Economic News Update

Edconomic News Update: 16th January, 2017


Naira may reverse loss this week, say experts

Economic and financial experts have said the naira may reverse this week the loss it recorded against the United States dollar last week. Owing to increased scarcity of the dollar, the naira fell from 490/dollar to 497/dollar during the past week.

Currency and financial experts, however, linked the loss recorded by the local unit to acute shortage of foreign exchange occasioned by the absence of the Central Bank of Nigeria in the forex markets in the past three weeks.

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FG, CBN mull cheaper agric loan

Nigerian farmers might soon begin to access cheaper loans, the Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele has said. Emefiele said the loan currently given to farmers through the Anchor Borrowers Programme at nine per cent interest rate may be reviewed with time to make it “more affordable and easily accessible to them so that they can go to the farm, buy inputs and then grow the agricultural produce that we need very badly to feed our people.”

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Oil prices drop as doubts over output cuts mount

OIL prices slipped yesterday over doubts that large oil producers will reduce production as promised and on expectations that United States production would increase again this year. Benchmark Brent crude oil was down 23 cents a barrel at $55.22, while U.S. light crude fell 21 cents to $52.16.

The Organization of the Petroleum Exporting Countries (OPEC) has agreed to cut production by 1.2 million barrels per day (bpd) to 32.5 million bpd from January 1 in an attempt to clear global oversupply that has depressed prices for more than two years.

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External reserves rise by $1bn in two weeks

The country’s external reserves have hit $26.968bn, nearing the $27bn mark, the latest statistics posted on the Central Bank of Nigeria website have shown. The reserves rose to $26.968bn on January 13 from $26.765bn on January 11, having hit $26.658bn and $26.552bn on January and 10 and January 11, respectively.

Between December 30, 2016 and January 12, 2017, the foreign exchange reserves rose from $25.8bn to $26.8bn, indicating an accretion of $1bn in two weeks, the CBN data showed.

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The political economy of BDCs and black market premiums

Bureaux de change (BDCs) and their cousins, the road side black market dealers, need no introduction. They exist in almost every town across the country. In most towns, there are whole streets associated with currency trading, and almost everyone has a guy that can be called for quick foreign exchange transactions. In a way, this feature is not unique to Nigeria. BDCs exist in many cities around the world although they are mostly associated with tourist locations.

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Over N30bn unclaimed dividends paid to investors –SEC

The Securities and Exchange Commission (SEC) has said that over N30 billion has so far been paid to investors in the Nigerian capital market from the backlog of unclaimed dividends. As a means to further reduce the unclaimed dividends profile and curb its growth in the country, the Commission notified the investing public that it will continue to underwrite the cost of e-dividend enrolment till June 30, 2017.

A statement by SEC said, “with a view to ensuring all investors benefit from the e-dividend programme free of charge, the SEC had committed to pay the cost of enrolment throughout 2016, resulting in about 48 per cent of investors being enrolled for the e-dividend payments. Arising from this exercise, over N30 billion, which was hitherto unclaimed has so far been credited to respective bank accounts of investors.

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Nigerians may pay more for stamp duty

Nigerians may soon begin to pay higher for stamp duty going by a proposal before the National Assembly for an increase in the cost of postage stamps across the country. The 2004 Stamp Duties Act, which became effective in January 2016, tied the rate of stamp duty to the cost of postage within the nation.

Investigation by our correspondent showed that the Nigerian Postal Service had prepared a proposal that would see the cost of postage across the country go up by about 300 per cent.

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Nigeria loses N25b yearly to importation of foreign lottery technology

The acquisition, deployment and maintenance of lottery technologies in Nigeria are causing the country a yearly loss of about N25 billion.

This was disclosed in Lagos by the Managing Director and Chief Executive Officer of Lotgrand – operator of Grandlotto Yellow Terminal brand – Niyi Adekunle, whose company promotes the lotto business in Nigeria with the Machine Number Series (MNS). The loss, in essence means that the sector requires indigenous technology, both software and hardware to curb the increasing capital flight.

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Nigeria’s Oil Will Soon Be Useless, Osinbajo Warns

 Vice President Yemi Osinbajo yesterday raised the alarm that in no distant future, the country would be in grave danger if it continues to rely on oil as its major source of revenue generation.

The sad reality that crude oil will soon become useless is staring Nigeria in the face and as such, “we must be smart and act intelligently and fast,” he said. The vice president gave the warning when he visited Gbaramatu kingdom in Delta State as part of his peace mission to the Niger Delta region, in furtherance of the federal government’s quest for lasting solutions to the challenges in the region.

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NSE community programme gains momentum

The Nigerian Stock Exchange Employee Volunteering Programme recently made some progress as employees of the Exchange donated food and sundry items to charities in their communities as part of the annual employee give-back initiative.

In addition, they volunteered their time and resources to mentor some students in select schools under the EVP.

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Cooking gas price to crash as NLNG discharges 13,000 tonnes of LPG

Consumers may now heave a sigh of relief as the skyrocketing price of cooking gas, which hit an all time high of N5,000 from N3,200 is to crash with the delivery of 13,000 tonnes of LPG by the Nigerian Liquefied Natural Gas (NLNG) Limited, in Lagos jetty at the weekend.

General Manager, External Relations, NLNG, Mr. Kudo Eresia-Eke, said following the delivery of the 13,000 tonnes of LPG, the vessel is scheduled to return to NLNG’s facility in Bonny, Rivers State, to reload, adding that NLNG would continue in its efforts to ensure adequate supply and price stability to the market.

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Dangote targets 3000 jobs with $100m truck assembly plant

Africa’s richest man, Aliko Dangote has embarked on the establishment of multi-million dollar vehicle assembly plant project in Lagos to reduce costs on importation of trucks needed for the distribution of commodities produced locally by the his brand.

Indeed, Dangote is partnering a leading Chinese Company, National Heavy Duty Truck Group Company Limited, SINOTRUCK to produce several thousand of trucks used mainly for haulage business from its newly promoted assembly plant at Ikeja, Lagos.

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NAICOM faces shutdown as workers threaten strike

The crisis rocking the National Insurance Commission may be far from over as the leadership of the workers’ union in the agency has issued a fresh threat to embark on an industrial action.

The Amalgamated Union of Public Corporations, Civil Service, Technical and Recreational Services Employees has issued a seven-day ultimatum for the resolution of the contending issues, or it will embark on an industrial action that will result in a complete shutdown of the agency.

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Rate convergence as strategic option for naira stability

Nigeria’s currency has indeed witnessed a bumpy ride over the last two years in its race with other convertible currencies. This was even as the  drop in crude oil prices and foreign reserves has further weakened the local currency at both official and parallel markets. As expected, the Central Bank of Nigeria (CBN) has since thrown in some ice to soften the ground, but this seem to have failed to stem the tide.

But as part of the effort to stabilise the naira, the Association of Bureaux De Change Operators of Nigeria (ABCON) at a media forum in Lagos, launched a Uniform Weekly Exchange Rate for Licensed Bureaux De Change to enforce same-rate for operators. Even as this move is being tested, many believe ABCON’s role of complementing the CBN’s policies and ongoing plans to boost public confidence in registered BDCs would help the naira firm up slightly.

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BoI gives new loan condition to manufacturers

The Bank of Industry has included certification from the National Agency for Food and Drug Administration and Control as prerequisite for approval of loan requests by manufacturers of drugs, pharmaceuticals, food and food products. The Acting Managing Director, BoI, Mr. Waheed Olagunju, stated this in Lagos on Friday, during the signing of a Memorandum of Understanding between the bank and NAFDAC.

According to the bank, the partnership with NAFDAC is aimed at ensuring that food and drugs produced in the country meet international standards, while ensuring that the Small and Medium Enterprises producing them have the financial support they need.

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Develop your zone, don’t wait for FG, Obasanjo tells S-East govs, Ndigbo

Former President Olusegun Obasanjo, yesterday, asked Ndigbo and their governors to take their destiny in their hands by developing the South-East geographical zone instead of waiting for the government.

Obasanjo said there was no need for the governors to wait for the Federal Government to develop South-East when they already had the instruments already. Obasanjo noted that economy and security were two sides of the same coin, adding that none could be achieved without the other.

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Trouble in nation’s mortgage banks over liquidity squeeze

A Crisis looms in the nation’s financial system as lack of funds hits the Primary Mortgage Banking (PMB) segment, The Guardian has learnt. It was learnt that the situation which has become critical for one of the mortgage banks, as it no longer honours depositors’ claims, may soon result in its collapse and affect the sub-sector.

As each depositor is only insured to the tune of N500,000, the collapse of PMBs would spell disaster for their customers. The development could undermine confidence in the operations of the banks, set the national housing policy backward and lead to the collapse of some of the mortgage institutions.

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IMF Revises Nigeria’s Growth Projections Upwards

The International Monetary Fund has said it expects Nigeria’s economy to recover in 2016 even as it revised upward the growth projections for the country to 0.8 per cent based on higher oil production as well as likely improved price of crude at the international market.

The IMF in its World Economic Outlook update released yesterday said economic activities in both advanced economies and Emerging Markets and Developing Economies (EMDEs) is forecast to accelerate in 2017 and 2018, with global growth projected to be 3.4 percent and 3.6 percent, respectively, unchanged from its October forecasts.

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Mastercard announces new payment app

Mastercard has announced the roll out of the Identity Check Mobile, a new payment technology application that uses biometrics, including fingerprint and facial recognition, to verify a cardholder’s identity and simplify online shopping.

BMO Financial Group (BMO) will be the first bank in America and Canada to offer Identity Check Mobile to its corporate customers from the first half of the year.

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FG recapitalises Bank of Agriculture with N500bn

The Federal Government on Monday inaugurated the National Council on Privatisation steering committee for the restructuring and recapitalisation of the Bank of Agriculture, as well as the project delivery team for the exercise. It also announced a sum of N500bn for the recapitalisation the BoA once its restructuring is completed by the steering committee, which is chaired by Vice President Yemi Osinbajo.

The Vice Chairman of the committee and Minister of Agriculture, Chief Audu Ogbeh, who inaugurated the teams in Abuja in the presence of the Governor of the Central Bank of Nigeria, Godwin Emefiele, told journalists that the BoA would be upgraded from a completely manual bank to an electronically-run financial institution.

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Police microfinance bank urges arrest of loan defaulters

The Nigerian Police Force (NPF) Micro-Finance Bank has directed that policemen be deployed in recovering all loans granted to defaulters by the bank, in order to keep the financial institution viable.

Although the management of the Bank expressed satisfaction over the loan repayment by some customers but pointed out that the outstanding loans should be recovered from defaulters through the intensive effort of the Police.

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Computer Society frets over govt’s move on agencies

The Nigeria Computer Society (NCS) has enjoined the Minister of Communications, Mr Adebayo Shittu, to prevail on the Federal Government to jettison the idea of moving some federal agencies under the Ministry of Communications to the Ministry of Science and Technology.

Specifically, the society and other stakeholders in the industry kicked against the request by the Science and Technology Ministry asking the Federal Government to bring the National Information Technology Development Agency (NITDA), Galaxy Backbone and the Nigerian Communication Satellite (NigComSat) under its supervision.

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