Economic and Business News

For the Week ending, Friday, 18th August, 2017

1

Lagos closes N85BN series 2 bond issuance programme

Lagos State Government on Monday announced the closure of the N85, 140,000,000 Series 2 Bond Issuance geared towards improving the physical and social infrastructure in the State.

Commissioner for Finance, Mr. Akinyemi Ashade in a statement, said the Bond was issued in two tranches of N46,370,000,000 16.75 percent Tranche 1 maturing August 2024 and the N38,770,000,000 17.25 percent Tranche 2 maturing August 2027, under the N500bn Third Debt Issuance Programme.

Ashade recalled that the Government had on Friday, August 12, issued an N85.14billion Series II Bond in two tranches- a 7 year N46, 370,000,000 16.75 percent bond maturing in August 2024; and a 10-year N38, 770,000,000 17.25 percent bond maturing in August 2027, under the N500billion Third Debt Issuance Programme, by way of a book building.

Vanguard. Monday, 14th August, 2017

2

6 banks book N144.6bn bad loans in 6 months - Analysis

ALTHOUGH many deposit money banks are putting finishing touches to their half year financial performance in readiness for their release this week, Nigerian Tribune's analysis of results for six lenders showed that their impairment charges/write backs increased to N144.6billion in the first half of 2017. This compares with N128.6 billion recorded in the corresponding period of 2016, representing an increase of N16billion.

But looking beyond the regular gross earnings which commercial banks like to showcase each time they release their results, a few profitability ratios can provide further clue to the impressive or non-impressive outing of the six banks that have released their results.

The lenders are: First Bank of Nigeria (FBN) Holdings, First City Monument Bank (FCMB), Union Bank, Sterling Bank, Diamond Bank and Zenith Bank plc.

Impairment charges are loans that may no longer be recovered especially those that had more exposure to upstream oil sub-sector, power sector and foreign currency loans.

Nigerian Tribune. Monday, 14th August, 2017

3

US, FG back 20,000bpd oil refinery in Lagos

The construction of a 20,000-barrels-per-day crude oil refinery in Lagos by a Nigerian petrochemical and refining company has received a major boost with the signing of a grant by the United States Trade and Development Agency.

Similarly, the Federal Government has pledged to provide the necessary support to the company towards the completion of the project aimed at ramping up the nation's oil refining capacity.

The USTDA on Friday signed the grant with Eko Petrochem and Refining Company Limited for a feasibility study supporting technologies and development of an implementation plan for the modular refinery on Tomaro Island in Lagos.

The Punch. Monday, 14th August, 2017

4

BoI disburses N450m to Ogun SMEs

Micro credit disbursement by the Bank of Industry under the Federal Government's Government Enterprise and Empowerment Programme in Ogun State has hit over N450m.

According to the Development Finance Institution, over 7,000 beneficiaries across 130 associations have so far accessed the marketmoni loans in the state.

A statement from it quoted the Ogun State Governor, Ibikunle Amosun, as saying during the BoI's presentation of loan certificates to beneficiaries of the GEEP programme tagged "Marketmoni alert train don land," that the Micro Small and Medium Enterprises were a major catalyst for economic growth and development of big industries.

The Punch. Tuesday, 15th August, 2017

5

NDPHC develops 120 transmission, 10 critical generation projects

The Niger-Delta Power Holding Company of Nigeria says it has embarked on the construction of 120 transmission stations and sub -stations and 10 critical generation projects to support power generation and supply in the country.The Managing Director of NDPHC, Mr Chiedu Ugbo, said that the company was also involved in the construction of distribution lines to increase distribution of electricity to the rural communities.

"We have projects on going; we have 10 power generation projects; we have completed eight of the projects and two is on the verge of completion when commissioned, it will be transferred to the grid."According to him, among the 10 critical generation plants, two of the projects, Olorosogun project in Ogun and Geregu in Kogi, are not located in the Niger-Delta region.

The Punch. Tuesday, 15th August, 2017

6

Naira watch: Naira appreciates to N362.5/$ in NAFEX

The Naira, yesterday, appreciated to N362.5 per dollar in the Investors & Exporters (I&E) window due to improved dollar supply.

 Data from Financial Market Dealers Quote (FMDQ) showed that the indicative exchange rate for the window, known as Nigeria Autonomous Foreign Exchange (NAFEX), dropped to N362.5 per dollar, yesterday, from N366.5 per dollar, last week, translating to N4 appreciation for the naira. The naira has appreciated for two consecutive weeks, gaining N2.28 kobo against the dollar, buoyed by improved dollar supply into the market.

According to FMDQ, $117.36 million was traded in the window yesterday, while, $611.6 million was traded last week.

Vanguard. Tuesday, 15th August, 2017

7

Zenith Bank makes 30% provision on 9mobile loan -CEO

Zenith Bank Plc says it has made a provision of 30 per cent on its loan to 9mobile, the country's fourth largest telecoms company formerly known as Etisalat Nigeria.

"We have taken about 30 per cent … as a provision which we believe is very prudent as the company is undergoing restructuring to prepare for a new investor," the bank's Chief Executive Officer, Mr. Peter Amangbo, told a conference call on Monday, Reuters reported.

The Federal Government had stepped in last month to save Etisalat Nigeria from collapse and prevent commercial banks from placing the telecoms firm into receivership.

The move led to board, management and name change

The Punch. Tuesday, 15th August, 2017

8

Compliance audit: NPDC, BPE, Total among 15 lowest performers - Nigeria Extractive Industries Transparency Initiative (NEITI)

The Nigeria Extractive Industries Transparency Initiative on Tuesday announced that its ongoing independent audit of the oil and gas industry covering 2015 recorded 94 per cent compliance by companies and relevant government agencies.

According to the audit report, while 14 out of the 65 companies that participated in the exercise topped the ranking table with a maximum score of 100 per cent, 15 others scored between 51st and 62nd positions.

Two subsidiaries of the Nigerian National Petroleum Corporation, namely: the Nigerian Petroleum Development Company and Crude Oil Marketing Division of the NNPC, as well as the Bureau of Public Enterprises, Total Exploration and Production Nigeria Limited, amongst others, were listed among the 15 firms in the 51st to 62nd positions.

Some of the 14 companies that topped the ranking table included Chevron Nigeria Limited, Consolidated, Continental, Eroton, Esso Exploration, Mobil Producing Nigeria Unlimited and Niger Delta Petroleum Resources.

The Punch. Wednesday, 16th August, 2017

9

Wine bottle recycling plant established in Jos

A wine bottle recycling plant has been established in Jos, the Plateau capital, newsmen report.Our correspondent, who visited the firm, observed wine bottles being cut into various shapes and sizes and turned into cups, candle lights, lamp holders, fibre glass and flower vessels.

Other items produced from the recycled wine bottles included mini jugs, interior and exterior decorations, decorative lights, bottle lights, outdoor and indoor glows, among others.Speaking with NAN, Mr Samuel Kyarshik, Managing Director, Jos Masterminds Ltd, owners of the plant, said that the recycling company was focused on "turning thrash into treasure".

Vanguard. Wednesday, 16th August, 2017

10

Fashola makes a U-turn, says consumers can pay for meters

The Federal Government has said that it will not oppose the wishes of electricity consumers that are willing to pay for meters from their distribution companies based on agreement between both parties as endorsed by the power sector regulator.

But in April last year, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, had directed the Nigerian Electricity Regulatory Commission to immediately wind down its alternative metering scheme, the Credited Advance Payment for Metering Initiative, which allowed customers to pay for electricity meters from their respective Discos.

However, in his speech at the 18th monthly power sector meeting, which was made available to our correspondent in Abuja on Tuesday, Fashola stated he had been receiving several requests from the Discos that their customers still wanted to pay for meters.

The Punch. Wednesday, 16th August, 2017

11

Nigeria may record 16% decline in air travel

Nigeria's airports, especially the Murtala Muhammed International Airport, Lagos which is the country's hub, will record between nine per cent and 16 per cent drop in domestic and international flights from August to December this year, a new report has revealed.

The report by travel data specialists, ForwardKeys, which analysed seat capacity for travel to top 10 international airports in Africa, noted that the decline was connected to Arik Air cutting 53 per cent of its seats for the rest of the year.

The analysts specifically stated that from August to December 2017, there would be 16 per cent fewer airline seats on domestic routes; and nine per cent fewer on international routes to and from Lagos.

The Punch. Wednesday, 16th August, 2017

12

CBN joins NPA, NIMASA's port charges to forex window

• Auctions $364m, as parallel market rate rises

 The Central Bank of Nigeria (CBN) yesterday added the Nigeria Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) to its official forex window. The move, according to CBN is to improve foreign exchange availability in the market and reduce challenges encountered by critical stakeholders, including in the payment of port charges to the related authorities.

 The Guardian learnt that it would further liberalise the market that would allow some transactions that earlier sourced foreign exchange autonomously to regain access to the official window.

The Guardian. Wednesday, 16th August, 2017

13

CBN injects $364m as naira depreciates to N370/$ in parallel market

The Central Bank of Nigeria (CBN) Tuesday injected $364 million into the interbank foreign exchange market, in a bid to sustain its intervention and boost liquidity in the foreign exchange market.

Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okororafor disclosed this in a statement yesterday, He said: "The CBN intervened in the inter-bank foreign exchange market to the tune of $364million in a bid to sustain liquidity in the market.

"The Retail Secondary Market Intervention Sales (SMIS) received the largest allocation of $264.19 million. The CBN also offered the sum of $100 million to authorised dealers in the wholesale window.

He said the CBN also received requests from authorized forex dealers on behalf of their customers, for which results will be released, stressing that the CBN remained committed to achieving a convergence of rates at the inter-bank and bureau-de-change segments of the market.

Vanguard. Wednesday, 16th August, 2017

14

ECOWAS assesses Nigerian port facilities on security code

THE Economic Communities of West African States (ECOWAS) recently carried out an assessment of port facilities in Nigeria with a view to ascertaining the country's level of compliance to the International Ship and Port Security, ISPS Code.

Confirming the development at the just concluded monthly meeting of the Lagos Maritime Security Zone of the Port Facility Security Officers (PFSO) Forum, Mr. Ignatius Uche, Secretary of the Forum, said that ECOWAS sent a consultant to carry out the assessment on facilities across the region.

Uche also said that the Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigerian Ports Authority (NPA) were represented at the assessment exercise, adding that the consultant spent more time in Nigeria because it is the biggest country in the region.

Vanguard. Thursday, 17th August, 2017

15

FG approves $122.6m repairs for Ajaokuta rail line

The Federal Executive Council on Wednesday approved the contract for the repairs of the Itapke-Ajaokuta rail link.The Minister of Information and Culture, Alhaji Lai Mohammed, who briefed State House correspondents at the end of the meeting presided over by the Acting President, Yemi Osinbajo, put the cost of the contract at $122,616,582.

He said the cost was inclusive of all taxes at the prevailing Central Bank of Nigeria’s exchange rate of $1 to N305.The minister said the contract, which spans 15 months, includes completion of 12 rail stations. Mohammed said the council also approved a ‘letter of comfort’ to GE for the concession of narrow gauge railway system as the government targets the haulage of one million tons of goods by rail this year.

The Punch. Thursday, 17th August, 2017

16

No audit report on N4.2tn TSA two years after - AGF

Members of the House of Representatives were in shock on Wednesday when the Auditor-General of the Federation, Mr. Anthony Ayine, disclosed that over two years after the Treasury Single Account policy came into operation, it had not been audited.

He also claimed not to be aware of the amount of funds so far deposited into the account since his office had not done due diligence on it.Ayine had appeared before an ad hoc committee of the House, which is investigating the operations of the TSA since it was inaugurated in 2015.The committee said an estimated N4.2tn had so far been transferred into the TSA, which is domiciled in the Central Bank of Nigeria.

The Punch. Thursday, 17th August, 2017

17

BoI unveils plans to upscale risk assets for small, medium firms

The Bank of Industry (BoI) has unveiled plans to leverage its existing partnership with commercial banks to build its risk assets from the current N600 billion to N1.2 trillion as part of efforts to improve its intervention to Small and Medium Enterprises (SMEs).

The Managing Director, BoI, Olukayode Pitan, who was represented by the bank's Executive Director, SME, Waheed Olagunju, during the African SME expo 2017, added that the bank had budgeted about N310 billion for SME development with an average of N60 billion yearly, but have not been able to process loans worth N50 billion to SMEs on account of viability.

Meanwhile, the State Minister, Industry, Trade and Investment, Aisha Abubakar, added that SMEs are recognisable world over as the engine of economic growth and development due to the critical role they play in job and wealth creation.

The Guardian. Thursday, 17th August, 2017

18

CBN's power, airline interventions hit N277 billion

Agric scheme's interest drawback gulps N105m. Development interventions by the Central Bank of Nigeria (CBN) in the power and aviation sectors have reached N277.4 billion cumulatively between September 2016 till June 2017, with repayments by the operators trailing progressively.

The programme, under CBN's Power and Airline Intervention Fund (PAIF) has supported 59 projects in both sectors in efforts to keep them afloat amid harsh economic situation and threats to jobs.Correspondingly, about N106.13 billion has so far been repaid cumulatively, with consistent and slight increments in the volume of repayments per quarter since September 2016 to June 2017.

A further analysis of the figures from CBN data on the level of repayments in both sectors shows responsiveness on the part of the borrowers, as well as relative return of stability in activities, which continue to boost their revenues in meeting the obligations.

The Guardian. Thursday, 17th August, 2017

19

Naira appreciates to N359.7/$ as External reserve hits $31.35bn

The naira yesterday appreciated below N360 per dollar for the first time in the Investors and Exporters (I&E) window due to increased dollar supply. Meanwhile, the Central Bank of Nigeria (CBN) said that the nation's external reserve rose to a new high of $31.35 billion as at Friday August 11, 2017. Data posted by the apex bank shows that the external reserve rose by $392 million to $31.375 billion last week Friday from $30.965 billion Friday the previous week.

Data from Financial Market Dealers Quote (FMDQ) showed that the indicative exchange rate for the I&E window, known as Nigeria Autonomous Foreign Exchange (NAFEX), dropped to N359.65 per dollar yesterday from N362.38 per dollar on Tuesday.This translated to N2.69 appreciation for the naira against the dollar. Hence the naira has appreciated by N6.81 against the dollar this week.

The appreciation was driven by increased dollar supply into the window, with the volume of dollars traded yesterday rising by 154 per cent to $236.38 million, from $93.21 million on Tuesday.Consequently $446.95 million has been traded in the window this week.

Vanguard. Thursday, 17th August, 2017

20

TCN secures $2billion to expand capacity to 20,000MW

The Transmission Company of Nigeria (TCN) has secured close to $2billion for the rehabilitation of national grid infrastructure and expansion of its transmission capacities up to 20,000 megawatts target within the next three years.Before now, some of the transmission facilities are outdated, or inadequate and too weak to evacuate power generated by the Generation Companies (GenCos) thereby limiting the GenCos from achieving its optimum capacities.

The Managing Director, TCN, Usman Gur Mohammed, made these disclosures at the just concluded power sector stakeholders meeting presided by the Minister of Power, Works and Housing, Babatunde Fashola, in Kano.He spoke while fielding questions from journalists on the challenges and programmes of the company towards achieving sustainable power supply throughout Nigeria.

The Guardian. Friday, 18th August, 2017

21

TSA: FG begins audit of banks' remittances to CBN

The Federal Government has commenced an independent audit of remittances of its funds into the Treasury Single Account by Deposit Money Banks.The TSA is a platform used by the government to unify all its accounts by ensuring that all funds belonging to the Federal Government are kept with the Central Bank of Nigeria.

The initiative, which began fully in September 2015, has been complied with by over 900 agencies of the government with 20,000 bank accounts closed while over N5tn has been moved from banks to the CBN.There was a discovery last week that about seven banks had yet to remit a total of $793m government funds into the TSA.

But speaking in Abuja at a two-day workshop for finance journalists on the TSA and other public financial management reforms, the Director, Funds, Office of the Accountant General of the Federation, Mr. Alexander Adeyemi, said a comprehensive audit of the remittances by banks was being carried out

The Punch. Friday, 18th August, 2017

22

N200bn Agric loan: CBN orders beneficiaries to insure projects with NAIC

THE Central Bank of Nigeria (CBN) has ordered beneficiaries of the N200 billion Commercial Agricultural Credit Scheme (CACS) to henceforth obtain insurance cover for their projects from the Nigeria Agricultural Insurance Company (NAIC).

The order followed the release of the amended guidelines for the CACS in a circular signed by the Director, Financial Policy and Regulation Department, CBN, Mr. Kelvin Amugo.

Entitled: "Amendment to the CACS Guidelines", the circular stated: "The CBN has reviewed the guidelines for CACS, to enhance its effectiveness and further mitigate the risks faced by participating financial institutions in financing the agricultural sector. This revision affects sections 16 and 17 of the guidelines and introduces significant changes, including a requirement that henceforth, NAIC should provide insurance cover for all agricultural facilities/projects under CACS in line with NAIC Act".

Vanguard. Friday, 18th August, 2017

Other Economic and Business Indicators

GDP -0.52%
(Q1, 2017)
Inflation Rate
(Year-on-Year change)
16.10%
(June, 2017)
Unemployment Rate 14.2%
(Q4, 2016)
Underemployment Rate 21.0%
(Q4, 2016)
Monetary Policy Rate 14%
(July, 2017)
Inter-Bank Call Rate 13.46%
(June, 2017)
Prime Lending Rate 17.59%
(June, 2017)
Maximum Lending Rate 30.94%
(June, 2017)
External Reserve USD 31,551,330,610       
(16 August, 2017)
Exchange Rate (CBN)
18 August 2017
USD: 305.7
POUNDS: 393.77
EUROS: 358.89
Exchange Rate (Parallel Market)
18 August 2017
USD: 370.00
POUNDS: 475.00
EUROS: 432.00
Liquidity Ratio 30%
Treasury Bill Rate (91 Days) 13.35%
(16, August 2017)
Demand Deposits at Banks
(NGN million)
8,406,673.93
(June, 2017)
Credit to Government (Net)
(NGN million)
4,942,464.50
(June, 2017)
Credit to Private Sector
(NGN million)
21,978,566.76
(June, 2017)
Currency in Circulation
(Million Naira)
1,873,544.00
(June, 2017)
Bank Reserves
(Million Naira)
3,266,289.65
(June, 2017)
External Debt: FGN + States
(USD million)
13,807.59
(as at March 31, 2017)
Local Debt: FGN only
(NGN million)
11,971,336.53
(as at March 31, 2017)
Nigeria's Merchandise Trade 5,7286.6 billion (Quarter 4, 2016)
Crude Oil $48.86 (OPEC Daily Basket, 18 August, 2017)

Source: CBN, NBS and DMO
Compiled by: Research Department, NACCIMA
21 August, 2017