11 Mar

Daily Watch – Naira “stabilises” at 320 per USD, MTN winks at NCC

  • The NNPC staff union has suspended its industrial action, which shut down all facilities of the corporation on Wednesday. Announcing the end of the strike action, NNPC, via its Twitter handle, said the unions are now ready to work in the restructuring of a new NNPC. Both the NNPC staff union and the National Assembly had accused the Federal government of violating the NNPC Act of 1977 which established the NNPC. The NNPC Act specifically states that the Act or any part thereof can only be altered, changed or otherwise amended by the Act of the National Assembly. While the Senate declared the action illegal and had begun to probe the decision to undertake the unbundling, PENGASSAN and NUPENG shut NNPC offices in protest against the move, sparking off fears of worsening fuel scarcity.
  • The value of the naira appears to have stabilised at N320 to the American dollar, neither rising nor falling significantly, through the week. The naira, which traded at between N301 and N310 per USD at about the same time last week, depreciated at the open of business on Monday to trade at N318 to N320. The interbank rate however, has continued trading at N197.5 per USD. The CBN has said that the naira would recover as soon as the 2016 budget is passed and implementation begins.
  • MTN has proposed to pay $1.5 billion (N300 billion) of the $5.2 billion fine imposed on it by Nigeria. The fine was imposed last year by the NCC after MTN failed to to meet the deadline to deregister 5.1 million improperly registered SIM cards on its network. The fine was cut down to $3.9 billion after MTN entered into negotiations with Nigeria’s government, but as the deadline to pay up approached, the company filed a suit to contest the NCC’s powers to fine it. Last week, however, MTN withdrew the matter from court and paid an initial N50 billion, and is now requesting that the overall fine be further reduced to N300 billion. However, the Senate Committee on Communication has condemned the manner in which the out-of-court settlement arrangement between the federal government and MTN was being conducted.
  • The Minister of state for Budget and National Planning, Zainab Ahmed, has said that about 37 percent of Nigerians are suffering from malnutrition. Speaking at a programme on the Reviewed National Policy on Food and Nutrition, Ahmed decried the high rate of malnutrition in Nigeria, and said that children and the poor are the worst hit because of their vulnerability in the society. According to her, one in every two deaths among Nigerian Nigeria is caused by malnutrition.
  • Shares of manufacturers quoted on the Nigerian Stock Exchange have been consistently beaten down since 2015, a situation compounded by foreign exchange restrictions imposed by the CBN. Flour Mills, the largest miller in Nigeria saw its stock price rise to the N31 in March 2015, but is currently trading at N17.51. Honeywell’s share price was N2.65 in March 2015 as against N1.58 today. Nigeria Breweries, the largest brewer by market value closed at N138 a year ago, and is now trading at N97. Guinness closed at N147 a year ago, and is now trading at N114. Manufacturers have complained about being unable to settle foreign suppliers, and have pointed out that the CBN’s policies have also hindered them from importing raw materials for the purpose of production. This has caused stock-out as inventory level cannot be replenished on the back of dollar scarcity.