Demand for solutions to economic woes
Hundreds of Nigerians have recently taken to the streets in Lagos to protest against the government’s handling of the country’s economic crisis and to demand solutions to the crippling recession. Business Day reports that the protest came as the government said President Muhammadu Buhari would remain in the UK to complete medical tests. His spokesperson tried to reassure the public that there would be no disruption to government operations. Buhari, 74, was scheduled to return to Nigeria, after leaving on 19 January to undergo unspecified medical tests. Vice-President Yemi Osinbajo is serving as acting president. The report says the initiator of the protest, Afro-pop star 2Face, announced he had pulled out of the rally because of security concerns. But his call to action – a rare event from a celebrity in Nigeria – had received widespread popular support and several civil society organisations vowed to carry on with the protest. The vice-president said the government was ‘determined to give the ordinary man a fair deal’. The government heard Nigerians ‘loud and clear’ when they said things were difficult, Osinbajo is quoted as saying. ‘But years of deterioration and corruption cannot be remedied overnight.’

Nigeria’s economy is projected to have contracted 1.54% in 2016, according to a budget ministry document, with Africa’s most populous country mired in its first recession in a quarter of a century. Nigeria is heavily dependent on crude oil exports to fuel its economy, but Business Report reports that low global prices and militant attacks on the south-eastern Delta oil hub have hammered those exports and slashed government revenues. ‘The Nigerian economy, in response to both external and internal economic pressures, inevitably contracted and is currently in recession with a projected growth of -1.54percent for 2016,’ the document said. The budget ministry draft said the recession was also caused by growth dependent on consumption rather than investment and ‘huge leaks in government resources through corruption and inefficient spending’. The report says the International Monetary Fund has predicted that Nigeria’s economy would shrink 1.8% in 2016. Final official figures are due to be released by Nigeria on 28 February.

With discontent mounting and Nigeria seeking to raise international debt, lenders and investors are waiting for President Muhammadu Buhari to announce a plan that could determine whether he keeps his promises to boost the economy and create millions of jobs, reports Fin24. Buhari’s economic blueprint for the next four years, due to be released this month, will aim to lift West Africa’s biggest economy from its worst slump in more than two decades and boost the annual economic growth rate to at least 7% by 2020, Budget and Planning Minister Udo Udoma said. The recovery and growth plan for 2017 to 2020 comes after Buhari forced the central bank to maintain a currency peg for more than a year, curbing foreign investment, while the importers of certain raw materials and equipment are still banned from accessing dollars, denting manufacturing output. Ensuring macroeconomic stability, foreign-exchange availability and food and energy security are immediate priorities for the government, Udoma said.

The good news is that the recently issued Eurobond has been over-subscribed – in excess of $7.8bn compared to a pre-issuance target of $1bn, which, the government said, showed strong market appetite for Nigeria. According to a Nigeria Bulletin report it also said the development is confirming confidence of the international investment community in Nigeria’s economic reform agenda. The government said after two consecutive quarters of negative growth, the non-oil sector of the economy witnessed a modest return to positive territory, at 0.03% in third quarter of 2016. It attributed the marginal growth to the continued good performance of agriculture and the solid minerals, two sectors prioritised by the federal government.
Business Day 
Business Report 
Fin24
Nigeria Bulletin 

CBN urged to try to close foreign exchange gap
Nigerian lawmakers have adopted an official exchange rate of 305 naira per dollar for the 2017 budget but have asked the central bank to initiate measures to close the 40% spread with the black market, the deputy senate president is quoted in a Reuters Africa report as saying. Members of the upper house of parliament said during a review of the budget that they were worried about the differential, which they described as damaging to the economy and said had led to a loss of investor confidence. The naira’s official rate, controlled by the government, has hovered just above 300 to the dollar since it was devalued in June. But the gap with the parallel market is discouraging investment from overseas and leaving Nigeria starved of foreign currency. By basing its budget on the official exchange rate, even though most individuals and businesses source dollars from the parallel market, the government is at risk of struggling to fund its economic plans. ‘The sustained and widening gap between the official exchange rate and the parallel market has created several loopholes in the system,’ said the senate document, the recommendations of which were passed.
Reuters Africa 

Revenue lost as crude output cut to record lows
Nigeria said it lost out on as much as $100bn in revenue last year as attacks by militants in the oil-rich Niger Delta cut crude output to a record low. Bloomberg quotes Emmanuel Kachikwu, minister of state for petroleum, as saying that production fell by 1m barrels a day to 1.2m a day at the peak of the attacks. Last year, Nigeria suffered its first full-year recession since 1991 as a resurgence of armed conflict in the delta, combined with lower oil prices, blighted the economy. While recent peace efforts have curbed the frequency of attacks on oil infrastructure, the West African nation has struggled to boost output as one of its largest export terminals remains closed. ‘We continue to engage,’ Kachikwu said, referring to peace talks between the government and local leaders from the delta. ‘It is a difficult undertaking to try to embark on trying to resolve it once and for all, but we’re very bullish about this.’

While that is bad news for a country mired in its worst economic slump in 25 years, it is making life easier for fellow Organisation of Petroleum Exporting Countries (Opec) members, says a Business Day report. While peace efforts have curbed the frequency of attacks in the oil-rich Niger River delta, the Forcados export terminal, the country’s third largest, remains closed and shipments are down at many others. If these disruptions persist they could have an unintended consequence: helping Opec boost oil prices. ‘Bringing the Forcados loading terminal back into action is key for Nigeria’s exports,’ said Charles Swabey, an oil and gas analyst at BMI Research. If the government followed through on the peace process, then Nigeria could become ‘a drag’ on Opec’s push to rebalance the market, Swabey said, ‘and will likely slow the process down’.
Bloomberg
Business Day 

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 

Power sector to be boosted by $1bn investment 
A US initiative to light up Africa, ‘Power Africa,’ says it’s planning to invest about $1bn on the power sector in Nigeria, according to a Nigeria Bulletin report. The programme’s coordinator Andrew Herscowitz said that the initiative that was aimed at strengthening Nigeria’s power sector had already received billions of dollars in US funding. The programme launched by previous US president Barack Obama is aimed at adding more than 30,000 megawatts of efficient energy development in sub-Saharan Africa. Herscowitz said the project would also targeting the substantial wind, solar, hydro power, natural gas, biomass, and geothermal resources on the continent. He said: ‘Since Power Africa was launched, the US Trade Development Agency has committed approximately $6.5m in funding for 10 activities supporting Nigeria’s energy sector, which could leverage up to $2.7bn in investment.’ ‘It has advanced $50m in financing from the Oversea Private Investment Corporation (OPIC) to Lumos, a Nigeria-based solar energy company, to scale up it’s off grid solar power service to about 200,000 Nigerian homes and businesses.
Nigerian Bulletin

Nigeria included in Total’s potential new production scenario
French oil major Total SA will make final decision on 10 oil and gas production projects in the next 18 months in countries including Nigeria, Angola, Azerbaijan and Argentina. The company said in its fourth quarter and full-year 2016 results that it plans to boost oil and gas production by 5% a year from 2014 to 2020. A Daily Trust report says that although there was no mention of the specific Nigerian projects, Total has bet on a string of projects such as Egina in Nigeria, Kaombo in Angola and Moho in the Republic of Congo to help it boost production to a target of 2.8m barrels of oil equivalent per day in 2017. The Egina project in Nigeria, which is the largest offshore project currently going will have a production capacity of 200,000 barrels of oil per day (b/d) and should at the end of 2017 reinforce Nigeria’s deepwater production potential. The report says Total’s exploration arm in Nigeria with joint venture partners in the OPL 223 is working on future development plans on the Owowo field.
Daily Trust 

Shell to improve production and reduce costs
Shell Petroleum Development Company of Nigeria Ltd says it plans to continue to reduce operation costs and improve production in Nigeria. The Guardian, Nigeria quotes Shell’s vice president, Nigeria and Gabon, Peter Costello as expressing confidence that the company can address the challenges in its operating environment and continue to deliver real value to all stakeholders. He said: ‘I know a lot of work has gone into driving costs down and improving our production availability and this must continue. We must understand the criticality of being competitive – we have to generate positive cash flow. No business can keep making a loss and still remain in business. If at the end of my time here, it can be said that we ran a safer, more competitive and better business than our competition, I will be a happy man.’ He said he believed the present challenges in the Nigeria’s oil and gas industry are not insurmountable.
The Guardian, Nigeria

Airport employees could strike over Abuja airport closure 
Nigerian airport employees may walk out over pay issues at the capital’s temporary airport while the main airport’s runway is being repaired, their trade union is quoted in a Reuters Africa report as saying. Nigeria’s government has said airlines will be able to use the airport at the provincial city of Kaduna, 160km north of Abuja during the six-week repair period from 8 March. ‘The federal government has to pay staff posted from Abuja to Kaduna all their entitlements before we can contemplate moving to Kaduna to give our services,’ said Olayinka Abioye, secretary general of the National Union of Air Transport Employees. ‘There have been situations in the past when such staff were owed their travel and other associated entitlements for two to three years. We do not want a repeat.’ The report says Abuja-bound passengers will have to temporarily fly to Kaduna and travel by bus under security escort to the capital on a road where kidnappings have taken place in the past few years. Kaduna airport handled just 12 international flights in December 2015, the last month for which Nigeria’s airports authority has figures, compared with 812 that used Abuja.

South African Airways and British Airways have, meanwhile, informed the Nigerian government of their final decision not to use the Kaduna airport as an alternative when the Nnamdi Azikiwe International Airport, Abuja will be closed for repair works. According to a Nigerian Bulletin report, they cited safety and security of passengers, lack of catering services as well as ‘adequate’ technology as their reason for not using the Kaduna airport.
Reuters Africa 
Nigerian Bulletin

Beleaguered Arik Air suspends flights to New York, London and SA
The Asset Management Corporation of Nigeria (AMCOM) has assumed control of beleaguered airline Arik Air saying that it requires at least $31.7m for it to resume full and uninterrupted operations, says a CH.Aviation report. The state-owned firm’s head of the corporate communications, Jude Nwauzor, said that the ‘mess’ was actually greater than anticipated. ‘It appears that unlike previously recorded, Arik has debts in excess of $951m with some banks, excluding fuel suppliers, lessors and maintenance companies.’ He said that all creditors’ claims will be addressed in due course. AMCOM says the insurance cover for Arik’s aircraft has been paid with its aircraft gradually resuming flights. AMCON said, however that the airline’s New York JFK service as well as the carrier’s flights to London’s Heathrow and Johannesburg’s OR Tambo have been suspended in favour of     focusing on the West African market.

The new management of Arik Air has appointed KPMG to undertake a forensic and diagnostic audit of the airline to ascertain the true status of its finances. A Nigerian Bulletin report quotes Simon Tumba of SY&T Communications Ltd, media consultant to AMCON as saying: ‘We have hired KPMG to look into the financial position of Arik with a tooth comb and advise us with verifiable facts on what went wrong with the airline. We need to do that because the outcome will help us plug the loopholes and stabilise the airline.’

AMCON has also taken over Odengene Air-Shuttle Services, known more as OAS Helicopters in Lagos following a court order. It was the third aviation firm to be taken over by the bad bank in four months, says a The Guardian, Nigeria report. OAS is one of the leading helicopter charter service companies in the country.
CH-Aviation report 
Nigerian Bulletin
The Guardian, Nigeria

Former NNPC head under investigation 
A former head of Nigeria’s state-run oil firm, Andrew Yakubu, is under investigation after almost $10m in cash was found at a property he owns, reports Business Day. The Economic and Financial Crimes Commission said it had seized $9.8m from a house belonging to Yakubu. A further £74,000 was found at the property in the northern city of Kaduna. The anticorruption agency’s spokesperson Wilson Uwujaren would not reveal its next steps, only saying that the matter was under investigation. The report says Yakubu has denied any wrongdoing. He admitted the money belonged to him but said it was a gift from friends. Yakubu was the group MD of the Nigerian National Petroleum Corporation from 2012 to 2014. In 2014, Central Bank of Nigeria governor Lamido Sanusi claimed the firm had failed to remit $20bn in revenue.
Business Day 

Big Brother ‘bother’ highlights difficulties in doing business
The Nigerian edition of ‘Big Brother’ has the same mix of narcissism, banality and back-stabbing found in every other version of the show. But, says an Economist report, an extra controversy was added to the fallouts and flirtations when Nigerians learned that their programme, in which contestants are locked in a house and filmed 24/7, was being made in South Africa. On 24 January, the country’s information minister, Lai Mohammed, opened an investigation into ‘the issue of possible deceit’, urging those who had ‘bombarded’ him with complaints to stay calm. The report says MultiChoice, the production company behind ‘Big Brother Naija’, was unapologetic, pointing out that it was easier and more cost-effective to stage the show in its existing house in Johannesburg. During the only previous Nigerian edition a sponsor had removed the fuses from the house’s generators in a dispute over advertising, taking the programme off-air for eight hours, says Remi Ogunpitan, a producer at the time. The report says far from being offended, many Nigerians simply see the bother over ‘Big Brother’ as a wake-up call to their government – and further proof, if any were needed, that their country is a tough place to do business.
Economist 

IN COURT

Community loses bid to have Shell pollution case heard in London
A British court has blocked pollution claims against Anglo-Dutch energy company Shell by more than 40,000 Niger Delta residents demanding action over decades of oil spills. Business Day reports that members of the Ogale and Bille communities had applied for the case to be heard in Britain, arguing they could not get justice in Nigeria. But the High Court in London said it did not have jurisdiction in the case. The firm’s lawyer, Peter Goldsmith, told Judge Peter Fraser during a hearing in November that the cases concerned ‘fundamentally Nigerian issues’, and should not be heard in London. However, Daniel Leader from legal firm Leigh Day, representing the claimants, responded that the spills had ‘blighted the lives of … thousands’. He said they had ‘no choice’ other than to seek legal redress in London. Goldsmith also argued that the case involved Shell’s Nigerian subsidiary SPDC, which runs a joint venture with the Nigerian government. The lawyer claimed that the case was aimed at establishing the high court’s jurisdiction over SPDC, opening the door for further claims. Leigh Day had argued that Shell was ‘ultimately responsible for failing to ensure that its Nigerian subsidiary operates without causing environmental devastation’.
Business Day

Nigerian chief, jailed in the UK for fraud, returns home
One of Nigeria’s most powerful men, who was jailed in Britain for money laundering and fraud in a landmark anti-corruption case, has returned home, reports MSN. Chief James Ibori who was governor of the oil-rich Delta state between 1999 and 2007, was jailed in April 2012 for fraud amounting to nearly $78.5m following a drawn-out extradition procedure and his evasion of arrest and prosecution in Nigeria. Ibori has vowed to appeal the conviction, claiming that at least one police officer involved in the investigation against him had been compromised by taking bribes. London’s Metropolitan Police has said it has investigated the claim but no charges were brought. Transparency International on Friday called Ibori’s intent to appeal ‘an affront to justice’. ‘Attempts to mask his own corrupt dealings by highlighting corruption elsewhere must not be allowed to prevail.’ The report says opinions are divided in Nigeria itself about whether Ibori should face a fresh trial on his return given the strong anti-corruption stance of President Muhammadu Buhari.
MSN

WEST AFRICA

International investment company buys into Ghanaian bank
Newly formed investment company, Arise has recently acquired a 27.7% stake in CAL Bank in Ghana from DPI, an Africa-focused private equity firm with assets under management in excess of $1bn. Fin24 reports that Arise, a collaborative partnership between international companies, Norfund, FMO and Rabobank, take and manage minority stakes in sub-Saharan African Financial Service Providers (FSPs) with the core aim of building strong and stable institutions that serve retail, small and medium enterprises (SMEs), the rural sector, and clients who have not previously had access to financial services. Arise CEO Deepak Malik is quoted in the report as saying: ‘We are excited to partner with CAL Bank, the third largest bank in Ghana based on loans advanced and a listed company on the Ghana Stock Exchange. The institution has a strong track record of delivering high growth and solid performance and with the support of Arise is well-positioned to deliver future growth in Ghana, one of Africa’s core emerging economies.’
Fin24