- Nigeria is expected to emerge from recession this year, but threats to recovery remained elevated and the economy will not grow enough to reduce unemployment and poverty, the International Monetary Fund said on Wednesday. The country slipped into a recession last year as low crude prices and oil production slashed government revenues, caused dollar shortages and crippled its economy. The Fund projected Nigeria’s economy will grow 0.8 percent this year, it said in a report, adding that various indicators suggest an uptick in economic activity in the second quarter. Low growth and exposure to the oil sector increased non-performing loans at banks to 15 percent in March from 6 percent in 2015. They rose 8 percent excluding four under-capitalised banks, the IMF said. “Concerns about delays in policy implementation, a reversal of favorable external market conditions, possible shortfalls in agricultural and oil production, additional fiscal pressures, continued market segmentation in a foreign exchange market that remains dependent on central bank interventions, and banking system fragilities represent the main risks to the outlook,” the IMF said.
- The NCC, the telecoms regulatory body, will turn down any requests from Skye Bank to take over the assets of ntel, the first national carrier owned by Tunde Ayeni, the news website TheCable reports. Skye’s management had written to Acting President Yemi Osinbajo detailing how Ayeni, who was also the bank’s chairman between 2010 and 2016, allegedly used his position to take huge loans from the bank. The bank wants Osinbajo’s assistance in taking over the assets of ntel (former Nitel/Mtel) to repay the debts. “A practical solution would be to secure the entire industry exposure with the Nitel assets estimated at ₦282 billion (Open Market Value) and ₦183 billion (Forced Sale Value) by Knight Frank in 2014, and thereafter place the company into Receivership for recovery and sale to interested investors,” wrote Muhammad Ahmad, the chairman, and Adetokunbo Abiru, the group managing director, in a joint letter. TheCable quotes an unnamed senior NCC official as saying that Skye Bank’s request will not have the commission’s backing. “We have made it clear again and again that the operating licences we issued to telcos are exclusively for the telcos and nobody can take the licences through the back door,” the official said.
- The FG has approached the China Import-Export Bank for a loan of $550 million to acquire two new communications satellites for the Nigeria Communications Satellites Limited and the completion of a project managed by Galaxy Backbone. Communications Minister Adebayo Shittu told a forum on the proposed ICT University that Galaxy Backbone needed about $350 million to complete the funding of its project so that the country would be completely covered by satellite technology. The minister said the third area the loan was going to fund was the proposed ICT University, which would provide skills training and manpower to Nigerian youths and potential students from other African countries. He said other critical areas of financing included the ICT Park and Exhibition Centre and the establishment of the ICT Development Bank.
- Guinness Nigeria is shifting its focus from premium brands to the “lower end” volume market in order to boost sales and revive profits, it said in its rights issue share offer prospectus. The Nigerian subsidiary of Diageo is looking to raise ₦39.7 billion ($109 million) to help reduce its now expensive dollar-denominated debt and to support its volume growth strategy in the face of a recession in Africa’s biggest economy. Diageo, which owns 54 percent of the company, is supporting the cash call by converting into equity part of a dollar-denominated loan which it granted Guinness Nigeria at the peak of Nigeria’s currency crisis. The company said shareholders can buy five new shares for every 11 held at ₦58 a share, a 17 percent discount on Wednesday’s market price of ₦69.87. “Given the economic recession in Nigeria … the company plans to deepen its participation in the value beer segment and increase beer product offerings in the lower end of the market,” Guinness Nigeria said in the share sale prospectus.