Daily Watch – MPR raised as oil output slumps, Togo lengthens presidential term

27th March 2024

The Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) has increased the Monetary Policy Rate (MPR) by 200 basis points from 22.75% to 24.75%. This was disclosed by the CBN Governor who doubles as the MPC Chairman, Olayemi Cardoso, at the end of the MPC meeting held in Abuja. The MPC changed the asymmetric corridor from +100/-700 to +100/-300 around the MPR. Furthermore, the CBN retained the Cash Reserve Ratio (CRR) of commercial banks at 45%, but increased the CRR of merchant banks from 10% to 14% while retaining the liquidity ratio at 30%. The present MPR reflects the CBN’s commitment to tackling inflation and exchange rate fluctuations. The next MPC meeting is scheduled for May 2024.

Nigeria’s oil production has slumped by 104,062 barrels per day (bpd). Data gleaned from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed Nigeria’s oil production, including condensates, declined to 1.5 million bpd in February from 1.6 million bpd in January. NUPRC report also showed that many of Nigeria’s large oil fields, especially those in the Niger Delta like Forcados, Bonny, Escravos, Brass River and Qua Iboe and some offshore fields like Akpo, Usan and Yoho, all pumped below their normal levels in February. At Bonny terminal, oil production, including condensates, declined to 5.1 million barrels in February from 6.9 million barrels; Brass terminal declined to 752,687 barrels from 896,581 barrels while Qua Iboe declined to 3.7 million barrels from 4.2 million barrels.

Ghana wants to speed up its remaining debt restructuring negotiations, as the government pushes to rework over $13 billion of international bonds. The government reached a deal in principle in January to restructure $5.4 billion of loans with official creditors. Finance Minister Mohammed Amin Adam told a news conference that the government had received counter-proposals from two bondholder groups that would be assessed. The minister said Ghana’s government had concluded negotiations with Independent Power Producers (IPPs) and would be signing an agreement with them over the next two to three weeks. The IPPs had rejected a proposal to restructure $1.58 billion in arrears owed them by the state. “The signing of this agreement will allow us to spread the arrears over some years, maybe five years, to provide us relief,” Adam said. He added that the IMF was expected to visit Ghana for a second review of its Extended Credit Facility-backed programme for 10 days from 2 April.

Togo has adopted a new constitution that lengthens presidential terms by one year while limiting the number of terms to one, which will likely allow President Faure Gnassingbe to extend his 19-year rule by a year longer than previously expected. Under the new constitution, Faure Gnassingbe can now stay in power until 2031 if he is re-elected in 2025. This is a highly likely scenario because his party controls parliament. The new constitution, approved by 89 out of 91 lawmakers, says the president is elected by parliament for a single six-year term. Under the previous constitution, a president was elected by universal suffrage for a maximum of two five-year terms. The new constitution also creates a new role, president of the council of ministers, with extensive authority to manage government affairs.