Economy
Despite CBN RT200 FX Programme, Forex Scarcity Worsens
By Dipo Olowookere
Over a year ago, the Central Bank of Nigeria (CBN) announced that it was coming up with an initiative designed to attract $200 billion inflow from non-oil exports over the next three to five years.
The initiative, the RT200 FX programme, was to ensure exporters channel their inflow through the official window and sell it through the Investors and Exporters (I&E) segment of the foreign exchange (forex) market.
While speaking in November 2022 at the second edition of the RT200 Export Summit in Lagos, the governor of the CBN, Mr Godwin Emefiele, informed the audience that about $4.987 billion had been repatriated into the country by non-oil exporters, higher than the $3.190 billion achieved in 2021, noting that, “Of this amount, only $1.966 billion qualified for the rebate program, and $1.559 billion was sold at the I&E window or for own use.”
He stated that the central bank had met just 3 per cent of the RT200 FX target in nine months.
Business Post observed that this scheme, designed to boost FX supply in the country, has not solved the liquidity crisis in Nigeria, as many customers are unable to access forex.
Also, the external reserves of the nation have continued to deplete very fast despite a slight improvement in the prices of crude oil benchmarks in the global market.
Data obtained by this newspaper from the CBN showed that as of Monday, April 3, 2023, the amount left in the reserves stood at $35.415 billion, 0.64 per cent or $228 million lower than the $35.643 billion as of Monday, March 27, 2023.
It was observed that customers who approach banks for FX have been finding it difficult to get allocation because of a shortage in supply.
Also, withdrawing forex from domiciliary accounts has been cumbersome for many customers as banks are unable to honour their requests, and when asked to transfer to another domiciliary account, this is only honoured if the receiver operates such an account with the same bank.
“I went to withdraw from my domiciliary account last week, but I was told it was impossible because there was no cash available. When I requested to have the funds transferred to a forex trader, who uses another bank, I was informed it would not be possible except I get someone who operates a domiciliary account with my bank,” a customer of one of the tier-1 banks, who identified himself as Mr Kingsley Oche, told this reporter.
Similarly, commercial banks in the country have blocked the transfer of funds into cards from foreign payment platforms like PayPal.
Before now, Nigerians doing remote jobs get payments via PayPal and transfer their funds through prepaid and debit cards of Nigerian banks, but most of them have been unable to get their funds since December 2022 because of the FX crisis in the country.
“I am already frustrated by this forex issue in the country,” Mr Goke Akinsanya told this newspaper, noting that this situation has left him without much to spend.
Also, those who receive funds from International Money Transfer Operators (IMTOs) like Western Union have been having a slight challenge getting their money over-the-counter in Nigeria because of the forex scarcity.
However, there are indications that things might get better when the next administration takes charge of the control of the economy next month.
By Aduragbemi Omiyale
On Tuesday, December 17, 2024, President Bola Tinubu will present the 2025 budget to a joint session of the National Assembly.
The size of the 2025 Appropriation Bill is about N47.9 trillion and would be presented to the parliament for approval.
Speaking at the plenary on Thursday, December 12, 2024, the President of the Senate, Mr Godswill Akpabio, said the presentation by Mr Tinubu would be at the chamber of the House of Representatives.
However, it is not certain if the lawmakers will pass the budget before December 31 to allow for a recent budget cycle of January to December.
Recall that on December 3, the senate approved the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) for 2025 to 2027.
This was after the President presented this the National Assembly on November 19 ahead of the consideration of the 2025 budget proposal.
In the MTEF/FSP, the government said it planned to borrow about N9.22 trillion from local and foreign sources to finance the budget deficit.
It pegged the crude oil benchmark at $75 per barrel and a daily oil production of 2.06 million barrels at an exchange rate of N1,400 to $1, and a targeted gross domestic product (GDP) growth rate of 6.4 percent.
At the plenary today, Mr Akpabio informed his colleagues that, “The President has made his intention known to the National Assembly to present the 2025 budget to the joint session of the National Assembly on December 17, 2024.”
By Adedapo Adesanya
Nigeria added 150,000 barrels per day to its crude production in November 2024 as it continues to pursue an ambitious 2 million barrels per day target.
According to the Organisation of the Petroleum Exporting Countries (OPEC), Nigeria’s oil production rose to 1.48 million barrels per day in November, up from 1.33 million barrels per day the previous month.
In its Monthly Oil Market Report (MOMR), OPEC revealed that at 1.48 million barrels per day, it is the continent’s leading oil producer, surpassing Algeria’s 908,000 barrels per day and Congo’s 268,000 barrels per day.
Business Post reports that OPEC doesn’t account for condensates, which Nigeria’s accounts for in its broader 2 million barrels per day target.
Despite the surge in production levels, Nigeria is still under producing its 1.5 million barrels per day output quota under a deal involving OPEC and 10 other producers known as OPEC+.
OPEC said it relied on primary data gotten through direct communication, noting that secondary sources reported 1.417 million barrels per day as Nigeria’s crude production in November — up from 1.4 million barrels per day in October.
The data also shows that OPEC’s total oil production among its 12 members rose by 104,000 barrels per day in the month under review.
According to secondary sources, the total of the 12 OPEC countries’ crude oil production averaged 26.66 million barrels per day in November 2024.
“Crude oil output increased mainly in Libya, Iran, and Nigeria, while production in Iraq, Venezuela, and Kuwait decreased”, OPEC said.
“At the same time, total non-OPEC DoC crude oil production averaged 14.01 mb/d in November 2024, which is 219 tb/d higher, m-o-m. Crude oil output increased mainly in Kazakhstan and Malaysia,” the organisation added.
In a related development, OPEC trimmed its 2024 and 2025 oil demand growth forecasts for the fifth time this year.
Now, the cartel expects the world’s oil demand growth at 1.61 million barrels per day from the previously 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, a 900,000 barrels per day cut from the previously expected 1.54 million barrels per day.
On the changes, OPEC says that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
By Adedapo Adesanya
The duo of Afriland Properties Plc and Geo-Fluids Plc crashed the NASD Over-the-Counter (OTC) Securities Exchange by a marginal 0.06 per cent on Wednesday, December 11 due to profit-taking activities.
The OTC securities exchange experienced a downfall at midweek despite UBN Property Plc posting a price appreciation of 17 Kobo to close at N1.96 per share, in contrast to Tuesday’s closing price of N1.79.
Business Post reports that Afriland Properties Plc slid by N1.14 to finish at N15.80 per unit versus the preceding day’s N16.94 per unit, and Geo-Fluids Plc declined by 1 Kobo to trade at N3.92 per share compared with the N3.93 it ended a day earlier.
At the close of transactions, the market capitalisation of the bourse, which measures the total value of securities on the platform, shrank by N650 million to finish at N1.055 trillion compared with the previous day’s N1.056 trillion and the NASD Unlisted Security Index (NSI) went down by 1.86 points to wrap the session at 3,012.50 points compared with 3,014.36 points recorded in the previous session.
The alternative stock market was busy yesterday as the volume of securities traded by investors soared by 146.9 per cent to 5.9 million units from 2.4 million units, as the value of shares transacted by the market participants jumped by 360.9 per cent to N22.5 million from N4.9 million, and the number of deals increased by 50 per cent to 21 deals from 14 deals.
When the bourse closed for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, followed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc 297.5 million units sold for N5.3 million.
Also, Aradel Holdings Plc, which is now listed on the Nigerian Exchange (NGX) Limited after its exit from NASD, remained the most active stock by value (year-to-date) with 108.7 million units sold for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 billion.
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