CAPITALDIGEST, DAILY NEWS, 30 MAY 2022.
MONDAY 23/5/2022 – NIGERIA LOSES N2.2TN REVENUE TO CRUDE PRODUCTION DELAYS –REPORT
Nigeria lost a whopping N2.1 trillion as a result of crude oil production deferment in one year. The 2021 statistics, obtained by The PUNCH on Sunday from the Nigeria Extractive Industries Transparency Initiative, said the huge loss was recorded in 2020. The revelation comes on the heels of perpetual low crude oil production being recorded by the country in the past two years. Deferment is the reduction in production or injection availability caused by an activity, breakdown, trip, poor equipment performance, or sub-optimum operations, resulting in a reduction in the volume sold or injected, delaying the production or injection until a later time. According to the NEITI’s Oil & Gas Report 2020, the deferment was recorded by crude oil companies, including SNEPCO, CNL, NAOC, SPDC, NPDC SEPLAT, Newcross E & P, and APENL. Others are: Continental, Energia, AITEO, Oriental, APDNL, Consolidated, Waltersmith, AND Chorus operating in the country. A breakdown of the loss revealed that Shell Nigeria Exploration and Production Company (SNEPCO) recorded the highest deferment of approximately 25 per cent (17.8mn/b), followed by Chevron Nigeria Limited (CNL), 17 per cent (12.2mn/b). The Nigerian Agip Oil Company (NAOC) ranked third on the list with 15.4 per cent (11.1mn/b), and Shell Petroleum Development Company (SPDC) with 15.1 per cent (11mn/d). The Nigerian Petroleum Development Company (NPDC SEPLAT) deferred 7.4m/b or 10.2 per cent/b of the production, while NewCross E&P deferred 4.2m/b or 5.8 per cent of output in that year.
TUESDAY 24/5/2022 – UPDATED: CBN RAISES INTEREST RATE TO 13%
The Central Bank of Nigeria on Tuesday raised the interest rate to 13 per cent for the first time in two years. The interest rate was raised from 11.5 per cent to 13.5 per cent. The CBN Governor, Godwin Emefiele, announced this on Tuesday while addressing the reporters after the Monetary Policy Committee meeting in Abuja. Justifying the raise, Emefiele said the MPC is suspicious there might be an aggressive accretion of inflation. To prevent the looming inflation, he said, the MPC had to increase the monetary policy rate by 150 basis points. Meanwhile, the nation’s apex bank retained the asymmetric corridor around the MPR at +100 /-700 basis points, Cash Reserve Ratio at 27.4 per cent, and Liquidity Ratio at 30 percent. “Six members voted to raise the MPR by 150 basis points, four members’ by 100 basis points and one member, by 50 basis points.
WEDNESDAY 25/5/2022 – SEC MOVES TO TACKLE IDENTITY FRAUD IN CAPITAL MARKET
The Securities and Exchange Commission says that the Identity Management System being developed by the capital market will tackle the lingering identity management issues. This was stated by the Director General of the SEC, Mr. Lamido Yuguda, when he received members of the Committee on Identity Management for the Capital Market in Abuja weekend. Yuguda described identity theft as a fraudulent practice of using another person’s name and personal information to obtain shares, credit and loans, among others, noting that the Commission decided to engage relevant stakeholders in a bid to resolve issues of identity management to tackle the problem of unclaimed dividends. According to him, the problem of unclaimed dividends had to do with identity management, hence the Commission was engaging stakeholders to harmonise various databases of investors and facilitate data accuracy in the market as well as increasing investors’ education to stem the trend.
THURSDAY 26/5/2022 – STOCK MARKET DEFIES MPR RATE HIKE, RISES 1.2%
The Nigerian equities market yesterday defied the interest rate hike recording strong gains, driven by Airtel Africa Plc. The Monetary Policy Committee (MPC) of the Central Bank of Nigeria, CBN, had raised the interest rate by 150bps to 13 per cent at the end of its meeting on Tuesday. However, the market rose by 1.2 per cent after the benchmark All Share Index (ASI) appreciated to 52,591.41 points, reversing this week’s losses in the process. Also, the market capitalisation rose by N346 billion to N28.353 trillion from N28.007 trillion the previous day. Analysis of the day’s trading showed that sentiments remained weak as FBN Holding (-8.66%) fell by 8.66 per cent, while investors continued to sell off Lafarge Africa Plc, GTCO and International Breweries Plc’s shares, which fell by 5.53 per cent, 2.6 per cent and 6.25 per cent respectively.
FRIDAY 27/5/2022 – CBN DEFENDS NAIRA WITH $3.36BN IN TWO MONTHS
The Central Bank of Nigeria injected $3.36bn into the foreign exchange market in two months as part of efforts to ensure the stability of the naira. Figures obtained from the CBN’s January monthly report on ‘Foreign Exchange Market Developments’ showed that $1.71bn and $1.65bn were injected in December 2021 and January 2022 respectively. The report said, “Total foreign exchange sales to authorised dealers by the Bank was $1.65bn in January, representing a decrease of 3.1 per cent, relative to $1.71bn in December 2021. “A breakdown shows that foreign exchange sales at the Small and Medium Enterprises window, interbank/invisible foreign exchange sales and matured swaps contracts rose by 24.4 per cent, 25.9 per cent, and 60.8 per cent to $0.14bn, $0.18bn and $0.21bn, respectively, in January, relative to the amount in December 2021. “However foreign exchange sales to the Investors and Exporters and Secondary Market Intervention Sales windows fell by 13.7 per cent and 16.3 per cent to $0.58bn and $0.54bn, respectively, in the month under review.” The CBN stopped forex intervention through the Bureau de Change segment of the market in 2021 and said it would stop further interventions through the banks by the end of 2022. Experts have, however, decried the unprecedented rate of oil theft recorded in recent times and its debilitating impact on government revenue and accretion to the country’s external reserves, which are used to defend the naira value.