03 May

Daily Watch – Osinbajo fed up with CBN ‘black list’, Arik to resume Maiduguri route

  • Vice President Yemi Osinbajo says the federal government is nudging the CBN to replace some of the 41 items not eligible for foreign exchange. Earlier in the life of the administration, the CBN listed 41 items as not valid for forex through the official forex window. This action has weathered strong criticism for nearly two years now, with the CBN holding its stance on those items — but that may be changing soon. Speaking at The Platform, a programme organised by Covenant Christian Centre, on Monday, Osinbajo said the government is seeking to review the list to exclude items that need to be important for local manufacturing. “In stabilising the macroeconomic environment, we’ve focused on aligning our fiscal and monetary policy, and nudging the central bank in the general direction of allowing a more market-determined exchange rate,” Osinbajo said.
  • The FG said it had released $400 million to settle outstanding Joint Venture cash call debts owed International Oil Companies. The oil minister, Ibe Kachikwu, made this known in Houston on Tuesday while speaking to reporters on the sidelines of ongoing 2017 Offshore Technology Conference. Kachikwu said that the money was paid to the IOCs last week and that the balance would be defrayed within a year. He explained that the payment was part of a $1.2 billion cash call debt owed the IOCs in 2016. He explained that it was separate from the discounted $5.1 billion cash call arrears it negotiated in December 2016 with the IOCs.
  • Nigerian stocks hit a three-month high on Tuesday, lifted by company earnings results that outperformed market expectations and hopes that a new currency-trading window will help lure investors back to Africa’s biggest economy, analysts said. The market all share index rose 0.77 percent to 25,965 points, led higher by banking and oil stocks. In a client briefing note, Vetiva Capital noted corporate results were better than expected and said it anticipated increased demand for Nigerian stocks this week. Dangote Cement, which accounts for a third of the market capitalisation, reported a 34 percent rise in post-tax profit, beating the market consensus. In a boost for investors in Nigerian equities, the CBN last week allowed portfolio investors to trade the naira currency at a market-determined exchange rate and increased dollar sales on the interbank market.
  • Arik Air says it will resume flight operations to Maiduguri, Borno state capital via Abuja, from May 9. In a statement signed by Adebanji Ola, spokesman for the airline, Arik said flights to Maiduguri will operate thrice weekly – Tuesday, Thursday and Saturday. Ola said there was the possibility of increasing the frequency in the coming weeks. “Though the flight will operate via Abuja, passengers from other Arik Air network can conveniently connect to Abuja for their onward journey to Maiduguri,” the statement read. In December 2013, Arik Air, Nigeria’s largest carrier, suspended operations to Maiduguri due to security reasons. In a related development, AMCON says it has injected N1.5 billion in Arik Air to safeguard its operations and enhance the payment of staff salaries since its takeover.
  • Ecobank Nigeria, a subsidiary of the Ecobank group, says it has merged 74 of its branches. The bank says it will deploy staff from the merged branches to other projects. A statement by the bank reaffirmed its commitment to digital transformation, which would enable customers carry out banking activities online, thereby reducing the need to visit physical locations. Charles Kie, the managing director, said the bank hopes to shift its activities to digital channels and improve customers’ experience at reduced cost. “After a detailed analysis of the physical network of branches needed to serve our customers, the decision was made by the Ecobank Nigeria board, and approved by the CBN, to optimise 74 out of its 479 branches,” Kie said. The statement failed to touch on Thursday’s reports that the bank had terminated the appointment of about 50 top staff. “We are deploying staff and other resources from the merged branches to other ongoing projects, while also strengthening the existing branches to make them more resourceful and up to speed in their daily activities,” he added.
  • Transcorp has posted ₦15.77 billion in revenue and ₦1.49 billion in Profit After Tax in its first quarter operations. Specifically, the firm’s result for Q1 ended March 31, 2017, showed a 20 percent increase in revenue from ₦13.2 billion recorded in the corresponding period in 2016 to ₦15.8 billion during the period under review. Similarly, the firm’s PAT rose to ₦1.49 billion, which represents a 24 percent rise when compared to ₦1.21 billion achieved during the corresponding period in 2016. The firm attributed the improved first quarter performance to top line Year-on-Year growth recorded in its power business as a result of improvements in gas supply. Gross Profit stood at ₦6.94 billion, up from ₦5.91 billion achieved in Q1 2016 while operating profit increased from ₦3.25 billion in Q1 2016 to ₦4.23 billion in Q1, 2017. Emmanuel Nnorom, Transcorp CEO explained that Transcorp’s resilient performance was drawn from the diversity of its various business offerings. He pointed out that the closure of the Abuja Airport negatively affected occupancy for the hotel business. Transcorp is a publicly quoted conglomerate with a diversified shareholder base of over 300,000 investors.