CBN anticipates raising interest rates amidst rapid monetary policy shifts

In an upcoming meeting on November 20th and 21st, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN)is expected to announce a further 100 basis point hike in its Monetary Policy Rate (MPR), signalling a continued commitment to combat inflation. Since the July MPC meeting, the monetary policy landscape has undergone significant changes, accelerated by recent initiatives introduced by the Central Bank, notably in October. The decision to forego the September policy meeting due to the appointment of a new CBN governor added anticipation to this week's gathering. A report from Cordros Capital highlighted that a potential MPR increase would convey the apex bank's dedication to managing inflation, especially with short-term inflation expectations pointing towards a potential peak of 28.02 percent year-on-year in December. Maintaining the MPR at current levels is seen as incongruent with the prevailing uptick in market interest rates. Cordros Capital suggests that a further MPR increase is likely, given its role as a key signalling tool for market interest rates and the persistence of inflationary pressures. Notable changes in the monetary space include the removal of the maximum limit on the Standing Deposit Facility (SDF) and alterations to Open Market Operations (OMO) auctions. These modifications have influenced expectations for the upcoming MPC meeting. After an eight-month hiatus, the CBN auctioned OMO bills in August, with stop rates averaging 12.49 percent across various tenors. The subsequent October auctions saw increased rates, aligning with the aim of mopping up system liquidity and attracting foreign portfolio investors (FPIs). Inflationary pressures persist, with domestic prices rising to 27.33 percent as of October. Food and core baskets contributed to the upward trend. Additionally, currency pressures continue, with local players dominating the Nigerian Autonomous Foreign Exchange Market (NAFEM), although offshore investors are exhibiting renewed interest. As the MPC convenes, these factors contribute to an environment where a proactive stance on interest rates is expected to address evolving economic dynamics.

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Nigeria’s naira hits lowest level of N1,105 on official window

Nigeria's naira briefly slumped to a record low against the dollar in thin trading on the official market on Thursday, bringing the official exchange rate within touching distance of the parallel market rate. The currency of Africa's biggest economy fell as low as 1,105 naira to the dollar from 830 at Wednesday's close, LSEG data showed, before recovering to trade firmer on the day around 800 to the dollar. A central bank spokesperson did not respond to a request for comment on the naira's fall or its plans for the currency when contacted by Reuters. The naira's official exchange rate has been drifting towards the parallel market level for the past two weeks, traders said. The naira was quoted at 1,135 to the dollar on the parallel market on Thursday, while lenders had been quoting the currency within a range of roughly 750 naira to 990 naira on the official market before Thursday's trade. "We suspect this is an anomalous rate in a liquidity squeeze due to increased demand in the I&E window (official market), and don't expect this to be reflective of a true market rate going forward," said Kyle Chapman, FX markets analyst at London-based Ballinger & Co. Olayemi Cardoso, the central bank governor who took office in September, has been silent about where he wants to see the trading band for the naira or when further liquidity might be injected into the market. The central bank has not intervened on the official market since October, which has helped accelerate the naira's slide, traders said. Last week, the naira recovered from a record low of 1,300 on the parallel market after the central bank sold dollars to 14 lenders to clear outstanding currency forwards. Some other lenders are yet to get settlements. The government has said it is expecting $10 billion in foreign currency inflows that will improve market liquidity, but it is not clear when those funds will arrive.

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Nigeria to wave $1.1 bln civil claims Italian oil firm Eni

Nigeria is withdrawing civil claims totaling $1.1 billion against energy producer Eni SpA, Bloomberg News reported on Thursday. The West African country's justice ministry will waive the claims before Italy's highest court "unconditionally" and "with immediate effect" no later than Nov. 17, the report said, citing a letter seen by Bloomberg.

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Maida applauds Project Train 3M on ICT Skills

The Executive Vice Chairman of the Nigerian Communications Commission (NCC), Aminu Maida, has applauded the proposal by the Minister of Communications, Innovation, and Digital Economy, Bosun Tijani, to enlist and train three million Nigerians over a period of four years, which will make the country an exporter of digital skills. Maida, who spoke recently in Lagos at the City Business News Summit, said the programme, which has already attracted one million applicants, is capable of increasing Nigeria’s pool of technically skilled persons in the global market, leading potential employers of digital and technical skills in the international scene to begin to engage more Nigerians. Speaking on the theme of the summit, ‘Repositioning Nigerian Economy through Telecommunications: 2023 and Beyond', the NCC boss noted that, in recognition of the rapid pace of technological advancement that is disrupting industries across the globe, Nigeria’s vision is rooted in the belief that embracing this disruption and fostering innovation will propel the nation towards sustainable growth, economic diversification, and enhanced living standards for all Nigerians. Represented by the Commission’s Director of Research and Development, Ismail Adedigba, the NCC’s chief executive officer said, “The vision is, thus, to accelerate the growth of Nigeria as a global technical talent hub and a net exporter of talent; to deepen and accelerate our position in global research in key technology areas; and to raise the complexity and dynamics of our economy by significantly increasing the level of digital literacy across Nigeria. In this regard, the honourable minister is looking to create a pipeline of three million technical talents.

“This programme, which has already commenced with over 1 million applications by potential trainees, is expected to increase the level of digital and technical skills among Nigerians, especially young and middle-level talents, to 70 percent by the end of 2027. This will position Nigerians to productively contribute to the economy and place us in the top 25 percentile of research globally in the key areas of artificial intelligence (AI), unmanned aerial vehicles (UAVs), IoT, robotics, blockchain, and additive manufacturing, in keeping with the strategic plan unveiled by the Honourable Minister,” he said. Maida said the policy direction of the Ministry, which is being driven by five pillars, will deliver on the goals of fostering economic growth and development. These pillars, which include policy, infrastructure, innovation, entrepreneurship, capital, trade, and knowledge, are the bedrock of the Strategic Vision Plan (2023–2025) and form the guide to channelling our efforts to harness the potential of the telecommunications sector and drive positive change in Nigeria. He said the Commission remains committed to providing an enabling environment for the building of the critical infrastructure required to power a strong digital economy, guarantee improved access to quality broadband connectivity, and ensure the efficient management of the nation’s spectrum resources. “As we work with our supervising ministry—communications, innovation, and digital economy—to take these steps to provide the enabling environment for repositioning the Nigerian economy through telecommunications in 2023 and beyond, we call on Nigerians—and especially our compatriots in the media—to tap into the aspects of these interventions that are relevant to them. The ambitious plans we have set out may seem lofty and even incredible, but through strategic partnerships and collaborations with all stakeholders, we believe that they are achievable,” the EVC said.

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Kyari calls for adaptation to the changing energy landscape. …Advocates a Diversified Energy Portfolio

The GCEO, NNPC Ltd., Mele Kyari, has charged stakeholders within the Nigerian oil and gas industry to adapt, evolve, and lead in the ever-changing global energy landscape. Kyari gave this charge on Tuesday while delivering an industry address at the opening ceremony of the 41st Nigerian Association of Petroleum Explorationists (NAPE) Conference taking place in Lagos. The GCEO, who was represented by NNPC Ltd’s Executive Vice President, Upstream, Oritsemeyiwa Eyesan, underscored the pivotal role of oil and gas exploration in shaping the future of the oil industry and emphasised the need for dedication, expertise, and pursuit of knowledge in the quest to unlock new frontiers and push technological and economic boundaries within the industry.

Reiterating NNPC Ltd.'s commitment, Kyari emphasised the company's dedication to embracing exploration, developing renewables, fostering innovation, adopting emerging technologies, and implementing portfolio management as key drivers of success in the evolving energy landscape. He expressed optimism that the NAPE Conference would yield solutions and positively impact the nation's economic landscape. While acknowledging the global shift towards renewable energy, the GCEO pointed out challenges such as intermittency, predictability, and reliability due to geological constraints. He further highlighted the absence of a perfect energy source and advocated for a diversified energy portfolio that leverages innovation and technology to harness the strengths of different energy sources. The NAPE Conference is an annual convergence of geologists and industry professionals engaged in oil and gas exploration and production. This year’s edition has as its theme "Repositioning the Oil & Gas Industry for Future Dynamics" and seeks to advance the study and application of geosciences for the benefit of stakeholders.

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Oil prices dip as US crude production at its peak

Oil prices dipped on Wednesday amid signs the United States, the world's biggest oil producer, is at peak production, offsetting positive crude demand signals from top consumer China. Brent futures were down 34 cents to $82.13 a barrel at 0949 GMT, while U.S. West Texas Intermediate (WTI) crude was down 40 cents to $77.86. China's economic activity perked up in October as industrial output increased at a faster pace and retail sales growth beat expectations, an encouraging sign for the world's second-largest economy. The International Energy Agency (IEA) joined the Organization of the Petroleum Exporting Countries and its allies (OPEC+) in raising oil demand growth forecasts for this year, despite projections of slower economic growth in many major countries. "With China being a scapegoat for much of the world's lack of industrial demand, this glimmer of light ought to aid oil's progress, but the reluctance is so far winning out," said John Evans of oil broker PVM in a note. Downward pressure on oil prices may come from the supply side, with the United States "likely at peak production for crude," while the delayed release of oil data from the world's biggest producer makes the investment situation more opaque, Evans said.

The U.S. Energy Information Administration (EIA) will release its first oil inventory report in two weeks on Wednesday, after a delay last week due to a systems upgrade. The Financial Times reported on Wednesday that Denmark will be tasked with inspecting and potentially blocking Russian oil tankers sailing through its waters under new European Union plans as the West explores more ways of enforcing a price cap on Moscow's crude. However, it is still to be seen how Denmark will enforce this. A softer U.S. inflation reading that bolstered expectations for an interest rate cut by the Federal Reserve next spring sent the U.S. dollar (.DXY) down to a two-and-a-half-month low against a basket of other currencies. A weaker dollar can boost oil demand by making crude cheaper for buyers using other currencies. British inflation also cooled in October, more than expected, reinforcing expectations that the Bank of England's hiking cycle has ended, with the Federal Reserve and European Central Bank also seemingly having reached the peak for interest rates. Elsewhere, the European Union reached a deal on Wednesday on a law to place methane emissions limits on Europe's oil and gas imports from 2030, pressuring international suppliers to clamp down on leaks of the potent greenhouse gas. Reporting by Paul Carsten in London and Sudarshan Varadhan and Laura Sanicola; Editing by Raju Gopalakrishnan and Mark Potter

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Nigeria seeks funding from Islamic bank for infrastructure

President Bola Tinubu met top officials of the Islamic Development Bank (IsDB) to negotiate a "multi-billion-dollar infrastructure finance facility" to help build ports and power plants, his spokesperson said on Tuesday. Tinubu held talks with IsDB vice president Mansur Muhtar late on Monday in Mecca, Saudi Arabia, spokesperson Ajuri Ngelale said in a statement. He didn't provide further details of the financial package sought by the Nigerian government. "We have serious deficits in port infrastructure, power infrastructure, and agro-allied facilities," Tinubu said in the statement. "These deficits present unrivaled opportunity for savvy investors in a market that is by far the largest on the continent," he said. On Friday, Nigeria agreed to a series of investments and cooperation deals with Saudi Arabia, including a pledge by the Saudi government to make a "substantial deposit" of foreign exchange to help boost Nigeria's forex liquidity.

Under Tinubu, Nigeria has embarked on its boldest reforms in decades, ending a costly petrol subsidy and restrictions on foreign currency trading as part of measures to boost economic growth. Tinubu, who was sworn into office in May, has pledged to revive the economy fraught with sluggish growth, double-digit inflation, foreign currency shortages, widespread insecurity, and crude oil theft. Muhtar said the IsDB is ready to work with the government to support big investments in Nigeria, which is expected to get a "significant share" of a $50 billion Africa investment fund announced by the bank in cooperation with the Arab Coordination Group. The Jeddah, Saudi Arabia-based IsDB is a multilateral development bank that provides financing for infrastructure and other development projects in Muslim-majority countries.

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Nigeria's equities market surges 0.25% despite escalating inflation

By Samuel Bankole In a noteworthy performance, the Nigerian equity market demonstrated resilience by closing on a positive note, with the All Share Index posting a 0.25 percent increase, reaching 71,014.34 points. This achievement comes against the backdrop of a surging inflation rate. The National Bureau of Statistics (NBS) reported a 0.61 percent rise in headline inflation for October, reaching 27.33 percent, up from 26.72 percent recorded in September 2023. Despite this economic challenge, the market cap of equities listed on the NGX witnessed growth, reaching N39.054 trillion, compared to the previous close of N38.941 trillion.

Trading activity was robust, with a total volume of 297.354 million units valued at ₦6.16 billion exchanged in 6,172 deals. Market breadth favoured the bulls, with 39 gainers outnumbering 19 losers. The NGX 30 Index, closing at 2,605.85 points, showed a 0.17% increase from the previous close at 2,601.33 points. Key gainers included International Breweries and BUA Cement, while Fidelity and Zenith emerged as the key losers. Despite challenges, core inflation, excluding volatile agricultural produce prices, rose to 22.58% in October 2023, compared to 21.84% in September 2023. Additionally, the composite food index registered a year-on-year increase of 31.52% in October 2023, up from 30.64% in September 2023.

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Lagos Chamber of commerce asks govt to create asset register to ease debt burden

Lagos Chamber of commerce asks govt to create asset register to ease debt burden: As such, it is critical to create a national asset register, and have a coordinated mechanism in place for valuing and managing Nigerian assets. READ MORE

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UAE adopts guidelines to combat money laundering

The Committee approved six-risk assessment reports related to terrorism financing, trade-based money laundering, misuse of legal persons, non-profit organisations, lawyers and the gold sector. READ MORE

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EFCC boss, Bawa seeks senate backing for anti-graft fight

The EFCC chairman sought the support of the committee to enable the Commission to carry out its functions effectively. READ MORE

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New USSD pricing model, a setback for financial inclusion

The critical difference between both models is that in a bank-led model, Telcos provide the underlying infrastructure for USSD services, whilst the banks leverage this infrastructure to provide the banking services. READ MORE

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Nigeria says 26,000 capacity modular refineries ready for commissioning

Among those with inactive refining licenses are Sifax Oil and Gas Compay with 120,000 capacity, Capital Oil and Gas with 100,000 capacity and Aiteo Energy Resources with 100,000 capacity. READ MORE

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African fisheries need reforms to boost resilience after Covid-19 ~study

The study stated that the sector is currently grappling with fragile value chains and marketing, weak management institutions and serious issues relating to the governance of fisheries resources. READ MORE

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MTN Nigeria seeks cooperations of banking partners to work out long-term deal on USSD code

“We are confident that partners in the banking sector will work with us to ensure this process concludes as quickly as possible to the benefit of the entire industry,” the telecom firm said in a statement. READ MORE

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NNPC commits to renewable energy projects with Kebbi

The NNPC chief said the biofuels project being embarked on by the parthers was viable and in tandem with the global transition to renewable energy. READ MORE

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Dangote Sugar backward integration on course, dismisses allegations of price-fixing

Speaking on efforts by DSR to ensure seamless sugar production and availability in the country, Singhvi said the company began its Backward Integration Programme (BIP) with a 10-year sugar development plan, to produce 1.5 million MT per annum of sugar from locally grown sugarcane. READ MORE

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CBN Devalues Naira by 17.26% To N360/$, External Buffer Down $35.9 Bln

The Central Bank of Nigeria (CBN) on Friday officially devalued the nation’s currency at both the official window and the Investors’ & Exporters’ (I&E) FX Window to reflect the reality and conditions of the marker, a top banker told Global Financial Digest.
The regulatory bank has moved the official rate to N360 to the dollar from N307 per dollar previously and now selling dollar to foreign portfolio investors (FPI) at N380.20 at the I&E window from N366 per dollar previously.
Also, the CBN has effectively moved the rate for the bureau de change segment of the market to N380 to the dollar, while the operators are expected to buy dollar from the CBN at N378 per dollar, according to a circular sent to the BDC operators by the apex bank.
With this action, the regulatory bank has effectively unified the foreign exchange rates in the market in line with the recommendations of the International Monetary Fund (IMF).
In the circular sent to BDC, the CBN said proceeds from the International Money Transfer Service Operators (IMTOs) to banks will hence be traded at N376 per dollar, while from banks to the CBN, the rate will now go for N377 per dollar.
The CBN said it will now sell dollars to the BDC at N378 to the dollar while the BDC operators will sell to end-users at N380 to the dollar.
“Please be advised that the applicable exchange rate for the disbursement of proceeds of IMTOs for the period Monday, March 23 to Friday, March 27, is as follows,” the CBN circular signed by the director of Trade and Exchange, O.S Nnaji stated.
There have been speculations in the market in recent time that the CBN may devalue the currency in view of the impact of the Coronavirus and the sharp drop in global oil prices.
The unification of the exchange rate has effectively end almost three years of multiple exchange rates in the market.
Before now, the country has about five different exchange rates; one for offshore investors at I&E window, the other for the official window, another one for the interbank, while the bureau de change operators rate was also different from the rest.
A top banker said: “This is a devaluation. It might also lead to convergence of rates. The question is, is it enough?”
“Today, it is still difficult to buy funds from the market at 380. So let’s see how it goes,” the banker who preferred anonymity told one of our correspondents.
Nigeria’s external forex reserves fell $35.94 billion by March 19, from $38.53 billion, representing a 6.72 percent drop year-to-date.
“The best approach has always been allowing the market to decide. The market will move the price to a level that will create an equilibrium price for both demand and supply and that price that will be appropriate for the market at this point in time considering the environment,” the senior banker said.
He, however, noted that If there is an overreaction to the latest move, the market will correct itself. The CBN May step in extreme volatility to calm the markets by providing supply.

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China Construction Firm To Build Railway Assembly Plants In Nigeria

The China Civil Engineering Corporation (CCEC) is to build a railway wagon assembly plants that will produce around 500 wagons for train across the continent, the foundation for the project was laid by Nigeria Vice President Yemi Osinbajo on Saturday.

The plant located in Kajola, Ogun State is expected to generate about 5,000 direct and indirect jobs and would emerge as the largest private investment by CCECC in sub-Saharan Africa when completed.
Osinbajo while laying the foundation of the plants, charged the contractor handling the project, CCECC to start assembling locomotives and coaches in Nigeria.
The Federal Ministry of Transportation had earlier stated that the plant would create 5,000 direct and indirect jobs, as well as boost the country’s foreign exchange through exports.
“The plant which is a private investment to be undertaken by Messers CCECC, is central in the production of rolling stock needed for the railway modernisation programme being implemented by this administration.
“This ceremony is not just another event, it is a historic turning point. For us, the railway is not only an alternative and comfortable mode of travel, it holds the master key to transforming commerce in Nigeria and across the continent,” Osinbajo said at the ceremony.
On the assembling of coaches in Nigeria, Osinbajo stated that he was directed by President Muhammadu Buhari to tell the contractors to work towards achieving the feat.
“I have a message also from the President and this is to CCECC which is that we expect that you move on very quickly to the next phase of this project which is the assembly and construction of coaches and locomotives.
“This for us will be a significant breakthrough and we will be looking forward to hearing from you as quickly as possible when this will come into operation.”
He said the plant would produce some of the parts, as well as wagons that would be deployed in the Lagos-Ibadan railway.
Osinbajo said, “By linking our ports to rail lines and now building the rolling stock locally, import and export business within, into and out of Africa’s largest market will never be the same.
“When completed, it is expected that the plant would produce some parts of the wagons for the Lagos-Ibadan and Abuja-Kaduna rail lines, also for the central rail lines and to satisfy the needs of other rail operators within the West African sub-region.”

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Nigeria Senate Excited Over $10 Bln Train 7 NLNG Project

Nigeria plans to increase gas production capacity by 35 percent and invest $10 billion on train seven of the Liquefied natural gas project is being backed by the country's Senate.

The Nigeria Liquefied Natural Gas (NLNG) chief executive Tony Attah was at the Senate to make presentation on the proposed expansion of gas production in the country on Thursday.
The Senate Committee on Local Content, headed by Teslim Folarin has urged Nigerians to actively participate in the project which would create 10,000 new jobs and expand gas production capacity by 35 percent.
Folarin said the Senate is committed towards ensuring that Nigerians are active participants in the gas sector.
Folarin in a statement by his Senior Legislative Aid Bamidela Ajibola on Friday said the committee was delighted at the expansion of the nation’s gas capacity from 22MTPA to 30MTPA through the train7 project.
He said the project would be constructed by the SCD consortium, comprising of Saipem, Chiyoda and Daewoo.
Folarin stressed with the foreign direct investment on the project, the gas sector and the nation, stands to witness unprecedented benefit.
He, however, said that NLNG should expect further invitations from the senate given its determination to ensure that the project complies with Local Content laws once the Final Investment Decision (FID) on the TRAIN seven project was signed.
Attah in his remark explained that NLNG was owned by four shareholders, namely the Federal Government, represented by the Nigerian National Petroleum Corporation (NNPC) with 49 per cent, stake; Shell Gas has 25.6 percent Total Gaz Electricite with 15 percent and Eni International with 10.4 percent.
He said NLNG selected the SCD consortium for the Train seven project after a thorough bidding process.
According to him, the SCD consortium will collectively build the seven billion dollars Train seven LNG expansion plant.
Attah said that an additional 3billion dollars worth of investment in upstream gas development would be spent to meet the expected demands of the new capacity.
He said the investment would raise the global profile of Nigeria as the fourth largest exporter of LNG in the world.
He commended the Senate and its Committee on Local Content for the support rendered so far.

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