Economic and Business News

For the Week ending, Friday, 26 May, 2017


PIB to limit expatriates in oil sector -Senate panel

The Senate Joint Committees on Petroleum handling the Petroleum Industry Governance Bill has said the bill, when passed by the National Assembly and assented to by the President, will limit the services of foreigners in Nigeria's petroleum sector.

Chairman, Senate Committee on Petroleum (Upstream), Senator Tayo Alasoadura, in a statement on Saturday, said the engagement and services of expatriates would be restricted under the new law while it would create more jobs for Nigerians and a conducive business environment for petroleum operations.

Alasoadura explained that under the new law, it would become illegal to employ foreigners for certain skills which could be sourced locally. He stressed that even when such skills are sourced from abroad due to unavailability locally, it would be mandatory for Nigerians to understudy such an expatriate.

Punch. Sunday, 21 May 2017


Osinbajo signs 3 executive orders on ease of doing business

THE Federal Government, yesterday, endorsed and signed three Executive Orders expected to give boost to the Nigeria's concept of ease of doing business. The signing was performed by Acting President, Prof. Yemi Osinbajo, at the Presidential Villa, Abuja.

The development will increase patronage for locally manufactured goods. It will also remove all bureaucratic bottlenecks that stifled growth of businesses in Nigeria. The three executive orders, according to a statement from the Office of the acting president, touched on specific instructions on a number of policy issues.

The issues include "the promotion of transparency and efficiency in the business environment designed to facilitate the ease of doing business in the country; timely submission of annual budgetary estimates by all statutory and non-statutory agencies, including companies owned by the Federal Government; and support for local contents in public procurement by the Federal Government."

Vanguard. Sunday, 21 May 2017


FG requires $1.21bn to revive Ajaokuta Steel Complex

The country requires a total of $1.21bn to put Ajaokuta Steel Company Limited, Nigeria's integrated steel complex, into production, investigation has shown. This amount is $813m higher than $400m needed to complete the steel complex 17 years ago when an audit of the complex was conducted by the government of former President Olusegun Obasanjo.

The new funds injection includes $513m required to complete the construction of the steel plant and $700m for external infrastructure.

The Ajaokuta project has so far consumed about $4.66bn. This includes the cost of the plant; the cost of an extensive estate known as the Steel Township; and that of the rail bridge across the River Niger.

Punch. Monday, 22 May 2017


Banks' average monthly borrowing from CBN hit N316.68bn

Due to tight financial system liquidity in recent times, the average monthly borrowing by Deposit Money Banks (DMBs) has reached N316.68 billion. According to industry sources, there have been increasing borrowing by banks at the

Standing Lending Facility (SLF) window observed at a monthly average of N316.68 billion in April compared to N249.74 in March and N224.57 billion in February.

This means that of recent, more banks are depending on the apex bank loans to meet their cash obligations, following the lack of liquidity in the banking system. Banks access the SLF to borrow from the CBN while they access the Standing Deposit Facility (SDF) to place deposit with the CBN.

Nigerian Tribune. Monday, 22 May 2017


Price of cooking gas rises by 100 % in one year

THE price of cooking gas has risen by 100 per cent in Nigeria's domestic market between April 2016 and April 2017 as a result of increased demand, supply disruptions and foreign exchange issues. A market survey over the weekend showed that the price of the 5kg rose from N1, 000 in April, 2016 to over N2, 000 in April, 2017.

It showed that the prices of 10 kg and 12.5 kg which stood at N2, 000 and N2, 500 in April 2016 have risen to N4, 000 and N5, 000 respectively.

The market survey showed that the 25 kg and 50 kg which prices stood at N5, 000 and N10, 000 in April 2016 have hit the roof at N10, 000 and N20, 000 respectively.

Vanguard. Tuesday, 23 May 2017


Discos demand tariff hike, Gencos seek N504bn payment

Power generation companies have put the outstanding debt being owed them at N504bn and demanded that it be paid for them to continue generating electricity. This is coming as power distribution companies have also called for the implementation of a cost-reflective electricity tariff for end users as captured in the last tariff review carried out by the Nigeria Electricity Regulatory Commission.

The Discos often argue that a cost-reflective tariff will be about N68 per kilowatt-hour, as against the N25/KWh that the largest percentage of electricity consumers across the country currently pay.

The demands of the power firms were contained in a communique issued at the end of the second quarter market participants/key stakeholders' interactive forum, which was organised by the Market Operator in Abuja. The MO is an arm of the Transmission Company of Nigeria.

Punch. Tuesday, 23 May 2017


FG okays higher interest rate on unpaid taxes

The Federal Government has approved a new interest rate spread on unpaid taxes for the year 2017 as to raise the current low tax to GDP ratio of six per cent to higher level.

The development may be the implementation of the recent recommendation of the country's National Tax Policy. The new interest rate was approved by Minister of Finance, Mrs. Kemi Adeosun, and is coming on the heels of the tax amnesty declared by the Federal Inland Revenue Service (FIRS) last year for tax debtors to liquidate their indebtedness without the prescribed penalties.

Attempts last night to confirm if the amnesty window has lapsed was not successful as officials of the FIRS and the Federal Ministry of Finance could not be reached on phone.

However, in the new tax fiscal regime announced by the minister as contained in a statement by the Deputy Director in charge of Information, Mrs. Patricia Deworitshe, the new interest rate shall be five per cent over the Central Bank of Nigeria's Minimum Re-Discount Rate (MRR) for the year 2017.

The Guardian. Tuesday, 23 May 2017


Nigerian economy shrinks by 0.5% in Q1

Nigeria’s economy contracted for a fifth straight quarter, official figures showed Tuesday, as low oil production dented overall output. Gross domestic product shrank by 0.5 percent in the first three months of 2017, an improvement from a 1.7 percent fall in the last quarter of 2016, said Nigeria’s National Bureau of Statistics.

Despite an encouraging pick-up of momentum in the non-oil sector, the latest reading disappointed expectations of a modest recovery and an exit out of a debilitating recession. “It’s worse than what we’d expected,” said John Ashbourne, Africa economist at London-based Capital Economics.

“But if you remove oil, non-oil GDP increased. Manufacturing picked up and construction picked up,” Ashbourne said, “it’s a pretty positive set of figures in the sense that the contraction is easing.”

The Guardian. Tuesday 23 May 2017


CBN injects $205m as Naira falls to N379/$

The Central Bank of Nigeria (CBN) yesterday injected $205 million into the foreign exchange market even as the naira depreciated to N379 per dollar in the parallel market.

Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okoroafor confirmed the dollar injection in a statement yesterday. According to the statement, "The CBN again injected over $205 million in to the foreign exchange market. A breakdown of what market watchers termed as another massive intervention indicated that the sum of $100 million was released for the wholesale segment of the market for both spots and forwards.

Also, Basic Travel Allowance (BTA) which comes under invisibles segment garnered $50 million while the Small and Medium Scale Enterprises (SME) segment got $55 million.

Vanguard. Tuesday, 23 May 2017


FG seeks creation of continental free trade area

The Federal Government on Tuesday said there was a need for the African Union Commission to quickly establish the Continental Free Trade Area so as to encourage infra-African trade. The Minister of Finance, Mrs. Kemi Adeosun, said this in Abuja at the opening session of the first extra-ordinary meeting of the African Union Sub-committee of Directors-General of Customs.

She said the CFTA, when established, would promote the utilisation of African products and improve the economic status of its citizens. She said while the activities of Customs at the borders could make or brake an economy, there was a need for the leadership of Customs in each African country to come up with innovative ways to expedite the movement of goods and services.

This, the minister added, should be done in a simplified and predictable manner to enhance trade facilitation and promote economic growth within the continent.

Punch. Wednesday, 24 May 2017


FG's borrowing excessive - CBN

The Central Bank of Nigeria, CBN, has expressed concern over the borrowing activities of the federal government, saying the pace of government'sborrowing has exceeded the target for the 2017 fiscal year.

The CBN position came along with its Monetary Policy Committee, MPC, decision at the end of the second quarter 2017 meeting, yesterday, to retain all its key policy rates, citing challenges weighing down the domestic economy and uncertainties in the global environment. The decision also followed announcement by theNational Bureau of Statistics, NBS, that the nation's economy contracted for the fifth consecutive quarter, as the real Gross Domestic Products, GDP, declined by 0.52 per cent in the first quarter of 2017.

According to the NBS, "In the first quarter of 2017, the nation's Gross Domestic Product, GDP, contracted by -0.52 per cent (year-on-year) in real terms, representing the fifth consecutive quarter of contraction since Q1 2016. This is 0.15 per cent higher than the rate recorded in the corresponding quarter of 2016 (revised to -0.67 per cent from -0.36 per cent) higher by 1.21 per cent points from rate recorded in the preceding quarter, (revised to -1.73 per cent from -1.30 per cent). Quarter-on-quarter, real GDP growth was 12.92 per cent. During the quarter, aggregateGDP stood at N26.03 trillion in nominal terms, compared to N22.24 trillion in Q1 2016, resulting in a nominal GDP growth of 17.06 per cent."

Vanguard. Wednesday, 24 May 2017


Osun State Govt. provides 15 hectares of land for commercial farming

The Osun State Government on Thursday said it had provided about 15 hectares of land for large scale cultivation to boost food production in the state. Dr Bukola Aluko, the coordinating director, Osun state Ministry of Agriculture, Food Security, and Youths Engagement, disclosed this in an interview with newsmen in Osogbo.

According to Aluko, the state government is collaborating with investors that will facilitate farming on large and commercial scales in the state. "Through this collaboration, billions of naira will be invested in agriculture: planting, processing and packaging of farm produce. Currently, farmers that are interested in partnering the state government have started importing their raw materials.

The State Government on its part has provided between 10 hectares and 15 hectares of land to investors for cultivation of farm crops, " he said.

He said that the state government would allocate plots of lands to farmers to cultivate crops like cassava, maize and soya beans on a large scale.

Vanguard. Thursday, 25 May 2017


Foreign capital inflow at $908m in Q1 2017 drops to 41.4%

THE total value of capital imported into Nigeria in the first quarter of 2017 (Q1'17) was estimated to be $908.27 million, according to a report released, yesterday, by the Nigerian Bureau of Statistics (NBS).

This represents a 41.36 percent drop from the value recorded in the previous quarter (Q4 '16), and was the second lowest value recorded since 2007, although it was an increase of 27.75 percent relative to the same quarter of 2016.

The NBS report noted that though there was a high-profile Eurobond sales denoted in a foreign currency during the quarter, the inflow has not yet reflected in the data. "There is a lag between subscription and actual payment, and therefore it is possible that this will show up next quarter," the NBS stated.

Vanguard. Thursday, 25 May 2017


Senate passes PIB into law

The Senate, Thursday, broke the 17 years jinx by passing into law the age long Petroleum Industry Governance Bill.

Senate President, Bukola Saraki while commenting on the bill said “this is a Bill #PIGB that has been here for many years, we made a commitment and it’s being fulfilled.” Continuing, Saraki said, “this Bill is not only for Nigerians but for our investors. We are proud of what has been done.”

The PIG bill was read the third time at the Senate’s plenary before it was passed.

The PIGB was passed after the Senate, in the Committee of the Whole, considered the Report of the Committee on Petroleum Upstream, Petroleum Downstream and Gas presented by Senator Donald Alasoadura.

Vanguard. Thursday, 25 May 2017


Banks reduce lending to economy by N115bn in Q1

BANKS reduced their lend ing to the economy by N115 billion in the first quarter of 2017, even as Nigerians withdrew N1.5 trillion through ATMs during the quarter.

These were disclosed by the National Bureau of Statistics, NBS, in a report titled: "Selected Banking Sector Data" released yesterday.

According to the report, banks lending to 17 sectors of the economy fell to N16 trillion in the first quarter of 2017 from N16.12 trillion in fourth quarter of 2016, indicating decline of 0.71 per cent or N114.8 billion. However when compared to lending in the first quarter of 2016, banks' lending to the sectors increased by 23 per cent.

Vanguard. Friday, 26 May 2017


NBS ranks Lagos, A'Ibom, three others most investment-friendly states

The National Bureau of Statistics has listed Lagos, Akwa Ibom, Ogun, Oyo, Rivers states and the Federal Capital Territory, Abuja as the most investors-friendly destinations in the country in the first quarter of 2017.

According to the NBS, the five states and the FCT attracted a total of $908.268m capital importation in the first quarter of 2017, adding that Lagos got 95 per cent of the imported capital. This was contained in the bureau's report for the first quarter of the year.

It noted that Lagos, which is home to the head offices of the Nigerian Stock Exchange, most of the commercial banks and telecoms companies, attracted $865.718m capital importation. The report also showed that while Akwa Ibom, which is a major tourism hub of the country, attracted $18.361m capital importation, the FCT attracted $14.867m.

Punch. Friday, 26 May 2017


External reserve falls to $30.5bn as Naira appreciates to N376/$

The nation's external reserves continued its downward slide for the 20thday as it fell to $30.52 billion Thursday. However, the Naira yesterday appreciated by N3 against the dollar to N376 per dollar in the parallel market. Data posted by the Central Bank of Nigeria (CBN) on its website yesterday showed that the external reserve fell to $30.52 billion yesterday from $30.7 as at last week Thursday. This implies week-on-week decline of $180 million.

Vanguard survey revealed that the parallel market exchange rate, which had been stable at N379 per dollar since Monday, fell to N376 per dollar at the close of business yesterday, indicating N3 appreciation for the Naira. Market operators who confirmed this development to Vanguard attributed the appreciation to yesterday's dollar sale to bureaux de change (BDCs) by the Central Bank of Nigeria (CBN).

Vanguard. Friday, 26 May 2017

Other Economic and Business Indicators


(Q1, 2017)

Inflation Rate
(Year-on-Year change)

(April, 2017)

Unemployment Rate

(Q3, 2016)

Underemployment Rate

(Q3, 2016)

Monetary Policy Rate

(April, 2017)

Inter-Bank Call Rate

(April, 2017)

Prime Lending Rate

(December, 2016)

Maximum Lending Rate

(December, 2016)

External Reserve

USD 30,494,680,050  
(25 May, 2017)

Exchange Rate (CBN)
26 May 2017

USD: 305.35
POUNDS: 391.95
EUROS: 341.74

Exchange Rate (Parallel Market)
26 May 2017

USD: 382.00
POUNDS: 495.00
EUROS: 422.00

Liquidity Ratio


Treasury Bill Rate (91 Days)

(17 May, 2017)

Currency in Circulation (Million Naira)

(April, 2017)

External Debt - FGN + States (USD million)

(as at June 30, 2016)

Local Debt - FGN only (NGN million)

(as at June 30, 2016)

Bank Credit to to Private Sector (NGN million)

(April, 2017)

Demand Deposits at Banks (NGN million)

(April, 2017)

Nigeria's Merchandise Trade

5,7286.6 billion (Quarter 4, 2016)

Crude Oil

$49.48 (OPEC Daily Basket, May 26, 2017)

Source: CBN, NBS and DMO
Compiled by: Research Department, NACCIMA
29 May, 2017