NAIJAFEED

Friday, February 9, 2024

Nigeria to propose naira payment for local gas sale

Nigeria is proposing for gas producers to sell gas to local power plants in naira to solve problems of dollar shortages after a second currency devaluation in less than a year is expected to balloon costs and make it hard for firms to pay.

Nigeria has 24 gas power plants with a combined output capacity of 11,434 megawatts, but it only delivers around a third of its capacity to the grid due to issues with gas supply.

"Proposing domestic gas payment in naira is a key step toward stability, aligning with our economy's needs and promoting sustainable energy production," Power Minister Adebayo Adelabu said in a post on X.

Adelabu added that he plans to create legislative measures that will mandate naira payments for domestic gas supply.

Natural gas is sold in dollars to power plants because investments tied to building gas plants and pipelines are priced and paid for in dollars.

However, local operators have had difficulties making dollar payments since a currency crisis which has seen the naira lose significant value. The currency weakness is expected to force the price of gas in the domestic market sharply higher.

Nigeria has proven gas reserves of 206 trillion cubic feet which it has struggled to tap due to capital constraints. The government hopes it can fix the challenges by switching to naira payments and capping dollar prices.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the local gas regulator, has asked producers to keep gas prices at $2.18 per million British Thermal Units (MMBtu) as per agreement with unions three-years ago.

By Isaac Anyaogu, Reuters

Video - Nigeria caps foreign exchange position for banks

Nigerians taunt South Africans with Tyla's song Water after Afcon victory

A video of Nigerians celebrating their football team's victory over South Africa in the Africa Cup of Nations has gone viral on social media.

In the clip, the Super Eagles fans taunt their rivals by pouring liquid over their bodies while singing the hit Water by South African singer Tyla.

On Sunday, she won Best African Music Performance at the Grammys, beating several Nigerian superstars.

Disappointed Nigerians responded by vowing revenge at the Afcon semi-final.

Nigeria beat South Africa on penalties after the match added 1-1 on Wednesday night, sparking scenes of jubilation around the country.

There is a long history of rivalry between Nigeria, Africa's most populous nation, and South Africa, the continent's most advanced economy.

The viral Water clip - which is being widely shared on WhatsApp across Nigeria - was filmed at Ahmadu Bello University in the northern city of Zaria.

Hundreds of students gathered in the courtyard of their hall of residence to sing Water after the Super Eagles' victory.

Popular Nigerian pastor Jimmy Odukoya joined in the jesting by commending Bafana Bafana for their performance despite their defeat, but telling the South African players: "You need water."

He added: "If it's any consolation, it's Grammy water."

Some Nigerians have expanded the musical rivalry by saying that Afrobeats is superior to amapiano, the South African blend of hip-hop, soul and slowed-down house music that has also gained global popularity in recent years.

And the banter has also taken on a culinary dimension, with Nigerians saying their Jollof Rice is better than South Africa's Bobotie, a spicy mince-meat dish.

Nigeria will face hosts Ivory Coast in the final on Sunday.

Most South Africans are likely to back the Ivorians.

By Mansur Abubakar, BBC

Naira at record low despite improving FX liquidity

Nigeria's naira dropped to a record intra-day low against the dollar on Friday, LSEG data showed, following a devaluation last week, its second adjustment in less than a year, despite the central bank saying liquidity was improving.

Central bank governor Olayemi Cardoso said on Friday that over $1 billion had come into the economy in the last few days to buy Nigerian Treasury bills after it auctioned one trillion naira ($678.60 million) worth of notes that were oversubscribed.

He told lawmakers on Friday that the measures taken by the bank to improve dollar supply have tamed currency volatility. But he added that forex demand had to be moderated for these measures to be sustainable.

The central bank this week hiked open market rates to 19% from under 12% to draw investors to bills which had lost their shine to equities as inflation climbed to a nearly three-decade high and lagged behind the benchmark policy rate of 18.75%.

It also scrapped caps on interbank forex spreads.

"These measures, aimed at ensuring a more market-oriented mechanism for exchange rate determination, will boost foreign exchange inflows, stabilize the exchange rate, and minimize its pass-through to domestic inflation," he said.

Africa's largest economy has been experiencing a crippling dollar shortage that has pushed its currency to record lows in recent weeks, though Cardoso has said that dollar liquidity was improving.

The official naira exchange rate last week plunged to as low as 1,531 per dollar from 900, well below black market levels, after the market regulator changed its closing rate calculation methodology, in a de facto devaluation.

The naira fell to as low as 1,540 intra-day on Friday, dropping lower than the 1,449.27 naira quoted on the unofficial parallel market.

The central bank is due hold its first rate-setting meeting under Cardoso on Feb. 26, six months after the last one, with several analysts expecting the bank to tighten rates by at least 200 basis points to 20.75%.

"Indeed, they (central bank measures) have already started yielding early results with significant interest from foreign portfolio investors that have already begun to supply the much-needed foreign exchange to the economy," Cardoso said.

By Chijioke Ohuocha, Reuters

Video - Activists Working to End Painful Practice of Breast Ironing in Nigeria

A harmful practice called breast ironing or flattening affects about 3.8 million women in Africa, including some parts of Nigeria. The practice aims to delay development in adolescent girls. Gibson Emeka has this story, narrated by Salem Solomon.

VOA

Thursday, February 8, 2024

MultiChoice will pay settlement of $37.3 mln to Nigerian tax authorities

Africa's biggest pay TV company MultiChoice Group

said on Thursday its subsidiaries have reached a settlement with Nigerian tax authorities and agreed to pay a total tax amount of about $37.3 million.

Nigeria's Federal Inland Revenue Service (FIRS) froze MultiChoice Nigeria's accounts in 2022 and served MultiChoice Group with a 1.8 trillion naira ($1.27 billion) tax claim for its Nigeria operation and a $342 million claim for value-added taxes.

The group said in a statement the total tax amount of 35.4 billion naira to be paid by MultiChoice Nigeria and MultiChoice Africa Holdings will be offset against the security deposits and good faith payments made to date.

Reuters