Minister of finance and coordinating minister of the Nigerian economy, Wale Edun has said the government would begin the sale of crude oil to Dangote and other local refineries in Naira from October 1 2024.
The minister gave the remarks on Monday at the second meeting of the implementation committee meeting on the transition to crude oil Sales in Naira that was established by President Bola Tinubu.
“The meeting reviewed progress on key initiatives, including the upcoming commencement of Naira payments for crude oil sales to the Dangote Refinery starting October 1, 2024,” the finance ministry said in a statement on its verified X handle.
The statement said updates on the Port Harcourt and Dangote Refineries were also provided, with significant production increases expected from November 2024. It however failed to state when the Port Harcourt refinery would commence operation. The Nigerian National Petroleum Company Limited (NNPC) has postponed the operationalisation of the refinery for the sixth time since Mele Kyari took office as GMD of the government owned firm.
Chairman of the Federal Inland Revenue Service, Zacch Adedeji who is also the chairman of the technical sub-committee, reported that the first PMS delivery from Dangote is expected next month under existing agreements.
The Nigerian authorities had approved that the 450,000 barrels meant for domestic consumption in the oil sector regulatory PIA be offered in Naira to Nigerian refineries, with Dangote refinery as a pilot. The aim is to cut the demand for dollars with a focus on reducing the current high rate of gasoline.
According to the brief note of the meeting that was posted online, key roles were outlined for stakeholders, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Central Bank of Nigeria (CBN), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the African Export-Import Bank to ensure smooth implementation.
The minister emphasised the need for transparency and directed the Technical Sub-Committee to finalise details and prepare a report for the President, confirming that his directives are on track for implementation from September.
Shareholders of Transnational Corporation (Transcorp) Plc, along with its listed subsidiaries, Transcorp Hotels Plc and Transcorp Power Plc received N16.339 billion interim dividends.
These Companies for the first time in their history paid shareholders an interim dividend. This milestone reflects Transcorp Group’s commitment to delivering sustainable value to its shareholders and demonstrates the strength and resilience of its diversified portfolio.
Transcorp paid N4.065 billion or 10 kobo per share interim dividend, Transcorp Power’s shareholders received N11.250 billion or N1.50 per share, while Transcorp Hotels paid N1.024 billion or 10 kobo per share interim dividend.
Highlights of Transcorp H1 2024 results showed that revenue increased by 114 per cent to N175.4 billion, compared to N82.1 billion in H1 2023. Profit before tax rose by 283 per cent to N70.9 billion in 2024 compared to N18.5 billion in the same period last year. Total Assets grew by 18 per cent from N529.9 billion in December 2023 to N625.1 billion in H1 2024, while shareholders’ funds increased by 25 per cent from N187.3 billion in December 2023 to N234.4 billion at the end of H1 2024.
For Transcorp Hotels, H1 2024 revenue hit N29.7 billion, up 61 per cent, in comparison with N18.5 billion reported in H1 2023. Profit before tax rose by 192 per cent to N10.5 billion in 2024, compared to N3.6 billion during the same period last year, while profit after tax grew by 157 per cent year-on-year to N6.6 billion in H1, compared to N2.6 billion during the same period last year. Occupancy grew to 81 per cent in H1 2024, up from 77 per cent in H1 2023.
Meanwhile, Transcorp Power’s revenue grew to N135.4 billion in H1 2024, a growth of 142 per cent from N55.9 billion in H1 2023. Net finance cost fell by 37 per cent to N1.3 billion, a reduction from N2.1 billion in H1 2023.
Profit before tax recorded a growth of 214 per cent to N50.9 billion compared to N16.2 billion in the previous year. Total assets grew by 45 per cent to N322.9 billion as of June 30, 2024, up from N223.3 billion at the beginning of the year, driven by robust operational performance.
Shareholders’ funds increased by 64 per cent to N94.6 billion as of June 30, 2024, up from N57.8 billion as of December 31, 2023, boosted by retained earnings.
Speaking on the Group H1 results, group chairman, Transcorp Group, Tony Elumelu said that, “Transcorp exemplifies delivering a vision, executing through operational excellence and consistently creating the transformative impact that we are renowned for. We are building to last, across key sectors in Nigeria.”
President/group chief executive officer of Transcorp Group, Owen Omogiafo attributed the Group’s remarkable growth to its commitment to operational excellence, strategic management of its portfolio, and innovation, saying that “Transcorp Group and its subsidiaries remain firmly committed to delivering exceptional and long-term value to our stakeholders.”
Says 221,000bpd crude oil pledged for debt financing
The Nigerian National Petroleum Company (NNPC) Limited has declared a net profit of N3.297 trillion at the close of the financial year which ended in December 2023.
This indicated an increase of N700 billion or 28 per cent compared to the 2022 profit of N2.548 trillion.
The NNPC said it has pledged 221,000 barrels per day (bpd) to meet its debt financing obligations, totalling $5.5 billion.
Data obtained from the 2023 Audited Financial Statement (AFS) of the national oil firm indicated that 90,000 barrels per day was pledged to service a $3.3 billion loan for Project Gazelle Forex stabilisation arranged and coordinated by the African Import Export Bank (AfreximBank).
The company also said it also pledged another 35,000bpd for a $1 billion loan to finance the Acquisition of Dangote Refinery equity stake (now fully repaid) while 67,000 barrels per day was pledged to service a $1 billion debt for the rehabilitation of old & new Port Harcourt Refinery, with 210 barrels per day refining capacity;
For Projects Brogues and Eagle 2, the report showed that 8,000bpd and 21,000bpd were pledged as payment for $0.3 billion and $0.950 billion loans to finance OML 86/88 Acquisition (now fully repaid) by the NNPC E&P Limited (NEPL) and General Corporate Purpose loan to NEPL respectively.
The NNPC, announced the release of its 2023 Audited Financial Statement (AFS), on Monday, declared a net profit of N3.297 trillion at the close of the financial year which ended in December 2023.
This indicated an increase of N700 billion or 28 per cent compared to the 2022 profit of N2.548 trillion.
The NNPC, which announced the release of its 2023 Audited Financial Statement (AFS), in Abuja on Monday, said it is targeting 2mbpd crude oil production by December 2024.
Chief financial officer of the company, Umar Ajiya, who made these known said the NNPC Ltd will announce Initial Public offer (IPO) once the shareholders and Board make a decision.
NNPCL, said the CFO, in the period under review recorded “N243.99 trillion revenue, gross revenue of N243.99 trillion, gross profit of N7 trillion, operating profit of N4.3 trillion, Profit Before Tax of N5.9 trillion and Net Profit of N3.29 trillion.”
He said the profit grew by 28% from the N2.54 trillion recorded in 2022, N674.1 billion in 2021, N287.0 billion in 2020, N-1.7billion in 2019, and N-1.7billion.
“Now, in 2023, profit has also grown by 28” from N2.5 trillion to N3.297 trillion, said Ajiya.
The CFO depicted the profit as a reflection of the commitment and hard work of management and staff of NNPCL who have worked day and night to ensure this company is sustainable and in growth trajectory.
He said the 2023 figure is the highest since the inception of the company. He said the profit is a reflection of the company’s 12 agenda.
Ajiya said in the period under review, consequently, NNPCL has declared N2.10 trillion dividends.
On the assets side, he said in 2019, NNPC was literally holding an asset base of N8 trillion and then moved to N9.5 trillion in 2020, by 2021 under the transfer of the JV assets the company’s assets grew to N15.3 trillion.
He added that by 2022, resulting from the transfer of the asset, it grew to N37 trillion of assets.
Ajiya said “That has doubled in 2023, resulting from investments. We are expected to produce our financial statement in dollars and translate it to Naira.”
He revealed that NNPC has fully repaid $1billion equity stake to Dangote Petroleum Refinery with 35,000barrel per day of crude oil.
The CFO added that “We took $1billion from Afreximbank to rehabilitate Port Harcourt Refinery. That is still ongoing.”
Asked when the company will sell its shares to the public and the quantity of shares, he said only the board and shareholders can give NNPC the approval to sell shares and the volume to sell.
Ajiya said, “At the end of 2024, you will have sufficient profitability indices to share with our investors. But of course, determining the amount of quantum to divest, is the prerogative of the shareholders and the board. We as a company cannot tell you this is the time shares will be sold but the company will go public or this is the amount that will be sold.
“We have a board and the board also reports to shareholders. So that kind of decision is for shareholders and the board and we will execute.”
He said NNPC has never paid subsidies to anyone.
Speaking, executive vice president Upstream, Oritsemeyiwa Eyesan said the company has succeeded in reducing the cost of crude oil production from $34/barrel to $30/barrel.
She said NNPC, which is currently producing 1.7million barrels per day of crude oil and condensate, is targeting 2mb/d by the end of 2024.
“We have sufficient crude oil. We do not need to import for our refineries, ” she added.
Continuing on crude oil production, she said, “We increased production to as much as 1.7mb/d in August. “This is just one snap shot represented. But if I am taking my year to date production, it is 1.558mb/d of crude and condensate. The condensate amount there is 229,000 b/d.”
Meanwhile, executive vice president, Power and New Energy, Lekan Ogunleye said the total gas production in Nigeria is about 26.289billion standard cubic feet (bscuf) per day.
He further noted that about 45 per cent of this total quantum is the amount for the export market from the NLNG.
He added that about 2.799bscuf/d is directed towards export.
The domestic market, according to Ogunleye, gets the daily quantum of about 1.474bscuf per day.
He said the company is expecting 25% growth in the next 12 months
The executive vice president, Downstream, Dapo Segun said its 60,000 barrels Port Harcourt Refinery will get approval to distribute products to the public in September 2024.
He said the refinery will not release its off-spec production, which should be ready in the next few days to the public until NNPC gets the NMDPRA.
He recalled that NNPCL did the mechanical completion of the refinery last year, urging Nigerians to be patient.
He revealed that currently, the Crude Distillation Unit (CDU) that is the primary producing unit is now working.
According to him, the CDU, which is a kettle, was fired up early this month.
He declared that “So, the CDU of the Port Harcourt Refinery is working as we speak.”
When will we get the product out? He said, “That is the combination of the process of testing. We will test. You don’t get perfect production immediately when you start your refinery. You are going to get off-spec production.
“So we should be getting some off-spec production coming into town in the next few days. But we will not be able to get that to the public until we get off-spec production, which has been certified by NMDPRA.
On scarcity of petrol, Segun attributed it to a distribution challenge occasioned by rains and thunderstorms that have endangered the loading of the product.
He also said the roads are part of the distribution challenges hindering the product supply.
Segun said “We have also had issues with the road network and that also gives challenges in bringing the product to the country. “The terminal in Lagos was built to address a very short supply gap. Vessels are in Lagos now discharging as I speak. “A number of these combined to create a nightmare situation for us but I can assure you we are doing everything in making sure we get petroleum products to the nooks and crannies of the country.”
Accugas has invested an additional $45 million in a new compression system at the Uquo facility that will allow the company to continue to provide reliable gas supplies to customers for years to come.
The system comprises two parallel trains with a capacity of 160 MMscfpd each and is designed to increase the gas export pressure to a maximum of 81 bar gauge. The project is expected to be completed and operational later this year.
Accugas Limited, a subsidiary of Savannah Energy, has invested significantly in gas processing plants boosting thermal power plants in the country.
The managing director of Savannah Energy, Nigeria, Pade Durotoye, who spoke during the visit of minister of power, Chief Adebayo Adelabu, to its facility in Akwa Ibom State, said the company supports the federal government’s adoption of natural gas as a transition fuel in Nigeria’s net-zero pathway, particularly power generation.
This is why Accugas has invested in building a nameplate 200 million standard cubic feet per day (MMscfpd) processing facility, supported by a ~260km pipeline network solely for the domestic market.
Durotoye said: “All our gas is consumed domestically, with 80 per cent being sold to power generation companies, which account for approximately 20 per cent of Nigeria’s thermal generation capacity for the grid.
In addition, the gas supplied by Accugas enables about 10% of the country’s cement production.”
Earlier, Adelabu, commended Savannah Energy, the British independent energy company focused around the delivery of Projects that Matter, for its investment in Nigeria’s energy sector, as well as its contribution to the growth of the domestic gas market to support national development.
The minister was at the Uquo Central Processing Facility (CPF), in Akwa Ibom State, which is owned by Accugas Limited, a subsidiary of Savannah Energy.
Adelabu described the Uquo gas facility as a huge investment and evidence of Savannah Energy’s confidence in Nigeria’s economy. He appealed to other companies in the gas industry to emulate Accugas so that Nigeria’s power challenges can be addressed.
He said: “We are calling on other companies to emulate the activities of Accugas so that the unreliable supply of gas that we have will be a thing of the past. They have been tried, they have been tested and they are trusted. One other thing I also noted is their investment in a new gas compressor to boost pressure for gas supplies. It is a significant investment. We really appreciate it, and we will continue to be partners.”
Regarding the company’s social impact projects, Adelabu said: “I want to also thank you for the jobs you have created directly and indirectly, the CSR projects executed and for the safeguarding of the environment. We don’t want you to relent. We want you to do more to continue your expansion plans, so that you can supply more gas.”
The Centre for the Promotion of Private Enterprise (CPPE), has urged the federal government to peg the exchange rate for computing Customs import duty at the nation’s seaports to N1,000/$1 as it fuelling diversion of cargoes to neighbouring seaports and massive smuggling through the land borders.
The Centre in a statement by its director, Dr Muda Yusuf, said cargo diversion to neighbouring countries and smuggling would jeopardise the realisation of Customs revenue target.
LEADERSHIP reports that the exchange rate for importation currently stands at N1578/$1 as stakeholders have attributed the recent drop in the Importation of cargoes into the nation’s seaport to the non stability of the Central Bank of Nigeria (CBN).
The former director general of Lagos Chamber of Commerce and Industry (LCCI), however, appealed to President Bola Tinubu to peg Customs duty exchange rate at N1000/$1 for the next six months in the first instance through an Executive Order.
Dr Yusuf, said the high and volatile exchange rate for import duty assessment is fueling the already high inflation, increasing production and operating costs for manufacturers and other businesses. He stated that the volatile exchange rate would worsen the cost-of-living crisis, putting maritime sector jobs and investments at risk and weakening investors’ confidence.
“CPPE is worried that the problem of the prohibitive and unpredictable exchange rate for cargo clearance is yet to be addressed by the government. We believe it is a major policy adjustment that needs to happen to complement current measures to address the current cost-of-living crises in the country. The high and volatile exchange rate for import duty assessment is fueling the already high inflation, increasing production and operating costs for manufacturers and other businesses, worsening the cost-of-living crisis, putting maritime sector jobs and investments at risk and weakening investors’ confidence.
“There is also the added heightened risk of cargo diversion to neighbouring countries and smuggling which could jeopardise the realisation of customs revenue targets. This situation additionally creates serious competitiveness challenges for ethical and compliant investors in the economy because of their relatively elevated production and operating costs.
“In the light of this, the CPPE is reiterating its appeal to the presidency to peg the customs duty exchange rate at N1000/$ for the next six months in the first instance through an Executive Order. This resonates with the current federal government’s commitment to alleviating the current hardships on the citizens and the burden on businesses.
“It is gratifying that the Presidential Committee on Fiscal Policy and Tax Reforms has made similar recommendations. The Organised private Sector (OPS) had also strongly advocated in the same vein. The current customs duty exchange rate on the Nigeria Customs Service portal is N1578/$. This rate has been changing almost weekly, which is not good for the investment environment.
It is important to clarify that this proposition is without prejudice to the ongoing foreign exchange reforms of the present administration.
“Contrary to concerns expressed in some quarters, the adoption of a lower exchange rate for computation of customs duty would not undermine the current foreign exchange reforms. It is not a request for a concessionary exchange rate for forex allocation.”
Yusuf, however, stated that matters relating to international trade should be within the remit of the Federal Ministry of Finance and the Federal Ministry of Trade and Investment and not the CBN.
“We are dealing with two separate issues here. One is about foreign exchange policy, the other is purely a trade policy matter. The responsibility of the CBN should end at the point of opening of Form M for importers within the context of extant foreign exchange policy. All other matters relating to international trade should be within the remit of the Federal Ministry of Finance and the Federal Ministry of Trade and Investment.
“These are the institutions statutorily responsible for trade policy issues. The determination of the customs duty exchange rate by the CBN is an intrusion into trade policy space which needs to be urgently corrected.”
“Meanwhile, in order to permanently address this matter, it might be necessary to amend the Customs Act to move the responsibility of determining the applicable exchange rate for import duty payment to the fiscal authorities. This is necessary to bring such rates in alignment with the extant trade policy direction of the government and remove the current avoidable uncertainty around international trade.
“This is what our peculiar circumstances demand. It is important to localise and adapt economic policy models to our peculiar circumstances.”
Federal government is set to auction Series 1 of its first ever domestic dollar bond worth $500 million on Monday.
This is as the Debt Management Office will be issuing three tranches of FGN bonds worth N190 billion on Monday.
The bond, unveiled Thursday through the Debt Management Office (DMO), will be accessible to a broad range of investors, with a minimum investment amount of $10,000, with additional investments allowed in increments of $1,000. This structure is intended to enable wider participation among investors both within Nigeria and the diaspora.
“This bond issuance is more than just a financial instrument; it is a strategic move to channel funds into sectors that will catalyse economic growth,” Wale Edun, minister of finance and coordinating minister of the economy, said at the roadshow in Lagos.
The bond issuance will be listed on platforms such as the Nigerian Exchange and FMDQ, making it accessible to a variety of investors. The principal will be repaid after five years, with interest payments made every six months. This structured repayment schedule is designed to provide confidence to investors.
The FGN Bonds issuance includes the reopening of a five-year N70 billion bond alongside reopenings of seven- and nine-year bonds, each valued at N70 billion and N50 billion each.
At the last auction in July, DMO sold N378 billion across the three bonds offered, with the stop rates of the longest tenure at 20.45 percent.
DMO sold double the N100 billion offered on its longest offer (a nine-year bond) as investors locked in on a 21.98 per cent yield at its auction today.
“The market is trying to look for a higher yield, ”Olaolu Boboye, lead economist at CardinalStone Securities Limited, said.
Preference was given to the long-dated tenor (new nine-year bond) selling N200.65 billion, 100 percent higher than offered with an oversubscription of N241.65 billion.
A total of N225.72 billion FGN bonds was sold at the auction today; the amount sold was less than the auctioned N300 billion FGN bonds across three tranches. It included a reopened nine-year bond and five and seven tenures at N100 billion each.
Yield on the long-dated instrument increased to 21.98 percent at today’s sales from 21.50 percent in the previous auction.
The stop rates of the five- and seven-year bonds also grew to 19.89 and 21.00 from 19.64 and 20.19 percent reported at the last auction, respectively.
This is marginally less than the stop rate on the one-year Treasury bill considered less risky than longer-dated bonds.
CardinalStone, in its midyear outlook, reported that fixed income yields are currently high and probably unsustainable and advised investors to invest in long-dated instruments.
“With improved production from the Dangote refinery, the world’s largest single-train facility, the price of diesel is expected to crash to about N900 per litre while long queues at filling stations are tapped to end.”
The reintroduction of the Retail Dutch Auction System (RDAS) is meant to alleviate the persistent demand pressure in the FX market and to enhance the process of price discovery, BUKOLA ARO-LAMBO writes.
In managing the unrelenting liquidity pressures at the foreign exchange market, the Central Bank of Nigeria (CBN) resuscitated the Retail Dutch Auction System (RDAS), making the first dollar sales of $876.3 million at a rate of N1,495 per $1 to 26 qualified banks.
According to the CBN, the reintroduction of the RDAS is meant to alleviate the persistent demand pressure in the FX market and to enhance the process of price discovery and analysts believe the move will curb the volatility at the foreign exchange market at least in the short term.
Used by the CBN in 1987, 1990 and 2002-2006, the RDAS is being brought back more than 10 years after the former CBN Governor Godwin Emefiele scrapped it alongside the Wholesale Dutch Auction System (WDAS). The CBN under Emefiele had made the decision due to the need to reduce market fragmentation and speculative attacks on the naira. It had subsequently moved towards managing the exchange rate more directly through the interbank market, marking the end of the DAS in Nigeria.
Under the RDAS, eligible customers could directly participate in the forex auction, bidding for the currency at a rate they were willing to pay. The auction system was designed so that the lowest bids were filled first, and the marginal rate became the official exchange rate for that auction.
At the auction held last week, the CBN had supplied $876.3 million, approximately 75 per cent of the $1.2 billion requested by 32 dealer banks, disqualifying bids from six banks due to submission errors. Data from the CBN showed that United Bank for Africa, First City Monument Bank, Stanbic IBTC, Wema Bank, Suntrust Bank and Rand Merchant Bank were disqualified with the first five submitting late with no bid rates and no bid received from the last two respectively.
A statement from the apex bank and signed by its director, Financial Markets department, Dr Omolara Duke, explained that the RDAS starts with a call for the submission of bids for an auction and all the bids are collated and arranged from the highest bid to the lowest bid.
“The Auction mechanism is predicated on the volume of the forex that is available for sale. In addition, it is also to give forward guidance of the price of exchange rate that will promote forex market stability. The cut off point of an Auction is the lowest exchange rate that clears the volume that is offered for the Auction.” It stated.
The apex bank explained further that “the call for bids were in naira/US dollar currency pair for unmet forex demand backed by verifiable Forms A and M only. All bids were password protected and submitted through the dedicated email address provided by CBN between 09:00 a.m. and 3:00 p.m. Bids received after 3:00pm were disqualified. Passwords for the bids were sent after the close of the auction. The total bids received was valued at $1.191 billion. The range of successful bids was N1495- N1650/$ across 26 banks.”
Commenting on the development, analysts at FBNQuest believe that the reintroduction of the RDAS will see the volatility at the forex market reduce in the second half of the year. “Given the improvements in FX inflows, the FX market may experience reduced volatility in H2’24. While this development could contribute to a more stable economic environment, the impact on import costs and inflation will depend on broader market conditions and policy responses” the analysts said.
Analysts at Cordros Research opine that the RDAS had eased pressure on the naira which had seen a 2.7 per cent appreciation week on week to N1,574.20 to the dollar at the Nigeria Autonomous Foreign Exchange Market (NAFEM) despite a reduced inflow at the window.
“The naira appreciated in the week on reduced demand pressure following the successful completion of the CBN’s RDAS. Additionally, FPI participation in the forex market improved as the CBN’s move to stabilise the naira increased investor confidence. While we anticipate forex liquidity will remain frail over the short-term, we expect the naira to trade with less volatility due to the moderation in demand pressure” analysts at Cordros note.
However, analysts at Afrinvest West Africa are a bit pessimistic on the long term impact of the RDAS. Whilst applauding the move to stabilise the forex market, the analysts note that several challenges remain that questions the long-term sustainability of the approach and other stop-gap measures recently introduced by the CBN.
“We are of the view that the apex bank does not possess the required financial war chest to meet the average forex demand for an extended period. Recall that Dr. Cardoso, during the last MPC meeting, stated that the country’s foreign reserves of $37.1 billion could cover 11 months’ imports. This implies a monthly average import spend of $3.3 billion.
“Regardless of the estimate considered, the FX reserves could run dry in six to nine months should the magnitude of the bids at the auction be met weekly and accretion rate does not offset outflows. In addition, seasonality trends suggest that forex demand for manufacturing imports, educational commitments and summer travels peaks in Q3. Hence, we are of the view that the measure will only temper the demand pressure that is building up,” they pointed out.
Nigeria’s headline inflation has eased for the first time in 19 months in July to 33.4 per cent.
The National Bureau of Statistics (NBS) reported a decline in Nigeria’s headline inflation rate, which dropped to 33.40 per cent in July 2024. This figure represents a slight decrease of 0.8 percentage points from the 34.19 per cent recorded in June.
The Consumer Price Index (CPI) and Inflation Report for July 2024, released by the NBS in Abuja, highlights this reduction. Despite the monthly decline, the year-on-year comparison shows that the inflation rate in July 2024 was 9.32 percentage points higher than the 24.08 per cent recorded in July 2023.
On a month-on-month basis, the headline inflation rate in July 2024 stood at 2.28 per cent, which is a marginal decrease from the 2.31 per cent recorded in June 2024. This suggests that the rate of increase in the average price level in July was slightly slower than that of June.
The report attributes the year-on-year and month-on-month increases in the headline index to rising prices of various goods and services across different divisions. Notable contributors include food and non-alcoholic beverages, housing, water, electricity, gas, and other fuels, along with clothing, footwear, and transportation. Other areas experiencing price hikes were furnishings, household equipment, education, health, miscellaneous goods and services, restaurants and hotels, alcoholic beverages, tobacco and kola, recreation and culture, and communication.
The report also notes that the average CPI for the 12 months ending in July 2024 increased by 30.76 per cent, marking an 8.84 percentage point rise compared to the 21.92 per cent recorded in July 2023. Food inflation, in particular, saw a significant year-on-year increase to 39.53 per cent in July 2024, up by 12.55 percentage points from 26.98 per cent in July 2023. The NBS attributes this rise to the increased prices of staples such as semovita, yam flour, wheat flour, Irish potatoes, and various oils.
On a month-on-month basis, food inflation slightly decreased to 2.47 per cent in July, down from 2.55 per cent in June 2024. This decrease was influenced by lower prices for items such as tin milk, baby powdered milk, mudfish, fresh fish, and certain fruits and vegetables.
Core inflation, which excludes volatile agricultural produce and energy, rose to 27.47 per cent in July 2024 on a year-on-year basis, representing a 6.99 percentage point increase from the 20.47 per cent recorded in July 2023. The report attributes this rise to the deregulation of PMS following the removal of subsidies.
The report further breaks down inflation rates across urban and rural areas. In July 2024, urban inflation was 35.77 per cent, up by 9.94 percentage points from July 2023, while rural inflation stood at 31.26 per cent, reflecting an 8.77 percentage point increase from the previous year.
In terms of regional analysis, Bauchi recorded the highest year-on-year inflation rate at 46.04 per cent, followed by Jigawa at 40.77 per cent, and Kebbi at 37.47 per cent. Conversely, Benue experienced the slowest rise at 27.28 per cent, followed by Delta and Borno at 28.06 per cent and 28.33 per cent, respectively.
On a month-on-month basis, Abuja led with the highest inflation rate at 3.91 per cent, followed by Borno at 3.84%, and Enugu at 3.76 per cent. The slowest increases were recorded in Taraba, Kwara, and Ondo, with inflation rates of 0.71 per cent, 0.62 per cent, and 0.91 per cent, respectively.
Regarding food inflation, Sokoto topped the year-on-year chart at 46.26 per cent, with Jigawa and Enugu following closely. The slowest rise in food inflation was observed in Adamawa, Bauchi, and Benue. However, on a month-on-month basis, Borno, Sokoto, and Enugu saw the highest increases, while Kwara, Taraba, and Ondo experienced the slowest rises.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has stated that the $500 million domestic FGN US dollar bond will enhance external reserves and help stabilise the foreign exchange situation in the country.
He stated this at the hybrid roadshow for the domestic FGN US Dollar Bond with investors, held yesterday in Lagos.
The launch of the Series one Domestic USD Bond, aiming to raise at least $500 million from both local and international investors will commence on August 19, 2024. The bond offers bullet repayment at maturity in US dollars, ensuring full repayment of the principal amount at the end of the five-year term. The bond is open to Nigerians and non-Nigerians resident in Nigeria, Nigerians in the Diaspora, and Qualified Institutional Investors. Investors can subscribe with a minimum amount of $10,000, with additional investments in multiples of $1,000 thereafter.
Edun said “We are here today to discuss dollar funding, which is critical for the exchange rate and essential for stabilising investment and the economy. The Central Bank has adopted the ‘willing buyer, willing seller’ model, which has proven efficient and has contributed to the influx of additional dollars.
“Specifically, the flow of dollars into the economy has improved through portfolio investors, foreign direct investors, and multilateral organisations that have supported the President’s macroeconomic policies.
Today, we are playing a significant role in this process with the domestic issuance of US dollar bonds, aimed at increasing the flow of dollars into the economy.”
“We are already seeing success with the combination of monetary and fiscal policies, which is attracting foreign portfolio investments (FPIs). Additionally, foreign direct investments are starting to increase, particularly in the oil and gas sector.
“More foreign exchange leads to higher reserves and a stronger exchange rate, which can reduce inflation and, consequently, interest rates. This creates opportunities for borrowing, investing, increasing productivity, creating jobs, and reducing poverty,” he said.
He noted that Nigeria’s external reserves, as of August 12, stood at $36.62 billion, according to data from the Central Bank of Nigeria.
Detailing the offering, managing director of Investment Banking at United Capital, the lead issuing house, Dr Gbadebo Adenrele disclosed that the $500 million domestic bond targets Nigerians, non-Nigerians residing in the country, and Nigerians in the diaspora.”
Adenrele said, “one of the key aspects of this bond issuance is that it will be listed on platforms such as the Nigerian Exchange and FMDQ, making it accessible to a variety of investors.”
The director-general of the Debt Management Office (DMO), Patience Oniha, noted that the settlement date for the domestic dollar bond auction will likely be in 10 days after the auction date.
United Bank for Africa (UBA) Plc, has said it is partnering with Aura by Tanscorp, to roll out its summer campaign that will see its customers enjoy exclusive benefits and discounts for customers with UBA debit and prepaid cards.
The summer campaign, with the theme “#UBA Summer Memories,” is to run from August 17 to September 7, 2024, and holds and would have customers enjoy benefits including a 10 per cent discount on all bookings.
Asides this, one customer will get a free night stay worth N150,000; five customers will win N20,000 discounts on their spa vouchers, 10 customers will also get N15,000 discounts on apartment bookings, while another 10 UBA customers will get N10,000 discount on hotel bookings.
Commenting on the campaign, UBA’s Group Head, Retail and Digital Banking, Shamsideen Fashola, emphasised the bank’s commitment towards encouraging savings culture, recreation, lifestyle, and rewarding loyalty among its customers.
“That is why we would be offering our loyal customers travelling abroad for vacation up to 35% discount off their flights tickets, hotel bookings, shopping, and car rentals, as well as the chance to win other amazing prizes, when they make use of their UBA VISA or Mastercard Dollar Cards for transactions”, Fashola said.
He added, “This promotion underscores our commitment to enhancing the lifestyle of our customers. We recognize the importance of work and rest and as a bank that puts customers first in all we do, we are keen to make our customers enjoy both seasons with ease. By using the UBA Dollar cards to make payments this season, our customers will gain a lot of great benefits”.
Also speaking on the summer campaign, UBA’s Group Head, Marketing & Corporate Communications, Alero Ladipo, encouraged customers to share their beautiful summer memories on social media with the hashtag #UBASummerMemories for a chance to win a weekend staycation at a luxury resort.
She said, “We’re inviting our customers to share their summer experiences using the hashtag #UBASummerMemories across all social media platforms. This initiative aims to create a sense of community among our users and also offers them the chance to win more amazing prizes.
