26 Jan

Daily Watch – Nigeria ‘protest’ US weapons sale conditions, Reps okay NSE public listing

  • The FG will consider raising $2.5 billion through Eurobonds in the first quarter to refinance a portion of its domestic treasury bill portfolio at lower cost, the head of the Debt Management Office told Reuters on Thursday. Patience Oniha said the country will also try to get back into the JP Morgan Government Bond Index (GBI-EM), with improving liquidity in the local currency market. She said a Eurobond placement will depend on market conditions, pricing and tenor. “We are looking the issue probably first quarter depending on what the advisers say and subject to the market conditions,” the DMO director general said. Nigeria could also look at a possible syndicated loan as an alternative, Oniha said, adding that the issue is part of a $5.5 billion fundraising program approved by parliament last year. Nigeria has said it plans to refinance $3 billion worth of a local treasury bill portfolio of ₦2.7 trillion ($8.9 billion).
  • Nigeria will protest to the United States over conditions imposed on its planned $494 million purchase of 12 A-29 Super Tucano fighter planes, Defence Minister Mansur Dan Ali said on Thursday. Those conditions include the 2020 transfer date for the aircraft and that Nigerian technicians will not be trained by U.S. staff, be part of maintenance crews, nor can they study the production of the planes, he told reporters at a briefing in Abuja. The sale of the planes has been dogged by controversy. Under Barack Obama, the former U.S. president, the aircraft deal had been held off due to concerns about the Nigerian military’s human rights abuses. But the Donald Trump administration approved the sale to support Nigeria’s efforts to fight Boko Haram militants and to boost U.S. defence jobs. In December, Nigeria’s air force said the deal had been formally agreed. Dan Ali did not say whether the disagreement over the conditions would affect the air force’s 20 February target for the final agreements to be signed and initial payments made. The sale of the 12 aircraft, with weapons and service, includes thousands of bombs and rockets.
  • The House of Representatives passed a bill that will allow the stock exchange to become a publicly listed company that can issue shares to investors. Oscar Onyema, NSE CEO said last week he expected the bill to be signed into law this year. The Senate passed the bill in December, which will now be sent to the president to sign into law. The second-biggest exchange in sub-Saharan Africa after Johannesburg and a key entry point for investors in Africa, the Nigerian bourse last year got approval from its members, mostly stockbrokers and some institutional investors, to become a publicly listed company. The exchange has around 200 listed companies and plans to launch exchange-traded derivatives securities this year. It has not said whether it would list via an IPO or raise new monies.
  • The Senate has voted to launch an investigation of the NNPC’s state long-awaited Brass LNG and its banking records. According to the Senate motion, while Brass LNG’s bank account was intended to be held by the CBN, corporate records show it is at Keystone Bank. The Senate documents said the most recent deposit into the account was $648 million in September 2016 and that it currently holds $137 million. It did not provide detail on the discrepancy between the September 2016 deposit and the current balance. It is due to report back in four weeks. The Brass LNG company was originally set up in 2003, with NNPC owning 49 percent and affiliates of Conoco Phillips, ENI and Chevron each holding 17 percent, according to the Senate motion, citing corporate records. Chevron and Conoco Phillips pulled out of the project in 2006.
  • The Sokoto State Cattle Breeding Project will be inaugurated in May, Commissioner for Animal Health and Fisheries Development, Tukur Alkali announced to journalists on a project site visit to Sokoto and Rabah LGAs. Alkali said the project will improve the genetics of local cattle breeds by ensuring higher milk and beef production while at the same time empowering farmers with modern techniques of livestock production. According to him, the project, which has cost ₦2.8 billion including on such things as the supply of Argentinian cattle to be used for cross-breeding, construction, training of personnel, security and other logistics inputs, “is the most definite long-term strategy to end farmers-herdsmen clashes as is being experienced across the federation, and in some neighbouring West African countries.” Sokoto had in 2010 signed a ₦2 billion contract with an Argentine firm, South American Breeding Technologies for the establishment of a cattle breeding, milk and beef production factory.