Nairametrics| According to Reuters, the Central Bank of Nigeria’s newest window, the investor window, seems to already be in a state of confusion as traders and locals disagree over applicable exchange rates in the window.
While foreign investors were demanding rates above 400 naira per dollar locals were quoting rates as low as 350, necessitating the FMDQ OTC Securities Exchange to convene a traders’ meeting to discuss this wide range of quotes on the naira for investors. Unfortunately, though, the meeting did not have any favorable, ‘concrete’ outcome.
The worry for traders continues to be the illiquidity in the currency market despite the fact that the CBN has allowed rates in the window to be market-determined. The CBN, while selling dollars aggressively on the forward market, has only sold tiny volumes on the spot market, a move analysts believe the apex bank is using to narrow the currency spread with black market rates. Traders say this has contributed to illiquidity in the market. Similarly, investors are adamant that the over-the-phone trading system encourages a lack of price discovery and transparency in the market.
While these problems and disagreements could be looked at as initial hiccups common to new initiatives, they could signal a wider problem which the CBN would have to tackle sooner rather than later. On the flip side, the CBN could use these problems as further proof of why it is reluctant to allow for a full float of the Naira.
TikTok’s owner seeks $60 billion valuation in US deal as Oracle, Walmart take stakes
Oracle and Walmart have rights to buy 12.5% and 7.5% respectively of a newly established TikTok Global.
TikTok’s parent company, ByteDance is seeking a valuation of $60 billion for its video-sharing app, as Oracle Corp and Walmart Inc take stakes in the technology firm’s US operations to address the security concerns of the Trump administration.
According to a report from Bloomberg, Oracle and Walmart have rights to buy 12.5% and 7.5% respectively of a newly established TikTok Global under an agreement that has gotten the approval of President Donald Trump.
The duo US firms would be paying a combined amount of $12 billion for their stakes if they reach an agreement with TikTok for the asking price of $60 billion.
The final valuation had not been set as the parties worked out the equity and measures for data security.
It was also stated that China is yet to approve the deal, although regulators are said to have expressed support for any transaction in which BtyeDance still maintains control of its valuable recommendation algorithms and other proprietary technology.
It would be recalled that President Donald Trump, had threatened to ban the ByteDance owned TikTok, over national security concerns, but which some analysts see as part of the row between US and China. This pressured ByteDance into the deal as they looked to avoid the ban by the US government.
The US officials had expressed concern that the personal data of as many as 100 million Americans that use the app were being passed on to the Chinese government.
ByteDance turned down the proposal of a full buyout from Microsoft Corp but rather agreed to Oracle’s offer in which the Chinese parent company will still maintain a majority stake in the technology firm.
Trump told reporters on Saturday, ‘’I approve the deal in concept. If they get it done, that’s great. If they don’t, that’s ok too.’’
Trump’s new stance appears to conflict with his earlier executive order for China’s ByteDance to divest from the video-sharing app’s operations in the United States.
ByteDance is in a race to avoid a ban on TikTok after the US Commerce Department said on Friday that it would block new downloads and updates to the app from Sunday.
According to market researcher, CB Insights, ByteDance is the most valued private start-up in the world at $140 billion. Under the proposed deal, ByteDance may end up owning as much as 80% of TikTok Global, which include the app’s operations in the US and the rest of the world excluding China. Venture firms like Sequoia Capital and General Atlantic may also acquire equity in the new business.
Lagos to shut Ojota’s axis of main carriage way of Ikorodu road for 3 months
The Commissioner advised all motorists to utilize alternative routes suggested during the stipulated time.
The Lagos State Government has announced the shutdown of the entire length of the main carriageway of Ikorodu Road from Ojota interchange to Ojota Second Pedestrian Bridge from Monday, September 21, 2020, for a duration of 3 months.
This is development is part of the next phase ongoing rehabilitation work on Ikorodu Road which is set to commence from the Ojota Interchange to Ojota Second Pedestrian Bridge and the Service lane inbound Lagos.
While making the disclosure, the Lagos State Commissioner for Transportation, Dr Frederick Oladeinde, advised all motorists to utilize alternative routes suggested during the stipulated time for the repairs following the closure of the entire length of the main carriageway for reconstruction work.
Oladeinde in his statement said, “Vehicles coming from Maryland will be diverted at Odoyalaro into the Service lane and the BRT Corridor to link back the main carriageway at Ketu bus stop and Demurin junction respectively.’’
The commissioner gave an assurance that the Lagos State Traffic Management Authority (LASTMA) and other law enforcement agencies will be available to direct traffic for free vehicular movement during the entire period of construction work.
While soliciting for the cooperation and support of residents and motorists that ply the axis, the Commissioner stated that the project is aimed at finding a lasting solution to the ever-busy road as well as to achieve the present administration’s traffic management and transportation policy objectives.
The Lagos State Government is set to commence the next phase of repairs from Ojota Interchange to Ojota Second Pedestrian Bridge and the Service lane inbound Lagos, from Monday 21st of September, 2020 for a duration of three months.@jidesanwoolu @dr_oladeinde#ForAGreaterLagos pic.twitter.com/8mzYGauqpi
— The Lagos State Govt (@followlasg) September 18, 2020
Petrol supply drops by over 23% due to decline in consumption
Consumption of petroleum products to decline to 27.2 billion litres in 2020.
The total volume of petrol supplied in Nigeria declined by 23.88% in July, when it fell from 1.34 billion litres in June 2020 to 1.02 billion litres.
This was disclosed by the Nigerian National Petroleum Corporation (NNPC), in its monthly performance data for July.
According to the report, the 1.02 billion litres translated to 32.95 million litres per day, down from 44.62 million litres per day in June, when 1.34 billion litres were supplied.
The performance data also stated that 0.95 billion litres (30.67 million litres/day) were supplied in May, and 0.94 billion litres (31.37 million litres/day) in April.
In March and February, the volume of petrol supplied stood at 1.73 billion (59.72 million litres/day), up from 1.20 billion litres in January (38.68 million litres/day)
It stated, “The corporation has continued to diligently monitor the daily stock of Premium Motor Spirit, to achieve smooth distribution of petroleum products and zero fuel queue across the nation.”
Agusto projects further decline
Experts in Agusto & Co, in a report, have noted that the impact of the COVID-19 pandemic on economic activities in the country resulted in a decline in the consumption of petroleum products.
The report said, “Agusto & Co. expects the consumption of petroleum products, particularly PMS and Aviation Turbine Kerosene, to decline to 27.2 billion litres in 2020, given the severely restricted travel and transportation activities during the second and third quarters of the year.
“This is expected to translate to a decline in revenue to N4.3tn in 2020.”
NNPC has, until recently, been the sole importer of petrol into the country for more than two years, after private oil marketers stopped importing the commodity, due to crude price fluctuations, among other issues.
The refineries, located in Port Harcourt, Kaduna and Warri, have a combined installed capacity of 445,000 barrels per day, but have continued to operate far below the installed capacity.