22 Mar

Daily Watch – Argentina takes Nigerian crude, Government revenues fall

  • No fewer than 313 mining companies have been sanctioned by the federal government over non-fulfilment of environmental obligations. Salim Salaam, a director of compliance at the mines and steel development ministry said the mining operators were issued sanction letters on March 20 for failing to conduct Environmental Impact Assessment, Environmental Protection and Rehabilitation Programme and the Community Development Agreement. Salaam said four of the mining companies affected were given a ‘stop work’ order, after being warned several times.
  • Argentina is taking a rare cargo of Nigerian crude next month. Trafigura sold a cargo of Bonga destined for Argentina splitting it between Argentina’s YPF and Axion, traders told Reuters. Argentina took another cargo of Nigerian crude in early March this year and just one cargo last year. It picked up more Nigerian grades in 2015. About 10 cargoes remain from the April programme with Vitol showing cargoes of Qua Iboe, Escravos, Bonga and Brass River.
  • The CBN on Tuesday assured that it has the capacity to sustain the gains which the naira has made in the last few weeks. Godwin Emefiele, CBN governor, gave the assurance just as the MPC retained its bench mark interest rate at 14 percent on fears that any policy shift could worsen inflation, interest and exchange rate gains. The regulator also left the CRR unchanged at 22.5 percent, Liquidity Ratio at 30 percent as well as the asymmetric corridor around the MPR at +200 basis points and -500 basis points. “The benefits of loosening at this term which would be in line with the plans of the fiscal policy to resart growth. The MPC however notes that loosening will exacerbate inflationary pressure, worsen exchange rate and further pull the real interest rate into negative territory. Since interest rates are sticking downwards, loosening may not necessarily transmit into lower retail lending rate,” Emefiele said.
  • Nigeria’s distributable government revenues fell to ₦429.127 billion in February from ₦465.19 billion in January due to lower oil prices and attempts to sabotage its oil pipelines. Distributable revenue is government income that is shared at various levels of state including the FG, state governments and local government councils. Average oil prices fell to $44.74 from $49.57 per barrel in February. “Production diminished during the period due largely to leakages in the pipelines arising from sabotage,” said the FG.