The Central Bank of Nigeria (CBN) has raised the Monetary Policy Rate (MPR) from 13 percent to 14 percent. CBN Governor Godwin Emefiele announced this on Tuesday during the 286th meeting of the Monetary Policy Committee held in Lagos. Mr Emefiele said the hike in interest rate would help address Nigeria’s rising inflation. While the regulatory bank increased the MPR, it retained other parameters. The asymmetric corridor remains +100 and -700 basis points around the MPR, and the Cash Reserve Ratio (CRR) at 27 percent. Also, Nigeria’s $1.5 billion Eurobond yield with a maturity of February 2031 rose to 14.29% as of July 12, 2022, according to data from the Debt Management Office. The yield was about 13.4% at the end of June and was as low as 8.6% at the end of the first quarter of 2022 (Mar 31). Nigeria’s 10-year Eurobond closed the first half of the year at a yield of 13.45% or $69.8 in unit price pointing to one of the worst yields in years for Africa’s largest economy. The current price is now $66.7.
The Nigerian National Petroleum Corporation formally became a commercial company on Tuesday, known as NNPC Limited. Minister Timipre Sylva said the move would deliver more profitability and accountability. As a commercial entity, NNPC Ltd will no longer have access to state funds. Its shares will be held by the ministries of petroleum and finance, who will decide which assets and liabilities to keep or transfer to the government. Sylva said NNPC Ltd will now operate as a profitable entity that would declare dividends. The Nigerian National Petroleum Company (NNPC) Limited then went on to approve an upward review in the pump price of petrol from ₦165 per litre to ₦179, effective Tuesday. NNPC, in a notice to fuel marketers, directed them to change the petrol price on pumps to the new price. This was even as the company equally increased the ex-depot price from ₦148.17 to ₦167 per litre. This came after weeks of petrol scarcity resurfaced across the country as fuel retailers were adopting different price bands to force unofficial deregulation attempts.
Italian prosecutors on Tuesday dropped criminal proceedings over a $1.3 billion Nigerian oilfield deal, clearing energy majors Eni and Shell, as well as managers including Eni Chief Executive Claudio Descalzi. Attorney General Celestina Gravina signalled the prosecution did not plan to pursue the case at the start of an appeal hearing into one of the oil industry’s biggest ever corruption cases. Eni said he was very satisfied that the case had been concluded, describing it as “unmotivated and disconcerting.” The Tribunal Prosecutor’s Office, which is a separate body, and the Nigerian government had sought to appeal a March 2021 ruling which had acquitted the two companies and defendants after a three-year trial. Lucio Lucia, a lawyer representing the Nigerian government, said the decision not to proceed was unusual. He argued that the lower court had failed to assess the documentary proof against the defendants properly. The next hearings for the civil case are scheduled for September.
The International Monetary Fund has approved a $235.6 million disbursement to Kenya as it approved a third review of the country’s Extended Credit Facility and Extended Fund Facility arrangements. The disbursement is usable for budget support and brings such payouts to $1.208 billion under the 38-month arrangements, which were worth $2.34 billion when they were approved in April 2021, the IMF said. “Kenya’s economy has rebounded strongly in a challenging environment and is projected to grow by 5.7% in 2022,” the IMF said, adding that inflation, which hit 7.5% in June, was likely to peak this year before easing back to the Central Bank of Kenya’s 2.5% target by early 2023. “Downside risks predominate in the near term. Uncertainties stem from the war in Ukraine, continuing drought in the semi-arid regions, unsettled global financial market conditions and the political calendar,” the IMF said. “But Kenya’s medium-term outlook remains favourable.” The IMF said that Kenya showed “very strong” performance in tax collections during the 2021/22 fiscal year, which has created fiscal space to temporarily cushion part of the higher fuel and food costs that have hit households while still meeting the program’s fiscal targets.