Index to Nigerian Newspapers

The Federal Government is expected to make up to $17bn if it sells down its stake in most joint-ventures oil and assets, JP Morgan has stated. The United States bank’s projection came against the backdrop of the government’s plan to boost foreign exchange earnings and external reserves in order to ease forex pressure. The US bank stated this in a report titled, ‘Nigeria: Reform pause rather than fatigue (CBN’s financial accounts open a can of worms).’ According to JP Morgan, the low net forex reserves mean a continued forex market pressure, adding however that the CBN can still source forex at commercial and semi-commercial rates. The highly profitable nature of the currency swap arrangements between the CBN and domestic commercial banks is expected to continue for some time, it said. Commenting on the government assets which can provide succor in the medium term, it stated, “For example, the President’s policy advisory council has recommended the government sell down its stake in the most joint-venture oil and gas assets, a proposal that is estimated to bring in up to $17bn.” The US bank further said the recently announced $3bn loan to the NNPC could help partly improve FX liquidity conditions in the market, with the oil company selling the dollars to the CBN and remitting the naira proceeds to the government as upfront payments for oil revenues and taxes. However, the large external financing needs of the private sector will sustain forex pressures, the bank warned.