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CAPITALDIGEST DAILY NEWS, 24/10/2022

NNPC TO RESUME PUMPING OF CRUDE OIL FROM VANDALISED PIPELINE IN A WEEK, SAYS KYARI The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Mallam Mele Kyari , yesterday said that the damaged major pipeline that has hobbled Nigeria’s oil production for months will come on stream in a week. Speaking during a summit organised by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), in Abuja, he stated that the country was recording successes in its fight against crude oil thieves and pipeline vandals. For months, the Trans-Forcados Oil Pipeline System, the second longest pipeline network in the Niger Delta has been down, affecting the export terminal and leading to closure of about 20 oilfields. Kyari stated that if left uncurbed, the activities of the vandals would destroy the oil and gas industry and subsequently frustrate the NNPC’s mandate of guaranteeing energy security. “The government security agencies in partnership with NNPC and other companies are on the table today because if we don’t arrest pipeline vandalism, we will have no industry. “And more than anything else, it will completely question any possibility of energy security for our country. For NNPC, we are by law required to be the guarantor of energy security for this country. This is very broad, very tough and very demanding. It means that we must supply energy to this country in all its forms. NAIRA MAY DEVALUE BY 20% IN 2023- BOA Nigeria’s local currency unit is set to weaken further next year as its current exchange rate to the dollar is well above fair value, according to Bank of America. According to a report by Bloomberg, economist Tatonga Rusike said in a note to clients on Tuesday that, “three indicators, the widely-used black-market rate, the central bank’s real effective exchange rate, and our own currency fair value analysis shows the naira is 20 per cent overvalued. “We see scope for it to weaken by an equivalent amount over the next six-nine months, taking it to as high as 520 per USD.” While the naira will come under increasing pressure “due to limited government external borrowing,” devaluation is unlikely to happen until after the February 2023 presidential elections, the bank said. Africa’s largest economy operates a multiple exchange regime dominated by a tightly controlled official exchange rate and a parallel market where the currency is freely traded. The naira exchanged at 440.95 to the dollar in the official spot while parallel rate went up to N740, according to the bureau de change operators FG RECORDS N5.33TN DEFICIT IN EIGHT MONTHS Amid Nigeria’s tight fiscal space, the Federal Government has recorded a deficit of N5.33tn between January and August 2022, which is N430.82bn above the prorate level. The government spent N9.56tn from January to August 2022, out of N11.55tn pro rata expenditure projected for the period. Of the N9.56tn spent in eight months, N3.52tn was expended on debt service while N2.89tn was used for personnel costs and pensions. The total expenditure projected for the whole of 2022 is N17.32tn. Speaking during the ministerial presentation of the 2023 budget on Wednesday in Abuja, Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, said the Federal Government’s retained revenue was N4.23 trillion as of August 2022, representing 64 per cent of the pro-rata target of N6.65tn. She disclosed that the Federal Government’s share of oil revenues in 2022 was N395.06bn, representing 27.1 per cent performance, while non-oil tax revenues totalled N1,549.91tn, indicating 102.9 per cent performance. CBN PAYS EXPORTERS N42BN FOR REPATRIATING $1.3BN The Central Bank of Nigeria paid exporters N42bn for repatriating $1.28bn through its official window. The Managing Director/Chief Executive Officer, Citibank Nigeria, Ireti Samuel-Ogbu, during the Post Bankers’ Committee Meeting Press Briefing that was held on Thursday. According to the MD, the exporters through the CBN’s RT 200, repatriated $1.28bn for the quarter, out of which $870m was sold to the I&E window. The RT 200 policy was introduced in February with the aim to raise $200bn in foreign exchange earnings from non-oil proceed in three to five years. Samuel-Ogbu said, “The whole idea behind this initiative was to diversify sources of FX away from the dominance of oil and to increase the contribution of non-oil exports to increase availability and to support export-oriented companies to expand their operations and capabilities. “We are very pleased to observe that this initiative is beginning to bear fruit and show successes. At the end of quarter three, September, the total amount repatriated was $1.28bn for the quarter and out of that the total amount sold into the I & E window was $870m which ended up in terms of rebates that was paid by the CBN, and you may be familiar that rebates are paid N65 to the dollar, totaling N42bn in rebates have been paid in the third quarter. ABCON: BDCS CENTRAL TO CBN’S EXCHANGE RATE POLICIES The Association of Bureaux De Change of Nigeria (ABCON) has stated that Bureaux De Change (BDCs) are at the centre of Central Bank of Nigeria (CBN’s) exchange rate policies. The ABCON President, Aminu Gwadabe, who disclosed this in Lagos, said the CBN suspension of forex sales to the BDCs will not lead to revocation of licenses as the operators are still under the purview of CBN regulations. Gwadabe, said the small retail exchange institutions – BDCs- remain at the centre of CBN’s exchange rate policies implementation, hence the need for the regulator and public to continuously support BDCs’ roles in exchange rate stability. This, he added, can be achieved through increased automation of their processes and providing more channels of transactions for sustainable price equilibrium while eradicating rent seeking, currency substitution and speculation. “I am very confident that Nigeria will in not too distant future appreciate a stable exchange rate and availability of forex in the local economy as the right people for government policies’ implementation get such responsibility, “he stated. Gwadabe cited the Naira-4-Dollar scheme of N5 bonus for every $1 diaspora remittances as well as the N65 rebate for every dollar of non-oil export proceeds and other incentives as commendable, but require total overhaul with stakeholders’ engagement.