By Comfort Barida
- Arik Air on Wednesday announced reduction of their flights due to the lingering scarcity of aviation fuel. It said that aviation fuel scarcity started manifesting last week when major oil marketers began to ration supply of the product to airlines. The announcement was made in a statement by the airline communications manager, Mr Ola Adebanji, in Lagos.
- A consortium of German renewable energy companies led by Nigus Green energy Nigeria has concluded plans with the Federal Government to build five solar power plants worth N183bn ($600m) in some North-Eastern states. According to the Nigerian Investment Promotion Council (NIPC) and the consortium, each of the solar power plants will have capacity to generate 100 megawatts of electricity.
- Nova-Lumos, a Dutch firm is set to roll out a 10 megawatt (mw) off-grid system for 75,000 households and SMEs in northern Nigeria, in a bid to alleviate the country’s significant electricity deficit. In a report made by the Africa Corporate Data on its Nigeria off-grid solar overview for third quarter the firm had received $15 million in the past twelve months from the US Overseas Private Investment Corporation and a $218,000 grant from the Department for International Developments (DFID’s) Solar Nigeria Programme.
- The Minster of Power, Works and Housing, Mr. Babtunde Fashola, disclosed on Wednesday in Abuja at a business forum on ‘Financing Opportunities in the Nigerian Power Sector’ that the Federal Government has expressed its readiness to spend $150m on rural electrification. He said government would use 44 tertiary institutions and small hydro dams in the rural areas as anchors for the electrification programme.
Oil and gas sector
- The Federal Government’s efforts at sanitizing the petroleum industry and attracting the much-needed investment into the industry appears to have started yielding positive results, as the foreign investment inflow into the oil and gas industry rose sharply to $392.85 million in the first nine months of 2016. National Bureau of Statistics, NBS, in its Nigerian Capital Importation Report for third quarter of 2016, Q3’16, stated that compared to $16.54 million recorded in the first nine months of 2015, the figure for the first nine months of 2016 appreciated by $375.31 million or 2,275.15 percent. Giving a breakdown of total inflow in 2016, the NBS report disclosed that in the first, second and third quarters of 2016, foreign capital inflow into the oil and gas industry stood at $20.83 million, $200.39 million and $171.63 million respectively. This was in comparison to foreign capital inflow of $9.47 million, $4.86 million and $2.21 million recorded in the first, second and third quarter of 2015 respectively. In addition to the fourth quarter 2015 foreign capital inflow, which the NBS put at $13.22 million, total inflow into the oil and gas industry in 2015 stood at $29.76 million.
- The Niger Delta Avengers militant group said it has bombed three oil pipelines in southern Nigeria, an attack it said would lead to a production loss of 300,000 barrels per day in the OPEC-member nation. Attacks on pipelines by several militant groups have slashed Nigeria’s oil production helping to tip the country into recession as it struggles to adapt to the low price of crude globally. The Niger Delta Avengers, blamed for a wave of such attacks since the start of the year, said the latest bombing was to register its displeasure with way the government was handling grievances in the oil region.
- Union of Petroleum and Natural Gas Workers (NUPENG) has rejected the reported plans by the Federal Government to scrap the Nigerian National Petroleum Corporation (NNPC) Department of Petroleum Resources (DPR) Petroleum Products, Pricing and Regulatory Agency (PPPRA) and other agencies in the oil and gas industry, saying it is unacceptable. The president of NUPENG, Igwe Achese said it was another attempt by the Government to reduce the workforce in the sector and vowed that moves would be resisted by labour.
- The cash call arrears owed oil companies by the Federal Government have swollen to over $8.5bn (N2.6tn), a development that has seen the government making moves to exit the Joint Venture cash call system. The Group Managing Director of Nigerian National Petroleum Corporation, Dr. Maikanti Baru, disclosed this on Tuesday at the Nigerian Association of Petroleum Explorationists’ 34th Annual International Conference and Exhibition in Lagos. The nation’s oil and gas production structure is split between JV onshore and in shallow waters with foreign and local companies, and Production Sharing Contracts in deep water offshore. The NNPC owns between 55 per cent of the JVs with Shell and 60 per cent of all the others, and the JVs are jointly funded by the private oil companies and the Federal Government through the corporation.
- The Lagos State Governor, Mr. Akinwunmi Ambode, has said that the state expects to get its first derivation fund next month following the first export from the Aje oil field located offshore Lagos. The governor disclosed this on Tuesday in Lagos at this year’s annual international conference and exhibition of the Nigerian Association of Petroleum Explorationists. Yinka Folawiyo Petroleum Company Limited, a wholly owned indigenous firm and operator of the OML 113, had on May 3 announced the commencement of crude oil production from the Aje field. Oil producing states in the country are entitled to 13 per cent derivation fund from the Federation Account on crude from their territories.
Banking and Financial Institutions
- The Central Bank of Nigeria (CBN) Tuesday dismissed speculations about the financial condition of Heritage Bank, saying the bank is not distressed.
- The equities market, on Tuesday, lost N44bn following depreciation in 21 stocks at the close of trading on the floor of the Nigerian Stock Exchange. The NSE market capitalisation dropped to N8.901tn from N8.945tn, while the All-Share Index declined to 25,857.06 basis points from 25,986.81 basis points. A total of 189.725 million shares worth N905.102m were traded in 2,417 deals. The NSE ASI, therefore, maintained its losing streak, paring by 0.50 per cent to settle the year-to-date return at -9.72 per cent. The volume of transactions advanced by 17.91 per cent while market turnover declined by 18.90 per cent relative to the previous day’s trading.
- The Federal Ministry of Finance, on Tuesday announced the constitution of a committee to recover about N450bn unremitted operating surpluses from some agencies of the government. The agencies include the Central Bank of Nigeria, Petroleum Technology Development Fund, National Agency for Food and Drug Administration and Control, Nigerian Television Authority, and the Securities and Exchange Commission, among others. The committee is headed by the Accountant-General of the Federation, Alhaji Ahmed Idris, and he is to reconcile the operating surpluses of 31 revenue-generating agencies of government for the period 2010-2015. The findings of the committee have so far shown under-remittance of over N450bn, which accrued within the period.
Nigerian Economy Update
- The Federal Government is proposing to fund part of the 2017 budget deficit of N2.69tn from funds recovered from treasury looters. The proposal is contained in the Medium Term Expenditure Framework/Fiscal Strategy Paper, which was submitted to the National Assembly. The Senate had dismissed the 2017-2019 MTEF/FSP sent to it by President Muhammadu Buhari, two weeks ago, describing the documents as “empty” and as such should not be considered. The MTEF provides the basis for annual budget planning and consists of a macroeconomic framework that indicates fiscal targets, estimates, revenues and expenditures, including the government’s financial obligations in the medium term. The document, prepared by the Ministry of Budget and National Planning, also sets out the underlying assumptions for the projections, provides an evaluation and analysis of the previous budget, and presents an overview of the consolidated debt and potential fiscal risks.
- MTN to list on the Nigerian Stock Exchange (NSE) in 2017. Capital market operators have described MTN Nigeria’s decision to become a Public Liability Company (Plc.) as a ‘welcome development’, saying it would boost corporate governance and deepen the market and encourage the active participation of indigenous consumers in the company’s wealth creation process.
- The National Bureau of Statistics announced on Monday that the Consumer Price Index, which measures inflation rate, rose to a 94-month high of 18.3 per cent in October. The 18.3 per cent inflation rate, which is about 0.48 per cent higher than the 17.9 per cent recorded in September, is the highest since January 2009 when the NBS started publishing the revised version of the CPI. The bureau attributed the increase in inflation rate to pressures recorded in some sub-indexes such as housing, electricity, gas, water, lubricants for personal transport and education. It explained that while the prices of food items such as bread, cereals, fish and meat also recorded significant increases, those of fruit items moderated during the period.
- The general rise in prices of goods and services in Nigeria hit an all-time high of 18.3 per cent in October. This means that the prices of food items and other consumables have gone up considerably making it difficult for the average person to eat three square meals a day. Inflation has been on the rise for 12 months. The general rise in prices is attributable to exchange-rate pressures that have persisted on its impact on the prices of goods and services, complicating the central bank’s task of supporting an economy in recession
- The Presidency has warned that Nigeria, currently Africa’s largest producer of cereals and grains risked famine from early next year, following a huge demand in the global market that is targeting the country’s surplus production. Giving the grim forecast in a radio interview in Kano on Monday, a spokesman of the President, Mallam Garba Shehu, said the “huge demand for our grains in the global market is creating an excellent environment for the mindless export of Nigerian grains across our borders and unless this curtailed, Nigerian markets will be bereft of food by January next year.” Shehu in a statement made available to State House correspondents in Abuja, on Monday said the Ministry of Agriculture has advised the President on the need to draw the attention of all Nigerians to this issue which, if not addressed promptly, could lead to a shortage of grains in the country by January.
- The World Bank said it has currently committed to about $400 million into the Nigerian agriculture, and also unveiled plans to commit another $200 million in the nation’s livestock development. The Bank representative, Shehu Salau, disclosed this at the Regional Wrap-up meeting of the West Africa Agricultural Productivity Programme (WAAPP) Implementation Support Missions, on Monday. He said the World Bank has prioritized agriculture and energy in the African economy due to the fact that Africa is largely agrarian.
- The Academic Staff Union of Universities (ASUU) said it would embark on a one week warning strike starting on Wednesday 16, November 2016 and continue indefinitely if the federal government fails to honour a 2009 agreement regarding their welfare and another 2013 Memorandum of Understanding, bordering on university reforms and yearly release of N200 billion for five years. ASUU also wants the Federal Government to exclude university funding from the Single Treasury Account (TSA) that delays disbursement due to bureaucracy.