28 Mar

Daily Watch – CBN tweaks naira rates again, Nnamdi Azikiwe runway makeover extended

  • The CBN set a new naira exchange rate on Monday for consumers with certain foreign expenses and stepped up dollar sales on the official market to narrow the spread with the black market. Analysts doubted whether the moves would draw investors back to the suffering economy. Nigeria has at least five exchange rates — the official one, the black market, a rate for Muslim pilgrims going to Saudi Arabia, a retail rate set by licensed exchange bureaux and a rate for foreign travel, school and medical fees. It was the last rate that was changed — to ₦360 to the dollar, a four percent rise since the last rate was set. The regulator auctioned $1.5 million and offered $100 million on the forward market to boost liquidity. However, it sold naira on the spot market at 306.30, 21 percent weaker than the black market. The CBN also barred lenders from reselling foreign currency to retail exchange bureaux to curb speculation.
  • AMCON has recovered ₦681.5 billion ($2.2 billion) over the past six years from debtors in the form of cash, properties and shares, it said on Monday. AMCON was set up in 2010 to absorb banking sector-wide non-performing loans in exchange for government bonds after the CBN rescued nine weak lenders from collapse in 2009. But pressure has been building up again, with loan books – nearly half of them in dollars – hammered by shrinkage in the economy, a sinking currency and acute foreign exchange shortages – all consequences of the slump in oil prices. The “bad bank” said it has around ₦1.7 trillion ($5.6 billion) worth of assets under litigations. In February AMCON took over the day-to-day running of Arik Air in an attempt to rescue the country’s largest airline, which was placed in receivership after it failed to pay workers or creditors. Last week it sold the nationalised Keystone Bank to a consortium of local investors.
  • Total current account deposits in Nigerian banks fell by ₦1 trillion in February, implying banks generated fewer deposits during the month due to the biting effect of the economic recession. This was one of the highlights of the Depository Corporation survey for February 2017 recently published by the CBN. Among other things, the survey revealed that total demand (current account) deposit of banks fell by 10.75 percent to ₦8.6 trillion in February from ₦9.636 trillion in January. Similarly, currency outside the banks declined month-on-month by 1.16 percent to ₦1.61 trillion. Consequently, Narrow money supply declined m-o-m by 9.36 percent (and 11.35 percent year-to-date, to ₦10.21 trillion. According to the report, broad money supply moderated month-on-month by 4.34 percent to ₦22.37 trillion following a 0.46 percent increase in Net Domestic Assets to ₦13.82 trillion and an 11.21 percent decline in Net Foreign Assets to ₦8.55 trillion. The increase in NDA followed a 0.54 percent m-o-m increase in Net domestic credit to ₦26.77 trillion which more than offset a 0.62 percent increase in other liabilities (net) to ₦12.95 trillion.
  • After an initial six weeks, the Abuja airport runway will require another 18 weeks of upgrades Premium Times quotes an unnamed official in the Presidency on Sunday. According to a statement circulated to select journalists by the presidency, the 18 weeks’ upgrade would be carried out at night, meaning normal flight operations will continue during the day. The source also said the Minister of State for Aviation, Hadi Sirika, has been working diligently to minimise the inconvenience caused by the closure. “After the Abuja airport reopens for operations on April 19, upgrade works on the runway would continue for another 18 weeks,” he said. “This second phase of upgrade works on the runway will be carried out at night, with no disruption to flight schedules,” the official further disclosed. In a related development, the Federal Airport Authority of Nigeria and Julius Berger, the contractor handling the repair of Nnamdi Azikiwe International Airport, Abuja runway, have said that the work is 40 percent completed. The duo made the announcement when members of the House of Representatives Committee on Aviation led by its chairperson, Nkeiruka Onyejeocha, inspected the project on Monday. Yemi Ayelesan, an FAAN engineer, told the committee that the hardest part of the work on the 3.6 kilometres runway had been completed. He explained that the laying of “fibre glide rubber’’ which prevents water from going deep underground and also prevents the runway from cracking had also been completed.
  • The Minister of State for Aviation, Sen. Hadi Sirika, on Monday, said the Murtala Muhammed International Airport, Lagos, would be certified by the International Civil Aviation Organisation in May. Sirika, who spoke at a session with members of the Aviation Round Table in Lagos, said that ICAO would also certify the Nnamdi Azikiwe International Airport, Abuja, in December. “I want to assure you that by May, Lagos airport will be certified, and in December, ICAO will also certify the Abuja airport. The Abuja airport ought to have been certified first, but it was shifted due to the closure of its runway, which is currently being rehabilitated,’’ Sirika said.