20 Jul

Daily Watch – IMF says Nigeria will contract 1.8% in 2016, Eko DISCO revenue plunges to N1.8bn

  • Nigeria’s economy will probably contract by 1.8 percent this year and curb growth in sub-Saharan Africa, according to the IMF. The Washington-based lender cut its 2016 growth forecast from 2.3 percent projected in April, according to its World Economic Outlook update released on Tuesday. The projection for next year was reduced to 1.1 percent from 3.5 percent. The Nigerian economy will contract for the first time in more than two decades as it “adjusts to foreign-currency shortages as a result of lower oil receipts, lower power generation and weaker investor confidence,” the IMF said. GDP shrank by 0.4 percent in the three months through March as oil output and prices slumped and the approval of the budget for 2016 were delayed.
  • CBN governor, Godwin Emefiele presented a lucid and comprehensive account of the performance of the Nigerian economy in the past year to a closed-door session of Senators on Tuesday, highlighting measures being taken by the federal government to address a bleak economic environment. According to a statement issued after the meeting, “The Governor’s presentation also gave the Senators insight into the Bank’s decisions in the Foreign Exchange Market, and the rationale underlying the recent re-introduction of a flexible exchange rate mechanism in Nigeria. Vanguard reports that the CBN governor told senators that it was frightening that the nation was experiencing economic stagnation at the same time with inflation and saw the economic outlook as gloomy, stagnant and worsening.
  • The NSE is clamping down on directors of stockbroking firms who mismanage their firms or violate market rules, according to Thisday. The current rules punish only former employees of stockbroking firms that have been mismanaged or exposed to disciplinary action for violation of rules while directors are left out. It has been observed that directors of stockbroking firms are often quick to resign in instances where firms have either been mismanaged or exposed to disciplinary action for violation of the rules without any form of liability or accountability. To effectively police them, the NSE has proposed an amendment of its Rule 19.4, saying in view of the supervisory role of the Board of Directors over the management of stockbroking firms, it has become necessary to make directors more accountable for the activities of the management whom they oversee.
  • The Eko Electricity Distribution Company has said that its monthly revenue generation had dropped from ₦4 billion to ₦1.5 billion. Mr Oladele Amoda, EKEDP Chief Executive Officer, said that the drop was due to inadequate electricity supply to the network. Amoda attributed the reduction to pipeline gas disruptions in the Niger Delta. He added that the company usually generated above ₦4 billion monthly but that had now dropped to ₦1.5 billion. He said the shortfall had adversely impacted the ability of the company to make capital investments in metering, network expansion, equipment rehabilitation and replacement.