As Naira exchanges at record low of 368/$ at Black Market
Resolves to screen 47 Ambassadorial nominees
Senate yesterday asked Finance Minister Kemi Adeosun to unfailingly appear before it today, to explain monetary and fiscal policies adopted to salvage the economic situation in the country. This is coming just as the Naira-Dollar exchange rate dipped further to 368/$.
Yesterday also, the Senate resolved to screen the 47 ambassadorial nominees forwarded to them by President Muhammadu Buhari on June 9.
The decision to summon the finance minister followed an observation made by Godswill Akpabio, the minority leader of the Senate, on the absence of the minister in Senate plenary yesterday to give explanations on the state of the economy.
Akpabio said the minister ought to have considered the fact that she would be attending the Federal Executive Council meeting when fixing her appointment with the Senate.
He expressed concern that despite knowing that she would not make it, she did not notify the red chamber ahead of time.
“She sent the message very late in the day to the Senate. I will not take it as disrespect for the hallowed chamber but as an act of omission on her part. I hope this will not repeat itself,” he said.
In his remarks, Senate President Bukpla Saraki directed the minister to appear before it on Thursday unfailingly, in view of the fact that the National Assembly would be proceeding on recess on Thursday, July 21.
Saraki further said her appearance was necessary in view of the various challenges faced by Nigerians.
“The comments of the minority leader are very pertinent. She picked today. We must take her before we go tomorrow because the CBN governor, Godwin Emefiele, made effort to be here on Tuesday.
“I hope she will make it today or tomorrow because these are issues that are very important to Nigerians. She must be here unfailingly tomorrow,” said Saraki.
Following the current state of the economy in the country, the Nigerian Senate on Wednesday, May 25, resolved to invite Adeosun and the Central Bank governor, Godwin Emefiele, to brief the legislators.
The decision was moved by Senator Bassey Akpan, who pushed that the Senate should invite Adeosun and Emefiele to brief it on the monetary/fiscal policies adopted to salvage the current state of the economy, especially with the imminent plans to effect naira devaluation.
Naira exchanges at record low of 368/dollar at Black Market
Naira yesterday traded 368 to the dollar at the black market, indicating sharp fall from its previous quote, traders said.
However, it was also stuck at a record closing low of 292.90 to the dollar after just one transaction was carried out, with the supply of dollars drying up and no intervention by the Central Bank of Nigeria, CBN.
The naira was unchanged from Tuesday’s close after one transaction worth $380,000 was made on Wednesday. That trade was done at 1150 GMT, more than three hours after the market opened.
The interbank market had seen just $300,000 traded on Tuesday, again in one transaction.
Traders had expected the CBN to intervene to ease dollar shortages, but that did not materialise. Commercial banks had been quoting to trade the dollar as low as 295.50 naira on Wednesday.
“Recent FX reforms have been enough to re-open the investment case for Nigeria, but there is still some uncertainty about the functioning of the market,” Alan Cameron, economist at Exotix said.
“The absence of volatility at N283/US$ was interpreted as a sign that administrative controls were still in place; it remains to be seen if those will be fully removed.”
Banks had been quoting the dollar at 281 to 285 naira after the CBN lifted its 16-month old peg of 197 naira to the dollar last month.
But the lack of liquidity has curbed activity, leaving the CBN as the main supplier of dollars, traders say.
On Monday, currency traders introduced a maximum resale premium on dollar trades to try to boost liquidity after a transaction made without spreads sent the naira tumbling to a record intra-day low.
Investors have welcomed the removal of currency controls but many are still steering clear until Africa’s biggest economy shows signs of a concrete recovery.
“Most investors would like to see a more liquid FX market before resuming purchases of local assets,” said Samir Gadio, head of Africa strategy at Standard Chartered Bank.
“Given the significant discount of naira-settled futures, a number of offshore financial institutions and hedge funds could be tempted to get involved in the foreseeable future.”
A total of $579.3 million has been sold in futures contracts ranging between one month and one year. A one-month contract for $26.7 million due on July 27 was sold at 279 naira.
In non-deliverable forward markets, the one-month naira-dollar forward was quoted at 314.50. The one-year contract fell as low as 345.13 per dollar.
Senate to screen 47 Ambassadorial nominees
The Senate yesterday resolved to begin consideration and screening of 47 ambassadorial nominees sent by President Muhammadu Buhari for approval.
This followed the approval of the recommendation of the Committee on Foreign Affairs chaired by Senator Shehu Sani, following 37 petitions alleging lopsidedness in thenominations among others.
Presenting the report, Sani said Secretary to the Government of the Federation, Mr Lawal Babachir informed the committee that affected states did not meet the requirements.
He said that most senior officers from the states affected either did not meet the required minimum of 30 months to their retirement or fell short of other criteria.
He said that from the committee’s investigation, due process was followed in appointing the nominees.
However, the lawmaker said the SGF gave the assurance that President Buhari would address the seeming lopsidedness with the appointment of non-career ambassadors.
The committee recommended that the Senate should proceed with the screening while urging the federal government to quickly submit the list of non-career ambassadors.
On Thursday, June 9, President Buhari released the list of ambassadorial nominees which was contained in a letter sent to Senate President Saraki.
This was disclosed after Saraki read out the list of the 47 nominees on the floor of the Senate.
According to the letter, the nominees are career diplomats who will oversee Nigeria’s mission outside the country.
Meanwhile, the Senate also urged the federal government to sustain the tradition of submitting the list of non-career ambassadors alongside that of career ambassadors.
The Senate thereafter adopted the recommendations of the committee through a voice vote and resolved to commence screening of nominees as soon as possible.