Nigeria’s external reserves diminished by 2.8 per cent in one month to $23.948 billion as at October 27, 2016, compared with the $24.615 billion it was as at September 27, 2016.
The latest external reserves position released by the Central Bank of Nigeria (CBN) showed that the reserves derived mostly from the proceeds of crude oil sales fell by $667 million in the last one month, as the country’s earnings continued to shrink.
From N510.270 billion shared by the three tiers of government for August allocations, the sum of N420 billion was approved for sharing at the Federation Account Allocation Committee (FAAC) meeting in Abuja recently, indicating a decline of N90.2 billion.
The Permanent Secretary, Federal Ministry of Finance, Dr. Mahmoud Isa-Dutse had stated that there was a decrease of oil for export in the month of June by 1.15 million barrels due to attacks on oil assets.
President Muhammadu Buhari last week wrote the National Assembly seeking approval to borrow $29.96 billion under the External Borrowing (Rolling) Plan to address the infrastructure deficit in the health, education, water resources and other sectors.
The president’s letter, which was read at plenary by the Speaker of the House of Representatives, Yakubu Dogara, indicated that the $29.96 billion would be for proposed projects and programmes loan of $11.274 billion, $10.686 billion for special national infrastructure projects, Eurobonds of $4.5 billion, and federal government budget support of $3.5 billion.
The naira closed flat at 470 against the United States dollar on Monday, the same level it recorded on Friday.
The naira had plunged to 470 on Wednesday, down from 455 on Tuesday as fresh dollar shortage hit the official and parallel forex markets.
The local currency, which had been relatively stable against the greenback, fell last week as fresh scarcity hit the forex markets.
Travelex and First Bank of Nigeria Limited commenced sale of foreign exchange to Bureau De Change operators some weeks ago following the approval by the Central Bank of Nigeria.
Forex traders, however, said last week that the scheme had failed to ease the biting dollar shortage in the country.
“What we get from Travelex is not sufficient,” one trader told Reuters, referring to demand in the market.
At the official market, the naira closed at 305.50 per dollar, a level it had closed for more than two months, supported by the CBN interventions.
The President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, told our correspondent on Monday that the sale of dollars to the BDC operators had yet to get across the country.
This, he said, was partly responsible for the fresh dollar scarcity.
“There are still logistics problems in selling forex to all the BDC operators. This is what is causing this relative scarcity,” he said.
Earlier, the CBN asked the International Money Transfer Operators to sell dollars directly to the BDC operators to boost liquidity and narrow the gulf between the parallel market and the official market rates.
Travelex sells around $15,000 to 1,000 retail currency outlets weekly, but the amount is a fraction of what is required to cover demand from individuals and small businesses.
Dollar shortages have caused many companies to halt operations and lay off workers, compounding an economic crisis exacerbated by the fall in global prices of oil, which accounts for 70 per cent of Nigeria’s budget revenue.
The CBN has struggled to support the naira as the nation’s external reserves continue to fall.
Traders said the naira had been testing new lows as they tried to find thresholds where liquidity could begin to return.
Oando Plc monday announced a growth of 26 per cent in revenue to N330 billion for the nine months ended September 30, 2016, from N262 billion in the corresponding period of 2015. However, the company ended the period with a loss of N35.886 billion, which is lower than the loss of N47.631 billion in the corresponding period of 2015.
Commenting on the results, Group Chief Executive, Oando Plc, Mr. Wale Tinubu, said: “The third quarter witnessed the Federal Government of Nigeria establish a ceasefire with the militants responsible for production disruptions in the Niger Delta, leading to stabilised daily productions from our assets and expectations of imminent increases to our 2015 production highs of 56kbbls/day. We have also been proactive in our cost management initiative to ensure maximised value extraction for every barrel of oil produced as the global oil price still lingers below $50/bbl. We are pleased to have executed a sales and purchase agreement (SPA) with Helios Investment partners for $116 million, representing 49 per cent legal voting rights in the company’s midstream business, of which the proceeds of the divestment will be utilised towards the company’s debt restructuring initiative. Our trading business has grown significantly this year having exported over 11 cargoes of crude with volumes exceeding 11mmbbls and an additional 31 cargoes of other oil based products year to date.
Market analysts have said that the slump in global oil prices continues to have far-reaching implications on indigenous companies such as Oando. In Nigeria, oil companies are faced with an even more challenging environment including; production disruptions by militant activities in the Niger Delta. Oando witnessed a 22.7 per cent decrease in oil production from 53,169 boe/day in Q3, 2015 to 41,094 boe/day in Q3, 2016. Seplat Nigeria recorded a N24.1 billion loss in Q3, 2016 while Exxon Mobil reported a 38 per cent drop in quarterly profit and a three per cent fall in production as a result of production disruption by militants in the Niger Delta.
