Economic, Industry and Business Developments in Nigeria
Nigeria's economy exits recession but recovery is weak
Nigeria moved out of recession in the second quarter but the pace of growth was slow despite higher earnings from oil, suggesting Africa’s largest economy remains fragile and dependent on its dominant export. Growth was 0.55 percent year-on-year, the statistics office said on Tuesday, while OPEC data shows crude production rebounded 9.1 percent to 1.68 million barrels per day over the same period.
All You Need to Know About Nigeria's New Pioneer Status Tax Incentive
The Federal Government of Nigeria recently approved twenty-seven (27) new industries for inclusion in the list of pioneer industries and pioneer products. By implication, companies operating in these industries listed above would automatically be eligible to apply for and enjoy Pioneer Status Incentive. In addition to income tax holiday, pioneer companies enjoy other benefits such as the exemption of dividends paid out of pioneer profits from withholding tax.
The Nigerian Federal Government in August launched a fund with an initial value of $200m to support local oil and gas firms. The intervention fund, according to the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, is part of measures to improve access to low-cost credit for oil and gas firms operating in the economy. The new fund would offer finance to energy firms setting up manufacturing facilities or acquiring assets such as oil rigs, ministry officials said. It would also offer project financing and help refinance existing loans, they said.
Nigeria to join aviation emission reduction implementation by 2021
By 2021, Nigeria will join the International Civil Aviation Organisation in the implementation of the pilot phase of the Carbon Offsetting Reduction Scheme for International Aviation, the Nigerian Civil Aviation Authority has said. The country has also developed and submitted its state action plan to ICAO and has also voluntarily notified ICAO that it will join CORSIA implementation from the outset during the pilot phase from 2021 with a view to being on the same page with the rest of the world on emission mitigation measures.
Investment inflows into Nigeria rises by 95% to $1.7 billion
According to the National Bureau of Statistics August capital importation report, investment inflows into the country rose by 95.02 per cent from $884.1m in the first quarter of this year to $1.79bn in the second quarter. Year on year, this was an increase of 43.6 per cent from the $1.04bn recorded in Q2 of 2016. A month on month analysis of capital importation in the second quarter shows that the month of May recorded the highest of amount of capital importation ($616.5m), followed by June with $612.6m and May with $563.3m.
Africa’s richest man and industrialist Aliko Dangote is set to expand his business territory as he plans to move into renewable energy and petrochemicals industries, even as he intends to put in $50billion investments in the U. S. and Europe by 2025. Chairman of the Group Aliko Dangote, who made this known in an interview with Bloomberg Markets, also said that he would move into these territories beginning 2020 after completing almost $5 billion of agricultural projects and an $11 billion oil refinery in Lagos. “Beginning in 2020, 60 percent of our future investments will be outside Africa, so we can have a balance,” said Dangote, worth $11.6 billion, according to Bloomberg’s Billionaires Index.
Nigeria and Morocco have set up a steering committee to develop a sustainable crop insurance scheme for the country. The committee comprises representatives of the Nigerian Agricultural Insurance Corporation, Bank of Agriculture, the Moroccan Agricultural Insurance Company, MAMDA and MAMDA RE. In developing the insurance scheme, the committee is expected to use parametric products and leverage the Moroccan model for crops covering selected areas of between 5,000 and 10,000 hectares of land.
The President, Dangote Group, Alhaji Aliko Dangote, in August disclosed that the company would invest $450m in agriculture development in Niger State over the next three years. Dangote, who made this known during the 2017 Niger State Investment Summit in Minna, said the funds would be used in establishing a large scale rice processing mill to process over 200, 000 metric tonnes of paddy rice and a state of the art fully integrated sugar industry involving the development of over 30,000 hectares of sugar cane plantation and the production of about 500, 000 metric tonnes of refined sugar.
Russian bank targets Nigeria, others in expansion drive
Promsvyazbank, one of Russia’s largest privately-held banks, is looking to Nigeria and other African countries to expand its business, one of its senior executives told Reuters. To cater to its clients’ needs, Promsvyazbank is now studying business opportunities in Nigeria, Kenya, Rwanda, Tanzania, Uganda, Zambia and other countries, Alexander Meshcheryakov, the bank’s Head of Transaction, Documentary and International Businesses said in an interview with Reuters.
Lafarge to merge Nigerian units to simplify ownership structure
Lafarge Africa is consolidating its businesses on the continent to simplify its ownership structure and operations, its head of strategy, Wole Adeleke, told Reuters in August. Wole Adeleke said the decision was made three years ago after Lafarge combined its Nigerian business with its South African operations and listed the combined entity, which it renamed Lafarge Africa, on the Lagos stock exchange. Now its seeking approval from the Securities and Exchange Commission to merge the operations of two other wholly-owned units, in a move engineered to consolidate management of the companies with no operational savings, Adeleke said.
General Electric will rehabilitate and run two of Nigeria’s narrow gauge rail lines for a period of 30 years, the Federal Government has said. The Minister of Transportation, Mr. Rotimi Amaechi, stated that GE would start operating in Nigeria in two months’ time. He said, “We are giving the narrow gauge rail system to General Electric as a concession. GE will rehabilitate it and run it for 30 years. We concluded on Tuesday. The agreement is being drafted. So, around ending of August or early September this year, we will sign the agreement. After we sign the agreement, by October 2017, they will start operating. They will operate and repair the narrow gauge.”
MTN returns to first-half profit after turbulent 2016
MTN Group, Africa’s biggest mobile phone operator, on Thursday returned to profit in the first half of the year, helping the company to move on from a turbulent 2016 that highlighted the risks of its emerging markets strategy. The results were bolstered by the absence of charges related to a $1.1 billion fine imposed by Nigerian authorities last year in a long-running dispute over unregistered SIM cards. But the profits disappointed analysts and investors partly because of the impact of foreign currency translation.
Britain's Unilever to subscribe to Nigerian unit's share sale
Britain’s Unilever will subscribe to a 58.85 billion naira ($162 mln) share sale by its Nigerian unit in cash and will not convert a shareholder loan to equity for the rights issue. Unilever granted its Nigerian unit a $108 million loan to help clear currency backlogs in the wake of a dollar shortages in Africa’s biggest economy, brought on by low oil prices. The household products maker, 60.05 percent owned by Unilever is in the market to raise fresh funds to offset loans owed to related firms and to avoid currency risk in case of a devaluation of the naira, its chief financial officer said.
Nigerian Investor Sets Up $135 Million Commodities Exchange
A Nigerian startup is developing a new agricultural commodities exchange in Africa’s most populous country to take advantage of the government’s efforts to boost farming output to reduce reliance on oil. The exchange, Integrated Produce City Ltd., will be located near the southern city of Benin, about 300 kilometers (186 miles) east of Lagos, Nigeria’s commercial hub, a site accessible to nearby growers of cocoa, palm oil, rubber and cassava, Chief Executive Officer Pat Utomi said in an interview.
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