Daily Watch – FAAC stalemate threatens public sector, NPA suspends Maersk over ‘dumping’

16th July 2018

  • The salaries of civil servants in Nigeria’s states might be affected as members of the FAAC have agreed to suspend meetings indefinitely. Mahmood Yunusa, the chairman of the Commissioners of Finance Forum, said the meetings will not hold until an effective revenue collection process is implemented. He said that the committee is tired of battling with the NNPC over oil revenue collections, saying it had already taken the matter before President Muhammadu Buhari, “but in the short term, FAAC meetings have been suspended until a more effective collection method is established”. Meetings convened on 27 June and 10 July to share revenue generated in May both ended in a stalemate.
  • The IMF says inflation rates will rise in the second half of 2018 as consumer spending increases and agricultural output drops. Lucie Fouda, IMF’s Africa press officer, said even though crude oil prices are higher, the rise in inflation coupled with reduced oil and non-oil output would put significant pressure on Nigeria’s macroeconomic environment, making it vulnerable to shocks. “Inflation would pick up in the second half of 2018 as base effects dissipate and higher spending and supply constraints in agriculture put pressure on prices,” the Bretton Wood institution said. “Under current policies, the outlook remains challenging. Growth would pick up to about two per cent in 2018, weighed down by lower than expected oil production and relatively weak agriculture growth.”
  • The NPA has slammed a 10-day suspension on Maersk and three other shipping companies that allegedly failed to comply with the directive to acquire and operate holding bays. In a statement by deputy spokesman Isah Suwaid, the regulator said it took the decision as part of efforts to resolve the protest by truck drivers at the Lagos Port Complex and the Tin Can Island ports, Lagos. The other companies affected are Cosco Shipping, APS and Lansal. The NPA said it also discovered that the companies import a large number of containers which they “dump” at both ports, causing gridlock. The suspension took effect from 14 July.
  • Aliko Dangote has signed a $650 million loan facility with the African Export-Import Bank for his oil refinery project. The seven-year term loan would attract a moratorium of five years, according to facility terms read out during the signing. Cairo-based Africa’s trade bank also signed a $750 million facility with the Bank of Industry. Dangote Group Executive Director Devakumar Edwin said last week that the oil refinery would cost around $10 billion and should be completed by December 2019. He said the company would borrow $3.3 billion for the project, arranged by Standard Chartered Bank. The remainder will be funded by equity and through export agencies.
  • Shell says it lifted force majeure on Nigerian Bonny Light crude oil exports on Friday. The company says it “lifted the force majeure on Bonny Light exports following the repair and reopening of the Nembe Creek Trunkline by the operator, Aiteo Eastern E&P Company Limited.” Shell declared force majeure on May 17 following the shutdown of the Nembe Creek Trunkline. Nembe Creek is one of two main pipelines that carry Bonny Light oil to the export terminal