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Category: Business and Economy

NDIC warns public against patronising wonder banks
The National Deposit Insurance Corporation (NDIC) has warned members of the public to stop patronising wonder banks that are offering mouth-watering interest rates.
The Managing Director of the l, Alhaji Umaru Ibrahim, gave the warning at the ongoing 31st Enugu International Trade Fair in Enugu on Wednesday.
Ibrahim said the wonder banks were offering attractive interest rates just to dupe unsuspected people of their hard-earned income.
The managing director was represented by the South-East Zonal Comptroller of the corporation, Mr Veronica Ogbo-Ikwue.
He said that the wonder banks were neither licensed by the Central Bank of Nigeria (CBN) nor were they under the NDIC deposit insurance scheme.
Ibrahim advised people to rather patronise insured banking institution that displays the NDIC sticker in their banking premises.
She said that NDIC would continue to protect depositors through prompt operational responses to novel developments in the banking system as they evolve.
“People should desist from keeping their monies in homes or shops to avoid the dangers of fire, theft, armed robbery, flood or other forms of losses.
“The public policy objective of the corporation is to protect depositors of licensed banks as well as promoting public confidence in the financial system.
“The objective is derived from the NDIC mandate of deposit guarantee, bank supervision, distress resolution and bank liquidation.
“Since its establishment, over 30 years ago, the corporation had recorded numerous achievements in the discharge of its mandates.
“The NDIC has fully paid all the depositors of the 18 closed deposit money banks all their monies both insured and uninsured that were trapped in such banks,’’ Ibrahim said.
He said that the corporation had developed a framework for the extension of deposit insurance cover to the tune of N500,000 per depositor for depositors in banks.
“The NDIC, like other critical participants in the financial system, is fully aware of its obligations towards the fulfilment of the federal government’s policies on the growth and development of the Small and Medium Enterprises (SMEs)
“We are aware the SMEs remain the major catalysts for employment generation and poverty alleviation.
“The middle class and small businesses will require safe and secured access to financial services.’’
In an address, the ECCIMA President, Mr Emeka Nwandu congratulated NDIC for the role it played towards building the confidence of bank depositors, which he said, “is helping to grow the Nigerian financial sector’’.
Nwandu encouraged the CBN through its regulatory framework to make the work of NDIC much easier by ensuring that the chances of bank failure were reduced to the barest minimum.
He commended the CBN and NDIC as key players in the financial sector for the stability and near tranquility in the banking sector. (NAN)
March 19, 2020
Oil price gains as investors wait to see if coronavirus stimulus works
Oil prices rose on Thursday but pared early gains as investors tried to assess how effective massive stimulus by central banks will be in shoring up the global economy as the shock from the coronavirus pandemic deepens.
Bucking panic selling in other financial markets, Brent crude was up 37 cents, or 1.1 per cent at $25.25 a barrel by 0355 GMT, having earlier risen to $27.19.
The global benchmark slumped 13 per cent on Wednesday on the third day of relentless selling.
U.S. oil gained $1.44, or 7.1 per cent, to $21.81 after surging nearly 20 per cent earlier.
The U.S. benchmark dropped nearly 25 per cent in the previous session.
“After a 24 per cent crash, oil prices are firming up on some selling exhaustion and as U.S. and European leaders unleash … aid and stimulus,’’ said Edward Moya, Senior Market Analyst at OANDA in New York.
Among the latest moves by a major central bank to try to mitigate the spiralling economic and financial fallout from the epidemic, the European Central Bank kicked off a 750 billion euro ($820 billion) emergency bond purchase scheme after an unscheduled meeting on Wednesday.
Japan is considering handing out cash to households as it faces the likelihood of recession after a sharp contraction of growth even before the outbreak, while South Korea and Australia also took action.
“Monetary and fiscal stimulus will do little in returning energy demand back to normal but it will build confidence that global economy will be in a better position once it is behind the virus,’’ Moya said.
Analysts are also slashing estimates for China, where the coronavirus outbreak originated, to the lowest since the Cultural Revolution came to an end in 1976, in a further grim outlook for the world’s second-largest economy and oil demand.
The spread of coronavirus is showing no sign of abating internationally.
Countries on every continent have resorted to drastic lockdowns to try to contain the virus that has now infected more than 200,000 people worldwide, killing more than 8,000.
Many analysts say a major global recession is in prospect.
OANDA’s Moya cautioned that the selling could start again in oil markets.
“A bottom for oil is not in place, but we could finally see some stabilisation if financial markets can maintain a somewhat constructive tone with all the stimulus that is about to hit,’’ he said.
While oil investors try to get a grip on the demand shock from the pandemic, supply keeps flowing into the market as major producers fight for market share.
Saudi Arabia’s Energy Ministry has directed national oil company, Saudi Aramco, to keep supplying crude oil at a record rate of 12.3 million barrels per day in the coming months. (Reuters/NAN)
March 19, 2020
Nigerians say reduction of petrol price timely
Some Nigerians on Thursday in Lagos commended the Federal Government for reducing the pump price of Premium Motor Spirit (PMS), otherwise known as petrol, from N145 to N125 per litre.
The price reduction followed the drop in crude oil prices which had lowered the expected open market price of imported petrol below the official pump price of N145 per litre.
President Muhammadu Buhari gave the approval for the reduction in the price of PMS which was said to be a direct effect of the crash in global crude oil prices.
In an interview with News Agency of Nigeria (NAN), the Executive Secretary of Anti-Corruption and Research Based Data Initiative, Chief Dennis Aghanya, described the decision as “”very timely’’.
“The decision is very timely for the masses to be able to cope with the impact of the global economic devastation arising from COVID-19.
“It is also a sincere reaction to market forces and a part of steps of an administration determined to rewrite the grievous and foundational mistakes which are hurting us as a country now.
“Ordinarily, one would have wondered the source of courage for the government to implement this policy at a time our revenue has dropped even far below expectation because of the fall in price of crude oil.
“This is even when it is still battling on how to meet up with the benchmark to be able to finance the 2020 budget,” he said.
Also speaking, Prof. Wellington Oyibo, Head, African Networks for Drug and Diagnostic Innovation (ANDI), an NGO, described government’s response as “very commendable”.
“The response from government is very commendable. Economy drives the life of people and how they respond to situations.
“The action will reduce prices of transportation of goods and services and still leave people with money for some other things.
“But, the over all of this is for governments to see how it can reduce out of pocket expenses for health, this is very essential,” Oyibo said.
The Managing Director, BIC Consultancy services, Dr Boniface Chizea, however, said the pump price reduction ought to have come before now.
“That is what should be expected when we say that we are going to deregulate the price of petroleum.
“We did so in the expectations that when the price goes up, we are going to pay more and when the price falls like it has fallen now, a pump price reduction should be reflected.
“So, that has been part of the expectations.
“But quite some time now, that has not happened, we never had any reduction. I think that this is a welcome development that should be commended,” he said.
Meanwhile,the compliance level of some petrol stations around Ikotun and Ejigbo Local Council Development Area is poor.
At the NNPC filling station in Ejigbo, fuel is now sold at N125 per litre, the change has also been effected on its signboard, same at PetroCam, Ilepo, Ejigbo.
The Mobil Filling station, Hostel Bus Stop and First Royal petrol station, Ikotun Egbe, had yet to start selling at the approved price as at the time of filing this report.(NAN)
March 19, 2020
Coronavirus: TUC advocates tax holidays to boost economy
The Trade Union Congress (TUC), has called on the Federal Government to grant tax holidays to business owners in the country to enable them cushion the adverse economic effects associated with the outbreak of coronavirus.
Mr Quadri Olaleye, the TUC President, made the call on Wednesday in Abuja during an interactive parley with journalist.
Olaleye said that it is a global practice to grant tax holidays during economic crisis, adding that the coronavirus outbreak has impacted negatively on the Nigerian economy.
He said: “The expectations of workers from government is that the Nigerian government should assist the people.
“The government should also look at how it can cushion the effects for business owners, especially providing adequate financing, to enable them continue to run their businesses.
“Budget some amount of money to rescue businesses, especially people in entertainment and transport sectors.
“Everything is not about taking away from businesses, in situation like this, one of the ways you can encourage people is to give them tax holidays.
“So we (TUC) are going to take a step towards that, to see how we can discuss with government to give tax holidays to encourage businessmen, so that more people are not pushed into the labour market.”
On the new minimum wage, the TUC president commended the Federal Government for implementing the pay rise.
He also commended the states that have implemented the new minimum wage, and urged others yet to do so to commence implementation.
“About 80 per cent of the states have implemented the minimum wage and I want to salute their courage.
“We have few states that have not implemented. For those ones, we have issued out letters of ultimatum to them and we are going to take action.
“When TUC issues ultimatum, we follow it up and for the few states that have not implemented, I am sure they are ready for us.
“We are going to shut down the states and let us see how they are going to perform if they are not ready to pay the minimum wage’” Olaleye added.
The TUC president called for more collaboration with the media to enable the Congress serve the people better.
According to him, the media is key to ensuring that the TUC lived up to its responsibility and accountable to the people. (NAN)
March 19, 2020
Oil pares gains as investors wait to see if coronavirus stimulus works
Tokyo, March 19, 2020 Oil prices rose on Thursday but pared early gains as investors tried to assess how effective massive stimulus by central banks will be in shoring up the global economy as the shock from the coronavirus pandemic deepens.
Bucking panic selling in other financial markets, Brent crude was up 37 cents, or 1.1 per cent at $25.25 a barrel by 0355 GMT, having earlier risen to $27.19.
The global benchmark slumped 13 per cent on Wednesday on the third day of relentless selling.
U.S. oil gained $1.44, or 7.1 per cent, to $21.81 after surging nearly 20 per cent earlier.
The U.S. benchmark dropped nearly 25 per cent in the previous session.
“After a 24 per cent crash, oil prices are firming up on some selling exhaustion and as U.S. and European leaders unleash … aid and stimulus,’’ said Edward Moya, Senior Market Analyst at OANDA in New York.
Among the latest moves by a major central bank to try to mitigate the spiralling economic and financial fallout from the epidemic, the European Central Bank kicked off a 750 billion euro ($820 billion) emergency bond purchase scheme after an unscheduled meeting on Wednesday.
Japan is considering handing out cash to households as it faces the likelihood of recession after a sharp contraction of growth even before the outbreak, while South Korea and Australia also took action.
“Monetary and fiscal stimulus will do little in returning energy demand back to normal but it will build confidence that global economy will be in a better position once it is behind the virus,’’ Moya said.
Analysts are also slashing estimates for China, where the coronavirus outbreak originated, to the lowest since the Cultural Revolution came to an end in 1976, in a further grim outlook for the world’s second-largest economy and oil demand.
The spread of coronavirus is showing no sign of abating internationally.
Countries on every continent have resorted to drastic lockdowns to try to contain the virus that has now infected more than 200,000 people worldwide, killing more than 8,000.
Many analysts say a major global recession is in prospect.
OANDA’s Moya cautioned that the selling could start again in oil markets.
“A bottom for oil is not in place, but we could finally see some stabilisation if financial markets can maintain a somewhat constructive tone with all the stimulus that is about to hit,’’ he said.
While oil investors try to get a grip on the demand shock from the pandemic, supply keeps flowing into the market as major producers fight for market share.
Saudi Arabia’s Energy Ministry has directed national oil company, Saudi Aramco, to keep supplying crude oil at a record rate of 12.3 million barrels per day in the coming months.
March 19, 2020
COVID-19: FG reduces 2020 budget by N1.5trn, suspends recruitment, reviews Social Investment Programmes
The Federal Executive Council (FEC) on Wednesday approved reduction in the size of the 2020 budget by about N1.5 trillion, as part of measures to address the impacts of Coronavirus disease on Nigerian economy.
The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, made this known when she addressed State House correspondents on the outcome of the Council meeting, presided over by President Muhammadu Buhari, in Abuja.
She said the proposed budget cut of N1.5trillion, which must be approved by the National Assembly would include N457 billion from Premium Motor Spirit (PMS) under-recovery.
The minister said: “From the expenditure side, the President has approved that we should cut down the capital expenditure budgeted by 20 per cent across Ministries, Departments and Agencies.
“Also, a 25 per cent cut of all government owned enterprises and these include the ones that are in the national budget, the 10 top ones we included in the 2020 budget but also those we did not include in the 2020 budget.
“So, all of these would have their recurrent expenditure and capital expenditure cut down by 25 per cent.
“By these measures we expect that the operating surpluses that would accrue to the federation will increase because when their operational expenditure reduces the operating surpluses that they remit to the treasury will also increase significantly.
“What we have done is that we have written every ministry and given them guidelines on how these adjustments will be made to enable us have detailed inputs from the ministries.
“But I can just say that the bulk cut is about N1.5 trillion, the reduction in the size of the budget. And this includes N457 billion from PMS under-recovery.’’
According to the minister, other policy matter that had been discussed for implementation is for the administration to stop recruitment except for essential services such as security and health services.
She said the Council also agreed to restore and compliant by the civil service retirement regulations, while the modalities for the implementation of the Social Investment Programme would also be reviewed.
Ahmed also disclosed that the Council agreed to review the non-essential tax rebate currently being implemented to cut down on tax expenditure so as to generate more revenue.
She, however, revealed that the Council approved that recruitment into the civil service should be suspended but the current federal government workforce would be maintained.
“On recruitment, there is already an instruction to stop recruitment. What the agencies have been doing is replacement but even that is being suspended.
“When things improve we will go back to the issue of recruitment but for now, our wage bill is already very high.
“The president has directed that salaries and pensions must be paid unfailingly, so we are not looking at downsizing in anyway.
“We are maintaining our workforce as it is but we are just stopping the increase in the size of the nominal roll.
On benchmark, the minister said: “We are working on the worst case scenario of 30 dollars per barrel and also we are holding to the production numbers of 2.18 million barrels per day.
“This you will remember is approved by the National Assembly. This is our own analysis and we will start engaging the National Assembly.’’
The Minister of State for Transportation, Mrs Gbemisola Saraki, also told the correspondents that the Council approved N2billion revised cost for the completion of an inland river port in Lokoja, Kogi .
She said: “The Ministry of Transportation presented a memo to council for approval of revised estimate total cost for the completion of the construction of an inland river port in Jemata-Akpanya, Lokoja, Kogi State.
“This project actually started eight years ago, and was supposed to have been completed within a year and half, but unfortunately due to some complications, and owing to the fact that the location had been encumbered, the project stalled and is now been revived.”
According to her, the total sum for the project now stands at N6.4 billion.(NAN)
March 19, 2020
NSE sustains negative outlook, index down by 0.71%
Sell pressure continued on the Nigerian Stock Exchange (NSE) on Tuesday with the indices dropping further by 0.71 per cent , just as Feburary inflation rate hit 12.20 per cent.
Specifically, the All-Share Index (ASI) lost 162.12 points or 0.71 per cent to close at 22,543.07 compared with 22,705.19 on Monday.
Similarly, the market capitalisation dipped N85 billion to close at N11.747 trillion against N11.832 trillion on Monday.
The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which were; Dangote Cement, CAP, Ardova Plc, NASCON and International Breweries.
Analysts at Afrinvest Limited said: “We expect the bearish sentiment to persist for the rest of the week. However, we note that there are opportunities for bargain hunting.”
Dangote Cement and NASCON led the losers’ chart in percentage terms, dropping by 10 per cent each, to close at N137.70 and N8.55 per share, respectively.
Ardova followed with a decline of 9.80 per cent to close at N13.80, while CAP lost 9.77 per cent to close at N18 per share.
International Breweries was down by 9.57 to close at N5.20, while Lasaco Assurance, Niger Insurance and Courteville Business Solutions shed 9.09 per cent each, to close at 20k per share each.
Conversely, Access Bank, Lafarge Africa and United Capital led the gainers’ table in percentage terms, gaining 10 per cent each, to close at N6.05, N11 and N2.42 per share, respectively.
FCMB Group garnered 9.66 per cent to close at N1.59, while Cadbury and Caverton rose by 9.62 per cent each, to close N5.70 and N2.28 per share, respectively.
Transcorp increased by 9.52 per cent to close at 69k, while NPF Microfinance Bank rose by 9.41 per cent to close at 93k per share.
However, the total volume of shares traded rose by 22.56 per cent as investors bought and sold 675.91 million shares valued N8.06 billion in 7,368 deals.
This was in contrast with a total of 551.48 million shares worth N5.76 billion shares achieved in 6,981 deals on Monday.
Transactions in the shares of Zenith Bank topped the activity chart with 173.94 million shares worth N2.32 billion.
Guaranty Trust Bank came second with 131.06 million shares valued N2.57 billion, while FBN Holdings traded 119.27 million shares worth N478.91 million.
Access Bank sold 92.03 million shares valued N539.13 million, while United Bank for Africa transacted 31.47 million shares worth N168.89 million. (NAN)
March 18, 2020
FG begins review of oil and gas free zones authority Act
The Federal Government on Tuesday in Abuja began review of the Act establishing Oil and Gas Free Zones Authority (OGFZA) in Nigeria.
The review is to remove ambiguities and enhance effectiveness in the sector.
Mr Adeniyi Adebayo, the Minister of Industry, Trade and Investment while declaring open a stakeholder’s forum to review the OGFZA Act no 8 of 1996, called for stakeholders’ input.
OGFZA is the government agency which promotes investments in the nation’s oil and gas free zones.
The stakeholder’s forum was organised by the ministry to examine the OGFZA act and the imperative of addressing imperfections in the act through an amendment bill to reposition the agency.
The minister said review of the OGFZA act based on the experience and observation that the act required a serious review to remove ambiguities and inconsistencies to achieve clarity and enhance effectiveness.
He said over the years, the inadequacy of the act led to avoidable inter-agency conflicts and hampered OGFZA in the execution of its mandate, hence the decision to create a platform to engage stakeholders for best possible outcome.
“Nigeria is the pioneer in Specialised Economic Zones (SEZs) with the establishment of the first oil and gas free zone Act No 8 of March 29, 1996 in Onne, Rivers, which was supervised at the time by the then Ministry of Commerce.
“Nigeria occupies this pride of place in a global industry that boast no fewer than 5,383 SEZs as at 2019, according to the United Nations Conference on trade and Development (UNCTAD) statistics,’’ he said.
He expressed regret that in spite of the efforts of pioneering the industry of SEZs, the inadequacy of the law empowering the regulating agency for the SEZs had not allowed the nation to reap its optimal benefits.
Adebayo commended President Muhammadu Buhari’s administration on its sound policy initiatives that had attracted Foreign Direct Investments (FDIs) into the nation’s oil and gas free zones.
He also said the ministry felt a special sense of privilege to contribute to the achievement of the policy goals of the current administration.
According to him, the ministry will also look at the situations in all the agencies under the ministry with a view to repositioning them for the important task of developing the non-oil sector.
He urged the forum to take a close look and suggest pathways for the legal framework that would make OGFZA act the most effective oil and gas free zone regulatory agency.
Amb. Mariam Katagum, the Minister of State for Industry, Trade and Investment said the ministry had consistently delivered on the promise to promote economic growth.
This she noted the ministry had done by championing creation of jobs and drive for inclusive growth while promoting integration of Nigeria based businesses into regional and global value chains.
“OGFZA plays both a strategic and catalytic role in economic development, particularly in employment creation, contribution to Gross Domestic Product (GDP), zero oil plan, skills development and industrialisation, technology and innovation,’’ she said.
Mr Umana Okon, OGFZA Managing Director, expressed worry over imperfections in the act which was put in place 24 years ago.
According to him, without appropriate legal framework, it cannot not exercise its mandate appropriately.
Okon urged the stakeholders to look into areas such as, concession of taxes, supervision and conduct of export free zones, licences permit and tax incentives for investors.
He said that between 2007 to 2017, the oil and gas free zone contributed highest cargo throughout, with the creation of 200, 000 direct and indirect jobs.
Okon said it also attracted FDIs worth more than 15 billion dollars to Nigeria.
He noted other free zones fully licensed by OGFZA and in operation are the Warri Oil and Gas Free Zone, Notore Industrial City, Onne, Rivers, Brass Oil and Gas City, Bayelsa and Lagos Oil and Gas Free Zone, Apapa. (NAN)
March 18, 2020
COVID-19: Buhari meets Economic Council, vows to protect Nigerians
President Muhammadu Buhari says Nigeria has foreseen the economic problems that may come in the wake of the COVID-19 pandemic, and will explore all alternatives to protect citizens.
Mr Femi Adesina, the President’s spokesman, said in a statement that the president spoke on Tuesday at State House, Abuja, during a briefing session by the Presidential Economic Advisory Council (PEAC) led by Prof. Doyin Salami.
The president noted that with oil prices oscillating between 29 and 30 dollars in recent times, as opposed to the 57 dollars benchmark for year 2020 Budget, many variables, including production cost and political impact will determine oil prices.
”We will see how to survive fallen prices, as we already envisaged the problem,” he added.
He explained that protecting the people from vagaries of international economic fortunes, ”and associated fallen prices of oil, is a priority of government, and we will do our best to do so”.
While stressing the importance of education and healthcare, Buhari submitted that if people were adequately educated “they won’t accept any form of mismanagement by leadership, nor would they allow themselves to be manipulated by those promoting ethnic and religious sentiments”.
He promised that inputs in agriculture, education and healthcare would continue as much as practicable.
In his briefing, Salami, leading a team of PEAC members, painted sobering scenarios of what could happen to the Nigerian economy, if the COVID-19 pandemic lasted for too long.
These, according to him, include slower growth, as the supply and demand sides of global economy would be affected; uncertainty, which would erode confidence; governments acting unilaterally instead of cooperatively; further drop in oil prices, and lockdowns gaining grounds around the world.
”There would also be oil glut, trade imbalance, drop in foreign reserves and rise in unemployment,” it said.
While noting that many countries round the world may go into economic recession, the PEAC advocated hard work for Nigeria to keep its head above the waters.
The council recommended, among others, a possible revision of the 2020 Budget, with priority spending on healthcare, reprioritisation of expenditure on infrastructure to focus on projects nearing completion with pro-poor effects and curtailing recurrent expenditure.
It added that the private sector should be mobilised to strengthen health sector infrastructure and boosting of government revenue.
The PEAC also stressed that the projections may seem dire, but the worst may be avoided with hard work and scrupulous implementation of policies. (NAN)
March 18, 2020
Bauchi speaker empowers 500 unemployed youths
Mr Abubakar Suleiman, Speaker, Bauchi State House of Assembly has disbursed N5 million to 500 unemployed youths to enable them to engage in productive activities.
Sulieman, (PDP Ningi Constituency) distributed monies to indigent constituents as part of comprehensive youths and women empowerment initiative.
Mr Abdul Burra, the Spokesman of the speaker made the disclosure in an interview with News Agency of Nigeria (NAN), on Wednesday in Bauchi.
Burra said the beneficiaries were carefully selected in the eleven wards in the area, adding that the scope of the programme would be expanded to mobilise participation.
He said that 200 females received N5, 000 each while 300 their male counter part got N10, 000 each, respectively.
Burra said the disbursement committee set up by the speaker would monitor the beneficiaries to ensure effective utilisation of the monies to achieve the expected positive impact on them.
According to him, about 100 youth will be train on vocational and skill acquisition programme designed to expose the trainees to weaving, pomade processing , leather work and computer literacy.
The spokesman added that the speaker also engaged 10 unemployed qualified health personnel to serve as casual workers of the General Hospital, Ningi.
He said: “They are placed on a N10, 000 monthly stipend while several boreholes and hand pumps were procured to enhance access to clean water in the area”. (NAN)
March 18, 2020