Investors want Naira devalued as foreign reserves hit 7-month high

Despite a record rise in Nigeria’s foreign reserves, which should ordinarily strengthen the naira, investors are asking the Central Bank of Nigeria (CBN) to further devalue the local currency.

The investors insist that the naira, which is trading at 305/$ at the official market and 490/$ at the parallel market, is not adequately priced.

The local currency saw a decline in six-month contracts to its lowest level since September, as crude oil prices rise by over 20 percent after the Organisation of Petroleum Exporting Countries (OPEC) agreed to an output cut.

The nation also saw it foreign reserves rise to its highest point since June 2016, at $26.29 billion.

Despite the positive strides, the Standard Chartered Plc and London-based Duet Asset Management say the nation needs to devalue the naira and loosen capital controls.

Ayodele Salami, who oversees around $450 million of African stocks as chief investment officer at Duet, told Bloomberg that “oil’s rise isn’t enough to eliminate the need for a change”.

Nigeria won’t attract inflows until it weakens its currency, he added.

Samir Gadio, the London-based head of Africa strategy at Standard Chartered, which forecasts the official exchange rate will be steady for at least the first half of 2017, also said Nigeria will eventually take the step.

“Eventually, they’ll have to revert to a more flexible currency regime. But for the time being, there’s no indication from policy makers that this will happen,” he said.

Tunde Bakare, serving overseer of the Latter Rain Assembly, called on the CBN on Sunday to discard the current exchange rate regime, which he regarded as confusing.

We won’t reverse power privatization on any grounds, says Fashola

Babatunde Fashola, minister of power, works and housing, says the ministry of power, under his leadership will not cancel power privatisation on any grounds.


Aliko Dangote, president of Dangote Group, had asked that the power privatisation process be revisited and reversed into the “right hands”.


“We should be as open as we can if government doesn’t  intervene by taking back these assets and giving them to people who really have money that they can really inject, we will not be able to deliver on power,” Dangote had said.


“We should ask, how many people, who and who are these guys that have actually gone into the power sector then you will know when you see the quality of people, are they really serious, because they went in to just make money, power business is not just about money, it is a huge business when you invest heavily you will reap at the end of the day.”


Speaking at the fifth EU-Nigeria business forum in Lagos on Thursday, Fashola said those who want to get out of the agreement could, based on terms of agreement signed at the beginning of the deal, but added that total cancellation is not to be considered.


“I have heard discussions about revisiting the privatisation of power, honestly, I don’t know what it means. I’d like those who made the arguments to be specific; let them come out. Let us have a discussion; does revisiting means cancelling it?If it does, I don’t support it,” he said.


“The investors who took the plough, must have the assurance that government will not flip flop, and contracts that fail, have consequences.

FG Offers 3-year Tax Holiday To Investors

As part of measures to incentivise investments in the  Nigerian mining sector, the Federal Government yesterday offered prospective investors a  three-year tax holidays.
Speaking at the opening session of the ongoing Africa Down Under Conference in Perth, Australia recently, Minister of Solid Mineral Development, Dr. Kayode  Fayemi, said the country was determined to return stronger to the global ore and mineral market to drive the growth and development of the sector through the private sector.
He said that the tax holiday would commence from the date the investor begins mining operations in the country.
The Minister listed other incentives approved by the Federal Government for investors in the mineral and mining sector to include exemption from Customs and import duties on mining equipment, in addition to the option of whole ownership of the firm by such investors.
Fayemi also identified security as another major area the government was investing in, in order to ensure security of investment as well as life and property.
“Our government has a renewed commitment to the improvement of security across mine sites, logistic related security and general terrorism,” he said.
The Minister who presented graphical details of incentives obtainable in several other major mining countries, including Australia, USA, South Africa and Chile, told his audience, comprising investors, operators and other allied professionals that Nigeria was offering more generous incentives, including favourable tax regime and royalties.
He said the country was determined to build a world-class minerals and mining ecosystem designed to serve a targeted domestic and export market for minerals and metals, adding that part of the vision of the Ministry is to contribute to job creation.
“We are focusing on rebuilding our minerals and mining sector in three phases: Phase 1, in the immediate term, we are achieving import substitution by winning over domestic users of industrial minerals.
“Phase 2, our focus is on further expanding our domestic ore and mineral asset processing capacity. Phase 3, we will return stronger to the global ore and minerals markets at a market competitive price point,” Fayemi added.

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External Reserves Rise by $595m as Offshore Investors Stake $327m on Bonds

Nigeria’s external reserves, which have plummeted for about two months, pared some of the losses in recent weeks when they rose by $595 million in just five days to $26.196 billion Monday.

The marginal accretion represented an increase of 2.26 per cent, compared with $25.601 billion as of August 24.

The development was attributed to the inflow of funds into the country’s fixed income market. It was reported yesterday that there had been renewed interest by both foreign and local investors in the fixed income market given the attractive yields.

This was largely buoyed by a single $270 million transaction at N345 per dollar by Citibank Nigeria which bought 11-months treasury bills on behalf of offshore investors.
But other transactions were carried out at between N314.50 to N317.34 to the dollar.
The FX market registered $327 million worth of trades yesterday, about six times more than its usual volume, the Chief Executive Officer of FMDQ OTC Securities Exchange, Mr. Bola Onadele, disclosed.

Average trading is around $50 million a day on normal days, but might reach $100 million on days the Central Bank of Nigeria (CBN) intervenes in the currency market.
Traders told Reuters that the central bank sold an undisclosed amount of dollars close to the end of market session, to help prop up the naira.

Yesterday’s surge in trading came after the central bank said on Friday that it planned to offer N212.85 billion treasury bills maturing between 91-days and 1-year this week.
The central bank said it would sell N45.85 billion worth of the 91-day bills, N62 billion of the 182-day paper and N105 billion of the 1-year debt. Payment for the purchase will be effected on Thursday.

The CBN has been selling short-dated open market bills at yields as high as 18 per cent in an effort to attract offshore funds, most of whom fled Nigeria’s bond and equity markets during a financial crisis that began when oil prices plunged.

The crisis ultimately led the central bank to let the naira’s value float in June.
Yet, despite the intervention by the banking sector regulator, the spot rate of the naira fell to N318.83 to the dollar on the interbank forex market yesterday, down from the N314.95 last Friday.
On the parallel market, the naira also fell to N413 to the dollar Monday, down from the N412 to the dollar last Friday.

Read More: thisdaylive

Investors Pump N760bn Into Stock Market In 3 Days

The unveiling of the new foreign exchange guidelines for the country by the Central Bank of Nigeria has prompted stock investors to pump huge amount of funds into the market.

The Nigerian Stock Exchange reacted positively to the news of the unveiling of the new foreign exchange guidelines by the CBN last Wednesday as the market capitalization soared by over N760bn, with investors committing huge sums to acquire more shares.

The move by investors to acquire more stocks at this time is hinged on their desire to re-enter the market when share prices are at their lowest, as the market is expected to recover after months of persistent fall.

Prior to the three-day straight gains last week, the NSE market capitalization had stood at N9.284tn on Tuesday. But as of the last day of trading last week on Friday, the value of the market had soared to N10.044tn.

Credit: Punch

FG To Free $1bn For Solid Minerals Investors

The Federal Government hinted yesterday that it has resolved to provide $1 billion ( about N200 billion) as solid minerals development fund for potential investors in the mining sector.

It, however, noted that only serious investors who look certain to bring profit and success to the country would be allowed to access the fund which had been given legislative backing.

The minister of Mines and Solid Minerals, Dr Kayode Fayemi said Federal Government’s plan is to fully activate the solid minerals development fund, which is already provided for in existing legislation, as a way to kick start investment.

Speaking on the sidelines of an African Mining Conference in Cape Town, South Africa, Fayemi who said the legislation pegs the development fund somewhere in the region of about 200 billion naira ($1 billion) fund that could be accessed by serious investors with bankable plans.

“Frankly by the first quarter of next year I would really like to see this fund in place”, he added, even as he hinted that the federal government has completed a review of its mining licenses and will publish the results next week.

Credit: Leadership

Fashola Renders Explanation For Tariff Hike

The Minister of Power, Works and Housing, Mr Babatunde Fashola, says the new electrify tariff is the first major decision that will attract needed investment in the sector.

Fashola’s comment in Lagos on Monday came just as the Nigeria Labour Congress the Trade Union Congress and their allies held nationwide protest against the tariff hike of 45 per cent.

“The question on the lips of everybody is; why can’t we have power first before we pay?

“I wish we could do that, but if they understood that power business is funded from finance from banks. So, no bank is going to lend money to you if you can’t show a recovery price.

“That is the reason we can’t have power first before tariff. It has to be produced before we have it and it has to be paid for.

“The supplier of gas is not going to supply unless he sees his cash,” the Minister explained.

On the protest by the unions, Mr Fashola urged them not to start a new fight, saying “we don’t need one”.

“In any event, there are part of the employee of all these DISCOs and GENCOs that are still working, so let’s get to productivity. Let’s stop fighting (and) let’s produce.”

On the level of electricity supply which the unions are insisting must improve before a new tariff is issued, the Minister said that the capacity Nigeria had in January had never been reached before.

“In the last week of January, we recorded all time high generation of 5,000mw. Nigeria has never reached that level of generation (and) we need a lot more.

“But even with that 5,000mw, there is a lot of service work that needs to go on so that people can access the power.

“So not paying for power, you are disrupting the system; diverting lines, you are disrupting the system; vandalising pipes, you are disrupting the system, you are cheating the system, it is part of anti-corruption (and) everybody must pay for what he uses.”

Credit: ChannelsTv

We Will Continue With Jonathan’s Privatisation Programme – President Buhari

President Muhammadu Buhari has assured international investors of the readiness of his administration to continue with major privatisation programme started by previous governments but with “improved moral architecture.”

The President gave the assurance on Tuesday at a business forum organised by the United States Chamber of Commerce and The Corporate Council on Africa, in continuation of his four-day official visit to the US.

He called on US investors to take advantage of the nation’s liberal trade and investment climate by investing in the various profitable businesses available in Nigeria.

According to him, his government’s intention was to continue to create enabling environment for
future investments to thrive in the country.

He said: “It is my intention to create the necessary environment for future investment in Nigeria.

“We are the most populous nation with largest market in Africa with vast human and natural resources and blessed with abundant young skilled workforce.

“We are therefore a proud candidate to become the destination of choice for United States investments in Africa. I will work assiduously to welcome new investors to our country.

“I will like to remind you all that we are continuing in major privatisation programmes with sectors ranging from telecommunication, energy, gas, solid minerals, aviation, health and infrastructural development, but with improved moral architecture. We will also simplify visa procedures based on principle of reciprocity.

“May I, therefore, seize this opportunity to formally invite the American business community to take advantage of our liberal trade and investment climate to do profitable business in Nigeria”

The President further urged the American business community to take advantage of the excellent political relationship between the two nations to expand trade and investment activities, including joint venture projects in priority sectors of the Nigerian economy, adding that the private sector must assume increasing role as part of the engine of growth.

According to Buhari, his government would specifically welcome genuine investors who were willing to embark on solid mineral exploration in Nigeria.

He also pledged that his administration would fulfill its key campaign promises which included creation of employment opportunities for millions of Nigerian youths.

He added: “Employment generation was one of my key campaign promises. I will do my best to keep this promise.

“There is no other way to expand economic opportunities and create employment opportunities for millions of our youths than boosting domestic manufacturing, undertaking infrastructural development and industrialisation.

“Let me repeat, Nigeria will partner with genuine investors who are willing to join us to achieve our economic objective and at the same time realise handsome returns to recoup their investments.

“There is more to Nigeria than oil. This is why I will continue to stress the need for increased United States investments in our non-oil sector.

“In this respect, the present administration will be attentive to the needs of the business community and pursue policies that will strengthen the sectors that drive the growth.’’

President Buhari To Accomodate Investors From Japan, Others To Revitalize Economy

President Buhari said his government will welcome greater investment in-flows from Japan and other developed countries to revitalize the Nigeria’s economy and create more jobs.

Buhari said this yesterday while receiving the new Japanese ambassador to Nigeria, Sadanobu Kusaoke who was at the State House to present his letters of credence.

He said his government would take all necessary steps to significantly improve the operating environment for domestic and international companies in Nigeria.

The president said his government would particularly welcome more trade and economic cooperation with Japan in the areas of technology, manufacturing and agriculture.

“I was very impressed with the role your prime minister played at our talks with G-7 leaders in Germany. He had a deep understanding of the challenge in the North-East of Nigeria and how it is affecting our economy. We look forward to a stronger partnership with your country in many areas, especially in technology, which is now the major driver of job creation across the world today”, he told the Japanese envoy.

Credit: dailytrust