Economy and Business News (Part 2)

[JoblessBeggar]

Originally Posted by HerachioBlo

Foreign Reserves Hit Record High At $50bn - Iweala

Good.
But not a "record" high, considering it's previously gotten as high as $63bn.

[HerachioBlo]

really? when?

[Intentionz316]

Originally Posted by JoblessBeggar

Good.
But not a "record" high, considering it's previously gotten as high as $63bn.

I think it's the highest we've achieved solely for Foreign Reserves... You probably have it mixed up with the total that accrued from both Foreign Reserves (at $45 Billion) and Excess Crude Account (at $22 Billion), totaling $67 Billion when Obasanjo relinquished power...

[Tbite]

YEah I was about to say the same thing.

That is no record high.

but it is a record high for the post Obasanjo era.

Hmmmm @ Intentionz316 That is an interesting point.

Foreign Reserves is what the economy runs on, which is why NOI said that we need at least $50 Billion to run the economy. Excess Crude Account also known as Oil Windfall among other names, is meant to augment the Federal Reserves if need be. The Sovereign Wealth Fund itself comes out of the Oil Windfall and as even supposedly replaced it entirely.

Now I cannot remember if what Intentionz316 is saying is true...but it sounds about right...the 47 Billion for Oil Reserves sounds familiar.

[JoblessBeggar]

http://www.nigerianmuse.com/20090102...-52-7-billion/

Foreign Reserves Fall by $6bn in One Month
ThisDay 01.03.2009

As the global credit crisis takes its toll on the world economy and further depresses oil prices, Nigeria’s foreign currency reserves fell by $6 billion or 8.2 per cent in December last year to $52.7 billion.

Reserves in the month to December 29 dropped from $57.4 billion in November, the Central Bank of Nigeria said yesterday in its monthly report.

Record oil prices had helped Nigeria to build the largest currency reserves in sub-Saharan Africa, which peaked at $63 billion in September 2008.

http://www.thesourceng.com/ReservesOctober292012.htm

Reserves up to the month of December, 2011 has constantly dropped. Before now, oil prices had helped Nigeria to build the largest currency reserves in the sub-Saharan Africa, which peaked at $63 billion in September 2008.

http://www.thenationonlineng.net/arc...l.php?id=69448

Nigeria’s foreign reserves hit $59.69b
The Nation, 2008-11-12
By Chijama Ogbu, Business Editor

Nigeria’s foreign reserves are inching back to $60 billion mark, after sliding to a little over a little over $58 billion at the end of October.

The reserves stood at $59.69 billion yesterday, according to the website of the Central Bank of Nigeria. This represents a rise by $1.16 billion or 2 per cent over the $58.53 billion they ended October.

Before this current upswing in the movement of the reserves, it had been on a consistent downslide for two weeks, dropping $4.3 billion or 6.85 per cent in the period, from $62.7 billion October 14, 2008 to $58.4-illion in October 29.

Figures obtained from the Central Bank of Nigeria (CBN) showed that the reserves had risen to over $63 billion up to October 10, before the two-week period of depletion.

http://businessdayonline.com/NG/inde...dling-reserves

How recovery in oil price will bolster dwindling reserves
BUSINESSDAY TUESDAY, 13 JANUARY 2009 22:09
OYIBO EGWUONISO

It is no news that the continuous fall in oil prices has impacted negatively on Nigeria foreign currency reserves. From a previous fairly impressive high of over $60 billion, external reserves fell to $52.7 this month, posing serious challenges to budget financing in 2009.

[JoblessBeggar]

*deleted*

[Tegh7]

Dangote Secures $4.25 Billion for Nigeria
Oil Refinery

By Ryan Chilcote and Andres R. Martinez
May 07, 2013 12:45 PM EDT

Aliko Dangote, Africa’s wealthiest man, says he has secured $4.25 billion from banks to build a refinery to help the continent’s largest oil producer reduce fuel imports.
Refining “is an excellent business to get in to,”Dangote said in an interview with Bloomberg TV’s Ryan Chilcote in Cape Town, where he was attending a business forum. “We have already secured $4.25 billion. Two offshore banks and the rest are Nigerian banks.”
Nigeria, a member of the Organization of the
Petroleum Exporting Countries, imports about 70 percent of the oil products it needs to meet
domestic requirements. The nation’s four
refineries process less than the 445,000 barrels a day of capacity because of aging infrastructure and poor maintenance. The country exports about four times that volume in crude oil.
Dangote is Africa’s richest person, with an
estimated wealth of $20 billion, and the 34th
wealthiest person globally, on the Bloomberg
Billionaires Index.

http://www.bloomberg.com/news/2013-0...-refinery.html

Woah! partial financing already secured.

[Tegh7]

N7.62trn informal sector booms in Lagos

May 8, 2013 | 12:20 am
By Olasunkanmi Akoni & Monsur Olowoopejo

THE Lagos State government has disclosed
that informal sector in the state is worth
N7.615 trillion ($48.2 billion). The sector is
locked outside the state’s legal framework,
which is under-capitalising business activities in the state.”
The government however said it was working
on modalities to formalise the state’s informal sector. It has also assured investors that the Lekki Free Trade Zone would be made a fully functional investment haven that will help improve the industrial sector.
Commissioner for Commerce and Industry,
Mrs. Olusola Oworu, disclosed this during the
2013 ministerial briefing on the activities of
her ministry at Alausa, to commemorate the
sixth year of Governor Babatunde Fashola’s
administration.
According to Oworu, “an estimated $48.2
billion was locked in the extralegal sector with concomitant under capitalisation of business undertakings, and impoverishment of the masses.” She explained that these assets existing in the informal markets/extra-legal economy are classified as dead capital or locked assets.
“Despite the status of Lagos State as Nigeria’s economic nerve centre, several business transactions were done outside the formal economic structure in what is otherwise termed the informal sector or shadow economy which has been found to be quite massive in size in the state.
This scenario leaves much to be desired in
terms of the ability of operators in this sector
to leverage on their assets for the creation of
the much needed capital essential for the
growth and expansion of their businesses,”
she said
The commissioner added that the state
government had commenced works on the
development of the Lekki-Epe International
Airport to complement activities at the LFTZ
and also provide alternative air transport
services in the State.
“The Lekki-Epe International Airport is
designed to handle 5 million passengers
annually with provision for a modular terminal for future expansion. Preliminary works on the project have commenced the clearing of 150 hectares (run way), 4.5km of the access road and 9 kilometres of perimeter road,” she added.
Oworu pointed out that the airport would be
built and managed by private investors,
noting that the process for the selection of
private investors to develop and manage the
airport has commenced. She said the process
of selecting the private manager had been
contracted to a team of local and
internationally acclaimed consultants namely
Stanbic IBTC (Financial Advisers), Arup PTY
(Technical Consultants), Norton Rose (Off-
shore Legal Consultants) and Banwo &
Ighodalo (Local Legal Consultants).
The commissioner also lamented the
inadequacy of facilities at the Apapa and Tin-
Can Island Ports, thereby necessitating the
need for Lekki Deep Seaport. She said the
state government with the Federal
Government through the Nigerian Ports
Authority and a private investor – Lekki Port
LFTZ Enterprise (LPLE) had commenced the
development of the Lekki Deep Seaport.
“Presently, shareholders agreement has been
executed while preliminary works have
started at the site. When completed the Port
would relieve the pressure on the Apapa and
Tin-Can Island Ports and would also support
business activities at the Lekki Free Zone.”
The commissioner said the construction of the
Port is expected to last for about four years
and over 10,000 jobs are projected to be
created directly and indirectly during the
construction period while over 169,000 jobs
would be generated directly and indirectly
when it becomes fully operational.

http://www.vanguardngr.com/2013/05/n...ooms-in-lagos/

Hmm......I hold my breath!

[Tegh7]

*delete*

[HerachioBlo]

Jonathan to hold talks with MTN,Toyota, Nissan

Business
Tuesday, May 7, 2013

CAPE TOWN (AFP) – The leaders of Africa’s two largest economies, South Africa and Nigeria, are meeting Tuesday in an effort to improve sometimes patchy ties.

Jonathan will also hold separate talks with the South African-based MTN telecommunications company, as well as representatives of car manufacturers Toyota and Nissan in South Africa

South African President Jacob Zuma and his Nigerian counterpart Goodluck Jonathan are expected to sign several pacts in a display of warming relations between the two African powerhouses on the heels of a trip last month by Zuma to Lagos.

Zuma welcomed Jonathan — on the first state visit to South Africa by any Nigerian leader since 2009 — with red carpet pomp and ceremony including a 21-gun salute, navy band and guard of honour.

Nigerian and South African flags lined the road to parliament in Cape Town and were also hanging outside the National Assembly where Jonathan is due to make an address at 1200 GMT.

“I think symbolically it’s very important to indicate a growing closeness between the leadership of the two countries,” said Dianna Games, honorary chief executive of the South Africa-Nigeria Chamber of Commerce.

“There is a kind of a rivalry that has dogged the relationship over some time, and as a result the two countries are not speaking with a united voice on issues affecting Africa, let alone issues in the relationship itself.”

While South Africa is still the continent’s biggest economy, Nigerian business activity is set to grow more than twice as fast, by 7.2 percent, this year, according to International Monetary Fund estimates.

Total two-way trade has risen to $4.1 billion, with a surplus in oil-rich Nigeria’s favour, according to South Africa’s department of trade.

Nigeria is the continent’s most populous country and its biggest oil producer.

The two states, which both want seats in an expanded UN Security Council, were at loggerheads last year over who would become head of the African Union’s commission.

“It created a very frosty relationship between the two countries,” said Alfredo Tjiurimo Hengari, analyst at the South African Institute of International Affairs.

“My view is also that South Africa has also been trying to overstretch its role on the continent by trying to play a very important role” in countries in Nigeria’s backyard such as Ivory Coast and Mali.

An embarrassing tit-for-tat row also broke out over yellow fever vaccinations that saw passengers turned away at airports in both countries in March last year.

The fact that there had not yet been an official state visit between the two countries was “abnormal for two continental powerhouses”, said Hengari.

“Ordinarily in his first year in office, Jonathan Goodluck should have been to South Africa and President Zuma should have been to Nigeria. That is a symbol of a very very strong bilateral relationship.”

South Africa’s “charm offensive” pointed the way to a more cordial relationship where cooperation could be deepened and contentious issues discussed, he said.

While courting the emerging BRIC markets — Brazil, Russia, India and China — South Africa has not shown the “same political eagerness on the continent” with Nigeria an obvious target, said Games.

“If this is the start of a closer relationship, then I think that would be a very good thing all around for both countries and the continent as a whole because they are the two big powers in Africa,” she said.

The two leaders will attend a meeting of a bilateral business forum, while Jonathan will also hold separate talks with the South African-based MTN telecommunications company, as well as representatives of car manufacturers Toyota and Nissan in South Africa.

http://odili.net/news/source/2013/may/7/341.html

[undisputed naija]

very good development, but i dont get the bric part, i thought that S/A was among the brics, or are they trying to form another group?

[Tegh7]

FG to sell $1bn Eurobond

Fri, 2013-05-10 13:41

The federal government plans to sell $1 billion of Euro bonds to finance power projects after meetings with international investors in June,Minister of Finance and Coordinating Minister of the economy, Ngozi Okonjo-Iweala, has said.
The securities will be dollar-denominated, Okonjo-Iweala said in an interview in Cape Town, where she is attending the World Economic Forum on Africa. Nigeria is to host the conference for the first time next year, she said. “We need $10 billion a year in investment in infrastructure in Nigeria in order to keep up with the needs of the country,” she said.
Nigeria is tapping global markets for the second time, taking advantage of investors’ appetite for higher-yielding assets. The government is raising funds to boost electricity output in a country where demand is almost double the supply of about 4,000 megawatts.“Preparations are going full-steam ahead” to sell the bonds, Okonjo-Iweala said. “We need $10billion a year in investment in infrastructure in Nigeria in order to keep up with the needs of the country.”
Blackouts are a daily occurrence in Nigeria with more than 160 million people. President Goodluck Jonathan said in a May 8 statement that the government cannot alone build the infrastructure that the country needs.
Nigeria’s $500 million of bonds due January 2021 have surged since the debut in 2011, sending yields 271 basis points, or 2.71 percentage points, lower to 4.08 percent, according to data.
“Our prospects are very good” for the new sale based on the yield drop, Okonjo-Iweala said.
Oil Slump
Nigeria’s economy may come under pressure
because of declining oil prices, Okonjo-Iweala said. Bonny Light crude, one of Nigeria’s main export blends, has fallen 12 percent to $107.18 a barrel by 11:48 a.m. in London since this year’s peak onFeb. 8.
“We’re quite concerned with the decline in oil
prices,” Okonjo-Iweala said. “We have to be since we get 75 percent of revenues from oil.”
Nigeria has oil savings of $7 billion in its Excess Crude Account and a $1 billion sovereign wealth fund to help buffer the economy, she said. The government lost about $1 billion last month because of missed oil production targets, said Okonjo-Iweala.
Production fell to 1.81 million barrels a day in
March, the lowest level since September 2009,according to data compiled by Bloomberg.
Output averaged 2.2 million barrels a day in the first quarter, according to figures released by state-owned Nigerian National Petroleum Corp. on April 17. That compares with a production forecast of 2.53 million barrels a day used in this year’s budget. The loss was due to crude theft and pipeline sabotage, according to NNPC.
Savings Buffer
“We’ve quickly put mechanisms in place to try to recover that,” Okonjo-Iweala said. “We expect by this coming month, we’ll be back on stream. We also have a buffer of savings to deal with that.”
Lower interest rates would spur growth in the
economy and help entrepreneurs borrow and
invest in their businesses, she said. Nigeria’s
central bank Governor Lamido Sanusi said in a March interview that he wants to keep the
benchmark interest rate at a record high of 12
percent to ensure currency stability and control inflation.
The naira has gained 3.2 percent since the end of 2011 to 157.3 per dollar, Africa’s second best performer during the period. Nigeria’s inflation rate fell to its lowest in almost five years in March,easing to 8.6 percent from 9.5 percent in February.
“If we can continue to work together to drive
inflation down and banks also look at their cost margins, we want to see interest rates in a much more friendly zone to encourage the private sector,” said Okonjo-Iweala. “I’m not going to jump in and predict policy for the central bank. I’m not going to speculate on what they’re going to do.”

www.businessdaynigeria.com/fg-sell-1bn-eurobond

[Tegh7]

IMF sees Nigeria rebuilding reserves to $80bn in next 4years

Fri, 2013-05-10 11:02

The International Monetary Fund (IMF) says it
foresees the Central Bank of Nigeria (CBN)
building the nation¡¯s reserves to a high of at least $80 billion in the next four years.
This forecast is based on the fact that
government remains committed to its stated
intentions in the medium term expenditure
framework as well as IMF¡¯s assumption of single digit inflation going forward, W. Scott Rogers, IMF senior resident representative told a press conference in Abuja on Thursday.
With renewed commitment to save the nation¡¯s foreign exchange earnings, the CBN has been able to grow the external reserves to over $50billion.
The IMF also expects to see foreign exchange
inflows to Nigeria rise to about $2 billion in the next two years buoyed by growth in the oil sector.
These forecasts it, however, said are only possible if potential threats from insufficient export diversification and a possible weaker portfolio inflows as inflation ebbs and interest rates fall as are subdued.

http://www.businessdaynigeria.com/im...n-next-4-years

[Tegh7]

Statistics bureau considers 2012 as new base year for GDP

The National Bureau of Statistics (NBS) is
considering using 2012 as a base for the
calculation of Nigeria¡¯s Gross Domestic Product(GDP) as it reviews its methods, the head of the agency, Yemi Kale, has said.
The bureau is updating its GDP base year to give a better indication of the size and composition of the economy of Africa¡¯s largest oil producer. It had previously decided to use 2010 as the reference.
The NBS will decide before the end of the month which of the two years is better, Kale said in a phone interview yesterday from Abuja.
The agency agreed to look into the issue after
consulting experts from inside and outside
government. They advised the use of 2012 as the base year because they thought 2010 ¡°isn¡¯t a normal year,¡± Kale said. ¡°We were quite comfortable with 2010, but they highlighted some problems.¡±
Nigeria¡¯s GDP is currently based on production and consumption patterns in 1990. The updated data will probably boost the reported size of the Nigerian economy, according to the statistics bureau.
The re-based data will probably be released
sometime next year, Kale said.
Nigeria¡¯s economy was estimated at $268.7
billion last year and forecast to expand 7.2
percent this year by the International Monetary Fund.

http://www.businessdaynigeria.com/nb...-base-year-gdp


The "goal post" keeps shifting. This just highlights the lack of technical capacity within the NBS. Goodness!

[JoblessBeggar]

Originally Posted by Tegh7

The "goal post" keeps shifting. This just highlights the lack of technical capacity within the NBS. Goodness!

What's the rush? So long the do a good job, they can take all the time they need.

[Tegh7]

I guess u are right. However, the inconsistencies fall short of engendering trust in the capacity/credibility of the NBS.

[paddylo]

Originally Posted by Tegh7

Statistics bureau considers 2012 as new base year for GDP



http://www.businessdaynigeria.com/nb...-base-year-gdp


The "goal post" keeps shifting. This just highlights the lack of technical capacity within the NBS. Goodness!

The new NBS under Yemi Kale is quite competent, i have had the opportunity to sit and talk with the Statistician General (Kale) recently.

The problem is one of funding.
The NBS budget is too minuscle to do the job. Nigeria is also a huge country geographically, so sending out statisticians to conduct surveys in all states is a logistic problem.

In the final scheme of things the NBS according to Kale wants to do a good job, that cannot be questioned by anybody.

The numbers should come out in early 2014.

[Tegh7]

Originally Posted by paddylo

The new NBS under Yemi Kale is quite competent

That's entirely subjective.

i have had the opportunity to sit and talk with the Statistician General (Kale) recently.

Good! In truth, it prove nothing.

The problem is one of funding.
The NBS budget is too minuscle to do the job.

This appears to always be the issue. It is pertinent at this point for government institution to develop mechanism and systems aimed at generating independent funding(exclusive of government funding). The resources accrued to the FG isn't sufficient to support all interest.

Nigeria is also a huge country geographically, so sending out statisticians to conduct surveys in all states is a logistic problem.

Hmm...., this is a head-scratcher. In any case, the same applies to MANY countries; the world over.

In the final scheme of things the NBS according to Kale wants to do a good job, that cannot be questioned by anybody.

Again with the varied inconsistency, I remain unconvinced regarding the "cannot be questioned" segment.

The numbers should come out in early 2014.

For everyone's sake, I just hope that happens.
Then again, if the trend is consistent, even 2014 is far fetched.

[Tbite]