- Tata Power is blaming the prevalence of lawlessness, corruption, policy inconsistencies, and insecurity in Nigeria for its decision to hold back on making an investment in Nigeria’s power sector. But the firm welcomes the current fight against corruption by President Muhammadu Buhari’s administration, and says its success could persuade a change of heart at Tata. Anil Sardana, formerly of the World Bank and currently the managing director of Tata Power said, “Nigeria is an energy surplus country, it can be the biggest hub for energy. There is no reason why the country cannot be an export hub to its neighbours. We are very keen as to what happens with the policy direction of the new Buhari administration,” he said.
- Analysts are pushing for the reduction of the Cash Reserve Ratio (CRR) to alleviate the burden of banks’ cost of funds, as the implementation of the Treasury Single Account (TSA) with Ministries Departments and Agencies (MDAs) commences today. The TSA policy would mean a 100 percent CRR on public sector deposits and will lead to interbank borrowing at a higher rate, by banks which are heavily dependent on public sector funds. With the average cost to income ratio at about 60 percent, the policy could lead to a retraction in lending.
- Nigeria’s seaport terminals are operating 40 percent below their capacity as cargo volumes decline following the government’s policies on the importation of rice and motor vehicles, as well as the new Central Bank of Nigeria (CBN) policy on foreign exchange. Formerly, an average of 100 vessels berthed at the port monthly, this number has now decreased in the past three months, to an average of 40 vessels per month. The implication is that terminals, which have the capacity to handle three to four vessels simultaneously now handle one or two vessels in a week. “The impact is that goods will be diverted to the Republic of Benin and that is exactly what is happening now. Ships containing rice and other cargo are being diverted to Cotonou and these cargoes will find their way back to the Nigerian market,” Vicky Haastrup, chairperson of the Seaport Terminal Operators Association of Nigeria (STOAN) said.