- The CBN said on Tuesday that the monthly supply of dollars at its disposal had dropped to between $600 million and $700 million. While the bank had a stock of up to $3 billion monthly in 2013 and 2014, it said the forex scarcity that hit the country had left it with roughly $700 million. Deputy Governor, Sarah Alade, who appeared before an ad hoc committee of the House of Representatives in Abuja, explained that the forex scarcity was the reason why the regulator was unable to meet all demands, particularly those coming from importers of petroleum products. The ad hoc committee, which is headed by a member from Imo, Nnanna Igbokwe, is conducting a public hearing on the review of the pump price of petrol from ₦145 to ₦70.04 as proposed by the House. In response to an explanation as to why international oil companies got involved in the sale of foreign exchange to importers and petroleum marketers in the country, oil minister, Ibe Kachikwu said it was an arrangement to ease supply to the importers, who received between 35 percent and 45 percent of the available forex. The minister described it as an “intervention scheme,” which was coordinated by the NNPC and the Petroleum Products Pricing Regulatory Agency to ensure that beneficiaries were screened after duly applying for the forex.
- Nigeria is targeting economic growth of at least 7 percent by 2020, the Ministry of Budget and National Planning said on Tuesday, as the government seeks to lift the country out of its first recession in 25 years. The target for gross domestic product growth is part of a medium-term economic recovery plan, it said in a statement. “Our goal is to have an economy with low inflation, stable exchange rates, and a diversified and inclusive growth,” Minister of Budget and National Planning Udoma Udo Udoma said in the statement.
- The CBN plans to raise about ₦142.43 billion ($453.60 million) in short-dated Treasury bills at an auction on Feb. 15, it said on Tuesday. The bank said it would raise ₦32.43 billion in three-month debt, ₦30 billion in six-month bills and ₦80 billion in one-year notes, using a Dutch auction system. Payment will be due the day after the auction. Last week, Nigeria raised a total of ₦302.4 billion naira in Treasury bills, more than the ₦242 billion planned due to strong demand for the one-year debt. The central bank at the auction offered a yield above its benchmark interest rate to lure investors in the face of galloping inflation. Annual inflation rose in December to 18.55 percent, its highest for more than 11 years and the eleventh straight monthly rise.
- Economists at PwC say Nigeria’s GDP could grow by $500 billion if corruption is reduced to estimated levels in Malaysia, with a more efficient tax system potentially boosting the economy with annual non-oil revenue of about $104 billion. In a new report released on Tuesday, the accounting consultancy outlined about five ways Nigeria could drive inclusive economic growth. These, according to the report include: improving tax collection, economic diversification, eliminating corruption, easing the constraints to business, and increasing labour productivity. On improving tax collection the report said “Nigeria is a low-taxed economy compared to its peers with the tax-to-GDP, ratio estimated at just 8 percent, the second lowest in Africa and the fourth lowest in the world. Higher tax revenues Corruption If these could be increased to the Sub-Saharan African economies’ average of 18 per cent of GDP, Nigeria could potentially raise its tax revenues to around $104 billion. The report further stated: “Higher tax revenues would reduce government borrowing and encourage financial institutions to offer funds at lower interest rates, thereby boosting the real economy and economic diversification.” The report reiterated Nigeria’s potential advantages for future growth to include a large consumer market, a strategic geographic location as a hub for Africa, and a young and entrepreneurial population. It added: “The first step in harnessing these opportunities requires deliberate efforts to improve value-adding activity in the non-oil economy, particularly in agriculture and the services sectors.”
- FMDQ OTC Securities Exchange on Tuesday signed a Memorandum of Understanding with Dow Jones Indices, a division of S&P Global, for the adoption of the S&P Nigeria Sovereign Bond Index. The S&P Nigeria Sovereign Bond Index tracks the performance of local currency denominated sovereign debt, publicly issued by the Federal Government in its domestic market. The index is a sub-index of the S&P Africa Sovereign Bond Index, a broad, transparent and independent benchmark that comprises a universe of sovereign bonds, denominated in local currency from 13 African countries. At the signing ceremony in Lagos, FMDQ Managing Director, Bola Onadele, said that the index adoption would help in the development of the nation’s financial market. He said that it was part of the company’s mandate to promote price discovery and transparency in the Nigerian financial market, adding that it would revolutionise the face of the financial markets by providing investors with a consistent, credible and objective measure of the performance of their investments.