It's interactive and very controversial, with incisive analysis and market forecast. Don't miss it!
Friday 29 January 2016
Business Talk on the Mid-day dialogue with Imoh
It's interactive and very controversial, with incisive analysis and market forecast. Don't miss it!
Electricity tariff: Consumers to determine their own bills – PHED
According to Jay McCoskey, the new CEO of PHED, who replaced Jon Abbas, in a quarterly pre-briefing in Port Harcourt with newsmen, better services would be the hallmark of the new electricity regime.
McCoskey said the increase in what people paid before and now would be not more than 35 percent, saying the Discos would also introduce energy efficient solutions such as special light bulbs into the market to help users manage their consumption.
“With the introduction of these energy efficient appliances, customers’ actual consumption would be the determining factor on the bills that they pay,” he said.
He noted that this was the reason why PHED would intensify its mass metering programme, as studies had shown that with pre-paid meters, electricity users consume between 12-15 percent less than those using post-paid meters.
Also speaking at the event, Nancy Abdala, chief legal and regulatory officer, PHED, said the new electricity tariff addresses issues usually raised by customers on fixed charges, high electricity bills and meter provision.
According to Abdala, with the removal by the regulatory body of fixed charges, the new tariff includes all costs, so customers only pay this new tariff per unit consumed, meaning that a consumer would be the one to determine his consumption.
Under the new tariff approved by Nigerian Electricity Regulation Commission (NERC) single-phase residential customers would now pay N24.91 per unit with no fixed charge, as against N15.09 per unit.
Rural customers (those who consume less than 50Kw/h every month) also known as R1, have their tariff unchanged at N4.00. In addition, commercial customers classified as C1, C2 and C3, would now pay an all-inclusive charge of N35.88, N43.72 and N44.30; while industrial customers classified as D1, D2 and D3 pay an all-inclusive charge of 36.19, 44.01 and 44.59 per unit.
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Boeing wins contract to build new Air Force One presidential jets
The U.S. Air Force awarded Boeing an initial contract worth $25.8 million to reduce risk and lower the cost of the program by looking at the tradeoffs between the requirements and design of the new plane, according to the Pentagon's daily digest of arms deals.
Details about the total value of the new contract have not been released, but the Air Force has previously said that it had earmarked $1.65 billion for two replacement jets.
The Air Force first announced in January 2015 that Boeing's 747-8 would be used to replace the two current Air Force planes used to transport the U.S. president. Air Force One is one of the most visible symbols of the United States.
The Air Force plans to modify the contract in coming years as the Air Force One program moves into the engineering and design phase, and later, into production.
The Air Force now operates two VC-25s, specially configured Boeing 747-200Bs, which are nearing the end of their planned 30-year life.
In January, Air Force Secretary Deborah James said the Air Force One program would use proven technologies and commercially certified equipment to keep the program affordable.
The Air Force decision was widely expected since the only other suitable four-engine jet is the A380 built by Airbus (AIR.PA) in Toulouse, France.
The 747-8 is the only four-engine commercial jet Boeing makes, providing an extra margin of flight safety over the more standard twin-engine planes.
Boeing last week said it would cut production of the 747-8 in half in September and take a $569 million charge in the fourth quarter as it faces dwindling sales.
The four-engine jet is now mostly a cargo workhorse, eclipsed by more fuel-efficient twin-engine jets for passengers.
The double-decker plane entered service in 1970, undergoing a major overhaul in 2012, with new engines and a longer fuselage.
2016: Govs budget billions of naira for feeding, maintenance, others
The information is contained in the 2016 budget proposals as presented by many of the state governors.
Deliberations on the proposals are ongoing at the various state Houses of Assembly but some of the copies of the proposed budgets exclusively obtained by our correspondents showed that the governments had budgeted billions of naira for feeding, travels, vehicles, maintenance, allowances and others.
For instance, Governor Ben Ayade of Cross River State had presented the 2016 budget proposal of N350bn to the state House of Assembly.
A copy of the proposed budget obtained showed that the government budgeted N13.9bn as overhead cost for the office of the Chief of Staff to the Governor.
A breakdown of the overhead cost showed that N1.4bn was proposed for entertainment and hospitality in 2016 for the governor under the office of the Chief of Staff.
A further breakdown under the sub-head showed that entertainment at meetings would gulp N500m while financial assistance was put at N900m.
Under travel and transportation, a total of N844m has been budgeted with local travel and transport gulping N832m while foreign trips were put at N12m.
The governor’s office is expected to spend N560m on maintenance repairs and services with plant and generator gulping N100m.
In the aspect of other services, the governor’s security vote was pegged at N4bn, while contingency and press/public relations were proposed to gulp N2.1bn and N610m respectively.
For the office of the deputy governor, overhead cost was put at N225m.
In Delta State, findings showed that the administration of Governor Ifeanyi Okowa budgeted N25bn for the running of the Government House.
Meanwhile, the government has been criticised by some residents over some of its appointments and its pace, which has been described as slow.
Special Adviser to the Governor on Labour Matters, Mr. Mike Okeme, said the N25bn budgeted for the Government House would take care of “repairs, maintenance, logistics, and others.”
Sources said the governor would not likely execute any project because of cash crunch.
A source said, “The man will not execute any project rather; he will keep receiving visitors on courtesy calls as nothing is going on in the state.”
The Plateau State budgeted N8.98bn for the administration of the Government House.
Apart from that, there are some projects the state governor, Mr. Simon Lalong, plans to execute this year, which include the completion of a new Government House, renovation and expansion of the state House of Assembly complex and the renovation and furnishing of the state secretariat.
The Special Adviser to the State Governor on Media, Mr. Mark Longyen, identified other projects to be executed under the budget to include the building and furnishing of a protocol lounge at the Yakubu Gowon Airport, Heipang.
The appropriation bill submitted to the Akwa Ibom State House of Assembly by the state governor apportioned N66.86bn to administration, N9.89bn to education and N7.419bn to health.
Information about the amount budgeted for the State House, governor’s aides and others could not be ascertained as of the time of filing this report.
The Commissioner for Information and Communications, Akwa Ibom State, Mr. Aniekan Umana, said, “We need to look at the budget when the House finishes deliberation on it. As of now, we do not have a budget, what we have now is a proposal; until the House of Assembly passes it into law and the governor gives his assent to it; it is only then we can look at International Statement of Accounting Standard, which breaks down everything.
The Chairman, House Committee on Appropriation and Finance, Mr. Usoro Akpanuso, said work was not yet concluded on the appropriation bill.
The Commissioner for Finance, Mr. Akan Okon, promised to get back to our correspondent as he said he was on board a flight to Abuja.
Meanwhile, the Edo State Chapter of the Peoples Democratic Party has described the state’s 2016 budget as a budget of misappropriation, saying that the state governor, Mr. Adams Oshiomhole, appropriated N10.65bn, representing 9.6 per cent of the total budget to his office.
The party said Oshiomhole’s administration, however, allocated N35m of the N111.50bn budget to the office of his deputy.
The party also accused the state government of neglecting the provision of water to the majority of the citizens of the state by voting a “paltry” N100m for the sector; N300m for agriculture; N5bn for security and N400m for Information and Communications Technology.
Edo State Chairman of the party, Chief Dan Orbih, who recently spoke to journalists in Benin while analysing the state’s 2016 budget, also accused the governor of voting the sum of N3.5bn to the construction of the Accident and Emergency Ward unit at the Benin Central Hospital.
He, therefore, described the hospital ward project as a conduit that would be used to siphon the resources of the state. Funds were also allocated to the ward in the previous two budgets.
But the Special Adviser on Media to Governor Oshiomhole, Prince Kassim Afegbua, said that the budget was only a proposal and “until it becomes a law, it cannot be commented upon.”
The Ogun State Governor, Senator Ibikunle Amosun, recently signed the 2016 Appropriation Bill into law following its passage by the state House of Assembly.
The N200.3bn appropriation bill allocated N89.91bn for recurrent expenditure, N11bn for consolidated revenue fund charges including pensions and gratuities, while N99.291bn was earmarked for capital expenditure.
Efforts by our correspondent to get the sectoral analysis of the budget at the Ministry of Budget and Planning were unsuccessful.
A government source, who spoke on condition of anonymity, said the ministry had yet to do the breakdown.
The source said, “We have yet to do the sectoral analysis of the budget. It is difficult to tell you which sector has what budget for now.”
However, the Kaduna State Governor, Mallam Nasir El-Rufai, described the state’s N171.7bn budget as that of “Sacrifice, Restoration and Change.”
El-Rufal said his administration was able to reduce the 2016 recurrent expenditure by 50 per cent when compared to that of 2014.
He said Government House expenses for 2016 are projected at N563.7m, a 70 per cent cut from the N2.1bn that the previous government spent in 2014, “the same year that they appropriated only N300m to Ministry of Health for capital projects.”
The governor had said that the 2016 revenue and expenditure estimates comprise N109.3bn (64 per cent) capital and N62.4 (36 per cent) recurrent components, based on a conservative benchmark crude oil price of about $39.50 per barrel.
El-Rufai said, “The budget proposals restore the minimum of 60:40 ratios in favour of capital expenditure. This is in keeping with our agenda to expand access to education, health care, jobs and security.”
A non-governmental organisation, Policy Alert, has urged the Akwa Ibom State Government to be transparent in its budget formulation and implementation.
Its Executive Director, Mr. Larry Ineme, said an appropriation bill should be an open document and that the legislature should invite members of the public for inputs.
Ineme, who was represented by his assistant, Mr. Tijah Akpan, said in Uyo on Friday that citizens should be able to walk into any budget office and obtain a copy of the document for a cover price.
Commenting on the governors’ budgets, a labour consultant and lawyer, Mr. Femi Aborisade, said it was frightening that the state chief executive officers could budget huge billions of Naira for items that had no positive impact on the lives of the people who elected them.
Aborisade said such items like refreshment, food and sitting allowance, among others, should be ignored now because the nation’s economy could not support them.
He said, “Budgeting for refreshments, food, sitting allowances is not limited to governors. The governors are merely following the bad example set by the Presidency. In a period of economic stress where the bulk of the budgets are to be borrowed, budgeting huge amounts for items that are not necessary reflects the insensitivity and callousness of the ruling class.
“There should be mass peaceful protests against budgeting for refreshments where the national minimum wage is not being paid and several thousands of workers are being sacked.
A poet and social commentator, Mr. Odia Ofeinum, said government budgets in the country had been riddled by corruption.
He said, “Most of the budgets we have had in the Fourth Republic have 60 per cent of waste and corruption. You can remove 60 per cent of the budgets and throw it away and they would not have done lesser than they have done, which tells you that the level of waste in the system accounts for the hogwash we have called budgets.”
He, however, said it would be difficult for Nigeria to get out of this situation “with corrupt persons dictating the affairs of political parties.”
Naira stable at N306 to dollar at parallel market
According to reports the apex bank’s Monetary Policy Committee retained its MPR at 11 per cent and the Cash Reserve Ratio (CRR) at 20 per cent.
The naira lost a point from the N305 to a dollar it had previously exchanged, a depreciation of 0.3 per cent.
It, however, closed at N197 to the dollar at the official Central Bank of Nigeria rate.
Traders at the market cited shortage of the greenback and anxiety over calls for the devaluation of the nation’s currency.
They argued that the devaluation wind was still affecting sales at the market.
Chevron wins S’Court case over OML 53 & 55
Brittania-U, one of the bidders for the assets, had in December 2013 sued Chevron over the planned sale of the assets to Seplat, arguing that it emerged as the highest bidder. The litigation prevented the full completion of the sale process and transfer of the assets.
CNL, in a statement signed by its General Manager, Policy, Government and Public Affairs, Mr. Deji Haastrup, said it had formally handed over the producing assets in OMLs 53 and 55 to Seplat and Belemaoil, respectively.
It said the handover and induction exercise, which concluded the asset sale transaction between Chevron and the two local firms, were done at CNL’s Lekki Headquarters and the Jisike Flow Station, near Owerri, Imo State.
The Chairman and Managing Director, CNL, Mr. Clay Neff, was quoted in the statement as saying, “We are pleased to conclude the handover of the producing assets in OMLs 53 and 55 to Seplat and Belemaoil respectively. This affords these companies an opportunity to grow their production, while also confirming our commitment to developing Nigerian content.”
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In response, the Chief Executive Officer, Seplat, Mr. Austin Avuru, said the acquisition of these assets was in realisation of the company’s carefully designed strategy to create long-term value and shared prosperity for their shareholders and other stakeholders.
He said, “Seplat will leverage its core strengths and expertise to capitalize on growth opportunities available to them across the upstream value cycle.”
On his part, the Founder of Belemaoil, Mr. Jack-Rich Tein, said, “We are pleased that the acquisition of OML 55 by Belemaoil is now concluded and we will now proceed with our long-term strategy to maximize value for all stakeholders.”
CNL signed a sales and purchase agreement in November 2013 for the sale of its interests in OMLs 52, 53 and 55 to the Seplat consortium comprising Seplat, Belemaoil and Amni International Petroleum Development Company Limited.
The litigation reached the Supreme Court, following an appeal brought by Brittania-U against the judgment of the Court of Appeal in Nigeria. The Court of Appeal decision delivered on June 20, 2014 set aside the ruling of the lower court, which had extended an ex-parte order of interim injunction obtained by Brittania-U at the commencement of the action.
Brittania-U had also sought the order of the Supreme Court for an interlocutory injunction restraining CNL and Seplat from proceeding with the sale and transfer of the assets until the determination of the appeal by the Supreme Court.
Job loss looms as BDCs set to sack 21,000 over Foreign exchange rules
Despite the succour granted the Bureau De Change Operators last week by the Central Bank of Nigeria (CBN) that they can now source forex from oil companies and the Nigerian National Petroleum Corporation (NNPC), the 2,786 operators in the country may still sack not less than 21,000 of their workers nationwide.
The ugly development is sequel to CBN stoppage of direct sale of foreign currencies (forex) from official source to the BDC operators.
Before the parley between the CBN and the BDC association took place last week, The Guardian had gathered that the operators were already perfecting plans to send some of their workers home as a result of poor business allegedly occasioned by the CBN’s new rules which have led to paucity of foreign currency to carry on in business by the BDCs.
According to some of the operators interviewed in Lagos, each of the 2,786 operators has not less than 10 employees on their respective payrolls. The employees comprise those involved in the movement of cash from one client to the other, clerical officers and others who do the cleaning and help in one office duty or the other.
The Managing Director and Chief Executive Officer of TR Wonton Nigeria Limited, an operator based in Broad Street, Lagos, Alhaji Awwal Tukur, said the CBN’s directives had prevented them from getting official supplies of foreign currencies, and now they have to get their stock from, among others, individuals from abroad and exporters of locally produced goods who are paid in foreign currency. According to him, supplies of the volume of foreign exchange from such sources cannot be compared to the one from the CBN.
Another operator, who claimed to be an official of Cash Express Bureau De Change, Lagos Island, but pleaded that his comment was personal and should not be taken as official statement from his company, said that besides the workers that would be laid off, the local and state governments would also lose revenue from the taxes and levies that the operators have been paying to them. According to him, survival is hanging on the mercy of individuals who come into the country from abroad, majority of whom do their transactions at the ports and borders.
The Acting President of the BDC association, Aminu Gwadabe, who spoke with newsmen that about 21,000 employees would be thrown out of job, said they (BDC association) held a meeting with the CBN Governor Emefiele, last weekend, on the issue.
He said it was resolved that instead of allowing the BDC operators to crash out of business because of the CBN’s new policy on forex, the BDC operators can be allowed to source their forex needs from oil companies and NNPC, though the arrangement would not provide enough forex to sustain them in business as before. According to Gwadabe, the succor will not stop them from retrenching workers, it would only reduce the number of people that would have been affected.
“We know the CBN did not just wake up to take the drastic measure it took on forex. It was due to the hard time that the apex bank is facing and all of us too are facing the same challenge of acute shortage of the dollar. We are all Nigerians; we know the foreign reserve is down. Dollar is something you have to earn.
Nigerian banks activate N50 stamp duty charge
In a notice by the UBA, STANBIC and GTB on Friday, the banks said it commenced the collection from 15 January, meaning there will be some back charges on customers’ accounts.
A charge of N50 will be slammed on electronic transfers and teller deposits from N1,000 and above.
The banks clarified that the stamp duty is only payable by receiving accounts.
Exempted are payment deposits or transfers by self to self whether inter or intra bank. Also exempted are withdrawals or transfers from saving accounts.
Nigeria expects to rake in over N66 billion from the charge in a year.
42 Ships laden with petroleum products, foods expected in Lagos
The Nigerian Ports Authority (NPA) stated this in its daily publication – `Shipping Position’ made available to the Newsmen on Friday in Lagos.
NPA stated that the expected ships contained general cargoes, buck wheat, containers, bulk sugar, steel products, bulk salt, bulk gypsum, crude palm olein, petrol and base oil.
The document noted that six ships had arrived the ports, waiting to berth with petroleum products and frozen fish.
IEB reports that 18 other ships are at the ports discharging buck wheat, general cargoes, bulk sugar, diesel, containers, bulk rice and petrol.
Bird flu affects 2.5m chickens in 18 states in Nigeria
Avian Influenza or bird flu is an infectious viral disease of birds. While most Avian Influenza viruses do not infect humans, a few others like A(H5N1) and A(H7N9) have caused serious infections in people.
NIAS, which is the regulatory agency of the Federal Government for the regulation of all matters pertaining to animal husbandry in Nigeria, on Friday stated that bird flu was spreading so fast and as such all adequate measures to stop the spread must be enforced.
Asked to state the number of birds affected by the disease, the Registrar/Chief Executive Officer, NIAS, Dr. Godwin Oyedeji, said, “By the last count, I think as of yesterday (Thursday), not less than 2.5 million chickens have been infected and over 700 farms have been affected nationwide. From one incidence in one state and moving to two states, it has increased and I think by now we are having it in not less than 18 states.”
Oyedeji, who spoke during a press briefing in Abuja, added, “In the Kuje area, here in the Federal Capital Territory, over 900,000 birds have been affected. This should not continue, and it is because things that should be done are not being done.
“If we cannot prevent wild birds that carry the influenza from overflying Nigeria and if the virus has come into Nigeria, then we can prevent, through good animal husbandry practices, the spread from one farm to the other.”
He noted that something was wrong somewhere, adding that the institute had gone to the field to ascertain what was not being done right by poultry farmers.
2016 Budget: Akwa Ibom Assembly pledges legislative support to state varsity
Hon. Usoro stated this, when the Vice-Chancellor of the university, Prof. Eno James Ibanga defended the budgetary estimate of the university at the assembly complex.
While sympathising with the VC on the challenges faced by management in the task of administering the institution, the Esit Eket/Ibeno Lawmaker said the House of Assembly will draw attention of the executive to the plight of the university.
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“At appropriate time we will liaise with the governor to ensure releases are made to you for the running of the university”
Earlier, the Vice-Chancellor, Prof. Eno Ibanga had appealed to the lawmakers to save the university from extinction, lamenting that poor funding and inadequate facility were some of the biting challenges the school was facing.
He reasoned that it has become necessary for members of the House of Assembly to do every thing within their powers to make AKS a citadel of excellence.
The VC also listed non – availability of hostel facility to accommodate increasing number of students, among other pressing needs that requires urgent attention ti on.
Arewa youth group declares support for Kachukwu
The National President, Arewa Youth Integrity Forum, Alhaji Audu Zakari with journalists in Abuja, said that the group has great confidence in the ability of Mr. Kachikwu to manage the affairs of the ministry.
Zakari condemned the recent attempt to link the minister, who is also the Group Managing Director of the Nigerian National Petroleum Corporation to alleged manipulation in the NNPC.
They urged Kachikwu not to be deterred by the cabals in the sector, who he said, are not happy with new reforms introduced by the minister.
He said: “The recent attempt to blackmail the minister by a faceless group known as South-South All Progressive Congress Youths which tried to fruitlessly link the minister to alleged manipulations in the NNPC is a typical demonstration of corruption fighting back.
He said its investigation had revealed that Dumebi, whose name has become a tool in the hands of mischief makers, had no experience in the oil sector.
“His major areas are Telecoms and Agriculture, especially animal husbandry,” he said.
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“It is obvious that every Nigerian is now happy that for the first time the high tower is experiencing peaceful and positive changes without the usual hardship that citizens were made to go through in the past as a result of deregulation.
According to Mr. Zakari, the Minister of State for Petroleum, Dr. Emmanuel Kachikwu deserves commendation over his handling of the oil sector since assuming office, warning that it is no longer business as usual.
It would be recalled that a group known as South-South All Progressive Congress Youths had recently accused the younger brother of the Minister of state for petroleum of interfering with the operations of the NNPC.
“They are angry that the President has appointed somebody that has refused to share our money for them to sleep at Nicon Hilton Abuja. The same persons yesterday could sit down to allocate to themselves oil lifting licenses and are bitter that the system has changed,” he added.
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Emir Of Kano Tasks CBN On Economic Policy
The monarch made this known on Thursday while receiving the Managing Director of Fidelity Bank, Mr. Nnamdi Okonkwo at his palace.
Sanusi further appealed to the federal government to pay more attention to advice coming from professionals to address the linkage problems of economic policies affecting the socio-economic development of the country.
Also, he implored banks in the country to come out with their frank positions and tell the government their views on the economy, especially as the country faces foreign exchange shortage.
Over 2,500 to lose jobs as Nigeria’s biggest cashew factory set to shut down
Sotonye Anga, the National Publicity Secretary of NCAN, told the News Agency of Nigeria in Lagos that cashew processors require government’s support to survive in the country.
Anga said the main reason for the imminent closure was because the factory was operating below 30 per cent installed capacity in 2015, in addition to the high cost of production.
He said the factory had an initial capacity of 28,000 metric tons per annum and had over 2,500 workers who were mostly women.
Anga said: “It is sad to say, but I am compelled to let you know that within days from today, January 28, Nigeria’s largest cashew processing factory will be shut down.
“In 2015, the cashew factory operated below 30 per cent of its installed capacity and by January 2016, it has become totally unsustainable and no longer viable processing cashew from this factory.
“The rationale behind the closure is the high cost of processing and production of cashew nuts, making them uncompetitive globally.”
According to Anga, the cost of processing cashew in other parts of the world is relatively low.
He cited countries such as India, Brazil, Ghana and Vietnam.
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Anga said the average cost of processing cashew in Nigeria is $500 per ton, as against $200 to $250 in other cashew processing countries earlier mentioned.
He said: “How can Nigeria compete globally when the cost of production is about the highest owing to poor electricity supply, high cost of diesel, huge cost of running the generators?
New electricity tariffs take effect on Monday – NERC
Akah, who said this when he led top executives of the regulatory agency on a courtesy call on the National Orientation Agency in Abuja on Thursday, also said there was no going back on the new tariffs.
The NERC boss said the lack of cost-reflective tariffs had hindered the electricity companies from acquiring the necessary infrastructure, adding that with the new tariffs, they would not have any excuse for not delivering on agreements they entered into with the government.
He said the Nigerian power sector reform must provide an appropriate pricing template, which had been lacking, leading to deficiency in revenues from power.
This, he added, necessitated the new Multi-Year Tariff Order to enable the generating, transmission and distribution companies to provide the needed infrastructure for higher generation and supply of electricity to meet the needs of consumers.
Akah said under the new MYTO, all premises must be metered and consumers who subscribe to specific metering models must be supplied meters within 60 days after which they would not be disconnected or charged on estimation if a meter was not supplied.
He also said that a Power Consumer Assistance Fund had been put in place to cater for the electricity needs of the less-privileged in the country, adding that the visit was part of the establishment of a coordinated approach to creating public awareness ahead of the February 1 implementation date of the new MYTO.
Telecoms operators threaten to shut down operations in six states
At a press briefing in Lagos yesterday, the operators, under the aegis of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), alleged unnecessary harassment by state agents, a situation they said was seriously waning on quality of telecommunications services in the country.
Chairman of ALTON, Gbenga Adebayo, who, while briefing journalists, listed the states to include Ogun, Ondo, Akwa-Ibom, Ebonyi, Osun and Kaduna, said the body continued to record cases of arbitrary site closure in the states in an attempt to force service providers to pay local taxes and levies, some of which they described as multiple in nature and most of which are only aimed toward telecoms operators.
According to Adebayo, the states are treating the industry like an extractive one and imposing myriads of taxes on operators and closing down the BTS sites arbitrarily through their agents, not minding the security and economic implications.
A BTS is a piece of equipment that facilitates wireless communication between user equipment (UE) and a network. UEs are devices like mobile phones (handsets), WLL phones, and computers with wireless Internet connectivity. The network can be that of any of the wireless communication technologies like GSM, CDMA, wireless local loop, Wi-Fi, WiMAX or other wide area network (WAN) technology.
CBN says Nigerian forex reserves fall to lowest since 2005
Nigeria's foreign exchange reserves fell to $28.2 billion by
Jan 27, the lowest level since 2005.
The Central Bank of Nigeria data revealed this on Friday.
The
data showed that the reserves had stood at $29.13 billion a month ago.
The Governor of the bank, Mr. Godwin Emefiele, had said that the CBN was however, working to provide some flexibility in the foreign exchange market, with a view to deepening it at the face of persistent pressure on the Naira.
KPMG, SIAO to audit NNPC, NIMASA, NPA, 78 other agencies
Audit firms, KPMG and SIAO will carry out forensic audit on 81 revenue generating agencies in Nigeria including NNPC, NIMASA, NPA, FIRS and 77 other agencies.
The decision to the firms was reached after the National Economic Council (NEC) rose from its 65th meeting on Thursday in Abuja, Nigeria’s capital.
The approval followed submission of an interim report by the ad hoc committee of NEC, chaired by Governor Adams Oshiomhole of Edo, to review the management of the Excess Crude Account and remittances into the Federation Account.
The governors of Jigawa, Alhaji Baderu Abubakar; Anambra, Willie Obiano; Lagos, Akinwumi Ambode; and the Minister for Budget and National Planning, Sen. Udoma Udo Udoma, said this in their joint briefing to State House Correspondents.
According to Lagos governor, 18 core revenue generating agencies, such as NNPC, will be audited by KPMG, an international audit firm, while an indigenous firm, SIAO, will audit other non-core revenue generating agencies.
The governor said that NEC would take further action on the agencies after the firms had completed the forensic auditing.
The Jigawa governor said that the Accountant-General of the Federation reported to council that as at December 31, 2015 the Excess Crude Account stood at $2.26 billion.
The governor said that the Central Bank Governor, Godwin Emefiele informed the council of the standing of the bailout funds given to states.
He said that 23 states had benefitted from the N10 billion each, Excess Crude Account-backed soft loan, while a total of 28 states benefitted from the presidential bail out for the payment of salaries and gratuities.
Governor Obiano gave a report concerning some MDAs collecting revenue in foreign currency and remitting in local currency into the Federation Account.
Obiano said the permanent secretary, Finance, reported that besides NNPC, NIMASA and NPA, other agencies involved in such revenues were FIRS, Shippers Council, Airport Authority and Nigeria Immigration Service.
Thursday 28 January 2016
UPDATE 1-Nigeria's Buhari against devaluing naira, sees recovery soon
The central bank decided on Tuesday to keep the current official exchange rate against the dollar at around 197 compared to street rates as weak as 305.
Africa's top oil exporter is in the middle of an economic crisis as a slump in global oil prices has eroded public finances, hit the currency and dried up commercial banks' dollar supplies needed for basic imports.
"Likening devaluing the Naira to having it 'killed', President Buhari said that proponents of devaluation will have to work much harder to convince him that ordinary Nigerians will gain anything from it," his office said in a statement titled "President Buhari rejects devaluation".
Nigerian firms and foreign investors have complained that they cannot get hard currency to fund essential imports such as food or machinery spare parts.
Foreign stock and bond market investors have become reluctant to put money into Nigeria because they assume the West African nation will have to devalue its currency eventually.
Buhari also backed the central bank's decision to stop selling dollars to foreign exchange bureaus, saying: "We don't have the dollars to give to the BDCs (bureaux des change). Let them go and get it from wherever they can other than the central bank."
President Buhari says he's not convinced naira should be devalued
"Likening devaluing the Naira to having it 'killed', President Buhari said that proponents of devaluation will have to work much harder to convince him that ordinary Nigerians will gain anything from it," the presidency quoted him as saying in a statement.
On Tuesday, the central bank decided to keep the current official exchange rate against the dollar despite a sharp fall of the naira on the parallel market due to a loss of oil revenues.
CBN forex restriction; Nigeria loses 50% cargoes to Cotonou port
The President of the association, Mr Jonathan Nicol made the disclosure while speaking in an interview with the News Agency of Nigeria (NAN) in Lagos. He said that many Nigerian shippers had diverted their cargoes to the ports in the Republic of Benin since the policy started, adding that there were less restrictions on imports in the West African country.
Nicol said the development had deprived Nigeria a lot of revenue , urging the Federal Government to ease the policy to boost revenue. "When the CBN forex restriction policy came into being, we appealed to the Federal Government to review the policy and remove some critical items because it is hurting our business and the country`s revenue. "The reflection of that restriction is beginning to show up because we are having less cargoes in our ports.
Nicol decried what he called the incursion of foreign shipping lines into the freight forwarding business in the country, saying the development was not good for the economy. "If foreigners with better resources and expertise are allowed to intrude into the business, it might render no fewer than 100,000 Nigerian freight forwarders jobless." We do not understand why a foreigner will suddenly come from nowhere, claiming to be a Nigerian company and make incursion into the freight forwarding business.
NSE to buy Nasdaq monitoring system after stocks plunge
Nigeria's financial authorities last made substantial reforms to the stock market after a crash in 2008 stoked worries about inadequate oversight and brought allegations of financial mismanagement including insider trading.
In the five years after the 2008 crash, the stock exchange switched to a quote-driven from a price-driven market using the Nasdaq X-Stream trading platform and extended the trading day so that it overlapped with Wall Street's opening, in a bid to increase participation from U.S. and other foreign investors.
In 2011, the bourse also appointed a former American Stock Exchange senior vice president, Oscar Onyema, as its chief executive officer.
Despite the changes, Nigeria's benchmark index has fallen more than 30 percent in the past year as a currency crisis caused by a plunge in the price of oil, the country's main export, hit Nigerian assets across the board.
Tuesday 26 January 2016
Nigeria stocks end five-day rally as investors book profit
Nigerian stocks ended a five-day rally to fall 0.55 percent on Tuesday as investors booked profits from recent gains.
The index, which has the second biggest weighting on the MSCI frontier market index after Kuwait, closed at 23,832 points after gaining 5.9 percent over five days from Jan. 19.
Traders said investors were taking profits in stocks that had rallied more than 20 percent over the five-day period.
Unilever was the hardest hit, dropping 4.90 percent. FBN Holdings shed 3.51 percent, Stanbic IBTC was down 2.26 percent while Dangote Cement, which accounts for a third of the market capitalization, fell 0.14 percent.
The Nigerian stock market, sub-Saharan Africa's second biggest, has fallen 16.3 percent so far this month, depressed by a weak outlook for the naira currency and the persistent drop in the price of oil, the country's main export.
Nigerian minister tells MTN to drop lawsuit over fine
The Nigerian Communications Commission (NCC) slapped a $5.2 billion fine on MTN in October for failing to disconnect users with unregistered SIM cards but after weeks of negotiations reduced it by 25 percent.
MTN, which makes about 37 percent of its revenue from Nigeria, then filed a suit in the West African country questioning NCC's legal grounds for imposing the penalty.
"I'm not aware of any out-of-the-court settlement," telecoms minister Adebayo Shittu told reporters.
Shittu said President Muhammadu Buhari will have the final decision on the matter, adding that MTN might be advised to withdraw the court case filed against the fine.
"If they withdraw it creates a better environment, an environment where there is no stress or pressure on either side," he said.
A judge in Lagos, Nigeria's commercial capital, last week gave the company until March 18 to try to reach a settlement with the Nigerian authorities over the fine. The prospect of a lower fine boosted MTN shares.
The fine equates to more than twice MTN's annual average capital spending over the past five years.
CBN keeps benchmark interest rate at 11 pct
The Governor of the bank, Mr. Godwin Emefiele, told journalists at the end of the Monetary Policy Committee, MPC, meeting in Abuja, that Cash Reserve Ratio, CRR, and the Liquidity Ratio were equally retained at 20 per cent and 30 per cent, respectively.
Fielding questions from journalists, he said that the CBN was however, working to provide some flexibility in the forex market, with a view to deepening it at the face of persistent pressure on the Naira.
His words, “I want to assure Nigerians that we are seeking ways to improve the foreign exchange supply into the market. And as we eventually achieve this objective, this will be unfolded, so as to ensure that we fund the forex market appropriately.
“I am sure in the course of time you will begin to see some of the efforts that we are putting in place so that you begin to see how we will provide some sort of flexibility in the market. And also deepen the market so that businesses can continue the way they are supposed to be.”
According to Mr. Emefiele, Nigeria’s foreign reserve currently stands at $28 billion as at today.
Speaking, further on how to manage the reserves, the CBN boss said that the apex bank was already building several scenarios around the oil price and that it would ensure the best options possible.
He said, “With time you will see how we will provide the needed framework for a flexible forex regime.
Monday 25 January 2016
Nigeria's Lagos State to meet bondholders on debt repayment
The state on Monday wants to pay interest and principal semi-annually rather than making a single bullet repayment of the principal at maturity.
Lagos, a mega-city of 21 million people in the state of the same name, is the commercial engine of Africa's biggest economy and accounts for about a third of Nigeria's overall output.
The meeting will be held on February 23.
The state government said the debt in question includes an 80 billion naira seven-year bond maturing in 2019 and an 87.5 billion naira to be repaid in 2020. Coupons on the bonds would remain unchanged at 14.5 percent and 13.5 percent respectively.
The state government did not say why it wants to change the payment schedule but analysts said Lagos may be hoping to sell new debt at lower yields to fund infrastructure projects.
The federal government approved a $200 million loan from a World Bank agency this month to develop infrastructure in Lagos state, the minister for works, power and housing said.
FG removes kerosene subsidy, product to sell for N83 per litre
With the development, the product would now sell for N83 per litre from N50 per litre.
The Petroleum Products Pricing Regulatory Agency, PPPRA, in its product pricing template released over the weekend, however, stated that the N83 per litre price applies only to the Nigerian National Petroleum Corporation (NNPC), meaning that other petrol stations and dealers can sell higher than the stipulated amount.
The PPPRA’s template also indicated that at N83 per litre, the Federal Government is making a gain of N10.72 for every litre, as it puts the Expected Open Market Price, which is the Landing Cost plus Total Margins at N72.28 per litre.
Giving a breakdown of the price, the PPPRA template put the Landing Cost of the product at N57.98 per litre, while the total margin due middlemen was put at N14.30.
Further breakdown of the Total Margins showed that retailers margin was put at N5per litre; Transporters – N3.05 per litre; Dealers – N1.95 per litre; Bridging fund – N5.85 per litre; Marine Transport Average – N0.15 and Admin Charges – N0.15.
The PPPRA further put official ex-depot price, which is the price depot owners would sell at marketers, at N68.70 per litre, official ex-depot price for collection – N73 per litre, while ex-coastal price – N68.02 per litre.
CBN reintroduces CoT as current account maintenance fee
The circular was titled, “Introduction of Negotiable Current Account Maintenaince Fee Not Exceeding N1/Mille. It stated, “The Revised Guide to Bank Charges (RGBC) which came into effect on April 1, 2013 provides for a phased elimination of COT charges in the Nigerian banking Industry. Under the Guidelines, a zero COT regime was to come into effect from January 2016.
The CBN noted that while the gradual phase out was being observed, some banks continued to charge Account Maintenance Fees in addition to the reduced COT rate, which in effect amounted to double coincidence of charges The CBN is not oblivious of the impact of declining crude oil prices; operation of Treasury Single Account; and other market turbulences on the viability and stability of the banking system.
“In furtherance of the mandate to promote and safeguard a sound financial system in Nigeria, banks are by this circular reminded that the 2016 Zero COT regime as jointly agreed during the 311th Bankers Committee meeting of February 12, 2013 has come into effect. In the interest of stability of the banking system, a Negotiable Current Account Maintenance Fee not exceeding N1 per mille may be charged in respect of all customer induced debit transactions. Please ensure strict compliance”.
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