12 Jan

Daily Watch – Edo increases Chinese FPI profile, NNPC on the hunt as more scarcity looms

  • The Association of Bureaux De Change Operators of Nigeria, the umbrella body of over 3,500 BDC operators licensed by the CBN, has called on the regulator to extend the 31 January deadline set for the renewal of operating licence of its members to 31 March. Speaking at the end of an ABCON meeting held in Lagos on Wednesday, National Treasurer Gbadamosi Moh-Murtala said the organisation will also call on the regulator in a meeting on Friday to review the exchange rate band for the sale of U.S. dollars to the BDCs from ₦360/$. Moh-Murtala said, “We want the CBN to review the BDC rate to ensure that currency speculators do not return to the market. Remember the BDCs buy dollars at ₦360/$ from the International Money Transfer Operators. Many forex users prefer to buy at the parallel market instead of the BDCs because there are no longer rate gaps. They prefer the parallel market where no single documentation is required. That is why we are calling on the CBN to review the rate band for the BDCs.”
  • Nigeria’s petrol scarcity may be more widespread than first expected because the NNPC has issued a spot tender seeking 1,480,000 metric tonnes of petrol from January to April, on top of the existing term of volumes it imports. Nigeria imports around 1-1.25 million MT of petrol every month to meet national demand estimated at 35 million to 40 million litres per day, according to Platts. These import requirements are set to increase further due to the current situation. It is rare for the NNPC to issue a tender for petrol imports and the move highlights the significance of the existing shortages. The latest tender shows the NNPC is concerned that the supply crisis might get worse, and in a bid to cover its requirements it is tendering for more spot petrol. The NNPC accounts for more than 90 percent of the petrol imported into the country through the direct sale of crude and direct purchase of refined products model. The tender is reportedly restricted to companies which were selected in 2017 to participate in the DSDP programme.
  • The Edo State Government on Wednesday said it had signed an MoU with a Chinese consortium for the construction of a modular refinery in the state. It said that the 5,000 bpd refinery would be built by the Peiyang Chemical Equipment Company of China, Sinopec International Petroleum Service Corporation and a Nigerian company, African Infrastructure Partners. The government said the first phase of the project would be ready in 12 months as all the necessary approvals have been granted by the regulatory authorities. The deal comes hours after a similar MoU was signed with China Harbour Engineering Company in Beijing for the development of the Gelegele seaport.
  • The Cocoa Farmers Association of Nigeria has predicted that the country may record another year of below average cocoa production if the FG fails to address the issue of substandard and fake inputs procured and supplied to its members last year. The association said fake inputs allegedly procured and supplied by persons contracted by the Ministry of Agriculture and Rural Development was responsible for low cocoa production in 2017 and said in the absence of a review of the procurement process, 2018 was bound to be no different. Speaking with journalists in Akure, the National President, Raimi Adeniji called for the intervention of President Muhammadu Buhari and the Minister for Agriculture and Rural Development, Chief Audu Ogbeh.
  • The World Bank forecasts that economic growth in Nigeria would edge up to at least 2.5 percent in 2018, as the country benefits from improved commodity prices, investments and trade. According to the World Bank’s January 2018 Global Economic Prospect report launched on Tuesday in Washington DC, Nigeria’s GDP is expected to grow by 2.8 percent in 2019 and 2020. The World Bank forecast that global economic growth will go up to 3.1 percent in 2018. According to the bank, growth in Sub-Saharan Africa is projected to continue to rise to 3.2 percent in 2018 and to 3.5 percent in 2019, on the back of firming commodity prices and gradually strengthening domestic demand. However, the report showed that growth would remain below pre-crisis averages, partly reflecting a struggle in larger economies to boost private investment.