24 May

Daily Watch – Interest rate stays same, NCAA to audit Med-View

  • The CBN kept its benchmark interest rate at 14 percent on Tuesday, its governor said, hours after the statistics office said the economy contracted in the first quarter. Governor Godwin Emefiele said the MPC had voted to retain the headline rate. “In consideration of the challenges weighing down the domestic economy and the uncertainties in the global environment, the committee decided by a unanimous vote of eight members in attendance to retain the MPR at 14 percent,” he said. The bank also kept its cash reserve ratios for commercial banks at 22.5 percent. Emefiele also told reporters the bank wanted to end the spread between the black market and official foreign exchange rates, adding that the recent rise of the naira versus the dollar showed that the central bank’s policies were working. The central bank chief said Nigeria will exit a biting recession by the end of the third quarter.
  • The Federation Account Allocation Committee on Tuesday shared ₦415.7 billion, ₦52.1 billion less than what the three tiers of government shared as revenue for March. The Accountant-General, Ahmed Idris, who represented finance minister Kemi Adeosun, said that the ₦415.7 billion was distributed under four sub-heads. “The distributable revenue for the month is ₦272.1 billion. The sum of ₦6.33 billion was refunded by NNPC. There is also a proposed distribution of ₦20.42 billion from the excess Petroleum Profit Tax. Also, exchange gain of ₦38.5 billion is proposed for distribution. Therefore, the total revenue distributable for the current month, including VAT of ₦81.2 billion is ₦415.7 billion”, he said. Idris said government generated ₦177.7 billion as mineral revenue in April, a reduction of ₦50 billion from the ₦228.5 billion generated in March. Similarly, non-mineral revenue also shrunk by ₦6.6 billion, from ₦103 billion in March. The minister said after deducting the cost of collections to the revenue generating agencies, the federal government got ₦124.4 billion, states ₦63.1 billion and local government councils ₦48.7 billion. In addition, he said ₦22 billion was given to the oil producing states based on the 13 percent derivation principle. The excess crude account now stands at $2.45 billion.
  • Acting President, Yemi Osinbajo, has requested the House of Representatives approval to borrow $1.28 billion and €9 million in fresh loans under the 2016-2018 External Borrowing (Rolling) Plans of the FG. In a letter written to the House of Representatives and was read to members by the Speaker, Yakubu Dogara, on Tuesday, Osinbajo explained that the $1.28 billion was to support the operations of the Development Bank of Nigeria. He said the “multi-donor supported bank” was approved during the Goodluck Jonathan administration and had its financial agreements executed on February 25, 2015. However, the acting President stated that the $1.28 billion, which ought to have been included in the 2014-2016 borrowing plans, was inadvertently omitted. He noted that there was an urgency to re-list it in the 2016-2018 borrowing plans because the creditors were ready to provide the funding. The World Bank Group is to provide $500 million; the African Development Bank, $450 million; Kfw Development of Germany, $200 million and the French Development Agency, $130 million, bringing the total to $1.28 billion. The letter added that the €9 million would go into the Fund for Agricultural Finance in Nigeria. On April 26, President Muhammadu Buhari had written the National Assembly seeking approval to include another $6.9 billion in the borrowing plans for the execution of key rail projects, the rehabilitation of the North-East and projects in education, agriculture and health.
  • A full-scale audit would soon be conducted on the operations of Med-view Airlines to ensure the safety of its aircraft, according to the spokesperson of the NCAA, Sam Adurogboye. He said the in-house audit was part of plans to ensure that the ban placed on it by the EU was lifted. The findings, according to the NCAA, would determine further actions on the airlines, ahead of plans to engage the European Union Air Safety Committee this week. The NCAA had said in January that it would intensify economic audit on all local airlines. The NCAA had last week temporarily restricted Med-View’s flight operations to the region over alleged safety concerns and non-updating of its certification audit. The Guardian reports that the restriction was due to the airlines’ delay in having its Boeing 767 aircraft audited for international operations, in accordance with the EU airspace rules. The prohibition is, however, restricted to Med-View designated planes and not its entire operations. On May 16, the European Commission added Med-View to its EU Air Safety List, a list of non-European airlines that do not meet international safety standards and are therefore subject to an operating ban or operational restrictions within the European Union.