Economic and Business News

For the Week ending, Friday, 10th April, 2017


FG constitutes committee to enforce ban of taxes on agric produce

The Federal Government has constituted an Inter-Agency Committee to enforce ban on collection of levies and taxes on agricultural produce on highways.

A statement issued by Mr Tony Ohaeri, the Director of Information, Federal Ministry of Agriculture and Rural Development in Abuja on Monday, said the committee was inaugurated by the Minister, Chief Audu Ogbeh.

The News Agency of Nigeria (NAN) reports that the committee was constituted following recommendations of the Presidential Taskforce on increasing food prices set up in February by Vice President Yemi Osinbajo.

Ogbeh had raised concerns about the illegal checkpoints and revenue collectors along transportation routes for food items, saying it had its impact on the current increase in the prices of food.

The Guardian. Monday, 3 April 2017


Ogun State attracts 75% FDI into Nigeria -UK envoy

The British Deputy High Commissioner to Nigeria, Laure Beaufils, has said that Ogun State alone attracts 75 per cent of the Foreign Direct Investment into Nigeria.

The British envoy stated this when she led a delegation from the Department for International Development on a courtesy visit to the governor in his office in Abeokuta, a statement by Adejuwon Soyinka, the Senior Special Assistant (Media) to Amosun, on Friday, said.

The envoy expressed delight at the development and asked how the administration had been able to achieve the feat. Beaufils expressed the intention of the British government to engage the state and assist it in the agricultural and agro-allied sector. Responding, the governor thanked the DFID for the offer, but stressed the need for the agency to assist the state in several other areas.

Punch. Sunday, 2 April 2017


Illegal refineries in Niger Delta to refine 1,000 barrels of oil per day -NNPC

THE Group Managing Director of Nigerian National Petroleum Corporation, NNPC, Maikanti Baru, has thrown light on the modular refineries the Federal Government is planning for the Niger Delta region.

Mr. Maikanti, at the 53rd International Conference and Exhibition of the Nigerian Mining and Geosciences Society, NMGS, in Abuja, said that the government will organise the youths now engaged in illegal refining of crude into consortia.

Each consortium will refine 1,000 barrels of crude daily. Baru also defended the Federal Government's plan to transform illegal refineries in the Niger Delta into legal entities for proper integration of the youths in the region.

Vanguard. Monday, 3 April 2017


American investor earmarks $200m for Nigeria's 1st modular refinery

THE Federal Government's plan to establish modular refineries in the oil producing areas has received a boost with a leading United States modular refinery investor, Missouri American Energy, Moham, setting aside $200 million for the take-off of Nigeria's first modular refinery with 20,000 barrels per day production capacity in Gbaramatu Kingdom, Warri South-West Local Government Area, Delta State.

President of Missouri American Energy, Mohan, Mr Henry Iwenofu, who led a delegation of the company's top officials, including the local promoters, to Abuja, told the Minister of State for Petroleum, Dr. Ibe Kachikwu, that $200 million budgeted by the company for the fabrication and installation of Gbaramatu Modular Refinery, GMR, components in the United States and Nigeria was in one piece.

Another $200 million, he disclosed, was available for infrastructural development, adding: "All Missouri American Energy Mohan needed is a friendly business environment with government policies and programmes that will enable the refinery strive and achieve its desired objective."

He was accompanied by the pioneer chairman of Delta State Oil Producing Areas Development Commission, DESOPADEC, and Bolowei (Prime Minister) of Gbaramatu Kingdom, who is the promoter of Gbaramatu Modular Refinery, Chief Wellington Okirika, Investor's Representative, Mr. Howard Wegman of Community Capital Group of Canada, Vice President and Director, Moham, Dr Chike Okechukwu and Dr. Alfred Okeke, respectively.

Vanguard. Monday, 3 April 2017


CBN injects another $240m into FX market

TheCentral Bank of Nigeria (CBN), Monday, injected another $240 million into the nation's foreign exchange market to sustain Naira's gains against the Dollar and other hard currencies.

Of that amount, $90 million was to meet requests for invisibles such as BTA/PTA, medical and school fees. The balanceof$150 million was given to authorized FOREX dealersin the interbank wholesale auction window.

The Bank's Acting Director in charge of Corporate Communications, Isaac Okorafor, confirmed the figures, disclosing that the CBN had adjusted BDC sale days to Tuesdays only to reduce logistical difficulties.

He added that henceforth the apex Bank would sell $10,000 only to low-end forex dealers once a week, instead of the twice weekly earlier announced.

According to Okorafor, in a bid to further ease the access of customers, the CBN has also directed all banks to pay cash over the counter to desiring foreign exchange customers.

Vanguard. Monday, 3 April 2017


Development Bank of Nigeria to finance 20,000 MSMEs

The newly licensed Development Bank of Nigeria will be financing a total of 20,000 Micro, Small and Medium Enterprises within the first year of its operations.

The Managing Director of the Bank, Mr Tony Okpanachi, stated this on Friday during a media briefing where some of the management team were unveiled by the Minister of Finance, Mrs Kemi Adeosun.

He said that the bank would be taking off it’s operations with a total of $1.3bn, adding that this would be used to provide wholesale long-term funding to small businesses.

He said the long-term fund would be provided to microfinance Banks for on-lending to MSMEs, adding that this would enable the sector create jobs and contribute significantly to economic growth.

Punch. Sunday, 2 April 2017


External reserves hit two-week low as naira weakens

The country's external reserves fell to a two-week low and the naira eased on the black market on Friday after the Central Bank of Nigeria pledged to step up dollar sales. This came just as the CBN said it would announce a new exchange rate for Bureau De Change Operators next week, Reuters reported.

The central bank had on Tuesday set a rate of N362/dollar for the BDC operators to sell the greenback to customers, an 11 per cent rise over the 399 it set in January.

The CBN has been selling the dollars on the official market in order to narrow the spread with the black market rate, which was quoted at a record low of N520 per dollar a month ago. On Friday, the black market naira rate, which has firmed 17 per cent since last month due to central bank dollar sales on the official market aimed at narrowing the spread, eased by 1.8 per cent to 390/dollar, Thomson Reuters data showed.

Punch. Sunday, 2 April 2017


Nigeria's debt burden to hit N19.3tn by December

Analysts have cautioned the government against plunging the nation into another debt trap, even as there are plans to raise funds from external sources to finance critical infrastructure, IFEANYI ONUBA writes. If the federal and state governments continue to rely heavily on debt instruments for the financing of the country's infrastructure needs, then, Nigeria's total debt burden will be hitting the N19tn mark by the end of this year.

Based on figures obtained from the Ministry of Budget and National Planning, the country's total debt stock is expected to rise by N6.72tn this year from the 2016 figure of N12.58tn, making the total debt liability to rise to N19.3tn by the end of 2017. The frequency of borrowing by the federal and state governments has become a source of worry to many analysts, who sound a note of caution that the country may be heading for another debt trap if restraint is not exercised.

According to the Economic Recovery and Growth Plan, Nigeria's public debt has increased in recent years as the Federal Government has increased borrowing to finance budget deficits owing to declining revenue.

Punch. Monday, 3 April 2017


Ibadan chamber advises private sector on recession

The President, Ibadan Chamber of Commerce and Industry, Mines and Agriculture, Margaret Amusa-Ogunnaike, has called on members of the Organised Private Sector to help end the economic recession in the country by creating opportunities for knowledge sharing.

She made the call at the 2017 Annual General Meeting of the chamber held in Ibadan. Speaking on activities in the last one year, Amusa-Ogunnaike lamented low performance of trade groups and companies mainly as a result of the depreciation of the naira and unfavourable foreign exchange rates in the banks and at the parallel market.

She said these adversely affected the business environment in the country last year, noting that exchange of ideas and information in the form of training and workshops would allow for wider views on how to overcome financial challenges.

Punch. Tuesday 4 April 2017


Buhari’s change of direction in Niger Delta boosts oil output.

When militants in Nigeria's southern Niger River delta started attacking oil installations, President Muhammadu Buhari promised to crush them by force. A year and $7 billion in lost oil exports later, his decision to switch tack by negotiating with the fighters seems to be working.

All but one force majeure, a clause that gives oil producers the right to miss supply obligations, have been lifted since peace talks were initiated in November with militants. Shipments at Forcados, the nation's third-largest export terminal, are on course to restart in the second quarter. Nigeria rivals Angola as Africa's biggest oil producer.

"Despite the president's initial threats and bluster on the delta, common sense now seems to be prevailing," said Cheta Nwanze, Lagos-based head of research at risk advisers SBM Intelligence. "The government needs steady oil production to stand any chance of a quick end to the economic recession."

The Guardian. Tuesday, 4 April 2017


Expert predicts naira appreciation as BDCs receive more Diaspora remittances

Alhaji Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON) has said that the naira will soon bounce to glory as BDCs are set to receive more Diaspora remittances.

Gwadabe said this on Tuesday in Lagos that the improved inflows of Diaspora remittances into the economy, in spite of falling oil prices, would fast track rate convergence and unification.

According to him, the increased inflows will help the CBN to address the dwindling confidence of foreign investors in assuring them of meeting the liquidity needs of the BDC sub-sector rather than that of the inter-bank market.

The financial operator explained that foreign investors relied heavily on the liquidity from the BDC sub-sector in informing their decisions on the economy.

Vanguard. Tuesday, 4 April 2017


CAC introduces 24-hour company registration process

The Registrar-General, Corporate Affairs Commission (CAC), Mr Mahmud Bello, says the commission has started operating 24 hours company registration process to make startup of business easier in Nigeria.

Bello said this at the CAC Customers' Forum in Kano, organised in collaboration with the Presidential Enabling Business Environment Council (PEBEC).

The registrar-general made this known in a statement on Tuesday in Abuja

He said that the aim of operating the new system was to ensure that business owners in Nigeria conveniently registered their businesses online within 48 hours.

According to him, series of reforms has been implemented by the commission this year to make it quicker, cheaper and more convenient for Nigerians to start businesses.

The Guardian. Tuesday, 4 April 2017


NUPENG calls off strike, FG raises bridging cost to N7.20

The Nigeria Union of Petroleum and Natural Gas employees has announced the immediate suspension of the nationwide industrial action embarked upon by its Petroleum Tanker Drivers division.

This is coming as motorists went about their normal activities in Abuja and Lagos on Monday as most of the filling stations dispensed products seamlessly without queues despite the strike by the tanker drivers.

Punch. Tuesday, 4 April 2017


Power sector records 2,746mw, N34.60bn shortfall in March

As the nation grapples with inadequate electricity supply, the power sector suffered a loss of 2,746 megawatts (mw) and N34.60 billion, in the month of March due to system collapse and gas constraints, according to the daily operational report of the Nigerian Electricity System Operation obtained by Sweetcrude.

This shows an improvement over the 4,276mw loss recorded in February, but a worsened situation in terms of revenue when compared with the N24.04 billion loss recorded also in February.

However, there are indications that the power situation may get further worse as Egbin Power Plc, which has the biggest power plant in Nigeria and one of the biggest single power generating stations in Africa, has threatened to shut down operations due to non-settlement of N100 billion debt, inadequate gas supply and inefficiency in operations of the Transmission Company of Nigeria (TCN).

Vanguard. Tuesday, 4 April 2017


CBN directs banks to pay cash to forex users

The Central Bank of Nigeria on Monday directed all banks to pay cash over-the-counter to desiring foreign exchange customers.

The directive, according to the Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, was issued to further ease the access of customers to foreign exchange.

He said that the apex bank had also released the sum of $240m to meet genuine demands from users of foreign exchange.

Out of this amount, he stated that the CBN released the sum of $90m to meet requests for invisibles such as business and personal travel allowances, as well as medical and school fees.

He added that the balance of $150m was offered to authorised forex dealers in the interbank wholesale auction window.

Punch. Tuesday, 4 April 2017


CBN to sell dollars to fuel importers, airlines

THE Central Bank of Nigeria (CBN), said, on Tuesday it will offer dollar forwards to be delivered within two months to offset a backlog of matured foreign exchange obligations to manufacturers, airlines, fuel importers and agriculture businesses. Authorised dealers' accounts with the central bank will be debited in full for the naira equivalent of the dollar bid amount on a spot basis," the bank said in a notice to commercial lenders.

"The central bank will settle the bids through forward settlements of two months," added the bank, which did not specify the amount of dollars to be sold. The bank had on Monday offered $150 million wholesale forwards to banks and said it also released $90 million for invisible transactions to ensure liquidity in the forex market.

The bank has been selling dollars on the official market in an attempt to narrow the spread with the black market exchange rate of the naira.

Nigerian Tribune. Wednesday, 5 April 2017


FG approves $1.3bn take-off grant for Nigeria Development Bank

The Federal Executive Council has approved a $1.3bn loan credit facility for the commencement of the Development Bank of Nigeria. The approval came on the heels of a memo submitted by the Finance Minister, Kemi Adeosun seeking council's ratification on the loan's request.

Adeosun, who briefed State House correspondents on the outcome of FEC meeting which was presided over by President Muhammadu Buhari, said $500m of the amount would come from the World Bank. According to the minister, another $450m is expected from the African Development Bank, and $200m from KFW, a financial corporation.

Adeosun said another $130m would come from the French Development Agency to make up the $1.3bn earmarked for the commencement of the bank.

Punch. Thursday, 6 April 2017.


Banks' non-performing loans hit N2tn - CBN

The challenging economic situation in the country made the banking industry's non-performing loans ratio to rise from N1.678bn in June to N2.084tn in December 2016, the latest Central Bank of Nigeria's Financial System Stability Report revealed on Wednesday.

The financial soundness indicators used to appraise the stability of the financial system included asset quality, capital and income-expense, the report stated.

The FSS report stated that the ratios of non-performing loans to gross loans increased from 11.7 per cent in June to 14 per cent in December 2016.

Punch. Thursday, 6 April 2017.


US import of Nigerian oil hits 42-month high

The increase in the United States' imports of Nigeria crude oil has continued, with a record import of 9.78 million barrels in January, the latest report from the US Energy Information Administration has revealed.

Nigeria saw significant reduction in the US imports of its crude in recent years, starting from 2012, following the shale oil production boom.

The US import of Nigerian crude fell to 6.17 million in June 2013 from 10.115 million barrels in May and about 40 million barrels in March 2007.

Punch. Thursday, 6 April 2017.


Naira overvalued by 20%, says IMF

The International Monetary Fund has said Nigeria's economy needs urgent reform.

In a in a report published on Wednesday, it highlighted the risks to growth for the recession-hit country and the dangers of a volatile foreign exchange market.

The document, a report from the IMF staff which Reuters saw an earlier version of last month, outlined a raft of failings in the Federal Government's handling of the economy and could affect at least $1.4bn in international loans.

The report expressed the issue in a more critical tone than the IMF's board adopted in a statement last week, although it also said Nigeria should lift the remaining foreign exchange restrictions and scrap the system of multiple exchange rates.

Punch. Thursday, 6 April 2017.


Nigerian banks tie money in government bonds, cuts back on loans

The Nigerian government is offering such good rates on bonds and Treasury bills that the country's banks would rather tie their money up in state debt than lend to businesses or consumers.

"Banks in Nigeria have a reduced incentive to lend to the private sector because of the favourable interest on government securities," Akintunde Majekodunmi, a banking analyst at Moody's Investors Service, said by phone from London on Wednesday. "They have increased appetite for government securities, which may cannibalise private-sector credit."

Lending in Africa's biggest oil producer just about stalled in 2016, according to Moody's estimates, as the economy contracted for the first time in 25 years and unpaid loans soared. There is easier money to be made from government debt auctions where yields of 18.74 percent on Nigerian 12-month T-bills, the highest level since February 2012, and rates on 10-year naira bonds of 16.3 percent, come with a lot less risk.

The Guardian. Friday, 7 April 2017


CBN releases $100m, naira rises to 397/dollar

The Central Bank of Nigeria on Thursday offered $100m in currency forwards, to be settled within 60 days, currency traders said, quoting a notice from the CBN.

The central bank has been selling dollars to try to narrow the spread between the naira's official and black market exchange rates.

This came just as the naira recorded a slight gain against the United States dollar, rising from 398/dollar on Wednesday to 397/dollar on Thursday.

The CBN had on Wednesday intervened in the Bureau de Change segment of the market, selling $10,000 to operators aside the $10,000 it sold to them on Tuesday.

Punch. Friday, 7 April 2017


Importers can clear vehicles, pay duty later - Customs

Vehicle dealers in the country will now enjoy the privilege of clearing their cars from the ports and paying the duty later going by a new policy approved by the Federal Government for the Nigeria Customs Service.

The implication of the new policy, according to the service, is that people can clear their vehicles from the ports and take them away for 28 days before paying the import duty on them.

The NCS had earlier said that it would issue licences for the establishment of inland bonded vehicle terminals across the country.

The establishment of inland bonded terminals means that dealers will not necessarily have to go to Lagos to clear their vehicles.

Punch. Friday, 7 April 2017.

Other Economic and Business Indicators

GDP -1.30%
(Q4, 2016)
Inflation Rate
(Year-on-Year change)
(February, 2017)
Unemployment Rate 13.9%
(Q3, 2016)
Underemployment Rate 19.7%
(Q3, 2016)
Monetary Policy Rate 14%
(March, 2017)
Inter-Bank Call Rate 10.39%
(December, 2016)
Prime Lending Rate 17.09%
(December, 2016)
Maximum Lending Rate 28.55%
(December, 2016)
External Reserve USD 30,325,761,977     
(5 April, 2017)
Exchange Rate (CBN)
7 April 2017
USD: 306.15
POUNDS: 380.48
EUROS: 325.41
Exchange Rate (Parallel Market)
7 April 2017
USD: 405.00
POUNDS: 490.00
EUROS: 425.00
Liquidity Ratio 30%
Treasury Bill Rate (91 Days) 13.55%
(22 March, 2017)
Currency in Circulation (Million Naira) 2,179,174
(December, 2016)
Banks Reserves(Million Naira) 3,318,344.71
(December, 2016)
External Debt - FGN + States (USD million) 11,261.89
(as at June 30, 2016)
Local Debt - FGN only (NGN million) 10,606,334.22
(as at June 30, 2016)
Bank Credit to to Private Sector (NGN million) 22,374,718.08
(December, 2016)
Demand Deposits at Banks (NGN million) 9,699,750.76
(December, 2016)
Nigeria's Merchandise Trade 4,721.9 billion (Quarter 3, 2016)
Crude Oil $51.82 (OPEC Daily Basket, April 6, 2017)

Source: CBN, NBS and DMO
Compiled by: Research Department, NACCIMA
10 April, 2017