Hyundai hits market with Grand i10, Kona

Stallion Hyundai Motors Nigeria has last Saturday launched locally-assembled petrol-powered Hyundai Kona and the 2021 Hyundai Grand i10 Sedan into the Nigerian market.

The auto giant had late last year and last month launched Hyundai Kona Electric (EV) in Lagos and Abuja respectively.

Addressing reporters at Hyundai Motors Nigeria showroom on Victoria Island, Lagos, the brand’s Head (Sales and Marketing), Gaurav Vashisht said the Petrol-powered option of Kona was launched for its regular customers.

He said: “Hyundai Kona EV and its Petrol-powered sibling are two different vehicles. While the Kona EV is powered by an electric motor and draws power from its 64 kwh battery, Kona Petrol is powered by the conventional but more advanced internal combustion engine.

 

“But the shape, size and dimension remain the same. Other similarities, apart from the same name are: infotainment, six airbags, tyre size as well as interior comfort and space.

“Powered by 2.0-litre engine, the 2021Kona Petrol version comes with most of the impressive and award-winning styling, equipment and safety features available in the Kona EV. It is also available at a comfortable price of N12.5million.”

The 2021 Hyundai Grand i10 was designed to appeal primarily to entry level buyers in their 20 – 30s, young families, single males and females, salaried and self-employed, budget-conscious, looking to downsize.

The Grand i10 hits target precisely by delivering modern design, spacious interior with advanced connectivity options, superior safety features and economical operation.

By virtue of its extended dimensions, long list of standard features and numerous optional extras, Grand i10, which competes with Toyota Yaris, Suzuki Dzire, Ford Figo and Chevrolet Sail, is a segment buster with the ability to poach buyers from the B-segment.

Hyundai Kona`

Grand i10 checks all the boxes— power, economy and comfort, while delivering all the safety expected of a family car. Superb driving dynamics are ensured by the advanced Kappa powertrain and an ultra-rigid body structure that helps enhance suspension, steering and braking performance.

From the very first look, the new Grand i10 sedan demands attention and a closer investigation. From the large cooling aperture to the masculine character lines running along the hood, every detail reflects purposeful strength and agility. Backward pointed headlamps convey a high tech feel, while skill-full applications of glossy paint add a premium touch.

Available with 1.2-liter engine mated to 4-speed automatic transmission, Grand i10 is designed and built to the highest standards, earning an “A+” grade, when it comes to protecting the driver and cabin occupants.

From the advanced steel crumple zones to its highly capable depowered airbags, ABS and ESC braking system, Grand i10 promotes safety and peace of mind at every turn.

In addition, the car is equipped with Child lock (manual), Child anchor system, Day/Night rear view mirror.

Buyers are also offered four interior trims, including: Greige two-tone, Black mono-tone- Red, Cloth+Vinyl Standard and Cloth + Artificial leather – Red

“This is a car that will be popular among the youths as well as attract patronage from banks and other corporate organizations that need portable and rugged vehicle for their day-to-day runs,’’ Gaurav Vashisht pointed out, adding, “though the market is sluggish, because of the pandemic we are optimistic that during the second quarter, the market will bounce back.”

The original price for Kona Petrol is N12.9million, but it is sold for N12.5million as a very limited introductory offer, while the Grand i10 sedan is currently going for N7.7million.

Peugeot unveils new brand identity

By Tajudeen Adebanjo

 

Peugeot, the world’s oldest surviving automaker, has a brand new logo. It is the brand’s first new logo in a decade and the eleventh since 1850.

Peugeot said the new visual language “reflects its bold electrification strategy and its desire to enhance the ownership experience through pioneering new technologies”. The new Peugeot logo features a new take on the Peugeot lion, with a roaring lion’s head inside a new Peugeot coat of arms.

The new look will be accompanied by an international campaign and new-look website, as well as a new lifestyle collection of clothing and accessories later this year. The new logo also “showcases Peugeot as a timeless brand, celebrating its more than 210-year history, while also looking to the future, towards new technologies and innovations provided by the new Stellantis partnership”.

The logo will feature across all new models, starting with the all-new Peugeot 308, which will make its world premiere later this year.

Peugeot UK Managing Director Julie David, said: “A new logo and brand identity are significant developments for any marque, let alone Peugeot, who has a history spanning more than 210 years. The new logo reflects our changing model line-up and new philosophy around living in the moment, and we are very excited to showcase both the logo and the brand identity to our customers this year.”

Peugeot has had ten logos since way back in 1850, and the lion has been a prominent fixture of all of them. The new logo is said to reflect the brand’s move towards more upmarket products and features a coat of arms and the powerful head of a lion. This is the first new logo that the brand has introduced since 2010.

Few safe havens as equities lose N1.36tr in February

Nigerian equities sunk into the red in February with sustained losses in four consecutive weeks eroding early gains and building up losses in most portfolios. Deputy Group Business Editor, Taofik Salako, reports on the near market-wide depreciation and apprehension over the market outlook

 

The bears are on the rampage. Nigerian equities closed weekend with average decline of 6.16 per cent in February 2021, equivalent to net capital depreciation of N1.36 trillion.

From large to mid to small-cap stocks, from financial services to manufacturing, agriculture and engineering, from stocks to ethical stocks, the rampaging bears left the telltales of losses.

With the exception of the oil and gas sector, all sectoral indices at the stock market closed negative, underlining the widespread price depreciation that has shaken the boisterous confidence occasioned by world-ranking returns in 2020 and January 2021.

The All Share Index (ASI)-the value-based common index that tracks all share prices at the Nigerian Stock Exchange (NSE) closed weekend at 39,799.89 points as against February’s opening index of 42,416.66 points.

The ASI-being Nigeria’s largest equities index doubles as Nigeria’s sovereign equity index and serves as a broad measure of the mood at the domestic market and its competitiveness against the global advanced and emerging markets. The decline in February pushed the two-month average year-to-date return for the Nigerian equities market to -1.17 per cent, eroding positive return of 5.32 per cent recorded in January 2021.

 

Negative turn

Aggregate market value of all quoted also dropped correspondingly from February’s opening value of N22.187 trillion to close weekend at N20.823 trillion, representing a loss of N1.36 trillion or 6.15 per cent. The concurrence between the changes in ASI and market capitalisation underscores the fact that the steep decline was almost entirely due to share price depreciation, rather than other corporate changes such as delisting, share reconstruction and merger among others. With the February decline, net capital depreciation for the two-month period stands at N234 billion on straight line deduction or N246.4 billion when adjusted fully alongside the ASI.

The ASI had opened 2021 at 40,270.72 points and rallied to 42,416.66 points in the first month. Aggregate market value of quoted equities, which opened 2021 at N21.057 trillion, had rallied to N22.187 trillion by the end of January 2021.

The decline in February was driven by widespread profit-taking transactions as investors sought to monetise capital gains or realign portfolios away from quoted equities, despite the onset of the earnings season and expectations of dividend declarations. With the exception of the oil and gas sector, which has continued to play the contrarian riding on the back of global oil recovery, all sectoral indices at the NSE closed weekend negative. Most highly capitalised stocks suffered above-average decline during the period, with losses in the influential banking and industrial goods sectors more than three percentage points above the benchmark. The industrial goods sector is the most capitalised sector while banks are the most active and liquid stocks at the Exchange. The NSE Oil and Gas Index posted a positive return of 4.36 per cent in February, extending the sector’s unbeaten run to a two-month average return of 17.33 per cent.

 

Widespread losses

The NSE Industrial Goods Index showed negative average return of -8.80 per cent for February 2021. The NSE Banking Index posted a negative return of -9.73 per cent. The NSE 30 Index-which tracks the 30 largest stocks at the NSE, closed weekend with average return of -7.41 per cent for the month. The NSE Insurance Index recorded the highest decline of 17.82 per cent for the month. The NSE Consumer Goods Index closed weekend with a negative average return of -8.12 per cent for the month. The NSE Pension Index, which tracks stocks specially screened in line with pension funds investment guidelines, closed February with a negative return of -7.68 per cent.  The NSE Lotus Islamic Index, which tracks ethical stocks in compliance with Islamic Shari’ah, declined by 6.12 per cent during the month.

Also, the NSE Main Board Index- which tracks stocks on the main, oldest and largest board at the Exchange, declined by 6.14 per cent.  The NSE Premium Index-which tracks some large-cap stocks with high liquidity and capitalisation, including Dangote Cement, the largest stock at the market, declined by 6.20 per cent in February 2021. The NSE Corporate Governance Index- which mirrors stocks with high corporate governance standards, posted negative return of -7.65 per cent while the NSE Sovereign Bond Index-which tracks national debt issues by the Federal Government of Nigeria, showed a decline of 0.94 per cent within the month.

Further analysis showed that the February slump has also eroded previous gains by most investors, deepening the sense of loss. The NSE Industrial Goods Index now carries a negative two-month average year-to-date return of -7.51 per cent. The NSE Banking Index has so far this year declined by 2.61 per cent. The NSE 30 Index closed weekend with average year-to-date return of -2.84 per cent. The NSE Lotus Islamic Index has declined by 2.79 per cent so far this year. The NSE Consumer Goods Index closed weekend with average year-to-date return of -1.66 per cent. The NSE Pension Index closed with a two-month negative return of -0.77 per cent. The NSE Corporate Governance Index dropped by 1.29 per cent within the two-month period.  The NSE Main Board Index carries a marginal negative return of -0.15 per cent. The NSE Premium Index posted a negative two-month return of -2.33 per cent while the NSE Sovereign Bond Index remained with -0.94 per cent. However, the NSE Insurance Index drew on its substantial gain in January to retain a positive two-month return of 6.64 per cent while the NSE Oil and Gas Index sustained the highest year-to-date return of 17.33 per cent.

 

Cautious optimism

Market analysts said the downtrend at the equities market might not be unconnected with the increasing yields in the fixed-income market. At the last auction for Nigerian Treasury Bills (NTB), stop rates rose by an average of 254 basis points to 3.67 per cent as against 2.33 per cent at the previous auction.

Most analysts are increasingly becoming cautious, balancing expectations of positive sentiment from corporate earnings and dividend recommendations with the possible flight to safety in rising low-risk fixed-income returns.

Analysts at Cowry Asset Management Limited said equities may further trade southwards as investors trade cautiously amid rising fixed income yields. They however expected investors to position in companies which are expected to announce good dividend payments.

Analysts at Cordros Securities said they expected increased flow of corporate earnings in the days ahead as more companies publish their audited full-year results for 2020. Companies quoted on the NSE are expected to submit their audited result not later than 90 days after the end of the relevant business year. Most companies, including all banks and major corporates, use the 12-month Gregorian calendar as their business year. Thus, most companies are expected to submit their audited results, usually accompanied with dividend recommendations, not later than March 31, 2021.

“We believe this (earnings and dividends) should provide respite for market performance. However, we expect intermittent profit-taking activities to continue due to lingering concerns about yield elevation in the fixed-income market.  As a result, we think the local bourse will likely exhibit a zig-zag pattern. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings,” Cordros Securities stated.

Afrinvest Securities said it expected “trading sessions to be a mix of bargain hunting and sustained sell-offs”.

According to analysts at Afrinvest, the direction of yields in the fixed income market would also influence trades especially given the sustained increase in marginal rates at the Open Market Operation (OMO) auction.

 

Global phenomenon

The portfolio shift due to rising fixed-income yield is not limited to the Nigerian or emerging markets alone, investors across the world are showing risk aversion, conscious of the improving yields at the fixed-income market.

Market Analyst, FXTM, Han Tan noted that the massive ascent in yields is prompting investors to cast serious doubt over their exposure to equities, especially for global tech stocks. While global equities indices are declining, Tan pointed out that the rising yields gave reason for the dollar index to keep its head above the 90 psychological level for the time being.

According to Tan, investors were inclined to think of long-running increase in yields and were concerned by about possible tapering by the US Fed. Fed funds futures are already pointing to an interest rate hike that has brought forward to the end of 2022, from 2024.

“With such a debate raging, we can expect to see more volatile days ahead until markets can reach a greater consensus and a firmer understanding over the Fed’s next policy steps, which should in turn offer a new equilibrium for treasury yields,” Tan said.

The calls have mostly been for fixed-income securities. Spot gold was on course to register its sixth monthly loss from the past seven, with rising treasury yields dealing a blow to the non-yielding precious metal. Bullion’s year-to-date losses stand at 7.12 per cent at the time of writing.

“Despite the threat of rising inflation, investors are clearly willing to ditch gold in favour of other assets that can better ride on the economic recovery’s coattails, as well as the subsequent overshoot in prices. Gold ETFs have shed their holdings by more than 2.0 million ounces so far this year,” Tan noted.

 

Cycle of gains and losses

Amid the COVID-19 pandemic and economic recession, Nigerian equities had played the full contrarian to close 2020 with net capital gain of N6.48 trillion. Benchmark indices at the NSE showed average full-year return of 50.03 per cent for the 2020 business year. It was ranked highest in the world. This implied net capital gain of N6.483 trillion. The recent highest return was 42.3 per cent recorded in 2017. The ASI closed 2020 at 40,270.72 points, 50.03 per cent above 26,842.07 points recorded as opening index for the year.

Aggregate market value of all quoted equities at the NSE rose to N21.057 trillion by the end of 2020 as against N12.958 trillion recorded as opening value for the year, an increase of N8.1 trillion. The additional increase in value of market capitalisation, above the ASI percentage change, was due to additional or supplementary listing of shares during the year.

While a steep decline of 18.75 per cent in March 2020 had driven the first quarter to a negative return of -20.7 per cent or net loss of N2.68 trillion, the market recovered in the second quarter with positive average return of 14.12 per cent or net capital gains of N1.656 trillion. It continued its rally with average return of 9.61 per cent or net capital gains of N1.23 trillion in third quarter 2020.

The recovery since 2020 is particularly spectacular when viewed against the background of negative performance in recent years. After posting a world-ranking return of 42.3 per cent in 2017, the market had reversed to negative in 2018 with average full-year return of -17.81 per cent.

In 2019, investors suffered net loss of about N1.71 trillion with negative average return of -14.60 per cent. Prior to 2017, the stock market had been on a losing streak since 2014. Investors lost N1.75 trillion in 2014 and followed this with another loss of N1.63 trillion in 2015. Against the general expectation that political transition and new government will quicken a rebound, equities closed 2016 with a net capital loss of N604 billion.

Will earnings and dividend recommendations enliven the market in March? A cocktail of fixed-income yields, dividend yields, earnings performance and global crude oil performance will moderate equities’ return in the weeks ahead. But it appears too early to call the market for the bear.

 

SEC to develop enabling regulation for digital assets

The Securities and Exchange Commission (SEC) has acknowledged the emerging importance of digital assets like crypto assets and committed itself to leading efforts towards developing efficient regulatory framework for the digital assets segment.

Director-General, SEC, Mr. Lamido Yuguda made the commitment at the joint session of the Senate Committee on Banking, Insurance and other Financial Institutions, Capital Market and ICT and Cyber Crime in Abuja.

He said SEC was committed to enhancing financial inclusion in the country through technology.

According to him, SEC recognises the disruption of FinTech in the financial industry and aims to create an enabling regulatory environment that would ensure a balance between investor protection and technological advancement.

He said SEC believes that FinTech would not only bring about efficiency to the capital market but would also serve as a veritable tool for advancing Nigeria’s financial inclusion agenda.

He, however, noted the need to develop an appropriate regulatory framework to ensure the safety of innovation to investors and preserve market integrity.

He said the SEC will advance efforts towards developing a comprehensive regulatory framework that ensures that operators in the crypto asset space conduct their activities in a manner that protects investors and maintains financial system stability.

“The SEC will continue to monitor developments in the digital asset space and further engage and collaborate with all critical stakeholders, including the Central Bank of Nigeria (CBN), to create a regulatory structure that enhances economic development while promoting a safe, innovative and transparent capital market,” Yuguda said.

According to him, SEC’s approach is consistent with the approaches of several securities regulators around the world as in the United States of America, the US SEC requires platforms that offer trading in digital asset securities and operate as exchanges to register or seek to be exempted from registration.

He outlined that in the United Kingdom, the Financial Conduct Authority (FCA) requires firms that carry on specified activities, by way of business, involving a crypto asset, to be authorized.

Crypto assets are viewed as financial products in South Africa and the Financial Sector Conduct Authority (FSCA) requires persons carrying out associated activities to be regulated. In Malaysia, operators of digital asset platforms are required to be approved by the Securities Commission (SC) as recognized market operators. Several other securities regulators have taken similar positions.

Speaking earlier, Chairman of the Joint Committee, Senator Uba Sani said the committee was on a fact- finding mission in the interest of Nigerians and the nation’s economy.

Sani said the committee would look at enabling laws in line with global best practices.

“We shall look at the position of the CBN who have said cryptocurrencies are very volatile and support insurgency. The Senate will always support innovation and the effective use of ICT for economic empowerment.

“We are aware of the damage it has done and are poised to protect our economy and ensure that our people benefit where necessary,” Sani said.

 

Southwest GDP worth over $80b, says Odua Investment

By Juliana Agbo, Abuja

 

Odua Investment Company Limited, the asset management firm of Southwest region, has said the Gross Domestic Product (GDP) of investment in the region is worth $80 billion.

To further unlock the potential of the region, Odua Investment Company  has constituted six new board members for the Southwest Agricultural Company Limited (SWAgCo), for a four-year term while expanding the business to unlock the untapped potential of agriculture in the region so as to create wealth, job opportunities and contribute to the nation’s GDP growth.

SWAgCo is an agricultural investment company, fully owned by Odua Investment Company with a strong capital base, established to unlock unrealised agriculture and sub-optimised agribusiness value by transforming underinvested agribusiness opportunities within Nigeria into institutional-grade investment operations.

Speaking at the inauguration, Group Chairman of Odua Investment, Dr Segun Aina said the new directors joined SWAgCo at a time of it is implementing its strategy for economic and social impact within the agricultural space in Nigeria.

Aina said the development is part of a strategy to strengthen its corporate governance and repositioning the company.

He said the directors have been given the mandate to change the the landscape and investment outlook of agriculture in the region.

“The new leadership, which were selected through a competitive process handled by KPMG, brings a wealth of professional experience and expertise at a senior level in Investment, Finance, Agriculture and Performance Solutions to consolidate SWAgCo’s operation and set it on the path of achieving its mission to change the landscape of agriculture and agriculture investment in Nigeria,” he said.

Also, Chairman, SWAgCo, Mr. Owolabi Salami said he is committed to work towards changing the landscape and investment outlook of agriculture in the region.

 

“This is a significant moment in the history of our country, it is a great honour to serve as Chairman of the SWAgCo Board of Directors. I am proud of the major accomplishments over the past few months of its establishment and the commitment put into the pre-operational phase of the institution by the Interim Board. I look forward to working closely with all our shareholders, and the management team”, he added.

 

Among the Board of Directors, Mr. Owolabi Salami is the Chairman of SWAgCo, who recently retired from the insurance industry, Mr. Adeola Adetunji, currently the CEO, Africa for Waxed Mobile and Mvoula Group Limited, Ms. Cecilia Akintomide, currently an Independent Director on the Board of FBN Holdings Plc, Ms. Adekemi Ajayi as Non-Executive Directors to the SWAgCo board, currently an Executive Director in Odua Investment who will be representing the Group on the Board.

 

For the CEO, Mr. Babajide Arowosafe and Mr. Adegboyega Osobu as Executive Director of the organisation, were both appointed through a competitive selection process, conducted by KPMG in late 2020 as Executive Director, Technical and Chief Executive Officer respectively, to lead the development and execution of long-term strategies of SWAgCo, to increase shareholder value.

 

COVID-19 changes spending priorities for airports, airlines

By Kelvin Osa-Okunbor

 

COVID-19 pandemic has refocused the information technology spending priorities of airlines and airports across the globe as the air transport industry face stricter health and operational requirements needed to keep the sector afloat.

Studies by global air travel information technology service provider: Société Internationale de Télécommunications Aéronautiques (SITA) reveals accelerated investment in automated passenger processing focusing on touch-less and mobile services.

SITA is a multinational information technology company providing information technology and telecommunication services to the air transport industry.

The study also reveals strong focus on virtual and remote   information technology services that allowed employees to work from home while ramping up communications with passengers.

SITA, in the study, listed new trends in Cybersecurity and cloud services  as packages that helped automate operations and drive new efficiencies.

Chief Executive Officer, SITA  David Lavorel said severe slowdown in 2020 forced the air transport industry to focus on driving new cost efficiencies.

According to him, making  the check-in process completely touchless is now the main priority for airports and airlines to help protect passengers and staff in addition to improving  the passenger experience, and drive efficiency.

He said biometric  technology is the focus for airport investment with 64 per cent  of airports aiming to roll out self-boarding gates using biometric and identity documentation by 2023, three times higher than figures for last year.

He said airlines  have doubled implementations and plan to double investment for self-boarding using biometric  identity documentation by 2023.

Similarly, airlines, he added are prioritising a completely touchless check-in process, and most want mobile touchless payment options for all services provided.

Airline mobile applications for passenger services , he said has become a priority with nearly 97 per cent  of airlines having major programmes  in research and development in place by 2023.

By 2023 the majority of airlines plan to send passengers real-time notifications on their mobile devices about their bags and plan to provide real-time bag-tracking information for staff.

In response to the pandemic, he said  many airlines and airports are investing more in in-house virtual and remote information technology services allowing employees to work in a more agile and effective way while speeding up communications with passengers.

He said: “Almost three-quarters of airports and airlines will continue to invest in data exchange, cloud services, cybersecurity, and business intelligence to accelerate their digital airport processes. This includes increasing services on passenger mobile apps and ensuring staff services are accessible via mobile or tablets.

 

 

“Adding to the pressure, airlines and airports had to rapidly incorporate new health measures such as touch-less passenger processing and the handling of new health information and protocols, including PCR testing in many destinations. These efforts have been made in a market that continues to face rapid changes in air travel regulations that make operational planning volatile and last minute.

 

“To solve these challenges, the industry has turned to technology and, in many cases, reprioritised where they invested in 2020.

 

The good news is that airlines and airports were able to capitalise on existing trends to automation and have made significant strides in implementing new solutions that will bring new improvements for the passenger now and into the future.”

 

‘Economy depends on recovering manufacturing’

By Daniel Essiet

 

The  President, Association of Micro Entrepreneurs of Nigeria(AMEN), Prince Saviour  Iche  has said  economic  growth  depends on   recovery of small  scale manufacturing.

According to him, the development of small scale manufacturing was an important building block to more sophisticated manufacturing.

Speaking with The Nation, Iche   said Nigeria has the capacity to produce higher value goods but needs support in terms of investments in production.

He said because of the choking environment companies were moving production out of the country.

He said small manufacturing has suffered, underscoring the fragile and uneven nature of economic recovery.

He noted that   Micro, Small and Medium Enterprises (MSMEs) were critical drivers of economic development, particularly in fostering growth, employment, and income, but was facing challenges following shift of production bases by companies.

Iche said while manufacturing has increased, producers were losing so much because of high cost of raw materials.

He   said small businesses rely on raw materials that are imported, such as chemicals which the cost is driven by exchange rate.

He said there were concerns among producers about whether they would be able to afford enough raw materials to continue production.

He was not optimistic on the outlook for activity as the sector has the most to lose

He advised the government to stabilise the macro economy, improve the local business climate, and ensure that public investment is strictly supervised and implemented in an effective manner in order to enhance the resilience of the economy.

He underlined the need to maintain macroeconomic stability, keep inflation and interest rates low, ensure the stability of exchange rates, and improve the local investment climate through strictly monitoring public investment and effectively implementing measures to swiftly revive the economy.

 

SEC takes over DEAP Capital after board’s forced resignation

By Taofik Salako, Deputy Group Business Editor

 

The Securities and Exchange Commission (SEC) has taken over and appointed an interim management team for the troubled DEAP Capital Management & Trust Plc.

The appointment of the interim management by SEC was sequel to the resignation of the entire board of DEAP Capital Management & Trust. Sources said the resignation of the directors were due to regulatory pressure.

The three-man interim management is expected to oversee the affairs of the company, overseeing both the board’s oversight functions and key managerial decisions.

The three-man team included Mrs Anastasia Braimoh as chairperson, Mr Alhassan Sidi and Mrs Gbemi Adekola.

In a regulatory filing, Company Secretary, Deap Capital Management & Trust, Yetunde Fashesin-Souza, said the interim management team would soon call an emergency general meeting of members of the company to constitute a new board of directors.

The Asset Management Corporation of Nigeria (AMCON) had last week taken over assets belonging to the 14 former directors of Deap Capital Management over alleged indebtedness of some N1.6 billion.  AMCON had purchased the non-performing loan (NPL) of Deap Capital Management & Trust during the first phase of Eligible Bank Assets (EBA) purchases from Zenith Bank and FCMB in 2011.

The seizure was sequel to the order of Justice C. J. Aneke of the Federal High Court, Lagos Division made on January 18, 2021.

AMCON on February 23, 2021 took effective possession of the seven properties listed by the court through its Debt Recovery Agent – Etonye & Etonye.

The court also ordered the freezing of the bank accounts and shares of the company’s directors namely David Ogwu, Anthony Ezeh, Clara Rotzler, Vincent Otiono, Vincent Sankey, Victoria Alo, Hon. Preye Ogriki, Treasure Afolanyan, Chief Nwagwu, Peter Ololo, Gordons Ejikeme, Joe Idudu, Falcon Securities Limited and Rainoil Limited. Rainoil has, however, denied any involvement in any AMCON-related transaction.

The seized properties included properties situated at Plots 14, 15, 16 and 17 in Block 1B, Isolo-Ishaga Area, Mushin, Lagos State; Mile 3 Old Isheri Road, Ikeja, Lagos State; Plot 13, Block 65 Magodo Residential Scheme, Lagos State; No. 73, Femi Kila Street, Okota, Isolo, Lagos State; Plot 22, Block 91, Lekki Peninsula Residential Scheme, Lekki Area, Lagos; Government Land Allocation, Lekki Peninsula Scheme II, Lekki, Lagos State; and 2nd Avenue Estate Extension Ikoyi, Plot No. 11 Eti Osa LGA, Lagos State.

Founded in 2002, Deap Capital is a fund management and investment banking firm quoted on the Nigerian Stock Exchange (NSE).

AMCON had last July enforced on properties belonging to the chief promoter of the company, Mr. Emmanuel Ugboh.

However, due to the lack of adequate collateral, AMCON had to commence asset tracing on the company’s directors, an exercise, which revealed the seven properties the corporation now enforced upon.

AMCON’s action is in line with Section 61 of the AMCON Act, 2010 and Section 49 (1) & (2) of the AMCON Act 2019 (As Amended).

 

PDP Sends Warning To New EFCC Boss, Abdulrasheed Bawa

The Nigeria opposition party, Peoples Democratic Party (PDP) has sent a warning to the Chairman, Economic and Financial Crimes Commission, Abdulrasheed Bawa, over his fight against financial crimes.

PDP on Sunday, February 28 in a statement by its National Publicity Secretary Kola Ologbondiyan, in Abuja, cautioned the newly appointed head of the nation’s anti-graft agency against bowing to partisan pressures to use the commission to harass dissenting voices.

The party also warned Bawa to avoid the peril of his immediate predecessor and work all commitment towards restoring the commission to its proper role of leading Nigeria’s war against financial crimes.

The statement read in part, “The Peoples Democratic Party (PDP) charges the new Chairman of the EFCC, Abdulrasheed Bawa, to re-engineer and restore professionalism in the anti-graft agency.

“The party urges Bawa to avoid the pitfalls of his immediate predecessor in office, by resisting all-partisan pressures to use the agency as a tool for political persecution, harassment of dissenting voices, settling of personal scores as well as for personal enrichment, as witnessed under the last chairman.

“Such tendencies eroded professionalism in the EFCC, compromised its activities and diminished the public confidence with regard to fairness, impartiality and even-handedness in the handling of cases.”

Meanwhile, a human rights lawyer, Femi Falana, (SAN) has condemned the detention of former media aide to Governor Abdullahi Umar Ganduje of Kano State, Salihu Tanko-Yakasai, Naija News reports.

Okorocha’s Son-In-Law Shot During Brawl, Flown Abroad

A son-in-law to Senator Rochas Okorocha (APC-Imo West), Uzor Anwuka, has been flown abroad after been was shot when Okorocha’s loyalists clashed with government officials.

Okorocha was last Sunday arrested for unsealing the Royal Palm Estate sealed by the state government under the leadership of Uzodinma.

The immediate past Imo State Governor was arrested for violently breaking into the government-sealed Royal palm spring estate along Akachi road in Owerri.

Anwuka, an American-trained medical doctor, who was shot on the left leg during the clash, has undergone three surgeries.

Speaking when the former governor visited him at a hospital at Apo, Abuja, on Sunday, Uzor said he had undergone surgeries without any improvement.

He said, “On the day of the incident, my father-in-law called me that he was in Owerri to see his seized property and I drove down their to see him.

“On getting there, I saw a crowd of thugs led by one of the governor’s cousins. They had guns, cutlasses and other dangerous weapons, they started harassing everyone including my father-in-law (Okorocha).

“Later, they were asked to round us up and they started shooting, I made an attempt to climb the fence but I was hit by bullet and I fell into the bush and I was there for several hours before I was rescued and brought to the hospital.

“I have been in this hospital for six days and my leg has been operated three times but it is not getting better. So, I will be going out to get a better treatment.”

Okorocha Alleges Attack By ‘Desperate Politicians’

A former governor of Imo State, Rochas Okorocha has alleged an attack on him by some loyalist of governor Hope Uzodinma.

The politician in a statement made available to newsmen on Sunday, February 28 by his spokesman, Sam Onwuemeodo, said accused governor Uzodimma of assembling ‘desperate political office seekers’ to hurl insult on him last Saturday.

Okorocha alleged that individuals who gathered at a stakeholders’ meeting organised by the state government during the last weekend were not recognised members of the All Progressives Congress, APC. According to him, real stakeholders would have asked the governor why he had allegedly refused to pay workers salaries.

The politician faulted the Uzodinma for claiming to have constructed and rehabilitated some major roads in the state.

He said: “The truth is that most of the roads the Governor had claimed to have constructed and rehabilitated were roads constructed by Okorocha. Otherwise, let the governor mention one virgin road he had undertaken its construction since he came on board.”

Okorocha’s statement reads in full: “The statement reads partly, “A meeting of stakeholders would not have held in Imo and out of the five governors that had governed the state, only one, Chief Ikedi Ohakim, was there. And he was reported to have joined the governor’s own faction of APC.

“No Senator from the state, former or present since 1999 was there. No House of Representatives’ member, former or present, from 1999 till date was there. No Speaker, former or present since 1999 till date, was there, except the one who is also a member of his own faction of APC.

“Aside Prof. Marince Iwu, who was there because his younger brother is the Secretary to the State Government, no other prominent citizen of the state was there, including those in business and politics and so on.

“If the stakeholders of Imo State were there, they would have asked the governor to tell them what he had done with about N60bn loan, N56bn federal allocation, N8bn ISOPADEC fund, N42bn local government funds, IGR of N69bn and billions of naira from donor agencies. But the factional APC members-only abused Okorocha and left with their fuel or transport money.”

On his part, Uzodimma’s Senior Special Assistant on Print Media, Modestus Nwamkpa while responding to Okorocha’s statement, cautioned him to stop peddling lies.

He said it was wrong for the former governor to had asserted that a stakeholders meeting that had four out of five former deputy governors, a former governor, four former speakers, former and current members of the National Assembly, religious leaders, including Catholic and Anglican bishops, as a meeting of Uzodimma’s loyalists.

He said “Okorocha should stop telling lies to Imo people. What should preoccupy his mind now is how to return diverted assets to Imo people.”

Naija News understands that these were coming after Justice Fred Njemanze of the Imo State High Court, on Thursday ordered an interim forfeiture of all the properties illegally acquired by Rochas Okoroch, the lawmaker representing Imo West Senatorial district.

African Energy Chamber focuses on attracting direct investors to Africa

The Investment Committee of the African Energy Chamber has met for the second time to set an agenda that will facilitate capital raising for energy projects in Africa.

The committee acknowledged the increased difficulty of raising capital for energy projects in a post-COVID-19 era but agreed that African Energy projects remain extremely profitable, when tackled with the right investment structure.

According to the World Economic Forum, Africa’s urban population is expected to nearly triple by 2050, to 1.34 billion. Consequently, there is an important need for investment in energy to cater for their needs, to facilitate the development of industry and the generation of much needed revenue and jobs.

The discussion focused on solutions to the lack of investments. “The traditional way of investing is changing,” said Nosizwe Nokwe-Macamo, Executive Chairman & Founder of Raise Africa Investments.

“The African Energy Chamber must look to tap into non-traditional funding streams and look further afield than the usual geographical hotspots for investments,” she added.

Similarly, Chief Commercial Officer, Mixta Africa, Rolake Akinkugbe-Filani, emphasised: “To begin with, we need to be able to articulate clearly what the need is for energy across the diverse African countries and what the different opportunities are. Where possible and appropriate, we must tap into local sources of funding as well as other largely unexplored sources of funding, such as pension funds. There is appetite for African infrastructure projects but we must think of encouraging innovation to meet multiple objectives. Developing infrastructure and traditional energy sources, while also furthering transition to renewable energy. The Chamber, its partners, members and wider network must connect opportunities to funding opportunities.”

Chief Executive Officer (CEO) Mahube Infrastructure Gontse Moseneke,  added: “We must use this current situation to uncover where new opportunities arise. Our natural resources need to be translated into permanent capital and it takes bodies like the Chamber to be bold enough to facilitate the provision of energy needed for that. On the energy transition he said this was an opportunity for Africans to restructure, with the understanding that localisation is key.”

Vice President for Africa, ION Folarin Lajumoke, stressed: “Governments have a critical role to play in the quest to raise much needed capital to fund oil and gas projects. Recent events make for a very globally competitive landscape. To drive investors towards Africa, fiscal terms would need to be reviewed with a potential investor or explorer’s ROI in mind. Many fiscal terms are no longer fit for purpose in light of the emerging trend in energy transition. Funding for hydrocarbons in Africa will compete not only with similar opportunities in other continents but also with other sectors such as agriculture, technology and renewables.”

In a bearish market, the fiscal terms and policies in place could swing an explorer/investor from one geological basin to another. Hard-line bureaucracy on exploration is another major challenge. Exploration helps de-risk geology thereby attracting investment. Unattractive fiscal terms, coupled with bureaucratic excesses towards exploration, is toxic for capital raise. Furthermore, African NOCs have an important role to play by becoming full-cycle energy companies which seek opportunities outside their own countries. A diversified NOC such as Qatar Petroleum or Petronas is better placed in raising capital for growth/expansion than one which isn’t. It is also politically strategic for the much-needed growth in intra-Africa trade. ”

“It is with this in mind that the African Energy Chamber will call on interested investors and projects sponsors to approach the chamber and benefit from its network of partners and members to facilitate project implementation.

 

“We will continue to build partnerships with the private sector and governments worldwide to attract critical funding to energy projects” said Samantha Raoult, Director of International relations at the chamber.

 

Agric gets boost as Valency Agro Nigeria raises N5.12b

The agricultural sector has received a major boost with the raising of N5.12 billion by Valency Agro Nigeria Limited. The new capital is the first tranche under the company’s  N20 billion commercial paper programme.

The FMDQ Securities Exchange has approved the quotation of the N5.12 billion Series 1 Commercial Paper (CP) on its platform.

Executive Director, Valency Agro Nigeria Limited, Mr. Sumit Jain, said Valency Agro’s debut commercial paper issuance comes at a time the economy is bedeviled with soaring food prices, amid challenges of insecurity.

According to him, the agricultural sector and its attendant transformation agenda have never been more important in driving increased and sustainable production of agricultural products as well as the derived foreign earnings through exports.

He explained that the proceeds from the issue would be applied by Valency Agro towards meeting the mid-term working capital requirements of the various agricultural produce under its portfolio such as cashew, sesame, cocoa and in value addition prior to export.

“We are thankful to our investors towards showing their faith in our agenda to grow the agriculture focused business with a clear aim to maximise value addition and create employment opportunities in Nigeria. We would also like to commend the efforts made by FBNQuest Merchant Bank Limited’s team to build the reach and FMDQ for their unconditional support for the industry,” Jain said.

Head, Capital Markets, FBNQuest Merchant Bank Limited, Mr. Oluseun Olatidoye said the success of the issue reiterated the bank’s effort to enable underserved sectors access the debt markets, optimise their capital structure and further deepen the domestic capital markets.

” We are proud of the instrumental role FBNQuest Merchant Bank played in this transaction and appreciate the trust the management of Valency Agro placed in us to assist them. Our clients remain our priority, and we strongly believe their success is our success,” Olatidoye said.

FMDQ noted that the timely admission of the issuance and in general, securities on FMDQ Exchange, is a testament to the efficient processes and integrated systems through which FMDQ Holdings Plc, through its wholly owned subsidiaries – FMDQ Exchange, FMDQ Clear Limited, FMDQ Depository Limited and FMDQ Private Markets Limited – has continued to create unique value for its diverse stakeholders during this peculiar time and beyond.

“In keeping with its commitment to the development of the market, FMDQ Exchange shall sustain its efforts in supporting issuers with tailored financing options to enable them achieve their strategic objectives, deepen and effectively position the debt capital market for growth, in support of the realisation of a globally competitive and vibrant economy,” FMDQ stated.

 

NSE’s demutualisation will strengthen investor confidence, says FIRS

The ongoing conversion of the Nigerian Stock Exchange (NSE) from a not-for-profit, member-owned, mutual organisation to a profit-based public limited liability company will create many benefits and improve investor’s confidence.

Executive Chairman, Federal Inland Revenue Service (FIRS), Alhaji Muhammad Nami, at the weekend, expressed support for the conversion, otherwise known as demutualisation, describing it as noteworthy development that is beneficial to the market.

He spoke at the weekend during engagement with the capital market community, during which he was honoured with the digital closing gong ceremony at the NSE.

According to him, the FIRS has been keenly following activities and the developments at the Exchange which bear mutual benefits to both institutions.

“Noteworthy is the demutualisation of the NSE which will undoubtedly promote access to diverse investment opportunities and strengthen investors’ confidence in the capital market,” Nami said.

He added that there was an evidence that the policies being put in place by the management of the Exchange were yielding positive results given the impressive performance of the equities market in 2020 despite the COVID-19 pandemic and harsh social and economic conditions.

“I assure you that the FIRS will continue to support the positive initiatives of the NSE to improve its operations, achieve its goals and deliver on its mandate,” Nami said.

Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema said the FIRS was saddled with assessing, collecting and accounting for tax and other revenue accruing to the Federal Government.

He commended the FIRS for its internal revenue assessment and collection efforts for the benefit of economy, even in these challenging times.

“As responsible corporate citizens, we at the NSE are proud to be associated with the FIRS and will continue to strengthen our relationship even as we look ahead to our post-demutualisation phase,” Onyema said.

He noted that the Exchange has remained resolute in its commitment to provide a platform for stakeholders to engage with the capital market community, pointing out that since the activation of its business continuity plan last  March, which led to remote trading and working from home, the Exchange has transitioned many of its events to digital formats – including the closing gong ceremony – and continues to maintain seamless operations almost a year later.

 

Subscribers seek improved internet services

By Lucas Ajanaku

 

Subscribers at the weekend urged the Nigerian Communications Commission (NCC) to pay more attention to the quality of internet services provided by mobile network operators (MNOs) and internet service providers (ISPs).The subscribers lamented the slow speed and poor quality of services and sought an urgent regulatory fix to the problem.

Chairman, Section of Business Law, Nigeria Bar Association (NBA), Ayuli Jemide, who gave a the keynote remarks during the virtual presentation of a book:  “Nigerian Telecommunications Law and Regulation,” co-authored by Quasim Odunmbaku, a telecoms regulatory professional at the NCC and Rotimi Akapo, who specialises in Telecommunications, Media and Technology (TMT) at the weekend in Abuja, lamented that his experience in the area of internet services has not been palatable.

Jemide told the virtual audience that included the Minister of Youth and Sports, Mr Sunday Dare; Chief Executive Officer (CEO) of NCC, Prof Garba Dambatta and others, said he had internet subscription plans at home with the MNOs and some ISPs, lamenting, however, that his experience had not been anything to write home about. He urged the NCC to address the issue.

Another subscriber, Aderemi Esan, said the speed at which sites open is  frustrating. The NCC, he said, should intervene.

Danbatta, who was the chairman and lead presenter at the event, was among the scholars and industry practitioners that endorsed the book.

He said law and regulation remain two critical pillars, which influence the speed and impact of innovation in the telecoms sector.

“As important as these two factors are, they typically lag behind technology. It, therefore, behoves on all legal and regulatory practitioners in the sector to keep abreast of developments so that knowledge gaps do not stifle innovation and/or deny consumers of the optimum value,” he said.

Represented by the Executive Commissioner Stakeholder Management at NCC, Adeleke Adwolu, the EVC acknowledged that there is a noticeable paucity of well-researched books and reference materials on the legal and regulatory regime governing the telecommunications and indeed the ICT sector in Nigeria.

 

 

“I am, therefore, delighted that the authors of “Nigerian Telecommunications Law and Regulation” have taken up the challenge and have produced a comprehensive reference material which touches on practically every aspect of the subject.”

 

The official public presentation of the book was done by Mr Dare, who, who incidentally was a former ECSM at NCC, and had worked closely with one of the authors. Dare described the book as “a compendium that will greatly enrich the level knowledge needed to enhance telecoms growth.”

 

The book’s reviewer, Dr. Mohammed Suleh-Yusuf, said:  “The book is highly useful to practitioners and lay readers alike. It serves as a window into what shapes the industry and ensures readers are familiar at surface, to the basic rules and norms that influence the industry.”

 

Other stakeholders have overwhelmingly endorsed the book, describing it as a good reference material and comprehensive guide, reference material and source-book on the policy, legal and regulatory framework governing the Nigerian telecommunications sector, which, many stakeholders said, will fill a critical contemporary knowledge gap for legal practitioners, investors and the academia.

 

Head, Sub-Saharan Africa Operations, Global System for Mobile Communications Association (GSMA), Akinwale Goodluck, said: “As an industry practitioner, I have thoroughly enjoyed reading the book and recommend it very strongly for everyone with an interest in the industry. It also provides invaluable insight for other countries in sub-Saharan Africa to learn from the Nigeria experience.”

 

Immediate past President, Association of Telecom Companies of Nigeria (ATCON), Olusola Teniola, and his successor, Ike Nnamani, said the authors have challenged the industry by putting together an encyclopedia behind the growth of the industry from the perspective of legal, regulatory, economic, social and technological impacts.

 

Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said “the book carefully dissects the policies, rules, regulations and industry best practices which makes the Nigerian telecommunications industry the success story that it is today, despite numerous challenges.”

 

Other stakeholders, who rated the book very high both in contents and relevance to industry practitioners include Jemide; Director, Legal & Regulatory Affairs/Company Secretary, Airtel Networks Limited, Shola Adeyemi; Principal Partner and Head, ICT Law & Regulation, Sceptre Law, Lagos, Otu Etuk; Prof. Abiola Sanni of the Faculty of Law, University of Lagos, among others.

 

‘How non-oil sector boosted Nigeria’s exit from recession’

Nigeria’s economy has bucked a global trend and has exited recession in the fourth quarter (Q4) of 2020, writes Colin Stevens.

According to data from the country’s National Bureau of Statistics (NBS), gross domestic product (GDP) increased by 0.11 per cent  between October and December, supported primarily by growth in agriculture and telecommunications, which expanded by 3.4per cent and 17.6per cent.

While increased global oil prices contributed to the growth, the figures also demonstrate the importance of the non-crude sector for Africa’s most populous nation and the diversification of the country’s economy.

Analysts note that the figures may indicate a sustained period of faster growth, as the world watches on to see which countries achieve a V-shaped recovery following the pandemic.

Growth in domestic product was also supported by the country’s Economic Sustainability Plan (ESP), an ambitious set of policies announced by President Buhari’s Administration in June 2020 to address the immediate challenge of the COVID-19 pandemic.

Already, the focus on infrastructure and job creation in the agricultural and other labour-intensive sectors have borne fruit, and the ESP is soon to enter a new phase, with the installation of solar power in five million homes further boosting employment opportunities and access to power.

Special Advisor to President Buhari on Media, Femi Adesina, said: “Infrastructure is where Buhari will leave his biggest footprints. Bridges. Rail. Airports. AKK gas pipeline. All to be delivered before the administration exits in 2023.”

In parallel, a new job creation initiative aimed at the country’s youth was launched in January, providing placements for over 700,000 unemployed young people.

Nigeria’s GDP numbers at the end of 2020 challenged the expectations of international organisations as well as global trends. Countries with larger stimulus packages, such as the U.S. and Japan, saw lower quarter on quarter growth than Nigeria over the period.

In Europe, Spain and Germany also experienced unexpected increases of 0.4per cent and 0.1per cent respectively, while France’s GDP fell less than was forecast but remained negative.

This week also saw reports that corruption in Nigeria has fallen dramatically, with BudgIT, a civic advocacy organisation focused on budget and public finance issues, reporting the payment of public funds into personal accounts has declined by 94.75 per cent.

While the trend in Nigeria is no doubt positive, risks of further waves of infection and a slow vaccine roll-out threaten the country’s sustained recovery, and are difficult to mitigate. Nigeria’s National Agency for Food and Drug Administration and Control (NADFAC) recently approved the AztraZeneca vaccine for the country and has requested 10million doses from the World Health Organisation (WHO)’s  Covax programme. However, it is unclear when these vaccines will arrive and be rolled-out across Nigeria.

 

Renewable energy forms 30% of Fed Govt’s 2030 power target

By Joseph Jibueze, Deputy News Editor

 

Renewable energy is expected to form 30 per cent of the 30 gigawatts (GW) electricity target by 2030, the Federal Government has said.

Minister of Power, Sale Mamman, stated this in Lagos during the media presentation of the Ashama 200MW Solar Photovoltaic (PV), described as West Africa’s largest solar PV farm, located in Delta State.

Mamman, represented by his Special Adviser on Policy, Abba Aliu, said the Muhammadu Buhari administration launched the Vision 30:30:30 with renewable energy as a key part.

“The target is to deliver 30GW of electricity with 30 percent renewable energy by 2030.

“This is a key focus of the nation’s electrification strategy to avail Nigerians reliable, sustainable and affordable power,” he said.

Mamman said the objective of the government’s off-grid policy is to attract investment.

The minister added: “The Ashama 200MW Solar Farm, when completed, will serve as the biggest utility solar project not only in the country but the West African region.

“This landmark project will be developed in partnership with Singapore based renewable energy firm, B&S Power and SunnyFred Global.

“From the project documentation, it will be located on about 304 hectares of land in Ashama village, Aniocha South of Delta State.”

Mamman said the off-grid sector can only achieve sustainability when the government de-risks it.

“Investors are encouraged to develop and present a sustainable and innovative approach to making their projects bankable,” he said.

Dr Olawale Akinwumi, co-founder/President of Greenplinth Africa, the consultant/technical partner for the project, said the financing was ready.

He believes when the regulatory processes are completed, the project would be completed within nine months.

Akinwumi said: “This project is the largest in West Africa. It’ll take care of a lot of people who don’t have energy access.

“It will create jobs and financial benefits to investors. Ultimately, Nigeria will have more electricity supplied to the grid.

“The idea is to have this sort of project in the six geopolitical zones. This is just the starting point. The project will take effect almost immediately because the paperwork is being done. The finance is there. The time-frame is nine months.”

Former Director-General of the Energy Commission of Nigeria, Prof Abubakar Sambo, who chaired the event, said renewables make the energy system resilient, which according to him, is important in preventing power shortages.

He added: “Renewables make urban energy infrastructures more independent from remote sources and grids.

“Businesses and industries invest in renewables to avoid disruptions, including resilience to weather-related impacts of climate change. Renewable energy is accessible to all. That’s good for development.”

“In many parts of the world, renewables represent the lowest-cost source of new power generation technologies, and the costs continue to decline.

“This particularly so for cities in the developing world where renewable energy is the only way to expand energy access to all inhabitants, especially those living in urban slums and informal settlements and in suburban and peri-urban areas.

“Renewable energy is secure. That’s good for stability.”

The renowned professor of engineering said 4,000 MW for a population of 200 million works out to an average annual electricity consumption per capita (aaec/ca) of only 175 kWh, which he described as too low for a country like Nigeria.

Also at the event were representative of the Minister of Industry, Trade and Investment; Permanent Secretary, Ministry of Labour and Employment, among others.

 

Anxiety over fuel price hike thickens with bullish oil price predictions

By Lucas Ajanaku

 

There are fears that the fuel price hike might be inevitable with banks and other renowned agencies predicting that the price of crude oil will rise to between $70 and $75 per barrel this year.

When Brent crude moved from $58 to over $63 per barrel, it had led to a unilateral hike in the pump price of petrol by oil marketers, especially Independent Petroleum Marketers Association of Nigeria (IPMAN). The rise in the price of petrol was blamed on the rise in the price of crude oil in the international market.

United States-based investment banks have released significantly higher oil price predictions through the year, citing rollout of COVID-19 vaccines, optimistic global economic data and non- members of the Organisation of Petroleum Exporting Countries (OPEC+) production discipline.

Goldman Sachs commodities team said global benchmark Brent oil will hit $70 a barrel in the second quarter (Q2) and $75 in the following three months.

The team’s $10 rise from their previous forecast was mainly driven by lower expected inventories and supply lagging behind demand.

Goldman said overall global demand would reach 100 million barrels a day (bpd) by late July 2021, rebounding to pre-pandemic levels while supply will still be depressed as major producers remain “highly inelastic” to the rising prices.

Morgan Stanley also raised its forecast for Brent prices. According to the U.S. bank, Brent crude prices will climb to $65 per barrel in Q2 and $70 in Q3 before it drops back to $65 in Q4.

The bank envisages that “signs of a much-improved market”, including prospects of a pick-up in demand, would support higher crude prices in the third quarter.

According to the bank, new COVID-19 cases are falling fast globally, mobility statistics are starting to improve and refineries in non-Organisation for Economic Co-operation and Development (OECD) countries are recovering to the pre-COVID production levels.

Therefore, Morgan Stanley predicts that demand is likely to improve by about four million bpd by the year-end, inventories will normalise and spare capacity should see a meaningful reduction.

Similarly, the Bank of America (BoA) forecasts that Brent will surge and average between $50 and $70 a barrel until 2026. Although short-lived, the bank predicts that oil prices could jump to $100 a barrel in the next five years.

“While it is tempting to join the bull bandwagon, our cost-of-supply data, Covid lockdowns, potential vaccination delays, and ultimately crude supply-demand balances indicate that the oil price may be dabbling in speculative excess, for now,” Rystad Energy oil markets analyst Louise Dickson told Anadolu Agency.

Dickson said Brent Front Month has not been as overbought since 2002 as it is now, which she said is usually followed by a correction.

She also pointed to the “not-so-smart money in the stock market right now chasing quick yields”.

Confirming the bullish sentiment on oil demand and the progress of vaccine inoculations, Dickson said Rystad expects 2021 oil demand to average 95.5 million bpd given the accelerated progress in vaccination production and distribution.

“We expect Europe and North America to reach a 50 per cent vaccinated population by the end of the year,” she said and warned that “vaccine distribution and a return to regular economic activity would not be homogenous globally, and inequality is generally a net drag on consumption.”

While many share the investment banks’ predictions, Dickson said Rystad diverges on such supply outlooks.

“We do not yet see evidence of supply crunch materialising in 2021, especially given that U.S. shale is again in a growth phase towards 11.7 million bpd by the end of the year, not to mention the more than 11 million bpd of spare OPEC+ capacity that can theoretically (with the exception of Iran, perhaps) be brought online along with sustained higher oil prices,” she added.

 

CBN defended naira with $10.3b in six months

By Collins Nweze

 

The Central Bank of Nigeria (CBN) defended the naira in six months with $10.3 billion intervention in the inter-bank foreign exchange market, its half-year report has shown.

The naira dipped to N429.75/$1 on the Investors’ & Exporters’ window at last week’s trading sessions, depreciation from around $410/$1 it exchanged previously.

Although the local currency has remained stable at the official CBN rate of N379/$1, it exchange at N482/$1 at the parallel market on Friday. The local currency’s depreciation at I&E window has howler continued to narrow rate gaps.

According to the report signed by CBN Deputy Governor, Economic Policy, Kingsley Obiora, the apex bank’s intervention in the inter-bank foreign exchange market was to cushion demand pressures and ensure exchange rate stability.

The Financial Markets Half-year Activity Report is a presentation of activities undertaken by the Department to implement the bank’s monetary policy measures. It details the span of activities in the money, fixed income and foreign exchange markets to support the policies of the apex bank.

In the first half of last year, the CBN said the dollar sales breakdown comprised $5.05 billion sold at the Investors’ & Exporters window; $1.19 billion  at the inter-bank spot; $570 million for Small and Medium Enterprises (SMEs); $312 million for invisibles, while forwards sales were $3.17 billion.

The CBN purchased a total of $2.2 billion, which resulted in a net sale of $8.09 billion. The sum of $5.42 billion  matured at the forwards segment, while $2.5 billion was outstanding.

In comparison with the first half of 2019, a total of $8.47 billion was sold at the foreign exchange market.

This comprised $2.16 billion at the inter-bank spot, $810.00 million for SMEs, $550.70 million for invisibles, $294.59 million at the I & E window, while forwards sales were $4.65 billion.

The CBN purchased $9.55 billion, which resulted in a net sale of $1.08 billion.

According to the report, $4.97 billion matured at the forwards segment, while $2.55 billion was outstanding at end-June 2019.

Obiora said the spread of the novel coronavirus disease (COVID-19) continues to undermine economic and social activities across the world, with many countries recording negative output growth.

He said Nigeria has not escaped some of the negative consequences of the COVID-19. He said despite headwinds, the economy performed better than expected in the first quarter of the year. Although downside risks abound, his  outlook for the economy was more optimistic than most analysts seem to portray.

“I believe that in the middle of this pandemic, lies great opportunities to support growth, and there cannot be a better time to make a big push, particularly given our wide negative output gap and rising inflation,” he said.

‘Nigeria’s debt grew by N1tr without borrowing’

By Nduka Chiejina, Assistant Editor

 

By devaluing the naira, Nigeria has added N1 trillion to her total debt without borrowing.

The devaluation of the naira and an opaque revenue-generating strategy have contributed to make Nigeria’s debt unsustainable.

Senior Economist with SPM Professionals, Dr. Paul Alaje, spoke at the Annual Forum of Finance Correspondents Association of Nigeria (FICAN) in Abuja at the weekend.

According to Alaje, “devaluation happened last year from N306 official figure to N379 according to CBN, now when you study debt management publication carefully, you will see that because of devaluation, Nigeria has added N1trillion to debt for borrowing nothing

“Looking at the foreign component of Nigeria’s debt and the conversion to Naira, Nigeria devalued and borrowed in dollars that its self will make our debt profile to increase,” he said.

Interestingly, Nigeria will still service this debt at the same dollar rate it borrowed the money because the rate of servicing has not reduced.

He noted: “When you make provision for inflation and devaluation and you look at revenue over the years, it appears the revenue is growing but revenue is actually not growing it is actually reducing when you look at it in real terms.”

Alaje lamented that Nigeria’s strategy to reduce borrowing “does not adequately address how to generate revenue. Until we are able to do that, we can’t continue to compare our selves with large economy that have capacity to generate revenue”.

Alaje said: “Some of them are owing but countries are also owing them. The question is who is owing Nigeria and how much are they owing us? And and what asset do we have, that is why China says “for us to lend to you, you must present some level of sovereign guarantee which means you will allow us come to your country to take away our asset because your asset are weak”.

The unsustanability of Nigeria’s debt is further compounded by the fact that a large chunk of the country’s debt are commercial loans, euro bonds; treasury bills. “Who will forgive treasury bills and bonds?” he asked.

“Who will forgive us of euro bonds? These are commercial loans unlike the one we have with Paris club and some other international organisation” he said,

“The borrowing is not free, when we keep borrowing, we are going to be paying back and the burden will be so much on our national revenue so we now have less revenue to spend,” he explained.

The solution he said rests on two options, “it is either we expand revenue which we have not figured out right now or we keep borrowing more”.

Alaje insisted that Nigeria “cannot continue to borrow more and expect a difference or a change to happen suddenly. Nobody lends to a commercial business or a firm, an organisation because their balance sheet looks good every body borrows because of ability to pay back. The question is do we think Nigeria, based on our revenue today have ability not just to service but the ability to pay back? The answer is No.

For Nigeria to generate needed revenue, governments at both state and federal levels he said should plug leakages and think of new ideas of generating revenue other than the traditional ways.

According Alaje, “the former administration were advised to build telecom masts so that telecom operators will come and operate, today, average revenue per telecom mast per day is about N7.5 million. Multiply that by 365 days, multiply that by 50,000 telecom mast standing in Nigeria, just one window.”

To plug leakages, he said, “we realised that individual government staff have been the ones collecting revenue from people, no receipt no information. In fact, some of the biggest telecom, have outstanding up to about millions and hundreds of millions, and billions and hundreds of billions of naira government does not even know”.

“The unfortunate thing is that you don’t even know that your revenue is leaking, once some monies which is becoming peanuts by the day is coming from Niger-Delta and FIRS can contribute its own, you are fine,” he lamented.

Alaje warned: “Custom revenue will drop with AfCFTA so when that happens, government will need to be innovative we need to look inward rather than borrowing, NBS told us that telecommunications sector is fastest growing in Nigeria right now, the question is why is government revenue from telecom sector not growing? That means we are not even growing our economy the way at which sectors are growing.”

 

Between Labour and opposition to deregulation

By Olu Tayo

 

Last week, the price of crude oil rallied to $66 per barrel, the highest in 13 months.  This was after oil price sank to sub-zero level in the wake of the COVID-19 pandemic in 2020.

Ordinarily, for a country like Nigeria that is heavily dependent on revenue from oil, the price rally ought to be good news as it portends more money for the government to provide social amenities for the welfare of the citizens.

But the cheery news of oil price rally is dampened by the prospect of a rise in the pump price of petrol.

In March 2020, the Federal Government finally took the bull by the horns and deregulated the downstream by taking advantage of the low oil prices induced by the pandemic.

The Petroleum Products Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), had announced that petrol prices would henceforth be determined by market forces. It had explained that the new price regime with its cost-reflective nature was expected to help to improve product availability and attract investments to the sector as marketers now have increased margin.

Since then, the Petroleum Product Pricing Regulatory Authority (PPPRA) has been giving monthly guidance on petrol prices through price modulation method, meaning that when crude price goes up, petrol price would go up, and when it comes down, petrol price would follow suit.

Owing to this, during the launch of the Nigerian Upstream Cost Optimisation Programme (NUCOP) recently, both the Minister of State for Petroleum Resources, Chief Timipre Sylva, and the Group Managing Director of NNPC, Mallam Mele Kyari, had hinted at the prospect of a rise in the pump price of petrol in the country in line with the deregulation regime in operation in the downstream, following the rise in the price of crude oil.

Since then, the leadership of organised labour has been beating drums of war, contending that a pump price increase would impose more hardship on Nigerians who are already battling the effect of a sluggish economy.

Deregulation of the downstream and pump price increase have been very testy issues that have generated a lot of conflict between the government and labour for close to two decades.

Indeed, since 2004 when the Federal Government started the policy of selling the crude oil earmarked for local refining/consumption at international price, it created a situation where the landing price of petroleum products was higher than the regulated pump price of petroleum products in the country.

The old system where crude oil earmarked for local refining/consumption was sold to the NNPC at a subsidised rate was able to take care of price differential between landing cost and regulated pump price.

With the new policy, a system of subsidy payment was introduced to take care of the price differential.

But over time, the subsidy system became cumbersome and the federal government began to find it unwieldy and unsustainable.

For instance, the Federal Government had disclosed that the nation spent N10. 413 trillion on fuel subsidy between 2006 and 2019, even as the country consistently grappled with low revenue generation over same period.

The various attempts to end the subsidy regime by deregulating the downstream became a constant subject of bitter conflicts between the government and labour sometimes resulting in debilitating strikes.

Therefore, with the current rise in the price of crude oil, it is inevitable that the price of petrol would go up in the local market.

More so when there is no provision in the 2021 Appropriation Act for subsidy payment. The deregulation of the downstream is supposed to bring about some sort of liberalisation of the sector which would make it possible for all petroleum products marketers to source their products from anywhere and sell at any price dictated by prevailing market forces.

The competition arising from that would have helped to force pump prices down to the benefit of the citizens.

But the scarcity of foreign exchange has made it difficult for the marketers to import products, thereby making NNPC the sole importer in keeping with its statutory role as marketer of last resort.

With the agitation of labour to roll back the deregulation, NNPC is inadvertently being made the fall guy to absorb the cost of the price differential between landing cost and pump price.

This would put NNPC in a very bad spot financially and eventually lead to a situation where it would be difficult to further import products. The obvious implication of that is fuel scarcity and the return of fuel queues.

The same people who are resisting the deregulation would be the same people who would turn around to castigate NNPC for not supplying enough fuel to guarantee zero fuel queues and for not making a profit at the end of its financial year.

To analysts at CSL Stockbrokers, the removal of the subsidy on petrol remains a critical free-market reform.

“In our view, and we believe it is beneficial to the finances of the government and the overall economy,” the Lagos-based firm added.

To the Chief Executive Officer of Financial Derivatives Company Limited, Mr. Bismarck Rewane, the removal of subsidy would boost investments in the downstream sector of the oil and gas industry.

Rewane said subsidy removal would encourage investments in private refineries such as the Dangote Refinery, and the BUA Refinery springing up in the country.

According to him, petrol subsidy would free revenue for the government to provide essential services and at the same time boost investments in the downstream sector.

“Investments will increase. It will boost investments in private refineries such as Dangote Refinery, while those who will buy our dilapidated refineries will also come,” he added.

The Chairman of Fidelity Bank Plc and former Managing Director of the Asset Management Corporation of Nigeria (AMCON), Mr. Mustapha Chike-Obi, said Nigeria can no longer afford the subsidies that it had been paying.

Also, the Chairman of the Major Oil Marketers Association of Nigeria (MOMAN), Mr. Adetunji Oyebanji, said fuel subsidy removal would give operators the opportunity to recover their costs, adding that it would in the long run, encourage investment and create jobs.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, believes that incurring further costs on under-recovery has been stopped permanently.

According to her, “This we have been able to do by adopting a price modulation mechanism and the government has removed fuel subsidy provision from its revised 2020 budget and also from the Medium Term Economic Framework (MTEF) for 2021-2023. We don’t have plans to incur any expenditure on fuel subsidy.

“What that means is that the price of refined products (petrol) will be determined by the global price of crude oil, so the price will keep changing according to how the global market operates.”

Sylva said Nigeria was no longer in the business of fixing fuel prices, adding that global oil price crash had made removing the subsidies inevitable.

“It is about the survival of our country. There are certain things that the country can ill-afford at this time,” he said.

Therefore, labour must learn to be objective in its resistance to the downstream sector reforms meant to eradicate the distortions in the market which have been responsible for bouts of scarcity and lack of investments in the sector.

If the labour leaders spearheading the resistance to deregulation are fair to themselves, they would recognise that the deregulation has largely stabilised petroleum products supply over this past year.

Once the foreign exchange issue that has made it difficult for major and independent marketers to engage in importation of petroleum products is resolved, the other gains of deregulation will kick in and Nigerians will be better for it.

One of the key arguments of labour is that if the refineries were in operation, it would help reduce the prices of products and mitigate the hardship that deregulation would impose. But the reality on ground does not support that.

The revamping of the refineries will only result in marginal decrease in the pump price of petroleum products since the only cost element it would affect is the freight cost. Since the refineries would pay international price for crude oil, the benefit from local refining in terms of products pricing would be marginal.

The earlier the labour leaders understand this and allow the deregulation process to go on unhindered, the better for Nigeria and Nigerians.

If they are in doubt, they should  ask the former Edo State Governor, Adams Oshiomhole, who made a career out of his opposition to deregulation for over 10 years only to turn around to become an apostle of deregulation as a governor.

The market stabilisation that has been brought about by the past one year of deregulation should be enough to assure labour that full deregulation is the way to go if Nigerians are to enjoy the full benefits of their hydrocarbon wealth. Resisting deregulation under the guise of fighting for the welfare of Nigerians is only an attempt to hoodwink Nigerians into believing that they can eat their cake and still have it.

 

• Tayo is a Lagos-based oil sector analyst

Gov Bala Reveals Who The ‘Man In Aso Rock’ Is To Him

Governor Bala Mohammed of Bauchi State has revealed who President Muhammadu Buhari is to him.

Speaking while inspecting an ongoing construction at a housing project jointly being built by the Federal Government and Bauchi State government at Dunga, the outskirt of the state, the Peoples Democratic Party (PDP) governor said he considers the man in Aso Rock (President Buhari) as his father.

Naija News understands that Mohammed on Sunday, February 28 revealed that he and the President are working together for the people of his Bauchi state despite their political differences.

The governor in his remark during the project inspection thanked the President for directing the Federal Ministry of Finance to give the state the sum of N12 billion loan to commence the construction of 2,500 housing units in the state.

See below some of the photos taking during the project inspection:

The governor’s statement reads: “We thank Mr President for directing the Ministry of Finance to release N12 billion in total for us on loan for these housing units.

“This is because the President likes Bauchi State. The same people who voted for him into office voted for me and I am his son.

“The only difference is the party but the same people and we think the same way and we are doing this project as a joint venture with Family Homes Funds,” Governor Mohammed added.

Meanwhile, President Muhammadu Buhari on Sunday assured Nigerians that the government has put together fresh security strategies that will ensure students are no longer kidnapped from their schools by bandits and other criminals.

Naija News reports that the assurance was given by the Minister of Aviation, Sen. Hadi Sirika who led the federal government delegation on a sympathy visit to the Zamfara State government over the abduction of some female students from Government Girls Science Secondary School, Jangebe.

Fed Govt’s modular refineries crusade

By Chikodi Obioma

 

One popular maxim among people who are indigenous to Southeastern part of Nigeria is that obu ihe ojo mmadu ihapu ara nneya wee nua akpu (it’s an abomination for a child to suck the boil on its mother’s chest in the stead of its mother’s breast).

Again, it is an abomination (aru) for people to stand in the middle of an ocean and begin to wash their hands with saliva (O bu aru mmadu ino n’etiti oshimiri wee jiri asu kwuo aka).

The two axioms are illustrations of Nigerians’ nasty experiences in relation to petrol, which is a by-product of crude oil with which God blessed the country abundantly.

Crude oil started being the beginning-and-the-end of all socio-economic activities after agriculture that “breastfed” the country was abandoned.

Every now and then, Nigerians will be on the throes of one petrol palaver or the other. Most times, fuel scarcity will hold us at the jugular. When this happens, Nigeria’s poor will agonise staggeringly because of the cost of foodstuffs skyrockets. This is because everything in Nigeria is fuel-dependent, including, arguably, making one’s wife pregnant.

As the late Professor Chinualumogu Achebe would argue that if a man could not say from where the rain started beating (drenching) him, he will not know where the rain stopped drenching him.

Nigeria and Nigerians began experiencing problems that resulted from the oil and gas sector when the four refineries in Nigeria stopped functioning as a result of criminal neglect by successive administrations.

Matters came to a head when the Federal Government refused to address the issues of oil pollution that resulted in environmental degradation. Those from the region, especially their youths began agitation and every time the government will tell them that their better life is in the pipeline so much so that the youth could no longer bear it and began breaking the pipelines to find out the things government has put there.

Some of them with little technical knowhow went into building illicit refineries which the government kept on destroying; without the thought that it could have been legalised by issuing licences to some operators or convert them to government property, improve on them for refining crude oil since our refineries have been consigned to the trash can of history.

However, as religious gatekeepers would say, for everything, there is a season, there seems to be a season to end the debilitating issue of fuel and gas wahala in Nigeria.

That time may be now that President Muhammadu Buhari has vowed to fix the country’s oil and gas sector. To walk the talk, he appointed a savvy in the oil and gas sector, Chief Timipreye Sylva as Minister of State for Petroleum Resources to join him to move the sector forward.

Ever since the duo started managing the sector, Nigerians are experiencing a sharp difference.

To fix the sector, they have evolved several methods to make things work.

Unlike previous administrations, the current APC administration has been quick to support moves to establish modular refineries as a way to boost the country’s refining capacity.

As part of its strategy to reposition the oil and gas industry, President Muhammadu Buhari in 2016 launched a roadmap of short and medium-term priorities aimed at developing a stable and enabling the oil and gas landscape with improved transparency, efficiency, stable investment climate and a well-protected environment tagged “7big wins”.

The fourth initiative in the roadmap, “Refineries and local production capacity” seeks to transit Nigeria from being an import-dependent nation into a net exporter of refined petroleum products through the modular refineries as vehicle.

This is seen as one of the ways and means of tackling non-availability of petroleum products. This much was evidenced when President Buhari performed the virtual inauguration of the National Oil and Gas Excellence Centre on January 21, this year. One of the issues he spoke about was a modular refinery. He mentioned the completion of the 5,000 barrels per day Waltersmith Modular Refinery in Imo State which is the biggest modular refinery to be inaugurated.

The phase one of the refinery began operations in November, last year after the firm was granted a license by the Department of Petroleum Resources (DPR) in June 2015.

With the expansion of the refinery to 50,000bpd capacity in November last year, the country is set to begin a phase of reduced import of petroleum products.

It is expected that the refinery would deliver 271 million litres of refined petroleum products a year as the crude oil storage capacity of the refinery is approximately 60,000 barrels.

With President Buhari’s instruction to DPR and the Nigerian National Petroleum Corporation (NNPC) to provide all necessary support in securing oil and condensate feedstock for the second phase, there are indications that the project will be a success.

Although it is said that Edo is not Imo, what has happened in Imo with regard to the modular refinery is also happening in Edo as the Edo Modular Energy refinery is set to increase crude oil production from 6,000 barrels per day (bpd) to 60,000 bpd.

The project will enhance fuel sufficiency in the country and reduce the sufferings of Nigerians in every facet.

Projections are that some of its products will be exported to boost foreign exchange earnings and by the time it extends operations into different phases, the firm would be able to take care of more than 80 per cent of diesel requirement in Nigeria. The investment is also expected to benefit Edo people through job creation increased revenue and ease of pressure on other refineries.

If Sylva’s commitment to easing life for Nigerians doesn’t become flaccid, another modular refinery-the Atlantic Modular Refinery on Brass Island, Bayelsa State, will begin operation before this year ends. Going by his pedigree, Sylva doesn’t fail if he promises as his name is fast transmuting to Ekwueme (doing what he says).

If Chief Sylva’s intentions about the modular refinery initiative are to promote availability of petroleum products in the country, conserve foreign exchange utilisation for the importation of petroleum products, promote socio-economic development in order to stop restiveness, criminal and illegal refinery activities thereby sustaining peaceful co-existence in the Niger Delta and mitigate environmental degradation associated with illegal refinery activities, crude oil theft and pipelines vandalism, then Nigerians are on their way to the Promised Land.

Even though there are divergent views about the economic viability of these modular refineries, Chief Sylva should not be distracted by these on-shaky-ground arguments since there are shreds of evidence that as of January last year, the average net profit margin for the industry was 6.8 per cent, according to data from NYU Stern School of Business.

Chief Sylva should not be deterred by any infinitesimal drawback on the sector precipitated by competition from shale oil, excessive supply; generous financial markets and the Coronavirus pandemic had a deleterious effect on the sector’s net profit margins.

The question is: is there some silver lining on Sylva’s plans for the industry which favours arguments for modular refineries?

Luckily, Nigeria has inadequate refining capacity and meets all the criteria, hence the opportunities for modular refineries because they are simple, fast to start up and usually operating at optimal capacity.

In theory, this is an advantage over larger refineries. It can also commence production with a small capacity of 5,000BPSD or 10,000BPSD, and grow its capacity over time by adding more modules.

Huge investment opportunities in the mid-downstream sector that will result in growth of the Gross Domestic Product (GDP) and jobs creation are some of the enormous benefits of modular refinery initiative.

One of the crucial components of this initiative is the government’s support for the establishment of the third party financed Greenfield and modular refineries for in-country petroleum products sufficiency that will stimulate products export.

To make this plausible, it is planned that the refineries should be scalable and located within refinery clusters for effective operations and minimal environmental footprint. This is a great strategy on the part of the government.

Chief Sylva, as the Minister of State for Petroleum Resources, has a date with history with regard to saving Nigerians from the shackles of unending fuel scarcity and coldblooded importers of petroleum products who rip off the country of billions of Naira in form of petrol subsidy.

Chief Sylva needs to write and etch his name in the minds of Nigerians. The time to do that is now; during the current era of modular refineries. If he succeeds, his name will become BEAST slayer.

Nigerians would have the cause to sing that Chief Sylva has done what others could not do as people of Israel sang for David when he killed the GOLIATH on their flesh.

Obioma, a public commentator, wrote from Umuahia