Summary of the top business, economic and political news in Nigeria today.
- The International Monetary Fund (IMF) projects that Nigeria’s economy will grow at a faster pace than the South African economy in the 2018 fiscal year. According to its World Economic Outlook (WEO) for July 2017, the IMF said Nigeria will grow at 1.9 percent in 2018, while South Africa will only climb by 1.2 percent. Link
- Barring any last-minute change, electricity consumers in Nigeria are to pay between N2.89 and N7.45 per kilowatt hour (kwh) increase in the new cost reflective tariff slated for announcement before October. Investigations showed that the Nigerian Electricity Regulatory Commission (NERC), an agency in charge of the tariff, which completed receipts of complaints on the tariff review after expiration of 30-day window, is “awaiting final signal” from Presidency before it would announce the new tariff. Link
- The Central Bank of Nigeria has offered six and 12-month Treasuries at yields higher than the country’s inflation rate to lure yield-hungry investors and attract dollar inflows. Link
- The Director, Banking Supervision, CBN, AlhajiAhmad Abdullahi has disclosed that with less than six months to the implementation of the International Financial Reporting Standards 9 (IFRS-9) deadline, many banks are yet to meet up with the deadline given by the Central Bank of Nigeria (CBN) to move to the new financial reporting regime with effect from 1, January, 2018. Link
- The British government has said it will invest in Nigeria’s oil pipeline infrastructure, renewable energy, as well as gas and power. The British High Commissioner to Nigeria, Mr. Paul Arkwright said Britain had genuine investment interests in the downstream, midstream and upstream sectors of the Nigerian oil and gas industry. Link
- The Federal Government spent $25.82bn to service its debts between 2012 and 2016, the Debt Management Office has said. If converted to naira using the official rate of N305 to one dollar as of December 31, 2016, DMO said this amounted to N7.88tn. Link
- The President of the African Development Bank, Dr Akinwumi Adesina, says the bank will invest $24bn in agriculture in Africa over the next 10 years. Link
- The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said that high inflation rate and rising operating costs in the banking sector are some of the major reasons for the high interest rate in the country. Link
- Lagos State Governor, Mr Akinwunmi Ambode on Monday said his administration has already embarked on reform aimed at generating 3000MW of power within the next few years, adding that the initiative, which is on course, would go a long way in scaling up the State’s economy and make life more comfortable for the people. Link
- The Nigerian Export and Promotion Council (NEPC), has proposed to the Federal Government the approval of five billion naira to support industries in the country. Link
- Lagos State governor, Akinwunmi Ambode disclosed that Six states of the South West are jointly working on an agricultural master plan to push their frontier in food supply in the country. The states include Oyo, Ogun, Osun, Ondo, Lagos, and Ekiti. “We have in the pipeline an agricultural summit that we are planning in conjunction with the entire south west states and the idea is for us to create a master plan that allows other States in the region to partner with us”. Link
- Fitch Ratings has affirmed Lagos State’s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at ‘B+’ with Negative Outlook and Short-Term Foreign Currency IDR at ‘B’. Link
- A Federal High Court in Lagos, on Thursday, granted an ex-parte application by the office of the Attorney General of the Federation (AGF) for an order directing the banks to remit the funds to the Federal Government. The office of the AGF, through its lawyer, Prof. Yemi Akinseye-George (SAN), accused seven banks of unlawfully withholding $793,200,000 (about N249,659,700,000.00) in breach of the Treasury Single Account (TSA) policy. The banks listed in the court documents filed by the office of the AGF are: United Bank for Africa (UBA), Diamond Bank Plc, Skye Bank Plc, First Bank Limited, Fidelity Bank Plc, Keystone Bank Limited and Sterling Bank Plc. Link
- OPEC Secretary-General Mohammad Barkindo said on Monday Nigeria has no intention of going beyond its oil production target of 1.8 million barrels per day (bpd) until the end of March 2018. Link
- In line with its quest for sustenance of its operations and to ensure its programmes reach more unemployed youths, the Lagos State Employment Trust Fund (LSETF), an initiative of the Lagos state government, has launched a funding partnership programme targetted at high net worth individuals, private organisations, donor agencies, non-governmental agencies, and international development organisations. The Fund, which already has N25 billion commitment from the Lagos state government, said in a statement at the weekend that it plans to double the figure through the funding partnership arrangement as it seeks to expand its operations to benefit more businesses and people in the state. Link
- Kuwaiti Oil Minister Essam al-Marzouq said on Monday that Nigeria would voluntarily cap its oil output at 1.8 million barrels per day (bpd) once it reaches that level. Link
- Efforts by the federal government to diversify the economy and generate foreign exchange from other sources might have started yielding the needed results as the trade statistics report by the National Bureau of Statistics (NBS), revealed that the exportation of agricultural goods grew by 82 per cent in the first quarter of 2017. The sectoral breakdown showed that proceeds from agricultural products stood at $340 million (N105.06 billion) in the first quarter of 2017, representing 39.5 per cent of total non-oil export proceeds. Food products, manufactured products and industrial goods counted for 10.8 per cent, 16.9 per cent and 10.9 per cent respectively. Link
- As part of the backward integration policy of Prof. Ben Ayade’s administration, Cross River State Government is set to roll out 30 tonnes of cotton from its cotton farm by November this year. The cotton farm situated in Woda community, Yala Local Government Area of the state, is in partnership with Arewa Cottons. Link
- Nigeria’s oil export may suffered a setback as India, the country’s biggest oil destination, has started buying crude from the United States as it looks to diversify its sources of the commodity. Link
- Nigerians in the first six months of the year spent N40.607 trillion through the electronic platforms in the country, increasing electronic transactions by 100.5 per cent compared to the N20.245 trillion figure recorded as at March 2017. Link
- Investigation has shown that Nigeria’s power Grid can now carry 6,200 megawatts as against 5000MW. A reliable source close to the situation, disclosed that the Grid has been misunderstood over the years by past administrators, who have said one of the problems of generation companies is because the grid can carry only 5,000 MW. Link
- Ecobank has extended the capabilities of its Rapid Transfer product enabling all bank account holders in Nigeria receive money through the service instantly from 33 African countries where Ecobank operates. Link
- Stability is fast returning to Skye Bank Plc, as it had recorded a N60 billion recovery from its bad loan books.It also achieved a N6.2 billion cash inflow from full divestment from four local subsidiaries, and currently in the process of divesting from others, as part of strategies to weed it of unprofitable ventures and streamline operations for sustainable growth. Link
- Wapic Insurance Plc has said that it has introduced a savings product called Wapic Smart to help people achieve their financial goals. Link
- Nigerian pasta maker Dufil Prima Food plans to raise 40 billion naira ($131 million) from the local debt market to broaden its funding base, it said on Monday. The company has appointed Stanbic IBTC Capital, the local unit of South Africa’s Standard Bank to arrange the debt. Link
- President of Dangote group, Aliko Dangote is now moving into Dairy farming and production. The philanthropist who is already into rice, sugar and tomato farming is planning to develop dairy plants and develop home-grown milk production as he seeks more ways of ensuring Nigerians don’t go hungry as the population increases drastically. Link
- Financial advisers, other parties to the N58.851 billion Rights Issue of Unilever Nigeria Plc and directors of the company have held a signing ceremony for a successful issue. This followed the receipt of clearance documents from the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) in respect of the Rights Issue. Unilever Nigeria wants to raise N58.851 billion by way of rights to existing shareholders on the basis of 14 new shares for every 27 shares held by shareholders at an issue price of N30 per share. Link
- Visa, a global payments solution provider, in collaboration with some Nigerian banks, has launched mVisa, its innovative mobile payment service, in Nigeria. The solution is currently being rolled out across Africa. Link
- The Nigerian National Petroleum Corporation (NNPC) Group Managing Director (GMD) Dr. Maikanti Baru on Monday announced that the corporation could not sustain its last week record of 2.2million barrel per day (mbd) owing to the Monday attack on the Trans Niger Pipeline in Ogoniland which culminated in the loss of 150,000barrel. Link
- The Kano Electricity Distribution Company said it has disconnected power supply to over 10,000 homes over N84m revenue loss due to illegal connections at Rijiyar Zaki area in the Kano metropolis. Link
- The Managing Director of a real estate investment company, J. Missri and Company Limited, Nze Edozie Okafor, has called for the intervention of Governor Akinwumni Ambode over alleged unlawful acquisition of the company’s landed property at No. 23, Breadfruit Street, Lagos by the State Urban Renewal Agency (LASURA). Link
- The Anambra State Head of Service (HoS), Mr Harry Udu, has said that the Contributory Pension Scheme (CPS) will commence in the state in 2018. Link
- Nigerian Labour Congress says Kano state government owes over N11.2Billion of gratuity ,death benefit and pension arrears as at May 2017. Link
FG announces schedule for 4th evacuation flight from the USA
The evacuees will be expected to present an original COVID-19 negative test result not older than 14.
The Federal government has approved the fourth evacuation flight for Nigerians stranded in the United States of America for July 28.
According to a statement that was signed by the Consulate General of Nigeria, the Ethiopian Airline with flight number ET509 will depart Newark Liberty International Airport, New Jersey on Tuesday 28 July 2020 by 21:15hrs and arrive Nnamdi Azikiwe International Airport, Abuja on Wednesday 29 July 2020 by 13:25hrs.
“All prospective evacuees duly registered with any of the three Nigerian missions in the USA should purchase their one-way tickets at a cost of $1250 for economy class and $2800 for business class for adult/child fare including all taxes with the usual percentage reduction for infants under 2 years,” the statement read.
In line with the earlier announced protocols from the Nigerian Presidential Task Force on COVID-19, the evacuees will be expected to present an original COVID-19 negative test result not older than 14 days on the day of departure at the airport.
There will also be a temperature check at the airport, and any intending evacuee with a body temperature above 38°c or any symptoms suggestive of COVID-19 will not be allowed to check-in.
Evacuees are also required to wear a face mask as a matter of necessity and be in possession of hand sanitizer for intermittent use during the flight, while also adhering to the instructions of the
Furthermore, all returnees are enjoined to adhere strictly to all instructions of Port Health Services (PHS) officials and observe other entry screening protocols on arrival.
Notice on the FOURTH Evacuation Flight from the United States of America to Nigeria. #StayHomeSaveLives #COVID19Nigeria #COVID19 #PTFCOVID19 @NigeriaGov @DigiCommsNG @USinNigeria @FMICNigeria pic.twitter.com/NFVWWDGgSx
— Geoffrey Onyeama (@GeoffreyOnyeama) July 10, 2020
Covid-19: British High Commission to resume visa application in Nigeria
Nigerians who want to visit the UK can do so as soon as international flight operations resume.
The British High Commission in Nigeria has announced plans to resume visa processing in the country. It revealed that it will soon begin receiving visa applications from Nigerians who want to travel to the United Kingdom (UK).
This was disclosed in a public statement by the British High Commission in Abuja on Thursday, July 9, 2020.
It said that Nigerians who want to visit the United Kingdom can do so as soon as the international flight operations resume in the country. The statement said:
“We know there are many Nigerian nationals hoping to be able to travel to the UK when flights resume, both for employment and to see family members.
“UKVI are working closely with TSL contact, our commercial partner, to reopen visa application centres that were suspended due to COVID-19. UK visa application centres are reopening in phased manner globally when it is safe to do so and when we can operate an effective service.
“TSL contact are putting appropriate measures in place and working hard to reopen in Nigeria. We will share details of when VACs will reopen soon,”
READ MORE: US to stop issuing visa for Birth Tourism
It can be recalled that the Federal Government had shut down the airports to both domestic and international flight operations in March as part of measures to contain the spread of the coronavirus disease.
Following the gradual resumption of domestic flight operations, Nigerians are expecting that international flight operations might be resuming soon.
Nigeria’s excess crude account falls to $72 million
Nigeria’s excess crude account has now fallen by a whopping 98% in just 5 years.
Nigeria’s Excess Crude Account (ECA) now stands at $72 million as the country continues to grapple with an unprecedented revenue crisis not seen since the early eighties. The ECA account has now fallen by about 98% within the last 5 years.
The information on the excess crude account was revealed by the Minister of Finance, Zainab Ahmed in a National Economic Council Meeting during the week. The ECA is a savings account retained by the Federal Government and is funded by the difference between the market price of crude oil and the budgeted price of crude oil as contained in the appropriation bill.
There were major concerns last November when it was reported that the ECA balances held just $324.5 million one of the lowest balances recorded at the time. At $72 million the ECA is in low territory highlighting the effect of the fall in crude oil prices this year. Crude oil prices have crashed to sub-zero in March and have risen back o just over $40/barrel in recent weeks. However, it still remains low from Nigeria’s previous budget benchmark.
ECA in the news
About a year ago Nairametrics reported Nigeria’s Excess Crude Account has dropped to $480 million. This is as controversy continues to trail the $1 billion military spendings which were withdrawn from Nigeria’s Excess Crude. According to the Central Bank of Nigeria’s annual report for 2018, Nigeria’s crude excess account fell from $2.45 billion in 2017 to $480 million as of December 2018.
Just 5 years ago (August 2015) the ECA stood at $2.2 billion. This was the early days of the Buhari administration. It was $3.6 billion in February 2014, one of the highest balances on record. That same month, at its monthly FAAC, the government agreed to remove fuel subsidy from its books. Fuel subsidy is currently being borne by the NNPC.
The Controversies: Last year, the federal government under President Muhammadu Buhari was accused of mismanaging the country’s Excess Crude Account especially the $1 billion reportedly spent on military equipment.
- The National Security Adviser (NSA) retired Major General Babagana Monguno Gen. Babagana was quoted to have disclosed that he was not aware of the whereabouts or disbursement of the $1billion drawn from the ECA by the Buhari presidency in 2017 for security purposes.
- While controversies trail the statement credited to the NSA, with many describing it as diversion of public funds, the Presidency provided some explanations.
- Responding to the allegations, Senior Special Assistant on Media and Publicity, Garba Shehu, disclosed that various procurements had been made for the purchase of critical equipment for the Nigerian Army, the Nigerian Navy, and the Air Force, contrary to the allegations.
Nigeria’s ECA in retrospect: In Nigeria, there are two Sovereign Wealth Funds: the Excess Crude Account and the Nigeria Sovereign Investment Authority (NSIA). Note that these two are funded by the savings earned when oil prices are at peak.
- Hence, as a larger chunk of revenue is appropriated for ECA and NSIA, the country’s external reserves are likely to fall.
- Note that the sovereign wealth fund was established to address the controversies surrounding the Excess Crude Account.
- The fund is usually expected to generate revenue to meet budget shortfalls in the future, provide dedicated funding for the development of infrastructure and saves for future generations.
ECA depleted by 98% in 5 years: A closer look at the various annual reports of the Central Bank of Nigeria shows that Nigeria’s excess crude account has now fallen by a whopping 98% in just 5 years.