Summary of the top business, economic and political news in Nigeria today.
- Nigeria’s manufacturers, airlines, fuel importers and agriculture businesses will be able to buy dollars at a special market intervention to clear a backlog of foreign exchange obligations now due, the central bank said on Wednesday. The central bank plans to settle the bids through a combination of spot and short-term forward deals, currency traders said, citing a notice from the bank. It did not specify the amount of dollars to be sold. Link
- The Managing Director, Lekki Free Zone Development Company, Mr. Ding Yonghuaa, has announced that construction work on the port will begin in July. On transportation, Yonghuaa said in future, there would be four access roads linking the zone in addition to a railway. Link
- One of the leading global rating agencies, Fitch Ratings has stated that Nigerian banks’ ability to access foreign currency (FC) has improved considerably since the Central Bank of Nigeria (CBN) introduced a foreign exchange (FX) window at the end of April aimed at investors and exporters. Link
- Justice A. R. Mohammed of the Federal High Court, Abuja has issued an interim order directing the Nigerian Ports Authority and four others to maintain the status quo in a suit filed by Intels Nigeria Limited on the de-categorisation of terminals at the nation’s seaports. Link
- The Federal Government has streamlined the number of agencies operating at the nation’s seaports, permitting only seven agencies at the ports. The Managing Director, Nigerian Ports Authority, Hadiza Usman stated that the permitted agencies are the NPA, Nigeria Customs Service, Nigerian Maritime Administration and Safety Agency, Nigeria Police, Department of State Services, Nigeria Immigration Service and Port Health. Link
- The Executive Chairman, Kwara State Internal Revenue Service, Dr. Muritala Awodun, on Wednesday stated that the agency collected N6.6bn in internally-generated revenue in the first quarter of this year. He gave the breakdown as N2.1bn in January, N1.7bn in February, and N2.7bn March. According to Awodun, the N6.6bn represents almost a 100 per cent increase over the N3.4bn the service recorded in the corresponding period of last year. Link
- The United States’ import of Nigeria’s crude oil rose to 25.97 million barrels in the first three months of this year from 18.62 million barrels in the same period of 2016. The US Energy Information Administration revealed in its latest data that the country bought a record 10.24 million barrels from Nigeria in March, the highest monthly import since July 2013. Link
- The Nigeria Meteorological Agency (NiMet) is targeting to raise over N100billion in Internally Generated Revenue (IGR) by selling weather information through mobile phones to Nigerians. NiMet intends to achieve this by selling weather information to least 30 million Nigerians on a daily basis via the mobile networks in a product tagged Mobile Meteorology (MoileMet). Link
- Executive Secretary of the Nigerian Extractive Industry Transparency Initiative (NEITI), Waziri Adio, has called on the House of Representatives to investigate the loss of $15.9 billion dividend from Federal Government’s 49 per cent equity in the Nigerian Liquefied Natural Gas (NLNG). Adio who appeared before the Abdulrazak Namdas-led House Adhoc Committee investigating $17 billion undeclared proceeds of crude oil and liquefied gas sale between 2011 and 2014, alleged that the money was received by NLNG but cannot be found in the Federation Account. Link
- Executive Vice-Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta, has said the commission is pursuing the national broadband agenda with vigour, stressing that the country is well positioned to achieve the 30 per cent penetration target by 2018. Link
- The Debt Management Office (DMO) on Thursday announced the commencement of a global offering of Nigeria’s first Diaspora Bond. Statement obtained from its website states that application would be made for the bonds to be admitted to the official list of the UK Listing Authority and the London Stock Exchange Plc. Link
- The Nasarawa State Government has invoked the `no work no pay’ policy on striking public sector workers, the state Head of Service, Mr Thomas Ogiri, announced on Thursday. He, however, assured that civil servants not participating in the ongoing strike would be paid their salaries. Link
- The management of Continental Broadcasting Services (CBS) has announced their commitment to increase investments in its television and radio businesses aimed at improving the viewing and listening experience of its esteemed audience. In a statement released by the CBS, the investments will cut across CBS’ three major properties which are: TVC Entertainment; TVC News and Radio Continental. Link
- A Civil Society Organisation, an Independent Hajj Reporters, on Thursday appealed to the Federal Government to grant an exchange rate concession of N200 to a dollar to 2017 intending pilgrims. It said such gesture would lower the financial burden of the exercise on the intending pilgrims. The News Agency of Nigeria (NAN) reports that the 2017 hajj fare is between N1.48 million and N1.58 million per pilgrim depending on their state, including $800 the Basic Travelling Allowance. Link
- Lafarge Africa Plc says it is intensifying efforts to adopt biomass as an alternative source of energy generation in order to boost efficiency. The Legal Director, Lafarge Africa Plc, Mrs. Edith Onwuchekwa, said that the company had commenced the process of sourcing for biomass such as agricultural waste products, among others, adding that the company was looking at the next three to five years to concretise the move. Link
- The shareholders of Lafarge Africa Plc have approved a N140bn rights issue by the building solutions provider to its existing shareholders during its Annual General Meeting held in Lagos on Wednesday. Link
- Dangote Group is planning to invest $450million in agricultural sector in Niger state. The Group is investing heavily in rice and sugar production in the State, the Executive Director in charge of Stakeholders Management and Corporate Communications Mansur Ahmed said at the just concluded Trade Fair in Niger State. Link
- Nigeria-focused oil and gas group, Eland Oil & Gas Plc, is set to raise up to $19.5m to boost production from its Oil Mining Lease 40 three-fold. Link
- Siemens Limited Nigeria has announced the introduction of new technologies aimed at reducing costs in the Nigerian oil and gas industry. The Vice-President, Oil and Gas, North America and Africa, Siemens Energy Incorporated, Mr. Patrice Laporte, said, “Basically, people are looking at reducing costs at the moment and it is not by the traditional way of asking for price reduction. What we are proposing are new methodologies and tools like software tools and connection of assets to the cloud.” Link
- The Nigerian Bulk Electricity Trader (NBET) has disclosed that about 10 generating companies (GenCos) have received N12 billion from the N710 billion intervention fund earmarked to sustain steady power generation in the country. Link
- While several liquefied natural gas projects in Nigeria continue to suffer from lack of final investment decision by shareholders, Italian oil giant, Eni, and others have signed off on a $7bn investment to export natural gas from Mozambique. Link
- Shell Petroleum Development Company Limited has officially lifted force majeure on exports of Nigeria’s Forcados crude oil, thus increasing the nation’s oil output by additional 200,000 barrels per day. Link
- Legacy Pension Manager Limited said it recorded an increase of 16.55 per cent in its Asset Under Management from N166.13bn in 2015 to N193.62bn in 2016 while net profit after tax rose by N20.18m. Link
- The Plateau State Government says it has injected about N250 million to revive the over 70-year-old Hill Station Hotel which once hosted the Queen Elizabeth II. The hotel, established in 1938, is owned by the governments of Plateau, Nasarawa and Benue states, as well as the New Nigeria Development Company (NNDC) and a company known as Leacon. Link
- At the close of 2nd Session of the 6th Assembly, Tuesday, leadership of the Enugu State House of Assembly, disclosed that they passed 23 out of 30 bills brought to the floor of the House into law. The House in the same period received and passed 35 resolutions and motions. Link
- The House of Representatives Committee on Constituency Outreach and some civil society groups on Wednesday differed on necessity of establishing constituency development fund to finance constituency projects undertaken by lawmakers. While the lawmakers held that the fund would enhance even distribution and execution of constituency projects across the country, the civil society believed that the house was trying to usurp the constitutional responsibility of local governments. Link
COVID-19: World Bank approves $114 million response funds for Nigeria
FG is expected to provide grants from the CoPREP to the 36 states and the FCT.
The World Bank has approved the sum of $114 million to assist Nigeria in its fight against the coronavirus pandemic.
The fund is to help Nigeria prevent, identify and respond to the dangers associated with the coronavirus disease with special focus on the various states and the Federal Capital Territory.
This was disclosed in a statement from the bank on Friday, August 7, 2020.
According to the statement, the funds come in the form of $100 million credit facility from the International Development Association (IDA) and $14 million grant from the Pandemic Emergency Financing Facility.
It also states that the Federal Government is expected to provide grants from the COVID-19 Preparedness and Response Project (CoPREP) to the 36 states and the Federal Capital Territory.
The World Bank Director for Nigeria, Shubham Chaudhuri, in a statement on Friday, said, “Nigeria has ramped up its efforts to contain the Covid-19 outbreak, but more needs to be done at the states level, which are at the front line of the response.”
He disclosed that the project would provide the states with the much needed direct technical and fiscal support in order to strengthen their position in the fight against the pandemic.
The World Bank Chief also pointed out that the project would finance federal procurements of medical equipment, laboratory tests and medicines to be distributed to the states based on their needs.
According to the World Bank, CoPREP would finance further support to all the 36 states and the FCT through the NCDC to implement the COVID-19 Incident Action Plan.
Nigeria has recorded about 45,687 confirmed cases of the coronavirus disease with 936 fatalities and 32,637 people discharged as at August 7, 2020. Some serious concerns have been raised about the country’s testing capacity, which though has improved is still regarded as inadequate.
How Nike rejection birthed sports wear industry in Nigeria
To Udezue, sport is more about creating opportunities than just winning trophies.
For many years, Nigerian sports had to depend on foreign brands for all kinds of sporting and leisure wears. In doing this, Nigeria was also ceding to these countries the opportunities that came with the business of sports. None of these changed, until Africa for Africa (AFA) Sports started out in Nigeria years ago.
Recently on Nairametrics Business Half Hour show, Founder of Africa for Africa (AFA) Sports talked about how Nike’s rejection became the birth of an industry in Nigeria.
Ugo Udezue had come to Nigeria to establish the Continental Basketball League, (CBL) after spending 17 years with BDA Sports management in California. At this time, he saw sports as being “more about creating opportunities than just winning trophies”.
What he saw was the prospects of creating a whole economy built around the game – alternate relaxation options for workers who had spent long hours at work, and better opportunities for people to trade their wares and entertain guests during the games.
A major kitting challenge came up for the CBL, as most of the foreign brands did not seem to cater for the African climate. The kits and balls being used had been designed by foreign brands using their weather condition and environment as the guiding factor. Because of this, they could not cater to the needs of the Nigerian basketball players.
“The balls were not designed to absorb sweat and so the players kept dropping the balls. Even the jerseys and shoes had clearly not been designed for the African weather since we did not play the game in air-conditioned courts,” he explained.
When Udezue reached out to Nike to seek Apparel sponsorship for the CBL, he received the shocking news that “Africa was not in their plans at the time”.
This rejection, though a short term challenge, became the inspiration behind founding AFA Sports, done by Africans to cater to the sporting needs of Africans.
As you may well know, there were foreign companies sponsoring Nigerian teams at the time, making jerseys and other apparel. But because they were not producing these things locally, they were depriving the country of the opportunities and benefits which should have come with such ventures.
Gradually, Udezue and his team moved from the initial years of chaos and unprofitability, to growing AFA Sports into the biggest performing sports brand in Africa. The company’s products are now shipped to different countries.
In a couple of years, the dream started to materialise when AFA sports became the official apparel sponsor of the Nigerian National Basketball team D’Tigers during the Afro Basket 2017 competition. It was a major game-changer for sporting in Africa.
An industry waiting to explode
Manufacturing in Nigeria is often thought of along the lines or agricultural and industrial products, without much attention on the sporting and leisure industry. From jerseys to tracksuits, leisure wears, boots, balls, caps and others, there is a whole economy waiting to be explored.
“I saw sports as a way to create wealth. I realised that it was an opportunity to create jobs for Nigerians while meeting the need for football clothing, and for as long we keep sourcing these materials from the foreign brands, we will miss out on ways we could have used it to empower our economy,” Udezue said.
With these items produced locally at the factories and even exported to other countries, jobs are created for Nigerians. AFA sports, for instance, has three factories in Lagos state where it employs people to carry out its productions of sports and leisure wears.
Beyond saving Nigeria the cost implications of importing such products, the products are now being exported to other African countries bringing in some foreign exchange for Nigeria.
As Nigeria moves towards self-sufficiency, there is the need to pay attention to the sports economy and its attendant benefits. Much more than sponsorships, hosting games in local economy can turn the fortunes of small business owners in the locality, given them a wider market and increased income.
Crude oil prices settle almost 2% lower amid growing geopolitical risks
The surge in recent days in Covid-19 caseloads remains a great concern for oil traders.
Crude oil prices settled almost 2% lower at the last trading session of the week, dropping for the second time in five days amid growing fears that global energy demand could plummet to record lows.
U.S. West Texas Intermediate futures closed lower, having shed 1.74% to trade at $41.22 per barrel. Brent, the world’s barometer for crude, also lost about 1.53% to close at $43.30.
Why crude oil traders are concerned
The recent surge in COVID-19 caseloads remains a great concern for oil traders. Cases in the world’s largest economy are still rising, while India recently reported a record daily rise in COVID-19 caseloads. More than 700,000 people have died because of the COVID-19 pandemic.
Stephen Innes, Chief Global Market Strategist at AxiCorp, in a note to Nairametrics, explained the geopolitical risks facing the energy market. He said:
“By the shift in lower oil prices today, it confirms that when it comes to geopolitical risk, Asia oil traders (and most for that fact) have an unfortunate predisposition to heightened US-China tensions as oil reverses lower at midday.
“The executive orders (signed by President Trump) leveled on TikTok, and the scrutiny over WeChat has opened up a most unwelcome can of worms, especially ahead of the August 15th trade meeting.”
Crude oil traders closed some of their long positions at the last trading week remembering the invisible enemy, COVID-19.