The naira recorded further gains against the United States dollar on the parallel market on Wednesday, reversing losses it made earlier in the week. Specifically, the naira rose to ₦505/dollar on February 22, up from ₦512/dollar on Tuesday, as the Central Bank of Nigeria started increasing dollar supply on the official market. The regulator had on February 20 introduced a new forex policy action aimed at boost forex supply to enable commercial lenders to meet the needs of customers seeking dollar to pay school fees and medical bills overseas, as well as for personal travel allowances. It then intervened in the interbank market on February 21 by injecting a total of $370.9 million to the wholesale market through 23 deposit money banks to help them meet customer demand. According to a Premium Times report, the qualified bids for U.S. dollars ranged from ₦315 to ₦360, with seven banks receiving full allotments of their respective bids valued at $37.5 million each. The allotments for other banks ranged between $46,512.50 million and $15.578 million. The CBN will begin weekly sales of $1 million to each of the country’s 21 commercial banks at ₦375/dollar to clear a backlog of demand for retail users and try to narrow the premium between the official and black market rates. The decision was announced hours after the naira tumbled to ₦520/dollar on the parallel market on February 20 as scarcity of the US currency continued to weigh on exchange rates. The naira had closed at ₦516/dollar on February 17, after hitting ₦510/dollar on February 16 and ₦507/dollar on February 14.
The Kaduna government has imposed a 24-hour curfew on parts of the state, a government spokesman said on February 21, after clashes killed at least 14 in the southern part of the state. Conflict over grazing land and water, chiefly between semi-nomadic Fulani herders and local settler farmers, has piled pressure on national authorities already facing an Islamist insurgency in its northeast and militants in the oil-rich south. Gunmen shot dead at least 14 villagers and destroyed property in an attack on the Kaura village of Takad in southern Kaduna state on Monday, said Enock Andong, a local community leader. As a result of violence in Kaura and Jema’a local government areas, the state government imposed a 24-hour curfew on the two areas, Samuel Aruwan, a spokesman for Kaduna governor, said in a statement. Kaduna – a flashpoint for north-south, Muslim-Christian frictions – has in recent months seen the worst violence since 800 people were killed in riots after elections in 2011. In another development, two German archaeologists were kidnapped on February 22, a police official said, near the road that will run between the capital Abuja and its temporary airport from next month. Abuja’s main airport will be closed for repairs for six weeks from March 8, with flight rerouted to the city of Kaduna some 100 miles (160 km) to the north.That set-up has raised security concerns. Abuja-bound passengers will have to fly to Kaduna and travel in buses, guarded by security, on a road where several kidnappings have taken place in the past few years. Kidnappings for ransom are a common problem in parts of Nigeria.The two German archaeologists, Peter Breunij & Johannes Buringer were kidnapped on Wednesday morning during excavation work at Jajela village, Kaduna state police spokesman Aliyu Usman told Reuters.
The United Nations needs $4.4 billion by the end of March to prevent catastrophic hunger and famine in South Sudan, Nigeria, Somalia and Yemen, yet just $90 million has been collected so far, Secretary-General Antonio Guterres said Wednesday. With over 20 million people at risk of starvation over the next six months and famine already declared in parts of South Sudan, “we are facing a tragedy,” Guterres told reporters at a briefing at the U.N. headquarters, Guterres amplified concerns that U.N. officials and humanitarian groups have expressed in recent weeks about the lack of food in the four nations. In Nigeria, a seven-year uprising by the Islamic extremist group Boko Haram has killed more than 20,000 people and driven 2.6 million from their homes. A U.N. humanitarian coordinator last month said malnutrition in the nation’s northeast is so pronounced that some adults are too weak to walk and some communities have lost all their toddlers.
The Nigeria Liquefied Natural Gas Ltd (NLNG) said an explosion hit one of its gas transmission systems, which houses two gas pipelines. The explosion struck about 3 km from Rumuji in Rivers State, the company said late on February 22, adding that one of the gas pipelines belongs to NLNG. Emergency response procedures were immediately activated and the relevant authorities notified. It is investigating the cause of the explosion and also noted that there’s been no report of injuries and casualties thus far.
- It appears that the CBN was finally jolted into action by ₦500+/dollar exchange rates. For weeks industry operators and watchers had been raising alarm that demand for dollar for school fees payment and personal travel was taking a toll on the exchange rate at the parallel market. The policy actions of CBN were tailored at meeting specific demands and the action caused speculators to sell off some of their dollar holdings and wait for the exchange rate to stabilise before taking further decision. Within a few months it will be summer time in Europe and America, and demand for dollars will rise again. If CBN is able to provide the extra supply in the official market then rates could remain around current levels, if not the chase for Naira’s true value will continue into the ember months.
- This escalating conflict in Kaduna is coming at a particularly sensitive time for the state. On its part, the Kaduna state government had said that a garrison commander from the Nigerian Army’s First Division had been sent to Southern Kaduna to coordinate a response to these attacks. What is important for the government to note though, is that justice must be seen to be done, or else resentment will continue building until a breaking point is reached. Such a point, will render all the government’s effort at rebuilding the state meaningless. One of these possible pluses for the state, the temporary conversion of its airport to become the main air hub in central and northern Nigeria, with the announced closure of the Nnamdi Azikiwe Airport in Abuja next month. The federal government had hoped that international carriers would use Kaduna during the Abuja airport closure, but many have said that they will not fly there as an alternative. The Kaduna Airport handled 12 flights in December 2015, the last month for which Nigeria’s airports authority has figures, compared with 812 that used Abuja International. This is a damning stat, and puts the decision to move there in harsh light.
- While the federal government deserves the plaudits it is receiving for militarily contending and significantly eroding the Boko Haram security threat, it has spectacularly failed at competently addressing the real tragedy of the eight-year insurgency – the stunning humanitarian crisis it has spawned. Manuel Fontaine, Unicef’s regional director for the west and central Africa Region warns that about 120,000 people are at risk of famine some time this year in northern Nigeria. While all the hot zones the UN is warning about differ in many ways, their plights all are connected by a thread of violent conflict. In Nigeria, the Victims Support Fund created to address the human cost of this conflict at a national level has faded into near anonymity and as we showed last week, is now bogged down with allegations of abandoning the people it was designed to serve. Abuja can do a far better job of doing what all national governments explicitly undertake to do – look out for the interests of its people. Even information minister, Lai Mohammed cannot dismiss this as ‘fake news’.
- The Nigerian Oil and Gas industry just can’t seem to catch a break. Although it’s unclear what or who is responsible for this latest explosion, we expect the NLNG to rebound from this and continue to supply LNG to the gas markets. A possible cheery take from this on the power sector, is that this gas from NLNG does not feed the power generation plants as it is mostly for export so there should be little to no impact. From the draft gas policy released last year by the Ministry of Petroleum Resources, the NLNG faces a challenging market and so it must ensure this does not in any way impact its market share.