CAPITALDIGEST, DAILY NEWS. 11 APRIL 2022
MONDAY 4/4/2022 – EXTERNAL RESERVES’ DROPS BY $971.4M IN Q1 AMID 49% GAIN IN CRUDE OIL PRICE
Amidst 49 per cent rally in crude oil price, Nigeria’s external reserve dropped by $971.4 million in the first quarter of 2022 (Q1), the Central Bank of Nigeria (CBN) data on daily reserves’ movement has revealed. Accordin to the CB data, the country’s foreign exchange buffer dropped to $39.55billion billion as at March 31, 2022 compared to $40.52billion it commenced 2022 amid steady increase in global oil prices. In January, the external reserve had dropped by $478.95milion to $40.04billion, while in February, it depreciated further by $121.45million to $39.98billion from $39.86billion. However, in March 2022, the external reserve moved from $39.86billion to $39.55billion as at March 31, 2022, representing a decline of $317.8 million. Analysis of the CBN’s data showed that the external reserve was at a threshold of $40billion in January and moved to $39billion February 2022. The global oil prices recently reached record high as oil and gas costs soar amid fears of a global economic shock from Russia’s invasion of Ukraine. Further analysis of the CBN data showed that daily crude oil price has gained 49 per cent to close as of March at $119.06 per barrel from $80.07 per barrel it opened in 2022. Oil jumped to $128.27 a barrel as of March 9, the highest level for almost 14 years. Experts have expressed that the current crisis in Niger-Delta relating to oil theft might be responsible for dwindling production, a major contributing factor impacting on external reserves growth on the backdrop of increase in global oil prices. They noted that the increasing CBN’s intervention in the foreign exchange market is also a contributing factor. The Group Managing Director/CEO of NNPC Limited, Mallam Mele Kyari had recently disclosed that Nigeria oil production crashed to 1.15 million barrels per day due to rising cases of oil theft and pipeline vandalism in the Niger Delta.
TUESDAY 5/4/2022 – EXCHANGE RATE PRESSURE, ECONOMIC RECOVERY TO CONTINUE IN 2022 — EXPERTS
Experts have predicted that Nigeria’s currency, Naira, will further depreciate while the Gross Domestic Product, GDP will further grow by almost three percent. Addressing economic stakeholders and participants at the Stanbic IBTC’s Blue Talks Enterprise Banking webinar, Muyiwa Oni, Regional Head of Equity Research, West Africa, Standard Bank Group, said that the financial institution forecasts that Naira’s value will drop as the year progresses. He stated: “We predict that the currency, on the official market, will be around N440 per dollar. Our view is that as long as we don’t see formal reforms in the foreign exchange market, the shortage will persist.” While noting that due to unfavourable business environments, several investors have resolved to take their money out of the Nigerian economy, Oni also said inflation will average around 15 per cent, adding that the country’s Gross Domestic Product (GDP) will grow by 2.9 per cent. His words: “Last year, we saw a GDP growth of 3.4 per cent, which is still recovering from the contraction in 2020. Even with this, some people argue that the economy is not still operating at the 2019 level yet, and our view for 2022 is that we will see further economic growth which we estimate at 2.9 per cent in GDP. “Our expectation is that the non-oil sectors will continue to drive it. We have seen strong growth in the ICT sector, trade, real estate, construction, and manufacturing as well,” he added.
WEDNESDAY 6/4/2022 – CBN IMPOSES HEAVY SANCTIONS ON BANKS OVER MUTILATED NOTES
The Central Bank of Nigeria has expressed concern over the increasing amount of mutilated banknotes deposited with the apex bank by Deposit Money Banks. To this end, the CBN has warned banks to stop including composed currency notes in their deposits or risk paying a penalty of 400 per cent of the value of the banknote. Composed banknotes are mutilated currency notes that comprise several parts of different banknotes of the same denomination. The parts of such currency notes are usually put together with the intention of receiving value. The CBN gave the warning in a circular titled, ‘Treatment of Composed Banknotes’, issued to all deposit money banks on March 31, and signed by its Director, Currency Operations Department, Ahmed Umar. Umar said that the existence of such banknotes in the economy falsifies the true value of the currency in circulation and could also be an avenue for fraudulent activities. He added that the directive took effect from April 1. The circular read in part, “The management of the CBN observed with concern the increasing number of composed banknotes deposited by DMBs and request for replacement of such banknotes by members of the public. “The existence of composed banknotes in the economy falsifies the true value of the currency in circulation, and can also be an avenue for fraudulent activities.
THURSDAY 7/4/2022 – FSI PARTNERS VARSITY TO DRIVE FINANCIAL SOLUTIONS FOR MSMES
THE Financial Services Innovators, a Nigerian non-profit organisation committed to enabling start-ups within the technology and financial space, has reaffirmed its commitment to creating inclusive financial solutions in suburban Nigeria with the announcement of the final round of the ‘IncludeMe’ virtual hackathon competition. This was disclosed by the SMEDAN State Manager, Mr Folorunsho Lukman, at the ongoing virtual Hackathon, which started on the 11th of March with a webinar entitled ‘MSME challenges in northern Nigeria’. Lukman said the event was aimed at engendering inclusive financial solutions for the Micro, Small, and Medium Enterprises, focusing on the banking and insurance services sectors in Northern Nigeria. While speaking on the innovative Hackathon, the Executive Director, FSI, Aituaz Kola-Oladejo, said, “We are excited to see this virtual hackathon moving ahead to a logical stage since we started. It has proven to be a unique platform for engaging the brain and minds of our various university students left redundant by the lingering ASUU nationwide industrial action. “At FSI, we know that great ideas come from great minds; when tech-enthusiasts come together with a determination to ignite change with their diverse backgrounds and skill levels, the result is better excitingly impressive.” He added that the hackathon was team-based with a minimum of two participants and a maximum of five participants. The teams would develop technological applications to solve real-life problems in suburban communities, he noted.
FRIDAY 8/4/2022 – CURRENCY IN CIRCULATION FALLS BY N42.43BN IN TWO MONTHS
CURRENCY in circulation fell by N42.43bn between January and March, figures obtained from the Central Bank of Nigeria have revealed. The CBN revealed in its data on currency that the currencies, which stood at N3.29tn as of the end of January, fell to N3.25tn by the end of March. The CBN recently warned Deposit Money Banks against accepting mutilated naira notes, explaining that they were not the real currencies in circulation. In a circular to the DMBs titled ‘Treatment of composed banknotes’, it said, “The management of the Central Bank of Nigeria observed with concern the increase number of composed banknotes deposited by DMBs and request for replacement of such banknotes by members of the public. “The existence of composed banknotes in the economy falsifies the true value of currency in circulation and can also be avenue for fraudulent activities. “A composed banknote is a banknote that comprises of several parts of different banknotes of the same denomination put together with the intention of receiving value.” Consequently, it added that any composed banknote discovered in the deposit of DMbs would attract penalty of 400 per cent of the value.