Subsidy removal: FG saves N18.3bn in six weeks

The Federal Government’s savings as a result of the removal of subsidy on both petrol and kerosene are growing daily,

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Between January 1 and February 12 this year, an interval of about six weeks, the Federal Government made over N18.3bn as savings from the removal of subsidy on Premium Motor Spirit and House Hold Kerosene.

The government officially stopped subsidy on PMS, popularly known as petrol, on January 1, 2016, while on January 23 this year, it also ended the subsidy regime on kerosene, according to the pricing templates for both commodities obtained from the Petroleum Products Pricing Regulatory Agency. The PPPRA is the agency of the Federal Government that fixes and regulates the prices of the white products, PMS and HHK, as well as other refined petroleum products across the country. The PPPRA occasionally updates the templates for both commodities to reflect fluctuations in the global prices of crude oil.It unveiled its revised PMS template on January 1, 2016 while that of HHK was posted on January 23, a development that showed that the Federal Government now makes extra cash daily from every litre of petrol and kerosene sold across the country.

An analysis of the various updated templates so far released by the agency after they were revised showed that the Federal Government had raked in over N18.3bn in six weeks. For instance, in the recent template for PMS, which was posted on the PPPRA website on February 12, the government made a cash recovery of N15.23 on every litre of petrol sold in the country. On petrol alone, about six templates had been released by the regulatory agency, beginning with the one posted on January 1 this year, which confirmed the stoppage of petrol subsidy and showed an over recovery of N1.4 per litre of PMS.

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CBN backs real sector with N1.3tn

The Central Bank of Nigeria says it has supported the real sector of the economy to the tune of over N1.3tn as part of its efforts to tackle the challenges facing the economy.

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CBN Governor, Godwin Emefiele

The support, according to the CBN, includes the N300bn Real Sector Support Facility; N220bn Micro-Small and Medium Enterprises Development Fund; N75bn Nigeria Incentive-Based Risk Sharing System for Agricultural Lending; and the N213bn Nigeria Electricity Market Stabilisation Fund. Others are the N50bn Nigeria Export Import Bank Fund; and the N500bn Export Refinancing and Restructuring Facility.

The Governor, CBN, Mr. Godwin Emefiele, stated this while declaring open a seminar for financial journalists in Ibadan on Monday. Emefiele, who was represented by the Deputy Governor, Corporate Services, CBN, Mr. Adebayo Adelabu, said that beyond the primary mandate of the central bank which is to ensure monetary, price and financial system stability, it had gone a step further to support different sectors of the economy for developmental purposes.

He said, “The far-reaching objectives of the CBN in the implementation of schemes and programmes for real sector development focuse on the inherent potential in the sector vis-à-vis our conviction that the sector has sufficient employment capabilities, high growth potential, contributes significantly in accretion to foreign reserves, expands the industrial base and apparently diversifies the growth potential of the national economy.

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New electricity tariffs take effect today amid opposition

The Association of National Electricity Distributors on Sunday has described the new tariffs, which will become effective on Monday (today), as a necessary move that will attract investments into the power sector.

The Association of National Electricity Distributors on Sunday has described the new tariffs, which will become effective on Monday (today), as a necessary move that will attract investments into the power sector. This is, however, coming amid opposition from labour unions, with the Nigeria Labour Congress, Trade Union Congress of Nigeria and some civil society organisations vowing to picket electricity distribution companies across the country as a way of resisting the hike in electricity tariffs.

The Minister of Power, Works and Housing, Babatunde Fashola, however, said the new electricity tariff regime was the first major policy of the President Muhammadu Buhari administration. The labour groups said the tariff increase could not be justified as there had not been any significant improvement in the services of the power firms. The Executive Director, Research and Advocacy, ANED, Mr. Sunday Oduntan, said in aninterview with our correspondent that the country could not see improved power supply under the current tariff regime.

He said, “If you want an improved service, we have to have a cost-reflective tariff. The required huge investment cannot happen without us having an appropriate pricing. That is the issue. We have been under-selling for a long time, and you can’t be selling a product that is supposed to be N100 at N60 and people are expecting improvement; that business will collapse. “So, it is not about us increasing tariffs, it is about reviewing the tariffs upward to meet the operational cost of the business so that we will not continue to be in darkness perpetually.”

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Minister of Power, Works and Housing, Mr. Babtunde Fashola

Four Nigerian banks among world’s top 500

First Bank of Nigeria Limited, Guaranty Trust Bank Plc, Zenith Bank Plc and United Bank for Africa have been named among the world’s top 500 banks. A new study conducted by the United Kingdom-based The Banker Magazine gave this verdict.

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The 2016 The Banker and Brand Finance Top 500 Banking Brands report showed that First Bank retained its number one banking brand ranking in Nigeria for the fifth consecutive year.

First Bank moved up the scale by 16 places, rising from 336th position in 2015 to 320th this year. The ranking was published in the February edition of The Banker magazine of the Financial Times Group in conjunction with London-based Brand Finance.

While GTB moved to 389 in the world from 417 in 2015, Zenith Bank dropped from 388 in 2015 to 392 in 2016. UBA returned to the ranking in 447, while Access Bank Plc dropped from the 2016 ranking. Access Bank was ranked 496 in 2015.

A statement by the Country Representative of The Banker magazine in Nigeria, Mr. Kunle Ogedengbe, noted that First Bank’s brand value increased to $322m in 2016 from $300m in 2015 while that of GTB also increased to $243m from $213m. A brand value is the licensing rate that a third-party would need to pay to use the bank’s brand. The 2016 brand value of Zenith Bank increased to $238m from $235 in 2015 while UBA that made a return to the ranking since 2012 has a brand value of $198m. UBA’s brand value in 2012 was $121m.

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Dollar scarcity delays petrol importation – Marketers

The country may experience another round of petrol scarcity soon if the naira continues to depreciate in value, particularly against the United States dollar, oil marketers have said.

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The marketers noted that sourcing for dollars to import the product was becoming increasingly difficult, with most them turning to the parallel market for foreign exchange. The oil marketers told our correspondent that they buy a dollar for as high as N280 at the parallel market, because it was not easy to get the greenback at the Central Bank of Nigeria’s official exchange rate of N197.

A major oil marketer, who spoke on condition of anonymity due to the sensitive nature of the issue, said, “Everybody is sourcing for forex; when you are lucky, you get it. But when luck is not on your side, you have to wait. Since the petrol import allocations usually lapse after three months, people often have the latitude to source for forex within the period. For example, the last allocations were given in December and so people had the latitude to source for the foreign exchange for about two months.

“The essence of giving the allocations ahead is also for you to plan. For instance, if you want to bring in three cargos, you can’t bring in all at once. Maybe you bring one in the first month, the second in the next month and the third cargo in the last month.

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HSBC to freeze salaries, hiring in 2016 in battle to cut costs

Europe's largest lender, HSBC, is imposing a hiring and pay freeze across the bank globally in 2016, two sources familiar with the matter told Reuters.

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HSBC headquarters building

An email was sent to staff on Friday detailing the latest cost-saving measures, according to the sources who spoke on condition of anonymity. Like numerous other global banks, HSBC (HSBA.L) is in the midst of a cost-cutting drive to boost profitability and returns to shareholders, and is pushing through with plans for annual cost savings of up to $5 billion by 2017.

Europe's biggest bank said in June that it planned to slash nearly one in five jobs and shrink its investment bank by a third in response to sluggish economic growth and tighter global regulation of bank balance sheet risk.

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