17 May

Daily Watch – Inflation budges slightly in April, Oil workers’ row deepens

  • The dispute between PENGASSAN and ExxonMobil deepened as the union extended its industrial action to other international oil companies operating in the country. This followed the rejection of the directive by the Minister of State for Petroleum Resources, Ibe Kachikwu, by the Exxon Branch of PENGASSAN that the industrial action should be suspended. Union officials locked workers out of offices at Shell, Eni and Chevron in Lagos, as well as the companies’ operational bases in the Niger Delta, Platts quoted officials of the IOCs as saying. The union has also shut some of ExxonMobil’s production facilities in Akwa Ibom, a company source was said to have confirmed. The oil workers are protesting the alleged refusal of the oil major to honour an agreement that it will review the sacking of 83 employees in December and that none of the workers that participated in a protest in December will be sanctioned for their actions. ExxonMobil produces more than 300,000 barrels of crude oil per day in Nigeria.
  • Annual inflation in Nigeria eased for the third straight month in April, inching down to 17.24 percent from 17.26 percent in March, the National Bureau of Statistics said in a report. A separate food price index, however, showed inflation there rose to 19.30 percent from 18.44 percent in March. “This is the third consecutive month of a decline in the headline CPI rate, exhibiting effects of some easing in already high food and non-food prices, as well as favourable base effects over 2016 prices,” the report stated. Annual inflation fell in March and the month prior to that. The fall in February was the first drop in inflation in 15 months.
  • Nigeria and Morocco have signed two bilateral agreements aimed at strengthening their economic relationship. Godfrey Onyeama, minister of foreign affairs; Audu Ogbeh, minister of agriculture; Kayode Fayemi, minister of mines and steel, and Abubakar Badaru, Jigawa governor, witnessed the signing of agreements in Rabat, the Moroccan capital. The first agreement was the joint initiative on the Morocco–Nigeria gas regional pipeline which is about the speeding up of electrification projects in West Africa. The memorandum of understanding was signed by the NNPC and the Office National des Hydrocarbures et des Mines (ONHYM). The second bilateral agreement is the second phase of the fertiliser initiative. The first phase was the supply of a cargo of phosphate by Morocco to Nigeria.
  • The net asset value of mutual funds in the Nigerian capital market grew by 159 percent from ₦102 billion in December 2012 to ₦264 billion in April 2017, according to SEC data. The numbers indicate that the NAV of the funds has grown by ₦162 billion in almost five years. However, despite the 159 percent growth, the relative size of the NAV to GDP remains low and relatively unchanged over the period at 0.2 percent in 2012 and 0.3 percent in 2016. Compared to other countries, the NAV ratio to GDP is very low, the ratio of mutual fund assets to GDP in the United States in 2014 was almost 90 percent, while that of South Africa was about 40 percent. India and China were about nine percent.
  • The Federal Airports Authority of Nigeria said all measures adopted in 2014 to curtail the spread of Ebola at airports across the country had been reviewed and fortified. The agency also assured passengers and other users of their safety at the nation’s airports following the World Health Organisation’s recent announcement on the outbreak of Ebola in the Democratic Republic of Congo. The Punch reports that additional personnel, thermal scanners and sanitisers were deployed in the country’s two major international airports by the Federal Government as part of measures to forestall another round of Ebola outbreak in Nigeria. Nnamdi Azikiwe International, Abuja, and Murtala Muhammed International, Lagos are the major focus areas although plans are in place to extend enhanced measures to Port Harcourt International as well as Aminu Kano International.
  • Wema Bank has posted gross earnings of ₦54.25 billion and Profit After Tax of ₦2.59 billion for the financial year ended December 31, 2016. Addressing shareholders during the bank’s yearly general meeting held in Lagos, the Managing Director, Segun Oloketuyi, told shareholders that the bank recorded a double-digit growth in gross earnings of 18.48 percent from ₦45.79 billion to ₦54.25 billion, driven by an 18.61 percent and 13.61 percent increase in interest and non-interest income respectively. Similarly, the bank recorded a 14.10 percent rise in PAT over the ₦2.27 billion recorded in the corresponding period in 2015. “Sound risk management practices remain at the core of our business model. The bank was not immune to the impact of the economic slowdown, but a more prudent approach was taken, in providing for some loans. We closed with a Non-Performing Loan ratio of 5.07 per cent from 2.67 per cent in the prior year. In addition, our coverage ratio remains robust at 100 percent with Capital Adequacy Ratio at 11.07 percent, which is above the regulatory minimum of 10 percent,” according to Oloketuyi.