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CAPITALDIGEST, DAILY NEWS, 5/9/2022

OVER 70% NIGERIANS LACK CLEAN COOKING FUEL – NNPC More than 70 per cent of the over 200 million people in Nigeria lack access to clean cooking fuels, the Nigerian National Petroleum Company Limited has said. In his keynote address at the recent conference of the Association of Energy Correspondents of Nigeria, the Group Chief Executive Officer, NNPC Ltd, Mele Kyari, stated that to solve energy poverty, Nigeria would have to increase access to clean cooking fuel such as gas. He spoke on using gas as the country’s transition energy. “The oil and gas sector is undergoing a transition, and transition means bringing value to the table with respect to the local and international challenges that you have to overcome. “And this means to make sure that energy poverty is tackled through the use of gas as transition fuel.” BANKS’ ASSETS RISE 22% TO N65TN Total assets in the Nigerian banking sector rose by N11.8bn in one year to N65.48tn as of the end of June 2022, representing 22 per cent increase over the period. The Deputy Governor, Financial Systems Stability Directorate, Aishah Ahmad, disclosed this in her personal statement at the last MPC meeting. “Key industry aggregates also continued their year-on-year upward trajectory with total assets rising to N65.48tn in June 2022 from N53.64tn in June 2021,” she said. She said gross credit had maintained an upward trajectory since 2019, rising by N5.02tn between June 2021 and June 2022 with significant growth in credit to manufacturing, general commerce and oil & gas sectors. The increase, she said, was achieved amidst continued decline in non-performing loans ratio from 5.3 per cent in April 2022 to 5.0 per cent in June 2022. BANKS LEND N3.38TN TO FIRMS AT SINGLE-DIGIT RATE Customers accessed loans worth N3.38tn at single-digit interest rates under the Central Bank of Nigeria’s intervention funds as of the end of June. A member of the Monetary Policy Committee meeting, Aliyu Sanusi, disclosed this in his personal statement at the last MPC meeting. According to reports released by the CBN, “Analysis of the interest rate band reveals that 65.9 per cent of customers borrowed a total of N4.77tn at interest rates of less than 15% as of June 2022, suggesting that interest rates are declining as credit to the real sector of the economy continues to increase. “As of June 2022, a total of N3.38tn was lent to beneficiaries at less than a 10 per cent interest rate through the CBN intervention funds.” WHY FOREIGN CAPITAL IMPORTATION DECLINE WILL PERSIST – EXPERT The ongoing tight monetary policy of major central banks around the world, as well as domestic factors including scarcity of foreign exchange, widespread insecurity, and pre-election jitters, will lead to further decline in foreign capital importation into Nigeria, according to Comercio Partners Asset Management Limited, a Nigeria-based investment banking firm. The Co-Managing Partner and Chief Executive Officer, Comercio Partners Asset Management, Tosin Oshunkoya, said this while commenting on the FCI into the country in the second quarter of 2022. Data from the Central Bank of Nigeris shows that the FCI into the country rose by 12 per cent, year-on-year, to $3.11bn in the first half of the year, from $2.78bn in the same period of last year. However, the FCI fell by 2.5 per cent, quarter-on-quarter, to $1.54bn in the second quarter of this year from $1.57bn in the first quarter of this year. Oshunkoya described the YoY growth in FCI in H1’22 as a statistical phenomenon due to weak base, stressing that the focus should be on the QoQ decline which showed that foreign investors’ appetite for the Nigerian economy was dwindling. Explaining the foreign and local factors responsible for this development, Oshunkoya said, “The ravaging trend of inflation across major developed economies has triggered hawkish policy responses such as interest rate hikes, which tend to spur capital repatriation from frontier economies such as Nigeria while discouraging foreign capital inflows into the local economy, particularly through foreign portfolio investments. COUNTING GAINS OF CBN’S ‘NAIRA-4-DOLLAR SCHEME’ Not ready to be overwhelmed by the persistent dollar scarcity, the Central Bank of Nigeria (CBN) has continued to explore ways to quench the thirst for foreign exchange by government, businesses and individuals as the last quarter of the year 2022 beckons. The reality is, as the year progresses, the demand for forex, especially the United States dollar is mounting, a development which analysts said has left the monetary authorities with no other choice but to ration the available foreign currencies. Already the federal government is proposing to spend N3.36 trillion for petrol subsidy in 2023 based on the 18-month extension announced in early 2022. Recall that last week, the minister disclosed that the government was spending N18.39 billion daily on petrol. Market watchers said despite the instability in the foreign exchange market, it will be unfair to under-report several initiatives put in place by the current leadership of the CBN in meeting the rising dollar needs of businesses and government given the fact that most of the triggers of the rush for dollars are beyond the apex bank.

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