Bailout funds effort has stalled
Nigeria’s efforts to secure funds from international lenders to help haul it out of recession have stalled because it has not submitted the required economic reform plans, according to one of the banks and sources close to the matter. Reuters Africa reports that the government has been in loan talks with the World Bank for a year. It had told the lender it would present its proposed reforms to make the economy more resilient and attractive to investment by the end of December, according to Western diplomats and a Nigerian official who declined to be named. But this has not happened and as a result of the delay, which the government has not explained, the Washington-based bank has not been able to consider a loan yet, the sources said. Nigerian Finance Minister Kemi Adeosun declined to comment. The report says that the African Development Bank (AfDB) is, meanwhile, holding back the second tranche of a $1bn loan for Nigeria, AfDB president Akinwumi Adesina said. ‘We are waiting for the economic policy recovery programme and the policy framework for that,’ said Adesina, without specifying when the AfDB had expected to receive the reform plans.
Reuters Africa 

Government joins with BDC traders in black market fight
Nigeria’s money-changers will introduce an exchange rate for the naira to help the central bank combat unregulated trading. Bloomberg reports that licensed dealers, known as bureaux de change, or BDCs, will post an exchange rate each Monday on their website from 16 January to ‘highlight positive rate development in the market’ and counter domains such as abokifx.com, which publishes unofficial prices daily, Aminu Gwadabe, the head of the local BDC association, said. The report says trading in the black market boomed since 2014 after the central bank strengthened capital controls and began to manipulate the interbank exchange rate as oil, the country’s top export, plummeted. The BDCs will initially quote a rate of 399, Gwadabe said. Nigerian officials have already tried to rein in the black market. In November, intelligence agents threatened to arrest any BDC operator or street-trader buying or selling the naira at a rate weaker than 400 per dollar.

The naira’s recovery in the forwards market may be deceptive, says a Bloomberg report. The currency is destined to weaken, however long policymakers hold out. The report says that in the first week of January, six-month contracts declined to their lowest level since last September as crude oil advanced about 20% after Opec agreed a production cut in November. It said a drop in forwards would be a sign of growing confidence in a nation’s economy and currency, but not this time. Even as oil prices advanced, Standard Chartered and Duet Asset Management said the nation needed to devalue the naira and loosen capital controls.

The naira’s official rate, controlled by the government, has hovered just above 300 to the dollar since it was devalued in June. But, says a Daily Trust report, that is still 40% stronger than rates on the parallel market, a gap that is discouraging investment from overseas and leaving Nigeria starved of foreign currency. The official and black market naira foreign exchange rates will be ‘unified’ this year, but there is no time frame for when it could happen, said Vice President Yemi Osinbajo. Financial institutions and others have argued that Nigeria must allow its currency to float freely to solve its foreign exchange woes, a measure which has met opposition from President Muhammadu Buhari. Nigeria aims to sell Eurobonds worth $1bn in March, said Osinbajo, rather than February as originally hoped, which could help refill the government’s coffers.
Bloomberg
Bloomberg
Daily Trust 

Bill asks for compulsory registration of foreign employers 
A Bill for compulsory registration of foreign employers in Nigeria by the Ministry of Labour and Productivity has passed second reading in the House of Representatives. Business Day reports that the Bill is intended to amend the Labour Act and to strengthen and review fines and punishments stipulated in the Act. Leading the debate on the Bill, Representative Femi Gbajabiamila (Lagos-APC), said the aim of the bill was to further protect the Nigerian worker from being exploited by foreign employers operating in the country. ‘As it stands, the Labour Act allows registration of employers by the ministry but this Bill seeks to separate foreign from local employers’, he explained. Speaker of the House, Yakubu Dogara, referred the bill to the Committee on Labour, Employment and Productivity for further action.
Business Day 

SEC and CBN issue transaction settlement guidelines
Committed to facilitating the development of efficient systems for the settlement of transactions, the Securities and Exchange Commission (SEC), in collaboration with the Central Bank of Nigeria (CBN), has issued guidelines for the settlement of all types of securities in Nigeria. The Guardian, Nigeria reports that the guidelines are expected to promote competitive, efficient, safe and sound post trading arrangements in Nigeria. This will ultimately lead to greater confidence in securities markets, boost investors’ protection and limit systemic risk. In addition, it would also improve the efficiency of the market infrastructure, which should in turn, promote and sustain the integration and competitiveness of the Nigerian securities markets.
The Guardian, Nigeria

CBN joins SEC in advising against virtual currency use
The Central Bank of Nigeria, CBN, has advised against the use of virtual currencies, including bitcoin, ripples, litecoin. The Nigerian Bulletin reports that this was after an earlier warning from the Securities and Exchange Commission. The warnings came on the heels of announcement by Mavrodi Mondial Movement (MMM) that its operations will now be via digital currency. Other ponzi schemes are asking their subscribers to start investing with digital currency. CBN said virtual currencies are largely used in terrorism financing and money laundering, considering the anonymity of virtual transactions. ‘The CBN reiterates that VCs such as bitcoin, ripples, monero, litecoin, dogecion, onecoin, etc, and similar products are not legal tenders in Nigeria. Thus, any bank or institution that transacts in such businesses does so at its own risk.’
Nigerian Bulletin

Pipeline fires continue to impact on oil output
Royal Dutch Shell has shut the Trans Niger oil pipeline after a fire, threatening to worsen a drop in Nigerian output due to unplanned disruptions. The line, which can transport about 180 000 barrels a day to the Bonny Export Terminal in the Niger Delta, was halted due to a blaze at Kpor in Ogoniland, Precious Okolobo, a company spokesman in Lagos, is quoted in Business Report as saying. Shell declined to comment on the impact on production. Nigeria’s daily output dropped by 200,000 barrels to 1.45m in December, ending three months of gains as the African nation struggled to restore capacity after a year of militant attacks on oil infrastructure. Production fell to 1.39m barrels in August, the lowest level since 1988, according to data compiled by Bloomberg.

Fires at oil pipelines in OML (oil mining lease) 30 and 34 in Nigeria’s Delta region have been extinguished. Reuters Africa reports that, according to Lucky Sorue, chair of the Urhobo committee on oil and gas: ‘The fire has been put out and soldiers are there now.’ The fires were set after Nigerian Vice President Yemi Osinbajo visited the Delta for talks with militants whose attacks have crippled crude production in the region.
Business Report 
Reuters Africa 

Rail link plan revived
Nigeria’s plan to build a railway to supply iron-ore to its idle Ajaokuta steel plant could be the biggest sign yet that President Muhammadu Buhari is implementing his policy to diversify away from oil. Mining Weekly reports that the project began in 1979 with what the World Bank in 2002 called obsolete Soviet technology, and has never been finished. Authorities want to revive it as part of Buhari’s efforts to lessen the economy’s dependence on crude. Ajaokuta cost more than $4.5bn from 1979 to 1993, according to the World Bank. The 275km railroad will link the plant to an iron-ore mine in the central Kogi state, the port city of Warri to the south and Kaduna state in the north before 2019, Transport Ministry Permanent Secretary Sabiu Zakari is quoted in the report as saying.
Mining Weekly 

Forex scarcity and fuel shortage impacts on aviation industry 
Year 2016 will go down as one of the most difficult for air passengers and operators in the industry. The Guardian, Nigeria reports that the twin problem of aviation fuel shortage and scarcity of foreign exchange (forex) persisted all year round. The report says that although the foreign airlines were not untroubled by the perennial fuel scarcity, their inability to repatriate funds back to their home countries posed more serious challenge to the airlines that were already hit by low patronage. Since the current administration restricted access to forex in 2015, the airlines have been unable to repatriate funds from ticket sales. Spanish national carrier, Iberia, and its US counterpart, United Airlines, suspended operations indefinitely. Several other airlines scaled down operations; either introducing smaller aircraft like British Airways or reducing their frequencies and routes – Emirates, Delta, and Turkish Airlines and others.
The Guardian, Nigeria

2016 a challenging year for maritime operators
While only a few days into 2017, maritime operators including seaport operators, clearing agents and all stakeholders are unanimous in their assessment that 2016 was most challenging, reports The Guardian, Nigeria. They attributed these challenges to the Federal Government’s unfavourable policies, a development that saw the seaports, which used to contribute a large chunk of Nigeria’s non-oil revenue becoming less active. Recent statistics from Nigerian Ports Authority showed that container traffic inward Nigerian ports (import) dropped to 6,831,348 tonnage as at September 2016, from 9,419,672 in 2015. And the outward container (export) also dropped from 2,263,594 tonnage in 2015 to 1,485,338 in September 2016. Also, the number of vessels dropped to 11-year lows, at 3,347 against 5,014 in 2015 and 5,333 in 2014. The report says that the importation of raw materials has dropped significantly, which the importers attributed to the lack of access to foreign exchange and low patronage. Spokesperson for the Seaport Terminal Operators Association of Nigeria, Bolaji Akinola, is quoted as saying that government needs to reduce tariffs to boost activity.
The Guardian, Nigeria

Lagos property sector reflecting overall gloom
With inert cranes, deserted construction sites and empty buildings, Lagos is suffering a hangover from a construction binge as Nigeria wrestles to overcome a recession. Fin24 reports that falling global oil prices and repeated attacks on crude infrastructure in Nigeria’s south severely hit the country’s economy in 2016, hammering the naira against the dollar. ‘Perhaps the greatest constraint for businesses operating in Nigeria at the moment has been the inability to access foreign currency, notably for the importation of goods, and repatriation of profits,’ said Roddy Barclay, an analyst at the Africa Practice research firm, in a November report. ‘Companies have reduced their activities and many expatriates have left,’ said Ade Kunle, a real estate agent. The report says it is unclear when they – and the construction projects – will come back. ‘The Nigerian banking sector will remain under pressure in 2017 and as a result, will look to limit higher-risk lending, such as that to construction projects’, said Richard Marshall, an analyst at BMI Research, a market research firm. It was unlikely the economy would whet the ‘appetite’ of foreign investors over the next two years, he said.
Fin24

Entertainment industry well placed for job creation
Nigeria’s entertainment industry can serve as a platform for creating jobs for Nigerian youths. Business Day reports that this is according to movie producer Bolanle Austine-Peters, who said that that the multi-billion naira industry was capable of generating huge revenue for the nation as well. Austine-Peters, the founder of Terra Kulture, a cultural firm, said that the industry is the third largest employer of labour around the world, and it has contributed meaningfully to the development of the nation. ‘The industry is full of creativities and potential that is capable of developing a country. The industry has removed millions of youths off the streets and also contributed meaningfully to the nation’s Gross Domestic Product (GDP),’ she said. The report says she also commended Nollywood for projecting the country’s fashion and movie industry positively around the world. ‘Africa fashion, style and movie industry is trending and it is gaining world recognition.’
Business Day 

Chinese nationals arrested for the importing of fake cell phones
Standards Organisation of Nigeria (SON), working with the law enforcement agencies, recently arrested two Chinese nationals over increasing complaints about fake and substandard phones imported into Nigeria. The Guardian, Nigeria reports that according to Osita Aboloma, director general of SON, the Agency has continued to receive numerous complaints about KZG phones from unsuspecting consumers in the country. Aboloma said ‘We have information on the activities of these Chinese people who are operating this KZG mobile here in Ikeja Lagos that people are complaining about the quality of their products and SON has to ensure that the quality of products sold in Nigeria is in compliance with the Nigeria industrial standards.’ The report says the Association of Telecommunications Operators of Nigeria (ATCON), discovered that a number of them are fake, substandard or type unapproved. ATCON called for urgent measures to curb the increasing rate of dumping fake mobile phones in the country.
The Guardian, Nigeria 

Taiwan asked to move trade mission from capital 
Nigeria has ordered Taiwan to move its trade mission from the capital, Abuja, to the commercial hub, Lagos. Business Day reports that this follows a visit by the Chinese foreign minister during which his government pledged to invest $40bn in infrastructure projects in the country. Nigerian Foreign Affairs Minister Geoffrey Onyeama said Taiwan would stop enjoying privileges because it was not a country recognised under international law. The report says the foreign ministry of Taiwan strongly condemned ‘the unreasonable, rude and outrageous act of political hype carried out by the Nigerian government in complying with mainland China’s political goals’. But the report quotes a Chinese foreign ministry spokesperson as saying: ‘Nigeria has made a correct political judgement. The country had ‘promised not to have any official dealings with Taiwan.’

Nigeria’s request reiterated its support for Beijing’s ‘One China’ policy, which demands that countries break official relations with Taiwan, as Beijing pulls economic levers in Africa and elsewhere to woo nations away from the island it regards as rebel-held territory within Chinese borders, says a Business Insider report. Since the US presidential election, President-elect Donald Trump has heightened tensions between the US and China by suggesting that his administration could reconsider nearly four decades of American support for ‘One China’ – a provocation that some analysts say has spurred China’s recent actions.
Business Day 
Business Insider 

IN COURT

Fake lawyer arrested 
A man who never had legal training has been arrested for certificate and identity theft, following a petition written to the police on behalf of the Ilorin branch of the Nigerian Bar Association by its legal adviser, Oyetunji Ojuokaiye. Ghana Web reports that apart from appearing in local courts, as investigation revealed that Peter Adogun had also appeared in a number of cases in the Supreme Court. ‘It was discovered that the accused had falsely taken the credentials of one Inufin David Taiwo, an Abuja-based lawyer, under the guise of helping him to secure job in an oil company, only to come to Ilorin and start practising as a lawyer with the photocopies,’ the investigation said.
Ghana Web 

London court to decide on jurisdiction argument
A court in London will decide in coming weeks whether Royal Dutch Shell can face trial in the UK over oil spill allegations in Nigeria, a decision some legal experts predict could attract more cases against multinationals in Britain. Reuters Africa reports that the High Court will judge whether members from two communities, Bille and Ogale in Nigeria’s oil-rich Delta region, can sue the Anglo-Dutch company in British courts. The communities say Nigerian courts are unfit to hear the case against Shell subsidiary Shell Petroleum Development Company of Nigeria. Shell says the case should be heard in Nigeria because the matter is ‘uniquely a Nigerian problem’.
Reuters Africa

Ex-president denies oil corruption claims 
Nigeria’s former president Goodluck Jonathan has denied allegations that he and his oil minister received kickbacks as part of a $1.3bn deal with Italian oil company ENI and Royal Dutch Shell. The two oil giants made the $1.3bn payment to purchase the OPL 245 block, an offshore oil block in Niger Delta region, in 2011. The deal is currently under investigation in Italy, where prosecutors alleged the two oil giants illegally bought the block, breaching domestic laws, ‘without competitive tendering’ and with ‘full, unconditional exemption from all national taxes’, says an International Business Times report. In December 2016, prosecutors presented documents in a court in Milan against the two oil companies as well as 11 other people. Jonathan has denied the allegations. A statement published on his official Facebook page stated that the claims were not based on factual evidence.
International Business Times 

High Court in Lagos to hear suit over alleged crude oil theft 
A Federal High Court in Lagos will start sitting in a suit filed by the Federal Government against Shell Western Supply and Trading Limited over alleged crude oil theft on 20 March. The Nation reports that Shell Petroleum Development Company of Nigeria Ltd and its subsidiary, Shell Western Supply and Trading Ltd are defendants in the suit filed before Justice Mojisola Olatoregun. The government is claiming $406.7m from the oil company, which represents a shortfall of money paid by the company into the government’s account with the Central Bank of Nigeria for crude shipped in 2013/2014. The government accused the Anglo-Dutch company of not declaring or under-declaring crude oil shipments during the period, which was discovered following forensic analysis of bills of lading and other shipping documents.
The Nation