- CBN Governor, Godwin Emefiele, will meet with bank chief executives today. The meeting may consider, among other things, lay-offs in the banking sector. Within the last week, Ecobank let go over 1,040 of its employees, while Diamond Bank and Skye Bank also disengaged 200 and 175 members of their workforce respectively. First Bank has announced that it would prune the number of its employees by 1,000. Following the job cuts, the Minister of Labour and Productivity, Chris Ngige, had directed the banks to stop any further sacking of workers, and threatened to withdraw the license of any bank that continued. However, the banks insist that there is no way they can sustain the huge cost of operations following the drop in government patronage. Another issue expected to be discussed is the new foreign exchange policy. Emefiele has said the policy, when unveiled, would enable the CBN to retain a small window for critical transactions. He gave some of such transactions as importation of vital machinery for production as well as essential basic raw materials critical for manufacturing, which by their nature could not be sourced locally.
- Reuters is reporting that against following supply disruptions in the Niger Delta, refineries from India and the United States are backing away from buying Nigerian oil because of increasing uncertainty about deliveries. Their reluctance to buy is limiting the prices Nigeria can get for its oil even as there is less of it, another hit to the finances of a country battling its worst economic crisis in decades. Attacks especially by the Niger Delta Avengers on installations belonging to Shell, Eni and Chevron, have pushed Nigeria’s oil output past 20-year lows. Some oil facilities have clawed back output, but the militant attacks have continued and the group has vowed to bring Nigerian production to zero. India’s Hindustan Petroleum Corporation was forced last month to cancel a vessel it chartered to carry two million barrels of Nigerian crude due to the Qua Iboe force majeure. The state-run Indian Oil Corporation Limited, a major buyer of Nigerian grades over the past year, has stated in its recent tenders that it would not take grades under force majeure. Qua Iboe, Nigeria’s largest crude oil stream, remained off the list in its latest tender, an extremely unusual development in its requests for sweet crude. Indonesia’s Pertamina, another frequent buyer, also chose not to buy Nigerian grades in its recent tenders, favouring Congolese Coco, Angolan Girassol and Saharan Blend from Algeria instead. Traders said Pertamina had shifted its preferences since the violence and uncertainty in Nigeria escalated.
- The Association of Licensed Telecommunications Operators in Nigeria has said that a lack of access to foreign exchange may put the telecommunications business in Nigeria in serious jeopardy if the FG fails to address the issue. According to ALTON, the forex scarcity is having an adverse effect on network service and also reducing their subscribers’ base. A new report by the NCC showed that the telecoms subscribers’ base in the country has been declining in the last few months. ALTON chairman, Gbenga Adebayo, expressed the association’s concern when he led the representatives of the operators in the country on a visit to the minister of communications Adebayo Shittu in Abuja. Adebayo pointed out that the plan to achieve 30% broadband penetration by 2018 would be a mirage if the government failed to make forex available for the operators to procure equipment for infrastructure.
- Rasheed Olagunju, MD of the Bank of Industry has announced that the bank will re-evaluate the viability of a $9.8 million bio-mass power project in Ebonyi State which it stopped funding a few years ago. The BOI pulled out of that project after concluding that the cost of the project was bloated and the location was at a disadvantage to the rice processing industries the project intends to serve. However, following a meeting with Olagunji, the Ebonyi state governor, David Umahi, expressed confidence the re-evaluation of the project will lead to its completion. He said that the bio-mass project is a demonstration project that will be replicated in the state to aid rice production.