COST HEADLINES WEEKLY REVIEW

1st - 7th February, 2016

February 1, 2016
VANGUARD
N331bn inflow from matured Treasury Bills rescues interbank market

The interbank money market experienced huge outflows of cash last week leading to scarcity of funds which was halted by N331 billion inflows from payment of matured treasury bills. Vanguard investigations revealed that the amount of idle cash in the market fell from N633 billion on Monday to zero at the end of business on Tuesday as banks diverted the idle cash to participate in foreign exchange sales by the Central bank of Nigeria (CBN). The ensuing scarcity of funds caused cost of funds to rise sharply from Tuesday to Wednesday. Data from Financial Market Dealers Quote (FMDQ) show that cost of unsecured lending rose from 0.67 percent on Monday to 7.17 percent on Tuesday and further to 8.61 percent on Wednesday. Similarly, cost of Over-night lending rose from 1.08 percent on Monday to 8.08 percent on Tuesday and further to 9.25 percent on Wednesday. READ MORE



February 2, 2016
VANGUARD
Corruption’ll cost Nigeria 30% of GDP by 2030 —Report

A new study by professional services firm, PriceWaterhouseCoopers, PwC has shown that Nigeria will lose 30 per cent of its GDP to corruption by 2030. Country and Regional Senior Partner, West Market Area, PwC, Mr. Uyi Akpata disclosed this when he led a PwC team to submit the report to the Vice President, Yemi Osinbajo at the Presidential Villa, Abuja. Speaking on the report which was titled: ‘Impact of Corruption on Nigeria’s Economy’ Akpata said: “”The results of the study show that corruption in Nigeria could cost up to 37% of Gross Domestic Products (GDP) by 2030 if it’s not dealt with immediately. This cost is equated to around $1,000 per person in 2014 and nearly $2,000 per person by 2030. The boost in average income that we estimate, given the current per capita income, can significantly improve the lives of many in Nigeria.” READ MORE



NIGERIAN PILOT
Guinness Nigeria H1 ‘15 pretax profit drops 65%

GUINNESS Nigeria Plc said its first-half (H1) pretax profit for the period ended December 31, 2015 dropped 65 percent to N1.652 billion from N4.658 billion recorded a year ago. Similarly, post-tax profit declined 66 percent to N1.172 billion from N3.398 billion posted the same period 2014. Revenue of the beer maker depreciated from N55.267 billion in the H1 period of 2014 to N49.863 billion in the review period of 2015; showing a decline of 10 percent, according to Guinness Nigeria in a filing with the Nigerian Stock Exchange, NSE. Shares of the company at the close of last trading on the Nigerian bourse increased 5.0 percent to N115.50 per share from N110.00 per share traded the previous session. Commenting on the results, Mr. Peter Ndegwa, the company’s Managing Director and Chief Executive Officer, stated: “Sales revenue came under pressure, declining by 9.8%, as the operating environment weakened further. READ MORE



GUARDIAN
New electricity tariff to attract N1.36tr investments in five years’
The new multi-year tariff order may raise the country’s yearly investment profile by N1.36 trillion over the next five years. Besides, power generation is expected to hit 5,465mw by the end of 2016; 7,199mw in 2017; 8,999mw in 2018; 10,493mw in 2019 and 11,383mw by 2020.Specifically, capital expenditure included in the Transmission Use of System (TUOS) are N206.212 billion in 2016; N418.504 billion in 2017; N265.203 billion in 2018; N247.828 billion in 2019 and N224.395 billion in 2020.This information was contained in the multiyear tariff order for the Transmission Company of Nigeria (TCN) for the period of January 1, 2016 to December 31, 2020 released by the Nigerian Electricity Regulatory Commission (NERC). READ MORE



THISDAY
FIRS Unveils N5trn Revenue Target for 2016

The Federal Inland Revenue Service (FIRS) disclosed Tuesday that its proposed revenue target for the 2016 fiscal year is N4.957 trillion, which is N385 billion higher than the N4.572 trillion in 2015. Of the N4.957 trillion for 2016, non- oil revenue is accounting for 80 per cent of the gross target while Value Added Tax( VAT) is to account for N2 trillion, representing 40.35 per cent. Company Income Tax (CIT) is expected to rake in N1.877 or 37.87 per cent. Both CIT and VAT are projected to account for 80 account of FIRS’ revenue haul in 2016.The Executive Chairman of FIRS, Mr. Tunde Fowler, who unveiled the figures in Abuja at the 2016 corporate strategy retreat, gave other details of the revenue target for 2016 as Petroleum Profit Tax (PPT) N800 billion; Company Income Tax ( CIT) N1,877trn; Education Tax (ET ) N180 billion; Consolidated Tax N80 billion and National Information Technology Development Endowment Fund(NITDEF) expected to contribute N20 billion. The retreat with the theme “Optimising Non- Oil Tax Revenue Collection through Compliance and Enforcement, 'attracted top management officers of FIRS and states' internal revenue board chairmen. READ MORE



SUN
$5bn budget deficit: Nigeria, Angola in loan talks with W’Bank

With a 2016 budget deficit of about $5 billion, and oil price hovering around $31, Nigeria and Angola, Africa’s two biggest oil producers, have opened talks with the World Bank to help them cope with low crude prices, weakening currencies and strained public finances. Though, Nigeria has held exploratory talks with the World Bank on borrowing to help fund part of its N6.08 trillion budget in 2016, Minister of Finance, Kemi Adeosun, explained that, Nigeria, the country has not applied for any emergency loans. Adeosun had said in January, Nigeria was planning to borrow as much as $5 billion to help fund a budget deficit due to a slump in oil revenues, of which $4 billion might come from international institutions and the rest from Eurobonds. “We have held exploratory talks with the World Bank. We have not applied for emergency loans,” she had said. READ MORE



February 3, 2016
SUN
FG to save N12bn yearly through Efficiency Unit - Minister

Federal Government will save over N12 billion from the Efficiency Unit which was set up on November 30, 2015 to eliminate waste and excesses in government’s expenditure. This is as it vows to sanction any sector that refuses to comply with the rules of the unit Speaking at a media roundtable with the Efficiency Unit, yesterday in Abuja, the Minister of Finance, Mrs. Kemi Adeosun, said that efficiency unit was established against the urgent need to achieve a better cost structure for the government and derive maximum value for money. The unit which was created at the instance of President Muhammadu Buhari and under the office of the Minister of Finance, would eliminate waste and duplications in government’s work processes and activities and generate savings from the procurement process. This unit, according to the Minister who spoke through the Head, Efficiency Unit, Mrs. Patience Oniha, noted that in the short to medium term there was potential opportunity to save up to N12 billion annually if goods and services are standardized and demands of Ministries, Departments and Agencies (MDAs) can be aggregated to negotiate fair discounts from suppliers. READ MORE



THISDAY
FG May Sell $100bn Assets to Shore up Foreign Reserves

Following the continued depletion of Nigeria’s external reserves as a result of dwindling crude oil prices and huge demand for the green back, experts in the nation’s financial sectors have stated that the federal government may sell its assets to foreign investors to shore up reserves. Data released by the Central Bank of Nigeria (CBN) last Friday showed that the nation’s external reserves fell to $28.1 billion on January 28, the lowest level since 2005. Analysts who spoke to THISDAY on the condition of anonymity said, the situation can only be remedied by the sale of the assets. Before the slide in the oil price, Chinese investors were said to have offered $70 billion for the Nigerian National Petroleum Corporation (NNPC) joint-venture interests. However, analysts at FBN Capital stressed that the valuation of these assets would have since fallen sharply as a result of the decline in crude oil prices. READ MORE



SUN
Crude Swap: NNPC to save $1bn with Direct Sale-Direct Purchase

The Nigerian National Petroleum Corporation (NNPC) has unveiled plans to replace the controversial crude-for-products exchange arrangement popularly referred to as crude swap with Direct-Sale–Direct-Purchase (DSDP).The Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Ibe Kachikwu, made the disclosure when he appeared before the House of Representatives Ad-Hoc Committee set up to investigate the Corporation’s offshore processing and crude swap arrangement for the period between 2010 to date. The NNPC, had in August 2015, announced the termination of the OPA, entered into in January, 2015 with three companies- Duke Oil Company Inc., Aiteo Energy Resources Limited and Sahara Energy Resources Nigeria Limited. Under the agreement, NNPC allocates a total of 210, 000 barrels of crude oil per day for refining at offshore locations in exchange for petroleum products at pre-agreed yield pattern. But Kachikwn had assured the House of Reps Members that DSDP, which is scheduled to take off by March, would save the country about $1 billion. READ MORE



DAILY TRUST
FG saves N9.4bn in one month from petrol, kerosene subsidy

The Federal Government may have saved close to N9.4 billion in January alone, following the stoppage of the payment of subsidy to oil marketers for the importation of petrol and kerosene. Data compiled from the Petroleum Products Pricing Regulatory Agency (PPPRA) website showed that the country was saved an average of N5.77 and N6.66 per day on a litre of petrol and kerosene respectively in January. The PPPRA which is the government agency that regulates the prices of petroleum products in the country had on January 1 revised its pricing template thereby erasing the usual subsidy component to negative subsidy on the products. Before the release of the revised template, the Expected Open Market Price (EOMP) which is the true cost of the products was usually higher than the pump price at filling stations. The difference between the Retail Price and the EOMP was what the federal government paid as subsidy to oil marketers. However, the new EOMP is lower than the Retail Price meaning a negative subsidy and that Nigerians are paying extra for the commodities whenever they buy them at both NNPC and non-NNPC run filling stations. READ MORE



February 04 2016
DAILY TIMES
Dwindling revenue: Experts charge government to block leakages, strengthen tax compliance

Financial experts have advised the Federal Government to strengthen tax compliance and block all the leakage in the system, in order to achieve the targeted 20 percent increase in tax collections in 2016.Speaking to our correspondent on the telephone in Lagos recently, the immediate past President/Chairman, Chartered Institute of Taxation of Nigeria (CITN), Chief Mark Dike, disclosed that government has to sit up and develop zero tolerance for the huge number of people who are not paying taxes in the country. Dike explained that a lot of people who did not pay tax are at the corridor of power or close to the corridors of power, but government must ensure that those who usually corner government pay the actual amount of tax, adding that government must be serious about tax compliance because there are lots of leakages in the system. READ MORE



February 05 2016
DAILY TIMES
Apapa Customs Command generates N23b in one month

Customs Area Controller of The Apapa Command of the Nigeria Customs Service, Comptroller Willy Egbudin has disclosed that the command has been able to generate the sum of N23.4billion as revenue for the month of January 2016.This much he disclosed at a monthly stakeholders meeting held in Lagos recently. The former CAC of Lilypond and Seme Commands who took over at the Apapa Command in January while comparing the revenue collected in 2014 and 2015 reiterated the commitment of his command to meet and exceed its target.“ In 2014, the command collected a total of N301 billion, while N288 billion was collected in 2015 respectively. “We pray that this year, we should be able to exceed at least N300 to N400 or N500 billion and that is our expectation. “So far, I don’t think we are doing badly. As at the end of the month of January this year we had been able to realize N23.4billion compared to January last year which was N20.7 billion, you know that we are starting well” READ MORE



GUARDIAN
FCMB grows revenue to N109.3b

FCMB Group Plc has reported revenue of N109.3 billion for the nine-months ended September 2015, representing an increase of 2 per cent from N106.7 billion recorded during the same period in 2014.The financial institution also recorded a profit before tax (PBT) of N2.6 billion for the during the same period, as against N16.8 billion for the nine-months of 2014.FCMB Group Plc, the financial holding company, comprises of First City Monument Bank Limited, FCMB Capital Markets Limited, CSL Stockbrokers Limited and CSL Trustees Limited. Going by the unaudited International Financial Reporting Standards (IFRS) – compliant Group results, which include the banks audited results for the same period, its net interest income for the period ended September 2014 stood at N48.7 billion. This is against N49.1 billion for the same period prior year. Operating expenses was up three per cent Year-on-Year (YoY) to N50.5 billion, for the nine-months ended September 2015, compared to N48.9 billion achieved at the same period the previous year. READ MORE



February 07 2016
DAILY TRUST
Telecom sector contributed N1.39trn to GDP in Q3 – NBS

The telecommunications sector contributed N1.39 trillion to Nigeria’s Gross Domestic Product (GDP) in the third quarter of last year. This was revealed in a report released by the National Bureau of Statistics (NBS) at the weekend in Abuja. The sector’s contribution to the nation’s GDP was 7.71 per cent, a slight increase relative to the 7.57 per cent contribution recorded in the third quarter of the previous year. However, analysis showed that it was lower than the 9.57 per cent recorded in the second quarter of 2015.The NBS stated that the decrease may not be unconnected to a large extent to “seasonal patterns of the telecommunications sector and whole economy.” READ MORE