- The FG has given contractors 30 days to resume delayed development projects in the Niger Delta or face prosecution. The government has been trying to build new roads and launch other projects to drag the region out of poverty and create jobs, aiming to give local people alternatives to joining the militants attacking oil facilities. The government has “directed that the list of all contractors who have not returned to site within the stipulated period be compiled and submitted to the Ministry of Justice and the EFCC for investigation and prosecution.” Many projects have been delayed due to the collapse in oil revenues or to graft accusations. The presidency also ordered the environment ministry to ensure “progress” of a cleanup of oil spills in the Ogoniland area, a project delayed for years.
- The National Assembly has approved a request by President Buhari for a $500 million Eurobond. Vice President Osinbajo had made the request as Acting President while Buhari was away on medical vacation in the United Kingdom. The bond, as explained in a letter to the Senate and House of Representatives, is to be accessed from the international capital market and used to fund the deficit in the 2016 budget in line with the borrowing plans already prepared for that purpose. In approving the request, the House of Representatives recalled that while the domestic borrowing had been incurred, the remaining ₦2.204 trillion in external borrowing had not been fully accessed. A report by the Committee on Loans/Aids and Debt Management, which the House acted upon, observed that there were no risks in accessing more funds.
- Global ratings agency, Fitch Ratings says Nigerian banks will continue to face challenges this year, following an extremely difficult 2016. Banks faced multiple threats from the operating environment in 2016, including Nigeria sliding into recession, the economy continuing to suffer from low oil prices and severe shortages of foreign currency. Consequently, banks struggled with declining operating profitability (excluding translation gains), sluggish credit growth, fast asset quality deterioration, tight FC liquidity and weakening capitalisation, putting increasing pressure on their credit profiles. The outlook for the rest of 2017 is not much brighter. In a statement, it said, “We believe that the banks will continue to face extremely tight FC liquidity despite the authorities’ best efforts to normalise the FX interbank market and improve the supply of US dollars. Importantly, deliveries under the CBN’s FX forward transactions since 1H16 have helped the banks access US dollars and reduce a large backlog of overdue trade finance obligations to international correspondent banks. However, given the severity of the FC liquidity issues, refinancing risk remains at the top of our perceived risks for the sector, especially as some banks have large Eurobond maturities in 2017/2018.”
- The FG has awarded a $1.79 billion contract to a Chinese state-owned firm for work on the second phase of Abuja’s mass transit railway, the capital city’s minister. The three-year management contract is the latest in a series of infrastructure projects won by China Civil Engineering Construction Corp. Muhammad Bello, minister of the federal capital territory, also said that the contract would be funded by the Export-Import Bank of China. The minister did not say when work would begin. CCECC had also worked on the first phase of the project.
- Lafarge Africa, one of the leading cement manufacturers in Nigeria, reported a profit after tax of ₦16.898 billion for the year ended December 31, 2016, showing a decline of 38 percent compared with ₦27.163 billion in 2015. According to the audited results, Lafarge Africa recorded revenue of ₦219.714 billion, compared with ₦267.234 billion in 2015. Loss before tax stood at ₦22.818 billion, compared with a profit before tax of ₦29.286 billion. However, a ₦39.717 billion tax credit, which came mainly from deferred tax assets generated from Unicem operations, lifted the company’s PAT to ₦16.898 billion. The board has recommended a dividend of 105 kobo, which is 65 percent lower than the 300 kobo the company declared in 2015.Commenting on the performance, the CEO, Lafarge Africa, Michel Puchercos said: “Our turnaround plan delivered solid results in Q4 2016 in spite of the challenging environment in Nigeria and South Africa.”
- Nigeria’s foreign exchange reserves, which had increased significantly in recent months to hit the $30 billion mark, fell for the first time this year on Tuesday. The latest CBN data showed on Wednesday that the external reserves dropped to $30.349 billion on Tuesday from $30.352 billion on Monday. The reserves, which rose 17.4 percent from last year when they closed at $25.843 billion, hit a low of $23.89 billion on October 19, 2016. The foreign exchange reserves had on December 14 dropped to $25.041 billion from $25.048 billion the previous day but it increased to $25.043 billion the next day. Continuing their upward trend since then, the reserves crossed the $30 billion mark on March 8, 2017 when it closed at $30.014 billion from $29.967 billion on March 7, the CBN data showed.