The Nigerian banking sector’s profit fell by 28.4 per cent in the 2015 financial year, the just released Afrinvest 2016 Banking Sector Report showed.

The report, released in Lagos on Wednesday, indicated that foreign exchange volatility and lower oil price led to a major decline in the fortune of the sector.

The report read, “The resilience of the Nigerian banking sector was put to the test as elevated risk concerns triggered a spike in NPL ratio and slowed the pace of credit expansion dramatically. Gross loans and advances dipped by 1.9 per cent in 2015 across our coverage universe compared to the 26.6 per cent growth in 2014 as lower oil prices, FX volatility and liquidity concerns dampened risk appetite amidst a hazy economic road map.

“Thus, growth in industry gross earnings moderated to 10.3 per cent in 2015 (compared to 14.6 per cent in 2014). At the same time, liquidity in the banking system (especially among Tier-2 banks) was pressured by the TSA implementation, which sterilised approximately N1.2tn from the banking system.”

It further stated, “As a result, sector profitability was depressed in 2015 with profit before tax tumbling by 28.4 per cent year-on-year as industry NPL ratio spiked to 4.9 per cent from three per cent in 2014.

“Furthermore, return on equity moderated to 9.1 per cent from 15.5 per cent in 2014. Capital adequacy ratio was strained on account of revised computation guidelines and increase in general loan loss provisioning, settling at 16.5 per cent in 2015 (relative to 19.7 per cent in 2014). Total deposits dipped by 1.8 per cent to N20.7tn, while total assets (+3.3 per cent ) and liabilities (+1.1 per cent) increased.”

Commenting on the report, the Group Managing Director, Afrinvest, Mr. Ike Chioke, said, “Our assessment of performance indicators in the Nigerian banking space indicated that performance softened in 2015 as events in the socio-political, economic and regulatory environment heightened risk consciousness, slowed the pace of credit expansion, deteriorated asset quality and weakened earnings capacity across all tiers in the sector.”

The report read in part, “Against the backdrop of lower oil prices, which have weakened macroeconomic fundamentals, the outlook for the sector in 2016 was expected to be dominated by developments in the FX market. Accordingly, we identify risk areas for Nigerian banks to include: credit exposure to high risk sectors; default risk arising from general commerce and manufacturing due to liquidity challenges in the FX market; credit concentration risk emanating from upstream oil and gas loans due to lower oil price; potential default risk arising from power asset loans, which are predominantly denominated in United States dollar; pressure on Capital Adequacy Ratio in the aftermath of the depreciation of the naira; and restrained appetite for both sovereign and corporate Eurobonds.

“The report highlighted expectations for the performance of the banking sector as risk assets to expand nominally due to currency adjustment. Although real loan growth is expected to be muted in 2016, the 29.1 per cent effective devaluation of the local unit will translate into a circa 15 per cent nominal expansion in industry loan book given the significant 37 per cent foreign currency denominated risk asset exposure as at FY 2015.”

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The nation’s electricity woes may worsen in the coming weeks as liquidity and gas supply issues are threatening the operation of its biggest power station, Egbin.

The Managing Director and Chief Executive Officer, Egbin Power Plc, Mr. Dallas Peavey Jr., told our correspondent in an exclusive interview that the owners of the plant might be forced to consider shutting it down if the challenges remain unresolved.

Egbin, which is located in Lagos, was acquired in 2013 by Kepco Energy Resource Limited in collaboration with its technical partner, Korea Electric Power Corporation, during the privatisation of the successor companies carved out of the defunct Power Holding Company of Nigeria.

Asked if the company had any challenge in paying gas suppliers, he said, “We do because we are owed N86bn and we in turn owe the gas suppliers approximately N30bn. We are working on payment plans.

“We think if this is not addressed in the next couple of weeks, we are going to take the hard look at shutting down, because we can’t afford running it any longer. That’s a dire prediction.”

Peavey said the company owed banks $325m as it had to borrow to overhaul the plant after it was acquired to enable it to operate at its installed capacity of 1,320 megawatts.

Generation from Egbin was said to be limited to 383MW on Wednesday due to gas constraints, compared to 1,085MW on March 15, according to industry data obtained by our correspondent. The plant hit a record low of 246MW on last Saturday from 425MW on Friday.

Its unit ST1 was said to have tripped on generator CB trouble; ST2, 3 and 5 not on spinning reserve due to Egbin G/S management decision, while the ST4 was out due to gas constraints.

“Right now, because of gas and transmission issues, we only have three of our six units running. Each one of our units can produce 220MW. For a megawatt, that is about 100,000 people that it provides power for,” Peavey said.

The Egbin CEO, who spoke with our correspondent shortly before the nation recorded its latest total system collapse on September 16, said, “We are helping to stabilise the national grid. If you notice, over the last six weeks, we haven’t had a grid failure or system collapse because of Egbin.

“Egbin is the sole reason there has not been a total system collapse in the nation, because we regulate everything coming to Lagos all the way to Abuja and farther north.”

Out of the six power stations meant to provide spinning reserves, only one had actual reserve of 9.4MW as of 6am on Wednesday, September 21, down from 17.4MW on Sunday and 30.4MW on September 10.

The power stations are Egbin, Kainji, Delta, Olorunsogo II, Geregu II and Omotosho II, with a combined reserve capacity of 235MW.

The reserve capacities and actual reserve of Egbin and Kainji stood at zero as of Wednesday, while those of Delta were 80MW and zero, respectively.

This year, the nation’s power grid has so far recorded 22 collapses – 16 total and five partial – up from 13 and 10 in the whole of 2014 and 2015, respectively.

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The country needs $15bn from asset sales and borrowing to revive the slumping economy and boost foreign reserves, according to Africa’s richest man, Aliko Dangote.

Dangote said in a Bloomberg TV interview at the US-Africa Business Forum in New York on Wednesday, “Through sales of assets, through loans from the Bank of China or wherever, we need something like $15bn. We’re having a problem as the reserves are low. The banks, entrepreneurs and everybody is speculating on the currency.”

Nigeria’s economy, battered by low oil prices and a dearth of foreign investment, is set to shrink in 2016 for the first time in 25 years, according to the International Monetary Fund, which forecasts a 1.8 per cent contraction.

The foreign reserves have fallen by more than a third since the end of September 2014 to more than 10-year low of $24.8bn. The naira has fallen almost 40 per cent against the dollar this year.

President Muhammadu Buhari’s government is trying to spend a record budget of N6.1tn to stimulate growth. The country plans to raise about $4.5bn of concessional loans and Eurobonds this year to help pay for the spending plans.

The President, according to Dangote, is making good on his promise to tackle corruption.

“President Buhari is doing a great job in terms of fighting corruption. Corruption has gone down dramatically,” he said.

The Emir of Kano, Muhammadu Sanusi II, on Wednesday joined the list of eminent Nigerians calling for sale of state assets to get the much-needed foreign exchange and shore up the nation’s fast-depleting external reserves.

Sanusi, who spoke in Lagos as the special guest at the launch of the 2016 Afrinvest Banking Sector Report, said, “One option is to sell down some assets; sell down some refineries in a manner that does not hurt your strategic interest; sell down some oil assets; sell down some refineries in a transparent manner that gives you value. You can also have options to buy them back later. You should expect basically forex.”

He also backed the Central Bank of Nigeria’s Monetary Policy Committee’s decision to keep the lending rate unchanged, praising it for not yielding to political pressure to increase the benchmark lending rate.

Sanusi said, “I think it is a positive thing when the fiscal authorities and the many people in the private sector said they wanted a lower rate of interest rate. I was concerned that the CBN would succumb to pressure.

“And the fact that the CBN did not succumb to the pressure is a fact that it is beginning to claim its independence, which is a very positive thing.

“And these are economic questions, you make choices. I can see why the CBN does not want to lower the interest rate at this time. If you lower the MPR by 100 or 200 basis points today, it is not going to lead to rapid increase in credit growth.

“You will not see an increase in credit growth that will reverse the downward trend in output by lowering the MPR by 100 or 200 per cent. You will, however, further fuel inflation, and you will reduce the yield in fixed income at a time you are trying to attract foreign exchange.

According to him, the economy is in a crisis and requires forex to survive, adding that the fiscal and monetary authorities must do everything to attract forex into the country.

In doing this, the emir said the CBN must demonstrate courage to implement the foreign exchange policy to the full.

He said, “The immediate oxygen that this economy needs is forex, because before you talk about long-term structural issues of power and refineries, you do need forex coming into this economy and portfolio investments are important.

“The CBN got the decision right, adopting a flexible exchange rate, and secondly, tightening monetary policy.

“But do we really have a flexible exchange rate? We need the CBN to take that risk and courage to implement the flexible foreign exchange policy. Let the market work in the next two or three weeks and see as people know they can come in, sell their dollars, buy stocks, sell their dollars and fixed income, make a profit in currency and capital acquisition; you are going to have gradually narrowing of the gap between the interbank and the parallel rates and have more liquidity in the market.”

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Aliko Dangote has not given up on his plan to acquire Arsenal. The Nigerian reportedly worth $10.9bn says he plans to take over the club by the end of the decade.

Dangote stated last year that he was prepared to pay any sum to take ownership of the Premier League club away from Stan Kroenke.

Dangote, a lifelong Arsenal fan whose fortune is largely tied up in Dangote Cement, is reported to have lost $4.4bn this year due largely to the depreciation of Nigeria’s currency

But the 59-year-old says he still plans to complete a takeover of the Gunners before the end of the decade once his latest ventures in gas pipelines and an oil refinery have developed.

“Maybe three to four years,” he told Bloomberg Television when asked when he intended to buy the club. “The issue is that we have more challenging headwinds. I need to get those out of the way first and start having tailwinds. Then I’ll focus on this.”

Dangote believes his success in the business world proves he is the right man to transform Arsenal’s fortunes, after years of relative stagnation under Kroenke and manager Arsene Wenger.

“It’s not about buying Arsenal and just continuing with business as usual,” he said. “It’s about buying Arsenal and turning it around.

“I’ve run a very successful business and I think I can also run a very successful team. Right now, with what we’re facing, over 20billion dollars of projects, I cannot do both.”

Kroenke, who has been criticised by fans for a perceived lack of interest in the team’s on-pitch successes, increased his majority shareholding to 67.05 per cent in May.

Alisher Uzmanov, the Russian billionaire who owns a 30.04 per cent stake in the club, moved to deny rumours last month that he was considering selling his shares, insisting that he sees the Gunners as “a long-term investment for family and future generations”.

Arsenal, who dispatched Nottingham Forest 4-0 in the EFL Cup on Tuesday, have won three, drawn one and lost one of their opening five Premier League games this season.

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Nigeria's debt profile has risen to N16.29tn, the Debt Management Office has said.

Statistics obtained from the DMO on Tuesday showed that the country’s total debt liability had risen to N16.29tn as of June 30, 2016. As of June 2015, the country’s total debt stood at N12.12tn.

This means that within the one-year period (July 2015 to June 2016), the country’s total debt rose by N4.17tn, or 34.41 per cent.

A breakdown of the country’s debt profile shows that external debt by the federal and state governments stood at $11.26bn or N3.19tn as of June 30, 2016. It was $10.32bn or N2.03tn by July last year.

According to the DMO, the Central Bank of Nigeria’s official exchange rates of N283 to $1 as of June 30, 2016, and N197 as at December 2015 were used in arriving at the naira equivalent of the foreign debt status.

The domestic debt of the Federal Government alone stood at N10.61tn as of June this year, up from N8.4tn a year ago.

This means that within 12 months, the Federal Government’s domestic debt profile rose by N2.21tn or 26.31 per cent.

The domestic debt of the states stood at N2.5tn at the end of June this year, whereas it was N1.69tn in July 2015. This means that within a period of one year, the domestic debt of the states rose by N810bn, an increase of 47.93 per cent.

For domestic debt, FGN Bonds remained the dominant instrument for borrowing from the domestic market, as it accounted for N7.47tn or 70.46 per cent of the Federal Government’s domestic debt profile.

The Nigerian Treasury Bills accounted for N2.9tn or 27.36 per cent of the Federal Government’s domestic debt profile.

Treasury Bonds, on the other hand, accounted for N230.99bn or 2.18 per cent of Federal Government’s domestic borrowing.

Although the Federal Government had for long acknowledged that it was borrowing too much from the domestic debt market and crowding out the private sector, current debt statistics show that the trend has not changed.

The DMO recently said that refinancing 30 per cent of the Federal Government’s domestic debt amounting to N2.56tn within the next one year posed a high risk to the economy.

The DMO, in a document, ‘Nigeria’s Debt Management Strategy 2016-2019’, said at least 30 per cent of the nation’s domestic debt would fall due within a one-year period.

It added that refinancing the 30 per cent component of the domestic debt posed high risk to the economy because of high interest rate.

It stated, “This debt stock is slightly lower than the published FGN’s total debt stock of $55,576.28m (N10,948,526.57m), because the Debt Management Strategy tool treats the NTBs stock based on the discount values and not on the face values; while for the external debt, the tool aggregates the debt by tranche and currency, and applies a common end-period exchange rate. These gave rise to the observed difference.

“The implied interest rate was high at 10.77 per cent, due mainly to the higher interest cost on domestic debt. The portfolio is further characterised by a relatively high share of domestic debt falling due within the next one year.

“Interest rate risk is high, since maturing debt will have to be refinanced at market rates, which could be higher than interest rates on existing debt. The foreign exchange risk is relatively low given the predominance of domestic debt in the portfolio.”

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The Federal Government said it would again set aside the sum of N500bn in the 2017 budget for its social intervention programme.

The amount when added to the N500bn earlier approved for the same purpose this year would bring the total budgetary allocation for programme to N1tn in two years.

The Minister of State for Budget and National Planning, Mrs. Zainab Ahmed, gave the figure on Monday while speaking at a media briefing in Abuja on the national nutrition week.

The main objective of the week is to intensify awareness on the importance of food and nutrition to child survival and its impact on human development, productivity and economic development.

She lamented that despite the commitment of the Federal Government to nutrition, malnutrition was still a major challenge to national development.

Financial analysts in the country have called for a strong collaboration between financial sector regulators and the banking industry to chart an ideal course, given the receding state of the economy.

They identified huge communication gaps among the parties, saying the gaps must be closed if the country must move forward economically.

According to them, the country is going through hard times, which require a more holistic and thorough approach to check the level of economic decadence.

The analysts made this submission at a panel discussion organised for industries’ leaders held at the Nigerian Stock Exchange.

The Federal Government has announced its readiness to partake in the $100bn market for pulses(food crops) in India as it has commenced moves to start growing the plant in commercial quantity for export to the Asian country.

It stated that it was finalizing arrangements for the signing of a Memorandum of Understanding with the Indian prime minister in order to ensure that Nigeria exports its pulses to India based on agreed terms.

The Minister of State for Agriculture and Rural Development, Sen. Heineken Lokpobiri, disclosed this on the sidelines of the closing ceremony for the Standing Technical Committee on Zero Reject of Agricultural Produce and non-oil Export in Abuja.

He said, “The Indian high commissioner came to our office a few days ago and said that if Nigeria could grow and supply pulses to India, his country would be willing to buy because India has over $100bn market for pulses. This is because it is a staple food in India as every Indian family will either have it for breakfast, lunch or even dinner.

The National Bureau of Statistics on Sunday said the  telecommunications  sector  contributed  N1.58tn in real terms to the country’s second quarter Gross Domestic Product.

It said the second quarter performance for the telecoms sector represented about 9.8 per cent of the total second quarter GDP.

In the telecoms report released by the NBS, it said that this was the largest contribution to the GDP  from  this  sector  in  the  rebased  period,  which  emphasised  that growth in telecommunications  remained robust when compared to total GDP.

However, it added that due to different  seasonal  patterns,  the  contribution  from telecommunications is usually the largest in the second quarter.

It said, “Although  growth  in  the  telecommunications  sector  remained  positive,  in contrast  with  the  economy  as  a  whole,  year-on-year  growth  nevertheless dropped  in  real  terms  from  five per cent  in  the  previous  quarter  to  1.5 per cent,  the  lowest rate since 2011 Q3.

The recall of one of Samsung Electronic's flagship devices is an embarrassing setback for the world's biggest selling smartphone maker. The Note 7 was unveiled just a month ago.

Samsung said it had found a problem with the phone's battery and was halting sales. It will replace all Galaxy Note 7s with a new product regardless of when it was purchased.

South Korean news agency Yonhap had previously reported that there have been five claims around the world of Note 7s catching fire. Samsung said it had been alerted to 35 cases worldwide.

The Securities and Exchange Commission has raised the alarm over the activities of some online fraudsters, who are currently running an online investment scheme tagged ‘MMM Federal Republic of Nigeria’.

The fraudsters, according to SEC, carry out their illegitimate business via Nigeria.mmm.net portal/platform, and are promising investors a monthly investment return of 30 per cent.

SEC said the venture had no tangible business model, describing it as a Ponzi scheme, where returns would be paid from other people’s invested funds.

Investopedia.com describes a Ponzi scheme as a fraudulent investing scam promising high rates of return with little risk to investors. The scheme generates returns for older investors by acquiring new investors.

SEC on its website, said, “The attention of SEC, Nigeria has been drawn to the activities of an online investment scheme tagged ‘MMM Federal Republic of Nigeria (nigeria.mmm.net). The platform has embarked on an aggressive online media campaign to lure the investing public to participate in what it called ‘mutual aid financial network’ with a monthly investment return of 30 per cent.

The National Bureau of Statistics on Wednesday said the country’s unemployment rate has risen from 12.1 per cent in the first quarter of this year to 13.3 per cent as at the end of the second quarter.

The bureau stated this in the unemployment report which was released by the Statistician General of the Federation in Abuja.

Manager Ronald Koeman was keen to bring Sissoko to Goodison Park on Deadline Day, agreeing a club-record £30m fee for the France midfielder with Sky Bet Championship side Newcastle.

Everton had agreed personal terms with Sissoko and organised a private plane to take him to Merseyside to undergo a medical, but the 27-year-old reneged on the deal after Tottenham matched the Toffees' offer.

Farhad Moshiri (left) says Everton withdrew from a deal to sign Sissoko

James McCarthy has made three appearances for Everton so far this season