Business

N1000/$: The Fall and Fall of the Naira

Published

10 months ago

September 23, 2023

Eric

By Eric Elezuo

This is not the best of times for the Nigerian Naira as market forces continue to work to its detriment, leading to a rush for the few available Dollars, and in turn falling to all time low.

On Thursday, a Bloomberg report quoted one Yahaya Adamu, a currency dealer in Wuse, a suburb of the nation’s capital, Abuja, Traders in Abuja as saying that the dollar was quoted at N998, just N2 short of N1000.

Also, in the commercial hub Lagos, the dollar is changing hands for around 990, according to Umar Salisu, a foreign-exchange operator who compiles the data in Lagos, noted Bloomberg.

This explains in a nutshell that the Nigerian naira extended its slide and hurtled toward the 1000-per-dollar mark in street trading, as the central bank held back from supplying dollars to a panic-stricken market.

Explaining further, Adamu informed tgat “Dollar is so scarce now that as I speak to you, you cannot find $1000 to buy,” Adamu said.

The currency’s parallel-market rate is now about 29% weaker than the official exchange rate, where the naira closed Wednesday at 770.71 per dollar on the FMDQ OTC trading platform. The two rates had briefly converged soon after the country’s newly elected president Bola Tinubu announced sweeping currency reforms in June, but they have diverged steadily since then as dollar supply from the central bank fell short.

The central bank has mostly been on the sidelines this month, according to market players, with one person saying it has barely supplied dollars to the official window. That has helped accelerate the naira’s slide, pushing it down from around 900 per dollar at the start of September.

Meanwhile, companies seeking hard currency to pay for imports have been joined in dollar buying by ordinary citizens who are fearful of further depreciation in the naira.

On Thursday, the central bank postponed a rate-setting meeting scheduled for Sept 25-26. Its new governor, ex-Citigroup executive Olayemi Cardoso, is yet to be confirmed in his role, while the acting governor and four deputy governors have resigned, effectively leaving a policy-making vacuum at the top.

Recall that since June when President Bola Tinubu tingled with the nation’s monetary policy, the naira has headed on a free uncontrolled fall. Tinubu touched on monetary policy and indicated his preference for a low interest rate regime to stimulate economic growth and employment.

Following the policy, the Central Bank of Nigeria announced immediate changes to operations in the Nigerian Foreign Exchange (FX) market, abolishing its hitherto multiple exchange rate windows and collapsed them into the business-based Investors and Exporters (I&E) window.

“All segments are now collapsed into the Investors and Exporters (I&E) window. Applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks,” Dr Angela Sere-Ejembi, a director of the bank said in a message to authorised dealers of forex.

FX operators and other market operators had predicted a couple that the naira will hit N1000, going by prevailing circumstances and indices, and today, the prediction has come to pass with no tangible clue that status quo ante as at May 2023 may be maintained.

In his defence, the Minister of Finance, and Coordinating Minister of the Economy, Adebayo Olawale Edun, said that up to $6.8 billion of overdue forward payments in the foreign exchange market was responsible for the slump in the naira and until it is addressed before the local currency can stabilise.

He explained that once unpaid contracts are resolved, it will help the naira become stronger and “pave the way for additional foreign exchange flows.”

While Nigerians await Edun’s prescription to come to pass, they look up the new Governor of the Central Bank of Nigeria, Michael Cardoso in collaboration with Efun to find a path to restoration as the populace groans in the hardship the present situation is unleashing on residents.

Business

Italian Oil Giant Eni Gets FG’s Approval to Sell Agip Oil to Oando

Published

1 day ago

July 25, 2024

Eric

Italian oil and gas giant, Eni, on Wednesday announced that it had received regulatory approval from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for the sale of Nigerian Agip Oil Company Limited (NAOC) to Oando Plc.

In a statement issued on Wednesday, Eni said it had received formal consent to finalise the deal. It will be the first deal to be approved under the Petroleum Industry Act (PIA) and under the new upstream regulatory body, the NUPRC.

Chief Executive Officer of NUPRC, Mr. Gbenga Komolafe had announced during an industry conference on July 3 in Abuja, that Oando had completed the acquisition of 100 per cent shares of Eni in its subsidiary, NAOC, adding that an announcement was imminent.

Confirming this in the statement, the Italian oil company said it had obtained all other relevant local and regulatory authorities’ authorisations.

“Having already obtained all other relevant local and regulatory authorities’ authorisations, this achievement will allow Eni to proceed to the completion of the transaction for the sale of Nigerian Agip Oil Company Ltd (NAOC), Eni’s wholly owned subsidiary focusing on onshore oil & gas exploration and production as well as power generation in Nigeria, to Oando PLC, Nigeria’s leading national energy solutions provider, listed on both the Nigerian and Johannesburg Stock Exchange.

“NAOC Ltd participating interest in SPDC JV (Shell Production Development Company Joint Venture – operator Shell 30 per cent, TotalEnergies 10 per cent, NAOC 5 per cent, NNPC 55 per cent) is not included in the perimeter of the transaction and will be retained in Eni’s portfolio.

“Eni remains committed to the country through investments in deepwater projects and Nigeria LNG,” the company stated in a statement.

The company also said it was developing plans for economic diversification in the country.

Eni said this includes assessing the potential production of agri-feedstock for Enilive bio-refineries and various nature- and technology-based projects, such as clean cooking initiatives to offset emissions.

Eni has been operating in Nigeria since 1962, actively engaging in hydrocarbon exploration and production, as well as power generation.

Currently, Eni has a substantial portfolio of assets in exploration and production, with an equity production of approximately 40,000 barrels of oil equivalent per day net of NAOC contribution. Eni also holds a 10.4 per cent interest in Nigeria LNG.

NAOC focuses on onshore oil & gas exploration and production as well as power generation, Eni said in the statement.

Aside from Eni, other companies in the process of getting approval are Shell Petroleum Development Company (SPDC), which is selling to Renaissance Consortium as well as ExxonMobil which is selling some of its oil assets to Seplat Energies.

Others are Chappal , which is buying from Total Energies as well Equinor which recently entered into a preliminary deal with the same Chappal Energies to sell some of its assets.

Arise News

Business

NNPCL Invested Only 7.2% in Our Refinery, Not 20%, Dangote Confirms

Published

2 weeks ago

July 14, 2024

Eric

By Eric Elezuo

President, Dangote Industries Limited and Africa’s richest man, Aliko Dangote, has said that contrary to popularly held view that the Nigerian National Petroleum Company Limited (NNPCL) invested 20 percent stake in Dangote Refinery and Petrochemicals, the company has only 7.2 per cent share holding.

Dangote made the revelation while addressing a full house of top media executives during a press parley and tour of the facilities at the Ibeju-Lekki site of the refinery and fertilizer plant.

Speaking matter of factly, Dangote, who said that the success of the refinery will depend majorly on the line of the policies the government of the day take, noted that while NNPC was originally billed to acquire 20 per cent share holding, it could only afford to pay 7.2 percent, which it now owns, having failed to remit the balance, which was due in June.

“NNPC do not own 20 percent stake in the Dangote refinery. They were meant to pay their balance in June, but have yet to fulfil the obligations. Now, they only own a 7.2% stake in the refinery,” Dangote confirmed.

Business

CIBN Appoints UBA CEO, Oliver Alawuba As Chairman

Published

2 weeks ago

July 11, 2024

Eric

The Group Managing Director/Chief Executive Officer, United Bank for Africa, (UBA) Plc, Oliver Alawuba has been appointed as the Chairman of the Chartered Institute of Bankers of Nigeria (CIBN), the Body of Banks’ CEOs.

The CIBN announced this appointment on its website on Monday, July 8, 2024.

This prestigious appointment underscores Alawuba’s extensive experience and visionary leadership in the banking sector, as well as his unwavering commitment towards advancing the financial industry in Nigeria and across Africa.

In his role as Chairman, Alawuba will be at the forefront of fostering collaboration and driving strategic initiatives among the top executives of banks in Nigeria.

Like he has achieved as the GMD of Africa’s Global Bank, UBA, his leadership is expected to bring innovative solutions and strengthen the collective efforts of the banking community while addressing the dynamic challenges and opportunities within the financial sector.

The CIBN also announced the appointment of Mrs. Miriam Olusanya, the CEO of GTBank, as the Vice Chairman of the Body of Banks’ CEOs. Her appointment, alongside Alawuba’s, signifies a strong and unified leadership team poised to enhance the banking landscape in Nigeria.

UBA extends its heartfelt congratulations to Alawuba and Olusanya on their appointment and the Bank is confident that their combined expertise and visionary leadership will usher in a new era of progress and innovation for the banking industry in Nigeria, and that under their guidance, the Body of Banks’ CEOs will continue to play a pivotal role in shaping policies and strategies that will drive sustainable economic growth and enhance the overall stability of the financial system in Nigeria.