Daily Watch – Unions prepare for battle, Cocoa production hit by bad weather

5th February 2016

  • The Nigeria Labour Congress, Trade Union Congress, and civil society allies say they will hold a protest on February 8 over the 45 percent increase in electricity tariffs announced by the Nigeria Electricity Regulatory Commission. The protests will take place in Abuja and across the country. Meanwhile, the NLC has insisted that there will be a “total shut down of Imo State” once the 14-day ultimatum issued to the state government to recall the 3000 sacked workers expires. The ultimatum expires on 5 February, and a strike is scheduled to begin 8 February. The Imo State government is owing workers of the state agencies between three and 15 months salaries and other benefits.
  • Morgan Stanley has projected that crude oil prices will remain low and has cut its quarterly crude forecasts for 2016 by as much as 51 percent. The investment bank expects Brent crude to average $31 a barrel in the first three months of this year and $30 in the second and third quarters. This compares with earlier targets of $42, $45 and $48, respectively. For Nigeria this means revenue shortfalls as most of the country’s oil is off shore and costs between $24 to $26 per barrel to drill. Nigeria will need to see share price remain at above $40 is it is to avoid further fiscal pressures.
  • The Cocoa Association of Nigeria says that Nigeria’s cocoa output may decline by as much as 60 percent in 2016 because of prolonged dry weather. The lingering heat wave had been affecting cocoa trees in farms. Nigeria reported a poor main-crop harvest with the start of the 2015-16 season in October after major growing areas were ravaged by floods and disease in the preceding months. The dry spell that ensued afterwards wasn’t broken by intermittent rains that would have helped the development of buds.
  • Nigeria plans to raise N90 billion ($452.26 million) worth in naira denominated bonds at an auction on February 10, the Debt Management Office has said. The second of such this year, the debt office said it will sell N40 billion in paper maturing in 2020 and N50 billion in the debt maturing in 2026, using the Dutch Auction System, in which the price is lowered until the bond is bought.
  • The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, and members of the House of Representatives exchanged words on Tuesday over the controversial crude oil for refined products exchange contracts between the Nigerian National Petroleum Corporation and some trading firms. The contracts, which ran between 2010 and 2014, were worth over $24bn in value. The swap deals involved the exchange of crude oil for refined petroleum products in which the corporation gave out part of its 445,000 barrels per day share crude allocation to the trading companies. An ad hoc committee of the House chaired by an All Progressives Congress lawmaker from Kwara State, Mr. Zakari Mohammed, is investigating the swap contracts in which Nigeria was reportedly short-changed to the tune of billions of dollars.