The Central Bank of Nigeria (CBN) last week reduced its supply of the United States dollar at its regulated Wholesale Dutch Auction System (WDAS) by 32.5 per cent to $270 million.
THISDAY checks showed that the amount, which was the total of then two sessions of the bi-weekly auction, represented a decrease by $130 million; compared with the $400 that was offered by the liquidity management office the preceding week.
A breakdown of the amount of the greenback showed that while the central bank offered a total of $150 million to the 11 dealers that participated in the auction last Monday, only a total of $105 million was sold. On the other hand, it sold the entire $120 million it offered to dealers at the second session of the bi-weekly auction held last Wednesday.
The naira appreciated slightly by 2 kobo to close at N155.75 to a dollar last week, as against the N155.77 to a dollar it stood the preceding week.
But the local currency slipped by 25 kobo at the interbank to close at N157.37 to a dollar on Friday, from N157.12 to a dollar the preceding Friday. The local currency was however stable at the parallel market at N159 to a dollar.
The Nigerian Interbank Offered Rates (NIBOR) jumped marginally on the average by 13.69 per cent on Friday, from 13.27 per cent the preceding Friday due to outflow of funds from the system for the purchase of treasury bills.
Some dealers however argued that withdrawal of funds by the Nigerian National Petroleum Corporation (NNPC) also drained liquidity from the system.
As a result of this, data from the Financial Market Dealers Association (FMDA) showed that just as the Overnight tenor climbed to 11.46 per cent on Friday, from 10.33 per cent the preceding Friday, the 7-day tenor also advanced to 12.25 per cent on Friday, from 10.75 per cent the preceding Friday.
In the same vein, while the 30-day tenor rose to 13.67 per cent, from 12.21 per cent the preceding Friday, the 60-day tenor reduced to 14.04 per cent on Friday, from 14.04 per cent the preceding Friday.
The NNPC sells dollars to dealers on the interbank segment of the forex market, but usually recall a portion of the proceeds to its account with the central bank to fulfil its obligations to the government. The market was said to have opened on Friday with a positive cash balance of about N129 billion.
President Goodluck Jonathan last week presented a budget of N4.92 trillion in 2013, from N4.697 trillion in 2012, two months earlier than usual. With this, its implementation period, if approved by the lawmakers and signed into law, may run from January to December next year.
The share of recurrent spending in aggregate expenditure in the 2013 budget estimate was reduced from 71.47 per cent in 2012 to 68.7 per cent, while capital expenditure as a share of aggregate spending was also increased from 28.53 per cent in 2012 to 31.3 per cent in 2013.
The appropriation bill also showed that the federal government plans to narrow the budget deficit of 2.17 per cent of Gross Domestic Product (GDP) in 2013, compared with 2.85 per cent in 2012. Also, the gross federally collectible revenue was projected at N10.84 trillion, of which the total revenue available for the federal government’s budget was forecast at N3.89 trillion; representing an increase of about nine per cent over the estimate for 2012.
Otedola-AMCON Debt Deal
The House of Representatives last week set up an eight-man ad hoc committee to investigate the N141 billion debt deal struck between the Chairman of Zenon Petroleum, Mr. Femi Otedola, and the Asset Management Corporation of Nigeria (AMCON).
The committee, headed by House Minority Leader, Hon. Femi Gbajabiamila, is expected to unravel the circumstances surrounding the final settlement of debt. Other members of the committee are Hon. Sani Kalgo, Hon. Uzo Azubuike, Hon. Ajibola Muraina, Hon. Pally Iriase, Hon. Evelyn Ojakovo, Hon. Jerry Manwe and Hon. Idris Wase.
The House set up the ad hoc committee to probe the transaction following a motion sponsored by Hon. Abimbola Daramola (PDP/Ekiti) on the debt recovery transaction.
The Managing Director/Chief Executive Officer, Keystone Bank Limited, Mr. Oti Ikomi, resigned from the bank last week. Ikomi informed THISDAY that his decision was based on personal and health reasons.
Responding to enquiries from THISDAY, Ikomi, who was appointed into the position 14 months ago, had said in a text message: “Mr. Oti Ikomi has resigned for personal and health reasons. He remains a proud member of the Keystone Bank family.”
A statement from the bank also confirmed the development. Under Ikomi, Keystone Bank, which was one year on August 5, had set a mission - to set the pace in financial services delivery and creating utmost value for its stakeholders.
The Board of Directors of Keystone Bank Limited last week announced the appointment of Dr. Shehu K. Muhammad as its new acting Managing Director/Chief Executive Officer.
A statement, which described Muhammad as an astute and experienced banker, revealed that until the appointment, Muhammad was the Executive Director, Corporate Banking at Keystone Bank. His appointment followed the resignation of Mr. Oti Ikomi, the first chief executive officer of the financial institution that was established on August 5, 2011.
THISDAY had predicted that any of the bank’s five Executive Directors could succeed Ikomi. Keystone Bank is wholly owned by the Asset Management Corporation of Nigeria (AMCON).
Nigeria’s external reserves increased to a two-year high of $41.662 billion as at Tuesday, October 9, this year, the Central Bank of Nigeria (CBN) revealed last week.
CBN Governor, Mallam Sanusi Lamido Sanusi, had said that the reserves had accreted from $41.510 billion, which it closed on Friday, October 5, representing an increase of $152 million within two working days. The last time the external reserves rose to $41.51 billion was in April 2010.
Sanusi, who enthused that external reserves were now staying above $40 billion mark for the first time in two years, attributed the build-up to the swelling of excess crude proceed account (ECA) as a result of high oil prices as well as closure of fiscal leakages and stable exchange rate. He noted that the amount in the ECA was $8 billion as at October 3 and had been projected to grow to $10 billion by the end of this year.
The World Bank last week advised the CBN and other stakeholders on the project to take consumer protection very serious. Senior Payment System Expert in Payment Systems Development Group, World Bank, Ceu Pereira, who said this, however expressed satisfaction over the recent creation of a Consumer Protection Department at the CBN.
She stressed that the cashless policy has been a very effective tool used by a lot of countries to foster financial inclusion.
“More and more, central banks need to be interested in consumer protection and competition issues. I am pleased to hear that the CBN recently created a consumer protection department. Consumer protection really needs to be fundamental in Nigeria if you want to make a positive move to cashless. I will also say that financial education is also very important,” the World Bank official had argued.
Crude Oil Production
After recording an all time high crude oil production figure of 2.7 million barrels per day (mbpd) late July, Nigeria’s production of crude oil now averages at 2.4 mbpd. According to the NNPC, the latest production figure was made known by the Group Managing Director of NNPC, Mr. Andrew Yakubu, at a function in Kaduna. If the trend persists, it may affect the Federal Government’s revenue projection for 2013 for which the nation hopes to spend N4.929 trillion.
The Federal Government in the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper that President Goodluck Jonathan submitted to the National Assembly in July had hinged revenue projection on the production of 2.53 mbpd of crude oil.
Credit to Private Sector
Banking sector credit to the private sector increased slightly to N14.885 trillion in August, reflecting a year-on-year slowdown of 36.9 per cent, data obtained from the CBN showed last week. The amount represented a marginal increase by 4.9 per cent in the first eight months of the year.
Credit to private sector stood at N14.845 trillion in July and had reflected a year-on-year increase of 49.2 per cent. The CBN’s economic indicator also showed that broad money (M2), which generally is made up of demand deposits at commercial banks and monies held in easily accessible accounts, stood at N13.769 trillion as at August.