HAPPY Eid-El Maulud

CBN to unveil N30bn agric/SME fund in January

The Central Bank of Nigeria has said it will, together with the Deposit Money Banks, set up a new fund to boost agriculture and the Small and Medium-sized Enterprises in the country, targeting at least N30bn for the first year.

The Governor, CBN, Mr. Godwin Emefiele, disclosed this on Saturday at a press briefing after the eighth Bankers’ Committee annual retreat in Lagos.

He said the Agriculture/SME Fund would be unveiled on January 1, 2017, but the money would not be available until around March or April after the DMBs’ audited accounts would have been presented to the public.

Emefiele, who is also the Chairman of the Bankers’ Committee, said the committee would continue to promote an efficient and stable economy to deliver price stability, financial system stability, financial inclusion and economic growth.

According to him, the committee has defined goals for 2017 to include supporting government’s efforts to develop adequate infrastructure to engender viable and productive SMEs, and increasing access and cost of funding, particularly to the agriculture and manufacturing SMEs.

He said, “We will identify opportunities to provide funding and necessary support for agriculture and manufacturing SMEs, including structures and systems to improve the ease of regulatory compliance.

“The central bank will, together with the banking sector, establish an agriculture/SME fund from contributions of a portion of profit after taxes of Deposit Money Banks as a deliberate strategy to support the funding and access to finance by the SMEs and primary agriculture.”

The governor said the modality for the fund, which will operate as an equity fund, would be worked out by the Bankers’ Committee and communicated in due course.

He said the committee would continue to focus on capacity building and expansion as well as deepening awareness of available information infrastructure.

The communiqué issued at the end of the retreat, “Efforts will include providing industry-focused SME financial skills curriculum to develop financial and business capacity; promoting the need for capacity building; promoting the use of payment systems; providing shared structures for basic financial records; and providing the use of new and existing financial infrastructures for access to credit.

“Over the next few days, the Bankers’ Committee will finalise the strategy, governance framework action plan and assign responsibilities for implementation of the committee’s programme for 2017 that will achieve the desired results and outcomes.” - Punch

Oil prices soar to $58 on global output cut deal

Oil prices shot up over four per cent to their highest level since 2015 early on Monday after OPEC and other producers over the weekend in Vienna reached first output cut deal since 2001 .

They jointly reduced output in order to rein in oversupply and prop up the market.

Brent sweet crude futures, the international benchmark for oil prices, soared to 57.89 dollars per barrel in overnight trading between Sunday and Monday, its highest level since July 2015.

U.S. West Texas Intermediate crude futures also hit a July 2015 high of 54.51 dollars a barrel.

With the deal finally signed after a year,the market’s focus will now switch to compliance with the agreement.

ANZ bank said that Saudi Aramco, Saudi Arabia’s state-controlled oil company, had informed customers that their allocations would be reduced in January 2017, in line with the recent OPEC production cut agreement.”

OPEC has said it will slash output by 1.2 million barrels per day from Jan. 1, with top exporter Saudi Arabia cutting around 486,000 bpd in a bid to end overproduction .

Oversupply has dogged markets for over two years and pushed the economies of many oil exporting countries into crisis.

On Saturday, producers from outside the 13- country OPEC group agreed to reduce output by 558,000 bpd, short of the initial target of 600,000 bpd .

Eid-El Maulud: FG Declares Monday Public Holiday

The federal government yesterday declared next public holiday to mark the Eid-El-Maulud celebration.

This was contained in a statement signed by the acting Permanent Secretary of the Ministry of Interior, Mr. Muhamadu Maccido, on behalf of the Minister, Lt. Gen. Abdulrahman Dambazzau (rtd), in Abuja.

The minister enjoined all Muslim faithful and Ni
gerians in general to cooperate and join hands with President Muhammadu Buhari, as he works tirelessly to build a strong, united and peaceful nation.

Dambazau, also urged Nigerians to use the occasion to pray for peace across the nation, while calling on all to be patient and supportive of the present administration for the successful implementation of its programmes.

India Seeks to Import 11m Metric Tonnes of Nigerian Crude in 2017

Barely one month after the Minister of State for Petroleum, Dr. Ibe Kachikwu, negotiated a $15 billion crude-for-cash swap deal with India that would see the Indian government making an upfront payment to Nigeria for crude purchases, Indian refiners have indicated interest in increasing Nigerian crude imports from nine million metric tonnes in 2016 (MMTPA) to 11 million metric tonnes in 2017.

By the terms of the deal, which are yet to be agreed, the $15 billion would be repaid on the basis of firm term crude contracts over some years and in consideration for Indian public sector (PSU) companies collaborating in the refining sector.

Other methods of repayment include: exploration and production activities on a government-to-government basis by Indian PSU companies, and long-term contracts for the supply of crude to Indian PSU companies from Nigeria.

Successful bidders for Nigeria’s crude oil term lifting contracts for 2017 will emerge by the middle of this month.

Indian refiners such as Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) currently have crude oil lifting contracts for 2016 with the Nigerian National Petroleum Corporation (NNPC).

However, NNPC’s Group Executive Director, Refineries, Anibor Kragha, told S&P Global Platts in an interview on the sidelines of the Petrotech conference in New Delhi on Monday that the Indian state-run refiners were pushing for an increase in crude oil allocations from Nigeria.

“Three Indian companies said that they were looking for a combined total of 11 million metric tonnes in 2017 from nine million mt this year,” Kragha said.

About seven barrels of crude make one metric ton.

“Now what they will get is a balance between term contracts and (spot) sales contracts,” he added.

“We just came out of a meeting with key Indian oil companies and they are pushing to get incremental allocations for the term contracts. We explained to them that there needs to be a balance.

“Once Nigerian output recovers, it will increasingly look towards India as the major buyer of its crude. Indian demand is very positive for us. A vibrant Indian economy is good for us,” Kragha explained.

Under the crude term contracts, Nigeria exports around 1.17 million bpd of Nigerian crude, out of the 2.2 million bpd production that is sold by contract holders to end-users, refiners and other buyers.

The country’s production dropped in recent months to a 20-year low as a result of renewed militancy in the Niger Delta.

However, Kachikwu also told journalists on the sidelines of the New Delhi conference that the total production was around 1.9 million bpd, including 300,000 bpd of condensates.

Kragha said negotiations were ongoing and that if the deal is successful and Nigerian output recovers, the country would “increasingly look towards India” as the major buyer of its crude.

“Indian demand is very positive for us. A vibrant Indian economy is good for us,” he added.

In 2015-16, India imported nearly 23.7 million metric tonnes of crude (nearly 12 per cent of India’s overall imports) and over 2MMTPA of LNG from Nigeria.

Following the $15 billion negotiation, the two countries agreed to work on a Memorandum of Understanding (MoU) to facilitate investments by India in the Nigerian oil and gas sector; specifically in areas such as the term contracts, participation of Indian companies in the refining sector, oil and gas marketing, upstream ventures, the development of gas infrastructure, and in the training of oil and gas personnel in Nigeria.

The MoU is expected to be firmed up this month during PETROTECH-2016.

According to a source from an Indian refiner, “Nigerian crude is a must have for most of our refineries, especially the older ones, which have been designed to run light sweet crude.

“Despite all the militancy issues, we still buy Nigerian crude, as our refineries need it. We will continue to buy Nigerian crude, but we want them to supply us with more,” he said.

India, which is one of the world’s fastest growing economies, has seen its gasoline and gasoil demand climb sharply over the past few years.

This has encouraged Indian refineries to buy more Nigerian crude. - The Guardian

Emefiele: Digital Financial Services Can Create Three Million Jobs by 2025

The Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele has said that increased adoption of Digital Financial Services (DFS) in Nigeria has the potential to create three million new jobs in Nigeria by 2025.

Also, for financial services providers, Emefiele said DFS has been estimated to reduce the cost of providing financial services by 80 to 90 per cent compared to the cost of a traditional bank branch.

Emefiele gave the advice in a keynote address he delivered at the 2016 BusinessDay Financial Inclusion Summit in Lagos yesterday. He also advised ministries, departments and agencies of governments as well as firms in the country to further digitise current cash payments.

He noted that the economy is presently going through a time of economic challenges, saying that Digital Financial Services have substantial potential to promote financial inclusion, increase productivity and support economic growth in our country.

Therefore, he urged all stakeholders to step up initiatives to successfully advance the movement in order to achieve the financial inclusion target by 2020 and boost economic growth in Nigeria.

“Digital financial services refer to financial services, such as payments, savings, loan or insurance products, which are provided through electronic platforms, such as mobile phones, the Internet, or electronic cards. Digital financial services can promote financial inclusion, because they are capable of dismantling the existing barriers to financial inclusion.

“One key barrier to financial inclusion, as defined in Nigeria’s National Financial Inclusion Strategy, is the remoteness of access to financial services. Several people do not use financial products because they live too far away from a physical financial access point such as bank branch, an insurance agent or ATM.

“Digital financial services transcend such physical barriers as they can be availed through virtual channels such as mobile phones, which today are ubiquitous. We have noted commendable innovations in the industry today, thereby financial institutions have begun to leverage the mobile platform to open accounts and conduct transactions, enabling existing clients and previously excluded population to access financial services in a more convenient manner.

“Digital financial services can also reduce other barriers to financial inclusion, such as high cost of transaction or transportation costs while also saving valuable travel time,” the CBN governor said.

Furthermore, Emefiele said DFS can also bring about substantial benefits for financial services providers, and can boost the country’s GDP significantly and more sustainably.

For instance, a McKinsey study postulated that digital financial services can increase Nigeria’s GDP by 12 percent or US$88 billion by the year 2025. - The Guardian

FG advises Nigerians to brace for telecom data price increase

Adebayo Shittu, communications Minister has asked Nigerians to brace for a price rise while making a case for telecom service providers, which according to the minister were operating under unfriendly business environment including lack of electricity and increasing security challenges.

But the Nigeria Communications Commission (NCC) said it intervened with an interim price floor for data services to avert a looming price war in the telecommunications sector.

The regulatory commission said it feared that the price war could eventually lead to a monopoly in the telecom industry that would force small operators to shut down.

It said that monopoly in the telecom sector could also push the country back to the days of NITEL – the troubled government-owned telco – to the detriment of small operators.

Prof. Umar Dambatta, NCC executive vice chairman stated this when he appeared before the Senate Committee on Communications.’

The committee was mandated to investigate the proposed data tariff hike said to have been ordered by the NCC.

But the minister, said the reality was that telecom service providers are operating in an unfriendly business environment, including lack of electricity and increasing security challenges.

He said: “This is one area that I believe that we all must face the reality… If you look at the NCC law, it is positioned to reflect experiences, expertise and all of that and I want to believe that there must not be too many interventions in the activities of the NCC.

“I am a political office holder. I am not an expert, so I cannot venture to say whether they did wrong or right, except they say that the constitution has granted them the role of a supervisor of a direct regulatory authorities, particularly relating to the activities in the telecoms industry.

“The only area I feel they were deficient was in the area of communicating with the people of this country, particularly because of the sensitivity that has been imposed on Nigerians by the harsh economic situation.

“I know that if you want to make omelet you must break eggs. Unfortunately in this country, we fail to appreciate the transformation role that ICT has brought about in the lives of Nigerians.

“So, I am not supporting at this stage or not supporting the price increase with regards to the floor. But what I am saying is, these are technical issues whose decision must be taken having regard to all the factors that are important before a decision can be taken.- The Guardian