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Category: Business

  • Banks, telcos settle USSD billing rift after N120bn debt

    Telecommunications companies and Deposit Money Banks (DMBs) have resolved their disagreement over the debt rising from the billing of the Unstructured Supplementary Service Data (USSD).

    The banks were owing the network providers N120 billion from the use of the USSD platform, which is charged on a corporate billing rather than end-user billing as preferred by the DMBs.

    On Thursday, the Executive Vice Chairman of the Nigerian Communications Commission (NCC) Umar Danbatta, stated that the intervention of the Governor of the Central Bank of Nigeria (CBN), Fola Shonubi, led to the settlement.

    Speaking at the Telecom Executives and Regulators Forum (TERF) held in Lagos, Danbatta said Shonubi assisted in resolving the confrontation because he knows that without the telcos, the CBN’s financial inclusion programme would not have achieved about 70 per cent.

    According to the NCC chief, disagreement over the billing system led to the increase in the debt, “The USSD service is being provided to the banks, who in turn provide the service to their customers. The question was who should be paying for the service.

    “They wanted end-user billing, but we said the service is being provided to the banks, not to their customers.

    “The banks charge their customers for the service, and they are to pay the telcos in the form of corporate billing, which is neat.

    “Then along the way, there was a misunderstanding and the debt kept piling until it reached a humongous amount of over N100 billion.

    “Even at that, the service was still being provided to customers by the banks using the telecom infrastructure and the telcos were being paid nothing. This was despite the intervention of the immediate past Minister,” he noted.

    Revealing the reason the CBN and the banks came to an agreement with the telcos, Danbatta stated: “Digital financial inclusion index or penetration is currently about 70% because it is telco driven.

    “And as such, there shouldn’t be any problem paying for the service. No service is free. Pay the telcos, that’s all we ask. Okay, and as we’re saying, Now, pay them for the debt, the accumulated debt, and then pay them for the service they are rendering as we speak.

    “At a meeting between the acting CBN governor, the NCC, the telcos and the banks, it was acknowledged that the debt exists, that going forward, the service has to be paid for by the banks through corporate billing.

    “It is an important development for the telecoms industry that we have found an amicable resolution to the problem because we’re all serving the same government. We do not want to disrupt financial services in the country.

    “We want to see the financial inclusion penetration to even go higher. We want it to be ubiquitous, but we cannot do this without settling the legacy debt, as well as paying for the service that is being provided.”

  • Oil price to hit $100, analysts forecast

    As Brent crude oil price continued to rise and trading on Wednesday around $90 a barrel for the second straight day, and now up 25 per cent since June due to the prospect of more production cuts by leading oil exporters, analysts have predicted the price may hit $100 a barrel.

    The surge is sending ripples through the global stock and bond markets and the prospect of higher prices at the pump and throughout manufacturing may spur diplomatic efforts to increase supply and tamp down any inflationary effects on the global economy.

    The two countries behind the price hike Saudi Arabia and Russia said on Tuesday that they would extend their oil production cuts equivalent to a combined 1.3 million barrels a day through year-end.

    The duration of the cuts surprised market watchers, as did Saudi Arabia’s hint that it may make even deeper cuts in the coming months.

    Nadia Martin Wiggen, a commodities analyst at Pareto Securities, told Bloomberg that Brent could hit $100 a barrel, a level it frequently surpassed in the first months following Russia’s invasion of Ukraine.

    China’s sputtering economy could sap demand for oil, keeping prices down and Saudi Arabia has little interest in seeing triple digit crude prices crash the global economy, Jorge León, an economist for the research firm Rystad Energy, told DealBook.

    “Higher oil prices will only increase the likelihood of more fiscal tightening, especially in the U.S., to curtail inflation,” León said.

    Investors have sold off government bonds, including 10-year Treasury bills, over the past two days on fears that central banks will be forced to stay hawkish on interest rates to blunt the inflationary effect of higher energy prices.

    Means, Iran’s oil exports have surged since Saudi Arabia began cutting its production this summer, and Bloomberg reported last week that Tehran and Washington have held back-channel talks to keep crude flowing to make up for supply reductions elsewhere. Venezuela, another exporter under sanctions, has reportedly turned to Beijing to help it revive production.

    In the US the Biden administration, “the only thing they can pretty much do to counteract Saudi cuts is to bring more oil into the market from other countries,” León said. “Iran and Venezuela are the best candidates,” he added, even if it’s politically unpalatable to fully reopen talks with them.

    The United States may have few other options as domestic producers of oil from shale won’t fill the void in the short term and Washington is unlikely to tap the nation’s strategic petroleum reserve, after doing so last year brought it down to levels last seen in the 1980s, León said.

  • As profit taking persists, Nigeria’s equity market sheds N112bn

    Trading activities on the floor of Nigerian Exchange (NGX) Thursday continued on a negative note, shedding N112 billion as profit taking by investors persisted in the market.

    Profit taking in the shares of Dangote Sugar, Dangote Cement, Nascon impacted on the market at the end of the trading session.

    Specifically, market capitalisation of listed equities declined by 0.30 per cent to N37.261 trillion from N37.373 trillion reported the previous day.

    The NGX All Share Index also depreciated by 204.17 basis points to 68082.11 points from 68286.28 points reported on Wednesday.

    Betaglass led gainers table, gaining 9.97 per cent to close at N51.85 per unit, Cadbury Nigeria Plc followed with a gain of 9.86 per cent to close at N15.60 per share, CWG gained 9.81 per cent to N5.26 per unit, Tantalizer gained 9.52 per cent to close at N0.46 per share, Guinea Insurance added 9.09 per cent to close at N0.36 per share.

    On the contrary, Morison Industry recorded the highest loss with 9.89 per cent to close at N2.55 per unit, Courtvellle Business Solutions trailed with a loss of 7.69 per cent to close at N0.60 per unit, Nascon dipped by 6.83 per cent to close at N56.60 per unit, RTBriscoe went down by 6.82 per cent to close at N0.41 per share while Wema Bank dipped by 6.42 per cent to close at N5.10 per share.

    Investors traded 378.089 million shares valued at N8.376 billion in 8106 deals against 378.654 million shares valued at N5.482 billion in 7671 deals.

    Transactions in the shares of Oando led market activities with 91.635 million shares valued at N678.965 million, Omatek trailed with account of 29.972 million shares valued at N19.207 million, Dangote Sugar Refinery traded 23.393 million shares valued at N1.483 million, Fidelity Bank exchanged 22.165 million shares cost N193.576 million, AccessCorp exchanged 20.803 million shares cost N361.865 million.

  • NNPCL raises concerns over Eni Sale

    Nigeria National Petroleum Corporation Limited (NNPCL) has raised reservations about Eni SpA’s sale of a subsidiary to local producer Oando Plc which could complicate the transaction.

    The Italian firm announced on September 4 an agreement to sell to Oando one of its units that has a 20 per cent operating stake in four onshore oil and gas blocks. The deal is the latest in a string of asset sales concluded by international producers in onshore and shallow-water areas of the Niger Delta.

    The failure to obtain the NNPCL’s prior authorization for the sale “constitutes a grave breach” of the contract governing the joint venture that holds the four permits, the state-owned company said in a letter to the Eni subsidiary, which was dated September 4 and confirmed by Bloomberg. The NNPCL “reserves its rights in relation to the said breach” including an entitlement to invalidate the agreement, the letter said.

    The letter is “not an objection to the transaction,” NNPCL spokesman Garba Deen Muhammad said by text message on Wednesday. It is “only drawing attention to certain important clauses” in the joint venture agreement that “might have been overlooked in error,” he said. “Adherence to those clauses will protect the transaction now and in the future.”

    Oando already had a 20 per cent interest in the licenses before the deal was agreed, while the NNPC holds a 60 per cent stake.

    An Oando spokeswoman declined to comment on the letter because it was addressed to Eni. She said the companies had agreed to the sale of shares in a subsidiary rather than the assignment of an interest in the joint venture.

    Eni denied committing any breach of the joint venture agreement in selling the subsidiary to Oando. While NNPC has pre-emption rights, Eni had no obligation to inform the state firm in advance of the announcement, the Rome-based company said in a statement Thursday. “Preemption procedures and other consents will be duly and carefully followed,” it said.

    Oando said in a statement on September 4 that completion of the transaction is subject to ministerial consent and other regulatory approvals. The Nigerian Upstream Petroleum Regulatory Commission and a spokesman for President Bola Tinubu didn’t immediately respond to requests for comment.

    Oil majors have been offloading onshore and shallow water blocks — located in a challenging operating environment where infrastructure damage from crude theft is a regular occurrence — to domestic producers for more than a decade. The trend is accelerating as international firms focus on deep-water projects in the West African country.

    Shell Plc and Exxon Mobil Corp. are also working to finalize sales that stalled under former President Muhammadu Buhari, who was succeeded by Tinubu in late May. A lawsuit over alleged pollution in the Delta is holding up Shell’s deal, while the NNPCL has opposed Exxon’s agreement with Seplat Energy Plc and asserted a right to acquire the permits itself.

  • CBN to clear $10bn forex backlog in 14 days

    CBN to clear $10bn forex backlog in 14 days

    The Central Bank of Nigeria (CBN) has  promised to inject more foreign exchange into the market to clear the backlog as scarcity persists.

    Acting Governor of the CBN, Folashodun Shonubi, who disclosed this recently said banks will be vital in clearing the backlogs, considering the DMBs control 75 percent of forex transactions.

    Breaking down the applications that will be sorted after being stalled for years due to a drop in Foreign Direct Investments (FDIs), Foreign Portfolio Investments (FPIs) inflows and international reserves, the apex bank chief mentioned manufacturers and importers of raw material inputs.

    Other applicants listed are requests for dollars to pay international school fees, and medical bills abroad, as well as Business Travel Allowances (BTAs) and Personal Travel Allowances (PTAs).

    Explaining the situation around the forex backlog, Shonubi said: “As matter of fact, there is a large amount of the obligations that the banks in Nigeria have already taken on. So, what happened was that at maturity, they actually made the foreign exchange available for those who needed to use them like importers and what have you.

    “There are some customers who still have their obligations and part of the restructuring with the banks in Nigeria, is also to clear that backlog. That is something we have been discussing for a while. I expect that we will do that, within the next one or two weeks.

    “What that means, therefore, is that this obligation that people keep on talking about will not be left. Today, we still intervene in the market, so it is not as if it has affected our ability to make monies available to banks in the Investors and Exporters foreign exchange market.

    “When we look at the volumes, the Central Bank of Nigeria today contributes less than 25 per cent into the forex market. And the aim if you remember about a year and a half ago, was that the Central Bank did not want to be a regular player, but more of intervening to stabilise the rates and that is where we are going.

    “There are so much more foreign exchange that people don’t talk about, that is being made available through the banking system and banks are selling to their customers. It doesn’t come to the Central Bank, it doesn’t appear as part of the demand that comes to us. And it is significant. It is almost three times what we as a Central Bank make available.”

  • Nigeria’s equity market sheds N27bn

    The local equity market on Wednesday returned to negative trend shedding N27 billion or 0.07 per cent to N37.373 trillion from N37.400 trillion reported the previous day.


    The NGX All Share Index also depreciated by 48.40 basis points to 68286.28 points from 68334.68 points reported the previous day.


    Volume of shares traded during the day declined by 179.198 million, representing 47.32 per cent as investors traded 378.654 million shares valued at N5.482 billion in 7671 deals against 557.852 million shares worth N10.210 billion exchanged hands the previous day in 9818 deals.


    Meanwhile, the domestic equity continued in positive trajectory for the fourth straight month to August with 3.44 per cent growth  month on month gains to close at 66,548.99 points, beating a 15-year high since March 2008. The bullish performance was spurred by strong investor sentiments in the consumer goods and Insurance sectors.


    Capital market operators also said that the positive interim dividend payments by corporates and strong search for gains by investors drove the rally which gave equity investors a total of N1.4 trillion in the month while the market capitalization of listed equities closed at N36.42 trillion and then the year to date return printed at 29.8 per cent.


    However, an analysis of the investment showed that Guinea Insurance led gainers table with 10 per cent to N0.23 per unit, Betaglass followed with a gain of 9.91 per cent to close at N47.15 per per share, Caverton gained 9.84 per cent to close at N1.34 per unit, Oando Plc added 9.70 per cent to close at N7.35 per unit, CWG added 9.11 per cent to close at N4.79 per unit.


    On the contrary, Vitafoam Nigeria Plc topped losers chart, declining by 10 per cent to close at N22.50 per share, Veritas Kapital trailed with a loss of 7.69 per cent to N0.24 per share, Linkage Assurance fell by 5.56 per cent to close at N0.85 per unit, Dangote Sugar Refinery dipped by 4.76 per cent to close at N66.65 per unit while International Breweries down by 4.35 per cent to N4.40 per unit.


    Transactions in the shares of Oando Plc led market activities with 83.526 million shares valued at N609.377 million, United Bank for Africa followed with account 35.627 million shares cost N533.748 million, Transnational Corporation of Nigeria exchanged 26.657 million shares cost N177.694 million, AccessCorp traded 18.534 million shares cost N321.080 million while Omatek exchanged 15.729 million shares cost N9.437 million.

  • NERC approves increase in cost of prepaid meter

    The Nigerian Electricity Regulatory Commission (NERC) has approved an increase in the price of pre-paid electricity meters in the country.

    This is contained in a NERC ‘order’ signed by its Chairman, Mr Sanusi Garba and the Commissioner, Legal, Licensing & Compliance, Mr Dafe Akpeneye obtained by newsmen on Wednesday in Abuja.

    The commission, in the order said that a single-phase prepaid meter would now cost N81,975.16k from the N58,661.69 while three phase pre paid meters would cost N143,836.10 from N109,684.36.

    It said that “significant changes in macroeconomic indicators, such as inflation and changes in the foreign exchange rates have necessitated a review of the regulated rates for MAP meters.

    The commission also stated that the approved meter prices were exclusive of the 7.5 per cent Value Added Tax (VAT).

    It said the new price regime was to ensure a fair and reasonable pricing of meters to both MAPs and end-use customers

     “Ensure Meter Assets Programme (MAP)’s ability to recover reasonable costs associated with meter procurement and maintenance while ensuring that their pricing structure allows for a viable return on investment.

    “Evaluate the affordability of meter services for consumers, aiming to prevent excessive pricing that could burden end-users. Ensure that MAPs are able to provide meters to end-use customers in the prevailing economic realities,” it said.

  • Electricity consumers call for power sector overhaul

    Electricity Consumers in the Federal Capital Territory (FCT), have asked the new Minister of Power, Mr. Adebayo Adelabu to overhaul the power sector to ensure stable power supply.

    The consumers, who spoke in separate interviews in Abuja, said overhauling the sector would improve power supply.

    The President, Nigeria Consumer Protection Network, Mr. Kunle Olubiyo, said the minister should do a surgical overhaul of the regulatory institutions and ecosystem of the power sector.

    According to him, the minister should do an appraisal of the performances of all agencies in the last 10 years using benchmarks of Key Performance Indicators (KPIs).

    Olubiyo also urged Adelabu to engage the best hands as advisers and working team to enable him to achieve the Federal Government’s desire to give its citizens a stable and uninterrupted power supply.

    He also urged the minister to review the privatization of the sector which he described as long overdue.

    The minister said 10 years after the privatisation, the exercise had failed to deliver the desired results.

    He said the review should be done across the value chain of the electricity sector from generation and transmission to distribution.

    “By doing so, issues relating to increased expansion of the huge metering gaps, sector liquidity challenges and poor remittances culture, load rejection will be addressed.

    “Other issues such as market shortfalls, tariff shortfalls, payment of generation capacity, and low generation per capita, weak transmission infrastructure resulting in a decline in transmission wheeling capacity and incessant power system collapse and load shedding will also be addressed’’, he said.

     According to him, load rejection by electricity distribution licensees at the downstream sub-sector, poor quality of services, and near zero governance structure will be eliminated.

    Also, the President, the Association For Public Policy Analysis, Mr. Princewill Okorie, said the privatisation of the power sector was meant to break the control of electricity generation and distribution from the government.

    Okorie said the privatisation was to ensure an adequate, regular, and stable supply of electricity to the consumer at a reasonable cost.

    He said unfortunately, the implementation of privatisation policy in the sector began to exclude consumer groups whose interest, satisfaction, and willingness to pay was seen as the attraction of the policy.

    Okorie said tariff reviews have taken place severally since 2013 when the privatisation commenced, adding that consumer satisfaction impact evaluation and assessment was hardly carried out.

    “We are appealing to the minister of power to support the delivery of people-oriented and consumer-protective power policies to Nigerians in the electricity sector,” he said.

    On his part, an electricity consumer, Mr. Reuben Okoro, said Nigerians expect the minister to deliver stable electricity to enable them to do their businesses without relying on generators.

    Okoro, who is a welder resident in Lugbe, FCT, said the minister should overhaul the entire power sector starting from generation to distribution.

    A Fashion Designer in Area 3, Garki, FCT, Mrs Nosayaba Odigie, also wanted the minister to look into the issue of epileptic power supply.

    Odigie said if the country was able to address the challenges in the sector all other things would fall in place.

  • Local investors will drive Nigerian upstream sector— Tinubu

    The Group Chief Executive, Oando Plc, Wale Tinubu, says indigenous investors will play a vital role in the future of Nigeria’s upstream sector.

    Tinubu, who made the assertion in a statement informing the Nigerian Exchange Limited (NGX) of Oando Plc planned acquisition of Nigerian Agip Oil Company Limited (NAOC Ltd) from ENI, said the deal shows the importance of local investors

    He noted that the acquisition of Agip, which will increase Oando’s ownership stake in all NEPL/NAOC/OOL Joint Venture assets and infrastructure, will unlock unparalleled opportunities for Oando.

    In the statement, Oando said its total reserves standing at 503.3MMboe as of 2021 estimates, will record a 98 per cent increase due to the deal to buyout ENI from the joint venture.

    Recall that Oando had on Monday agreed to acquire 100 per cent of Nigerian Agip Oil Company Limited. The deal will increase Oando’s stake to 40 per cent.

    The transaction also expands Oando’s exploration asset portfolio via the purchase of a 90 per cent stake in OPL 282 and a 48 per cent stake in OPL 135.

    NAOC’s participating interest in Shell Production Development Company Joint Venture (operator Shell 30 per cent, TotalEnergies 10 percent, NAOC 5 per cent, NNPC 55 per cent) is not part of the deal and so will be retained in Eni’s portfolio, Oando said.

    Presently, Oando and Agip have a 20 per cent stake each in the joint venture (NAOC JV) operated alongside the Nigerian National Petroleum Company (NNPC) E&P Limited, which has 60 per cent.

    Upon the completion of the deal, still awaiting Ministerial Consent and regulatory approvals, Oando will hold 40 per cent of the JV operating four onshore blocks (OML 60, 61, 62, 63).

    Oando will also have access to other enterprises Agip is involved in, “The synergies created by this acquisition will unlock unparalleled opportunities for us to re-align expectations, enhance efficiency, optimize resource allocation, and significantly increase production.

    “Furthermore, it is in alignment with our strategy of acquiring, enhancing, appraising, and efficiently developing reserves,” Tinubu said.

    The oil boss said the acquisition was “not just an important milestone for the future of Oando; it brings to bear the important role indigenous actors will play in the future of the Nigerian upstream sector.

    “Having achieved this significant milestone, we look forward to closing the transaction and harnessing the full potential of the enhanced platform to accrue value for our local communities, stakeholders and shareholders,” the statement quoted Tinubu.

    Shares in Oando, which has a secondary listing in Johannesburg, jumped by 9 per cent in Lagos at 10:56 WAT following the news.

    Last October, NNPC Limited acquired OVH Energy Marketing, owner and operator of Oando branded retail service stations, enabling the state oil firm to control Oando’s 380 filling stations across Nigeria.

  • Despite NLC strike, equity market gains N31bn

    Transactions on the floor of Nigerian Exchange (NGX) on Tuesday sustained an upward trend appreciating by N31 billion as gain recorded in the shares of BUAfoods, Dangote Sugar, Oando and other boosted market activities.

    Market capitalisation of listed equities appreciated by 0.08 per cent to N37.400 trillion from N37.369 trillion reported the previous day.

    The NGX All Share Index also appreciated by 55.54 basis points to 68334.68 points from 68279.14 points traded on Monday.

    The NGX trading for the day showed that four companies recorded 10 per cent gain at the close of trading for the day Multiverse, Omatek, Betaglass Sunu Assurance led gainers table in percentage terms, increasing by 10 per cent each to close at N2.97 per share N0.55, N42.90 and N0.88 per unit respectively, Oando Plc followed with a gain 9.84 per cent to close at N6.70 per unit.

    On the contrary, NSLTech topped losers’ chart, dropping by 10 per cent to close at N0.27 per share, Chellaram Plc trailed with a loss of 9.80 per cent to close at N3.22 per share, Ikaje Hotel fell by 9.68 per cent to N2.80 per unit, JohnHolt fell by 9.03 per cent to close at N1.31 per shares Neimeth international Pharmaceutical down by 8.93 per cent to close at N1.53 per share.

    The volume of transaction declined by 287.828 million, representing 34.04 per cent as investors traded 557.852 million shares valued at N10.210 billion in 9818 deals against 845.680 million shares worth N13.037 billion in 11934 deals.

    Trading activities in the shares of United Bank for Africa led market activities with 63.322 million shares valued at N951.178 million, Oando Plc followed with account of 61.258 million shares cost N409.752 million, Fidelity Bank traded 58.141 million shares cost N486.483 million, AccessCorp traded 42.110 million shares worth N728.417 million while Transcorps exchanged 40.499 million shares valued at N272.158 million.