Nigeria Missing in Global Quality of Living Ranking

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14/03/2017

Despite increased political and financial volatility in South Africa, its cities fell within the top 100 of the world’s highest quality of living and remain attractive destinations for expanding business operations and sending expatriates on assignment, according to Mercer’s 19^th annual Quality of Living survey. Durban (87) ranked the highest for quality of living within South Africa, closely followed by Cape Town (94) and Johannesburg (96).
“Economic instability, social unrest, and growing political upheaval all add to the complex challenge multinational companies face when analysing quality of living for their expatriate workforce,” said Ilya Bonic, senior partner and president of Mercer’s Career business. “For multinationals and governments it is vital to have quality of living information that is accurate, detailed, and reliable. It not only enables these employers to compensate employees appropriately, but it also provides a planning benchmark and insights into the often-sensitive operational environment that surrounds their workforce.
“In uncertain times, organisations that plan to establish themselves and send staff to a new location should ensure they get a complete picture of the city, including its viability as a business location and its attractiveness to key talent,” Mr Bonic added.
Vienna occupies first place for overall quality of living for the 8^th year running, with the rest of the top-ten list mostly filled by European cities: Zurich is in second place, with Munich (4), Dusseldorf (6), Frankfurt (7), Geneva (8), Copenhagen (9), and Basel, a newcomer to the list, in 10th place. The only non-European cities in the top ten are Auckland (3) and Vancouver (5). The highest ranking cities in Asia and Latin America are Singapore (25) and Montevideo (79), respectively.
Mercer’s survey also includes a city infrastructure ranking that assesses each city’s supply of electricity, drinking water, telephone and mail services, and public transportation as well as traffic congestion and the range of international flights available from local airports.

Singapore tops the city infrastructure ranking, followed by Frankfurt and Munich both in 2^nd place. Baghdad (230) and Port au Prince (231) rank last for city infrastructure.

Africa
Five Africa cities managed to remain in the top 100 rankings in regards to quality of living, with Port Louis in Mauritius topping the Africa chart at an overall 84^th position. Durban (87) ranked the highest for quality of living within South Africa, closely followed by Cape Town (94) and Johannesburg (96).

On the other side of the scope, Brazzaville (224) in the Republic of the Congo, N’Djamena (226) in Chad, Khartoum (227) in Sudan and Bangui (230) in the Central African Republic formed the four lowest-ranked cities for quality of living within Africa.
Port Louis is the only Africa city which managed to fall within the top 100 rankings with the highest for infrastructure in 94^th place. Cape Town missed it with 1 position ranking at 101^st position followed by Tunis (104) in Tunisia and Victoria (109) in Seychelles concluding the top 4 Africa cities.

Lack of infrastructure remains a challenge within Africa, with N’Djamena (224), Bangui (226), Conakry (227) in Guinea Republic and Brazzaville (228) in the Republic of the Congo forming the lowest rankings.

Middle East
Dubai (74) continues to rank highest for quality of living across the Middle East, rising one position in this year’s ranking, followed closely by Abu Dhabi (79), which climbed three spots. Damascus (225) in Syria, Sana’a (229) in Yemen and Baghdad (231) in Iraq are the region’s three lowest-ranked cities for quality of living.
Dubai also ranks highest for infrastructure in 51^st place. Only five other cities in this region make the top 100, including Tel Aviv (56), Abu Dhabi (67), Port Louis (94), Muscat (97), and upcoming host of the 2022 FIFA World Cup, Doha in Qatar, which ranks 96^th for infrastructure. Cities in the Middle Eastern countries dominate the bottom half of the table for infrastructure, with Damascus (224), Sana’a (229), and Baghdad (230) ranking the lowest.

Europe
Even with political and economic turbulence, Western European cities continue to enjoy some of the highest quality of living worldwide. Still in the top spot, Vienna is followed by Zurich (2), Munich (4), Dusseldorf (6), Frankfurt (7), Geneva (8), Copenhagen (9), and a newcomer to the list, Basel (10).

In 69^th place, Prague is the highest ranking city in Central and Eastern Europe, followed by Ljubljana (76) and Budapest (78). Most European cities remained stable in the ranking, with the exception of Brussels (27), dropping six places because of terrorism-related security issues, and Rome (57), down four places due to its waste-removal issues.

Finally, Istanbul fell from 122^nd to 133^rd place as a result of the severe political turmoil in Turkey during the past year. The lowest ranking cities in Europe are St. Petersburg and Tirana (both ranked 176), along with Minsk (189).
Western European cities also hold most of the top ten places in the city infrastructure ranking with Frankfurt and Munich jointly ranking 2^nd worldwide, followed by Copenhagen (4) and Dusseldorf (5). London is in 6^th place, and Hamburg and Zurich both rank 9^th. Ranking lowest across Europe are Sarajevo (171) and Tirana (188).
“Cities that rank high in the city infrastructure list provide a combination of top-notch local and international airport facilities, varied and extended coverage through their local transportation networks, and innovative solutions such as smart technology and alternative energy,” said Mr Parakatil. “Most cities now align variety, reliability, technology, and sustainability when designing infrastructure for the future.”

Americas
In North America, Canadian cities take the top positions in the ranking. Vancouver (5) is again the region’s highest ranking city for quality of living. Toronto and Ottawa follow in 16^th and 18^th place respectively, whereas San Francisco (29) is the highest ranking US city, followed by Boston (35), Honolulu (36), New York (44), and Seattle (45).

High crime rates in Los Angeles (58) and Chicago (47) resulted in these cities dropping nine and four places respectively. Monterrey (110) is the highest ranking city in Mexico, while the country’s capital, Mexico City, stands in 128^th position. In South America, Montevideo (79) ranks highest for quality of living, followed by Buenos Aires (93) and Santiago (95). La Paz (157) and Caracas (189) are the lowest ranking cities in the region.
For city infrastructure, Vancouver (in 9^th place) also ranks highest in the region. It is followed by Atlanta and Montreal, tied in 14^th place. Overall, the infrastructure of cities in Canada and the United States is of a high standard, including the airport and bus connectivity, the availability of clean drinking water, and the reliability of electricity supplies.

Traffic congestion is a concern in cities throughout the whole region. Tegucigalpa (208) and Port-au-Prince (231) have the lowest scores for city infrastructure in North America. In 84^th place, Santiago is the highest ranking South American city for infrastructure; La Paz (168) is the lowest.

Asia-Pacific
Singapore (25) remains the highest ranking city in the Asia-Pacific region, where there is great disparity in quality of living; Dushanbe (215) in Tajikistan ranks lowest. In Southeast Asia, Kuala Lumpur (86) follows Singapore; other key cities include Bangkok (131), Manila (135), and Jakarta (143).

Five Japanese cities top the ranking for East Asia: Tokyo (47), Kobe (50), Yokohama (51), Osaka (60), and Nagoya (63). Other notable cities in Asia include Hong Kong (71), Seoul (76), Taipei (85), Shanghai (102), and Beijing (119). There is also considerable regional variation in the city infrastructure ranking. The highest-ranked city is Singapore (1), whereas Dhaka (214) is near the bottom of the list.
New Zealand and Australia continue to rank highly in quality of living: Auckland (3), Sydney (10), Wellington (15), and Melbourne (16) all remain in the top 20.

However, when ranked for infrastructure, only Sydney (8) makes the top ten, with Perth (32), Melbourne (34), and Brisbane (37) also ranking well for infrastructure in Oceania. By and large, cities in Oceania enjoy good quality of living, though criteria such as airport connectivity and traffic congestion are among the factors that see them ranked lower in terms of city infrastructure.

Ghost Workers: FG Seeks BVN Policy in Microfinance Banks

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14/03/2017

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The Minister of Finance, Mrs. Kemi Adeosun, has strongly solicited the cooperation of the Central Bank of Nigeria (CBN), in extending the requirement for Bank Verification Number (BVN) to account holders in Microfinance Banks (MFBs), to facilitate the detection of bank accounts which might have been opened and operated in such banks for ghost workers by fraudulent syndicates.

The Minister, who sought the cooperation of the CBN in that regard in a correspondence addressed to the Governor of the Central Bank of Nigeria, said that the introduction of the Bank Verification Number by the CBN has contributed immensely in improving the integrity of the Federal Government payroll on which more than 50, 000 ghost workers were detected and removed.

Mrs. Adeosun stated that operating bank accounts in Microfinance Banks without requirement for BVN has left a huge loophole which individuals intent on financial crimes could use to hide and launder proceeds of crime and successfully escape detection by law enforcement agencies.

“Our on-going efforts to verify the integrity of Federal Government personnel costs and purge the system of fraud and error has made extensive use of the Bank Verification Number as a means of identifying recipients of multiple salaries, and salaries paid into accounts with names that differ to those held on our payroll records. The success of this effort has to date yielded the removal of over 50,000 payroll entries,” the Minister emphasised.

Mrs. Adeosun referred the CBN Governor to the discovery that, prior to the deadline for obtaining the BVN, the movement of a large number of salary accounts of Federal employees from commercial banks to Microfinance Banks, was observed.

“This is a suspicious activity and we have already commenced a review of such cases to identify and investigate any cases of fraud,” the Minister explained.

While noting that extending the requirement for BVN to Microfinance Banks may put a huge financial strain on the smaller Microfinance Banks, the Minister pointed out that “some MFBs, such as National Police Force Microfinance (NPF), have over 27,000 salary accounts. Our inability to perform checks on such a large number of salary earners is a key risk.”

“I am therefore seeking your co-operation to enforce compliance with BVN on any MFB with over 200 active salary accounts or those above a certain size. This will support the Federal Government’s efforts at reducing leakages to create headroom for the capital projects that will support the growth of the economy,” the Minister said in the correspondence.

It could be recalled that the CBN had in September in 2016 announced its intention to extend the requirement for the extension of the Bank Verification Number to MFBs in the country but the exercise has yet to take off.

Africa, M/E Tablet Market Declining in Line with Global Trend

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14/03/2017

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The Middle East and Africa (MEA) tablet market declined 24.2% year on year (Y-o-Y) in the final quarter of 2016 to total 3.07 million units, according to the latest figures announced today by International Data Corporation (IDC).

The global IT research and consulting services firm’s Middle East and Africa Quarterly Tablet Tracker shows that for 2016 as a whole, tablet shipments in MEA declined 14.7% Y-o-Y to total 13.8 million units, which is in line with global tablet market’s 15.6% decline over the same period.

“Tasks that were previously performed on tablets are increasingly moving to bigger-screen smartphones, so tablets are becoming redundant in the consumer ecosystem of gadgets,” says Nakul Dogra, senior research analyst for client devices at IDC MEA.

“Indeed, consumers are now investing more time and money into smartphones than tablets, which has led to a slowdown of tablet markets around the world, not just here in MEA. That said, there are still countries in Africa that harbor scope for further tablet penetration.”

In terms of vendor rankings, Samsung continued to lead the MEA tablet market in Q4 2016 with unit share of 17.6%, despite experiencing a significant decline in shipments of -28.0% on the previous quarter and -43.6% on the corresponding period of 2015. Lenovo remained in second place, increasing its share to 10.8% from 9.9% in Q4 2015. Apple climbed into third spot, capturing 8.7% share despite suffering a -41.2% Y-on-Y decline in shipments. UAE-based vendor i-Life rose to fourth in the rankings with a market share of 7.4%, spurred by the popularity of its low-cost offerings. Huawei’s shipments fell -39.6% Y-on-Y in Q4 2016 to account for market share of just 5.1%, a considerable drop from its 13.5% share in the previous quarter.

“With the lack of any noteworthy innovation taking place in much of the tablet space, there is little reason for the majority of consumers to upgrade to newer-generation tablets,” says Fouad Rafiq Charakla, senior research manager for client devices at IDC MEA. “This is prolonging the refreshment cycle for tablets in the region and causing an inevitable slowdown in the market.”

Taking the above factors into account, IDC’s tablet market forecast has been revised downwards. IDC now expects the market to decline -8.1% Y-on-Y in 2017 to total 12.76 million units. The longer-term forecast has also been revised downwards, with IDC now expecting the market to decline at a compound annual growth rate (CAGR) of -0.2% over the 2016–2021 period to total 13.64 million units in 2021.

“e-Tailers are expected to grow strongly in the coming years,” says Dogra. “Increasingly, local retailers are investing more in the online channel. Also, newer players are expected to enter the market in the coming year, which is going to further intensify competition in the online retail segment.

The above factors, coupled with aggressive pricing, will further drive the growth of the e-tailer segment, with IDC expecting that by the year 2021, 12% of tablets will be sold through e-tailers in the MEA region.”

IDC’s Middle East and Africa Quarterly Tablet Tracker provides insightful analysis of key market developments, covering vendors, operating systems, screen sizes, user segments and distribution channels, quarterly market share data, and a comprehensive 5–8 quarter and five-year forecast.

Global Airlines Financial Monitor: February 2017

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14/03/2017

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The latest financial results for Q4 2016 show that the decline in profitability, which began in the third quarter of 2016, continued across most regions in the fourth quarter, albeit from historically high levels.
Global airline share prices continued their positive start to 2017 during February, out-performing the wider global equity market, as expectations for airlines profits improve, particularly in the US.
Brent crude oil prices have been broadly stable since December, and traded within a very tight band of $US55-57/bbl during February. Oil prices are still expected to rise only gradually over the years ahead.
Average passenger yields in US$ terms continue to fall, but the recent strength of the US$ may be disguising signs of a stabilisation or slowing of this down-trend.
Passenger and freight demand both carried momentum into the New Year. The industry-wide passenger load factor remains stable at a record high, and the freight load factor has continued to recover.
Premium airfares generally held up better than those of the economy cabin in 2016, and premium’s share of revenues increased on a number of key routes. This has helped to support airline financial performance.

Post-recession Nigerian Economy and Export Diversification – By Bashir Wali

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12/03/2017

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‘Neither government agencies nor private sector businesses can do enough in supporting the agenda for diversifying the sources of foreign exchange earnings for the country.’

There are indications that the Nigerian economy is on the path of recovery. Oil prices have stabilised around $55 per barrel. Government’s peace overtures in the Niger Delta have helped to raise oil production from the nadir of 2016. In the last quarter of the year, the GDP contracted by 1.3 percent, an improvement over the2.24 percent in Q3 and 2.06 percent in Q2.

Moreover, various forecasts, including that of the World Bank, agree that the country will experience a positive output growth in 2017.

But the growth projections are largely underwhelming, ranging from a half percent to 1 percent. This explains why the Federal Government continues to work hard at the economic recovery plan. From 2017, one anticipates that the economic trend will take a sharp upward turn.

The corporates and the generality of Nigerians will savour such lease of positivity, and it will validate the current administration whose good intentions and programmes have been thwarted by a sharp fall in revenue as a result of the plunge in oil prices.

The expected recovery will, at best, take the country back to that place of opportunity of the past years before 2015, when we could have built a healthy foreign reserves level and financed non-oil export diversification. In the last two to three years, we have experienced the pains of external shocks to oil revenue.

The pains are attributable to lack of significant foreign reserves cover. But, fundamentally, the concentration on oil receipts to provide 70 percent of government total revenue, or 90 percent of its foreign exchange earnings, made the oil price crash much harder to bear.

It is time for more determined actions on the diversification of the economy, and diversification of foreign exchange earnings through increased non-oil exports. Raising non-oil exports revenue is a key area government’s interventions are needed. Analysts agree that the economy is broadly diversified, given that oil accounts for just about 15 percent of the country’s output. Agriculture, services – including finance, ICT, entertainment, hospitality – and their extensive value chains are major contributors to the GDP. Additional potentials are locked in the solid minerals sectors.

The Nigerian Export – Import Bank is statutorily mandated to facilitate the country’s non-oil export growth. NEXIM Bank has a range of tools, including credit financing in both local and foreign currencies, risk-bearing services in the form of export credit guarantee and export credit insurance facilities, special funds, loans for foreign inputs, export advice, and market information, to support the non-oil export sectors.

Since I assumed the leadership of NEXIM Bank a little over a year ago as managing director, in acting capacity, the Bank has maintained its unwavering commitment to its mandates.

Last month, the Federal House of Representatives’ Committee on Banking and Finance, embarked on an oversight tour of the businesses supported by NEXIM. One of the sites we visited was an agro-processing business. NEXIM Bank funds export producers and businesses with export potentials. We do this with the aim of increasing foreign exchange earnings for the country, boost industrial production and create jobs for Nigerians.

We visited the Ladgroup based at Ikenne, Ogun State. NEXIM’s facility of $5 million provided the company with the resources to import equipment for its production line for Shea Butter export, as well as working capital. With its newly installed capacity, the company aims to earn $5 million in the first year of operating the new facility, and $100 million in the next five years. Ladgroup will create at least 300 direct jobs and more than 600 indirect jobs.

However, the global demand for Shea Butter is estimated at $10 billion annually. Demand is expected to reach $30 billion by 2020. Shea Butter is a derivative of Shea Nuts, grown primarily in the Sahel region of West and East Africa.

Nigeria accounts for 53 percent of the 680,000 metric tonnes (MT) of Shea Nuts produced annually in West Africa, according to reports by Central Bank of Nigeria (CBN), and Oil Seeds Association of Nigeria (OSAN). Interestingly, NEXIM also financed Karite Oil Limited’s 22MT Shea Butter processing plant in Akure, Ondo State – a company formerly known as Fagow Oil & Gas Nigeria Limited.

The Shea Butter market serves here as an index case for the many opportunities to fund Nigerian export businesses. These opportunities are unmatched by the funding available. Private financiers usually have low risk appetite for such projects in nascent industries.

Access to funds is difficult except for oil & gas services and trade sectors. This puts significant responsibility on the government to provide needed interventions, in this case through NEXIM Bank. Indeed, the scope of the requirement is reflected by the vast opportunities in the focal areas of the Bank’s financial intervention, namely agriculture (agro-processing), manufacturing, solid minerals and services sectors.

In one of the efforts to reduce the wide gap in the supply of needed resources, the CBN last year created two funds. NEXIM Bank is the managing agency for the N500 billion Export Stimulation Facility (ESF) and the N50 billion Export Rediscounting & Refinancing Facility (RRF). Since the CBN released the guidelines for the funds in June, 2016, we have embarked on various sensitisation sessions in Lagos and Kano as well as capacity-building programmes with Banks and key stakeholders.

The responses have been swift. We have received applications worth N111.02 billion under the ESF and N3.59 billion under the RRF. Having done our appraisals, applications worth N33 billion under the ESF and N3.59 billion under RRF are under consideration, approval and disbursement by the CBN.

NEXIM Bank has continued in the broader areas of removing non-tariff barriers to Nigeria’s non-oil exports. One of the key projects we are facilitating with partners is the Sealink Project, to provide direct maritime links within West and Central Africa.

The Sealink will dramatically cut the time and financial cost of shipping sea cargoes within these regions through trans-shipment through Europe. The Board of the Sealink has concluded arrangement with a major operator to commence a pilot scheme by deploying ships along the routes that have been designated.

Last October, the Ministers of Transport of the ECOWAS member-countries met in Lome, Togo where far-reaching decisions were taken towards a smooth and efficient operation of the shipping company. During the meeting, the Sealink company was granted a Community Enterprise Status.

NEXIM Bank is making additional arrangements to realise the potentials of the project by working with Nigeria Shippers’ Council and Nigerian Inland Waterways Authority on the commencement of annual exports of about one million tonnes of coal, iron ore and lead/zinc using self-propelled and/or dry bulk cargo barges in the dredged inland waterways channels from Lokoja / Ajaokuta to Burutu Port.

We have also been working to improve the packaging of Nigerian agricultural exports to Europe and other countries, to minimise incidents of rejection. The use of hydrocarbon-free jute bags is very critical in this regard.

Currently, jute bags are imported to the country. The high cost has led to the problem of recycling old bags and the use of unsuitable packaging materials. As part of efforts to mitigate this challenge, we have commenced discussions with major investors to resuscitate and commence the production of jute bags in the country for packaging of exports.

In pursuing the agenda of boosting Nigerian non-oil exports, the Bank has been working with partners and stakeholders to promote a bill towards developing factoring in the country. Global factoring transactions in 2015 reached €2.3trillion with Africa contributing 0.7 percent.

The major players in Africa were South Africa, Tunisia, Morocco, Egypt & Mauritius, while Nigeria did not feature in the current African statistics. Factoring entails the purchase of receivables from an exporter, with the Factor assuming full credit and collection responsibilities. This will enable export manufacturers, especially SMEs, to maintain steady liquidity as well as take the burden of pursuing cross-border payments off the businesses, leaving them to concentrate on their core activities.

Neither government agencies nor private sector businesses can do enough in supporting the agenda for diversifying the sources of foreign exchange earnings for the country. We are coming out of a crisis that, in large part, has been characterised by foreign exchange scarcity, leading to sharp depreciation in the value of the naira.

The overarching lesson we should take from this experience is that diversification of foreign exchange earnings, through non-oil export growth, is the way to build resilience against the next episode of oil price shock. Nigeria’s economy of the post-2016 recession should thrive on export diversification.

NB: Bashir Wali is Acting Managing Director and CEO, Nigerian Export-Import Bank

Adeosun Hosts American Ambassador, Says Nigeria’s Economy Resilient

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12/03/2017

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The Minister of Finance, Mrs. Kemi Adeosun on Friday reaffirmed the commitment of the Muhammadu Buhari-led administration to return the economy on a path of sustainable growth having weathered the storm of a difficult macroeconomic environment over the years.

She said this during a courtesy visit in her office by the US Ambassador to Nigeria, Mr. W. Stuart Symington.

According to Adeosun, in spite of the oil price shock and drop in production volumes, the Federal Government has succeeded in utilising the situation to reposition the Nigerian economy which would ultimately be to the advantage of the nation. She emphasised the investment in infrastructure, citing that over N1trn had so far been released.

She noted that lack of adequate investment in infrastructure has been the bane of the Nigerian economy in the past, noting that the present administration has begun to correct this anomaly.

According to her, over N1trillion has been released for various infrastructure projects across the country. She emphasised the critical role of power on job and wealth creation.

The Minister further explained that investment in public infrastructure will begin to attract private sector funding which will enable diversification and growth in priority areas like Agriculture and Housing.

The US Ambassador, in his response, stated that finance is to growth and prosperity, what oxygen is to life. He therefore stressed the centrality of the Federal Ministry of Finance to the ongoing effort to turn the Nigerian economy around and commended the efforts of the Buhari’s administration in that regard.

AITEO: Emerging Oil & Gas Powerhouse in Nigeria

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12/03/2017

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Integrated energy group, Aiteo has announced a peak production of 90kpod just one year after its acquisition of sub-Saharan Africa’s reputedly largest onshore oil bloc, OML 29.
Aiteo acquired OML 29 in September, 2015 when oil major Shell Petroleum Development Company (SPDC) fully exited the facility. At the time of the divestment, average production was 23Kbpod. But Aiteo, one of the frontline sponsors of the just concluded 16th Oil and Gas (NOG) Conference held in the country’s capital Abuja, says it has tripled this figure leveraging the diversity and skills of its work force and bona fides as a dynamic international energy conglomerate.
Its CEO and Vice Chairman Benedict Peters said the company grew production from 23kbbl/d upon takeover of operations to a peak of 90Kbbl/d in one year. He also highlighted several existing and developing projects that could potentially grow Aiteo’s asset production to over 150 kbopd and 200mmscf/d.

He said: “Our outlook is bright with 3 producing oil fields and viable crude exports via Bonny terminal. We also have contingent resources to appraise and prospective ones to explore in the medium-to-long term, including full 3D coverage and 2P NNS reserves at 1.6bn bbl. Put simply, we have a clear vision for the future with the experience and assets crucial to providing oil and gas consistently on a regional and global scale.”
Aiteo’s ambitious five-year objectives include tackling the power challenges in Nigeria head-on through its legacy investments in the gas-to-power value chain. “This is a testament to our commitment to the transformation of the entire oil & gas value chain into a world-class landscape,” Peters added.
The company’s main subsidiary Aiteo Eastern E&P is also a major infrastructure provider for Nigeria’s oil industry as the operator of the 97km Nembe Creek Trunk Line, an industry-wide evacuation pipeline for produced fluids covering much of the country’s Eastern Delta region.
Aiteo’s Group Managing Director Mr. Chike Onyejekwe said: “Our growth drivers remain strong leadership, high commitment and motivation, technical and commercial excellence and superior asset base. In the next five years, our operations will continue to be guided by these qualities as we leverage our capabilities comparable to oil majors elsewhere in the world. Indeed, the future is Aiteo.”
In the interim, Aiteo says it is developing a pipeline of power generation projects across Nigeria. The company is confident that its significant gas resources at OML 29 will transform the country’s oil rich Niger Delta region into a power generation hub of repute before long.

About Aiteo:
AITEO Group is an international energy conglomerate in the forefront of innovative solutions with strategic investments across the energy value chain – petroleum products storage and distribution; natural gas; power; and exploration and production.
Our main subsidiary, Aiteo Eastern E&P is the operator of the NNPC-Aiteo Joint Venture. It is also a major infrastructure provider for Nigeria’s oil industry as the operator of the 97 KM Nembe Creek Trunk Line, which serves as an industry-wide evacuation pipeline for produced fluids from Balyelsa to the Bonny Terminal in the eastern delta region.
Aiteo is guided by the principles of sustainability: environmental-consciousness, inclusive operations and superior health and safety policies.
Aiteo is strategically focused on these business areas, with major prospects for immediate revenue growth and market penetration: • Exploration and production • Bulk petroleum storage • Refining of petroleum products • Trading, marketing and supply • Power generation and distribution.
Each of these areas holds massive potential, with global focus on the future of energy generation, significant oil and gas reserves still to be found throughout Africa, and a large number of alternative revenue streams to be found in the refinement of different petroleum products and derivatives.

With a drive towards building a high-quality asset base and significant growth on the horizon, we’re well positioned to deliver long-term value for our stakeholders, as well as for our business partners and customers.

The foundation of our growth strategy is the energy and expertise of our employees, who are committed to working with integrity as they engage and build strong links with our stakeholders in order to deliver significant mutual benefits.

We’re proud of our heritage and the solid reputation of our founders – and of our impeccable track record of safe, reliable and environmentally conscious energy development.

Goldlink Insurance Plc Receives FIRS Team

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12/03/2017

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The management of Goldlink Insurance Plc received a team of the Federal Inland Revenue Service (FIRS) at its Head Office with the purpose of fostering a better relationship.

The Federal team was on a Compliance visit to the underwriting firm in order to ensure its continuous commitment to its tax responsibilities as required by the law.

While appreciating the FIRS support over time, the Acting Managing Director of Goldlink Insurance Plc, Mrs. Funke Moore assured the team of the company’s unwavering commitment in ensuring full compliance with tax laws and obligations.

Goldlink Insurance was licensed in 1993, and has been one of the foremost and experienced underwriters in the Nigerian insurance industry, providing cover for Life and General Insurance businesses.

Nigeria’s PC Market to Decline on Weak Oil Price, Forex Crisis

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12/03/2017

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The Middle East and Africa (MEA) PC market experienced a mild decline of 1.8% year-on-year (Y-o-Y) in Q4 2016 to total 3.2 million units, according to global technology research and consulting firm International Data Corporation (IDC).

“With crude oil prices not showing any signs of strong growth in the near future, PC demand in several parts of the region is expected to suffer,” says Charakla.

“This will include Nigeria, Algeria, Saudi Arabia, the UAE, and several other Gulf countries, as well as some countries within the Rest of Middle East sub-region. Exchange-rate fluctuations and currency weaknesses continue to be another key inhibitor in several countries across the region and are expected to hinder PC demand over the coming quarters. Two of the most affected countries in this respect are Nigeria and Egypt.”

The decline stemmed from the desktop segment, as weak commercial demand saw shipments fall -10.0% Y-o-Y to total 1.2 million units for the quarter. Notebook shipments were up 3.6% to total 2 million units, driven primarily by demand from the consumer segment.

“The narrowing price gap between desktops and notebooks was one of the key factors driving this trend,” says Fouad Charakla, senior research manager for client devices at IDC Middle East, Africa, and Turkey. “The gap narrowed because the overall notebook market average street price (ASP) experienced a considerable decline, while the desktop market ASP experienced marginal growth.

“The region’s single biggest market, Turkey, experienced significant growth year on year, as vendors continued to push volumes into the market, catering to demand from year-end festivities, and companies continued to liquidate their budgets, some of which went towards IT investments. At the same time, there was a spate of government-driven initiatives aimed at triggering a positive outlook for the country’s economy, and this also helped spur PC demand.

“Other key markets, namely South Africa, the UAE and the Rest of Middle East (comprising Iran, Iraq, Syria, Yemen, Palestine, and Afghanistan), all remained close to flat, while Saudi Arabia experienced a Y-o-Y decline. With the Kingdom’s heavy dependence on oil combining with low oil prices, government spending in the country continues to be constrained, which is causing a similar spillover effect on other sectors as well.”

The top vendor rankings remained unchanged, with all top five vendors maintaining their positions from the previous quarter. The top three vendors combined, namely HP Inc, Dell, and Lenovo, accounted for almost 73% of commercial demand for PCs in the region during Q4 2016, which validates their decision to focus largely on serving the commercial segment. Conversely, the other key market players in the region remain largely focused on addressing consumer demand.

As was the case in previous quarters, the overall market share of local assemblers in the MEA region continued to contract as a growing portion of end users opted for multinational brands, with some even shifting towards refurbished PCs.

Middle East & Africa PC Market – Vendor Shares, Q4 2015 vs. Q4 2016
Vendor	Q4 2015	Q4 2016
HP Inc.	25.1%	26.3%
Lenovo	19.5%	20.5%
Dell	14.5%	14.0%
ASUS	7.2%	8.7%
Acer Group	4.8%	5.7%
Others	29.0%	24.8%

Source: IDC EMEA Quarterly PC Tracker, Q4 2016

HP continued to lead the MEA PC market in Q4 2016 in terms of share, after experienced a slight increase in overall shipments. Despite suffering a decline in commercial shipments, the vendor continued to comfortably dominate the commercial segment. Lenovo led the consumer space in terms of unit share, while Dell experienced a strengthening of its position in the commercial space and a loss of traction among home users.

Taiwanese vendors Asus and Acer placed fourth and fifth, respectively, with both experiencing strong Y-o-Y growth. The most significant increases for both vendors were seen in the ‘Rest of Middle East’ market. While it features much further down the vendor rankings ladder and is growing from a small base, i-life experienced the strongest shipment growth Y-o-Y.

With a sub-$200 price point on the majority of its products, the UAE-based vendor has been able to catapult itself to notable market share in the region.

Post-2017, the regional PC market is expected to achieve a marginal growth rate each year through the forecast period ending 2021, driven by growing IT implementations and a recovery from instability.

Etisalat Risks Take-over by Banks over N377bn Debt

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09/03/2017

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Etisalat Nigeria may be taken over by a consortium of banks over a debt of N377 billion hanging on the telco since four years ago.

In 2013, Etisalat took a loan of $1.2 billion from the banks for network expansion and modernization but has failed to keep up with the repayment terms, triggering the current attempt by the banks to take over the telecom firm.

Mr. Ibrahim Dikko, Vice-President for Regulatory Affairs at Etisalat blamed the economic recession in the country for the inability of Etisalat to make the necessary repayments to the banks as at when due. “We are in discussions with our bankers and have been for quite a while. They have not taken over the business and we are hoping that we can resolve the issue and find a way to renegotiate terms,” Dikko told Reuters.

Nigeria’s Weakness Slows Africa Passenger Growth in Jan

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09/03/2017

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The International Air Transport Association (IATA) announced global passenger traffic results for January 2017 showing demand (revenue passenger kilometers or RPKs) rose 9.6% compared to January 2016. This was the strongest increase in more than five years.

Results were positively affected by traffic associated with the Lunar New Year celebrations, which occurred in January this year, compared to February in 2016. IATA estimates the holiday-related travel contributed up to one-half a percentage point in extra demand growth. January capacity rose 8.0%, and load factor climbed 1.2 percentage points to 80.2%.

“2017 is off to a very strong start, with demand at levels not seen since 2011. This is supported by the upturn in the global economic cycle and a return to a more normal environment after the terrorism and political ‘shock’ events seen in early 2016,” said Alexandre de Juniac, IATA’s Director General and CEO.

January 2017 (% year-on-year)	World share¹	RPK	ASK	PLF (%-pt)²	PLF (level)³
Total Market	100.0%	9.6%	8.0%	1.2%	80.2%
Africa	2.2%	5.2%	3.9%	0.9%	70.1%
Asia Pacific	32.9%	14.3%	11.1%	2.2%	81.5%
Europe	26.4%	8.4%	7.0%	1.0%	79.4%
Latin America	5.2%	4.9%	3.7%	0.9%	83.2%
Middle East	9.6%	13.5%	11.2%	1.6%	79.4%
North America	23.7%	3.4%	4.1%	-0.5%	80.0%

¹% of industry RPKs in 2016 ²Year-on-year change in load factor ³Load factor level

International Passenger Markets
January international passenger traffic surged 9.3% compared to the year-ago period. Capacity rose 7.5% and load factor climbed 1.3 percentage point to 80.3%. All regions recorded year-over-year increases in demand led by the Middle East and Asia Pacific.

Asia Pacific carriers recorded an increase of 10.9% compared to January 2016, helped by the impact of Lunar New Year-related travel and solid growth on routes within Asia. Capacity rose 8.9%, pushing up load factor 1.5 percentage points to 81.4%.
European carriers’ international traffic climbed 8.3% in January compared to the year-ago period against a backdrop of moderate momentum in the Eurozone economy. Capacity rose 6.7% and load factor was up 1.2 percentage points to 80.3%.
Middle East carriers had the strongest year-over-year demand growth in January at 14.4%. Capacity climbed 11.4% and load factor rose against the year-ago period for a third consecutive month, up 2.1 percentage points to 79.8%.
North American airlines had the slowest demand growth, with traffic rising 3.2% in January, compared to a year ago. Capacity climbed 3.1%, and load factor was flat at 80.3%. Traffic on the transpacific market has continued to trend upwards but North Atlantic traffic growth has weakened since the middle of 2016, reflecting softer demand on UK-US routes.
Latin American airlines’ traffic climbed 8.2% in January. Capacity rose 5.7% and load factor increased 1.9 percentage points to 83.7%, highest among the regions. Robust international demand within South America is offsetting weaker demand to North America.
African airlines saw January traffic rise 5.6% compared to January 2016. This reflects a recovery on the key routes to/from Europe, despite continuing weakness in South Africa and Nigeria. With capacity up 4.5%, load factor rose 0.7 percentage point to 69.9%.

Kwesé TV Brings ESPN Back to Africa

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09/03/2017

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Econet Media’s Kwesé Sports and ESPN today launched the exclusive ESPN channel on the Kwesé TV bouquet. This collaboration with Africa’s emerging home of premium sports marks the much anticipated return of ESPN to the African continent.

The channel comes after the announcement of the game-changing long-term agreement between the two sports broadcasting powerhouses which confirmed Kwesé Sports as the home of ESPN in Africa.

The channel will deliver the most comprehensive sports coverage on the continent bringing the best in sports to African fans through live coverage of events from across the globe. Along with live sports, the channel introduces unique original programming including an African edition of the popular SportsCenterprogramme, an iconic and hugely popular show with fans across the world. Hosted by ESPN’s Philip Murphy, SportsCenter will cover the latest in sports news, highlights and updates in its signature fast-paced format, which has made it one of the most loved and awarded shows in television.

Since it launched in 2016, Kwesé Sports has continued to shake up the sports broadcasting industry with its unique offering that already boasts an impressive line-up which includes some of the best in American sports, including the NFL, NHL and the NBA. Through this collaboration with the global leader in sports media, Kwesé will exclusively bring thousands of hours of programming to audiences in 19 countries across sub-Saharan Africa.

The channel aims to be the first choice for fans wanting the latest news and updates and promises a diverse programming schedule designed to appeal to even the most discerning sports fan. The exciting launch programming for March includes; March Madness which tips off on the 15^th, X Games action live from Norway, Indy Car 2017 and AFL.

In addition to launching the ESPN channel, Kwesé and ESPN will launch an African edition of the ESPN website and mobile app later this year. Leveraging ESPN’s position as the world’s leading digital sports brand and Kwesé’s pan-African reach and TV everywhere multiplatform distribution, these digital destinations will keep sports fans up-to-date with access to news, scores, features, video, live games and matches wherever they are — putting the best in international sports in their pocket! KweseESPN.com and the new KweseESPN app, coupled with the Kwesé TV Everywhere App, will give its viewers 24/7 access to all the latest in sports from across the globe in a way that has never existed for African sports fans.

Commenting on the launch, President and CEO of Econet Media, Joseph Hundah said: “This is a real game changer. In ESPN we have a collaborator that enhances our offering to our viewers. We have always aimed to deliver premium sports programming and we continue to bring the best to our sports fans, through our acquisitions of top-shelf sports rights and our investment in our platforms and in how we deliver our programming whether through Pay-Tv, Free-to-air or digital mobile platforms. The launch of this channel is significant as it cements our place as a leading provider of sports programming in Africa.”

Added Russell Wolff, Executive Vice President and Managing Director, ESPN International: “We are thrilled to be working with a fellow innovator like Econet to bring ESPN and SportsCenter back to television screens in Africa and expanding the Kwesé and ESPN digital connection with fans. This launch is just the beginning of how these two great companies will serve fans Africa.”

FG Creates Assets Tracking, Management Project

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05/03/2017

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The Federal Government has launched an Asset Tracking and Management Project (ATMProject), through which for the first time, the Government would be able to locate, identify, assess and evaluate all its moveable and immoveable assets, the Minister of Finance, Mrs. Kemi Adeosun, has announced.

Similarly, a Central Asset Register would be created and domiciled in the Federal Ministry of Finance for recording the actual quantity, value, condition and location of all the capital assets belonging to the Federal Government. Under the International Public Sector reporting Standard (IPSAS) Government is expected to record both its assets and liabilities.

“For the first time a central and Unified National Database of Assets ( Asset Register) would be generated and maintained for the purpose of recording, tracking and managing the huge investments in capital assets owned by Government,” the Minister explained.

According to a statement by Salisu Na’inna Dambatta, Director of Information, Federal Ministry of Finance, the Assets Tracking and Management Project and the creation of the Assets Register were new initiatives of the Federal Ministry of Finance designed to enhance accountability, promote transparency and deepen efficiency in line with the change agenda of the Administration of President Muhammadu Buhari.

“The Asset Tracking exercise and Register will make planning and control easier and improve accountability for assets. With the increased allocation to capital expenditure to 30%, it is important that all assets are recorded and accounted for. Where disposals occur, they must be in line with the laid down procedures and must be transparent.”

The Asset Register would afford the Government to know and monitor in real time online information on the inventory of Government Assets.

A Project Coordinator has been appointed by the Minister for the immediate take-off of the Asset Tracking and Management Project and the creation of the first Central Asset Register for the Federal Government.

Meanwhile a circular signed by the Minister of Finance has been dispatched to all Federal Ministries, Departments and Agencies (MDAs) requesting their Accounting Officers to prepare an inventory of all fixed assets held as at 31^st December 2016, to facilitate physical verification by the Project Team.

The circular further requested all heads of MDAs “to ensure that any assets held by current and former staff are fully accounted for. In this regard, you may find it necessary to contact any former staff and /or political office holders to avail them the opportunity to return relevant assets in their possession.”

The circular emphasised that “all inventory records submitted will be cross-checked to capital releases and project account purchases to ensure completeness. Where assets have been sold or otherwise disposed of, they must be recorded with supporting authorization for sale and evidence of payment, where applicable.”

The Circular drew the attention of Heads of MDAs to Chapter 26 of the Financial Regulations, with regards to disposals of assets and warned that “any asset not accessible for physical inspection and not disposed of in accordance with financial requirements will be deemed to have been illegally withheld or converted. Please record such assets so as to enable the investigative agencies to be notified.”

The records of the assets disposed of should cover the last five years and all accounting officers of the MDAs were to submit their reports not later than three weeks from the date of receipt of the circular.

It could be recalled that the Independent Corrupt Practices Commission (ICPC) delivered 40 vehicles to the Federal Ministry of Water Resources which it recovered from some retired Directors of the Ministry; and also the Economic and Financial Crimes Commission (EFCC) announced the recovery of 40 Sports Utility Vehicles from a retired Permanent Secretary who served in the Federal Ministry of Power.

GDP Contracts 1.3% in Q4: 2016; February PMI Data Shows Further Weakness

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05/03/2017

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The National Bureau of Statistics (NBS) released Q4:2016 GDP estimates during the week alongside FY: 2016 GDP report.

The report showed economic output declined in real terms for the fourth consecutive quarter by 1.3% Y-o-Y in Q4:2016, much in line with Afrinvest’s projection of -1.2%, thus bringing FY: 2016 GDP growth to -1.5% Y-o-Y: the first annual GDP contraction in 25 years.
Oil sector was the major drag to aggregate GDP performance against the backdrop of renewed militancy in the Niger Delta region which kept oil production below optimal and medium term trend level for much of 2016.

This culminated in a 12.3% Y-o-Y decline in Oil GDP in Q4:2016 despite an 8.1% Q-o-Q growth which was driven by improvement in oil production volumes from 1.6mb/d in Q3:2016 to 1.9mb/d in Q4:2016.

Non-Oil GDP also contracted 0.3% Y-o-Y in Q4: 2016, reversing the 3bps Y-o-Y growth in Q3: 2016, following a steeper and extended contraction in Services sector output to third consecutive quarter (-1.5% Y-o-Y in Q4:2016 from -1.2% Y-o-Y in Q3:2016) which offset sustained outperformance of the Agriculture sector which grew +4.0% Y-o-Y in the period and moderation in Industrial sector weakness (from -12.2% Y-o-Y in Q3:2016 to -6.7% in Q4:2016).
Sectoral breakdown for full year numbers indicates the Industrial Sector recorded the worst performance (-8.4% Y-o-Y compared to -2.2% in FY:2015) due to weaker oil production volumes and lingering FX challenges which weighed on Manufacturing sector activities. Similarly, the Services sector contracted 0.9% Y-o-Y from 4.7% Y-o-Y in FY: 2015. The Agriculture sector was the only outlier as it strengthened 4.0% Y-o-Y from 3.8% Y-o-Y in FY: 2015.
Our outlook for growth in FY: 2017 is more sanguine than our last forecast update. Of the three cyclical/structural factors we listed as important in influencing Nigeria’s business cycle – oil production, oil prices and policymaking, we have seen substantial improvement in two. Oil production has improved to peak level of 2.2mb/d according to government officials, while oil prices have also stabilized above US$50.0/b with outlook still bullish. The combination of higher oil production and oil prices is positive for FX earnings, government revenue, oil GDP and ultimately aggregate growth. Consequently, we expect a sub-1.0% contraction in Q1:2017 but forecast GDP numbers to swing positive from Q2:2017 due to low oil GDP base in the last 9 months of 2016. Hence, we have revised our FY: 2017 growth forecast upward from an earlier flattish projection to 0.85%.
Yet, rekindling the animal spirit in investors and consumers to achieve high and sustainable growth requires a boost in confidence which at the moment remains ebbed by FX liquidity challenges amidst other structural constraints. February PMI data released by the CBN earlier in the week is a pointer of the subsisting weak level of confidence in the economy.

Manufacturing and Non-Manufacturing activity of the private sector fell for the second consecutive month at a faster rate with the indicators declining from 48.2 and 49.4 in January to 44.6 and 44.5 respectively in February.

Manufacturing production level fell in the month (from an expansion in January), while new orders, employment level and inventories declined at a faster rate. Non-manufacturing business activity, inventory level, level of employment and new orders also declined. The data reinforce our conviction that despite rebound in some key cyclical growth drivers, policymaking (fiscal and monetary) could remain the major downside risk to growth in the short to medium term.

Global Market Review and Outlook
Sentiment in the global equities markets under our coverage was mixed this week as the dollar slid on Friday but stayed on track for a W-o-W gain on growing anticipations that the U.S. Federal Reserve will raise interest rates at its mid-March meeting. All indices in the developed market closed higher as the US S&P rose 0.6% W-o-W while the NASDAQ recorded 0.3% W-o-W gains. The UK FTSE was up 1.6% W-o-W.
In the Euro-Asian region, performance was largely bullish as all indices closed northwards save for the Hong Kong HANG SENG which depreciated 1.7% W-o-W. European equities were led by gains in banking and mining stocks with the France CAC advancing the most, up 3.0% W-o-W while the German DAX followed with a 1.9% W-o-W uptrend. Similarly, the Japan Nikkei close 1.0% higher.
BRICS markets recorded a bearish week as all indices closed in the red save for the South African FTSE which added 0.1% W-o-W. Conversely, the Russian RTS topped decliners, shedding 2.1%W-o-W while the China Shanghai followed suit, losing 1.1% W-o-W. Similarly, the Brazil IBOVESPA and the Indian BSE also slid 0.6% and 0.2% W-o-W.
African markets posted mixed performance with 2 indices closing higher and two lower. The Egyptian EGX and Ghana GSE rose 0.6% apiece while the Kenya NSE tumbled 2.0% W-o-W. Contrary to the previous week, the Nigerian All Share Index was unable to sustain gains as it recorded a 0.9% loss W-o-W on account of DANGCEM.

Equities Market Review and Outlook
Unable to sustain previous week’s uptrend, the All Share Index (ASI) was down 0.9% W-o-W dragged by decline in DANGCEM which fell 5.0% despite FY: 2016 earnings published during the week. The index trended southwards on all trading days of the week save for Monday and Friday.

ASI rose 0.5% on Monday following an exciting FY: 2016 result submitted by ZENITH which triggered a rally in Tier-1 lenders. ZENITH’s gross earnings advanced 17.4% Y-o-Y to N508.0bn while PAT rose 22.7% Y-o-Y to N129.7bn. YTD loss settled at -6.3% while market capitalization depreciated N82.5bn to close at N8.7tn. Activity level improved as average volume and value traded jumped 82.8% and 41.3% to 277.5m and N2.7bn respectively.
During the week, a mixture of largely impressive FY: 2016 earnings submitted by DANGCEM(Gross Revenue and PAT grew 25.1% and 2.9% Y-o-Y to N615.1bn and N186.6bn respectively) as well as a “not-so-surprising” Q4:2016 GDP report published by the NBS, which confirmed Nigeria’s 2016 GDP to have contracted 1.5% Y-o-Y, left sentiment for equities soft by mid-week.

Meanwhile, NESTLE’s FY: 2016 result released on Thursday echoed overall weakness in the economy as a 20.3% Y-o-Y growth in gross revenue to N181.9bn was more than offset by a 66.6% decline in PAT to N7.9bn. The Company however declared a N10.00 dividend for the reporting period.
Performance across sector was largely bullish, save for the Industrial Goods Index which closed southwards, down 2.3% as a result of sell offs in DANGCEM (-5.0%) and PAINTCOM(-4.6%). On the flip side, the Oil & Gas index bounced back from last week’s decline, with a 4.5% W-o-W gain on account of bargain hunting in SEPLAT (+8.1%) and OANDO (+5.3%).

The Banking and Consumer Goods indices added 0.8% apiece owing to gains in GUARANTY(+3.1%), UBA (+2.0%), NESTLE (+10.2%) and VITAFOAM (+9.9%) while the Insurance index advanced 0.4% against the backdrop of declines in AIICO (+9.1%) and NEM (+2.5%).
Investor sentiment improved, as market breadth settled at 1.0x – from 0.5x in the previous week following 23 stocks that advanced against 22 declining stocks. The gainers’ chart was topped by NESTLE (+10.3%), OKOMUOIL (+10.2%) and VITAFOAM (+9.9%) while CADBURY (-13.3%), 7UP (-10.8%) and TRANSCORP (-8.0%) led the list of laggards. We expect the performance to be shaped by further influx of corporate earnings releases in the coming week.

Money Market Review and Outlook
Rates in the money market traded within a band of 13.1% -16.2% for Open Buy Back (OBB) and 14.1% – 17.3% for Overnight (O/N) rate as liquidity levels remained tight during the week. On Monday, the OBB and O/N rate settled at 12.7% and 13.3%, lower than the previous Friday as liquidity levels improved to N73.8bn (from a negative position of –N45.6bn on Friday).

The CBN auctioned OMO bills on Monday offering a total of N60.0bn. Of the N60.0bn on offer, only N16.3bn was subscribed while N15.8bn was allotted. Our view is that lesser allotment relative to subscription is tied to higher marginal rates quoted by investors. To keep liquidity in check, the CBN auctioned OMO on all days save for Wednesday. OBB and O/N settled at 16.7% and 17.3% respectively on Friday, up 3.6% and 3.3% W-o-W.
Activity in the T-Bills market opened the week soft as investors awaited primary market auction slated for Wednesday. Accordingly, average yield steadied at 18.6% from Monday to Wednesday. A total of N310.2bn worth of T-Bills was rolled over at the auction on Wednesday, and investors continued to show strong appetite for these instruments which were all over-subscribed. Average yield settled at 19.1% on Friday, up 2.2% W-o-W.
In a circular released by the DMO during the week, the minimum amount required for participation in T-Bills PMA was revised from N10, 000.0 to N50.0m naira. We believe this could potentially slow activities in the market.

Foreign Exchange Review and Outlook
Following the implementation of the New CBN directive last week, parallel market rate appreciated to N455.00/US1.00 on Monday from N460.00/US$1.00 the previous Friday. The local unit further improved to N450.00/US$1.00 on Tuesday as the CBN continued its intervention to the official market to fulfil bids for Personal and Business Travel Allowance, School fees as well as Medical and Tourism Allowance. Interestingly, this trend was reversed on Thursday as street rates depreciated to N458.00/US$1.00 and to N465.00/US $1.00 on Friday. At the official market, rates marginally improved from N305.50/US$1.00 on Monday to N305.25/US$1.00 on Friday.
Total value of open contracts at the FMDQ OTC FX Futures market settled at US$3.96bn similar to the prior week. The APRIL 2017 instrument remains the most subscribed at US$0.8bn of the US$1.00 on offer for the instrument. Since the introduction of the market in 2016, no instrument is yet to be fully subscribed and as such the liquidity need for which the market was created is yet to be fully realised.
We expect official market rates to continue to trade within a tight band as the CBN sustains its intervention program, parallel market rate is however expected to pull southwards until demand and supply dynamics establishes new short term rate.

Bond Market Review and Outlook
Activities in the local bonds market remained soft this week as investors’ concentrated on shorter term money market instruments. Nonetheless, benchmark bond yields trended southward, with fair buy interest observed during the week (save for Monday when average yield rose 13bps). Average bond yield across benchmark instruments opened the week at 16.3% and had dipped to 16.2% by Thursday, before settling at 16.2% at the end of the week, indicating a flat W-o-W performance. We expect the scheduled commencement of the FGN savings bonds on March 13 2017 to deepen retail penetration and involvement in the local bonds market and also buoy activity level in the market.
Contrary to last week when positive sentiment filtered across Sub-Saharan African sovereign Eurobonds, performance was mixed this week.

The re-pricing of instruments led to an increase in yields on the Nigerian, Ghanaian and South African sovereign bond instruments whilst the Gabon, Senegal, Ivory Coast and Zambian sovereigns enjoyed buy sentiment. Nonetheless, Nigeria’s FGN 2023 Eurobond remains the best performing sovereign Eurobond with a YTD return of 5.5%.
Similarly, performance of the Nigerian corporate Eurobonds was mixed as yield fell on the ZENITH 2019 (down 47bps W-o-W) and FIRST BANK 2020 (down 12bps W-o-W) instruments. All Access Bank Plc’s instruments enjoyed positive sentiment with yield on ACCESS 2017, ACCESS JUN 2021 and ACCESS OCT 2021 declining 32bps, 46bps and 45bps respectively.

On the flip side, sell sentiment was apparent on the FIDELITY 2018 (up 8bps W-o-W), GUARANTY 2018 (up 12bps W-o-W) and DIAMOND 2019 (up 29bps W-o-W). The DIAMOND 2019 and ACCESS 2017 Eurobonds remains the best & worst performer amongst the Nigerian corporate Eurobonds with YTD return of 13.2% and -0.1% respectively.

Afrinvest Research

UN Security Council Visits Nigeria on Fact-finding Mission

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05/03/2017

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As part of its mission to the countries of the Lake Chad Basin (Cameroon, Chad, Niger, Nigeria), the United Nations Security Council (UNSC) will be visited Nigeria yesterday and today (Maiduguri and Abuja).

The mission to Nigeria is aimed at enabling the UN Body get first-hand information on the various issues affecting the country. This will be the first time the Council is visiting Nigeria.

With the on-going crisis in the North East and other challenges faced by the country, the delegation will use the mission to engage with Federal and State Authorities, actors on the ground supporting national response efforts and visit selected affected population.

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