20 Oct

Daily Watch – Fitch thinks Nigeria will grow 2.6 percent in 2017, FG approves ₦30bn mining fund

  • The Federal Government on Wednesday ratified the approval of a ₦30 billion intervention fund for the development of the country’s mining sector. The intervention fund will be used mostly for exploration of solid minerals in the country to give a boost to the activities of the sector as the government intends to raise revenue through the diverse sources. This was disclosed by the Minister of Mines and Steel Development, Kayode Fayemi after the Federal Executive Council meeting. He said the fund is part of 1.68 percentage deductions from the Federation account. According to Fayemi who briefed alongside the ministers of culture and tourism, Lai Mohammed, and Transport, Rotimi Amaechi, the fund will also be used to tackle other issues relating to illegal mining, security, environmental and multi-sectional issues at ministerial coordination level. The mining intervention fund will also support small-scale miners with lands.
  • Fitch Ratings has projected that Nigeria’s economy will grow by 2.6 percent growth in 2017. This was contained in a statement issued by the global rating agency. Though Fitch reduced its forecast for the country’s GDP growth for 2016 to 1.0 percent from 1.5 percent, citing weak performance in the first half of the year, continuing policy challenges, including the implementation of the new foreign-exchange regime and delays in the disbursement of the 2016 budget, it said the economy will bounce back in 2017 with a GDP growth of 2.6 percent. The rating agency said the “medium-term growth outlook remains significantly lower than the 5.6 percent growth seen in 2010-14. “Our revisions incorporate a weaker-than-anticipated first half performance. GDP shrank 2.1 percent YOY in 2Q16, the second consecutive fall. Much of the contraction was due to falling oil production, which shrank from an average of 2.1 million barrels per day (mbpd) in 1Q to 1.7mbpd in 2Q. An improving situation in the Niger Delta region will prevent further production loss, but levels are not likely to reach 1Q levels this year.”
  • ExxonMobil has divested its 60 percent stake in Mobil Oil Nigeria Plc to Nipco Plc, an indigenous Nigerian downstream oil and gas company. With the latest divestment, French energy major, Total is now the only international oil company operating in the downstream sector of the Nigerian oil and gas industry. Nipco, in a statement on Wednesday, said the acquisition was agreed with the execution of a sales and purchase agreement with ExxonMobil. Its Managing Director, Venkataraman Venkatapathy said, “With the signing, we will start the transition period and initiate the process of obtaining regulatory approvals from the requisite federal agencies – the Securities and Exchange Commission and the Nigerian Stock Exchange.” He said the transition period would also enable Nipco to effectively manage a smooth and successful completion of the transaction.
  • The reopened Warri Refinery and Petrochemical Company says it now produces 2.5 million litres of petrol and 2.2m of kerosene per day despite challenges posed by renewed militant activities in the Niger Delta. The company’s managing director, Solomon Ladenegan made the announcement on Tuesday at Ifiekporo, Warri South LGA, Delta State, where he commissioned a WRPC community road project. He said that the “militancy has not directly affected the refinery, but has only slowed crude supply. It is not good for the refinery to be running and get shut down for 12 days due to lack of crude oil, so we are dealing with the issues.”
  • The Benin Electricity Distribution Plc said it is the top performer among its peers in deploying electricity meter deployment to its customers. The BEDC, which is one of the 11 power distribution companies in the country, covers Edo, Ondo, Delta, and Ekiti states. A company statement said a metering performance rating report carried out by the Nigerian Electricity Regulatory Commission for the second quarter showed that the company outperformed other Discos. The BEDC scored 65.30 percent to emerge the overall lead performer in the metering progress aspect of the report, which indicated the percentage of customers metered. The statement added that “The BEDC has demonstrated its consciousness of the metering gap existing across its various customer classes and has commenced the process to cover the metering gap for existing customers in its area of operations. The company has been proactive in the installation of meters, having installed over 120,500 meters since the takeover of the company. It has taken advantage of both the industry CAPMI scheme and own funded meters. More than 90,000 metres have been installed in 2016 alone.” The company said it plans to achieve 100 per cent metering of all industrial and maximum demand customers by the end of November, and the installation of 100,000 meters for domestic and commercial customers for the remainder of the year.
  • Netflix, an Internet TV service provider has partnered with Spectranet to deploy the first dedicated Netflix servers in Africa. This high capacity server will hold the entire Netflix content library in Lagos, providing Spectranet’s customers with the best possible video streaming performance. This solution will offer faster delivery in a cost-effective way, according to the company. Speaking on the development, Spectranet CEO, David Venn said “because we focus on providing families with an excellent and affordable broadband service, this partnership with Netflix means that our customers will be able to enjoy the very best TV experience available in Nigeria. We are honoured that Netflix has selected Spectranet for one of its first deployments in Africa and the only one in West Africa.”
  • Shell has appointed Peter Costello as its new Vice President for Nigeria and Gabon. A statement signed by the company’s spokesperson, Bamidele Odugbesan, stated that Costello succeeded Markus Droll, who assumes a new role of Executive Vice President, Projects, Shell International in Rijswijk, Netherlands. According to the company, Costello, who is an engineer, has spent over three decades in the oil and gas industry, starting his career in British Gas and working in the UK, India, Philippines, Thailand and Kazakhstan.