14 Nov

Daily Watch – CBN may lower MPC in 2018, Construction firms decry WHT uncertainty

  • Oil producers are expected to unanimously extend a production cut accord later this month but its duration is being discussed, the UAE energy minister said on Monday. “I think this group of committed and responsible producers came together… and I think they will continue to do what it takes to take us to the next level,” United Arab Emirates Energy Minister Suheil al-Mazrouei told an international oil conference in Abu Dhabi. He said 158 million barrels of surplus crude oil remain on the market and “we need to reduce that — which means there is a potential for extension”. Mazrouei said there was near-unanimity among the 24 OPEC and non-OPEC producers which agreed a year ago to cut output by 1.8 million barrels per day. OPEC ministers are holding a crucial meeting in Vienna at the end of November to discuss extending the cuts deal as well as imposing the quota system on countries that have so far been exempted: Libya, Iran and Nigeria.
  • CBN Governor, Godwin Emefiele says the monetary policy committee may lower interest rate in 2018 if the pace of disinflation becomes adequate. Emefiele was speaking on the theme ‘Policy Options for Sustaining Nigeria’s Economic Upturn’ at the 2017 annual bankers’ dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN). However, he did not indicate how low the interest rate could drop in 2018. In July 2016 when the inflation rate was on the rise, the CBN monetary policy committee raised the interest rate to 14 percent from 12 percent. “If the pace of disinflation becomes adequate and we see inflation at predicted levels, I am very optimistic that monetary policy committee may begin to see a strong justification for an easing of monetary policy, which may further accelerate the recovery process.” The economy had recorded eight consecutive months of disinflation in 2017, seeing inflation rate decline to 15.98 percent in October from 18.72 percent in January.
  • Two Nigerian international airports, Murtala Muhammed Airport, Lagos and Port Harcourt International Airport, have been rated among the 20 worst airports in the world, according to a new survey. Port Harcourt, which was last year rated as the worst airport moved up two places to become the third worst airport while Lagos emerged the fifth worst airport. A consumer website www.sleepinginairports.net asked travellers to rate airports worldwide based on their overall airport experience on various parameters which include Comfort (Gate seating & availability of rest zones); Services, facilities and things to do; food options; and immigration/security. Other factors were customer service; cleanliness; navigation and ease of transit and sleepability. The report said the two Nigerian airports based on the prevalence of bribery and extortion, said not much improvement has been recorded in Port Harcourt Airport from last year.
  • The Federation of Construction Industry has said that over ₦36 billion Withholding Tax credit belonging to its members is pending with the Federal Inland Revenue Service. FOCI, which is the umbrella body for all the construction firms in the country, stated that the pending WHT credit notes had constrained its members from applying for tax settlement. The FOCI President, Nasiru Dantata, made the appeal when he led members of the group on a courtesy visit to the FIRS Executive Chairman, Babatunde Fowler. Dantata drew the attention of the FIRS boss to inconsistency in the WTH rate, adding that it was initially fixed at five percent, later reviewed down to 3.5 percent and finally 2.5 percent.
  • The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending and Union Bank have launched a ₦10 billion financing partnership that will see the lender providing funds for the agricultural sector. The move is part of measures to support the Economic Recovery and Growth Plan. The partnership was sealed at a ceremony that took place at the NIRSAL head office in Abuja, with senior executives and management of both organisations in attendance. NIRSAL Managing Director Aliyu Abdulhameed said the partnership was in line with the agency’s mandate to attract private sector finance to agriculture.