8/3/2019 Weekly Report Nigeria, January 13 - 20, 2012

1/2

Page | 1

Weekly Report Nigeria, January 13 - 20, 2012

Sovereign Wealth Fund hits $1bn as FG, states reach compromise: The Federal and state governments havefinally agreed to withdraw the sum of $1 billion from the Excess Crude Account (ECA) into the SovereignWealth Fund Account. Ngozi Okonjo-Iweala, Finance Minister and coordinating Minister for the Economy, alsodisclosed that the total sum of $1.001 billion was accrued into the account domiciled with the Central Bank ofNigeria (CBN).

Senate wants $75 per barrel oil benchmark in budget: Nigeria's Senate has said it wants to adopt a $75 perbarrel oil price benchmark in the 2012 budget, up from the $70 proposed by the finance ministry, which wouldgive the government more money to spend and leave less for savings. Nigeria saves money into an ExcessCrude Account (ECA) over the benchmark price in its budget to cushion the economy against potential oil priceshocks. Raising the benchmark price would help meet the unaccounted for costs associated with the fuel subsidybut leaves less money in the ECA and for a recently set-up sovereign wealth fund. The ECA contained morethan $20 billion in 2007 but despite a period of record high oil prices since, the account has been drained andonly contained $3 billion at the end of last year. President Goodluck Jonathan attempted to remove fuel importsubsidies on Jan. 1 but had to partially reinstate them under intense pressure from the public, which staged 6-days of strikes and mass street protests.

Two Nigerian unions suspend strike after president cuts fuel prices, amid continue protest in Lagos State:Two Nigerian labor groups suspended their 6 days nationwide strike Monday, January 16 over the eliminationof the country's fuel subsidy and urged demonstrators to go home "in order to save lives and in the interest ofnational survival. The unions began nationwide strike last Monday, January 9 to protest the increase in theprice of fuel from N65 to N141. This came after President Goodluck Jonathan in an early morning broadcast onMonday, January 16 announced the reduction of petrol pump price from N141 per liter to N97.

Nigeria Police fired tear gas at Lagos protest as protest continue in Lagos state: Nigerian police fired teargas Thursday, January 19 in Lagos at hundreds of protestors marching against the authorities' securitycrackdown in the aftermath of a week-long strike over fuel prices. Thursday's protests were led by a formerpresidential hopeful, Tunji Braithwaite, alongside a host of other respected Nigerians, including a formerfinance minister, Muslim leaders and renowned lawyers. More than 200 protestors defied police warnings andmarched towards a park in the economic capital that had become the epicenter of mass mobilization against theremoval of fuel subsidies.Troops and tanks have since been stationed in parts of the country and sealed off themain protest ground in Lagos.

Senate backs subsidy probe as EFCC raids PPPRA: The Senate has declared support for President GoodluckJonathans directive to the Economic and Financial Crimes Commission (EFCC) to probe fuel subsidypayments. Meanwhile, the EFCC on Monday stormed the office of the Petroleum Products and PricingRegulatory Agency (PPPRA) in Abuja hours after Jonathan directed the anti-graft agency to probe all paymentsmade in respect of fuel subsidy. No arrest was made during the raid. The Commission is collaborating withforeign anti-graft agencies and the INTERPOL to establish facts in the claims of the petroleum marketer.

Nigerias inflation defies seasonal hike, moderates at 10.3%: The usual seasonal hike in commodity pricesduring Christmas was unable to push up Nigerias inflation which rather moderated to 10.3% in December 2011,

slightly lower than the 10.5% recorded in November The Nigeria Bureau of Statistics (NBS) said. Food inflationyear-on-year however leaped to double digit, settling at 11%, the highest since June 2011. The increase in foodindex was however moderated by a drop in core inflation. The largest contributors to consumer inflation inDecember were the high prices of food items, kerosene and transportation.

NBS estimates N207bn lost to subsidy removal strike action: NBS estimates that Nigeria incurred aboutN207, 40828 billion economic losses during the eight-day nationwide strike action initiated by the NigerianLabour Congress and Trade Union Congress, to protest the removal of fuel subsidy. It noted that the Wholesaleand Retail Sector which was the worst hit by the crisis, with respect to absolute amount and relative proportionto other sectors, recorded a loss of approximately N86.98184 billion. This sector accounted for 42% of the

8/3/2019 Weekly Report Nigeria, January 13 - 20, 2012

2/2

Page | 2

overall total loss in output during the period. Wholesale and Retail Sector was followed by the Crude Petroleumand Natural Gas Sector, the largest source of government revenue accounting for N28.71087 billion, and 14percent of economic losses.

Nigeria to raise N130-240bn bonds in Q1 says DMO: Nigeria plans to raise between 129.75-239.75 billionnaira ($1.49 billion) in 10-year sovereign bonds in the first quarter of the year, the Debt Management Office(DMO) said on Thursday, a major step to plug the revenue gap in 2012. The debt office said it would auctionbetween 79.75-99.75 billion naira in 10-year bonds of various maturity dates in January, 60-80 billion naira inFebruary and 50-60 billion naira in March of the same tenor respectively. DMO discontinued the issuance oflower tenor papers of 3 and 5-year in the third quarter of last year and concentrated on the 10-year instrument aspart of its debt restructuring measures.

Nigeria to export 368,000 bpd of Qua oil in March: Nigeria will export around 368,000 barrels per day of itslight, sweet Qua Iboe oil grade in March, a trade source said on Thursday citing a provisional loadingprogramme. The volume of the benchmark grade is expected to be around 11.4 million barrels on 12 cargoes,the source said. The daily volume was little changed from February when Nigeria planned to export around360,000 bpd.

Government orders audit of the oil and gas sector as FEC approved N364m for audit: Nigeria'sgovernment ordered a fresh audit of its entire oil and gas sector covering the last three years on Wednesday,January 18 the latest move to clean up corruption in oil industry after a week of anti-government protests. Theweekly Federal Executive Council (FEC) meeting, on Thursday, January 19 approved N364 million for the auditof the oil, gas and mining revenues by the Nigeria Extractive Industries Transparency Initiative (NEITI) .It isexpected that the audit report which spans over two-year period, 2009-2011, for the oil and gas and 2009-2010for the mining sector, will offer the government the opportunity to look deep into the books of the respectivesectors.

Government to revise 2012 budget following the botched unilateral removal of fuel subsidy : The FederalGovernment said on Thursday said it would need to rework the 2012 budget estimates, following the anti-subsidy removal protests which forced the government to re-adjust the pump price of petrol. The N4.7tn budget

proposal currently before the National Assembly has no provision for fuel subsidy, owing to the governmentsoriginal plan to phase out the subsidy regime. In 2011, the NNPC deducted N673.9bn to pay itself for subsidy,

while the total subsidy deduction for 2006 to 2011 was N1.5tn, covering 46billion litres of products it importedwithin the period.

Police place N50m bounty on the escaped Christmas bomber: The Federal Government on Thursdaydeclared the suspected mastermind of the Christmas Day bombing wanted. Government also offered a bounty ofN50m for information leading to his arrest. Kabir Umar, a.k.a Kabir Sokoto, a member of the violent Islamicsect, Boko Haram, had escaped from police custody on Monday, 24 hours after his arrest. The Christmas Day

bombing of the St. Theresas Catholic Church, Madalla, Niger State, killed 40 worshippers and destroyedproperties worth millions of Naira.

Police IG given 24 hours to find escaped terror suspect: The head of Nigeria's police has been given 24 hoursto produce a terror attack suspect who escaped police custody under suspicious circumstances, a government

minister said Thursday. The fugitive, identified by police as Kabiru Sokoto, is suspected to be the mastermind ofa series of deadly church bombings on Christmas Day. A 50 million naira ($307,000) reward was offered bypolice Thursday for any information leading to Sokoto's capture and a photograph of him in custody has beendistributed to all police stations in the country. Police Inspector General (IG) Hafiz Ringim, will face severesanctions for negligence of duty if Sokoto is not found. There were conflicting reports that the suspect had beenrearrested and was said to have been caught while attempting to cross into neighboring Chad Republic. But thespokesperson of the Nigeria Police, Olusola Amore, said he was unaware of the re-arrest of Sokoto, promisingto issue a statement if the bomber had indeed been rearrested. A police commissioner was suspended after theescape of a suspect on Wednesday.