30 Apr

Daily Watch – 17 states insolvent, Zenith becomes Nigeria’s biggest bank

  • The Economic Confidential has released its Annual States Viability Index which shows that 17 states are insolvent as their IGR in 2017 were far below 10 percent of their receipts from FAAC. Without the monthly disbursement from FAAC, many states remain unviable, and cannot survive without oil receipts. According to the report, the IGR of Lagos State of ₦333 billionn is higher than that of 30 States put together whose internal revenues are extremely low and poor compared to their allocations from the Federation Account. Asides Lagos, other states with more than 30% of their income generated from IGR are Ogun, Rivers, Edo, Kwara, Enugu and Kano who generated ₦607 billion in total, while all the other states combined generated a total of ₦327 billion in 2017. The states that may not survive without FAAC due to poor IGR are Adamawa, Akwa Ibom, Bauchi, Borno, Ebonyi, Ekiti, Imo, Jigawa, Katsina, Kebbi, Niger, Osun, Taraba and Yobe.
  • The Nigerian Export Promotion Council has said Nigerians are exporting goods worth over $40 billion informally every year. The CEO of the NEPC, Segun Awolowo, said that a lot of goods are moving from Nigeria to other African countries without being documented. He said the council had initially estimated such trade as $8 billion annually, but going by the calculation of the International Trade Centre in Geneva, over $40 billion worth of goods were informally exported. Awolowo worried that this informal trade did not reflect on the economy and sought the Nigerian Association of Chambers of Commerce, Industry Mines and Agriculture’s collaboration to formalise the trade.
  • The FG and four companies led by General Electric have signed an agreement to start the interim phase of the Nigerian narrow-gauge railway concession. According to Yewande Thorpe, head of communications, GE Nigeria, the interim phase will include “light remedial civil and track repair works” on the narrow gauge rail line. Additionally, a joint operation will be established between the consortium and the Nigeria Railway Corporation with a supply of 10 locomotives and 200 wagons provided to augument the existing rolling stock in Nigeria. Other companies involved in the agreement are SinoHydro, an infrastructure construction company, Transnet, a logistics infrastructure management company, and APM Terminals, a ports services provider. The final concession agreement, which will be negotiated after the interim phase, will expand the rail service to up to 200 locomotives and rehabilitate the entire rail system.
  • Zenith Bank is now Nigeria’s largest bank by Customer Deposit. In its 2017 annual report and first quarter 2018 interim report released by the company, it reported that its total customer deposits are now ₦3.396 trillion as at end of March 2018, up from ₦3.43 trillion as at year-end December 2017. With this, Zenith Bank has overtaken First Bank as Nigeria’s largest bank by Customer Deposits, a position held by First Bank for decades. In its 2017 December, year-end annual report recently released, FBN Holdings, the parent company of First Bank Limited, reported a total customer deposit of ₦3.14 trillion only. In its first quarter ending March 31st interim report, First Bank revealed that its total customer deposits were ₦3.24 trillion.