SEC laments negative impact of TSA on capital market operations

The Director-General, Securities and Exchange Commission, Mr Mounir Gwarzo, on Tuesday, said the inclusion of the commission in the implementation of the Treasury Single Account is affecting its capital market operation.

Gwarzo said this when the House of Representatives Committee on capital market visited the commission in Abuja.

He said apart from the TSA, the downturn in the capital market is a huge challenge to the commission as the income currently being generated cannot cover 50 per cent of its operating.

For instance, he said in the 2015 budget, the commission had projected to generate an income of N6.9bn adding that this could not be realized as it could only generate N4.9bn.

He said, “What we generate from the market cannot cover more than 50 per cent of our cost. So more often we have to dip into that fund (funds saved by past SEC administrations).

“But now with the TSA and other things, that flexibility is being cut off because some of the interest income that we derive from those investment, we don’t enjoy them any longer.”

“SEC is now running a very tight budget, given that the market has gone down and given that there are aspirations to move the market up we have to set aside some amount of money.”

Gwarzo said the commission is putting in place strategies to attract more retail investors into the Nigerian capital market in its determination to deepen and develop the market.

He said unlike countries such as South Africa and Malaysia, Nigeria has a low rate of retail investors penetration.

He said “We have pursued a lot of initiatives in the last year and we are pursuing more this year.

“We are taking it from a perspective that this market has never witnessed and the perspective is to address some of the lingering complaints of the investor.

“We believe that the retail investors are the owners of this market so our strategy should focus on them.

“As a country we have only less than two per cent participation of retail investors in our market. Malaysia has nine per cent,South Africa 19 per cent,United State and United Kingdom 13 per cent.”

The SEC DG disclosed that the commission was addressing the issue of dematerialization, where share certificates have not been fully dematerialized in the market.

The Chairman of the Committee, Dr. Tajudeen Yusuf said the committee would assist the commission in increasing the number of quoted companies on the stock exchange.

He said, “We are all aware that the market is not doing well presently and SEC generates to own revenue from the market.

Power drops below 2,800mw – NERC

The Nigerian Electricity Regulatory Commission (NERC) has said that power supply through the national grid which peaked to 5000mw in past two weeks had dropped below 2,800mw due to vandalism.

Dr. Anthony Akah, the Acting Chief Executive Officer of the commission disclosed this while signing a Memorandum of Understanding with the Consumer Protection Council (CPC).

A statement issued on the ceremony by Dr. Usman Abba- Arabi, Head, Public Affairs Department of NERC was made available to the News Agency of Nigeria (NAN) on Wednesday in Abuja.

In the statement, Akah expressed dissatisfaction and worries over the spate of vandalism in the power sector.

It stated that the NERC boss enjoined the public and the CPC to collaborate with Distribution Companies (DISCOs) and security agencies to safeguard electrical installations.

The statement also said that the NERC would soon compel the DISCOs to publish their meter deployment schedules.

It added that the publication would ensure adherence to the meter roll out plan contained in the performance agreement signed with government by the utility firms.

“Such publication will make unmetered customers to be aware of the estimated period they have to wait before they can be metered,’’ it stated.

It stated that NERC had issued warning to the DISCOs against wrongful estimated billings and the acts of compelling customers to buy, install and repair transformers and poles.

The statement said the MoU between, NERC and CPC was part of concerted efforts to reduce the incidence of estimated billing completely.

According to the statement, the Director General of CPC, Mrs. Modupe Atoki, commended NERC for the long standing relationship between the two agencies.

Atoki, according to the statement, expressed CPC’s cooperation and renewed effort to protect electricity consumers from abuse of their rights.

Nigeria’s crude oil production to decline by 70,000bpd

The International Energy Administration (IEA) expected Nigeria’s oil production to decline by 70,000 barrels per day (bpd) by 2021 to 1.85 million bpd due to reduction in investment in the country’s deepwater projects and oil theft and pipeline sabotage in the Niger Delta continues unabated.

The IEA, which made this disclosure in its energy outlook released recently, stated that African crude oil exports will fall by 600,000 bpd over the next six years as production from its biggest producers slips and rising regional refinery activity absorbs more domestic output.

Besides, crude oil prices have continued to rise as Brent increased by 2.42 per cent from the $35.1 to $35.97 per barrel during early trading hour yesterday.

West Texas Intermediate (WTI) also gained $0.97 per barrel to $33.75 a barrel.

On the New York Mercantile Exchange, Nigeria’s light sweet crude futures for delivery in April traded at $34.23 a barrel, up by $0.48 a barrel.

The report said that West Africa oil producers like Nigeria and Angola may be forced to cut prices to sell barrels, with low prices, oversupply and high stocks projected to prevail until at least early-2017.
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Europe is expected to remain the main demand outlet for WAF crude, but imports of African crude to Europe are set to decline by 500,000 bpd accounting for 2.2 million bpd in 2021.

According to IEA, oil price collapse was causing “particular pain” for Africa’s two largest oil producers Nigeria and Angola, as oil output is expected to slow down along with declining state revenues.
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The report also said that by 2021, the Dangote refinery project in Nigeria is expected to start-up, which will process Nigerian crudes and thus reduce the volumes for export.

Africa will observe the steepest absolute decline by a major crude exporting region, with regional crude production set to decline by 400,000 bpd mainly due to fall in output in Nigeria, Algeria and Angola, it said.

The IEA also said that West African oil producers are likely to have problems marketing their crudes over the next couple of years due to the existing global glut of sweet crude, which has made this region a new “swing producer.”

Crude runs are expected to reach 300,000 bpd in 2021 with the full 500,000 bpd nameplate capacity reached in subsequent years, the report said.

IEA said that Algeria’s oil production will fall by 170,000 bpd to 990,000 bpd in 2021 as a lack of investment pushes aging oil fields into decline.

Africa’s second largest producer Angola will see its crude production fall to 1.8 million bpd in 2021, a fall of 20,000 bpd over the six-year forecast period, according to the IEA.

The IEA said that Angola’s official two million bpd target looked unachievable even before the fall in oil prices due to technical problems besetting its deep water projects.

“The country’s aging offshore oil fields need continuous support from new and costly projects to offset steep declines and since output peaked in 2008, Luanda has struggled to stem the drop,” the report added.

Judge renews order barring electricity tariff hike

Justice Mohammed Idris of the Federal High Court in Lagos on Monday renewed the order barring the Nigerian Electricity Regulatory Commission (NERC) from increasing electricity tariff.
He said the order that parties maintain status quo ante bellum subsists.

“The order that the parties in this suit should maintain the status quo ante bellum remains valid and binding until it is set aside by a court of competent jurisdiction,” Justice Idris held.

He spoke while delivering ruling on a contempt proceedings initiated by activist-lawyer, Toluwani Adebiyi, against NERC chairman and Chief Executives of Distribution Companies (DISCOs).

Justice Idris first made the order last May, but while the suit was pending, NERC announced the tariff hike.
NERC’s lawyer, Chief Anthony Idigbe (SAN), and others said they were not personally served with the Form 48 (notice of consequence of disobedience of court order).

Ruling, Justice Idris agreed with the respondents and held that Adebiyi issued Form 49 (a formal application for committal to prison of a person who refuses to obey an order) without properly serving the alleged contemnors with the Form 48.

He said: “It is clear, in this case, that the purported issuance of the Form 49 on the defendants by the plaintiff without prior and proper service of the Form 48 is premature.
“The issuance of Form 49 when the court is yet to hear and determine the application of the plaintiff for leave to serve Form 48 is also inappropriate.

“In the circumstances, I hold that the defendants’ objections have merit. The Form 49 and the motion for order for committal issued by the plaintiff against the defendants are hereby set aside. The court has set aside the contempt application due to fundamental procedural irregularities.”

Justice Idris, however, said NERC and the DISCOs are still liable to be held in contempt should they continue to violate the order.

Forex Crisis: Importers Resort To Groupage For Survival

Some importers have resorted to groupage for survival in view of increasing exchange rate, the News Agency of Nigeria (NAN) reports.

The importers at Balogun wing of the Lagos International Trade Fair Complex, spoke on this in separate interviews with NAN on Monday in Lagos..

A cosmetics dealer, Mr Chidi Okeke, said that it had become difficult for an individual to bear the cost of shipping cargoes to Nigeria.

“The foreign exchange restriction is also affecting commerce and our income. Many of us just come into the market to sit and no transaction is taking place,” Okeke said.

A Freight Forwarder and Business Support Consultant, Mr Gab Nwankere, told NAN that with the foreign exchange rate and import restriction, traders had to devise other means of survival.

Nwankere said that business support consultants had created new avenues for traders to cope with the situation.

“We informed the traders about the window in an interactive session in November and today they are reaping the fruits,” he said.

According to him, my organisation links traders in the market with others willing to combine in shipping goods from China and other countries.

Mrs Grace Nwaoha, who sells toiletries, said that there were five traders that imported a 40 ft. container full of different items.

NNPC takes delivery of four fuel cargoes

The Nigerian National Petroleum Corporation (NNPC) has assured of sufficient supply of premium motor spirit (petrol) as it has taken delivery of four more cargoes of the product over the weekend to keep the country wet.

The deliveries which amount to about 180 million litres is part of a new arrangement by the corporation to have a cargo of PMS delivered daily as from March.

The corporation which made the announcement in a statement made available to the journalists stated that the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, has warned depot owners against selling petrol above the approved ex-depot price of N77 per litre.

The warning comes against the background of repeated complaints by marketers of sharp practices at the depots.

The statement quotes the minister as warning that depot owners found to be involved in selling products above the approved ex-depot prices would be severely sanctioned.

Nigerians protest high bank charges

Nigerians are planning to boycott banking activities on Tuesday, to protest exorbitant deductions by banks, activities on social media are indicating.
Consumer Advocacy Foundation of Nigeria, a not-for-profit group dedicated to advocacy for consumer rights and protection in Africa’s largest consumer market is leading the protest.
According to a petition posted on CAFON’s website by the organisation’s president, Sola Salako, the #NoBankingDay is aimed at pressuring Nigerian banks to review their charges downwards. The group is also calling for a review of bank forms and contracts to include more protection for consumers and for consumer complaints to be resolved promptly and satisfactorily.
Other demands are that banks must clear fees with consumers before debiting their accounts and that CBN must review the new Stamp Duty Charge, Account Maintenance Charge and Debit Card Maintenance Fees.
“March 1 is “No Banking Day” Protest against excessive bank charges Dear Nigerian Banks Consumers For many years now, consumers of banking services have been subject to series of poor and unsatisfactory transaction and relationship terms,” Salako said in the post.
“We have endured excessive charges, illegal fees and unfair contracts that only protect the bank but do not protect the consumers.
“Banks debit our accounts at will for charges we never agreed to or were not aware of; they charge us for every little service; we pay for getting our statements; introduction letters; and now, some banks are charging N200 for the use of deposit and transfer forms!”
Salako noted that under the current CBN management, abolished fees are being reintroduced.
“ATM withdrawals that were free now cost N65 on 3rd withdrawals,” she said.
“ We pay N1000 for debit card issuance and renewals; we pay N105 for every online transfer; and they still charge N105 as Annual Debit Card Maintenance and now, a new Stamp Duty charge of N50 on every credit of over N1000 has just been introduced.”
“COT that was supposed to end finally in 2016 is now being reintroduced as 1% of every withdrawal purportedly as Monthly Current Account Maintenance Fees!”
She said the exploitation has become unbearable and has necessitated speaking out by consumers.
“That is why CAFON, a consumer rights NGO is calling consumers to join us in protest against banking exploitation by declaring Tuesday, March 1 2016 as NO BANKING DAY!” Salako said.