Adeosun: FG, states N13.1b richer in December – NAN

By Racheal Ishaya/Abuja

The Minister of Finance, Mrs Kemi Adeosun said the Federation Account Allocation Committee (FAAC)  shared N400 billion which is N13.1 billion more than what the three tiers of government shared as revenue in December.

She said the N400 billion was distributed under four distributable sub-heads.

They are statutory allocation where the sum of N224.88 billion was allocated; Value Added Tax N79.27 billion, exchange gain N52.84 billion and excess Petroleum Profit Tax N42.99 billion.

From the statutory allocations, the minister said after deducting cost of collections to the revenue generating agencies, the Federal Government got N105.76 billion, states N53.64 billion and local government councils N41.35 billion.

In addition, she said the sum of N15.5 billion was given to the oil producing states based on the 13 per cent derivation principle.

For VAT allocation, Adeosun said the Federal Government received N11.4 billion, states N38 billion while Local Government Councils got N26.63 billion.

Adeosun said that the Federation generated N145.6 billion as Mineral Revenue and N103.1 billion as non-Mineral revenue.

The minister said the excess crude account now has a balance of $2.45 billion.

Adeosun said that the Force Majeure at Forcados, Qua Iboe and Brass terminals was still impacting negatively on revenue generation.

For instance, she said there was revenue decline of 65.4 million dollars in oil export sales due to a drop in production volume of 1.39 million barrels.

Also, the Chairman, Forum of Finance Commissioners in Nigeria, Mr Mahmoud Yunusa, said that states were determined to keep improving their internally generated revenue.

“Low federation revenue has become a blessing in disguise to us. Initially almost all the states relied heavily on FAAC.

“But now, because the money is no longer there, it has forced us to look inwards at the opportunities and potentials in our respective states and begin to explore them.

“We had to look at cutting cost in running governance and blocking all revenue leakages’’,. he said.

Yunusa said that most of the states have been able to improve their IGR through improved tax collection method and increased tax base.

No petrol scarcity, no debt to marketers: PPPRA – NAN

PPPRA Thursday denied reports speculating an imminent petrol scarcity over Federal Government’s inability to pay fuel marketers’  N660 billion debt‎. ‎

In a statement released in Abuja by the PPPRA spokesman, Mr Lanre Oladele, the agency said the report was misleading and “a gross misrepresentation of facts”. ‎

‎”There were reports that fuel queues may soon return following the Federal Government’s inability to settle marketers’ N660billion  debt and non-availability of foreign exchange to fund fuel imports.

”PPPRA wishes to state unequivocally, that these stories are gross misrepresentation of available facts at our disposal, hence misleading.

”For the avoidance of doubts, the National Petroleum Products Stock data and import plan, currently indicate that the country has two months Premium Motor Spirit (petrol) sufficiency.

”Hence, we want to assure motorists and commuters alike, that the products supply situation is robust and able to cater for the fuel needs of all Nigerians, pending when ongoing challenges are addressed.

”As a corollary to the above, PPPRA also wants to inform that contrary to a widely-held belief on the status of kerosene, the product is fully deregulated.‎

”We hereby appeal to all Nigerians to remain calm and desist from any form of panic-buying, as we assure of our total commitment to adequate products supply and distribution across the country, in line with our mandate,” Oladele said.‎

He appealed to all depot owners to adhere strictly to the subsisting truck-out principle in order to ensure that products get to retail outlets across the country in a seamless manner.

”The Agency shall not hesitate to apply appropriate sanctions where necessary,” he warned.

The NNPC had on Wednesday also assured Nigerians that there was no fuel scarcity to warrant panic buying by motorists. The corporation also denied plans to increase petrol price of N145.

In a statement released in Abuja by the Group General Manager, Group Public Affairs Division, Mr Ndu Ughamadu, the Corporation further assured motorists that there was enough supply in stock.

”The Corporation has 1.3 billion litres stock of PMS, otherwise called petrol, which is sufficient to serve the nation for more than 38 days.

”This plea comes on the heels of reports that some motorists have begun panic buying of petrol, following rumours that the government is about to increase the pump price of the white product from N145 per litre.

”NNPC wishes to assure Nigerians that there is no iota of truth in the rumour that government is scheduled to adjust pump price of petrol.

”Indeed, with the resumption of production by the Corporation’s three refineries in Kaduna, Port Harcourt and Warri, complemented by imports, there is enough stock of petrol‎, diesel and kerosene,” Ughamadu said.

We’ve no choice but to borrow $30bn – Adeosun – Punch

Ifeanyi Onuba, Abuja

The Minister of Finance, Mrs. Kemi Adeosun, on Thursday said that the inability of the Federal Government to generate enough revenue to meet its obligations had left it with no other choice than to turn to international financial institutions for loans to finance critical infrastructure projects.

She said that with a huge monthly personnel expenditure of about N210bn, coupled with additional debt service burden of N120bn,making a total of N330bn every month, it had become difficult with the low receipts from oil to generate enough revenue to meet these obligations as well as fund capital projects.

The minister stated these in Abuja at the 14th Daily Trust Dialogue, which had as its theme: ‘Beyond recession: Towards a resilient economy’.

The Senate had on November 1, 2016 unanimously rejected President Muhammadu Buhari’s 2016-2018 external borrowing rolling plan through which the sum of $29.9bn was requested. It asked the executive to provide further details on it.

The budget has a huge deficit of N2.36tn (or 2.18 per cent of the country’s Gross Domestic Product), a figure the President said would be financed through borrowing.

While a lot of people have faulted the borrowing plan, which seeks to borrow the sum of $29.9bn from foreign sources, the Finance minister said the realities on ground had made it imperative for Nigeria to get the loan if it must survive the economic crisis.

She said, “Where are we today and what’s the problem? This is my requirement every month: salaries, statutory transfers every month, I need N210bn every month. Debt, not the debt that we are planning to take, but the inherited debt; I need N120bn just to service it. So, every month, I need N330bn

“Just to give you an idea of where we are today, last month’s FAAC allocation was N310bn. So, the Federal Government got about N140bn; but I must cover N330bn a month before we can do a single capital project.
“So, when we start the argument, should we borrow, should we not? The truth is that we have no choice. If you are waiting for the oil price to recover, the prognosis is that it’s not going to go back to $110 per barrel any time soon.”

Adeosun added, “So, to get the economy growing, we have no choice but to look for low-cost funds and put that infrastructure in place, because it is the infrastructure that will unlock the economy.

“It is the infrastructure that will allow us to, rather than importing powdered milk, have the cows in Taraba State with huge potential.”

The minister lamented that if the country had adopted the steps being taken now to reduce expenditure through efficiency in spending when oil price was $110 per barrel, Nigeria would not have slipped into recession.

She said apart from borrowing, part of the survival strategies of the government was to make sure that revenue generating agencies remitted their operating surpluses to the coffers of the government.

Tomato paste manufacturers tackle CBN over FX policy – Vanguard

By Nkiruka Nnorom

THE Union of Tomato Paste Manufacturers in Nigeria has raised alarm over the danger of the foreign exchange policy on the industry.

They said that the once vibrant industry might cease to exist next year if the Central Bank of Nigeria (CBN) did not amend its policy on forex to exclude triple concentrate tomato paste from the scope of the 41 items under the restricted list.

The union raised the alarm through its spokesperson, Mr. Nnamdi Nnodebe. Nnodebe, who is also the Managing Director, Sonia Foods Industries Limited, said: “While trying to heal the economy, the pillars that hold the economy together are being removed. Pillars such as the tomato industry are invaluable to growing a vibrant economy. The total investment in the packing manufacturing sector of tomato paste is about N19 billion. The economy cannot afford to lose such a huge industry that provides millions of direct and indirect jobs for Nigerians.

The fact is this industry that grew to be the 13th largest in the world and second largest in Africa might die before the second quarter of next year if the ban on forex is not lifted.” “The unavailability of tomato paste triple concentrate for the industry will grind production to a halt; meaning millions of people who depend on the industry for their livelihood will lose their jobs or have reduced incomes. The impact of this on the economy will be massive and negative as consumer behaviour will also be influenced leading to low purchase of goods in all sectors, not just tomato.

These workers also patronise electronics shops, banks, petrol stations, they pay taxes etc. but they will no longer be able to fulfill all these.” The value of imported tomato paste in Nigeria used to be about 170 million USD (before the CBN ban on 41 items). The imported triple concentrate tomato paste used as raw material by the packers used to be around $50 million out of the $170 million (2014).

The imported concentrated raw material is then further processed in order to make it available for the consumers into products such as consumer packs of tomato paste, ketchup, sauces etc. “It makes better economics to import the raw materials that will enable production, grow the economy and keep jobs rather than importing the finished products or frustrating efforts to get the raw materials, thereby rendering millions jobless which might further kill the economy. The local packing industry can also form the hub for exports to the hinterland countries as there are adequate local capacities to more than cater to the domestic requirement,” Nnodebe said.

Hope rises for recovery from economic recession in 2017 – Guardian

By Kingsley Jeremiah

But companies operating in the country are worried that struggling economy, corruption, volatility and political risks as well as violence may jeopardise business development.

BMI’s latest report revealed that negative investor sentiment and delays on government-supported infrastructure would keep real Gross Domestic Product (GDP) growth far from pre-2014 levels.

However, experts at the 6th Annual Allianz Risk Barometer in Lagos, on Wednesday, noted that growing concerns, including digital dilemmas arising from new technologies and cyber risks as well as government policies may not enable businesses to thrive.

While macroeconomic situation is expected to improve should the country exit the economic slump, projected risks could create loss in GDP, as organisations need to invest more resources into better monitoring politics and policymaking.

“We see little prospect of the NGN6.7trillion budget shown to parliament by President Muhammadu Buhari in October, being realised in 2017, despite the deficit likely to remain quite wide, at 2.7 per cent of GDP,” BMI said.
It however noted that Nigeria’s current account deficit will be equivalent to 4.2 per cent of GDP in 2017, marking an improvement on the 6.2 per cent projected in 2016.

“This will be driven by a pick-up in the oil sector, both in terms of global prices and production. Nevertheless, this is still far from the surpluses recorded over the decade to 2013, which averaged 9.3 per cent of GDP.

“We expect that pressure on the naira will be much reduced in 2017 following a projected devaluation to N350 per dollar, but the weak inward flows of foreign capital will continue to exert downward pressure on the currency, albeit to a far lesser degree than seen in 201,” the report said.

The President, Risk Managers Society of Nigeria (RIMSON), Jacob Adeosun, who described the Barometer as a worthy compass, telescope and guide, urged managers, investors, professionals, governments, policymakers and corporate entities not to ignore it in their strategic decisions in 2017.

Speaking, the Chief Executive Officer, Allianz Global Corporate & Specialty (AGCS), Africa, Delphine Maïdou, noted that: “Nigeria faces macroeconomic challenges including low commodity prices, the Chinese slowdown and the tightening of U.S. monetary policy. It also suffers its own internal pressures such as inflation, weak domestic demand and socio-political tensions. The country’s growth is held back by weaker macroeconomic environment, the struggling financial sector, underdeveloped infrastructure, insufficient health and education.”

Emefiele: CBN’s Policies in Best Interest of Nigerians At This Time – Thisday

The Governor of Central Bank of Nigeria, Mr Godwin Emefiele, yesterday offered insights into the prevailing economic crisis in the country, explaining that it was caused by the nation’s failure to diversify the base of its economy.

The CBN chief, who spoke in Abuja at the Annual Media Trust Dialogue, with the theme, “Beyond Recession: Towards a Resilient Economy,” also defended the monetary policies of the apex bank, saying they were made in the best interest of majority of Nigerians.
Panelists at the dialogue had come down heavily on the central bank’s monetary policies, arguing that they weighed heavily in favour of the few rich in the country.
They were particularly critical of its forex policy which allocates 60 percent of the nation’s forex to the manufacturing sector that they said accounts for only 10 per cent of the Gross Domestic Product (GDP).

At the parley were other prominent Nigerians, including the Speaker of House of Representatives, Hon. Yakubu Dogara; Minister of Finance, Mrs. Kemi Adeosun; a former minister of Petroleum Resources, Chief Philip Asiodu; and the Chairman, Standard/IBTC, Mr. Atedo Peterside, who all proffered solutions to the nation’s biting economic hardship.

But Emefiele said the panelists’ perception of the CBN policies was wrong, submitting that the “policies were put in place to help Nigeria pull through the hard time.”
He said the forex policy was meant to stimulate the economy at a time of acute scarcity.

He explained that the country found itself in the present situation due to lack of appropriate commitment to economic diversification, especially when the earnings from oil were as high as $140 per barrel, just as he noted that earnings of the government had risen to as high as $3.2 billion and fell to about $500m per month recently.
According to the governor, there was also a time when the crude oil price stabilised at $105 per barrel over a period of five years.

“What did we do with the huge accretion to the reserves then?” he queried yesterday.
Emefiele therefore, counselled critics of the CBN and government policies that “priority will be given to Nigerian masses by managing the limited resources to provide for industrial raw materials, plants and equipment and agricultural inputs in order to create employment and generate wealth.”

One of the panelists, Mr. Atedo Peterside, had raised concern that the foreign exchange policy of the CBN was hurting business interests to which the CBN Governor responded that policy makers don’t make policies in isolation or are designed to hurt the citizenry but with the objectives to improve the life of all concerned and not just for a few powerful and rich individuals.

Many of the speakers at the dialogue, however, suggested radical and bi-partisan measures to build a vibrant economy.

They recommended that for the nation to overcome the recession and begin a trajectory of sound economic growth, it must, among others, go back to the era of rolling plans, embark on massive infrastructure development, and align fiscal and monetary policies efficiently.

In his opening remarks, Asiodu who was the chairman of the occasion, embarked on a historical journey, tracing the nation’s present economic stagnation to the abandonment of development planning.

He recalled that in the early ’70s, the Yakubu Gowon administration had a comprehensive development plan, which was jettisoned when former President Olusegun Obasanjo emerged as military head of state in 1976.

He recalled that successive administrations also abandoned development plans until the late Gen. Sani Abacha enunciated a broad economic plan, encapsulated under Vision 2010.

According to him, by 1998, all the institutions to galvanise efforts towards implementing the 2010 blueprint were already put in place by the Abacha administration.

That blueprint, he regretted, was also jettisoned by the civilian administration under former President Obasanjo in 1999.

Asiodu noted that the President Goodluck Jonathan government was to come up with Vision 2020 and the Transformation Agenda, which were not implemented to the letter.

He lamented that the lack of political will and commitment to pursue and implement development plans by past administrations set the stage for the deterioration of infrastructure, and brought the nation to the current economic quagmire.

Asiodu observed that in the first republic, Nigeria was at par with the Asian Tigers growth-wise because there were workable development plans.
He said it was wrong to look at the economic recession from the standpoint of oil and the precipitous fall in the price of the commodity.

Asiodu, who was also a former Chief Economic Adviser to former President Obasanjo, said the fall in the price of oil was not the cause of the nation’s problem, arguing that many African countries without oil were doing well.
He called for a national income policy, and underscored the desirability of such a policy with a flash back to when he was in government.

In her presentation, the Finance Minister, Mrs. Kemi Adeosun, noted that lack of infrastructure had held the country down for too long, regretting that an abysmally low investment on infrastructure had been a trend over the years.

Adeosun lamented that the previous administrations missed the opportunity of investing massively on infrastructure, which she described as the bedrock of economic growth and development, when oil prices were very high.

She also debunked views that Nigeria is an oil economy, describing the notion as erroneous.
According to her, with a daily oil production of 2.2 million barrels of oil per day (mbpd) for a population of about 180 million people, compared to Saudi Arabia’s 10 mbpd for a 30 million population, Nigeria cannot be described as an oil economy.

The minister stated that poor investment on infrastructure, corruption and inability to foresee the future when oil prices were high led to the current economic recession.

She noted that the present administration was desirous of navigating the country out of past mistakes and launch it into a sustainable economic growth, anchored on massive infrastructure.
Investment in infrastructure, she noted, was the key to the nation’s industrialisation.

In his presentation, the Chairman of Stanbic IBTC Bank, Mr. Atedo Peterside observed that while the present administration was doing some things right, it was equally taking many wrong steps, noting that there was a reluctance on the part of the government to break away from the past.

According to him, the Buhari administration has just this year to make an impact on the economic landscape and the general well-being of the nation as politicking would dominate the scene from 2018.

He listed some of the challenges of the administration as the inability to take bold, holistic and audacious approach to harmonise fiscal and monetary policies to attain sound economic outcomes.

Peterside said the government’s monetary and economic policies were at best unclear, citing the existence of multiple forex regimes and half-hearted policy on deregulation, among others.

On what he listed as 11 items he considered as the grey areas that government did not do well, he said not resolving the Niger Delta agitation expeditiously was a major undoing, which had dire economic consequences for the country.

That, he said, led to a $6 billion monthly revenue loss, even as he picked hole in the lack of will for the full deregulation of the downstream sector.
He also pooh-poohed the CBN forex policy, particularly its directive to the banks to allocate 60 per cent of their FX resources to the manufacturing sector.

Peterside said it was wrong to allocate 60 per cent FX to a sector that accounts for about 10 per cent of GDP and leave a mere 40 per cent to all the other sectors, adding that it engendered a huge distortionary trend, created panic in the system and led to the disappearance of forex inflows.

He also stated that shying away from the political restructuring of the nation was a serious mistake on the part of the government adding that irrespective of how unpalatable the concept might sound to some people, it was a necessity.

While calling for an open mind on the issue, Peterside, who punctuated every point with “because I love my country,” noted that less than 25 per cent of the nation’s 36 states were economically viable.

In his keynote address, the Speaker of the House of Representatives, Hon. Yakubu Dogara, said he was optimistic the economy would come out of the recession soon, adding that the National Assembly was collaborating with the executive to turn the economy around.

He regretted that lack of development plans was the nation’s bane, adding that wasting resources to plan and not implementing such plans was wrong.

Dogara noted that while the federal government was tackling terrorism, it was disturbing that other security challenges, including armed robbery, kidnapping and other vices were on the prowl.
He regretted that attracting Foreign Direct Investment (FDI) would be difficult in such an atmosphere.

Naira trades at 498/$ as foreign reserves hit 10-month high – The Cable

Despite the continuous rise in Nigeria’s foreign reserves, the naira is currently trading at 498 to the dollar, defying the movement in reserves.

The foreign reserves hit a 10-month high on Thursday, surging to $27.378 billion, which is also its highest point in 2017.

For 2017 alone, the foreign exchange has added over $1 billion, climbing out of an 11-year low. The naira was however seen as trading at 305 per dollar at the official side of the foreign exchange market.

Speaking at the World Economic Forum in Davos, Switzerland on Wednesday, Vice President Yemi Osinbajo, said the government was in talks with the CBN to fully implement the “free-float” foreign exchange policy, but it simply could not float the naira.

“We already have a foreign exchange policy. Now, that policy, that is the point I have been making all along, that stabilising that policy, ensuring that it works fully, is really what we are trying to get to, in our interactions with the central bank, which of course is independent,” he had said.

“We are trying to get them to see that you need to implement this policy fully. Central bank of course has its own constraints; we have to be careful.

“We simply can’t allow the currency to float; we have to look at all of the market conditions and all of that. But really, the point we are making is that we must create the environment which will help the Central Bank as well.”

The British pound and euro were trading at 596 and 520 respectively at the parallel market, while also exchanging for 388, 337 at the official side.

Nigeria’s crude oil output increases by 403,900bpd – Guardian

Nigeria’s crude oil output increased by about 403,900 barrels per day (bpd) to 1.940 million bpd in December 2016, above November levels of 1.536 million bpd, according to the current figures released by Organisation of the Petroleum Exporting Countries (OPEC).

Compared to third quarter 2016, 1.2 million bpd output, the boost in production is attributed to Federal Government’s overtures to militant groups in the oil-rich Niger Delta region, to pave the way for a comprehensive dialogue with a view to resolving all the issues.

Due to the vandals and militants activities Nigeria’s crude oil output dropped to as low as 900,000 bpd in early 2016, a far cry from the 2.2 million barrels benchmarked in the budget.

Despite the December uplift, the country is having a shortfall of 260,000 barrels daily, which will challenge the full execution of the 2017 National Budget, also pegged at 2.2mbpd.

OPEC said in the report released on Wednesday, that crude oil production in December decreased by 2.21 million bpd from the previous month to average 33.08 mbpd.

According to OPEC, which supplies about 40 percent of the world oil, output increased the most in Iraq, Angola and Libya, while production in Saudi Arabia, Nigeria and Venezuela showed the largest decline.

Speaking on efforts the country is making to increase oil output, Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, in his 2017 projection for the industry hoped that Nigeria would achieve 2.1 million barrels per this month.

Kachikwu noted that the vandalism of the Forcados export pipeline negatively impacted on the country’s oil output, adding that the issue was currently being addressed.

He said: “In terms of crude oil output, we are still not where we should be. These days, I am always conscious about giving figures so that I do not attract attention unnecessarily. “Obviously, the Forcados incident did impact us. My guess is that we are moving closer to 1.9 million barrels per day at this point. We are still managing the issue.”

The Director General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf stressed the need for the country to increase output.

To achievethis, Yusuf said the country must tackle the problem of the Niger Delta, which is a critical to maximising inherent opportunities.

“Remember, we were exempted from the OPEC quota thing, so we should take full advantage of that by increasing our output. We cannot increase output unless we deal with Niger Delta issue. So that is why we have to tackle this issue of Niger Delta. We need to come up with clear ways of dealing with the problem,” he said.

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Dollar to Naira Rate Black Market January 20 2017

Dollar to Naira Rate Black Market January 20 2017. Today’s Naira Black Market Exchange Rates. Dollar to Naira. Pounds to Naira. Euros to Naira.

These are the prevalent rates for Lagos. Actual rates may vary slightly based on vendor. Rates are updated during the day as they change.

NAIRA (N)

USD ($)

EURO (€)

GBP (£)

BUY/SELL

BUY/SELL

BUY/SELL

20/1/2017

490/498

515/522

587/597

19/1/2017

490/498

515/520

587/596

18/1/2017

490/497

515/521

587/597

17/1/2017

490/497

510/517

587/597

16/1/2017

490/497

505/515

587/597

Click Here for BDC Rates

Click Here for Western Union Money Transfer Rate

Naira depreciates further against dollar – NAN

The Naira on Thursday remained indifferent to the sale of over $250m to licensed Bureau De Change operators nationwide as it suffered another loss against the dollar.

The Naira inched against the dollar at the early hours of Thursday morning by 2 points but could not sustain the gain as it shed 3 points to close at N498 to a dollar at the open market.

The Pound Sterling and the Euro traded at N596 and N520, respectively, at the open market.

At the BDC window, the Naira exchanged at N399 to a dollar, CBN controlled rate, while the Pound Sterling and the Euro closed at N599 and N522, respectively.

Trading at the interbank market saw the Naira weakening further as it closed at N305.50, from the N305.25 it recorded on Wednesday.

Traders at the market were hopeful that the Naira would bounce back as quickly as possible.

They, however, noted that the Naira was waging a guerilla-like war against speculators who manipulate the market for their selfish ends.