Business News
Next Level: Exchange rate under Buhari by 2023
As President Muhammadu Buhari won Nigeria’s recently-concluded presidential election for his second term bid, Nigerians who voted-in the president again ‘surprisingly’ do not have demanding expectations from him.
Unlike when he was contesting for the first term tenure, almost all Nigerians wanted a change in government and ease in the country’s economy. It may not be erroneous to say Buhari had won the presidency in 2015, as a result of his campaign on boosting the country’s economy.
Buhari’s ‘change’ mantra, according to the president, was also designed to influence the Nigerian exchange rate. During his presidential campaign in 2015, the president promised to equal naira to the dollar. This was one of the most exciting promises Buhari made to win Nigerians’ heart.
Little did anyone know that the exchange rate would only go from bad to worse. Under his first tenure, naira depreciated in it value by 81.82%, a development no one saw coming.
While an exchange rate is the rate of one country’s currency in relation to another currency, a currency peg is a country or government’s exchange rate policy whereby it attaches, or links, the central bank’s rate of exchange to another country’s currency.
How naira depreciated drastically
The naira has been weakened against the U.S. dollar since June 2015 when the Central Bank of Nigeria (CBN) scrapped the currency peg that had kept it at an artificially-high value of around N198 per $1.
Following the scrapping of the peg, naira lost over 40% of its value against the US dollar. While the Central Bank had pledged to move to a free-floating exchange regime, it intervened in the foreign exchange market after the devaluation to keep the naira within a narrow range of N282 to N285 per USD.
In mid-July, 2015, the apex bank reduced its interventions, causing the naira to depreciate further. On July 28, 2015, the currency fell to a record-low of N322 per USD, which marked a 14.2% depreciation over the same day in June and a 61.8% depreciation in annual terms. Since then, the naira has been fluctuating at low levels. In the same year, the naira traded N321 per USD.
However, naira is currently exchanging at N360 per $1 in the parallel market.
Are Nigerians expecting much?
As mentioned earlier, the demands are not as much as they were in 2015. Nigerians seem to have received the exchange rate under Buhari by 2023 in good faith already.
Some Nigerians have taken to Twitter to predict the exchange rate by the time the president will be ending his tenure, and it’s not far from ‘more depreciation’.
700/$ assuming oil is $65. Are you time stamping this 🧐
— Charlie Robertson (@RencapMan) February 26, 2019
Which of the exchange rates? We will have 9 different usd/ngn rates by 2023
— SEVER 🇳🇬☄️🇬🇧 (@XSEVE_Trades) February 27, 2019
N420/$1.00
— Emeka Igwe (@igwechu60114594) February 26, 2019
N500/$ with crude oil prices around $50 – $60 on average. The cost of containing it at these level will be elevated interest rate environment and massive intervention by the CBN. This will happen no matter who becomes the CBN Governor.
— Kayode Trinity (@KayTrinity) February 28, 2019
Maximum N750 to 1 USD…………after all it was like N195 to USD 1 when GEJ left. By the same proportion of change, we should hit N750 at best.
— IamChiggy (@van_chiggy4) February 26, 2019
N256 =1$ oil @$80
— Abba kyari (@abdulgombe1060) February 26, 2019
I can't say for 2023 but all I know is that the Naira will hit N400 in few months this year.
— Timinipere Ababa (@timinipereAbaba) February 27, 2019
Business News
Ecobank Transnational to hold AGM by proxies on June 30th
Due to the ravaging Coronavirus pandemic, ETI said the AGM will be held by proxies.
Ecobank Transnational Incorporated (ETI) has announced the date and venue of its 32nd Annual General Meeting (AGM). According to a disclosure that was sent to the Nigerian Stock Exchange, the company’s AGM and an Extraordinary Meeting are scheduled to hold on June 30th, 2020, at Eko Hotels and Suites in Victoria Island, Lagos.
Due to the ravaging Coronavirus pandemic, ETI said the AGM will be held by proxies. The proxy AGM is expected to enable the Pan-African financial institution to abide by the directives issued by governments and agencies regarding COVID-19 and how to contain its spread.
“As a responsible corporate citizen, ETI intends to strictly comply with this restriction in addition to other applicable health and safety measures. Accordingly, attendance at this year’s General Meetings shall be mainly by proxies in accordance with the Articles of Association of the Company and applicable law,” a statement by the company said.
To this end, shareholders have been advised to select any of the company’s top executives (including the Chairman, Emmanuel Ikazoboh, and the MD of Ecobank Nigeria, Patrick Akinwuntan) to represent and vote on their behalf during the AGM. Proxy forms may be downloaded from the company’s website, filled, and submitted in advance.
Meanwhile, the issues that are up for discussion during the AGM and the Extra Ordinary meeting are enumerated below.
Annual General Meeting
1. Approval of the accounts
2. Appropriation of the Profits
3. Election of Directors
4. Ratification of the co-option of directors
5. Renewal of the appointment of the joint auditors
6. Approval of the Final Board Fees for Retiring Directors
Extraordinary General Meeting
1. Withdrawal of resolution on consolidation of shares
2. Amendment of the Articles
Note that in Q1 2020, ETI reported profited after-tax from continuing operation of N66.4 billion, marking a 19% decline when compared to N81.9 billion during the comparable period in 2019.
ETI’s share price on the Nigerian Stock Exchange closed Friday’s trading session at N5.55. The company has a market capitalisation of about N137.3 billion according to information obtained from Bloomberg.
Business News
NNPC explains measures to cut cost of crude oil production
Ewubare stated that NNPC was looking very closely at such variables as logistics, security, and transportation with a view to reducing the cost of production to $10 per barrel or below.
The Nigerian National Petroleum Corporation (NNPC) has said that it is taking some measures to bring down the cost of crude oil production to $10 per barrel or below.
According to a press statement that was signed by NNPC’s Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, this was disclosed by the Corporation’s Chief Operating Officer (COO), Ventures and Business Development, Mr. Roland Ewubare, on a Channels TV breakfast programme on Friday, June 5, 2020.
Ewubare pointed out that the peculiarity of the terrain was an important factor in determining cost, with such issues as pipeline vandalism, crude oil theft, and some others being critical factors that are peculiar to the Nigerian terrain and would definitely drive up crude oil production cost in the country.
He, however, stated that NNPC was looking very closely at such variables as logistics, security, and transportation with a view to reducing cost of production to $10 per barrel or below.
He disclosed that much had been done over the years in the area of reducing contracting cycle which used to be a major factor responsible for high cost of production, stressing that the National Petroleum Investment Management Services (NAPIMS) achieved a six-month contracting cycle under him as Group General Manager.
Mr. Ewubare denied reports that Nigeria is part of OPEC+ member countries that did not comply with the output cut that was agreed by the alliance
Mr. Ewubare explained that though Nigeria’s total production capacity was 2.3million barrels per day, it was currently producing only about 1.4million barrels per day in compliance with the OPEC+ production quota, stressing that what makes up the little extra over the 1.4mbpd figure being bandied around for Nigeria was condensate which is usually not computed as part of production in OPEC quota.
While making some clarification, Ewubare said, “There’s some confusion in the market around the parameters for the production cuts. Nigeria has a full production capacity of about 2.3mbpd. We are currently producing between 1.6 and 1.7mbpd. Our OPEC quota as a result of the cuts is about 1.4mbpd. You and I know that condensate is not included in the computation of the cut numbers. So what we have is 1.4mbpd of crude oil. The little you see above 1.4mbpd is made up of condensate which does not count as part of the basis for assessing our OPEC quota”.
NNPC Group Managing Director, Mallam Mele Kyari, in a recent interview, advanced a similar position where he stressed that NNPC was working assiduously to bring down the cost of crude oil production to not more than $10 per barrel by 2021.
Business News
NNPC raises alarm over low grade, contaminated diesel in the market
This warning was contained in a report by the Managing Director, NNPC Retail Limited Managing Director, Dr. Billy Okoye, who also admonished motorists to be careful of the off-spec products.
The Nigerian National Petroleum Corporation (NNPC) has raised alarm over the circulation of low grade and contaminated AGO, popularly known as diesel, which is offered at discounted prices in some parts of the country.
This was disclosed in a press release by the Group General Manager, Group Public Affairs Division, Dr Kennie Obateru, on Friday June 5, 2020.
This warning was contained in a report by the Managing Director, NNPC Retail Limited Managing Director, Dr. Billy Okoye, who also admonished motorists to be careful of the off-spec products.
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The state oil giant, in the press statement, said, “The Nigerian National Petroleum Corporation (NNPC) has raised an alarm over prevalent low grade and contaminated AGO, otherwise called diesel, offered at discounted prices in parts of the country.”
Dr. Okoye, stated that the warning became necessary because the low grade contaminated diesel is harmful to machines and the environment. He explained that NNPC Retail Ltd is a market leader and therefore considered it incumbent upon it to alert the general public on the circulation of these low grade products.
While urging consumers of the product to patronize the oil firm’s service stations where the quality of their products was assured, Dr. Okoye gave assurances that NNPC Retail Limited dealt only in premium high-quality products in the interest of Nigerian motorists and users.
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Unlike the premium motor spirit otherwise known as petrol, which was operating a fixed price regime and had NNPC as the sole importer, the diesel products were deregulated and had other independent marketers apart from NNPC importing the products as well.
The intense competition and unhealthy drive for profit, in addition to poor regulation, could have given rise to this.
