19 May

Daily Watch – Budget 2017 is looking for a signature, Kaduna threatens banks over tax

  • Acting President Yemi Osinbajo has said that he would assent to the 2017 budget. The Information Minister Lai Mohammed had earlier told State House reporters after the Federal Executive Council meeting chaired by Osinbajo on Wednesday that the decision on who to sign the budget would be taken when the document is transmitted to the Presidency. But Osinbajo, via a Twitter statement by his spokesman Laolu Akande, said the question on who would sign the budget was clear. “Just so we are clear: when the time comes, everything is set and he is satisfied, Acting President Yemi Osinbajo will assent to the 2017 budget,” the statement read. There has been some confusion over who will sign the budget in President Muhammadu Buhari’s absence. Ita Enang, the special adviser to the President Buhari on National Assembly matters, says “Mr President” will sign the budget into law. Enang told Channels Television’s Seun Okin on the ‘Politics Today’ programme that “It will be ready tomorrow (Thursday) all things being equal, and it will be transmitted to the President, all things being equal tomorrow. The budget will be transmitted to Mr President and the President will assent to the budget.”
  • The NNPC is in the final stage of signing $6 billion worth of deals to exchange more than 300,000 barrels per day (bpd) of crude oil for imported gasoline and diesel. The contracts, which come three months later than expected, include three more pairs of companies than last year, reflecting Nigeria’s increased reliance on NNPC for fuel imports. At least four of the 10 groups have signed contracts, set to begin from July 1, with the rest expected to do so by Friday, the sources said. The NNPC, which is due to approve them by the end of the week, did not immediately respond to a request for comment. The fuel quality in the final agreements was not immediately clear, but July 1 is the same deadline the country set for switching over to higher quality, lower sulphur fuels that create less toxic fumes. The latest list contains several companies from 2016, including Varo Energy, Societe Ivorienne de Raffinage, Total and Cepsa. Italy’s ENI and India’s Essar, which won 2016 contracts, are absent from this year’s list, while Socar and Mercuria are new additions. The contracts were initially planned to begin in April but last year’s swap deals were extended at least twice in order to give NNPC more time to negotiate. NNPC had previously said this year’s contracts would exchange up to 800,000 bpd of crude oil, though at some 40 percent of peak exports that target was seen by markets as unlikely.
  • The African Export-Import Bank has disbursed more than $35 billion in trade and project financing to Nigeria. The disbursements, targeted at public and private sector entities since its inception to support the country’s economic and trade growth, are in furtherance of efforts to rev up regional and bilateral integration. The bank’s President, Benedict Oramah, who made the disclosure on Wednesday in Abuja after visiting the Acting President, Yemi Osinbajo, said Afreximbank’s current credit exposure to Nigeria stood at $3.5 billion. He told the Acting President that the Bank’s disbursals to Nigeria included financing provided to the country’s banking sector to improve trade finance and foreign exchange liquidity, which helped the economy adjust to the recent adverse commodity price shock. Last year, Nigeria’s high net worth investors were admitted by the lender into its shareholding structure, while a few months after its yearly general meeting, it reached deals with some financial institutions to provide trade loans. The Afreximbank delegation held further meetings with Muhammad Musa Bello, Minister in charge of Nigeria’s Federal Capital Territory; Kemi Adeosun, the Minister of Finance, and Godwin Emefiele, CBN Governor.
  • The Kaduna State Internal Revenue Service has threatened to seal all banks operating in the state which failed to pay its communication mast and signage fees as required by law. The KDIRS’ legal adviser, Francis Kozah told the News Agency of Nigeria in Kaduna on Thursday that the defaulting banks were given two weeks to pay or be sealed. Kozah explained that the Kaduna State Tax Codification and Consolidation Law 2016 provided that all bank branches operating in the state with communication mast and synergy were to pay certain fees. He, however, said that with the exception of the United Bank of Africa Plc, most of the banks have failed to pay, particularly for 2016 and 2017. “We have served them demand notices, Kaduna State Urban Planning and Development Agency equally served them, asking them to come and settle their liabilities but they have failed to do so,” he said.
  • General Electric plans to launch a gas turbine assembly plant in Nigeria next year and has invested over $100 million as it seeks to tap growing demand for gas-fired power plants in Africa’s biggest economy, its local CEO said on Thursday. Lazarus Angbazo said GE wants to support the development of Nigeria’s gas reserve which is largely untapped, adding that the U.S. company has invested in some local power plants. Nigeria privatised its electricity sector in 2013, aiming to end decades of blackouts which have hampered economic growth. Most of the plants it sold were gas-fired, operating below capacity due to inadequate gas supply. Officials say demand for gas in Nigeria is estimated to rise to 3 billion standard cubic feet (SCF) per day by 2017 from 1.2 billion SCF per day in 2015, ten times the 300 million of eight years ago. Nigeria has the world’s ninth largest proven gas reserves at 187 trillion SCF. Last month state-oil firm NNPC said it wanted to more than triple gas supply for local use by 2020. Angbazo said construction work on the plant which is located in Calabar is expected to be completed in December. Operations will start in the first quarter, the company told Reuters. GE has made a bid for a $2 billion railway project to connect Nigeria’s northern cities to the south and could expand its plant to include locomotive assembly.