08 Mar

Daily Watch – Economic Recovery Plan released, Stocks see biggest half-year rise

  • The CBN aims to achieve a market-determined exchange rate regime, according to an official economic plan released on Tuesday, as pressure mounts to let the naira float freely. The government will also review and possibly remove a ban on accessing foreign exchange for 41 goods and services, said the Economic Recovery and Growth Plan 2017-2020, released by the Budget Ministry. Nigeria also sees 2017 inflation at 15.74 percent, and at 12.42 percent next year, the plan said. Inflation in January hit 18.7 percent, its highest level in more than 11 years.
  • Nigeria plans to raise ₦130 billion ($427 million) from its third debt sale this year on March 15, the Debt Management Office said on Tuesday. The DMO said it would issue ₦45 billion in bonds due in 2021, ₦50 billion maturing in 2027, and ₦35 billion due 2036, using the Dutch auction system which begins with a high asking price that is lowered until the bond is sold. Settlement is expected on the day following the issue. The bonds are reopenings of previous issues, except the 2027 note which is a new issue. Africa’s biggest economy auctions sovereign bonds monthly to help fund its budget deficit, support the local debt market and to maintain a benchmark for companies to follow. The DMO plans to sell ₦1.13 trillion ($3.70 billion) worth of treasury bills between March 16 and 1 June, according to a CBN debt calendar. The bank aims to auction ₦243 billion in 91-day bills, ₦198 billion in 182-day and ₦689 billion in 364-day debt. The central bank sells treasury bills twice a month to help fund the government’s budget deficit and support commercial banks in managing liquidity. Nigeria expects a ₦2.36 trillion budget deficit for 2017, with half of it funded through domestic borrowing.
  • Nigerian stocks posted their biggest daily rise for six months on Tuesday, rising 2.23 percent to 25,129 points. Nigeria’s biggest listed company, Dangote Cement, majority-owned by Africa’s richest man Aliko Dangote and accounting for a third of total market capitalisation, rose 4.92 percent. Brokers say better than expected corporate results especially from the banking sector after Zenith Bank and Access Bank declared dividends amidst a weak economic outlook buoyed stocks.
  • The Securities and Exchange Commission, on Tuesday, said it had paid about ₦42 billion out of about ₦117 billion unclaimed dividends to investors. According to the Director-General, Munir Gwarzo said this at a public hearing organised by the Joint Senate and House of Representatives Committees on Capital Market on “The need to determine the status of unclaimed ₦90 billion dividends in securities for Nigerian investors.” Gwarzo said efforts by the SEC to address the issue of unclaimed dividends were already showing results with the e-dividend registration system. He said as a result unclaimed dividend had dropped from ₦117 billion to ₦75 billion.
  • The FIRS Executive Chairman, Tunde Fowler has said that the agency realised the sum of ₦27.08 billion from the waiver of tax penalty and interest programme. Fowler disclosed this in Abuja during an oversight visit by the House of Representatives Committee on Finance to the agency. The FIRS gave a 45-day window from October 5 to November 24, 2016 for taxpayers owing tax liabilities, inclusive of interest and penalty for three years (2013 to 2015), to come forward and pay a minimum of 25 percent of their actual tax liabilities and spread the balance, while the penalty and interest were waived. The waiver programme, which came after due consultation with relevant stakeholders, was part of the Federal Government’s efforts to reduce the burden of tax liabilities on taxpayers, promote voluntary compliance and shield taxpayers from the burden of carrying forward old liabilities accruing from penalty and interest. At least 2,735 taxpayers applied under the tax waiver programme while 814,000 new taxpayers were added to the register, according to a statement from the agency.