Summary of the top business, economic and political news in Nigeria today.
- The Federal Government is hiring the United States technology giants such as Oracle Corporation and Microsoft Corporation as it steps up efforts to save costs and fight corruption. Other companies interested in taking on more work in Nigeria include IBM Corporation and Sweden’s Ericsson AB, the Managing Director of government-owned Galaxy Backbone, which provides technology services to the government, Yusuf Kazaure, said. Link
- The Bureau of Public Enterprises (BPE), according to its Director General, Alex Okoh, is working with core investors in some privatised enterprises sold by deferred public offering to ensure they sell at least 20 percent of such entities to the market through public listing. Okoh said that Public listings remain a strategic objective of the reform and privatisation programme of the Federal Government. Link
- The Federal Government said on Tuesday that it borrowed N3.57tn between June 2015 and March 2017 to finance budget deficits. Link
- Pension Fund Administrators (PFAs) paid N4 billion to 12,464 disengaged workers in the third quarter of last year, a Quarterly Summary Report of the National Pension Commission (PenCom), has shown. The breakdown of the report showed that the private sector accounted for 95.43 per cent, which amounted to 173,578 of the disengaged workers while the public sector accounted for 4.57 per cent, which is 8,305 workers. Link
- Chief Financial Officers, Heads of Finance and Tax Managers in some of the leading organisations across major industry groups in Nigeria have described the style of Federal Inland Revenue Service, FIRS, in assessment of additional tax liabilities as aggressive. Link
- The Central Bank of Nigeria (CBN) says the nation recorded a growth rate of 51.1 per cent in employment level last month (June). According to a newly released employment index report which covers the manufacturing and non-manufacturing sub-sectors, the index in June 2017 stood at 51.1 and 53.4 points respectively, indicating growth rate in employment level for the second consecutive month. Link
- The federal government has in response to what it views as unsatisfactory general performance of operators in the sugar production sector in recent times, introduced new guidelines as well as putting in place benchmarks for raw sugar allocation. Under the new guideline, the Executive Secretary of NSDC, Dr. Latif Busari said that, operators would be required to submit their requests for quota sugar allocation for the following year in December of the preceding year and that the year 2017 allocation shall be the last in which sugar allocation shall be based on the old criteria including market/share refinery capacity. Link
- Minister of Industry, Trade and Investment, Mr. Okechukwu Enelamah, has said that the National Action Plan, NAP-60 Plan, which major objective is to promote the ease of doing business in the country would save Small and Medium Enterprises, SMEs, in the country about N2.6 billion in registration cost annually. Link
- International oil companies (IOCs) operating in the country will continue to hold back on the divestment of onshore assets until after the passage of the Petroleum Industry Bill (PIB) that governs fiscal terms, and the expiration of some of the joint venture onshore assets in 2019. A former Minister of State for Petroleum Resources, Mr. Odein Ajumogobia has also hinted that the asset disposals will continue in the foreseeable future, with up to $12 billion of the portfolio of oil multinationals potentially up for grabs. Link
- Investors have traded a total of N54.75 trillion in the fixed income and currency market between January and May 2017. Of the transactions, N9.49 trillion was exchanged in the month of May alone, which was 7.9 per cent higher than the N8.79trillion traded in April. According to the FMDQ OTC Securities Exchange, the month-on-month growth was primarily driven by increased trading activities experienced in the FX (Spot) and Repurchase Agreements (Repos)/Buy-Backs product categories. Link
- The Amukpe Escravos Pipeline Project (AEPP) belonging to Pan Ocean Oil Corporation, an indigenous exploration and production company in Nigeria’s upstream oil sector, is expected to come on stream before the end of 2017. Link
- The Federal Government on Tuesday in Abuja said it has provided N40 billion to settle reconciled outstanding electricity bills of its ministries and agencies. Link
- The Nigeria Cassava Growers Association (NCGA), says Nigeria can save N2 trillion from the importation of wheat, if appropriate measures are put in place to boost cassava cultivation. Link
- A drug trafficking syndicate generate $320 billion, approximately N115.2trillion annually, the National Drug Law and Enforcement Agency (NDLEA) said yesterday. This is just as the agency said it arrested a total of 77,558 persons for drug trafficking between 2015 and last year. Link
- Nigeria’s cabinet has approved a National Gas Policy that aims to reduce the country’s dependence on crude oil by increasing gas exploration and facilities, the oil ministry said in a statement. The 100-page National Gas Policy seeks to set up a single independent petroleum regulator. It also aims to separate upstream from midstream operations and to separate gas infrastructure ownership and operations from gas trading, the oil ministry said. Link
- Nigeria plans to raise between 360 billion naira and 450 billion naira ($1.18 bln-$1.48 bln) in sovereign bonds maturing between five and 20 years in the third quarter, the Debt Management Office (DMO) said on Wednesday. The debt office added it would auction 90-120 billion naira in the five-year note and 135-165 billion in the 10-year and 20-year debt between July and September. Link
- ARM Life Plc, a life insurance company quoted on the NASD Plc, has opened application list for its N1 billion rights issue. It urged shareholders to subscribe for their rights. The application list, which opened June 30 would close August 9. ARM Life is offering about 1.929 billion ordinary shares of 50 kobo each to its shareholders at a price of 52 kobo per share. Link
- Following recurrent cases of accidents and deaths among members of all registered cooperative societies in the state, the Lagos State Government, has appointed a consortium of seven insurance companies to mitigate losses that they might incur. Special Adviser on Commerce, Industry & Cooperatives, Mr. Benjamin Olabinjo said the insurance companies include STACO Insurance Plc, Industrial and General Insurance Company Plc, UBA Metropolitan Life Insurance Ltd and Capital Express Assurance Limited, AIICO Insurance Company Plc, ARM Life Plc and Cornerstone Insurance Plc, with the STACO Insurance Plc as the lead underwriter. Link
- The Nigerian National Petroleum Corporation (NNPC) said that it is impossible for the corporation to bring down the price of Premium Motor Spirit (PMS) also known as petrol due to the high demand of the product in the country. Link
- Addax Petroleum has agreed to pay 31 million Swiss francs ($32 million) to settle charges of suspected bribery of foreign officials, the Geneva prosecutor’s office said on Wednesday. Prosecutors for the Swiss canton of Geneva investigated the company, whose chief executive officer and legal director were also charged, over several tens of millions of dollars in payments to a company and several lawyers in Nigeria. A four-month investigation found the payments were not sufficiently documented and doubts remained on their legality, but no criminal intent was established, the Geneva prosecutor’s office said in a statement. Link
- The Transmission Company of Nigeria will complete over 200 projects to improve power supply to the distribution companies, Mr Babatunde Fashola, Minister of Power, Works and Housing, said on Wednesday. Link
- Following the strategic partnership earlier sealed between Interswitch, Africa’s leading integrated payments and transaction switching company and EVSL, developers of FuelVoucher in 2015, the distribution network of the electronic fuel purchasing solution has been further broadened considerably in further partnership with three of the leading downstream oil marketing firms, OVH Energy Marketing, Forte Oil & RainOil in Lagos. Link
- Ashaka Cement Plc has voluntarily delisted from the Nigerian Stock Exchange (NSE) for violation of the exchange free float deficiency provision of 20 per cent. Link
- The Deputy Governor of the Central Bank of Nigeria, Joseph Nnanna, has emerged as the new Chairman of Etisalat Nigeria, and will henceforth lead the company’s new Board of Directors. Also appointed to the board of Etisalat Nigeria are Mr. Oluseyi Bickersteth, Mr. Ken Igbokwe, Mr. Boye Olusanya and Mrs. Funke Ighodaro. While Bickersteth and Igbokwe will act as non-executive directors, Olusanya assumes office as the Chief Executive Officer to replace Mr. Matthew Willsher; and Ighodaro takes over from Mr. Olawole Obasunloye as the Chief Finance Officer. Etisalat Nigeria said in statement that Willsher was retained as an adviser to the new CEO “till his contract with the company runs out in December 2017.” Link
- Etisalat, in partnership with Support Microfinance Bank has simplified access to loans through the launch of its new service, KwikCash. The service, which is currently available only on the Etisalat network, was developed for subscribers who have bank accounts and need to access cash loans to settle urgent financial needs. It enables customers to get instant loans with ease using their mobile phones. Link
- The Nigerian National Petroleum Corporation, NNPC, says the cost of producing crude oil in Nigeria was reduced by $5 dollars within the last one year. The Group Managing Director, Maikanti Baru, said on Tuesday in a podcast to the corporation’s staff to mark his one year in office adding that the company was able to lower its production/operating costs from $27 per barrel to $22. Link
- A Federal High Court in Abuja has ordered an interim forfeiture of the sums of N500m and $500,000 said to have been looted from the Paris Club refunds made by the Federal Government in favour of the 36 states of the federation. The sums of money, said to have been recovered from two firms, First Generation Mortgage Bank Limited, and Gosh Projects Limited, were allegedly linked to Governor of Zamfara State and Chairman of the Nigeria Governors’ Forum, Abdulaziz Yari. Link
Lafarge moves to divest 35% shareholding in CBI Ghana
Lafarge Africa Plc has resolved to sell off its 35% shareholding in Continental Blue Investment Ghana Limited.
The Board of Lafarge Africa Plc has resolved to sell off its 35% shareholding in Continental Blue Investment Ghana Limited, in order to cut down on costs impacting the Group’s profit.
This disclosure was made in a notification tagged- “Notice of Divestment in Continental Blue Investment Ghana Limited”, which was issued by the Company Secretary, Mrs. Adewunmi Alode.
According to the statement, the Board of Directors of the Group made the decision to divest its 35% shareholding in Continental Blue Investment Ghana Limited (“CBI Ghana”), in line with the resolutions made at the emergency board meeting which held yesterday 20th, January 2020.
This move was made to set off the cement manufacturer on the path of sustainable growth and profitability, as Lafarge’s investment in CBI Ghana has depleted significantly over the years.
What you should know
- This is not the first time the company has had to sell off an unproductive investment in an effort to cut down on deadweight cost, as key players in the Cement industry like BUA and Dangote Cement continue to show strength and resilience through their effective cost minimization strategy which worked well in 2020.
- Recall that in August 2019, Lafarge Africa sold off all its stakes in Lafarge South Africa Holdings (LSAH). This move helped the company to cut down costs coming from its South African subsidiary, which had been making billions of naira worth of losses for years.
Multiverse forecasts N39.5 million profit in Q1 2021
The management of Multiverse Plc has projected a revenue of N76 million and a profit of N39.5 million in Q1 2021.
Multiverse Mining and Exploration Plc has projected that in the first quarter of 2021, the mining and exploration company will generate N76 million in revenue, and post a profit of N39.5 million.
These projections were made by the company in a recent earnings forecast issued by the Management, and signed by the Corporate Secretaries of the company.
Key highlights of the earnings forecast for Q1 2021
- Total revenue is projected at N76 million.
- Turnover from agency sale is projected at N1 million.
- Agency cost is s projected at N850 thousand.
- Total expenses are projected at N7.8 million.
- Operating Profit is projected at N67.3 million.
- EBIT (Earnings Before Interest and Taxation) is projected at N67.3 million.
- Interest Expense is projected at N27.8 million.
- Profit after tax is projected at N39.5 million.
Key assumptions made to support the earnings forecast and projection of the company
The earnings forecast was made on the ground that there won’t be any significant change in the economic policies of the Federal Government, while the monetary policies of the CBN would not be altered significantly.
The company also maintained that there would not be any industrial unrest that would affect its production and sales volume, while the profit of the company would not be pressured by rising costs of inputs, as prices of materials used in production shall be stable in the period under review.
GCR affirms Dangote Cement issuer ratings of AA+(NG) and A1+(NG)
Global Credit Ratings has affirmed Dangote Cement issuer ratings of AA+(NG) and A1+(NG).
Dangote Cement Plc has announced that Global Credit Ratings has affirmed the cement manufacturer a long-term and short-term national scale issuer ratings of AA+ (NG) and A1+(NG) respectively.
According to the press release issued by the company, the rating which maintains a stable outlook on Dangote Cement would expire by November 2021.
In line with this, GCR reviewed existing bonds of the company and assigned the N100bn Series 1 Fixed Rate Bond of Dangote Cement a rating of AA+.
Why this matters
- The ratings reflect Dangote Cement Plc’s status as Africa’s leading integrated cement manufacturer with a group-wide installed capacity of 45.6 million metric tonnes per annum across ten countries.
- The stable outlook which was maintained by GCR reflects the extensive distribution network, significant scale economies and position as the largest corporations on the Nigerian Stock Exchange, with sound access to capital.
- It is important to note that a rebound is expected within 18-24 months, on the back of strong base domestic demand.
What they are saying
Michel Puchercos, Chief Executive Officer, said:
- “Dangote Cement has shown great resilience in 2020 despite the COVID-19 pandemic and a challenging environment. The Group continues to report strong cash generation while maintaining strong financial discipline. As Africa’s leading cement producer, we are committed to maximizing shareholder value creation.”