25 Aug

Daily Watch – Investors panic on bank suspension, DISCOs complain of power supply … to them

  • The FG says it intends to use a crude oil price of $42.50 per barrel as its budgeting benchmark for the fiscal year 2017. According to Udo Udoma, budget and national planning minister, national planners have made a provision for a drop in Nigeria’s GDP ahead of crucial elections in 2019, with the 2017 spending plan focusing on critical infrastructure and continued diversification. In remarks made at the end of the weekly federal cabinet meeting, he said for the “oil price benchmark, we intend to use $42.50 as a reference price in 2017. We are projecting $45 in 2018 and $50 in 2019. So we are keeping to the very conservative in terms of the reference price of crude oil even though we are expecting it to go higher than this.”

  • Investors dumped shares in Nigerian banks on Wednesday, a day after the CBN suspended nine lenders from foreign exchange transactions for failing to remit money owed to the government. FCMB, First Bank, UBA, Heritage Bank, Keystone Bank, Skye Bank, Diamond Bank, Sterling Bank, and Fidelity Bank for withholding government dollars from the national treasury. Shares in Diamond Bank plummeted the most, shedding 7.32 percent in early trading, followed by Sterling which was down 3.88 percent. FCMB fell 2.5 percent, First Bank shed 1.5 percent, while Skye Bank was down 1.54 percent. According to the regulator, the banks had failed to remit $2.1 billion to the government’s CBN account, which was Abuja’s share of dividends from the NLNG. Last year, President Muhammadu Buhari ordered government payments to be made into one single CBN account as part of his pledge to fight graft. One of the banks, UBA, said it did not withhold any government funds, and its suspension was lifted late Wednesday.

  • The naira nosedived to 402 to the US dollar on the parallel market on Wednesday, traders said, weaker than the 397 it traded at its previous session as dollar shortages gripped the official market. The naira, which hit a fresh record low since the CBN floated the currency on the official interbank market in June, first touched 400 on the black market this month. On the interbank market on Wednesday, no trades were posted until three minutes before the end of the session, when the central bank which has been reducing its dollar sales, intervened.

  • Plateau has signed a memorandum of understanding with Oil and Chemical International, a member of the Duncan Group of Companies, to set up a 40-ton fertiliser blending plant in Foron in Barkin Ladi LGA. The state’s agriculture commissioner, Linda Barau, said a combination of a mostly agrarian workforce and Plateau’s unique geography made it suitable for a wide range of exotic and traditional crops to be cultivated, thus providing a ready market for fertiliser manufacturers. Michael Ekoja, operations director at Oil and Chemicals International said the project will help improve economic diversification, ramp up productivity and lead to higher crop yields.

  • Nigeria’s 11 DISCOs say the inability of the Transmission Company of Nigeria to efficiently supply electricity to their networks was costing them ₦1 billion in monthly revenue. The distributors, who spoke via their platform, the Association of Nigerian Electricity Distributors were responding to TCN’s recent claims that they, not it was the weakest link in the nation’s electricity value chain. ANED said the TCN still retained the “unholy character of the defunct and hugely corrupt Power Holding Company of Nigeria,” adding the company has not been able to guarantee its members, particularly their northern operations, stable power supply.

  • The first cargo flight, an Ethiopian Airlines jet, has landed at the Akanu Ibiam International Airport in Enugu in what is seen by many observers as the culmination of a sustained drive by successive state administrations, as well as the aviation and transport ministries in promoting the growth of alternate transport hubs in the country. Three years ago to the day, the first ever international passenger flight to Enugu, also operated by Ethiopian Airlines landed at the Akanu Ibiam airport.