14 May

Daily Watch – States may be unable to execute budgets, NAFDAC frees pharma coys

  • Capital inflow into Nigeria rose almost sixfold in the first quarter compared to a year ago, following last year’s liberalisation of the currency for foreign investors and steps to tighten liquidity to attract offshore funds. Figures released on Friday by the NBS showed capital inflow had hit $6.3 billion in the quarter, dominated by offshore portfolio investors buying local shares and bonds rather than foreign direct investment. Bills now trade at rates of around 12 percent. The NBS said most of the foreign capital inflow in the first quarter went into the banking sector, followed by the telecoms sector and services sector. Britain exported the most amount of capital to Nigeria, the statistics office said.
  • Less than a week after Bioraj, Emzor and Peace Standard Pharmaceuticals were sealed off by NAFDAC after being implicated in the codeine syrup crisis, the regulatory agency has finally reached a decision to lift the shutdown. NAFDAC’s DG, Professor Mojisola Adeyeye, said that the decision was reached after a meeting was held between NAFDAC’s directorates of Investigation and Enforcement, Drug Evaluation Research and Narcotics and Controlled Substances and representatives of the affected companies. Normal activities may now resume at the company’s factories located in Kwara and Lagos States.
  • NEITI says Nigerian states will be unable to execute their budgets or may have to increase borrowing because projected revenue is less than planned spending. In its quarterly review, NEITI said “the budget of all states completely outstrips their projected total revenues. The gap between projected total revenue and budgets is small in some states such as Kano, Enugu, Delta and Bayelsa. In these states, projected revenue is at least 60 percent of the budgets.” In 18 states, projected revenue is less than 40 percent of the budget (Adamawa, Akwa Ibom, Anambra, Bauchi, Benue, Borno, Cross River, Ebonyi, Imo, Katsina, Kebbi, Kwara, Ogun, Osun, Oyo, Plateau, Sokoto and Zamfara). In Cross River, projected revenue of ₦53.8 billion is four percent of projected spending of ₦1.3 trillion, the highest ever budgeted by a state in Nigeria’s history — a situation the report described as “chronic.”
  • Uruguay’s ANCAP bought a cargo of Nigerian Qua Iboe from BP via a tender, traders said. The firm was seeking a July 23-27 delivery cargo. Still, a surplus of West African oil remained and buyers said differentials needed to fall further. Nigerian spot trade was limited by fierce competition for buyers of light oil in Europe and the United States. Buyers said offer levels still needed to come lower, while sellers were targeting as much into tenders rather than aggressively offering on spot. Roughly two-thirds of the June-loading programme was still available for sale, sources told Reuters.