Category Archives: Business Updates

Just in: India opens railway network to private investments

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India has opened up its vast railway sector to private companies, allowing firms to operate trains on certain routes, in a bid to boost its stuttering, virus-hit economy.

The 167-year-old train network carries 20 million passengers daily but is plagued by deadly accidents, rickety infrastructure, lack of modern amenities and poor investment.

In an announcement late Wednesday, the railway ministry said it would now permit businesses to run trains along 109 routes, inviting bids from firms weeks after New Delhi opened up coal mining to the private sector.

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“This is the first initiative of private investment for running passenger trains over Indian Railways network,” the ministry said in a statement.

“The objective of this initiative is to introduce modern technology rolling stock with reduced maintenance, reduced transit time, boost job creation, provide enhanced safety, provide world class travel experience to passengers,” it added.

The project will require an investment of $4 billion and private players will have to pay the government fixed haul charges and a percentage of profits determined during the bidding process.

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Prime Minister Narendra Modi has sought to privatise a range of industries that have been under state control for decades, sparking criticism from the opposition Congress party.

“Now the government is in a desperate mood to sell a great chunk of one of our largest national asset #IndianRailways,” Congress politician Adhir Ranjan Chowdhury tweeted.

“Privatization cannot be construed as a panacea of railways malady”, he added.

The tottering network is notorious for accidents, with 15,000 passengers killed every year according to a 2012 government report that described the deaths as a “massacre”.

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Asia’s third-largest economy has been clobbered by the pandemic and a months-long lockdown, growing at its slowest pace in at least two decades last quarter.

The shutdown, which put millions out of work overnight, is widely expected to plunge the country into recession.

Fears for the economy prompted the government to allow many businesses to resume operations starting last month despite an ongoing increase in infections, which have now crossed 600,000.

Even before Modi announced the lockdown in late March, the economy was struggling to gain traction with sluggish growth, record unemployment and a flurry of bad loans making banks reluctant to lend.


#Newsworthy…

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PMS: FG increase pump price of petrol to N143.80

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The Federal Government through the Petroleum Products Pricing Regulatory Agency has announced a new price band of N140.80 to N143.80 per litre for Premium Motor Spirit, also known as petrol.

The PPPRA, in a circular dated July 1, 2020 to marketers, said, “After a review of the prevailing market fundamentals in the month of June and considering marketers’ realistic operating costs, as much as practicable, we wish to advise a new PMS pump price band of N140.80-N143.80 per litre for the month of July 2020.

“All marketers are advised to operate within the indicative prices as advised by the PPPRA.”

The agency had on May 31, 2020 announced a price band of N121.50 to N123.50 per litre for the product.

Sources at the Abuja headquarters of the agency said the rise in petrol price for July was primarily due to the increase in global crude oil prices, as PMS had been deregulated.


#Newsworthy…

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News+: Stakeholders urge kogi to meet with benchmark

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Stakeholders at a one-day Consultative Meeting on Public Financing of Agriculture have called on Kogi government to ensure its annual budget for the Agriculture sector met Maputo Declaration benchmark of 10 per cent minimum.

The stakeholders made the call in a communique issued at the end of the meeting, organised by the Public Financing of Agriculture (PFA) Committee of ActionAid Nigeria (AAN) on Wednesday in Lokoja.

The communique was signed by Mathias Okpanachi, chairman of PFA; Hajiya Safiya Yahaya, State Coordinator, SWOFON and Halima Sadiq, Executive Director, PIBCID.

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They observed that budgetary allocation to the Agriculture sector had not met the Maputo Declaration benchmark since its ratification and adoption by Nigeria in 2003.

“There is need for budget developers to ensure that Kogi State Public Sector Agriculture Budget meets the Maputo Declaration benchmark of 10 per cent minimum

“There is also need for the Ministry of Agriculture to adopt innovative revenue generation strategies and block resource leakages in its bureaucratic processes, and as well, improve capacity and attitudes of public service workers on quality service delivery”, they suggested.

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The stakeholders insisted that there must be an agreed participatory public sector policy on agriculture value chain development, while emphasising the need for government to off-take Agriculture produce from farmers.

They also urged increased partnership and collaboration between government and citizens on improving public sector funding for Agriculture, just as they advocated increased transparency and accountability in the sector to engender confidence.

They noted that the top-bottom approach to Public Sector Agriculture budget development was still a major challenge in ensuring participatory development in the sector.

The meeting was attended by representatives of Civil Society, Media, Kogi House of Assembly, Smallholder Women Farmers, Agriculture Financial Institutions, the state Agriculture Development Project (ADP) and Ministry of Agriculture representatives.


#Newsworthy…

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Google admit AirDrop-like feature coming soon

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After months of rumors, Google has finally confirmed that its “Nearby Share” feature is on the way. Some Android users are already testing a beta version.

After months of rumors, Google has finally confirmed that its “Nearby Share” feature is on the way. Some Android users are already testing a beta version.

“We’re currently conducting a beta test of a new Nearby Share feature that we plan to share more information on in the future,” Google told Android Police. “Our goal is to launch the feature with support for Android 6+ devices as well as other platforms.”

The feature started showing up in Chrome OS Canary builds earlier this month, indicating that it will work on Chromebooks as well.

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Nearby Share looks to function as an Android version of Apple’s AirDrop. You can use it to quickly and wirelessly transfer files between proximate Android phones. Android Police, which got a hands-on with the feature, says it works for photos and videos as well as links and tweets.

Per Android Police, you can’t use Nearby Share to send random things to strangers. A user has to have the function set up and made their phone “visible” (done easily via a Quick Settings tile) before they can receive content, and they must manually accept a file they’re receiving before it opens.

Samsung has been working on a similar feature called Quick Share, which allows you to blast files to as many as five friends at a time. (AirDrop is one to one.) The advantage of Nearby Share, though, is that it should work with Android products across manufacturers, while Quick Share is currently only intended for Samsung devices.


#Newsworthy…

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COVID-19: Profitability threat hit Banks in Nigeria

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The profitability of Nigerian Banks in the medium term may be under threat following rising inflation and increased government borrowing that was caused by the COVID-19 pandemic.

Report gathered exclusively by Noble Reporters Media released recently by Fitch Solutions that the banks are expected to grow in the medium term, but the rate of growth would be determined by the effects of inflation and government’s borrowing from the banks.

The report stated that due to COVID-19 pandemic and a weakened oil sector, there would be a deceleration of client loan growth from 14.0 per cent y-o-y in 2019 to 2.5 per cent in 2020, before a small pickup to 4.3 per cent in 2021.

Similarly, the demand for credit would weaken amid reduced economic activity and elevated uncertainty among consumers and businesses while deteriorating asset quality will make banks more cautious in issuing loans.

In the meantime, Fitch Solutions has revised its earlier 2020 growth forecast for Nigerian banks, including their total banking asset growth. The decision to change the earlier forecast was made out of consideration for the economic shortfalls caused by the pandemic.

Recall that Nigeria’s adoption of the IFRS 9 accounting standards for bad loans had considerably helped to improve asset quality in the banking sector. As a matter of fact, the ratio of non-performing loans had declined by as much as 40.7 per cent between Q4 2018 and Q4 2019.

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Unfortunately, the pandemic and the dramatic fall in oil prices earlier this year, all combined to negate the recent recorded success. This is why banks’ asset quality is projected to deteriorate this year, according to Fitch Solutions. This will also make banks become more cautious about lending.

“We continue to expect the changed minimum loan requirement to help drive client loan growth over the medium term. We have revised our growth forecast from the previous quarter and expect client loans to reach NGN14.9trn in 2020 with growth of 2.5 per cent from 2019.

“Due to economic headwinds caused by the coronavirus pandemic, we have revised our forecast for total banking asset growth to 5.3 per cent to NGN44.2trn. Over the medium term, we see average annual asset growth of 12.0 per cent to NGN63.8trn by 2024.

“Nigeria’s ratio of non-performing loans (NPLs) tied to the oil sector declined by 40.7 per cent from Q418 to Q419 as oil exports rose by 16.1 per cent in 2019. In turn, the total NPL ratio fell from 11.7 per cent to 6.0 per cent over this period. However, due to the combined economic impact of the Covid-19 pandemic and lower oil price, we expect asset quality to deteriorate this year, making banks more cautious about lending.”


#Newsworthy…

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AIICO Insurance reveal reason for divesting shares in Pension Managers

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AIICO Insurance Plc on Tuesday said the move to divest its 70 per cent stake in AIICO Pension Managers Limited to FCMB Pensions Limited had nothing to do with its recapitalisation plans.

The company said this in a statement by Mr Segun Olalandu, Head, Strategic Marketing and Communications Department, made available to Media in Lagos.

He quoted Mr Babatunde Fajemirokun, the Managing Director /CEO of AIICO, as saying that the proposal was for two reasons.

“The first is to unlock the value that is greater than holding the asset as a subsidiary now and in the future.

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“The second is to deploy the ensuing capital in other assets where AIICO has a stronger competitive advantage, thereby maximising long-term value for its stakeholders,” Fajemirokun was quoted in the statement.

According to the managing director, the move is not driven by the company’s recapitalisation plans which, on its own, is nearly completed.

The statement reiterated that AIICO was in discussions with FCMB Pensions Limited for the divestment of its 70 per cent stake in AIICO Pension Managers Limited.

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It explained that the proposed transaction was subject to the approval of the National Pension Commission (PenCom) and the Federal Competition and Consumer Protection Commission (FCCPC).

AIICO Insurance is a leading composite insurer in Nigeria with a record of accomplishment of serving its clients for over 50 years.

Founded in 1963, AIICO provides life, health and general insurance, and investment and pension management services as a means to create and protect wealth of individuals, families and corporate customers.

Recall that FCMB Group and AIICO Insurance had on Friday notified the Nigerian Stock Exchange (NSE) and the investing public of discussions for sale of 96 per cent stake of AIICO Pensions Managers to FCMB Pensions.

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This is disclosed in separate statements by FCMB Group and AIICO Insurance posted on the Exchange website.

FCMB Group in a statement signed by Mr Kayode Adewuyi, Chief Financial Officer and Mr Ladi Balogun, its Group Chief Executive Officer, said the proposed acquisition would make AIICO Pensions an indirect subsidiary of FCMB Group.

They said both organisations had entered into discussions with shareholders of AIICO Pension Managers to acquire the 70 per cent stake held by AIICO Insurance and 26 per cent held by some other shareholders in AIICO Pensions.

According to the statement, the proposed transaction is subject to the approvals of the National Pension Commission and the Federal Competition and Consumer Protection Commission.

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“We shall notify the NSE and the investing public once the relevant approvals for the transaction are received,” it said.

In the same vein, AIICO, in a statement signed by the Company Secretary, Mr Donald Kanu, said at the conclusion of the proposed sale, AIICO Pensions shall cease to be a subsidiary of AIICO Insurance Plc.

“The proposed sale is AIICO’s stake of 70 per cent and other shareholders stakes of 26 per cent thus bringing the cumulative sale of 96 per cent stake to be purchased by FCMB Pensions,” Kanu said.

He said that the company would notify NSE once the relevant approvals for the transaction were received.


#Newsworthy ..

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DisCos agree with NASS to halt tariff increase.

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The leadership of the National Assembly on Monday succeeded in persuading the electricity distribution companies (DisCos) to defer the planned tariff hike till the first quarter of 2021.

The Special Adviser to the Senate President on Media and Publicity, Ola Awoniyi, who disclosed this in a statement, said the NASS leadership would meet President Muhammadu Buhari later on the matter.

Many of the electricity distribution companies had announced last week that the implementation of the new tariff regime would begin on July 1.

The Ikeja Electricity had said in a statement issued by its Head of Corporate Communications, Mr. Felix Ofulue, that the new tariffs, which are service reflective, are end-user rates to be paid for electricity based on the level of service.

Monday’s meeting between the NASS leadership and the electricity distribution companies was attended by the Senate president, Ahmad Lawan, Speaker of the House of Representatives, Femi Gbajabiamila and other principal officers of the parliament.

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Also at the meeting were the chief executives of the electricity regulatory agencies and the DisCos.

The statement read: “The National Assembly leaders were emphatic at the meeting that the timing of the planned hike was wrong even though there is the need to introduce cost-reflective tariffs for the power sector to attract the much-needed investment.

“In the course of the meeting, the DisCos too admitted that they were not well prepared for the planned hike in tariffs even though they so much desired the increase.

“The meeting agreed to defer the planned hike till the first quarter of next year while the leadership of the National Assembly promised to meet with President Muhammadu Buhari on the issue.”


#Newsworthy…

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Access Bank set to refund customers charged of Stamp Duty

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After hours of heavy dragging and insults by Nigerians, Access Bank has bowed to pressure and has promised to refund the money they cut from their customers’ account in the name of Stamp Duty Charge.

According to a statement released by the bank, the charges were accumulated after months of not deducting the charges from the customers’ account.

Read below:


#Newsworthy…

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Amazon, Jeff to acquire autonomous start-up

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Amazon announced Friday that it will acquire Zoox, a self-driving startup founded in 2014 that has raised nearly $1 billion in funding and which aims to develop autonomous driving technology, including vehicles, for the purposes of providing a full-stack solution for ride-hailing.

Zoox will continue to exist as a standalone business, according to Amazon’s announcement, with current CEO Aicha Evans continuing in her role, as well as CTO and co-founder Jesse Levinson. Their overall company mission will also remain the same, the release notes. The Financial Time reports that the deal is worth $1.2 billion.

The Wall Street Journal had reported at the end of May that Amazon was looking at Zoox as a potential acquisition target, and that the deal had reached the advanced stages.

Zoox has chosen one of the most expensive possible paths in the autonomous driving industry, seeking to build a fit-for-purpose self-driving passenger vehicle from the ground up, along with the software and AI end to provide its autonomous driving capabilities. Zoox has done some notable cost-cutting in the past year, and it brought in CEO Evans in early 2019 from Intel, likely with an eye toward leveraging her experience to help the company move toward commercialization.

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With a deep-pocketed parent like Amazon, Zoox should gain the runway it needs to keep up with its primary rival — Waymo, which originated as Google’s self-driving car project, and which counts Google owner Alphabet as its corporate owner.

Amazon has been working on its own autonomous vehicle technology projects, including its last-mile delivery robots, which are six-wheeled sidewalk-treading bots designed to carry small packages to customer homes. The company has also invested in autonomous driving startup Aurora, and it has tested self-driving trucks powered by self-driving freight startup Embark.

The Zoox acquisition is specifically aimed at helping the startup “bring their vision of autonomous ride-hailing to reality,” according to Amazon, so this doesn’t look to be immediately focused on Amazon’s logistics operations for package delivery. But Zoox’s ground-up technology, which includes developing zero-emission vehicles built specifically for autonomous use, could easily translate to that side of Amazon’s operations.

Meanwhile, if Zoox really does remain on course for passenger ride-hailing, that could open up a whole new market for Amazon — one which would put it head-to-head with Uber and Lyft once the autonomous driving technology matures.


#Newsworthy...

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KEDCO set to rule out implementation of new electricity tariff

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The Management of Kano Electricity Distribution Company (KEDCO) says it has concluded arrangements for the implementation of the revised electricity tariff from July 1, 2020


Mr. Ibrahim Shawai, Head, Corporate Communications of the company, disclosed this in a statement on Saturday in Kano.

Shawai said the new tariff regime would guarantee quality customer oriented services, improvement in power supply, enhance availability and reliability in its franchise areas.

He said: “The Service Reflective Tariff is based on guaranteed hours of power supply, that will eventually deliver higher hours of quality service delivery, to ensure that customers get maximum satisfaction from KEDCO.

“Similarly, those currently enjoying higher hours of supply are expected to pay more, however, commensurate with the hours of supply.

“With the new initiative, customers would be categorised into five bands based on clusters for effective service delivery.

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He listed the Service Band (A) to include customers expected to enjoy minimum of 20-hours and 24-hours maximum supply; while Service Band (B) targeted customers expected to enjoy minimum of 16-hours and maximum of 20-hours power supply.

Others were Service Band (C, D and E) designed for customers expected to enjoyed power supply between four hours and maximum 16-hours daily consumption, respectively.

“It should be noted that the actual tariff categorisation is not yet approved by the Nigerian Electricity Regulatory Commission (NERC) as these proposals are before NERC and as soon as approvals are given, we will relate the same to our customers.”

Noble Reporters Media reports that KEDCO franchise areas comprise of Kano, Katsina and Jigawa States.


#Newsworthy…

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Ikeja to begin implementation of New Electricity tariff come July 1st

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Ikeja Electric Plc on Friday said it would begin implementation of its revised electricity tariff from July 1.

The electricity distribution company made the announcement in a statement signed by its Head of Corporate Communications, Mr Felix Ofulue.

Ofulue said the Ikeja Electric Plc’s new tariffs, which are service reflective, are end-user rates to be paid for electricity based on the level of service (including availability and reliability) provided to a cluster of customers.

He said: “This is in line with our Performance Improvement Plan (PIP) across the entire network in the coming months and years.

“The different service levels to all categories of electricity consumers will also be accompanied by a change in tariff which has taken into cognisance changes in macroeconomic indices in the country.

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”This will enable all the market players (Generation, Transmission, Distribution, and gas suppliers) in the Nigeria Electricity Supply Industry cover cost of their operations and ensure improved service delivery.”

According to him, the plan is for the sector to gradually make a transition to a full cost-recovery market where the cost of services provided will be fully recovered.

Ofulue said services were also expected to improve within a very short time in customer service delivery, infrastructural upgrade, metering and technological solutions.

He, however, said that this would be based on the level of investments that will be attracted, going forward.

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“For the purpose of customer classification, customers will now be categorised into maximum demand customers (MD) and non-maximum demand (Non-MD) customers, and will no longer be the usual residential, commercial and industrial customer classes.

“All customers have now been clustered into different bands depending on the level of service currently being enjoyed.

”Customers who are in the higher band currently being provided with good electricity supply will be expected to pay the true costs of the services being enjoyed.

“Customers who are within the lower band and are not receiving optimal services will be expected to pay a much lower tariff pending improvements in services and the movement to a higher tariff band reflecting improved service delivery, ” he said.

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Ofulue said that IE remained committed to bridging the metering gap and reducing the incidence of estimated bills.

“In recent times, we have doubled our efforts to realise our objective of metering our unmetered customers within the shortest possible time.

“We also note that complaints resolution by customers have been a concern in the past but this is set to improve as we move forward with this new tariff regime

“Lastly, this tariff implementation is subject to the approval of the regulator but it is necessary for performance improvement expected by customers,” the IE spokesman said.


#Newsworthy…

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Storyline: FAAN raises fare charge by 100%

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The Federal Airports Authority of Nigeria (FAAN) said on Friday it would increase the passenger service charges on domestic and international flight tickets by 100 percent from August 1.

FAAN’s Managing Director, Rabiu Yadudu, stated this in a letter dated June 22, 2020, with reference FAAN/HQ/MD/18E/VOL.86/72, to airlines.

With this development, the PSC on domestic flights has been increased from the current N1,000 to N2,000.

FAAN would also hike the charges on international flights from $50 to $100, a development that would warrant a rise in airfares on local and international tickets.

Yadudu told the airlines that the decision had been approved by the Minister of Aviation, Hadi Sirika.

He added that FAAN planned to improve and upgrade airports’ infrastructure across the country, among others.


#Newsworthy….

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IMF agree 1 year loan program for Egypt.

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The IMF board on Friday approved a one-year, $5.2 billion financing package for Egypt to help the country alleviate the economic impact of the COVID-19 pandemic.

The new funding under a standby arrangement comes on top of $2.8 billion in emergency aid the IMF board approved a month ago, although at the time officials acknowledged that more help would be needed.

The IMF noted Cairo had “a strong track record” of implementing economic reforms under fund-supported programs over the past four years, and the new loan will help put it on strong footing for recovery.

“Egypt was one of the fastest-growing emerging markets prior to the COVID-19 outbreak,” the IMF said in a statement. “However, the significant domestic and global disruptions from the pandemic have worsened the economic outlook and reshuffled policy priorities.”

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The aid will focus first on health and social spending, as well as financial stability to keep a lid on inflation.

Fund staff agreed with authorities on the terms of the loan in early June, and said the funds also will open the doors to financing from other lenders and help support job creation by the private sector.

Egypt has suffered over 2,500 COVID-19 fatalities with over 61,000 cases, according to Johns Hopkins University’s tally.


#Newsworthy…

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Nigeria’s production index falls further – CBN

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Nigeria’s Manufacturing Purchasing Managers’ Index (PMI), which measures the prevailing direction of economic trends in the manufacturing sector, stood at 41.1 points in June 2020, indicating contraction in the sector for the second time, data obtained from the Central Bank of Nigeria (CBN) website on Thursday has revealed.

Similarly, the production level of the manufacturing sector fell to 36.6 points in June for the second straight month.

Of the 14 sub-sectors surveyed, only 5 recorded growth (above 50% threshold) in the following order according to the PMI Survey Report for June 2020: electrical equipment; cement; petroleum and coal products; transportation equipment and paper products.

According to the survey carried out by the CBN statistics department between 8th and 12th June 2020, the 9 sub-sectors that witnessed decline included printing and related support activities; textile, apparel, leather and footwear; primary metal; plastics and rubber products; non-metallic mineral products; fabricated metal products; food, beverage and tobacco products; chemical and pharmaceutical products and furniture and related products.

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3 sub-sectors saw increase in their production level, 2 remained unchanged while the rest 9 experienced decline.

The manufacturing supplier delivery time index stood at 60.9 points in June, reflecting growth in supplier delivery time index for the second time.

9 of the 14 sub-sectors reported improved suppliers’ delivery time, 3 sub-sectors recorded no change while 2 witnessed slump in delivery time.

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“The employment level index in June 2020 stood at 38.8 points, indicating decline in employment level index for the third month. Of the 14 sub-sectors, two sub-sectors recorded increases in employment, one sub-sector remained unchanged, while the remaining 11 sub-sectors recorded lower employment level in the review month.

“The manufacturing sector inventories index showed contraction for the third time in June 2020. At 41.0 points, the raw materials inventories index is contracting at a slower rate when compared to its level in May 2020.

“Three of the 14 sub-sectors recorded reported growth in inventories, one remained unchanged, while the remaining 10 sub-sectors recorded lower raw material inventories in the review month,” the report said.

The composite PMI for the non-manufacturing sector stood at 35.7 points, implying contraction for the third month in a row.


#Newsworthy…

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World Bank yes $750M loan to Nigeria’s power sector

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The World Bank on Wednesday says it has approved $750 million International Development Association (IDA) credit for Nigeria’s Power Sector Recovery Operation (PSRO), to improve electricity supply.

The Bank, in a statement in Abuja, said the facility is intended to help Nigeria achieve financial and fiscal sustainability and enhance accountability in the power sector.

According to the bank, the economic cost of power shortages in Nigeria is estimated at around $28 billion, which is equivalent to two per cent of Nigeria’s Gross Domestic Product (GDP).

It stated that getting access to electricity is one of the major constraints for the private sector according to the Ease of Doing Business report.

It added that improving power sector performance, particularly in the non-oil sectors of manufacturing and services, would be central to unlocking economic growth post COVID-19.

Shubham Chaudhuri, World Bank Country Director for Nigeria, said “lack of reliable power has stifled economic activity and private investment and job creation.

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”This is ultimately what is needed to lift 100 million Nigerians out of poverty.

“The objective of this operation is to help turn around the power sector and set it on a fiscally sustainable path. This is particularly urgent at a time when the government needs all the fiscal resources it can marshal to help protect lives and livelihoods amid the COVID-19 pandemic”.

The bank said that PSRO would provide results-based financing to support the implementation of the Government’s Power Sector Recovery Programme (PSRP).

It further explained that the PSRP was a comprehensive programme to restore the power sector’s financial viability, improve service delivery and reduce its fiscal burden.

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“The PSRO is expected to increase annual electricity supplied to the distribution grid, enhance power sector financial viability while reducing annual tariff shortfalls and protecting the poor from the impact of tariff adjustments.

“This will enable the turnaround of power sector while helping the Federal Government to redirect large fiscal resources from highly regressive tariff shortfall financing towards critical crisis-responsive and pro-poor expenditures. It will also increase public awareness about ongoing power sector reforms and performance.

“Specifically, the PSRO will ensure that 4,500 mwh/hour of electricity is supplied to the distribution grid by 2022 by strengthening the regulatory, policy and financing framework.

“It will also enhance the accountability and financial viability of the sector, helping the sector create a track record of sustainable operation necessary for unlocking much needed private investments in the future,” the Bank explained


#Newsworthy…

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Donald Trump’s China Trade Deal ‘Intact’

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President Donald Trump said the phase one trade deal with China is “fully intact,” after his adviser Peter Navarro sowed confusion and spurred a temporary stock slump with comments interpreted as a decision to end the agreement.

“The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!” Trump said in a Twitter post late Monday.

Navarro had responded to a long question by Fox News interviewer Martha MacCallum asking whether aspects of the deal were “over” by saying: “It’s over. Yes.”

From the transcript:

Martha MacCallum, Fox News: You know, when — do you think that the president sort of — I mean, he obviously really wanted to hang onto this trade deal as much as possible. And he wanted them to make good on the promises, because there had been progress made on that trade deal, but given everything that’s happened and all the things you just listed, is that over?

Navarro: It’s over. Yes.

U.S. futures swung wildly with the yuan as the remarks caused concern that the deal signed in January, which paused the trade war between world’s two largest economies, was in jeopardy. Navarro later said his comments “have been taken wildly out of context.”

The market reaction and rapid response by Trump signal the sensitivity over the trade agreement at a time when the global economy is being pummeled by the coronavirus and faced with growing worries over the relationship between Washington and Beijing. The two nations are locked in confrontation over the pandemic, Hong Kong, human rights and technology.

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Contracts on the S&P 500 Index fell as much as 1.6% before paring losses and the offshore yuan weakened 0.4% after multiple media outlets reported the remarks.

Chinese officials have insisted that they intend to stick to the deal, which implies increasing imports from the U.S. by a total of $200 billion over two years. The economic slump caused by the coronavirus has made reaching those targets doubtful, though the U.S. had signaled some flexibility.

Navarro is not the decisive voice on the future of the trade deal. The architect of the agreement, Trade Representative Robert Lighthizer, said last week that the phase one agreement is “enforceable” and the U.S. fully intends to carry it through.

China’s foreign and commerce ministries did not immediately respond to a request for comments on Navarro’s Fox interview.


#Newsworthy…

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China restrict U.S Chickens – Close Pepsi plant

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Imports of frozen chicken from Tyson Foods have been “temporarily suspended”, the General Administration of Customs said, after a virus outbreak was found at one of the company’s production facilities in the US.

China banned imports from a top US poultry producer and ordered a Beijing Pepsi factory to close Sunday as authorities clamped down on food production and distribution amid a new coronavirus cluster in the capital.

Health officials also reported 22 new virus cases in Beijing, where they have tested more than two million residents as they seek to contain a wave of new infections linked to a wholesale market in the capital.

Imports of frozen chicken from Tyson Foods have been “temporarily suspended”, the General Administration of Customs said, after a virus outbreak was found at one of the company’s production facilities in the US.

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Products from the firm that have already arrived in China will be confiscated, the statement said.

US food and drinks giant PepsiCo was also ordered to shut down one of its snack-making plants in Beijing after several employees tested positive, company spokeswoman Fan Zhimin said.

She added that 87 close contacts had been traced and quarantined.

More than 220 people have so far tested positive from the new Beijing clusters that have been traced to chopping boards used to handle imported salmon at the city’s Xinfadi market.

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The market supplies more than 70 percent of Beijing’s fresh produce and has been closed, with officials on Friday advising citizens to dispose of frozen seafood and bean products bought there.

Officials on Friday also announced a nationwide campaign to inspect all fresh products coming from “high-risk countries” following reports of new virus clusters at plants in Germany and the US.

Authorities are targeting those who work in restaurants, supermarkets, markets and food delivery couriers for testing, according to Gao Xiaojun of the Beijing Municipal Helth Commission.

Dozens of communities have also been sealed off in the city to contain the spread, with residents told to avoid non-essential travel and schools closed.


#Newsworthy…

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AIICO Insurance set to Recapitalize

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AIICO Insurance on Wednesday said it was way ahead with its recapitalisation plans, as it unveiled another phase of its strategy.

The company said it had submitted application to the Nigerian Stock Exchange (NSE) on June 15, for the approval and listing of 4,357,770,954 ordinary shares of fifty kobo each at eighty kobo per share.

The shares presented for listing was on the basis of five new ordinary shares for every 13 ordinary shares held.

A statement by the firm’s Head, Strategic Marketing and Communications, Segun Olalandu, made available to the News Agency of Nigeria in Lagos noted that listing of its shares was another phase of its recapitalistion strategy.

Also, NSE All-Share rebounds by 0.17%.

He said the firm’s shareholders had the opportunity to increase their stake and position themselves for higher returns in a company with excellent prospects.

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” AIICO’s recapitalisation journey started in earnest when the insurance regulator, the National Insurance Commission (NAICOM) set a strategic plan to increase the capacity of the industry to take on more risks.

” Responding to this, AIICO quickly articulated a clear path to meet the new minimum regulatory capital requirement.

“The company followed through with regular communications at all stages in the execution of the strategy with its shareholders, who have been supportive of the efforts, ” he said.

According to him, the firm, in February, completed its private placement successfully with 38.83 per cent of its shares snapped up by two strategic investors; LeapFrog Nigeria Insurance Holdings Limited (28.24 per cent) and AIICO Bahamas Nigeria Limited (10.59 per cent), raising the share capital from N6.1billion to N11.3billion.

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He said that the Rights Issue was expected to generate N3.5billion, bringing the company closer to meeting the required minimum paid-up capital of N18 billion.

The company’s spokesman said the exercise would be followed subsequently with a capitalisation (bonus) issue, which has a qualification date of September 23, 2020.

” The industry, as with others, is facing daunting challenges as a result of the pandemic.

” As a result, NAICOM recently revised its recapitalization guidelines; 50 per cent of the new minimum capital to be achieved by December 31, 2020, while the deadline for overall completion has been extended till September 30, 2021.

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“AIICO has, however, maintained an unbroken focus on its journey to its recapitalisation.

“The company also provided updates on the convertible loan instrument with the International Finance Corporation (IFC).

“It obtained a loan of US$7million from the IFC on June 30, 2015, at an interest rate of 6.5 per cent plus six month LIBOR for seven years with a moratorium period of four years on the principal, ” he said.

According to him, the loan had an embedded derivative (a conversion option) whereby IFC had the right to convert all or a portion of the outstanding principal amount into the equivalent number of shares of the company.

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Olalandu, noted that the loan repayment is in six equal instalments starting in March 2020 and is expected to end in September 2022 except if prepaid before then.

He said this convertible option, however, expired in December 2019 without the IFC exercising its option. Hence, the loan is now a straight loan without a conversion option till maturity.

AIICO Insurance is a leading composite insurer in Nigeria with a record of accomplishment of serving its clients that dates back over 50 years.

Founded in 1963, AIICO provides life and health insurance, general insurance, investment management and pension management services as a means to create and protect wealth for individuals, families and corporate customers.


#Newsworthy…

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Why Oil Price could increase – Energy Minister speak up

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UAE Energy Minister Suheil al-Mazrouei said on Monday current low oil and gas prices are unsustainable and warned that if they last longer, it could lead to energy shocks.

Mazrouei said that “very good signs” of rising demand for oil have been seen in China and India, two of the world’s biggest crude consumers, and to some degree in Europe.

“This environment of low oil and gas prices, I don’t think it’s sustainable,” the minister said in a virtual interview hosted by the US-UAE Business Council.

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Mazrouei said that if low oil prices persist for a long period, some of the current high-cost producers will drop out leaving a supply gap, pushing prices higher.

“We need someone to fill in that gap, otherwise we are going to have shocks in… prices and the last thing we want is to have shocks,” he said.

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“We need to have stability and to have a reasonable and fair price.”

Brent crude crashed to multi-year lows under $20 a barrel and WTI (for May delivery) sank into negative territory in April for the first time in history as demand slumped due to coronavirus lockdowns and a global supply glut.

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The two benchmarks have recovered to around $40 a barrel after the OPEC+ producers alliance agreed to record production cuts of 9.7 million barrels per day in April, effective for two months starting May.

Earlier this month, the alliance extended the historic cuts through July as governments around the world ease unprecedented lockdowns in many countries.

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Mazrouei said that although oil consumption has dropped to 2013 levels “we think things will go back to normal within one or two years.”

“Unless we have a second wave of Covid-19, I think we will see a demand recovery at a pace that is adequate to the cut we have done as… OPEC+, provided other producers do not rush and over-produce,” Mazrouei said.


#Newsworthy…

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NNPC want partners to drop oil cost to 40%

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The Nigerian National Petroleum Corporation (NNPC) said it has directed all its partners and suppliers to bring down their cost to between 30 and 40 per cent to ensure production efficiency.

NNPC’s Group Managing Director, Malam Melem Kyari, made the disclosure when he featured as a guest on a live Television programme on Thursday.

He said the corporation had resolved to cut down its capital expenditure and to ensure it achieved the crude oil production cost reduction of 10 dollars per barrel.

“Our target is to bring down the cost to $10 by the end of 2021. We have insisted on making sure that our partners and all our suppliers cut their costs to at least 30 to 40 percent and that will significantly bring down our costs. It’s very realistic and we are realising that,” he said.

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He noted that the target of $10 per barrel by 2021 will help the country to remain competitive in the global market.

“If you can’t do this, you walk away, this is not a business of subsidies,” he noted.

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Kyari assured the public that the corporation would not witness any job loss to the target, saying, “we will escape this year without job cuts in NNPC”.

“We are reviewing other heavy cost areas that can bring our cost to normality. But I know also that in terms of our partners, many of them are looking at a situation whereby job cuts will be unavoidable.

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“But what is informing that much more than the cost, is actually the issue of efficiency that we have seen in the last couple of years,” he said.

On Crude oil sales discount, he said the NNPC had set July as the deadline to end the regime, adding that the corporation was looking at achieving the target either by June 30, or latest by July.

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Kyari noted that if oil price settled at the current 42 dollars, it was still till a good business for NNPC and the country.

The NNPC boss said though Nigeria did not fully comply with a pact by oil producers to rein in output to balance markets, it would make additional cuts to make up for the lapses by mid-July.

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On whether the NNPC would continue offering discounts on crude oil as the price recovers, Kyari said, “Absolutely not, discount will go away, definitely within the shortest period of time.

“As you know, what we did in the last two months was to close that gap much shorter than what it was, and by the end of either June or July we will see a situation where we can take out that discount because it’s no longer necessary.”


#Newsworthy…

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Price of Gold rise to Rs1,700 – touch Rs105,400 per tola

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The gold prices shot up in Pakistan on Wednesday with an increase of Rs 1,700 it touched Rs105,400 per tola. While per 10-gram gold price is Rs90,400.

Earlier on 09 June the gold rate per 10 gram in Pakistan was Rs88,900 and the price of gold was Rs103,700 per tola.


#Newsworthy…

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