Banking and Finance

Court Orders UBA, Diamond Bank, Five Others to transfer $793m to Govt –Lawyer

A Nigerian court has ordered seven local banks to transfer a combined $793 million to the government immediately, and a government lawyer said on Thursday the lenders had withheld money collected on behalf of the state, Reuters reports.

Commercial banks in Nigeria collect grants, taxes, fees and tariffs on behalf of the government which they send to a single treasury account with the central bank in line with a policy introduced in 2015 aimed at curbing corruption.

CBN sold $2.64b to Authorised Dealers in May –Report

The Central Bank of Nigeria (CBN) said it sold a total of 2.64 billion dollars to authorised dealers in May.

According to the CBN’s Economic report for May, the amount indicated 70.8 per cent and 106.1 per cent increase above the levels in the preceding month and the corresponding period of 2016 respectively.

The bank attributed the development to the increase in inter-bank sales, matured forwards contracts and Bureau De Change (BDC) sales during the period under review.

Interbank Rate Rises as Lenders Settle Debt Purchases

Nigeria's interbank lending rate rose to 12 percent on Friday from eight percent after bond and treasury bill purchases paid for by lenders drained banking system liquidity, traders said.

The central bank sold 25 billion naira ($82 million) worth of 363-day treasury bills on Friday, while lenders paid for bonds bought at an auction on Wednesday.

Money market rates stood at 15 percent last week. They dropped to 8 percent after the central bank injected 89.96 billion naira to settle matured treasury bills on Thursday.

Uncertainties in Oil Market Threaten 2017 Budget

The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, says the 2017 budget implementation will be affected by growing uncertainties in the global oil market.

Kachikwu told journalists on Wednesday in Abuja the Ministry of Finance and the Federal Executive Council were, however, working on measures to cushion the impacts of the shortfall from oil production on the budget.

Kachikwu explained that while the oil production benchmark in the budget was 2.2 million barrels per day (mbpd), the country was producing about 1.7 mbpd.

Nigeria to Issue of 10-year Note of $8.9b to Offset Debts

Nigeria plans to issue a 10-year promissory note to offset 2.7 trillion naira ($8.85 billion) owed to government contractors and employees, the finance minister said on Wednesday.

Nigeria, Africa's biggest economy, is in the second year of a recession caused by low crude oil prices and attacks by militants on facilities in its Niger Delta energy hub. Oil sales account for 70 percent of government revenues.

Nigeria "Cannot Borrow Anymore", Says Finance Minister

Nigeria must not borrow more to fund its budget and should instead raise money it needs by other means, the country's finance minister said on Tuesday, calling into question planned foreign loans of $2 billion from lenders like the World Bank.

Africa's largest economy is in its first recession in 25 years, and had planned to borrow extensively from overseas to fund a record budget aimed at helping the country spend its way out of its economic doldrums.

Nigeria Issues ₦32b Debt to Tighten Liquidity

Nigeria's central bank sold 31.94 billion naira ($104.76 million) in treasury bills on Friday in a bid to tighten liquidity in the money market while overnight lending rate fell.

Traders said the bank sold 31.52 billion naira of 349-day treasury bill at 18.59 percent and 440 million naira of 160-day treasury bill at 17.98 percent at an auction on Friday.

Cost of borrowing among commercial lenders however dropped to around five percent on the interbank market from around 8.5 percent last week.

Forex Reserve dips slightly in June –CBN

Nigeria's foreign exchange reserve stood at $30.25 billion by June 28, down 0.36 percent from a month ago, central bank data showed on Friday, Reuters reports.

The reserves showed a 14.8 percent rise from a year ago, when they stood at $26.34 billion. Nigeria's dollar reserves have risen slightly this year thanks to the rise in global oil prices.

The OPEC member country has added $4.2 billion to its reserves since the beginning of the year. Foreign reserves stood at $26.09 billion at the beginning of the year.

Nigeria’s Borrowing Spree: Any Cause for Worry?

Much has been said on Nigeria’s aggressive borrowing spree from domestic and international capital markets since 2016, and deservedly so. Since the start of a prolonged global oil price drop in H2:2014, the Nigerian economy has recorded a significant downturn in performance as plummeting government revenues and the resultant FX crisis dragged the economy into its first recession in 25 years. As a result, an expansionary budget of N6.1tn was adopted in the 2016 fiscal year to boost growth and fund more capital projects, with a deficit of N1.8tn estimated for the period.

FG Revenues Rise in May Due to Higher Corporate Tax Proceeds

Nigeria's distributable government revenues rose to 462.4 billion naira ($1.43 billion) in May from 415.7 billion naira in April due to higher proceeds from corporate taxes, a government statement said on Thursday.

Distributable revenue is government income that is shared at various levels of state including the federal government, state governments and local government councils.

The revenues were boosted by "significant increases in revenues from companies income tax," said the statement issued by the accountant general.