14 Mar

Daily Watch – Senate to screen MPC nominees, Lagos denies vehicle fees increase

  • The Senate plans to start screening new members of the central bank’s interest rate committee after it held up some of President Muhammadu Buhari’s nominees in a political spat. Rafiu Ibrahim, the head of the Senate’s banking committee, brought a motion on Tuesday urging parliament to consider Buhari’s nominations. The Senate disagreed with the president about its powers to confirm – or deny – his nominees to key government posts, a disagreement that has kept several prospective members of the MPC from being approved. Buhari has nominated CBN veteran, Edward Adamu, to be a deputy governor of the bank, replacing Sulaiman Barau, who retired in December. But Adamu and others are yet to be screened. Consequently, the MPC has just four members now, out of 12 positions. A quorum of at least six members is needed to approve an interest rate decision. Unable to gather a quorum, the CBN had to cancel a meeting in January and leave rates unchanged at 14 percent, where they have been for more than a year. An MPC meeting is scheduled for next week, with a decision on rates due on Tuesday.
  • Nigerian crude looked set for a sizeable overhang on Tuesday with more than half the April programme still available, with the May schedules due out within the next week. Demand has been weak as refinery maintenance in both Europe and Asia is set to peak in May. April loading Angolan has sold better than Nigerian with less than 10 cargoes left. The differentials for Russian Urals have slumped in the last few weeks prompting European refiners to favour the medium, sour grade instead of expensive west African crude, a trader told Reuters. Another trader said differentials for Nigerian crude would have to correct sharply lower to elicit interest. Some 35-40 cargoes were still available from the April programme with May schedules due out as soon as Friday.
  • The DMO plans to raise ₦70 billion ($222 million) via a sovereign bond sale next week, it said on Tuesday, less than it has sold at previous auctions. The DMO said it would issue a five-year bond to raise ₦10 billion, and sell the 10-year paper to fetch ₦30 billion, using the Dutch auction system on 21 March. It plans to introduce a new seven-year note to raise another ₦30 billion, it said in a bond notice. The result of the auction is expected on 23 March, the DMO said. Nigeria has been working to lower costs, particularly as inflation fell for the 12th time in a row in January. The DMO has paid off a portion of the government’s maturing treasury bills instead of rolling over the debt as it has done in the past and plans to cut the amount it raises at home from future auctions. However, it is boosting dollar loans and wants to increase its foreign debt holding to 40 percent of total loans by 2019 from 27 percent now.
  • The Lagos state government says it has not increased the cost of processing motor vehicle particulars and application for number plates. In a statement released on Tuesday by Kehinde Bamigbetan, commissioner for information and strategy, the state said the rumoured increase was being peddled by mischief makers who want to take advantage of the unpopular review of the state’s land use charge to further their own political goals. “Although the cost of maintaining the roads and expanding infrastructures which ease the operations of vehicles is enormous, the Lagos state government shall continue to bear the burden of keeping the roads motorable and safe for all users,” the statement read. Bamigbetan said anyone with evidence of an increase in the rates from any of the official centres managed by the Lagos State Motor Vehicle Administration Authority should report to the agency or the ministry of transportation.