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The minister of state for Petroleum Resources, Dr Emmanuel Ibe Kachikwu, has described the nation’s importation of petroleum products as a fraud and must be put to an end if the nation was to make progress in the oil and gas sector.

He added that the act was also shameful, stressing that the system has been opaque for a long period hence despite having abundant oil resources, the country has been importing finished petroleum products over the years.

Speaking at the ongoing Nigeria Oil and Gas Conference in Abuja, Kachikwu said the government through the Nigerian National Petroleum Corporation (NNPC) must meet its target of ending petroleum products’ importation between 2018 and 2019.

Presenting his ministerial address titled: “Reforming and Repositioning the Oil and Gas Industry in Nigeria,” the minister said “Importation of petroleum products will have to cease. There’s absolutely no reason why a country with the resources that we have will continue to import petroleum products. It is a shame on this country, it is a fraud on the system and we are going to end it.

“We are committed to the 2018/2019 template, because it is something we have to do. The refineries are not performing to capacity and it is not going to be easy, but we have to end importation of petroleum products.

“If we do that, the downstream will survive; but if we don’t, then by the first quarter of 2020, the Dangote refinery will come on board. And if that happens, it then means we will have scraps in our hands as refineries. Therefore, there’s the urgency of now to end importation.”

The minister noted that despite these, Nigeria remained a leading producer in Africa with the potential to boost production to the neighbourhood of three million barrels of oil per day by 2020 once the required investments flowed in and the planned deep-water projects were fully realised.

This, he said, was aimed at achieving an incremental reserve of at least one billion barrels and half a million barrels in production capacity per day.

“For example, the opening up of the Dahomey Basin with the coming on stream of the Aje field is certainly a major milestone for the industry,” he stated.

Kachikwu also noted that the engagements with state governments and groups in the Niger Delta had started yielding positive results, as over the last 60 days, the activities of militants in the region had dropped to near zero.

 

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Investors in the generation companies (GenCos) have warned of an imminent blackout nationwide if the N601 billion debts owed them by consumers through the off-taker, the Nigerian Bulk Electricity Trading Plc (NBET) – a Federal Government’s owned public liability company.

The investors spoke yesterday at the Nigeria Power Summit, part of the ongoing Nigeria Oil and Gas Conference (NOG) holding in Abuja.

The Managing Director and Chief Executive Officer of Mainstream Energy Solutions Limited, Mr. Lamu Audu, stated that only 20 percent of the cost of power produced across the supply value chain is being paid for.He noted that foreign exchange (forex) challenge also remains a major bottleneck for power investors as a result fluctuating exchange rates, which was less than N200 to a dollar when the power assets were bought, and currently above N350.

He said: “Virtually all the spare parts used in the power sector are imported and we need foreign exchange to procure them. But, unfortunately, the fluctuating exchange rate has made planning difficult for investors.”

Another worrisome trend in the sector, according to Audu, is the issue of ageing transmission infrastructure, which most time leads to rejection of generated power by the Transmission Company of Nigeria (TCN).

Investors in the generation companies (GenCos) have warned of an imminent blackout nationwide if the N601 billion debts owed them by consumers through the off-taker, the Nigerian Bulk Electricity Trading Plc (NBET) – a Federal Government’s owned public liability company.

The investors spoke yesterday at the Nigeria Power Summit, part of the ongoing Nigeria Oil and Gas Conference (NOG) holding in Abuja.

The Managing Director and Chief Executive Officer of Mainstream Energy Solutions Limited, Mr. Lamu Audu, stated that only 20 percent of the cost of power produced across the supply value chain is being paid for.He noted that foreign exchange (forex) challenge also remains a major bottleneck for power investors as a result fluctuating exchange rates, which was less than N200 to a dollar when the power assets were bought, and currently above N350.

He said: “Virtually all the spare parts used in the power sector are imported and we need foreign exchange to procure them. But, unfortunately, the fluctuating exchange rate has made planning difficult for investors.”

Another worrisome trend in the sector, according to Audu, is the issue of ageing transmission infrastructure, which most time leads to rejection of generated power by the Transmission Company of Nigeria (TCN).

“This is a major loss on the part of power generation companies. When the generated power is rejected, who bears the loss? I think government should be in a position to pay for this. And going forward, I think TCN should be privatised,” he advised.

Also the Managing Director of Sahara Power, Mr. Kola Adesina, lamented about the paucity of funds for power investors. H e noted that lack of fund remains a stumbling block to the growth of the sector, adding that power sector being a cycle feeds from four sources; gas, generation, transmission and distribution. He said when one leg of the cycle is stifled of fund, all other segments are affected from functioning at optimal level.

According to him, the inability of consumers to pay for power consumed ultimately affects payment to gas producers, GenCos and the transmission company. He also noted that lack of adequate gas supply to the generating companies is also a major issue hindering the smooth operation of the sector, adding that constant attacks on gas infrastructure by agitators remains an issue that government must address for the sector to move forward.

 

 

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The World Bank has offered to give Nigeria a $500 million-loan to assist out -of-school children, according to an official of the bank.

The News Agency of Nigeria (NAN) reports that a Senior Education Specialist with the bank, Dr Olatunde Adekola, disclosed this in Sokoto on Sunday. Adekola, who led a five-man team of the bank on a courtesy call on Gov. Aminu Tambuwal of Sokoto State, added that the loan would be given under its `Better Education-For-All (BEDA)’ Project.

He said that the project would, specifically, focus on the northern parts of Nigeria, specifically to bolster the girl-child education.

Adekola said: “The project will be results oriented, ensure that children are able to read and write,

“This is to help the government to strengthen its service delivery mechanisms to children, girls, women and other vulnerable groups.

“Most of the challenges in the country are education related and the five-year project is aimed at reversing the ugly trend.”

The World Bank official, however, expressed satisfaction with the efforts so far made by Tambuwal to move the education sector forward in the state.

Adekola lauded the state for allocating about 27 per cent of its annual budget to education in 2016 and 2017 fiscal years.

He said: “The state government also deserves a pat on the back for ensuring the prompt payment of teachers’ salaries.

“We have also noted an unlimited appetite by parents in the state for the education of their children.”

Responding, Gov.Tambuwal promised to sustain the existing partnership between the bank and the state government.

“ We will continue to honour our own side of commitments to such agreements in terms of finances and other issues.

“We have begun the process of creating an agency to be in charge of the education of the girl-child.

“We will ensure the effective utilization of the funds, to avoid any infractions,” the governor said.

 

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In order to cut the cost of maintaining government quarters, the Kaduna State government has decided to sell about 1,990 of its non-essential residential quarters.

The full list of available properties placed on the state website indicates that about 1,990 houses are to be sold by means of a public auction based on their open-market value.

The decision to sell the houses was endorsed by the State Executive Council.

The approved guidelines contained in an advertorial placed by the secretary, committee on the sale of government residential quarters in Kaduna State, said only persons and corporate bodies resident in Kaduna State are eligible to submit bids for the properties, and each property will be sold at the highest price offered.

The guidelines also stipulated that no property will be sold for less than its reserve price and that every bidder is restricted to only one property.

The guidelines further indicates that, “The public servants that currently occupy those properties have the first right of refusal to match the winning bid. The sale excludes all government quarters in schools, hospitals and similar public institutions.”

It was gathered that, the government houses which numbered about 3000 residential quarters were not enough to accommodate the teeming civil servants of the state as they accommodated only a minority of public servants but with a disproportionate impact in terms of resources devoted to their maintenance and renovation.

 

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Three years after it stopped the charges, the Central Bank of Nigeria announced the reintroduction of bank charges on certain categories of cash deposits and withdrawals.

The reintroduction of the charges was contained in a circular to all Deposit Money Banks posted on the website of the CBN.

The apex bank in the country said the decision to reintroduce the charges on cash deposits was part of the review of charges on deposits and withdrawals under the cashless policy.

The decision, the CBN said, was taken at the Bankers’ Committee meeting, which held in Abuja two weeks ago.

The circular was signed by the Director, Banking and Payments System Department, CBN, Dipo Fatokun.

The circular said the committee decided that the cashless policy should be extended to the remaining 30 states of the federation.

Only six states have been operating the cashless policy before now.

These are the Federal Capital Territory, Lagos, Ogun, Anambra, Abia, Kano and Rivers States.

The CBN also directed that with effect from April 1, 2017, banks in the states where the cashless policy was already operating would begin to impose charges on deposits and withdrawals above N500,000.

Banks will from that date begin to charge individuals 1.5 per cent and two per cent for deposits and withdrawals between N500,000 and N1 million.

The circular said individuals depositing or withdrawing between N1 million and N5 million will be charged two per cent and three per cent respectively.

Any amount above N5 million will for an individual attract three per cent and 7.5 per cent for deposits and withdrawals respectively.

For companies, deposits and withdrawals under N3 million would not attract any charge, but that such customers depositing or withdrawing between N3 million and N10 million would be charged two per cent and five per cent respectively.

Also for deposits and withdrawals between N10 million and N40 million, customers will be charged three per cent and 7.5 per cent respectively.

Deposits or withdrawals above N40 million by corporate customers will attract a charge of five per cent and 10 per cent respectively.

According to the CBN, the new policy on charges will be implemented in selected states on May 1 and August 1, while the total implementation will become effective on October 1.

The regulator noted that the committee agreed that income generated from the processing fees above the allowable cash limits would be shared between it and the banks in the ratio of 40:60.

However, the CBN said that existing exemptions to the policy such as revenue generating agencies of the federal, state and local governments (for lodgments) will be sustained.

Also exempted from the processing fees are embassies, diplomatic missions, multilateral and aid agencies.

 

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The Awka Ibom state government is set to commission the first ever pencil factory in the country.

In its commitment aimed at re-awakening the spirit of enterprise among the youths and position them to benefit from the industrialization programme of the state, government of Akwa Ibom State would soon commission its multibillion naira pencil and tooth pick factory.

The factory which is wholly-owned by the state government was floated in 2015 under the Akwa Ibom Enterprises and Employment Scheme (AKEES).

The Administrative and Utility Manager of the factory, Miss. Nsisiong Umoh, told newsmen in Uyo that although the factory is currently on a test run with staff strength of over 60, all drawn from AKEES database, it has been producing for two months now.

The factory she said is currently producing about 100,000 per month and intends to increase drastically when the factory is finally inaugurated.

Umoh added that government’s plan is to also build pen, matches and sagged bag factories within the premises, thereby creating more employment opportunities for the teeming youths.

She said the factory is yet to start selling its products, revealing that so many companies have already indicated interest to act as their marketers/distributors.

Meanwhile, the pencil and tooth pick factory has received orders from the Sokoto State government to supply 144,000 pencils every three months.

 

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The slide in the value of the naira against the dollars has caused the price of aviation fuel, known as Jet A1, to skyrocket.

 

The price which stabilized in recent times, selling between N220 to N255 per litre, has increased to N265 following acute dollar scarcity.

 

The naira hit an all-time low last week exchanging for between N507 to N510 to a dollar. This, coupled with the scarcity, has taken effect on the prices of aviation fuel with airline operators lamenting over the weekend.

Findings have showed that a litre of fuel which sold for N230-N240 in Lagos few weeks ago has now increased to N245-N250 per litre.

 

However in other airports across the country, it has skyrocketed to about N265-N280.

Director of Flight Operations, Azman Air, Capt. Tanko Afegbua, confirmed the development, He said, “I can tell you that in Kano, the price has gone up to N280 per litre and we don’t have option than to buy it in order to keep the operations running.”

He attributed the development to dollar shortage, saying fuel marketers were complaining that the landing cost has increased.

 

There are fears in the industry that the price may soon hit N300 if the naira continued to depreciate against the dollar which will in turn increase the cost of air tickets which has gone up enormously with a one-hour ticket from Lagos to Abuja now costing about N50,000 from N20,000 to N25,000 it used to be for a one way trip.

 

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Enugu State Board of Internal Revenue, after obtaining Exparte Orders from the Enugu State High Court, sealed eight banks in the state for refusal to remit Withholding Taxes worth about N1billion into the coffer of the State Government.

Mr. Emeka Odo Chairman(on behalf of Esir),Enugu State Board of Internal Revenue gave reasons why the 8 banks were sealed off.....

Eight banks were this morning sealed by the Enugu State Government for failure to remit about ₦1, 000,000,000.00 (One Billion naira) in taxes to the coffer official the state government.

The state government, through the Enugu State Board of Internal Revenue (ESBIR) on Feburary 6 and 16, 2017, obtained Exparte Orders from the Enugu State High Court to distrain the affected banks. The Board began the enforcement exercise this morning, and I wish to state that it was very successful.

The eight banks are Access Bank PLC, Stanbic IBTC Bank, Skye Bank, Union Bank, Unity Bank, Heritage (Enterprise) Bank, Keystone Bank, and Sterling Bank.

The branches of the affected banks in the State, which are now under lock and key will remain locked until they pay to the state government the taxes they have collected on its behalf.

The government has been encouraging individual tax payers and tax agents to comply voluntarily by paying their taxes promptly. We have reformed the process of remittances of government revenues to make it easy for banks to pay their taxes like other corporate citizens.

In the past one year we have written the affected banks severally and held meetings with them on the subject matter but they would rather hold onto government funds illegally.

The action of the affected banks has been denying the State government of the funds it needs to execute its developmental programmes that would impact positively on the lives of the people.

The eight banks have a combined branch network of 36 branches in Enugu metropolis and the neighbouring towns of Agbani and Ituku  Ozalla.

The sealing of the banks is the first phase of the enforcement exercise on major companies and institutions to ensure that they perform their civic obligation to the state government.

We can no longer allow the banks to behave like corporate outlaws, moreso, when it is on record that the Withholding Taxes (WHT) which the state government is demanding that Banks remit to its coffer,  have already been deducted by  the banks from the interests that they pay on deposits to their customers.

The banks have no business holding onto these taxes they collected on behalf of the government.

The present administration in Enugu State has laid out an ambitious plan to upgrade critical infrastructural facilities in the State. These people-oriented programmes need to be adequately funded urgently, because the state government is in a hurry to deliver on all its campaign promises to the people.

We are all aware that revenue allocation from the Federation Account to the state government has been dwindling. The government expects banks and other financial institutions to join hands with it to harness its internally generated revenues.

In view of the above, we call on the people of the state, especially customers of the affected banks to be calm and see the action as a measure to enable the government serve them better as their monies in the affected banks are safe.

 

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FMDQ OTC Securities Exchange (FMDQ) has admitted the quotation of the Sterling Bank Plc N2.40 billion Series 1-3 Commercial Paper (CP) Notes (the Sterling Bank CP), under its N100.00 billion CP Programme and the listing of the FCMB Financing SPV Plc N5.10 billion 7-year 17.25 per cent Series 3 Fixed Rate Unsecured Bond (the FCMB SPV Bond) under its N100.00 billion Debt Issuance Programme, on its platform.

According to FMDQ, the successive admittance of these securities, following due approval from the FMDQ Board Listings, Markets and Technology Committee, attests to the highly efficient time to market the uniquely tailored Listings and Quotations service offered by FMDQ. In the coming weeks, respective ceremonies will be held in honour of the issuers, Sterling Bank PLC and FCMB SPV Plc to commemorate these achievements.

“From the continuous provision of invaluable information, to global visibility, improved secondary market liquidity, efficient price formation and unique transparency, the activities and value-adding services of the OTC Exchange continue to be experienced by businesses, corporate and government entities with debt securities listed/quoted on FMDQ. As part of FMDQ’s commitment to organise, govern and enforce credibility and transparency in the debt capital market space, the OTC Exchange has, through its innovative practices and the concerted efforts of its stakeholders, positively influenced the competitiveness of the Nigerian financial markets.

FMDQ shall continue to validate its operational mandate of aligning the markets within its purview to international standards, striving to ensure they emerge as globally competitive, operationally excellent, liquid and diverse. Through the continued support for institutional growth, the OTC Exchange shall invariably contribute its quota to rejuvenating the vibrancy of the Nigerian economy,” the Securities Exchange said.

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The Central Bank of Nigeria (CBN) could be set to adjust its current foreign exchange regime, as it comes under increasing pressure to ease dollar scarcity and stem the naira’s free-fall on the parallel market. In a note issued last weekend, the investment and research firm, Renaissance Capital (RenCap) stated that it gathered during its meetings with policy makers and development partners in Abuja last week, that the apex bank was planning an adjustment of the forex policy in the short term, though this will not be the full float of the naira desired by international investors.

 RenCap’s sub-Sahara Africa Economist, Yvonne Mhango, said: “We think the most probable outcome of an FX policy adjustment is a managed float, possibly a new peg, but a full float is unlikely.

The failure of the June 2016 FX liberalisation is attributed to a poor implementation framework. We heard this is being “fine-tuned”. It was unclear whether the 60:40 rule would be removed, but the authorities are talking of replacing the de facto ban on 41 items with import tariffs.

“The $5 billion build-up of FX reserves since November is a deliberate policy of the central bank (pent-up demand is c. $4 billion). This is in keeping with plans for an FX policy adjustment. Making the interbank FX market work is key for the central bank. Improved liquidity, a smaller premium between the parallel and interbank rate, price discovery, and transparency would signal success.

Our YE17 forecast is N447/$1.” The naira has been in free fall mode in recent days on the parallel market, crossing the N500/$ mark penultimate week and falling to N507/dollar and N510/$ on Monday and Wednesday respectively. With the local currency further sliding to N515/$ to the greenback last Wednesday, pressure has been mounting on the CBN to review its forex policy.

Last Thursday, the National Economic Council (NEC) demanded an urgent review of the policy. Deputy Governor of Nasarawa state, Silas Ali Agara, told journalists after the NEC meeting: “(National Economic) Council members generally expressed concern over the current situation of the exchange rate and called for an urgent review of the current forex policy, especially the gap between interbank and the parallel market rates.”

He added that the CBN governor, Governor, Godwin Emefiele, had told the body, which comprises the country’s 36 federal states, Vice President Yemi Osinbajo and other ministers, that patience was needed but that the situation was under control. The CBN had launched its liberalised forex market on June 20 last year, announcing that the new regime would be purely market driven.

CBN Governor, Godwin Emefiele, said at the time that under the new regime, the market will operate as a single market through the inter-bank/ autonomous window, adding that it will use the Thomson- Reuters Order Matching System as well as the Conversational Dealing Book. He, however, stated that the CBN would participate in the market through periodic interventions to either buy or sell FX as the need arises.

Although with the new policy, the baning watchdog removed its currency peg (N197/$) and essentially devalued the naira to about N280/$, analysts soon started seeking further devaluation of the local currency when it became apparent that the CBN was always intervening in the official market to ensure the exchange rate did not fall below N305.5/$. Analysts blamed the CBN’s ‘manipulation’ of the official exchange rate for its failure to attract foreign inflows, a key requirement for the success of the forex policy.

 

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