Nigeria Customs Service on Saturday denied reported plans to shut down upscale Lagos hospitality spot, Intercontinental Hotel, on Victoria Island.
The service said in a statement by its Public Relations Officer, Wale Adeniyi, that it found it necessary to clarify its position on its “ongoing battle to compel defaulting rice importers pay outstanding duties owed the Federal Government of Nigeria.”
It stated that the clarification became necessary in view of media reports that it was planning to shut down the hotel.
“The confusion was created in view of the association of its owners, Milan Nigeria Limited with one of the defaulting importers.
Our records have shown that Intercontinental Hotel is not indebted to the Nigeria Customs Service, and will therefore not be shut down as insinuated.
It is also necessary to clarify that the defaulting importers targeted for sanctions, Conti Agro Nigeria Limited, is a separate legal entity from Milan Nigeria Limited, owners of Intercontinental Hotel.
“The Management of Conti Agro has commenced engagement with the Customs to make payments of duty owed by it, and resolve the issue.”
Stock futures rise as Wall Street looks to snap losing streak
Stock futures gained on Friday morning as Wall Street looked to grind out a rare positive week in what has been a rough first half of the year.
Futures tied to the Dow Jones Industrial Average rose 102 points, or 0.33%. Futures for the S&P 500 were 0.51% higher, while Nasdaq 100 futures advanced 0.78%.
The moves in futures come as the stock market appears to have found some stability this week, at least for the short term. After an afternoon rally on Thursday, the S&P 500 is up 3.3% for the week, while the Nasdaq composite is up 4% and the Dow is 2.6%.
All three averages are looking to snap three-week losing streaks.
Economic data will be a key focus on Friday, as investors try to determine if the U.S. economy is falling into a recession. New home sales data is due out at 10 a.m. ET and the final University of Michigan consumer sentiment report for June will follow later in the day.
“Recession talk remains the focal point on Wall Street and that means whatever stock market rebounds emerge will probably be short-lived,” Oanda senior market analyst Ed Moya said in a note. “Wall Street won’t have any answers anytime soon for the questions on when will inflation peak, how soon will we see a recession, and how high will the Fed raise rates?”
The consumer sentiment reading could be particularly important for investors, as Federal Reserve Chair Jerome Powell said that a surprise drop in the preliminary reading was one of the reasons the central bank hiked its benchmark interest rate by three-quarters of a percentage point earlier this month.
On the corporate front, shares of FedEx moved higher in extended trading despite a mixed fourth-quarter report after the logistics company delivered an upbeat earnings forecast. Carnival Cruise Line is scheduled to release a business updated on Friday morning.
States to lose N19bn in oil, gas revenues in 2022 – World Bank
The World Bank has said that Nigerian states will likely lose N18.8bn in oil and gas revenues in 2022, as worsening revenue collection at the federation level increases budgetary pressures for the states.
The Washington-based bank said this in its Nigeria Development Update report, titled, ‘The Continuing Urgency of Business Unusual’.
According to the lending bank, the declining revenue from the federation level had put many states in a precarious fiscal position.
The bank warned that many states would be unable to meet up with their expenditures, adding that there was an increase in debt servicing expenditures of States.
The report read in part, “With net oil and gas revenues stagnating, most states will not be able to achieve their intended levels of expenditures in 2022.
“In addition, debt servicing expenditures at the state level are also mounting due to a decline in gross statutory account revenue transfers from the federation account allocation committee, which comprises oil and non-value added tax, non-oil revenues.”
The bank further said that the expected higher VAT collection or improvements in independently generated revenues would not compensate for the lower transfers from the Federation Accounts Allocation Committee in 2022.
The financial institution also warned that there would be a 2.7 per cent decline in FAAC transfers in 2022 when compared to 2021, adding that this decline would push states to borrow more and slash discretionary expenditure.
“Stagnating net oil revenues will significantly affect the fiscal situation at the state level. State governments are projected to collectively receive 2.7 per cent fewer revenues than in 2021, as federal transfers are estimated to decline by 10 per cent against 2020 levels.
“Lower transfers will cause state governments to incur debt or drastically slash discretionary expenditure. Although states receive the majority of VAT revenues, VAT increases would not make up for the loss of net oil revenues.
“As a result, in 2022, the average state in Nigeria will lose N18.8bn in oil and gas revenues, while optimistic projections place average gains from VAT and the electronic money transfer Levy at N7.1bn per state, and average increases in each state’s independent revenues at N6.7bn. As a result, the average state can expect to lose N5bn in revenue in 2022,” the report stated.
The Nigerian National Petroleum Company Limited (NNPC) might deduct over N1tn in the next six months from the Federation Accounts Allocation Committee, following the decision of the Federal Government to continue subsidising Premium Motor Spirit, popularly called petrol.
Figures obtained from the oil firm on its subsidy deductions in 2021 indicated that the amount deducted monthly from FAAC by the NNPC was higher during the periods of higher crude oil prices.
This was also confirmed by economists, who explained that the higher the international price of crude oil, the higher the amount to be deducted by the NNPC from FAAC.
“Of course, the NNPC will spend more on subsidies this year because crude oil price has been increasing and the higher the price of crude, the higher the amount to be spent on subsidy,” the Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said.
He added, “In fact, about N2.5tn might be spent on subsidy this year, meaning that about half of that amount could be spent in six months and this means hard times for states because the funds will be deducted from FAAC as usual.
“Some states would struggle to pay salaries, especially states that are heavily dependent on federal allocation. Some may have to lay off some of their work force. Many will struggle to meet their financial obligations as sub-nationals.”
Nigerian banks record N1.21tn non-performing loans
The total non-performing loans in the banking sector hit N1.21tn as of the end of February 2022, figures obtained from the Central Bank of Nigeria have revealed.
The CBN stated in reports obtained from the Monetary Policy Committee that the total credit in the sector rose to N25.25tn as of the end of February 2022 from N21.13tn as of the end of February 2021.
It stated that the non-performing loans reflected the case-by-case review of regulatory forbearance, effects of the Global Standing Instruction policy, and sound industry risk management practices.
A member of the MPC, Kingsley Obiora, said the banking system maintained its resilience amid economic recovery.
He said, “Overall, the industry credit increased by 19.53 per cent to N25.25n in February 2022 from N21.13tn in February 2021. The industry NPL ratio continued to trend below the prudential threshold of five per cent.
“It decreased to 4.80 per cent at the end of February 2022 compared with 6.38 per cent in February 2021. The downward trend was attributable to recoveries, restructuring of facilities and sound management practices by DMBs (Deposit Money Banks).”
The Deputy Governor, Financial Systems Stability Directorate, CBN, Aishah Ahmad, said, “Total credit also increased by N4.13tn between end February 2021 and end-February 2022 with significant growth in credit to manufacturing, general commerce, and oil and gas sectors.”
She added that the non-performing loans ratio declined further to 4.8 per cent in February 2022, from 4.94 per cent in December 2021.
A member of the MPC, Robert Asogwa, said, the financial sector remained strong similar to the position at the last MPC meeting especially looking at the banking and capital market developments.
He said the banking sector appeared sound and resilient with a considerably high Capital Adequacy Ratio and Liquidity Ratio in February 2022, in line with prudential requirements.
With a persistently lowering non-performing loan ratio since 2021 despite the shocks caused by the COVID-19 pandemic, he said the asset quality of the banking system was now one of the strongest in Sub-Sahara Africa.
He said, “Bank intermediation continued to improve in February 2022 with industry total credit increasing from N24.6tn in January 2022 to N25.25tn in February 2022.”
“The extension of the moratoria on bank loans up to the middle of 2022 as part of the COVID-19 relief measures continues to alleviate the burden on the borrowers impacted severely by the pandemic.”
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