LEADERSHIP
The Federal Government, Wednesday, borrowed N70 billion ($440.31 million), though the issuance of 5-year and 10-year bonds maturing in 2017 and 2022, at its regular auction, the Debt Management Office (DMO) said. The debt office said that it sold N35 billion each in 5-year and 10-year paper with maturities of four years, 11 months and nine years, eight months, respectively. The bonds are due to mature in 2017 and 2022, respectively, and are re-openings of previous issues. The 2017 bond has a coupon of 15.24 per cent, compared with 15.1 per cent at the last auction in April, while the 2022 paper pay a rate of 15.45 per cent against 15.47 per cent previously. The country’s DMO issues sovereign bonds monthly to support the local bond market create a benchmark for corporate issuance and fund its budget deficit.
Osun State Government has warned the Minister for Finance, Mrs Ngozi Okonjo-Iweala against withdrawing the sum of $1billion from the Excess Crude Oil Account for the Sovereign Wealth Fund (SWF). Okonjo-Iweala had some few days ago said the Federal Government would withdraw the sum of $1billion from the Excess Crude Oil Account to be saved in the SWF on behalf of the 36 states of the federation. Reacting to Okonjo-Iweala’s proposed step, the State Commissioner for Information and Strategy, Akinrogun Sunday Akere, said any activities on the Excess Crude Oil Account are expected to be suspended, pending the determination of the suit filed against the FG by the 29 states on the account.
The Nigerian Union of Petroleum and Natural Gas (NUPENG) has alleged that the House of Representatives probe panel on fuel subsidy did not do a thorough investigation before coming out with their findings, insisting that they did not take pain to visit the depots, refineries, Central Bank and other agencies to verify and assess claims. President of the union, Comrade Igwe Achese, revealed this at a recent press conference in Lagos.“NUPENG was vehement in the condemnation of the use of brief case carriers as allotees to the importation of petroleum products. However, we make bold to say that the probe panel did not do a thorough investigation before coming out with their findings, said.
THISDAY
Govt Officials Spend N300b Annually on Aircraft Charter
It has been revealed that top government officials at the Federal and state levels, including Ministers, President’s aides, governors, Senate and House committees, Speakers of State Houses of Assembly and others expend over N300 billion annually on aircraft charter. A confirmed insider told thisday on Monday that charter operations in Nigeria is a multibillion Naira business that effectively competes with that of scheduled commercial operation and involves largely foreign registered aircraft with foreign registered crew, although most of the aircraft are owned by Nigerians. With average of about $6,500.00 (N1, 01400) for one hour charter, the charter operators rake in huge amounts of revenue every month from mainly government officials and some Nigerian businessmen and women.
The Federation Accounts Allocation Committee (FAAC) Thursday finally began the technical session of its two-day meeting to share monthly revenue to the three-tiers of government for April. The actual figures distributed are expected to be announced Friday. The meeting originally scheduled for Monday and Tuesday had been put on hold following the alleged lack of sufficient revenue to distribute largely because of the sustained crude oil theft and illegal bunkering activities particularly in the Niger Delta region with has cost the economy huge revenue leakages. Other sources said the meeting could not hold because the Nigerian National Petroleum Corporation (NNPC) was not yet ready with the figures of how much came into the coffers from crude oil sale.
The Federal Government Thursday said it would introduce the “Treasury Single Account” to sweep excess bank charges into one account in order to streamline government’s current account balances. Coordinating Minister for the Economy and Minister for Finance, Dr. Ngozi Okonjo-Iweala, disclosed this when members of the House of Representatives Committee on Finance visited the ministry as part of its oversight function in Abuja. Okonjo-Iweala, who was reacting to pleas from the legislators that banks were “stealing” government blind with excessive bank charges, also disclosed that Nigeria’s per capita GDP has grown to $1,452. According to her, “over the past few years, we have been growing at an average of about 7 per cent. This is not bad at all. And the good news is that much of this growth has been coming from the non-oil sector of the economy. This growth now sets Nigeria’s new GDP growth figures at $ 1, 452 per capita which puts us in the lower middle income countries.”
THE NATION
The Minister of Finance, Dr Ngozi Okonjo-Iweala, yesterday in Abuja asked the National Assembly to quickly approve the Federal Government’s external borrowing plan of $7.9b, about N1.8 trillion. Okonjo-Iweala made the request during an oversight visit to her office, by members of the House Committee on Finance. President Goodluck Jonathan had written the Senate and House of Representatives in February seeking approval for the loans to fund key projects in various sectors of the economy. Nigeria is seeking the loan facility from the World Bank, Africa Development Bank, Islamic Development Bank, Exim Bank of China and India lines of credit. "We have an external borrowing plan that we have put to the National Assembly, as we are required to do and I am really counting on your help to get out the borrowing plan as quickly as possible."
As part of efforts to address the problem of access to credit facilities, the Lagos State Government is partnering with the Bank of Industry (BOI) to raise funds for on-lending to Small and Medium Scale Enterprises (SMEs). Under the arrangement, the state government would contribute N500million, while the Bank of Industry would match the same amount to create LASG-SMEs fund, accessible at a single interest rate on convenient repayment terms. The Lagos State Commissioner for Commerce and Industry, Mrs. Olushola Oworu, disclosed this at a one day workshop on Business Opportunities and Funding for SMEs which was organised by the National Association of Small and Medium Scale Industrialists (NASSI), in Lagos. She said the ministry in conjunction with the Lagos State Electricity Board, had conducted a power audit of all the four state-owned small and medium scale industrial estates, accommodating a total of 148 factory units to assess their electricity requirements as well as boost their productivity.
PUNCH
Due to the growing influence of the cash-less policy, inter-bank fund transfers, instant payments and cheque transactions in the Nigeria Inter Bank Settlement Payment System Plc are now worth N2.1tn monthly. The Central Bank of Nigeria, in a document made available to our correspondent on Thursday, confirmed that the NIBSS now handles the processing of 140,344 electronic fund transfer, instant payment and cheque transactions every day. The transactions are worth over N70.2bn. The Head, Shared Services, CBN, Mr. Chidi Umeano, who confirmed the data, explained that the NIBSS was processing 6,749 instant payments worth N5.66bn; 99,602 electronic fund transfers worth N40bn; and 33,993 cheque transactions worth N24.7bn.
The Federal Government on Thursday raised the alarm over declining crude oil proceeds due to theft and smuggling. It also said that the country’s production volume dropped by 17 per cent in April alone. The Minister of Finance, Dr. Ngozi Okonjo-Iweala, said this when members of the House of Representatives Committee on Finance led by Dr. Abdul-Mumini Jubrin, visited the ministry for oversight function. The country is currently exporting 1.85 million barrels of crude oil per day, representing a drop from the 1.87 million bpd loaded in March and 1.96 million bpd projection for April. Addressing the lawmakers, the Okonjo-Iweala, said despite the drop in production, the country was not broke as its reserves had been on the upward swing in the past few months. According to her, the country’s reserves currently stand at $36.8bn.
The Citizens Wealth Platform on Thursday raised the alarm that the 2012 budget contained N76.14bn “wasteful and unclear” expenditure by ministries, departments and agencies of the Federal Government. The CWP, a group of non-governmental and faith based organisations, in a 31-page analysis of the 2012 budget, said the fiscal document contained several provisions that were “bloated and duplicated.” The Facilitator, Mr. Eze Onyekwere, at a press briefing in Abuja, said the ambiguous nature of the expenditure makes it difficult for the budget to be monitored and implemented. He listed some of the MDAs with wasteful expenditure to include the Office of the Head of Service of the Federation, N266.33m; Ministry of Police Affairs, N219.93m; Police Service Commission, N350.82m; and Ministry of Women Affairs and Social Development N60.09m.
NIGERIAN COMPASS
As Nigerians are still perusing through the report of the Ad-Hoc Committee of the House of Representatives, CHARLES OKONJI reports the views of the stakeholders in the industry, who pointed out that the corruption in the oil and gas industry is endemic. The rot in the oil industry has been there for a very long time. If there is any agitation to sack the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, then you have to probe all the past ministers of petroleum resources. “I take exception to that. That lady is extremely brilliant. That lady knew her ounce. I don’t know her before, but listening to her, she has the grip of the issues in that sector. Unfortunately, Nigeria is built around the politics of who you know.
The Nigerian National Petroleum Corporation (NNPC) has said that it would conclude Final Investment Decision (FID) on Brass Liquefied Natural Gas (Brass LNG), which has two-train with 10 million metric tonne per year, before December this year. An official of the company, while maintaining that project was still on track despite indications by ConocoPhillips to sell its Nigerian assets, said: “ConocoPhillips have informed the shareholders in Brass LNG that they plan to sell some of their assets not only in Nigeria but globally. However, this will have no impact on the progress of the (Brass LNG) project.“The shareholders have already made a commitment and we are on course to taking the FID on Brass LNG in December this year or at the latest in the first quarter of next year,” he stressed. NNPC holds 30 percent equity in Brass LNG, while BayelsaState government has 10 per cent, LNG, Japan four per cent, Itochu Corporation three per cent, and a joint venture between a Nigerian company, Sahara, and France-based Sempra Energy, which holds two per cent.
BUSINESSDAY
A Bill that would compel most of the multinationals operating in the country to list on the Nigerian Stock Exchange (NSE) has been submitted to the House of Representatives for debate and passage, Abdulmumin Jubril, chairman, House Committee on Finance, said on Thursday. The Bill, if it scales through, would address current concerns that most of the multinationals, including oil and telecommunications companies, make so much profit from the economy but have failed to list on the NSE. Meanwhile, Yerima Lawal Ngama Minister of State for Finance, has disclosed that the Federal Government has uncovered about 35, 000 ghost workers on its payroll from 178 of its Ministries, Departments and Agencies (MDAs) and has saved N14 billion, using the Integrated Payroll and Personnel Information System, it deployed to scrutinise the number of workers on its payroll.
The volume of spending by Nigerian consumers on packaged goods has assumed a crescendo, making it the highest in Africa, according to a survey by Nielsen, a leading global provider of information and insight into consumer behaviour on consumer packaged goods (CPG). The report demonstrates an increase in consumer earnings in the country. “Nigerians earn more and spend more on CPG products than the African average,” the report has stated, while noting that the middle and high income consumer segments, which it categorised as Trendy Aspirants, Balanced Seniors and Progressive Affluents, account for over 50 percent of spending on CPG, which is significantly higher than the Africa average of 45 percent. As the most populous country in Africa and the second largest economy in sub-Sahara Africa, Nigeria ’s growing middle class and consumer spending have made it an attractive destination to investors with keen interest in emerging markets.
VANGUARD
All countries need to focus on structural reforms to drive future economic growth, says Robert Zoellick, World Bank President.“All countries – developed and developing – need to focus on the structural reforms – the microeconomic policies – that will drive future growth”, he said at the 14th Annual Global Private Equity Conference of the International Finance Corporation Explaining the importance of structural changes to the recovery of the global economy, Zoellick said, “Structural changes are essential to enhance productivity, competition, and innovation for developed and developing countries – whether it’s so that Europe can restore its economic performance, or China can avoid the so-called “middle income trap” and meet its challenges in the coming decades.
Barely 24 hours that President Goodluck Jonathan set up an agricultural transformation implementation council charged with the responsibility of creating additional 20 million metric tons of food into the nation’s domestic food supply by the year 2015, Governor Babatunde Fashola of Lagos State Tuesday, led the federal delegation to the official kick off of rice processing factory. The factory with capacity to produce 20,000 metric tonnes of rice per annum is situated at Imota, Ikorodu Local Government Area of the state as part of effort to boost domestic food production as well as ensure food security by 2015. Fashola, accompanied by the Minister of State for Agriculture and Rural Development, Alhaji Buka Tijani, also commissioned Poultry Estate, Erikorodo with 10,000 birds capacity mechanized broiler house, 2,000 birds per day processing capacity plant and 1.5T per hour feed mill.
The Federal, Lagos and Ogun State Governments have requested Cement Manufacturers Association (CMAN) to further bring down the prices of cement in the market if they are to key into the use of concrete pavements technology being canvassed by the Association for the construction of road projects in the country instead of using asphalt. CMAN comprises Dangote Cement PLC, Lafarge WAPCO Nigeria PLC, including Cement Company of Northern Nigeria, Askaka Cement and United Cement Company UniCem, Calabar. Keynote speaker, Robert Rodden, Director of Technical Services and Product Development, American, Concrete Pavement Association (ACPA), said concrete pavements is now the new construction reality globally because of its economic advantages over asphalt pavements.
THE GUARDIAN
Business Recovery Insolvency Practitioners Association of Nigeria (BRIPAN), a Non Governmental organisation (NGO) involved in advocacy in the area of insolvency law, has advocated for the creation of a well- articulated regulatory regime as well as being proactive in handling such global issues as the only way to mitigate the impact of global economic meltdown in Nigeria economy. The President of BRIPAN, Chief Anthony Idigbe (SAN), who expresses the view of the association during a press briefing in Lagos to herald the association’s international workshop scheduled for June 7 – 8 as well as it fellowship workshop fixed for May 29-30 in Lagos, said if Nigeria is proactive in putting in place a regulatory regime as shown in other economies, the projected economic meltdown might not have much impact to the nation’s economy as before.
Justice Charles Archibong of a Federal High Court, Lagos has dismissed a suit filed by Bank PHB’s challenging the revocation of its banking licence and subsequent takeover of its assets by the Nigerian Deposit Insurance Corporation (NDIC) and the Asset Management Corporation of Nigeria (AMCON). Respondents in the suit are the Central Bank of Nigeria, Keystone Bank and the Federal Government. Justice Archibong in his ruling on the suit dismissed the argument of the Plaintiff counsel, Chief Anthony Idigbe (SAN). Idigbe had argued that the 1st defendant’s action in revocation of the bank’s licence was tainted with malice but the judge held that “CBN cannot standby, once it is shown that depositors’ funds were in danger.”The court, therefore, upheld the arguments of CBN’s counsel, Kola Awodein SAN, and counsel to the Federal Government, Fabian Ajogwu SAN, that the CBN acted within its powers under the CBN Act, and particularly section 53 of the Banks and Other Financial Institutions Act, ( BOFIA) 2004.
Crude oil prices rose from the lowest settlement in six months in New York after economic data in Japan beat estimates and technical indicators signaled declines in crude prices may be exaggerated. Crude for June delivery rose as much as 91 cents to $93.72 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.25 at 3:04 p.m. Singapore time. The contract on Wednesday fell 1.2 per cent to $92.81, the lowest close since November 2. Prices are down 5.7 per cent this year. Brent oil for July settlement dropped 39 cents to $109.36 a barrel on the London-based ICE Futures Europe exchange. The June contract expired on Wednesday, falling 53 cents to $111.71. The European benchmark contract was at a premium to West Texas Intermediate of $15.75. West Texas Intermediate advanced as much as one per cent, climbing for the first time in five days.
NATIONAL MIRROR
The Federal Government has appealed to the National Assembly to urgently consider the External Borrowing Plan submitted to it by the Executive with a view to ensuring the successful implementation of the 2012 capital budget and achievement of the broad policy objectives of the 2011-2013 Medium Term Expenditure Framework. Making the appeal yesterday when members of the House Committee of Finance visited her office as part of their oversight functions, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, stated that timely consideration of the proposal would help the country in meeting urgent financial commitments in critical sectors in the current financial year. The minister, who spoke on various efforts being made by government to ensure fiscal discipline at all levels of public finance, said the soft loans, which would be sourced at an interest rate of less than three per cent, were crucial to funding key capital projects, particularly at the state government level.
BBC
Spain bond auction sees cost of borrowing rise
Spain has paid sharply higher rates of interest to borrow money on the international markets, as worries grow about the state of its economy. In total, it raised 2.5bn euros ($3.2bn; £2bn) through issuing a number of different types of bonds. On bonds due to be paid back in January 2015, it had to pay an interest rate of 4.373%, up from 2.89% in April. On debt maturing in April 2016, Spain had to pay an interest rate of 5.106%, up from 3.374% on 15 March. "The auctions have gone OK, probably better than the market feared," said Peter Chatwell, interest rate strategist at the French bank, Credit Agricole. "The market should stabilise for the moment as this is another successful funding round from Spain," he said. On Wednesday, Spain's Prime Minister Mariano Rajoy warned that borrowing costs could become "astronomical".
CNN
Rating agency Moody's, downgraded 16 Spanish banks on Thursday, the latest sign of distress in Europe. Among those downgraded were giants Banco Santander and BBVA, the country's two largest banks. Moody's cited concerns about the banks' exposure to Spain's faltering economy and the "reduced" ability of the Spanish government to support them in a crisis. "The Spanish economy has fallen back into recession in first-quarter 2012, and Moody's does not expect conditions to improve during 2012," the agency said. "Moreover, the real-estate crisis that began in 2008 is ongoing, and unemployment has risen to very high levels, with rising risks to white-collar employment (in addition to extremely-high youth unemployment) affecting the outlook for banks' household lending."
BLOOMBERG
The European Central Bank said it will temporarily stop lending to some Greek banks to limit its risk as President Mario Draghi signaled the ECB won’t compromise on key principles to keep Greece in the euro area. The Frankfurt-based ECB said yesterday it will push the responsibility for lending to some Greek financial institutions onto the Greek central bank until they have sufficiently boosted their capital. “Once the recapitalization process is finalized, and we expect this to be finalized soon, the banks will regain access to standard Eurosystem refinancing operations,” the ECB said in an emailed statement. The move comes after Draghi acknowledged for the first time that Greece could leave the monetary union.
UPI
U.S. stock indexes headed lower Thursday with investors keeping an eye on the financial sector and the weekly job report. The U.S. Labor Department said first-time claims for unemployment benefits were unchanged in the week with 370,000 filed. The four-week rolling average, however, dropped by almost 5,000 claims to 375,000. Recent losses at JPMorgan Chase from market bets stand at $2 billion, but estimates are growing. The losses, plus dour news on banking from Europe have taken a toll on the financial sector. Moody's Investors Service said Spanish banks would have credit ratings lowered. Rival credit rating agency Fitch has said banks around the world will need to raise $566 billion to meet new regulatory demands.
CNBC
China second quarter GDP growth seen at 7.5 percent
China's annual economic growth could slow to 7.5 percent in the second quarter, largely due to curbs on the property sector and headwinds from external demand, the State Information Center, a government think-tank, said in a report published on Friday. If the GDP forecast is accurate, growth in the second three months of 2012 would be the slowest since the first quarter of 2009, when the global economy was in the grip of the worst financial crisis since the Great Depression. The forecast is in line with the government's official 2012 growth target of 7.5 percent which was set in March. But a fall below 8 percent would worry many investors who regard that rate of growth as the minimum needed to ensure sufficient job creation for China's hundreds of millions of mainly poorly paid rural migrant workers.