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Nigeria’s Currency Falls to Record Low as Traders Track Central Bank’s Latest Dollar Sale

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Nigeria’s currency fell to the lowest on record after traders adjusted prices to reflect the rate Central Bank of Nigeria sold the currency amid a lack of dollar supply in the authorized foreign-exchange market.

Pressure on foreign reserves, which is down 3.4% since the beginning of the year, despite higher oil prices in Africa’s largest crude producer, has forced the central bank to cut down on dollar sales, creating scarcity of the greenback on the market.

The Abuja-based bank did not sell dollars to foreign portfolio investors last week, making many local buyers to source their own foreign-exchange from alternative sources, local investment bank Chapel Hill Denham said in an investment note Monday. “While we are yet to understand the reason behind this, we believe the persisting declines in FX reserves might have triggered CBN’s restraint to supply FX last week,” it said.

The dollar scarcity is creating a black market boom, where the naira is exchanging at a record low of 615 to the dollar, giving a spread of 44% on the the official rate. Last month, MSCI Inc. said it’s considering a downgrade of the MSCI Nigeria indexes to standalone markets status from frontier market due to persistent foreign-exchange shortages.

The naira’s fall “may only point to partial and gradual convergence to higher spot levels at CBN FX sales,” said Samir Gadio, head of Africa Strategy at Standard Chartered Bank. “The CBN is already selling USD in spot at 450-465 at its secondary market intervention sales auctions,” he said in emailed response to questions.

The Abuja-based central bank has devalued the currency three times in the last two years as it succumbs to demand pressure amid worsening scarcity of the greenback in the continent’s most populous nation. It has a backlog of about $1.7 billion in unmet dollar demand from investors, according to the International Monetary Fund.

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Africa

Ethiopian Airlines consortium wins bid for new Nigeria airline

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A consortium led by Ethiopian Airlines is the preferred bidder for shares in new Nigerian airline Nigeria Air, the country’s aviation minister said on Friday.

The airline was one of President Muhammadu Buhari’s 2015 election campaign promises.

Ethiopian Airlines will own a 49% stake in the new airline, while the Nigerian Sovereign Fund will take 46% and the Nigerian federal government the remaining 5%.

Aviation minister Hadi Sirika told reporters that Buhari’s cabinet was expected to sign off on the shareholding plan in the next few weeks. Nigeria Air would have an initial capital of $300 million and plans to have 30 aircraft within four years, he said.

Nigeria Air will launch with service between the capital Abuja and Lagos, the commercial capital, and add other routes later.

“We are going to initially bring in six Boeing 737 aircraft and between third and fourth year the airline will be able to acquire up to 30 aircraft,” Sirika said.

“Nigeria Air is a limited liability company that will have no government intervention,” he added.

Nigeria has been seeking to set up a national carrier and develop its aviation infrastructure – currently seen as a barrier to economic growth – to create a hub for West Africa.

Africa’s most populous country’s previous national carrier, Nigeria Airways, was founded in 1958 and wholly owned by the government. It ceased to operate in 2003

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Shaq to open the first Big Chicken Restaurant in Houston

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Everything Shaquille O’Neal does is big. So it was no surprise that when he decided to launch a fast-casual chicken franchise, it would be called Big Chicken.

The basketball legend, who recently moved to Dallas, has announced that he will be opening the first Big Chicken restaurant in Houston. Shaq’s store will be located in Woodland Square at 9660 Westheimer Road, Suite #250, close to El Tiempo on South Gessner Road.

Earlier this year, Shaq announced he planned to open 50 Big Chicken locations across Texas. While a Big Chicken outlet is located in the Moody Center Arena in Austin, this new store in Houston will be the first brick-and-mortar store for the company in Texas. While there is no set date for the opening, it is expected to be late 2022 or early 2023.

To help with the expansion across Texas, the Big Chicken company is working with Fazil and Frank Malik, the duo behind gas station and convenience store operations company Northwest Petroleum and Skylark Construction, and also as Noordin Jhaver, the CEO of Dew Real Estate Holdings, LLC, which owns over 50 Sonic restaurants.

With Shaq now living in Texas, there is a strong chance he will make an appearance at the new Houston store. And with his reputation for generosity and giving to people he meets, this will be exciting for the people of Houston.

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Nigeria’s Buhari grants consent to Seplat’s buy of Exxon Mobil’s Nigeria unit

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Nigerian President Muhammadu Buhari has granted consent to the acquisition of Exxon Mobil’s Nigerian unit by Seplat Energy, in a $1.28 billion deal announced in February.

Buhari, who doubles as oil minister, granted ministerial approval to the deal, the presidency said in a statement on Monday.

Exxon and Seplat are expected to operate the unit’s oil licenses, supporting Nigeria meet its OPEC production quota in the short term as well as accelerate the development of gas resources in the area.

Seplat said in February its offshore unit had entered an agreement to buy the entire share capital of Exxon’s Nigerian offshore shallow water business for $1.28 billion, plus a further consideration of up to $300 million based on the oil price and the average production of the unit, Mobil Producing Nigeria Unlimited, over a five-year period.

Seplat is listed on the London and Nigerian stock exchanges.

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