04 Jul

Daily Watch – Nigeria enters recession, NCAA clamps down on USD ticket sales

  • The CBN has reported that economic activities declined faster in June, confirming that Nigeria’s economy formally entered into recession in Q2. The economy contracted by 0.36 percent in Q1. The CBN’s PMI for June revealed that economic activities declined faster, especially in the manufacturing sector where “Production level, new orders, and employment level and raw material inventories declined at a faster rate; while supplier delivery time improved at a faster rate.” The report also showed that in the non-manufacturing sector, “Business activity, new orders and employment level declined at faster rate while raw materials inventories declined at a slower rate.” The health care & social assistance sub-sector remained unchanged, while the remaining three sub-sectors recorded growth in the order: water supply, sewage & waste management; agriculture; and transportation & warehousing.”
  • The NCAA has ordered all airlines selling flight tickets in foreign currency in Nigeria to stop the practice. The regulator said the act contravened the CBN guidelines on the cost of products or services in Nigeria. “The CBN, via a circular issued on April 17,2015, has directed that “pricing of any product shall continue to be in naira only and it is illegal to price or denominate the cost of any product or service (visible or invisible) in any foreign currency. NCAA said ticket sales in foreign currencies also contravened the provisions of BASA agreements between Nigeria and other countries. The latest statement comes as Kenya Airways says it expects to start receiving $25 million in outstanding fares from the Nigerian government within a month. The company is one of several international airlines owed $600 million in foreign-denominated revenue held by the Nigerian government.
  • Gunmen opened fire on a boat transporting Eni SpA workers in the Niger Delta, killing at least two people, the company said. The team was attacked on June 29 “on the way to a well location for routine operations in the Nembe area,” Rome-based Eni said in an e-mailed statement on Saturday. “Three members of the team managed to escape.” The bodies of the two that were missing were found two days later, the oil producer said. Security agencies are investigating the incident, according to the company. No group has claimed responsibility for the attack, said Desmond Agu, the local commandant of the Civil Defence Force, whose agency had been part of the search party that recovered the bodies. The latest surge in violence in the southern delta, which accounts for most of the country’s oil, slashed output in Africa’s second largest oil producer to the lowest in almost three decades in June, according to the International Energy Agency. The attacks came after President Buhari ended contracts to protect oil facilities with militant commanders and slashed monthly stipends paid to fighters that the previous government approved to end a similar uprising in 2009.
  • Imo state governor, Rochas Okorocha, has ordered that salaries for the months of April, May and June 2016 be paid before Friday, July 8. He also asked that the directors of Accounts in all state ministries and local governments meet with the Accountant-General of the State to work out the salaries of council workers up to the month of June. These orders came after a meeting at Government House, Owerri with government functionaries, directors of Accounts, treasurers, permanent secretaries, leaders of Imo Council of Elders and Transition Council Chairmen and other stakeholders. The governor stated that June 2016 should be the last time salaries would be owed in the state and assured workers that their salaries would be paid as and when due.