Nigeria’s FX Reserves Rise By $621.2 Million In 10 Days

Nigeria’s foreign exchange (FX) reserves rose by $621.2 million in 10 days following the successful sale of a domestic dollar bond.

The gross FX reserves increased from $36.24 billion on September 2, 2024, to $36.87 billion by September 12, 2024.

This is according to the latest data on the reserves from the Central Bank of Nigeria (CBN).

This growth reflects the positive impact of domestic dollar bond at boosting the nation’s reserves.

What the data says
On September 2, 2024, the country’s reserves stood at $36.24 billion. Over the course of the following 10 days, this figure saw steady growth, eventually reaching $36.87 billion by September 12, 2024.

The first notable uptick occurred between September 2 and September 3, 2024, when the reserves rose from $36.24 billion to $36.27 billion, reflecting a modest increase of approximately $30 million.

This growth continued over the next few days, with the reserves standing at $36.30 billion by September 4 and reaching $36.33 billion on September 5. These incremental gains suggest a sustained flow of foreign exchange into the country.

By September 6, 2024, the reserves had risen to $36.39 billion, marking a more significant increase as the CBN’s bond strategy gained traction. The rise between September 6 and September 9, when reserves hit $36.64 billion, reflects a particularly strong phase of accumulation. This $250 million growth over a weekend suggests robust demand for Nigeria’s dollar bond and reflects increased liquidity entering the financial system.

The trend continued into the second week of September, with reserves reaching $36.73 billion on September 10, before climbing further to $36.81 billion on September 11. The largest single-day increase occurred between September 11 and September 12, 2024, with reserves jumping by $54.4 million, culminating in the final figure of $36.87 billion.

What you should know
Nairametrics earlier reported that Nigeria’s FX reserves have dipped by about $505.68 million (1.37%) in August 2024.

The dip represents the steepest monthly decline in Nigeria’s forex reserves since April 2024.

However, this increase can be attributed to Nigeria’s recent domestic bond issuance, which was aimed at attracting foreign capital and improving reserve levels. The rise in reserves comes at a critical time for Nigeria, which has been grappling with economic pressures, including the need to support the naira amidst global currency fluctuations.

Nigeria successfully launched its first-ever domestic dollar-denominated bond, seeing over $900 million in subscriptions.

The $500 million bond, coordinated by the Africa Finance Corporation (AFC), marks a pivotal moment in Nigeria’s economic development and highlights the growing confidence in the country’s capital market.

The five-year bond, which was issued at par with a 9.75% annual coupon, witnessed a 180% subscription.

This overwhelming interest from investors highlights the strong domestic confidence in Nigeria’s economic growth prospects, as well as the strategic role of the AFC in deepening the domestic capital markets.

According to a statement from the AFC, investors for this bond issuance ranged from local Nigerians and non-Nigerians residing in the country to Nigerians in the Diaspora and major institutional investors.

The bond will be available for trading on the Nigerian Exchange Limited (NGX) and FMDQ Securities Exchange Limited (FMDQ Exchange), providing a significant boost to the liquidity of Nigeria’s financial markets.

FG, Dangote reach agreement on petrol supply

The Federal Government, on Friday, disclosed that the supply of petrol from Dangote Refinery will commence tomorrow after both parties reached an agreement on pricing and supply.

NNPC will remain as the sole off-taker of petrol from the refinery with other marketers getting the product from the national oil company.

Speaking in Abuja, a member of the Presidential Committee on the Sale of crude Oil and Refined Products and Chairman of the Federal Inland Revenue Service, Zacch Adedeji said in return NNPC Limited would commence the supply of 385,000 barrels of crude oil to Dangote Refinery on October 1, 2024.

Adedeji announced that “all agreements have been completed and loading of the first batch of PMS from the Dangote Refinery will commence on Sunday 15th September”.

He disclosed that Dangote Refinery will in return supply PMS and diesel of equivalent value to the domestic market to be paid for in Naira.

He said other decisions reached by the committee include the sale of Diesel in Naira by the Dangote Refinery to any interested off-taker while PMS will only be sold to NNPC.

“From 1 October, NNPC will commence the supply of about 385kbpd of crude oil to the Dangote Refinery to be paid for in Naira

“In return, the Dangote Refinery will supply PMS and diesel of equivalent value to the domestic market to be paid in Naira.

“Diesel will be sold in Naira by the Dangote Refinery to any interested off-taker. PMS will only be sold to NNPC, NNPC will then sell to various marketers for now. All associated regulatory costs will also be paid for in Naira”, he added.

Borno: Aliko Dangote Foundation donates N1bn to Maiduguri Flood Victims

…Presidential Committee on Flooding also donates N1bn

Chairman of Aliko Dangote Foundation (ADF) and Chairman, National Committee on Flood Relief and Rehabilitation, Mr. Aliko Dangote, has donated a whopping sum of one billion Naira to help assuage the pains of the Maiduguri flood victims in Borno State.

The Presidential Committee on Flood Relief and Rehabilitation (PCFRR), which Dangote heads, also donated another sum of one billion naira to the cause, to help the Maiduguri victims of the flooding.

During an on-the-spot inspection of the disaster-stricken areas on Friday, Dangote, who is also the President and Chief Executive of the Dangote Industries Limited, empathised with the victims and rallied for support from other Nigerians and willing stakeholders.

Speaking on the flooding incident, Dangote described the sight as “mindboggling”, and exclaimed that he has “never seen a disaster of this scale before.”

He said, “I am moved with pity; I have never seen a disaster of this magnitude before. The state needs urgent help and intervention from well-meaning Nigerians and stakeholders.

“A lot of infrastructural development needs to be done; the houses and roads need urgent attention for people to get their lives back. Again, we are asking that corporate organisations need to intervene and provide succour in every way possible as the government cannot do it alone.”

In his remarks, Borno State governor, Babagana Zulum, appreciated Dangote’s support, stating that he has contributed immensely into the development of the state.

He added that he was not surprised to see the business mogul visit the disaster area as a solidarity gesture. He called on well-meaning Nigerians to emulate Mr. Dangote in his charitable contributions.

Recall that the flood, has displaced over a million residents and about 30 persons have been confirmed dead.

The Director-General of the Borno State Emergency Management Agency (SEMA), Mr. Barkindo Mohammed, stated that “As of 5pm on Thursday, SEMA evacuated 3,683 persons from their homes in a rescue operation. The search and rescue operation is still ongoing.

“The mode of rescue involves motorists, boats, canoes, divers, military, and fire service trucks, among others. As the water continues to recede, we are concentrating on those who make distress calls and will start search and rescue today and tomorrow,” Mohammed said.

According to him, about two million people were affected, and so far, SEMA has opened 14 official camps and many informal camps where displaced persons can go. He said that the Federal Government has supported the state with N3 billion and food consignments.

“President Bola Tinubu has supported Borno and other states with N3 billion each. Governor Babagana Zulum of Borno State has forwarded the money to SEMA, and he has added more on what the federal government gave. We are not only responding to the flood victims in Maiduguri but also in Local Government Areas across the state,” Mohammed said.

In early December 2022, the Dangote-led Presidential Committee on Flood Relief and Rehabilitation (PCFRR), known as Dangote Flood Committee had commenced the distribution of relief materials, worth N1.5 billion to victims of flooding nationwide. The PCFRR, which was established by the Federal Government following the 2012 flooding, is co-chaired by Aliko Dangote and renowned legal giant, Dr. Olisa Agbakoba.