The Nation Newspaper

Tag: controls

  • Angola may ease currency controls

    Nigeria’s decision to free its currency may push Angola to loosen controls on its own exchange rate, according to analysts. Angola’s central bank has allowed the Kwanza to devalue by 35 per cent over the past 12 months, but this hasn’t started to bridge the gap with the black market rate, where dollars are selling at a 200 per cent premium to the official rate.

    With Nigeria’s example, the pressure may increase on policy makers in Luanda to adopt more flexibility as the nation begins talks with the International Monetary Fund (IMF) for a loan of as much as $4.5 billion.

  • ‘My husband’s family controls him’

    A 45-year-old businesswoman, Anna Oshomogbe, has asked an Igando Customary Court in Lagos to dissolve her marriage with Edmund because his family controls their home.

    She told the court that Edmund cannot make decisions on his own. The couple have been married for 18 years and they have two children.

    “My husband’s mother and brothers are controlling our home.

    “If we discuss anything, my husband will first go to his family to consult with them, what they say will be my husband’s final decision.

    “I am just like a maid, my decision is always rejected. In fact, I don’t have a say in my matrimonial home,’’ she said.

    Mrs. Oshomogbe also told the court that her husband is a drunk.

    “My husband always spends his salary with his brothers at a beer parlour and after drinking to stupor, he will be staggering and falling into the gutter.

    “He urinates and messes up everywhere in our flat whenever he is drunk and most times, he beats me without reason,” she said.

    The petitioner accused her husband, who has failed to appear in court after receiving several summons, of being an irresponsible husband and father.

    “When my daughter fainted when she had fever, I called my husband to come home so that we could take her to the hospital, he said that he was in a beer joint and that he could not come.

    “He does not sleep at home most times as he stays with his brothers or mother.

    “He always tells me that nothing can separate him and his family.

    “I pay the house rent and the children’s school fees because my husband refused to pay,” she said.

    Mrs Oshomogbe claimed that her husband asked her to go to his village for spiritual cleansing.

    “My husband is forcing me to go to his village for cleansing; I don’t just understand what the cleansing is all about.

    “Two of my husband’s elder brothers’ wives had gone to the village for cleansing, they died few days after returning to Lagos.

    “I am afraid because I don’t want to die now,” she said.

    The petitioner presented a text message sent to her by her husband that she should go to his village for cleansing and that he would not appear in court for any dissolution.

    The court president, Mr Adegboyega Omilola, ordered the court bailiff to serve the respondent again and adjourned the case to June 28 for mediation.

  • ‘NNPC, subsidiaries must adopt financial controls, transparency’

    ‘NNPC, subsidiaries must adopt financial controls, transparency’

    The Natural Resource Governance Institute (NRGI) has advised the management of the Nigerian National Petroleum Corporation (NNPC) to adopt proper financial controls, transparency measures in all of its subsidiaries, if it intends to be profitable.

    The Institute in a report said despite the current global low oil prices, the Corporation could still net several billions of dollars per year for the nation’s treasury if it follows certain standard operational steps in its reforms.

    It said the government must first put in place a clear, legally enforceable rule that will govern revenues the NNPC can keep, adding that previous efforts at reforming and restructuring the NNPC did not follow this step.

    The NNPC must adopt new financial controls and transparency measures for its subsidiaries. This will apply not only to the Nigerian Petroleum Development Company (NPDC), but equally to the Corporation’s half-dozen oil trading subsidiaries, none of which the Institute disclosed what they earn or how they share earnings.

    The group said there is no public accounting for the money that NNPC’s downstream arm, the Pipelines and Product Marketing Company (PPMC), makes from selling refined products including the billions of dollars in gasoline imported each year through oil-for-product swaps

    In the NRGI report made available to The Nation, the Director, Governance Programmes, Alexandra Gillies said the domestic crude allocation should be eliminated by the government, and agree to a new way of supplying oil to the refineries as part of its efforts to find new ownership and management structures for them. She noted that NNPC could remain the largest or even sole supplier under several different models.

    These include tolling, where the NNPC would grant the refineries operational independence and lease refining capacity from them in exchange for crude; repurchase agreements, where the Corporation would buy crude from its upstream partners on behalf of the refineries; or further inter-company sales, with volumes restricted at the refineries’ actual needs instead of 445,000 barrels per day – an amount she said far exceeded the small volumes (often under 100,000 bpd) they can process.

    She said if the NNPC continues to do oil-for-product swaps; it could simply allocate parts of its regular export sales to those deals.

    The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu had announced the unbundling or restructuring of the Corporation into  seven divisions and 30 independent companies with their own managing directors. Gillies agreed it was a step toward turning NNPC into a more appropriately-sized, profit-driven firm, but nevertheless pointed out the proposal did not explain how the new companies would fund their operations or share their earnings with the government.

    She said such a rule was also missing from the current plans to break the long delayed Petroleum Industry Bill (PIB) into smaller pieces for passage, adding drafts of a first, senate-led installment were already making the rounds. However, senate leadership said debate would start soon.

    She noted the new bill envisions an NNPC split into two partially privatized companies: the Nigeria Petroleum Assets Management Company and a national oil company. She said the latest drafts talk variously about these entities retaining unspecified shares of earnings, charging the government ‘management fees,’ receiving federal budget appropriations to cover some un-enumerated costs, and paying dividends to the Federation Account based on policies to be agreed down the road.

  • CBN to retain currency controls

    CBN to retain currency controls

    • Apex bank raises N127b T-bills

    • DMO to issue 10-year bond

    The Central Bank of Nigeria (CBN) will retain foreign currency controls because of concerns about slowing growth, a senior bank official has said.

    The apex bank also says it plans to raise N127.07 billion in treasury bills with maturities of three months to one year at an auction on October 7.

    It  said it will issue new 91-day paper worth N25.40 billion, N33.49 billion in 182-day bills and N68.18 billion in one-year debt, using the Dutch Auction System. Results of the auction are expected to be released the following day. Nigeria issues treasury bills twice-monthly to fund the government budget deficit and manage liquidity in the banking system.

    Nigeria’s economic growth was 2.35 per cent in the second quarter year on year, compared with 6.54 in the same quarter last year. “We are concerned that we are having declining growth,”  CBN’s monetary policy director, Moses Tule, was quoted by Reuters as saying.

    He defended the bank’s decision to impose currency controls to preserve foreign reserves, which fell 23 per cent in the year to September 23, according to CBN data.

    “We have to protect the nation before we protect businesses,” Tule told a conference in Lagos.

    Meanwhile, the Debt Management Office (DMO) plans to re-issue its five- and 10-year bonds in the last quarter of the year to raise up to N270 billion after JP Morgan’s index delisted half of the maturities belonging to Nigeria’s economy.

    The 10-year bond, among those to be delisted on the influential index, edged higher to yield 15.09 per cent after the DMO released its calendar showing it will re-introduce the benchmark paper, which was not issued in the third quarter.

    The DMO said it will sell between N60 billion and N90 billion each in five- and 10-year bonds in each of the remaining three months of the year as re-openings of outstanding maturities.

  • CBN rules out capital controls despite naira slide

    CBN rules out capital controls despite naira slide

    The Central Bank of Nigeria (CBN) said it will not introduce capital controls, rather, it is reviewing a rule introduced last month that investors said crushed liquidity in the foreign exchange market, its Governor, Godwin Emefiele has said.

    According to Bloomberg, the naira has been battered by oil prices that have dropped more than 50 per cent since June. The naira depreciated almost 11 per cent in the past three months, the highest among 24 African currencies tracked by Bloomberg.

    The CBN last month told banks to clear foreign exchange positions daily, having previously allowed them net-open positions of one percent of shareholder funds, in a bid to bolster the currency.

    “There will be a review in due course. But I can tell you categorically it will no longer be one per cent. It will be less than one per cent. The reason we put a stop to one per cent is because we felt that it was too large to be held by banks as a trading position.

    “The CBN has no plans to change a rule adopted around the same time that dollars bought in the interbank market be used within 48 hours or sold to the regulator. The naira is “currently appropriately priced” and no new measures are being considered,”the CBN chief told Bloomberg.

    The currency weakened for a third day, declining 0.2 per cent to trade at 184.23 per dollar in Lagos.

    “We are satisfied with the current adjustment that’s been done. It remains a free entry and free exit market,” Emefiele said.

    Nigeria, which gets 70 per cent of government revenue and almost all export earnings from oil, has proposed spending cuts and in November raised interest rates 100 basis points to a record 13 per cent in a bid to stem capital outflows and defend the naira.

    The CBN on November 25 also moved the naira’s official peg for twice-weekly auctions to a midpoint of 168 per dollar from 155 and widened its trading band to five per cent either side from three per cent.

    The measures implemented by the regulator have made it difficult for foreign investors to exit their holdings, Samir Gadio, head of African strategy at Standard Chartered Plc, said.

    “There’s a risk that these measures last as long as the CBN feels it doesn’t have the ability to control the exchange rate,” he said.

    “That is news to me that foreign investors are unable to exit their positions. If any foreign investor needs to exit its position, he should make a demand to a bank. If the bank cannot find those dollars to buy in the interbank market, the central bank will provide the dollars,” he said.