24 Jul

Daily Watch – Nigeria OPEC honeymoon to continue, Buhari resurfaces

  • The Presidency released a photograph of President Muhammadu Buhari on Sunday, the first in almost three months after he left the country on May 7 for medical leave in the United Kingdom. In stark contrast to his first absence, when numerous photos of a notably skeletal leader were published, no images of Buhari during his current absence have been released until now. That sparked speculation ranging from his ability to contest the 2019 election for a second term to his death. The president is on his second medical leave so far this year, the majority of which he has spent being treated for an undisclosed ailment in London. The picture purports to show Buhari dining in Britain with senior members of his political party on Sunday, according to an accompanying statement from the presidency. Details of the 74-year-old president’s condition have not been disclosed.
  • Limiting oil output from Nigeria and Libya won’t be on the agenda when OPEC and other producers meet on Monday, with both African nations saying they’ll need to keep pumping at a higher level before they can join a global effort to stem a supply glut. Nigeria is ready to cap or even reduce supply if it can maintain output of 1.8 million barrels a day, said the two people, asking not to be identified because the information is confidential. Libya isn’t planning to join any agreement to curb output until it reaches its target of 1.25 million barrels a day by December. Producers including Saudi Arabia and Russia are gathering in St. Petersburg, Russia, to assess the effectiveness of an international accord to pare output. Saudi Energy Minister Khalid Al-Falih met with delegations from Libya and Nigeria over the weekend to discuss their production recovery plans, “including the challenges they currently face,” the OPEC said Sunday in a statement on its website. Both African OPEC members were exempt from the cuts agreement, which took effect in January, because of their struggles to restore production amid internal strife.
  • The NNPC has said that the CBN was supervising the remittance of funds to the government totalling $231.8 million from Diamond Bank, Skye Bank and Keystone Bank. Commercial banks collect grants, taxes, fees and tariffs on behalf of the government and then send them to a single treasury account with the CBN. Some banks have previously been accused of withholding remittances. The money accrued from investments — $174.4 million with Diamond Bank, $40.7 million in Skye Bank and $16.7 million in Keystone Bank — was being remitted to a treasury account under a government policy to curb corruption. NNPC spokesman Ndu Ughamadu said the company’s announcement was made to clarify remittances related to NNPC after media reports about a court order for seven local banks to transfer a combined $793 million to the government immediately.
  • Fitch Ratings has affirmed Lagos’s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘B+’ with Negative Outlook and Short-Term Foreign Currency IDR at ‘B’. The National Long-Term Rating was affirmed at ‘AA+(nga)’, with a Stable Outlook. The ratings on Lagos’ medium-term note (MTN) programme, as well as senior unsecured bonds, have also been affirmed at ‘B+’/AA+(nga)’. The affirmation, Fitch says, reflects the state’s weak socio-economic indicators by international standards. It also reflects the rating agency’s expectations of resilient operating performance in the medium term, adequate transparency compared with national standards and satisfactory debt metrics. Lagos’ IGR represents on average about 70% of the state revenue budget or about 40% of IGR collected in Nigeria, which however includes a higher share of informal non-oil activities compared with the oil sector. Fitch said it expects Lagos’ medium-term operating margin to be in the 45%-50% range, supported by a growing revenue base, especially from IGR. It did express concerns about the considerable size of the state’s informal economy.