02 Sep

Daily Watch – Crude exports to rise this month, Innoson calls it quits over forex

  • Transport minister, Rotimi Amaechi, has said the Calabar-Port Harcourt coastal rail line and the Lagos-Kano rail modernisation project willl be completed before the end of 2018. Amaechi, who signed an MoU for the project with the China Civil Engineering Construction Corporation, and added that the ministries of Finance, Works and Housing, National Planning and Justice were all involved in efforts to drive the project to completion in record time.
  • Less than 24 hours after Aero Contractors, Nigeria’s second-biggest carrier, suspended its operations, another carrier, First Nation, has followed suit. NCCA director-general, Capt. Muhtar Usman, said the decision was taken in order to ensure the airline carried out required and scheduled maintenance on its fleet. Usman insisted domestic carriers had not wound down their operations but were “merely suspending their operations temporarily to enable them to undertake certain operational overhaul,” in response to growing concerns that adverse economic conditions may be taking a toll on the nation’s airlines.
  • Airtel Nigeria is mulling over a possible NSE listing, according to its CEO, Segun Ogunsanya. “There are plans to look at every option. It is something we are going to consider. I am going to have some discussions with the president of the exchange on how and when we are going to do this and we will do what is best for the economy and the company at the right time.” None of the four main telcos is listed on the local bourse which reflects only about 17 percent of Nigeria’s economy. MTN has announced its plans to list in 2017, as part of its settlement with the federal government for failing to disconnect unregistered subscribers which saw a ₦1.4 trillion fine pruned to ₦330 billion.
  • Nigeria raised ₦212.85 billion ($654.92 million) in an auction of treasury bills on Wednesday, with yields little changed from previous sales, data from the Debt Management Office showed on Thursday. The debt office raised ₦45.85 billion of three-month paper at 14.38 percent, down from 14.99 percent in mid-August; ₦62 billion of six-month bills at 17.50 percent, up from 17.48 percent, and ₦105 billion of one-year paper at 18.42 percent, down from 18.50 percent. Higher subscriptions on the one-year sale suggested some offshore investors participated, market players said. The continued scarcity of forex on pushed the naira to an all-time-low of 420 against the American dollar on Wednesday at the parallel market.
  • Exports of Nigerian crude is expected to increase by about 380,000 barrels per day in a couple of days, following the expected return of Shell’s Forcados crude pipeline by mid-September. Shoreline Group CEO, Kola Karim told Bloomberg that Shell Nigeria’s Forcados crude oil pipeline would resume deliveries this month. In its latest financial numbers for June, the NNPC said the subsisting force majeure at the Forcados terminal, which has been targeted by militants on multiple occasions this year, meant about 380,000 barrels of oil per day remained shut in.
  • Nigeria’s major vehicle assembly plant, Innoson Vehicle Manufacturing has announced it is shutting down due to lack of foreign exchange to import vehicle components. IVM chairman, Innocent Chukwuma told Reuters that workers had been sent home due to a lack of parts from Japan, Germany and China, which account for much of the content of the vehicles they produce. “Production has stopped as we are waiting for the imported items for which there is forex issue,” Chukwuma stated. IVM was launched in 2010 and had raised its 2016 production target to 6,000 vehicles due to a ‘Made in Nigeria’ campaign that generated strong sales to the police, state agencies and churches.
  • Nigerian billionaire Aliko Dangote’s fortune has fallen by 35 percent this year, a loss of $5.4 billion – which using an average exchange rate of ₦250 to a dollar, translates to about ₦1.35 trillion – on the back of a commodities slump and a devaluation of the naira in June. The cement mogul’s net worth is $9.9 billion, a 62 percent drop since January 2014, according to the Bloomberg Billionaires Index. Africa’s second-wealthiest person, South African Christo Wiese, trails Dangote by $2.8 billion with his fortune climbing 12 percent this year on the index.