- Nigeria plans to redeem ₦762.5 billion ($2.5 billion) worth of treasury bills from the proceeds of a planned $2.5 billion Eurobond, to lower borrowing costs for the government, Finance Minister Kemi Adeosun said on Wednesday. Africa’s largest economy expects to save ₦64 billion each year after it refinances the local bills with the dollar debt, she told reporters following a cabinet meeting in Abuja. In January, the head of the debt office said the FG would consider raising $2.5 billion through Eurobonds in the first quarter to refinance a portion of its domestic treasury bill portfolio at lower cost. Nigeria wants to refinance $3 billion worth of a local treasury bill portfolio of ₦2.7 trillion. The debt payoff will lead to a drop in rates by around 300 basis points which translate into savings for the government, Adeosun said. On Wednesday, bond yields rose 50 basis points to a level last seen five months ago as global risk-off sentiment spread to local assets. The rise hit the actively traded five-year bond and benchmark 20-year debt the most.
- PwC says the naira may exchange at ₦386 in the second half of 2018. In its 2018 economic outlook, PwC said lowered oil prices, disruptions to crude oil productions and political instability are the major near-term risks to economic stability. “In H2’18, we estimate a 7 percent exchange rate depreciation in the I&E window to ₦386/USD, as FX demand increases and foreign investments slow ahead of the 2019 elections,” PwC said. The consultancy said the CBN will maintain its multiple exchange rate regime, sustaining its intervention in the various FX markets and revenue will under-perform budget by 34 perfect as a shortfall in non-oil revenues offsets the impact of the strong recovery in oil revenues. “Consequently, debt service to revenue expands to 45 percent, higher than the projected 31 percent in the budget,” the report added. PwC expects the fiscal deficit to widen by 67 percent to ₦3.4 trillion or 2.4 percent of GDP, a situation which will require an increased issuance in the domestic bond market.
- Nigeria’s push to keep its citizens stocked with petrol, is drawing close to a million tonnes a month of gasoline from Europe – including now on a rare Suezmax vessel booked by Vitol. The country is working overtime to replenish its tanks after shortages and queues popped up across the country in early December – sparking a scramble by the NNPC. The Vitol-booked, 115,000-tonne cargo aboard the newly built Sea Icon is sailing to West Africa from the Latvian port of Ventspils, according to Reuters ship tracking and trading sources. It is expected to arrive around 22 February when it will offload its cargo to smaller vessels that can more easily sail into Nigeria’s ports, which cannot accommodate the unusually large, “clean” ship. The cargo adds to roughly 1 million tonnes that are already booked to sail for Lagos alone from Europe this month, according to industry monitor Genscape. That followed a similar amount loading on that route in January, but compared with just under 500,000 tonnes in November, Genscape data showed.
- The NCC’s board has approved two additional infrastructure company (Infraco) licences for the south-east and north-east regions of the country. In a statement on Wednesday, spokesman Tony Ojobo said the approval is to deepen the country’s broadband penetration, currently at 22 percent and on par to hit the government’s target of 30 percent at the end of the year. He listed the Infraco licences to include Zinox Technology for the south-east and Brinks Integrated Solutions for the north-east. “The Infraco licences are based on the NCC’s Open Access Model in line with the National Broadband Plan of (2013 – 2018),” the statement read. The approval brings to four the number of Infracos licensed in the country; MainOne Cable has been licensed to provide services in Lagos and IHS to cover the north-central region including Abuja.
- Production of Qua Iboe, Nigeria’s largest crude oil stream, has dropped to its lowest level for the first time since 2010. The latest DPR crude/condensate stream production data shows that output of the crude collapsed by about 41 percent from 135 million barrels in 2010 to 79 million barrels in 2016, the year militant attacks cut Nigeria’s overall production to its lowest in decades. Nigeria produces over 26 different crude oil grades, but Qua Iboe Light, Bonny Light, Agbami, Forcados Blend and Escravos Light have remained five of the main and largest streams produced over the years. Qua Iboe is a light crude that produces high quality, low sulphur products after simple refining and it is produced from numerous offshore fields 20 to 40 miles southeast of Nigeria’s coast. Volumes are brought to shore via a seabed pipeline system to the Qua Iboe Terminal located on the eastern side of the Qua Iboe River.