07 Jun

Daily Watch – Unemployment problem worsens, New brewer on the horizon

  • Nigeria’s oil production declined to an average of 1.388 million bpd in the first quarter of 2017 according to OPEC data. This is an approximately one percent reduction from the 1.401 mbpd recorded in the Q4 2016. While the decline in production in other OPEC countries within the period was mainly because of quota allocation by OPEC, Nigeria’s decline was mainly due to infrastructure vandalism, which made it impossible for the country to meet its OPEC quota of 2 million barrels per day. Another reason is the Trans Forcados, a major export terminal, which resumed operation last May, had been shut down since November 2016 after militants bombed the sub-sea facility for the second time. Before the militant attacks, the Forcados stream accounted for between 200,000 and 240,000 barrels per day.
  • The National Bureau of Statistics has said that the number of Nigerians who became unemployed rose by 2.1 million to 11.55 million at the end of 2016 from 9.48 million at the beginning of the year. During the period, the unemployment rate rose from 13.9 percent to 14.2 percent. The NBS report said the rate was highest for persons in the labour force between the ages of 15‐24 and 25‐34, which represents the youth population in Nigeria. Unemployment rate was highest for those within the ages of 15 to 24 rising from 25 percent to 25.2 percent. For the 25 to 34 age group, the unemployment rate, according to the NBS report increased from 15 per cent to 15.4 percent. While 16.3 percent of women in the labour force were unemployed as at the end of the fourth quarter of 2016, 12. 3 percent of males were unemployed. “The economically active population increased from 108.03 million to 108.59 million, this represents a 0.5 percent increase over the previous quarter and a 3.4 per cent increase when compared to fourth quarter 2015,” the NBS said.
  • The boards of directors of International Breweries, Intafact Beverages and Pabod Breweries have agreed to explore the merger of the three businesses, subject to required regulatory and shareholder approval. Should the proposed merger be approved, the enlarged company is expected to be one of the leading listed companies in Nigeria. Currently, AB InBev indirectly owns 75% of Intafact, 82.8% of Pabod Beverages and 72.2% of International Breweries. International Breweries is currently listed on the Nigerian Stock Exchange. Ricardo Tadeu, AB InBev Zone President for Africa, said that the proposed merger would create a single efficient company through which AB InBev will continue its investment into Nigeria.
  • Nigeria’s external reserve recorded its second monthly decline. According to the CBN, the external reserve fell from $30.864 billion at the end of April to $30.329 billion on May 31, translating to decline of $535 million during the month. The reserve has risen steadily by $7.06 billion from $23.93 billion on October 24 last year to $30.99 billion on May 4 when it commenced its steady decline. The reserve grew by $819 million in November, $1.07 billion in December, $2.33 billion in January and by $1.47 billion in February. The reserve, however, dropped by $645 million in March, while it also grew by $573 million in April. The decline in the reserve in May was driven by increased dollar sales by the CBN, and the slight drop in price of crude oil price from $53.69 dollars on April 12 to $48.85 per barrel on June 1.