Money Supply up in Nigeria

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Eight years after leaving government and residing in the UK, Alison Madueke, Nigeria’s first female petroleum minister and former Minister of Petroleum under President Goodluck Jonathan, will appear in court October 2 in the same UK on bribery allegations.

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Markets

• The benchmark NGX All-Share Index (ASI) climbed 286.26 (0.44%) points to close at 65,488.67, representing a week gain of 0.86%, a 4-week loss of 0.76%, but an overall year-to-date gain of 27.78%. Nigerian Breweries share price declined by 10% at NGN 38.25 per share, followed by Chellarams (-10%), Sunu Assurances Nigeria (-10%) and John Holt (-8.81%).

• Oil prices fell slightly on Tuesday. Brent crude was down 36 cents at US $84.37 a barrel while the more active U.S. West Texas Intermediate slipped 36 cents to US $79.76.

• US JP Morgan’s assessment of Nigeria’s reserves has rattled the market. Naira was down at both the I&E Window and the street market. At the I&E window, Naira depreciated by 4.22%, ultimately closing at a rate of N770.72 against the US dollar. On the streets, Naira was down by 0.69%, reaching a value of N875.00 against the US dollar.

• U.S. natural gas futures eased more than 3% on Tuesday as the amount of gas flowing to liquefied natural gas (LNG) export plants remains low due to maintenance outages and as a tropical storm reduces power demand in Texas.

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National Headlines

• Money Supply up in Nigeria – Nigeria’s money supply, a critical factor of inflation and exchange rate, increased to N64.9 trillion in the month of July 2023, from N64.3 trillion in June, and N55.5 trillion in May. That is N9.4 trillion increase in two months. These figures come from the latest data released by the Central Bank of Nigeria as captured in its money and credit statistics. However, currency in circulation dropped to N2.59 trillion in July 2023 from N2.6 trillion in June 2023, marking the first monthly decrease since February 2023.

• Platform Capital Chairman denies fraud allegations – Akintoye Akindele, chairman Platform capital and the Managing Director of Duport Midstream Company Ltd, after his recent release, has denied all fraud allegations leveled against him. The background to the story is the dispute around the supply of crude oil condensate and the escalation of claims and counter claims of about US $10 million. The commercial dispute has since become a legal dispute in the Suit No. FHC/L/CS729/2023, but no final determination yet. Meanwhile, Akindele chided the police for imposing themselves on a business and civil dispute.

• UK charges Allison for Corruption – Over 8 years after leaving government, while residing in the UK, the UK government finally have a case against former Minister of Petroleum Resources under President Goodluck Jonathan. The UK government is charging her for receiving bribes in the discharge of her duties as petroleum minister between 2010 and 2015. She will appear in court October 2, eight years after her first arrest in October 2015. The UK National Crime Agency (NCA), the agency leading the investigations and prosecution believes this is a milestone after what it describes as “thorough and complex international operations”.

Global Headlines

• AU suspends Niger – The African Union has suspended Niger until the country reverts to democratic rule. The suspension is coming almost four weeks after the coup of July 26^th that ousted President Mohamed Bazoum. It follows measures by ECOWAS, the West African regional body that include sanctions and the threat of military action to remove the junta. Niger has now been added to the list of countries suspended by the AU. Other countries currently suspended include Burkina Faso, Mali, Guinea, and Sudan. Mali, Guinea, and Sudan were suspended in 2021, while Burkina Faso was suspended in 2022. This suspension comes after the coup leaders in Niger suggested it will take three years to return to constitutional rule in the country.

• Microsoft’s Activision Blizzard acquisition nears conclusion? – Microsoft, the US software technology giant, in its continued quest to acquire Activision Blizzard, has proposed to “transfer the cloud computing streaming rights for all current and new Activision PC and console games released over the next 15 years to Ubisoft Entertainment SA, a leading global game publisher.” Microsoft expects that this proposal will satisfy the UK competition authorities in time for the conclusion of the agreement between it and Activision October 18^th , the date the current agreement extension expires. The deal, as reported here before, is worth US $69 billion. This is the last hurdle before the merger as the US and EU regulators have given their nod.

• BRICS attracting interest rarely seen before – The emerging market group of Brazil, Russia, India, China, and South Africa summit in South Africa is attracting global interest rarely seen before. Formed 14 years ago, this year’s meeting is attracting so much attention because of the geopolitical tensions between China and the US on trade and technology, the Russia / Ukraine war, and debate around the extension of the ‘club’ as a counterweight to the G7. The greatest strength of the BRICS nations is their population, 40% of global size, while accounting for 25% of the global economy. The BRICS will gain further strength from here because it now has the two of the top five economies in the world – China and India, the largest economy in South America in Brazil, and the country with ab0ut the largest oil and gas resources in Russia. South Africa provides the platform for the future as an African nation.

This Week

• Today, Wednesday 23^rd August 2023, Nigeria Bureau of Statistics will release Nigerian Capital Importation for Q2 2023 report. Also, the NBS will release the Selected Banking Sector Data: Sectorial Breakdown of Credit, ePayment Channels and Staff Strength (Q2 2023)

• Friday 25^th August 2023, the highly anticipated Nigerian Gross Domestic Product by Output Report (Q2 2023) will be released. The latest statistics shows that Nigeria's GDP grew by 2.31% y/y in real terms in Q1 2023, from 3.11% recorded Q1 2022, and 3.52% in Q4 of 2022.