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Naira eases on importer demand for dollars

Nigerian naira

The naira eased slightly against the dollar on the interbank market on Monday after dollar demand from importers put pressure on foreign currency liquidity, dealers said.

The naira ended at 159.20 to the dollar, weakening from a close of 158.85 on Friday when it hit a 2-1/2 month high, helped by U.S. oil giant Chevron selling $54 million to banks in exchange for naira.

The currency was unchanged after a central bank auction on Monday.

The bank sold $250 million at 156.50 naira to the dollar at the auction, the same rate and amount sold at its previous auction last Wednesday.

Dealers say they expect dollar sales this week from energy firms including state-owned NNPC to help give the naira a boost.

“We expect the naira to strengthen this week because of expected dollar sales by NNPC, Mobil and Shell ,” one dealer said, adding that interbank rates could start to converge with central bank rates if dollar liquidity is sustained.

The naira lost 4.5 percent against the dollar in 2011 but analysts say the Nigerian currency is likely to appreciate this year given the country’s foreign reserves of $34.72 billion and because of oil companies’ expanding supply of dollars.

“The market has witnessed significant dollar inflows from energy firms since the beginning of the year which will help stabilise the value of the currency in the medium term,” he told Reuters


Pirates kill captain, chief engineer in ship attack

Suspected pirates assemble on the deck of a dh...

(Reuters) – Pirates shot dead the captain and the chief engineer on a cargo ship off the coast of Nigeria on Monday, an International Maritime Bureau (IMB) official said, the latest in a string of attacks on vessels off the coast of Africa‘s No. 1 oil producer.

“Armed pirates chased and fired upon a drifting bulk carrier. Vessel raised alarm and headed towards Lagos. All crew except the bridge team took shelter in the citadel. Due to the continuous firing the captain and the chief engineer were shot,” a notice on the IMB website said.

The attack. about 110 miles south of the commercial hub and main Nigerian port Lagos, comes two days after pirates on two boats in the same stretch of water fired shots at a different cargo vessel and chased it for 25 minutes before giving up, the website said.

Pirates off the coast of Nigeria tend to raid ships for cash and cargo rather than hijacking the crews for ransom like their counterparts off the coast of Somalia.

The frequency of attacks, while not as high as off the Somali coast or surrounding Indian Ocean, is on the rise.

Nigerian poverty rising despite economic growth- Reuters Report

English: A juxtaposition of affluence and poverty

Image via Wikipedia

Poverty in Nigeria is rising with almost 100 million people living on less than $1 a day, despite strong growth in Africa‘s second largest economy, data showed on Monday.

The percentage of Nigerians living in absolute poverty – those who can afford only the bare essentials of food, shelter and clothing – rose to 60.9 percent in 2010, compared with 54.7 percent in 2004, the national bureau of statistics said.

Although Nigeria’s economy is projected to continue growing, poverty is likely to get worse as the gap between rich and poor in Africa’s largest oil producer continues to widen.

“It remains a paradox … that despite the fact that the Nigerian economy is growing, the proportion of Nigerians living in poverty is increasing every year,” Statistician General Yemi Kale told reporters in the capital Abuja.

“NBS estimates that this trend may have increased further in 2011 if the potential positive impacts of several anti-poverty and employment generation intervention programmes are not taken into account,” Kale said.

Corruption is rife in Nigeria and for decades politicians have focused on milking cash from crude oil exports, which average more than 2 million barrels per day, rather than developing infrastructure and creating jobs for locals.

Despite holding the world’s seventh largest gas reserves, which could be used to generate power, Nigeria only produces enough electricity to power a medium-sized European city.

More than half of the country’s 160 million inhabitants live without electricity, while the rest have to rely on expensive generators run on diesel supplies controlled by a small and powerful cartel of importers.

Tens of thousands of Nigerians protested for over a week in January against the government’s decision to end subsidies on petrol imports, a decision welcomed by economists.

What started as a protest against fuel prices, quickly developed into anger over government corruption and poor governance and pressure has been building on President Goodluck Jonathan to tackle graft, particularly in the oil sector.

Jonathan has set up several committees and an audit report is being carried out on the national oil company NNPC. Many such reports have been ignored in the past and industry experts say it is unlikely endemic corruption will be reined in.

The protests came at a bad time for Jonathan who has been criticised for not getting a grip on increasingly deadly attacks by radical Islamist sect Boko Haram in the north.

Boko Haram, which wants Islamic law more widely applied in Nigeria, killed more than 250 people in January in a series of bomb and gun attacks in northern cities. It mostly focuses its violence on the police and other authority figures.

Poverty feeds the unrest because the sect is able to coax into its campaign disillusioned youths angry with a government which offers them little.

Data on Monday showed that the northeast and northwest, where Boko Haram originated, are the poorest regions in Nigeria. The southwest, which includes the thriving commercial hub Lagos, had the lowest levels of poverty.

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