Daily Watch – 2016 was negative, Fewer Nigerians online in January

1st March 2017

  • Nigeria’s economy contracted 1.5 percent in 2016 due to lower oil revenues and a shortage of hard currency, the NBS said on Tuesday, its first annual contraction in a quarter of a century. Africa’s largest economy slid into recession in the second quarter of 2016 as a slump in crude prices hammered its public finances and battered the naira. Crude sales make up two-thirds of government revenue. “This contraction reflects a difficult year for Nigeria, which included weaker inflation-induced consumption demand, an increase in pipeline vandalism, significantly reduced foreign reserves and a concomitantly weaker currency,” the statistics office said in a report. The IMF had predicted Nigeria’s economy would shrink 1.8 percent in 2016. Fourth-quarter national output shrunk by 1.3 percent. However, non-oil sector production fell by only 0.33 percent during the three months to end-December. Oil production – Nigeria’s economic mainstay – fell to 1.833 million barrels a day last year after 2.13 mbpd in 2015. Acting President, Yemi Osinbajo, said that the GDP data suggested Nigeria was “well on its way out of recession”. The expectation is that this trend and the slowing down of month-on-month inflation will enable an early return to positive growth in the economy,” Osinbajo said.
  • Oil production has risen to 2.1 million barrels a day, the NNPC managing director said on Tuesday, without giving an explanation for the increase. “We are hoping that by the end of 2017 we should ramp up production to above 2.2 mbpd,” Maikanti Baru told an oil conference in Abuja. Nigeria has given differing figures for its oil output in recent weeks. Finance Minister Kemi Adeosun said on Thursday production was 2.2 mbpd, without giving an explanation. Acting President Yemi Osinbajo had put output at between 1.7 mbpd and 1.8 mbpd at the World Economic Forum in Davos, Switzerland. Markets have been surprised by the reported rise because a major export pipeline carrying nearly 250,000 bpd, Forcados in the restive Niger Delta, has only been open for three weeks of the past year due to militant attacks. There has been no sign of the pipeline resuming operation. According to a Reuters survey, Nigeria’s output was around 1.57 mbpd in January. There have been no recent militant attacks on pipelines in the Delta since Osinbajo visited the southern region to calm tensions and broker a peace agreement. Baru also said Nigeria wanted to boost oil output by 2020 to 3 mbpd and crude reserves to 40 million barrels in the same time frame, up from 37 million barrels.
  • South Africa’s Nedbank booked a $293 million write-down on the value of its stake in sub-Saharan lender Ecobank on Tuesday and reported its slowest growth in annual profit since 2009. Ecobank Transnational’s operations in central and west Africa are exposed to some economies that have been pressured by the commodity price slide and unfavourable currency swings since Nedbank bought a 20 percent stake for $500 million in 2014. The write-down reduces Ecobank’s value on Nedbank’s books to 4 billion rand ($308 million) from 7.8 billion rand, the South African lender said in a statement. Nedbank said, however, that Ecobank remained vital to its expansion elsewhere on the African continent, where Ecobank has operations in nearly 40 countries outside its home market. CEO Mike Brown forecast another tough year for Ecobank, which makes the bulk of its earnings in Nigeria, before improving in 2018 and beyond. Nigeria, Africa’s biggest economy, has been hit by a currency crisis and its first recession in 25 years following the slide in oil prices since the middle of 2014.
  • Dangote Cement exported 400,000 tonnes of the product to other countries in 2016. In its 2016 full year audited results presented at the NSE in Lagos on Monday, Dangote Cement sold 8.6 million metric tonnes of cement outside Nigeria, which is 54 percent more than what was sold in 2015. While presenting the results, the company’s CEO, Onne van der Weijde said the company achieved sales and revenue growth of 25 percent and consolidated its position as Africa’s leading cement producer. While sales from Nigerian operations increased by 13.8 percent to nearly 15.1 million metric tonnes, its total revenue leapt by 25.1 percent to ₦615.1 billion. Earnings per share increased by 4.5 percent to ₦11.34 and the dividend payout to the shareholders also increased significantly by 6.3 percent to ₦8.5 kobo per share. However, Profit Before Tax declined by 4% y/y to ₦180.9 billion although Profit After Tax grew by 78% y/y to ₦294.6 billion.
  • The number of internet users on Nigeria’s telecommunications networks declined to 91,274,446 in January, the NCC said. The NCC made the disclosure in its Monthly Internet Subscribers Data for January 2017 on its website on Tuesday in Abuja. According to the data released, internet users dropped to 91,274,446 in January as against 91,880,032 users recorded in December 2016, showing a decline of 605,586. The data revealed that MTN had 31,015,450 subscribers browsing the internet on its network in the month of January, a drop of 737, 964 internet subscribers in January after recording 31,753,369 in December 2016. Airtel had 19,618,485 internet users in January, adding 254,940 customers to its December record of 19,363.545. With Etisalat, the data showed 13,564,284 customers browsed the internet in January, a decrease of 188,656 users against the 13,752,940 users recorded in December 2016. The data showed that Globacom had 27,076,272 Internet customers on its network in January, an increase of 66,094 users from the 27,010,178 users of the internet on the network in December 2016.
  • The FIRS, on Monday, sealed the offices of Kabo Airlines, Monaco Ventures and Paki International Motors, all in Kano, over tax liabilities. Kabo Airlines owes ₦149,707,949.03 from the assessment year of 2004 to 2013. According to the head of the enforcement team in Kano, Bukar Gana, the airline’s liabilities are made up of Income Tax and Education Tax. He explained that the company did not contest the liabilities, an action which led to the sealing of its premises on Ashton Road, Kano State. Also sealed was Paki International Motors, which owes Company Income Tax of ₦51,148,117.57, accumulated between 2008 and 2014. The enforcement exercise continues in other parts of the country.