We Have Paid N50 Billion To NCC – MTN

MTNMTN Group appears to have paid about N50 billion out of the N780 billion fine imposed on it by the Nigerian Communications Commission (NCC). 

The company, in a statement, explained that the payment was made “on the basis that this will be applied toward a settlement, where one is eventually, hopefully arrived at.

MTN also agreed to withdraw the matter from the High Court in Lagos to achieve an “amicable settlement.

“In renewed steps towards a negotiated settlement and to create a conducive atmosphere for further negotiations, MTN Nigeria today withdrew its case against the NCC at the Federal High Court of Lagos in response to a request by the authorities.

“MTN Nigeria has paid N50 Billion to the Federal Government as a gesture of good faith and commitment to continued efforts towards an amicable resolution”, the statement added.

Meanwhile, the Special Assistant to the Minister of Communications, Mr Victor Oluwadamilare, in a telephone interview, said the ministry cannot ascertain the claimed payment from MTN Nigeria.

The company’s stock has declined 31 percent since the fine originally set at $5.2 billion was made public in October last year.

The NCC had imposed a N1.04 Trillion fine on MTN Nigeria in October 2015, for its failure to disconnect 5.1 Million improperly registered lines within the prescribed deadline.

The fine was adjusted by 25% to N780 billion, an amount that was considered inimical to the survival of the business.

Nigerian Interbank Rates Rise On Treasury Bills Sales

naira-notesNigeria interbank lending rates rose 3.25 percentage points week-on-week on Friday to 9.25 points on average, driven by large treasury bills sold at both primary and secondary market by the central bank, which soaked up liquidity from the system.

The Central Bank of Nigeria (CBN) sold about N250 billion ($1.26 billion) in the open market operations bills and N150.6 billion worth at an auction on Wednesday.

“The market has been very liquid from the spillover from budget allocations and large matured bonds two weeks ago, but the outflows to fresh treasury bills sales drained some liquidity and caused rates to rise on Friday,” one dealer told Reuters News Agency.

Nigerian interbank lending rates dropped below 10 percent three weeks ago, their lowest this year, because of a liquidity boost from a large cash injection into the banking system from retired bonds, treasury bills and budget allocations to government agencies.

Banks had a balance at the CBN of N494 billion on Friday compared with over N840 billion on Monday, traders said.

The secured Open Buy Back rose to 9 percent from 6 percent, 4 percentage points below the CBN’s 13 percent benchmark rate.

Overnight placement rose to 9.5 percent against 6 percent last week.

“We expect little change in lending rates next … week, unless CBN embark on aggressive mopping up of liquidity” to reduce excess cash in the system, another dealer said.

Nigeria Overnight Rate Hits 90 Pct, Nears Record High

naira-notesNigeria overnight rate spiked to 90 percent on Tuesday, near record highs, up from 60 percent on Monday, dealers said, two days after the Central Bank of Nigeria (CBN) debited lenders to enforce its cash reserve requirements.

Rates have been rising sharply for two days — the overnight lending rate stood at 27 percent on Friday last week, before the CBN bank withdrew the funds.

Rates set a record high of 100 percent in February.

“Everyone scrambling for cash … liquidity is very tight after the central bank recalled N72 billion,” one dealer said.

The open balance with the central bank stood at N26 billion as at Monday, down from around N160 billion last week, traders said.

Nigerian Interbank Rates Rise On Tightening Liquidity

naira-notesNigerian overnight lending rates rose to 11.25 per cent on Friday compared with 8.25 per cent last week after local currency liquidity tightened following purchases of Treasury bills and foreign exchange, traders said. 

Market liquidity dropped to about N260 billion ($1.31 billion) credit by Thursday compared with N400 billion last Friday, according to dealers.

Nigeria sold a total of N254.96 billion of debt against bids worth N318.58 billion.

The secured Open Buy Back (OBB) rose to around 11 percent from 8 percent last week.

The secured fund was 2 percentage points short of the central bank’s 13 per cent benchmark interest rate. Overnight placement stood at 11.5 percent against 8.5 percent last week.

“We anticipate a slight increase in the cost of borrowing among banks next week because of plans to debit banks’ account for cash reserves requirement (CRR) on Thursday and cash outflow to bond issuance,” one dealer told Reuters News Agency.

Nigeria’s central bank requires commercial lenders to set aside 75 per cent of public sector and 15 per cent of private sector deposits in liquid cash in their account with it.

The regulator debit banks accounts twice every month to enforce this requirement.

Nigeria plans to raise N95 billion by selling sovereign bonds with maturities ranging between 5 and 20 years on March 11.

Central Bank Leaves Interest Rate At 12 Per Cent

CBNThe Central Bank has left its benchmark interest rate at 12 per cent for the fifteenth time in a row but tightened the cash reserve requirement on private sector deposits by 300 basis points to 15 per cent.

The Acting Central Bank Governor, Dr Sarah Alade told a news conference, where she briefed journalists on the outcome of the Monetary Policy Committee meeting, that the nations inflation rate is stable but expressed concerns over the non- development of  the nation’s industrial sector.

Dr Alade said the nation’s external reserve as at March 2014 stood at N37.8 billion compared with N42 billion realised at the end of December 2013.

Dr Alade first listed the developments in the international market, the domestic market and the external sector development before stating the committee’s decisions.

While inflation rate for the first quarter was put at 7.2 per cent, members of the Monetary Policy Committee said food inflation may not grow beyond the current levels as it expects bumper harvest in 2014.

Nigeria stock index closes near one-year high

Nigeria’s all share index on Wednesday closed near a one-year high on rising 1.16 percent, lifted by strong half-year earnings from banks and cement firms, and an increase in foreign capital inflows.

The index rose to 23,329 points, the highest close since August 5 last year, when it reached 23,397 points.

Nigeria’s  index has gained almost 12 percent year-to-date, recouping earlier losses it sustained due to dwindling oil prices in May and weak global risk appetite in the wake of ongoing European economic turmoil.

Top gainers on Wednesday include Dangote Cement, rising 3.51 percent to 114.02 naira.

Others were Zenith Bank up 3.89 percent and FCMB up 2.24 percent.

Flour Mills of Nigeria seeks approval to buy Rom Oil Mills.

The Flour Mills of Nigeria said on Wednesday it will seek shareholders’ approval to acquire a controlling stake in privately-held food manufacturer Rom Oil Mills, to boost its market share in Nigeria and beyond.

Flour Mills said in a notice to investors that at the next general meeting, which will be holding September 12 they will like to buy 90% stake in Rom Oil Mills based in Ibadan.

Flour Mills, whose interests include cement, fertilizer manufacturing and has a 40 percent market share in flour milling, did not disclose how much it was offering for the stake in the vegetable and edible oil refining business.

Shares in Flour Mills were trading flat at 52 naira at 1239 GMT on the news, to value it at 121 billion naira ($753 mln).

Reports have it that flour demands in Nigeria is over 2 million tonnes per annum and the country has 23 flour plants. ($1 = 160.65 naira)