Weekly Roundup of Business & Economic News From Nigeria (March 25, 2017)

Welcome to our Economic and Business Review, our weekly summary of some of the most important Nigerian economic and business news. March 25, 2017

1. The Central Bank of Nigeria has released foreign exchange to oil marketers to enable them to import petroleum products into Nigeria. According to the Nigerian National Petroleum Corporation, the release of forex to marketers is in response to the repeated requests made by the oil dealers for this purpose. They did not state how much was released and at what rate.
2. The Federal Government disbursed the latest tranche of the N500 billion London-Paris Club loan refund to states last week. The refund was disbursed by the Federal Ministry of Finance is to commence this week. The amount represents deductions made from states over and above what was required in the years prior to the servicing of the Paris Club loan in the nineties.
3. The shut-down of the Shell Bonga field for 15 days has translated to a short fall of 3.4 million. The shutdown cost Nigeria about 225,000 barrels per day resulting in an estimated loss of $178.875 million. The plants were shut down for routine maintenance and will be reopened next month.
4. The Federal Government will soon unveil a comprehensive road map for the development of the Niger Delta, according to reports in the media. The road map is expected to include the clean up of Ogoni Land, Pipeline protection contracts, revamp amnesty program, modular refineries, maritime university etc.
5. Traders at the Computer Village, Ikeja, Lagos are worried about the plans of the Lagos State Government to relocate them to Abule Egba. They lamented that the area is prone to traffic and will discourage their customers from patronizing them.
6. The Nigerian Society of Engineers (NSE) has faulted the Federal Government’s Economic Recovery and Growth Plan (ERGP) 2017-2020, saying the document lacked engineering content. They also claimed that the document contained past policies that had failed to work and that the public wasn’t consulted before the document was published.

7. The CBN Monetary Policy Committee on Tuesday left the benchmark Monetary Policy Rate (MPR) at 14 percent. This was in line with most analysts prediction. The CBN had resisted calls for a reduction in MPR citing the high inflation rate of 17.5 per cent as its reasons.

8. The Federal Government on Tuesday unveiled an accounting software known as OneBook to ensure financial discipline among the three tiers of government. The software will be help power the government’s switch from cash to accrual accounting and will also be used by States. We have never heard of “OneBook” before and searched the internet. We did not see anything related to accounting software.

9. The Bill and Melinda Gates foundation has given Nigeria a grant of N7.6 billion for the cassava development. The fund is to be channelled into a project called NextGen Cassava, which is developing new varieties of cassava with higher yield and nutritional content for African farmers. The project is being executed by the International Institute of Tropical Agriculture, with support from the Boyce Thompson Institute, Brazil; International Centre for Tropical Agriculture, Colombia; National Crops Resources Research Institute, Uganda; National Root Crops Research Institute, Nigeria; US Department of Agriculture-Agricultural Research Service; and other international partners.

10. We received some data that about BVN registration in Nigeria. According to data from the Nigeria Interbank Settlement Systems Plc’s (NIBSS), the total number of bank customers that now have Bank Verification Number (BVN) has increased to 51.72 million as at February 2017. The data showed that on monthly basis, the enrolment on BVN has continued to improve steadily.
    For instance, as at January last year, 30.13 million customers had gotten their BVN, compared with the 2.24 million it was as at January 2015. Also, enrolment increased further to 31.11 million as at February last year (2.71 million as at February 2015); 32.19 million as at March last year (3.34 million as at March 2015); 33.63 million as at April 2016 (7.71 million April 2015); 35.44 million as at May last year (9.2 million as at May 2015); and 36.12 million as at June 2016 (12.49 million as at June 2015).
11. Ratings agency Fitch issued a comment about the state of Nigerian banks last week. Fitch maintained that more headwinds lay ahead for banks in 2017 citing the risk of more loans going bad due to the state of the economy. Fitch was also worried about the concentration of bank loans to select industries, like Oil and Gas, and was worried that it will translate to higer non performing loans by second quarter of 2017. Fitch also expected more capital raise and pitched its tent with Tier 1 banks.

12. Minister for Mines and Steel Dr Kayode Fayemi says that the Federal Government is “alarmed” about the way foreigners are “moving into the nation’s mining sector and is taking measures to check the export of unprocessed solid minerals. He said the number of expatriates that are mining solid minerals is shocking, adding that the local players and traditional rulers have petitioned the ministry in order to know who and what is required to engage in mining in their areas of jurisdiction. He also explained that Nigeria cannot expect to attract foreign investors and then whip up Xenophobic sentiments at the same time. However, he insisted that we cannot afford to have foreigners involvement to the detriment of our local engagement, so for jobs that our people have the capacity to do, we don’t allow in our ministry and we have a responsibility for anything happening in the mining industry.

13. Central Bank of Nigeria’s (CBN) Deputy Governor, Economic Policy and one time Acting governor of the apex bank, Dr. Sarah Alade has retired. She spent 23 years at the CBN.
14. The National Economic Council (NEC) has reconstitution of the Board of Directors of the Nigeria Sovereign Investment Authority (NSIA). The board reconstitution has restored the number of board members to nine directors, three of whom are Executive Directors (EDs) .The list of nominees, which covers all six geo-political zones  was forwarded to and approved by President Muhammdu Buhari. Joining the three Executive Directors of the Board are: Olajide Zeitlin (South West) – Chairman; Bello Maccido (North West); Ms. Lois Laraba Machunga-Disu (North Central); Urum Kalu Eke, (South East); Mrs. Halima Buba (North-East) and Asue Ighodalo (South-South).The Executive Directors are Uche Orji Chief Executive Officer/ Managing Director; Mrs. Stella Ojekwe Onyejeli, Executive Director/ Chief Risk Officer and Hanspeter Ackerman, Executive Director/ Chief Investment Officer.
15. The Federal Executive Council (FEC) last week approved N102.077 billion and $1.79 billion for roads projects across the country and rail project in the Federal Capital Territory (FCT). Fashola said N80 billion was approved for 12 roads and bridges in various states including Taraba, Adamawa, Sokoto, Zamfara, Bauchi, Plateau, Osun, Kwara, Kano, Oyo, Enugu, and Kaduna. He also said that there was approval of N150.84 million for the engineering and Consultancy design for access road 1 and 2 to link Asaba in Delta State and Onitsha in Anambra State to link the Second Niger Bridge project.
16. The Lagos State Government last week approved 15 per cent discount for all owners of properties in the state, who intend to pay their land use charge between now and April 14.
17. The exchange rate between the naira and dollar dropped below N400 for the first time since August 2016. The naira has strengthened every week since the CBN issued its new FX policy on February 20th The policy targeted FX sales to the retail end of the market hitting at the heart of the demand that has flowed to the black market in recent months

18. Nigeria’s Debt Management Office last Thursday announced results of its first FGN Savings bonds targeted at retail investors. The DMO said it raised N2.07 billion from a new two-year savings bond. The March auction attracted subscription from over 2,500 applicants during the five-day sale period, the DMO said, adding that the next sale will be on April
19. The Central Bank of Nigeria on Thursday said it sold one-year treasury bills at 18.69 per cent in its bi-weekly auctions. The rate was above inflation rate for the second consecutive time in a bid to maintain positive yield and attract investors. The CBN said it raised N83.16bn by issuing the one-year bill, which it had sold at a yield of 18.55 per cent at its previous auction on March 15.

20. The Nigerian Immigration office last week launched an online system aimed at enabling business executives to apply for a visa online and collect it on arrival 48 hours later. Under the new system, travellers must register with the Nigeria Immigration Service (NIS) and provide details including travel document information, after which a letter of approval may be issued and the visa collected on arrival.

21. President Muhammadu Buhari has approved the appointment of an interim managing director/chief executive officer, as well as executive directors for the Bank of Agriculture. They are as follows; Kabiru Mohammed, interim MD/CEO; Prince Akenzua, South-South, Executive Director, Corporate Finance; Dr. Okenwa Gabriel, South-East, Executive Director, Partnerships and Strategy; Ameh Owoicho, North-Central, Executive Director, Credit and Empowerment; and Bode Abikoye, South-West, Executive Director, Credit and Empowerment

22. The FG last week announced that it is now ready to lift the suspension of the Export Expansion Grant (EEG). The suspension will be lifted next week and will include payment of outstanding liabilities of over N200 billion. The outstanding debts will be cleared by issuing sovereign notes/promissory notes to non-oil exporters it was owing to boost exportation under the revival strategy being implemented by the administration.

23. The International Monetary Fund (IMF) warned that Nigeria’s economy needed urgent reform. This was based on a report seen by Reuters. Reuters claim that the failure to adhere to IMF’s request could delay talks over $1.4 billion in much-needed international loans. IMF urged Nigeria to introduce immediate changes to its exchange rate policy and say its recent reform plan is not enough to drag Africa’s biggest economy out of recession

24. The Tomato Union of Nigeria, (TUN), has implored the Central Bank of Nigeria, (CBN), to consider removing tomato paste triple concentrate from the forex policy restrictions or provide the raw materials to the industry. Spokesman of the union, Mr. Nmandi Nnodebe, told reporters in Lagos  that  if local producers of tomato paste get raw materials directly from the apex bank, it would save the industry from collapse and avoid job losses. He added that forex policy continues to encourage smuggling of inferior tomato paste brands through the borders.

Credits: Ugodre Obi-Chukwu