Nigerian stocks recover, led by banking and energy

  Nigerian stocks showed signs of recovery on Friday, gaining more than one percent after a strings of losses caused by falling oil prices and weakening growth in Africa's biggest economy.

Nigeria's stock index, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, rose 1.26 percent to 28,577 points in early trade, lifted mainly by gains in banking, breweries and energy firms stocks.

Shares of First Bank holdings rose 9.26 percent to 5.92 naira, Guinness was up 10.24 percent to 127.33 naira, Guaranty Trust Bank was trading 4.98 percent higher at 21.73 naira and energy firm Oando was up 10.16 percent to 10.19 naira.

Other gainers include PZ Cussons trading at 4.98 percent up to 21.91 naira, Dangote Sugar up 3.48 percent to 6.83 naira and Nigerian Breweries trading at 5 percent to 115.71 naira.

Bank customers get CBN’s six-year timeline to lodge complaints

The Central Bank of Nigeria (CBN) has set a six-year time limit within which all transaction-based complaints against financial institutions can be lodged.

A circular endorsed by its Director, Financial Policy and Regulation, Udofia Obot, addressed to all banks, discount houses and other financial institutions, explained that the new policy became exigent following recent challenges in ensuring timely resolution of complaints from consumers of financial services against banks.

The circular stressed that the CBN’s consumer protection role had over the years been hampered by “non-availability of, or delays in receiving documentary evidences from both parties.” This, it stressed underscored the need to have a policy on “time bar” for complaints management in the financial services industry.

“Consequently, the CBN having consulted the relevant stakeholders in the financial services industry, and in line with provisions of limitation legislation; Money Laundering (Prohibition) Act 2013; and CBN Anti-Money Laundering and Counter Financing of Terrorism Regulation for Banks and Other Financial Institutions in Nigeria, 2013, hereby adopts a time limit of six years, effective from the date of the transaction, within which complaints against financial institutions shall be lodged,” it added.

However, the circular stated that the time limit would not apply to fraud cases; complaints already lodged with the financial institutions and CBN; and international electronic payment transactions which records are not retained beyond 180 days on the dispute resolution application (arbiter). The circular further explained that the latest circular supersedes the earlier circular dated February 16 ths year on the subject matter.

Nigeria's Warri refinery temporarily shut: NNPC

Nigeria's Warri refinery has been shut down temporarily and operations will resume by Tuesday, a spokesman for the Nigerian National Petroleum Corporation (NNPC) said on Thursday.

Oil sales account for about 70 percent of government revenue in Africa's top crude producer. It imports most of the fuel used by its 170 million inhabitants, however, because of its ageing, inefficient refineries in Warri, Kaduna and Port Harcourt.

NNPC spokesman Ohi Alegbe said the decision to shut down the Warri refinery was taken because there was insufficient crude oil in the system.

"They are supposed to have at least a 25-day sufficiency in the supply of crude. So because of the depletion in the volume of crude they have had to temporarily shut down," said Alegbe.

"It was shut down on Monday. This is a temporary measure and it should be up and running by Tuesday," he said.

The move comes a day after NNPC announced it had cancelled its contract for the delivery of crude to Nigeria's refineries.

The state oil company also said on Thursday it has reduced the number of off-takers that will emerge after a competitive bid for the proposed 2015/16 crude oil term contract to 16 from 43.

NNPC, which announced a raft of measures aimed at rooting out mismanagement in Nigeria's oil sector, said it had extended invitations to Mobil and Forte Oil, in addition to an earlier published list, to bid for the new proposed offshore processing agreement.

NNPC reduces crude off-takers to 16

 

 Nigeria's state oil company, the Nigerian National Petroleum Corporation (NNPC), has reduced the number of off-takers that will emerge after a competitive bid for the proposed 2015/16 crude oil term contract to 16 from 43, it said on Thursday.


NNPC, which has been announcing a raft of measures aimed at rooting out corruption in Nigeria's oil sector, said it had extended invitations to Mobil and Forte Oil, in addition to an earlier published list, to bid for the new proposed offshore processing agreement.

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Shell declares force majeure on Nigerian Bonny oil exports

 Royal Dutch Shell's Nigeria operation has declared force majeure on its Bonny Light crude oil exports after shutting down two key pipelines due to a leak and oil theft, the company said on Thursday.

Shell said in a statement it had closed the Trans-Niger Pipeline due to a leak and the Nembe Creek Trunkline to repair damage caused by oil thieves.

FG to review cost of 2nd Niger Bridge

The Federal Government is to review the Second Niger Bridge contract to ascertain the exact cost of the project.

The construction of the Second Niger Bridge, a Public Private Partnership arrangement, was awarded to Julius Berger at the cost of N130 billion to complement the ageing River Niger Bridge.

Aminu Dikko, director-general, Infrastructure Concession Regulatory Commission (ICRC), told journalists on Wednesday at the Presidential Villa in Abuja, that the commission had asked the ministry of works to review and justify the cost of the project, as the project was not likely to be completed soon.

Dikko, who was at Aso Rock to brief the president on the activities and challenges of the commission, said the certificate of compliance for the project was also being withheld until all grey areas were cleared.

“The Second Niger Bridge is one of the projects that we discussed with the president. We did say yes, it is in the commission for regulatory oversight.
“We have been discussing the transaction with the ministry of works but before it can be finalised, the commissioner has to give a certificate of compliance. We haven’t given that because we have seen a lot of issues that we are uncomfortable with. We are talking with the ministry of works for them to correct it.

“We will also talk about the actual cost of the bridge eventually. We have asked the ministry of works to review it and justify how much the project should cost,” he said.

Dikko further explained that communities were still clamouring for adequate settlement for their land.

Onitsha traditional council, he said, had written to the commission, complaining that they have not been adequately represented in the transaction.
“We need to be convinced that these few problems are sorted properly,” he said.

Work had reportedly been abandoned at the construction site of the bridge, which was flagged off on March 10, 2014, by former President Goodluck Jonathan. The project, which had been given a timeline of 48 month, measures about 1,590 metres long and forms part of the 11.90-kilometre length project.

So far, N10 billion has been spent and, out of it, N1.5 billion was used for paying for damages and others, he had said at the time.

Legacy concessions inherited by the commission were also discussed. These include the Lagos International Trade Fair complex, the Tafawa Balewa Square and the Lagos-Ibadan Expressway.

There is also a proposal to build three deep sea ports for the country with a combined estimated cost of about $6 billion.

“So, we are reviewing these proposals with the ministry of transport and in due course, we will come out with a position on that,” he said.

The president in turn directed the commission to involve the state governors in their plans to concession the silos to private owners, to see how best they can encourage their farmers to utilise these silos when they come into effect.

The president also directed that MDAs should ensure that they have adequate funding for development of project in their budgets, and if they don’t they should look for alternative ways of getting such funding, rather than expect funds from the ICRC, the director-general said.

NNPC Cancels Crude Supply Contracts To Refineries

The Nigeria National Petroleum Cooperation (NNPC) has cancelled the current contracts on the supply of crude to the nation’s refineries.

The move according to the cooperation is to curb the exorbitant cost and inappropriate process of engagement.

While that subsist, NIDAS Marine Limited, a subsidiary of the NNPC has been engaged to provide crude delivery service on negotiated industry standard rate pending the establishment of substantive contracts.

When another contract is in place, it will be the delivery of crude to the refineries by marine vessels rather than through the pipeline network, which the corporation says is susceptible to vandalism.

In the same vein, the Corporation also terminated the Offshore Processing Agreements (OPA), entered into in January, 2015 with three companies, namely- Duke Oil Company Inc., Aiteo Energy Resources Limited and Sahara Energy Resources (Nig) Ltd, claiming that the current OPA is skewed in favour of the companies’ such that the value of product delivered is significantly lower than the equivalent crude oil allocated for the programme.

To the alternative, the NNPC has invited Messrs. Oando, Sahara Energy, Calson, MRS, Duke Oil, BP/Nigermed and Total Trading to bid for the new Offshore Processing agreement.

On the status of the Crude for Product Exchange Agreement (SWAP) reportedly entered into by the NNPC and some oil traders, the Corporation informed that the last SWAP arrangement lapsed in December, 2014 and was never renewed.

Meanwhile, a tendering process for the 2015/2016 Crude Oil Term Contract for the evacuation of Nigeria’s crude oil equity from the various crude and condensate production arrangements will soon be commenced.

Heritage Bank finally seals merger deal with Enterprise Bank on CBN, court approvals

Nigerian lender – Heritage Bank Limited has finally sealed its merger deal with Enterprise Bank Limited –a development which will increase the bank’s branch network (Experience Centres) from current 15 to about 200 branches, and thus position it among the top seven banks in Nigeria.

The Central Bank of Nigeria (CBN) has granted final approval for the deal. Also, the Federal High Court has sanctioned the scheme of merger and ordered the merger of both institutions.

“The Management  of the Central Bank of Nigeria  (CBN) has approved  the grant  of Final Merger Approval  to Heritage  Banking Company  Limited and  Enterprise Bank Limited and  the license  of Heritage Bank Limited (the successor),” the CBN said in a letter to Heritage Bank.

Heritage Bank had on October 15, 2014, made history with the successful completion of the acquisition of Enterprise Bank, after investing about N56 billion in the deal.

A Federal High Court sitting in Lagos, on July 27 this year, had ordered an Extra-ordinary General Meeting (EGM) of all the parties to the deal. This EGM was held on Wednesday August 12,  this year, where the shareholders of the merging banks sealed the deal.

Ifie Sekibo, Managing Director/Chief Executive, Heritage Bank, said “We are pleased with the final approval of the merger of the two institutions. The stage is now set for us to achieve the vision of a bigger and better bank that offers world class banking services designed to help customers to create, preserve and transfer wealth”.

Sekibo added that “With this acquisition, the new Heritage Bank is better positioned to offer unparalleled banking services which spread across over 200 branches, 177 ATMs, 57 Cash Centres and 2000 POS terminals in 26 states. We shall harness the better of the two worlds combined in terms of our innovative products, bespoke technology and extended branch network manned by a team of tenacious people; as this automatically transforms our bank from a tier-2 player to a strong Tier-1 player that is one bigger, better,.

“As we integrate into a larger bank, we assure our esteemed customers that this strategic stride is ultimately to serve them better. We affirm our commitment to all stakeholders that we will continue to deliver on our promise of creating and preserving wealth across generations through highly personalised service.”

As a brand built on a legacy of innovation, Heritage Bank recently achieved a milestone with the ISO/IEC 27001:2013 certification award in recognition of its commitment to effective and secured financial system.

The bank has also set a record as the only bank in Nigeria to get this certification award in less than three years of operation. It has, by this certification, joined the league of big players already certified in the industry, including the CBN.

“The legacy of innovation was reinforced when the bank received the Payment Card Industry Data Security Standard, PCI DSS certification, in addition to the ISO/IEC 27001:2013 award. The PCI DSS is a proprietary information security standard for organisations that handle branded credit cards from the major card schemes including Visa, MasterCard, American Express, Discover, and JCB.

The certification was in recognition of the bank’s commitment to effective and secured financial system which has put the bank in the league of big players in the industry and confer internationally-recognised standard on its operations.

DPR shuts 42 petrol stations in Imo

No fewer than 42 petrol stations have been shut down in Imo State by the Directorate of Petroleum Resources (DPR) for selling Premium Motor Spirit (PMS) above the government regulated price of N87.00 and engaging in other sharp practices which include under dispensing, adulteration and hoarding of petroleum products.

The zonal Assistant Director Operations, Engineer Ona Edwin who briefed journalists at the Directorate’s headquarters in Owerri, the Imo State capital, said the closure of private depots engaging in similar offences strengthened the operations of the DPR, adding that it will no longer be business as usual for independent marketers who violate government regulations.

He however disclosed that 14 out of the 42 sealed petrol stations have been reopened after paying the official fine of N100, 000.00.

Meanwhile the Zonal Operations Controller, Ndy Akpambo, who decried the fraudulent activities of the independent marketers, stated that, “the measures taken against the defaulting marketers are within the armbit of our regulation but aside from the shutting of the petrol stations, operational licenses of marketers can also be out rightly revoked depending on the offense committed.”

FG, states, LGs share N511.799b for July

The Federation Account Allocation Committee (FAAC) has shared the sum of N511.799 billion to the three tiers of government for the month of July, 2015.

Giving a breakdown of amount shared, the Permanent Secretary who is also the Chairperson of the FAAC, Mrs. Anastasia Nwokobia, revealed that the gross revenue of N433.584 billion was received for the month of July was lower than the N485.952 billion received in the previous month of June 2015 by 52.368 billion.

Mrs. Nwokobia said that shutdown and shut-in of production for maintenance and the emergency repairs as well as declaration of Force Majure by Shell Petroleum Development Company (SPDC) were the major issues that negatively impacted crude oil revenue.

According to her, the Federal Government got N202.111 billion representing 52.68% of the total amount shared while state governments got N102.513 billion which is 26.72 % of the total revenue distributed.

The local government Councils got N79.033 billion which also represented 20.60 % of the total revenue shared for the month of July.

She noted that there was also revenue loss of $22.53 million as a result of drop in average price of crude oil from $65.76bpd in May to $61.27 in June, 2015.

The Permanent Secretary stated that the distributable statutory revenue for the month is N433.584 billion adding that the sum of N6.330 billion was refunded by the Nigerian national Petroleum Corporation (NNPC) to the Federal Government.

She said that the present amount of money in the Excess Crude Account (ECA) is $2.257 billion.

Also, there was exchange gain of N6.409 billion which was proposed for distribution. She therefore, put the total revenue distributable for the current month to N511.799 billion.

According to FAAC, the gross revenue available from the Value Added Tax (VAT) was N74.945 billion as against N64.992 billion distributed in the preceeding month resulting in an increase of N9.953 billion.

The sum of N28.209 billion 13 % derivation mineral revenue of oil and gas was given to the oil producing states.

Giving a further breakdown of the revenue distribution for the current month, the sum of 6.421 was given to the Federal Inland Revenue Service (FIRS) as 4% cost of revenue collection, while the Nigerian Customs Service got N3.199 billion representing 7% cost of the revenue collected for the month.

Similarly, the Department for Petroleum Resources (DPR) got N2.389 billion which also represent 4% of its revenue collection for July, 2013.

The Committee also disclosed that the Nigerian Customs Service refunded the sum of N.240 billion to the federal government.

Mrs Nwokobia attributed the delay in holding FAAC meetings by second week of every month to challenges of revenue inflow which has also delay the payment salaries to civil servants and pleaded for their understanding.

On the level of compliance to the Single Treasury Account (TSA), by Ministries, Departments and Agencies (MDAs), the Accountant General of the Federation Mr Ahmed Idris said that no MDAs is exempted from remitting revenue to the TSA.

Mr Idris described the TSA as a government’s policy that does not exempt any agency of government saying that it will enable government to have an overview of its budget and expenditure ahead of time.

W/Bank offers FG N27.58bn for community projects

The World Bank says it would soon start the disbursement of $140m (N27.58bn) under its assisted Community and Social Development Project to 26 states and the Federal Capital Territory.

The bank, in a statement issued in Abuja , said about $200m (N39.4bn) had been disbursed under the first phase of the project, thus bringing the total amount provided under the programme to $340m (N66.98bn)

It said states that would benefit from the additional financing would focus on the most vulnerable households in poor communities in the country.

Anambra, Kaduna and Sokoto states, it added, are also set to participate in the additional financing.

The statement said the additional financing was expected to fund micro-project facilities such as rehabilitation and construction of school class rooms, health centres and clinics and skills acquisition.

Others are rural electrification, rural transport, community water schemes, community housing schemes and rural market infrastructure.

Power generation hits 4,810.7 megawatts

The management of Transmission Company of Nigeria (TCN), in a statement on Wednesday, said that it had attained new peak of 4,810.7 megawatts of generated electricity.

The statement signed by the Managing Director, System/Market Operation of TCN, Dipak Sarma, said this was achieved at 20.45 hours of August 25 following a record set on Tuesday when 4748megawatt was generated.

It said these successes were due to the joint contributions of the gas companies, generation companies, distribution companies and the TCN.

According to the statement, the Managing Director of TCN, Mr Paul Stefiszyn, said: “The Federal Government has been supportive in coordinating the activities of the sector across the value chain.’’

It stated that the sector now aimed at achieving 5,000 megawatts in a short time, adding that this would be an important milestone for the nation’s economy.

FG, states, LGs share N511.799b for July

The Federation Account Allocation Committee (FAAC) has shared the sum of N511.799 billion to the three tiers of government for the month of July, 2015.

Giving a breakdown of amount shared, the Permanent Secretary who is also the Chairperson of the FAAC, Mrs. Anastasia Nwokobia, revealed that the gross revenue of N433.584 billion was received for the month of July was lower than the N485.952 billion received in the previous month of June 2015 by 52.368 billion.

According to her, the Federal Government got N202.111 billion representing 52.68% of the total amount shared while state governments got N102.513 billion which is 26.72 % of the total revenue distributed, while the local government Councils got N79.033 billion which also represented 20.60 % of the total revenue shared for the month of July.

Mrs. Nwokobia said that shutdown and shut-in of production for maintenance and the emergency repairs as well as declaration of Force Majure by Shell Petroleum Development Company (SPDC) were the major issues that negatively impacted crude oil revenue.

She noted that there was also revenue loss of $22.53 million as a result of drop in average price of crude oil from $65.76bpd in May to $61.27 in June, 2015.

NERC says corruption, poor budgeting bedevilling power sector

The Nigerian Electricity Regulatory Commission (NERC), has blamed corruption and poor budgeting as the major impediments to the nation’s electricity sector.

Chairman of the commission, Dr Sam Amadi, who stated this also clarified that “fixed charge has not been removed and cannot be removed by an ‘executive fiat’ unless it goes through a process by the regulator.”

He was speaking at the opening of a two-day meeting of NERC and Industry Performance Management Officers of Generation and Transmission Company of Nigeria (TCN).

The meeting was organised by NERC to present a template for effective project management to the electricity industry performance management officers in Abuja.

Noting that prior to 2010, the sector suffered the problem of modelling, Amadi further observed that the sector had been bedevilled by project management problem from 2010 till date.

The problem is mostly caused by corruption, he said, adding that inefficient budget circle has made it difficult for effective delivery of projects within a target time frame in the sector.

Nigeria would have hit about 9,000 megawatts (mw), if all the Nigerian Independent Power Projects (NIPP) were completed and the capacities of existing electricity generation companies recovered, he said.

“Today, the real problem of this sector is performance management. We have moved from modelling. We have set a fairly good enough model that will allow us to create sustainable electricity.

“The problem is poor project management. It includes corruption, which is the beginning because, if you miss-procure, if you award contracts to those who cannot deliver, there is no magic. So, it is not a NERC problem. It is a problem of delivery.

Nigerian bourse introduces Premium Board Index as Dangote Cement, FBN Holdings, Zenith make entry

DangoteThe Nigerian Stock Exchange (NSE) Tuesday launched a new listing platform – the Premium Board and the associated Premium Board Index, in keeping with its commitment to promoting Africa’s biggest companies, as well as influencing the economic growth and development of Nigeria.

The companies that have qualified for the Premium Board are Dangote Cement plc, FBN Holdings plc, and Zenith International Bank plc, with market capitalisation of N2.87 trillion, N277.7billion and N587.43 billion, respectively. They all passed the Corporate Governance Rating System (CGRS) before applying for the Premium Board.

The Premium Board is for issuers with minimum market capitalisation of N200 billion and highest corporate governance standards. Companies aspiring to be listed on the Premium Board must achieve a minimum score of 70 percent on the stringent CGRS.  In addition, they are required to maintain a minimum free float of 20 percent of their issued share capital or a free float value equal to or above N40 billion.

Oscar Onyema, CEO, NSE, said: “The Premium Board Index would serve as a benchmark for investors looking to track the performance of large firms with excellent corporate governance and sustainable business models. 

Typically, similar indices outperform their market wide index by double digits. The NSE Premium Board Index had a four-year average return of 17.65 percent versus the All Share Index return of 11.31 percent over the same period.

Contract Inflation: BPP has saved Nigeria N659 bn – DG

The Director-General, Bureau of Public Procurement (BPP), Emeka Ezeh, says the bureau saved the country N659 billion from contracts awards between 2009 and 2014.

Ezeh said this in his paper on “Ending the scourge of abandoned projects in Nigeria”, presented in Abuja.

Ezeh said the sum amounted to the difference between the proposed sum for contracts submitted by Federal Government contractors in different ministries, departments and agencies, and what the bureau approved.

He urged the overnment to strengthen institutions like the BPP through which corruption and waste could be minimised.

Ezeh said it was not enough for the BPP Act to regulate the Federal Government. He said it was also important for states and local governments to adopt the act to curb corruption at all levels.

The DG expressed concern over the way many international companies that handled huge construction projects in Nigeria were shrinking or closing operations.

On abandoned projects, MRr. Ezeh said the three tiers of government had contributed to the trend, which he said, had led to huge waste of resources.

Nigeria's economic growth slows as low oil prices weigh

 

The National Bureau of Statistics says Nigeria's economic growth slowed sharply in the second quarter as lower crude prices took their toll.

The statistics body stated this in its quarterly report in Abuja.

It said annual growth dropped to 2.35 percent from 6.54 percent a year earlier, while Oil production fell to 2.05 million barrels per day from 2.21 million over the same period.

With oil accounting for more than 90 percent of Nigeria's foreign exchange earnings and about 70 percent of government revenues, the fall in crude prices and output has hurt Nigeria's finances and its naira currency, with foreign investors pulling out of its stock and bond markets.