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Naira crashes further at the parallel market due to dollar scarcity, lowest since 2017

 The downward slide of the naira in the parallel market appears to be continuing unabated as the slump in crude oil prices

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Naira crashes further at the parallel market due to dollar scarcity, lowest since 2017, Naira drops to N454, foreign investors and importers struggle for dollars

The downward slide of the naira in the parallel market appears not to end anytime soon, as the slump in crude oil prices, and pressure on the foreign exchange market continues.

The local currency dropped to N425 to a dollar, its lowest level in the parallel market since 2017, according to information gotten from Aboki fx.
This indicates a depreciation of about 1.2%, when compared to the N420 per dollar that it sold for on Tuesday, April 21, 2020.

It is also coming against the backdrop of the slump of Bonny light crude price to just over $14 per barrel, and the selling of Brent crude at less than $20 per barrel on Tuesday.

The naira has been hitting new lows in the parallel market and over the counter spots on declining volume, due to low dollar inflow. The naira was quoted at a low of N388.92 to a dollar in the spot market on Tuesday.

(READ MORE: Naira forwards hit record high as local currency crashes to N420/dollar in the parallel…)

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The further crash of crude oil prices globally, as a result of low demand and storage issues, has put further pressure on the already strained foreign exchange market.

It was also reported that the naira weakened in the forward market, as the one-year dollar/naira non-deliverable forwards were 498.5 points on Tuesday, as against 492.4 on Monday.

READ ALSO: Questioning Nigeria’s fiscal federalism and resource sharing models

The increased demand for US dollar is caused by importers with past-due obligations scrambling for hard currency and speculators who are buying to hedge against the future, while providers of foreign exchange, like foreign investors and the ones from foreign remittances, have either exited or declined drastically as a result of the global lockdown.

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This is compounded by the suspension of dollar sales to Bureau de Change operators.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Coronavirus

Cost of Ivermectin soars after research suggest 75% chance of cutting Covid-19 deaths

Ivermectin prices have risen after Research published by the International Ivermectin Project Team shows drug can reduce Covid-19 deaths

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As Azuka lay down in bed feverish, he had resigned to his fate believing he was not going to make it to the next day.

Just 3 days into the new year and all the fun he had attending weddings and burial ceremonies in the east all seemed like a big mistake. He must have caught covid-19 at one of those events, he thought.

Since attending the last event, he fell sick and has been exhibiting the symptoms of Covid-19 and just waiting to die until someone recommended Ivermectin, a little known drug as a potential medicine that could help save his life.

READ: Only 68.8% of Nigerians believe Covid-19 is real – SBM Intel

A few days later he recovered and spread the news to friends and family- he believes Ivermectin cured him.

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The rush to purchase Ivermectin in Lagos has increased of late after stories similar to that of Azuka (not his real name) spread. As Nigeria’s caseloads rise past 120k cases, some Nigerians are increasingly worried about contracting Covid-19, rushing to pharmacies to purchase a drug that they all believe is the most portent to fight Covid-19.

READ: Hepatitis C drugs may be effective against COVID-19, virus may spread through high-rise buildings

What is Ivermectin?

According to the World Health Organisation, Ivermectin was originally produced in the 1980s as a veterinary drug used largely for nematode control in cattle, horses, pigs, and dogs and became the standard for control of the ectoparasitic disease, scabies. It soon became the world’s most profitable veterinary drug.

Since then, Ivermectin has been used on humans for controlling strongyloidiasis, a human pathogenic parasitic roundworm causing the disease strongyloidiasis. According to medical sources, it is also known in the US as threadworm, UK, and Australia as pinworms.

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In Nigeria, it has been used to treat worms, according to a pharmacist who spoke to Nairametrics.

READ: Nigeria, others to receive first-ever HIV generic drug for babies in the first half of 2021

“Originally it’s a worm expeller (Antihelminthic) used in the elimination of parasitic worms from the body. They use it in combination with doxycycline. They also use Vitamin C in combination with Axrthromycin.”

However, more recently, the drug is now being used for the treatment of Covid-19 pushing demands for the drug high across pharmacies in Lagos. A Nairametrics survey suggests the drug cost as high as N100,000.

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Another pharmacist who craved anonymity explains.

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“It was one of the available free drugs dispensed to patients at clinics in Nigeria – for eliminating different types of worms from the body. People usually don’t buy it from pharmacies because of the low price, thinking it’s not good quality tabled for expelling worms. It was not expensive and almost cost next to nothing, but now it sells for as high as N200 per tablet”

At N200 per tablet, a pack of 500 tablets could go for as high as N100,000. From all indications, the prices are unstable and could be purchased from as little as N20,000 per pack of 500 tablets to as high as N100,000. It all depends on demand and supply and who is under pressure to get a “cure”.

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READ: COVID-19: WHO warns against Gilead’s remdesivir drug approved by US FDA

Is the drug credible?

Several social media posts and videos allude to the efficacy of the drug in “preventing and curing” Covid-19 but this is yet to be certified by the WHO.

The drug however came into the limelight after a Financial Times article claimed the drug had a chance of cutting covid-19 deaths by up to 75%.

The article was based on research published by the International Ivermectin Project Team led by the University of Liverpool lecturer Andrew Hill. A Nigerian Olufemi Emmanual Babalola, from Bingham University/Lagos University, Nigeria is also part of the group.

READ: WHO study reveals new discovery about remdesivir drug’s effect on Covid-19 patients

Here is an excerpt of the result of the research conducted by the group

“Ivermectin was associated with reduced inflammatory markers (C-Reactive Protein, d-dimer, and ferritin) and faster viral clearance by PCR. Viral clearance was treatment dose- and duration-dependent. Ivermectin showed significantly shorter duration of hospitalization compared to control. In six RCTs of moderate or severe infection, there was a 75% reduction in mortality (Relative Risk=0.25 [95%CI 0.12- 0.52]; p=0.0002); 14/650 (2.1%) deaths on ivermectin; 57/597 (9.5%) deaths in controls) with favorable clinical recovery and reduced hospitalization. “

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Currently, the only other drug with the same level of worldwide unofficial approval for treatment of Covid-19 is Remdesivir, after it also showed an effect on improving recovery rate for Covid-19 patients.

READ: US Mission recognises Nigerian doctor who helped develop COVID-19 vaccine

The choice between waiting for a vaccine or self-medication

More recently, the search for cures for Covid-19 has been overshadowed by vaccine breakthroughs across the world. For most governments, preventing covid-19 is better than curing it which is why more effort is geared towards vaccine distributions and other preventive measures such as insisting on facemasks and introducing new lockdowns.

But for developing economies like Nigeria, where self-medication is prevalent, drugs like Ivermectin are easier to purchase over the counter as well as administer. Just like the demand for chloroquine, zinc, and vitamin C soared in the first wave of Covid-19, demand for Ivermectin is rising along with its price.

Fortunately, Ivermectin is backed by research even though the researchers expressed caution as more trials need to be conducted.

READ: Nigeria records 1,964 new cases of Covid-19, highest daily surge

“Despite the encouraging trend this existing data base demonstrates, it is not yet a sufficiently robust evidence base to justify the use or regulatory approval of ivermectin. However, the current paucity of high-quality evidence only highlights the clear need for additional, higher-quality and larger-scale clinical trials, warranted to investigate the use of ivermectin further.

“The maximum effective dose of ivermectin needs to be clarified and new clinical trials should use a consistent multi-day dosing regime, with at least 0.4mg/kg/day. The appropriate dose and schedule of ivermectin still requires evaluation and the current randomized clinical trials of ivermectin need to be continued until ready for rigorous review by regulatory agencies.” International Ivermectin Project Team 

Asides Ivermectin, Nigerians have also resorted to traditional medicine such as a beverage of lemongrass, dogonyaro leaves, garlic, ginger, and bitter kola to prevent and cure Covid-19, despite orthodox vaccines proven to be effective.

Perhaps it is because no one is sure when the vaccine will get to Nigeria after it was initially meant to arrive in January and since pushed to February 2021. And even if it does arrive in Nigeria, most people do not believe it will get to ordinary Nigerians on time especially when they cite the way the Covid-19 palliatives was handled.

For now, the need for self-reliance is driving people towards any drug they believe can cure covid-19.

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Financial Services

Niger Insurance Plc gets shareholders nod to restructure business

Niger Insurance Plc has announced plans to restructure its insurance business into distinct but mutually dependent business entities.

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Edwin Igbiti

Niger Insurance Plc has obtained shareholders’ approval to restructure its insurance business into general, life and business insurance, with each segment to be structured as a separate legal entity.

This is part of the resolutions passed at the 50th Annual General Meeting of Niger Insurance Plc., held on 20th of January, 2021 at Peninsula Hotel in Lekki, Lagos.

The decision to restructure the company is in a bid to make it more efficient and profitable to stakeholders, especially as efforts are geared towards overturning a loss of about 1,1723.2% Year-on-Year, earlier made by the company in its last reported financial statement, Q2, 2020, as reported by Nairametrics.

Other key decisions reached at the 50th AGM include;

  • The re-appointment of Mr Ebi Enaholo and Mrs. Olufemi Owopetu as Directors of the company.
  • Acceptance of the presented financial statement for the year ended December 31, 2019 and the report of the audit committee, directors and auditors.
  • Directors were authorized to fix the remuneration of the auditors.
  • Directors were authorized to appoint external auditors to replace retiring auditors of the company.
  • The appointment of four individuals as members of the audit committee.
  • A decision to restructure the company’s business capital was also reached.

In case you missed it: The shareholders of Niger Insurance Plc in the 49th Annual General Meeting approved the decision by the company’s board to raise additional capital to the tune of N15 billion, in a bid to meet the revised recapitalization targets for general and life insurance companies.

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What you should know: The House of Representatives had in December 2020 directed NAICOM to suspend the mandatory deadline for the first phase of 50%-60% of the minimum paid-up share capital for insurance and reinsurance firms.

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Energy

Nigeria’s Qua Iboe crude exports resume as ExxonMobil lifts force majeure

ExxonMobil has lifted a force majeure on Nigeria’s Qua Iboe crude oil exports as production resumes.

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Nigeria's Qua Iboe crude exports resume as ExxonMobil lifts force majeure

ExxonMobil has lifted a force majeure on Nigeria’s Qua Iboe crude oil export terminal, as crude exports resume for the first time in almost six weeks after a fire at the terminal halted operations.

This is according to a company spokesman yesterday, who confirmed the company had lifted force majeure on Qua Iboe crude loadings.

Qua Iboe production started to ramp up to normal levels of 200,000 b/d in the past week, according to sources, with the release of both the February and March loading programs.

READ: Shell declares force majeure, to stop Bonny Light crude oil export 

The VLCC Dalia was also in the process of loading a 1-million-barrel stem at the Qua terminal since January 21, 2021, according to data intelligence firm Kpler. This will be the first export of Qua Iboe since December 15, 2020, after a fire hit the facility and injured two workers.

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The company has been under pressure since the closure and prices have taken a hit as a result of the disruption. S&P Global Platts last assessed the grade at a discount to Dated Brent of 50 cents/b, down from a premium against the benchmark in December.

Bonny Light, a mainstay Nigerian crude which typically trades at roughly the same level as Qua Iboe, was last assessed 30 cents/b higher.

READ: Nigeria’s crude oil export suffers due to force majeure declared by Shell, others

What they are saying

One trader said: “If you get a cargo of Qua now it could be 50 cents to a dollar below Bonny even – a January cargo is completely out of cycle and the reliability issues mean people won’t touch it.”

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Another trader stated that: “[The return of Qua Iboe] is not what West African crude assessments (WAF) differentials needed.”

READ: Nigeria faces breaking point as India’s global crude oil demand drops by 70%

What you should know

  • Qua Iboe is one of Nigeria’s largest export grades, and is very popular among global refiners, with India, the US, Canada, Italy, Spain, Indonesia, and the Netherlands being key buyers.
  • Qua Iboe is light sweet crude, which has a gravity of 36 API and sulfur content of 0.13%. The crude, produced from fields 20-40 miles off the coast of southeast Nigeria, is brought to shore at the Qua Iboe terminal via a seabed pipeline system.
  • Indian demand has steadied following a buying spree late last year, and European demand has been hit by renewed coronavirus lockdowns in the region.
  • Prices for Nigerian crude have suffered in recent weeks, even with lower supply due to the outage.
  • February and March loading programs have been issued for Qua Iboe averaging 169,643 b/d and 153,226 b/d respectively.
  • Production of this key grade ranged between 180,000-220,000 b/d in 2020, according to S&P Global Platts estimates.

READ: GenCos to halt supply if NBET insists on new service charge 

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