24 Jun

Daily Watch – Again, CBN steps into market, NCC in NASS crosshairs

  • The CBN opened its discount window in an apparent bid to save the banking system from a scarcity of funds which sent the interbank interest rate to 74 percent at the close of business on Thursday. The naira had appreciated to ₦283 per dollar as the competition for funds in the money market intensified, sending interest rates to 68 percent. The decision of the CBN to sell $4.2 billion to clear the backlog of matured foreign exchange obligations had triggered an intense demand for funds in the interbank market as banks sourced for ₦1.1 trillion to fund rising dollar purchases. Consequently, the interest rate has more than doubled this week, rising by an average of 165 percent on Tuesday and on Thursday by an average of 33 percent.
  • Shell has blamed the delayed start-up dates for two major gas-gathering projects on a lack of adequate joint-venture funding. The oil and gas major says the Forcados Yokri Integrated Project and the Southern Swamp Associated Gas-Gathering Solutions remain “at advanced stages of completion.”
  • The House of Representatives has unanimously mandated its Committee on Telecommunications to investigate the proposed auctioning of the 2.6GHz spectrum by the NCC. The investigation is ostensibly aimed at averting potentially significant job losses in the telecommunication sector if the proposed auction takes place. This comes on the heels of the Senate issuing a summons to the CBN governor, Godwin Emefiele; communications minister, Adebayo Shittu, and justice minister, Abubakar Malami, to explain the reduction of a fine imposed on MTN, a move it sees as shortchanging the public purse. The NCC had slammed a $5.2 billion (₦1.04 trillion) fine on the telecom operator for failing to disconnect unregistered phone lines. It was later reduced to ₦330 billion.
  • Revenue accruing to the federal, state and local governments went up significantly in May by ₦23.628 billion, with all governments sharing ₦305.128 billion as against the ₦281.5 billion shared in April. Finance minister, Kemi Adeosun said the gross statutory revenue of ₦234.466 billion received for the month was higher than the ₦213.817 billion received in the previous month by ₦23.649 billion. According to her, crude production and exports dropped by 2.3 million barrels in February due to the force majeure declared at Forcados terminal, as well as the shut-in and shut-down of pipelines at other terminals for repairs and maintenance.