15 Mar

Daily Watch – Inflation down 13th straight month, National debt hits ₦21.7 trillion

  • Annual inflation fell to its lowest level in almost a year in February and slowed for the 13th month in a row led by decelerating food prices, the statistics office said on Wednesday. Core inflation was 14.33 percent in February, its lowest since last April, down from 15.13 percent in January. The food price index showed inflation of 17.59 percent in February versus 18.92 percent in January. Yemi Kale, head of the NBS said in January he expected inflation to fall faster this year, but that spending ahead of 2019 presidential elections could stoke prices. Food price inflation has remained in high double digits over the last year. Kale has said the country is in a harvest period and output is increasing, which would help lower food prices, but household consumption remains fragile after the 2016 recession.
  • Next week, the Senate will consider a report into nominations for the CBN’s monetary policy committee, in a move that could end an impasse that has halted policy decisions. The upper house has held up some of President Buhari’s nominees for the committee in a political spat which has left it unable since the start of the year to form a quorum to set interest rates. Senators said details of the nominees had been formally referred to the committee on banking. “Your report should be back in one week”, Senate President Bukola Saraki said of the report, to be compiled by the committee. If lawmakers accept the committee’s report it will be sent to Buhari and the new members can be sworn in. The CBN was forced to cancel its rate-setting meeting in January because it was unable to reach a quorum. It meant the headline interest rate was left unchanged at 14 percent, where it has been for more than a year.
  • Nigeria’s total national debt grew to ₦21.7 trillion ($70.92 billion) at the end of December 2017, the director-general of the DMO told a news briefing on Wednesday. It was ₦17.36 trillion at the end of 2016. The country’s first Eurobond will be repaid when it matures in July, said the head of the DMO, Patience Oniha. The national debt mix is about 30 percent foreign and 70 percent local after a $2.5 billion Eurobond sale in February, she said.
  • Seplat said on Tuesday that it has priced its offering of $350 million in an aggregate principal amount of 9.25 percent senior notes due 2023. In a submission to the NSE, the Lagos and London listed company said the gross proceeds of the notes will be used to repay and cancel existing indebtedness. The company also announced that it has successfully refinanced its existing $300 million revolving credit facility due December 2018 with a new four year $300 million revolving credit facility due June 2022. Seplat stated that the RCF carries initial interest of Libor +6 percent payable semi-annually. The company envisaged its proforma gross debt post-closing of both the notes and the RCF, expected to occur on 21 March 2018, will be $550 million.