01 Nov

Daily Watch – AfDB weigh Nigeria loan options, Access Ghana will grow ‘organically’

  • The African Development Bank said on Tuesday it could consider an additional $400 million for Nigeria to support its growth and recovery efforts and was in talks with the government on how to help it reinvigorate Africa’s largest economy. The bank had been in talks with Nigeria for around a year to lend $400 million, the second tranche of a $1 billion loan, to shore up the country’s budget deficit. On Monday, a vice president at the bank, Amadou Hott, had told Reuters that the money was no longer for budget support and would instead be redirected to specific projects.
  • An Italian judge is expected to decide on December 20 whether to send oil majors Eni and Shell to trial over alleged corruption in Nigeria, Reuters quotes two legal sources as saying. Milan prosecutors have asked for the two companies and some past and present managers, including current Eni CEO Claudio Descalzi, to be indicted in a case revolving around the purchase of a Nigerian oilfield in 2011. The Italian inquiry is one of several underway into the acquisition of the OPL-245 field for about $1.3 billion, including current cases in the Netherlands and Nigeria.
  • The Development Bank of Nigeria, recently established by the FG, on Monday commenced lending activities to the economy with the release of ₦5 billion to three micro-finance banks. The amount is for on-lending by the micro-finance banks to 20,000 MSME entrepreneurs. The three institutions that got the first set of loan disbursement are Fortis MFB, LAPO MFB and the NPF MFB. According to the managing director, Tony Okpanachi, while the Nigerian economy is powered by 37 million MSMEs whose activities accounted for over 50 percent of GDP, less than five percent had access to credit in the financial system. The banks will offer loans with a repayment period of up to 10 years with a moratorium period of up to 18 months.
  • Russia’s state-owned Rosatom and Nigeria have signed agreements for the construction and operation of a nuclear power plant and research centre in Africa’s biggest economy, Rosatom said on Monday. “The development of nuclear technologies will allow Nigeria to strengthen its position as one of the leading countries of the African continent,” Anton Moskvin, Rosatom’s vice president for overseas marketing and business development, said in a statement.
  • Access Bank plans to pursue organic growth in Ghana rather than mergers or acquisitions after the central bank raised the minimum capital requirement for lenders, its group chief executive Herbert Wigwe said on an analyst call on Tuesday. Ghana’s central bank in September raised the minimum capital required for banks threefold to 400 million cedis (₦32.6 billion) as part of measures to ensure financial stability, its spokesman said. Lenders have until the end of 2018 to comply. The previous capital requirement for banks and new entrants in Ghana was 120 million cedis. Access Bank owns 91 percent of Access Bank Ghana which has ₦230.67 billion ($699 million) in total assets.
  • Shoprite increased turnover 6.4 percent in the three months to end-September, buoyed by South African sales, but with weaker commodity prices weighing on in its business in the rest of Africa. Africa’s largest grocer grew South African sales 8.1 percent in the three months to end-September as it kept price increases low amid weak economic growth, the company said on Monday. Sales growth in Angola slowed “significantly” from an increase of 110 percent the previous year, the company said without giving more detail. Shoprite’s supermarkets outside South Africa reported a 1.8 percent drop in turnover mainly due to the impact of lower commodity prices and weaker currencies in Angola, Nigeria and Zambia, the company said.