10 Mar

Daily Watch – 3.67m Nigerians got jobless in 2016, ₦5 note is dead

  • Nigeria’s total debt rose to ₦17.36 trillion ($56 billion) as of Dec. 2016 from ₦12.60 trillion a year earlier, the DMO said, as the country grappled with its first recession in a quarter of century caused by low oil prices. Africa’s biggest economy expects a budget deficit of ₦2.36 trillion for 2017, with half of it funded through domestic borrowing. Foreign bonds and loans stood at $11.40 billion at the end of December, the debt office said on its website – equivalent to about 20 percent of total debt and up from $10.7 billion at the end of 2015. Local debt spiked to ₦13.88 trillion last year, up from ₦8.83 trillion in 2015 and is set to rise further. The government has said it will raise ₦130 billion at its third domestic debt sale this year on March 15 and sell ₦1.13 trillion worth of treasury bills by the second quarter. Nigeria also plans to issue a new savings bond this month targeted at retail investors to broaden its funding base followed by a ₦20 billion “green bond” sale in April.
  • The NBS says 3.67 million Nigerians became unemployed in 2016. Also, the number of unemployed Nigerians rose from 7.51 million at the beginning of October 2015 to 11.19 million at the end of September 2016. The unemployment report for October to December 2016, although billed to be formally released on March 29 is contained in the ERGP 2017 – 2020 proposed by the FG on Tuesday. The unemployment rate was highest for those within the age group of 15 to 24 rising from 17.8 percent in the beginning of Q4 2015 to 25 percent as of the end of September 2016. It also increased for the 25-34 age group, from 10.8 percent to 15 percent during the period.
  • A Guardian newspaper analysis suggests that rising consumer prices may be the death knell of some of Nigeria’s denominations. The paper said that across several markets, but for small scale farmers in rural Nigeria who give away their produce at lesser prices, it is difficult to get any item that can be bought at ₦5, while only a few can be purchased for ₦20. The development is now calling to question the rationale for continued printing of the denominations, which is currently assessed as excess in circulation when there is none or few items available that they can buy, as well as the need for commodity price control and management.
  • Kaduna began a six-week stint Wednesday night, as the backup airport for Abuja-bound flights while the capital’s airport is closed for runway repairs. The cutting of direct flights to Abuja, an important business hub as well as Nigeria’s political nerve centre, raises economic and security concerns. Passengers will take the journey of around 160 km (100 miles) to the capital on guarded buses, along a road where kidnappings have taken place in recent years. A flight carrying passengers on Ethiopian Airlines, the only international airline that has said it will use the alternative airport, arrived at the new terminal at 11.30 am on Wednesday. Airlines including British Airways, Lufthansa and South African Airways have refused to fly into Kaduna due to security concerns. Reuters reports seeing police vehicles stationed at about 2 km intervals on the road between Abuja and Kaduna.
  • Access Bank said its lending grew by 32 percent last year, far above its 10 percent target for 2016, due largely to a devaluation which drove up the naira value of foreign loans. Core credit rose only 8 percent, it said. The lender said it would keep the same target for this year while monitoring to limit bad loans. Loans grew 25 percent in 2015, it said in a presentation. Access Bank said its non-performing loans stood at 2.1 percent in 2016, up from 1.7 percent in 2015. Industry NPLs hit 12 percent last year, according to a government estimate, far above a 5 percent CBN limit. On Monday, Access Bank posted a pretax profit of ₦90.34 billion ($290 million) for 2016, up from ₦75.04 billion a year earlier and proposed a dividend of ₦0.40. Its shares have recorded gains of 10 percent this year after they rose 21 percent in 2016.
  • NLNG could unlock three times as much gas as the country’s proven reserves and create hundreds of thousands of jobs if it goes ahead with a proposed expansion plan, it said on Wednesday. NLNG often cited as a successful public-private partnership, is a venture between the NNPC, Royal Dutch Shell, Total and Eni to produce liquefied natural gas for export. It currently operates six trains — liquefaction and purification facilities – and CEO Tony Attah said the company was ready to add another two trains, although he did not say whether a final decision had been taken. Building Trains 7 and 8 would require a total investment of $25 billion, he said. Nigeria has the world’s ninth largest proven gas reserves, at 187 trillion cubic feet, and Attah said NLNG estimated “scope for reserves of 600 tcf” if the company expands. NLNG, which has 23 LNG carriers, has generated $85 billion in 17 years with assets of more than $13 billion.