Nigeria’s Arik Air to buy mostly Boeing planes to double its fleet -Reuters

By Oludare Mayowa and Chijioke Ohuocha

LAGOS Oct 31 (Reuters) – Nigeria’s largest airline Arik Air plans to nearly double its fleet to 52 planes within 10 years and has already ordered some of them from Boeing, a source at the company said on Monday.

Most of the carrier’s existing fleet are Boeing planes and the source, who did not wish to be identified, said the airline would buy most of the new planes from the U.S. planemaker. The source did not say how many had already been ordered or the value of the purchases.

Privately owned Arik Air needs more planes as it aims to add international routes and increase services, including daily flights to New York, to offset a slowdown at home and bring in more hard currency.

It is also seeking new investors to help it grow and has said it wants to raise up to $1 billion through a private share placement next year and a possible initial public offering (IPO).

Founded a decade ago and now west Africa’s biggest carrier by passenger numbers, Arik Air has appointed advisers for the share placement and potential IPO in Lagos, with a secondary listing in London.

“We hope to maintain our market leadership and our growth strategy involving substantially increasing our fleet to 52 aircrafts by 2025,” Managing Director Chris Ndulue said on Monday at a briefing in Lagos to mark the carrier’s 10 years of operations.

“We plan to … put our footprint in Europe, Asia and Latin America and the Middle East, and this requires additional aircraft,” he said.

Arik Air’s home market has been hit by falling demand as a currency crisis in Africa’s top economy deepens, due in part to the oil price slump. United and Iberia both stopped services to Nigeria this year and Emirates and Kenya Airways have announced plans to suspend flights to Nigeria’s capital Abuja by next month.

Ndulue said Arik Air would also look at various funding options from international banks despite dollar shortages and the economic recession at home, which had affected businesses.

The carrier currently has a fleet of 28 aircraft, mostly Boeings but also three Airbus planes and nine Bombardier aircraft.

New routes and services would help the airline generate foreign currency.

Last week Arik announced plans to start daily flights to New York in the next six months, up from three times a week, and start flights to Rome and Paris within 18 to 24 months. The carrier flies mainly within western and central Africa, as well as to London and Johannesburg.

A plunge in Nigeria’s naira currency has ramped up the cost of importing jet fuel and hurt profit margins as many passengers pay fares in naira. (Reporting by Oludare Mayowa and Chijioke Ohuocha; Editing by Susan Fenton)

 

Naira records marginal appreciation against dollar – NAN

The Naira on Monday in Lagos appreciated marginally against the dollar at the parallel market, gaining N2, the News Agency of Nigeria NAN) reports.

The currency exchanged at N468 to the dollar as against N470 it traded on Friday.

The Pound Sterling and the Euro closed at N565 and 510, respectively.

Trading at the Bureau De Change (BDC) window showed that the currency closed at N385 to the dollar, while the Pound Sterling and the Euro traded at N564 and N504, respectively.

A BDC operator, Mr Abubakar Adamu, expressed optimism that the naira would appreciate further in the coming days.

OPEC oil output hits new record on Nigeria, Libya – Reuters survey

* OPEC supply rises by 130,000 bpd to 33.82 million bpd

* Output 820,000 bpd above top of new planned output range

* Saudi output steady to lower, still close to record

By Alex Lawler

LONDON, Oct 31 (Reuters) – OPEC’s oil output is likely to set another record high in October, a Reuters survey found on Monday, as Nigerian and Libyan output partially recovered from disruptions and Iraq boosted exports.

The rise in output could add to scepticism about OPEC’s ability to finalise a plan agreed in September to limit supplies. Oil, which rallied to a 2016 high near $54 a barrel following the decision, has since slipped towards $48.

Supply from the Organization of the Petroleum Exporting Countries has risen to 33.82 million barrels per day (bpd) in October from a revised 33.69 million bpd in September, according to the survey based on shipping data and information from industry sources.

That would be 820,000 bpd above the top end of a target output range OPEC agreed to adopt at a Sept. 28 meeting. According to analysts, production near 34 million bpd would prolong the supply surplus weighing on the market.

“With OPEC production creeping up towards 34 million barrels a day, a production freeze guarantees that the oil market will remain out of balance throughout 2017 and into 2018,” said David Hufton of oil broker PVM.

Supply has risen since OPEC in 2014 dropped its historic role of fixing output to prop up prices as Saudi Arabia, Iraq and Iran pumped more. Production has also climbed due to the return of Indonesia in 2015 and Gabon in July as members.

October’s supply from OPEC excluding Gabon and Indonesia, at 32.88 million bpd, is the highest in Reuters survey records starting in 1997.

In October, the increase was led by Nigeria, Libya and Iraq.

Supply in Nigeria, where output had fallen due to militant attacks on oil installations, rose as exports of Qua Iboe and Forcados crude resumed.

In Libya, production has been hit by port shutdowns, strikes and protests since the fall of Muammar Gaddafi in 2011. Output has increased in recent weeks since the reopening of some major terminals, but remains a fraction of the 2011 rate.

Iraq exported more crude from its northern and southern ports, lifting supply to 4.58 million bpd in October from a revised 4.52 million bpd in September, according to the survey. Iraq says its September production is higher.

Saudi Arabia has kept supply steady to lower, but still within sight of the record high reached in the summer, sources in the survey said. One source said there were signs of a bigger drop in output.

Fellow Gulf producers the United Arab Emirates and Kuwait both pumped slightly more. The two say their production is higher than estimated by both the Reuters survey and by the sources that OPEC uses to monitor its output.

Supply growth in Iran, OPEC’s fastest source of production increases earlier this year after the lifting of Western sanctions, has slowed down as output nears the pre-sanctions rate. Iran is seeking investment to boost supply further.

Among countries with lower output, the biggest drop was in Angola because of planned maintenance on the Dalia crude stream which pushed exports to a 10-year low.

OPEC’s smallest producer Gabon pumped less because of a workers’ strike, which cut output for part of the month.

The Reuters survey is based on shipping data provided by external sources, Thomson Reuters flows data, and information provided by sources at oil companies, OPEC and consulting firms. (Additional reporting by Rania El Gamal; Editing by William Hardy)

 

CBN sells N51bn T-Bills, interbank rate flat – Today

The Central Bank of Nigeria (CBN) at the weekend, sold about N51 billion ($168 million) worth of treasury bills to mop up liquidity even as the overnight lending rate traded flat around 10 per cent, traders said.

The bank sold N25 billion of 174-day open market operation bills at 18 per cent and N26 billion of the 364-day paper at 18.5 per cent at an auction of Friday.

The transaction brought the total of debt sales last week to N370.67 billion as the CBN has been trying to remove cash from the banking system to contain annual inflation, which hit a more than 11-year high in September.

Financial market analysts said liquidity got a lift by the CBN’s budget allocations for government agencies on Monday and the repayment of matured treasury bills due on Thursday.

Traders said major players were willing to lend their cash at 10 percent for overnight lending, unchanged to Thursday. “We expect the overnight rate to remain stable around the present level next week unless the central bank sustains its cash withdrawal exercise,” one trader said.

The T-bills’ maturities range between three months and a year and would be raised today, according to the CBN. T-bills are marketable short-term money market securities that serve the purpose of raising money for the government and also help in monetary policy management of the CBN.

The CBN issues treasury bills to raise cash to fund the government budget deficit, help manage banking system liquidity and curb rising inflation.

The CBN had on August 3, raised N245.18 billion ($773.44 million) worth of T-bills to settle short-term obligations. The CBN issued N45.18 billion in three-month debt, N80 billion of six-month paper and N120 billion of one year bills in a Dutch auction, traders said. Indicative rates for the auction are 16 per cent for three-months, 18 per cent for six-months and 18.5 per cent for one-year bills. The auction’s results will be published the day after the sale.

The main investors in government securities are mainly pension funds and commercial banks which control more than 60 per cent of the market, followed by insurance funds and a few micro-finance institutions.

Yields on fixed income securities have been rising in recent months with the CBN mopping up naira liquidity to try to lure back foreign investors who sold naira assets following the plunge in the price of oil, Nigeria’s economic mainstay.

The bank lifted interest rates by 200 basis points last week to 14 per cent to help fight inflation, which hit a 10-year high of 16.5 per cent in June.

Nigerian militant group threatens more attacks if army campaign continues – Reuters

* Militants fight for greater share of oil money in Niger Delta

* Major group warns President Buhari to end military campaign

* Buhari due to meet Niger Delta leaders on Tuesday

* Nigeria’s oil hub suffers from poverty despite energy wealth

By Tife Owolabi

LAGOS, Oct 31 (Reuters) – A Nigerian militant group threatened on Monday to step up attacks on oil facilities in the Niger Delta if the president pursues a military campaign, casting a shadow over peace talks between the government and groups due to start on Tuesday.

In written responses to Reuters questions, Mudoch Agbinibo, spokesman for the Niger Delta Avengers (NDA), said President Muhammadu Buhari must “come down from…his iron-horse of ethnic and religious bigotry”.

On Tuesday, Buhari is due to meet Niger Delta leaders and representatives of various militant groups in Abuja, the first time since the government began a dialogue in June to end a wave of attacks on oil facilities that has crippled output.

The stakes are high as the OPEC member badly needs peace in the impoverished swamp land to bring back oil output, which at its lowest point halved from 2.2 million barrels per day in January, to drag Africa’s biggest economy out of recession.

Analysts say the NDA are the region’s most sophisticated militants and receive help from inside oil firms advising which facility to attack. Their divers blew up a Shell undersea pipeline, which stopped up to 300,000 bpd overnight.

Agbinibo said the group was “determined to gradually grind the flow of our oil” if Buhari’s administration opted to continue its military campaign in the southern region.

Buhari ordered a heightened military presence in the restive region in May which saw the introduction of patrols in remote communities which has stoked anger in the last few months.

An offensive targeting militant camps launched in August led to the deaths of five people and the arrests of 23 others. The death of an ex-militant leader’s 84-year-old father due to injuries allegedly sustained in an army raid marked a flashpoint.

“Any plan of the Nigerian government thinking of exploiting the resources of the Niger Delta to fund…government without our genuine involvement will be a very tall dream,” said the spokesman who carries the title of “Brigadier General”.

There was no immediate comment from the Nigerian government.

The comments come comes days after the Avengers claimed a strike on a Chevron pipeline last week – only the second since saying in August they would cease hostilities to pursue talks. They said it was carried out as a warning to oil companies.

The Avengers want a greater share of Nigeria’s oil wealth to be directed to the impoverished southern swampland Delta region, which produces most of the crude oil whose sales account for around two-thirds of government revenue.

The NDA spokesman said the group was a “liberation movement, poised towards the control of our resources” that would “pay appropriate tax to the central government”.

The secretive group had so far avoided talking to foreign media, announcing only attacks and often lengthy and rambling statements resembling lectures on Nigerian history on social media and its website.

There is no phone number to call them, only an anonymous email account. Agbinibo has previously sent details of attacks directly to Reuters which have later appeared on the group’s website – its primary means of communication.

NEW FIGHT

The last administration in 2009 ended a previous Niger Delta insurgency by offering cash, contracts and job training for those fighters who stopped blowing up pipelines.

The militants resumed their fight in January after Buhari shook up the amnesty as much of the payments worth some $300 million annually had ended up in the pockets of “generals”. Some had become millionaires on contracts protecting pipelines they used to blow up.

The Avengers in August said they would halt hostilities to pursue talks with the government. Asked by Reuters whether the NDA would take part in Tuesday’s talks, Agbinibo said it had given a mandate to local community leader Edwin Clark to handle negotiations.

In an email written in patchy English, Agbinibo said the NDA was ready to talk but Buhari, a Muslim from the north, needed to end what it called discrimination against the Christian region where many complain they remain poor despite the area producing most of Nigeria’s oil.

Agbinibo did not make any specific demands, repeating only grievances widespread in the south that a clique of northerners was exploiting the oil wealth.

“Gone are the days, where successive governments will be killing our people and bombarding our communities under the cover of military programs to protect the oil industry without our interest,” the militant spokesman said. (Writing by Ulf Laessing; editing by Ralph Boulton)

 

Nigeria central bank to hold $500 mln forwards auction – Reuters

LAGOS Oct 31 (Reuters) – Nigeria’s central bank will sell $500 million of two- and three-month currency forwards at auction on Monday to clear a demand backlog from manufacturers, traders said, as it seeks ways to resolve a chronic dollar shortage.

A lack of dollars has caused many firms to halt operations and lay off workers, compounding an economic crisis rooted in falls in the price of oil, which accounts for 70 percent of Nigeria’s budget revenues.

Africa’s biggest economy is facing its first recession in 25 years.

The central bank asked lenders to submit bids for the forwards before 1300 GMT, traders said.

The bank held a two-month dollar forward auction two weeks ago in which it sold less than expected, traders said.

The economic crisis has kept the naira under pressure against the dollar, and the central bank has struggled to support the local currency with diminishing foreign exchange reserves.

It said on Monday its dollar reserves dipped to $23.95 billion as of Oct 27, down 2.7 percent from Sept 27 and 20.5 percent lower than a year ago.

Traders said there had been no activity on the interbank market, where the naira is quoted at 305 per dollar, two hours after it opened on Monday.

On the black market, the naira was quoted at 470. (Reporting by Chijioke Ohuocha and Oludare Mayowa; editing by John Stonestreet)

 

Nigerian foreign reserves fall 20.5 pct to $23.95 bln by Oct. 27 -central bank – Reuters

LAGOS Oct 31 (Reuters) – Nigeria’s foreign currency reserves fell 20.5 percent year-on-year to $23.95 billion by Oct. 27, down 2.7 percent month-on-month, central bank data showed on Monday.

The central bank has been selling dollars to support the weakening naira, hit by low oil prices that have triggered the first recession for 25 years.

The central bank will sell $500 million currency forwards at an auction to clear demand backlog from manufacturers, traders said on Monday, as the regulator tries to find ways to resolve a chronic dollar shortage plaguing the West African nation. (Reporting by Oludare Mayowa; Editing by Chijioke Ohuocha and Louise Ireland)

 

Niger-Delta Leaders Reject FG’s $10bn Development Package – Vanguard

AHEAD of their meeting with President Muhammadu Buhari, tomorrow, strong indications emerged, yesterday, that elders, leaders and stakeholders of the Niger Delta Region have rejected the Federal Government’s move to launch a $10 billion (N4 trillion) infrastructural rebirth investment programme in the area.

The multi-trillion naira programme is part of the Short and Medium Term Priorities to Grow Nigeria’s Oil and Gas Industry (2015 to 2019), tagged the ‘7 BigWins’, a new initiative of the Ministry of Petroleum Resources.

Dismissing the proposal as a blackmail since there is no money to fund it, the Niger-Delta leaders said it is imperative to tell President Buhari that they are rejecting the move because it is private sector-driven with the aim of dragging the government into it.

“At the end of the day, other Nigerians will say why complain when you have $10 billion and the money is not there in the first place. If the companies have such money, they should pay the money owed the Niger Delta Development Commission, NDDC, rather than blackmail the region with such money,” they said.

These are part of the issues that would be raised with President Buhari tomorrow. These were also some of the resolutions at the end of a meeting held at the residence of the convener, Chief Edwin Clark at his 43, Haile Selassie Street, Asokoro, Abuja in the wee hours of Saturday.

Clark, a former Federal Commissioner for Information and South-South leader, will lead about 46 traditional rulers, elders and leaders drawn from the academia, civil society, freedom fighters and ethnic nationalities of the six South-South states to meet President Buhari tomorrow.

The leaders said it would be blackmail for the people of the Niger Delta as they were not consulted before the decision was taken and announced, adding that the people should have been carried along and their inputs obtained because they know the problems of the region.

Canvassing a bottoms-up approach instead of a top-bottom strategy, the leaders noted that the people of the region are suffering from oil exploitation, while mining is going on in the North without anyone harassing the people.

The elders also urged President Buhari to jettison moves to change the Maritime University, Okerenkoko, Gbaramatu, Delta State to a polytechnic, against the backdrop that the government did not consult with the people of the region.

The region is also seeking for a special Marshal plan for the Niger Delta, review of the amnesty programme and the need to have a ministerial department that will always be a platform for discussion by the people of the region.

Expected at the parley are the Olu of Warri, His Royal Majesty, Ogiame Ikenwoli; Obong of Calabar, Ekpo Abasi – Otu V; Orodje of Okpe Kingdom, His Royal Majesty, Major-General Felix Mujakperuo, retd; first Military Governor of old Rivers State and Amanyanabo of Twon-Brass, King Alfred Papapreye Diete-Spiff; and His Royal Majesty, Pere Charles Ayemi-Botu among others.

Also to attend tomorrow’s meeting are former Akwa Ibom governor, Obong Victor Attah; Air Commodore Idongesit Nkanga, Professor G.G. Darah, Chief Timi Alaibe, Ambassador Godknows Igali, Alabo Tonye Graham-Douglas, Alaowei Broderick Bozimo, Chief TKO Okorotie, Hon. Justice Francis Tabai, High Chief Mike Ekayama Loyibo, T.K. Ogoriba, High Chief Wellington Okirika, Chief Justice CET Ayama (retd), Dr. Alfred Mulade, Professor Oserheimen Osunbor, MOSOP leader, Ledum Mitee, former Cross River State governor, Donald Duke; Ambassador Nkoyo Toyo; Brigadier Gen. Idada Ikponmwen, Senator Rowland Owie, Tony Uranta, Chief Dan Ikpebide and Senator Bassey Henshaw among others.

The elders and leaders at the meeting will engage the President on the need for Justice, equity, fairness, confidence-building and consultations with Niger-Delta people prior to taking decisions on their problems.

Other issues to be raised at the parley include the need for restructuring the country and the zone; implementation of the 2014 National Conference report, the Petroleum Industry Bill, PIB, appointments of board of the Nigerian National Petroleum Corporation, NNPC where membership must reflect oil producing areas, and the need to perfect the protocol of memorandum of understanding, MOU on the ceding of Bakassi, because if not addressed, the people of the area stand the risk of not having a country. The problem in Gbaramatu with military allegedly harassing the people would also be presented before the President. After tomorrow’s meeting, the elders and leaders will ask for an executive session with the President where meaningful discussions would take place.

In his remark at the meeting, Chief Clark, who noted that the issue of not having representatives to negotiate with government for Niger Delta people was gone, saying the people are ready for negotiation. He said if there were issues, the meeting will not be the last, adding that the people are one family, though they are from different communities.

The elder statesman, who stressed the need for unity of purpose, said the people were not fighting the President but wanted government to carry them along.

His words: “We are going to ask for justice, fairness and equity. We are going to tell him that he should dialogue with the people of the Niger Delta and that the use of force is not and cannot be a solution to the Niger Delta crisis.

“He is our President. We will pledge our loyalty to him. We will congratulate him on his election because this is the first time we are seeing him as a people since he won. We are not going to be submitting any long list of demands to him, but we will let him know the need for him to carry the people of Niger Delta along in his government. They should take us as a people who are part of Nigeria. We are not separating from Nigeria.

“It is obvious that the country requires true federalism to move forward. We will tell him that and that is the same thing other parts of the country are asking for. If there is true federalism, we will not have a case of states not being able to pay salaries or maintain themselves. Those (states) that cannot stand on their own will join others.

“Of course, we are going to talk to him about the need to develop Niger Delta. The problem is not lack of ideas on what should be done, the Mitee Technical Committee Report on Niger Delta in 2009 and others are there; the problem is lack of political will to develop the region.”

Manufacturers Return To Black Market For Forex – Punch

The scarcity of foreign exchange from the official window has compelled some manufacturers to source funds from the black market in order to keep their business going.

In the coming months, affected manufacturing firms say consumers may have to pay about 100 per cent more than what they currently pay for locally manufactured products.

Some manufacturers say they have been on queue to access forex for a period ranging from six months to one year without making any progress.

“While you wait endlessly like this, your production suffers and you do not have products to sell to your customers,” the Managing Director of Mojec Metering, Chantel Abdul, said.

When In June, the Central Bank of Nigeria dropped its fixed exchange rate strategy and adopted a flexible exchange rate, the move was seen as one that would bring enough supply of forex.

Although the new official rate was put at N280, the President, Manufacturers Association of Nigeria, Dr. Frank Jacobs, agreed that though it was high but that there should be more dollars in circulation than in the previous months.

The Director General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, said of the policy, “The Chamber believes that this policy choice offers an improvement in the efficiency of foreign exchange allocation in the economy, improvement of liquidity in the foreign exchange market, reduction in the current trade arrears, reduction in the arrears of remittances.”

Contrary to all expectations, however, the foreign exchange market has become very illiquid and all efforts made to redeem the situation by the apex bank have yielded no respite to the manufacturing sector.

It was gathered that the CBN’s directive that 60 per cent of the forex supply in the system should go to the manufacturing sector had failed as manufacturers are unable to benefit from the policy months after the apex bank initiated it.

A reliable source in one of the commercial banks told our correspondent that banks were under a lot of pressure because of high forex demand from customers.

“There is very limited supply of forex and a lot of people are coming for the supply. The banks do not even have the forex not to talk of giving 60 per cent to a particular sector,” the source said.

An analyst and professor of Economics, Leo Ukpong, explained that the situation could not be helped, adding that the dollar was a foreign currency that Nigeria had no control over and so could not determine its supply or rate.

Already prices of some household items that are manufactured locally have been rising almost every day following the increase in the cost of production.

For instance, a tablet of toilet soap, which sold for between N25 and N30 a few months ago, was offered on Friday for N100; while the price of 1kg of Omo sachet had gone up to N600 from N350 two months ago.

A major household products manufacturer, PZ Cussons, said sometimes in April that it was producing with dollars sourced at the parallel market rate of N320, at a time when the Federal Government pegged the official exchange rate of the dollar at N197. The dollar currently exchanges for N450 to N470 at the parallel market.

DMO sets 2017 debt limit for FG – Today

The Debt Management Office has fixed the maximum limit for the federal government’s domestic and external borrowing at 22.08 billion dollars for the 2017 fiscal year.

This is part of policy recommendations of the Debt Management Office contained in its 2016 report of the annual national debt sustainability analysis.

According to the management office, new domestic borrowing has been pegged at 5.52 billion dollars, while new external borrowing is put at 16.56 billion for 2017.

The report explains that, the present value of ‘total public debt to GDP’ ratio for 2016 for the federal government is projected at 13.5 percent with an available borrowing space of 5.89 percent of the estimated GDP of 374.95 billion dollars for 2017.

The management office also recommends that government should explore other alternative and viable sources of financing for the country’s huge infrastructure requirements.