02 Mar

Daily Watch – PMI shriveled in February, BRT users moan increased fares

  • Nigeria plans to target retail investors with a new savings bond that will go on sale this month, the Debt Management Office said on Wednesday. Two- and three-year maturities will be offered, with interest paid quarterly. The interest rate has yet to be announced, but the debt office paid 16.5 percent on a five-year bond sold to institutional investors last month. The bonds will be “good for savings towards retirement, marriage, school fees, house projects,” the debt office said. Savings accounts at Nigeria’s commercial banks pay up to 5 percent in interest, but the country’s inflation is running at more than 18 percent annually. The bond offer will open on March 13 and end after five days, the debt office said. New issues will be sold every month. The minimum subscription will be ₦5,000 ($16) and the maximum ₦50 million. Nigeria’s government depends on local borrowing to fund more than half its budget deficit, which is expected to reach ₦2.36 trillion this year. The government also plans to sell a $300 million diaspora bond abroad this year and its first sovereign sukuk in the local market.
  • The FG on Wednesday approved a ₦701 billion payment assurance guarantee for any energy produced by the electricity generation companies through the CBN in order to strengthen the Nigerian Bulk Electricity Trading. It also approved a short-term financing option for two ongoing projects, the Lagos-Ibadan Expressway and the Second Niger Bridge. The announcement was made shortly after Wednesday’s Federal Executive Council meeting presided over by the Acting President, Prof. Yemi Osinbajo, at the Presidential Villa, Abuja. According to the Power, Works and Housing minister, Babatunde Fashola, the payment guarantee was designed to solve some of the liquidity problems, especially as they related to the government firm that buys power from the generation companies.
  • The Manufacturing Purchasing Managers’ Index stood at 44.6 index points in February 2017, indicating a decline in manufacturing for two consecutive months after expanding in December 2016. The PMI is an indicator of the economic health of the manufacturing sector. The PMI is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment. According to February’s PMI released by the CBN on Wednesday, 14 of the 16 sub-sectors reported declines in the review month in the following order: transportation equipment; paper products; electrical equipment; printing & related support activities; fabricated metal products; chemical & pharmaceutical products; furniture & related products; cement; plastics & rubber products; petroleum & coal products; textile, apparel, leather & footwear; computer & electronic products; nonmetallic mineral products and primary metal. But the appliances & components and food, beverage & tobacco products sub-sectors reported an expansion in the review period. Similarly, the production level index for manufacturing sector contracted in February 2017. The index at 45.2 points indicated a decline in production levels when compared to the 51.3 points it recorded in the previous month.
  • Seized vehicles with duty paid value worth at least ₦6 billion are wasting away in various Customs warehouses and premises across the country, following the suspension of the auction process by the Nigeria Customs Service since August 2015, a new Punch report says. The vehicles numbering about 2,000 units, most of which were seized by the NCS as part of its anti-smuggling drive, have started depreciating in value, the report concludes. Some of the vehicles were impounded along some interstate highways when their owners could not produce proofs of import duty payment. According to the NCS’ reports, some of the vehicles comprising cars, buses, trucks and tankers were intercepted during attempts to smuggle them into Nigeria. Others were reportedly seized for being the mode of conveyance for smuggled items. The Comptroller General of Customs, Hameed Ali (retd.), suspended the auction of seized goods in August 2015. An exemption was granted by President Muhammadu Buhari for the distribution of seized rice to IDP camps to address the food crises they face.
  • A hike in fares announced by the Lagos State government for Bus Rapid Transit (BRT), LAGBUS and franchise buses began on March 1 and has been heavily criticised by commuters. The Lagos Metropolitan Area Transport Authority had recently announced its plans to effect an upward review of BRT and LAGBUS fares from March 1, stating that the current economic recession posed a serious threat to its continued operations. Aggrieved commuters say the increase would cause more havoc to the sufferings of Lagosians, who are battling with a shrinking purchasing power occasioned by the recession. The fare increase, which ranges from 20 to 50 percent, will affect all routes. For instance, a trip from Ikorodu to Mile 12, with a fare of ₦70 will become ₦100 from today. Ikotun to Iyana Ipaja will move up from ₦50 to ₦100, while Ikotun to Ikeja would be ₦200 from ₦100 per trip. Igando to Maryland will now cost ₦150 from its former fare of ₦100, while every passenger commuting from Dopemu to Ikeja/Maryland will pay ₦200 as against the ₦150 fare.
  • Air Peace has inaugurated its Lagos-Abuja-Sokoto route. The aircraft, a Boeing 737-300, with 136 passengers on board, landed at the Sultan Abubakar III International Airport at 12:43 p.m. Sokoto state governor, Aminu Tambuwal, who welcomed the aircraft, described the airline as one of the “best, safest and reliable” in Nigeria. The airport manager, Sokoto, Ahmed Adamu, assured the airline of the availability of excellent facilities. The airline, which is on an aggressive route expansion programme, plans to commence new flights to Abidjan, Douala, Niamey, Dakar, Johannesburg, Dubai, Mumbai, Guangzhou, Atlanta and London.