Wednesday, September 21, 2016
Video - Nigeria's Central bank retains benchmark interest rate at 14%
Nigeria's central bank kept its benchmark interest rate at 14 percent on Tuesday, resisting the finance minister's call to lower borrowing costs. Policymakers urged the government to spend more to drag Africa's top economy out of recession. The West African nation is going through its first recession in more than 20 years, brought on by low oil prices, and inflation accelerated to an 11-year high of 17.6 percent in August. The naira has traded at a record low of 425 to the dollar on the parallel market since last week.Finance Minister Kemi Adeosun said on Monday that the central bank should lower interest rates so that the government can borrow domestically to boost the economy.
Video - Fulani herdsmen and farmers in Nigeria fighting over resources
Decades of fierce competition for natural resources has left thousands dead, property damaged and villages desolate in Nigeria's Benue state. Fulani herdsmen are fighting with farmers in another row over scarce resources. Both sides have repeatedly fought over farmland, access to grazing areas and water.
Video - Nigeria drops from fourth to seventh largest cocoa producer
Nigeria's Cocoa Association has confirmed that the country has dropped to the world's seventh top producer of the crop. This is after its projected output for the 2015-2016 season was lowered to 190,000 metric tons. The International Cocoa Organization had previously ranked Nigeria as the world's fourth biggest cocoa producer. The downgrade was attributed to the exchange rate policy, the lack of reliable data and low synergy between the public and private sectors. The ICCO had initially projected Nigeria would produce 270,000 metric tons of cocoa in the current season.
Nigeria must consider selling oil assets - Saraki
Nigeria must consider selling stakes in joint ventures with oil majors and other assets as talks to borrow abroad have not succeeded yet and would in any case not generate enough funds to stimulate economic recovery, the leader of the Senate said.
Senate President Bukola Saraki, the third most powerful official in Africa's biggest economy, also said the oil producer might struggle with recession for up to nine months or even longer unless it got serious about attracting investors.
The government said this month it had approved loans from China, the World Bank, Japan and the African Development Bank, but Saraki, whose relations with the president have cooled since last year, said such talks were still ongoing with no deals yet.
"There is a big hole now in the fiscal deficit because that funding is not coming through. So we've got to look for alternative ways to fund that," Saraki said in a joint interview with the Financial Times on Monday when asked about the loans.
The government has said it plans to borrow as much as $10 billion, with half of that coming from foreign sources, including a planned $1 billion Eurobond issue, to fund a budget deficit of 2.2 trillion naira ($7.21 billion) and boost an economy hammered by low oil prices and hard currency shortages.
Saraki said that even if the loan talks succeeded, the amount raised would not be enough to plug the hole in public finances. "My take is that even if it does come through, it's money too little, too late," he said, referring to the loan talks.
He said Nigeria needed to sell stakes in oil and gas joint ventures, oil exploration contracts and refineries to raise funds. "In my view, I really can't see any other pathway to recovery. We need investors, we need to raise capital."
Such an asset sale would be necessary even if global crude prices recovered to $70 a barrel and Nigeria managed to restore oil production to 2 million barrels per day (bpd) with an end to militant attacks in the Niger Delta oil hub, Saraki said. Officials say the attacks have reduced output by 700,000 bpd.
Saraki said Nigeria could overcome recession in six to nine months if swift action was taken -- a more downcast view than that of the government, which has forecast a quick recovery.
Central bank governor Godwin Emefiele was due to hold a news conference at around 1315 GMT (09:15 a.m. EDT) after a meeting of the rate-setting Monetary Policy Committee. The finance minister said on Monday the central bank should lower interest rates so that the government can borrow domestically to boost the economy.
Economists polled by Reuters last week predicted that the central bank would keep its key interest rate at 14 percent and reiterate its focus on resuscitating growth.
The government has said it is considering asset sales, but has given no details.
"If we do things right, the confidence will come in," Saraki said. "If we carry on waiting for government revenues to go up, if we don't do anything seen as thinking out of the box" the recession could drag on longer.
Nigeria's 2016 budget was the largest in the nation's history, but the oil price drop and Delta attacks have left the government scrambling for funds.
Saraki is from the same ruling All Progressives Congress (APC) as President Muhammadu Buhari, who was elected in March 2015 on a promise to end graft and mismanagement in the West African nation.
But relations between the two have been strained since Saraki ran unopposed for the position of Senate president last year, mainly with the backing of the opposition. He was not the APC's preferred candidate.
(1 = 305.0000 naira)
Senate President Bukola Saraki, the third most powerful official in Africa's biggest economy, also said the oil producer might struggle with recession for up to nine months or even longer unless it got serious about attracting investors.
The government said this month it had approved loans from China, the World Bank, Japan and the African Development Bank, but Saraki, whose relations with the president have cooled since last year, said such talks were still ongoing with no deals yet.
"There is a big hole now in the fiscal deficit because that funding is not coming through. So we've got to look for alternative ways to fund that," Saraki said in a joint interview with the Financial Times on Monday when asked about the loans.
The government has said it plans to borrow as much as $10 billion, with half of that coming from foreign sources, including a planned $1 billion Eurobond issue, to fund a budget deficit of 2.2 trillion naira ($7.21 billion) and boost an economy hammered by low oil prices and hard currency shortages.
Saraki said that even if the loan talks succeeded, the amount raised would not be enough to plug the hole in public finances. "My take is that even if it does come through, it's money too little, too late," he said, referring to the loan talks.
He said Nigeria needed to sell stakes in oil and gas joint ventures, oil exploration contracts and refineries to raise funds. "In my view, I really can't see any other pathway to recovery. We need investors, we need to raise capital."
Such an asset sale would be necessary even if global crude prices recovered to $70 a barrel and Nigeria managed to restore oil production to 2 million barrels per day (bpd) with an end to militant attacks in the Niger Delta oil hub, Saraki said. Officials say the attacks have reduced output by 700,000 bpd.
Saraki said Nigeria could overcome recession in six to nine months if swift action was taken -- a more downcast view than that of the government, which has forecast a quick recovery.
Central bank governor Godwin Emefiele was due to hold a news conference at around 1315 GMT (09:15 a.m. EDT) after a meeting of the rate-setting Monetary Policy Committee. The finance minister said on Monday the central bank should lower interest rates so that the government can borrow domestically to boost the economy.
Economists polled by Reuters last week predicted that the central bank would keep its key interest rate at 14 percent and reiterate its focus on resuscitating growth.
The government has said it is considering asset sales, but has given no details.
"If we do things right, the confidence will come in," Saraki said. "If we carry on waiting for government revenues to go up, if we don't do anything seen as thinking out of the box" the recession could drag on longer.
Nigeria's 2016 budget was the largest in the nation's history, but the oil price drop and Delta attacks have left the government scrambling for funds.
Saraki is from the same ruling All Progressives Congress (APC) as President Muhammadu Buhari, who was elected in March 2015 on a promise to end graft and mismanagement in the West African nation.
But relations between the two have been strained since Saraki ran unopposed for the position of Senate president last year, mainly with the backing of the opposition. He was not the APC's preferred candidate.
(1 = 305.0000 naira)
Boko Haram claimed to have killed 40 troops in Nigeria
Nigeria's army claimed victory Wednesday in "a fierce battle" in a remote desert trading post where Islamic extremists said they killed 40 troops from a multinational force.
Army spokesman Col. Sani Kukasheka Usman said troops recaptured Malam Fatori town on Tuesday and killed several extremists, but the insurgents regrouped at the nearby border with Niger.
The Islamic State's West Africa Province, one faction of the Boko Haram extremist group, hours earlier claimed it had annihilated "a convoy of the African Coalition Crusader forces" at Malam Fatori, killing more than 40 soldiers and wounding dozens, according to the SITE Intelligence Group, which monitors extremist communiques.
There was no way to independently verify either side's claim.
Tuesday's battle was the first Nigeria attack claimed by the Islamic State group since August, when it named a new caliph in Nigeria, provoking a leadership struggle. Leader Abubakar Shekau pledged Boko Haram's allegiance to IS in 2015, giving the Islamic State its first sub-Saharan franchise. But IS last month announced it had replaced Shekau in a dispute around his indiscriminate killings of Muslims.
The town of Malam Fatori has changed hands many times in the seven-year Boko Haram uprising that has killed more than 20,000. Many residents fled to Niger in 2014 after soldiers in a punitive raid burned down hundreds of huts because a wounded extremist was given refuge there.
Tuesday's was the fourth insurgent attack in northeast Nigeria in three days.
Eighteen people were killed Sunday and Monday when extremists gunned down Christians leaving a church service, beheaded a village head and his son and ambushed a convoy within miles of Maiduguri, the biggest city in the northeast.
No one has claimed responsibility for those attacks.
Army spokesman Col. Sani Kukasheka Usman said troops recaptured Malam Fatori town on Tuesday and killed several extremists, but the insurgents regrouped at the nearby border with Niger.
The Islamic State's West Africa Province, one faction of the Boko Haram extremist group, hours earlier claimed it had annihilated "a convoy of the African Coalition Crusader forces" at Malam Fatori, killing more than 40 soldiers and wounding dozens, according to the SITE Intelligence Group, which monitors extremist communiques.
There was no way to independently verify either side's claim.
Tuesday's battle was the first Nigeria attack claimed by the Islamic State group since August, when it named a new caliph in Nigeria, provoking a leadership struggle. Leader Abubakar Shekau pledged Boko Haram's allegiance to IS in 2015, giving the Islamic State its first sub-Saharan franchise. But IS last month announced it had replaced Shekau in a dispute around his indiscriminate killings of Muslims.
The town of Malam Fatori has changed hands many times in the seven-year Boko Haram uprising that has killed more than 20,000. Many residents fled to Niger in 2014 after soldiers in a punitive raid burned down hundreds of huts because a wounded extremist was given refuge there.
Tuesday's was the fourth insurgent attack in northeast Nigeria in three days.
Eighteen people were killed Sunday and Monday when extremists gunned down Christians leaving a church service, beheaded a village head and his son and ambushed a convoy within miles of Maiduguri, the biggest city in the northeast.
No one has claimed responsibility for those attacks.
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