• Nigeria’s external reserves depleted by $3.5 billion in Q3 2018 despite upticks in oil prices and the implementation of the Nigeria-China currency swap programme. Pressure on the reserves gives an insight into the sentiment playing out in the currency market. Although relatively stable compared to peers across emerging and frontier markets, the Naira shed 0.7 per cent in Q3-18 at the Investors & Exporters window as the demand for the greenback strengthened. The latest data from the CBN shows that the contraction in the foreign exchange reserves continued as they declined to $N43.437 billion as of October 10, 2018, representing a drop of 6.91 per cent.
  • Nigerian National Petroleum Corp. Monday said it has shut down a key oil pipeline network in the following a fire caused by an explosion that was triggered by suspected oil thieves. The closure of NNPC System 2E pipeline network at the weekend has disrupted the supply of both imported gasoline and output from the 210,000 bpd Port Harcourt refineries to most of South East and Northern Nigeria, an NNPC spokesman said. “The oil pipeline fire outbreak along the Osisioma axis near Aba Depot might have been caused by suspected oil thieves who had hacked into the line to intercept flow of petrol from Port Harcourt to Aba,” the spokesman said. The NNPC says that 16 people died in the inferno, although some media reports put the death toll had risen to 150.
  • A bi-monthly update report on the state of Nigeria’s economy by Financial Derivatives Company says that Nigeria’s petrol subsidy will exceed the $3.85 billion (₦1.38 trillion) estimate made by the junior oil minister, Ibe Kachikwu. Nigeria currently absorbs costs to keep petrol pump price at the government rate of ₦145 per litre. As a result of the surge in landing cost of a litre of petrol at ₦196.30, which when added to the ₦14.30 which is charged as distribution margin in the pricing template of the Petroleum Products Pricing Regulatory Agency, would amount to an open market price per litre of petrol of ₦210.60. Even with the daily 1.7 million barrels production of crude per day, Nigeria has very little refining capacity and imports roughly 90 per cent of its petrol, this neutralises the benefits oil-producing nations accrue from high crude prices. At the current selling price of $85 per barrel in the international market, Nigeria’s chances of an increased revenue still remain uncertain due to rising subsidy figures. The NNPC paid roughly $215 million in under-recovery costs which means the difference between what it paid to import fuel and how much it sells the fuel for. Also, in May, when Brent crude prices averaged about $77, it said the NNPC paid $245 million to fill the under-recovery gap.
  • Citigroup, the parent company of Citibank Nigeria has reported a 12 per cent growth in net income for Q3 2018 of $4.6 billion as compared with its previous figure in the same period in 2017. Revenues of $18.4 billion were largely unchanged from the prior-year period. Excluding the gains on sale of about $580 million of a fixed income business in 2017 period and $250 million of an asset management business in Mexico as well as the impact of foreign exchange translation, revenues increased four per cent driven by growth in Institutional Clients Group.
  • Niger Republic through its shippers council has opted for using seaports in the Republic of Benin and Ghana due to better reliability and efficiency of both as compared to Nigeria. The country, which still has an MOU with the Nigerian Shippers’ Council to ship transit cargo through Nigeria, now prefers to work with both countries. The Executive Secretary, NSC, Hassan Bello, sited a number of hindrances shipping transit cargo through Nigeria, many of which have remained a major problem with the Lagos ports. Some of the issues raised are the lack of commitment on the part of the Nigerian Shippers’ Council to over-turn the amount of time wasted in positioning containers and processing documents, lack of automation of processes, lacklustre and poor attitude of operators and government agencies to work towards customers, high port charges with little or no improvement or upgrade to existing infrastructure, most especially a railing system that would have aided transportation more efficiently rather than the roads with are not motor-able, causing a lot of gridlock which has a negative effect on the business.