News Headlines – Nigeria News Today | 23 March 2017
Nigeria awards US$1.79bn railway contract to Chinese state firm CCECC: Nigeria has awarded a US$1.79bn contract to a Chinese state-owned firm for work on the second phase of Abuja’s mass transit railway, the capital city’s minister said on Wednesday. The three-year management contract is the latest in a series of infrastructure projects won by China Civil Engineering Construction Corp (CCECC) in Africa’s most populous nation. Muhammad Bello, minister of the federal capital territory, also said that the contract would be funded by the Export-Import Bank of China. (Source: Reuters)
N’Assembly approves US$500m Eurobond issue: The National Assembly on Wednesday approved the request by the executive for the issuance of a US$500m Eurobond to fund the deficit in the 2016 budget. A resolution of the National Assembly is a critical condition that must be met for securities issuance in the international capital market. (Source: Thisday)
US dollar drops below N400/US$ for first time in seven months: For the first time in seven months, the US dollar fell below the psychological N400 barrier, when the greenback traded at N399 to the US dollar in Lagos and exchanged at N395 in Abuja, lower than N410 at which it traded on Tuesday. With the gains made by the local currency in the last five weeks, the Naira inched closer to one of the Central Bank of Nigeria’s (CBN) key foreign exchange policy objectives of an exchange rate convergence. (Source: Thisday)
Buhari approves reconstituted NSIA Board: President Muhammadu Buhari has ratified the reconstituted Board of the Nigeria Sovereign Investment Authority (NSIA), operators of Nigeria Sovereign Wealth Fund (NSWF). The National Economic Council (NEC) had last month approved a list of six nominees for appointment into the board. (Source: Thisday)
FG to establish Niger Delta Development Bank: The federal government (FG) is working towards the establishment of a Niger Delta Development Bank to speed up the development of the region, the Managing Director of Niger Delta Development Commission (NDDC), Nsima Ekere, has said. (Source: Thisday)
External reserves drop for first time since December: The nation’s foreign exchange reserves, which had increased significantly in recent months to hit the US$30bn mark, fell for the first time this year on Tuesday. Latest data from the Central Bank of Nigeria showed on Wednesday that the external reserves dropped to US$30.3bn on Tuesday from US$30.4bn on Monday. (Source: Punch)
FG approves N2bn for Rural Electrification Fund: The FG on Wednesday announced that it would jumpstart the Rural Electrification Fund (REF) with N2bn (US$6.5m) and that this had been provided for in the 2017 budget estimates. It stated that the idea to commence the REF with N2bn was to enable private investors with viable off-grid renewable electricity projects in rural communities across the country to access the fund. (Source: Punch)
FG okays power service improvement plan: The FG on Wednesday approved the Power Sector Recovery Programme comprising many policy actions to be carried out to improve service delivery and also approved contracts for the construction of 13 roads and replacement of bridges across states of the federation and the Federal Capital Territory worth N85bn (US$276.0m). The decisions were taken at a meeting of the Federal Executive Council presided over by President Muhammadu Buhari at the Presidential Villa, Abuja. (Source: Punch)
News Headlines – Nigeria News Today | 21 March 2017
Nigerian ‘bad bank’ AMCON sells Keystone Bank to local investors: Nigeria’s state-backed ‘bad bank’ AMCON has sold the nationalised Keystone Bank to a consortium of local investors called Sigma Golf Nigeria Limited and Riverbank Investment Resources, it said on Monday. Keystone Bank was the last of the lenders nationalised in Nigeria, which state-backed AMCON was seeking to sell. It was one of three banks nationalised following a US$4bn central bank bailout that saved several lenders from near bankruptcy in 2009. In a statement, the Asset Management Company of Nigeria (AMCON) said the consortium had been picked out of 18 local and international bidders. (Source: Reuters)
Nigeria’s Cenbank to sell US$100m forward at auction: Nigeria’s central bank plans to offer US$100m in currency forwards on Monday to be delivered within the next 60 days, traders say. The bank has consistently been selling foreign exchange to importers since February in a move to increase US dollar supply in the market and narrow the margin between official and black market rate. (Source: Reuters)
Adeosun gives conditions for further release of Paris-London Club refunds: The Minister of Finance, Kemi Adeosun, on Monday doused the expectations of the 36 state governors on the further release of Paris-London Club refunds to the states, making it clear that any further payments was dependent on the current and projected cash flows of the federation. (Source: Thisday)
NNPC shops for US$15bn to build 4,000MW power plants: The Nigerian National Petroleum Corporation (NNPC) has disclosed that it will invest about US$15bn to build thermal power plants with a combined generation capacity of 4,000 megawatts (MW) across the country over the next 10 years. It said three of the power plants with a combined output of 3,100MW would be built in Abuja, Kaduna and Kano, along the route of its Abuja-Kaduna-Kano (AKK) gas pipeline corridor currently under construction and from which gas supply to them would be guaranteed. (Source: Thisday)
World Bank to invest US$57bn in Nigeria, others: Following a meeting with G20 finance ministers and central bank governors, the World Bank Group President, Jim Yong Kim, has announced that the Bank would be investing US$57bn in financing for Sub-Saharan African countries over the next three years. According to a statement, the bulk of the financing, US$45bn, will come from the International Development Association (IDA), the World Bank Group’s fund for the poorest countries. (Source: Thisday)
Naira sustains gains on parallel market as CBN auctions US$180m: The Naira sustained its momentum on the parallel market yesterday where it appreciated by N5 to close at N444 to the US dollar, stronger than the N449 to the US dollar last Friday. The gain was largely influenced by the increased US dollar liquidity in the economy as the Central Bank of Nigeria (CBN) continues its intervention in the interbank foreign exchange (FX) market. The CBN yesterday offered US$180m to dealers in the interbank FX market. (Source: Thisday)
FG, states owe foreign creditors US$11.41bn: The federal government (FG), the 36 state governments, and the Federal Capital Territory administration currently owe foreign creditors a total of US$11.41bn, the Debt Management Office has said. Statistics obtained from the DMO on Monday showed that while the FG’s foreign debt stood at US$7.84bn as of December 31, 2016, the 36 states of the federation and the FCTA owed US$3.57bn. (Source: Punch)
News Headlines – Nigeria News Today | 17 March 2017
Nigeria sells more treasury bills than planned – central bank: Nigeria’s central bank said on Thursday it had sold more treasury bills than originally planned at an auction after it lured demand for one-year debt with yields above inflation. The bank raised N253.8bn at an auction on Wednesday, N40bn more than it had offered to sell. It offered the one-year bill at 18.55% to raise N166.3bn, against a yield of 18.49% at its last auction and higher than February’s inflation rate of 17.78%. (Source: Reuters)
Nigeria’s central bank offers and receives US$100m in forwards: : Nigeria’s central bank on Thursday said it had offered and received bids for US$100m in currency forwards from authorised dealers in the interbank market. Central bank spokesman Isaac Okorafor said the sales would be settled on Friday. The bank has been selling the U.S. currency since February after it effectively devalued the Naira for individuals, offering them the US dollar at half the rate obtained on the black market in a bid to close the gap with the official rate. (Source: Reuters)
Buhari approves release of more London-Paris Club refunds to governors: Despite allegations that some state governors diverted the first tranche of London-Paris Club refunds which was released to the states last year to enable them offset the salary arrears of their workers, President Muhammadu Buhari on Thursday asked the Minister of Finance, Kemi Adeosun, and the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, to immediately release the second tranche of the London-Paris Club refunds to the states to ease their financial difficulties. (Source: Thisday)
NEITI raises alarm over N3.3trn states’ debt: The Nigeria Extractive Transparency Initiative (NEITI) yesterday raised the alarm over the rising debt profiles of states in the country, stating that the 36 states of the Federation are indebted to the tune of N3.342trn as at the end of 2016. NEITI, in the third edition of its quarterly review, titled: ‘FAAC Disbursements In 2016: Review and Projections,’ also put the total debt burden of four states – Lagos, Delta, Osun and Akwa Ibom – at N1.262trn as at the end of 2016. The four states accounted for 37.76% of the total indebtedness of the 36 states of the federation. (Source: Vanguard)
Govt targets N305bn from voluntary asset, income declaration: The federal government (FG) is targeting an estimated revenue of N305bn (US$968.6m) from the proposed Nigeria Voluntary Asset and Income Declaration Scheme. The scheme, which will commence on May 1, 2017, is meant to offer a window for those who have not complied with extant tax regulations to remedy their positions by the provision of limited amnesty to enable voluntary declaration and payment of liabilities. (Source: Punch)
Banks reject Etisalat’s US dollar loan conversion to Naira: Local banks being owed by Etisalat Nigeria have opposed a proposal by the company to convert part of the US$1.2bn loan from US dollars to Naira and want the Abu Dhabi telecoms group, Etisalat, and its other shareholders to recapitalise the firm instead. (Source: Punch)
NIGERIA | DAILY MORNING NOTE | Good Morning Nigeria 17 March 2017: Towards a business friendly environment
Towards a business friendly environment
Small and medium sized enterprises stand to benefit from the recently launched 60-day National Action Plan by the Presidential Enabling Business Environment Council (PEBEC). This group contributed c.50% to Nigeria’s national output in 2016. The ministries, departments and agencies (MDA) are tasked with implementing the plan but participation from other stakeholders such as specific state governments, the National Assembly and the private sector is also required if the plan is to have any realistic chance of succeeding. Nigeria is currently ranked 169 out of 190 in the ease of doing business index by the World Bank.
·There are eight focus areas within the plan; ‘starting a business’ features at the top. Based on the World Bank’s most recent survey, Abuja, Zamfara, Kebbi, Lagos and Ogun emerged as the five leading states with regards to ease of starting a new business.
·Generally, in Nigeria, the procedure for start-ups is cumbersome. When compared with developed economies, there are at least two times as many steps required. The action plan aims to reduce the number of days required to register a business from ten days to 2. The Corporate Affairs Council will drive this by adopting a more electronic approach.
·In addition, obtaining construction permits proves to be difficult in Kaduna, Abuja, Lagos and Anambra. Nonetheless, these state still record a high level of construction activities. The action plan aims to reduce this process from forty two days to 20.
·Usually applicants are unclear about which rules, fees, and procedures apply. The PEBEC hopes to address this by ensuring fees predictability during applications and transparency of planning permit assessment.
·With respect to property registration, there is a high level of discord. The time required for a state governor’s consent delays the process considerably. Using e-signatures instead is currently being considered and the council aims to reduce the property registration duration from seventy seven days to 30.
·Trading across borders is not very encouraging in Nigeria as well. We gather that the FGN has considered reducing the number of agencies operating at the air and sea ports to ease the process of clearing goods to within 24 or 48 hours. This should promote growth and stimulate pan-African trade.
·Business travel into Nigeria can be challenging due to the long visa on arrival and submission processes as well as the poor conditions at the airports. The council has now harmonised the entry and exit forms at the airports.
·Additionally, authorities at the airports have been mandated to install the iCheck Security Solution Technology, which should phase out these entry and exit forms in the medium to long term.
·We commend the FGN’s efforts made so far. However, we note that plans on eliminating major bottlenecks such as better access to credit and power shortages have not been clearly articulated.