24 Mar

Daily Watch – Lagos and Kebbi open up state relationships, Forex issues threaten jobs

  • The Senate has passed the 2016 budget, with an unprecedented reduction in the budget’s total. President Muhammadu Buhari presented a N6.08 trillion proposal in December 2015, but the Senate passed N6.06 trillion budget after considering its conference report on the budget. It is the first time since 1999 that the National Assembly has approved a figure lower than that proposed by the Executive. John Enoh, who heads the Senate finance committee, said that the approved budget reflected the “mood of the country and the world” and showed “discipline” of the part of the National Assembly. The House of Representatives is expected to approve the same figure.
  • The Minister of State for Petroleum, Ibe Kachikwu, was quoted as saying that the current queues at petrol stations will persist till late May. Kachikwu, who doubles as the GMD of the NNPC added that he was not a magician to make the queues disappear overnight. According to him, it is a minor miracle that the petrol stations were still getting the volume of products they dispense to the public, judging from the prevailing circumstances at NNPC. Kachikwu revealed that NNPC’s import rates have moved form 50 percent to 100 percent, saying that the 445 barrels allocated to crude swap now service 50 to 55 percent importation of refined product. The NNPC has issued a statement saying that Mr. Kachikwu was misquoted, and that the scarcity will end “soon”.
  • The National Union of Air Transport Employees has called on government to soften forex restriction for foreign airlines operating in Nigeria in order to protect the jobs of Nigerians working with them. The union alleged that there are plans by foreign airlines operating into the country to sack over 2,000 Nigerian employees in order to cut costs and shrink operations. The airlines have been unable to repatriate proceeds from the sales of tickets in the last few months due to the foreign exchange scarcity. At least twenty-five foreign airlines have over $100 million as ticket sales proceeds stuck in the country because they cannot access foreign exchange from the CBN to enable them return the monies to their respective head offices. Because of this, some of these airlines are threatening to reduce the number of flights into the country.
  • The unions have warned that the food, beverage and tobacco sector of Nigeria’s economy is on the verge of shutting down, putting at risk over three million jobs. This is because of the inability of companies to source foreign exchange for raw material importation to facilitate operations. Already leading companies in the sector, such as Flour Mills, Nigerian Breweries, Guinness, Nigerian Bottling Company, 7UP, and Friesland Campina Wamco, have written to labour for discussions over the retrenchment of workers. In the last three months, no fewer than 1,500 workers have been sacked in the sector as employers seek ways of coping with foreign exchange crisis, among others.
  • The Lagos and Kebbi State Governments have signed an MoU which they said would culminate in the production of 70 per cent of Nigeria’s rice requirements annually. The agreement was ratified at the State House, Alausa, Ikeja, Lagos by the Lagos State Governor, Akinwunmi Ambode, and his Kebbi State counterpart, Atiku Bagudu, along with representatives of the two governments. The agreement centres on boosting the production of wheat, ground nut, maize, millet, sorghum, sugar cane, cows among others, and is the first state-to-state relationship in Nigeria. Bagudu has said that the goal of Lagos-Kebbi partnership on food production was “to produce 60 to 70 per cent of Nigeria’s rice needs, and replicate same in other food items.” He therefore explained that in the world of genetically modified food, the partnership between Lagos and Kebbi States was an additional motivation to provide certainties for the people in terms of food production and sufficiency.