Bread price hike, CBN FX reforms… 7 top business stories to track this week

Here are the seven top business stories you need to track this week — February 5  to February 10.

BAKERS LAMENT HIGH COST OF BREAD PRODUCTION, ANNOUNCE PRICE HIKE 

The Association of Master Bakers and Caterers of Nigeria (AMBCN), Abuja chapter, says they will increase the price of bread.

The AMBCN said the upward review was due to the rising cost of all baking materials in the country.

In a statement on Friday, Adeyemi Richard, secretary of the association, said the survival of the industry cannot be guaranteed as all associated baking materials have continued to be on the high side.

According to Richard, the rising cost experienced towards the last quarter of 2023 forced many of their members out of business, noting that others who managed to survive are yet to stabilise.

Also, a group of protesters under the umbrella of the Association of Women Gurasa Bakers staged a protest in Kano over the high cost of read production.

CBN STOPS DAILY CRR DEBITS, REMOVES ALLOWABLE LIMIT FOR IMTOs

The Central Bank of Nigeria (CBN) says it will stop daily cash reserve requirement (CRR) debits of deposits in commercial banks.

CRR mandates banks to reserve or hold a fraction (or a combination) of their customers’ deposits in the vault. The banks are restricted from using the reserved funds to conduct their daily operations, such as investments and loan disbursements.

In the last monetary policy committee (MPC) meeting of the CBN in July 2023, the CRR was retained at 32.5 percent.

The CBN said it is ceasing the daily CRR debits, with plans to adopt an updated CRR mechanism.

The apex bank also removed the allowable limit of exchange rate quoted by the international money transfer operators (IMTOs).

FG TO SANCTION AIRLINES OVER DELAYED, CANCELLED FLIGHTS

Festus Keyamo, minister of aviation and aerospace development, has threatened to start publishing the names of domestic airlines that delay or cancel flights from next week.

The minister said airlines cannot be sanctioned by suspending their operations.

According to Keyamo, the issue is a delicate one and should be handled carefully so as not to discourage potential investors.

However, he said customers must find succour, hence rules must be implemented.

“Every week, we will start publishing the list of flights that were delayed or cancelled and the reasons and action taken,” Keyamo said.

“We will start publishing them next week. We will name and shame erring airlines.”

$700M REMAINS BLOCKED, IATA REPLIES CBN OVER RELEASE OF AIRLINES ’ FUNDS 

The International Air Transport Association (IATA) said it will engage foreign member airlines operating in Nigeria to verify the release of $136.73 million by the country’s central bank, stating that $700 million remains blocked.

Meanwhile, on January 30, 2024, the apex bank said it had concluded the payment of all verified foreign exchange (FX) claims by airlines with an additional $64.44 million to the concerned foreign aviation firms.

‘NO PLANS TO CONVERT DOLLAR DEPOSITS TO NAIRA’

The CBN also said there are no plans to convert $30 billion deposits in domiciliary accounts to naira.

A report had alleged that the regulator was considering a policy that would result in the conversion of foreign currencies in domiciliary accounts of citizens to naira to stabilise and increase liquidity in the FX market.

However, the apex bank, in a post on its official X handle on Saturday, described the reports as fake news.

The development came amid the free fall of the naira and efforts of the CBN to stabilise the market.

CUSTOMS ADJUSTS FX RATE FOR TARIFFS TO N1,413/$ from N1,356/$

The Nigerian Customs Service (NCS) has adjusted its foreign exchange (FX) rate for tariffs and duties collection to N1,413.62 per dollar.

The adjustment had come a day after customs moved the rate to N1,356 on Friday, February 2, 2024 — from N951.

The new rate, which represents an increase of 4.18 percent or N56.74, was updated on the government’s single window trade portal on Saturday.

DANGOTE REFINERY TO IMPORT CRUDE FROM THE UNITED STATES

The Dangote Refinery plans to import crude from the United States in the coming months.

According to a Bloomberg report, the transaction indicates how competitive American barrels have become in the international market.

Trafigura Group sold 2 million barrels of West Texas Intermediate (WTI) Midland to Dangote refinery for February-end delivery, the report quoted traders as saying.

This is the first time that the giant refinery has bought non-Nigerian crude, traders said.