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CAPITALDIGEST, DAILY NEWS. 28 MARCH 2022.

MONDAY 21/3/2022 – WE’LL DEDUCT N242.53BN FUEL SUBSIDY FROM FAAC THIS MONTH – NNPC The Nigerian National Petroleum Company Limited is to deduct N242.53bn as subsidy on Premium Motor Spirit, popularly called petrol, from the Federation Account this month. Although it described the proposed subsidy deduction as a value shortfall, the oil firm stated that the fund would be recovered from February 2022 proceeds due for sharing in the March 2022 Federation Account Allocation Committee meeting. The NNPC disclosed this in its latest presentation to the FAAC meeting, which was obtained by our correspondent in Abuja on Friday. It said, “The December 2021 value shortfall recovery on the importation of PMS amounted to N210.38bn. “The recovery consists of December 2021 value shortfall of N176.48bn plus the outstanding value shortfall recovery of N33.9bn accrued over the 2021 year. The November 2021 spot arrears of N98.81bn is also outstanding. “The estimated value shortfall of N242.53bn (consisting of N143.72bn for January 2022 recovery plus November spot arrears of N98.81bn) is to be recovered from February 2022 proceed due for sharing at the March 2022 FAAC meeting.” Recall that in February this year, the NNPC remitted no money to FAAC due to its huge fuel subsidy spending and subsequent deduction from the Federation Account.   TUESDAY 22/3/2022 –   INVESTORS ADVOCATE REVIEW OF PROTECTION MECHANISMS IN CAPITAL MARKET As the regulators strategise to increase retail investors’ patronage in the market, shareholders have stressed the need for a review of existing protection mechanisms for Nigerian investors in line with global principles, and articulate ways to conform to the right standards. The investors who spoke in separate interviews with The Guardian said time is ripe for the regulator to review existing investors’ protection mechanisms and institute a model that would ensure that investors are protected in the event of bank collapse. They believe that if adequate investors’ protection mechanisms are instituted in the market and followed strictly, it would boost investors’ participation and boost market capitalisation. The shareholders also urged both the regulators and operators to forestall future losses arising from poor corporate governance, advisory services, regulation, and inadequate oversight of accounts among others in the market. According to them, one of the reasons why retail investors had shown apathy to the Nigerian stock market since the meltdown in 2009 was because of the issue of nationalised banks.   WEDNESDAY 23/3/2022 – MASSIVE JOB CUT LOOMS AS DOLLAR HITS N590, FOREX SCARCITY BITES HARDER The lingering foreign exchange scarcity in the country has continued to worsen even as the exchange rate on the parallel market is inching towards N590/$1, The PUNCH has learnt. The development may lead to massive job loss in the manufacturing industry, among other sectors, according to the Manufacturers Association of Nigeria. The development comes over eight months after the Central Bank of Nigeria stopped the sale of forex to Bureau de Change operators and promised to boost liquidity in commercial banks. Checks by The PUNCH on Tuesday showed that the exchange rate stood at N585/$1 and N785/£1 on the black market as against the N582/$1 last Friday. This is just as banks have also limited customers’ access to forex, placing a cap of $20 per month for online transactions. Insiders told The PUNCH that things may worsen even further as electioneering intensifies, adding that politicians had begun to mop up dollars, driving up the demand. “The naira will keep falling because those who need dollars cannot get it and they will patronise the parallel market, increasing demand. It is also one of the fallouts of an election year. We are not earning as much FX and we will spend more financing on petrol subsidy. Ultimately, there will be a wider gap between the import and export window and the parallel market,” a government official, who craved anonymity, said.   THURSDAY 24/3/2022 – NGX BOSS HIGHLIGHTS VALUE OF CORPORATE GOVERNANCE IN CAPITAL MARKET Nigerian Exchange Limited (NGX), has highlighted the value of sound corporate governance as the foundation that creates transparency and establishes the trust required to keep the global financial system running.  The Chief Executive Officer of the NGX, Mr Temi Popoola stated this during the launch of the Corporate Governance Triangle, an initiative of the Nigerian Bar Association Section on Business Law (NBA-SBL), NGX and the Institute of Directors, Nigeria (IoD) in Lagos. Represented by Divisional Head, Capital Markets, NGX, Jude Chiemeka, he said, “As a securities exchange, we recognize our unique role in fostering the growth of long-term sustainable capital by positively influencing our key stakeholders to adopt sustainable business practices, including best practice corporate governance. Sound corporate governance ultimately brings about greater transparency and trust in the Nigerian capital market and positions the market on a strong pedestal as a leading capital market in the region”. Popoola expressed delight in the initiative, saying, NGX is delighted to collaborate with Institute of Directors Nigeria (“IoD Nigeria”) and Nigerian Bar Association-Section on Business Law (“NBA-SBL”) on the establishment of the Corporate Governance Triangle.  He said, “We look forward to working closely with our colleagues in these highly-reputed organisations to formulate and implement initiatives that will further raise the bar on corporate governance standards and practice in Nigeria.”   FRIDAY 25/3/2022 – EXTERNAL RESERVES SHED $975.7M YEAR-TO-DATE AS FREE FALL CONTINUES Nigeria’s foreign reserves continued its downward slope, a trend formed towards the end of last year after it failed to sustain a momentary recovery witnessed in October. The gross figure, which has remained a consistent gradual depletion in the past five months, dropped to $39.54 billion on Tuesday. Year-to-date (YTD), the external reserves shed $975.7 million. Last year closed with an estimated reserve gross value of $40.52 billion. The reserves suffered a wobbling performance last year, tumbling below $34 billion at some point. A breather, however, came with $3.35 billion International Monetary Fund (IMF)’s special drawing rights (SDR) and Eurobond issuance. Windfalls from the two sources provided the needed buffer and pushed up the reserves above the magical N40 billion market. But the move was short-lived. The gross figure had hit $41.8 billion and hovered around that region before a fresh crisis set in. A financial expert, David Adonri, said it was obvious the country could not sustain the momentary recovery as there was an FX hole waiting to swallow the earnings. Earlier in the year, Bismarck Rewane, the chief executive officer of Financial Derivative Company Limited, projected that the reserves would nosedive to about $32 billion as the monetary authority would require between $8 billion and $10 billion to defend the naira.

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