- The CBN has extended guarantees to Skye Bank for another year, while it considers the bank’s recapitalisation proposal, the mid-tier lender has said. The had last year shored up Skye with a ₦100 billion capital injection, after sacking its top management for failing to meet minimum capital requirements while appointing a new management team. In a newspaper advertorial on Tuesday, the bank said it had recovered ₦60 billion in bad loans, closed some branches and sold four subsidiaries to boost capital in the past year. It was in talks with shareholders and investors last year to raise ₦30 billion but suspended the plans when weak oil prices hit capital markets and drove foreign investors away. “The bank continues to require assistance from central bank and government as it repairs the damage inflicted on the institution in the past and charts a sustainable path forward for the bank,” Skye Bank said. It said it had also reached restructuring agreements with many of the chronic bad debtors resulting in improved payments and prospects of future recoveries. The CBN designated Skye Bank as one of the systemically important banks due to the size of total deposits it holds after it acquired Mainstreet Bank. This means it has to increase its capital adequacy ratio to 16 percent, the industry average.
- The Nigeria Extractive Industry Transparency Initiative (NEITI) says all of the country’s oil savings since the inception of its savings history cannot fund 20% of 2017 budget. In its second occasional paper series unveiled on Tuesday by Waziri Adio, its executive secretary, NEITI, said: “Nigeria has about three decades of experience in implementing different oil revenue funds. However, attempts at oil revenue savings have been plagued by contested legal frameworks, governance issues and inadequate political will. “Nigeria has one of lowest natural resource revenue savings in the world. The balance in the three funds (0.5% stabilisation fund, ECA and NSIA) is less than $3.9 billion, not enough to fund 20% of 2017’s federal budget. Nigeria’s $1.5 billion sovereign wealth fund is one of the lowest in the world, has one of the worst ratios to annual budget (10%), and one of the lowest SWF per capital ($8), better only than war-torn Iraq and crisis-hit Venezuela, but not by much,” Adio said. “In contrast, Norway, a country of 5.2 million people (2.8% of Nigeria’s 186million people) has a sovereign wealth fund worth $922 billion (which is 23,641% of the $3.9 billion balance in Nigeria’s three oil revenue funds).” In simpler terms, if Nigeria’s oil savings were shared across the country, each citizen will have access to only $8, after over 60 years of oil exploration.
- Business activities were paralysed at the Corporate Affairs Commission headquarters in Abuja on Tuesday following an industrial action embarked upon by staffers. The industrial action led to the closure of the typically bustling CAC premises thus preventing staff as well as the public from carrying out any business as workers protested the non-payment of allowances as well as poor welfare conditions. Media reports showed employees displaying posters with various inscriptions at the gate. The workers, under the auspices of the Amalgamated Union of Public Corporations, Civil Service, Technical and Recreational Services Employees, accused the CAC of not taking the issue of their welfare seriously, following failed negotiations between the union and the management. The CAC’s Deputy Director of Public Affairs, Godfrey Ike, told the Punch that the management had signed a Memorandum of Understanding with the workers to address the grey areas.
- Holcim Nigeria plans to pass a resolution next month to dissolve the company after its Swiss-based parent firm merged with French rival Lafarge two years ago, the cement maker said on Tuesday. Reuters reported that Holcim Nigeria is now part of Lafarge Africa following a mega-merger in 2015 to create the world’s biggest cement maker LafargeHolcim. Beat Hess, LafargeHolcim Chairman has said the company was still adjusting its structures in big markets where both Lafarge and Holcim are present following the merger. The cement maker said it will present the final accounts of Holcim Nigeria as part of the voluntary winding up process at a meeting of shareholders on August 21. Lafarge Africa expects to generate cost saving synergies of ₦9 billion ($46 million) by 2018 in Nigeria, following the merger, it has said. The Nigeria-based business of the Franco-Swiss cement group is in the market to raise ₦140 billion in fresh equity and convert some loans into shares as part of a planned rights issue after it reported losses last year. LafargeHolcim has said it will take part in a capital increase of the Nigerian unit to avoid diluting its nearly 73 percent stake, in a move which would also help simplify the ownership structure in the country.