30 Jun

Daily Watch – Cross River okays power plant, Audit Big Four snag ₦6.4b in fees

  • An analysis of data from some of Nigeria’s largest quoted companies by market capitalisation by the financial website, Nairametrics shows that the big 4 audit firms – PWC, KPMG, Deloitte, and Ernst & Young earned ₦6.4 billion in audit fees for the year ended December 2016. The fees were earned by auditing 28 of Nigeria’s biggest firms cutting across the banking, consumer goods, cement and oil and gas. According to the data obtained by Nairametrics research, the big four increased their earnings by 9 percent year on year after earnings about ₦5.78 billion in 2015. The 28 companies under review made a combined ₦6.2 trillion in revenues for the period thus audit fees as a percentage of revenues was about 0.1 percent of revenue. PWC earned the most fees of about ₦2.5 billion in 2016 (2015: ₦2.2 billion) from auditing GTBank, Guinness and Transcorp among others. KPMG, whose clients include such firms as Zenith Bank, Total and Unilever, was second as the audit firm earned ₦2 billion in 2016, a 15 percent increase from the ₦1.7 billion received as fees in 2015. Ernst and Young earned about ₦1.1 billion in 2016 auditing such firms as Seplat, Oando and Fidelity Bank, a 4 percent dip from the ₦1.2 billion earned in 2015. Deloitte, the only non-billion earner, recorded the largest percentage increase in earnings after income rose by 30 percent to ₦530.2 million compared to ₦406 million earned a year earlier, majorly on income from Dangote Cement which rose 38 percent year-on-year in the period under review.
  • The CBN says deposit money banks do not need additional licences to operate agency banking. The regulator’s head of Financial Inclusion, Temitope Akin-Fadeyi, speaking at the second edition of the Ciuci Consulting’s Nigeria Retail Banking Workshop, fielded discussions on catalysing SME funding and retail lending to Nigeria’s economic development. Akin-Fadeyi clarified that retail banks only needed the regulator’s approval to perform agency banking. She added that super agents, on the other hand, would undergo stringent measures to obtain an agency banking licence, showing how regulation supports retail banks in their push for driving financial inclusion.
  • Cross River’s government has given the go-ahead for the commencement of the construction of a second power plant to complement an ongoing 21MW plant in the state. Funded jointly by the Export-Import Bank of India and the Cross River State Government, the 26MW gas-powered plant in Tinapa is expected to be completed in 24 months. The President of the Skipper Seil Group, Jitender Sachdeva, disclosed this during a technical presentation of the final execution plan for the proposed power generation project to Governor Ben Ayade in Calabar. “This project is not just the construction of the 26MW power plant but it will also involve the construction of gas pipelines, a pump station as well as end-to-end gas distribution networks for domestic use,” the governor said. The state government had signed an agreement pact with the Dubai-based firm in August 2016 to build the power plants as well as train staffers at the Institute of Technology and Management, Ugep.
  • About 40,000 Base Transceiver Stations are required by Nigerian telcos operators to expand and strengthen 4G/LTE services across the country. According to the Guardian, both Tier I and II operators, which currently offer 4G/LTE services have about 7,500 BTS, a number which has grown from a base of 1,500. 4G LTE offers faster, more reliable mobile broadband Internet for devices like smartphones, tablets and laptops. The implications of fewer 4G/LTE BTS are poor service delivery and limited areas of coverage. In October and November 2017, Tier I operators including MTN, Globacom, and Etisalat launched 4G/LTE services in some cities, including Lagos, Abuja and Port Harcourt. An Ericsson Mobility Report predicts that in 2018, LTE (4G) will overtake GSM as the largest access technology by subscription numbers. In Q1 2017, about 250 million new LTE subscriptions were added globally.