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Category: Business

  • FG’s Fiscal Deficit To Further Decline In Q3, Q4 -MPC

    Some members of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) have projected that the federal government’s fiscal deficit will continue to decline in the third and fourth quarters of 2023.

    Their projections are predicated on the recent efforts by the government to manage expenditures better and also improve oil and non-oil revenues. 

    Their prediction contained in their various personal statements during the last MPC meeting, as posted on the CBN website.               

    In his personal statement, the Permanent Secretary, the Federal Ministry of Finance, Budget, and National Planning, Aliyu Ahmed, said: “The fiscal deficit is expected to decline in the third and fourth quarters of 2023 on the back of recent efforts by the new government to manage expenditures better and also improve oil and non-oil revenues.

    “With expenditure reprioritization and fiscal wisdom at both the federal and state levels, there is an expectation that the government debt ratio may fall at least marginally by the end of 2023. 

    “Speaking on the fiscal sector, Adenikinju Adeola, a member, explained that both government revenue and expenditure underperformed between January and May 2023.

    He explained that the Federal Government’s retained revenue stood at N1.67 trillion, lower than the pro-rata target of N1.96 trillion due to the underperformance of Federation Account Allocation Committee (FAAC) receipts and gross independent revenue.      

    However, on the positive side, he stated: “Total FGN expenditure as of May 2023 was N4.76 trillion, 27.8 percent lower than the budget estimate of N6.606 trillion. The shortfall came mainly from allocations for debt service, interest on Ways and Means, and capital expenditure.

    “Overall budget deficit reduced by -18.15 percent in the first five months of 2023.  

    “The underperformance of the budget is especially felt in the capital expenditures, thus impacting negatively on economic development”, he added. 

    On his part, another member, Obadan Mike, noted that although the new government is making serious efforts to boost revenue generation, fiscal deficits and associated public debt accumulation will continue to elicit deep concerns.     

    Meanwhile, the MPC members also called for a review of border closures to increase food supply in the country while expressing concern about the decline in growth of the agricultural sector in the first quarter of 2023.                                                           

    Adenikinju said, “The continuous closure of the borders should also be reviewed. This is to expand food and non-food supply to the economy and force down domestic prices, especially food. 

    Also expressing concern about the declining growth in the agricultural sector, Ahmed said: “The decline in growth in the agriculture sector is particularly worrisome, given its role in food production and employment generation.   

    “Targeted intervention by the fiscal and monetary authorities in the agriculture sector is crucial to ensuring medium- to long-term food security and price moderation. The recent initiative by the CBN to offload grains from the national strategic grain reserves to lower food prices could not have come at a more auspicious time.

    “There is also a need to leverage the African Development Bank (AfDB) Agro Pocket Wallet to support farmers in the production of grains and fertilizers.”

  • Rail transport revenue surges to N1.1bn in Q2 2023 –NBS

    The National Bureau of Statistics (NBS) has said that its revenue for the second quarter of 2023 increased to N1.1 billion from the sum of N768 million collected from rail passengers in the first quarter of this year.

    In its Transportation Data (Q2 2023)’ report published on its website Friday, the statistics bureau the figure represents a 69.7 per cent increase over the Q1 figure.

    On a year-on-year basis, the amount represents a 83 per cent increase over the sum of N598.74 million generated in the corresponding quarter of 2022.

    The NBS disclosed that in the quarter under review, a total of N188.03 million was generated from the transportation of goods and cargo by rail, amounting to an increase of 105.04 per cent when compared to the N91.70 million revenue in Q2 2022.

    Furthermore, the Bureau disclosed that miscellaneous income from rail transport in Q2 2023 amounted to N18.74 million, reflecting a decline of 62.31% from the N49.73 million reported in Q2 2022.

    On the number of passengers that travelled by rail during the quarter, the statistics agency reported a significant increase with a total of 474,117 passengers, which also indicated 12.25% increase compared to the 422,393 passengers reported in the same quarter of 2022.

    However, the report showed that the volume of goods transported by rail in Q2 this year reduced to 56,029 tons, from the 59,996 tons recorded in the first quarter of 2023 but that when compared to the corresponding quarter of 2022, the volume of cargo increased from 31,197 tons.

  • DisCos raked in N247.33bn revenue in Q1 2023 -NBS

    Data from the National Bureau of Statistics (NBS) has revealed that there was a slight increase in the number of total number of customers in the second quarter of 2023 with the number moving to 11.47 million from 11.27 million in the first quarter of 2023, indicting a 1.84 per cent increase.

    In its Nigeria Electricity Report Q2 2023: Energy Billed, Revenue Generated and Customers By DISCOS, the bureau stated that on a year-on-year basis, customer numbers in Q2 2023 rose by 6.17% from 10.81 million reported in Q2 2022.

    Similarly, metered customers stood at 5.47 million in Q2 2023, indicating a growth of 3.10% from 5.31 million recorded in the preceding quarter.

    “On a year-on-year basis, this grew by 10.40% from the figure reported in Q2 2022 which was 4.96 million. In addition, estimated customers during the quarter were 6.00 million, higher by 0.72% from 5.96 million in Q1 2023.

    “On a year-on-year basis, estimated customers increased by 2.58% in Q2 2023 from 5.85 million in Q2 2022,” it said.

    The coordinating agency for all statistics in Nigeria added that revenue collected by the DISCOs in Q2 was N263.08 billion from N247.33 billion in Q1 2023.

    “On a year-on-year basis, revenue generated in the reference period rose by 39.63% from N188.41 billion recorded in Q2 2022.

    “Electricity supply was 5,909.83 (Gwh) in Q2 2023 from 5,851.87 (Gwh) in the previous quarter. However, on a year-on-year basis, electricity supply increased by 13.06% compared to 5,226.97 (Gwh) reported in Q2 2022,” it said.  

  • We’ll continue to support fight against oil theft -Chevron

    Oil major, Chevron Nigeria Limited, has said that it would not relent in the continued support of the fight against oil theft and pipeline vandalism in the Niger delta region.

    General Manager, Policy, Government and Public Affairs of Chevron, Esimaje Brikinn, in a statement on Saturday insisted that over the years, it has been in the vanguard of the fight to curb oil theft and pipeline vandalism in the oil rich region.

    CNL is the operator of the joint venture between the Nigerian National Petroleum Company Limited (NNPCL/CNL JV).

    According to Esimaje, to therefore blame the company for incidences of oil theft and pipeline vandalism is not only untrue but also without basis.

    “Chevron Nigeria Limited is aware of a report in one of the online media platforms blaming international oil companies (IOCs), communities and other stakeholders for the oil theft that has hindered the growth of the oil industry.

    “Chevron and another IOC were specifically mentioned in the report allegedly attributed to the Chairman of the House of Representatives ad hoc committee set up to investigate crude oil theft.

    “CNL refutes this assertion as it is untrue, incorrect, and made without any basis. CNL reiterates its commitment to supporting the collaborative efforts to prevent oil theft and pipeline vandalism in its area of operation.

    “CNL affirms illegal bunkering and oil theft in the Niger Delta region has negatively impacted CNL’s operation and has devastating effects on the nation’s economy and the environment in the Niger Delta region. CNL continues to monitor the environment in its areas of operations and report any suspected illegal activity and breaches to the relevant Government Security Forces and regulatory agencies.

    “CNL has helped in reducing pipeline vandalism and oil theft in the Niger Delta region by collaborating with communities around the areas of the company’s operations to set up the Community Pipeline and Facilities Surveillance Programme (CPFSP) in 2005. Through the CPFSP, CNL continues to tackle the challenge of oil theft and pipeline vandalism and engage the community youth in pipeline surveillance to reduce oil theft in CNL’s area of operation. CNL also deploys security surveillance equipment and other technologies in addition to physical water-borne patrols by the CPFSP and the government security forces,” the company said.

    He noted that CNL’s commitment to working with government agencies and others to prevent oil theft and its impact on the environment was recently commended by the Special Investigation Panel on Oil Theft/Losses in Nigeria set up by the Federal Government during their visit to CNL’s operations.

    “CNL is committed to the highest ethical standards and business principles. CNL operates as a responsible company and conducts its business in full compliance with the law and in a socially and environmentally responsible manner. CNL will continue to work with the Nigerian government towards the development of the oil and gas industry and the Nigerian economy generally,” he added.

  • Growing concerns surround delisting of companies from NGX

    Growing concerns surround delisting of companies from NGX

    Amidst rising domestic costs, fluctuating naira exchange rates, and challenges in dividend declaration and tax payments, several large-cap companies listed on the Nigeria Exchange Limited (NGX) are considering leaving the market, raising concerns among equity market stakeholders.

    Over the past 22 years, more than 120 companies have either voluntarily or regulatory delisted from the NGX, and the increasing frequency of such announcements or rumours is causing unease among analysts and investors.

    Initial estimates suggest that approximately N182 billion in market value could exit the NGX due to potential departures by prominent companies like PZ Cussons (current price N20), GSK (current price N12.65), and Oando (current price N7.07).

    This trend underscores several critical issues within the market, including the perceived lack of tangible benefits associated with being listed, difficulties in raising capital, relatively lower valuations of publicly-listed companies compared to their private counterparts, and challenges in determining exit pricing.

    Many companies, particularly those with international interests, are opting for private status due to the opportunity cost of remaining listed on a formal exchange. Market analysts argue that this shift should be a cause for concern for NGX management and the Securities and Exchange Commission (SEC).

    While these companies intend to continue operations within Nigeria, they seek the advantages of private arrangements, which offer more confidentiality and flexibility in managing profits to minimize tax obligations, thus avoiding the need for widespread distribution of local dividends.

    To reverse this growing delisting trend and safeguard the interests of minority shareholders, several corrective measures are being considered.

    These include revising listing regulations to enhance the quality of publicly-listed firms, providing support for companies through innovative equity funding programs, offering incentives such as corporate income tax (CIT) reductions to listed firms, and increasing the costs associated with delisting.

    The issue of low exit pricing, which significantly impacts the value of investments held by minority shareholders, is a primary concern that calls for regulatory attention.

  • We’re not opposed to Agip Oil share sales to Oando -NNPCL

    We’re not opposed to Agip Oil share sales to Oando -NNPCL

    The Nigerian National Petroleum Company Limited (NNPCL) has said that it was never opposed to the sale of the shares of Agip Oil Company to Oando Plc.

    In a statement signed by the Chief Corporate Communications Officer of the company, Garba Deen Muhammad said the letter to Agip Oil did not indicate it was opposed to the deal.

    In a letter to the Managing Director of Nigerian Agip Oil Company Ltd, dated September 4, and signed by Managing Director of NNPC E&P Limited, Ali Muhammed Zarah, NNPCL said if the deal goes through, it would have far-reaching contractual/legal implications in relation to the joint Operating Agreement dated July 1991 governing the operations of the NAOC/NEPL/OOL Joint venture.

    NNPCL said in the letter that its consent as a member of the joint venture member operating ENI’s onshore asset, was not obtained before the planned divestment to Oando. This it said was against contract rules governing the joint venture operation, and could affect the deal.

    The statement reads, “It has come to our notice that a routine communication in the form of a letter written by NNPC E&P Limited (NEPL) to its JV Partner, Nigerian Agip Oil Company Limited (NAOC) is being interpreted to suggest that NNPC Ltd. is opposed to the sale of NAOC shares to Oando PLC. This is not correct.
     

    “NNPC Ltd. wishes to state that the letter was sent by NEPL, an NNPC Ltd. subsidiary. However, nowhere was opposition or objection to the transaction mentioned in the letter.

    “NEPL is only drawing attention to certain important clauses in the Joint Operating Agreement (JOA) between it, NAOC and OOL; which might have been overlooked in error. Adherence to those clauses will protect the transaction, now and in the future.”

    Oil major Eni had in a press release saying that it had signed an agreement with Oando, an energy solutions provider listed on both the Nigerian and Johannesburg Stock Exchange, for the sale of all its stake in Nigerian Agip Oil Company Ltd (NAOC Ltd), a wholly-owned subsidiary focusing on onshore oil & gas exploration and production in Nigeria, as well as power generation.

  • FBN introduces FirstEdu loans to enhance school infrastructure funding

    One of Nigeria’s top-tier financial institutions, FirstBank is addressing the infrastructure funding challenge faced by private schools across Nigeria through its FirstEdu loan solutions. The bank believes this initiative will significantly contribute to improving the overall quality of education in the country.

    Designed to assist schools in financing their capital projects, FirstEdu loans offer a maximum tenor of 48 months. T

    his product provides private school owners with flexible funding options to address urgent cash flow needs, replace outdated furniture and equipment, and renovate deteriorating buildings and classrooms.

    Folake Ani-Mumuney, Group Head of Marketing & Corporate Communications at FirstBank, emphasized that FirstEdu loans empower school proprietors to stay competitive in delivering educational services and support to their target audience.

    Since its launch in 2018, the FirstEdu loan has played a pivotal role in continuously enhancing schools’ facilities while positioning them favorably to achieve their medium and long-term goals. These objectives encompass expanding schools through land acquisitions, purchasing school buses, modernizing educational facilities, and acquiring tools and equipment to optimize daily operations.

    Furthermore, renewable energy loans are now available to schools, allowing them to control and reduce their fuel-related costs while adopting eco-friendly power solutions.

    FirstEdu loans are exclusively targeted at private Nursery & Primary, Secondary, and A-Levels schools. Eligible institutions must have been in operation for at least 24 months and maintained an account relationship with FirstBank for a minimum of six months or with any bank registered with the Central Bank of Nigeria (CBN) for a minimum of 12 months. The loan amount can vary, depending on the school’s cashflow capacity, with the potential to access up to N20 million or more.

    Chuma Ezirim, Group Executive of e-Business and Retail Products at FirstBank, expressed the bank’s unwavering commitment to supporting the educational sector as part of its nation-building strategy.

    The positive reception of the FirstEdu product across the country underscores its impact on the educational sector’s value chain, contributing significantly to Nigeria’s socio-economic development. Education serves as the foundation for any society, and FirstBank is dedicated to helping build this foundation for the nation’s future generations.

  • SEC emphasizes strong regulation’s role in boosting banks’ growth

    SEC emphasizes strong regulation’s role in boosting banks’ growth

    The Securities and Exchange Commission (SEC) has said the remarkable growth witnessed in the Nigerian banking industry over the past decade is partly attributable to the capital market and SEC’s comprehensive regulatory approach.

    Mr. Lamido Yuguda, Director General of SEC said this at the 2023 Chartered Institute of Bankers (CIBN) graduates’ induction and prize award recently in Lagos.

    He said, “The harmonious relationship between the capital market and the banking sector is further exemplified by our role in facilitating capital raising, mergers and acquisitions for banks. 

    “By streamlining the listing process and ensuring adherence to high standards of transparency and corporate governance, we enable banks to tap into the securities market as a means to secure funds from a diverse range of investors

    “This synergy between the banking industry and the capital market is illuminated by the fact that only 4 out of the 25 banks that emerged from the Central Bank’s 2004 recapitalization exercise did not access the capital market before compliance.”

    Yuguda charged the graduates on professionalism and adapting to changes in the financial world. 

    “Distinguished graduates, as you embark on your banking careers, remember the importance of integrity, good moral conduct, and adaptability.

    “The financial world is evolving rapidly due to technology and global changes. Embrace these shifts as unique and timely opportunities to contribute positively to the banking industry”, he said. 

    He said the theme, “Navigating the Pathways of Banking Excellence,” aptly encapsulates the journey that each of them embarks upon.

    “I extend my sincere gratitude to the Chartered Institute of Bankers of Nigeria for its determined commitment to nurturing industry-ready professionals. Your dedication resonates with our shared vision of fostering a resilient, well-regulated financial ecosystem that can withstand challenges and foster sustainable growth.

    “The most renowned professionals are celebrated today for building business empires and nurturing thoroughbred professionalism, achieving success through proper conduct, steadfast dedication, and a meticulous approach that allowed them to refine their long-term visions and goals.

    He said the CIBN’s vision aligns with the Commission’s quest for transparent and fair conduct in securities business by ensuring that operators in the capital market play according to the rules.

    “The Commission also recognizes individual and corporate players whose conducts not only ensure compliance but do more to make investment an interesting endeavour.

    “As regulators and professional bodies, we must ensure that our onboarding processes for new entrants are robust enough so that only fit and proper persons find their way into the very exciting careers in the financial market.

     “Similar to what obtains in the money market, the Commission’s engagement spans a spectrum of activities, including registration, surveillance, proactive regulation, and robust enforcement mechanisms, all aimed at nurturing a fair and transparent market environment.

     “Even though the CBN is unrelenting in ensuring full compliance by banks and other financial institutions through relevant departments, the professional bodies, especially the CIBN must leverage continuous assessment to ensure that bankers demonstrate probity and ethical conduct at all times.   

     “As the financial market continues to evolve with the increasing need to embrace financial technology, we must keep fine-tuning the regulatory frameworks that guide our continued operation in the market,” he said. 

     He said the culture of transparency mandated by the Investments and Securities Act empowers investors to make informed decisions. 

  • NCAA lifts suspension on XEjet operations

    The Nigerian Civil Aviation Authority (NCAA) said it lifted the suspension on the operations of XEjet Airline following the resolution of an aircraft insurance challenge with one of the airline’s planes. 

    According to a letter signed by Director General Civil Aviation, Capt Musa Nuhu, after considering the submission of the airline and confirming it met regulatory compliance, the suspension was lifted.

    The document titled: Lifting Of Suspension On Your Air Transport Licence (Atl) And Air Operators Certificate (AOC) reads: Further to the NCAA’s letter on the above subject matter referenced NCAA/DGCA/GC/8/16/628 and dated 30 August, 2023, the Authority hereby lifts the suspension on your ATL and AOC after considering your submissions. 

    “Consequently, you have been cleared to exercise the privilege of your ATL and AOC.”

    Speaking on the issue, Chairman and Chief Executive Officer of XEjet, Mr. Emmanuel Iza said: “The suspension is within the regulatory framework and we want to thank the Authority for diligently doing its work. We are happy to be back and we will continue to deepen our safety consciousness.

    “We sincerely thank you all for your patience, unwavering support, understanding and cooperation. We look forward to continuing delivering our premium services to you. Your safety and security is always of utmost importance to us.”

  • Capital market can act as financing tool for PPP projects –Yuguda

    The Director-General, Securities and Exchange Commission (SEC) has stated that the Nigerian Capital Market has the capacity and is well positioned to finance Public-Private Partnership (PPP) infrastructure projects in the country.

    Yuguda made this remark at the 2023 Chartered Institute of Stockbrokers (CIS) National Workshop which was held in Abuja on Thursday.

    Speaking on the theme; leveraging the capital market to drive public-private partnership for effective national economic growth, Yuguda, citing a World Bank report, pointed out that Nigeria’s current level of public spending on infrastructure is one of the lowest globally and added that this lack of investment has resulted in a significant infrastructure gap, which has adversely affected the quality of infrastructure and limited access to essential services.

    The SEC DG who was represented by the Executive Commissioner, Corporate Services, Ibrahim Boyi, highlighted that given the current rate of capital expenditure, it would take approximately 300 years to bridge Nigeria’s infrastructure gap.

    He stressed the need for a new approach to financing infrastructure development in Nigeria to stimulate economic growth and argued that leveraging public-private partnerships is essential, and the capital market can play a crucial role in this regard.

    The Director-General explained that the capital market, with its patient capital and established project financing options, is well-suited to finance PPP infrastructure projects at various levels. He cited the common model used in many developed countries, where governments and private sector partners raise debt capital for PPP projects through bonds and loans.

    His words, “This is an infrastructure financing model that is a common choice in many developed nations of the world. Capital markets allow governments and private sector partners to raise debt capital for PPP projects. Governments can issue bonds to finance their share of the project costs while private companies can secure loans or issue corporate bonds for their contributions.

    The capital market’s ability to provide funding, risk management tools, liquidity, and efficient allocation of resources make it a crucial partner in the success of PPP projects. It allows governments and private sector partners to leverage their strengths and resources to deliver essential public infrastructure and services”.

    He thereafter commended the CIS for its role in developing the economy by equipping individuals and organizations with the necessary skills and expertise in the financial sector, which is crucial for the success of PPP projects.