23 May

Daily Watch – NLC calls off strike, Naira to remain at 197/$

  • The NLC has suspended its nationwide strike called to protest the government’s decision to increase pump price of petrol and hike in electricity tariffs. NLC president, Ayuba Wabba, said the union resolved to suspend the strike with immediate effect. He spoke at the end of an emergency meeting of the union’s National Executive in Abuja, called to review the impact of the strike. The General Secretary, Peter Ozo-Eson, said after due consultation with its constituents and affiliates, the NLC also resolved to resume negotiations with government on the twin issues of the hike in electricity tariff and an increase in the pump price of petroleum products as well as any other issue that may arise during the meeting. Negotiations had stalemated after the government refused to listen to the NLC on its demands.
  • The Cable is reporting that a devaluation of the naira will not feature on the agenda of the monetary policy committee of the CBN which will hold today. Many analysts were expecting an adjustment in the official exchange rate following the decision of the federal government to increase petrol price from N86.50 to N145 per litre in “partial deregulation”. Official devaluation was seen as the next logical move to create some stability in the forex market and narrow the gap between the CBN and secondary rates. There are also proposals that the CBN should open a second window — the autonomous foreign exchange market — to encourage independent forex inflows at a rate closer to market realities. While the CBN officially fixes the dollar at N197, the interbank sells at N285 and the black market goes for N346.
  • Nigeria’s foreign reserves fell to $26.59 billion, an all-year low Thursday, following a fluctuation in the naira, crude oil prices and the country’s oil production levels. The reserves opened 2016 at $29.07 billion. In April, Nigeria’s production levels fell short of the petroleum ministry’s projections by over 500,000 barrels per day. The fall in oil output was worsened by the activities of vandals in the Niger Delta region, which reduced Nigeria’s output to 1.4 million barrels per day. A further fall in Nigeria’s crude oil output has led to an oil price rise. The OPEC crude basket rose as high as $44.88 per barrel on Wednesday, before falling to $43.84 on Friday.