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MONDAY 6/6/2022 – SUBSIDY HITS 45% OF FUEL IMPORT BILL IN Q1 – NBS REPORT The National Bureau of Statistics has disclosed that Nigeria spent N1.51tn on the imports of premium motor spirit, also known as petrol, in the first quarter of 2022. This was 25.54 per cent of the total imports for this quarter, and an increase of 17.05 per cent when compared to the N1.29tn spent on importing fuel in Q1 2021. The PMS import, as usual, tops the list of imported products for this quarter. This was disclosed in the Foreign Trade in Goods Statistics report of the NBS. Figures from the Nigerian National Petroleum Company Limited showed that the oil firm spent N210.38bn, N219.78bn, and N245.77bn as subsidy on petrol in January, February, and March 2022 respectively. This means that a total of N675.93bn was spent on fuel subsidy in Q1 2022. The amount spent on fuel subsidy is 44.86 per cent of the amount spent on fuel import. The PUNCH earlier reported that the amount spent on fuel subsidy monthly rose from N60.39bn in March 2021 to N245.77bn in March 2022, indicating an increase of 306.97 per cent. Despite the increasing cost of the fuel subsidy, Nigerians still suffered a hike in the cost of transportation. Economic and energy experts have continued to decry the rising cost of fuel subsidy to the Federal Government. The World Bank and the International Monetary Fund have decried the Federal Government’s huge spending on petrol subsidy, urging the government to end the regime. The World Bank, in its Africa’s Pulse report, said increasing fuel subsidy puts the Nigerian economy at a high risk as subsidy payments could significantly impact public finance and pose debt sustainability concerns. TUESDAY 7/6/2022 – BDCS CAN HELP CBN END MULTIPLE EXCHANGE RATES – ABCON BOSS The President, the Association of Bureaux De Change Operators of Nigeria, Alhaji Aminu Gwadabe, has urged the Central Bank of Nigeria, CBN, to use the Bureaux De Change operators to end multiple rate practices and usher in stability in the foreign market. He noted that the CBN’s operational manual defined BDCs as small retail end institutions licensed to carry on the business of selling Personal Travel Allowances, Business Travel Allowances, school fees and medical bills payment abroad, among other roles, at the criteria retail end of the foreign exchange market. However, he noted that the various policies of the CBN on the operations of the sub-sector continued to be inhibitive and limiting BDCs’ from providing their constitutional roles in the forex market and economy. Gwadabe called for a collaboration between the BDCs and the CBN in the implementation of market-friendly policies that would make the BDCs’ impact more positively in the market and promote exchange rate stability in the economy. The ABCON boss said the hasty generalisation that criminalised the BDC sub-sector as responsible for all market crisis and infractions like selling dollars with higher premium above regulatory limit, promoting loss of confidence in the near and multiplicity of the exchange rates was not in the best interest of the market and economy. “It is in view of this disturbing situation and the need to strengthen BDCs value chain as obtainable in organised climes that we urge the regulators and policymakers to consider BDCs as the most potent tool in liberalising the foreign exchange market and stopping multiples exchange rates in the system,” he said. WEDNESDAY 8/6/2022 – CBN BARS BANK NEUTRAL CASH HUBS FROM FX TRANSACTIONS The Central Bank of Nigeria (CBN) has said Bank Neutral Cash Hubs (BNCHs), established to provide a platform for customers to make cash deposits and receive value irrespective of the bank with which their account is domiciled – are not permitted to receive, disburse, or engage in any transaction involving foreign currency. The central bank also barred the hubs from carrying out investing or lending activities; sub-contract another entity to carry out their operations as well as any other activities that may be prohibited by the apex bank. The CBN disclosed this in the Guidelines for the Registration and Operation of Bank Neutral Cash Hubs (BNCH) in Nigeria, which was posted on its website. The initiative, which was developed in collaboration with the Banker’s Committee is in furtherance of the central bank’s mandate to promote a sound financial system in the country. The BNCH is one of the initiatives from the Nigerian Cash Management System (NCMS) conceived by both parties to reduce cost and improve operational efficiency in the country’s cash management value chain. Essentially, the BNCHs are cash collection centers to be established by registered (licensed) processing companies or Deposit Money Banks (DMBs) based on business needs. According to the apex bank, the hubs are, however, authorised to receive Naira denominated deposits on behalf of financial institutions from individuals and businesses with high volumes of cash. THURSDAY 9/6/2022 – STOCK MARKET DOWN 0.14% ON SELL-OFF IN FBN HOLDINGS, 17 OTHERS Trading activities in the stock market of the Nigerian Exchange Limited (NGX) yesterday depreciated by 0.14 per cent, following investors sell-off in FBN Holdings (FBNH) and 17 others stocks In summary, the NGX All-Share Index (ASI) declined by 76.90 basis points or 0.14 per cent to close at 53,193.98 basis points from 53,270.88 basis points it opened for trading Similarly, the overall market capitalization value lost N42 billion to close at N28.677 trillion from N28.719trillion it close for trading the previous day. Consequently, the stock market in its Month-to-Date and Year-to-Date gains moderated to 0.4per cent and 24.5per cent, respectively. Sectoral performance was mixed as the Insurance index depreciated by 1.8per cent and Banking Index down by 0.9per cent, while the Industrial Goods and Oil & Gas indices closed flat. The Consumer Goods index added 0.1 per cent, the sole gainer yesterday. Market breadth closed negative as 18 stocks lost relative to 16 gainers. Caverton Offshore Support Group recorded the highest price gain of 7.34 per cent to close at N1.17, per share. FTN Cocoa processors followed with a gain 5.88 per cent to close at 36 kobo, while Transnational Corporation of Nigeria (Transcorp) gained 5.69 per cent to close at N1.30, per share. Cutix appreciated by 4.98 per cent to close at N2.74, while Linkage Assurance gained 3.70 per cent to close at 56 kobo, per share. FRIDAY 10/6/2022 – BANKS REWARD SAVINGS ACCOUNTS WITH 1.28%, LENDING HITS 26.61% The gap between the savings and lending rates in the banking sector widened by 25.33 per cent in March, according to figures obtained from the Central Bank of Nigeria. Latest figures obtained from the CBN on money market indicators revealed that savings deposit rate was 1.28 per cent in March while the maximum lending rate was 26.61 per cent. It showed that in February, the savings rate was 1.28 per cent while lending rate was 26.61 per cent. According to the figures, the savings rate stood at 1.25 per cent in January while lending rate was 30.73 per cent. Experts have, however, said that the rates introduced in the in the market by the banking regulator would discourage people from saving and encourage those with the funds to look for other investments that would yield better returns. But some experts have expressed concerns that the lending rate is too high for entrepreneurs to do business and could hinder them from making profits, asides other hostile economic challenges. A former President, Association of National Accountants of Nigeria, Dr Sam Nzekwe, noted that the CBN dropped the rates of savings, including fixed deposit rate, because it was trying to discourage people from saving their money but to invest them.