Zamfara goes ‘unconventional’ in its fight against insecurity
The Governor of Zamfara state, Bello Matawalle, has approved that local communities and local governments employ measures to defend themselves against the rising banditry in the state.
The governor disclosed this on Friday, in a statement marking his two years in office as governor.
Matawalle revealed that the state had tried multiple conventional approaches towards dealing with insecurity in the past, so governors in the region had collectively agreed to engage the services of locals to complement security operatives in the fight against banditry and other criminal activities in the zone.
He added that Zamfara “would collaborate with security agencies and traditional leaders to ensure that credible persons were recruited from the communities.”
FIRS launches online portal to check fake tax certificates
The Federal Inland Revenue Service (FIRS) has announced the launch of an online portal to address the issue of fake Tax Clearance Certificates (TCC).
This was disclosed in a statement by Abdullahi Ahmad, director, Communications and Liaison Department of FIRS, in Abuja on Friday.
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The FIRS director added that the launch of the portal was to fight the activities of fraudsters who made fake TCCs for Nigerian businesses.
He explained that they had unveiled a state-of-the-art and user-friendly online portal that detected any TCC not duly issued by the FIRS.
Quoting the FIRS executive chairman, Muhammad Nami, he said, “We are not unmindful of the activities of fraudsters who specialise in producing and selling fake TCCs to tax evaders.
The FIRS has now gone ahead of them as it has launched an online portal through which ministries, departments and agencies, corporates and individuals could confirm the genuineness of TCCs issued to them.
NCC set to roll out the new cost-based international termination rate
The Nigerian Communications Commission (NCC) has concluded plans to roll out a new Mobile International Termination Rate (ITR).
This follows the finalisation of the process for determining the cost-based price of ITR to ensure healthy competition on traffic handling for voice services between local and international operators in Nigeria.
International Termination Rate is the rate paid to local operators by international operators to terminate calls in Nigeria as contrasted with MTR, which is the rate local operators pay to another local operator to terminate calls within the country.
According to a press statement signed by NCC’s director, Public Affairs, Ikechukwu Adinde, on June 10, 2021, this was made known at the final stakeholders’ forum for the presentation of the study on cost-based pricing of mobile ITR, undertaken by Messrs Payday Advance and Support Services Limited, held at the Commission’s Head Office in Abuja on Tuesday, June 8, 2021, with Management of NCC and critical Industry stakeholders physically and virtually participating.
Danbatta said, “The overriding need for regulatory options and intervention in relation to the international termination rate in the voice market segment is predicated on some intractable challenges, most common with economies with severe macroeconomic volatility such as ours.”
NBS economic data release calendar for the week ahead
The NBS release calendar for the coming week indicates the following:
- Monday 14th June 2021: Sectoral Distribution of Value Added Tax (Q1 2021)
- Tuesday 15th June 2021: CPI and Inflation Report May 2021
- Wednesday 16th June 2021: National Household Kerosene Price Watch May 2020 & Premium Motor Spirit (PETROL) Price Watch May 2021.
- Thursday 17th June 2021: Automotive Gas oil (DIESEL) Price Watch May 2021, Liquefied Petroleum Gas (COOKING GAS) Price Watch May 2021 & Selected Food Prices May 2021.
- Friday 18th June 2021: Federation Account Allocation Committee (FAAC) May 2021 Disbursement & Transport Fare Watch May 2021.
Oil prices boost on recovery expectations in fuel demand
U.S. investment bank, Goldman Sachs, on Thursday, projected that Brent crude prices could reach $80 per barrel this summer, betting on the recent oil market rally which may continue as vaccination rollouts boost global economic activity and demand for the commodity.
Oil prices rose on Friday to fresh multi-year highs heading for their third weekly jump on expectations of a recovery in fuel demand in the United States, Europe, and China as rising vaccination rates lead to an easing of pandemic curbs.
The International Energy Agency, on Friday said that the world would need a lot more oil from OPEC+ as global demand returns to pre-pandemic levels. This projection targets the end of 2022. Brent had a weekly growth of 1.12%
Outlook
In the coming week, oil prices are expected to rise on expectations of a recovery in fuel demand in the United States, Europe, and China as rising vaccination rates lead to an easing of pandemic curbs.
Gold and Bitcoin take a bow
The yellow metal posted a significant amount of losses at the end of Friday’s trading sessions, breaking below $1,890 per ounce with the strength in the greenback dulling investment demand for gold. Gold eased by -0.22% while Silver grew by 1.40% W-o-W
Although expectations still remain that the United States apex bank might stick to its previous narrative, recent gains seen in the U.S Jobs report and a red-hot inflation rate might increase the risk of the U.S Federal reserve becoming less dovish.
Additionally, the crypto market also suffered immense selling pressure with the rising value in the U.S dollar stalling Bitcoin’s decent recovery in the past few days. This, coupled with increased regulatory fears, pushed the pioneer crypto-asset around the $35,000 price levels.
Outlook
Gold prices are expected to be mixed in the coming week, pressured by the dollar and bond yields.
Currency market outlook
The currency market continued its bearish trend last week at the BDC window majorly driven by panic buyers, although the Naira rebounded marginally against the dollar towards the end of the week, however not to the previous week’s value.
It depreciated against the US dollar, British Pound and Euro by -0.65%, -1.84% and -0.50% respectively closing at $1/N498, £1/N718 and €1/N608 at the BDC window.
At the I & E FX window, the Naira appreciated marginally week-on-week by +0.01% and +0.02% at the NAFEX window. The Naira closed the week at $/N410.80 at the I&E FX window, at the NAFEX (spot market) it closed at $/N409.92.
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Outlook
More of the same is expected in the week ahead as the Naira is anticipated to continue to hover around N406/$1-N412/$1 threshold in the NAFEX window.
Money market outlook
Funding rates are expected to trend in double digits in the coming week.
Financial system liquidity opened the previous week at N117.62 billion, consequently pushing funding rates lower at the start of the week.
At the close of the trading session last week, funding rates rose significantly. Open Buyback (OBB) closed at 22.33% while Overnight (O/N) rates closed at 22.93% indicating a Week-on-Week (W-o-W) increase of +48.87% for OBB and +50.36% for O/N rates.
Treasury bills market outlook
Activity in the treasury bills market is expected to remain subdued this week as system liquidity remains relatively tight.
The Treasury bills market remained quiet at the start of last weeks’ trading session and remained so for most of the trading session last week, however, the market ended on a bearish note.
At the close of the week, the average benchmark yield for T-bills rose by +1.59% to close at 6.36% while OMO bills fell by -3.20% W-o-W to close at 9.64%, CBN’s Special Bill rose by +5.78%.
The CBN sold N179.25 billion worth of notes against N91.27 billion offered at its NTB auction last week.
The offer was over-subscribed. The 91-day, 182-day & 364-day notes were allotted at 2.50%, 3.50%, & 9.64% respectively.
Compared to the previous auction, rates on the 91-day & 182-day were unchanged while the 364-day paper fell slightly by 1bps.
FGN bond and Eurobond market outlook
The bullish momentum in the Bond market eased at the start of last week as offers improved slightly across the board particularly on the mid to long end of the curve which was maintained throughout the week.
At the close of the week, the overall market was bearish with selling interest seen at the short and long end of the curve.
The overall average benchmark yields closed at 9.78% for the week which rose W-o-W by +0.38%.
Ecobank Transnational Incorporated (“ETI”) is seeking to raise US$300 Million from the international debt capital markets through the issuance of Tier 2 qualifying Sustainability Notes under the United States Securities and Exchange Commission Rule 144A and Regulations.
The Eurobond market started the previous week on a relatively quiet note as a deal by the world’s richest nations on global minimum corporate tax overshadowed bets on a full economic reopening.
The average benchmark yield closed at 5.91% at the end of the week rising marginally W-o-W by +1.55%.
Outlook
Market sentiment is expected to remain soft in the near term in the absence of any trigger.
Nigerian capital market
The Nigerian bourse closed the week on a positive note with growth of +1.11%.
The Nigerian Stock Exchange gained N224.24bn thus, year-to-date return moderated to -2.77%, while the market capitalization settled at N20.41 trillion.
The volume and value of stocks traded on the exchange last week grew by +45.22% and +122.84% respectively.
Sectoral performance across sectors tracked was significantly bullish last week as the NSE-IND was the highest gainer for the week with +2.36% while NSE Insurance recorded the highest decline with -4.12%. NSE Oil and Gas, NSE-30, NSE Consumer Goods and NSE Banking closed the week positive with +1.37%, +1.36%, +1.06% and +0.89% respectively.
Market breadth for the week closed negative with 35 gainers led by CUTIX and OKOMUOIL as against 36 losers led by CWG and FTNCOCOA.
Outlook
In the coming week, we expect the possibility of sustained bargain hunting as investors look to take advantage of good bargains; however, press releases from listed companies and other macroeconomic developments are likely to impact investors’ decisions.
In addition, we expect investors to monitor the movement of yields in the fixed income market.
The Nigerian economy in retrospect
The Federal Executive Council has approved the supplementary budget draft of N895bn. The budget which is to be forwarded to the National Assembly for approval allows for N770bn as Defense spending, N83.56 billion on Johnson and Johnson vaccines, and N1.69 billion for the Nigerian Comprehensive AIDS program.
Meanwhile, the National Assembly has promised to expedite the passage of the bill to meet immediate needs.
According to the figures released by the Debt Management Office on Wednesday Nigeria’s debt stock rises by 0.58% in three months as total debt reaches N33.107tn at the end of March 2021.
Ahead of the release of Inflation Data for May, Analysts expect a rise in food inflation on account of worsened Insecurity. Analysts pencil in 18.2% headline inflation for May up from 18.12% in April.
According to NetBlock a British digital company, Nigeria loses over N2 Billion daily due to the Twitter Ban.
The company however did not specify whether this economic loss is from advertising revenue, Twitter marketing and sales of products, traffic generated by Twitter, or reduction in telecommunications operators’ revenue.
The World Bank has on Tuesday raised Nigeria’s GDP growth outlook from the 1.1 % forecast made in January to 1.8 %. The bank made this known in its June 2021 Global Economic Prospects report released.
The bank’s optimism stems from higher global oil prices, structural oil sector reforms, and market-based flexible exchange rate management.
The Multilateral organization also pegged global economic growth at 5.6 % in 2021.
According to the foreign trade statistics, Q1,2021′, released by NBS earlier in the week value of trade increased Q-o-Q by+6.99 % from N 9.07tn to N9.76tn while total trade increased Y-o-Y by +14.13 % from N8.38trn to N9.76trn. The export element of total trade stood at N2.91tn, representing 29.79 % of the total trade while imports were valued at N6.85tn representing 70.21 % of total trade.
By implication, imports exceeded exports and created a trade deficit (in goods) of N3.94tn. The proportion of imports in total trade rose by +15.61 % in Q1, 2021 compared to Q4,2020 and +54.30 % compared to Q1,2020.
Nigeria is set to export energy to Four West African countries namely: Niger, Togo, Benin, and Burkina Faso.
The four countries would be collaborating to buy the power generated but not transmitted within Nigeria, the Chairman of the Executive Board of the West African Power Pool, Sule Abdulaziz made this known on Wednesday.
CBN increased import duty on cargoes imported into the country by N23 after raising the custom exchange rate (which is the official rate for cargo clearance) from N381 to N404.97 per dollar. Analysts are concerned about the inflationary effects that the increase could amount to.
Nigeria and the Netherlands have agreed to collaborate on increase bilateral trade as well as partnerships in dairy development, export promotion, process, and capacity research, and knowledge exchange.
The Dutch ambassador made this known at the Annual ambassador to Nigeria Bilateral Working Group (BWG) Meeting on Trade and Investment on Tuesday in Abuja.
Nigeria’s oil and gas industry together with the industry regulator had its 4th Nigeria International Petroleum Summit (NIPS) in Abuja on the 6-10th June 2021 with the theme- From Crisis to Opportunities: New Approaches to the Future of Hydrocarbons.
The minister of state for Petroleum Resources, Timipre Sylva, disclosed on Monday during his opening address at NIPS that Nigeria will produce four million barrels of crude oil per day and grow its reserves to 40 billion barrels through the marginal oilfields.
The president of the Senate, Ahmed Lawan, on Monday also promised that the National Assembly will pass the Petroleum Industry Bill before the end of June.
Also at the summit, the executive secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote said there is a renewed effort by members of the African Petroleum Producers Association (APPO) to develop regional oil and gas investments fund and renegotiate the COP-21 Climate Change Agreement.
International Oil Companies (IOCs) operating in Nigeria also urged the National Assembly not to relent in its effort to pass the Petroleum Industry Bill before the end of this month.
The Department of Petroleum Resources (DPR) during its session at the summit said Nigeria has recorded an increase in its proven natural gas reserves to 206.53 trillion cubic feet (tcf) as of January 1st, 2021 up from 203.16tcf in January 2020.
