Business

Forex Scarcity Sends Naira Tumbling Unprecedentedly

Published

2 years ago

September 14, 2023

There are indications that exchange rate crises that trailed the foreign exchange market reforms in June 2023 may linger further as supply gap led to further depreciation of Naira in the parallel market yesterday to N930/ $1, down from N925 mid last week.

However, the exchange rate improved week-on-week in the Investors and Exporters (I&E) window to N758.1 from N775.6.

The prevailing exchange rates indicates a rising parallel market premium which is the gap between the parallel market rate and that of the I&E window.

The gap, as at last week Wednesday, was N153.41 per dollar, but has risen to N171.9 per dollar by yesterday, a development which has created a huge incentive for round-tripping and arbitraging in the foreign exchange market ecosystem.

Moreover, market observers have also noted that the Bureau de Changes, BDCs, have not helped the market as envisaged a month ago when the segment was re-admitted into the Central Bank Of Nigeria, CBN, official trading window for the purpose of opening the market to more independent forex supply and better access for individual retail end users.

The BDCs have, instead, lamented that the renewed depreciation of the local currency was mainly due to the scarcity of the foreign currencies.

A BDC operator told Vanguard that the scarcity is so much that ‘‘even some Nigerians are unable to withdraw forex from their domiciliary accounts in banks”.

He said the lifting of the ban by the CBN on sales of forex to BDC operators has failed to help resolve the scarcity as the banks are not selling to the BDCs.

Data from FMDQ showed that the market opened at N761.24 to the dollar, recording a high of N807.15 and a low of N738.

A total of $42.26 million was traded in foreign exchange at the I&E window.

On Tuesday, CBN said a review of the change in the forex regime showed that banks are in a position to profit from its potential to significantly increase the naira value of banks’ foreign currency (FCY) assets and liabilities.

The apex bank directed deposit money banks, DMBs, to stop utilising gains from the revaluation of the naira to pay dividends or finance operations.

Some financial market analysts

CBN should reduce BDCs through mergers, acquisition—Prof Uwalake

Commenting on the renewed depreciation of the naira even with the lifting of ban on sale of forex to BDCs, Prof Uche Uwaleke, President. Association of Capital Market Academics of Nigeria, ACMAN said: “Recall that the ban was placed in the first place due to the abuses associated with the selling of Forex to BDCs due to their large and unmanageable number.

‘‘If the CBN has established a need to resume such sales, then it should first trim the over 5000 BDCs to a controllable number of less than 1000 through a regulatory-induced merger and acquisition.

‘‘It is only then that the CBN can be in a position to effectively supervise the BDCs else the CBN ends up going round in circles.”

Allocation of forex to BDCs may not address scarcity- Adonri

Also commenting, David Adonri, analyst and Executive Vice Chairman at Highcap Securities Limited, said: “Since BDCs are authorized retail dealers licensed by CBN, sale of forex to them is in order.

‘‘However, CBN should endeavor to sell to all its authorized buyers at the prevailing open market price in order to avoid rent seeking abuses. This U-turn may not address scarcity but provide a level playing field for participants in the foreign exchange market.”

I doubt there will be any improvement Chiazor

Another financial expert, Victor Chiazor, Head of Research and Investment at FSL Securities Limited, said: “The CBN’s decision to lift the ban on sale of Forex to BDCs would have aided liquidity in the FX market if the CBN actually had enough FX in its vaults.

‘‘But I doubt there will be any change to the current pressure on the Naira.

“The case today is that our FX reserves which is at around $33 billion while the net liquid position is far lower, which means that in real terms the CBN does not have the required FX liquidity to meet the current FX demand, not also forgetting the existing backlog of FX payments owed to businesses.”
VANGUARD

Business

Fuel Scarcity Imminent As NUPENG, Dangote Face-off Festers Business

Published

1 day ago

September 5, 2025

Editor

The stability in the distribution and availability of petroleum products being enjoyed by Nigerians is about to be aborted as a result of the seeming cold war between the management of the Dangote Refinery and one of the umbrella unions of workers in the oil industry, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG).

NUPENG, in a statement jointly signed by Comrades Williams Akporeha and Afolabi Olawale, President and General Secretary, respectively of NUPENG and issued to newsmen in Abuja on Friday, the Union accused the management of Dangote Refinery of alleged anti-labour practices, inimical to the survival and means of livelihoods of its members under its Petroleum and Tanker Drivers Branch.

The Union specifically expressed strong reservations about the position of Chairman of Dangote Refinery, Aliko Dangote, that drivers recruited for operations of its 10,000 Compressed Natural Gas (CNG) Trucks imported into the country would not be allowed to join any trade union.

The Union described the position taken by the management of Dangote Refinery as an affront on the right of association, guaranteed under the 1999 Constitution, and a breach of relevant international labour laws to which Nigeria is a signatory.

The NUPENG recalled several meetings it initiated, jointly with the leadership of the Nigerian Association of Road Transport Owners ( NARTO), to prevail on Aliko Dangote to rescind his stance not to allow its drivers to join trade unions. The Union expressed regret that its appeals fell on deaf ears.

“Arising from the unfortunate outcome of the meeting, the leadership of the Union has made several efforts to get relevant institutions of the country to make Alhaji Aliko Dangote and his cousin, Alhaji Sayyu Ali Dantata, follow the line of global best practices and decency, but all to no avail.

“To our utmost shock, Alhaji Sayyu Aliu Dantata’s MRS commenced the recruitment of drivers for the imported CNG Trucks on Friday, 29th August 2025. “The drivers being recruited are being forced to sign an undertaking not to belong to any existing union in the Oil and Gas Industry.

“NUPENG is seriously concerned and disturbed with the unconscionable business practices of Alhaji Sayyu Aliu Dantata and Alhaji Aliko Dangote, who are scared of allowing unions to exist in their business outfits. To us, amassing wealth on the basis of enslavement, depriving workers of a union and a voice, amounts to creating filthy wealth.

“NUPENG will not stand idly by while these billionaires seek to destroy the livelihoods of thousands of workers, including tanker drivers.

“NUPENG stood in solidarity with Dangote Refinery during its construction and commissioning.

“We did so in good faith, in expectation that it would create jobs, strengthen local capacity, and benefit the Nigerian people, under a conducive atmosphere for unions to thrive.

“Unfortunately, Alhaji Aliko Dangote has chosen to betray that trust by scheming to monopolise distribution, crush competition, and enslave the sector and raise prices, which would ultimately result in an attack on the living standards of the masses of ordinary Nigerians.

“This is not philanthropy, it is economic sabotage!”
While appealing to relevant oil industry regulatory agencies to wade into the unfolding crisis, the Union dropped the hint that it would call on its members to down tools and shun loading of petroleum products, effective from Monday, September 8.

“We call on the Nigerian Midstream & Downstream Petroleum Authority (the Authority, for
short) to invoke its powers under Section 32(u) & (aa) of the Petroleum Industry Act (PIA). Under those two provisions, the Authority is empowered to promote competition and private sector participation in the midstream and downstream petroleum operations.

“The Authority has responsibility to identify, investigate, and prevent abuse of dominant positions and
restrictive business practices with regard to midstream and downstream petroleum operations.

“Nigeria is a member of the international community and a member state of the International Labour Organisation. Nigeria has ratified Convention No. 87 of 1948, the Convention on Freedom of Association and Protection of the Right to Organise, 1948. This Convention had
been ratified by Nigeria as far back as 17th October 1960. Under the Convention, workers have the right to join unions of their choice, for the protection of their employment and trade union rights, and without prior authorization of any employer or authority.

“Indeed, by virtue of section 254C (2) of the Constitution of Nigeria, a ratified ILO Convention is a constitutional provision.

“Therefore, any practice or policy by any employer that seeks to deprive workers of the right of association is an affront to the Constitution.

“Above all, the rights of association, including membership of trade unions, are guaranteed by Section 40 of the Constitution. Alhaji Aliko Dangote and his cousin, Alhaji Sayyu Aliu Dantata, should not be allowed to enslave Nigerian workers. They should be made to be lawful business persons and not lawless individuals or business outfits. Nigeria is a country of laws, not a lawless society.

“By this statement, we call on the Federal Government of Nigeria and its agencies, including well-meaning segments of the Nigerian society, to call the two trillionaire businessmen to order. They should be told to obey the laws of Nigeria. If they persist in their anti-union, tyrannical attitudes, NUPENG is set and ready to mobilise its forces to fight within the framework of the law.

“Meanwhile, since Alh Aliko Dangote and his cousin have resolved to replace all Petroleum Tanker Drivers in Nigeria, and no one or institution can stop them, the members of the Petroleum Tanker Drivers Branch of NUPENG will, from Monday, 8th September 2025, start
looking for alternative employment/skills and sources of livelihoods.

“We plead with the general public to bear any inconveniences our struggle against this tyranny and indecency may cause.“
(TRIBUNE)

Business

FG Offers Up To 16.54% Yield On September Savings Bonds

Published

5 days ago

September 1, 2025

Editor

The Federal Government, through the Debt Management Office, is offering investors annual yields of up to 16.541% on its September 2025 Federal Government of Nigeria Savings Bonds.

The DMO, in a circular on its website on Monday, announced that the subscription window opens immediately and will close on Friday, September 5, 2025, with settlement scheduled for September 10, 2025.

Coupon payments will be made quarterly on March 10, June 10, September 10, and December 10 and will be paid directly to investors.

The DMO offered investors two subscription categories of the Federal Government Savings Bond.

The first is a two-year bond, which will mature on September 10, 2027, and attracts an annual interest rate of 15.541 per cent.

The second is a three-year bond, set to mature on September 10, 2028, with a higher annual interest rate of 16.541 per cent.

The two-year bond interest rate rose to 15.541% in September 2025, up from 14.401% in August.

Similarly, the three-year bond recorded an increase to 16.541% in September, compared to 15.401% in the previous month.

The FGN Savings Bond programme, launched in 2017, aims to deepen the domestic bond market, promote financial inclusion, and give retail investors access to secure, low-risk government securities.

Each bond unit is priced at ₦1,000, with a minimum subscription of ₦5,000 and additional subscriptions in multiples of ₦1,000. Individual investors can subscribe up to ₦50 million.

On the status of FGN Savings Bonds, DMO noted it “qualifies as securities in which trustees can invest under the Trustee Investment Act; Qualifies as Government securities within the meaning of Company Income Tax Act (“CITA”) and Personal Income Tax Act (“PITA”) for Tax Exemption for Pension Funds, amongst other investors.

“Listed on The Nigerian Exchange Limited (and); qualifies as a liquid asset for liquidity ratio calculation for banks.”

The office said the bond is “backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.”

Business

NNPCL Reduces Fuel Price After Dangote Refinery’s Adjustment

Published

3 weeks ago

August 14, 2025

Editor

The Nigerian National Petroleum Company Limited has reduced its premium motor spirit pump price on Thursday, according to DAILY POST.

It was confirmed that NNPCL retail outlets in the Federal Capital Territory, Abuja, have reduced their pump price to N890 per litre from N945.

This new fuel price has been reflected in NNPCL retail outlets such as mega station Danziyal Plaza, Central Area, Wuse Zone 4, Wuse Zone 6, and other of its filling stations in the nation’s capital.

The latest downward review of fuel price in NNPCL outlets represents an N55 reduction in fuel pump price.

“It was reduced to N890 per litre this afternoon, down from N945,” an NNPCL fuel attendant told DAILY POST anonymously on Thursday.

This comes a Nigerian filling station, MRS Empire Energy, on Thursday adjusted their fuel pump price to N885 and N946 per litre, down from N910 and N955 per litre.

The latest fuel price reduction trend is unconnected to Dangote Refinery’s ex-depot petrol price adjustment by N30 to N820 per litre from N850 and the price of crude oil in the international market.