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Weak naira fuels high building materials’ cost

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Weak naira fuels high building materials’ cost

Reprieve seems to be far from  low income Nigerian seeking roof over their heads as flexible foreign exchange still  triggers high cost of building materials in property market.

According to the President of Nigerian Institute of Building (NIOB), Mr. Kunle Awobodu, weak naira to the dollar is responsible for high building material cost in the country, especially imported items for home finishing.

This, among other factors, according to the built environment expert, is being reflected in the cost of delivering new homes, making them unaffodable for the target group.

Currently, one dollar is being exchange for N365.00 in the market.

To reduce building material cost, the president of NIOB said that one critical area government must look at was how to increase the value of naira through local material manufacturing for export.

He pointed out that efforts by NIOB to woo foreign investors from the United States to the country for building material production recently was frustrated due to weak Nigerian currency when compared to the dollar.

He explained that when the price of materials is converted from dollar to naira, it becomes too expensive to bear for affordable housing production in the country. 

He said:”When we went to builders’ show in the United States, one of the objectives was to bring investors to Nigeria on building materials, but by the time we compared prices of building materials  and converted them  to  naira, it was huge.”

To really increase the value of Nigerian currency, Awobodu emphasised that it had become expedient for government to encourage local production of building  materials for exportation.

“The best thing is to start manufacturing most of these things in Nigeria so that we will not be importing them, which was what China did to raise the value of their currency,” he said.

Market survey by New Telegraph showed that local building material cost is even 15 per cent higher than imported types due to energy  and logistics costs.

As at the end of August 2019, a bag of 50 kilogramme of cement cost N1,560; granite -N90,000 per 20 tons; sharp sand -N45,000 per 20 tons;  steel/ iron rods – N170 and N185,000 per tonnage depending on size; blocks – 180.00-N190.00 base on size  and doors – N30,000 to150,000,  among others

Further investigations showed that average selling price for one and two bedroom apartments in major Nigerian cities range between N4 million and N12 million, while many states are still finding it difficult to implement the new minimum wage of N30,000 per month.

Awobodu said the greatest challenge before the government was how to improve the economy, noting that  huge number of youths unemployment was intimidating.

The NIOB president  explained that one of the sectors that  could generate jobs for youths is construction, urging government and private sector to create jobs while  deliberately checkmating influx of foreign artisans into the country.

For rapid economic recovery, the NIOB boss  pointed out that steel companies were  very germane for rejuvenation of the nation’s economy, expressing  worry about the moribund  state of Ajaokuta Steel Company  in Kogi State.

While urging the present government to turn around the fortune of the moribund steel mill,  he said: “For a project that is very crucial for the development of a nation’s steel sector to be moving round the circle without progress is very worrisome.”

“We are just lucky that the Indians and Chinese came with rolling mills . These are the rolling mills that have  been helping the  steel sector in the country, without them, the sector would have been in shamble,” he said.

If Ajaokuta Steel Company is rejuvenated, Awobodu said it would aid the   manufacturing industry, improve naira’s value and the nation’ s foreign earnings.

He said: “Rather than importing ballet from abroad, we will get it right locally, get the iron ore right here, even  those who are manufacturing steel base vehicles and other things will find them cheaper to operate.

“Invariably if the steel companies become very active, honestly  prices of steel based materials will become affordable.”

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1 Comment

  1. Tonja Musemeche

    November 13, 2019 at 5:35 pm

    very cool

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Energy

OPEC+ likely to extend oil supply cuts until June – sources

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OPEC+ likely to extend oil supply cuts until June – sources

OPEC and its allies are likely to extend existing oil output cuts when they meet next month until mid-2020, with non-OPEC oil producer Russia supporting Saudi Arabia’s push for stable oil prices amid the listing of state oil giant Saudi Aramco.

The Organisation of the Petroleum Exporting Countries meets on Dec. 5 at its headquarters in Vienna, followed by talks with a group of other oil producers, lead by Russia, known as OPEC+. The current oil supply cuts run through to March 2020.

On December 5, Saudi Arabia is set to announce the final pricing of the initial public offering of Aramco, in what it hopes will be the world’s largest IPO. The oil price at the time is likely to be key to Aramco’s listing, expected around mid-December, reports Reuters.

“So far we have two main scenarios: either meet in December and extend the current cuts until June; or defer the decision until early next year, meet before March to see how the market looks and extend the cuts until the middle of the year,” said an OPEC source.

“It is more likely that we will extend the agreement in December to send a positive message to the market. The Saudis don’t want oil prices to fall, they want to put a floor under the prices because of the (Aramco) IPO.”

OPEC sources said market conditions in the first quarter of 2020 remain unclear amid concerns of a slowdown in oil demand and weak output compliance by some producers such as Iraq and Nigeria, which is complicating the outlook.

An OPEC delegate said: “My feeling is that (an extension) to end-June to avoid meeting again early March, with the possibility of calling for an (earlier) meeting should market conditions require it … is the likely scenario as of today.”

The two sources said formally announcing deeper cuts looked unlikely for now although a message about better compliance with existing cuts could be sent to the market.

Saudi Arabia, OPEC’s de facto leader, wants to focus first on boosting adherence to the group’s production-reduction pact before committing to any more cuts, they said.

“The Saudis want to see how the rest of those who are not complying (with the cuts) do first. There are no numbers being circulated so far for deeper cuts or changing output quotas,” said the first OPEC source.

Amrita Sen, co-founder of Energy Aspects think-tank, which closely watches OPEC and Saudi oil policies, said a mere extension by OPEC+ of the existing output cuts until June might not be enough to support oil prices.

“The market expects a further cut and an extension until the end of 2020. In any other scenario, the market will sell,” she said.

Russian President Vladimir Putin set the tone for the December meeting last week, calling Saudi Arabia’s position ahead of the talks “tough”.

Moscow argues that it will find it hard to cut oil production voluntarily during the cold winter months, especially in western Siberia, where Russia produces two-thirds of its oil and where most of its well rigs are located.

Freezing temperatures make it difficult for Russia to shut in and restart wells in winter months.

“There is no doubt that Russia won’t let the Saudis down in case of a price collapse, given the upcoming IPO,” said one source familiar with Russian thinking.

He added that Putin had developed close ties with Saudi Crown Prince Mohammed bin Salman and the Russian government was aware that the three-year-old partnership could fall apart if Russia did not support Riyadh.

The OPEC+ alliance has since January implemented a deal to cut output by 1.2 million barrels per day, to help boost oil prices trading now at $62 a barrel.

“This is not only about supporting Saudi Arabia. The deal, without a doubt, is beneficial for Russia. The Russian budget has received more than $100 billion from the deal. And the deal has stabilized the Russian economy,” Kirill Dmitriev, the head of Russia’s Direct Investment Fund, told Reuters.

Dmitriev and Energy Minister Alexander Novak were the key architects of a deal with Saudi Arabia, which began in 2017.

Saudi Arabia and other Gulf producers in OPEC have been delivering more than their share of promised cuts to stabilise the market and prevent prices from falling.

In October, the kingdom raised its oil output to its OPEC target, pumping 10.3 million bpd to replenish its inventories after attacks on its facilities last month, but kept the volumes of crude supplied to the market at 9.9 million bpd.

Last week, OPEC Secretary-General Mohammad Barkindo said U.S. shale oil supply growth could slow next year while demand may have upside potential, appearing to downplay any need to cut output more deeply.

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Traders lament continuous border closure

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Traders lament continuous border closure

The sustained border closure by Federal Government has continued to destabilise commodity retailers, especially those into food item business.

Investigation by New Telegraph revealed that the situation had started creating an atmosphere of hopelessness since the Federal Government has vowed to sustain the closure till end of January 2020.

Nigeria closed its land borders to both Benin and Niger in August in what the government said was aimed at curbing smuggling of goods, especially rice into Nigeria. The closure has led to increase in food prices and subsequently pushed up annual inflation in the country.

Speaking on the development, John Paul, who sells food stuff such as rice, beans garri, noodles, among others at Egbeda market, complained that since the closure of the border his business had been affected in terms of both patronage and restocking.

He said the effect of the closure was obvious, as he has both increased the price at which he sells as well as reduce the quantity he buys.

Another woman, who pleaded anonymity, complained that the fairly used clothes she sells were now difficult to buy.

According to her, before the closure of the border she used to purchase her goods from neighboring countries at cheaper price, but with the closure, she now buys here in Nigeria but at a high price.

Before the border closure she used to sell her clothes for as low as N300 or N400 depending on the quality of the material, but now she sells them for nothing less than N600.

Another woman, who also pleaded anonymity, explained that there were goods currently on demand but not available as a result of the closure.

“Products such as sardines and some brand of sanitary wares are no longer in the market,” she added.

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Business

ICPC bestows integrity award on FAAN staff

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ICPC bestows integrity award on FAAN staff

The Independent Corrupt Practices and Other Related Offences Commission (ICPC) has recognized a staff of the Federal Airports Authority of Nigeria, Mrs. Josephine Ugwu for her honesty and integrity in the discharge of her duties.

Mrs Ugwu was presented with the award at a two day summit on ‘Diminishing Corruption in the Public Sector’ jointly organized by the Office of the Secretary to the

Government of the Federation and ICPC in Abuja.

You will recall that in a celebrated case in the year 2015, Mrs. Ugwu while carrying out her duties as a cleaner at the Murtala Muhammed Airport, Lagos saw the sum of $12,200,000 in a toilet and submitted it to security officials. The money was subsequently returned to the owner. She has also refunded other sums lost by several other passengers at different times.

Mrs. Ugwu was subsequently given automatic employment by the Authority in recognition of her honesty and exemplary conducts.

The event climaxed with an hand shake to Mrs. Ugwu from the President of the Federal Republic of Nigeria, President Muhammadu Buhari. She was also given a brand new apartment in Lagos for her act of honesty and integrity.

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Business

Senate pledges to help AMCON recover N5.4trn debt

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Senate pledges to help AMCON recover N5.4trn debt

The Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Uba Sani, has declared that the Senate under the leadership of current Senate President, Ahmed Lawan, will join forces with the executive arm of government to wage serious and sustained war against obligors of the  Asset Management Corporation of Nigeria (AMCON), whom he described as economic saboteurs, saying they must be made to repay the over N5trillion outstanding debt owed the corporation.

Sani made the declaration at the commencement of the 2019 retreat for members of the Senate Committee on Banking, Insurance and other Financial Institutions, which began in Kaduna on Wednesday.

He said recovering the huge debt of AMCON had become a major burden for which the National Assembly will consider all options including reactivating the Failed Bank Act and at some point invite the pioneer management of AMCON under the leadership of Mustapha Chike-Obi to come and explain to Nigerians what they did during their tenure.

The chairman also hinted that the National Assembly would continue to support AMCON by providing all legislative supports including further amendment of the AMCON Act, if need be, to enable the corporation to recover the huge outstanding obligation.

He said the red chamber would bring up several motions that will enlighten the public on the real dangers of non-recovery of the debts to the economy. As the upper legislative arm provides AMCON with such support, the senator said if need be the Senate would along the line step on toes as far as the recovery of these national assets are concerned.

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Business

NSE extends gain with N46bn

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NSE extends gain with N46bn

Nigerian stocks market yesterday sustained its positive outlook as the overall performance measures, NSE ASI and market capitalisation, rose further by 0.36 per cent each.

Market watchers attributed development to renew of confidence as bargain hunters leverage on under value stocks.

Consequently, the All-Share Index rose by 95.94 basis points or 0.36 per cent to close at 26.872.09 index points as against 26.776.15 recorded the previous day while market capitalisation of equities appreciated by N46 billion or 0.36 per cent to close higher at N12.969 trillion from N12.923 trillion as market sentiment remained on the green territory.

Meanwhile, a turnover of 239.2 million shares in 3,585 deals was recorded in the day’s trading.

The premium sub-sector was the most active (measured by turnover volume); with 121 million shares exchanged by investors in 1,527 deals.

Volume in the sub-sector was driven by activities in the shares of FBNH Plc and Zenith Bank Plc.

The banking sub-sector boosted by the activities in the shares of GTB Plc and Sterling  Bank Plc followed with a turnover of 45 million shares in 624 deals.

The number of gainers at the close of trading session was 21 while decliners closed at 12.

Further analysis of the day’s trading showed that Cornerstone Insurance Plc topped the gainers’ table with 10 per cent to close at 77 kobo per share while Oando  Plc followed with 9.89 per cent to close at N3.89 per share and Flour Mills Plc with a gain of 9.85 per cent to close at N17.85 per share.

On the flip side, CCNN Plc led the losers’ chart with a drop of 10 per cent to close at N18.00 per share. Jaiz Bank Plc followed with a loss of eight per cent to close at 69 kobo per share while Lasaco Assurance  Plc dropped by 7. 41 per cent to close at 25 kobo per share.

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FirstBank reiterates commitment to women empowerment

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FirstBank reiterates commitment to women empowerment

The Chief Executive Officer, First Bank of Nigeria, Dr Adesola Adeduntan, has restated the lender’s commitment to empowerment of women.

He stated this at the bank’s first female-focused product, ’FirstGem’, 3rd Anniversary Conference held in Lagos yesterday.

He said: “May I reiterate that FirstBank is committed to the empowerment of women. We understand their story and recognise their invaluable contributions to the economy of our nation in particular and the global economy in general.

“Having identified the gaps in their lives, both in corporate Nigeria and in the entrepreneurial space, we are committed to bridging those gaps effectively by providing the tools required for women’s empowerment.”

The First Bank CEO said he was delighted that FirstGem was already in its third year, adding that the product, which was launched on 28 October 2016, was designed specifically to meet the financial needs of both corporate and entrepreneurial women.

“This product, apart from being an account dedicated solely to women, is lifestyle-enhancing. It provides a total lifestyle support for discerning women to enable them meet their economic needs and aspirations,” he said.

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Business

Savannah Bank: Reps summon Emefiele, NDIC boss

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Savannah Bank: Reps summon Emefiele, NDIC boss

The House of Representatives has mandated its Committee on Banking and Currency to summon the Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele and Managing Director, Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru, to ascertain the new status of Savannah Bank, its readiness to commence operation and to ascertain whether promoters of the bank have fulfilled all requirements to begin business.

The committee is also requested to invite the shareholders and the new management of the bank to brief it on possible ways they have fashioned to pay or refund depositors’ funds.

The resolution followed the adoption of a motion sponsored by Aliyu Da’u Magaji (APC, Jigawa), at Thursday’s plenary of the House.

The committee, which is to submit its findings in two months, has also been mandated to ensure that effective measures are put in place to avoid the reoccurrence of what led to the withdrawal of the bank’s licence and eventual closure in 2002.

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Business

Pension: Workers invest N951.28bn in banking sector

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Pension: Workers invest N951.28bn in banking sector

Nigerian workers, who are active in their contributions under the new pension arrangement, Contributory Pension Scheme (CPS), have so far invested about N951.28 billion in the banking sector.

The investment carried out on their behalf by pension Fund Administrators (PFAs) represent 9.93 per cent of the total N9.58 trillion pension assets.

According to a breakdown of the total investment posted on the industry regulator, National Pension Commission (PenCom)’s website, the pension fund managers also invested a total of N6.84 trillion in Federal Government securities within the period, representing 71.43 per cent of the total assets.

Details of the commitment shows that Federal Government bond got the highest with N4,47 trillion at 46.1 per cent; treasury bills, N2.2 trillion (23.62%); agency bonds N10.2 billion (0.11%); Sukuk, N80.52 billion (0.84), and green bonds, N13.37 billion (0.14%).

Within the same period, a total of N125.24 billion, representing 1.31 per cent was invested in state government securities while corporate debts securities gulped N621.95 billion, representing 6.49 per cent.

In the same vein, corporate bonds got N572.41 billion (5.97%); corporate infrastructure bond, N17.79 billion (0.19%); corporate green bonds, N31.71 billion (0.33%) and supra-national bonds N4.03 billion, representing 0.4 per cent.

Other areas invested in include commercial papers, N123.28 billion (1.29%), and foreign money market securities, N1.07 trillion (11.21%).

For mutual fund, they invested N9.90 billion (0.10%) in open/close-end funds and N11.91 billion (0.12%) in Reits.

The investment choice as stipulated by law setting up the scheme also includes real etste properties, N231.48 billion (2.42%); private equity fund, N32.06 billion (0.33%); infrastructure fund, N34.89 billion (0.36%) as well as cash and other assets, N26.47 billion, representing 0.28 per cent.

From recent development, the outlook of investment is likely to expand as the regulator disclosed recently that workers in the informal sector are gradually keying into the scheme.

According to the Head, Corporate Communications, PenCom, Peter Aghahowa, 19 PFAs have registered 28,000 micro pension participants as at November.

According to the breakdown, 21,430 participants were registered as at June 2019,b while in July, 221 participants were registered. In August 2019, 1,299 Nigerians were registered, September, 2737 registered and in October, 2313 participants registered.

While over 40 million Nigerians in the formal sector have no pension plan, which account for about 65 per cent of the GDP, Aghahowa said registration had, however, been challenged due to low financial literacy.

Other challenges include the need for National Identity Number (NIN), which is one of the criteria for registration; low awareness about the scheme and inadequate technology platform to support the registration process.

He said in a bid to tackle the challenges, the commission embarked on campaign across the traditional, social and digital media, engaging with union, associations, professional bodies and non-governmental organisations.

“Though NIN has slowed down the process of micro pension registration, PenCom has, however, collaborated with the National Identity Management Commission (NIMC) to ensure that participants get their numbers on time to fast track registration.

“The commission is working on having its own USSD code to ease payment of pension contribution for enrollees,” he added.

Though the micro pension scheme is moving at a slow pace, the President, PenOp, Aderonke Adedeji, said there was need to give it time in order to avoid mistakes.

Speaking on the growth of the industry, Adedeji said 15 years after setting up the Contributory Pension Scheme, it has grown to over N9.trillion.

“However, we are not yet where we want to be. We need to address the issue of transfer window and the slow registration of NIN, but we are making progress in that aspect.

“In recent time, we have been experiencing slow pace of growth of the industry and the reason is not far-fetched.

“In terms of the state of the Nigerian economy, we have increase in unemployment rate which is a threat to the growth of the industry,” she added.

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Business

IGR: Taraba woos investors

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IGR: Taraba woos investors

To boost its internally generated revenue Taraba State Governor, His Excellency, Arc. Darius Ishaku, has called on local and foreigners to invest in its Mambila Beverages Nigeria Limited so as to expand the production of Highland Tea.   

Ishaku, who disclosed this to journalists during the launch of the tea in Lagos, said his administration planned to hands-off running of the firm soon and targeting interested investors both foreign and local to partner with the state government to expand the production.

According to him, the company currently employs over 3,000 people and also accepts green leaf from about 2,000 out growers who cultivate tea on 800 hectares of farmland across villages on the Mambila Plateau, which is enhancing the economic viability of communities on the Mambila Plateau and Taraba State at large.

He said that Mambila Beverages Nigeria Limited, makers of Highland Tea, was one of the 25 moribund companies he revived under his rescued mission during his  first term in office, all in a bid to create employment for Taraba citizens and generate more IGR for the state.

Speaking on the choice of Lagos to unveil the commodity, the governor stressed that Lagos was strategically chosen as venue of the launch because of its population, large market and returns of investment, saying that the firm plans to set up its Lagos office for the distribution of the product.

“Lagos, the largest market in Africa, a city of over 20 million people, you cannot but have to deal with them. The idea is to bring our Highland Tea from Taraba to Lagos where the large market is available so that we can expose it to Nigerians here. After the acceptability of the product here, we will then think of West African countries. We will export but let’s satisfy the home demand.

“Nigerians don’t even know much about Highland Tea. Some people have taken it, they love it but it’s not in the market. We are going to bring it to the market in Lagos.”

The governor explained that Highland Tea had demonstrated to be a home grown tea that is better than foreign ones in terms of health.

Speaking on the Mambila Beverages Nigeria Limited, Ishaku noted that the company was a subsidiary of Taraba Investment and Properties Limited, which was incorporated as a private limited liability company in 2012 to manage the assets acquired by the Taraba State Government.

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CBN to create 2m jobs via cassava value chain

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CBN to create 2m jobs via cassava value chain

In line with its ongoing strategic intervention in key sectors of the economy, the Central Bank of Nigeria (CBN) is intervening in cassava production, which it said has potential of providing two million jobs across value chain.

To bring cassava’s enormous potential to fruition, CBN governor, Mr. Godwin Emefiele, yesterday in Abuja, facilitated the signing of Memorandum of Understanding (MoU) between Nigeria Cassava Growers Association and Large Scale Cassava Processors.

Emefiele, who underscored importance of cassava as agriculture commodity, said Nigeria is hugely blessed with the commodity.

He disclosed that Nigeria imports cassava derivatives valued at about $600 million annually.

The CBN governor linked the apex bank’s interest in cassava value chain to President Muhammadu Buhari’s economic diversification programme for Nigeria.

This, he said, was because economic diversification is an essential tool for national development, pledging that CBN would leave no stone unturned towards repositioning Nigeria on the map of the world not just as the leading cassava producer, but a processor as well.

To achieve the cassava sufficiency goal, he said the CBN was holding consultations with the International Institute for Tropical Agriculture (IITA), Ibadan and the National Root Crops Research Institute, Umudike.

He said: “We place a high premium on cassava because the commodity can generally be used for different uses along the value chain. The value chain has enormous potential for employing over two million people in Nigeria if well harnessed, due to the diverse secondary products that it offers.

“Some of the products include High Quality Cassava Flour (HQCF), starch, sugar syrups and sweeteners, chips for domestic livestock feed and for export to China, Ethanol/bio-fuels, High Fructose Cassava Syrup (HFCS), Fuel Ethanol (E10) as well as Animal Feed from cassava waste among others”.

“In our midst today are large corporations like Nestle, Flour mills, Promasidor, Unilever who require the secondary outputs from cassava such as starch, glucose, sorbitol etc. as raw materials for the production of their final products. We also have the companies whose responsibility is the processing of cassava to starch, glucose, ethanol etc., as well as members of the Cassava Farmers Association,” Emefiele said.

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