The financial market has continued to price money at higher rates as a result of recent monetary policy tightening. This has significantly impacted the financial sector, with short-term benchmark interest rates rising to double-digit levels.
According to statistics from the FMDQ platform, interbank rates in the money market increased sharply last week as a result of the financial system’s stressed liquidity balance.
Short-term benchmark interest rates have modified to reflect a hawkish monetary policy stance in an effort to combat inflationary forces such as an excessive money supply.
The Apex Bank increased the monetary policy rate and cash reserve ratio (CRR) to 27.25% and 50.0%, respectively, thus keeping a substantial portion of bank deposits with the authority, limiting liquidity, and constraining interbank lending, Afrinvest said.
Data obtained from the market revealed that liquidity level in the financial system started with a credit balance of around ₦709 billion, AIICO Capital Limited said in an emailed note but dropped by over ₦1.4 trillion last week.
According to market analysts, the decrease was caused by outflows related to the Central Bank of Nigeria’s (CBN) foreign currency market (FX) intervention settlements.
The market also witnessed outflows related to cash reserves ratio (CRR) debits on banks and OMO auction settlements, despite some inflows from different sources.
Total outflow relating to OMO bills auction was N731.14 billion, Cash Reserves ratio debit was N110 billion, while FX sales intervention reduced the liquidity level by an additional sum of N98 billion.
Analysts said the amount that exited the system overwhelmed Remita inflows, swap maturities, FGN bond coupon inflows, and FCT Signature Bonus, which bolstered the balance in the financial market.
As a result, the interbank rates notably rose, with the open repo rate (OPR) and the overnight rate (O/N) increasing by 2.54% and 2.80% to 32.23% and 32.77%, respectively, analysts said.
As a result, the average system liquidity closed at a net short position of NGN174.26 billion, down from a net long position of NGN462.09 billion the week before, according to Cordros Capital Limited.
“We expect the overnight lending rate to remain elevated in the absence of any notable inflows to support the financial system amid a possible net issuance at the Wednesday Nigerian Treasury Bills auction,” the company reported.
According to Afrinvest Limited, the Federal Accounts Allocation Committee (FAAC) inflow totaled N903.4 billion in September, providing an occasional boost to system liquidity.
However, this influx was offset by overall outflows of around N1.34 trillion due to the CBN’s Treasury bill sales outflow of N622.7 billion and OMO auctions totaling N712.5 billion. Nonetheless, system liquidity ended higher at ₦253.6 billion in September from the negative close in August.
Mr Olayemi Cardoso, Governor of the Central Bank of Nigeria, has justified the bank’s decision to raise the Monetary Policy Rate to 27.25 percent, calling it as a vital step toward controlling inflation and reducing surplus money in circulation. The apex bank issued a press statement on Sunday.
Speaking at the Harvard Club of Nigeria over the weekend, Cardoso highlighted that the rate hike, while difficult for borrowers, is critical to the country’s economic stability.
“Our decision to raise the Monetary Policy Rate to 27.25 per cent was a bold move. Higher interest rates, while painful for borrowers, are necessary to curb excess money in circulation and control inflation. Leadership is about making hard choices to secure long-term stability over short-term comfort in moments like these,” Cardoso said.
He stated that the CBN’s focus on key objectives, such as limiting inflation, restoring credibility, and increasing public trust in the financial system, is crucial to any meaningful recovery.
Cardoso made his remarks as he reflected on his one-year time as CBN governor. He emphasized that trust is at the heart of central banking, and without it, the efficiency of the bank’s initiatives would suffer.
The CBN Governor also stated that the establishment of the Electronic Foreign Exchange Matching System is a critical measure for increasing transparency and restoring market trust.
“Trust is the currency of central banking. If the public loses trust in the institution, the efficacy of its policies diminishes. Our decision to implement the Electronic Foreign Exchange Matching System is rooted in this understanding.
“By enhancing transparency and providing more accurate oversight of forex transactions, we send a strong signal that the CBN is serious about fair and efficient markets,” he said.
Cardoso also revisited the bank’s controversial decision to float the naira, a move that was met with public criticism.
He explained that the decision was necessary to bring the official exchange rate closer to market reality and reduce speculative trading.
He asserted that the move had started stabilising the currency markets and reducing speculative trading.
While the CBN has yet to fully achieve its inflation targets, Cardoso expressed optimism, citing recent reports from the National Bureau of Statistics (NBS), which showed inflation had begun to decline in July and August 2024. He acknowledged that the bank’s policies are gradually steering the economy in the right direction, though challenges remain.
As part of its attempts to reduce prices, the federal government recently granted VAT exemptions for a variety of energy goods, including diesel, liquefied natural gas (LNG), compressed natural gas (CNG), and electric vehicles.
According to Finance Minister Wale Edun, these initiatives are intended to reduce the cost of living, improve energy security, and accelerate Nigeria’s transition to cleaner energy sources.The Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS), and other agencies would no longer collect VAT on 63 products, according to an official Gazette from the Ministry of Finance titled “VALUE ADDED TAX (MODIFICATION) ORDER, 2024.”
According to the official Gazette, the exclusion of VAT from Automotive Gas Oil (AGO) also called diesel would become effective from October 1, 2024, while other items would be implemented by the relevant agency with approval from the Minister of Finance.
The VAT rate in Nigeria is 7.5% according to 2020 and excludes businesses with less than N25 million turnover in one year.
The 69 items are
CNG/LPG Dual Fuel Vehicles
Dedicated LPG Vehicles and CNG/LPG Dual Fuel Vehicles
Parts, and semi-knocked down units (for assembly) of CNG and LPG Buses
Parts, and semi-knocked-down units (for assembly) of Electric Vehicles
Electric Vehicles
Electric Vehicles Battery
Electric Vehicles Charging System
Electric Vehicle Solar Charging System
LPG/CNG Conversion Kits
CNG Cylinders.
CNG Cascades
CNG Dispensers
Gas Generators
CNG Trucks (Bobtails and Bridgers; fixed axle and semi-trailers)
Steel Pipes
Steel Valves & Fittings
SS Tubes & Fittings
Storage Tanks (all sizes)
Regulators
CNG Pumps and Compressors (all types)
Steel
Pressure Relief Valves
Hydraulic press/Rolling machine
Heat Treatment Equipment
Liquid Level Guage
Pumping Housing and Motors
Regulator Body
Pressure Guage
Truck Chassis
Metering and Measuring Equipment (including weighbridges, filling scales)
Dispensing equipment (dispensing scales, nozzles, gas filling systems)
Point-of-sale transactions in Nigeria totalled N6.23 trillion between January and July 2024, according to data from the Nigeria Inter-Bank Settlement System.
This marks a 7.4 per cent decline compared to the N6.79tn recorded in the same period in 2023, reflecting changes in consumer behaviour and spending patterns.
A breakdown of the NIBSS data shows that PoS transactions increased by 5.3 per cent in January to N850.09bn, up from N807.16bn in the corresponding month of 2023.
However, February witnessed a decline to N805.05bn, down 8.9 per cent from N883.45bn in February 2023. March saw a sharp 16.5 per cent drop, with transactions falling to N961.86bn from N1.15tn in March of the previous year.
The downward trend continued in April, with PoS transactions dropping by 22.3 per cent to N811.78bn, compared to N1.04tn in April 2023. However, May reversed the trend, with transactions increasing by 16.1 per cent year-on-year to N868.66bn.
The downturn began in June, with PoS transactions falling by 1.3% to N930.76 billion, from N943.38 billion in June 2023. However, PoS transactions in the country increased by 8.9 percent in July, totaling N1005.42 billion, up from N923.32 billion in July 2023.
E-payment transactions in the country increased by 86.44 percent to N566.39 trillion in the first half of 2024, from N303.60 trillion in the same time previous year. The data showed that July had the greatest transaction value, totaling N89.50 trillion, compared to N47.39 trillion in July 2023.
Housemate Kingsley Oritsetimeyin, alias Kellyrae, has won Big Brother Naija Season 9, No Loose Guard. Kellyrae beat off eight rivals to win the coveted N60 million cash prize, an SUV, and other prizes.
The ultimate finale featured eight housemates: Kellyrae, Wanni, Victoria, Onyeka, Ozee, Sooj, Nelly, and Anita. The competition was strong as the housemates vied for the top slot. Sooj was eliminated first, then Anita and Ozee.
Nelly was the next to go, followed by Victoria, reducing the competition to Kellyrae, Wanni, and Onyeka. As tensions rose, Onyeka was the next to depart the Big Brother house. Wanni also left, making Kellyrae the winner of the show.
The finale was a star-studded affair, featuring performances from popular artistes Joseph Akinfewa-Donus, aka Joeboy, and Chimamanda Chukwuma, popularly referred to as Qing Madi.
Hosted by Chukwuebuka Obi-Uchendu, the event offered viewers a nostalgic look back at the memorable moments from the housemates’ journey throughout the season.
The “No Loose Guard” season premiered on July 24, 2024, with fierce competition among 14 pairs of dynamic housemates vying for the ultimate prize.
Former US President and Republican presidential candidate Donald Trump has accused Google of only showing “bad stories” about him, threatening to have the internet giant prosecuted if he returns to the White House.
In a post on his Truth Social platform on Friday, September 27, 2024, Trump gave no evidence to back up his charge.
The former president claims that the search engine only returns positive information about his Democratic competitor, Vice President Kamala Harris.
Trump noted: “This is an illegal activity, and hopefully the Justice Department will criminally prosecute them for this blatant Interference of Elections.
“If not, and subject to the Laws of our Country, I will request their prosecution, at the maximum levels, when I win the election.”
Trump’s post came after a conservative group reported on what it said it found when doing a search on “Donald Trump presidential race 2024”.
Google said in response to an AFP inquiry: “Both campaign websites consistently appear at the top of Search for relevant and common search queries.
“This report looked at a single rare search term on a single day a few weeks ago, and even for that search, both candidates’ websites ranked in the top results on Google.”
Google has been adamant that it does not manipulate search results to favour any political candidate. The company does not disclose the inner workings of the software that powers its ubiquitous search engine. However, factors known to influence search results for news stories include the timeliness and popularity of topics.
Trump is at the centre of numerous criminal and civil cases in which he faces accusations including sexual abuse, paying hush money to a porn star, interfering with the 2020 election, and trying to thwart the peaceful transition of power after President Joe Biden defeated him.
USA President Joe Biden has stated that he is not certain that the November election would be peaceful. Biden said this on Friday, October 4, 2024, citing fiery remarks made by Republican presidential nominee Donald Trump, who continues to reject his 2020 defeat.
Biden’s warning came as politicians and analysts expressed alarm about the increasingly bellicose campaign language ahead of the vote.
Trump, who escaped an assassination attempt in July and another apparent plot in September, claimed widespread fraud following his defeat to Biden, and pro-Trump rioters enraged by his bogus allegations ransacked the United States Capitol.
Biden told reporters: “I’m confident it will be free and fair. I don’t know whether it will be peaceful.
“The things that Trump has said and the things that he said last time out when he didn’t like the outcome of the election were very dangerous.”
Trump was impeached in 2021 for inciting the insurrection after hundreds of his supporters—exhorted by the defeated Republican to “fight like hell” – battered police as they smashed windows at the Capitol and broke through doors.
He has been indicted over what prosecutors allege was a “private criminal effort” to subvert the election that culminated in the violence.
Trump – who is due to return to the venue of his first assassination bid in Butler, Pennsylvania on Saturday – has long been assailed over his violent rhetoric. Biden made his comments during what was the first appearance of his presidency in the White House briefing room, where he touted his administration’s achievements as his vice president, Kamala Harris, battles Trump.
Harris and Trump meanwhile were barnstorming the battleground states that are likely to decide who wins the White House.
As Africa’s digital revolution charges forward, fintech is taking centre stage, driving economic growth and financial inclusion across the continent. Leading the charge is Interswitch, a key player in the African fintech landscape, who was recently announced as a sponsor of the 7th edition of the highly anticipated Nigeria Fintech Week. This national event promises to ignite conversations, spark collaboration, and inspire innovations that will shape the future of the fintech ecosystem.
Slated to run from Tuesday, October 8, 2024, to Thursday, October 10, 2024, at the Landmark Event Center, Victoria Island, Lagos, this year’s edition is themed “Positioning Africa’s Fintech Ecosystem to Accelerate Inclusive Growth.”
It will gather stakeholders from various sectors, including technology firms, financial institutions, regulators, investors, and industry experts. Together, they will critically assess the current state of fintech in Africa and chart a forward-thinking path for the future.
The theme couldn’t be more apt. Africa’s fintech industry has already earned its place on the global stage with innovative solutions that address the continent’s unique challenges. But to truly make a difference, fintech must reach every corner, offering access to millions of people currently underserved by traditional financial services.
Interswitch, with its pioneering role in digital payments and transaction processing across Africa, is a natural sponsor for this event. Since its inception, the company has been a key player in the transformation of Africa’s payment systems, making financial services accessible to individuals and businesses alike.
Through its integrated payment platforms, Interswitch has empowered millions by connecting them to the digital economy. This sponsorship underscores its commitment to an inclusive fintech ecosystem that benefits everyone, while also advocating for broader access to financial services.
Attendees can look forward to a range of impactful activities, including thought-provoking panel discussions on accelerating fintech’s role in inclusive growth. They will also experience workshops focusing on emerging technologies and regulatory frameworks, as well as invaluable networking sessions designed to foster partnerships between startups, established players, and policymakers.
Additionally, fintech innovators will have the opportunity to showcase their solutions tailored to Africa’s diverse needs.
As Africa’s fintech ecosystem continues to evolve, events like Nigeria Fintech Week remain essential for driving collaboration and innovation. With Interswitch’s involvement, this year’s gathering promises to have significant industry backing, deliver insights and tangible outcomes that will accelerate financial inclusion and economic growth across the continent.
So, as we gear up for the event, one thing’s for sure: the future of fintech in Africa is all about building bridges—between tech and financial systems, businesses and consumers, and most importantly, between innovation and inclusion.
In a bid to champion sustainable energy solutions across the continent, Stanbic IBTC recently hosted the Nigeria South Africa Chamber of Commerce September Breakfast Session.The event, which was held at the Iris Hall in the Eko Hotel & Suites, Lagos, was centred around the theme ‘Energy Transition: Identifying the need and financing the opportunities.’.
The gathering brought together a diverse group of industry leaders, experts, and stakeholders as they engaged in meaningful discussions, shared insights, and explored innovative strategies for identifying the needs related to energy transition and the various opportunities available for financing these endeavours. This session underscored the importance of collaborative efforts in making energy transition a reality; highlighting the pivotal role of financing in achieving sustainable energy solutions.
Commenting on the session, Wole Adeniyi, Chief Executive, Stanbic IBTC Bank, highlighted the importance of collaboration between Nigeria and South Africa in achieving sustainable economic growth and development. He emphasised the role of the financial sector in supporting cross-border investments and facilitating business transactions that are crucial for Africa’s economic integration.
“This is a significant step towards a future where Nigeria and South Africa leverage their collective strengths for the betterment of our continent. By joining forces, we position ourselves to address challenges with greater efficacy and to tap into the boundless opportunities that Africa holds; aiming for the prosperity of our populations. This collaborative spirit is not just about overcoming hurdles; it is about rewriting the narrative of our continent to highlight success, innovation, and sustainable growth.” Wole remarked.
According to Wole, the role of the financial sector in supporting cross-border investments and facilitating business transactions that are crucial for Africa’s economic integration and Stanbic IBTC pledges to be at the vanguard of this transformative era. “We are committed to delivering state-of-the-art financial solutions tailored to nurture the growth and triumph of businesses within both countries. Our mission extends beyond mere financial transactions; it is about building bridges between markets, fostering economic integration, and laying the groundwork for a future where the African continent can realise its full potential through unity and shared vision.”
Adebola Seriki, Sector Head of Conglomerates & Industrials, Corporate & Investment Banking; and Richard Inegbedion, Sector Head of Energy & Infrastructure, Business & Commercial Clients, both of Stanbic IBTC Bank shared an extensive analysis of the energy sector’s status quo and prospective evolution, particularly on renewable energy, addressing the electrification challenges and opportunities in Africa as of 2023.
The session presented crucial data, indicating Africa’s population at approximately 220 million in 2023, with an annual growth rate of 2.53 per cent. The disparity in electricity access is stark, with only 60 per cent of the populace having access; highlighting a pronounced urban-rural divide. The electricity generation capacity of 12.5GW starkly contrasts with the mere 5.1GW effectively available; pinpointing a critical gap due to infrastructural inefficiencies. The energy sector’s heavy reliance on oil and gas, accounting for 81 per cent[RA1][BA2] , with renewables at just 19 per cent, emphasises the pressing need for a diversified and sustainable energy portfolio.
The discussions at the breakfast session also highlighted the acute electricity and clean cooking facilities shortage, affecting over 500 million and 1 billion Africans, respectively. The renewable energy sector emerges as a promising avenue for substantial job creation, with projections indicating the potential to generate over 4 million jobs by 2030. The advocacy for decentralised energy solutions, like mini-grids and solar home systems, highlights their cost-effectiveness in broadening electricity access.
A significant focus was placed on the essential role of financing in realising the vision of universal energy access. The discourse highlighted the role of commercial banks in channelling capital towards renewable energy projects and the necessity for collaboration between the public and private sectors to facilitate this transition.
Stanbic IBTC Bank’s introduction of a novel financing scheme for developers involved in the World Bank-funded Rural Electrification Agency’s DARES programme marks a significant stride towards supporting renewable energy projects, including mini-grids and stand-alone solar systems. This initiative is evidence of the collective commitment to driving a sustainable energy transition in Africa.
The NSACC September Breakfast Session highlighted the critical challenges facing Africa’s energy sector and illuminated the path towards a just and inclusive energy transition. By leveraging investment, innovation, and supportive policies, and capitalising on the continent’s vast renewable energy potential, Africa can embark on a journey towards sustainable development and energy security for all its citizens.
The Race to the White House Presidential Forecast anticipated the likely winner in each state by analyzing recent polls, electoral history, and national economic trends over the previous two years.
Using this information, the model simulates the Electoral College 50,000 times to calculate the likelihood of Kamala Harris or Donald Trump winning the election. This data-driven forecast has been carefully validated for accuracy in every American presidential election since 1972.
Since its inception in 2020, Race to the White House has earned a solid reputation for making accurate forecasts. In 2022, it missed the precise number of Republican House members by one, and an independent analysis found that its House and Senate race probability were the most accurate among predictors.A
As of now, the forecast predicts that Kamala Harris has a 57.1% chance of winning, while Donald Trump has a 42.7% chance, with a margin of just 0.2% between them. In terms of projected Electoral College votes, Harris is expected to receive 284.2, while Trump is predicted to secure 253.8. Democrats are projected to win 247 seats, while Republicans are expected to claim 219.
Harris, the first female, Black, and Asian-American U.S. Vice President, gained President Biden’s endorsement to succeed him in the presidential race. Trump and Harris are the main contenders in the upcoming election. Harris has revitalised the Democratic base, swiftly closing the gap in the polls and reversing Trump’s gains in key swing states that could decide the election.
Meanwhile, on 15 September, Trump’s quiet weekend golf outing in Florida was abruptly interrupted by gunshots when a Secret Service agent thwarted what the FBI described as an apparent assassination attempt. Trump was unharmed, marking the second such incident in two months.
Investigators revealed that the gunman, Ryan Routh, did not fire at Trump but fled after a security agent spotted his rifle aimed through the tree line and opened fire. Trump blamed the incident on what he described as the “provocative rhetoric” of Biden and Harris.
Although Democrats condemned political violence, the incident highlights the growing volatility of U.S. politics just weeks before the election.
The exchange rate between the Naira and the US dollar, according to the data released on the FMDQ Security Exchange, the official forex trading portal, showed that the Naira closed at 1680.00 per $1 on Friday, October 4, 2024. Naira traded as high as 1657.00 to the dollar at the investors and exporters (I&E) window on Tuesday.
How much is a dollar to naira today in the black market?
Dollar to naira exchange rate today black market (Aboki dollar rate):
The exchange rate for a dollar to naira at Lagos Parallel Market (Black Market) players buy a dollar for N1665 and sell at N1680 on Thursday 3rd October 2024, according to sources at Bureau De Change (BDC).
Please note that the Central Bank of Nigeria (CBN) does not recognize the parallel market (black market), as it has directed individuals who want to engage in Forex to approach their respective banks.
Dollar to Naira Black Market Rate Today
Dollar to Naira (USD to NGN)
Black Market Exchange Rate Today
Buying Rate
N1665
Selling Rate
N1680
Dollar to Naira CBN Rate Today
Dollar to Naira (USD to NGN)
CBN Rate Today
Buying Rate
N1656
Selling Rate
N1657
Please note that the rates you buy or sell forex may be different from what is captured in this article because prices vary.
Petrol Imports Decline By 3.58 Billion Litres In One Year—NBS Reports
The National Bureau of Statistics (NBS) has revealed a significant reduction in the importation of Premium Motor Spirit (PMS), commonly known as petrol, over the past year.
According to the latest petroleum distribution figures released by the agency, petrol imports decreased by 3.58 billion litres between 2022 and 2023.
The report highlights that total petrol imports fell from 23.54 billion litres in 2022 to 20.30 billion litres in 2023, representing a year-on-year decline of 13.77%.
Notably, the second half of 2023 saw a sharp decrease in imports, with 8.36 billion litres imported compared to 11.94 billion litres in the first half, marking a 29.99% reduction.
The NBS statement further clarified, “In 2023, PMS truck out stood at 20.22 billion litres, indicating a 16.96 percent decrease relative to 24.35 billion litres recorded in 2022.
“In terms of imported products, 20.30 billion litres of Premium Motor Spirit were imported in 2023 relative to 23.54 billion litres in 2022, showing a decrease of 13.77 per cent. This downward trend is even more notable when compared to H2 2022.
“In the latter half of 2022, petrol imports stood at 11.98 billion litres, resulting in a 30.22 per cent drop when compared to H2 2023, equivalent to a reduction of 3.62 billion litres.”
As the interest rate hike shifted investors’ attitudes toward Nigerian government bonds, the benchmark yield increased due to prolonged selloffs at the short, belly, and longer ends of the curve.
In the secondary market for Federal Government of Nigeria (FGN) bonds, negative trading activity resulted in a 0.25% increase in the average yield, bringing it to 19.09%.
The monetary authority raised interest rates to 27.25% last month, bolstering market expectations of a higher return on investment. Since the start of the monetary policy committee’s rate hike cycle, the fixed income market has been the favorite destination for investors looking to capitalise on rates’ appeal.
Institutional investors, Pension Fund Administrators (PFAs) and other asset managers remained core players with elevated yield.
Even at that, investor funds are still exposed to inflation negatively, and analysts predict it is unlikely to see the gap close as the Debt Management Office keeps rates subdued to reduce pressure on federal government debt service costs.
Yields expanded at the short (+41 bps), mid (+17 bps), and long (+13 bps) segments, with notable activity around the 28s and 29s. As a result, the average yield rose by 25 bps to settle at 19.09%.
The yield curve was shifted due to profit-taking activities on the APR-2029 (+128bps), JUL-2030 (+41bps), and JUN-2038 (+85bps) bonds, respectively.
With the recent 50 basis points increase in the benchmark interest rate, fixed interest rates are expected to stay elevated, maintaining investor interest.
However, liquidity remains a key driver of yield direction, and analysts anticipate it will continue to shape market activities.
The Nigerian National Petroleum Company Limited has pledged 272,500 barrels of crude oil per day through a series of crude-for-loan transactions worth $8.86 billion.
The pledge of 272,500 barrels per day means that the national oil business will spend around 8.17 million barrels of crude for various credit transactions on a monthly basis. This is based on an analysis of the Nigeria Extractive Industries Transparency Initiative’s report and the NNPC’s financial filings.
Notable initiatives in these transactions include Project Panther, Project Bison, Project Eagle Export Funding (Original, Subsequent, and Subsequent 2 Debts), Project Yield, and Project Gazelle.
According to the data, NNPC has now fully repaid $2.61 billion in loans, accounting for 29.4 percent of the overall credit facility, with $6.25 billion, or 70.6 percent, still outstanding.
In addition, only around $6.97 billion of the $8.86 billion credit facility has been obtained through seven crude-for-loan transactions. One of the important initiatives is Project Panther, a joint venture between NNPC and Chevron Nigeria Limited funded by international and local banks.
The project received a $1.4 billion financing facility, with 23,500 bpd promised to service the debt. Repayment will begin following a moratorium, with financing terms comprising a SOFR (Secured Overnight Financing Rate) plus a 5.5 percent margin and a liquidity premium.
Another significant deal is Project Bison, tied to NNPC’s attempt to acquire a 20 per cent equity stake in the Dangote refinery. However, the national oil company only acquired a 7.25 per cent stake.
The project secured a $1.04bn loan from Afrexim Bank, with 35,000 bpd pledged as collateral. NNPC fully repaid this loan in June 2024. Project Eagle Export Funding comprises three separate loans aimed at meeting various financial obligations.
The original loan, secured in 2020 for $935m, was serviced with 30,000 bpd and was fully repaid by September 2023.
A subsequent loan of $635m was also fully repaid by the same period. The third tranche, known as Project Eagle Export Funding Subsequent 2 Debt, was secured in 2023 for $900m, with 21,000 bpd pledged. Repayment is scheduled to begin in June 2024, and the loan will mature in 2028.
Project Yield, designed to support the Port Harcourt Refining Company, involves a $950m loan, with 67,000 bpd pledged for repayment.
The repayment of the loan, secured in 2022, will begin in December. This seven-year facility is crucial to refurbishing the refinery and enhancing domestic refining capacity.
However, despite this crude-for-loan arrangement, The PUNCH reports that fuel production at the Port Harcourt refinery has yet to commence, despite multiple postponements as of August. Promises from the Federal Ministry of Petroleum Resources and NNPC have repeatedly fallen through.
More recently, there was the Project Gazelle deal, which aimed to stabilise Nigeria’s foreign exchange market.
In December 2023, NNPC secured a $3bn forward sale agreement, pledging 90,000bpd from Production Sharing Contract assets to cover future tax and royalty obligations. As of the end of 2023, $2.25bn had been drawn from this facility, with repayments scheduled to begin by mid-2024.
These crude-for-loan deals come at a time when Nigeria is struggling to boost its oil production. The NEITI 2022-2023 report revealed a significant decline in crude oil output, reaching the lowest levels in a decade. In 2022, the country produced 490.94 million barrels of crude oil, a steep drop from the peak of 798.54 million barrels in 2014.
Although production slightly improved to 537.57 million barrels in 2023, this still represents only 67.16 per cent of the country’s peak production capacity.
One of the major challenges facing the sector is production deferment. In 2023, Nigeria deferred 110.66 million barrels of crude oil, down from 153.44 million barrels in 2022.
The deferment was primarily due to unscheduled maintenance, repair issues, and oil theft. Despite government efforts to curb these issues, including initiatives to reduce theft and sabotage, operational inefficiencies persist.
NEITI reported that oil theft and sabotage resulted in the loss of 5.25 million barrels in 2023, exacerbating production struggles. The House of Representatives Special Joint Committee recently directed NNPC to halt further crude-for-loan agreements.
This directive follows reports that the company is planning to borrow an additional $2bn in oil-backed loans amid efforts to settle a $6bn backlog owed to international oil traders, particularly following the removal of fuel subsidy. The NNPC was in talks for another oil-backed loan to boost its finances and allow investment in its business, according to the Group Chief Executive Officer, NNPC, Mele Kyari.
Kyari said the company wanted the new loan against 30,000-35,000 barrels per day of crude production, though he declined to say how much money it sought.
Nigeria’s government finances rely on oil the NNPC exports, which provides the bulk of crucial foreign exchange reserves. However, pipeline theft and years of underinvestment have sapped oil production in recent years, and the cost of fuel subsidies has further depleted cash reserves.
President Bola Tinubu has been struggling to implement reforms in Africa’s biggest oil exporter – including eliminating fuel subsidies and allowing the naira currency to trade close to market levels – without putting the country’s population at a cost-of-living breaking point.
On August 17, 2023, the NNPC announced that it had secured a $3.3bn emergency crude oil repayment loan from the African Export-Import Bank.
It explained at the time that the oil company would use the loan to support the Federal Government in stabilising Nigeria’s exchange rate. The facility, among other things, would help the Federal Government attend to some of its dollar obligations, assist the Central Bank of Nigeria in stabilising the foreign exchange market, and provide funding for NNPC.
Providing details about the deal in the document titled, “Everything you need to know about the NNPC Limited’s $3.3bn loan, also known as Project Gazelle,” NNPC said, “This is a financing agreement secured by NNPC Limited to prepay future royalties and taxes to the Federal Government.”
The company also stated that it adopted a lower price benchmark for the $3.3bn crude-for-cash loan to reduce the risk of default and ensure financial stability.
Giving details on the benchmark oil price, the company said the facility used a conservative crude price of $65/barrel to calculate the allocated crude to be produced and sold.
NNPC also said repayments were strategically planned and tied to future oil sales, with conservative pricing in oil sales contracts mitigating the risks associated with oil price volatility.
Amid the existing crude-for-oil deals, President Bola Tinubu approved the sale of crude to local refineries in naira and the corresponding purchase of petroleum products in naira. From October 1, NNPC commenced the supply of about 385,000 barrels per day of crude oil to the Dangote refinery, which would be paid for in naira.
On Thursday, the worldwide cryptocurrency market capitalisation fell by 2.18% to about $2.1 trillion, owing to a sharp drop in Bitcoin prices.
Bitcoin is currently trading at $60,500, with negative price movement. The largest cryptocurrency has lost more than 6% of its market capitalization in the last six days.
According to CoinMarketCap.com, the overall cryptocurrency market volume in the latest 24 hours was $93.47 billion, a 21.73% decline from the previous day.
According to market reports, DeFi’s total volume is currently $5.07 billion, accounting for 5.42% of the overall crypto market 24-hour volume traded on the Exchange. The volume of all stable coins is presently $85.77 billion, which represents 91.76% of the whole crypto market 24-hour volume.
Yesterday, most major digital assets were in the red late Wednesday, with bitcoin (BTC-USD) dropping close to $60,000.
The CoinDesk Market Index, which tracks 134 digital assets, shed 2.9% in the past 24 hours, while US stock indexes were edging higher. The Nasdaq 100 rose 0.3%, while the S&P 500 and Dow Jones Industrial Average were up about 0.1% each.
Bitcoin, the most popular cryptocurrency, dropped 2.6% to $60,189. Ethereum (ETH-USD), the second-largest digital asset, slumped 4.9% to $2,375.
BNB (BNB-USD), the third-largest digital asset by market value excluding stablecoins, lost 2.1%, while Solana (SOL-USD), the fourth-largest, tumbled 4.8%. XRP (XRP-USD) sank 5.5%, Cardano (ADA-USD) slid 4.7%, and Dogecoin (DOGE-USD) dipped 1.6%.
The US 10-year Treasury yield closed at 3.783%, up from Tuesday’s close of 3.741%, while the five-year yield closed at 3.552%, up from 3.521%.
The Nigerian Exchange’s (NGX) stock market capitalisation fell by more than N671 billion due to selloffs in Dangote Cement, FBN Holdings, and others.
The continued selloffs on the local market brought key performance indicators down by 1.19%, forcing year-to-date returns to fall even further. As a result, the market index, or All-Share Index, fell by 1,167.97 basis points in today’s trading session, closing at 97,064.42 points.
Stockbrokers noticed profit-taking behavior in some mid and large-cap stocks. DANGCEM, DANGSUGAR, FBNH, and other companies have all declined. Today’s market activity decreased slightly, with total volume and total value traded falling by 36.96% and 20.02%, respectively.
In its market update, Atlass Portfolios Limited said approximately 268.39 million units valued at ₦6,758.88 million were transacted across 8,565 deals. UBA was the most traded stock in terms of volume, accounting for 13.85% of the total volume of traded on the Exchange.
Other volume drivers include ZENITHBANK (7.10%), DEAPCAP (5.19%), STERLINGNG (4.88%), and CAVERTON (4.52%) to complete the top 5 on the volume chart. SEPLAT emerged as the most traded stock in value terms, with 34.65% of the total value of trades on the exchange.
Also, SEPLAT topped the advancers’ chart today with a price appreciation of 10.00 percent. Other gainers include LIVESTOCK (+9.93%), REGALINS (+9.76%), CAVERTON (+9.63%), MANSARD (+7.82%), ABCTRANS (+7.69%) and nineteen others.
Twenty-seven stocks depreciated, according to data from the Nigerian Exchange. DANGCEM and MICNICHOLS were the top losers, with a price depreciation of -10.00% each.
Other decliners include DANGSUGAR (-4.41%), FBNH (-4.26%), HONYFLOUR (-4.21%), WAPCO (-1.76%), and TRANSCORP (-1.34%).
At the end of trading session, Stockbrokers said the market breadth closed negative, recording 27 gainers and 23 losers. However, the market sector performance was positive, as three of the five major market sectors were up.
The Oil & Gas sector grew by +3.80% followed by the Insurance sector which advanced by +2.00% while the Banking sector inched higher by +0.03%. On the other hand, the Industrial and Consumer goods sectors declined by 5.96% and 0.20% respectively.
Overall, the equities market capitalisation of the Nigerian Exchange declined or lost₦671.16 billion to close at₦55.78 trillion.
The naira rose against the US dollar in the foreign currency (FX) markets, causing the difference between official and parallel market rates to narrow dramatically.
The naira increased by 0.59% and closed at ₦1,659.26 per US dollar in the official market, according to FX spot data from the FMDQ website. Yesterday, the local currency fell sharply in the official window, losing 8.5% to close at N1,669.15 per USD.
Even while the nation’s foreign reserves are technically robust enough to weather the storm, the US dollar shortage continues to be a drag on exchange rate recovery.
However, analysts noted that a large portion of the entire balance of $38 billion in foreign reserves has been committed, implying that the genuine balance is far lower.
In the black market, exchange rate recovered, the same pattern observed in the official foreign currency market on Thursday. The market wide appreciation of the naira reduced FX gap significantly.
Channel check showed that the Naira closed at ₦1,665 to the US dollar in the parallel market today, from N1684 per greenback on Wednesday.
With official rate at N1659 and parallel market rate of N1665, FX gap has collapsed to N6 on each US dollar, thus reducing speculative activities in the currency markets.
This was in contrast to the official rate of N1665 versus N1684 per US dollar exchange rate in the parallel market on Wednesday; which left FX spread at N19 on each greenback.
Today, oil prices went up and are set for a third consecutive session of increases due to concerns that Israel might target Iran’s oil industry in response to Tehran’s recent ballistic missile strike.
Brent rose by 4.91% to $77.50, while WTI prices had gone up by 5.18% to $73.73. On the other hand, gold prices dropped due to a stronger dollar as investors lowered their expectations of a significant interest-rate cut from the U.S. Federal Reserve.
The market is now awaiting Friday’s payroll data for more insights into future policies. Currently, gold is trading at $2,680.30 per ounce.
Investors’ interest rates on OMO bills fell to 24.32% in the Central Bank of Nigeria’s (CBN) primary market auction on Thursday.
Spot rates fell after the CBN’s monetary policy committee raised the benchmark interest rate to 27.25%, indicating that the authority is reacting quickly to double-digit inflation.
The CBN offered N500 billion across standard maturities at today’s OMO Auction, with demand totaling N737.14 billion, concentrated at the long end, according to CardinalStone Securities Limited analysts in an email message.
According to the investment firm, the CBN sold to match demand at a 24.32% stop rate on 362-day OMO bills. Last week’s primary market auction saw the OMO bill valued at 24.44%.
The pressure on the money market exacerbated in the absence of major inflows from maturing instruments and various borrowing instruments. This kept financial markets tight on liquidity, and in order to allocate resources properly, rates rose beyond 33%.
The short-term benchmark interest rate, which often influences returns on mutual funds and other money market accounts, is projected to remain high.
Investment firms claimed that interbank rates rose higher when the financing level or liquidity balance in the financial system deteriorated.
Analysts claimed that the latest tightening has maintained short-term benchmark interest rates higher, as opposed to the previous position witnessed in late September.
Due to weak funding level, transaction at the money market environment were conducted at higher rates while cash rich local banks request higher rates.
According to AIICO Capital Limited, system liquidity opened significantly lower on Thursday while analysts at the firm said most participants relied on the Standing Lending Facility of the Central Bank of Nigeria to fund their operations.
This happed as the apex bank also conducted OMO auction which analysts had projected will put further pressure on funding level.
The funding pressure spurred by OMO auction on Thursday nudged interbank rates closed higher. Specifically, the Open Repo Rate (OPR) and the Overnight Rate (O/N) increased by 4.01% and 3.81% to 32.98% and 33.68%, respectively.
Nigerian interbank offered rate (NIBOR) rose across all maturities, with banks holding reserves aiming to capitalize on higher rates, analysts at Cowry Asset Limited said in a note.
Nigeria aims to increase oil and gas production to four million barrels per day and 10 billion cubic feet by 2030. Olu Verheijen, Special Adviser to the President on Energy and Head of the Presidency’s Energy Office, announced this on Thursday via her official X handle. She stated that this goal is supported by new fiscal incentives designed to increase investment in the oil and gas sector.
President Bola Tinubu recently announced these incentives, which include a VAT waiver for gas, diesel, and related equipment, as well as tax rebates for new investments in deepwater oil and gas extraction.
Verheijen emphasised the need for these reforms noting, “Since Nigeria’s last deepwater project – the Egina project was approved in 2013, International Oil Companies operating in Nigeria have committed more than $82bn in deepwater investments to other countries that they deem more competitive.
“Over the next few years, they plan to spend another $90bn to develop deepwater oil and gas projects. This is the pool of funds that our reforms are targeting, and we intend to unlock between $5bn to $10bn of new investments in Nigeria in the near- to medium-term.”
She stated that these reforms aim to create many new jobs, increase foreign exchange earnings, and improve tax revenues adding that with approximately 76 per cent of Nigeria’s gas resources still untapped, the government hopes to enhance energy security and stimulate economic growth.
Commenting, the the Chairman of the Oil Producers Trade Section, Osagie Okunbor, shared her optimism, saying, “For the first time in a long while, we’re seeing positive momentum in our industry in Nigeria, thanks to the Presidential Directives and the government’s deliberate efforts to engage the service sector.
“The level of coordination and policy coherence we’re seeing today is unprecedented. The accelerated pace of reforms over the past year has renewed our interest in Nigeria.”
The Central Bank of Nigeria has announced the launch of an Electronic Foreign Exchange Matching System, which aims to overhaul the country’s foreign exchange market.
This new system is expected to be operational in Nigeria’s foreign exchange market by December 1, 2024, following a two-week test run in November.
The EFEMS is projected to transform how foreign exchange transactions are done in the interbank market by increasing transparency and making market-driven exchange rates available to the public.
According to a circular by the Director of the Financial Markets Department at the CBN, Omolara O. Duke, the EFEMS will require all authorised dealers to conduct FX transactions using the platform, ensuring that transactions are immediately reflected within the market.
The circular read, “The Central Bank of Nigeria hereby announces the introduction of the Electronic Foreign Exchange Matching System for foreign exchange transactions in the Nigerian Foreign Exchange Market to be implemented no later than 1 December 2024. There will be a two-week test run in November 2024.
“Authorised dealers will subsequently conduct all foreign exchange transactions in the interbank FX market on the Electronic Foreign Exchange Matching System approved by the CBN, where transactions will be reflected immediately.”
The new system comes at a critical time as Nigeria continues to grapple with currency instability and speculative trading, which have contributed to market distortions.
By leveraging the EFEMS, the CBN aims to minimise these speculative activities while offering real-time data on exchange rates, including buy/sell orders.
The circular added, “The new system is expected to enhance governance and transparency and facilitate a market-driven exchange rate that will be accessible to the public. This development is expected to reduce speculative activities, eliminate market distortions, and give the CBN improved oversight capabilities to effectively regulate the market.
“The CBN will publish real-time prices and buy/sell orders data from the system, and in collaboration with the Financial Markets Dealers Association, publish the rules for the EFEMS. The Nigerian FX Code and revised Market Operating Guidelines for the Nigeria Foreign Exchange Market will also provide guidance to market participants.”
The collaboration between the CBN and the Financial Markets Dealers Association will ensure that the rules guiding EFEMS are clearly defined, with updated Market Operating Guidelines and the Nigerian FX Code providing further clarity to participants.
The CBN’s introduction of EFEMS is seen as a strategy to bolster regulatory oversight, ensuring the Nigerian FX market functions more smoothly and efficiently.
As the system prepares to go live, authorised dealers are mandated to comply with existing regulations and complete the necessary documentation, training, and system integration ahead of the implementation deadline.
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