18 Jul

Daily Watch – Inflation rises to 16.48%, FG to protect tomato paste manufacturers

  • In the last few minutes, the NBS has released its inflation figures for the month of June, 2016. Headline inflation year on year for June 2016 rose by 16.48 percent, and on a month on month basis by 1.7 percent in June from 2.8 percent in May. Headline inflation year on year was driven largely by imported goods, prices of energy and related items especially electricity & liquid/solid fuels. Food inflation year on year for June 2016 rose by 15.3 percent from 14.48 percent in May, and on a month on month basis by 1.4 percent in June from 2.6 percent in May. Food inflation year on yearr was driven by bread and cereals, fish, meat & oils and fats and month on month by fish, meat, bread & cereals & fruits. Core inflation year on year for June 2016 rose to 16.2 percent from 15.1 percent in May, and 1.8 percent in June from 2.7 percent in May. Urban inflation for June 2016 year on yearr stood at 18.1 percent, and month on month by 1.8%.
  • NERC has asked its lawyers to file an appeal against the court ruling that mandated it to reverse the 45 percent increase in electricity tariff across the country. Despite earlier accepting the verdict, NERC changed its stance after consulting its lawyers. A Federal High Court in Ikoyi, Lagos had on Wednesday reversed the 45 percent electricity tariff increase by NERC and the FG. The court declared the hike in tariff illegal and directed that it should be reversed immediately.
  • Oil prices rose across the international market as ExxonMobil announced the suspension of exports from the Qua Ibo crude oil terminal on Friday. WTI crude rose by 50 cents to trade at $46.07 per barrel, while Brent crude surged from $45.68 on Thursday to $47.79 on Friday afternoon. ExxonMobil declared force majeure on exports from Nigeria’s largest export stream. Spokesman, Todd Spitler, said the decision to declare was due to “a system anomaly observed during a routine check of its loading facility”. He suggested that the declaration was in no connection to militant activity in the Niger Delta region, but gave no definite date for a return to normal activities.
  • American and British bond investors have spurned the advances of CBN governor, Godwin Emefiele, who travelled to ask fund managers to return to the Nigerian sovereign bond market. According to Bloomberg, Emefiele and Deputy Governor Sarah Alade met investors in Los Angeles, Boston, New York and London. Investors in London told Emefiele that there wasn’t enough liquidity in Nigeria’s foreign-exchange market for them to be comfortable buying naira bonds. Investors also told him they were concerned that the CBN had lower reserves than its stated figure of $26.4 billion.
  • The FG says its planned policy on tomato will protect local manufacturers of the product and ensure an end to the importation of substandard tomato paste. Speaking before a tour of Erisco Foods in Lagos, the Minister of State for Industry, Trade and Investment, Aisha Abubakar, said that the government was developing a tomato policy to address the scarcity of tomatoes in the country, following the outbreak of ‘Tuta absoluta a few months back. “The major decision we have taken is to develop a tomato policy under our National Industrial Revolution Programme. A technical committee that would work on the policy draft should take-off next week (this week) so that we would have an approved plan in place before the next tomato season,” Abubakar said.