Naira, cedi, kwacha worst African currencies in 2014

Reports say Nigeria’s naira, Ghana’s cedi and Zambia’s kwacha have been named the worst performing African currencies in 2014.

The currencies were among a small basket that are relatively liquid, as falling commodity prices take a toll on some of the continent’s “lion” economies, according to a Reuters report.

The naira shed about 13.5 per cent last year, while South Africa’s rand fell over 10 per cent while the Kenyan and Ugandan shillings yielded about 4.5 and nine per cent respectively

On November 25, the Central Bank of Nigeria devalued the midpoint of the naira by eight per cent from 155 to 168.

The CBN blamed the naira slide on falling oil prices and speculations by currency dealers.

The cedi lost about 27 per cent in 2014, one sign of a fiscal crisis in an economy that grew strongly in previous years on gold, cocoa and oil exports. Economic growth in 2015 is seen slowing to 3.9 per cent in from an estimated 6.9 per cent last year.

The cedi slumped around 40 per cent earlier last year but a Eurobond issue, cocoa loan inflows and talks with the International Monetary Fund on a financial assistance programme helped it re-coup some losses.

Zambia’s kwacha is ended the year on the backfoot amid tax rows with mining houses, a lower growth forecast and a looming election.

Commercial banks quoted the currency of Africa’s second-largest copper producer at 6.3750 per dollar, bringing its losses over the past three weeks to three per cent and those for the year to around 15 per cent.

Zambia on Tuesday cut its 2014 growth forecast to six per cent – still brisk by global standards – from a targeted 6.5 per cent, citing operational challenges at some mines.

Brent turns lower, heads towards $57 as supply glut fears prevail

Brent crude futures retreated from early highs above $58 and fell towards $57 a barrel on Friday as an abundance of oil erased earlier support drawn from a larger-than-expected fall in U.S. crude stocks.


U.S. crude inventories fell by 1.8 million barrels in the last week as refineries raised production, compared with analysts' expectations of a decrease of 67,000 barrels.

But a supply glut in delivery hub Cushing, Oklahoma, persisted, rising by 1.995 million barrels, amid higher product stocks, EIA data showed.

Front-month U.S. crude for February delivery was up 38 cents a barrel from Wednesday at $53.65, after reaching an intraday high of $55.11.

Markets were shut on Thursday for the New Year holiday. Oil prices have fallen by half from last year's peak to a 5-1/2-year low, under pressure from a global glut of crude, exacerbated by the refusal of the world's top oil exporter, Saudi Arabia, to trim supply.

Gold ticks up with oil, but poised for third weekly decline

Gold inched up on Friday as higher oil prices boosted its safe-haven appeal, but the metal looked set to post its third straight weekly loss, weighed down by a strong dollar.

Bullion ended 2014 down nearly 2 percent, following a 28 percent slump the previous year, as its investment appeal tapered amid better-performing equities.

Many analysts expect another tough year for gold, with the dollar expected to gain further on expectations of higher U.S. interest rates and a recovering economy.

Spot gold rose 0.3 percent to $1,184.85 an ounce by 0317 GMT, following an uptick in oil. Liquidity was thin in post-holiday trading, with Chinese and Japanese markets closed on Friday.

Oil price fall: Foreign reserve dips by $9.13b in 2014

Nigeria’s gross foreign reserve has slumped by $9.13 billion (N1.5 trillion) last year, 2014.

The reserves movement analysis made by the Central Bank of Nigeria (CBN) has indicated that the nation’s foreign reserve stood at $43.63 billion (N7.19 trillion) as at December 30, 2013 but it came down to $34.5 billion (N5.69 trillion) as at 30, December 2014.

The drop occurred when Nigeria recently devalued the Naira and a chunk of the nation’s foreign reserves was spent in defending the Naira from further dropping in value.

The country’s external reserves derived mainly from the proceeds of crude oil production and sales.
Nigeria produces approximately 2,200,000 barrels per day of crude oil in joint venture with some international oil companies, notably Shell, Mobil and Chevron.

Out of this, Nigeria sells a predetermined proportion directly, while the joint venture partners sell the rest.
The joint venture partners pay Petroleum Profit Tax to the federal government through the Federal Board of Inland Revenue.

The fall in the price of crude oil at the international market, last year, by about 50% was regarded as the main reason for the sharp drop of the reserves.

CBN has at several occasions within the year intervened through the reserves to save the embattled naira at the forex market. The naira slide by about N22/dollar or 13 percent on year to year basis as at the end of the year yesterday.

FG shifts Abuja-Kaduna rail line completion

The federal government has proposed a budget of N287.820 million for the completion of Abuja (Idu) to Kaduna rail line.

The project, expected to have been completed, would now get its share of the budget from the N5.294 billion allocated to the Nigeria Railway Corporation (NRC) this year. The corporation has the highest monetary allocation compared with other parastatals of the federal ministry of transport this year.

Vice President Namadi Sambo, on his many visits to the construction sites of the rail line, maintained that it would be completed and made ready for haulage by December 2014. The corporation has also ear-marked another N2 million for the conduct of promotion, recruitment and appointment exercises this year.

NRC will also be spending N229 million on new projects, ranging from track rehabilitation of Lagos - Jebba, Port Harcourt to Makurdi, Karu - Maiduguri, and Zaria - Kaura Namoda in Zamfara State, to the procurement and rehabilitation of rail wagons.

The ministry’s headquarters got N2.577 billion from the total allocation of 11.981 billion for transport and its agencies in 2015.

CBN Revokes Licences of 21 Primary Mortgage Banks

 

The Central Bank of Nigeria (CBN) has revoked the operating licences of 21 Primary Mortgage Banks (PMBS) as well as one microfinance bank and directed the Nigeria Deposit Insurance Corporation (NDIC) to commence the process of orderly winding up of the affairs of the affected institutions.

The revocation was communicated by the CBN via its gazettes dated 14 and 19 November, 14 and 19, 2014.

THISDAY reports that the NDIC had simultaneously been appointed the provisional liquidator to wind up the affairs of the closed financial institutions.

Consequently, the corporation said it would soon make public announcement/publication on the verification and payment of insured deposits for depositors, creditors and shareholders of the affected banks.

Naira closes 2014 at 193 to dollar

The naira closed the year 2014 on Wednesday at 181.50 to the United States dollar at the interbank market and between 191 and 193 on the streets, against the 160.60 recorded on December 31, 2013.

The local currency had over a week ago traded for N194 to the dollar at the parallel markets in various parts of the country.

Dealers, however, said the amount of the greenback in circulation was still scarce.

The 181.50 recorded at the interbank market is about six naira higher than the N160-N176 target band the Central Bank of Nigeria set for the currency on November 25, 2014, when it devalued the currency by eight per cent.

It would be recalled that the Governor, CBN, Mr. Godwin Emefiele, had said the central bank was forced to devalue the naira because it could no longer continue to deplete the external reserves in order to defend the local currency.

35% Levy on Used Cars Defers Till April 30 - FG

A statement on Wednesday by the Director-General and Chief Executive Officer, National Automotive Council (NAC), says levy on used cars would be further deferred to 30 April 2015.”

Giving reason for the deferment, Jalal said the federal government intends to balance vehicle supply and affordability with the production by the assembly plants.

The Director General said: “The government earlier deferred the imposition of the levy on used cars to December 31, 2014 to enable assembly plants ramp up enough production to satisfy demand.”

He said the government had asked the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okojo-Iwaela, to extend the levy deferment on used cars to April  30, 2015.

He explained that the automotive policy has five elements, one of which is market development, adding that under market development, tariffs are increased on Fully Built Unit (FBU) vehicle imports.

According to him, these tariffs are to be reduced gradually over the years, as the vehicle assembly and local content operations gain momentum.

The Nigerian market, he said has approximately 400,000 vehicles annually, with about 300,000 imported as used, which was the reason “the government has to balance vehicle supply and affordability with the production by the assembly plants.”

Nigeria May Miss Cocoa Output Target as Disease Takes Toll

Nigeria may miss its cocoa output target of 500,000 metric tons in the 2014-15 season after an outbreak of fungal blackpod disease devastated farms following heavy rains, a farmers association said.

Coordinator of the Cocoa Farmers Association in the southwestern cocoa-growing Ondo state, Adeola Adegoke, said the devastating effect of the excessive rains last August and September is now telling on the overall tonnage of cocoa beans harvested.

Nigeria, the world’s fourth-largest producer of the chocolate ingredient behind Ivory Coast, Ghana and Indonesia, set a target to produce at least 500,000 tons of cocoa by the end of the season running through September 2015 on account on newly maturing trees.

The West African nation produced 350,000 tons of cocoa in the 2013-2014 season, according to the Agriculture Ministry. The International Cocoa Organization assessed Nigeria’s production for that season at 240,000 tons.

UPDATE: Nigerian naira, stocks end year sharply down

Currency of Africa's largest economy, the Naira rose against the dollar in thin early trade to 181.42 but remained on course for a 13.8 percent fall on the year. The stock market ended the year down 16 percent.

It would be recalled that the Central Bank of Nigeria, in November devalued the naira  and this month tightened trading rules to try to curb speculation against the currency, slowing trading to a trickle. The naira had been hard hit by falling world oil prices.

The devaluation of its target band by 8 percent to 160-176 against the dollar was meant to halt the slide in foreign reserves, but the naira has traded well outside that band - and reserves are still falling.

Foreign exchange reserves fell to $34.5 billion by Dec. 29, central bank data showed on Wednesday, down 20.8 percent on the year.

Nigeria's central bank decreed last month that banks are no longer allowed to hold their own funds in dollars and that all dollars bought from the interbank market can be held only for up to 48 hours, as it sought to get tough on speculators.

Nigerian naira edges up, on course for sharp drop on year

The Nigerian naira rose in thin early trade to 181.42 against the dollar, leaving it on course for a 13.5 percent fall on the year.

The central bank devalued the naira at the end of November and this month tightened trading rules to try to curb speculation against the currency, which has slowed trading to a trickle.

A dealer was quoted as saying "People are mostly just giving indicative quotes. A lot of people are looking for dollars but there's not much dollar liquidity. I haven't been able to do a trade at all,".

Ghana's cedi, Zambia's kwacha worst African currencies in 2014

Ghana's cedi and Zambia's kwacha are set to end 2014 as the worst performing African currencies among a small basket that are relatively liquid, as falling commodity prices take a toll on some of the continent's "lion" economies.

The cedi has lost about 27 percent in 2014, one sign of a fiscal crisis in an economy that grew strongly in previous years on gold, cocoa and oil exports. Economic growth in 2015 is seen slowing to 3.9 percent in 2015 from an estimated 6.9 percent this year.

The cedi slumped around 40 percent earlier this year but a Eurobond issue, cocoa loan inflows and talks with the International Monetary Fund on a financial assistance programme helped it recoup some losses.

Zambia's kwacha is ending the year on the backfoot amid tax rows with mining houses, a lower growth forecast and a looming election.

Nigerian stocks head for 15.5 pct fall on the year

Nigerian shares rose for a 13th consecutive day on Wednesday, but they still looked set to end the year down 15.5 percent down since the start of January.

Stocks were up 0.5 percent to 34,857 by 10:50 a.m. , after an initial rise of nearly 1 percent to top 35,000.