The International Monetary Fund (IMF) has put Nigeria’s debt at 34 percent of the country’s Gross Domestic Product (GDP).
 
The Fund revealed this in a new data it released on Wednesday, adding that global debt had reached an all-time high of $184 trillion in nominal terms, the equivalent of 225 per cent of Gross Domestic Product in 2017.
 
The IMF also warned of what it called “a legacy of excessive debt”.
 
In the new data released on the Fund’s website, IMF put total debt in Nigeria at 34 per cent of the nominal GDP of $376bn as of December 2017, with private debt accounting for 36.6 per cent of the debt.
 
Listing Nigeria among the low-income developing countries, IMF said public debt continued to grow in 2017 and, in some cases, reached levels close to those seen when countries sought debt relief.
 
“With financial conditions tightening in many countries, which includes rising interest rates, prospects for bringing debt down remain uncertain. The high levels of corporate and government debt built up over years of easy global financial conditions constitute a potential fault line.
 
“So, as we close the first decade after the global financial crisis, the legacy of excessive debt still looms large”, the IMF said.
 
According to the IMF data, on average, the world’s debt now exceeds $86,000 in per capita terms, which is more than two and a half times the average income per-capita.
 
“The most indebted economies in the world are also the richer ones. The top three borrowers in the world — the United States, China, and Japan — account for more than half of global debt, exceeding their share of global output.
 
“The private sector’s debt has tripled since 1950. This makes it the driving force behind global debt. Another change since the global financial crisis has been the rise in private debt in emerging markets, led by China, overtaking advanced economies. At the other end of the spectrum, private debt has remained very low in low-income developing countries.”
 
The IMF said global public debt, on the other hand, had experienced a reversal of sorts.
 
It added, “After a steady decline up to the mid-1970s, public debt has gone up since, with advanced economies at the helm and, of late, followed by emerging and low-income developing countries.
 
“For 2017, the signals are mixed. Compared to the previous peak in 2009, the world is now more than 11 percentage points of GDP deeper in debt. Nonetheless, in 2017 the global debt ratio fell by close to 1½ per cent of GDP compared to a year earlier.”
 
It said the last time the world witnessed a similar decline was in 2010, although it proved short-lived.
 
“However, it is not yet clear whether this is a hiatus in an otherwise uninterrupted ascending trend or if countries have begun a longer process to shed more debt. New country data available later in 2019 will tell us more about the global debt picture,” the IMF said.
 
 
Source: The Ripples
Daily production of crude oil by Nigeria increased by 9 percent in 2018 to 2.09 million barrels compared to the 1.86 million barrels daily production in 2017.
 
This was disclosed by the Group Managing Director, Nigerian National Petroleum Corporation (NNPC) Maikanti Baru, adding that Nigeria maintained a line of consistent year-on-year improvement in its daily crude oil production.
 
Baru, according to a statement by the NNPC Group General Manager, Group Public Affairs Division, Ndu Ughamadu on Tuesday, stated this in an end-of-year message to members of staff of the corporation, adding that the Nigerian Petroleum Development Company, Nigerian Gas Company, Petroleum Products Marketing Company, Duke Oil, NIDAS and Integrated Data Services Limited, were among the companies that boosted the corporation’s performance in 2018.
 
Baru however singled out NPDC, the corporation’s upstream company, as the major contributor to the industry’s success story in 2018.
 
Baru said he was enthusiastic on the 52 per cent daily crude oil production growth by the company when compared with its 2017 performance, explaining that the average crude production from NPDC’s operated assets alone grew from an average of 108,000 barrels of oil per day in 2017 to 165,000bod in 2018.
 
According to him, NPDC’s equity production share of 172,000bpd, representing about eight per cent of national daily production, was no less impressive, while the 200,000bpd addition which the Egina Floating Production Storage and Offloading vessel completed and sailed away to a location in August last year added to the nation’s daily production.
 
Baru revealed that the project achieved first oil at 11.20pm on December 29, 2018.
 
The NNPC GMD also informed staff members the corporation firm made a save of $1.7bn with the corporation’s Joint Venture partners over a five-year tenor repayment plan, adding that already the corporation had defrayed $1.5bn of thearrearss, promising that the NNPC would stick to the repayment agreement with the JV partners while transiting to self-funding IJV modes with the corporation’s partners.
 
 
Source: The Ripples
Beginning Tuesday, customers of Access Bank Plc and Diamond Bank Plc will have free access to 3,100 Automated Teller Machines (ATMs) for seamless banking services.
 
This revelation is contained in a statement issued by the banks on Monday.
 
The move follows the planned merger of the banks which is expected to be concluded in the first half of the year.
 
The banks, in the statement, said the merger will give customers access to the largest ATM network in the country.
 
Diamond Bank Plc in a follow-up message on Tuesday said all its customers across the world can now use their bank cards on Access Bank Automated Teller Machines without paying the customary N65 per transaction.
 
“Wishing everyone a happy new year. Now with over 3100 ATMs free to use for all our customers,” the bank said via its official Twitter handle.
 
The Central Bank of Nigeria had in 2014 announced that cash withdrawal at another bank other than an account holder’s bank would cost N65, although withdrawal at the ATMs of a customer’s bank is free.
 
According to the apex bank’s directive, the first three transactions in a month by the customer of another bank are free for the card holder but paid for by the issuing bank.
 
But, by this development, customers who have accounts with both banks would be exempted from the interbank charges.
 
This implies that customers using the ATM can presume that the banks are one, even as their merger negotiations still remain ongoing.
 
“Access Bank and Diamond Bank Customers now have access to over 3,100 ATMs free of charge,” the statement said Monday.
 
 
Source: The Premium Times
The Nigerian Civil Aviation Authority (NCAA) says it has sanctioned four operators for violating the Nigerian Civil Aviation Regulations (NigCARs).
 
Sam Adurogboye, General Manager, Public Relations, NCAA, who made the disclosure on Sunday in Lagos, said that those sanctioned included both scheduled and non-scheduled operators. He did not name the operators.
 
Mr Adurogboye said three of the affected operators were to pay a fine ranging from N1.5 million to N2 million, while the fourth operator had its Air Operator Certificate (AOC) suspended for 180 days.
 
He said the affected operators were caught when NCAA Aviation Safety Inspectors (ASI) visited their premises.
 
According to him, a number of deficiencies, including non-implementation of training programmes for maintenance personnel as required and irregularities concerning Helicopter flight identification were discovered during the inspection.
 
“Also discovered were deliberate violation of the regulations, performing maintenance programme without necessary approval and the use of outdated manual.
 
“Adurogboye said that NCAA has directed that the maintenance personnel be trained immediately.
 
“NCAA wishes to assure all stakeholders that it will continue to ensure the Standard Operating Procedures (SOPs) are strictly followed,” he said.
 
 
Source: The Ripples

The federal government of Nigeria is at risk of a $2.3 billion fine in arbitration over an alleged breach of contract for the $5.8 billion Mambilla power project in Taraba state.

The project, a 3,050-megawatt hydropower facility, has stalled owing to legal and funding crises after Sunrise Power and Transmission Company Limited (SPTCL), a local content partner, was reportedly sidelined in the project by the ministry of power, works and housing.

SPTCL, who claimed to have been awarded the build, operate and transfer (BOT) contract in 2003, has dragged the federal government and its Chinese partners before the International Chamber of Commerce (ICC) in Paris, France.

A UK arbitration court recently awarded nearly $9 billion against Nigeria over a breach of contract with Process and Industrial Developments Limited (P&ID), earlier given the green light to build a natural gas development refinery.

Meanwhile, the China Exim Bank, which is expected to provide 85 per cent of the joint funding with the federal government for the Mambilla project, has insisted on compliance with due process and terms of the November 2017 engineering, procurement and construction (EPC) contract signed with the partners before releasing funds.

Leno Adesanya, chief executive officer of SPTCL, in a letter dated March 31, 2017 to Babatunde Fashola, minister of power works and housing, had accused the minister of reneging on his promise to support the project.

Adesanya said between 2003 and 2009, SPTCL had spent millions of dollars with financial and legal consultants to raise about $6 billion for the execution of the project, yet the company has suffered a lot over the years “through improper administrative interruptions and interventions”.

ORIGINAL PLAN

“While we feel a deep sense of loss that Nigeria is still discussing this project when it should have been commissioned a long time ago, if the original plan was followed,” Adesanya said.

In another letter dated June 20, 2017 to the then Acting President Yemi Osinbajo requesting his intervention in the matter, Adesanya accused Abba Kyari, chief of staff to President Muhammadu Buhari, of taking the unilateral decision of directing the ministry of power to sideline the company from the contract against the advice of Abubakar Malami, attorney-general of the federation (AGF).

In the letter dated July 24, 2017 to Osinbajo, with a copy to the chief of staff, Malami had said SPTCL should be engaged as a local content partner on the project “as a means of accommodating its prior contractual interests on the project”.

However, Malami backtracked a few weeks later.

In another letter dated August 17, 2017 to the company, the attorney-general of the federation said he issued the previous opinion on the project based on the limited materials provided at the time.

He added that there was no requisite federal executive council (FEC) approval for the project.

“The logical conclusion in the circumstances should be that there was no valid contract between Federal Government of Nigeria and SPTC in respect of the project or at all,” Malami wrote.

NO STATUTE

In his response to Malami, Gbolahan Elias, a senior advocate of Nigeria, said there was no statute as at 2003 when the contract was awarded to SPTCL requiring the consent of the FEC before a letter of award could be validly issued.

Elias added that the letter of award to SPTCL predated the enactment of the Infrastructure Concession Regulatory Commission (ICRC) Act of 2005 which requires approval of projects and contracts by FEC.

In a recent petition dated November 18, 2018 to the president and seen by TheCable, Adesanya alleged that the company was removed from the contract without due process.

“Mr. President can save the project from being enmeshed in another controversy as it occurred during the government of President Yar’Adua where a Presidential adviser allegedly took millions of dollars in bribes, and eventually led to the removal of the official and the termination of the $1.46b civil works contract,” the petition read.

“Your Excellency’s commitment to expeditiously execute the Project in June 2015 was communicated by the Honourable Attorney-General of the Federation, Mr. Abubakar Malami SAN (the “HAGF”) to the Honourable Minister of Power, Works and Housing (the “HMOPWH”) Mr. Babatunde Fashola SAN on the 20th of May, 2016; when the HAGF directed the HMOWPH to comply fully with all existing agreements between the Federal Government of Nigeria (the “FGN”) and Sunrise; basically the out-of-court Settlement, and the General Project Execution Agreement(s) of November 25th 2012.”

CHINESE COMPANIES

Adesanya alleged that Kyari had instructed three Chinese companies, Sinohhydro Corporation of China, China Ghezouba Group Corporation of China and China Geo-Engineering Group Corporation, to form a joint venture for the execution of the project.

“On the 22nd of May, 2017, Your Excellency’s COS instructed the HMOPWH to remove Sunrise from the Mambilla hydropower project, and instructed that CGGC, CGCOC and SINOHYDRO would execute the Project,” he said in the petition.

“Bearing in mind that Your Excellency was on medical vacation in the UK, and Professor Yemi Osinbajo SAN GCON was the Acting President, we petitioned then Acting President, and the HAGF in respect of the constitutionally powers of the COS to approve N2 trillion or $5.8 billion contract in your absence, and without Due Process.”

A presidency official however told News men that Kyari is being wrongly accused by Adesanya.

“People need to start coming up with credible lies against the chief of staff. The truth is that he is immune to lobbying and any form of pressure, be it political or material, because public interest must override any other interest regardless of who the beneficiary is. This has made him easy target for baseless attacks,” the official, who declined to be named.

The Mambilla power project, the biggest plant in the country, was conceived in 1982.

Construction was expected to take six years.


Source: The Cable

The Central Bank of Nigeria (CBN) has said it would henceforth sanction banks who fail to adhere to its orders on customers complaints resolution.
 
The CBN stated this in a circular signed by a Director at the bank, Kofo Salam-Alada on Friday.
 
In the circular titled ‘Deployment of the Consumer Complaints Management System’, the CBN said it would apply the necessary sanctions on infractions.
 
The circular read in part: “The Central Bank of Nigeria, in furtherance of its mandate to promote a stable financial system, embarked on the development of the Consumer Complaints Management System, and an automated system aimed at easing complaints management to engender public confidence in the financial system.
 
“With effect from 2nd January, 2019, banks and other financial institutions are required to: Assign tracking number for every complaint received from their customers, issue an acknowledgement which shall contain the assigned tracking number to the customer, and commence upload of complaints to the CCMS on a daily basis.”
 
The CBN, in the circular, also added that the BOFIs are enjoined to always comply with the timelines stipulated in the CCMS for resolution of the various categories of complaints.
 
“Please note that non-compliance with this circular shall attract sanctions in line with the Banks and Other Financial Institutions Act, Cap B3, LFN 2004.
 
The apex bank had reported in its half-year report that the number of complaints it received from consumers of financial services rose to 1,439 in the first half of 2018 from 1,141 in the corresponding period of 2017.
 
According to the report, the complaints were mainly in respect of excess charges, frauds, dishonoured guarantees and unauthorised deductions/transfers, among others.
 
It also disclosed that a total of 2,451 complaints, including those outstanding from 2017, were resolved in the review period, compared with 1,270 complaints resolved in the same period of 2017.
 
The CBN further disclosed that total claims in the review period in local and foreign currencies amounted to N20.5bn, $163,479, £2,889.98 and €32.82, compared with N14.72bn, $2.42m and €6,940 in the corresponding period of 2017.
 
The CBN stated that the sums of N6.80bn, $119,349, £2,889.98 and €32.82 were refunded by financial institutions to their customers, compared with the sum of N7.21bn, $2.40m and €6,940, refunded in the same period of 2017.
 
 
Source: Business Insider
The Lagos Chamber of Commerce and Industry has called on the Federal Government to expidite action on the diversification of the Nigerian economy.
 
According to the chamber, this has become imperative because of the challenges facing the economy as a result of the recent downward trend in prices of crude oil in the international market.
 
The prices of crude has continued its free fall of recent and it currently below the benchmark for the 2019 budget put at $60 per barrel.
 
The LCCI, in its 2019 economic outlook released on Friday, said there was a need for some adjustments to forestall any impending shock and the risk of the country sliding into another recession.
 
The report, signed by its Director General, Mr. Muda Yusuf, the LCCI noted that given the challenging economic conditions, key policy reforms would be imperative to support and sustain macroeconomic stability.
 
The policy reforms, the chamber wants government to give priority include a foreign exchange management framework that reflects the market fundamentals, the acceleration of the economic diversification agenda, normalisation of Lagos ports environment and the oil and gas sector reform, (especially the Petroleum Industry Bill).
 
The chamber also listed the reduction in the cost of governance at all levels, and the improvement in the domestic revenue (particularly independent revenue) to reduce volatilities of government revenues, pointing out that the Nigerian economy had remained fragile with the high dependence on the oil sector for revenue and foreign exchange earnings.
 
“Although oil revenues increased with recovering oil prices in 2018, the impact on the economy was subdued by the huge foreign exchange commitments to petroleum product importations and the inherent subsidy. The high debt service obligations were also major constraints to the growth of the economy.
 
“With the limited progress in the ongoing effort to diversify government revenue sources, the performance of the oil and gas sector would remain a critical factor that would shape the outlook of the economy in 2019.
 
“According to estimates by Capital Economics’ analysts, every $10-per-barrel fall in oil prices will cause a three to five per cent decline of the Gross Domestic Product in most of the Gulf economies, and a slowdown of 1.5 to two per cent of GDP in Russia and Nigeria on an annualised basis”, the chamber said in the report.
 
The LCCI further said the outlook will depend to a large extent on developments in the oil and gas sector and the political will to undertake far-reaching reforms, beginning with the oil and gas sector.
 
 
Source: The Ripples
The Federal Government of Nigeria has said it is targeting increasing manufacturing exports by $30 billion by 2025 through the development of Special Economic Zones.
 
This was disclosed by the Ministry of Industry, Trade and Investment in a statement.
 
According to the ministry, special economic zones had been identified by the Economic Recovery and Growth Plan as a major strategic tool to accelerate the implementation of the Nigeria Industrial Revolution Plan.
 
The ministry further explained that in achieving this, government envisioned the Made-in-Nigeria for Exports project and the Nigeria Export Processing Zone Authority to develop economic zones to world-class standards.
 
According to the statement, this would assist in positioning Nigeria as the manufacturing hub in sub-Saharan Africa and a major exporter of made-in-Nigeria goods and services.
 
“The project seeks to aid structural transformation of the Nigerian economy by increasing the manufacturing sector’s contribution to Gross Domestic Product to 20 per cent by 2025; contribute to sustainable inclusive growth by creating 1.5 million new manufacturing jobs in the initial phase of the project; increase and diversify foreign exchange earnings by increasing manufacturing sector exports to at least $30bn annually by 2025″ the ministry said.
 
The ministry further said that the project would start with a phase one that would focus on the development and upgrade of SEZs in 12 states across Nigeria, after which the initiative would be extended to other states in subsequent phases.
 
The project would also involve partnering with the private sector to develop new world-class SEZs in Abia, Katsina and Lagos as pilot projects to demonstrate proof of concept and provide models for future SEZ development in Nigeria.
 
The statement said the Nigeria SEZ Investment Company Limited had already been set up as the special purpose vehicle to deliver the Made-in-Nigeria for Export project and harness the Federal Government spending on SEZs.
 
“The Federal Executive Council has approved NSEZCO as the holding entity for all the Federal Government’s investments and proprietary interests in existing and future SEZs.
 
“The FEC approval also provided that all current and future capital appropriations for Project MINE be transferred to NSEZCO’s account, as soon as opening formalities are completed,” it added.
 
According to the statement, aggregation and harnessing of the Federal Government’s investment in a strong corporate special purpose vehicle “is to ensure the facilitation and mobilisation of additional capital from development finance institutions and private investors.”
 
 
Source: Business Insider
Zainab Ahmed, Nigerian Minister of Finance, says owners of yachts and private jets will begin paying luxury taxes from 2019.
 
Addressing a press conference in Abuja on Monday, the minister said excise duties would be introduced in some areas while taxes would be reduced for small and medium enterprises.
 
“We are exploring the way to increase taxes as well as reduce taxes in some sectors. For Small and Medium Enterprises, what will happen is to reduce taxes. But there are some special taxes that we will be looking at imposing,” she said.
 
“For example, luxury taxes. If you have a private jet, we will be taxing you specially for that. If you have a yacht, we will be charging you for that and also in terms of excise duties, there are also some new areas where excise duties will be introduced.
 
“We haven’t got all the approvals but one of the major areas might be that of carbonated drinks produced in the country.”
 
According to Ahmed, the Whistleblower Unit has recovered over N8.5 billion and $465 million, among others, from the 1,051 investigations conducted from tips received.
 
“Based on verification outcome by the Presidential Initiative on Continuous Audit (PICA), we have also paid over 2,000 former workers of our defunct national carrier- Nigeria Airways Limited,” she said.
 
Patience Oniha, director general of the Debt Management Office (DMO); Mary Uduk, acting director general of the Securities and Exchange Commission (SEC), Babatunde Fowler, executive chairman of the Federal Inland Revenue Service (FIRS), were also present at the briefing to give an account of the activities of their agencies.
 
 
Source: The Ripples
Foreign Portfolio Investors (FPI) withdrew more than N94.4 billion in the third quarter of 2018 from the capital market, a member of the Central Bank of Nigeria Monetary Policy Committee, Mr. Robert Asogwa has confirmed.
 
Asogwa gave the confirmation in his personal statement at the recent MPC meeting, according to a data posted on CBN website.
 
According to him, capital inflows declined consistently especially since 2018, while outflows have more than doubled during this same period, a situation that has made external financing more challenging for Nigeria.
 
Asogwa said: “There have been sharp declines in inflows, especially for portfolio investments and Foreign Direct Investment (FDI).
 
“Between July and September 2018, foreign portfolio investors withdrew more than N94. 4 billion from the Nigerian Stock market alone.
 
“These movements have been attributed to the monetary policy normalisation process in some advanced economies, which has seen interest rates in places like the USA increased for three times in 2018.”
 
Asogwa also pointed at investors fear over the 2019 general elections as another contributing factor.
 
He pointed out that given that monetary policy forecasts for 2019 in many advanced economies suggests policy rate increases, “the capital flow position in Nigeria may possibly worsen in the near future.”
 
Asogwa said the US Federal Funds rate had been anticipated to reach 3.5 per cent by end of 2019, while the prevailing zero rates in the Euro Areas was expected to move a bit higher by mid-2019.
 
Asogwa further said in the statement that the return of frequent volatility in the oil market was already putting pressure on commodity exporting countries like Nigeria, adding that there are still expectations that prices may drop further in the early months of 2019.
 
He said: “CBN staff report shows that the NPL ratio, which has risen to 14.70 per cent in August 2018 had declined to 14.05 per cent in October which signals improvement even though it is still above the allowed prudential maximum thus requiring comprehensive NPL reduction strategies from the banks and the regulators.
 
“In addition, the modest improvement in the Capital Adequacy Ratio (CAR) and the Profitability Indicators (ROE and ROA) in October as compared to August shows that the financial sector weaknesses which was a key concern at the last MPC meeting of September are partly being halted.”
 
 
Source: The Ripples
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