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BusinessDay 14 Feb 2018

42 BUSINESS DAY

42 BUSINESS DAY C002D5556 Wednesday 14 February 2018 NEWS BusinessDay Economic Outlook 2018 charts... Continued from page 1 Avuru, CEO, Seplat Petroleum Development Company; Bismarck Rewane, CEO, Financial Derivatives Company Limited; Bola Koko, CEO, FMDQ OTC securities Exchange and Opeyemi Agbaje, CEO, RTC Advisory services “Today, business leaders are seeking deep insight, as they make critical decisions on much-needed investments to be made in the economy. In light of this, the Conference serves as a platform for dialogue between the policy makers from the public sector and business leaders within the private sector on the best strategies and opportunities to transition the economy from recovery to growth,” Frank Aigbogun, Publisher Buisness- Day said. Along with informed analysts and business leaders, panel President Muhammadu Buhari (r), welcoming Abdulsalami Abubakar, former head of state, to the Presidential Villa in Abuja, yesterday. NAN Continued from page 1 in the 2018 budget is projected at N2 trillion. “It is a tough call for the government, already in the 2018 budget the government is planning to borrow N1.6trillion, if we add the N2.7 trillion bond, it will amount to N4 trillion which is more than half of the 2018 budget,” Chukwu explained. While the interest payment on loans and contract inflation could be an issue, Ayo Akinwumi, head of investment firm, FSDH, thinks otherwise. “Nigeria is not over borrowing; Nigeria has one of the lowest debt stocks to GDP in the world. However, our interest expenses to revenue is quite high, which is where the problem lies,” Akinwumi said. “So, the two options available members will shed light on Nigeria’s economic indices, as well as provide insight on the direction of the economy in 2018 from the perspective of informed players in the public and private sectors. It will also explore prospects for growth amid a projected stabilisation in energy and commodity prices, which may provide a tailwind for Nigeria’s economic recovery. Nigeria’s economy is susceptible to oil prices and output. While it can control output, to the extent that OPEC cuts allow, it has no control over oil prices in the international market. The recent rally has seen prices rise to $70 per barrel and production has jumped to 1.8million barrels per day (bpd), fuelling optimism that the economy may yet turn the corner this year. The creation of the “Investor and Exporters (I & E) window,” Contractors fret over government debts as... are either you grow revenue or reduce debts; Nigeria revenue to GDP and tax to GDP is one of the lowest in the world; the government is gradually moving away from high interest expenses to low interest cost and also making much effort through the VAIDS scheme.” Luqman Agboola, head of energy and infrastructure, Sofidam Capital, said the most innovative way for government was to issue the bond that would become a liquidity instrument that money markets could trade, and would eventually deepen the money market. Agboola said, “The government have been very slow in its policy implementation, the contractor bond is not working because they have not commenced the issuance so any in April 2017, has also boosted dollar supply to the market and paved the way for foreign buying of Nigerian stocks which have since rallied to a three-year high. Some $28 billion worth of transactions have been done on the window, according to FMDQ data. This is why the World Bank forecasts that Nigeria’s economy will grow by at least 2.5 percent in 2018 from a one percent growth in 2017 due to improved commodity prices, investments and trade. The upward revision is based on the expectations of stability in Nigeria’s oil production and a surge in non-oil sector growth due to government reforms. Nigeria’s Gross Domestic Product (GDP) is expected to grow further by 2.8 percent in 2019 and 2020 according to the bank’s January 2018 Global Economic Prospect report. Buoyed by expected positive outcomes transaction with contractors that cannot close between this year and March 2019 is not worth pursuing.” BusinessDay’s analysis of construction firm, Julius Berger financial statement, showed that amount due from contracts receivable is N89.43 billion as of September 2017. Julius Berger is one of the biggest contractors to the government. Earlier in 2017, the Economic Management Team (EMT) under the leadership of Vice President Yemi Osinbajo, had mandated the minister of finance to head a committee that would establish a process to confirm the validity of inherited Federal Government obligations, and propose a mechanism to resolve them. These obligations consist of dues owed to state governments, oil marketers, power generation in Nigeria, the World Bank expects growth in Sub-Saharan Africa to increase to 3.2 percent in 2018 and 3.5 percent in 2019 on account of firming commodity prices and strengthening domestic demand. The 2018 BusinessDay economic outlook is an annual event that usually attracts the best minds from the public and private sectors. In 2017 edition, three guest speakers delivered presentations at the summit. Udoma Udo Udoma, minister of Budget and Planning, spoke on the key pillars of the 2017 Federal budget, as well as its key objectives. Babatunde Raji Fashola, minister of Power, Businesses spend N116bn on oil palm... Continued from page 4 oil producers, Nigeria is yet to recover and take its proper place in the comity of crude palm oil producing nations. This has been attributed to the discovery of crude oil, which changed the country’s palm oil narrative of the 60s. As a result, Indonesia and Malaysia have now surpassed Nigeria’s production, becoming the global leaders in oil palm output. Now, Nigeria is the fifth largest palm oil producer globally. With a well-developed palm oil industry, oil palm has the potential to earn huge foreign exchange for the country, experts say. An expert, who spoke with BusinessDay, says Nigeria can regain its status as a net exporter of crude palm oil when there is a well-articulated development plan for the subsector, with clear targets, strategies and timelines. “The country’s production has been stagnant, even though big plantations are coming up, smallholder production, which constitute over 80 percent of and distribution companies, suppliers and contractors to federal government parastatals and agencies, payments due under the Export Expansion Grant, EEG, outstanding judgement balances as well as pension and other benefits to federal government employees. Last year, The Federal Executive Council (FEC) said it has approved N2.7 trillion for payment of the federal government’s discounted obligations and its awaiting the approval of National Assembly The money consists of N740 billion of outstanding pensions and promotional salary arrears (not discounted) and N1.93 trillion (discounted) of other obligations including dues to federal government contractors and suppliers. Adeosun had promised to resolve long outstanding dues Works & Housing, made a presentation on the likely impact of infrastructure spending as a strategic route to economic recovery and the last presentation on the impact of an improved investment climate in attracting the needed private capital for sustained growth was made by Okechukwu Enelamah Minister of Industry, Trade and Investment. This year’s conference, as in previous editions, provides a unique platform for the attendees and delegates to debate and exchange ideas on the issues and trends impacting upon Nigeria’s economic growth and development. the total palm oil production in Nigeria, has continued to drop due to aging trees and poor management,” said Steven Babajide, country representative, Solidaridad’s Network, in an email response to questions. “With a development plan, critical segments along the entire value chain would then be addressed, using sustainable private sector led approach in its implementation,” said Babajide. “We need to also organise new plantings for smallholders, especially youths and women and facilitate the development of improved seedlings, farm management services, agro chemicals, and fertilisers to increase productivity,” he added. According to experts, oil palm has the capacity to produce more oil than any other oilseed crop. About 90 percent of palm oil is used in the production of foods, while the remaining 10 percent is used by the non-foods industry. Food products like noodles, vegetable oil, biscuits, chips, margarines, shortenings, cereals, baked stuff, washing detergents and even cosmetics are made from palm oil. owed to contractors, accumulated over the last two decades, through bonds and promissory note issuance. Indigenous contractors under the aegis of National Contractors Association of Nigeria (NCAN) say that they are being owed over N2.4 trillion by the federal government, states and local government councils across the nation. They further lamented that, over 572 of their members have died as a result of hypertension and stress caused by the huge debt they are being owed by the government. “The permanent solution is for the government to involve a Public private partnership (PPP) scheme were the private sector will begin to fund projects through commercial arrangement which is more sustainable,” Chukwu said.

Wednesday 14 February 2018 FAAN automates car park at GAT, removes unserviceable airplanes IFEOMA OKEKE Federal Airports Authority of Nigeria (FAAN) has automated the car park at the General Aviation Terminal (GAT) at the Murtala Muhammed Airport (MMA), Lagos. It says the evacuation of disused aircraft at the nation’s airports would continue with the removal of unserviceable airplanes at the Aminu Kano International Airport, Kano. Henrietta Yakubu, general manager, corporate communications, FAAN, in an interview with journalists at the agency’s headquarters Tuesday in Lagos, said within one month of the automation exercise, FAAN had recorded 68 percent revenue increase. Yakubu explained that the automation exercise had blocked some of the loopholes in the system, stressing that FAAN was making more revenues than in the past from the GAT. She said with the automation of the car park, rowdiness and massive traffic associated with the manual collection at the park had disappeared. She said FAAN would review the performance of the exercise by the end of this quarter and make adjustments where necessary, but ANIEFIOK UDONQUAK, Uyo noted that so far, the new system had been in favour of both FAAN and the public. FAAN commenced the automation of the GAT car park January 8, 2018, which eliminated the manual collection of toll that had been in existence for about two decades. “FAAN decided to overhaul the whole system and see how we could make it orderly because we were getting a lot of complaints from our passengers and airport users that they were not getting a space to park their vehicles. Then, we were wondering if all the people that park their vehicles at the car park are airport workers and travellers. “Also, we are in an era of technology where people no longer do things manually, but automated. That was what prompted FAAN into doing the automation. “And since we started, there has been a lot of sanity at the car park, there is a lot of orderliness, progression. As soon as you go into the airport, you just go into the car park without any issues. In time past, there were lots of queues. Once you get into the airport, if you are not dropping, you are encouraged to go to the car park and do your business there, rather than parking on the road and create traffic,” she said. A/Ibom Assembly passes 2018 appropriation bill Akwa Ibom State House of Assembly has passed the 2018 appropriation bill of N646.65 billion. The bill, as passed by the House, is reduced in size by 0.74 percent as against N651.50 billion presented by Governor Udom Emmanuel on November 24, 2017. Presenting the bill to be read a third time and passed, Usoroh Akpanusoh, chairman, House Committee on Finance and Appropriation, urged the executive to implement the budget as passed. Akpanusoh, in his report, appealed to government to ensure that amount appropriated were promptly release to Ministries. Departments and Agencies, stressing that government should ensure judicious used of the funds as budgeted. Udo Kierian Akpan, the House leader, moved the motion for the bill to be passed while Ime Okon, deputy House leader seconded the motion. The speaker, Onofiok Luke, commended the House committee on finance and appropriation for their painstaking job to ensure prompt passage of the appropriation estimate into law. He applauded the state government for prudent management of resources to the development of infra- structure in the state. Luke directed the Clerk of the House, Mandu Umoren to forward the appropriation law to the governor for his assent. The 2018 budget aims at actualization of the economic power base of the state through industrialisation and sustainable public private sector initiatives that would open up opportunities for growth and improved living standard. JOSHUA BASSEY CBN seeks proscription of ‘shell banks’ in Nigeria KEHINDE AKINTOLA, Abuja financial system. “Without prejudice to the provisions of subsection 2 of this section, and notwithstanding the provisions of section 34 of the CBN Act or anything written law or any limitations contained in the memorandum and articles of association of any bank, the bank shall have power at any time to acquire the shares of any bank up to a level that guarantees its control by the Bank and management of the bank. “Provided that the Bank shall dispose of such equity investment in the bank, when it is satisfied that the state of affairs of the bank concerned has improved” The CBN also backed the House of Representatives in imposing stiffer penalties and terms of imprisonment of certain offences on erring commercial banks and their staff. However, in his presentation, Belema Taribo, director of legal/board secretary for Nigeria Deposit Insurance Corporation (NDIC), opposed the proposed fines say- As part of efforts toward stemming money laundering in Nigeria, Central Bank of Nigeria (CBN) on Tuesday called for enactment of law that will prohibit operations of ‘shell banks’ across the country. Shell banks are unlicensed financial institutions that carry out financial activities. Godwin Emefiele, CBN governor, gave the charge at the opening of two-day public hearing organised by House Committee on Banking and Currency on a bill to amend the Banking and Other Financial Institutions Act (BOFIA) and other bills, held in Abuja. He said the shell banks, apart from being used for money laundering, distort the banking system and pose as major problems to the regulatory agencies. Emefiele, who was represented by Johnson Akinwumi, CBN’s director of Legal Services Department, said: “We wish to propose the introduction of new subsections 3(6 and 7) for the proscription of shell banks in response to the latest recommendations of the Financial Action Task Force (FATF) on money laundering to read: “Any bank or its subsidiaries without physical presence in the country where it is incorporated and licensed and is not affiliated to any financial services group that is subject to effective consolidated supervision shall not be allowed to operate in Nigeria and no Nigerian bank orbits subsidiaries shall establish or continue any relationship with such bank or subsidiary.” The apex bank also sought for additional powers to revoke licences of banks and inject funds into a falling bank by way of equity participation up to a level that guarantees control by CBN. The additional powers, according to the director is to enable the CBN acquire equity investment institutions and its ability to ensure a sound Lagos, Kano partner on economic development Lagos and Kano are collaborating to seek ways to further the economies of both states by sharing ideas on improved security, business environment, and infrastructure development and job creation. The two states have also agreed to organised a summit tagged ‘Lagos-Kano economic and investment summit’ that will bring their private sector partners to seek working solutions to challenges common to both CHANGE OF NAME I, formerly known and addressed as Geraldine Ahwobiwom Akeye now wish to be known and addressed as Geraldine Ahwobiwom Ushie. All former documents remain valid. General Public please take note. C002D5556 BUSINESS DAY 43 NEWS L-R: Grama Narasimhan, executive director, retail & consumer banking, Sterling Bank; Evelyn Nwaokolo, Emirates Holidays Nigeria; Obinna Henry Ezeanyim, winner of International Holiday Trip to Dubai; Eniola Obe, regional business executive, and Henry Bassey, chief marketing officer, both of Sterling Bank plc, during the Sterling Bank promo prize presentation to winners of International Vacation at the Radission Blu Anchorage Hotel in Lagos, yesterday. states. Akinyemi Ashade, Lagos State commissioner for finance, joined by officials of Kano State, at a press conference in Lagos, Tuesday, described the partnership as “a tool for sustainable economic development.” According to Ashade, CHANGE OF NAME I, formerly known and addressed as Odunjo Kofoworola Yosola now wish to be known and addressed as Obembe Kofoworola Yosola. All former documents remain valid. General Public please take note. CHANGE OF NAME I, formerly known and addressed as Damilola Aishat Habib now wish to be known and addressed as Damilola Aishat Keke. All former documents remain valid. General Public please take note. ... as Reps lament increasing banks’ NPLs the journey to initiate an enduring partnership between Lagos and Kano started at the inception of the Akinwunmi Ambodeled administration. Ashade, flanked by Shamsudeen Usman, chairman, Kano Economic Summit, said: “As you are all CHANGE OF NAME I, formerly known and addressed as Miss. Amadi Chika Hope now wish to be known and addressed as Mrs. Mba Chika Hope. All former documents remain valid. General Public please take note. CHANGE OF NAME I, formerly known and addressed as Miss Rachel Omokunle Akinuli now wish to be known and addressed as Mrs. Rachel Omokunle Olaniyi. All former documents remain valid. General Public please take note. aware, both states share peculiar history and pedigree in demography, economic viability and leading roles within each of our geopolitical regions. “We both have the highest population and cosmopolitan spread in Nigeria. I make bold to say that the CHANGE OF NAME I, formerly known and addressed as Evelyn Ifeayinwa Onwuka now wish to be known and addressed as Evelyn Oghogho Onwuka. All former documents remain valid. General Public please take note. CHANGE OF NAME I, formerly known and addressed as Chidinma Oyiri Dibunma Obi now wish to be known and addressed as Chidinma Oyiri Obi-Eghomwanre. All former documents remain valid. General Public please take note. ing they were too high. “The NDIC as a deposit insurer supports the passage of the bill into law as the current fine of N1,000 does not meet contemporary realities. However, it is our submission that the the proposed penalty of N200,000 is above N100,000 percent increment from the current penalty. In view of the above, we propose a fine of N5,000.” On the issuance of licence, NDIC proposed that CBN should seek the consent of NDIC before granting any application for banking licence. “This is to enable the corporation have a prior evaluation of the applicants with regard to insurance of deposits,” Taribo stated. Speaking earlier, Jones Onyereri, chairman, House Committee on Banking and Currency, explained that the proposed increase in penalties to the bank operators would streamline the operations of such banks to conform to international best practices. performances of the two states in areas of economic reforms, improved their business environments have contributed significantly in boosting Nigeria’s “ease of doing business” global ranking from 169 to 145 for the year 2018 as measured in 2017. CHANGE OF NAME I, formerly known and addressed as Golubkova Irina Alexandrovna now wish to be known and addressed as Oyedokun Irina Aleksandrova. All former documents remain valid. General Public, all authorities, ministries, organisations and individuals please take note. CHANGE OF NAME I, formerly known and addressed as Miss Akinruli Esther Aarinola now wish to be known and addressed as Mrs Emaiye Esther Arinola. All former documents remain valid. General Public please take note.

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