The exchange rate between the naira and dollar closed at N1,534/$1 on the official NAFEM market on Monday, February 12th, 2024.
This is the weakest ever the naira has fallen against the dollar at closing on the official market.
The intra-day high and low also hit N1,550 and N1,000 against the dollar as Nigeria continues to slide on the back of central bank reforms towards a free market exchange rate.
This is a developing story….
TotalEnergies has stated plans to sell its minority stake in a significant Nigerian onshore oil joint venture, Shell Petroleum Development Company of Nigeria Limited, SPDC.
The CEO of TotalEnergies, Patrick Pouyanne, disclosed this during a presentation of the company’s financial results.
Pouyanne said the company, which holds 10 per cent interest in SPDC, is looking to restructure its portfolio since producing oil in the Niger Delta has become difficult.
Meanwhile, the company noted that it is retaining its Nigerian gas assets, considering them essential for its expansion in liquefied natural gas development over the upcoming years.
“We want to divest our share of SPDC, and we are looking to reshape the portfolio.
“Fundamentally, it’s because producing this oil in the Niger Delta is not in line with our [Health, Security, and Environmental] policies; it’s a real difficulty,” it said.
This paper recalls that in January this year, Shell announced a plan to sell its 30 per cent stake in SPDC to Renaissance, a consortium of five companies based in Nigeria and an international energy group, for up to $2.4 billion.
Leading reporters gathered the SPDC JV is an unincorporated joint venture comprised of SPDC Ltd (30 per cent), the government-owned Nigerian National Petroleum Corporation (55 per cent), Total Exploration and Production Nigeria Ltd (10 per cent) and Nigeria Agip Oil Company Ltd (5 per cent).
The Central Bank of Nigeria (CBN) has uncovered a $2.4 billion scam involving false foreign exchange claims that have put pressure on the naira and spooked the currency market, Governor Yemi Cardoso revealed on Monday.
The discovery came to light after an audit by Deloitte, a consulting firm hired by the CBN to investigate the claims. The audit, part of a broader effort to make the CBN’s accounts transparent, exposed a $7 billion backlog of unmet dollar demand from investors and businesses. This “overhang,” as Cardoso called it, threatened to further weaken the naira against the dollar.
Cardoso, who was interviewed on Arise TV, explained that the Deloitte investigation revealed that $2.4 billion of the claims were entirely bogus. In some cases, claimants couldn’t produce valid import documents, and in others, the companies claiming the funds didn’t even exist.
“We had had reasons to believe we needed to take a harder look at these obligations. So we contracted Deloitte management consultants to do a forensics of all these obligations and to actually tell us what was valid and what was not,” Mr Cardoso said.
“The result that came out of this was startling in a great respect. It was startling. We discovered that of the roughly $7 billion, about $2.4 billion had issues, which we believe had no business being there and the infractions on that ranged from so many things, for example not having valid import documents and in some cases entities that do not exist.”
The discovery of the backlog follows the audit of CBN accounts after seven years of concealment.
The Bola Tinubu-led federal government, through the Central Bank of Nigeria (CBN), has increased the exchange rate for cargo clearance from N952 per dollar to N1.356 per dollar.
This adjustment follows recent increases in the exchange rate for cargo clearance, reflecting a continuing trend of fluctuations in the country’s foreign exchange policies.
The exchange rate for cargo clearance was initially raised from N757 per dollar to N783 per dollar in November, representing a 3.4% increase.
Subsequently, it was further increased to N952 per dollar in December.
According to Punch newspaper, the rate has now been adjusted to N1.356 per dollar.
Members of the Association of Nigerian Licensed Customs Agents and other stakeholders have expressed concerns over the frequent changes in exchange rates, emphasizing the potential impact on the cost of clearing and, subsequently, on commodity prices.
According to them, the adjustments could also have broader implications for importation and exportation activities, influencing trade dynamics in the country.
A member of the Association of Nigerian Licensed Customs Agents, Remilekun Sikiru, said, “How do we explain this? From N952/$ to N1.4/$ as of Friday morning with about N404 increase?
“It’s quite unfortunate that the prices of goods and commodities will automatically increase. Importation would further decrease and depreciate; vehicle prices would skyrocket again.
“Since this unification of a thing, the government has refused to look inward and critically into the maritime industry as regards importation and exportation.
“The sector have been neglected and things are getting worse daily. The question now is, how would freight forwarders and customs brokers agents cope with this new rate?”
Also speaking, an agent, Ben Anya, said that they woke up to the new rate, “which was before now set at N951 per dollar,”
Anya explained that with the latest increase in the exchange rate, the cost of clearing would increase.
“And this would also affect the cost of goods in the market. It would also lead to a drop in importation,” he said.
Amid its fresh moves to stabilise the nation’s volatile exchange rate, the Central Bank of Nigeria has ordered Deposit Money Banks to sell their excess dollar stock latest February 1, 2024.
The CBN, which made the disclosure in a new circular released on Wednesday, also warned lenders against hoarding excess foreign currencies for profit.
According to officials, the central bank believes some commercial banks hold long-term foreign exchange positions to enable them profit from the volatile movements of exchange rates.
The new circular introduces a set of guidelines aimed at reducing the risks associated with these practices.
In the circular titled, “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks”, the CBN raised concerns over the growing trend of banks holding large foreign currency positions.
The latest circular came barely 48 hours after the CBN released a circular, warning banks and FX dealers against reporting false exchange rates, among others.
The new development also came on the heels of the adjustment of the methodology used for the calculation of the nation’s official exchange rate by the FMDQ Exchange.
The review has pushed the Nigerian Autonomous Foreign Exchange Market rate (official exchange rate) from approximately N900/dollar to N1,480/dollar. The naira closed at 1,450/dollar at the parallel market on Tuesday.
The move which is aimed at unifying the official and parallel market exchange rates has been hailed by economists and other stakeholders.
They however challenged the CBN to clear FX backlogs estimated at over $5bn and also fund FX demands at the official market. This, they said, would forestall a situation whereby the parallel market rate would move away from the official rate again.
Apparently as part of the moves to fund FX request at the official window, the CBN in its latest circular released on Wednesday accused banks of holding excess foreign exchange positions.
As a result, the central bank gave lenders until February 1, 2024 (today) to sell off excess dollar positions.
The circulated, dated January 31, 2024, was signed by the Director, Trade and Exchange, CBN, Dr. Hassan Mahmud, and representative of the Director, Banking Supervision, CBN, Mrs. Rita Sike.
The circular read in part, “The Central Bank of Nigeria has noted with concern the growth in foreign currency exposures of banks through their Net Open Position (NOP). This has created an incentive for banks to hold excess long foreign currency positions, which exposes banks to foreign exchange and other risks.”
To address these issues, the CBN in the circular issued prudential requirements that banks must follow. A key focus of these requirements is the management of the Net Open Position (NOP).
The NOP measures the difference between a bank’s foreign currency assets (what it owns in foreign currencies) and its foreign currency liabilities (what it owes in foreign currencies).
The circular mandates that the NOP must not exceed 20 per cent short or 0 per cent long of the bank’s shareholders’ funds.
This calculation, the apex bank said, must be done using the Gross Aggregate Method, which provides a comprehensive view of the bank’s foreign currency exposure.
Furthermore, banks with current NOPs exceeding these limits are required to adjust their positions to comply with the new regulations latest by February 1, 2024.
Additionally, banks must calculate their daily and monthly NOP and Foreign Currency Trading Position (FCT) using specific templates provided by the CBN
The Senate on Wednesday, January 31, summoned the Governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, to appear before it on Tuesday next week over the state of the economy and free fall of the Naira.
The Chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, Senator Tokunbo Abiru (APC- Lagos East), handed down the summon after the panel met in Abuja.
Speaking with reporters after the emergency meeting of the Committee held behind closed doors, Abiru said the state of the nation’s economy, especially the inflation index was of great concern to the Senate.
Abiru said: “We have held a meeting this afternoon essentially to focus on the direction of the Nigerian economy.
“We are all living witnesses of what is going on. Underlining the major issue of the economy is the way the inflation index has been and of course, it is a major concern to us.
“We have deliberated among ourselves. Critical issues were addressed and we believe that the next line of action is to summon the Governor of the Central Bank of Nigeria on Tuesday at 3 pm to brief us properly on the state of the economy.
“That we have resolved and will communicate to the Governor of the Central Bank after which we will have further communication with members of the press.”
The Naira was said to have plummeted to about N1,500.00 to the US dollar as at the time of filing this report.
Chicken Republic urges its customers to bring their plates in support of the single-use plastics and styrofoam ban by the Lagos government.
On Monday, Chicken Republic shared a press statement on its Instagram page from their parent company, Food Concepts PLC, featuring commendations supporting the styrofoam ban.
The post was captioned, “Na so e be now. Feel free to come with your own plates. We are always at your service.”
The Nigerian fast food company also posted a picture of the press release on their Instagram story, saying, “Dear confam citizens, get your plates ready…Don’t forget to tag us, when you go get your food with your plates.”
According to the statement, the styrofoam ban will be immediately implemented in Lagos for walk-in and online orders.
“Effective immediately, all our outlets in Lagos will commence the transition from using Styrofoam packs for both walk-in and online orders,” the post stated.
It added that customers would pay for “reusable plastic takeaway containers.”
Some customers found the idea of bringing their plates to an eatery amusing.
An Instagram user, @asquare_cakesntreats, said, “Make I bring plate come eatery??? Some sort of joke? Use paper plates!”
Another netizen, Ronke_001, stated, “E con be like canteen ahh.”
A commenter, realestatewith_annie said, “Why can’t you use customised paper packs. Instead of asking clients to come with plate… Is it mama put you are selling is that the standard now… Shuuu.”
After almost 90 years nine decades
shell is selling its oil drilling business on Nigerian soil this is the second largest oil company in the world second only to Exxon Mobile
and shell finally has an exit plan.
it is selling off its onshore business in Nigeria for about 1.3 billion dollars up front and 1.1 billion in additional payments
this deal is for a number of assets
including shells existing facilities and 18 oil mining leasing the reserves are big estimated at about 458 million of million barrels of oil equivalent 4.58 million which translates to a lot of money way more than what shell is selling it for.
So why are they selling from the company’s perspective the Nigerian onshore business was a liability let me tell you why in 2008 there were two major oil spills tens of thousands of barrels of oil was spilled locals sewed shell for millions of dollars.
In 2015 the company paid the claimants $83 million in 2021 it paid more than $110 million
The United Nations has asked shell to clean up its mess the process is likely to last 30 years and cost over $1 billion local environmental groups have also been after shell
with numerous lawsuits over the oil spills and not just for the big incidents for smaller spills as well
regular ones that occur
due to theft as people keep stealing oil from shells Nigerian operations
and this results in frequent smaller oil spills.
Shell then has to clean up, the oil giant also faces sabotage attempts by locals who want the company to share its wealth and help make up for the damage it caused so the problem seemed unending and all of this got too much for shell which is why they want out of the Nigerian onshore business.
They’ve been trying to do this for about two years and now they finally got their buyers
a consortium of five companies
four of them are local firms
meaning more of the oil wealth would stay in Nigeria but it’s not exactly a steal for this consortium,
these new owners will have to fix the mess that shell is leaving behind they will have to assume responsibility for the cleanup work.
While shell gets to walk away
it will no longer drill on the Nigerian mainland or in shallow waters near the Niger River Delta that wasn’t the most profitable venture anyway
shell won’t leave Nigeria completely
this is Africa’s largest oil producer after all the company will just exit the mainland it will continue to operate in the deep sea
in the Gulf of Guinea and this mining is more profitable
and less at risk from theft or sabotage shell also has other businesses in Nigeria.
It has a gas supply firm a solar power unit and stakes in liquefied natural gas or LNG so
Shell’s logo will still be seen in Nigeria after this but with the sale of the onshore business a major problem will be dealt with
a problem for both the company and the locals it’s just one last step
approval from the Nigerian government after that both shell and the locals can end their troubled relationship.
Residents in Lagos are facing increasing frustration as landlords implement substantial rent hikes, surpassing 90%, attributing the surge to the prevalent inflationary pressures.
The rent surge has been particularly noticeable over the past five years, making affordable housing a significant challenge for many Lagosians.
The findings, sourced from data provided by prop-tech platform propertypro.ng and various estate agents, reveal that the weighted average of rent increases across different locations in Lagos stands at an alarming 90.32%.
The surge affects a wide range of neighbourhoods, including Ikeja, Iyana Ipaja, Ikorodu, Surulere, Ilasa, Gbagada, Yaba, Lekki, Ajah, Epe, Magodo Phase 1, and Ikoyi.
The rental rates for 2-bedroom standard apartments have seen dramatic shifts, with the most affordable areas, like Epe, having rates as low as N350,000. In contrast, the upscale Ikoyi area boasts rates reaching as high as N10 million.
Analysis of the data indicates that the economic climate, marked by inflation and increased costs of construction materials, is a driving force behind the rent surge.
Real estate experts point to the rapid urbanization in Lagos, coupled with the high demand for housing, as contributing factors. Economic growth and heightened real estate investments have further intensified the competition in the housing market.
The surge is evident in various parts of Lagos, with Ikeja and Iyana-Ipaja witnessing a doubling of rental rates to N2,000,000 and N800,000 between 2019 and 2024. Other areas like Ikorodu experienced a 60% rise, going from N250,000 in 2019 to N400,000 in 2024.
Femisi Balogun, a developer, attributes the surge to the increasing costs of building materials and inflation. He notes that these factors, combined with rapid urbanization, have driven high demand for housing, contributing to the overall escalation of rental prices.
A real estate expert, Odefadehan Christian, said the driving force behind the surge in rental prices could be attributed to inflation, particularly the significant spike in building material costs.
He told Punch, “The substantial increase in prices for essential materials, such as cement, which has more than doubled from 2,400 in 2019 to 5,500 in 2024, necessitates a corresponding adjustment in rental rates, to compensate for these heightened expenditures.
“Additionally, the evolution of construction techniques and the incorporation of cutting-edge technologies in building infrastructure, encompassing advanced wiring, sophisticated lighting features, and state-of-the-art security systems, contribute to an augmented overall cost of property development.
“Consequently, these advancements in both materials and technology are pivotal factors contributing to the upward trajectory of rental expenses.”
Telecom billionaire Mike Adenuga has regained the position of Nigeria’s second-richest person with a net worth of $7.4 billion, surpassing Abdul Samad Rabiu, who is now in the third position.
Forbes re-evaluated the worth of Adenuga’s mobile phone network, Globacom, contributing to the surge in his wealth. Initially, Adenuga had slipped to the third position due to a considerable drop in his net worth. However, the recent reassessment by Forbes restored him to the second-richest position in Nigeria, just behind Aliko Dangote.
Earlier in June 2023, Adenuga faced a significant decline in net worth, dropping to $3.6 billion, influenced by factors such as the unification of the naira and a downturn in the performance of his stake in Conoil.
Chairman of Conoil and founder of Globacom, Adenuga’s net worth has experienced fluctuations, reaching $7.3 billion in 2022 and a peak of $10 billion in 2015.
Despite his billionaire status, Adenuga’s career has encountered challenges, including a recent partial disconnection of Globacom by MTN over interconnect debt.
Globacom Ltd. disputes any outstanding interconnect charges owed to MTN, asserting that the purported N1.6 billion had been paid without dispute.
Reflecting on 2006, Adenuga faced scrutiny from the Economic and Financial Crimes Commission (EFCC) over a money laundering case, leading to his implication and detention. He chose to leave the country and reside in London until late President Umaru Musa Yar’Adua granted him a pardon.
In June 2016, new challenges arose as Adenuga was pursued for a debt exceeding $140.5 million by foreign and local entities. Conoil, under Adenuga’s ownership, defaulted on payments to creditors, including Total. Another company, Bellbop, faced a court injunction for failing to settle a $9.4 million debt to Baker Hughes.
Adenuga’s financial struggles affected creditors, leading to operational issues for companies like Depthwize, a local oil servicing company, which had to lay off workers and suspend services on Conoil’s rigs due to a $40 million debt.
Despite challenges, Adenuga remains committed to philanthropy. The Mike Adenuga Foundation allocates nearly $20.5 million in scholarships and aid annually, supporting students worldwide. In 2011, he donated N500 million to aid flood victims in Bayelsa State, Nigeria. In response to the COVID-19 pandemic, Adenuga contributed N1.5 billion towards virus-combatting efforts and donated $250,000 to Nigeria’s football team, the Super Eagles.
