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The International Monetary Fund (IMF) has projected that Nigeria’s economy will grow faster than South African economy in the 2018 fiscal year, despite Nigeria’s inflation rate of 16.10 per cent in June, 2017.

The IMF made the recent projection in its World Economic Outlook (WEO) for July 2017, where it stated that Nigeria will grow at 1.9 per cent in 2018, while South Africa will only leap by 1.2 per cent, Vanguard reports.

According to its forecast for 2017, the Nigeria economy was expected to grow by 0.8 per cent, while that of South Africa’s was projected at 1 per cent.

According to its projections: “In sub-Saharan Africa, the outlook remains challenging. Growth is projected to rise in 2017 and 2018 but will barely return to positive territory in per capita terms this year for the region as a whole and would remain negative for about a third of the countries in the region.

The slight upward revision to 2017 growth relative to the April 2017 WEO forecast reflects a modest upgrading of growth prospects for South Africa, which is experiencing a bumper crop due to better rainfall and an increase in mining output prompted by a moderate rebound in commodity prices.”

The IMF stated that elevated political uncertainty and weak consumer and business confidence possess difficulty for South Africa whose growth forecast was marked down for 2018.

The organisation forecasted that global growth will be aided by growths in the US and the UK, who are projected to grow at 2.1 per cent and 1.5 per cent respectively.

It said:

China’s growth projections have also been revised up (6.7 per cent), reflecting a strong first quarter of 2017 and expectations of continued fiscal support. “Inflation in advanced economies remains subdued and generally below targets; it has also been declining in several emerging economies, such as Brazil, India and Russia.”

Accompanied by several governors and ministers, an excited Osinbajo was freely interacting with the entrepreneurs who displayed their products at the venue.

In his remarks at the event, Professor Osinbajo stated that the future of the Nigerian economy lies in the small and medium scale enterprises.

The acting president however noted that it is not enough for the MSMEs to produce and manufacture, stressing that government must do its own part to support them.

He stated that government has a key role to play in creating an environment for businesses to prosper and for businesses to make good.

Cc
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President Muhammadu Buhari has restated his resolve to oppose the devaluation of the naira and increase in fuel price.

President Buhari

According to TheCable, the president stated his resolve in Abuja on Friday night at the 2016 regimental dinner organised by the presidential brigade of guards.

The annual event is organised to mark the end of drilling year of the commission – and it is also an opportunity for officers to “mingle” with their commanders.‎

Buhari said that his stance against the devaluation of the naira and fuel price increase precipitated his overthrow as military head of state in 1985.

I have resisted the devaluation of the naira, increase of the petroleum products, among others,” he told the soldiers and officers. “When I was military head of state, I rejected similar advice by the IMF and World Bank to devalue the naira. 

I refused and gave my reasons and the next thing I knew I was removed and detained for three and a half years. As a civilian president, I will do my best and I’m telling you all these because you are part of the leadership of this great country and God willing we will remain great,” he added.

At present, the official exchange rate of the naira is N300/$1, while it is N495/$1 at the black market. It was officially N197/$1 when Buhari assumed office in May 2015.

The pump price of petrol was N86.50 and has increased to N145.

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The Federal Government has secured $150m from the World Bank for the solid minerals sector support and economic diversification.

Kayode Fayemi

The Minister of Mines and Steel Development, Dr. Kayode Fayemi, disclosed this while briefing the press in Abuja on Monday on the activities of the ministry in 2016.

He also said that the ministry was seeking to raise $600m investment fund for the sector in alliance with the Nigerian Stock Exchange and the Nigerian Sovereign Investment Authority.

According to the minister, the World Bank fund will be used to provide technical assistance for the restructuring of the Mining Investment Fund.

Fayemi said,

“We are working with the Nigerian Sovereign Investment Authority, the Nigerian Stock Exchange and others to assemble a $600m investment fund for the sector, which we hope to conclude and operationalise by the second quarter of 2017. 

“We have secured support from the World Bank for $150m for the Mineral Sector Support for Economic Diversification programme, a critical component of which is to provide technical assistance for the restructuring and operationalisation of the Mining Investment Fund, which will make finance available to artisanal and small mining operators through development finance, microfinance and leasing institutions. 

“The fund will also help to bring back on stream previously abandoned proven mining projects like tin ore, iron ore, coal, gold and lead-zinc.”

He added,

“We are working to retrieve old data obtained on the various mineral deposits across the country, as well as enter into joint ventures with private exploration companies to generate new data from our Greenfield explorations. We hope that analysis of this information will help to further buttress our speculations on the quantity and quality of mineral deposits in the country. 

“Our Nigerian Geological Survey Agency has undertaken additional ground investigations nationwide to upgrade our National Minerals Database and to further ascertain the assays of our mineral assets to the level that can easily attract financial investments and assure operators of the scope of operations required for further exploration and/or mining. 

We have improved the productivity of the sector by tripling the ministry’s contribution to the Federation Account to about N2bn in 2016, up from N700m in 2015.”

He also stated that the government had constructed 10 prototype minerals buying centres across the country for specific strategic industrial minerals.

Fayemi said the centres were to serve as standardisation centres to enable artisanal and small mining cooperatives and operators receive fair premium for their labour.

The minister also inaugurated the Mining Implementation and Strategy Team as well as 38 project vehicles purchased at a cost of over N400m for mines’ inspection.

The Mining Implementation and Strategy Team, which is headed by the Chairman of Nigerian Mining and Geosciences Society, Prof. Olugbenga Okunlola, is tasked with the responsibility of implementing the Federal Government’s blueprint for the mining sector.

[Punch]

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The Naira has depreciated further to N484 per dollar at the parallel market.

The currency weakened from N480 to N482, then further down to N484/$1 at the black market on Friday afternoon.

The local currency also crashed to N590 to a Pound from N585 and N510 for the Euro from N500.

This fall of the naira can been attributed to the recent crackdown in the parallel market, against currency traders.

The consistent clampdown on black market operators by security agents has driven some currency retailers’ underground, putting more pressure on available hard currency,” one dealer said.

The fall of the local currency can also be attributed to the decision of the Central Bank of Nigeria (CBN) to slash dollar sales to BDCs by 46%.

It was gathered that the CBN sold $8,000 to each BDC through Travelex Nigeria Limited last week.

This represents 46% decline when compared to $15,000 usually sold per week to each BDC.

However, according to Alhaji Aminu Gwadabe, the president of Association of Bureau de Change Operators of Nigeria (ABCON), hoarding and increasing zero confidence of foreign investors among others are the main reasons for the continued spike in the exchange rate.

Speaking in an interview with the News Agency of Nigeria (NAN) in Lagos, the ABCON chief said that the existence of a Non-Derivable Forward (NDF) market in London that enjoyed the patronage of Nigerian companies and foreign investors contributed to dollar liquidity challenge.

The existence of that market is a challenge to liquidity inflow to our own market,” Gwadabe said.

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The naira on Wednesday stabilised at N304.75 to a dollar at the official interbank market.

At the Bureau De Change window, the nation’s currency traded at N385 to a dollar, Central Bank of Nigeria controlled rate, while the Pound Sterling and the Euro closed at N564 and N509, respectively.

The naira, however, weakened at the parallel market, losing five points to exchange at N470, from N465 traded on Tuesday, while the Pound Sterling and the Euro closed at N565 and 510 respectively.

A senior Economist at the Olabisi Onabanjo University, Ago Iwoye in Ogun, Prof. Sheiffdeen Tella, said that the naira required a continuous inflow to sustain its appreciation at the market.

Tella said that the market had been witnessing marginal appreciation because the inflow was not based on production.

He said that speculators take advantage of the movement of the naira to manipulate the market.

The don explained that manufacturers were also looking the way of the parallel market to source for forex, thereby putting undue pressures on the naira.

The sale of the proceeds of Diaspora remittances to BDCs had helped in sustaining the appreciation of the naira for about four weeks.

Stakeholders are, however, troubled that in spite of the weekly sale of Forex by Travelex and First Bank of Nigeria  in Lagos and Abuja, the naira was still struggling to survive.

-NAN

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These are the currency exchange rates for today, October 18, 2016, powered by Zenith Bank. The naira which exchanged for the dollar at the rate of N465 has improved to N455.
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The country and some oil companies lost at least N38.6bn in one month as gas production from joint venture assets and the Nigerian Petroleum Development Company dropped by 40.9 billion standard cubic feet in July.

The loss was as a result of production disruptions occasioned by the recent upsurge in militant attacks in the Niger Delta, mostly targeted at onshore and shallow water assets.

The latest monthly report from the Nigerian National Petroleum Corporation showed that 139.58 billion scf and 17.70 billion scf were produced from JV assets and NPDC assets, respectively in July, down from 173.8 billion scf and 24.4 billion scf in January.

With the price of natural gas put at $2.95 per 1,000 scf as of September 23, the difference of 40.9 billion scf translates to a loss of $120.7m or N36.8bn (using the official exchange rate of N305/dollar).

In February, when the Forcados export terminal was shut down following an attack on a subsea export pipeline, total gas production from JV and NPDC assets saw a decline of 15.85 billion scf over the previous month.

The NPDC’s gas production hit a low of 388.7 million scf per day in April, rising to 571.12 million scf in July.

The nation’s oil and gas production structure is majorly split between JVs onshore and in shallow water with foreign and local companies and Production Sharing Contracts in deep-water offshore.

Production from the PSCs were not affected by the militancy problem as production rose to 1.81 billion scfpd in April from 1.61 billion scfpd in January.

Total of 211.93 billion cubic feet of natural gas were produced in July, translating to an average daily production of 6.84 billion scfpd.

Out of the 205.90 billion scf of gas produced in July 2016, a total of 114.86 billion scf of gas was commercialised, comprising of 20.30 billion scf and 94.56 billion scf for the domestic and export markets, respectively.

The NNPC said the balance of 44.22 per cent was either re-injected, used as upstream fuel gas or flared, adding that the gas flare rate was 10.58 per cent (702.83 mmscfd) in July, compared with average gas flare rate of 8.87 per cent (668.91 mmscfd) for the period of August 2015 to July 2016.

According to the report, from the 654.78 mmscfd of gas supplied to the domestic market in July, about 405.47 mmscfd of gas, representing 61.93 per cent, was used for gas-fired power plants, while the balance of 249.31 mmscfd or 38.07 per cent was supplied to other industries.

The Petroleum Club noted in a statement that the current crisis in the Niger Delta had severely affected the Nigerian upstream oil and gas industry, combined with the global decline in oil prices.

It said,

 “Fifty to 80 per cent of traditional onshore/shallow water oil production, which yields the highest government revenue per barrel, has been shut down over the past half year. The bulk of the 1.2 to 1.5 million barrels of oil per day produced over this period comes from the deep offshore, which yields significantly less revenue accruing to all levels of government. “The collateral damage resulting from this oil production disruption is that some 25 to 40 per cent of domestic gas production is also breached, leading to severe reductions in electricity generation and distribution.”

The group noted that the disruption had also led to substantially reduced activity level in the industry. It added, “This in turn has had a knock-on effect on contractors, service providers, banks and business partners, resulting in severe job losses and an indefinite freeze on further job creation possibilities.

The current crisis in the Niger Delta must be quickly arrested through a carefully developed combination of engagements, dialogue, disarmament and ultimate restoration of law and order in the region.”

Commenting on the militancy problem in an interview with Bloomberg, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said the government was doing all it could to tackle the issue.

He said,

“There is a two-pronged approach, and the first is obviously dialogue, which is uppermost. I think with a realistic, robust and aggressive dialogue, we should be able to find a solution to this. There are some concerns that maybe government isn’t engaging as much as it should, and we are working very hard to cover that gap. “But the second is that at the end of the day, you have got to have also a robust military response, not in terms of real strike or attacks, but in terms of being able to respond in cases where you have sorts of surprises.”

Punch
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Nigeria’s foreign exchange market was tension-soaked yesterday, as the Naira raced towards N500/USD1. It closed at N490/ USD1 in the parallel market, with dealers expecting further rise today to hit the dreaded N500 mark.

Surprisingly, the Naira appreciated significantly to N305/ USD at the official interbank market same day, although dealers said foreign exchange was not available to most of the bids.

Meanwhile, the global investment bank, Morgan Stanley of United States of America, has warned that its MSCI Nigeria Indexes would be reclassified as Stand-alone next year, if currency restriction was instituted by the Central Bank of Nigeria, CBN.

Also the World Bank said, yesterday, that Nigeria and South Africa would drag down Africa’s growth rate by 1.6 per cent in 2016, as strings of negative economic indicators continued.

Vanguard
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The Nigerian Naira plunged further to a new record low today, down 1.76 percent against the dollar on the parallel market even as dollar supplies dry up.

The currency fell to 460 to the dollar on the black market, down from 452 at the close of trading yesterday.

Though the naira closed at 305.50 to the dollar on the official interbank market against 305 a dollar the previous day, traders said dollar liquidity remains a major challenge in the market.

"Trading has continue to be thin on the interbank market as the dollar shortage persists while demand for the greenback remains strong," one dealer said.

LLB
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