Wednesday, February 8, 2017
Video - Nigeria's All Share index stands at 4.5% in the red, in the year to Feb 3rd
On paper, Nigeria is an investors dream, with vast tracts of arable land, strong and growing demand for processed agricultural goods, a fast-growing population, and many others. But the reality, for many investors is very different, with the current exchange rate policy a huge turn off, and that's just one factor. Billions of dollars in loans from the African Development Bank, and the World Bank have been withheld, since by late January, Nigeria had not submitted an economic recovery plan. As Aly Khan Satchu, CEO at Rich Management, without a plan, and a flexible exchange rate, Nigeria is a place to avoid.
Nigeria aims to stop importing fuel by 2019
Nigeria will stop importing refined petroleum products by 2019, Ibe Kachikwu, the Minister of State for Petroleum Resources, said on Tuesday in Abuja.
Mr. Kachikwu said this at a public hearing on the review of petroleum pricing template for petrol organised by the House of Representatives.
He said that within two years, the Federal Government revived refineries that were non-functional to contribute about eight million out of over 20 million litres of petrol consumed in the country daily.
He explained that the Federal Government initiated a model which attracted foreign investors to partner with the Nigeria National Petroleum Corporation (NNPC) to repair the country’s refineries within the two-year period.
“This has consistently served as a target for this government so that by December 2018, NNPC must be able to deliver on some of the terms given them, one of which is to reduce petroleum importation by 60 per cent.
“Cognisant of the fact that Dangote is building one refinery, we expect to have an excess situation,’’ he said.
The minister said that Nigeria must also have the capacity to stop exporting crude oil.
According to him, selling crude oil is not different from selling agricultural produce in an unprocessed manner.
“The world is leaving that, every member of OPEC is leaving that because the pricing, volume and market challenges is now shifting from selling crude to selling refined petroleum products.
“That is what this country must do and there is a template we are working on.”
He said the ministry intended to create an enabling environment that would promote local refining of crude oil.
“The issue is not giving licences to illegality, the issue is how do we ensure that we create an investment environment that pulls individuals from illegal creek activities to legal business activities.
“We are looking at modular refineries, about 60 licences were given out just before this government came in and none of that was utilised because it requires a lot of money, land and crude security.
“But now we are going out to identify refineries, get individuals who can build refineries on the same platforms where our refineries are and identify some key specific modular refineries backed up by foreign investments working with state governments.
“Hopefully this will address the restiveness you see in the Niger Delta,’’ the minister said.
On the possibility of reducing the fuel pump price, Mr. Kachikwu said there was no padding in the petroleum pricing template for petrol currently sold at N145 per litre.
According to him, 71 per cent of the cost is for the production and freight, 18 per cent balance is covered by depot charges and retailers margin.
“In other words the storage tanks, the amount you get by verge of operating a filling station takes another 18 per cent, the output of those is already taking you to roughly about 90 per cent.
“The transportation is less than 10 per cent; we probably can do better, the templating is an insignificant 1 per cent or 2 per cent but that’s not where the problem is.
“The problem is with foreign exchange rate.
“There are two key elements in the template, how much you buy it is internationally fixed, it is not a Nigerian issue the cost of foreign exchange is a monetary policy issue.
“So at the time we did the template the Central Bank of Nigeria (CBN) monetary policy was N245, that was the basis upon which we calculated the pricing, today N305 is the exchange rate.
“And what we have tried to do is to ensure that anybody who sells us foreign exchange follows basically the instructions of the CBN in terms of the amount,’’ he said. (NAN)
Mr. Kachikwu said this at a public hearing on the review of petroleum pricing template for petrol organised by the House of Representatives.
He said that within two years, the Federal Government revived refineries that were non-functional to contribute about eight million out of over 20 million litres of petrol consumed in the country daily.
He explained that the Federal Government initiated a model which attracted foreign investors to partner with the Nigeria National Petroleum Corporation (NNPC) to repair the country’s refineries within the two-year period.
“This has consistently served as a target for this government so that by December 2018, NNPC must be able to deliver on some of the terms given them, one of which is to reduce petroleum importation by 60 per cent.
“Cognisant of the fact that Dangote is building one refinery, we expect to have an excess situation,’’ he said.
The minister said that Nigeria must also have the capacity to stop exporting crude oil.
According to him, selling crude oil is not different from selling agricultural produce in an unprocessed manner.
“The world is leaving that, every member of OPEC is leaving that because the pricing, volume and market challenges is now shifting from selling crude to selling refined petroleum products.
“That is what this country must do and there is a template we are working on.”
He said the ministry intended to create an enabling environment that would promote local refining of crude oil.
“The issue is not giving licences to illegality, the issue is how do we ensure that we create an investment environment that pulls individuals from illegal creek activities to legal business activities.
“We are looking at modular refineries, about 60 licences were given out just before this government came in and none of that was utilised because it requires a lot of money, land and crude security.
“But now we are going out to identify refineries, get individuals who can build refineries on the same platforms where our refineries are and identify some key specific modular refineries backed up by foreign investments working with state governments.
“Hopefully this will address the restiveness you see in the Niger Delta,’’ the minister said.
On the possibility of reducing the fuel pump price, Mr. Kachikwu said there was no padding in the petroleum pricing template for petrol currently sold at N145 per litre.
According to him, 71 per cent of the cost is for the production and freight, 18 per cent balance is covered by depot charges and retailers margin.
“In other words the storage tanks, the amount you get by verge of operating a filling station takes another 18 per cent, the output of those is already taking you to roughly about 90 per cent.
“The transportation is less than 10 per cent; we probably can do better, the templating is an insignificant 1 per cent or 2 per cent but that’s not where the problem is.
“The problem is with foreign exchange rate.
“There are two key elements in the template, how much you buy it is internationally fixed, it is not a Nigerian issue the cost of foreign exchange is a monetary policy issue.
“So at the time we did the template the Central Bank of Nigeria (CBN) monetary policy was N245, that was the basis upon which we calculated the pricing, today N305 is the exchange rate.
“And what we have tried to do is to ensure that anybody who sells us foreign exchange follows basically the instructions of the CBN in terms of the amount,’’ he said. (NAN)
Tuesday, February 7, 2017
Video - Nigerian banks under pressure as naira is forecast to lose more value
In Nigeria, rising non-performing loans and an imminent fall in the naira's value have put banks in a precarious position. They need to raise fresh capital amid a distressed economy. Checks show that the Capital Adequacy Ratio of a number of mid- and large-tier banks is at the threshold stipulated by the Central Bank of Nigeria. This means that in the absence of additional capital, a slight depletion in capital will force a number of the banks to fall below the minimum measures prescribed. This comes amid predictions by economic and financial experts that the naira will hit between 350 and 400 to the U.S. dollar this year, compared with the current rate of 305.
Ban extended by FIFA on top Nigerian officials
World football’s governing body FIFA on Tuesday said it had extended a ban on five officials who have been involved in a leadership battle for control of the game in Nigeria.
FIFA said its disciplinary committee had “decided to extend the five-year ban from taking part in any kind of football-related activity” on Chris Giwa and four others.
The ban would apply worldwide, it said in a statement on its website.
Giwa, the former owner of Giwa FC in the central city of Jos, has insisted since August 2014 that he was elected as the rightful president of the Nigeria Football Federation (NFF).
But the result of the ballot was disputed and prompted FIFA to threaten to ban Nigeria from international competition unless the election was re-run.
Amaju Pinnick was duly elected as NFF boss but Giwa has since dragged the federation to court to challenge its legitimacy.
In May last year the NFF banned him and his supporters for impersonation and breaching FIFA rules by taking football matters to a civil court.
The Confederation of African Football (CAF) also confirmed the ban.
FIFA said its disciplinary committee had “decided to extend the five-year ban from taking part in any kind of football-related activity” on Chris Giwa and four others.
The ban would apply worldwide, it said in a statement on its website.
Giwa, the former owner of Giwa FC in the central city of Jos, has insisted since August 2014 that he was elected as the rightful president of the Nigeria Football Federation (NFF).
But the result of the ballot was disputed and prompted FIFA to threaten to ban Nigeria from international competition unless the election was re-run.
Amaju Pinnick was duly elected as NFF boss but Giwa has since dragged the federation to court to challenge its legitimacy.
In May last year the NFF banned him and his supporters for impersonation and breaching FIFA rules by taking football matters to a civil court.
The Confederation of African Football (CAF) also confirmed the ban.
Arsenal Football Club to partner with MTN Nigeria
MTN has become the official Nigerian mobile telecommunications partner for English top-tier soccer team Arsenal.
Fans of the Premier League club in Nigeria will have access to a range of exclusive benefits, while the telecommunications company will provide exclusive content to its subscribers, including match highlights, clubs news, and interviews. In addition, MTN and Arsenal will partner on a series of promotional and marketing activities, and specialist coaching sessions in the west African country.
"This partnership with MTN will really help us engage with these passionate fans on a regular and personal basis," said Vinai Venkatesham, Arsenal's chief commercial officer. "We are expecting MTN's Arsenal exclusive content to be very popular among our supporters, as well as followers of football generally."
MTN's consumer marketing general manager, Richard Iweanoge, added: "We are excited to announce our partnership with Arsenal and look forward to engaging with sports enthusiasts beyond the current traditional broadcast of matches. Not only this but also digitally with access to exclusive contents that will be delivered via our network."
Arsenal have long enjoyed significant support within Africa's most populous nation. Nigeria currently provides the club's largest website traffic outside of the UK and the team's second highest digital members.
Fans of the Premier League club in Nigeria will have access to a range of exclusive benefits, while the telecommunications company will provide exclusive content to its subscribers, including match highlights, clubs news, and interviews. In addition, MTN and Arsenal will partner on a series of promotional and marketing activities, and specialist coaching sessions in the west African country.
"This partnership with MTN will really help us engage with these passionate fans on a regular and personal basis," said Vinai Venkatesham, Arsenal's chief commercial officer. "We are expecting MTN's Arsenal exclusive content to be very popular among our supporters, as well as followers of football generally."
MTN's consumer marketing general manager, Richard Iweanoge, added: "We are excited to announce our partnership with Arsenal and look forward to engaging with sports enthusiasts beyond the current traditional broadcast of matches. Not only this but also digitally with access to exclusive contents that will be delivered via our network."
Arsenal have long enjoyed significant support within Africa's most populous nation. Nigeria currently provides the club's largest website traffic outside of the UK and the team's second highest digital members.
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