05 Jul

Daily Watch – IEDC kicks against NERC, P&G to shut $300m Agbara plant

  • The Presidency will receive the long-awaited Petroleum Industry Governance Bill next week, BusinessDay reports, quoting the Senior Special Assistant to the President on National Assembly Matters (Senate) Ita Enang. The paper also said that President Muhammadu Buhari is currently “thoroughly reviewing” the new Electoral Amendment Bill before signs it into law. The PIGB was passed in March 2018 but Enang insists the Presidency was yet to receive the bill, a position confirmed by Senate Leader, Ahmad Lawan, due to legal advice received from the National Assembly Legal Services Directorate which observed some contentious areas in the bill. But Enang, on Wednesday, confirmed that the bill will be received by the President next week, as all the contentious issues have been resolved.
  • BudgIT says the projects added to the 2018 budget by the National Assembly are fragmented and do not fit into the ERGP. Abiola Afolabi, BudgIT’s communications manager, said, “Out of the 6,529 new projects entered into the budget, 90.6 per cent or 5918 items have a unit value below ₦200 million. Also, the projects cannot be directly linked to the written, medium-term aspirations of the government as highlighted in the Economic Recovery and Growth Plan.” “An analysis of the inserted projects shows that ₦63.64 billion or approximately 11 per cent of the new projects added by the National Assembly will be spent on various training and capacity building programmes in 2018.” The organisation said given that the budget will be largely funded by borrowings, as highlighted in the 2018 fiscal plan, “it is disheartening to discover that most of the identified line items therein show a significant disconnect from the developmental goals of government, as stated in its Economic Recovery and Growth Plan.”
  • The management of Ibadan Electricity Distribution Company says it has obtained a court order against the NERC’s suspension of its board. On 20 June, the NERC suspended the board of directors of IBEDC over a ₦6 billion “inappropriate” loan to its core investor and given a 21-day ultimatum to execute the order. IBEDC had challenged the NERC’s action in court. On Monday, Nnamdi Dimgba, an Abuja Federal High Court judge reportedly ordered the parties involved in the suit to maintain the status quo until the court resolves the matter. Dimgba was quoted to have said there would be an accelerated hearing of the matter and was adjourned till 15 October for the hearing of the substantive suit. The DisCo had in response, said they made all outstanding payments concerning the loan.
  • Procter & Gamble is in the process of shutting down its multi-billion naira plant in Agbara, Ogun, barely a year after the leading American FMCG leader decided to expand into the Nigerian market, according to Premium Times. Procter & Gamble commissioned the $300 million, 40.2-hectare production facility in June 2017, producing diapers and a range of sanitary pads, including the popular Always brand. While the company has not issued any official statement regarding the shutdown speculation, Procter & Gamble has struggled to break even over the past year due to challenges ranging from government regulations, stiff competition, and inadequate access to raw materials, the online newspaper quotes sources as saying. About 120 employees are gradually being laid off as part of the facility’s closure. A 2017 Nairametrics analysis found that Hayat Kimya Group, makers of Molfix, has a market leading 44 per cent of the diapers market with Procter & Gamble second at 37.3 per cent.
  • Flour Mills of Nigeria recently released its audited results for the financial year ended 31 March 2018, with group revenue rising to an all-time high of ₦542.7 billion, compared to ₦524 billion in 2017, representing 3.5 per cent year-on-year growth. Group operating profit stood at ₦48 billion compared to ₦41 billion in 2017, a 16.9 per cent increase. Also, Group Profit Before Tax at ₦16.4 billion compared to ₦10.4 billion in 2017, a 58 per cent increase while Profit After Tax grew 54.1 per cent to ₦13.6 billion from ₦8.8 billion in 2017. The group’s flagship leader, Flour Mills recorded revenue of ₦389 billion, compared to ₦375 billion in 2017, a 4 per cent increase. In an NSE dividend notice, the group said it will reward its shareholders with a final dividend of ₦1 per share.