S&P cuts Nigeria to B+ on weak oil, cites political risk

 

Credit agency Standard & Poor's downgraded Nigeria's rating to B+ from BB- on Friday, saying the decline in oil prices in the past seven months had significantly affected the country's finances.

Setting a stable outlook on the new rating, it also said political risk was a significant factor while the country's non-oil sector would support economic growth.

Nigeria holds a presidential election on March 28 when Goodluck Jonathan will seek another term. He faces former military ruler Muhammadu Buhari in what is expected to be the tightest ballot since the start of civilian government in 1999.

S&P said that while the west African country had taken numerous measures to counteract the effects of falling oil prices, such as tightening the 2015 budget and monetary policy, it believed the tense political atmosphere might undermine efforts to introduce other measures.

"The tightly contested general elections and potential underperformance on oil production may pose risks to the implementation of the federal economic management team's proactive and ambitious fiscal consolidation plans," it said.

S&P noted that Nigeria relies on oil and gas for about two-thirds of its fiscal revenues and over 90 percent of its exports, and that falling oil prices had notably impacted current account position.
But it added that the fastest growing sector, services, now accounted for more than 50 percent of GDP while oil and gas had shrunk to 14 percent.

An average current account deficit of 1.8 percent of GDP was expected for the period 2015-2018, it said, and annual economic growth was expected to average 5 percent in the same period.
The growth forecast was down from S&P's September report that expected a rate of 6.2 percent for the 2015-2017 period.

Fitch Affirms Nigerian State of Rivers at 'BB-'; Outlook Stable

 

Fitch Ratings has affirmed the Nigerian State of Rivers' Long-term foreign and local currency Issuer Default Ratings (IDRs) at 'BB-' and its National Long-term rating at 'AA-(nga)'.

The Outlooks are Stable. A draft rating action commentary (RAC) was submitted by Fitch to the State of Rivers on 11 March 2015, in line with the scheduled calendar.

As the issuer raised an appeal in relation to the draft RAC, the applicable committee review of which has now been held by Fitch, final publication of the RAC has been delayed until the above date.

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Brent oil falls on Opec output, Iran

 

Brent crude oil fell towards $54 a barrel on Friday and was on track for its third straight weekly loss, hurt by oversupply worries after Kuwait said Organisation of the Petroleum Exporting Countries (Opec) had no choice but to maintain output levels.

Brent for May delivery had fallen 33c to $54.10 by 9.31am . The contract is set to decline by more than 1% this week.

US crude for April delivery slipped 21c to $43.75 a barrel, headed for its fifth weekly loss. The contract expires on Friday.

Kuwait’s oil minister said on Thursday that Opec had no choice but to shun oil output cuts, reiterating the view from the emirate that the group will hold its course when it meets next in June.

Nigeria's Unity Bank swings to 2014 pretax profit

 Nigeria's Unity Bank swung to pretax profit of 13.63 billion naira ($68 million) in 2014 versus a pretax loss of 33.63 billion naira in the previous year, it said on Friday.

The lender said in a statement that the middle tier bank's revenue rose to 62.63 billion naira from 52.19 billion naira.

Nigerian interbank rates ease on government budget cash flow

 

 Nigerian interbank lending rates fell to 9 percent on average on Friday compared with 25 percent last week in anticipation of monthly budgetary allocations to government agencies.

Nigeria distributes revenue from oil exports among its three tiers of government - federal, states and local government - every month. Dealers said February allocations would filter through the banking system by close of business on Friday.

Cost of borrowing among banks had shot up to 25 percent last week partly because of debiting of banks' accounts for premium payment to the Nigerian Deposit Insurance Corporation (NDIC).

The secured Open Buy Back (OBB) fell to 9 percent from 25 percent last week. The secured fund was 4 percentage points below the 13 percent central bank's benchmark interest rate.

Overnight placement also fell to 9 percent against 25 percent last week.

Lending rates among banks are expected to stay steady next week because of the anticipated increase in liquidity from the disbursal of monthly budget allocations.

Low prices will hamper Nigeria's bid to boost output: Allison-Madueke

 

Consistently low oil prices will hamper Nigeria's bid to boost output to 4 million barrels per day (bpd), Oil Minister Diezani Alison-Madueke was quoted as saying on Tuesday.

"Flexibility in capex and funding in general will be further constrained in the year 2015," the minister said in a speech read out by Joseph Dawha, group managing director of the Nigerian National Petroleum Corp.

"Consistently depressed oil prices will limit industry's scope to manoeuvre ... and reaching the target of 4 million bpd," she said. "The industry must challenge itself to raise funding in order to meet these targets."

Alison-Madueke is also president of the Organization of the Petroleum Exporting Countries (OPEC).

Read more here on Reuters

Dangote group expects $9 bln refinery to start by 2017

 

A new $9 billion oil refinery producing 500,000 barrels per day being developed by Africa's richest man, Aliko Dangote, is expected to come onstream in Nigeria by 2017, a senior Dangote Group official said Tuesday.

The refinery, to be located in Lagos, will cut reliance on international markets for Africa's largest oil producer, which imports more than 80 percent of its fuel needs.

The lack of sufficient refining capacity is a major handicap in Africa's biggest economy.

"By the third quarter of 2017, we expect to be looking at commissioning," Mansur Ahmed, Dangote Industries Ltd's executive director of stakeholder management and corporate communications, told Reuters at an African refiners conference in Cape Town.

The refinery is being designed to process Nigerian crude mix and produce products conforming to Euro V fuel specifications, as fuel demands across the continent are forecast to rise rapidly with many countries enjoying strong economic growth.

Poor infrastructure, competitive global markets and financial constraints have traditionally held back Africa's refining capacity, while fuel subsidies in Nigeria are also an issue, said Ahmed, who spoke on behalf of Aliko Dangote.

Importers abandon N1b containers, vehicles at port

Over 120 containers and 96 vehicles worth over N1 billion have been abandoned at Tin-Can Island Port and other bonded terminals in Lagos, following the importers’ inability to clear them, it emerged last weekend.
Source said the importers are finding it difficult to get loans to fund their business. The devaluation of the naira is also said to be affecting their operations.

A source said the Nigeria Shippers’ Council (NSC) is not making things easy for the importers by not getting terminal operators and shipping firms to reduce their charges.

The Vice Chairman, Association, Nigeria Licensed Customs Agents (ANLCA), Tin Can Chapter, Mrs Ada Akpunonu, said importers abandoned their goods for two main reasons:

• the ports are the most expensive in West Africa; and

• the unstable exchange rate.

Banks, she said, have stopped lending to importers because of the fall of the naira and the increase in the prices of goods.

“There is no doubt that activities at the ports have reduced because of the exchange rate.. The terminal operators and the shipping companies are also not helping matters. Our port is the most expensive in the sub-region. Most importers are not making profit and that is why they have decided to abandon their goods at the ports.

NERC Reduces Electricity Tariff, Cuts Off Excessive Charges by 50%

Nigeria’s energy situation is considered “very pathetic” given its poor ratio of megawatts to populace, despite housing Africa’s biggest economy and largest black population; it produces roughly 3000MW to 5000MW of electricity for about 170 million.

However, locals may be dancing to the announcement, made today, that the country’s regulatory body, Nigerian Electricity Regulatory Commission, had reviewed electricity tariff downwards by 50 percent.

Chairman of the commission, Sam Amadi, said the commission has been listening to consumers’ complaints and taking full account of the impact of the high tariff on consumers and the Nigerian economy and therefore, the Commission has reviewed the basis of the MYTO 2.1 assumptions and has determined that it is inappropriate to transfer to consumers collection losses that are controllable by the DISCOs

The new tariff regime will kick-off from the start of April.

CPI Rises to 8.4% in Feb '15 as Predicted; Food Prices Increase Driven by Imported Food Items

The Nationa Bureau of Statistics in its February inflation report, states that the Consumer Price Index (CPI) which measures inflation rose by 8.4 percent (year-on-year), 0.2 percentage points from 8.2 percent recorded in January.

The reports noted that all major CIOCOP divisions that contribute to the index increased at a faster pace during the period, the only exception being Recreational and Culture Division which increased at a slower pace.

It further stated that the faster pace in Divisions that yield the Headline Index was also evidenced in both the Food and Core sub-indices. Food prices as observed by the Food Sub-index increased at a faster pace in February partly driven by increases in prices of imported food items.

Meanwhile, the Imported Food sub-index increased by 8.8 percent (year-on-year), the highest increase recorded since February 2013. The Food sub-index rose by 9.4 percent (year-on-year), 0.2 percentage points from January. By groups, while most groups that contribute to the Food sub-index increased at a faster pace during the month, the pace of increase in the Food Sub-index was weighed upon by a slower increase in the Bread and Cereals group.

Nigerian National Quality Policy to ensure industrial competitiveness - Aganga

 

Nigeria's Government has harped on the need for standard quality in the manufacturing and production of goods, to ensure industrial competitiveness in Nigeria.

Re-emphasizing this at the presentation of the National Quality Infrastructure documents in Abuja, Minister of Industry, Trade and Investment, Olusegun Aganga, said the policy will promote made-in-Nigeria goods, which can be compared to international standards. He added that it will further strengthen the diversification of the economy and improve the local Industries.

Speaking earlier the Secretary of the Committee and Director General of Standards Organization of Nigeria, Dr Joseph Odumodu, emphasized that quality assurance of good will be ensured as this will encourage growth in the industrial sector.


The Nigerian National Quality Infrastructure Policy is a 12 Million Euro project, funded by the European Union and supported by United Nations Industrial Development Organization, UNIDO.

Petrol subsidy rises by 1,142% in seven weeks

The amount payable by the Federal Government to oil marketers as subsidy on petrol has risen by over 1,142 per cent in the past seven weeks.

As of January 21 this year, the subsidy payable by the government on every litre of petrol was N2.84, but the latest information on the Petroleum Products Pricing Regulatory Agency’s website on Monday showed that the amount payable as subsidy on the product was now N35.28 per litre.

The PPPRA puts the current landing cost of the product at N106.79 per litre; while the total cost, comprising landing cost and distribution margin, was put at N122.28. However, the product still sells for the regulated price of N87 per litre at filling stations across the country.

Components that make up the landing cost include cost and freight, N95.23; traders’ margin, N1.47; lightering expenses, N4.16; NPA charge, N0.77; financing, N1.37; jetty depot thorough put charge, N0.80; and storage charge, N3.00.

Nigeria's Access Bank posts 20 pct rise in 2014 pretax profit

 

Nigeria's Access Bank reported a 20 percent rise in 2014 pretax profit to 52.02 billion naira ($261 million) compared with the previous year, it said on Monday.

Revenue also rose to 245.21 billion naira during the year to end-December against 206.89 billion naira in the previous year, the bank said in a statement.

Access Bank said it will pay a total dividend of 0.60 naira per share, unchanged from the previous year.

REPORT: Nigeria among 20 fastest growing economies

According to latest survey released by New York based financial newswire service, Bloomberg, Africa's largest economy Nigeria has been ranked among 20 fastest growing economies in the world. Leading online shopping community Kaymu.com.ng has attributed Nigeria's listing to the upshot of e-commerce in the country.

In an accompanying chart by Bloomberg, Nigeria with an expected growth rate of 4.9% was ranked sixth behind China (7%), the Philippines (6.3%), Kenya (6%), India (5.5%) and Indonesia (5.4%).

The explosion of the E-commerce space in the last two years has fuelled a massive consumer behavioural change. E-commerce in Nigeria records over $2m worth of transactions per week and close to 1.3bn per month from the 38% of Nigerians who prefer to buy products through the internet, according to a survey conducted by the business management and consulting firm Philip Consulting.

Read more here...http://www.bizcommunity.com/Article/410/87/125682.html

Nigerian naira trades in tight spread as oil firms sell dollars

Nigeria's naira traded within a range at which it has been stuck for almost a month on the interbank market, supported by dollar sales from the central bank and oil companies, dealers said on Monday.

The naira closed unchanged at 199 naira to the dollar, while it traded at 224 naira against the greenback at the parallel market, operated by bureau de change agents.

The central bank scrapped its bi-weekly forex auctions last month and fixed its clearing rate at 198 naira to the dollar, in a move to curb speculation on the currency. The naira has since been trading at around 197 to 199 to the dollar.

A total of 104.5 million dollar sales were carried out on Monday at a range of 197 to 199 naira to the dollar, just before the market closed, Thomson Reuters data showed, with dealers attributing some of the trades to a central bank forex sale.

The local units of Chevron sold $30.4 million while Shell sold an undisclosed amount to some lenders to buy naira for local use on Monday.

The central bank this month fixed the rate at which banks can buy dollars from oil companies at not more than 2 naira spread to its clearing rate, its latest attempt to prop up the currency hit by the drop in oil prices.