25 May

Daily Watch – Foreign Investment rising, NNPC takes digital baby steps

  • Two successive years of decline in Nigeria’s foreign investment inflow came to a staggering halt in the first quarter of 2017, the National Bureau of Statistics said Wednesday. The total value of capital imported into Nigeria in the first quarter of 2017 was estimated to be $908.27 million, representing an increase of 27.8 percent compared to the first three months of 2016 and marking the first time foreign inflows have risen since foreign investors fled the country after oil prices fell and acute dollar shortages reined. The total value was however 41.36 percent smaller than the capital imported in the previous quarter and was the second lowest level recorded since 2007, according to the NBS. Capital importation was particularly low in January, at $187.90 million; this was only the fourth month since 2007 in which capital importation was less than $200 million.
  • Nigeria’s indebtedness will climb to 24.1 percent of its GDP by 2018, the IMF has said. In its World Economic and Financial Surveys, the global multilateral lender also projected that by the end of 2017, the country’s current indebtedness would have reached 23.3 percent of GDP, having closed 2016 with a debt to GDP ratio of 18.6 percent. Nigeria’s GDP for the year ended December 31, 2016, stood at ₦67.98 trillion, according to the NBS. Going by the projection of 24.1 percent for 2018, it means that within three years, the nation’s debt to GDP ratio would have gone up by 100 percent. Although Nigeria’s debt to GDP ratio is considered among the lowest in Africa, there are worries about the rising spate of debt accumulation in recent years, while others less than satisfied with the quality and utilisation of debts by the nation. The World Bank recently expressed concern over the debt payment to revenue ratio, saying reduced revenue earnings might render the country’s debt unsustainable. A total of ₦1.84 trillion has been allocated in the 2017 budget for debt servicing.
  • The worst disruptions in the oil-producing Delta region are over, and production could reach 2.2 million barrels per day by the end of June, the chief executive of Oando said on Wednesday. Oando chief Pade Durotoye told the Africa Independents Forum in London the long-closed Forcados oilfield could be back to capacity by the end of June, enabling a return to nearly full production from what is typically Africa’s largest oil exporter. “We think that the worst is behind us,” Durotoye said. “Before the end of June, we will have Forcados back, which would take us comfortably back to 2.2 million bpd.” Attacks in the Niger Delta had pushed production to just over 1 million bpd at certain points last year, the lowest in decades, but attacks have abated since the start of the year. The first Forcados cargo from the main Trans Forcados export line loaded last week, though operator Royal Dutch Shell has said force majeure remains in place.
  • The NNPC has received no fewer than 34 bids submitted by companies for the digitisation of the state oil firm’s legacy documents. According to a statement by spokesman Ndu Ughamadu, the NNPC said the bid opening exercise was conducted in the presence of the representatives of the bidding companies and Civil Society Organizations at NNPC Towers in Abuja. In his opening remarks, Danladi Inuwa, the group general manager, Information and Technology Division, represented by Kunle Osobu, general manager applications, said the exercise was geared towards having electronic copies of all NNPC documents in line with global best practices. “I am happy that there is much show of interest in this process. The process is going to be transparent from the beginning to the end and we want the best yield in terms of value addition and best services and this was why the bid tender was extended to twelve weeks,” Osobu said.
  • Sweden’s Rezidor Group AB plans to increase by 60 percent the number of hotels it operates in sub-Saharan Africa to 120 in the next four years to take advantage of growing business travel, its regional head said on Tuesday. The company has been focusing on Africa due to growing demand for well-known accommodation brands, such as its Radisson Blu hotels. Such brands are estimated at about a third of the available room capacity in the region. The rest are independently-run hotels. “We really felt that there was an imbalance between supply and demand in a lot of African countries and a lot of African cities,” he said. “We have 16,500 rooms in Africa today. By the end of 2020 we would like to get to 23,000 rooms in Africa,” said McLachlan. He said Rezidor’s strategy on the continent was about 80 percent focused on business travel to help ride out the occasional dampener on the leisure market, including the outbreak of diseases such as Ebola or insecurity attacks.
  • Shareholders of Jaiz Bank have increased the bank’s authorised share capital from ₦15 billion to ₦25 billion. This was one of the resolutions passed at the bank’s annual general meeting in Abuja on Wednesday. According to Hassan Usman, its Managing Director, the bank had recorded lots of successes in five years and was now well established. According to him, these successes had manifested in the growth in its financial assets by 38 percent and strong deposit inflow which also increased by 30 percent. Usman said that these figures were as a result of a consistent and sustained focus on the needs of customers and employees. The bank announced a ₦343 million profit for the 2016 financial year, underlying customers loyalty formed over the years, the bank said. Usman said Jaiz’s capital adequacy ratio of 33 percent had further improved and was easily three times above the current regulatory requirements of 10 percent. The bank said it would soon list on the NSE.