02 Dec

Daily Watch – Exports were Q3’s feel good story, Sokoto test runs power plant

  • The Federal Executive Council on Wednesday approved the 2017 budget proposal preparatory to its transmission to the National Assembly for appropriation. Budget and National Planning minister, Udoma Udo Udoma while making the disclosure, did not offer details of the budget nor specify when the president would lay the document before lawmakers. “With regards to the date, the president will be communicating to the National Assembly and of course, it will be at the National Assembly’s discretion ultimately. The president will write to them and after they confirm, then the president can come to address them,” the minister said. On the 2016 budget, Udoma admitted that implementation is being affected by revenue constraints but that the government has been able to release ₦800 billion for capital projects and has also paid 100 percent on personnel cost. He insisted that the MTEF sent to the National Assembly ahead of the presentation of the 2017 budget was not empty but well prepared by “experts.” The Senate had said that the MTEF sent to the National Assembly on October 4, did not contain the details of the fiscal proposals and described it as empty and not worth considering.
  • Nigerian exports climbed 29 percent in the third quarter, official figures showed on Thursday, lifted by crude sales to India and the U.S. that helped cut a widening trade deficit in Africa’s largest economy. The NBS said the trade deficit narrowed to minus ₦104.14 billion in the third quarter, from ₦484.23 billion in the previous quarter, due to the rise in exports which went from $342.5 million to $1.59 billion. The recession in Nigeria deepened in the third quarter as oil output fell due to militant attacks in its crude-producing Niger Delta and global prices remained low, choking the economy of much-needed dollars to fund imports. Oil production averaged 1.63 million barrels per day between July to September, down from 1.69 million in the second quarter. The government’s budget calculations are based on 2.2 million barrels of oil production per day. “The structure of Nigeria’s export trade is still dominated by crude oil exports,” the statistics office said in its report. President Muhammadu Buhari has pledged to diversify government revenues to protect the economy from oil price shocks and broaden the tax base. However, results are yet to materialise. The government is struggling to secure much-needed funds to cover a shortfall in its record ₦6.06 trillion budget for 2016 as oil revenues decline. The NBS said crude exports accounted for 84.2 percent of export trade in the three months to September. It said total exports at ₦2.31 trillion were flat compared to a year ago, with India and United States accounting for more than 40 percent of export trade. Imports rose 6.2 percent in the third quarter to ₦2.41 trillion.
  • The CBN sold ₦117.16 billion ($372.46 million) in short-dated treasury bills at an auction on Wednesday, with yields broadly unchanged from rates at the previous auction, data from the central bank showed on Thursday. Africa’s top economy sold ₦26.14 billion worth of the 3-month paper at 13.99 percent, the same rate fetched by similar tenor paper at the last auction on Nov. 16. A total of ₦11 billion of 6-month debt was sold at 17.49 percent, slightly higher than 17.40 percent at the previous auction, while a total of ₦80.02 billion of 1-year bills was sold at 18.69 percent, compared with 18.70 percent previously. Total subscriptions stood at ₦156.56 billion against ₦158.07 billion at the last auction, the data showed.
  • Sokoto has conducted a test run of its ₦3.8 billion Independent Power Project, whose contract was awarded in November 2008. The project has the installed capacity of a minimum of 30 and maximum of 38 megawatts. The COO of the contracting firm, Vulcan Elvaton Ltd, Franklin Ngbor, told reporters during the test run on Wednesday that the turbine of the project had already been tested three times. He said: “What remains now is the synchronisation of the plant with the fuel tank and the main evacuation line, down to the transmission line. The plant when fully completed, finally fired and integrated into the national grid, can work for five consecutive years nonstop. It is only after it works for five years that it can be shut down for routine maintenance.” The Director-General of the project, Umar Bande stated that the plant has a dual type turbine that can use diesel, gas or LPFO. According to Umar, the plant was now being test-run on diesel, saying “it consumes 33,000 litres per day.” He further said that the state government would sign a fuel supply security agreement with the NNPC or other major oil firms to make the fuel supply cheaper, more sustainable and ensure maximum operations at the plant.
  • The National Union of Iron and Steel Workers on Wednesday said 3,000 of its members lost their jobs in the last quarter of 2015 following the closure of steel companies. Kasimu Kadiri, General Secretary of the union in Lagos said that the current economic recession had increased the number of unemployed people in his industry. Kadiri was reacting to plans to shut the biggest pipe factory in the country, SCC Nigeria Limited, due to recessionary headwinds. The pipe factory inaugurated a 280,000-ton ultra modern steel pipe manufacturing in October, 2015 in Ushafa, Abuja. However, after several months of staying idle, the government announced plan to close it due to low patronage. The union leader appealed to the government to stop the importation of finished steel products to allow local production thrive.
  • Dana Air has passed the IATA Operational Safety Audit (IOSA). The airline was on Wednesday admitted by IATA into its global safety registry after passing the audit. Its CCO, Obi Mbanuzuo, said the occasion confirmed the airline’s strict adherence to standards and recommended safety practices.