27 Feb

Daily Watch – Dollar rush fuels naira surge, AMCON faces impending Arik backlash

  • The FG has reviewed the visa process for foreigners who wish to visit Nigeria for business and tourism purposes, with a view to removing bureaucratic bottlenecks and encouraging business travellers and tourists, thus providing a boost to the economy. A statement issued on Sunday by the Information and Culture minister, Lai Mohammed, said the measures were part of the action plan for the ease of doing business as well as efforts to boost tourism, within the overall context of the administration’s economic diversification agenda. “The Nigeria Immigration Service has reviewed the requirements for Nigerian visas to make them more customer friendly, and details of this review are available on the NIS official website, www.immigration.gov.ng. Types of visas currently reviewed include Visa on Arrival processes, Business Visas, Tourist Visas and Transit Visas,” Mohammed said in the statement. The easing of travel restrictions is a core part of the Acting President’s 60-day plan to improve the pace of doing business in the country.
  • The CBN says it has sold $221.37 million to 16 banks through the interbank foreign exchange market. The regulator disclosed this in its Forex Forward Sales Report on the second wholesale intervention, obtained by the News Agency of Nigeria on Sunday. It said that the move was to enable the banks to meet demand for basic transport allowances, school fees and medicals by customers and to ease the stress of genuine customers in obtaining foreign currencies. The bank said 10 banks accessed $162.8 million dollars at a qualified bid ranging from ₦330 to ₦360/$ on a 30 days tenor, adding that it would mature on March 27. “For the 60 days tenor, six banks qualified to access $58.52 million with bids for the United States dollars ranging from ₦315 to ₦320.5/$ meant to mature on March 25, 2017. CBN recently unveiled a new policy action to make forex readily available for personal and business travels, medicals and school fees,” the statement said. CBN further said that it injected $370.9 million into the interbank market, through forward sales to 23 banks at a qualified bid ranging from ₦315 to ₦360/$. The regulator also disclosed that it made spot sales of $6 million to four banks and sold 35 million for the payment of school fees, medicals and BTA. About 24 hours after the announcement of the new policy, the naira firmed up at the black market from about ₦520/$ down to the current exchange rate of ₦440/$ on Sunday.
  • Mobile phone services provider, MTN has called on the NCC to release the spectrum that belongs to Visafone, whose equity shares it acquired in 2015. MTN made the call when the Group Chairman/Chief Executive Officer, MTN, Phuthuma Nhleko, led a delegation to the NCC headquarters in Abuja. Nhleko also appealed to the commission to grant the telecoms firm more spectrum licences, according to a transcript of the meeting obtained by The Punch. He said MTN had made its mark in voice and data services and that more services, like mobile financial services, were underway. In its response, the NCC said it was open to discussion with MTN on more spectrum licences. MTN acquired six slots in the 2.6GHz auction and experts had envisaged the full utilisation of that spectrum until the NCC restrictions.
  • The Nigerian Sovereign Investment Authority, operators of the Sovereign Wealth Fund, will from next week begin the implementation of a fertiliser project that will enable the country to save foreign exchange by about $1.5 billion (about ₦458 billion) over the next three years. The fertiliser project will see the NSIA and its partners invest a total sum of $286.4 million (₦87.2 billion) in the project for blending one million metric tonnes of fertiliser. The objective of the project is to deliver fertiliser to farmers in time and at a price of ₦5,500 per 50kg bag. This, according to the project document, is a reduction of between 30-40 percent from current prices, with deliveries starting from next week from the blending plants in Kaduna. The SWF, which was set up in 2013 with about $1.55 billion, has three pots from which investments can be anchored. The pots are Future Generation Fund, Infrastructure Fund, and Fiscal Stabilisation Fund. The National Economic Council approved the sum of $250 million (₦76.3 billion) as additional capital to the SWF this month.
  • AMCON has significantly scaled down flight operations of Arik Air to less than 30 percent of its operational capacity. The airline, which at peak periods used to operate 120 flights a day now operates about 15 flights, with a very low load factor. Out of the 28 operating aircraft fleet, only eight are now in operation, including two Bombardier, CRJ 900, one Bombardier Q400 and five Boeing 737. The Q400 is a dedicated service with Chevron, so the airline, in essence, utilises seven aircraft. Vanguard reports that the airline’s international financiers and other creditors have concluded plans to sue the Federal Government over its management of the company.