The Nation Newspaper

Tag: Economy

  • ‘Economy needs sound policies to thrive’

    The Red Card Movement (RCM) has called for transformation of the economy through sound policies and good leadership.

    The group, which will be launched on Thursday in Jos, the Plateau State capital, said the movement is aimed at rescuing Nigeria from bad governance and incompetent leadership, as well as promote electoral due process against the 2019 general elections, will pave way for new credible representation in governance.

    Its mandate remains to mobilise and encourage citizens who are eligible to vote, to obtain their Permanent Voters Card (PVC), go out and vote and protect their votes to ensure that good leaders emerge in the polity.

    Speaking on the movement, former official of the World Bank and civil rights activist, Oby Ezekwesili said: “We have a mandate which is to mobilize over 30 million Nigerians to participate in the general elections come 2019. The office of the citizen has been activated and everyone has resumed office. We will go from door to door, cities to cities, and we will be heard. With our PVCs we will send off bad government.”

    The RCM was formed to help citizens understand the essence of voting and their right to take part in political activities, especially elections and electoral processes.

    Ezekwesili further stressed that a key goal of the Movement is to increase the level of women and youths’ participation in the electoral process from 15 million to 62 million, as well as target national legislative positions in a process that is devoid of inducement and coercion.

    The group will take its activities across the country with a view to creating genuine awareness for electoral participation and due process at all levels.

     

  • ‘Economy needs sound policies to thrive’

    The Red Card Movement (RCM) has called for transformation of the economy through sound policies and good leadership.

    The group, which will be launched on Thursday in Jos, the Plateau State capital, said the movement is aimed at rescuing Nigeria from bad governance and incompetent leadership, as well as promote electoral due process against the 2019 general elections, will pave way for new credible representation in governance.

    Its mandate remains to mobilise and encourage citizens who are eligible to vote, to obtain their Permanent Voters Card (PVC), go out and vote and protect their votes to ensure that good leaders emerge in the polity.

    Speaking on the movement, former official of the World Bank and civil rights activist, Oby Ezekwesili said: “We have a mandate which is to mobilize over 30 million Nigerians to participate in the general elections come 2019. The office of the citizen has been activated and everyone has resumed office. We will go from door to door, cities to cities, and we will be heard. With our PVCs we will send off bad government.”

    The RCM was formed to help citizens understand the essence of voting and their right to take part in political activities, especially elections and electoral processes.

    Ezekwesili further stressed that a key goal of the Movement is to increase the level of women and youths’ participation in the electoral process from 15 million to 62 million, as well as target national legislative positions in a process that is devoid of inducement and coercion.

    The group will take its activities across the country with a view to creating genuine awareness for electoral participation and due process at all levels.

     

  • ‘Drop in inflation rate good omen for economy’

    The steady decline in the inflation rate has been considered a good omen for economy.

    Speaking with a cross-section of Nigerians drawn from all walks of life, they told our correspondent that this signpost economic recovery.

    The National Bureau of Statistics (NBS) report released last Thursday, the Consumer Price Index (CPI), which measures inflation, rose by 13.34 per cent (year-on-year) in March 2018.

    The report disclosed that the March 13.34 per cent is 0.99 percentage points less than the 14.33 per cent recorded in the preceding month of February.

    The latest report means that for fourteen consecutive months since January 2017, inflation rate in Nigeria has continued to experience slowdown.

    “The Consumer Price Index which measures inflation increased by 13.34 per cent (year-on-year) in March 2018.

    “This fourteenth consecutive disinflation since January 2017 is 0.99 per cent points less than the rate recorded in February 2018 (14.33) per cent.

    “The Composite Food Index rose by 16.08 per cent (year on year) in March 2018, down from the rate recorded in February (17.59 percent),” the NBS report read in part.

    Data from the NBS indicate that real Gross Domestic Product (GDP) grew by 1.92 per cent in the fourth quarter of 2017, up from 1.40 and 0.72 per cent in the third and second quarters, respectively. The economy grew overall by 0.83 per cent in 2017. The main drivers of real GDP growth were agriculture (1.08%), industry (0.56%) and trade (0.35%). Non-oil real GDP grew by 1.45 per cent in the fourth quarter of 2017 compared with a contraction of 0.76 per cent in third quarter of 2017, indicating that the economy is gradually returning to a path of sustainable positive growth.

    Inflationary pressures in the economy continued to moderate with headline inflation (year-on-year) receding for the thirteenth consecutive month to 14.33 per cent in February 2018 from 18.72 per cent in January 2017. Month-on-month food inflation fell by 133 basis points to 17.59 per cent in February 2018, and core inflation also declined marginally by 38 basis points to 11.71 per cent during the same period.

    According to Fabian Okechukwu, and Kingsley Nsofor, both economic and financial experts, the slow inflation rate could easily be interpreted as a sign of economic recovery.

    They were however quick to admit that the government should complement this with the right fiscal policies.

     

  • CBN’s stress test raises hope on economy

    The Central Bank of Nigeria (CBN) has conducted a biennial stress test to evaluate the resilience of banks to credit risk, liquidity and interest rate. The report showed that the economy is on the path of recovery. The Financial Stability Report (FSR) also predicted the economy’s return to the normal growth space bar this year, reports COLLINS NWEZE. 

    A FINANCIAL Stability Report (FSR) which captures the state of the banking sector in terms of credit risk, liquidity positions, interest rate and impact of oil and gas loans on lenders’ balance sheets, has been released by the Central Bank of Nigeria (CBN).

    The report linked oil asset deterioration in lenders’ books to lingering impact of macroeconomic instability triggered by the oil price shock in 2014.

    According to the report released last week, the CBN noted that industry asset quality deteriorated in the first half of last year as Non-Performing Loans (NPL) ratio rose 2.2 percentage points to 15 per cent from 12.8 per cent in 2016.

    The report said that regulatory attention was being focused on ensuring an improvement in the quality of banks’ assets  as  well  as  ensuring  that  the  banks  contribute  effectively  to  the  real  sector.  The disruptions experienced  in  the  economy,  with declining  oil prices  and  dwindling government  revenue, resulted  in  an  increase  in  the  NPLs  in  the  banking  industry.

    But, the  CBN said it  will continue  to  monitor  developments  and  initiate  measures  to  limit  contagion  and  ensure  that financial   institutions   remain   safe   and   sound.

    The report said the CBN will ensure that appropriate structures and policies for the combating of money laundering and the financing of terrorism are put in place in financial institutions.

    The assessment was carried out on 20 commercial and four merchant banks which were tiered based on asset size into Large (N1 trillion and above), Medium (assets above N500 billion but less than N1 trillion) and Small (total assets less than N500 billion) banks.

    The solvency stress test was carried out to determine effects of unexpected shocks on banks’ Capital Adequacy Ratio (CAR). It was evaluated using Credit Default, Credit Concentration, Sectoral Concentration and Interest Rate risks.

    Consequently, the average baseline CAR for the industry declined 3.3 percentage points to 11.5 per cent in the same period, mainly dragged by Large (down 2.3 percentage points to 13.1 per cent) and Medium (down 19.5 percentage points to -6.7 per cent) banks.

    On the flipside, the average CAR for small banks firmed up, rising 10.4 percentage points to 13.5 per cent in half-year 2017.

    On the back of the weaker capital ratios, the CBN Solvency stress test indicated that the Industry is vulnerable to credit risk as only large banks exhibited resilience under a scenario of a 50 per cent increase in NPLs, with an estimated post-shock CAR of 10.2 per cent for the peered group – above the 10 per cent prudential requirement.

    The FSR said: “On the other hand, Industry, Medium and Small banks post-shock average CAR fell to 7.9 per cent, -19.2 per cent and 9.1 per cent respectively, all below regulated minimum. However, when a further simulation, assuming a severe shock – 200 per cent increase in NPLs – was carried out, all peered groups were vulnerable as average CAR fell 15.2 percentage points, 9.8 percentage points, 93.4 percentage points and 17.5 percentage points below requirement for the Industry, Large, Medium and Small banks respectively.

    “This evaluation suggests that in the event of an extreme, albeit improbable near term scenario, of a 200 per cent spike in NPL level, most banks would fall below regulatory requirements on CAR.

    “A further analysis of credit distribution by sector showed the banking industry had high exposure to the Oil & Gas industry (29 per cent) in 2016; however, the downside risk of the high concentration on industry solvency is benign as the stress test of default in exposure to the sector showed that the banking industry and peered groups, with the exception of medium banks, withstood up to 20 per cent default as their post-shock CARs remained above 10 per cent prudential limit – Industry (10.7 per cent), large banks (12.3 per cent) and small banks (13.3 per cent).

    While the industry displayed resilience to Maturity Mismatch and Contagion Risk, Liquidity Stress test, using Implied Cash Flow Analysis (ICFA) assumptions – which assessed the industry’s ability to withstand unanticipated substantial withdrawals over five days and a cumulative 30-day period – suggested significant vulnerability to liquidity risks especially after the 30-day run as industry liquidity ratio fell to 7.9 per cent from a pre-shock position of 48.1 per cent.

    The Managing Director of Afrinvest West Africa, Ike Chioke, said in a note to investors that the results of the CBN’s stress test was in line with Article IV Consultation report by the International Monetary Fund (IMF) which highlighted the risks the banking sector faced, particularly with regards to solvency ratios of “four small and medium-sized undercapitalised banks (including one insolvent bank)”.

    He noted that some of the banks were being kept afloat through continuous recourse to the CBN’s lending facilities.

    Chioke, who stated that banks must raise their capital buffers, said the CBN directive on dividend payment was a welcome development whilst also calling a broad review of asset quality to unmask potential capital needs. Higher capital buffers and reduced government financing needs from the domestic market would spur more lending to the private sector, providing a catalyst for economic growth.

    Chioke said: “Whilst we highlight the need for the CBN to decisively address vulnerabilities in medium-sized banks, we are confident on near-term stability in the financial system on the back of improving macroeconomic fundamentals, which we anticipate will have a positive knock-on impact on asset quality, profitability and capital buffers,” he said.

     

    Banks approach CBN for loans

     

    Going by the CBN Economic Report for the fourth quarter of last year, commercial banks’ three-month total loan requests from the CBN stood at N11.73 trillion as at last December.

    The loan requests, which came in the form of Standing Lending Facility (SLF), including the Intra-day Lending Facilities (ILF), were made up of N7.26 trillion direct SLF and N4.46 trillion ILF converted to overnight rate.

    The SLF is an overnight CBN credit available on banking days between 2 pm and 3.30 pm, with settlement done on same day value. Funds were sourced mainly from time, savings and foreign currency deposits, as well as accretion to unclassified assets. The funds were used, largely, to extend credit to the private sector and payment of claims on demand deposit.

    According to the economic report, the banks continued to access the CBN’s Standing Facilities window to square up their positions either by borrowing from the SLF window or depositing excess reserves at the Standing Deposit Facility (SDF) window of the CBN at the end of each business day.

    The daily average for the 59 transaction days, from October 1 to December 27, was N198.88 billion, with daily request ranging from N67.35 billion to N383.53 billion, the report said.

    Besides, the total interest earned was N8.04 billion. The SLF was at its peak on October 10, last year. The subscriptions for the Federal Government of Nigeria (FGN) Bonds of various maturities were reopened in the fourth quarter of last year.

    The total standing deposit facility (SDF) granted during the quarter under review was N2.49 trillion with a daily average of N45 billion, compared with N1.53 trillion in the preceding quarter.  The daily transaction ranged from N0.35 billion to N137.85 billion while interest payment on SDF in the review quarter was N0.89 billion, compared with N0.52 billion, at end-September, last year.

    Activities at the CBN Standing Facility Window showed more patronage at the SLF window. Applicable rates for the SLF and SDF remained at 16 per cent and nine per cent.

    Besides, the total assets and liabilities of the commercial banks stood at N34.5 trillion within the period, representing 3.9 per cent increase over the level at end-September 2017. The funds were sourced, mainly, from reduction of claims on the Federal Government and mobilisation of demand, time, savings and foreign currency deposits.

    According to the report, the funds were used to increase claims on the CBN and the private sector, acquire foreign assets, increase accretion to reserves and reduce unclassified liabilities.

    At N20.4 trillion, banks’ credit to the domestic economy, fell by 5.5 per cent, below the level at the end of September 2017. The development reflected the decline in claims on the Federal Government and the private sector in the review quarter.

     

    Sinking Fund

     

    The report also showed that the  Banking  Sector  Resolution  Cost  Trust  Fund  (BSRCTF)  – Sinking Fund realised a  total  collection of N190.89 billion from commercial banks in  six month ended June 30, 2017.

    The report stated that the fund will be used to redeem outstanding bonds of the Asset Management Corporation of Nigeria (AMCON).

    This fund mandates banks to contribute five basis points or 0.5 per cent of their audited total assets at the end of each year to AMCON to enable the corporation pay some of its recovery expenses.

    The apex bank contributes ion of N50 billion annually to the fund established after it was realised that recoveries from AMCON acquired bad loans may be insufficient to meet the resolution cost of restoring financial stability. The fund was established to reduce the burden on the national treasury as banking crisis will be resolved by banks, the CBN and AMCON.

     

    Emefiele speaks on report

     

    Speaking on the FSR report, CBN Governor Godwin Emefiele said that during the period under review, there was general optimism  for  recovery in global  growth  as evidenced  by  increased  global  trade  and  manufacturing  as  well  as  rise  in  the  prices of key commodities.

    According to him, the fairly stable financial markets engendered confidence in the recovery.

    He said: “With global Gross Domestic Product (GDP)  inching up,  policy makers are beginning  to unwind the various unconventional  policy initiatives earlier adopted. However, concerns still remain about the potential impact of US monetary policy normalisation,  which  is  anticipated  to  strengthen  the  dollar, with implications  for  countries, especially emerging nations with dollar denominated credit and trade obligations.”

    The bank chief explained that on the domestic front, the impact of various policies aimed at engendering growth has resulted in our exit from the recession, which subsisted until the second quarter of 2017.

    Though fragile, he said, the recovery provides  the  needed  confidence  that  the  right  measures  were  adopted,  and  highlighted the  need  for focussed implementation of the Federal Government Economic Recovery and Growth Plan (ERGP).

    Emefiele explained that whereas the low growth environment may persist for a while, it is expected that the economy is on the path to full recovery, and as predicted, it will return to normal growth space bar this year.

    This is premised on the expected stability in oil prices, responsive monetary policy and expansionary fiscal policy  in the near term.

    He said: “The subsisting tight  monetary  policy  stance  has  resulted in moderating the inflationary  growth downward. However, with  inflation still at double-digit level,  the  bank will continue to apply monetary  and  other  complementary policy tools to contain inflationary pressure, maintain exchange rate stability and encourage banks to lend to the real sector of the economy.

    “The CBN will continue to play  its  developmental role by providing  key  interventions to bridge the financing gap in some segments of the real sector.”

    Reflecting on the recession in the first half of last year, he said there was noticeable deterioration in banks’ loan portfolios, especially, exposures to the oil and gas sector and foreign currency denominated credit. Therefore, to maintain  financial  system  stability,  efforts  have  been  intensified to proactively  engage  operators  to effectively  manage  the associated risks.

    Emefiele also said that a framework  for  the  establishment  of  private  asset restructuring  companies  to  acquire  NPLs  from  banks  and  other  financial  institutions will be released in due course.

    He said: “In  continuation  of  efforts  to  achieve  a  safe,  stable  and  sound  payments  system,  the  CBN  will implement  measures  to  further  encourage  the  adoption  of  electronic  mode  of  payments,  strengthen payment security, and enhance consumer education.

    “Finally,  let  me  assure  you  that  the  CBN  will  not  relent  in  its efforts  to  sustain  the  stability  of  the financial  system  as  well  as  strengthen  collaboration  with  the  fiscal  authorities  in  order  to  achieve sustained job creation and broad-based recovery of the Nigerian economy.”

    Also speaking on the FSR, the CBN Deputy Governor, Financial System Stability, Joseph Nnanna, said that in  the first  half  of  last year, the  forecasts  for  greater  recovery  in  global  output  growth was buoyed by enhanced growth expectations among emerging   markets   and   developing economies,  especially  in  the  face  of  recovering  commodity  prices.

    Nnnana said: “While  growth  forecasts were  revised  downward  for  the  UK (United Kingdom) and  U.S. (United States)  for  2017,  the  outcomes  from  the  emerging markets  and  developing  economies  are  expected  to  moderate  the  global  output. “With the unwinding  of  the  various  unconventional  measures  adopted  by  central  banks  to  address  the concerns of low growth, policy rates are generally picking up among   the   advanced economies.

    “In Nigeria, the economy returned to a  path  of  positive  growth.  Though fragile, the current recovery  from  the  recession is  expected  to  be  strengthened  by  the  implementation of the National  Economic  Recovery and  Growth Plan. With the improving macroeconomic condition, it is expected that inflationary pressure will ease and the economy will return to a regime of single-digit inflation.”

    According to Nnanna, a sustained stability in the foreign exchange  market  will boost enhance  the  productive capacity of local manufacturers  and  businesses  as  they  have greater access to imported raw materials and foreign direct investments.

    He said: “Regulatory attention is currently focused on ensuring an improvement in the quality of banks’ assets as well as ensuring  that  the  banks contribute  effectively  to  the  real  sector.

    “The disruptions  experienced  in  the  economy  with declining  oil prices and Government  revenue resulted in an increase  in  the  non-performing  loans in the banking industry. The CBN  will continue to monitor developments  and  initiate  measures to limit contagion and ensure that financial institutions remain  safe  and  sound.”

    Nnnana said the CBN will put in appropriate structures and policies for the combating of money laundering and the financing of terrorism in financial institutions.

    The apex bank has so far maintained its contractionary monetary policy stance in the first half of 2017 as it retained its monetary policy rate at 14.00 per cent.

    Is has been playing a developmental role by  providing  key  interventions to bridge the financing gap in some segments of the real sector.

    In the banking industry, the asset quality of commercial banks deteriorated in the first half of last year as the ratio of NPL to gross loans rose, compared with the level at close of the previous year. The development led to a light capital deterioration and a decline  in  earnings indicators.

  • Lagos’ll become Africa’s third largest economy, says Otedola

    Lagos’ll become Africa’s third largest economy, says Otedola

    •Businessman endorses Ambode

    Billionaire businessman Femi Otedola yesterday predicted that Lagos will become the third largest economy in Africa by the end of Governor Akinwunmi Ambode’s tenure.

    He said given the governor’s stellar performance,  the state would move up from its current fifth position.

    Otedola canvassed support for Ambode’s second term so as to continue with the good work, which he said is a continuation of “the foundation laid by his good predecessors.”

    Otedola, who hails from Epe, is the son of the aborted Third Republic Governor of the state, the late Chief Michael Otedola, who was in charge between 1992 and 1993.

    In a statement yesterday, entitled ‘Ambode has done overwhelmingly well’ Otedola, said:

    “As a Lagosian and OMO Ibile, I wish to expressly commend and appreciate The great good work our amiable Governor Ambode is doing in our dear Lagos – Nigeria’s no one State. I have watched and followed keenly, in the last three years of the brilliant transformation projects across the State. No doubt, Ambode is building on the foundations laid by his good predecessors. He is building roads and bridges, schools and hospitals, water treatment plants, sewage and storm water drainages, solid wastes management plants and mass  transportation infrastructure.

    “He has recently gotten approved the electricity power infrastructure for Lagos, which when fully executed, will make Lagos State almost energy independent in Nigeria.  You are all aware of the newly-acquired mass transit buses that are going to be natural gas-powered in order for us in Lagos to be the first to comply with the global climate agenda of DE Carbonisations. Clean and Smart Lagos will take us into the modern global village and make us the number four economy in Africa.

    “Our visionary governor is also spearheading the modernisation of the Lagos State bureaucracy in order to get all the processes  re-engineered for higher and best performances. A good government is a reflection of an efficient and responsive bureaucracy. It is the catalytic driver for private sector growth. A bad and weak bureaucracy will produce nothing for the people. We are lucky to have an able governor like Ambode at the helm of our affairs.

    “He is a knowledge-driven leader, hard working, with passion for our great state.

    “My endorsement and recommendations for him to have a second term is performance based and not just the usual conventional  charade of second term endorsement in Nigeria. I am sure that all my respected compatriots, friends and followers will agree with me that Governor Ambode should please continue with his good job till 2023.

    “Ambode, please Carry Go, the 2019 election and continue with your passionate work for Lagos State transformation.

    “Thank you for being a true servant leader and with your eyes on the ball, surely Lagos State will become number three economy in Africa.”

  • P&G at 25: Reaffirms commitment to developing Nigerian economy

    P&G at 25: Reaffirms commitment to developing Nigerian economy

    The Managing Director of Procter and Gamble, (P&G)  leading Fast Moving Consumer Goods (FMCG) Company, Mr. George Nassar has reaffirmed the company’s commitment to contributing to the Nigerian economy.

    He made the pledge at an event to mark  the 25th anniversary of the company held in Junior Secondary School, Karu, Abuja last Tuesday.

    In the last 25 years, Nassar said the company has been committed to investing in Nigeria and  providing  superior products that satisfy the needs of its  consumers.

    “We have dedicated ourselves to 25 years of product innovation and manufacturing  to provide our consumers with the highest quality of household products. At this stage, it is important for us to take a look at where we started, what we have accomplished, and what our plans are for the future,” he stated.

    As part of activities to mark the 25-year milestone, P&G announced its partnership with MercyCorps, an international not-for-profit organization, through its Always Keeping Girls in School (AKGIS) programme.

    This intervention is targeted at enhancing girls’ knowledge and practice around reproductive health through life skills training, provision of emergency sanitary kits and mobilization of stakeholders’ support for Menstrual Hygiene Management (MHM) for girls in schools.

    Speaking on the company’s brand activities, Director of Brands for P&G Nigeria Tolulope Adedeji said: “We are proud that over the years, not only have we introduced great brands for the satisfaction of our consumers, we have also engaged in projects that address social issues, like our Always School Program through which has equipped millions of young girls within ages 10 – 12 with information about personal and puberty hygiene.

    “This has resulted in the reduced rate of their absence in school and an increment in their confidence level and we are excited about our partnership with MercyCorps to educate more girls on Menstrual Hygiene Management”

    Among dignitaries and stakeholders  in attendance at the event were  the wife of the Vice President of Nigeria, Mrs Dolapo Osinbajo, Dr. Zainab Shinkafi Bagudu, First Lady of Kebbi State and Zainab S. Ahmed, Honourable Minister of State for Budget and National Planning.

  • Economy to benefit from hospitality industry

    The Nigerian hospitality industry is expected to contribute massively to Nigeria’s economic growth within the year, a report has said.

    According to research conducted by Lagos-based W Hospitality Group, operators within the sector are also confronted by multiple taxes and other levies charged by state governments.

    The report said the upbeat in the sector comes after more than three years of depressed performance.

    The W Hospitality Group interviewed hotel general managers working across Nigeria, and found that no fewer than 83 per cent are optimistic about their hotel’s performance in 2018, a strong bounce-back from 2017, due to renewed confidence in the Nigerian business environment.  Although the survey revealed that the business environment is still challenging, yet the expectations are high.

    Managing Director of the W Hospitality Group, Trevor Ward, said the feedback from hotel managers is encouraging.  “The hospitality industry is a good indication of the performance of the economy as a whole.  Stronger demand for hotel services is a good marker of increased investment and of economic growth.

    The problems we experienced of security issues, the oil price crash, and the recent recession are, we hope, behind us”.

    A negative finding from the survey is that fully 50 per cent of hotel executives complain about multiple taxes and other levies charged by State governments, on an industry which is seen as a cash cow to fill governments’ coffers.  “This is an increasing issue for the hoteliers,” Ward said.

    “Hotels already incur high operating costs, exacerbated by the depreciation of the Naira, and these ever-increasing government charges are an unfair and threatening burden, especially when we provide so many job opportunities, especially for young people”.

     

  • Lagos revs up economy with new power and property laws

    •To deliver 3,000mw in three years

    The Lagos State Government has perfected plans to bring about a quantum leap to the State’s economy in 2018 through the Embedded Power Supply Project and the review of the Land Use Charge Law.

    The power project, aimed at delivering an estimated 3,000 Megawatts to homes and industries, is expected to lift the economy of Lagos which is Nigeria’s industrial hub, while the revised Land Use Charge Law had been designed to improve the values of property in the State.

    The State’s House of Assembly had last week announced the passage of two bills expected to provide the legal framework for the programmes by enacting the Lagos State Embedded Power Supply Law 2018 and the Lagos State Land Use Charge Law 2018.

    Both laws are expected to be signed this week by the State Governor, Mr. Akinwunmi Ambode.

    Speaking on the development, Commissioner for Information and Strategy, Mr Kehinde Bamigbetan said the two strategic laws were part of the grand plan of the present administration to boost the economy and make life easier and comfortable for the people.

    He said: “The Embedded Power Supply programme will provide the enabling environment for the private sector to generate not less than 1000 mega watts every year in the first phase of three years by using gas to produce power and distributing the electricity to consumers.

    “As enabler, the Lagos State Government will guarantee the off-take of the generated power.

    “This new product is expected to expand the distribution network and increase metering capacity of the electricity distribution firms in Lagos State including Eko Distribution Company and Ikeja Electricity Distribution Company.”

    Bamigbetan said to ensure return on investment by participating companies and encourage more electricity companies to invest in the embedded power sector, the law has been arranged to provide the framework for the government to support the firms in the collection of tariffs and enforcement of contracts.

    Speaking further, the Commissioner said: “A novel feature of the law is the introduction of provisions for the prosecution and sentencing of those who tap electricity illegally or use the power produced through the embedded power system without entering into contracts with the companies.

    “Defined as power theft, industry watchers believe that this is the first law to provide penalties for a major cause of financial failures of electricity companies and with regular power supply in homes and industries, the Lagos State Government expects a giant leap in the production and growth of the economy,” Bamigbetan said.

    Besides, the Land Use Charge Law is considered as the answer to the agitations of residents for a transparent process of determining rates.

    Under the revised law, estate valuers authorised to assess and value tenements will ensure that the data are reliable and the indices are explicit.

    The revised law also exempts tenements owned by non-profit organisations, religious bodies and public cemeteries and burial grounds.

     

  • ISGPP to host seminar on economy

    ISGPP to host seminar on economy

    The Ibadan School of Government and Public Policy (ISGPP) will on Wednesday hold its first 2018 seminar series on the economy.

    The seminar titled, “Transiting from Bust to Boom: Fiscal, Financial, and Infrastructure Options” will hold at ISGPP’S premises, No 24 Awolowo Road, Bodija, Ibadan. This event will be hosted by Prof Akin Mabogunje, Chairman of the school and chaired by Prof. Ademola Oyejide, Emeritus Professor of Economics, University of Ibadan. Also Dr. Ayo Teriba Member, Board of Economists and CEO, Economist Associates; would deliver the lead paper while Amb. Dr Adeyemi Dipeolu, Economic Adviser to the President, Federal Republic of Nigeria will lead the panel sessions.

    Research and Programme Manager, Tobechukwu Nneli, the panel sessions which will be driven by experts drawn from the academia, government, private sector, and donor community is expected to develop a framework and policy roadmap to ensure that the Nigerian economy transits from bust to boom. The conversations are structured along three major thematic areas of macro economic reforms viz: Revenue Reforms, Financial Sector Reforms and Infrastructure Reforms. Resolving these three overriding macroeconomic crises will ease the burdens on all sectors of the economy, enable us to see what priorities to set for sectoral reforms more clearly and engender a viable national economy.

    Nneli added that this month’s ISGPP seminar therefore, is strategically positioned to contribute effectively to the policy space in Nigeria. Interested members of the public are invited to participate and contribute to the conversations at the scheduled event.

  • What JP Morgan’s likely return to Nigeria means for economy, by ABCON

    Bureaux De Change (BDC) operators are excited that the Federal Government plans to open talks with JPMorgan Chase & Co. for its reinstatement in the local-currency emerging-market bond index. They believe JP Morgan’s return will bring great benefits to the economy.

    Naira securities were removed from the JP Morgan Index in 2015 because of foreign-currency shortages which led to volatility in the market. JP Morgan is the largest bank in the United States, the world’s sixth largest bank by total assets, with total assets of $2.5 trillion, and $28 trillion in assets under custody and administration.

    Association of Bureaux De Change Operators of Nigeria (ABCON) President Aminu Gwadabe said yesterday that the return of the global finance giant will improve foreign exchange (forex) inflows and boost the Central Bank of Nigeria’s (CBN’s) chances of achieving its $60 billion foreign reserves target by 2018 in spite of any fall in oil prices.

    He praised the Federal Government’s plans to begin talks with JP Morgan about being included in its government bond index for emerging markets.

    To the ABCON boss, such return will also enable Nigeria benefit from the $20 billion overseas investment planned by the US bank which will see it raise wages, hire more hands, and open new branches in emerging market countries.

    Gwadabe said: “I want to use this opportunity to congratulate the CBN and the Federal Government on the good news of JP Morgan renewed interest in Nigerian bond market which will enhance investors’ confidence on our economy. The CBN has brought stability in the forex market by making dollar available to genuine forex users, especially at the retail-end of the market. That has ended volatility in the market and boosted the confidence of foreign investors in the local economy.”

    He also praised the CBN for introducing the Investors’ and Exporters’ (I&E) Forex Window, which has since April 2017 attracted over $27.8 billion in turnover into the economy and brought about transparency as well as stability in the forex market.

    The ABCON boss said the US Bank’s return to Nigeria will enable the government access funds for infrastructural development. He urged the CBN to explore the opportunity in reducing the multiple exchange rates and create more confidence for foreign investors. “It will create more opportunity for a genuine and transparent competition among forex operators and boost employment opportunities in the country as well as deepen the forex, naira and the equities markets,” Gwadabe said.

    The Federal Government is presently selling more foreign debts to reduce the financing burden from paying double-digit yields on local-currency bonds. That would help free up funds to increase investment in infrastructure and spur economic growth.  ”We would like to get back into the JP Morgan  Index,” Director-General of Debt Management Office (DMO) Ms. Patience Oniha said.

    Daily trading volumes for the naira have risen to about $200 million from as little as $20 million three years ago, according to Standard Chartered Plc. That bodes well for discussions on returning to the index, according to Oniha. “The securities trading was never the problem; it was always the foreign-currency liquidity, which has now improved”, she said.

    Also, Finance Minister Kemi Adeosun said the government is focusing on improving its economy, and indexes will “naturally” return to Nigeria when they see adjustments in line with their requirements.

    “JPMorgan have their own framework of how they evaluate an economy, and when they are ready, when conditions are good, they will list Nigeria again,” Mrs. Adeosun said.

    ”We should just move in our own direction. What we need to do is to re-position this economy,” she said, adding: “JPMorgan or any other index will come naturally. My focus really is on the recovery of the economy. They will come when the macro fundamentals are right. They left because the macro fundamentals were not right.”

    JP Morgan Chase & Co plans to expand its African presence into some countries, including Ghana and Kenya, Chief Executive Jamie Dimon said.  ”You will see us open in some countries we are not in, in Africa you will be hearing about some of that stuff,” Dimon said at the 2017 World Economic Forum meeting in Davos, Switzerland.