The Manufacturers Association of Nigeria has listed poor electricity, multiple taxation, high-interest rates, and poor accessibility to ports as parts of challenges affecting the operational capacity of companies in Nigeria. This is according to a quarterly Manufacturers CEOs Confidence Index survey across the six geo-political zones of the country and the ten Sectoral Groups of the association, conducted by the association to measure the pulse of the manufacturing sector. The report, which covers the manufacturing activities in Q1 2019 shows that the sector was stressed further, even as the confidence level of operators was low, though with high expectation of improvement down the year. The aggregate MCCI for Q1 stood at 51.3 points, slightly above the minimum 50 points threshold of good performance, implying that the sector is still struggling. On Capital Expenditure, the majority of respondents did not agree that government implementation encouraged productivity in the sector. The report put the indexes of Current Business Condition at 45.5 points and Current Employment Condition at 38 points. These were not very encouraging owing to the inability of manufacturers to operate at close to full capacity. However, based on the responses of manufacturers, indexes of Business Condition in the next ‘3’ months is put at 54.5 points; Employment condition in the next ‘3’ months at 52.5 points; and Production Level in the next ‘3’ months at 65.5 points, suggesting that manufacturing CEOs have confidence that the operating environment will improve, leading to an increase in manufacturing employment and production level in the second quarter of the year.
Access Bank has agreed to pay off a $200 million Eurobond issued by Diamond Bank in 2014. Moody’s Investor Service reported that Access has reduced the risk of default for investors by taking on the liability. Diamond Bank had attempted to raise between $300 million and $350 million at the time to meet its funding requirements. However, it was cut back to $200 million after investor demand was not as high as expected. Access Bank becomes responsible for all Diamond Bank’s liabilities after they completed a take-over in March to become Nigeria’s largest bank. Peter Mushangwe, Analyst at Moody’s said: “Access has stronger liquidity than Diamond, sharply reducing the risk of default.” He said the attempt by Diamond to become a leading Nigerian retail lender led to a build-up of nonperforming loans that ultimately threatened its solvency. Diamond’s liquidity management was also poor, leaving it with insufficient foreign currency balances to cover near-term obligations. Moody’s described Access Bank as “more stable board and a higher concentration of independent directors, which enhances the quality of its board oversight”. This, according to Moody’s “will make it more likely that Access will achieve the majority of its merger objectives, including a reduction of its stock of nonperforming loans within the intended timeframe.”
Only seven out of the 87 deepwater oil blocks in Nigeria are producing, while six are at different phases of development, the NNPC’s chief executive, Maikanti Baru, assured that the NNPC would continue to support planned deepwater projects while ensuring adequate local participation. Baru claimed that deepwater operations in the country had generated revenue exceeding $180 billion. The revenue, according to Baru, was generated following industry players’ capital investment in excess of $65 billion with the potential for growth amid untapped abundant opportunities in the sector. Represented by the Chief Operating Officer, Upstream of the NNPC, Bello Rabiu at the ongoing Offshore Technology Conference in Houston, Texas, Baru said that Nigeria held approximately 13 billion barrels of oil, out of which about two billion had been produced with a huge volume yet untapped. He also said out of the 15 Floating Production, Storage and Offloading vessels in Nigeria, seven have been deployed for deepwater operations as the country ranks only behind Angola within the African deepwater operations in terms of FPSO deployment. Local content contribution or services share in deepwater have continued to grow and improve from less than one percent to an aggregate contribution of over 25 percent from engineering man-hours of less than 20,000 to over 1.1 million in Egina project, Baru said.
President Muhammadu Buhari has reappointed Godwin Emefiele as Governor of the Central Bank of Nigeria. The President has written to the Senate to seek legislative approval for another tenure for Emefiele, whose tenure expires on 3 June, 2019. President of the Senate, Bukola Saraki, read the letter on the floor shortly before the plenary was adjourned. By the CBN Act, the Senate must confirm the nomination before it can take effect. Emefiele was first appointed in 2014 by former president Goodluck Jonathan and was retained when Buhari came to office in 2015. This is the first time since 1999, when Nigeria returned to democracy, that anyone would be nominated to serve two terms as CBN governor. Before assuming the office of the CBN governor, the 57-year-old banker was the group managing director of Zenith Bank. Emefiele was at the helm of affairs when the country slipped into its worst recession in 29 years. In 2015 when global oil prices began to decline, there had been calls for the devaluation of the naira. However, Buhari opposed the idea. As CBN governor, Emefiele introduced various interventions to ensure that the naira was kept stable. These interventions included introducing a list of items for whose import foreign exchange was made unavailable.