OPEC, Russia agree oil cut extension to end of 2018

OPEC and non-OPEC producers led by Russia agreed on Thursday to extend oil output cuts until the end of 2018 as they try to finish clearing a global glut of crude while signalling a possible early exit from the deal if the market overheats.
Russia, which this year reduced production significantly with OPEC for the first time, has been pushing for a clear message on how to exit the cuts so the market doesn’t flip into a deficit too soon, prices don’t rally too fast and rival U.S. shale firms don’t boost output further.
Russia needs much lower oil prices to balance its budget than OPEC’s leader Saudi Arabia, which is preparing a stock market listing for national energy champion Aramco next year and would hence benefit from pricier crude.
The producers’ current deal, under which they are cutting supply by about 1.8 million barrels per day (bpd) in an effort to boost oil prices, expires in March.
Saudi Energy Minister Khalid al-Falih told reporters the Organization of the Petroleum Exporting Countries and non-OPEC allies had agreed to extend the cuts by nine months until the end of 2018, as largely anticipated by the market.
OPEC also decided to cap the combined output of Nigeria and Libya at 2017 levels below 2.8 million bpd. Both countries have been exempt from cuts due to unrest and lower-than-normal production.
Falih said it was premature to talk about exiting the cuts at least for a couple of quarters as the world was entering a season of low winter demand. He added that OPEC would examine progress at its next regular meeting in June.
“When we get to an exit, we are going to do it very gradually ... to make sure we don’t shock the market,” he said.
OPEC and Russia together produce over 40 percent of global oil. Moscow’s first real cooperation with OPEC, put together with the help of President Vladimir Putin, has been crucial in roughly halving an excess of global oil stocks since January.
With oil prices rising above $60, Russia has expressed concerns that an extension for the whole of 2018 could prompt a spike in crude production in the United States, which is not participating in the deal.
A joint OPEC and non-OPEC communique said the next meeting in June 2018 would present an opportunity to adjust the agreement based on market conditions.
The Iraqi, Iranian and Angolan oil ministers also said before Thursday’s meetings that a review of the deal was possible in June in case the market became too tight.
International benchmark Brent crude rose around 0.5 percent on Thursday to trade above $63 per barrel.
GLUT OR SHORTAGE?
Just as OPEC gathered in Vienna, U.S. government data showed that U.S. oil production rose 3 percent in September to 9.48 million bpd. But Falih said OPEC “won’t be quick on the trigger” to react to short-term U.S. output spikes.
U.S. shale oil producers, which effectively triggered the global oil glut of recent years, have been adjusting their message over the past year, switching away from combative language with regard to OPEC actions.
“If producers in the U.S. increase their rig count over the next few months due to higher prices then I expect another price collapse by the end of 2018,” said Scott Sheffield, executive chairman of Pioneer Natural Resources Co, one of the largest producers in the Permian Basin of Texas and New Mexico, the largest U.S. oilfield.
“I hope that all U.S. shale companies will maintain their current rig counts and use all excess cash flow to increase dividends back to their shareholders,” he told Reuters.
Gary Ross, a veteran OPEC watcher and founder of Pira consultancy, said the market could surprise on the upside with Brent rising to $70 if there were a major supply disruption.
“Everywhere you look there is an ever-present risk to supply,” Ross said.
“In Iraq’s Kurdistan there is a major risk to oil exports because of tensions with Baghdad, in Libya militias are still fighting, in Nigeria the risks of disruptions are significant, Venezuela is on the verge of default, Iran could again face U.S. financial sanctions and even in Saudi Arabia political risk is on the rise,” Ross added.
The production cuts have been in place since the start of 2017 and helped halve an excess of global oil stocks although those remain at 140 million barrels above the five-year average, according to OPEC.
Russia has signalled it wants to understand better how producers will exit from the cuts as it needs to provide guidance to its private and state energy companies. On Thursday, Novak said all companies were on board with the latest limits.

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Nigeria's dollar reserves at $34.53 bln as of Nov. 24

Nigeria’s foreign exchange reserves stood at $34.53 billion as of Nov. 24, up nearly 3 percent from a month earlier, central bank data showed on Thursday.
The bank did not provide a reason for the increase in reserves, which stood at $33.58 billion at the same date last month.
Nigeria’s forex buffer has climbed 40.5 percent this year from a year ago but is still far off a peak of $64 billion hit in August 2008.
Meanwhile, The naira is seen stable on the spot market, supported by investor inflows and almost daily interventions by the central bank, traders said Volumes on the investor window, Nigeria’s main tradable market traded $218.66 million on Wednesday. 

Trades have been consistent on the market for months, helping the currency hold up at around 360 naira per dollar. 

Nigeria has at least six exchange rates which it has used to mask pressure on the currency. Traders expect the naira to hold up across its other exchange rates next week hovering at around 305 naira on the interbank market supported by the central bank.

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Nigeria's Seven-Up gets $60 mln takeover offer after losses

Nigeria’s Seven-Up bottling company has received an offer from its majority shareholder Affelka to buy out minorities for 19.33 billion naira ($60 million), in a takeover deal aimed at restructuring the struggling company.
Privately-held Affelka, the investment firm of the Lebanese El-Khalil family, has offered to acquire 171.5 million shares from minorities at 112.70 naira per share, an 18 percent premium to Thursday’s share price of 95.50 naira.
It already owns 73.2 percent of the bottler, set up 57 years ago, and has the licence to bottle PepsiCo’s Pepsi and other products in Africa’s most populous nation.
The soft drinks bottling industry has been hit by slow demand arising from weak economic growth in Nigeria, Africa’s most populous nation, which has just emerged from a recession and a currency crisis which stifled raw material imports.
“As of now we have received an offer from the majority shareholder of the company. It’s a financial restructuring,” Seven-Up vice-chairman Sunil Sawhney told Reuters by phone.
He said the company has been making losses for some time and that the deal was aimed at restructuring the bottler, which distributes PepsiCo’s 7up, Pepsi and Mirinda-branded drinks.
Shares in the soft drinks maker, which opened for trade at 92.50 naira, rose 5 percent on the news, valuing the company at 59.6 billion naira ($186.25 million).
The Seven-Up takeover deal comes six years after main rival Coca-Cola delisted its local bottling unit in a buyout deal worth $136 million, to expand the business and fend off competition.
Sawhney, who joined the company in a management change this year, said delisting Seven-Up from the stock exchange after the takeover would be “logical”. The takeover is subject to shareholder and regulatory approvals, he said.
Earlier Seven-Up said its board has received an offer from Affelka to acquire all outstanding shares that it does not currently own.
Profits at Seven-Up started to decline in the first three months of 2015 just before Nigeria, Africa’s biggest economy, slipped into its first recession in a quarter of century triggered by low oil prices.
Seven-Up then posted its first loss in half-year 2016 and since then losses have widened. It reported a 6.26 billion naira pretax loss in the first six months of 2017.
“(Affelka) will be injecting more capital into the business,” he told Reuters.

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Fitch says Nigeria targets consolidation but revenues may fall short

Nigeria's 2018 budget aims to narrow the government deficit, but revenues are still highly dependent on oil, and non-oil revenues are likely to fall short of the budget projections, Fitch Ratings says. President Muhammadu Buhari presented the budget to parliament on 7 November. The "Budget for Consolidation" sees the Federal Government of Nigeria's (FGN) fiscal deficit narrowing to 1.7 percent of GDP in 2018, from the 2.8 percent that Fitch expects for 2017. 

We expect rising oil revenues to aid consolidation, but forecast the FGN deficit to narrow less, to 2.4 percent of GDP. 

The key to achieving the envisaged deficit reduction is fully realising revenue forecasts, but this has proved challenging in the past. Nigeria's overall revenue/GDP ratio is among the lowest of Fitch-rated sovereigns. 

We expect that overall revenue will continue to increase in 2017 and 2018 as oil production increases and the economy recovers from recession, but more slowly than budget forecasts envisage. 

The budget speech reported that revenue collection was 14 percent below target as of September 2017, which would be a significant improvement over 2016, when net distributable revenue was 36 percent below budget forecasts. 

Tax revenue growth is likely to have accelerated in 2H17 with faster economic growth, which rose to 1.4 percent in the third quarter but is still unlikely to meet budget targets. The prospectus for Nigeria's recent Eurobond offering shows that, at end-June 2017, total revenue for 1H17 was just over 30 percent lower than the 2017 budget forecast. 

Fitch's forecast for 2017 GDP growth is 1.5 percent. Boosting non-oil revenue is a key pillar in the government's reform agenda, but the structural changes needed to improve tax compliance will only progress slowly. 

One-off increases in independent revenues and the recovery of stolen funds may help, but these brought in significantly less revenue than projected in the previous two budgets. 

The 2018 budget assumes NGN2.4 trillion (USD6.7 billion) in FGN retained oil revenue, based on a budgeted oil price of USD45 per barrel. 

This is well below Fitch's forecast that Brent crude will average USD52.5 per barrel in 2018, but the budget's production assumption of 2.3 million barrels per day (mbpd) is optimistic. 

It would represent a six-year production high and a meaningful and sustained increase in current levels of around 2.0 mbpd. 

Improvements in security and oil infrastructure have boosted production in the last 18 months, but insurgent activity in the Niger Delta, sabotage and theft are risks to production forecasts. 

Meanwhile, reforms to the Nigerian National Petroleum Corporation will take time to substantially increase production. Higher revenue is key to deficit reduction. 

Spending has typically been lower than budgeted, but improved financing conditions should support stronger execution of capital expenditure plans in 2018. 

President Buhari stated that rapid approval of the 2018 budget would help ensure "a more predictable budget cycle that runs from January to December" and avoid a repeat of the delays in approving last year's budget. 

Legislators seeking more spending in their respective states will remain an obstacle to a smooth budgeting cycle ahead of the next general election in 2019. 

The budget does not contain official consolidated deficit forecasts. We forecast the consolidated government deficit to narrow by 0.5pp of GDP to approximately 4.0 percent in 2018, broadly in line with the narrowing FGN deficit. 

Nigeria's general government debt stock is low relative to GDP but rising, and low revenues and the fragility of the economic recovery represent risks to public debt sustainability. 

This is reflected in the Negative Outlook on the country's 'B+' sovereign rating, which we affirmed on 31 August.

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Will OPEC extend its output accord?

OPEC’s output cap agreement has halved oversupply in the oil market, driving the average price up 23.2 percent from $43.8/barrel in 2016 to $54.0/barrel in 2017.

This has supported economies of African countries like Angola as well as Nigeria and Libya, which have both ramp-up production while benefiting from an exemption clause. 

This has also supported currency market liquidity and revenue buffers required to balance budgets in key oil exporting countries like S/Arabia and Russia.
Accordingly, OPEC is set to hold its 173rd extraordinary meeting on Thursday,30th November 2017. Our view is that the cartel alongside Russia will lengthen the output accord to the end of 2018 with the possibility for a review by mid-year if the market dynamics change. 

Nigeria and Libya’s exemption clause may be revisited as capping both members’ output at 1.8 mbpd and 1.0 mbpd respectively is a likely scenario. 

The Nigeria’s National Statistics Bureau recently reported that domestic oil output averaged 2.0 mbpd in Q3-2017. Hence, the argument to cap Nigeria’s output level may intensify.
Although a preliminary meeting held by top members of OPEC and Russia suggests that most members will be voting for an extension, a shorter than expected extension or a delayed outcome of the meeting may trigger pull-back in oil prices to a sub-$60/barrel level.

(C) United Capital Plc

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How Nigerian SEC DG pays self 104.85 mln naira severance while still in service

Nigeria has suspended the head of its Securities and Exchange Commission (SEC), Mounir Gwarzo and set up an administrative panel of inquiry to investigate allegations of financial impropriety against him.
In a statement issued by the minister of finance, Kemi Adeosun, Gwarzo was suspended from office allow for an unhindered investigation of several allegations of financial impropriety levelled against the Director-General.
The minister, according to the statement signed by the deputy director press in the ministry, Patricia Deworitshe, Panel of Inquiry is saddled with the responsibility of investigating and determining the culpability of the Director-General.
The SEC DG has been accused of collecting severance package worth 104.85 million naira while still in service in violation of the civil service rules.
Sources also alleged that Gwarzo retained his position as a director of Medusa Investment Limited, in violation of Public Service Rules (PRS) 03042.
Other allegations against him include the award of contracts to Medusa Investment and other companies to which he is related, thus resulting in a conflict of interest.
The SEC Director-General has been directed to hand over to the most senior officer at the Commission, pending the conclusion of the investigation.
The minister also suspended two other senior staff of the commission, Abdulsalam Naif Habu, Head of Media Division and Anastasia Omozele Braimoh, Head of Legal Department – who have been alleged to engage in financial impropriety in the Commission.

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Nigeria hits 79 pct tax revenue target in 10-month

Nigeria has met about 79 percent of its revenue target from taxes within the first ten months of the year, and its geared to ramp up collection before the year runs to an end, says the chief executive of Federal Inland Revenue Service (FIRS).
Tunde Fowler said the FIRS has generated a total of 3.23 trillion naira in the first ten months of the year through taxes, which represents about 79.35 percent of the amount projected for the whole year.
Fowler attributed the feat to the deployment of technology by the service to ramp up its collection process after the conduct of a tax audit revealed it can generate additional 1 trillion naira from taxes.
Fowler, who spoke before the House of Representative committee on finance and appropriation said the service has the capacity to generate more revenue for the Country.
The FIRS boss who briefed the joint committees on key strategies for achieving the objectives of the 2018 budget, said service hinged its 2018-2020 Revenue frameworks on the government Economic Recovery and Growth Plan (ERGP).
He said with the deployment of technology, the FIRS has been able to capture additional 3.7 billion naira of taxes into government coffers.
According to him, the FIRS has been successful in tax collection largely due to various measures adopted by it to ensure increased collections of federal government portion of corporate and individual taxes.
Fowler said the new modalities structured for optimal access of accruable dues from Voluntary Assets and Income Declaration Scheme (VAIDS) had yielded over 54 million dollars (N16.73 billion) and 207.41 billion naira to government coffers.
“We have stepped up enforcement activities against task defaulters on different fronts; these include placing non-compliance stickers on business premises of tax payers with outstanding amounts but made no move to liquidate it.”
“We also adopted substitution as enforcement tool by putting a lien on the bank account of errant tax payers. “This in my view will serve as deterrent to defaulters and consequently increase tax collection.
“FIRS has so far collected over 6 billion and $4.2 million totaling over 7.7 billion naira. “This drive is continuous and will be unrelenting going forward,” he said.

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Nigeria's stock market seen closing the year higher, analysts express concerns

The Nigeria's stock market is growing in leap and bound, thanks to the increasing flows of foreign portfolio investment (FPI) into the country, aided by the introduction of the investor and exporter foreign exchange window by the Central Bank of Nigeria (CBN) early in the year.
The stock market has grown 39 percent year-to-date as FPIs are taking advantage of improved fundamentals in the capital market and the attractive yields on local fixed assets to invest heavily in the domestic market.
Data from the National Bureau of Statistics (NBS) this week showed that the total value of capital imported into Nigeria more than doubled in the third quarter to $4.15 billion after the economy emerged from a recession.
The NBS report also indicated that investment in the stock market recorded the largest amount of capital imported in the third quarter of the year and closely followed by servicing and production sectors.
Already, capital market operators are optimistic that barring any challenges in the economy and other factors, the market is expected to close the year higher and emerged the best performing among its peers globally.
The nation's stock market has closed on the negative territory last year due to the decline in economic growth and the shortage of foreign exchange to power the productive sector.
"Investors confidence has been restored in the economy with the improvement in the macroeconomic outlook and improved in dollar liquidity in the foreign exchange market," one operator told GFD.
Nigeria has faced severed currency crisis in the wake of global oil price collapse, pushing the Africa's top economy down the slope of recession.
However, Nigeria exited recession in the second quarter of the year with a revised 0.7 percent increase in the Gross Domestic Product (GDP) and followed with 1.4 percent growth in the third quarter.
Although Nigeria economy is still largely driven by the recovery in the global oil price, the sustained tight monetary stance of the CBN has helped to attract more dollar inflow to the country as investors looking for better returns lapped up domestic fixed assets.
Analysts at United Capital Plc have expressed concerns over the dominant role played by the huge capital flow from foreign portfolio investors in the rapid growth of the stock market considering its negative long-term implications on the economy.
"This capital importation mix, which largely favours FPIs, is not sustainable for a mono-economy like Nigeria," the investment bank analysts said in a note to clients on Wednesday.
The analysts said while Foreign Direct Investors (FDIs) targets long-term investments, FPIs track financial assets (stocks, government bills, and bonds) mostly for short-term return. "Hence, portfolio investors are fair-weather friends who would not hesitate to exit at the slightest sign of trouble"

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Capital Importation into Nigeria: Hot money up, Cold money down -United Capital

The National Bureau of Statistics (NBS) recently released Nigerian capital importation data for Q3-17, indicating total capital imported increased 127.5 percent y/y and 131.3 percent q/q to $4.1 billion. The bulk of these came in form of Foreign Portfolio (FPIs) and Other Investments (comprising of; Trade credits, Loans, Currency deposits and Other claims) which advanced 200.7 percent and 124.5 percent y/y respectively in contrast to Foreign Direct Investments (FDIs) which remained significantly low at $117.6 million, after declining 65.5 percent y/y.
This capital importation mix, which largely favours FPIs, is not sustainable for a mono-economy like Nigeria. This is because while FDIs targets long-term investments, FPIs track financial assets (stocks, government bills, and bonds) mostly for short-term return. Hence, portfolio investors are fair-weather friends who would not hesitate to exit at the slightest sign of trouble.
Yet, the sustained influx of FPI into Nigeria at the expense of FDI reflects investor sentiment to the multiple FX regime currently operational in Nigeria. 

Given that huge FPIs are highly volatile, speculative and could have a destabilizing effect in the FX market. 

Nigeria would benefit from a further review of the multiple FX rates to attract cold money-FDI, which are certainly preferred to hot money and guarantee badly needed sustainable economic growth and recovery.

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Nigeria attracts $4.2 bln capital inflows in Q3 -NBS

The total value of capital imported into Nigeria more than doubled in the third quarter to $4.15 billion, after the economy emerged from a recession, the National Bureau of Statistics (NBS) said on Monday.
Nigeria’s economy grew in the second quarter, climbing out of its first recession in 25 years, as oil revenues rose. Last year the central bank imposed currency controls to prevent a collapse in the naira, which affected foreign capital inflows.
The NBS said capital imports were over $4 billion in the third quarter, the first such quarterly rise since 2015, just before the economy tipped into a recession. The rise was driven by portfolio and other investments, it said in a report.
“Shares recorded the largest amount of capital imported in Q3 2017, closely followed by servicing and production sectors,” the statistics office said.
Britain and the United States were among the top 10 sources of imported capital, the statistics office said.
Capital imports fell to $5.12 billion last year after reaching $9.64 billion in 2015.

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Ghana slashes key interest rate to 3-yr low as inflation slows

Ghana cut its benchmark interest rate to the lowest in more than three years as inflation slows toward the central bank’s target.
The Bank of Ghana reduced the rate to 20 percent, Governor Ernest Addison, told reporters in the capital, Accra, on Monday. Of the eight economists surveyed by Bloomberg, four forecast the move.
Ghana will meet the inflation target of 6 percent to 10 percent “at worst” by the second quarter of next year, Addison said.
West Africa’s second-largest economy is rebounding from the slowest growth in more than two decades in 2016 and looser monetary policy could support this. While the inflation rate is at the lowest in more than four years, a weaker cedi, which has lost 11 percent this year, is a threat to the price outlook.
“The indicators of economic activity and business and consumer confidence remain strong,” Addison said. “Inflation conditions remain subdued.”
The key rate has been lowered by 550 basis points since March. While inflation still exceeds the central bank’s target band, it has slowed from a peak of 19.2 percent in March 2016 to 11.6 percent in October.
The cedi weakened 2.4 percent to 4.625 per dollar at 11:45 a.m. in the capital.

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Kenya seeks proposals for $2 billion Eurobond sale

Kenya’s government is seeking proposals from banks about a possible $2 billion Eurobond offering in the first quarter of 2018, according to two people familiar with the matter.
The East African nation’s Treasury asked banks for pitches on how to structure the sale, said the people, who asked not to be identified because they aren’t authorized to speak publicly about the matter. The deadline for proposals is Nov. 29, they said.
Kenya’s return to international capital markets would mark its first sale of foreign debt since a debut Eurobond in 2014. The Treasury is seeking to plug a budget deficit that’s forecast to narrow to 6.4 percent of gross domestic product in the fiscal year through June from 8.5 percent last year.
The government plans to re-enter the Eurobond market before the end of the current budget year, though a placement is likely from February onward as funds are required for spending purposes, the people said.
Proposals from banks must outline the costs of either a five- to 10-year issue to be repaid in bullet form, or 12- to 15-year securities amortizing in the final three years, the people said. A government roadshow is expected to start in January, said one of the people.
Treasury Principal Secretary Kamau Thugge didn’t respond to two text messages and four calls to his mobile phone seeking comment.
New Government
Treasury Secretary Henry Rotich said earlier this month Kenya will return to international debt markets once a new government is in place. President Uhuru Kenyatta is scheduled to be sworn in for a second term on Tuesday after the country held a repeat election in October following the annulment of an August vote.
Yields on Kenya’s existing $2 billion of Eurobonds due June 2024 traded three basis points lower at 5.74 percent by 3:52 p.m. in the capital, Nairobi, on Monday.
Rotich said in May the government intended to use part of the proceeds of the Eurobond sale to repay a $750 million syndicated loan owed to banks including Citigroup Inc., Standard Bank Ltd. and Standard Chartered Plc. The government earlier this month asked for an extension on the repayment of the bulk of the loan until April. In 2014, Kenya extended the maturity of another syndicated loan by three months as it awaited better conditions to issue its debut Eurobond.

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Nigeria says devises fresh policy to achieve power reform objectives

Nigeria has assured the World Bank of its commitment to follow through power sector reforms to achieve its objective of stable and constant energy supply in the country.

Vice President Yemi Osinbajo told the bank official on a visit to his office that the government was appreciative of the support by the World Bank to the implementation of the Power sector recovery programme of the government.
The delegation of the World Bank (WB) and the International Finance Corporation (IFC) was led by

Riccardo Puliti, Senior Director of the Bank’s Global Energy Practice.
Osibanjo noted that the partnership with the World Bank had helped “Nigeria a great deal with the timelines and milestones that had to be achieved and also a great deal in refining our own approach to the entire reform process’’.
“We are completely committed to ensuring that we play our part in the arrangement and we think that this possibly one of the clearest pathways in a long time,’’ he added.
He lauded the partnership between the Federal Government and the World Bank team for the commitment and support shown to the implementation of the Power sector recovery programme.
In his remarks, the Senior Director of Global Energy Practice at the World Bank, Puliti, expressed satisfaction with federal government’s cooperation and commitment to the reform of the power sector.
According to him, the partnership between the World Bank and the federal government is a model which will add great value to the power sector in Nigeria.
Puliti equally praised President Muhammadu Buhari for the remarkable achievements in the ease of business ranking released recently by the World Bank.
He noted that it was a major milestone for the country’s economic reform programme.
The meeting was attended by the Minister of Power, Works and Housing, Babatunde Fashola and the Minister of Finance, Kemi Adeosun.

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Don't clean your ears with cotton buds, say experts

Cotton buds should not be used to clean ears, health officials say.
Inserting a bud could damage the ear canal and eardrum and push wax further down, according to the health watchdog.
The draft guidance from the National Institute for Health and Care Excellence (Nice) also says that ear syringing, in which a large metal syringe is used to pump water manually into the ear to clear out wax, is potentially harmful and should no longer be used.
Its committee agreed that buds may be a ‘hazard’ that can cause infections or push wax further into the ear canal.
The guideline says the ear canal is ‘self-cleaning’, with excess wax falling out on its own, and that the entrance to the ears can be cleaned with a damp flannel.
Rather than manual syringing, which can cause trauma, Nice recommends ‘ear irrigation’, in which an electronic machine pumps water safely into the ear at a controlled pressure to remove problem wax.
This can be done at GP surgeries and community clinics. Katherine Harrop-Griffiths, a consultant in audiovestibular medicine and chairman of the guideline committee, said: ‘Ear irrigation is an effective method of removing earwax.
‘Ear drops should be used to soften the wax, either immediately before or for up to five days before the procedure.’
The Nice committee admitted there is a ‘lack of evidence’ on the risks associated with using cotton buds but that they present a ‘potential hazard’ when used by patients to remove wax themselves.
They added: ‘The general advice given is not to insert anything into the ear canal as it is self-cleaning and the only cleaning needed is to gently wipe the conch of the external ear with a damp flannel over a finger.’
Wax can build up in the ear canal when someone has had surgery or used a hearing aid as well as if cotton buds have gone too deep.
The guideline, which has been put out for consultation until mid-January, also covers other issues linked to hearing loss.
Professor Mark Baker, director of the centre for guidelines at Nice, said: ‘Our draft recommendations can help improve care for people with hearing loss through better management of earwax and referring people with symptoms to the right service at the right time.’
Cotton buds have also proved controversial because of their plastic stems. They are one of the most common types of plastic waste found on beaches.
The current Wildlife Photographer of the Year exhibition at London’s Natural History Museum features a photo of a seahorse with its tail wrapped around one of the buds.

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Nigeria… in need of bold reforms -United Capital

Suppressed by military rule, Nigeria’s GDP growth averaged 1.7 percent in the 90s amid extreme hostilities in the socio-political environment. 

Nevertheless, democracy ushered in an era of fast GDP growth (averaging 8.6 percent) from 2000 to 2010. Over the last 7 years, growth in the Nigerian economy has slowed significantly, battered by mismanagement, insecurity and the collapse in oil prices.
While bold reforms in the Banking, Telecoms, Capital markets and External sector accounted for sharp growth from 2000-2010, the economy was broadly driven by above $100 oil prices from 2011- 2014. 

Given a lower oil prices environment, the IMF projects growth to remain sub-optimal at 1.7 percent into 2020, compared to 6.5 percent average in the last ten years.
With lower oil price being the new normal, embarking on bold reforms remain the only way back to the high growth era as observed above. 

Strategic action plan to develop the non-oil sector, especially the huge potential in the Agric sector is critical to this. 

The Power and Transport Sector must be overhauled and the Petroleum Industry Bill has to be passed. Healthcare and Education reforms will stall medical tourism, brain-drain, and poor manpower development. 

Even so, systems must be built to check corrupt practices, enhance the justice system, and incentivize excellence and meritocracy over mediocrity.

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Nigeria plans to increase taxes on luxury cars, alcohol, others

Barely all unforeseeable changes in policy, Nigeria plans to impose taxes on luxury items, including cars, alcohol and some other products consume by the elites in a move to boost revenue and enhance its fiscal policy.

The special tax, which is been contemplated by the government was designed to raise more revenue from non-oil sector and is targeted to generate additional one trillion naira in its quest to plug the ap in the 2018 budget.
it was projected that the government will generate around 2.5 billion naira through the special taxes on insurance of luxury cars and surcharge on other luxury goods.

The government has also estimated its expected earning from additional company income taxes from the Voluntary Assets and Income Declaration (VAID) scheme at 350 billion naira.

Government is also expected to rake in 100 billion naira from improvements by the collection of Value Added Tax.

According to the Minister of State for Budget and National Planning, Zainab Ahmad, the government has revised its Medium Term Expenditure Framework (MTEF) and Fiscal Stategy paper (FSP) to reflect the new reality.

She presented the revised copy to the Senate Joint Committee on MTEF.
The government had last month presented the 2018-2020 fiscal plan framework to the senate ahead of the presentation of the 2018 budget to the joint sitting of the National Assembly.
“When the FEC approved the MTEF/FSP, it constituted a committee chaired by the Minister of Finance which was tasked with identifying additional sources of about one trillion naira revenue to cut the 2018 budget deficit and new borrowings.
Ahmad said the outcome of the work of the committee necessitated a revision of the Medium Term Fiscal Framework.
According to the document, the adjustments include “710 billion naira to be generated from the restructuring of government’s equity in all the Joint Venture oil assets; and 320 billion naira additional revenues from revision of terms to improve government take in the production sharing contracts.”

The government is also expecting “additional 60 billion from excise duties on cigarettes and alcohol.
The Government is also reviewing the tax profiles of companies that received major payments from it in the last five years.
The review is part of measures aimed at identifying those that have yet to take advantage of the tax amnesty offered under the Voluntary Asset and Income Declaration Scheme.
The government also said it had recruited and trained 2,190 community tax liaison officers under the VAIDS.

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Nigeria holds main lending rate, calls recovery "fragile"

Nigeria’s central bank held its benchmark interest rate at 14 percent on Tuesday and said the recovery of Africa’s biggest economy from its first recession in a generation remained fragile.
Governor Godwin Emefiele said eight committee members had voted to hold the main rate, while one voted for a cut. All other policy parameters were kept unchanged.
“Inflation, in particular, requires very close monitoring to gain clarity on the medium-term optimum path of monetary policy,” Emefiele told a news conference.
All 15 analysts polled last week said rates would be held at 14 percent, with cuts of up to 100 basis points expected in either July or September 2018.
Official data on Tuesday showed growth of just 1.4 percent in the third quarter.
Among other risks for Nigeria, Emefiele cited low fiscal buffers.
The OPEC member’s economy shrank by 1.5 percent in 2016, its first annual contraction in 25 years. The recession was largely caused by low oil prices since the country relies on crude oil sales for around two-thirds of government revenue.
“Mr. Emefiele’s hints about future monetary easing were pretty clear. It seems that policymakers are waiting for a more substantial fall in inflation before starting to lower interest rates,” said Capital Economics analyst William Jackson.
Inflation is slowing but remained at an elevated 16 percent on an annual basis in October. At the media conference, Emefiele said he was optimistic consumer price-growth would moderate to one-digit levels in 2018.

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African richest man, Dangote to commission $500 mln cement plant in Congo this week

African richest man, Aliko Dangote is poised to commission the Congo plants of its cement factory this week in his bid to expand production capacity and increase its share of the commodity market in the continent. 
The plan, with a capacity of 1.5 million metric tonnes per annum is valued at $500 million, according to a statement by Dangote Cement Plc.
The plant, described as the largest in Congo, rolled out its first bag of cement on August 7, and is expected to create about 1000 direct and indirect jobs.
The statement noted that the Congo Plant will be the 10th of such in operation by the company across Africa.
It said that Dangote Cement maintained its stronghold in the domestic cement market accounting for 65 percent of local cement market while Pan-African volumes went up by 7.5 percent to 7.0 mta“We are consolidating our success across Africa through commissioning of our 1.5Mta factory in Congo, the tenth country in which we have established operations.
“In our key operations in Nigeria, we have significantly improved our fuel mix and this has helped increase margins across the Group.
“It is especially good for Nigeria because most of the coal we are using is mined in our own country,” it said.
It attributed sales increase to strong brand recognition, increased point of sales branding, improvements in sales and marketing strategies and higher visibility through trade shows.

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How the whole world is leaving Nigeria behind in everything

In the last couple of days, the Ikeja Electric has been battling to restore power supply to my area, Journalists’ Estate, Arepo, on the Lagos-Ibadan Expressway, simply as a result of a faulty transformer, which is as old as the estate itself. The transformer develops faults every other week while sometimes it will take the Ikeja Electric’s engineers days to rectify the fault.

This was a localised problem and notwithstanding the general malaise plaguing the entire power supply chain in the country. After 57 years of independence, Nigeria has not been able to generate enough energy to meet the need of its teeming population. According to the statistics from the Ministry of Power, Works and Housing, Nigeria currently has the capacity to generate an estimated 7,000 megawatts of electricity but only is able to distribute 4,000 megawatts at the peak period.
Our economic problems as a nation revolve around our inability to do what is right and just to propel us to achieve all-round development that will bring good life to the citizens.
In other climes where things work as they should be, planning is at the core of their developmental agenda. The power sector is just one of the areas we, as a nation, are lagging behind. In Ghana, the government has projected to secure 3,000 megawatts of electricity by 2020 to the already installed capacity. The same thing obtains in South Africa, which currently produces around 53,819 megawatts and still aims to increase generation capacity through other means.
But in Nigeria, huge resources have been deployed to fund power generation since the start of the present democracy, yet we have not been able to progress beyond the so-called 7,000 megawatts.
Apart from the aging equipment, which has continued to frustrate stable power supply, millions of Nigerians in the rural areas are cut off completely from power supply because they are not even connected to the national grid.
The same story is our lot in the petroleum sector of the economy, where fuel supply for local consumption depends largely on importation because all the refineries built years back are already obsolete and are performing below the optimal installed capacity.
With billions, in both local and foreign currencies, expended to carry out turnaround maintenance on the refineries, we have yet to get the right value for the money spent. This is so unfortunate because as an oil producing country, we are compelled to swap our crude oil for finished products to enable us to meet domestic needs. Our nation should have been a major supplier of finished products to the West African coast if we had properly put in place plans to maximise the advantage of our status as an oil producing country.
Again, as a nation, we are falling short of all expectations to find an end to fuel importation to meet domestic consumption. Our best bet to stop huge foreign exchange being lost to fuel importation is the ongoing Aliko Dangote’s 660,000 barrel per day capacity refinery when it finally comes on stream in 2019.
Our capacity to leverage our abundant landmass to produce enough food both for domestic consumption and export has also been challenged as a result of government’s lack of foresight to plan for the future.
In spite of the noise by government agents on improved rice production, millions of tonnes of rice are still being imported into the country, both from direct and directly, through our porous borders. One of the major yardsticks to measure our progress on food production is our consumer inflation index. While the figure has slowed down for the last six consecutive months to around 15.98 per cent on annualised basis, the food index has persistently remained high. This means that all the efforts at increasing capacity for local food productions have not yielded the right results.
We are being left behind by the whole world simply because we operate the so-called African time in our planning. While the rest of the civilised world is setting target dates on their development goals, we are still struggling to even keep up with the little that was achieved by our forefathers.
For instance, in the United Kingdom, the city of Oxford has set a target for all new vehicles to be electric or ultra-low emission by 2040. What this simply means is that by the target year, the major city in the UK would have done away with vehicles using petrol and diesel to reduce the level of emission. Already, all hands are on deck to achieve this aspiration.
In Nigeria, even though we have what is termed the Medium-Term Expenditure Framework and Fiscal Strategy, which captures our spending plans at the federal level, the question is how much of it we do religiously follow in execution.
Aside from the fiscal policy, how much of research from our tertiary institutions is going into our national policymaking process? What is our national goal for the petroleum industry, which lays the golden egg that keeps our economy going for instance?
The whole world is already on the road to phase out the use of petrol and diesel-consuming vehicles with a set target date. Yet, here in Nigeria, we have not been able to fix our refineries to even keep the petrol supply for our local consumption let alone join the electric car revolution.
In Germany, energy supply is predominantly sourced from fossil fuels, followed by nuclear power, biomass (wood and biofuels), wind, hydro and solar.
According to Wikipedia, “Key to Germany’s energy policies and politics is the ‘Energiewende’, meaning “energy turnaround” or “energy transformation”. Germany intends to eliminate current use of nuclear power by 2022. Some plants have already been closed ahead of their intended retirement dates.”
Across the globe today, many countries are setting targets to realise their goals on food sufficiency, economic growth, population, a cleaner environment and good governance. To them, the targets being set are sacrosanct and they are tenaciously working towards the set goal by deploying all needed resources to attain such.
But we are left behind by the whole world today because of our focus as a nation and the lack of priority to develop as fast as we could. Our educational institutions that should have been our fulcrum of development through research are in a shambles. The research institutions set up to galvanise our development strategy have been left in ruins due to underfunding and corruption. Large numbers of our best hands have migrated abroad in search of the green pastures because our politicians have hijacked the instruments of power for their selfish interest.
The sitcom television drama produced by the late poet and environmentalist in the 1980, Ken Saro-Wiwa, with the refrains, “To be a millionaire, think like a millionaire”, reminds me of our lack of thinking as a nation. To be like the developed world, we must start thinking like them.
Our people should learn to put our best into public offices and ensure that self-seeking politicians are not the one ruling us.
Our institutions of governance should be overhauled to make sure that merit supersedes nepotism and favouritism in our appointments in institutions of government.
If there is any lesson to be learnt from the Vision 2020 produced during the late Gen Sani Abacha regime, the present government should not hesitate to dust the document up and start implementing relevant portions and modify others to suit our present development needs and goals.
The attitude of throwing money at every challenge must stop, while proper planning to actually determine which direction our nation should pursue must hence take the front seat.
We have the resources, both the personnel and materials, to attain the right developmental goals for our nation if indeed we would like to reverse the order and be counted among the nations of the world that are moving forward. A clearer picture of a desirable future that will bring peace, prosperity and justice and fairness should be developed and pursued by the government if indeed their change mantra means anything to them.
It is time for us to deploy our best hands in all sectors of the economy to help tackle difficult areas of development and help draw the blueprint to take our nation from the Third World country to the developing one in the shortest possible time.

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Nigeria says to raise $3 bln in Eurobond at 6.5 pct, 7.6 pct by Nov 28

Nigeria on Monday said it plans to close the deal of its fourth Eurobond issuance with a total of $3 billion in two tranches on or before November 28, as part of its $4.5 billion Global Medium Term Note programme, the Debt Management Office has said.
In a statement on Monday, the debt office said it has priced the $1.5 billion naira 10-year debt at 6.5 percent while the $1.5 billion 30-year tenor debt will bear interest at 7.62 percent.
“Successful extension of tenure of financing to 30 years a first for sub-Saharan Africa excluding South Africa and delivers the foundation for long-term infrastructure financing,” the debt office said in a statement. The offering is expected to be closed on or about 28 November 2017, subject to the satisfaction of various customary closing conditions.
According to the Debt office, the offering is expected to be closed on or about 28 November 2017, subject to the satisfaction of various customary closing conditions.
The debt, which was part of Nigeria’s efforts to refinance its maturing domestic debt worth around 7 trillion naira was said to have attracted significant interest from leading global institutional investors.
When issued, the debt will be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market.
Also, the Nigeria said it may apply for the debt to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and The Nigerian Stock Exchange.

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Nigeria welcomes Q3 GDP, says economy steadily improving

Nigeria has welcome the latest improvement in the country's economic growth and promised to continue to work diligently to ensure inclusive growth through pursuant to a raft of policy initiatives, Vice President Yemi Osinbajo has said.
The National Bureau of Statistics (NBS) announced 1.40 percent growth in the country's GDP for the third quarter of the year in its latest bulletin on Monday.
"The Buhari administration welcomes the new growth figures and will continue to work diligently on a daily basis to ensure inclusive growth, to which we have always been committed through the active pursuit of a raft of policy initiatives, past and present," a statement from the office of the vice president said on Monday.
He said the country will government will be ramping up the implementation pace of the Economic Recovery & Growth Plan, formulated last year to restructure the Africa's biggest economy in the wake of it slipping into recession.
"Such initiatives include but not limited to the Social Investment Programmes, Anchor Borrowers Scheme, longstanding Budget Support Facilities to the States, plus other bailout packages, ensuring the comprehensive payment of workers’ salary & pension backlogs among others," the statement said.
"The latest NBS GDP figures show that the Nigerian economy grew by 1.4 percent year-on-year in real terms in the third quarter of 2017. This is a steady continuation of the positive growth of 0.55 percent (now revised to 0.72%) experienced in Q2 2017 and reinforces the exit from the 2016 recession," noted the vice president who heads the country's economic management team.
Osinbajo expressed confidence that the economy will continue to grow given these developments and the reform, and improvements in the business environment shown by the upward movement of 24 places in the recently released World Bank’s Ease of Doing Business Rankings which was better than the target of 20 places specified in the ERGP.
“The overall picture that emerges is that the economy is on the path of recovery. As inflation trends downwards, and with a steady implementation of the ERGP, real growth should soon be realised across all sectors in a mutually reinforcing manner.”

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Nigerian GDP accelerates to 1.4 pct in Q3 -NBS

Nigeria’s Gross Domestic Product (GDP)  1.4 percent year-on-year in the third quarter, extending the gains started in the second quarter when the Africa's biggest economy exited recession, according to the latest data from National Bureau Statistics (NBS) on Monday.

The West African country returned to growth in the second quarter of 2017 but the recovery has been fragile due to the continuation of depressed oil revenues and a shortage of hard currency.
The statistics offfice said oil production, on which the OPEC member state’s economy largely relies, stood at 2.03 million barrels per day in the third quarter.
President Muhammadu Buhari’s 2017 budget outlines record levels of spending, especially on infrastructure, to try to kick-start growth, but the plan has faltered.
The budget was delayed as lawmakers withheld approval, and even when passed, planned capital spending has been slow to happen.
Despite these problems, Buhari’s government is proposing record spending of 8.6 trillion naira in 2018, although economists have questioned whether that goal is realistic.
The faster economic growth may allow the central bank to continue its tight monetary policy to fight inflation that has been above the upper end of the 6 percent to 9 percent target range for more than two years. 

The monetary policy committee is scheduled to announce its final rate decision for the year on Tuesday. The MPC has kept the benchmark rate at a record high of 14 percent since July 2016.

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Ivory Coast to allow cocoa farms in protected reserves areas

Ivory Coast, the world’s top cocoa producer, plans to legalize farming on almost 5 million acres (2 million hectares) of protected reserves to help balance the rebuilding of forests with the output of its most important export.
Unauthorized farming has destroyed three-quarters of 66 identified reserves and the government wants to reclassify these areas as “protected agroforests” where existing farming may continue while new trees are planted, according to a Forestry Ministry document obtained by Bloomberg.

The reclassified forests would remain the property of the government, which said it aims to recover half of the areas and intensify farming, without giving any deadline.
The nation has one of the highest deforestation rates in Africa, losing 80 percent of its forests since the 1970s. That’s mostly due to the unauthorized settlement of cocoa growers, but also because of the uncontrolled timber trade, farming of rubber and small-scale mining.
The document’s proposals will be included in a forestry code review scheduled to be presented to lawmakers and would concern 1.9 million hectares of land, the Forestry Ministry said in the document that Minister Alain Richard Donwahi presented this week to financial partners and non-governmental organizations.
“Reality dictates that forests widely colonized by agricultural practices and people won’t completely be reclaimed,” the ministry said in the report.
Government spokesman Bruno Kone confirmed the report’s content.
Cocoa Output
Ivory Coast produced a record 2 million metric tons of cocoa in the 2016-17 season that ended in September, partly because of new plantations in some of the country’s protected western reserves. As much as 40 percent of its cocoa output may come from protected reserves and national parks, officials said last year.
The nation needs to legalize farming in widely destroyed areas “to pursue the socio-economic development of the country,” according to the document. About a quarter of the population live directly or indirectly off cocoa. The commodity accounted for $3.75 billion, or 29 percent, of the value of the nation’s total exports in 2015, according to the Observatory of Economic Complexity.
Deforestation has been accelerated by a 10-year conflict that left park rangers faced with rebels or ex-soldiers who seized protected areas and began distributing land in return for illicit taxes. Ivory Coast’s forest cover dropped to 3.4 million hectares in 2015 from 5.09 million hectares in 2000, the document showed.
As part of the new strategy, the government aims to also protect forests damaged less than 25 percent, the document showed. Authorities will force the immediate departure of growers in five protected areas across 114,000 hectares and proceed with high-density tree planting, it said.
In 31 other forests covering 427,000 hectares and destroyed by 25 to 75 percent, the government will seek a gradual removal of farmers over as long as 40 years, depending on the crops, the document showed.
The government will deploy 1,000 soldiers in the Gouin-Debe forest in the west during the next three months to start the disarmament of cocoa farmers in the area after clashes with local residents, spokesman Kone told reporters on Thursday. Since October, land disputes have stoked conflict between members of native ethnic groups and farmers who come from other parts of the country.

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Saudi energy minister: see oil glut persists till March 2018

 Saudi Arabia’s energy minister has predicted that there would be oil glut in the global market till the end-March next year, signalling a willingness to extend output cuts when OPEC meets at the end of November to decide on whether to extend caps well into 2018.

Khalid al-Falih said the exit from production cuts would be gradual to make sure market reaction is smooth.

He expressed reservation on the rapid increase in the global oil price, saying he did not want oil prices to rise too fast and too soon to shock consumers.

“We need to recognise that by the end of March we’re not going to be at the level we want to be which is the five-year average, that means an extension of some sort,” he said, referring to inventory levels in the developed world.

“We have gone over 50 percent in reducing excess inventories but that means we still have some excessive inventories that we need to drain,” he told journalists on the sidelines of the UN climate conference in Bonn, Germany.
“We don’t want any spikes in price that shock the market. We don’t want any price movements that are unhealthy for demand. We don’t think we’ve seen any of that yet but that’s a potential especially if God forbid we have disruptions in any major country. We’re hopeful none of this will happen.”
Asked about the most recent spike in oil prices to a two-year high this month he said, “I am not distracted by short-term gyrations in prices and I certainly don’t spend time looking at hedge funds and the flows into financial investment instruments.”
Falih said it was too early to make an assessment on a possible extension to OPEC’s global oil output cuts now, but said Saudi Arabia favours making an extension decision at the next OPEC meeting at the end of the month.
“The November 30 meeting will be an important milestone to announce the way forward. My preference is to give clarity to the market and announce on November 30 what we’re going to do.”
He said Riyadh was in extensive consultations with all colleagues around the world within and outside OPEC.
Asked whether Russia was committed, Falih said: “I have had extensive consultations with my Russian colleagues and I will have some more in the next two weeks, but I know one thing is that the Russians are committed to working with Saudi Arabia and with the rest of the 24 countries that have come together last year.”
He said OPEC will have a better picture closer to the meeting on market fundamentals that will help in making the decision.
“We are waiting for October data to be fully developed and shared with the technical team,” Falih said.
“We’re also waiting for better projections of the fourth and first quarter which are typically lower demand and we will have picture of supply from sources that are not part of the deal. That will give us better predictions on when markets will balance as well as finishing the consultation.”
Asked how OPEC would deal with potential supply shocks to the market including from OPEC member Venezuela where oil production hit a 28-year low recently, he said OPEC’s reaction would depend on the length of the disruption.
“If anything is extended then we will take proper action to make sure that consumers around the world are not short of oil”.
“I assure you that nobody will be short of oil but at the same time we will not stop our current action until global inventories are rebalanced,” he said.
EXIT STRATEGY
Asked what OPEC’s exit strategy from the supply control deal was, Falih said it would be one of gradual adjustment.
“We’ve done our reduction in a gradual way at the beginning of this year and it has worked beautifully so far”.
“We will be very mindful when the agreement ends ... so that we don’t enter a period of excess supply that builds inventories again,” he added.
Falih said Saudi Arabia’s market share remains “healthy” despite the cuts to its exports.
“We’re still number one or number two in all the major markets that we target like Japan, China, Korea, India.”
But in the United States, he said, Saudi Arabia deliberately trimmed its supply because it was an oversupplied market. He said U.S exports were already at 2 million bpd and the Americas as a region is also a major producer.
“The U.S. has access to Canadian, Mexican, Venezuelan, the US Gulf of Mexico and of course shale production.”
Saudi Arabia’s action in the United States was unique to the country but was not intended to be permanent.
“Once the supply curbs are lifted we’ll probably be back in the U.S. to make sure that our customers receive Saudi crude.”

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Ahead of MPC Meeting..to hold or cut, asks United Capital

The Monetary Policy Committee (MPC) will hold its last meeting for the year on November 20 and 21, to consider possible rate-setting choices in view of recent developments and outlook of the Nigerian economy. 

In its previous meeting, the Committee considered the options of tightening, loosening or maintaining the status quo. In the upcoming meeting, we believe the policy choices will now be limited to two - hold or cut rates.

Between the last MPC meeting and now, there have been appreciable improvements in the macro backdrop. 

This has further raised the prospects of a sustained economic recovery. The rally in crude oil prices is the most notable, with attendant accretion to the external reserves supported by significant FX inflows. 

The consistent decline in year-on-year (y/y) inflation, as well as moderation in the month-on-month movement, are other positive trends that the MPC is likely to cheer, even if the y/y decline has been marginal, keeping real rate in the negative territory.
Most recently, we have seen a market-induced correction in interest rates, which we expect the MPC to interpret rightly as an offshoot of stability in FX, better portfolio inflows, expected reduction in domestic borrowing and the general improvement in the macroeconomy. 

Against the backdrop of still high inflation, a possible rate hike by the Fed, and the need to consolidate on recent gains in the economy, the MPC is likely to keep rates unchanged next week.

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Ghana plans to spend $13 bln in 2018

Ghana has proposed to spend  62 billion Ghana cedis ($13.9 billion) in the 2018 fiscal year, the country’s finance minister has said.
Presenting the budget proposal to parliament, Kenneth Ofori-Atta, said the spending plans, with the theme “Putting Ghana Back to Work”, would continue and expand programmes that began in 2017 and initiate new strategic programmes in 2018.
This expenditure, the minister said, would be financed from revenue and grants expected to reach 51 billion cedis in the 2018 fiscal year.
Domestic revenue for 2018 is estimated at 50.5 billion cedis, representing an annual growth of 26.9 percent, while non-tax revenue is estimated at 8 billion cedis, equivalent to 3.3 percent of GDP.
From development partners, the government expects to receive 586.8 million cedis.
The West African cocoa, gold and oil exporter experienced lower revenue performance in the first half of 2017.
During the period, domestic revenue fell short of the target by 13.8 percent, driven mainly by a sharp drop in tax revenue.
Tax revenue fell short of target and accounted for 75.8 percent of the drop in total revenue, caused mainly by shortfalls in income taxes and import duties.
One of the programmes to maximise tax revenue, according to the minister, will be the employment of tertiary graduates in a “Revenue Ghana” programme aimed at employing 100,000 tertiary graduates into various sectors.
The 2018 budget is expected to result in an overall budget deficit of 10.9 billion cedis or 4.5 percent of GDP to be financed from both domestic and foreign sources.
Razia Khan, Chief Economist and Managing Director for Africa and Global Research at Standard Chartered Bank, said it “is a consolidation budget largely as had been expected, given the International Monetary Fund (IMF)’s likely input into the process”.
She added that Ghana was favoured by the rise in hydrocarbons production “which provides a boost to nominal growth, although our expectation is for a pick-up in non-oil GDP as well.”
“The 23 percent projected rise in total revenue and grants in 2018 will nonetheless still be scrutinised closely, as will the ability of the authorities to keep spending and arrears clearance within the limits outlined.
“The plan is for a reduction in the budget deficit (on an overall basis) to 4.5 percent of GDP, from a projected 6.3 percent of GDP this year,” she stated.
Given the revenue disappointment to date, Khan pointed out that there might be a case for Ghana to control spending much more stringently in order to achieve a primary surplus in 2018 of the 1.6 per cent magnitude suggested.
While Ghana has made significant improvements in debt management, the economist maintained that it was still going to require years of primary surpluses to reduce debt ratios meaningfully.
Khan added that the key test would be the political will to do what was needed, even when the IMF programme came to an end.

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Africa’s richest woman just got fired

Angolan President Joao Lourenco dismissed Isabel dos Santos as chair of state-owned oil company Sonangol as he takes aim at the family of former President Jose Eduardo dos Santos.
Africa’s richest woman was relieved of her post along with the entire board of Sonangol, according to a presidential statement. Later Wednesday the government ordered the state television station to terminate contracts for the management of a local and an international state-owned channel with two of Dos Santos’ younger children, according to a statement from the Ministry of Social Communications.
Since replacing the 75-year-old Dos Santos as president in September, Lourenco has vowed to end monopolies and fight corruption in a country where the former leader’s family and their allies control huge sectors of the economy. Before today’s dismissals, Lourenco fired the governor of the central bank, the head of diamond company Endiama and the boards of all three state-owned media companies.
Dos Santos’ dismissal “wasn’t unexpected given the changes that we saw taking place before today,” Gary van Staden, an analyst at NKC African Economics in Paarl, South Africa, said by phone. “I think this is the start of the end of the Dos Santos’ family influence in Angola.”
Another child, Jose Filomeno, heads Angola’s $5 billion sovereign wealth fund and has come under fire this month following a report by Swiss newspaper Le Matin Dimanche claiming the fund’s assets are being mismanaged.
Wednesday’s decisions mark the first time Lourenco has directly targeted the family of Dos Santos, who ruled Africa’s second-biggest oil producer for 38 years and appointed his eldest daughter to the helm of Sonangol last year.
She will be replaced by Carlos Saturnino, whom she fired from Sonangol last year. Saturnino was recently appointed the secretary of state for oil and put in charge of a 30-day review of the sector.
Isabel Dos Santos’ spokesman in Lisbon wasn’t immediately able to comment.
Apart from her former job at Sonangol, Isabel dos Santos also controls Unitel, Angola’s largest mobile-phone company. She owns Candando, a supermarket chain, and has stakes in Angolan lenders Banco BIC and BFA and several companies in Portugal. Bloomberg estimates her net worth at $2.5 billion.
More than a third of Angola’s population of 27 million lives on less than $2 a day, according to the World Bank. The country is struggling to recover from a drop in crude prices and the impact of a civil war that ended in 2002.

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Experts says Kenya's economy could face a bleak 2018

Kenya could face dare economic storm in 2018 in the aftermath of its twice disputed presidential elections.
Kenya now risks missing the government’s projection of 6 percent growth in the economy come 2018, according to top lenders as the East African country is saddled with the triple threat of austerity measures to pay for those votes, slowing credit growth and new accounting rules for banks.

Nairobi-based Stanbic Bank Kenya Ltd and Investec Bank Ltd. strategist, Chris Becker, says expansion could slow to as little as 1 percent.

“With growing headwinds, there is no longer any room for complacency,” said Ronak Gopaldas, an independent analyst, formerly at FirstRand Ltd.’s investment banking unit in Johannesburg. 

The new administration should “refocus its attention to the economy, which has been on the back-burner for the better part of the year,” he said.
The country’s Treasury has already cut this year’s growth target to 5 percent from 5.9 percent as the protracted election furor damped investment and a drought curbed farm output.
Now key indicators for East Africa’s largest economy, the regional hub for multinationals including IBM Corp. and Toyota Motor Corp., are flashing warnings signs, with the latest Purchasing Managers’ Index, a measure of private-sector activity, falling to a record low and bank loans growing the slowest in more than a decade.
After a court annulled an Aug. 8 election, Kenya held a rerun of the vote on Oct. 26, that was boycotted by the main opposition coalition. President Uhuru Kenyatta’s Jubilee Party also won the second ballot, which is now being challenged in the Supreme Court.
The nation’s 2.6 trillion-shilling ($25.1 billion) budget was amended to include “austerity measures” for the current fiscal year to accommodate unplanned expenditures such as the rerun of the election, Treasury Secretary Henry Rotich said in September. The Treasury has revised its 2017-18 budget deficit forecast to 8.5 percent of gross domestic product from 6.8 percent. The government recorded a 9.2 percent shortfall in year through June 2017.
Any reduction in government spending is likely to stunt growth, unless alternative sources of investment are found, said David Willacy, a foreign-exchange trader at London-based INTL FCStone Ltd. in London. Investors “are already weary of the country’s economy after the disastrous presidential election, which is still open to further turmoil,” he said.

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Factors to watch in Nigeria economy in 2018

The Nigerian economy has improved significantly so far this year. Although weak, GDP is on the path of recovery, inflation is moderating, and FX rate has been relatively stable over the last six months. 

The four factors responsible for the above include, OPEC's output cap agreement, government peace deal with N/Delta militants, FGN's ease of doing business initiative/massive spending efforts and the currency market reform.
Evidently, the factors above have boosted investors interest in Nigeria, the equities market is at a record high, up 37.5 percent YTD, 

Q3-17 GDP growth is expected to come in higher, while the inflation rate has also moderated further moderate for the 9th consecutive month amid improved dollar liquidity and stability in the currency market. 

Looking ahead, however, we ask, what factors will drive the performance of the Nigerian economy in 2018?
With 2018 being a pre-election year, the build-up to the 2019 general election is a factor to watch. Monetary policy operation must also be watched closely as the investors look forward to a rate cut in Q1-18 after a prolonged period of monetary tightening. 

Finally, OPEC's decision as to whether to extend its output deal beyond 2018 and FGN's handling of the N/Delta militancy are critical to economic performance.

(C) United Capital

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Decline in food index help slow down Nigerian inflation to 15.91 pct

The sudden drop in Nigeria food index has helped the Africa's biggest economy recorded moderate growth in its consumer inflation figure for the month of October, the National Bureau of Statistics (NBS) said on Wednesday in a report.

The annual consumer inflation slowed for the ninth month in a row in October to 15.91 percent from 15.98 percent the previous month.

However, the food price index slowed to 20.31 percent in October, compared with 20.32 percent in the previous month.
“The rise in the food index, in October 2017 was caused by increases in prices of bread and cereals, meats, oils and fats, coffee tea and cocoa, milk cheese and eggs vegetables and fish,” the statistics office said in its report.
Last month, Central Bank Governor Godwin Emefiele said he expected inflation rates to fall at a faster pace and reach high single-digit rates by the middle of 2018.
The central bank kept interest rates at 14 percent in September to keep liquidity tight, saying it felt that loosening would worsen inflation. The bank’s monetary policy committee is due to announce its latest interest rate decision on Nov. 21.
Nigeria emerged from its first recession in 25 years in the second quarter as oil revenues rose, although the slow pace of growth suggests the recovery remains fragile.
In a flash note to its clients, United Capital said a thorough analysis of the CPI numbers for the month of October indicated that the moderation in headline inflation rate to 15.91 percent was broadly driven by a surprise reduction in the food sub-index which slowed to 20.3 percent y/y and declined 2bps m/m in Oct-17.

Additionally, we observed that despite y/y marginal increase in core inflation sub-index to 12.1 percent in Oct-17, the m/m component of the sub-index fell for the fourth consecutive month to 0.8 percent in Oct-17, further supporting the slowdown in the headline rate. 

Overall, the slowdown in food sub-index is an indication that pressure on food prices continues to reduce. 

The continued stability in the FX market, as well as expectation of stable harvest season, should see inflation trend further down in the coming months. 

We, therefore, see the headline inflation number moderating to 15.70 percent in November.

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Nigeria, others African countries owe airlines $1.2 bln

The global airline industry has $1.2 billion blocked in nine dollar-strapped African countries, the International Air Transport Association (IATA) said on Monday.
The global commodities price crash that began in 2014 hit economies across Africa hard, particularly big resource exporters such as Angola and Nigeria. 

Low oil and mineral prices have reduced government revenue and caused chronic dollar shortages and immense pressure on local currencies.
The fiscal slump has meant governments have not allowed foreign airlines to repatriate their dollar profits in full.
At an aviation meeting in the Rwandan capital, IATA’s Vice President for Africa, Raphale Kuuchi, said that airlines were in talks with “a few governments to unblock airline funds”. He did not specify the companies were affected.
“To do business effectively, airlines must be able to reliably repatriate their revenues,” Kuuchi said. “And that’s not the case in nine African countries: Angola, Algeria, Eritrea, Ethiopia, Libya, Mozambique, Nigeria, Sudan and Zimbabwe.”
Of the total of $1.2 billion, Angola has blocked the largest amount, $500 million, while Sudan has held up $200 million, another IATA official, Adefunke Adeyemi, told Reuters.
Last year Nigeria owed airliners $600 million but as of October the amount had fallen to $221 million, she said.

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