25 Apr

Daily Watch – FG moves to end illegal oil mining, Diamond profit tumbles

  • The FG has announced that it has started discussions with illegal refiners of crude oil in order to have them work as duly recognised modular refinery operators. It also stated that it would ensure that militancy in the Niger Delta ended by the end of this year, adding that it would sustain its engagements with stakeholders in the region in that respect. The Minister of State for Petroleum Resources, Ibe Kachikwu, said that the FG working out how to involve illegal refiners in the new modular refinery scheme. “In the past two weeks, we have opened discussions with some of these refiners and government is assiduously working to ensure that this initiative is carefully implemented without polluting the environment. This will not only provide legal jobs and sources of income for the populace but will also contribute to our national policy initiative target,” Kachikwu said.
  • The CBN offered $150 million in currency forwards at an auction on Monday, it said in a statement, part of its efforts to narrow the spread between official and black market exchange rates and improve foreign exchange liquidity. Traders, citing a notice from the central bank, said settlement will be between one week and 45 days. The sale will be via a wholesale auction to meet forex demand from businesses. The CBN has been intervening on the official market to try to narrow the spread between the two markets since the intervention began in February and has sold about $4 billion, analysts say, a pace they doubt it can sustain. The regulator also said on Monday it offered $52 million to small and medium enterprises to help them access foreign currency, needed for imports, and $44.2 million for travel and medical fees, among other services. In a circular on Monday, the bank also said it will now allow investors to engage in foreign exchange trading at rates the buyers and sellers set, a move it hopes will increase the amount of dollars available.
  • The FG has inaugurated an Interim Management Board for the Bank of Agriculture (BOA), as part of efforts to restructure the bank. The agriculture and rural development, Audu Ogbeh, who inaugurated the board in Abuja on Monday, directed the board to begin the recovery of loans owed by farmers and other customers within 90 days. The minister also instructed the board to find ways of making the bank proactive, strong and capable of sustaining the needs of farmers who needed credit facilities to enable them to produce more food. He urged the bank to take over the CBN’s Anchor Borrowers Programme (ABP) set up to give loans to farmers. Ogbeh said that the Federal Government would explore partnerships with the Bank of Holland and Credit Agricoup of France as well as Morocco to see how they could assist the bank.
  • A new aircraft maintenance hangar would be developed in Abuja to service Nigeria and the West Africa sub-region. This hint coincided with the announcement by the federal government of its preparedness to phase out obsolete trainer aircraft at the Nigerian College of Aviation Technology, Zaria, Kaduna and replace them with modern ones. Junior minister for aviation, Senator Hadi Sirika; and the CEO, Interject Nigeria, Seun Peters, gave the indication during the delivery of a new trainer aircraft to the aviation college in Zaria. The new hangar, according to Peters, will be built by Diamond Aircraft of Austria, which manufactured the newly delivered trainer aircraft. The Rector and Chief Executive, NCAT, Capt. Abdulsalam Mohammed said that 29 trainer aircraft had become old and too expensive to maintain, stressing that the latest in the fleet was bought over 15 years ago.
  • Diamond Bank has reported a profit after tax of ₦3.498 billion for the year ended December 31, 2016. The lender’s financial results filed with the NSE on Monday showed that the 2016 after-tax profit was lower than the ₦5.656 billion posted in 2015. In a statement on Monday, the bank said its capital adequacy ratio remained stable at 15 percent, equal to the CBN’s required minimum, signposting its preparedness for profitable business expansion. Its loans to customers increased by 30.3 percent to ₦995.33 billion in 2016 from ₦763.63 billion in the previous year, while loans to other banks surged by 67.0 percent to ₦100.3 billion from ₦60.1 billion. The bank said despite the ravaging effect of the implementation of Treasury Single Account by the federal government and the CBN, customer deposits jumped to ₦1.4 trillion from ₦1.2 trillion in the previous year, representing a 15.5 percent increase and the strength of confidence in its strategic outline. Total assets rose to ₦2.04 trillion from the previous year’s ₦1.75 trillion. The lender said the increase of impairment charges by seven percent to ₦59.024 billion reflected its prudent provisioning aimed at strengthening performance in the business years ahead. It posted a 53 percent growth in total comprehensive income to ₦12.1 billion, while non-interest income increased by 6.9 percent to ₦53.9 billion.