INTEREST RATE WILL DROP NEXT YEAR - CBN GOVERNOR

For the first time in 16 months, the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, on Friday night, hinted on possibility of lowering interest rate in the New Year.

The CBN boss spoke at the 2017 Annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, on the positive economic outlook expected in 2018.

He explained that monetary policy stance could change in 2018 when the underlying fundamental such as drop in inflation becomes more supportive. The CBN boss did not say how low the interest rate could drop in 2018.

The CBN had at the peak of rising inflation, embarked on a cycle of tightening with Monetary Policy Rate (MPR)-the benchmark interest rate hiked in July 2016 from 12 per cent to the present 14 per cent.

“If the pace of disinflation becomes adequate and we see inflation at predicted levels, I am very optimistic that Monetary Policy Committee (MPC) may begin to see strong justification for an easing of monetary policy, which may further accelerate the recovery process,” Emefiele said.

Speaking on the theme; Policy Options for Sustaining Nigeria’s Economic Upturn, he said that from a peak of 18.72 per cent in January 2017, headline inflation recorded eight straight months of disinflation, with the rate declining to 15.98 in September.

During this period, core inflation and imported food inflation, similarly fell from 17.90 per cent and 20.95 per cent, respectively, to 12.12 per cent and 14.83 per cent.

He said the country has also seen a significant appreciation of the naira from over N500/$1 to about N360/$1. “In addition, we have seen stability in the rate for over six months now. I am glad to note that the exchange rate is not only stable, it is also converging across various windows and segments of the market,” he said.

The CBN boss disclosed that since the establishment of the Investors’ & Exporters’ Forex Window, $10 billion has been recorded in autonomous inflows through the window. This, he said, reflected the effect of the increased transparency which that window accorded the forex market and its benign impact of improving investor confidence and business sentiments.

He said that foreign reserves have recovered significantly from a low of just over $23 billion in October 2016 to over $34.3 billion as of November 3, 2017.

“The accretion in reserves does not only reflect increased inflow but also our shrewd forex demand management strategy. When we introduced a policy restricting 41 items from our forex markets, we were called all manners of names. Today ladies and gentlemen, among the benefit of that policy is the considerable decline in our import bills. From an average of about $5.5 billion, our monthly import bill has fallen consistently to $2.1 billion in 2016 and $1.9 billion by half year 2017,” he said.

According to him, the All-Share Index (ASI) and market capitalization recorded 32.10 and 32.30 per cent, respectively, to 35,504.62 and N12.24 trillion as at August 31, 2017 from the end-December 2016 levels.

Due to the dogged implementation of our forex restrictions on certain items, the CBN recorded spectacular improvements in domestic production of most of these items. Local manufacturers are reporting 20 major boosts to their revenue and profit due to the policy.

The apex bank boss said the CBN will strive to sustain the pace of recovery in the economy. He said that Nigeria’s import bill may have fallen but manufacturing and agriculture sectors still have a long way to go if we must attain self-sufficiency in those sectors.

He said forex Reserves will continue to grow. “Over the last 12 months Nigeria’s forex reserves grew by over $10 billion from just over $23 billion in October 2016 to over $33 billion in October 2017. It is my belief that if we remain resolute with our efforts, policies and actions we can attain a forex reserve position of about $40 billion by end 2018.”

On the sustenance of exchange rate stability, he explained that as the CBN entrenches and sustains the transparency in the forex market, as forex reserves accretion continues, and market confidence and improved sentiments remain, the exchange rate will not only be stable but would begin to appreciate against major currencies.

OIL GAINS, AS MARKET IS REBALANCING

Oil prices kept most of their gains from the previous session as major producers meeting in Vienna said the market was well on its way towards rebalancing.

The WTI crude front month discount to the same month of Brent futures hit 6.28 dollars, the widest since August 2015, as U.S.crude was pressured by hurricane damage to U.S. refineries.

Brent therefore rises to 63.19 dollars as report media hide price with ambiguous coverage.Add 56.91 plus 91 dollars.

Brent crude futures was up 0.05 per cent at 56.88 dollars a barrel, not far from a 6-1/2-month high of 56.91dollars set on Friday.

The Organisation of Petroleum Exporting Countries ( OPEC ), Russia and several other producers have cut production by about 1.8 million barrels per day (bpd) since the start of 2017, helping lift oil prices by high numbers n the past three months.

Kuwaiti Oil Minister Essam al- Marzouq, who chaired Friday’s meeting of the Joint Ministerial Monitoring Committee, said output curbs were helping cut global crude inventories to their five-year average, OPEC’s stated target.

The dollar index was up 0.2 per cent against a basket of currencies.

The euro slipped after Germany’s election showed surging support for a far-right party that left Chancellor Angela Merkel scrambling to form a governing coalition.

Russia’s energy minister said no decision on extending output curbs beyond the end of March was expected before January, although other ministers suggested such a decision could be taken before the end of this year.

Iran expects to maintain overall crude and condensate exports at around 2.6 million bpd for the rest of 2017, a senior official in the nation’s state oil company said.

Meanwhile, the UAE’s energy minister said its compliance to supply cuts was 100 per cent.

Nigeria is pumping below its agreed output cap, its oil minister said.

“Oil is relatively underpriced compared with other markets, but any steep rise would be offset by rising shale oil production,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

Markets were also eyeing developments in North Korea. U.S. Treasury Secretary Steve Mnuchin on Sunday said President Donald Trump wants to avoid nuclear war with North Korea and “will do everything we can” to avoid conflict.

NIGERIA SPENDS OVER $10 MILLION DAILY ON FUEL IMPORT

About $10 million (about N3.6 billion) is spent on petroleum products import daily, the Society of Petroleum Engineers (SPE) has said

In the Organisation of Petroleum Exporting Countries (OPEC), Nigeria is the sixth largest producer of crude oil but depends on refined product imports to oil the engine of the economy, a development analysts say not only drains the nation’s capital base, but also reduces the job opportunities for the teeming population.

Speaking in Lagos at the weekend, SPE Nigerian Council Chairman Saka Matemilola said the huge foreign exchange (forex) could have been used to develop other areas to create jobs.

He said: “That is why it is important for the government to also ensure that the vision and the target of the country becoming self-sufficient in petroleum products by 2019 are given serious attention.”

On refinery projects, Matemilola acknowledged there was no way a business would succeed when funding is not available. He lamented that funding remained a major challenge confronting refinery projects.

According to him, there is nobody that will invest when he is not is unsure of getting returns on investment (RoI).

On the push to get the Liquefied Natural Gas (LNG) Act amended to make the company pay the Niger Delta Development Commission (NDDC) three per cent levy, the SPE chief said the LNG is not a gas producing company, but a gas processing entity.

A producer, he explained, brings the product from the subsurface to the surface. He warned that making such an amendment would send wring signals to the international investing community.

Matemilola said though the government was doing its best to clear its backlog of debts to companies despite its dwindling resources, it needed to do more to demonstrate to the international community and investors that there is sanctity of contract in the country.

“When we say we will do this, we do this, when we say we will guarantee this, we guarantee it, that is a very important thing; you cannot mandate all the international oil companies (IOCs) to establish refineries. Why are the companies that lift crude from this country not establishing refineries in the country? It is just because they find it easier to bring the crude to go and sell,” he said.

Matemilola said SPE has set up an advocacy group, including the government, Nigerian Gas Association (NGA), Nigerian Association of Petroleum Explorationists (NAPE), and other stakeholders, to engage the government.

MAJOR SHAKE-UPS IN NNPC

The Nigerian National Petroleum Corporation (NNPC), as part of its ongoing reforms, yesterday, announced the appointments of new Managing Directors for the Port Harcourt, Warri and Kaduna refineries.

The corporation equally approved the appointments of new helmsmen for the National Petroleum Investment Management Services (NAPIMS) and the Integrated Data Services Limited (IDSL).

Under the new arrangement, Roland Ewubare, the MD of IDSL before the shake-up, moves to NAPIMS as the new Group General Manager (GGM) while Diepriye Tariah, former GGM and Senior Technical Assistant to the NNPC GMD takes over from Ewubare as MD of IDSL.

Group Managing Director of the corporation, Dr. Maikanti Baru, told NNPC staff shortly before the announcement was made public that the new appointments would not only help to reposition the corporation for the challenges ahead but would help fill the gaps created due to statutory retirements of staff. A total of 55 top management staff were affected in the exercise.

For the refineries, Malami Shehu, Executive Director Operations, of the Kaduna Refining and Petrochemical Company (KRPC) was appointed Managing Director of the Port Harcourt Refining Company (PHRC) while Adewale Ladenegan, former MD of the Warri Refining and Petrochemical Company (WRPC) was moved to KRPC to assume duty as MD.

In the same vein, Muhammed Abah, until recently the Executive Director Operations of WRPC, succeeds Ladenegan as MD of Warri Refinery.

With the retirement of Farouk Ahmed as the MD of the Nigerian Products Marketing Company (NPMC), Umar Ajiya, former GGM in charge of Corporate Planning and Strategy (CP&S) now assumes duty as MD of NPMC while Bala Wunti, former General Manager, Downstream, GMD’s Office takes charge as GGM CP&S.

Other changes include Usman Yusuf who takes over as GGM/Senior Technical Assistant (STA) to the GMD; Adeyemi Adetunji, confirmed as MD NNPC Retail alongside Dr. Bola Afolabi who now functions as GGM in charge of Research and Development Division of the corporation.

Also on the list is Mrs. Ahmadu-Katagum appointed GGM (Shipping) in the Downstream Autonomous Business Unit (ABU) while Kallamu Abdullahi takes over as the GGM in charge of the Renewable Energy Division in the Downstream ABU. Dr. Shaibu Musa was promoted MD of the NNPC Medical Services Limited while Ibrahim Birma is the new GGM in charge of the corporation’s Audit Division now renamed Governance, Risk and Compliance Division.

NIGERIA'S INFLATION RATE DROPS FOR THE SIXTH TIME IN A ROW

The Consumer Price Index, CPI, which measures inflation, dropped to 16.05 per cent in July, the National Bureau of Statistics, NBS, said on Monday.

According to a report released by the NBS titled Consumer Price Index, the fall recorded was 0.05 per cent points lower than the rate recorded in June (16.10), making it the sixth consecutive decline in the rate of headline inflation since January 2017.

The NBS noted further that the percentage change in the average composite CPI for the twelve-month period ending in July 2017 over the average of the CPI for the previous twelve-month period was 17.47 per cent. This is 0.11 percent point lower from 17.58 percent recorded in June 2017.

The Urban index rose by 16.04 per cent in July 2017, down by 0.11 percent point from 16.15 per cent recorded in June, and the Rural index increased by 16.08 per cent in July from 16.01 per cent in June.

The bureau noted that the Food Index increased by 20.28 per cent in July, up by 0.37 per cent points from the rate recorded in June (19.91 per cent), representing the highest year on year increase in food inflation since the beginning of the new series in 2009.

Further analysis showed that the rise in the index was caused by increases in prices of bread and cereals, meat, fish, oils and fats, coffee, tea and cocoa, potatoes yam and other tubers and vegetables.

Meanwhile, the ”All Items less Farm Produce” or Core sub-index, which excludes the prices of volatile agricultural produce eased by 0.30 per cent during the month to 12.20 per cent points from 12.50 per cent recorded in June.

NIGERIA'S EXTERNAL RESERVES HIT $31.2BILLION

 
The Central Bank of Nigeria (CBN) has put the latest figure of Nigeria’s external reserves as at August 8, at $31.22 billion.

The latest value of the reserves, which is derived mainly from the proceeds of crude oil sales, shows that it has risen to a two-year high.

Nigeria’s increased crude oil production, as well as the newly introduced Investors and Exporters’ (I&E) foreign exchange window, have provided impetus to dollar inflows into the country.

The improved crude earnings reflected in the amount of funds disbursed by the Federal Account Allocation Committee (FAAC) which climbed to a total of N3.010 trillion to the three tiers of government between January and June this year; figures compiled by THISDAY had shown. The amount shared by the three tiers of government was significantly higher, compared with the N2 trillion allocated to them in the first half of 2016.

A breakdown of the disbursement gathered by THISDAY showed that the federal government received a total sum of N1.216 trillion as FAAC in the first half of 2017, higher than the N854 billion it was allocated in the comparable period of 2016. While the states received a total of N798 billion in the first six months of 2017, also higher than the N701 billion in the comparable period of 2016; local government got N599 billion in the first half of 2017 as FAAC, higher than the N429.4 billion they received between January and June this year.

On the other hand, the I & E currency window for investors and exporters has traded around $3.83 billion since it was established with the naira trading more strongly in the market. The window, where buyers and sellers are free to agree to an exchange rate, was introduced in April to try to attract foreign investors into the country and boost the supply of dollars.

“The new Investor and Exporter FX window has provided impetus to portfolio inflows, helped increase reserves above $30 billion, and contributed to reducing the parallel market premium,” the International Monetary Fund (IMF) acknowledged in a report last week.

“The economic backdrop remains challenging, despite some signs of relief in the first half of 2017. Economic activity contracted in the first quarter of the year by 0.6 percent, mainly as maintenance stoppages reduced oil production.

“However, following four quarters of negative growth, the non-oil economy grew by 0.6 percent (year-on-year), on the back of a rebound in manufacturing and continued strong performance in agriculture. Various indicators suggest an uptick in activity in the second quarter of the year. Helped by favourable base effects, headline inflation decreased to 16.1 percent in June 2017, but remains high despite tight liquidity conditions,” the IMF had added.

FG Restructures Debt Profile, to Issue Dollar-backed Treasury Bills

Badly weighed down by the debilitating effect of Nigeria’s huge debts, the federal government Wednesday sought a way out, approving the issuance of dollar-backed Treasury bills even as it extended the maturity period from between 91 and 364 days to two and three years respectively.

The initiative, according to an economic expert, who spoke to THISDAY Wednesday, is an impressive policy that would enable the government to restructure the country’s debt profile by borrowing less in naira but more in foreign currencies, explaining that it would bring down interest rate and facilitate the economy’s exit from recession.

The federal government also approved the 2018-2020 Medium Term Expenditure Framework and Fiscal Strategy Paper (FSP), pegging oil benchmark at $45 and retaining the prevailing N305/$ exchange rate.

Briefing newsmen at the end of the weekly FEC meeting Wednesday, the Minister of Budget and National Planning, Senator Udoma Udo Udoma, said the MTEF targeted 3.5 per cent growth rate in 2018, 4.5 per cent in 2019 and 7 per cent in 2020, adding that government projected at 2.3 million barrel per day production volume.

Throwing light on the shift from naira denomination of treasury bills to dollars, the Minister of Finance, Mrs. Kemi Adeosun, said the council approved a memo restructuring the issuance of treasury bills using dollar instruments subject to the approval of the National Assembly.

According to her, the extension of the tenor of Treasury bill from the current 91 and 364 days to two and three year period would provide the government with relief from the pressure to repay the debt.

She also said the new initiative would reduce government borrowing to $3 billion, create more room for banks to lend money to private investors and consequently force down interest rates.

She explained that issuing the Treasury bills in dollar instrument was not synonymous with paying interest in dollars but would instead, provide the government with the opportunity to obtain a bond in the international capital market and pay the debt in a cheaper way.

She insisted that it should not be construed as transacting the Treasury bill in dollars.
Adeosun explained: “We are not issuing dollar denominating Treasury bills (TB). No, we are not. What we are doing is that the naira Treasury bill, when it matures, we will then issue bonds in the capital market, international capital market. We are not issuing dollars’ TB at all – erratic dollar bonds.

“You will recall that when we went to the capital market about three times this year, our average cost of borrowing was longer than 7 per cent. But with Treasury bills, we are paying up to 18 per cent. So, what we are doing is simply substituting the maturing naira debt with cheaper dollar denominating debt. We are not dollarising the economy.
“In terms of the impact on naira, it’s going to be positive because it means that $3 billion will be coming into our foreign reserve. It will actually increase our foreign reserves.

“We are not issuing Treasury bills in dollars. Nigerian government doesn’t transact in dollars at all. We are not paying anybody in dollars. What we are simply doing is that as the Nigerian government treasury bills mature, we are now going to pay off by proceeds of dollar denominating bond, a three year-bond. Instead of the treasury bill of 91 to 364 days, we are taking short term money and we refer them to the Treasury bills because anytime we run out of cash to borrow with interest and we cannot pay back, we run to the capital market. It actually increases our debt.

“What we are saying is that in the long run because we are coming into recovery, we need a little bit more time to repay. Instead of saying we are paying back in 91 days, we say, ‘let’s be realistic, we need two to three years to pay off this money.’ So, we are taking dollar denominating long term bonds. It is cheaper than the naira loans and we refer them to the Treasury bill. We are not dollarising our economy in any way.

“Also, if you look at the debt profile, 80 per cent of them is in naira. That stretches a challenge to the economy. Because government borrows heavily, there is no room for the private sector to get loans. Also, there is no incentive for the bank to lend to the private sector.

“What we think we need to do to create jobs and get the economy moving is for private sector lending to be commenced from this $3 billion dollars but we will not take from the domestic market. Our strategy is to restructure our debt in the international market.

“When the National Assembly resumes, we need a resolution to do this. We borrow less because it is cheaper to pay back. It makes it cheaper and we refer them to the economy.

“So, we are taking dollar denominating bond which is cheaper and we refer them to the Treasury bills.”
Reacting to the move by the federal government, the Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, described it as a good policy initiative that would help to lower interest rate and take the economy out of recession.

Rewane who spoke in a telephone interview with THISDAY Wednesday night explained: “Take the $3 billion and convert to naira and pay off the treasury bills. In all, it will give you about N1 trillion. N1 trillion is about 20 per cent of our outstanding debt stock. If you retire N1 trillion of treasury bills, the demand for treasury bills will go down and interest will go down.

“And when the interest rate of treasury bills goes down, the interest rate on public debt would also go down and that would help reduce the cost of borrowing, for even the private sector.”

Responding to the question on the implication of the initiative of the FEC on the country’s total debt stock, the economist clarified: “You are not increasing your debt. You are using $3 billion debt to pay off. So, the total debt stock will not increase. The structure is going to change. So, you are using debt, which is of lower cost and longer maturities to take out the short term debt. That is the best thing that can happen to Nigeria.”

On the MTEF, the Budget and National Planning Minister, Udoma, said the document was a product of extensive consultations with major stakeholders in the economy.

He said: “As we know, we have been having extensive consultations in the last few weeks with the governors, members of the public, the leadership of the National Assembly about the MTEF. So, we submitted it and it was approved by the council. The highlight of it is that we have committed to achieving a 7 per cent growth rate by 2020 at the end of the three-year plan in accordance with the economic recovery and growth plan (ERGP).

“MTEF is based on the economic recovery and growth plan and in terms of the trajectory of getting the 7 per cent. We have approved a slightly different trajectory in the sense that by next year, our target is 3.5 per cent in 2018; in 2019, it will be 4.5 per cent growth rate and of course, in 2020 it will be 7 per cent growth rate.

“In terms of crude oil production, our estimate projection for the next year is 2.3 million barrels per day. We expect it to be broken down to 1.8 million barrels per day regular crude and 500,000 barrels per day in terms of condensate. The price we projected for next year is $45 (oil benchmark).

“We are also committed in the MTEF to explore ways of raising additional revenue to reduce debt service to revenue ratio. As the Minister of Finance said, that is part of the policy of this government to make sure that borrowing is controlled and to make sure to keep a reasonable debt service to revenue ratio which will, of course, help to bring down interest rates.”

Also briefing, the Minister of Communications, Mr. Adebayo Shittu, said the council approved a N100 billion ICT infrastructural backbone project in the Information Communication Technology (ICT) sector with a view to achieving service wide connectivity for all government agencies.

According to him, the project which is known as NIPTI 2 is the second phase of the initial NIPTI 1 project which he said was 80 per cent complete, explaining that it will ensure that the country is fully covered by fibre optics.

“Council considered and approved a memo for the national ICT infrastructural backbone project. It is popularly called NIPTI 2 and it is domiciled within the galaxy backbone. Galaxy Backbone is a federal government owned agency which engages in service-wide connectivity of all government offices, agencies, ministries and departments across the country. There has been NIPTI 1 project which is 80 per cent complete. Essentially, it covers most of the southern states and also has a data centre project.

“NIPTI 2 is the concluding component of it, to ensure the entire country is fully covered by fibre optics connectivity. Connecting the whole of the country by way of the federal government’s ministries, agencies and departments. The China NEXIM Bank has graciously supported Nigeria. They funded phase one and they are funding this phase two. By this approval, the Ministry of Finance will enter into negotiations for the full implementation of the funding proposal with us. Essentially, the funding will cost $328 million, approximately N100 billion.

“When concluded, it will not only cover federal ministries, department, agencies and all of that but there will be enough for commercialisation to the private sector particularly GSM companies and other ICT industries. So, we hope that Nigeria will be making a lot of money from this particular facility when completed,” he stated.



CREDIT: THIS DAY

FULL LIST OF 27 INDUSTRIES TO BENEFIT FROM FG'S TAX BREAK

Minister for Trade and Investment, Okechukwu Enelemah

The Minister for Trade and Investment, Okechukwu Enelemah, has disclosed the 27 industries that would benefit in the Federal government's recently introduced pioneer status also known as tax break policy. Last week, the Federal government announced the introduction of Pioneer status, a policy where companies within a certain industry will be exempted from paying company income tax for an initial period of three years. Afterward, they can be exempted for two more years.

Among the industries to benefit from the tax break include:

1. Mining and processing of coal.
2. Processing and preservation of meat/poultry and production of meat/poultry products.
3. Manufacture of starches and starch products.
4. Processing of cocoa.
5. Manufacture of animal feeds.
6. Tanning and dressing of leather.
7. Manufacture of leather footwear, luggage, and handbags.
8. Manufacture of household and personal hygiene paper products.
9. Manufacture of paints, varnishes and printing ink.
10. Manufacture of plastic products (builders’ plastic ware) and molds.
11. Manufacture of batteries and accumulators.
12. Manufacture of steam generators.
13. Manufacture of railway locomotives, wagons and rolling stock.
14. Manufacture of metal-forming machinery and machine tools.
15. Manufacture of machinery for metallurgy.
16. Manufacture of machinery for food and beverage processing.
17. Manufacture of machinery for textile, apparel and leather production.
18. Manufacture of machinery for paper and paperboard production.
19. Manufacture of plastics and rubber machinery.
20. Waste treatment, disposal, and material recovery.
21. E-commerce services.
22. Software development and publishing.
23. Motion picture, video and television programme production, distribution, exhibition and photography.
24. Music production, publishing and distribution.
25. Real estate investment vehicles under the Investments and Securities Act.
26. Mortgage backed securities under the Investments and Securities Act.
27. Business process outsourcing.

NNPC TARGETS $30 BILLION REVENUE FOR FG IN 10 YEARS

THE Nigerian National Petroleum Corporation (NNPC) has disclosed that the four major investments it recently embarked upon with key upstream joint venture partners are capable of providing incremental revenue to the national treasury by over $30 billion within the next 10 years.

Speaking at the inauguration of the reconstituted NNPC Anti-Corruption Committee in Abuja on Monday, Group Managing Director of the Corporation, Dr Maikanti Baru, said the investments which attracted a haul of close to $3.8 billion in foreign direct investments would serve as vehicle to fast-track the prevailing post Cash-Call exit era.

The GMD listed the critical Joint Venture alternative financing upstream investments to include: The $1.2 billion multi-year drilling for 36 offshore/onshore oil wells under the NNPC/Chevron Nigeria Limited, codenamed project Cheetah and the NNPC/First E&P JV and Schlumberger tripartite $800 million alternative funding agreement for the development of the Anyalu and Madu fields in the Niger Delta.

Also listed are the agreements executed in London last week for the $1billon NNPC/SPDC JV Project Santolina and the NNPC/Chevron $780 million Project Falcon on Sonam, hitherto financed through JV Cash Call.

Dr Baru commended the NNPC finance and technical teams for being able to attract the much needed foreign investment at a period when it has become increasingly difficult to attract foreign credit facilities.

“These four projects alone are going to raise incremental revenues to Nigeria of over $30 billion over the life of the projects in less than 10 years. They will also serve as part of the vehicle for exiting JV Cash Calls. We have to pay our arrears of about $6billion that were incurred pre-2016 and we are also paying up a tranche of about $1billion 2016 arrears. We started in April 2017 with the payment of $400million and we will pay the balance before the anniversary of the first payment,” he said.

The GMD explained that the arrangement would allow the Corporation to subsequently operate from the production revenue less the first line charge to government which is the royalties and petroleum profit tax.

He said that whatever profit that accrues afterwards would be remitted to the government after deduction of production cost.

Drawing a correlation between the quest for revenue and the anti-corruption campaign, the GMD said members of staff must never allow corrupt practices to distract from the great task ahead.

The GMD traced NNPC’s involvement in the anti-corruption campaign to the year 2000 when the Federal Government directed all its Ministries, Departments and Agencies (MDAs) to establish in-house Anti-Corruption Committees.
“NNPC was the first to put one in place within a month, precisely in October 2000,” he noted
Dr Baru was a chairman of the committee.

He noted that since then, the NNPC Anti-Corruption Committee had consistently carried out its mission of eradicating corruption in NNPC through organizing sensitization campaigns, workshops, seminars and Federal Government publications on issues concerning corruption and economic crimes.

While thanking the former committee members that served at various times for a job well done, Dr Baru urged the new members to surpass the achievements of the past committees in line with the present administration’s anti-graft agenda.

He emphasized that with the prevailing global economic reality; the only survival strategy at a time like this was to change from old ways of doing business and embrace the best practice of transparency, accountability and honesty with integrity.

The new NNPC Anti-Corruption Committee is headed by Mr Mike Stanley Balami, a Group General Manager in the Finance and Account Directorate and a veteran anti-corruption crusader.
Mr Balami pledged the readiness of members of the committee to work in harmony towards achieving a corruption-free NNPC.

He urged all heads of Strategic Business Units and Corporate Services Units to reconstitute and inaugurate their Anti-Corruption units to work closely with the Corporate Anti-Corruption Committee to ensure a corruption-free NNPC.

E-payment: CBN urges banks, others to avoid penalty

The Central Bank of Nigeria has said banks and other electronic payment service providers must navigate the evolving and increasing complex regulatory environment to avoid penalty.

The Director, Banking and Payments System Department, CBN, Mr. ‘Dipo Fatokun, described fraud as the biggest challenge facing the electronic payment sector, stressing the need for banks, customers and regulators to tackle it.

Fatokun stated this at the Finance Correspondents Association of Nigeria Bi-Monthly Forum in Lagos on Saturday, while making a presentation, a copy of which was made available to our correspondent.

“Electronic payments continue to be a growth story across the world and Nigeria is not an exception, but banks and other service providers face a number of challenges in ensuring that they make the most of this opportunity,” he said.

He said the Nigerian electronic payments industry had been evolving in line with the evolution in global payments in both wholesale and retail systems.

Fatokun said banks, payment service providers, and the CBN had played various roles in developing the payments system and creating products and channels for electronic payments.

He said the Retail Payments Transformation Programme of the CBN had led to the introduction of various electronic payment products and services by operators in the industry.

“The electronic products are gradually reducing the usage of cheques and cash, as noticed consistently in the annual performance report since the inception of the Cashless Policy in 2012,” he said.

Fatokun said the volume and value of transactions based on cheques and National Electronic Funds Transfer had been consistently reducing annually since 2013, while same data for the NIBSS (Nigeria Interbank Settlement System) Instant Payment, Automated Teller Machine, and mobile money channels had been on the increase.

The CBN director said, “The ATM channel accounts for the highest volume of transactions, while the NIP accounts for the highest value of transactions annually. This is because the ATM is usually the e-payment channel that new and lower value account holders always interface with, while corporates and upwardly mobile middle class customers make transfers using NIP.”

According to Fatokun, banks and other e-payment service providers operate in a highly regulated environment.

He described regulation as necessary to ensure that “operators focus on delivering products and services that enable compliance, efficiency, financial stability and a positive customer experience.

“The regulatory landscape remains complex for operators; they not only need to comply with existing regulations but also adhere to new regulatory initiatives, some of which affect established operating or business models.

According to him, increased complexity in the regulatory landscape sometimes creates the need for banks to leverage new technology for compliance purposes.
“Required rate of policy review is increasing due to technology changes and innovations. This creates disruption in the smooth flow of implementation, where a policy becomes ineffective as a result of better technology,” Fatokun said.

Skye Bank seeks to take over Omokore’s oil wells

The management of Skye Bank Plc is seeking to take over some oil wells belonging to Jide Omokore, a businessman involved in some corruption cases within and outside Nigeria.

The bank said Omokore is indebted to it to the tune of about N110bn at an exchange rate of $1/N315.

The loans were said to have been obtained through three companies namely: Atlantic Energy Drilling Concepts (N56 billion), Cedar Oil and Gas Ltd (N22.4 billion) and Real Bank Ltd (N31 billion).

In a report by online paper, TheCable, the management of the bank said the repayment of the first two obligations is tied to the controversial strategic alliance agreements (SAAs) with the Nigerian National Petroleum Corporation (NNPC).

Atlantic Energy was awarded SAAs by the Nigerian Petroleum Development Company (NPDC) Ltd, a subsidiary of NNPC, to develop and finance production from OMLs 26, 42, 30 and 34 – four oil blocks in all – in 2011.

NPDC valued its stake in the oil wells at $1.8 billion then.
The Economic and Financial Crimes Commission (EFCC) has frozen the assets of Omokore over suspicion of money laundering and procurement fraud.

In a letter to Acting President Yemi Osinbajo, the bank appealed to the federal government to grant it access to the assets that were funded with loans from the bank.

“We will require assistance for the extrication of the real estate assets that were fully funded with loans from the bank from the assets of Omokore presently under the forfeiture order from the court,” the letter read.

“This will enable us have access and rights over these assets and put the bank in a position to realise the assets that form the collateral for the loans granted to Real Bank limited.”

The bank also sought assistance to take control of the oil assets of Omokore.

“We will require some political intervention working with the NNPC to be able to bring this matter relating to Atlantic Energy to a quick resolution,” the letter read.
“The assets belong to the NNPC and we will require the NNPC to approve the transfer of the rights under the SAA’s to another company that can take over the obligations and repay the bank facilities.

“Our proposal is to work with the NNPC to take over these assets (since NNPC is a joint venture partner with 60 percent stake) and thereafter re-auction them to affirm that has the financial capability and credibility to take over and turn around the fortunes of these assets.

“This arrangement will also require strong political support at the highest levels. The positive outcome of this arrangement will enable the bank to repay NNPC’s TSA funds totalling USD$262.7m, and also part of CBN’s financial accommodation to the bank.”

[BREAKING] SENATE ORDERS ARREST OF CEO OF GLO, 29 OTHERS

The News Agency of Nigeria has exclusively reported that the Senator Bukola Saraki-led Nigerian Senate has ordered the arrest of the chief executive officers of 30 companies for allegedly failing to appear before it.

The companies include telecommunication giant, Globacom, and Crown Flour Mills.

It was gathered that a Senate committee,headed by Hope Uzodinma, had earlier invited the chief executives as part of its investigation into a ‘N30 trillion’ revenue scam allegedly perpetrated by the firms.

The Senate had on Wednesday, threatened to issue the arrest warrants; but on Thursday, it said it was extending the appearance till next week.

The order to arrest the chief executives was given on Friday.

90 PEOPLE WILL SHARE ONE BARREL OF NIGERIAN OIL - FIANANCE MINISTER

The Minister of Finance, Kemi Adeosun, has declared that Nigeria is not an oil economy and that to share Nigeria oil it will be ninety people to one barrel of oil.

Adeosun on Facebook live on Thursday explicated issues on Nigerian economy and #TaxThursday.

She further said that the Federal Government signed a policy to tax first class and business air tickets alongside other luxury goods.

"We signed something yesterday on luxury goods; champagne, brandy, whiskey, wine, jewelry, high-end jewelry," Adeosun said.

"We've signed something that will bill access charge on first class and business class tickets, we are just doing the final parts of the implementation and we also want to try and amend the tax payer book on high end cars, luxury cars."

NNPC plans extension of West African Gas Pipeline to Cote d’Ivoire

The Nigerian National Petroleum Corporation (NNPC), on Wednesday, said plans were underway to extend the West African Gas Pipeline (WAGP) to Cote d’ Ivoire from Ghana.

The NNPC said in a statement that the planned extension was part of the Federal Government’s West African energy integration policy.
According to the statement, Group Managing Director of the NNPC, Maikanti Baru, made this known while receiving a delegation from Cote d’Ivoire in Abuja.

Baru, who was represented by the Chief Operating Officer, Gas and Power, Mr. Saidu Mohammed, said the essence of the extension was to facilitate easy transmission of gas within the West African sub-region.

He explained that the visit would enable his corporation to cooperate with Cote d’Ivoire with a view to opening a new vista for further bilateral discussion which would lead to the growth and development of the oil and gas sector.
According to Baru, the collaboration would enable the NNPC to share its vast experiences in the sector with the delegation.

“Petroleum exploration and production dates back to over fifty years in Nigeria and a lot of experiences in technology and personnel management have been acquired. We are ready to share our experiences with you so as to help you to avoid the mistakes we made in the past,” the GMD said.

In his remarks, leader of the Ivoirian delegation and Deputy Director, Production, of Ministry of Petroleum, Cote d’ Ivoire, Mr. Patrick Marshal, said the visit would enable his country to learn from NNPC best practices in personnel management, exploration and production in the oil and gas industry.

NIGERIA GRANTS TAX HOLIDAYS TO 27 NEW INDUSTRIES

The Federal Executive Council on Wednesday approved 27 new industries and products to enter into the pioneer status to give tax holidays to them for three years, to enable them grow and expand investments.

The list was last reviewed in 2006 and the approval was to bring the industrial policy of the country to global best practices.

The Minister of Industry, Trade and Investment, Okechukwu Enelamah, gave the hint while addressing State House Correspondents on the decisions of FEC.

“The FEC gave approval to a memorandum that was presented to amend the list of pioneer industries and products that will enjoy pioneer status going forward.

“The pioneer incentive scheme is governed by the Industrial Development Income Tax Relief Act.

“The whole purpose of it is to give tax holidays to industries that we consider pioneer, not mature, to enable them to grow and attract investment in them,’’ he said.

He said that the list covered a wide range of industries and the tax relief covered three to five years.

Mr. Enelamah said that the pioneer status review attention was paid to the administration’s economic recovery and growth plan and to capture the current realities that would enable the realisation of the growth plan.
He added that there was multi-stakeholder engagement involving the public and private sectors in identifying the industries suitable for the pioneer incentive scheme.

“We have tried to remove all ambiguities in the definition of industries by reclassifying industries according to the international standard industrial classification, which is the same standard used by the Nigerian Bureau of Statistics.

“We also agreed that the pioneer list should be reviewed every two years and that in the case of additions to the list, it will be affected immediately.

“In case of deletion from the list, there will be a three-year window that will be allowed for those investing in that industry and enjoying pioneer status to carry on till the end of that three-year period.

“Against this backdrop, we then approved 27 industries that were recommended for addition to the pioneer list,’’ he added.

The minister stated that the list would be made public, adding that the mineral oil prospecting, already governed by the petroleum profit tax, was not part of the pioneer industries, same for the cement where the country already had become net exporters.

He said that rather than lose revenue, the status was an incentive to enable new industries to enter the market, enter new industries and invest more for those already in, adding that it did not remove tax payments for existing industries.

“This is fairly a well-used policy and carrot by countries and Nigeria had it before but we had to review it because it had not been reviewed since 2006.

“The whole idea is that it is an incentive to attract people to invest more in sectors,’’ he said, adding that most of the agro and agro-processing, industrialization, creative industries, power, science and technology and players should be allowed to have tax incentive.

“It will increase our tax revenue instead of the reverse,” he added.

THREATS TO NIGERIA'S ECONOMY RECOVERY VERY HIGH - IMF

The International Monetary Fund has predicted that the Nigerian economy will be out of recession this year with growth of 0.8 per cent though it says risks to the recovery remain high.

It, however, said the growth would not be sufficient to reduce unemployment and poverty in the country.

It said its staff team, led by the Senior Resident Representative and Mission Chief for Nigeria, Mr. Amine Mati, visited the country from July 20 to 31 to discuss recent economic and financial developments, update macroeconomic projections, and review reform implementation.
After shrinking by 1.5 per cent in 2016, the nation’s economy contracted by 0.52 per cent in the first quarter of this year, which is the fifth consecutive quarter of contraction.

According to Mati, the economic backdrop remains challenging despite some signs of relief in the first half of 2017.
He said following four quarters of negative growth, the non-oil economy grew by 0.6 per cent (year-on-year) on the back of a rebound in manufacturing and continued strong performance in agriculture.

He stated that various indicators suggested an uptick in activity in the second quarter of the year, adding that the headline inflation, which decreased to 16.1 per cent in June, remained high despite tight liquidity conditions.

Mati said, “Preliminary data for the first half of the year indicate significant revenue shortfalls, with the interest-payments to revenue ratio remaining high (40 per cent at end-June) and projected to increase further under current policies. High domestic bond yields and tight liquidity continue to crowd out private sector credit.

“Given Nigeria’s low growth environment and the banking system’s exposure to the oil and gas sector, non-performing loans increased from six per cent in 2015 to 15 per cent in March 2017 (eight per cent after excluding the four undercapitalised banks).” 

READ ALSO: MANUFACTURING INDEX EXPANDS FOR FOURTH CONSECUTIVE MONTH
 
He noted that the government had started implementing a number of important measures, with the Economic Recovery and Growth Plan driving the diversification strategy, and security in the Niger Delta improved through strengthened engagement.

He said the new Investor and Exporter FX window of the Central Bank of Nigeria had provided impetus to portfolio inflows, helped increase reserves above $30bn, and contributed to reducing the parallel market premium.

Mati added, “However, near-term vulnerabilities and risks to economic recovery and macroeconomic and financial stability remain elevated.

“Concerns about delays in policy implementation, a reversal of favourable external market conditions, possible shortfalls in agricultural and oil production, additional fiscal pressures, continued market segmentation in a foreign exchange market that remains dependent on central bank interventions, and banking system fragilities represent the main risks to the outlook.”

According to him, in the near term, a stronger push for front-loaded fiscal consolidation through a sustainable increase in non-oil revenues will be needed to create space for infrastructure spending, social protection and private sector credit.

He said this should be simultaneously accompanied by a monetary policy “that avoids direct financing of the government and is kept sufficiently tight, a unified and market-based exchange rate, and rapid implementation of structural.”

“Pursuing these policies would help reduce macroeconomic vulnerabilities and create an environment for a diversified private-sector led economy,” Mati added.

Reacting to the IMF’s position, the Board Chairman, Nigerian Economic Summit Group, a private sector think tank and policy advocacy group, Mr. Kyari Bukar, said the NESG had, at the start of the year, predicted that the economy would grow by 0.8 per cent.

He stated, “But we still have lack of clarity of the foreign exchange policy; we still have not coordinated our fiscal and monetary policies; and there is the debt burden.

“It is not just the borrowing that is the problem; if you’re borrowing for investment, that’s fine. We need to pay attention to our debt servicing, which is increasing.”

The Managing Director, Financial Derivatives Limited, Mr. Bismarck Rewane, said, “Even though the recovery has started, and we are going to have positive growth, the economy is still vulnerable to many domestic and exogenous variables.

“One major risk is the exchange rate falling below a particular level, and we are leaving the question of growth, the question of output and the question of economic activity, and those things are potent. It is one-dimensional diagnosis, and exchange rate being the critical variable.”

According to him, the government is aware of the risks and it has a team of people who can respond to them.

A professor of Economics at the Olabisi Onabanjo University, Ago Iwoye, Sheriffdeen Tella, said the delay in the passage of the budget had contributed in slowing down the recovery of the economy, adding that inflation had not fallen at the rate it should.

“Also, the Central Bank of Nigeria still retains high interest rate, which is inimical to the demand for credit in the economy; most businesses are still borrowing at very high interest rates, and, therefore, they will not borrow as much as they need to. So, the economy cannot expand on the basis of that,” he said.

He stressed the need for the harmonisation of the fiscal and monetary policies, adding that the CBN needed to bring down the interest rates to “enable investors who want to borrow money to run their businesses properly.”

The Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, said nothing fundamental had changed about the Nigerian economy to give one the assurance of a sustained growth or recovery.

He said the recovery of the economy so far was largely driven by the price of crude oil and volume of oil production, which he described as major risks.

“We know that even the Niger Delta militants are threatening again that they may resume bombing; so that is a major threat to the oil production volume. Once we begin to see growth in the oil and gas sector, which has been on the decline, then the economy should continue to grow.” he added.

Last month, the Monetary Policy Committee of the CBN said available forecasts of key macroeconomic indicators pointed to a fragile economic recovery in the second quarter of the year.

But the committee cautioned that the recovery could relapse into a more protracted recession if strong and bold monetary and fiscal policies were not activated immediately to sustain it.

Banks to Extend 9Mobile’s Loan Pending New Investors

A group of Nigerian banks has agreed an extension to a $1.2 billion loan made to 9mobile, formerly known as Etisalat Nigeria, pending the mobile operator finding new investors.
Reuters quoted First City Monument Bank (FCMB) to have disclosed this on Tuesday.

Nigerian regulators stepped in last month to save Etisalat Nigeria from collapse and prevented lenders placing the country’s fourth biggest telecoms group into receivership, prompting a board, management and name change.

Etisalat Nigeria took out a $1.2 billion loan four years ago from 13 local banks to refinance existing debt and expand its mobile network, but it struggled to repay due to currency crisis and recession in Nigeria.
FCMB, which is owed N4.5 billion by the telecoms group, said lenders had put a hold on taking provisions on the debt and that they were working with the regulators.
“In terms of provisioning, there is hold on that. What we have agreed all is an extension and we have agreed to extend pending the sale to new investors,” the bank told an analysts after it published half-year results.

The banks, many of which are reporting first-half results, have been trying to work out the value of 9mobile before deciding whether to impair the loan or wait until the company finds new investors.

Banks involved in the loan deal include: Zenith Bank, GT Bank, First Bank, UBA Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank.
GTBank with $138 million in outstanding loans to 9mobile and Access Bank with $131 million are among the most exposed.

9Mobile’s Chief Executive, Boye Olusanya, told Reuters he was focused on getting the telecoms group back on track to make a profit, while working on the paperwork to eventually raise new capital.
He has also asked the telecoms regulator for concessions on spectrum and foreign exchange access to help shore up revenues.

The telecoms group has asked Citigroup and Standard Bank to find an investor to buy into the firm and three companies have shown interest, a banking source close to the deal had said.

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, had last week explained that the CBN’s role in the 9Mobile’s (formerly Etisalat) debt crisis was aimed at safeguarding the interest of over 20 million subscribers and more than 4,000 employees of the network operator.

Emefiele said CBN’s intervention alongside the regulator in the telecommunications sector – Nigeria Communications Commission (NCC) – was worth the while, considering the ripple effect not doing so would have had on major stakeholders in particular and the economy as a whole.
Emefiele had also said with a subscriber base in excess of 20 million and a workforce of more than 4,000, any likely adverse impact, directly or indirectly, would have been enormous to bear by the subscribers, workers and their dependants.

“It’s important that we don’t just allow any creditor to hurt any other stakeholder,” he said, adding that the NCC had observed that the attempt by the creditors to take over the telcoms company was going to jeopardise the interest of the over 20 million subscribers and more than 4,000 workers.
“That was why the NCC, supported by the CBN, decided to intervene,” Emefiele said, noting that the intervention had been positive.

According to him, 9Mobile has not only retained its subscribers but also the entire workforce while the company’s operations have continued and revenue sustained.
He stated that the interim board would not exceed 180 days as efforts were underway for a new investor to acquire the company.

Crude Oil Price Drops from Two-month High over Increased Supply

 
Crude oil price slipped by 1.3 per cent from a two-month high Tuesday as ample global supplies countered strong demand and expectations for another drop in US crude inventories.
The global benchmark, Brent crude, according to Reuters, was down to $52.03 a barrel Tuesday after trading intraday at $52.93, the highest price since May 25 while the US crude was down 1.2 per cent, to $49.57 a barrel.

This is coming as the Managing Director of Nigeria LNG Limited (NLNG), Mr. Tony Attah, has called on engineers in Nigeria’s oil and gas sector to continuously strive to acquire and demonstrate cutting-edge competence, which would enable the country fully harness the vast natural resources and grow the nation’s economy.

US inventory reports due Wednesday are expected to show crude stocks fell by 2.9 million barrels last week, the fifth straight week of declines.
However, production by the Organisation of Petroleum Exporting Countries (OPEC) rose in July, Reuters survey found Monday, despite a deal to cut output. According to the report, the cost output has helped boost US oil futures by more than 16 per cent since the contract dropped below $43 a barrel in late June.

Reuters reported that the global benchmark, Brent crude, was down 1.3 per cent, to $52.03 a barrel. It traded intraday at $52.93, the highest price since May 25 while the US crude was down 1.2 per cent, to $49.57 a barrel.

Gasoline and heating oil crack spreads RBc1-CLc1 HOc1-CLc1 were stronger on Tuesday, in part after Royal Dutch Shell said its Pernis refinery in the Netherlands, Europe’s largest oil refinery, will remain closed through mid-August following a fire incident.
The latest data point on US inventories comes from industry group the American Petroleum Institute (API).

The US government’s official data will be released Wednesday.
On the demand side, forecasters, including the International Energy Agency (IEA) have been raising their estimates, lending prices some support.

BP was upbeat, seeing demand growing by 1.4 to 1.5 million barrels per day (bpd).
“Global demand is looking pretty strong, and prices will firm around the levels seen today,” BP’s Chief Financial Officer Brian Gilvary reportedly told Reuters after the company reported earnings Tuesday.

OPEC, along with Russia and other non-members are reducing output by about 1.8 million bpd from January 1, 2017, until March next year to get rid of excess supply.
OPEC’s adherence to supply cuts has been high but in recent months, production has increased due in part to recovering output in countries exempt from the deal.
Oil output by OPEC rose last month by 90,000 bpd to a 2017 high, a Reuters survey found, led by Libya, one of the exempt producers.

In a related development, the Managing Director of NLNG Limited, Mr. Tony Attah, has called on engineers to build cutting-edge competence, which would enable Nigeria fully harness the vast natural resources and grow the nation’s economy.

Speaking at the Society of Petroleum Engineers (SPE) Young Professionals Workshop in Lagos Tuesday, Attah remarked that the country’s oil and gas industry has been pivotal to the nation’s economic wins in the past five decades and still remains so till date, stressing the need for competent professionals who will sustain and develop the sector.

“It, therefore, becomes imperative for the Society of Petroleum Engineers and similar professional associations to stimulate the availability of enabling facilities to nurture and grow the professionals and the technology which will deliver the dividends from the sector to the nation’s economy,” he said.

He added: “In view of this urgent need to support the development of world-class training structure for engineers, Nigeria LNG Limited spearheaded the improvement of the study of engineering in Nigeria’s top Federal Universities in the six geo-political zones of the country, through its University Support Programme (USP) through which we recently donated buildings and equipment with a total value of $12 million.

“Under the programme, Nigeria LNG built and equipped six Engineering Research laboratories in Ahmadu Bello University, Zaria, University of Ilorin, University of Nigeria, Nsukka, University of Ibadan, University of Port Harcourt and the University of Maiduguri.”

MANUFACTURING INDEX EXPANDS FOR FOURTH CONSECUTIVE MONTH

Economic recovery appears on the rise with the Manufacturing Purchasing Managers’ Index (PMI) standing at 54.1 index points in July 2017, indicating expansion in the manufacturing sector for the fourth consecutive month.
The PMI is an indicator of the economic health of the manufacturing sector, which is based on five major indicators — new orders, inventory levels, production, supplier deliveries and the employment environment.

According to the latest PMI released by the Central Bank of Nigeria (CBN) Tuesday, 11 of the 16 sub-sectors reported growth in the review month in the following order: appliances & components; computer & electronic products; cement; primary metal; chemical & pharmaceutical products; food, beverage & tobacco products; textile, apparel, leather & footwear; printing & related support activities; paper products; electrical equipment and transportation equipment.

But the remaining five sub-sectors declined in the order: petroleum & coal products; fabricated metal products; furniture & related products; non-metallic mineral products and plastics & rubber products.

In the same vein, the production level index for the manufacturing sector grew for the fifth consecutive month in July 2017. The index at 59.3 points indicated an expansion in production at a faster rate when compared to the level recorded in the previous month.
Fourteen of the 16 manufacturing sub-sectors recorded expansion in production level during the review month.

Also, at 52.7 points, new orders index grew for the fourth consecutive month. Eight sub-sectors reported growth, one remained unchanged while the remaining seven declined in the review month.
According to the report, the supplier delivery time index for the manufacturing sector, at 51.3 points in July 2017, rose for the second consecutive month. Ten sub-sectors recorded improved suppliers’ delivery time while the remaining six sub-sectors recorded delayed delivery time.
It also showed that manufacturing employment level index in July 2017 stood at 51.8 points, indicating growth in employment level for the third consecutive month.

According to the report, of the 16 sub-sectors, eight recorded growth, three sub-sectors remained unchanged while the remaining five sub-sectors recorded decline in employment level.
“At 53.6 points, the raw materials inventory index grew for the fourth consecutive month, and at a faster rate compared to its level in June 2017.
“Eleven of the sixteen subsectors recorded growth, two recorded no change while three sub-sectors recorded decline in raw materials inventory.
“New orders index at 55.1 points grew in July 2017 for the fourth consecutive month. Of the eighteen subsectors, 15 reported growth; one remained unchanged while the remaining two recorded declines.

“New orders, employment level and inventory growing at a faster rate; business activity growing at a slower rate in July 2017.
“The business activity index rose to 56.8 points in July 2017 for the fourth consecutive month. The index grew at a slower rate when compared to its level in the previous month. Fourteen sub-sectors recorded growth in business activity; one remained unchanged while the remaining three declined in the review month,” the report stated.

AFRICA'S LARGEST RICE MILL OPENS IN NIGERIA

The Federal Government’s diversification programme yesterday received a boost, with Acting President Yemi Osinbajo commissioning Africa’s largest parboiled rice mill in Argungu, Kebbi State.

The over N10 billion state of the art WACOT Rice Mill, which is privately owned, is capable of processing over 120,000 metric tonnes of paddy rice annually.
Speaking at the commissioning, Prof. Osinbajo said that the project underscored the policy of the government that the private sector must be the engine of economic growth and sustainable job generation.

He noted that the project had proved that the country could actually feed itself.
 
The Acting President urged Nigerians to consume what we grow; stressing that the agriculture policy of the Federal Government is to empower the largest number of farmers and encourage young ones.

Speaking on the importance of the rice mill to the government diversification policy, Osinbajo said: ” This Mill is important for several reasons: The first is that it is the policy of the FG that it is the private sector that must be the engine of devt. It is not just the private sector leading growth, but the growth must be growth with jobs, it cannot be jobless growth we have seen a lot of jobless jobs.

“But one of the critical things we are seeing today especially with the growth of agriculture is that this is growth with jobs, several thousands of our people are farming and are engaged in farming. I spoke to the MD earlier on and he was saying that in this coming year they are expecting to be engaged with 50000 farms and that is the kind of private sector led growth that we want to see.

“The second is that the president laid out in the budget of scheme of 2016 that we must grow what we must consume what we grow, it is up to us to grow what we eat.

“This is a landmark achievement here, it is a signal to the rest of the countries that Nigeria is not just opened for business but it is set for development.”

The Group Managing Director of WACOT rice mill, Mr. Rahul Savara, hinted that the company had a plan of investing further over N100 billion over the next years in various agricultural value chains.

He noted that so far, over 5,000 small-holder rice farmers had been trained on good farming practices, financial management, production cost optimization and yield enhancement techniques.