07 Mar

Daily Watch – Nigerian banks facing tough times over letters of credit, Telephone user-base increases

  • Nigerian banks are facing one of the most serious threats to their international reputation. Banks can no longer access foreign exchange to pay their financial obligations to foreign lenders. According to Reuters, banks looking for American dollars to repay letters of credit to their foreign lenders have been delayed for as much as a week compared to just a day or two in the past. Banks have attributed this to the CBN’s dollar rationing and strict capital controls which have restricted to flow of forex in and out banking system. The means that commercial banks may soon start to experience significant defaults if this continues. According to the report outstanding LCs could be as much as $500 million. The CBN now sells about $250 million weekly compared to about $500 million before it imposed controls.
  • The wheels are in motion for the Kaduna State Government, the Dangote Group and the Bank of Industry to acquire a majority stake in the Kaduna based Peugeot Automobile. Nasir El-Rufai, governor of Kaduna state, said this at the on-going Kaduna International Trade Fair. According to El- Rufai, interest for this acquisition has already been submitted to the Assets Management Company of Nigeria. The Governor believes that by taking ownership of PAN, the state would be able to provide jobs for a large number of job-seekers in Kaduna and beyond.
  • The ministers of Finance and Budget and the Deputy Governor of the CBN have met with the National Assembly Committees on Appropriation over the 2016 budget. Speaking during the meeting, the Minister of Finance, Kemi Adeosun, explained the Federal Government’s borrowing plan and also the present status of the Treasury Single Account. She gave account that the total volume of what had passed through the TSA was presently at about N2.9 trillion, saying that the ministry was more concerned about the balance.
  • Nigeria’s four refineries lost a total of N5.7 billion in January, according to the NNPC’s Monthly Operations and Financial Report for January, released on Sunday in Abuja. The Kaduna, Port Harcourt and Warri Refineries posted losses of N2.87 billion, N1.95 billion and N900 million respectively. NNPC also said it paid N85.96 billion into the Federation Account for January 2016, and N1.05 trillion within a 12-month period, from February 2015 to January 2016. Giving a breakdown of the amounts transferred in January, NNPC said N85.077 billion was from the sale of crude oil while N880.3 million was receipts from gas sales. It noted that the corporation posted a loss of N3.55 billion, compared to a loss of N11.86 billion recorded in December 2015. According to the report, NNPC’s loss-making performance was triggered by a drop in its revenue from N184.4 billion recorded in December 2015 to N130.86 billion in January 2016.
  • According to the NCC’s Monthly Subscriber Data, active subscribers in Nigeria’s telecommunications industry increased by 340,525 in January. Active lines in Nigeria stood at 151,357,769 for the month of January, against the figure of 151,017,244 in December, 2015. According to the data, 149,022,919 of the 151,357,769 active numbers subscribe to the GSM network services. The GSM operators’ active customers increased by 341,557 from the 148,681,362 subscribers they recorded in the month of December. The CDMA operators had 2,147,982 active users in January, indicating a decrease of 745 from the 2,148,727 customers they had in December. Also, the monthly subscriber data showed that the Fixed Wired/Wireless networks’ consumers decreased to 186,868 in January, as they lost 287 customers to their record of 187,155 in December.