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CBN bars immediate repatriation of all IOCs forex earnings

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The Central Bank of Nigeria (CBN) has announced far-reaching measures to shore up the value of the Naira, with more liquidity in the Foreign Exchange (FX) market as it directed International Oil Companies to henceforth repatriate 50 percent of their revenue to Nigeria.

The bank also announced an end to cash Personal Travel Allowance (PTA) and Business Travel Allowance (BTA), as such allowances are henceforth to be obtained in cards.

CBN’s Director of Trade and exchange, Dr. Hassan Mahmud, issued two different circulars on the two measures which were released to Dealer banks Wednesday night.

Until now, IOCs paid their FX earnings 100 percent directly to their parent companies through what is called Subsidiary pools, without the Nigerian FX market benefitting from their export proceeds.

However, under the new policy, the CBN said IOCs will no longer be allowed to remit 100% of their forex proceeds to their parent company abroad as soon as they are earned.

Instead, they will be allowed to repatriate only 50% of their proceeds immediately while the other 50% must be repatriated to Nigeria and the amount held for at least 90 days in Nigeria from the day of inflow before being allowed to be taken out of the country.

The apex bank therefore directed, “banks to pool cash on behalf of IOCs, subject to a maximum of 50% of the repatriated export proceeds in the first instance, the balance of 50 % may be repatriated after 90 days from the date of inflow of the export proceeds.”

The CBN outlined documentation requirements to include: its approval for the repatriation of funds under the “Cash Pooling” transaction; a “Cash Pooling” agreement with the parent entity of the IOCs operating in Nigeria; Statement of Expenditure incurred in the period prior to the cash polling.

Others are: Evidence of the source of foreign exchange inflow; and Completion of relevant forex form(s) as required under extant regulations.

The CBN directed all banks to inform their customers and comply with the regulation.

It said that it remained committed to the promotion of transparency in Nigerian FX market and would continue to develop policies to stabilize and deepen the market.

CBN bans PTA/BTA Cash FX

On FX for PTA and BTA, the CBN said it will longer allow cash for Business Travel Allowance (BTA) and Personal Travel Allowance (PTA).

All such allowances are, henceforth, to be issued in cards, the bank has announced, in a circular to all Authourised dealer banks.

The Circular was referenced: TED/FEB/PUB/FPC/001/006 and titled, “Allowable Channels for payout of Personal Travel Allowance and Business Travel Allowance and dated February 14, 2024.

It said that the new measure was part of efforts towards making such that only genuine travelers obtained BTA and PTA, going forward.

The circular read in part, “Memorandum 8 of the Foreign Exchange Manual and the circular with reference: FMD/DIR/CIR/GEN/08/003 dated February 20, 2017stipulates the eligibility criteria for accessing Personal and Business Travel Allowances (PTA/BTA).

In line with the bank’s commitment to ensure transparency in the foreign exchange market and avoid foreign exchange malpractices.

All Authorized Dealer Banks shall henceforth effect payout of PTA/BTA through electronic channels only, including debit and credit cards.

For the avoidance of doubt, payment of PTS/BTA by cash is no longer permitted.”

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Econony

FX turnover surges by 81.59% as Naira stays at $1339 against Dollar

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Foreign exchange turnover increased by 81.59 per cent to $328 million as the Naira maintained its N1339.33 per dollar appreciation mark against the Dollar at the official forex market.

FMDQ data showed that FX transactions turnover rose to $328.32 million at the close of trading on Tuesday from $180.80 million the previous day.

The development signaled renewed activity and demand in the foreign currency market.

Meanwhile, at the parallel market section, the Naira appreciated to N1500 per dollar on Tuesday from N1520 the previous day.

Experts have attributed the Naira’s strengthening against other currencies to the Central Bank of Nigeria’s intervention in the foreign exchange market.

CBN governor, Olayemi Cardoso in its 295th Monetary Policy Committee blamed the persistent FX crisis on seasonal fluctuations.

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NNPCL uncovers 112 illegal oil refineries in seven days

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The Nigerian National Petroleum Company Limited has discovered 122 illegal oil refining in the last seven days in the Niger Delta region.

According to a documentary released by the NNPCL on Tuesday, the firm said a filling station was sealed for selling illegally refined fuel to motorists in Akwa Ibom State.

The report noted that 65 illegal pipeline connections were uncovered and removed within the past week in Rivers and other states in the oil-rich Niger Delta.

“310 incidents were recorded between May 18 and 24 across the Niger Delta region,” the NNPCL disclosed while reeling out its efforts in fighting oil theft and vandalism

It was learned that the filling station selling illegally refined fuel was uncovered at Grey Creek in Akwa Ibom State.

Details of the report showed that the 122 illegal refineries were spotted at Tomble II, III, IV, Umuajuloke, Rivers State as well as Oporomor III, Eduwini, and Ajatiton in Bayelsa State.

Similarly, vandalized well heads were reportedly discovered in Tomble IV, Rivers and Egbema in Imo State.

Recall that The NNPCL Group Chief Executive Officer, Mele Kyari, said the country needs to tackle oil theft to boost crude oil production and revenue.

“No one is going to put money into oil production when he knows the production will not get to the market.

“Within the last two years, we removed over 5,800 illegal connections from our pipelines. We took down over 6,000 illegal refineries.

“You simply cannot get people to put money until you solve that problem,” he stated.

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FG Nets N242bn From Marine Sector, Targets $7bn Oil & Gas Investment

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The Minister of Marine and Blue Economy, Gboyega Oyetola, has said that his ministry recorded a revenue of N242 billion in the first quarter (Q1) of 2024.

During the ministerial press briefing on Tuesday in Abuja, Oyetola said the revenue recovered represented a 92 per cent increase from the N126bn recorded in Q1 of 2023.

“A comparison of Q1 of 2023 against Q1 of 2024 revenue performance across the agencies reveals a 92 per cent increase. The increase in revenue performance has largely been due to a 10 per cent increase in the number of vessels calling at our ports due to strategic investments in port infrastructure in the last one year; mooring boats, patrol vessels and dredging of the ports’ channels,” he added.

Also, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, stated that the government of President Bola Tinubu was not responsible for the economic conditions that led to the shutdown of about 800 companies in 2023.

In a statement on Tuesday, Edun’s explanation was coming on the heels of an earlreport in February by the Manufacturing Association of Nigeria (MAN) indicating that about 767 manufacturing companies shut down operations in Nigeria in 2023.

In addition, the association noted that another 335 companies were in distress financially in the same year.

Edun explained that the departure of the companies from Nigeria’s economic landscape did not happen overnight; but that factors like market instability, unfulfilled promises and breaches of contract forced them out.

He added that the issues were currently being addressed by the current administration.

He explained that, “Our government inherited the assets and liabilities of the previous administration. The 800 companies or so did not make up their minds overnight. They stayed until they could stay no more.

“The conditions which sent them packing are no more. Those conditions were a foreign exchange market that was in no way fit for business where there was no liquidity.

“They were the general economic regime marked by instability, broken promises, lack of adherence to contract and so on.

“The new environment which investors face is one in which inflation is being attacked which will eventually lead to lower interest rates where investors can use the very vibrant domestic market to add their own equities and invest.”

We expect $7bn investment in oil & gas sector

Edun also disclosed that the oil and gas sector received approximately $7bn investment pledge due to the new incentive frameworks introduced by President Bola Tinubu’s administration.

He said that the investment had been dormant for years, awaiting the appropriate economic conditions for inflow.

He also highlighted the CNG-fueled conversion programme as part of the administration’s policy framework to drive growth.

He said, “CNG is a government policy not just for vehicles, but for generators. They have to be either CNG-fueled or solar-based or electric vehicles.

“That is the new incentive structure. And it continues also in the oil and gas sector. There has just been a new set of incentives that are encouraging new investments.

“We expect $7bn worth of investments that have been sitting on the sidelines to now come in.

“A stable, growing economy attracts investment that increases productivity, grows the economy further, creates jobs and reduces poverty. That is the trajectory that Nigeria is now on.”

Nigeria’s economy recording positive growth

The minister also disclosed that Nigeria’s economy was returning to the path of positive growth with a Gross Domestic Product (GDP) growth rate of 2.98 per cent in the Q1 of 2024.

He said the 2.98 per cent growth rate was higher than last year’s GDP growth rate of 2.31 per cent.

Speaking on interventions of the government in the last one year, he said, “Efforts have been made to improve food security, with N200bn allocated to programmes.

“Also, access to credit has also been improved, with N100bn allocated to consumer credit and grants of N50,000 being given to one million nano industries.”

Nigeria attracted $3.5bn investment to textile industry in 1 year – Industry minister

The Minister of Industry, Trade and Investment, Doris Uzoka-Anite, said the federal government has secured $3.5bn in investments to enhance Nigeria’s textile, cotton and apparel sector in one year.

She said the investment was part of the ministry’s initiative to rejuvenate the long-dormant textile industry.

Similarly, the minister highlighted that, “Over 16,000 jobs have been created in the past year, through programmes and interventions by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). Such programmes include the National Business Skills Development Initiative (NBSDI), Conditional Grant Scheme (CGS) and General Enterprise Development Training (GEDT).”

She noted that, “The federal government, under the auspices of the ministry, generated N430m in the first quarter of 2024 from the Lagos International Trade Fair Complex, which is significantly more compared to the N17.9m accrued in the same period in the previous year.”

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