Economic and Business News

For the Week ending, Friday, 28th July, 2017

1.

NNPC losses persist, refinery capacity drops to 23.09%

Nigeria's refineries in Warri, Port Harcourt and Kaduna witnessed a drop in their consolidated capacity utilisation in May 2017, according to figures from the industry's latest monthly oil and gas report.

This is coming as the Nigerian National Petroleum Corporation sustained its monthly financial losses as it recorded another loss of N3.55bn in May 2017, pushing up the year-to-date loss of the oil firm to N42.82bn.
An analysis of the corporation's report showed that the consolidated capacity utilisation of the three refineries dropped from 24.59 per cent in April 2017, to 23.09 per cent in the month under review.

Nigeria's refineries are managed by the NNPC and they include the Warri Refining and Petrochemical Company, Port Harcourt Refining Company and Kaduna Refining and Petrochemical Company.

Punch. Sunday, 23 July 2017

2.

Why CBN can't cut interest rate now – Emefiele

The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said the 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.
He said this in a lecture titled: 'the dilemma of monetary policy and exchange rate management in a recession: Potential options for Nigeria' at the second homecoming series of the Economics Department of the University of Nigeria, Nsukka.

Emefiele, according to a statement, said with inflation rate still hovering above 16 per cent, the apex bank would be failing in one of its key mandates if it reduced interest rates at this time.

Punch. Monday, 24 July 2017

3.

Cash crunch hits banks as CBN mops up naira

In order to reduce demand for foreign exchange, especially the dollar, the Central Bank of Nigeria has engaged in continuous and aggressive mop up of cash from the economy in the past six months.

The development is said to be responsible for the cash crunch that has hit the economy with a heavy toll on consumers (households), companies and commercial banks, especially mid-size lenders in the country.

Specifically, through its twice-a-month primary market auction of Treasury Bills and now almost daily Open Market Operations (secondary market auction), the CBN has mopped up trillions of naira in the past six months, according to top bankers who spoke on condition of anonymity.

'Punch. Monday, 24 July 2017

4.

AFDB to invest $24bn in agriculture in Africa – Adesina

President of the African Development Bank (AFDB), Dr Akinwumi Adesina, says the bank would invest $24 billion in agriculture in Africa over the next 10 years.

Adesina made the disclosure at the 50th anniversary celebration of the International Institute of Tropical Agriculture (IITA) in Ibadan on Monday.
The AFDB president said the bank was committed to turning agriculture into a business across Africa and to ensure that the continent fed itself within the next 10 years.

Adesina said that AFDB had decided to work with IITA to help drive Africa's agricultural sector transformation and unlock its full potentials. "At the core of this is getting technologies to millions of farmers and the bank has developed the Technologies for African Agricultural Transformation (TAAT) together with IITA and other centres as a technology platform.

The Sun. Monday, 24 July 2017

5.

Power generation falls below 3,000MW, seven plants idle

TThe nation's power generation has fallen below the 3,000 megawatts mark as the number of idle power plants increased to eight on Sunday from five on Friday.
The nation's power grid lost a total of 743.4MW over the weekend as generation dropped from 3,306.6MW on Friday to 2,632.4MW and 2,563.2MW on Saturday and Sunday, respectively.

The total generation stood at 2,886.7MW as of 6am on Monday, with seven power plants, including Sapele II and Alaoji II not generating any megawatt.
Other idle plants on Monday were Afam IV & V, Gbarain II, AES, ASCO and Rivers IPP, according to the latest data from the Federal Ministry of Power, Works and Housing.

Punch. Tuesday, 25 July 2017

6.

Nigeria needs to invest $267bn on electricity by 2040 – Report

The G20's Global Infrastructure Hub (GI Hub) has called for the investment of $267 billion into Nigeria's electricity sector by 2040 to meet rising demand. In its latest report tagged, Global Infrastructure Outlook, GI Hub, also estimated that the country requires $878 billion to boost its infrastructure over 25 years. According to the report, to achieve the Sustainable Development Goals (SDGs) for electricity and water, an additional $187 billion will be needed by 2030, bringing the overall investment needs to $1.06 trillion.

The report also said that globally, the cost of providing infrastructure to support global economic growth will reach $94 trillion by 2040, with a further $3.5 trillion needed to meet the UN Sustainable Development Goals (SDGs) for universal household access to drinking water and electricity by 2030, bringing the total to $97 trillion.

Vanguard. Tuesday, 25 July 2017

7.

Nigeria to lose N57.5b daily as OPEC plans production cut

The Organisation of Petroleum Exporting Countries (OPEC) is planning to cap Nigeria's crude oil production at 1.8 million barrels per day (mbpd) as a way to boost prices in the market.

The Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC), which met in St. Petersburg for its fourth meeting yesterday, also called on several members to boost compliance with production cuts to help clear excessive global stocks and support prices.

By the OPEC's decision, Nigeria, which pegged its crude oil production at 2.2 million barrels per day to finance the 2017 budget, would have to struggle with a shortfall of 400,000bpd. At the current market price of $47 per barrel, the country would be losing about $188 million (N57.528 billion) daily, which would have been part of the revenue needed to finance the 2017 budget.

OPEC and 11 other producers, including Russia, had agreed in December to reduce their combined output by almost 1.8 million barrels per day (bpd) in the first half of this year, to support prices and curb oversupply.

The Guardian. Tuesday, 25 July 2017

8.

MPC: FX rate crashes as Naira appreciates

WFew hours after the CBN announced the outcome of its Monetary Policy Committee meeting, the exchange rate crashed at the parallel market as the Naira further appreciated against the dollar.

The Nigerian currency gained two points to trade at N363 to the dollar on Tuesday at the parallel market in Lagos, stronger than N365 posted on Monday.
The Pound Sterling and the Euro closed at N475 and N420 respectively at the parallel market.

At the Bureau De Change window, the Naira was sold at N362 to the dollar, while the Pound Sterling and the Euro exchanged at N477 and N419, respectively. Trading at the investors' window saw the Naira closing at N369.50, while it also closed at N305.75 at the interbank market.

Punch. Wednesday, 26 July 2017

9.

Nigeria needs strong fiscal, monetary policies to exit recession – CBN

The Monetary Policy Committee of the Central Bank of Nigeria on Tuesday warned that the economy might relapse into protracted recession if bold monetary and fiscal policies were not activated immediately to sustain the programmes of the Federal Government.
The committee stated that available forecasts of key macroeconomic indicators pointed to a fragile economic recovery in the second quarter of the year.
Data from the National Bureau of Statistics showed that the contraction in the economy moderated to 0.52 per cent in the first quarter.
The MPC identified the downside risks to economic outlook to include weak financial intermediation, poorly targeted fiscal stimulus and absence of structural programme implementation.

Punch. Wednesday, 26 July 2017

10.

Nigeria to ban mineral resources export

Plans are underway by the Federal Government to stop mineral resources export from the country, the Minister of Mines and Steel, Dr Kayode Fayemi has disclosed.

Speaking in Abuja recently on the theme, 'operationalising the framework for globalising our national economy' at the 6th Sustainability in the Extractive Industries (SITEI) conference, Fayemi, said at the expiration of the 18 month ultimatum set for the stoppage of raw mineral export, it would sanction perpetrators of such acts.

He hinted that in order to encourage local process of mineral resources, Federal Government is now ready to assist firms involved in minerals beneficiation with processing plants.

The Guardian. Wednesday, 26 July 2017

11.

Osinbajo launches world's biggest fertiliser plant in Rivers

MAActing President Yemi Osinbajo will visit Port Harcourt today to inaugurate the world's biggest fertiliser plant built by Indorama Eleme Fertilizer and Chemicals Limited.

Mr Laolu Akande, the Senior Special Assistant to the Acting President on Media and Publicity, made the announcement in a statement issued in Abuja on Wednesday.

According to the presidential aide, the plant with production capacity of 1.5 million metric tonnes of Urea fertiliser is considered the world's largest single-train Urea plant.

Punch. Thursday, 27 July 2017

12.

Naira appreciates to N362.29/$ on NAFEX

The naira yesterday appreciated to N362.29 per dollar in the Investors and Exporters (I&E) window due to sharp increase in dollar supply.

Data from Financial Market Dealers Quote (FMDQ) showed that the volume of dollar traded in the I&E window rose by 757 per cent yesterday to $645.92 million from $75.32 million on Wednesday. As a result, the indicative exchange rate for the window dropped sharply to N362.29 per dollar from N368.6 on Wednesday, translating to N6.31 appreciation for the naira.

However, the naira depreciated by N1 at the parallel market yesterday, as the market exchange rate rose to N365 per dollar at the close of business from N364 per dollar on Wednesday.

Vanguard. Friday, 28 July 2017

13.

FG plans N7.9tn budget for 2018

The Federal Government on Thursday said it would send the 2018 budget proposal to the National Assembly at the beginning of October this year.

The Minister of Budget and National Planning, Senator Udo Udoma, disclosed this in Abuja during a public dialogue with top government officials, members of civil society organisations and the Organised Private Sector, among others, on the 2018-2020 Medium Term Expenditure Framework and Fiscal Strategy Paper.

He said the decision to submit the 2018 budget proposal early was in line with provisions of the Fiscal Responsibility Act, 2000.

Punch. Friday, 28 July 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 17.58%
(May, 2017)
Maximum Lending Rate 30.75%
(May, 2017)
External Reserve USD 30,743,882,448      
(27 July, 2017)
Exchange Rate (CBN)
28 July 2017
USD: 305.65
POUNDS: 400.22
EUROS: 358.47
Exchange Rate (Parallel Market)
28 July 2017
USD: 365.00
POUNDS: 474.00
EUROS: 424.00
Liquidity Ratio 30%
Treasury Bill Rate (91 Days) 13.43%
(19 July, 2017)
Currency in Circulation (Million Naira) 1,873,544.00*
(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)
Net Domestic Credit: Claims on Private Sector
(NGN million)
21,978,566.76*
(June, 2017)
Demand Deposits at Banks (NGN million) 8,406,673.93*
(June, 2017)
Nigeria's Merchandise Trade 5,7286.6 billion (Quarter 4, 2016)
Crude Oil $49.46 (OPEC Daily Basket, 28 July, 2017)

* (Provisional Data - May Change in Future)

Source: CBN, NBS and DMO
Compiled by: Research Department, NACCIMA
31 July, 2017