Daily Watch – FG owes pensioners ₦400bn, Nigeria to go back to international debt markets

Nigerian banks recovered ₦738.15 billion in Non-Performing Loans from the Oil and Gas sector in one year, according to a report from the NBS. NPLs in the oil and gas sector dropped from ₦1.002 trillion in Q3’18 to ₦264 billion in Q3’19. This indicates that the CBN’s drive to solve liquidity challenges in the country’s financial sectors may already be paying off. The breakdown of NPL by sectors as at Q3’19 showed that there was a major drop in NPLs across sectors in the last one year, as Nigerian banks recouped loans from 16 sectors. The banks recovered ₦116.01 billion from the Power and Energy sector; ₦74.02 billion from Real Estate Activities; Manufacturing, ₦43.67 billion; Information and Communication, ₦39.40 billion, and Finance and Insurance ₦34.42 billion. Other sectors that witnessed reduction in NPLs include include Transportation and Storage with ₦32.27 billion; General N26.42 billion; Scientific and Technical Activities N5.19 billion; Mining and Quarrying ₦2.69 billion; Art, Entertainment and Recreation ₦2.36 billion; Human Health and Social Work Activities N1 billion; Administrative and Support Services ₦620 million; Capital Market ₦600 million, and Public Utilities 450 million. Meanwhile, NPL rose in a few sectors within the period with construction topping the list with N81.60 billion, an increase of ₦9.25 billion in one year. Other sectors that recorded a rise in NPL include the agricultural sector N49.96 billion; education ₦8.69 billion; government ₦1.28 billion, and waste management ₦2.24 billion.

Nigeria may offer Eurobonds as early as Q1 2020 after staying out of international debt markets this year. Finance Minister, Zainab Ahmed, said that the amount the government offers will be determined by how much it raises from concessional lenders such as the African Development Bank. While the country stayed out of the international debt market this year, it issued a record $10.7 billion of international bonds in 2018, and some investors were betting it would sell more this year to cover its widening budget deficit. The country’s debt management office in October ruled out further sales in 2019. Yields on Nigeria’s $1.5 billion of debt due August 2047 rose 8 basis points to 8.29% by 12:38 p.m. in London on Tuesday, compared with 7.63% when they were issued two years ago.

The Nigerian Government currently owes its retirees over ₦400 billion in accrued pension rights. The chairman of the Senate Committee on Establishment and Public Service, Ibrahim Shekarau, made this known during the second annual National Assembly retreat with the Pension Funds Operators Association of Nigeria in Uyo, Akwa Ibom State. Shekarau promised to take up the issue with the government to ensure that all the arrears were cleared, even if it would be the only achievement that the 9th National Assembly would be remembered for. The committee has written the Senate President on the matter, insisting that it should be addressed, he said. Shekarau blamed the indebtedness of state governments and local governments to their retirees on a lack of political will. He said the committee will initiate appropriate amendments to deter state governments from further owing their retirees.

Rising theft of crude oil theft and the activities of vandals in Nigeria are posing serious security risks to oil assets across the country. Speaking at the 9th Practical Nigerian Content holding in Bayelsa State, the MD of Aiteo Exploration and Production, Victor Okoronkwo, said that unscrupulous elements constantly vandalised oil pipelines and flow lines, especially its 600,000 barrels per day Nembe Creek Trunkline. Okoronkwo said that despite efforts to increase crude oil production, oil companies had continuously suffered more shutdown in their operations, leading to a significant loss of revenue for the companies and the government. Aiteo has seen more shutdown days in operations due to third party infractions for two more months this year than previous years. This, he said, has resulted in a loss of revenue and deferments estimated at about four million barrels so far this year. Also worrying is the amount of crude loss recorded even when the pipeline is operational, usually in the range of 25 to 35 percent.