29 Jul

The week ahead – Security, or a lack of it, has an economic effect

Heightened criminal attacks on Lagos state communities appear not to be slowing as militants descended on Igando, a community in the Lagos West Senatorial district, maiming and stealing properties worth millions of naira. Equally, the Ikorodu area of Lagos East Senatorial district has been under siege for months from suspected militants with killings and kidnapping rife in the area, and no end in sight. This has led to displacement of families and residents, and economic

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29 Jul

Daily Watch – Banks pass interest rate hike on, Shell production plunges

Deposit Money Banks have begun an upward review of the interest rates on all outstanding loans. Following Tuesday’s increase of the Monetary Policy Rate from 12 percent to 14 percent by the CBN’s Monetary Policy Committee, the Punch quoted multiple sources as saying that the lenders would, as early as next week, begin to dispatch letters to their customers, informing them of the upward review of the interest rates on their loans. They said the upward reviews

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28 Jul

Daily Watch – Stock market likes interest rate hike, Naira does not, MTN sets date for NSE listing

The naira fell to a record low of ₦334.50 per dollar following the CBN’s decision to hike interest rates to 14 percent. Investors expect that the local currency will fall as low as 350, before it starts to appreciate against other foreign currencies. However, the rates, which were raised to at least a 10-year high, also saw the stock market record a sizeable rise in All Share Index. ASI moved from 27,945 on Tuesday to 28,111 as at noon on Wednesday, with

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27 Jul

Daily Watch – CBN ramps key interest rate to 14%, Buhari commissions Abuja-Kaduna line

The CBN ramped up its benchmark interest rate by a bigger than expected 200 basis points to 14 percent on Tuesday in a bid to underpin its battered currency and attract more investment. The economy last month ditched its 16-month-old dollar peg to let the naira trade freely and lure back foreign investors who fled both the equities and bond markets in the wake of the plunge in crude prices. But the currency has since plunged and the supply of dollars has dried

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26 Jul

Daily Watch – Aviation fuel relief for passengers, Nigerian equities soar in Q2

The naira slipped 2.5 percent to a new closing low of 310 to the American dollar on Monday, failing to lure in local investors or foreign players as trade dried up a day before an expected interest rate hike from the CBN. The currency had opened at a record low of 302.10 on Monday and traded a total of just $8.64 million by the close, far less than $100.54 million on Friday when the central bank spurred the market by selling some of its dollars. Last Thursday

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25 Jul

Daily Watch – BDCs officially enter interbank market, Nigeria internet traffic to grow 6-fold

The finance minister, Kemi Adeosun, will meet World Bank officials on Wednesday to finalise the “policy support document” needed to complete Nigeria’s application for funds to help plug an $11 billion budget deficit. “What was delaying (budget support loans) was a lack of flexibility in the exchange rate. We now have that,” the minister said in an interview with the Financial Times on Sunday. Adeosun said the delayed passage of the 2016 budget had

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22 Jul

The week ahead – “Technical” or not, Nigeria cannot afford to remain in recession

Failure to meet revenue targets for the first and second quarters, persistent oil production shut-in from militancy and foreign exchange supply challenges have renewed concerns on the feasibility of the 2016 budget. Statistics from the NBS show that in Q1, Nigeria made ₦176.25 billion and ₦196.57 billion from company income tax and VAT respectively as against projected annual revenues of ₦1.87 trillion and ₦2 trillion respectively. Revenue projections failed

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22 Jul

Daily Watch – Electricity reversal to widen ₦300bn gap, CBN funds $697m in forwards

The CBN will today fund one-month forward contracts of $697 million on the interbank market, effectively improving dollar liquidity in the market, as the accounts of customers that hedged against the American dollar through their banks, last month will be credited. On the first day of trading under the revised rules for the interbank market on June 20, the CBN had cleared a $4.02 billion backlog by selling $532 million on the spot market and $3.487 billion in

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21 Jul

Daily Watch – Kogi gets 30-day strike ultimatum, Buhari makes NDDC nominations

Nigeria’s naira was stuck at a record closing low of 292.90 to the American dollar on Wednesday after just one transaction was carried out, with the supply of dollars drying up and no intervention by the central bank, traders said. The naira was unchanged from Tuesday’s close after one transaction worth $380,000 was made on Wednesday. That trade was done at 1150 GMT, more than three hours after the market opened. The interbank market had seen just

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20 Jul

Daily Watch – IMF says Nigeria will contract 1.8% in 2016, Eko DISCO revenue plunges to N1.8bn

Nigeria’s economy will probably contract by 1.8 percent this year and curb growth in sub-Saharan Africa, according to the IMF. The Washington-based lender cut its 2016 growth forecast from 2.3 percent projected in April, according to its World Economic Outlook update released on Tuesday. The projection for next year was reduced to 1.1 percent from 3.5 percent. The Nigerian economy will contract for the first time in more than two decades as it “adjusts

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