BNET Nigeria News Update

June 2017

“Now, we have to collaborate with you, and we will keep HIGHLIGHTS our side of the bargain in all the agreements we have signed,” Buhari was quoted to have said in a statement by his Special Adviser on Media and Publicity, Mr Femi China plans fresh $40 billion Adesina. round of investments in The president had visited China in April, last year, as guest of President Xi Jinping, and the two countries signed Nigeria memoranda of understanding on projects, running into billions of dollars. At the press briefing with his Nigerian counterpart, the Chinese Foreign Minister said the purpose of his visit to Nigeria was to implement the important agreement and cooperation reached between the Chinese and Nigerian January 2017 presidents and at the same time work closely with Nigeria to ensure that the outcome of the FOCAC summit are well The Chinese Foreign Affairs Minister, Wang Yi, has implemented here in Nigeria. disclosed plans by the Chinese government to invest up to “In order to achieve further development and prosperity $40 billion in Nigeria as part of efforts aimed at deepening of the two countries, we need to strengthen our political relations between the two countries. mutual trust, deepen complementarily between our The amount, which was announced by the minister during developments, further expand practical cooperation and a joint briefing with his Nigerian counterpart yesterday in deepen our strategic partnership,” he said. Abuja was in addition to other contributions China had He described Nigeria and China as strategic partners made to Nigeria to support her developmental activities. whose relations he noted had developed well. He, He said his country had invested about $45b in various however, said when compared with the size, population projects in Nigeria and is at the verge of releasing another and markets of the two countries, their cooperation had $40b. large potential to be deepened. “China has already invested or financed a total number of The foreign minister said he was confident his visit would $22billion projects here in Nigeria, another $23billion be successful in further strengthening the strategic projects are on-going. In addition, we are also following up partnership between China and Nigeria. another over $40billion of investments, which are in the Earlier, Nigeria’s Foreign Affairs Minister, Mr. Geoffrey pipeline,” Yi said. Onyeama, commended the Chinese government for her The Chinese foreign minister had met earlier in the day solidarity with Nigeria and Africa. with President Muhammadu Buhari at the Presidential He said the relationship between Nigeria and China was Villa, where the president pledged that Nigeria would one that was very strong and had been going on for many honour all agreements signed with the People’s Republic years. of China. While commending the Chinese government officicials for “This administration is very serious about infrastructural their yearly visit to African countries with a view to development. We want rail, road, power, skill acquisition discussing substantive issues of development, he stressed for our people. We ought to have developed beyond this that the visits were unique because they helped to display point, but we neglected infrastructure when we had the and show solidarity of the Peoples Republic with Africa. resources.

Onyeama said: “You know of course that the Peoples made by the Chinese government to realize national Republic of China has been meeting regularly with Africa unification”. and the forum for discussing technical cooperation with African countries, the acronym is FOCAC. On her part the Government of the People’s Republic of China while appreciating the gesture of Nigeria over the “The last one took place in South Africa last December and Taiwan issue reaffirmed her commitment to actively the government of China made available a total of $60b develop China-Nigeria strategic partnership across board. for Africa and a number of countries, including Nigeria are in discussions to see how much of that could be used to Speaking to journalists after the statement, Onyeama assist in the various projects that we have in this country. stated that the federal government took the decision to remove any iota of doubt in the minds of the Chinese He said aside the FOCAC issue, China had, so far, invested people about Nigeria’s commitment to the unity of China. between $60b and $80b in Nigeria, adding that President He said: “On the issue of building trust, the international Muhammadu Buhari’s visit to china last year had further community has embraced one China and China is a opened up more areas of cooperation. member of the United Nations and we don’t want to leave “In area of infrastructure, which is one of the priority areas any doubt on the issue,” adding: “We adhere to it in the diversification programme of this government from completely and there is no ambiguity at all.” oil to agriculture and infrastructure, the Chinese He said Nigeria as a nation would do everything to realize government has been showing a lot of cooperation with the one China policy as well as any effort that would us,” the minister said. promote the peace and well-being of the People’s He identified transportation as one area the Chinese Republic of China. government had been very helpful to Nigeria. According to Onyeama, China is one of the countries that Meanwhile, Nigeria has withdrawn its recognition for has been in full support of reforms in the UN that would Taiwan, pledging her support for one China in a move see Africa having two seats at the UN Security Council, considered as part of efforts at strengthening its relations saying it deserved to be supported in her unification drive. with China. Similarly, Yi, while noting that the gesture would enhance Nigeria is, therefore, to withdraw all diplomatic relations the bilateral ties between the two countries, said China with Taiwan as a country, as well as withdraw would not only respect the one Nigeria policy but would accreditation from Taiwan’s nationals. In addition, the do everything to support the one Nigeria dream. Taiwanese office in Abuja would be shut, while it would be allowed to relocate to Lagos as a trade mission with He pledged the support of China in helping Nigeria overcome her security challenges as well as supporting the skeletal staff. administration’s efforts at diversification of the economy, This position, which was contained in a joint statement by particularly in the area of agriculture and infrastructure. the Ministers of Foreign Affairs of both Nigeria and China in Abuja yesterday, also saw the governments of the two countries reaffirming their mutual respect for the Central Bank of Nigeria injects sovereignty and territorial integrity of each other. $418 million to oil marketers Nigeria, in the statement reaffirmed that the “One China” policy was at the core of its strategic partnership with and others china. It said: “The Government of the Federal Republic of Nigeria recognizes that there is only one China in the world; that the Government of the People’s Republic of

China is the sole legal government representing the whole of China, and that Taiwan is an inalienable part of China’s April 2017 territory. “The Government of the Federal Republic of Nigeria In line with its avowed determination to ensure ample reiterates not to have any official relations or engage in supply of foreign exchange (FX) in the market, the Central any official contacts with Taiwan, and supports all efforts Bank of Nigeria (CBN) last Friday auctioned US$418 million

2 through retail-Special Secondary Market Intervention Sales Monday in Lagos, to decide on ways to force down dollar (SMIS), at a marginal rate of N310/$. rates differential and narrow the gaps between official and parallel market rates. The Acting Director, Corporate Communications, CBN, Mr. Isaac Okoroafor, in a statement on Sunday, said The emergency meeting became exigent following last petroleum, airlines, agriculture and raw week’s sudden depreciation of the naira against dollar, materials/machineries sub sectors benefitted from the which the operators said is against the interest of their auction. operations and economy. The auction was in addition to the US$350 million sold as According to a statement on Sunday, the President, wholesale auction, Business Travel Allowance/Personal Association of Bureaux De Change Operators of Nigeria Travel Allowance (BTA/PTA) and school fees last week. (ABCON) Aminu Gwadabe said the meeting with the theme: ‘Role of BDCs in Price Stability- Realities and This is expected to strengthen the naira exchange rate in Compliance’ will be used to warn erring BDC directors on the coming days. the consequence of violating operating guidelines. The naira closed at N405 to the dollar on the parallel He said the BDCs would continue to support CBN’s market last Friday. exchange rate stability objectives and also ensure that “In the weeks ahead, the CBN will sustain its intervention official and parallel market rates convergence is achieved. through the sale of foreign exchange to all segments of the “We want BDC Directors to know the gains of price market i.e. PTA/BTA, Wholesale SMIS, Retail SMIS and the stability, rate harmonisation and regulatory compliance. BDC. The Bank will sell short tenured forwards of 7-30-day Operators with infractions will face penalties. We did it in maturity to meet demand of manufacturers and all other 2006 when the BDC window was first opened. We helped foreign exchange users,” Okoroafor said. the CBN to narrow the huge gap between official and He added: “These significant and consistent injection of parallel market rates. We are ready to do it again,” he said. foreign exchange into the market should reassure all Gwadade said the BDCs helped the CBN to narrow the foreign exchange users of our determination to continue exchange rate gap from N520 to present rate, and will to meet all legitimate FX demand in the market while continue to achieve better results as the CBN continues to striving to achieve exchange rate stability in the market.” fund BDCs with increased dollar allocations. THISDAY reported on Saturday that the anticipated $6.4 “We are ready to partner with the CBN to ensure there is billion inflow into the country was expected to boost rate convergence. We want to make the market dollar liquidity and help strengthen the naira against the transparent, accountable and secure for the economy, United States dollar. investors and Nigerians in Diaspora so that more dollars THISDAY findings show that the $6.4 billion inflow is will be attracted into the economy to strengthen the local expected to come from three sources: The sum of $4.5 currency,” he said. billion is expected into the country following the directive Gwadabe said the BDC directors are the owners of the by President Muhammadu Buhari to the Ministries of business, and should understand that they carry corporate Finance and Budget and Planning, as well as the Central governance burden, and will directly face sanctions when Bank of Nigeria (CBN) to address outstanding issues in their operations run contrary to CBN’s guidelines. securing the loan from the Peoples’ Republic of China. “We want the BDC directors to fully take charge of their Also, there is the balance of the $1 billion African businesses, because they will be punished if anything goes Development Bank (ADB) loan. Of this amount, $600 wrong. We also want the public to know that BDC million had been drawn, leaving a balance of $400 million, operators are not criminals, but remain critical partners of which is a potential boost to Nigeria’s forex reserves when the CBN in ensuring that price and exchange rate stability it flows into the country. are achieved,” he said. In addition to this, another $500 million is being expected The ABCON boss said that BDCs’ capital is eroded anytime from the Global Medium Term Note Programme which exchange rates go up, and naira is depreciated. “We suffer was issued recently and attached to the $1 billion earlier financial losses anytime the naira depreciates. We want a offered and over-subscribed. better and harmonised exchange rate,” he said. In a related development, directors of over 3,000 licenced Bureaux De Change (BDCs) firms will be meeting on 3

He praised the CBN for selling $20,000 to each licenced “He is very grateful for the prayers and good wishes of the BDC firms last week, adding that the funds would help to people, and hopes they would continue to pray for the further strengthen the naira against the dollar. peace and unity of the nation,” Mr Adesina said. “We expect that the $20,000 given to us will go a long way According to Mr Adesina, the length of the President’s stay to douse the tension in the market even as we urge the in London will be determined by the doctors, saying that CBN to continue to boost liquidity in the market,” he said. government will continue to function normally under the He also urged the CBN to continue to take steps that leadership of the vice-president. would help bring more foreign investors to the economy. “President Buhari has transmitted letters about the trip to Gwadabe said ABCON has a zero tolerance for non- the Senate and the House of Representatives, in compliance with regulatory requirement and unethical compliance with Section 145 (1) of the 1999 Constitution,” conduct amongst its members. The group, he said, created he added. the office of Compliance Officer at its National Secretariat President Buhari had travelled to London in January for a and in all its zonal offices and also provided vehicles for the compliance officers to regularly visit BDCs under their similar check up and returned on March 10, after 51 days. jurisdictions. Last year June, the president also travelled to check an ear infection. “BDCs are able to do more business when the exchange rate is stable and relatively close to the official exchange A Light Reception rate and so, will do everything within its powers to support CBN’s drive for exchange rate stability,” he said. Meanwhile, Vice-President Yemi Osinbajo and Senate President Bukola Saraki on Sunday night paid a farewell visit to President Buhari. Buhari returns to London for The president, who confirmed this development on his medical care Twitter handle on Sunday in Abuja, said he also received the Speaker of the House of Representatives, Mr Yakubu Dogara, in the Presidential Villa on similar mission. President Buhari posted: “I received Vice-President Yemi Osinbajo, Senate President Bukola Saraki and Speaker Yakubu Dogara at home this evening ahead of my trip tonight.’’ May 2017 President Buhari had earlier hosted the 82 rescued Chibok Nigerian President Muhammadu Buhari has again schoolgirls to a light reception shortly before the arrival of proceeded to London for follow-up medical consultation prof Osinbajo, Mr Bukola and Mr Dogara. with his doctors. The president described the 82 Chibok schoolgirls as a President Buhari who left Abuja on Sunday night, had been pleasant second anniversary gift to Nigerians. to London twice since last year for the same medical attention. Speculation has been rife that his health had deteriorated badly, but he attended last Friday prayers to douse such insinuations. The Prayers His Special Adviser on Media and Publicity, Mr Femi Adesina, disclosed in Abuja that President Buhari had planned to leave Sunday afternoon, but decided to delay a bit, due to the arrival of 82 Chibok schoolgirls in Abuja earlier in the day. “The President wishes to assure all Nigerians that there is no cause for worry. 4

Dangote signs deal with Nigeria’s $1 billion Eurobond Chinese for $100 million truck oversubscribed by eight-fold assembly plant

February 2017

January 2017 Nigerian government officials have successfully wrapped up sales of the country’s Eurobond, after a 4-city Dangote Group of Companies has established a $100 roadshow in the US and UK. Reports reaching Nairametrics million truck assembly plant in Lagos as part of its efforts suggest the $1 billion 15 year tenor Eurobond was to boost foreign exchange and job creation. oversubscribed by as much as 8 fold. The group said in a statement on Sunday in Lagos that the This is fantastic news for Finance Minister Kemi Adeosun plant was floated by the group in partnership with who has had to deal with issues surrounding her National Heavy Duty Truck Group Company Limited, competency having been compared with her predecessor (SINOTRUK), a Chinese firm. Okonjo Iweala. It is also good news for the embattled CBN Governor, Godwin Emefiele who has had to fight off Mr Anthony Chiejina, the Chief Corporate Communication criticisms of his exchange rate policy, a potential headwind Officer of Dangote Group said the plant, located in Ikeja, in the success of the road show. It was alleged that his has the capacity to produce 10,000 trucks annually. absence in the road show was deliberate. He stated that before now, Dangote had been spending Although there was initial skepticism around the potential heavily on importing trucks to distribute its products both uses of the bond proceed, given the fact that the public locally and across African countries. haven’t yet seen a comprehensive Economic recovery plan Chiejina said the conglomerate owned 60 per cent stake in and precise uses of the proceed, Investors however, piled the assembly plant while SINOTRUK holds 40 per cent, in a up to have a slice of Nigeria’s debt. partnership that was formed in 2014. This can be attributed to the fact that yields are very low According to him, the plant is expected to create 3,000 globally, given the muted growth being experienced all direct employments when fully operational. over the world. Nigeria’s Eurobond is attractive given the fact that it offers a yield of more 8.125% in an Nigeria is a major market for SINOTRUK products, with environment than even offers negative rates. Dangote Group, operating the largest fleet in Africa, having over 10,000 trucks for the distribution of its Following the interest rate environment, Emerging market products across the continent. bonds have held their attractiveness for investors who are always on the look out for yields. Chiejina said the new company would save Nigeria huge foreign exchange being spent on importation of heavy Subscriptions are currently at about $7.8 billion. duty vehicles. Given this high level of demand displayed by international investors, Analysts are of the opinion that Nigeria should have taken the opportunity to tap more funds from the global markets, stating that raising only $1 billion is inefficient. However, given the riskiness of Nigerian debt in the light of adverse macro indices and uncertainty around the currency, the Eurobond was priced relatively higher at 8.125%.

Concerns still remain over the potential use of the About N99 million was earmarked for Artisanal Mines and proceeds, as it may be spent supporting recurrent Registration Mineral Buying Centres. expenditure, or supporting the Naira. Nigeria and China to finalise Ajaokuta Steel Company gets $11 billion Lagos-Calabar rail $139 million for revival deal in June

January 2017 March 2017 The federal government has allocated over N4 billion for the resuscitation of the Ajaokuta Steel Company. The acting President, Yemi Osinbajo, on Tuesday said the federal government and the People’s Republic of China The allocation, according to the News Agency of Nigeria would round off negotiations on the Lagos-Calabar rail (NAN), is contained in the 2017 appropriation budget project estimated at $11.117 billion in June. which was presented to the National Assembly in December by President Muhammadu Buhari. Osinbajo also disclosed that the federal government had already provided its portion for funding the rail project According to the breakdown, a total sum of and promised that the negation would be concluded in the N4,272,797,371 was appropriated, higher than the N3.9 next three months. billion budgeted for 2016. He said this at the unveiling of Lagos-Ibadan rail project at Minister of Mines and Steel Development, Dr. Fayemi the Nigerian Railway Corporation compound, Ebute- Kayode, had reiterated the commitment of the federal Metta, Tuesday, noting that the national rail project would government to settle all litigations between it and Global create 500,000 jobs. Steel Holdings Limited, as regards the steel company. On behalf of the federal government, President The company is Nigeria’s leading steel plant, and was Muhammadu Buhari had in June 2016 signed an intended to be the leading supplier of quality steel agreement with the China Civil Engineering Construction products in all the major economic sectors including Company (CCECC) for the construction of the Lagos- construction, packaging and wire drawing/nail making Calabar coastal railway line at $11.117 billion. industry. Under the agreement, the federal government was able to Since its inauguration in 1983, however, the plant had negotiate the price of the contract downwards by $800 been embroiled in managerial inaptitude, controversy million, stressing that although the contract was initially ranging from allegations of obsolete machines and valued at $11.917 billion, it would now to cost $11.117 outdated blast furnace model. Despite its initial billion. completion, the plant had suffered years of neglect under successive administrations. The first segment of the rail line comprises Calabar, Uyo, Aba and Port Harcourt. Other segments of the Lagos According to the ministry’s budget, the Nigerian Geological Calabar coastal rail line such as Otueke, Yenagoa, Ughelli, Survey Agency (NGSA) got N3.8 billion, chiefly for the Warri, Sapele, Benin, Agbor, Asaba, Onitsha, Ijebu Ode, generation of geological data which hadn’t been updated Lagos, would be ready also within another two years. recently. Osinbajo, however, unveiled the Lagos-Ibadan rail project The National Metallurgical Development Centre, Jos, got alongside the state governor, Mr. Akinwunmi Ambode, his N821 million, the Metallurgical Training Institute, Onitsha Oyo State counterpart, Senator Abiola Ajimobi, the got N722 million, while the Nigerian Institute of Mining Minister of Transportation, Mr. Rotimi Amaechi, Senate and Geosciences was allocated N472 million. 6

Chief Whip, Senator Olusola Adeyeye and Oba of Lagos, Lagos and Ibadan within the projected time frame which is Oba Rilwan Akiolu, among others. on or before December 2018”. At the unveiling, the acting president disclosed that the Also speaking, Ambode commended the federal federal government “has already provided our portion for government for approving the right of way for the funding for the Lagos-Calabar route as well. We expect proposed Lagos Light Rail (Red Line) project, thereby that negotiations with the foreign component of the asking the Nigeria Railway Corporation “to cooperate with funding will be finalised within the next three months”. the state government during the construction of the red line”. He, therefore, assured Nigerians that a vibrant railway system “will confer many benefits on the society. Our He said the proposed extension of the Lagos-Ibadan Rail ultimate goal is to restore a railway using culture for both Project would go a long way to open up the economy of commercial and personal transportation. We are confident the South-west as well as facilitate regional integration that the national rail project will create up to 500,000 jobs. and growth. Aside, it will facilitate the movement of up to 3.2 million tonnes of cargo per annum.” He said the project also marked a new dawn in the transformation of the nation’s transport infrastructure, He explained that the ground breaking “reflects the especially for the South-west, thereby expressing delight federal government’s to build a globally competitive that the take-off had become a reality. economy with first grade infrastructure. Railway, in our Ambode added that aside boosting regional integration, strategy, is underscored by our economic recovery and the agricultural sector would receive the long awaited growth plan as well as incorporated 2016 and 2017 budgets”. boost as the rail line “will be a fast and convenient means of transporting farm produce from the hinterland to the “We made provision for matching funds in 2016 budget to city thereby increasing the economies of the states”. complement the concession loans obtained from the “A direct benefit of this project is that containers and People Republic of China. The Chinese Government and goods from the Apapa Port will now be transported by rail Chinese Exim Bank have always proved to be a reliable thereby reducing the number of trailers and other heavy partner to the Nigeria Government. We have the entire Lagos Kano rail track as well as the Lagos Calabar railway duty vehicles on our roads. track in the 2017 budget, he added.” “A direct consequence of this project would be less productive man hours wasted on the roads due to gridlock Osinbajo disclosed that negotiation on the Kaduna –Kano and bad roads due to heavy duty vehicles. In addition, we portion of the track would soon be completed, noting that expect government to expend fewer resources on road when completed the rail projects “will reduce the burden on national high ways. It will also reduce deterioration of repair and maintenance once the rail line takes off and the road network and increasing the life span of our reduce the pressure of articulated vehicles on our roads,” roads”. the governor said. He explained that railway network would support efforts “to diversify the economy and enhance our export US and Enugu Discuss $700 potentials. Several of our cities will become known as railway towns will boost economic activities within the million solar plant project railway lines that will eventually cut across the entire country”. He, therefore, said the new approach to rail project development explained why the federal government “supports the replacement of the 1964 railway acts with a legal frame work that open railway projects in the country to greater private sector participation. April 2017 “We expect to ensure that the resources to manage efficient modern and reliable train services. We will see The Foreign Commercial Service of the United States the same zeal in the project construction so that the Diplomatic Mission to Nigeria concluded a four-day railway lines we be completed on schedule. We are outreach to Enugu State that focused on expanding looking forward to a fast and efficient service between 7 commercial ties between the U.S. and Nigeria, especially the South-east geo-political zone. Nigeria consolidates $500 This is contained in a statement released yesterday by the million Eurobond with $1 Information Office, Public Affairs Section (PAS), U.S. Consulate General in Lagos. billion issue During the outreach which took place between April 4 and 7, a team of trade and commercial specialists from the U.S. Mission to Nigeria, led by Commercial Counselor Brent Omdahl, held meetings with Enugu State Governor Ifeanyi Ugwuanyi, state commissioners, and other senior cabinet- level officials on trade opportunities which would contribute to mutual prosperity and job growth for both March 2017 countries. The statement said, Governor Ugwuanyi and Commercial Nigeria disclosed on Wednesday that its $500 million notes Counselor Omdahl discussed U.S. investments in Enugu under the $1.5 billion Global Medium Term Note State, including the on-going $700 million Motir DuSable programme will be consolidated to form a single series solar plant project in the Nachi community of Udi local with the existing $1 billion notes, which the country issued government area. in February and will mature by 2032. The US officials said “At full capacity, the solar plant will The federal government therefore announced that it has add 300 Megawatts to the national grid. priced its offering of the $500 million aggregate principal amount of notes at a yield of 7.5 per cent under the $1.5 “This outreach demonstrates the strong U.S. business billion (increased from US$1 billion) Global Medium Term interest in expanding commercial ties with Nigeria.” Note Programme. While in Enugu State, the U.S. Foreign Commercial Service This, according to a statement by the Ministry of Finance, participated in the 28th Enugu International Trade fair. will be consolidated and form a single series with the The Foreign Commercial Service also hosted leading existing $1 billion 7.875 per cent notes due in 2032. regional business owners at a workshop entitled: “Networking with the USA Business Summit and The N1 billion notes (Original Notes) were issued on Conference – Enugu 2017.” February 16. The terms and conditions of the $500 million notes, said the statement, will be identical to those of the Omdahl said, “We are expanding our Networking with the Original Notes, paying a coupon of 7.875 per cent per USA (NUSA) programme to key growth areas in Nigeria annum and maturing on February 16, 2032. and we see Enugu as one such important growth area. During this programme, we advised Enugu companies on They will be repayable by way of bullet repayment of the best practices for engaging with American companies, in principal together with the Original Notes, the statement addition to discussing U.S. agencies to work with in order added. to take advantage of various partnerships.” “As with the Original Notes, the government intends to In the course of the Networking with the USA (NUSA) use the proceeds of the ($500 million) notes to fund programme, an American consular officer from the U.S. capital expenditures in the 2016 budget. Consulate General in Lagos held a session with the “The successful pricing, which is priced 37.5bps inside the business owners on the process for obtaining a business original coupon rate, demonstrates continued strong visa to America. The consular officer demystified the market appetite for Nigerian securities. commonly held ideas about U.S. visa application process. “This is despite continued volatility in emerging and The Foreign Commercial Service of the U.S. government frontier markets and shows confidence by the works to promote the expansion of U.S. trade and international investment community in Nigeria’s economic investment to Nigeria through support of business reform agenda,” the statement issued by the Director, partnerships between American and Nigerian companies. Information, Ministry of Finance, Mr. Salisu Na’Inna Dambatta, said.

When issued, the notes will be admitted alongside the authorisation to the Development Bank of Nigeria (DBN) Original Notes to the official list of the UK Listing Authority Plc. and will trade on the London Stock Exchange’s regulated market. Adeosun confirmed the issuance of the licence, a statement from the ministry said on Wednesday. Nigeria may apply for the notes to be eligible for trading or According to the statement, the approval was conveyed in listed on the Nigerian Stock Exchange and Financial a letter addressed to the Managing Director/Chief Markets Dealers Quotations Over-the-Counter Securities Exchange. Executive of Officer of DBN dated March 28, 2017. The letter was signed by the Deputy Governor of the CBN Pricing of the notes, the statement added, comes shortly in charge of Financial System Stability. after the country unveiled its National Economic Recovery and Growth Plan (NERGP) 2017-2020 on March 7. The approval was subject to meeting the minimum capital The plan focuses on policy objectives in five core areas: requirement of N100 billion, the reconstitution of the board of the bank and a review of its organogram. macroeconomic policy, economic diversification and growth drivers, competitiveness, social inclusion and jobs, The DBN was conceived in 2014, however its take off has and governance and other enablers. been fraught with delays. Key targets under the NERGP include reaching single-digit The Muhammadu Buhari administration inherited the inflation, further growth in the agricultural sector, project, but was determined to resolve all outstanding reducing unemployment, increasing operational energy issues and set a target of 2017 for its take-off. capacity and domestic refining capacity, improving The finance minister had said previously that the DBN transportation infrastructure, and stabilising the exchange would have access to $1.3 billion which will be jointly rate, with an emphasis on implementation, monitoring provided by the World Bank (WB), KfW (German and evaluation of these economic goals. Development Bank), the African Development Bank (AfDB) Commenting after the successful pricing, the Minister of and the Agence Française de Development (French Finance, Mrs. Kemi Adeosun, said: “The proceeds from this Development Agency). additional note issuance will go towards funding capital The bank is also expected to finalise agreements with the projects in the 2016 budget. European Investment Bank (EIB). “Infrastructure spending is at the heart of our National She also stated that the DBN would provide loans to all Economic Recovery and Growth Plan, which was released sectors of the economy including manufacturing, services earlier this month and guides how we will deliver the and other industries not currently served by existing development banks, thereby filling an important gap in the urgent reform our economy needs between now and provision of finance to micro, small and medium 2020. enterprises (MSMEs). “Resetting the Nigerian economy is essential in order for us to deliver sustainable long term growth.” As a wholesale bank, the DBN will lend wholesale to microfinance banks, which will on-lend to medium to long- The Director General, Debt Management Office (DMO), Dr. term loans to MSMEs. Abraham Nwankwo, said: “Following the success of our $1 MSMEs contribute about 48.47 per cent to Nigeria’s Gross billion note issuance in February, Nigeria is delighted to have increased our 2017 Eurobond programme to $1.5 Domestic Products (GDP), but have access to only about 5 billion and to have secured the additional $500 million. per cent of lending from Deposit Money Banks (DMBs). The federal government expects that the influx of “Nigeria was keen to take advantage of favourable market additional capital from the DBN will lower borrowing rates conditions and investors’ appetite for Nigerian debt to while the longer tenure of the loans will provide the complete our foreign borrowing programme for the 2016 required flexibility in the management of cash flows, giving budget and deliver further funds for vital capital projects.” businesses the opportunity to make capital improvements Citi and Standard Chartered acted as Joint Lead Managers and acquire equipment and supplies. and Stanbic IBTC as Financial Advisers on this issue.

Also, the finance ministry announced that the Central Bank of Nigeria (CBN) has approved a licence for a wholesale

Development Finance Institution (DFI) with national 9

Worsening of political and security environment that Fitch downgrades Nigeria and reduces oil production for a prolonged perio or worsens point to CBN forex policies ethnic or sectarian tensions. The CBN Governor revealed that Nigeria’s external reserves was now approaching $29 billion but did not provide details about why reserves has been growing since December 2016.

January 2017 EDUCATION

International Rating Agency, Fitch has downgraded Nigeria’s outlook from stable to negative blaming Nigeria’s tight foreign exchange liquidity position. The rating agency Court declares free, said it has revised the Outlook on Nigeria’s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to compulsory education Negative from Stable and affirmed the IDRs at ‘B+’. It also said that the issue ratings on Nigeria’s senior enforceable right unsecured foreign currency bonds have also been affirmed at ‘B+’. The Country Ceiling has been affirmed at ‘B+’ and the Short-Term Foreign and Local Currency IDRs have been affirmed at ‘B’. Last June, it downgraded Nigeria’s long- term foreign currency Issuer Default Rating (IDR) to ‘B+’ from ‘BB-’ as well as the country’s long-term local currency IDR to ‘BB-’ from ‘BB’. March 2017 Fitch blamed Nigeria’s tight forex liquidity as a major reason for the downgrade blaming it for the reason why A Federal High Court in Abuja has declared that failure of Nigeria dropped into its first recession since 1994. any government to fund free primary and junior secondary education will constitute breach of the Constitution. Access to foreign exchange will remain severely restricted until the Central Bank of Nigeria (CBN) can establish the Justice John Tsoho yesterday ruled that though the right to credibility of the Interbank Foreign Exchange Market free education in section 18 (3) (a) of the Constitution was (IFEM) and bring down the spread between the official ordinarily not enforceable being in Chapter two of the rate and the parallel market rates. Constitution, the enactment of Free Universal Basic The Central Bank of Nigeria’s Governor, Godwin Emefiele Education Act of 2004 has made that provision of the on Tuesday called critics of the multiple exchange rates, constitution an enforceable right. mischievous, and often flip-flopped from asserting that the The Legal Defence and Assistance Project (LEDAP) filed the Nigerian forex market is either in a “managed float” or suit against the Federal Ministry of Education and the “flexible”. The Naira closed at the black market on Attorney General of the Federation, in which it asked the Wednesday at N497, N3 shy of touching the N500 court to determine whether by the combined effect of resistance. section 18(3)(a) of the 1999 Constitution and section 2 (1) Fitch also threatenend a further downgrade if the of the Compulsory, Free Universal Basic Education Act following occurs: (UBE) 2004. Failure to secure an improvement in economic growth, for The NGO had asked the court to determine whether the example caused by continued tight FX liquidity. Federal and State governments are under constitutional obligation to provide financial and institutional resources Failure to narrow the fiscal deficit leading to a marked for free, compulsory and universal primary education and increase in public debt. free junior secondary education for all Nigerian citizens. A loss of foreign exchange reserves that increases vulnerability to external shocks.

Foreign currency for study abroad has been difficult to Senate set to restructure come by in Nigeria since the government halted sales in March last year. The CBN began issuing foreign currency Nigeria’s education system again in June 2016, but the amount customers have been able to access has been heavily restricted.

ABUJA—Senate president, Bukola Saraki, said yesterday As a result, people have been reportedly paying 40% that the Upper legislative chamber of the National premiums on dollars on the black market because they Assembly would in a few months embark on plans to have been unable to obtain them through retail banks. restructure Nigeria’s education system through a new Combined with the already low value of the naira, this lack legal framework to make it more competitive locally and of access to currency has curbed access to study abroad. internationally. The effect has been especially marked in the UK, which has According to him, the new legislative framework will been rendered unaffordable for many students. create more autonomy for the education system. Saraki Education agents therefore welcomed Monday’s also said that with the present economic recession in announcement that the CBN would begin supplying dollars Nigeria, interventions in the nation’s educational system immediately to retail clients via commercial lenders. must no longer be business as usual. “We all feel the directives have provided a ray of hope for The Senate president, who stated this in a statement the sector,” commented Ola Fatuga, education and signed by Special Adviser on Media and Publicity, Yusuph careers consultant at Equippers International, told The PIE Olaniyonu, said there was the urgent need for News. “The galloping Nigerian foreign exchange situation comprehensive education reform across all levels to has affected many; students have been withdrawn from ensure that Nigerian students and schools were UK schools back to Nigeria and interest in students coming competitive globally. He said: “Considering the economic over has reduced a great deal.” situation in the country and the widening social inequality, we need to ensure that all Nigerians are well equipped for Though she acknowledged the directive may not lead to a the future that lies ahead. “This means that any reform in complete recovery of the outbound market, she predicted: education can no longer be business as usual; it must “It may offer a temporary reprieve from the downward involve government, academia, and the private sector. overseas student’s migratory trend experienced in the last couple of years.” Nigeria issues welcome reform Yomi Asade, senior branch manager at UKEAS Nigeria, meanwhile said the announcement is “certainly a step in to forex for overseas study the right direction”.

“[It] would go a long way in increasing the number of February 2017 students aspiring to study overseas this year as students, along with their sponsors, may now be able to transfer Nigeria’s central bank has begun selling a fresh supply of tuition fees through the banks at the interbank rate, which dollars for students to pay for school fee payments and is much lower than the parallel market/black market rate.” travel abroad, increasing the amount they are allowed to Retailers will be allowed to charge no more than 20% buy and enabling them to avoid paying heavy premiums above the interbank market rate, which ranges from 305- for the currency on the black market. 315 naira to the dollar. In comparison, the parallel market The move comes as great relief to students who have rate has risen to 517 naira to the dollar, CBN spokesman struggled for almost a year with long processing times for Isaac Okorafor said in an interview last week with Arise foreign currency applications and inflated exchange rates News Network. on the parallel market. Parents or guardians of students who can produce a letter On February 20, the Central Bank of Nigeria said it would of admission and invoice from an overseas school will be reopen sales of foreign currency to cover overseas tuition able to buy $15,000 per semester to cover tuition fees, fees and a personal travel allowance for students “to ease which must be paid directly into the school’s account. the difficulties encountered by Nigerians in obtaining Students whose travel plans necessitate a flight of five or funds for some invisible transactions”. more hours will also be allowed to buy up to $4,000 per quarter as a personal travel allowance. 11

The amount should be enough to cover students’ fees in Specialist of the World Bank, Olatunde Adekola, said the most cases and will have a “huge impact for Nigerian project is to mop up out-of-school-children and would students looking to study overseas”, predicted Stuart focus essentially on Northern Nigeria with preference for Rennie, managing director of SJRennie Consulting. girl child education. “It means students will be able to secure much larger sums Adekola made the revelation when he led a five man of foreign currency to help pay deposits to universities, but World Bank team to visit the Governor of Sokoto state, more importantly, it means they will not have to pay the Aminu Tambuwal. He said Nigeria’s problems were mostly exorbitant rates currently in place on the black market,” education related and the five year project was aimed at he added. reversing the trend. In addition to school fees and personal travel, the new ''The project would be result-oriented and ensure that policy will also apply to the sale of currency for medical children are able to read and write," he said, adding, 'This needsand business travel. is to help the government to strengthen its service delivery mechanisms to children, girls, women and other In a statement, the CBN said it would “ensure that this vulnerable groups," Adekola had said. Adekola process is as smooth as possible” and “that as many commended the Sokoto state government 's allocation of customers as possible get the foreign exchange they about 27 per cent of the state's annual budget to genuinely demand”. education in 2016 and 2017. Given the clarity of the directive, Fatuga said there should In a remark, Governor Tambuwal assured that the existing be no problems with it coming into force. partnership between the bank and the state government “Implementing it should be fairly straightforward,” she would be sustained said. “What might frustrate the implementation of this policy, will be unnecessary bureaucracy by the banks North East 500 years behind which can put parents off.” South in education Rennie praised the government’s quick response to the reverse the forex policy that he said “was not working”.

“It will stabilise the student recruitment market and January 2017 provide confidence to parents and sponsors paying the tuition fees,” he said. The Vice Chancellor of University of Maiduguri (UNIMAID), Prof. Abubakar Njodi, has said it may take the North East Nigeria secures $500 million 500 years to “recover from the destruction” of its education system by Boko Haram, and catch up with the loan to boost education in the southern part of the country. North Njodi, a Professor of Physical and Health Education, who made the disclosure yesterday stated that even before the

advent of Boko Haram, studies had indicated that the region was about 150 years behind other parts of the March 2017 country, particularly the South. • The World bank has boosted Nigeria's education While receiving a delegation of the Presidential Committee system to the tune of $500million on North East Initiative (), which came to condole with him and the university community over the January 16, 2017 • The gesture, the bank explained is to build bomb attack that claimed the lives of three staff members, education in the Northern Nigeria, especially the including a professor, he stressed that “education in the girl child education North is endangered. • The programme is to last for five years “I have said it at different fora that prior to Boko Haram, World Bank has boosted Nigeria’s education system with there were some studies, some real, some speculative, the provision of $500million loan. Daily Trust is reporting that showed the North, currently comprising 19 states and that the loan was given to Nigeria under the World Bank’s the Federal Capital Territory, Abuja; was 100 years behind Better Education For All project. Senior Education the South. What it means here is that, at that time if the 12

South should stop going to school, it would take the North Earlier, Mr. Kjemprud said the government of Norway had 100 years to catch up,” Njodi added. helped Nigeria develop education in conflict areas. He further disclosed that: “When the northern part of the He said that recently during the Oslo humanitarian country was carved into North East, North West and North conference for Nigeria and Lake Chad, the country Central, the North East was 150 years behind,” adding that committed about $2.8 million to provide education for at that time, if the South stopped going to school, it would Nigerians. have taken the North East 150 years to catch up.” He said that an additional $9.5 million was also committed He therefore pointed out that with “the situation that to the education of young Nigerians affected by insurgency Boko Haram has put us now, if those studies are anything in the North Eastern part of the country. to go by, the North East may require about 500 to 1, 000 According to the envoy, Norway focuses on assisting years to catch up with the other five geo-political zones in Nigeria to boost education to prevent further crisis in the the country,” as the state of the educational sector there North-east. requires the support of all stakeholders, just as the future looks very “bleak and gloomy” for the next generation. “We made a commitment during the conference to stay with Nigeria through the northeast crisis, and through a Nigeria proposes bilateral whole long term engagement in the education sector,” he said. educational agreement with He, however, said that the Norwegian Government had Norway offered scholarships to Nigerian students to pursue postgraduate studies in Norway.

He added that about 39 students are currently studying for March 2017 their master programmes in oil engineering in a Norwegian school. The Minister of Education, Adamu Adamu, has proposed He further promised the Nigerian Government that the signing of a bilateral educational agreement between Norway would continue to sustain the implementation of Nigeria and Norway, which he said could east Nigerian the programme to enable Nigerian youth have quality youth’s access to education. education. Mr. Adamu made the proposal when the Ambassador of The News Agency of Nigeria recalls that the Norwegian Norway to Nigeria, Jens-Petter Kjemprud, paid him a Government in 2006 established an Education Trust Fund courtesy visit in Abuja on Thursday. to support sub-Saharan African countries develop He said, “I think what we should focus on is to see to it strategies and programmes for secondary education. that the bilateral educational agreement is signed so as to In 2014, as a result of the abducted Chibok girls, the curb crisis in conflict areas.” Norwegian Government also offered grant of N270 million The minister, therefore, commended the Norwegian to Nigerian Government to promote girl education in Government for its support toward ensuring that northern Nigeria. education was brought to every part of the country, Also in 2014, they signed an agreement with UNICEF especially the conflict area of the north-east. regarding the use of fund to support the nation`s safe “The government is very happy with your donation of school initiative. about N3.6 billion and we have made judicious use of it.

“We also know what you are doing in the Lake Chad region. “You have contributed to reduce the crisis but what I find not very easy is that we have not signed the bilateral educational agreement. “And I think that is what we should focus on,’’ he said.

nation’s intelligentsia. A nation’s development can be FG inaugurates 14-man seriously enhanced by the active participation of the intelligence in the pursuit of the country’ developmental committee to end strike in goals. Nigerian universities “We also want to assure you that we intend to rise beyond your expectations for the fourth realms of tertiary education in Nigeria. This task should not be February 2017 underestimated and with the commitment of all, it could provide a serious enhancement for education in Nigeria.” The Federal Government on Monday set up a 14-man Buhari’s ill-health: Fayose is sick, on anti-depressant drugs committee headed by Dr. Wale Babalakin (SAN) to end for asking President to resign – Kashamu incessant and protracted strikes in Nigerian tertiary institutions. Members of the committee include Prof. Munzali Jibril, Pro chancellor, Federal University, Lafia; Prof. Nimi Briggs, The committee is expected to re-negotiate the 2009 Pro. Chancellor, Federal University, Lokoja; Senator agreement between government, Academic Staff Union of Gbemisola Saraki, Pro chancellor, Federal University, Universities, Senior Staff Association of Nigerian Otuoke; Arc. Lawrence Ngbale, Pro chancellor, Federal Universities, National Association of Academic University, Birnin Kebbi; Prince Alex Mbata, Pro chancellor, Technologists and Non-Academic Staff Union of Associated Imo State University, Owerri and Prof. Olufemi Bamiro, Tai and Allied Institutions. Solarin University of Education, Ijagun. While inaugurating the committee, the Minister of Education, Malami Adamu Adamu, said the re-negotiation team showed that government was committed to keeping Tuition-free education not to its promise and ensuring an environment that was conducive for learning, teaching, research and community sustainable in Nigeria, say vice- service “engendered through lasting industrial harmony.” chancellors Adamu said, “Today’s inauguration kick-starts our drive for re-negotiation across the three segments of the tertiary education sub-sector-universities, polytechnics and March 2017 colleges of education, starting with universities. “Subsequently, the teams of the re-negotiation with the The committee of vice-chancellors of Nigerian Universities polytechnics and colleges of education, would be has said it is no longer realistic to have tuition-free constituted as soon as their respective governing councils university education in Nigeria. are put in place. The vice-chancellors in a communiqué called for a change “The inauguration of the re-negotiation team is significant in policy which would enable parents, guardians, and as it confirms to the unions that government is committed government “to equitably share the financial burden of to keeping its own side of the promise. It wants to ensure education”. that an environment that is conducive for teaching, The News Agency of Nigeria (NAN) reports that the learning, research and community service is engendered communiqué, signed by Michael Faborode, the through lasting industrial harmony in all our tertiary committee’s secretary-general, was issued after its institutions.” biennial meeting in Abuja. Fani-Kayode begs T.B Joshua to pray for actualization of “This will enable students pay revised fees commensurate Oduduwa Republic with the true value of university education. Babalakin further assured the unions that he would ensure “The current inclination towards free tuition or free that there would be no stalemate between the two parties university education is unrealistic to the national vision for and pledged that the committee’s objective would be in practical and qualitative education and not sustainable. creating a better educational system. “To account and provide for poor and indigent students, He said, “A conducive environment in the tertiary government is encouraged to set up/re-establish an institution is the bedrock for the development of a 14

Education Bank to provide loans and access to finance,” the vice chancellors said. eThink Education Becomes the It urged university managements to “think out of the box” First Certified Moodle Partner to exploit all alternative and additional means of funding universities, including payment of tuition fees. in Nigeria The communiqué also called for a holistic overhaul of the education sector so as to tackle the decay reflected from April 2017 the primary to the tertiary levels. The vice-chancellors urged universities to work out fresh eThink Education, a rapidly growing Certified Partner of strategies to build linkages with industries and the open-source Learning Management System (LMS) partnerships with the private sector. Moodle, has become the first official Moodle Partner to offer Moodle hosting and services in Nigeria. eThink has They urged the federal government to ensure sustainable also announced the launch of a Moodle by eThink African funding of universities and other tertiary institutions to Learning Network (ALN), which will allow member make them relevant, globally competitive and be properly institutions to collaborate, easily share resources, and positioned to spearhead sustainable development. provide a connected educational experience to learners across the region. The communiqué also advised the government to increase scholarships, bursaries and other aids for students A certified U.S. Moodle Partner since early 2016, eThink desirous of pursuing tertiary and postgraduate education. has now expanded their Moodle partnership to be better able to offer Moodle services to interested higher It urged university managements to control the unending education institutions, corporations, government entities, labour disputes in campuses and ensure transparent and and K-12 schools and districts in Nigeria. Furthermore, the accountable management of resources. Moodle by eThink African Learning Network (ALN) will It called on the government to ensure that full university provide a connected community of educators and autonomy was attained and sustained in Nigerian learners, allowing participating institutions to enjoy universities. unlimited resource-sharing, networking, and endless social learning opportunities directly through the Moodle “In this regard, and as captured in the laws of the various platform. universities, Councils should be given unfettered leeway to deal with all matters in their respective universities. eThink Education provides a fully-managed Moodle experience including: cloud hosting, implementation, “Such that the task of university governance should be integration, and management services of Moodle. Moodle wholesomely formulated by the Governing Council, on by eThink hosting includes unlimited modules, storage and paper and in practice, including determining its future support, including custom reports, consultation, and more. direction and fostering an environment in which the eThink also specializes in back-end SIS/ERP integrations institutional mission is achieved. and works with clients to streamline their primary “As independent arbiters, Councils are central to industrial systems. Clients in Nigeria will now have easier access to harmony, peace and stability on campuses and indeed the the full range of eThink’s Moodle services. entire Nigerian university system,” it said. “eThink is excited to become the first official Moodle The communiqué further said that proprietors of private Partner in Nigeria. As such, we will be better able to universities should adhere strictly to guidelines and service the Moodle needs in this territory for higher templates for appointing chairmen and members of the education and K-12 institutions as well as corporations,” councils. said Brian Carlson, Co-Founder and CEO of eThink. “Moodle has already been widely adopted throughout This, the communiqué said, would ensure that only the many regions in Africa and we look forward to being able best in society were saddled with the task of governing the to help support those institutions, as well as help others, nation’s universities. to leverage the benefits of a low cost eLearning platform.”

As an official Moodle partner, eThink has a direct line of communication to Moodle HQ and is able to more directly 15 contribute to the future development and success of the To learn more about eThink Education or the Moodle by Moodle product. Furthermore, this partnership allows eThink African Learning Network, you can connect with a eThink to be better advocates for the wants and needs of Moodle by eThink team member here. their clients across the globe.

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