Nigerian interbank rates ease on liquidity boost from matured Treasury bills

 

Nigeria's interbank lending rates eased to 14 percent on Friday from 40 percent last week after injections of liquidity from matured Treasury bills and refunds by the central bank of cash set aside by banks to buy dollars.


The cost of borrowing among banks jumped to as high as 70 percent during the week on tight liquidity after the central bank tightened liquidity to support the naira currency. The central bank last week directed banks to pay for their dollar purchases 48 hours in advance, draining the market of liquidity.

Traders said about 183 billion naira ($920 million) in matured Treasury bills was injected into the money market on Thursday by the central bank causing rates to fall.

Also, more funds from interest payment on bonds and refunds to banks from the central bank for their forex cash provision also raised liquidity, traders said.

"Interbank lending rates swung this week as a result of tight liquidity arising from the provision for forex purchases and we expect the cycle to continue next week," one dealer said.
Traders said banks' cash balances with the central bank stood at about 80 billion naira compared with a 25 billion naira cash surplus last week.

The secured Open Buy Back (OBB) and overnight placement closed at 14 percent from 40 percent apiece for OBB and overnight placement last week.

"We expect rates to trend up early next week on possible cash withdrawal by NNPC (state-owned energy firm) and could trade around the 30 percent level until inflows of budgetary allocations to government agencies come in," another trader said.

Nigeria, Africa's top crude exporter, distributes revenue from oil among its three tiers of government every month, injecting liquidity into the money markets.

NNPC GMD Meets Buhari, Says More Heads Will Roll

 The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Emmanuel Kachikwu, on Thursday said more heads will roll as part of his activities aimed at restructuring the company for better performance and accountability.

He said the restructuring would affect all levels of the corporation with the new Group Executive Directors and Group Managing Directors taking the exercise to the lower layers.

Kachikwu spoke with State House correspondents shortly after meeting President Muhammadu Buhari behind closed-doors at the Presidential Villa.

He said after the personnel aspect would have been completed, he would also order for a proper forensic audit that would cover 2014 and 2015.

That exercise, he added, would show the true state of the company.

Kachikwu noted that when the process is completed within five or six months, a new NNPC would have emerged.

Power supply reaches 4 600mw

Godknows Igali, the Permanent Secretary in the Federal Ministry of Power, says electicity supply nationwide had reached 4,600 megawatts.

Igali told State House correspondents after briefing President Muhammadu Buhari on the current state of power situation in the country.

He said that the volume was a great improvement in the sector.

According to him, electricity supply is one of the most discussed topics in Nigeria and naturally so because it is fundamental to the country’s social and economic development.

"Where we stand is that we are doing over 4 600mw of power on the grid and we can do better but then this is a big improvement from about 3 000mw.

"The other time we attained 4 000mw but because of pipeline disruptions we go down to 2 000mw, we go down to 3 000.

"But consistently in the past two months also we have been over 4 500mw, now we are reaching close to 4,700mw.

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N183bn NDDC funds diverted, says Auditor General

The Auditor General of the Federation, Mr. Samuel Ukura, says N183bn meant for the development of the Niger Delta was diverted.

He, therefore, recommended that the money should be recovered.

Ukura stated this when he submitted three special audit reports to the Clerk to the National Assembly, Alhaji Salisu Maikasuwa.

The Auditor General explained that the amount was discovered in the periodic checks carried out by his office on the activities and programmes of the Niger Delta Development Commission between 2008 and 2012.

He said N70.4bn was paid as mobilisation to various contractors who never reported to site while N90.4bn was the extra-budgetary expenditure “for Head and Sub-heads without approval by the legal authorities.”

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Naira firms on black market as CBN sells dollars

Nigeria's central bank sold $80 million to bureaux de change (BDC) operators on Wednesday at 197 naira helping the local currency strengthen on the parallel market, the president of the association of forex dealers said.

The naira was quoted at 221 on the parallel market, up 1.36 percent on the day, after dollar liquidity rose, traders said.

On the interbank market, the naira ended at the bank's pegged rate of 197 to the dollar.

Aminu Gwadabe, president of Nigeria's bureaux de change association, told Reuters that the central bank has started to sell dollars twice weekly to BDCs since last week.

Nigerian Inflation Stays at 9.2%

The nation's inflation rate was unchanged in July, ending a seven-month period of acceleration that pushed the rate outside the central bank’s target band.
The National Bureau of Statistics in its monthly inflation report in Abuja, noted that consumer prices rose 9.2 percent from a year ago. The inflation rate rose 0.7 percent in the month.

It would be recalled that the Central Bank of Nigeria kept its benchmark interest rate unchanged at 13 percent in July even as inflation breached the target range of 6 percent to 9 percent in the previous month.

Inflation has been fueled by the naira’s 7.8 percent slump against the dollar this year.

NNPC appoints four new executive directors

Nigeria's state oil firm has appointed four new group executive directors and reduced its management staff from 122 to 83, it said on Tuesday.

Last week former Exxon Mobil executive Emmanuel Ibe Kachikwu was appointed as the new head of Nigerian National Petroleum Corporation (NNPC) and he dismissed all of the company's executive directors the next day after a government directive.

President Muhammadu Buhari has made a number of changes at NNPC as part of a crackdown on corruption and mismanagement in Nigeria's main money earner.

The appointments, approved by Buhari, include Maikanti Baru as group executive director for exploration and production and Isiaka Abdulrazaq as group executive director for finance and services.

The other appointments were Dennis Nnamdi Ajulu, as group executive director for refining and technology, and Babatunde Victor Adeniran, who is now group executive director for commercial and investment.

"The new appointments are in line with the federal government's aspiration to transform the corporation into a lean, efficient, business-focused, transparent and accountable national oil company," said the emailed statement.

The statement added that more than 30 members of top management staff had been retired, "reducing the number from 122 to 83".

Buhari has said about 250,000 barrels of oil were being stolen each day and that his government was aiming to recover an estimated $150 billion in stolen funds with U.S. assistance.

In 2013, the then central bank governor Lamido Sanusi said tens of billions of dollars in oil revenue had failed to make it into state coffers, which the company denied.

In June, Nigeria's National Economic Council said NNPC had earned 8.1 trillion naira ($41 billion) from 2012 until the end of May, but only paid 4.3 trillion to the federal government.