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Dana Air to increase fleet with embattled Boeing aircraft

Nigerian airline operator, @DanaAir, has disclosed it will be taking delivery of three @Boeing -737 models in 2019 as it increases the company’s fleet for operation.

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Dana Air

Nigerian airline operator, Dana Air, has disclosed it will be taking delivery of three Boeing-737 in 2019 as it increases the company’s fleet for operation and intensifies expansion of its routes.

When will Dana Air take delivery of the planes?: One Boeing 737 will arrive Nigeria in the second quarter of 2019, while the other two would be added to the fleet before the end of the year. This is according to Dana Air‘s Chief Operating Officer (COO), Obi Mbanuzuo.

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“We will definitely add more aircraft to our operating fleet in 2019. We are looking at bringing three B737 aircraft.

“Currently, we have five aircraft and hopefully, before the end of the year, we should have additional three aircraft. Of the five aircraft that we have, one is a private jet and we have four commercial airplanes.”

Domestic airline operators continue romance with embattled Boeing

While it was not specified if the Boeing 737 aircraft is the controversial Max models, Dana Air is the second domestic airline operator that is waiting to take delivery of a Boeing aircraft. Air Peace had also in 2018 ordered for planes from the plane maker.

Note that as at the time Air Peace ordered the Boeing 737-Max model, the aircraft was the cynosure of airline operators around the world. But within the space of five months, the beloved aircraft became infamous after two deadly accidents.

The aircraft was banned by over fifty countries after an Ethiopian Airways flight crashed, killing all 157 passengers. According to a preliminary investigation into the accident, the Pilots of both airlines struggled with MCAS, a Boeing software which caused the planes to nosedive.

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Stakeholders are jittery after the Boeing crashes

Following the Ethiopian Airways accident, media reports about Air Peace ordering the same plane-type went viral. The domestic airline’s customers even demanded that the order be cancelled.

However, Air Peace said it’s too early to make such decision, informing their customers and the public that it intends to wait for the full investigation of both crashes.

Air Peace is expected to take delivery of the Boeing Max model later this year.

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Now with Dana Air looking to increase its fleet with Boeing planes without clarity on the model-type, this might compound the fears of air travellers in the country.

Recall that the Nigerian Government had earlier warned that no Boeing 737-Max 8 jets will be allowed in the country’s airspace. Boeing also supported action to temporarily ground 737 MAX Operations after consultation.

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Patricia

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

2 Comments

2 Comments

  1. Ofuzo

    April 9, 2019 at 9:10 pm

    Very bad journalism. Dana air can’t possibly get any max airplanes this year because it takes at least four years to deliver brand new airplanes. The person who wrote the article should have first inquired from Dana the types of Boeing they ordered before publishing this newstory.

  2. 5NFGS

    April 14, 2019 at 8:11 pm

    Dana are likely acquiring 737 Classic or NG aircraft.

    Like Ofuzo said, acquiring 737 MAX brand new will take a few years and none is presently flying worldwide except for testing purposes.

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Coronavirus

Governor David Umahi of Ebonyi tests positive for COVID-19

Umahi has directed those who worked in the budget review for 2020 to immediately test for COVID-19.

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Ebonyi State workers will not get salaries for this reason

The Governor of Ebonyi State, David Umahi has tested positive for COVID-19, reported on Saturday afternoon.

Umahi’s Special Assistant on Media, Mr. Francis Nwaze, confirmed the news and also revealed that some associates of the governor also tested positive.

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He also said that the Governor is not showing any symptoms of the disease, though he has isolated himself in line with the NCDC protocols.

“The governor has directed his Deputy, Dr Kelechi, to coordinate the state’s fight against the disease and appealed to the citizens to take the NCDC protocols seriously.

“He will currently be working from ‘home’ and will be conducting all meetings virtually,” Nwaze added.

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David Umahi becomes the sixth Nigerian governor to test positive for the disease, Governors of Kaduna, El- Rufai, Bauchi, Bala Mohammed and Oyo, Seyi Makinde have fully recovered while the recent cases have been the Governors of Ondo, Rotimi Akeredolu and Delta, Ifeanyi Okowa.

On Thursday, Governor Umahi announced that the state’s Executive Council was finalizing the budget review required by World Bank and said “most us broke down and are being treated of malaria.”

He also directed those who worked in the budget review for 2020 to immediately test for COVID-19 and admitted he is expecting a second test result after he initially tested negative in March.

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Economy & Politics

Nigeria’s debt rises to $79.5 billion, as debt to revenue ratio worsens

According to data obtained from DMO, $27.66 billion (N9.9 trillion) is the total external debt.

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DMO suspends April 2020 FGN savings bond offer

Nigeria, Africa’s largest economy’s total public debt rose to $79.5 billion (N28.63 trillion) as of the first quarter of 2020, which is March 31, 2020. This represents a 15% increase from the figure that was recorded for the corresponding period in 2019, which was about $69.09 billion (N24.94 trillion).

This was disclosed in a latest publication by the Debt Management Office (DMO) on Friday June 3, 2020.

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Nigeria has seen its debt stock rise sharply in recent years as the country tries to fund infrastructural and developmental projects and boost its fragile economy, which has been in and out of recession. The country’s economy has been projected to fall into recession again, due to the adverse impact of COVID-19 that has seen oil prices crash globally.

According to data obtained from DMO, $27.66 billion (N9.9 trillion) is the total external debt. This represents 34.89% of the total public debt stock. Whereas, $51.64 billion (N18.64 trillion) is the total domestic debt, which represents 65.11% of the total public debt.

The Federal Government accounts for 50.77% of the total domestic debt, which is $40.26 billion (N14.53 trillion), whereas the State Governments and Federal Capital Territory account for 14.34% of the total domestic debt which is $11.37 billion (N4.11 trillion).

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Nigeria has been under a lot of fiscal crisis following the crash of oil prices triggered by the coronavirus pandemic. The oil sector accounts for about 90% of the country’s foreign exchange earnings and about 60% of its total revenue.

The country, which had lined up a series of debt issue this year, had to halt the external commercial borrowing due to oil price collapse. The Minister for Finance, Zainab Ahmed, had last week disclosed that the country would no longer go ahead with its Eurobond debt issue.

The Nigerian government, for now, is focusing on the domestic markets and concessionary loans to help fund the 2020 budget deficit which is made worse by drop in revenue. In the recently approved 2020 revised budget, the federal government is expected to borrow N850 billion from the domestic market.

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This rising debt has put a lot of pressure on the government’s resources as it spent $1.69 billion (N609,13 billion) to service its domestic debt in the first quarter of 2020 alone.

Nairametrics had reported that Nigeria’s global rating is at risk due to the sharp rise in the country’s sovereign debt and a growing finance gap. According to a report from the global rating agency, Fitch Ratings, this could trigger a rating downgrade as policymakers struggle to stimulate growth and deal with the impact of low oil prices and sharp drop in revenue.

According to Fitch, the country’s debt to revenue ration is set to deteriorate further to 538% by the end of 2020, from the 348% that it was a year earlier.

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Financial Services

CBN imposes fresh CRR debits on banks to the tune of N118 billion

These debits have inevitably tightened liquidity in the banking system and bankers are complaining.

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CRR Debits

On July 3rd, 2020, the Central Bank of Nigeria (CBN) once again debited many banks in Nigeria in line with its Cash Reserve Ratio (CRR) compliance requirement. This time around, about 14 banks were debited to the tune of N118 billion.

These banks are:

  • Access Bank Plc: N3 billion
  • Guaranty Trust Bank Plc: N15 billion
  • First Bank of Nigeria Ltd: N12.4 billion
  • Ecobank Nigeria: N7 billion
  • Sterling Bank Plc: N5 billion
  • Fidelity Bank Plc: N11 billion
  • Union Bank of Nigeria Plc: N12.5 billion
  • First City Monument Bank Ltd: N10 billion
  • CitiBank Nigeria Ltd: N10.2 billion
  • Stanbic IBTC Bank: N15 billion
  • Zenith Bank Plc: N7 billion
  • Wema Bank Plc: N3 billion
  • Titan Trust Bank: N2.5 billion
  • Rand Merchant Bank Nigeria Ltd: N4 billion

More details on these debits

These constant CRR debits, which typically herald the apex bank’s FX auctions as Nairametrics was made to understand, have served to significantly reduce liquidity in the system. An insider who informed Nairametrics about the latest debit said “the liquidity within the system is now very tight”. As a matter of fact, liquidity is now reportedly below N100 billion.

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Apparently, the CBN is using these weekly CRR debits to mop up liquidity in the system. In other words, these debits help to prevent banks from coming to the FX auctions with lots of cash. Too much FX demands tend to put the apex bank under pressure.

Note that inasmuch as the CBN is trying hard to stabilise the FX markets, these constant debits have inevitably affected banks negatively by leaving them cash-strapped. Our source, who was quoted above, earlier complained about these ‘indiscriminate debits’ when he said:

“These are huge amounts that are leaving the banking sector. It’s a squeeze on the banks. A bank like First Bank, for instance, has about N1.4 trillion in CRR with the Central Bank. And there is Zenith Bank with equally as much as N1.5 trillion. These are monies that banks can potentially put in loans at 52% at 30%, or even put in money market instruments at maybe 10%. So, for a shareholder of these banks, this CRR debits are impairing the banks’ ability to increase their earnings because now are not able to use the funds that are legitimately theirs to create money for their shareholders. And the question is that under what framework is the Central Bank choosing to take people’s money?”

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Banks’ stakeholders have also collectively complained

Meanwhile, bank stakeholders have also collectively complained about these incessant CRR debits by the Central Bank of Nigeria. As Nairametrics reported yesterday, the negative impacts of CBN’s constant CRR debits were among some of the issues raised by banks’ stakeholders during Standard Chartered Bank’s 2020 Africa Investor’s Conference.

It is important to point out that many banks in the country, including the likes of First Bank, now have billions of their customers’ debits sterilised for the sake of CRR compliance.

Understanding CRR

The cash reserve requirement is the minimum amount banks are expected to leave retained with the Central Bank of Nigeria from customer deposits. In January, the CRR was increased by 5% to 27.5%  by the CBN Monetary Policy Committee (MPC) who explained that the decision was intended to address monetary-induced inflation whilst retaining the benefits from the CBN’s LDR policy.

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Patricia
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