30 May

Daily Watch – AMCON flogs PAN to Dangote, ₦4t in 2016 budget projects unimplemented

  • Moses Tule, CBN’s director of monetary policy says about ₦4 trillion from the 2016 budget is yet to be implemented and will be applied between now and July. Speaking in an interview with Arise TV, Tule said about ₦12-₦13 trillion will be spent by government in 2017, and this will, by all means, get the country out of recession. Speaking on the stated optimism of Governor Godwin Emefiele that Nigeria will get out of recession by the end of September, Tule highlighted actions by fiscal authorities corroborating money policies. “The economic growth plan has been launched, the IMF had cautioned that it is a good plan but that government should be very careful to follow through on the implementation, and I’m very sure that the fiscal authorities have taken that message very clearly,” he said. “The plan is good on paper but you’d need to follow through with implementation,” he added.
  • The Asset Management Corporation of Nigeria says it recovered about ₦134 billion in cash and assets in the 2016 fiscal year and hopes to do even more in 2017. Speaking at a press conference in Lagos, the management of Nigeria’s bad bank gave updates on its financial accounts for the 2016 fiscal year and expressed optimism for better results in 2017. Olugbenga Ataiyero, head, finance and budgeting, said the company posted a standalone loss of ₦254.34 billion in improving its records by ₦49.86 billion as against ₦304.2 billion posted in 2015. Its credit losses turned positive as the net gain on financial assets moved from ₦10 billion in losses in 2015 to ₦17 billion in profit by 2016. However, due to losses suffered from its subsidiaries, AMCON’s consolidated losses grew from ₦295.45 billion in 2015 to ₦352.15 billion in 2016. Ahmed Kuru, the bank’s managing director, said the bad debt bank is expected to pay as much as ₦280 billion in interest to the CBN on a monthly basis.
  • The UK’s Department for International Development says 18 Nigerian states now produce about 5.7 million metric tonnes of milled rice, bringing the country’s production closer to its seven million metric tonnes projected milled rice requirement for 2016. According to a report on Growth and Employment in States, which was funded by the DFID, the 18 states were selected based on their contributions to national rice production as per the 2015 Agricultural Production Survey. The April 2017 report, which was titled, ‘Mapping of rice production clusters in Nigeria’, noted that in the 18 states, rice farming was widely spread across 165 clusters and 2,812 sub-clusters. The report said, “The 2016 total paddy production estimate is put at 17.5 million tonnes with a marketing surplus after post-harvest losses and domestic use of 11.4 million tonnes, equivalent to 5.7 million tonnes milled rice. This is just below the total national demand for rice, which was projected to reach seven million tonnes in 2016, and it implies that the country is progressing towards its goal of rice self-sufficiency.” The report noted that Kebbi led the pack with the production at 3.56 million metric tonnes for the wet and dry seasons combined, followed by Kano at 2.82 million metric tonnes.
  • Kano governor, Abdullahi Ganduje, has waived a ₦221 million permit fee that had delayed the deployment of fibre infrastructure in the state by MTN Nigeria. According to the paper, officials of the Kano State Urban Planning and Development Authority had last week arrested employees of Huawei Technology Company working on MTN’s infrastructure expansion in the state, because the telecom firm had not paid the permit fee. The development put a stop to the project and the telecommunications company reportedly asked the Nigerian Communications Commission to intervene in the matter. The NCC Executive Vice Chairman, Umar Danbatta is said to have paid an unscheduled visit to the governor where he convinced him about the economic advantages that the state stood to gain from the deployment of more telecom infrastructure, as well as the potential quality of service concern that millions of service subscribers would face if the work was further delayed. The CEO of the Kano State Urban Planning and Development Authority, Bashir Adamu, confirmed the waiver of the permit fee, saying that the agency had written to MTN Nigeria to that effect. A similar intervention by the NCC in Ogun State last year resulted in the unsealing of 47 base stations, while the governor, Ibikunle Amosun reduced the ground rent fees owed by IHS Towers from ₦370 million to ₦120 million.
  • Arik Air’s auditors say the company’s debt may be more than the previously stated figure of ₦375 billion. Reports say the initial 12 week period given to external auditors KPMG, may not be enough as new local and foreign debt were being discovered. The airline’s spokesman, Simon Tumba said the auditors could not give a timeline for the completion of their task. The Receiver/Manager of the airline, Oluseye Opasanya in an affidavit filed in respect to AMCON’s takeover of the airline said it was owing over ₦375 billion. AMCON’s spokesman, Jude Nwauzor said the organisation had underestimated the situation of things at Arik. The current management of the airline, Nigeria’s biggest carrier, had in February appointed KPMG this year to audit the company’s assets and liabilities as at January 31, 2017. The delay in the audit findings and possibilities of additional debts has several implications for the airline. Potential investors may decide to shy away from or value the company at a lower price.
  • AMCON has disclosed that it is close to selling Peugeot Automobile Nigeria to a consortium led by Aliko Dangote and two Nigerian states. AMCON’s CEO Ahmed Kuru told Reuters that all processes on the bids were completed about two months ago, with the deal awaiting the CBN’s approval. Dangote, Africa’s richest man, in alliance with the Kaduna, Kebbi and the Bank of Industry, made a bid to acquire a majority stake in PAN last year after AMCON moved to sell off some of the assets it acquired in the wake of the banking crisis. The automaker is worth over ₦15 billion. Peugeot Automobile, a Nigerian vehicle assembly plant located in Kaduna, has Psa Peugeot Citroen as its technical partner with a capacity to assemble 90,000 cars a year.