28 Apr

Daily Watch – Oil climbs higher, NLC wants threefold increase in minimum wage

  • The prices of crude oil hit its highest point in 2016 on Wednesday, trading a few cents above the previous 2016 high of $46 per barrel and inching closer to $50 on the global market. As at 1500 hours WAT, Brent crude was trading at $46.73 – less than $4 away from the $50 mark – while the WTI rose by 92 cents to trade at $44.96 per barrel. The OPEC basket price for crude oil rose by 48 cents from $39.40 to $39.88 per barrel. The rise is crude oil prices has been attributed to a cut in global oversupply, with a major part of the reduction coming from Nigeria, which has become the second largest exporter in Africa, after Angola. According to OPEC’s Monthly Oil Market Report released in March, Nigeria’s oil production fell by about an average of 100,000 barrel per day and is responsible for the fall in OPEC production levels. The figures are said to have fallen to as low as 1.6 million barrels per day, following incessant pipelines vandalism in the country.
  • The Lagos State Government has restructured its N167.5 billion programme II, series 1 and 2 bonds. Akinkunmi Mustapha, the state commissioner for Finance, said that the restructuring which was approved by SEC last week, was achieved through the finalisation of a process through which the state reached an agreement with its bond creditors on accelerating repayment terms. According to Mustapha, the transaction will generate savings in excess of N40 billion for the state over the next five years. This arrangement, the commissioner said, had been approved by 99.6% of the state’s bondholders at an extraordinary general meeting which held recently, with Chapel Hill Denham acting as financial adviser to the state government.
  • Another lender, Diamond Bank, has said that its profits slumped 78 percent in 2015 as the plunge in oil prices weighed on Nigeria’s economy. According to Diamond bank’s 2015 audited financial statement, net income was N5.65 billion, lower than the N25.48 billion recorded in 2014. The receding profit was as a result of a 109.21 percent increase in provision for loan losses to N55.17 billion in the period under review. The introduction of the Treasury Single Accounts impacted negatively on Diamond Bank’s loan and deposit growth. Loans and advances to customers were down by 3.47 percent while deposit from customers fell by 18 percent. Yesterday, First Bank, the largest lender in Nigeria recorded an 82 percent fall in net income, caused by huge write-offs.
  • The NLC and the TUC have jointly proposed a new minimum wage of N56,000 to the Federal Government. The current national minimum wage is N18,000. NLC president, Ayuba Wabba, said both the NLC and the TUC made the formal demand on the proposed national minimum wage to the Federal Government on Tuesday. “I can say now authoritatively that as of yesterday (Tuesday) we made a formal proposal to the Federal Government of N56,000 to be the new minimum wage. The demand has been submitted officially to government and we hope that the tripartite system to look at the review will actually be put set up to look at it. Our argument is that, yes, it is true that the economy is not doing well, but the law stated that wages for workers must be reviewed after every five years. So, the issue must be looked into by the Federal Government and workers should not be seen as sleeping on their rights,” he said.