21 Nov

Daily Watch – GDP continues rise, Regulators raise ‘serious concerns’ with Barclays over 9mobile

  • Nigeria’s economy grew 1.4 percent year-on-year in Q3, the statistics office said on Monday, extending its slow climb out of its first recession in a generation. Africa’s largest economy returned to growth in the second quarter of 2017 but the recovery has been fragile due to the continuation of depressed oil revenues and a shortage of hard currency. The NBS said oil production stood at 2.03 million barrels per day in the third quarter. Agriculture grew by 3.06 percent in Q3 compared with 3.01 percent recorded in Q2. Q2 GDP growth, formerly put at 0.55 percent, was revised to 0.72% following revisions by NNPC to oil output. Quarter-on-quarter, real GDP growth was 8.97 percent. Telecommunications & information services contracted further by 5.68 percent in Q3 2017 after shrinking 1.92 percent in Q2.
  • The Cable reports that the handling of the sale process of 9mobile by financial advisers Barclays Africa has attracted the consternation of the CBN and the NCC. The online news site says that NCC executive vice-chairman Umar Danbatta and CBN Governor Godwin Emefiele wrote a joint letter to GTBank, the facility agent for the 9mobile syndicated loan, expressing their displeasure with the “unwillingness of Barclays Africa” to follow due process in the bid. In the letter, dated 4 November 4, the two regulators said they made it clear from the outset that the sale process must be “transparent and fair, with the financial and technical capabilities of the final bidders without question”. Both regulators say they have expressed their “serious concerns” since the appointment of Barclays Africa as financial advisers. Thisday reports that 10 firms have moved to the financial stage of the bid process, including Globacom, Bharti Airtel, Smile Telecoms, Helios Towers, Ericsson, Africa Capital Alliance and The Carlyle Group.
  • The NNPC and Chevron Nigeria have executed the second and final phase of an alternative financing agreement expected to increase the country’s crude production by about 39,000 barrels per day from the Niger Delta fields of Sonam and Okan located in the OML 90 and 91. According to the state oil company, the agreement, signed in London on Saturday, will also achieve an incremental peak production of about 283mmscfd of gas. The NNPC’s Group Managing Director, Maikanti Baru, who signed on behalf of the corporation, said the increment to be achieved by the agreement would spread over the remaining life of the assets until 2045. He added that the project was about 92 percent complete and would cost about $1.7 billion, with $780 million to be funded by a third-party.
  • Standard and Poor’s has affirmed the UBA’s rating at ‘B/B’ ‘ngBBB/ngA-2’ as well as a stable outlook. The rating agency said it anticipates that the lender would continue to maintain sound earnings and asset quality over the next 12 months, despite the sluggish Nigerian economy and the high economic risk in its other African operations. In a statement at the weekend, S&P explained that “the affirmation reflects our view that the group will maintain its top-tier competitive position in the Nigerian banking sector. UBA benefits from a good franchise in the corporate and retail segments in Nigeria and increasing geographic diversification.”
  • The Senate Committee on Local Content has asked Total Nigeria to provide it with details of the local content component of its Egina FPSO project. When completed, the project, which includes the drilling and completion of 44 oil wells and other ancillary facilities in deep sea waters, is expected to create 50,000 Nigerian jobs and aid the acquisition of highly technical skills. The committee chairman, Senator Solomon Adeola directed the oil major to furnish the panel with its level of implementation of the Nigerian Local Content Act, 2010 on the project during an appearance before the panel.