Legislation aimed at ceding mineral resources to States scales second reading – Businessday

By KEHINDE AKINTOLA, Abuja

Stakeholders across the country are expected to deliberate on the legislative framework which seeks to grant States the power to control revenues derived from minerals resources during the Constitution review exercise to be flagged off soon.

The bill, sponsored by Leo Ogor, Minority Leader during Wednesday plenary session, scaled through second reading on the floor of the House of Representatives.

Ogor (PDP-Delta) stressed the need to amend the Constitution with the view to empower the states to control of the revenues derived from all the mineral resources including: oil, natural gas in, under or upon any land in the states of the federation.

After robust debate on the bill titled: “A bill for an Act to alter the Constitution of the Federal Republic of Nigeria, 1999, to vest the control of the revenues derived from minerals, mineral oils, natural gas in, under or upon any land in the states of the federation,” Speaker Yakubu Dogara referred it to the Special Ad-hoc Committee on Constitution Review, chaired by Yussuff Lasun for further legislative action.

Ogor, in his lead debate, said the bill if passed into law will give impetus to the quest of the government to diversify its economy, as states will focus on areas where they have comparative advantage.

He noted every state in the country is endowed with one natural resources or the other, adding that if these resources are well harnessed, they will make the states less dependent on the federal allocations.

He added that if the bill is passed into law, it will help the country function better as a federal state.

“We are confronted with a situation where states go cap in hand every month to Abuja for federal allocation.

“When states take up resources in their areas, it will lead to specialisation. The exclusive legislative list is over crowded,” Ogor argued.

In his contribution, Fredrick Agbedi (PDP-Bayelsa), who argued that the bill was long overdue, stressed that the bill when passed into law, would help to enhance the economy of the country and the pull the nation out of recession.

“We need to take practical steps to see that w end this recession. We will not be able to end the recession, if states continue to come to Abuja to collect money,” he said.

CBN goes hard on banks over high charges on intervention funds – Businessday

By Onyinye Nwachukwu

 

The Central Bank of Nigeria (CBN) has indicated it would henceforth go hard on commercial lenders which continue to lend its intervention funds at high interests.

CBN governor, Godwin Emefiele warned Participating Financial Institutions (PFIs) in the country against charging double-digit interest on intervention funds guaranteed by the apex bank.

“Report any bank that charges you above 9% interest on loans guaranteed by the CBN,” Emefiele told young farmers in Abeokuta as he assured them of the Bank’s funding support through their respective PFIs.

Emefiele gave the warning in Abeokuta, Ogun State during an interaction between the Presidential Task Force on Agricultural Commodities and Production and young farmers at the Owowo Model Farm Estate.

Available records show that the CBN’s intervention schemes to spur liquidity into the system has so far reached N2.02 trillion.

These include Commercial Agricultural Credit Schemes, CACs which amounts to N200 billion, Power and Aviation Intervention Fund, PAIF, N300 billion, Micro Small Medium Enterprise Development Fund, MSMEDF, N220 billion, Real Sector Support Facility, RSSF N300 billion and Nigeria Electricity Market Stabilisation Facility, NEMSF N213 billion.

CBN has also established multi-pronged financing under the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending NISRAL, which included risk sharing, insurance and technical assistance facilities as well as holistic bank rating and bank incentives mechanisms, which amounts to N75 billion.

There is also the N203 billion guarantee funds under the Agricultural Credit Guarantee Scheme Fund, ACGSF.  Despites these intervention, inability to access finance is a major challenge of Nigerian businesses due to high cost of funds.

Emefiele assured the young farmers that Development Finance Officers from the Bank were readily available to assist them on how to access credit from the various intervention funds in order to guarantee employment, create wealth and meet the country’s food needs.

He urged the young farmers to take advantage of the Bank’s Youth Entrepreneurship Development Programme (YEDP) as well as the Micro, Small and Medium Enterprises Development Fund (MSMEDF) to create wealth,

Minister of Agriculture and Rural Development, Audu Ogbeh frowned at the spate of importation of goods that can be easily produced in Nigeria, and expressed confidence in the ability of the youth to produce agricultural commodities that will earn the country the much-needed foreign exchange.

He also commended the effort of the CBN Governor, who he noted was very concerned about the import bills of the country, particularly as it had to do with rice importation.

 

    Delayed Baggage: CPC summons Arik Air over alleged consumer rights abuse – Businessday

    By  HARRISON EDEH

     

    Following complaints of alleged ill-treatment by passengers of recent London-Abuja Arik Air flights, the Consumer Protection Council (CPC) has summoned the management of the airline to appear before it to provide facts relating to the allegations.

    The Summons, which was issued by the Council on Wednesday is summoning the airline’s Chief Executive Officer, Michael Arumemi Ikhide, the Chief Operating Officer, Conor Prendergast and the Managing Director, Chris Ndulue, to appear before the Council on Monday, December 19, 2016.

    According to the Summons, the Council disclosed that it received “complaints/information from the public and passengers on board Arik Air flights from London to Lagos between 2nd and 5th December, 2016 alleging that the flights arrived Murtala Muhammed Airport, Ikeja, Lagos Nigeria, without the passengers’ luggage and without prior information”.

    The Council in a statement said, “the said passengers, many of whom had connecting flights to Cameroon, Abuja, Port Harcourt and Ibadan could not continue their journeys as a result of the non-arrival of their luggage from London, while some passengers on the said flights could not have access to personal supplies, baby food or medication.

    “Arik Air Ltd did not provide the passengers with temporary accommodation for transit; neither was there any customer service desk to assist the passengers in resolving their individual complaints”, it stated.

    CPC disclosed further  in a statement  that it had issued the Summons in line with sections 8, 15 and 18 of its enabling Act.

    It would be recalled that passengers of Turkish Airlines had similar experience with the airline’s Flight 623 from Istanbul to Abuja on 25th and 31st of December 2015 and 9th of January 2016, which prompted the Council to consistently demand for a situation report on the incidents.

    However, the refusal of Turkish Airlines to respond to the Council’s Summons and the ultimatum of the Attorney General of the Federation to the airline on the same request, has led to the criminal prosecution of the airline and two of its principal officers, Liker Ayci and Rasak Shobowale, the airline’s Board Chairman and Commercial Manager respectively before Federal High Court 10 in Abuja over alleged criminal violation of the Consumer Protection Council (CPC) Act.

    The criminal prosecution of Turkish Airlines and its principal officers has been fixed for February 9, 2017 for hearing.

    Brexit referendum not legally binding, Supreme Court told – Reuters

    By Michael Holden and Estelle Shirbon | LONDON

    Dec 7 The referendum in which Britons voted to leave the European Union is not legally binding, the Supreme Court was told on Wednesday during a hearing on who has the power to trigger Brexit.

    The court is considering an appeal by the government against a ruling last month that ministers cannot invoke Article 50 of the EU’s Lisbon Treaty, the first formal step in the process of leaving the bloc, without parliament’s explicit approval.

    If the Supreme Court upholds that ruling, the risk for the government is that proceedings in parliament could delay Prime Minister Theresa May’s plan to trigger Article 50 by the end of March, watering down her Brexit strategy.

    The case has inflamed passions in Britain, with pro-Brexit critics saying those challenging the government through the courts were seeking to thwart the will of the people.

    On Wednesday, police announced they had arrested a man on suspicion of making racist threats against Gina Miller, the lead claimant in the case against the government. 

    David Pannick, the lawyer acting for Miller, told the court the June referendum, in which Britons voted for Brexit by 52 percent to 48, had important political consequences but not legal ones.

    “Parliament has deliberately chosen a model which does not involve any binding legal effect,” he told the 11 Supreme Court justices during an exchange on the 2015 act of parliament that set the rules for the referendum to take place.

    Pannick argued that the 2015 act did not say what should happen after the referendum, and that since triggering Article 50 would effectively nullify the 1972 act through which Britain joined the EU, only parliament could authorise such a step.

    OVER TO THE GOVERNMENT?

    Pannick’s assertion that the outcome of the referendum was merely advisory goes to the heart of the controversy generated by the case.

    Many politicians in May’s Conservative Party and some pro-Brexit newspapers say the courts would be overstepping their constitutional role if they ignored the express will of the people.

    Miller and Pannick counter that their case is not aimed at blocking Brexit but rather at ensuring parliament is properly involved in the process. They won convincingly in the High Court in November.

    Supreme Court President David Neuberger questioned Pannick on Wednesday over whether parliament needed further involvement.

    “One could say it (the referendum process) is parliament ceding the ground … to the people, to a referendum. It’s done that, and then it’s over to the government,” Neuberger said.

    “It could be said to be a bit surprising that … an act such as the Referendum Act and an event such as the referendum has no effect as a matter of law.”

    A stone’s throw away from the Supreme Court, parliament will vote on Wednesday on whether to back May’s timetable on Article 50.

    Pannick said that even parliament did vote in favour of the March deadline, that would make no difference to his case that parliament, not ministers, had the power to authorise triggering the article.

    “Our submission is that a motion in parliament does not affect, cannot affect, the legal issues in this case,” he said. (Writing by Michael Holden and Estelle Shirbon; editing by John Stonestreet)

    Euro firms against dollar before ECB meeting – Reuters

    By Karen Brettell | NEW YORK

    The euro gained slightly on the dollar on Wednesday as investors focused on Thursday’s European Central Bank meeting for possible indications on when the central bank may begin paring bond purchases under its quantitative easing program.

    The euro has been the main focus for traders this week after Italian Prime Minister Matteo Renzi’s loss in a referendum over constitutional reform on Sunday.

    After initially dropping on the news, the euro rallied strongly on Monday and has since held below three-week highs against the dollar as investors wait on the ECB.

     
     

    “The ECB we think is likely to announce an extension of the QE program beyond March 2017,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

    The euro could extend gains if the ECB indicates a time limit to any QE extension, as investors watch for indications of tapering.

    Osborne said any further euro strength is likely temporary as investors focus on higher U.S. growth prospects.

    “The broader trends for the market beyond the holiday season should be dictated by stronger growth and rising interest rates in the U.S., and that should be positive for the U.S. dollar,” Osborne said.

    The Federal Reserve is widely expected to raise interest rates for the first time this year when its policy-setting committee meets next week.

    The euro EUR= was last up 0.25 percent against the dollar, at $1.0744, after hitting a three-week high of $1.0796 on Monday.

    The dollar index .DXY, which measures the greenback against a basket of six major currencies, fell 0.12 percent to 100.37, after dropping to 99.849 on Monday, the lowest level since Nov. 15.

    The dollar was flat at 113.96 yen JPY=. The yen weakened earlier on Wednesday after Bank of Japan Deputy Governor Kikuo Iwata said the central bank had not shifted its focus away from the pace of money printing.

    Sterling fell as much as 0.8 percent to hit a one-week low of 85.255 pence against the euro EURGBP= after data showed British industrial output suffered its biggest monthly fall in more than four years.

    The Australian dollar AUD= fell as low $0.7411 before retracing losses after data showed Australia’s economy shrank 0.5 percent last quarter, the largest decline since 2008.

    (Additional reporting by Jemima Kelly in London; Editing by Paul Simao)

    UPDATE 1-OPEC deal will go ahead even if only Russia commits – Nigeria oil min – Reuters

    (Adds details, quotes)

    By Maha El Dahan and Stanley Carvalho

     

    ABU DHABI Dec 7 (Reuters) – OPEC’s deal to cut oil production will go ahead even if Russia becomes the only non-OPEC country to commit to reduce output at a meeting this week, Nigeria said on Wednesday, while the UAE voiced optimism that other producers would participate.

    OPEC agreed last week to slash output by around 1.2 million barrels per day beginning in January in an effort to reduce global oversupply and prop up oil prices. It hopes non-OPEC countries will contribute a further 600,000 bpd of cuts. Russia has said it will reduce output by around 300,000 bpd.

    “Yes, we will go ahead, but we will continue to work on the rest to come onboard,” Nigerian Oil Minister Emmanuel Ibe Kachikwu said when asked whether OPEC was ready to go ahead with the production agreement even if only Russia committed to cut.

    “We did clearly say we would like to see non-OPEC participate, but we did not say we would not go ahead when they don’t,” Kachikwu told reporters on the sidelines of a Bloomberg Markets summit in Abu Dhabi.

    Nigeria, which is exempt from output cuts under the deal because of militant attacks on its oil infrastructure, hopes to boost production to 2.1 million bpd next month, the minister said.

    Fourteen non-OPEC countries including Russia have been invited to meet with the Organization of the Petroleum Exporting Countries in Vienna on Saturday to cement the pact.

    The United Arab Emirates’ energy minister said he was optimistic that non-OPEC producers would pledge cuts.

    “I think it’s reasonable what we set for them. It’s half of what OPEC committed to,” Suhail bin Mohammed al-Mazroui told reporters.

    Mazroui said the oil market needs prices that provide an incentive to invest in production. Investment was declining even at $50 a barrel, he said.

    “We have tested $40 and $50 prices and it hasn’t worked,” he said, adding that six months could be enough to correct the market to reasonable levels.

    “We will see in six months what will be the requirement and take the right measures.”

    Venezuelan Oil Minister Eulogio Del Pino told Russia’s TASS news agency in Caracas that the oil market would rebalance within six to nine months and that OPEC aimed for moderate prices within a range of $60-70 a barrel. (Writing by Rania El Gamal; Editing by Dale Hudson and Louise Heavens)

     

    Nigeria appoints Citi, Stanchard and Stanbic for $1 bln Eurobond – Reuters

    LAGOS Dec 7 (Reuters) – Nigeria has appointed Citigroup, Standard Chartered Bank and Stanbic IBTC Bank as advisers on its planned $1 billion Eurobond, Finance Minister Kemi Adeosun said on Wednesday.

    Buhari’s cabinet on Wednesday approved the appointment of the advisers following the finance minister’s presentation. They also appointed legal advisers on the deal, Adeosun told reporters. (Reporting by Felix Onuah; Writing by Chijioke Ohuocha; Editing by Alexis Akwagyiram)

     

    African Currencies, Nigerian Naira and the New US Dollar Volatility – FX Street

    By 

    While OPEC production cuts could slow the plunge of Nigerian naira, the real headwinds are ahead, thanks to the impending Fed rate hike, the incoming Trump administration and US dollar as the new fear index.

    In Africa, some 14 countries have been using the CFA franc that is pegged to the euro, while three have been pegged to the South African rand. Before the Trump triumph, the conventional wisdom was that as the US dollar would weaken against the euro in the short term, this will reduce inflationary pressures in these countries. However, skeptics argued that inflationary pressures were already low in most countries with a euro peg and a stronger currency would affect their competitiveness.

    The post-US election conventional wisdom deems that a Trump presidency may strengthen the so-called ‘safe-haven currencies,’ including the euro and the yen, in the short term, whereas emerging market currencies will come under pressure. That, in turn, would mean raising inflationary pressures while boosting competitiveness in those countries that have more liberalized exchange-rate systems.

    Yet, the realities are more complex and less promising.

     

    African currency turmoil

    In South Africa, political turbulence and international pressures have been reflected in the whip-sawing of its currency. In the past, rand exemplified the hopes associated with the BRICs economies. Today, it has been hit almost as hard as Mexican peso in the aftermath of the Trump triumph.

    While fairly stable this year, Ghana’s cedi has been struggling the past few weeks, surging to 4.20 to US dollar compared to 4.04 only a while back. Kenyan shilling is expected to weaken, due to rising dollar demand from importers. In Uganda, the shilling has been hit by weak foreign demand.

    Ever since 2009 and the global crisis, Zimbadwe has used the US dollar to replace its own failed dollar, along with rand, the euro and the Chinese renminbi. Only days ago, Zimbadwe rolled out a ‘bond notes’ currency, kind of surrogate dollars, to avoid a cash crunch, despite warnings that it could cause hyperinflation and undermine the rule of the 92-year old Robert Mugabe.

    Like Nigeria, Angola, another major African oil exporter, has pegged its currency with the US dollar. As its budget deficit is likely to climb to 5% during the next five years, the national currency kwanza will lose value against the US dollar. In the official market, kwanza has almost doubled in the past four years to almost 166 to US dollar. Thanks to low oil prices, the difficulties to obtain the US currency are increasing, while the disparity with the exchange rate on the black market is likely to remain high.

     

    The plunge of naira

    Nigeria is in no way immune to foreign-exchange headwinds. After the summer devaluation of the official rate, the naira fell from about N200 to $1 to almost N300. Although official rate remains around N315, the black market rate has climbed from N350 in mid-summer to N480.

    Typically, the plunge is explained by the eclipse of the commodity super-cycle, particularly the fall of oil prices ever since spring 2014. As long as Nigeria is inadequately diversified and dependent on oil revenues, which account over 90% of export revenues, any decline in dollar-denominated oil prices means the fall of naira.

    An emerging economy needs foreign exchange to finance investment and growth. Consequently, the willingness to import at the expense of exports and preference for foreign products, has amplified the challenges. Furthermore, with the abuse of public funds, collective assets morph into dollars, which are then parked in private foreign dollar accounts, which compounds naira’s depreciation. Finally, the confidence of foreign investors, which began to fall in the Jonathan era, has continued to deepen.

    Recently, the Organization of Petroleum Exporting Countries (OPEC) agreed to reduce oil production by around 1.2 million barrels per day, starting in January 2017. In Nigeria, the production is up to 1.9 million barrels and could rise to 2.2 million. As a result of the proposed cuts, oil prices are expected to climb from $50 to $60, which has a potential to alleviate Nigeria’s malaise to a degree. As Nigeria along with Libya were exempted from the OPEC cut, observers hope that this gives time to resolve the Niger-Delta crises.

    However, the hopes associated with the production cuts must go hand in hand with the anticipated US Federal Reserve rate increase in December and President-elect Trump’s expressed desire to toughen American trade and currency policies.

     

    Rising US dollar, rising global risks

    In Africa, foreign-exchange volatility has escalated since the embrace of ultra-low rates and quantitative easing by central banks in major advanced economies in  2009-10. With the Fed rate hike, turmoil is about to enter a new stage.

    Along with other emerging market currencies, the naira must cope with the US dollar, which recently hit a 14-year high, driven by rising US bond yields, expectations of a Trump fiscal stimulus and the impending Fed rate hike. In the process, Asian currencies suffered a sell-off and so did many currencies in the Americas and emerging markets overall. African currencies, including Nigerian naira, must also cope with US dollar’s growing risk in the world economy.

    Before the 2008-9 financial crisis, there was still a close correlation between leverage and the volatility index (VIX). When the VIX was low, the appetite for borrowing went up, and vice versa. That correlation no longer prevails, due to years of ultra-low rates and rounds of quantitative easing by advanced economies central banks.

    Recently, the Bank for International Settlements (BIS) reported that the US dollar has replaced the volatility index as the new fear index. As the VIX’s predictive power has diminished, US dollar has become the indicator of risk appetite and leverage. This dynamic has distressing implications because it has pushed international borrowers and investors toward the dollar.

    Yet, US fundamentals are eroding, as President-elect Trump himself has acknowledged. US sovereign debt has soared to $20 trillion, while in the past year foreign central banks sold almost $375 billion in Treasuries. In these conditions, the Fed rate hikes could boost the US dollar as a kind of a global Fed funds rate, which would result in dollar tightening and deflationary constraints. That, in turn, could impair emerging economies that today fuel the global growth prospects.

    Such a scenario has potential to unleash a chorus of criticism of the current dollar-based system, particularly in the BRICs economies. Like the economist Keynes in the 1940s, they argue that the fundamentals of the US economy do not support US market valuations and US dollar – not to speak of international markets and currencies.

    What’s good for the US dollar is no longer that good for the world economy.

      Naira defies effort at recovery, exchanges at N485/$ – Vanguard

      The Naira appears helpless in the face of efforts by the CBN and stakeholders in the forex market in fast -tracking its recovery, the News Agency of Nigeria (NAN) reports.

      The Nigerian currency exchanged at N485 to a dollar at the parallel market on Wednesday in Lagos, while the Pound Sterling and the Euro traded at N600 and N510, respectively. At the Bureau De Change (BDC) window, the Naira closed at N399 to a dollar, CBN controlled rate, while the Pound Sterling and the Euro exchanged at N606 and N512, respectively. Trading at the interbank market saw the Naira closed at N305.50 to a dollar.

      Naira-Dollar Traders at the market said that the shortage of the green back was impacting negatively on the performance of the Naira. As the yuletide approaches, it is becoming clear that navigating the Naira to an upward trajectory involves concerted efforts by well meaning Nigerians.

      It is undisputable that the Nigerian currency is fighting many battles that require patriotism on the part of the business community to win. It will be recalled that Alhaji Aminu Gwadabe, President, Association of Bureau de Change Operators of Nigeria (ABCON) last week identified currency hoarding and speculation as monsters challenging the very existence of the Naira.

      Remittances from Nigerians living abroad, which is put at 21 billion dollars, which was hitherto assisting in the defence of the nation’s currency from total destruction, has now reduced drastically. The Naira stirs everyone in the face to salvage it from its attackers.

      Read more at: Vanguard

        Quest to digitalise operations at Nigerian ports heightens – The Guardian

        By Sulaimon Salau

        The nation’s quest to reposition Nigerian ports for modern equipment and technology appears so close to reality, as major stakeholders, including the Nigerian Ports Authority (NPA) project a brighter future for the industry.

        The stakeholders, who gathered at the Executive Business Networking Lunch seminar on improving port operational efficiency organized by the Nigeria International Maritime Ports and Terminal Conference and Exhibition (NIMPORT) in Lagos, agreed that the application of modern technology in cargo handling equipment is very important as it determines the operational effectiveness at the quay and in the sheds.

        The Chairman, NIMPORT, Fortune Idu, said the efficient port operations is required to foster development, just as quality port equipment helps to accelerate cargo facilitation and reduce overall time losses.

        He noted that, “addressing the issue of substandard equipment and facilities will directly address the problems for the port efficiency and in particular help reduce economic losses at the port and logistics corridors due to broken down trucks, lifters and forklifts among others,”The guest speaker, Head Transport and Policy, School of Transport, Lagos State University, Iyiola Oni, said considering the current economic crisis, Nigerian ports needed to adapt efficiently in order to meet the ever changing and developing needs of the industry.

        Noting that equipment is a sensitive item in port operations, Oni said it is estimated that about 35 per cent of port’s capital budget is spent on procurement and maintenance of cargo handling equipment.

        Giving reference to some policies of NPA on trade facilitation (TFC), Information Communication Technology (ICT) and e-payment platforms among others, he said the technologies must be integrated with current operational and information structures and systems at ports terminals.

        Oni also recommended that terminals must be continually upgraded; while advanced ICTs applied across the entire intermodal system will offer important opportunities to increase existing system capacity.

        Besides, he clamoured that infrastructural facilities should be adequately available, adding that global competitiveness in the near future will depend on the level of technological advancement and integrated and coordinated multimodality through robust ICT and GIS applications.

        The Managing Director, NPA, Ms Hadiza Bala Usman, said NPA’s vision is to be the leading port in Africa.

        This, according to her, also means that the nation must lead in modernization of equipment and infrastructure to respond to global trends in shipping business, thus developments and upgrades of existing port infrastructure, as well as improvements in port performance have become imperative.

        She said the review of the concession agreements will challenge all parties to meet their various obligations with regards to provision of infrastructure including technology and up-to-date equipment aimed at improve efficiency.

        Making her commitment to make the maritime industry play a key role in boosting Nigeria’s economy, Usman urged operators to position themselves to deliver by investing in the requisite up-to-date equipment that will provide efficient services competitively.