

Africa's biggest economy distributes revenues from oil exports among its three tiers of government on a monthly basis, while President Muhammadu Buhari is expected to begin the implementation of the 2016 budget any time from now.
The local currency fell marginally to 323 a dollar on Thursday compared with 320 to the dollar on the parallel market last week, while at the official window the currency was trading at 198.90 to the dollar around the peg rate.
"We anticipate a rise in government spending in the coming weeks and this could put the forex market under pressure and a slight depreciation in the naira is expected," one currency trader said.
ZAMBIA
The kwacha is expected to remain firm versus the greenback due to dollar sales by companies preparing to pay taxes due in the local currency.
At 0944 GMT, the currency of Africa's second-biggest copper producer was quoted at 9.1900 per dollar, stronger than a close of 9.8500 a week ago.
"We expect the local unit to continue outperforming as corporates convert (dollars) to meet mid-month tax obligations," analysts at Atlas Mara's Zambian branch, BancABC said in a note.
GHANA
Ghana's cedi is seen fairly steady on muted economic activity as investors gauge the policy direction of new central bank governor Abdul-Nashiru Issahaku.
The local unit has remained firm on renewed investor confidence since the central bank began financing of the government's budget deficit this year to support fiscal stability. The cedi was quoted at 3.8300 at noon on Thursday, compared to 3.8290 last week.
"We expect the pair (USD/GHS) to remain within the current range... partly as a result of slowdown in economic activity and a no-hurry-to-buy attitude from investors and local businesses," said Biggles Amponsah of Accra-based Dortis Research.
Issahaku told Reuters his top priorities were to fight inflation and pursue growth of local businesses.
UGANDA
The shilling is forecast to trade in a narrow range in the coming days, helped in part by a slump in importer appetite for hard currency.
At 0945 GMT commercial banks quoted the shilling at 3,340/3,350, stronger than last Thursday's close of 3,355/3,365. Traders say the shilling will likely play in the 3,325-3,385 range over the coming week.
KENYA
The shilling is expected to trade in a narrow band of 100.70-101.50 as the market weighs the impact of recent liquidity constraints in the banking sector.
The shilling traded around 101.10/20 per dollar slightly up from 101.30/40 last week. The central bank on Sunday pledged to offer liquidity to any lender in need and has pumped shillings into the market with reverse repos in recent days.
TANZANIA
The shilling is expected to hold steady and could appreciate slightly towards the end of the month, helped by a slowdown in demand for the U.S. currency from the oil sector.
At 1210 GMT Commercial banks quoted the shilling at 2,190/2,195 to the dollar, weaker than 2,182/2,192 a week ago.
Mohamed Laseko, a dealer at CRDB Bank said the shilling will remain trading around 2,190-2,195 level until the week after next "when it might start to strengthen due to month-end inflows."
(*First published by Reuters

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Missing Nigerian girls identified in new video as calls renew to find them

Nigerian schoolgirls abducted by the Islamist group Boko Haram exactly two years ago have been identified in a new video, raising hopes that they are all alive and renewing global calls for efforts to find them.
A video obtained by U.S. network CNN was shown to three mothers of girls abducted two years ago from Chibok in northeast Nigeria in the first possible sighting of the girls since a video of them in captivity was released in May 2014.
Boko Haram militants abducted 276 schoolgirls from Chibok on April 14, 2014, of which 57 escaped but 219 are still missing despite a global campaign #bringbackourgirls involving celebrities and U.S. first lady Michelle Obama.
About 15 girls featured in the new video, saying they were from the Government Girls Secondary School in Chibok and pleading with the Nigerian government to cooperate with Boko Haram on their release.
The girls said they were being treated well but wanted to go home and be with their families.
Rifkatu Ayuba and Mary Ishaya said they recognised their daughters, Saratu and Hauwa, in the video, while a third mother, Yana Galang, identified five of the missing girls.
"The girls were looking very, very well," Galang said in a telephone interview with the Thomson Reuters Foundation after a screening of the video in Maiduguri in northeast Nigeria.
A CNN spokesman said the network had obtained the video from a source "close to the negotiations" after it was sent to negotiators by their captors as "proof of life".
He said it appeared to have been shot on December 25 last year because the girls say so in the video and the metadata also indicated this.
Various false leads have raised hopes of finding the girls over the past two years but their whereabouts remains unknown.
POLITICAL TENSIONS
The kidnapping of the girls became a political issue in Nigeria with the government and military criticised for their handling of the incident and failing to track down the girls.
Former President Goodluck Jonathan was criticized for his slow reaction. He was defeated in an election last year by Muhammadu Buhari who ordered a new investigation into the abductions.
Galang said the girls in the video spoke in Hausa, which is widely spoken in Nigeria, and in Kibaku, the Chibok language.
"They were definitely our daughters ... all we want is for the government to bring back our girls," said Galang, adding all the girls were wearing hijabs in the video.
Galang said one mother, Ayuba, was relieved to see her daughter as she had heard a rumour shortly after the kidnapping that her daughter had been killed by Boko Haram.
"She was very happy to see her in the video ... her daughter is alive," Galang said.
To mark two years since the mass abduction, the United Nations Special Envoy for Global Education, Gordon Brown, called for immediate action to release the girls.
"The Chibok girls are now a symbol of our apparent weakness to protect young lives," Brown said in a statement.
"Their parents still wake up each morning not knowing whether their daughters are alive or dead, married or single or violated as slaves. They deserve better."
Brown, a former British prime minister, called on the UN Security Council to take urgent action to protect children.
He urged backing for a declaration stating attacks on schools and universities are crimes against humanity and more funding for schools in conflict situations and fragile states.
Amnesty International estimates about 2,000 girls and boys have been abducted by the Boko Haram since 2014, with many used as sex slaves, fighters and even suicide bombers.
This week a report from the United Nations Children's Fund (UNICEF) said Boko Haram child suicide bombings have surged 11-fold in West Africa over the last year, to 44, with children as young as 8, mostly girls, used to bomb schools and markets.
Boko Haram's six-year campaign to set up an Islamic emirate in northeastern Nigeria has killed some 15,000 people, according to the U.S. military.
*First published by Reuters

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After global oil freeze deal, prospects for cuts unclear and remote

Oil freeze could set basis for future supply agreements
No prospect of supply cut before late 2016-2017 - delegates
Iran, Libya supply, and compliance seen as key uncertainties
An oil output cut by global producers, following on from the output freeze initiative, is quite unlikely and would be months away, OPEC sources said, suggesting any additional action to boost prices is remote. 

The freeze plan - to be discussed by OPEC and non-members such as Russia on Sunday in Doha - has helped oil prices to rise over 60 percent from a 12-year low near $27 a barrel in January, despite doubts whether it is enough to tackle a supply glut.
While a cut would go further, OPEC delegates say doubts over compliance with the output freeze and the uncertainties over Libyan and Iranian supply means that any discussion of a cut would be unlikely before late 2016 or next year.
"It is difficult to talk about a cut," said a delegate from a major OPEC producer, adding any such discussions would be months away if they occurred at all.
"Maybe when the Iranians arrive at their previous production level of 3.6 million barrels a day or 3.7 million bpd, and then OPEC will talk about a cut. Not before that."
A second delegate from another major producer in the Organization of the Petroleum Exporting Countries gave a similar timeframe, dismissing the prospect that OPEC could trim supply at its next scheduled meeting in June.
"There will be no cut in June. Maybe later in the year or next year. It depends on the market rebalancing."
Libya, pumping a fraction of its potential due to fighting in the country, has said it does not plan to attend Sunday's meeting.
Iran, pumping about 3.30 million bpd, has refused to join the output freeze as it wants to recover market share following the lifting of Western sanctions in January.
Russian oil minister Alexander Novak told a closed-door briefing this week that the oil output freeze will be loosely-framed with few detailed commitments, two people present at the briefing told Reuters.
BARELY AGREE
Oil officials are not seriously talking about any steps beyond the output freeze, according to another OPEC source.
"Talk of a cut is far behind the scenes now. ‎They can barely agree on the freeze," he said.
Nonetheless, the common wish of all sides to avoid a renewed drop in prices puts pressure on all sides to get the freeze deal agreed, OPEC sources said.
Countries are discussing a number of reference points at which to freeze output - January levels, February levels or an average - and have floated the idea of setting up a committee to monitor compliance.
"The Saudis don't want the deal to fail because of the political pressure on them to act," an OPEC watcher who asked not to be named said. "And in general, no one wants to see prices sinking to $30 and below again."
A production freeze, at least in theory, will set down a baseline which could form a starting point for any future supply agreements - potentially making such agreements easier.
But delegates say it is still early days. OPEC ditched individual output quotas in late 2011 when it set an overall output target for all members. The overall target was also scrapped by OPEC last December.
"If OPEC and non-OPEC agree on something and implement it, surely it could help oil market stability," said a third OPEC delegate. "However, this is a big if."
ters, except where permitted by the terms of the relevant Thomson Reuters service agreement. Neither Thomson Reuters nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon. Thomson Reuters and its logo are registered trademarks or trademarks of the Thomson Reuters group of companies around the world.
*First published by Reuters

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Nigeria sells 170 bln naira in local currency bonds at higher yields -debt office

Nigeria raised 170.18 billion naira in local currency bonds maturing in 2036, 2026 and 2020 at an auction, the Debt Management Office (DMO) said on Thursday, paying higher returns than at the previous auction on March 16.

Nwankwo, DMO boss

The office said it sold 40 billion naira ($201 million) of 2036 paper at 13.08 percent at Wednesday's auction, compared with 12.40 percent at the previous auction
It also sold 40 billion naira of 2026 debt at 12.60 percent, against 12.09 percent, and 20 billion naira of the 2020 debt at 12 percent against 11.33 percent.
The debt office allocated an additional 70 billion naira of the 2026 maturing debt to investors in a non-competitive tender.
Subscriptions from investors stood at 206.72 billion naira compared with 262.42 billion naira at the last auction.
Africa's biggest economy issues local bonds as part of measures to finance the government budget deficit and also help to manage liquidity in the banking system.
Nigeria said it would borrow about 900 billion naira locally to finance part of the 2.2 trillion naira deficit in its 2016 budget.

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Ghana consumer inflation rises to 19.2 pct in March

Ghana's annual consumer price inflation rose to 19.2 percent in March from 18.5 percent in February, pushed up by road transport fare increases, the statistics office said on Wednesday.
A major commodities exporter, the West African country is implementing a three-year aid programme with the International Monetary Fund in an attempt to remedy fiscal problems including inflation persistently above government targets.

Road transport operators in Ghana announced a 15 percent hike in fares in late February.
"Fares are linked to almost all market activities and locally produced goods and any change in those fares tends to have a direct impact on consumer prices," government statistician Philomena Nyarko told a press conference in Accra.
For Razia Khan, Standard Chartered Bank's chief economist for Africa, the rise in inflation was a "disappointing outcome".
"There had been some hope that tight policy and relative (currency) stability would start to bring about an improvement in inflation", she said in an email sent to Reuters.
"Our view is that the CPI print is more likely to mean that it will be some time before the BoG (Bank of Ghana) can comfortably ease the policy rate, helping to bring the policy rate more in line with where market rates are", she added.
Year-on-year food inflation remained unchanged at 8.3 percent compared to last month while non-inflation rose marginally to 25.7 percent from 24.5 percent the month before.
Ghana's new central bank governor said on Monday his top priority was to fight inflation, but he also wanted to pursue new policies to boost local business growth.
*First published by Reuters

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Nigeria's Dangote signs Chinese bank loan for two cement plants

Dangote Group, the company owned by Africa's richest man Aliko Dangote, signed a deal on Tuesday for a $2 billion loan from the Industrial Commercial Bank of China Ltd  for two cement plants, he told Reuters.
"The interest rate is okay, quite favorable with me," Dangote said, without elaborating. "It's for my two cement companies that we are establishing in Nigeria."
The deal included China Export & Credit Insurance Corporation (Sinosure)

*First published by Reuters

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Nigeria's inflation rises to almost 4-year high in March

Nigeria's annual inflation rose to a near four year high of 12.8 percent in March from 11.4 percent in February, driven by a rise in food prices, the National Bureau of Statistics said.
Africa's biggest economy is facing its worst economic crisis in decades fueled by the collapse in crude prices, which has slashed government revenues, weakened the currency and caused growth to slow. The economy grew 2.8 percent last year, its slowest pace in decades.
Food prices, which account for the bulk of the inflation basket, rose by 1.4 percent points to 12.7 percent in March, the bureau said on its website.
"The higher price level was reflected in faster increases
across all divisions," the bureau said in a report.
The NBS expects inflation to end the year at 10.16 percent, above the central bank's target upper limit of nine percent. The price index ended at 9.55 percent last year.

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Nigeria to raise 167.5 bln naira in treasury bills

Nigeria plans to raise 167.51 billion naira ($843.67 million) in treasury bills with maturities ranging between 3-month and 1-year on April 20, the central bank said on Tuesday.
The bank aims to raise 36.78 billion naira in the 3-month paper, 35 billion naira in the 6-month note and 95.73 billion naira in the 1-year debt, using the Dutch auction system.
Nigeria issues short-dated debt to mop-up excess liquidity in the banking system to curb rising inflation, finance a portion of the budget deficit and help commercial lenders manage their liquidity.

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Oil hits 2016 high above $43 on producer meeting hopes

Oil rose above $43 a barrel to its highest level so far in 2016 on Tuesday, supported by hopes that a meeting of oil producers will agree steps to tackle a supply glut, and by a weak U.S. dollar and further signs of strong demand in China.
Many members of OPEC plus outside producers such as Russia are meeting in Doha, Qatar, on Sunday to discuss freezing output. The dollar fell to its lowest in nearly eight months against a basket of currencies, supporting commodities. 

Brent crude was up 34 cents at $43.17 a barrel at 1057 GMT and earlier in the session reached a 2016 high of $43.58. U.S. crude gained 23 cents to $40.59.
"The weak dollar is one important reason," said Eugen Weinberg of Commerzbank. "Also, the fact that we are above $40 and at multi-month highs is also contributing to the price increase as it is prompting some speculative buying."
Also supporting prices was rising vehicle sales in China - a further sign of strong gasoline demand in the No. 2 consumer - and a plan by thousands of oil and gas workers in Kuwait to go on strike from Sunday.
"If it is not clear if the strike will last long and will have any meaningful impact on exports or domestic production (including refineries), it does illustrate further the amount of pain that (Gulf) oil producers are also facing at current price levels," said Olivier Jakob, analyst at Petromatrix.
Oil prices have collapsed from above $100 in mid-2014 due to oversupply. The Organization of the Petroleum Exporting Countries' decision in November 2014 to abandon its traditional role of cutting output helped deepen the decline.
In a sign that oversupply may be easing, the structure of the Brent crude market has strengthened and the discount at which the first-month contract is trading to the second - known as contango - has narrowed significantly.
This is partly in response to oilfield maintenance in the North Sea in June that will reduce supply of the crudes underpinning the Brent benchmark.
Crude gained a boost last week after a surprise decline in U.S. inventories from a record high. But this week's U.S. supply reports are expected to show an increase in stocks of 2.8 million barrels.
Industry group the American Petroleum Institute is scheduled to release its report on Tuesday at 4:30 p.m. , while the government's figures are due out on Wednesday.

*First published by Reuters 

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Nigeria may save cash for oil projects to make up budget shortfall: finance minister

Nigeria's Finance Minister Kemi Adeosun

Nigeria might use money set aside for funding joint venture projects with foreign and local oil firms to make up any shortfall in the 2016 budget if government revenue projections are not met, Finance Minister Kemi Adeosun said on Saturday.
The West African nation has been trying to boost tax revenues and the non-oil income to fund a record $30 billion 2016 budget aimed at reviving Africa's biggest economy hit by the slump in oil prices.
"The Plan B is around the cash calls," Adeosun told Reuters and the Financial Times in an interview in Lagos when asked how the budget would be funded if revenue projections fell short.
Cash calls are the government's financial obligations to joint venture projects between state oil firm NNPC and international and local oil companies.
"If the revenue doesn't come in we have got 1 trillion (naira) in the budget for cash calls. We will not fund those cash calls from the budget," the minister said.
"We will force those cash calls out into the modified carrier arrangement and we will release that money back into the federation account. That's where the fiscal buffer sits," she said.

Modified Carry Agreements are loans provided by oil majors to NNPC for investing in oil exploration and production projects.

Nigeria's oil and gas output has been relatively stagnant as new projects have been held up by delays in government funding for its share of joint ventures with foreign and local firms.

NNPC has been to trying to cut back debt owed to the oil firms, reducing it to $3 billion by December, down from $3.5-$4 billion, NNPC head Emmanuel Ibe Kachikwu said last month.

The 2016 budget, which anticipates a deficit of 2.2 trillion naira ($11 billion), would triple capital expenditure to invest in roads and power supply to diversify the economy away from oil, which accounts for 70 percent of national income.

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Nigerian interbank rate eases amid drop in liquidity

Nigeria's overnight interbank rate eased on Friday to around 3.5 percent from 5 percent last week, even though liquidity in the system fell as banks set aside cash for reserves and to pay interest on deposits.
"We consider market liquidity sufficient at the present level to support transactions and this accounts for the drop in cost of borrowing among banks," one dealer said.
Traders said liquidity dropped from around 564.35 billion naira ($2.84 billion) last week to about 401.7 billion naira on Friday due to premium payments to the Nigerian Deposit Insurance Corporation (NDIC) and cash reserves ratio (CRR) debits on Thursday.
"The market is comfortable with the level of liquidity in the market, because many fund placers are not ready to keep their idle funds with the central bank," another trader said.
This is the second consecutive week that the interbank rate has dropped, even though the central bank raised its benchmark interest rate from 11 to 12 percent last month, and the cash reserve ratio for commercial banks to 22.5 percent from 20 percent, to try to curb inflation.
Traders said rates are seen at the same level next week because treasury bills worth about 91 billion naira are due to mature on Thursday and unused cash deposited for foreign exchange purchases will be refunded.

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Nigeria's cocoa farmers and grinders still waiting on government policy help

One year on from the election of President Muhammadu Buhari, Nigeria is still awaiting the promised policies to boost the cocoa sector, whose growth is seen as vital to offset a slump in oil revenue that has plunged the economy into crisis.
Buhari routinely states the need to expand the agricultural sector to end the reliance of Africa's biggest oil producer on crude exports and cut its $20 billion annual food import bill.
A priority is to develop cocoa farming, the only sizeable agriculture sector in the continent's biggest economy to have survived government neglect since the 1950s oil discovery. But Buhari's policies have not yet made it beyond the talking stage. 

"The government has not come out clearly to say what they are pursuing for cocoa, so we are still in the dark," said an official at the Cocoa Research Institute of Nigeria (CRIN), a body which advises the government.
Reuters was unable to get a comment from the government on its agricultural policies.
Cocoa farmers in Nigeria, the world's fourth-largest grower, have recently enjoyed bumper profits, but this is due to high global prices for raw beans rather than government intervention.
At the same time, for cocoa processors, Buhari's foreign exchange policies have added to a crisis, as grinders struggle to get dollars to import spare parts, since the central bank has imposed hefty curbs to support the naira.
This, combined with high bean prices, Nigeria's high transport costs and sporadic power supply, have driven up production costs, causing several plants to shut in recent months.
"There are about eight processing factories in Nigeria and I think only three or four of us are in operation," said Cocoa Products (Ile-Oluji) managing director Akin Olusuyi based in southwestern Ondo, the country's largest cocoa producing state.
Olusuyi struggles to afford raw beans as traders, lured by a surge in global prices, offer farmers dollars and snap up part of the harvest usually going to grinders. As a result, his plant's output fell to 4,000 tonnes last year, a fraction of its 30,000 tonnes capacity.
So far the clearest message from Buhari's administration is that it will retain many of its predecessor's policies.
The roadmap inherited by this government seeks to increase output to 1 million tonnes by 2018 in a bid to catch up with the 1.8 million tonnes of top producer Ivory Coast.
The agriculture ministry also wants to plant 2 million cocoa trees within three years, but no details have been given to show how this would be achieved.
"We're looking forward to quick intervention, quick action on the part of government ... But we haven't seen that yet," said cocoa consultant Robo Adhuse, who works with farmers and non-governmental organisations.
HARD TO IMPLEMENT
Buhari has unveiled a record $30 billion budget for 2016 to invest in infrastructure to diversify the economy, but the bill setting this out has been delayed by parliamentary wrangling.
Adding further woes, a policy retained from the previous administration in which farmers could receive central bank loans at a rate of 9 percent, instead of borrowing from commercial banks at about 18 percent, has proved difficult to implement.
Buhari has urged banks to increase lending to the agriculture sector and in March said the central bank should bear part of the risk of such loans. But the central bank governor has complained that banks have largely failed to follow this guidance.
Buhari's refusal to devalue the naira currency has exacerbated processors' problems, said Edward George, head of group research at Ecobank.
"This is squeezing grinders, who must source dollars on the black market (for imports), but who are paid the official interbank market rate for their cocoa exports, which is overvalued," said George.
Nonetheless, Nigeria's cocoa output is set to rise to 350,000 tonnes in the 2015/16 season, as farmers are reinvesting last season's larger profits in fertilizer and pesticides, said the CRIN official who wanted to remain anonymous.
Aside from a brief drop in January, global cocoa prices have risen for two years, buoyed by growing demand for cocoa products and chocolate, particularly in China and India, plus fears that the El Nino weather pattern could affect beans.
Ebeneezer Akimade, 56, whose five farms located just a 20 minute drive from the Cocoa Products plant span 12 hectares, typifies gains made by farmers in the last few months.
"Last year the price of cocoa was 270,000 to 300,00 naira, but this year it's 800,000 per tonne, which is of great benefit to me," he said.
High poverty levels among the 180 million Nigerians have prompted authorities to see the labour-intensive cocoa industry as a way to create jobs, but Olysuyi at Cocoa Products has been firing workers to stay afloat.
"A lot of things have been said," he noted. "But to me, all of those things are still talking." 

*First published by Reuters

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MSCI could exclude Nigeria from Frontier Markets index

Index provider MSCI is seeking feedback from investors on the ease of access to the Nigerian equity market, a move that could lead to it being excluded from MSCI's Frontier Markets index.
The consultation follows the introduction of restrictions on foreign currency trading, MSCI said in a statement issued late on Thursday, adding that it would announce its decision on or before April 29.
Nigeria, Africa's biggest economy, is facing its worst crisis in decades as the falling price of oil has slashed revenues, prompting the central bank to peg the currency and introduce curbs to protect foreign exchange reserves, which have fallen to 11-year lows.
The International Monetary Fund has called on Nigeria to lift the curbs and let the naira currency reflect market forces more closely, as the restrictions have significantly affected the private sector.
MSCI said that ease of capital inflows and outflows was one of the key criteria in its market classification framework.
"Introduction of restrictive measures, such as capital
or foreign exchange controls, which can lead to material deterioration of equity market accessibility, may result in the exclusion of such market from the MSCI Frontier Markets Indexes and a reclassification to Standalone Market status," it warned.
Charles Robertson, global chief economist at Renaissance Capital, said the possibility that Nigeria might lose its place in the index had been a risk since it was excluded from key bond indices by JPMorgan and Barclays last year. "Now the risk has become acute," he said.
Being excluded would create a higher hurdle to attracting future investments, as there would be no need for passive frontier market funds, which track the MSCI index, to hold Nigerian stocks. "With this news, Nigeria's hopes of attracting private sector investors have been dealt another blow," Robertson added.
Daniel Salter, head of equity strategy at Renaissance Capital, said that about $480 million of MSCI benchmarked money was in Nigeria, in both mutual funds and exchange traded funds.

*First published by Reuters

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Nigeria plans to sell 40 pct stakes in new NNPC -draft law

Nigeria plans to split state oil company Nigerian National Petroleum Corporation (NNPC) into two to help ease a planned stake sale and wants to sell at least 40 percent of a newly created National Petroleum Co (NPC) in coming years, according to a draft of a long-awaited oil bill seen by Reuters.
The bill envisages the sale of at least 10 percent of NPC over five years and is targeting 40 percent or more over 10 years, as Africa's top oil exporter seeks to fix a cash shortage that is hampering investment at NNPC and end graft.

NNPC HQ

President Buhari

Parliament is to start debating within days the amended 

Petroleum Industry Bill, in the works for a decade and designed to change everything from taxes to environmental rules and revenue sharing, as well as overhauling NNPC.
Lawmakers have not previously been able to agree on the 200-page bill, but President Muhammadu Buhari has made its passing a priority as he seeks to overhaul the oil and gas sector, which accounts for 70 percent of state income.
NNPC's output has been stagnant at around 2 million barrels a day for years as the company struggles with graft, bureaucracy and funding problems.
To accelerate the reform process, the West African nation is breaking up the bill, with the first part dealing with the reform of NNPC, a pet project of Buhari.
"Divestment of shares ... may include the sale or transfer of shares to institutional or strategic investors," the draft said, without giving more details.
A sale of at least a 10 percent stake in NPC is to take place within five years, with the rest to happen within 10 years, the bill says. The previous draft had called for a 30 percent sale within six years.
LARGER STAKE
It gave no reason for the longer timeframe but a source involved in the draft said selling a larger stake was intended to raise more funds and help minimize the risk of corruption, because of the greater influence of outside investors and private firms.
"Bidding is open to international investors," the source said.
Part of Nigeria's output comes from joint ventures with foreign and local companies in which NNPC holds the majority stake. However, NNPC is always behind on covering its share of costs owing to the slow pace of government approvals, explaining the need for outside funding.
The act that created NNPC decades ago contained legal gray areas which allowed mismanagement to go unchecked and billions of dollars in revenue to go seemingly unaccounted for.
NPC will look after joint ventures mainly with oil majors,while the second company to be created from NNPC, dubbed NPAM, will manage all production-sharing contrac‎ts and service agreements, a second source involved in drafting the bill said.
The draft bill already lists 26 licences but the source said there would be many more.
The second source involved in the drafting also said that the other bills which would be part of the overall reform of the energy sector have not yet been finalized.
*First published by Reuters

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Nigeria seeks ro raise VAT rate, says 5 pct too low

Nigeria's Vice President Yemi Osinbajo said on Thursday the 5 percent rate currently charged as Value Added Tax (VAT) in Africa's biggest economy remains the lowest in the continent amid dwindling revenue from oil exports and growing economic hardship.
Osinbajo, who spoke in the country's commercial nerves center hinted of plans by the government to expand both the coverage, scope and the rate soon in a move to boost revenue to fund the West African country over 2 trillion naira budget deficit.

President Buhari

“To move the nation forward, we must move beyond oil. The reality is that while oil accounts for 14.4 per cent of our Gross Domestic Product, it continues to be the source of 90 per cent of official foreign exchange earnings; and prior to this year, up to 76 per cent of government revenues,” Osinbajo said.
He said having an easy source of revenue had denied Nigeria the opportunity to engage in critical thinking to develop the economy.
“In order to move forward, we must reduce the current dependence of the federal and state governments on the ritual sharing of revenues from oil. Doing so requires broader and genuine efforts at the diversification of our economic structures in terms of drivers of economic activities. The foundation for a strong economy requires that we have appropriate fiscal policies,” the vice president explained.
Noting that the country had a very low rate of VAT of five per cent and a low taxpayer base, Osinbajo said, “We are focused on increasing the taxpayer base in the first instance this year.”
VAT is a consumption tax payable on goods and services consumed by individuals, government agencies and business organisations.
“At the federal level, implementation of the budget will stimulate the economy rather than impose undue austerity. Accordingly, up to 30 percent of expenditure has been devoted to capital spending and 500 billion naira for social intervention, which will create jobs directly and indirectly, while also boosting demand.”
According to him, non-oil sources, comprising mainly Company Income Tax, VAT, and customs and excise duties are expected to contribute about 1.5 trillion naira, which is more than oil-related revenue estimated at about 820 billion naira.
“This is unprecedented in a long while in our nation and is a near complete reversal of the previous ratio of oil to non-oil revenues. These are bold and clear indications that the Buhari administration is serious about change,” he said.
The vice president noted that the way forward was for the nation to move from reliance on crude oil to the production of petroleum products.
Osinbajo stated, “By this, I mean that instead of merely extracting and exporting crude oil, Nigeria must now take full advantage of the petroleum sector and its entire value chain. This will mean refining our crude before it is exported; it will entail becoming an African regional petrochemical hub.
“It will also require making full use of our natural gas resources domestically and abroad; and it will require that we fully implement local content laws and regulations in the oil sector so as to fully utilise its abundant forward and backward linkages.”
The International Monetary Fund had last week reiterated its advice to the Federal Government to increase the VAT rate gradually.
Managing Director of the fund, Christine Lagarde, had in January during her visit to Nigeria, urged the government to increase the VAT rate.
*First publisshed by Punch Newspaper

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Nigeria's Zenith Bank loses 200.5 mln naira to fraud, forgeries

Nigeria's Zenith Bank has said that it recorded about 200.52 million naira loss to fraud and forgeries in its operations last year.

Ovia, Zenith Bank chairman

In its corporate governance report, the bank reported about five fraud cases committed by the bank’s staff members resulted in a 155.73 million loss. This accounted for 78 per cent of losses in the fraud/forgeries category.
The bank was said to have recorded 14.04 million naira fraud by staff in 2014, according to details made available at its 25th Annual General Meeting held in Lagos on Wednesday.
For 2015, the bank said it recorded no losses from Automated Teller Machine/electronic fraud and impersonation.
Addressing shareholders at the meeting, the Chairman of the bank, Mr. Jim Ovia, said 2015 was marked by significant global and domestic macroeconomic developments, which impacted the business in many ways.
“But the resilience of our bank has enabled us to successfully weather through these economic headwinds,” he said.
Meanwhile, total deposits for the bank stood at 2.33 trillion naira in 2015, representing a three per cent increase over the previous year figure of 2.27 trilion naira.
Profit before tax also rose by 6.8 per cent, from N107.85bn in 2014 to N115.22bn in 2015; while profit after tax similarly rose by 6.8 per cent from N92.48bn in 2014 to N98.78bn in 2015.
On dividend payouts, the bank said it had declared and paid an interim dividend of 25 kobo per share in the course of 2015 to shareholders. It also proposed a final dividend of 155 kobo per share. This brought the total dividend for 2015 to 180 kobo per share as against 175 kobo per share that was paid in 2014.
The bank said it had adopted an integrated approach to risk management by bringing all risks together under a limited number of oversight functions.

*First published by Punch

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