Author: Businessam Staff

Social networking firm, Facebook, on Wednesday, agreed to pay a record $5 billion to settle an ongoing investigation into allegations of privacy violations.

The settlement with the United States Federal Trade Commission (FTC) also said the company will increase its board members for additional oversight of its privacy policy, according to several U.S. media reports.

Facebook has long denied allegations of compromising user data to advertisers, amongst other claims. But the latest settlement will also see CEO Mark Zuckerberg relieved of final authority over privacy decisions.

An independent privacy committee of the company’s board will now take final decisions on issues bordering on users’ privacy. Billions of people use Facebook and its subsidiaries, which include Instagram and WhatsApp

Some investors in the Nigerian capital market have called on the federal government to extend the exemption of value added tax (VAT) charges on transactions on the Nigerian Stock Exchange (NSE) so as to attract more patronage to the market.

The federal government, had in 2014 exempted brokerage commission and transactions fees charged by Securities and Exchange Commission(SEC), NSE and Central Securities Clearing System(CSCS) Plc from the five percent VAT.

NgoziOkonjo-Iweala, the then coordinating minister for the economy and minister of finance, had announced the exemption as part of efforts to resuscitate the market. The exemption was for five years.

Following the expiration of the exemption, the NSE has notified stockbrokers that effective Thursday July 25, 2019 (tomorrow) the five per cent VAT would now be charged.

In a notification to stockbrokers, signed by head, broker/dealer regulation, NSE, Olufemi Shobanjo, said that exemption, which became effective on 25 July 2014 and valid for a period of five years, has expired July 24, 2019.

“To that extent, all dealing members of the NSE are to note that effective 25 July 2019, barring any further extensions from the federal government: VAT is to be charged on all commissions applicable to capital market transactions.

These are commissions earned by dealing members on traded values of shares; and payable to the NSE and CSCS

The International Monetary Fund has raised the growth forecast of Nigeria’s economy for the 2019 financial year by 0.3 percent to 2.3 percent.

It disclosed this in its July update on the World Economic Outlook with the theme, ‘Sluggish global growth call for supportive policies’.

The Fund in its January report had revised the country’s Gross Domestic Product projection down to two percent from 2.3 percent projected in October 2018.

On the global outlook, the IMF stated, “We are revising downward our projection for global growth to 3.2 percent in 2019 and 3.5 percent in 2020. While this is a modest revision of 0.1 percentage points for both years relative to our projections in April, it comes on top of previous significant downward revisions.

“The revision for 2019 reflects negative surprises for growth in emerging market and developing economies that offset positive surprises in some advanced economies.”

It stated that growth was projected to improve between 2019 and 2020.

However, close to 70 percent of the increase relied on an improvement in the growth performance in stressed emerging market and developing economies and was therefore subject to high uncertainty.

Global growth was sluggish and precarious, but it did not have to be this way because some of this is self-inflicted, according to the report.

“Dynamism in the global economy is being weighed down by prolonged policy uncertainty as trade tensions remain heightened despite the recent US-China trade truce, technology tensions have erupted threatening global technology supply chains, and the prospects of a no-deal Brexit have increased,” it stated.

The IMF report said the negative consequences of policy uncertainty were visible in the diverging trends between the manufacturing and services sector, and the significant weakness in global trade.

The Central Bank of Nigeria (CBN) has added three new banks to the list of deposit money banks and financial holding companies operating in Nigeria.

The banks are Titan Trust Bank Limited, Globus Bank Limited, and Taj Bank Limited.

This raised the number of lending institutions from 21 to 23 on its DMB’s list.

Titan Trust Bank Limited got a commercial banking licence with national authorisation, increasing the commercial banks to 11.

Globus Bank Limited was granted a commercial banking licence with regional authorisation, increasing the commercial banking operators to three.

Taj Bank Limited was issued with a non-interest banking licence as the only lender with regional authorisation.

The latest list from the banking regulator revealed there were currently eight commercial banking operators with international authorisation licence, and one non-interest bank with national authorisation licence.

Others were five merchant banks with national authorisation licence and four holding companies in the country.

According to a CBN source, licensing for banks follows certain stages. “The stages of licensing a bank are that you apply, your application will be acknowledged and you are given an approval in principle.

“They will search your funds to ensure that they are not illicit funds or laundered money you are bringing to Nigerian banks.

“There is the due diligence they will conduct. And they will conduct diligence on your proposed directors and promoters.

“These are stages considered before they are finally approved.”

The upper chamber of Nigeria’s senate has mandated its petroleum committee to invite the ministry of petroleum and the Nigerian National Petroleum Corporation (NNPC) to brief it on the status of existing refineries in the country.

It also asked the committee to ascertain the true position of things with the newly licensed modular refineries.

The decision followed a motion by Rose Oko, the Cross River PDP senator on a motion entitled, ‘Existing Petroleum Subsidy: Ensuring Self-Sufficiency in Domestic Refining of Petroleum Products’.

The motion had 42 other senators as sponsors.

Speaking on the motion at the plenary, Oko said although Nigeria was producing 1.7m barrels of crude oil per day, its moribund refineries had little refining capacity.

She lamented that the nation was importing about 90 percent of its fuel, negating much of the benefits accruing to oil producing nations from high crude prices.

She said despite the resources expended on turnaround maintenance, none of the NNPC’s four refineries currently functioned up to 50 percent of their combined capacity of 445,000 barrels per day.

She added that data from the Department of Petroleum Resources website indicated that a total of 633,000 barrels per day refining capacity had already been lost due to the expiration of licences of both conventional and modular refinery projects.

Oko, who also spoke on the fuel subsidy, said more than $160m was spent on subsidy in early 2017.

In his submission, Ifeanyi Ubah, another senator who is also a major player in the petroleum industry, asked the senate to invite other stakeholders for the parley.

He said the major oil marketers association of Nigeria, the depot and petroleum products marketers association, the independent petroleum marketers association of Nigeria and the department of petroleum resources should be part of the talks.

Ubah noted with regret that Federal Government’s policy of importing refined petroleum products while still trying to encourage local production would never encourage investors.

He said, “There is a reason many people are scared of investing in modular refinery. They are afraid that the Federal Government would continue to import fuel and that would affect their business.

The loan to deposit ratio (LDR) of the Nigerian banking industry measures low when pitched against what is obtainable in other countries, says Godwin Emefiele, the governor of Nigeria’s Central Bank.

Emefiele said the LDR of Nigeria’s banking industry is currently at 57 percent. This is against what is obtainable in countries such as Brazil wbich has 70 percent, the United States (75 percent), China (71.2 percent), India (75 percent), South Africa (91 percent) Kenya (76 percent), and Japan (70 percent).

According to him, the situation will be addressed if there is no improvement by September.

He said the CBN is looking to address the situation through a monthly review of banking sector’s LDR by September 30.

“We need everybody’s support to achieve growth in Nigeria. When the monetary policy raised the concern, we had a flat loan-deposit ratio.

We would apply certain sanctions that involve asking the 50 percent of the ‘un-lent’ portions of their loans into the CRR.

The deadline is 30th of September. After September 30, we are going to begin a month-by-month monitoring and then prescription of deposit loan ratio for the banks,” Emefiele told news men shortly after the July 2019 monetary policy committee (MPC) meeting held in Abuja.

The loan-deposit ratio is a ratio between the banks total loans and total deposits and it is used to calculate a lending institution’s ability to cover withdrawals made by its customers.

The CBN governor said the MPC was of the view that there was a need to boost output growth through sustained increase in consumer credit, mortgage loans and granting loans to the Small and Medium Enterprises.

He said the committee also observed that while the management of the CBN had started the prescription of using benchmark loan-to-deposit ratios to redirect the banks’ focus to lending, there was a need to mitigate credit risk.

To achieve this, Emefiele explained that the committee enjoined the management of the CBN to de-risk the financial markets, through the development of a reliable credit scoring system, similar to the arrangement in the advanced countries as this would encourage the DMBs to safely grow their credit portfolios.

Emefiele said the MPC also called on the fiscal authorities to expedite action in expanding the tax base of the economy to improve government’s revenue and stem the growth in public borrowing.

The committee further urged the fiscal authorities to build fiscal buffers to avert macroeconomic downturn in the event of a decline in oil prices.

Lafarge Africa Plc.’s financial position has been further strengthened by about N239 billion as a result of its recently concluded fully subscribed rights issue as well as the divestment from its South African operations.

According to the company, the construction industry in South Africa still remains subdued and net sales down were down 2.1 percent in Q2 2019 despite price increase, nevertheless the Lafarge South African operations continue to yield positive results from its turnaround plan.

The company revealed these in a statement informing the public and stakeholders of its financial performance for the second quarter (Q2) and half year period (HY) of 2019.

According to the statement, the rights issue and divestment will strengthen the company’s balance sheet and significantly reduce financing costs.

Lafarge said although net sales dropped marginally by 1.2 percent in HY 2019 from N162.3 billion to N160.3 billion, continuous focus on cash cost reduction, which is an outlook for the 2019 financial year, will drive operational performance.

Other highlights of the result shows that the company reduced its net financial debt by 19.2 percent to N206.6 billion form N255.9 billion while Earnings per share (EPS) stood at N57 from a loss of N45 in the same period of last year.
Michel Pucheros, CEO of Lafarge Africa stated: “Our Strategy 2022 « building for growth » in Nigeria is delivering the expected results with strong volume growth, considerable EBITDA improvement, robust net income and operating cash flow development.

Pucheros noted that the company continues to deliver strong margins as a result of turnaround and cost reduction strategy in Q2 with improvement in commercial transformation, logistics performance, and industrial and energy efficiencies.

“Our ambition is to continue the acceleration of growth and earnings in 2019.”

The company noted that for the 2019 financial year, it expects softer cement growth compared to 2018. It said it also expects a stable pricing environment, implementation of route-to-market and energy initiatives to continue to deliver, continuous focus on cash cost reduction to drive operational performance, and a total divestment from South African operations in Q3.

Other financial highlights for the firm’s second quarter showed that net financial expenses for Q2 2019 was N4.8 billion compared to N13.5 billion in Q2 2018. The decrease was mainly driven by the repayment of all the company’s short-term loans and overdraft from the proceeds of the Rights issue which was successfully completed on March 8, 2019, Lafarge explained.

The company’s free cash flow stood at N28.4 billion with significant improvement over H1 2018’s N10 billion. While Net Profit After Tax for Q2 was restored to positive territory at N5.9 billion compared to -1.9 billion in previous year.

It is no longer news that agriculture is the new big thing, and many who are involved in it are making it. In any sector you find yourself, to stay relevant you must learn new and innovative ways that will keep you at the top of the ladder.

Millennial farmers from the suburbs in the United States (US) are already thinking ahead of their peers who spent most of their day on the farm; these young farmers are actually taking advantage of the new media (social media) to share their experience about farming to prospective, existing and non farmers who subscribe to their YouTube channel.

YouTube for many is a platform where one can watch videos or stream live events, but beyond that, those who know the business side of YouTube have turned it a money making platform than a time wasting one.

For Zach Johnson, (MN Millennial Farmer) a corn and soybean grower in Minnesota earns five times more than what his crops could provide for his family.

“I love agriculture, I love farming,” Zach Johnson said. “It’s my whole life, and it’s the life for all of my friends and family. People have become so disconnected from agriculture,” Johnson said.

“They’re curious about where their food comes from, and who the people that grow their food are. We have a really good opportunity to talk to people, discuss those things and show them why we do the things that we do”, he added.

Johnson, 34 with Becky have about 300,000 subscribers with 50 million views, what they do on YouTube is they share  their experience and thoughts on both the depressed state of the rural economy and growing consumer interest in how food is produced.

“Yes, we use GMOs, we use pesticides, drain tiles and irrigation and there are real reasons why we use those things,” Johnson said in an interview. Their role is to strike a balance to a discussion often dominated by critics of modern farming practices. They leave farmer to decide on whether to adopt new farming techniques or remain with the conventional farming methods.

Farmers accept new methods of farming when they hear from their colleagues who have adopted these new methods and it is result oriented.

According to a survey by the University of Illinois, conducted on farmers, close to 60 percent of these farmers over the last year have adopted the use of social media to engage farmers like them in new farm practice from pre-planting to harvest.

“Farm organizations and commodity groups have encouraged producers to be part of the conversation on social media,” said Keith Good, social media at Farmdoc project at the University of Illinois

Suzzane Cook, or WT. Farm Girl 37, a female farmer who has 40,000 subscribers to her YouTube channel is advocating for more women who are 10 percent of her subscribers to go into farming.

“For a female, it’s even harder because most guys don’t take you seriously,” she said in a telephone interview. “YouTube has helped me because a lot of my subscribers are encouraging.”

Josh Drapper (Stoney Ridge Farm), a first generation cattle farmer with over 220,000 subscribers is calling on ex servicemen in the US to embrace farming. “A lot of people are getting back to agriculture”, Josh said.

A $3.15 billion financing and technical services agreement that is being described as an oil and gas project financing game changer in Nigeria has been signed between Sterling Oil Exploration and Energy Production Company Limited (SEEPCO) and the Nigerian Petroleum Development Company (NPDC), the exploration and production arm of the Nigerian National Petroleum Corporation (NNPC).

The financing and technical services agreement is for the development of the oil mining lease (OML) 13 located in the eastern axis of the Niger Delta and covering a total area of 1987 square kilometres.

Over the next 15 years during the life of the project, Nigeria will earn $10.2 billion in royalties and taxes, with the NNPC earning $5 billion after payment of the entire financing would have been made, it has been computed.

The signing of the agreement will, indeed, add to the push by the state-owned oil corporation to raise the country’s crude reserves and daily oil production to three million barrels (mbpd), a statement issued by Ndu Ughamadu, group general manager, group public affairs division, noted.

The mining lease is wholly owned by the NPDC which has been showing strength in recent years after a number of years of false starts in the Nigerian production space where international oil companies (IOCs) hold sway.

But it was Mele Kyari, NNPC’s group managing director, who is quoted in the statement as describing the new funding arrangement as “a game changer to oil and gas project financing in Nigeria,” signposting the big break the agreement represents.

Approval for the deal was given by President Muhammadu Buhari, who doubles as minister of petroleum resources for the country.

Represented by Roland Ewubare, the corporation’s chief operating officer, upstream, Kyari expressed gratitude to President Buhari for the approval, and added that OML 13 held strong potentials both for the petroleum industry and the nation’s economy.

At the signing ceremony Kyari advised the management of NPDC to develop a strong community engagement strategy to forestall any crisis that could hinder operations.

According to Ughamadu’s statement, Kyari disclosed that the acreage boasts of over 926 million stock tank barrels (mmstb) and 5.24 trillion cubic feet (tcf) respectively of oil and gas reserves, adding that the agreement was for a period of 15 years while the $3.15bn ceiling funding would be provided by SEEPCO with a 10-year capital investment period and five years for cost recovery.

First oil of about 7,900bpd is expected from the project by 1st April, 2020, while production is expected to peak at 94,000bpd and 542mmscfd within four years.

On local content, the project is expected to enhance participation by indigenous companies in the industry by providing over 2,000 direct and indirect job opportunities.

The statement also noted that Tony Chukwueke, chairman of Sterling Oil Exploration and Energy Production Company Limited, expressed delight at the opportunity offered the company to support the production and reserves growth aspiration of the Federal Government. 

The International Monetary Fund trimmed its forecast for global economic growth again as the U.S.-China trade war continues, Brexit worries linger and inflation remains muted.

The global economy is expected to expand by 3.2% in 2019, the fund said in a report released Tuesday morning. The revised economic growth figure is 0.1 percentage points lower than the IMF had forecast in April and is 0.3 percentage points below the fund’s growth estimate at the start of the year.

“Risks to the forecast are mainly to the downside,” the IMF said. “They include further trade and technology tensions that dent sentiment and slow investment; a protracted increase in risk aversion that exposes the financial vulnerabilities continuing to accumulate after years of low interest rates.”

“Mounting disinflationary pressures that increase debt service difficulties, constrain monetary policy space to counter downturns, and make adverse shocks more persistent than normal,” the fund added.

Back in May, China and the U.S. hiked tariffs on billions of dollars worth of each other’s goods, stoking fears of a more protracted trade war between the world’s biggest economies. The U.S.-China trade war began last year when the U.S. imposed levies on Chinese imports and China retaliated with tariffs of its own.

This conflict has dampened expectations for economic growth and corporate profits. Some companies are also moving their supply chains out of China to avoid tariffs.

The IMF points out that global trade volume growth declined to around 0.5% on a year-over-year basis in the first quarter of 2019.

“Weak trade prospects—to an extent reflecting trade tensions—in turn create headwinds for investment,” the IMF said. “The silver lining remains the performance of the service sector, where sentiment has been relatively resilient, supporting employment growth (which, in turn, has helped shore up consumer confidence).”

Another factor dampening the global growth outlook is the uncertainty around the UK’s exit from the European Union.

In April, the EU and UK agreed to extend the Brexit deadline until Oct. 31. Still, it is not clear whether the two parties will strike a deal to maintain some economic ties before the deadline or if these will be completely severed.

“The forecast assumes an orderly Brexit followed by a gradual transition to the new regime. However, as of mid-July, the ultimate form of Brexit remained highly uncertain,” the fund said.

To boot, inflationary pressures in developed economies like the U.S., Europe and Japan remain low. This has led major central banks to maintain historically low interest rates or further ease their monetary policy stances.

The Federal Reserve in the U.S. is largely expected to cut interest rates by at least 25 basis points at the end of July. European Central Bank President Mario Draghi also cleared the path for more monetary stimulus last month if economic conditions do not improve.

“Lower inflation and entrenched lower inflation expectations increase debt service difficulties for borrowers, weigh on corporate investment spending, and constrain the monetary policy space central banks have to counter downturns, meaning that growth could be persistently lower for any given adverse shock,” the IMF said.