19 Oct

Daily Watch – Another airline bites the dust, Job centres coming in March

  • Emirates has confirmed that it will suspend its Abuja-Dubai flight operations from October 30. The airline will now only fly out of Lagos cutting its Nigerian flight frequency from 21 times a week to about 5 times a week. The airline blamed the decision on “challenges with foreign exchange, low patronage, and other operational issues, which have reduced the profitability of flying on the route.” A few months ago, United and Iberia stopped operations in Nigeria blaming operational and forex related issues. Egypt Air has also stopped operations in Nigeria while Kenya Airways is set to suspend its Abuja route.
  • Total Nigeria Plc hit a major milestone on Tuesday after its share price closed above N300 and an implied market valuation of about N103 billion for the first time ever. Analysts say that at a price earnings ratio of about 9x, Total is still relatively cheap especially if it beats last year’s earnings per share by as much as 60%.
  • Overnight interbank rate was quoted at a record high of 150 percent on Tuesday, two days after commercial banks placed funds with the CBN to participate in last Friday’s currency forward auction. Traders said a few deals were done on Tuesday as a result of a shortage of naira on the money market, with banks unwilling to place funds among themselves until the result of Friday’s currency auction was published. On Friday, the CBN held a two-month dollar forward auction to clear a backlog of demand from airlines, manufacturers and other companies, as the exchange rate crisis deepened. Traders said the banks were later directed by the CBN to re-submit bids again on Monday. Rates spiked because banks were barred from the CBN’s repo window before any currency auction. The CBN had not announced result of the auction as of Tuesday.
  • The FG has announced that it would locate job centres in all local government areas across the country before the end of March next year. The job centres, with at least one in every local government, will be used to gather data on the actual number of unemployed persons in Nigeria. The Permanent Secretary, Federal Ministry of Labour and Employment, Dr. Paul Adalikwu, said that the centres would address the lack of data for unemployed persons, adding that currently, no one seemed to know the exact number of jobless people across the country.
  • Enforcement officers from the Federal Inland Revenue Service from Abuja stormed Rivers State on Monday and sealed off Lafarge in Onne and IGPES in Port Harcourt for  alleged tax evasion. While the cement company was sealed for allegedly failing to pay over N10 million in taxes; IGPES, an engineering firm, was shut for allegedly evading tax to the tune N1.2 billion. Speaking shortly after sealing off the two companies, the leader of the FIRS team, Ruth Mandeun, warned their managements to pay the outstanding taxes to allow for the reopening of the firms. Mandeun also cautioned the managements of the companies not to forcefully open the seals and padlocks used in locking up the premises. She explained that the two firms defaulted through the non-remittance of their Value Added Tax, Company Income Tax, Withholding Tax, Education Tax and late return penalty.