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NIGERIA
Still a lot to be done to boost Africa’s biggest economies
African economies were hit hard in 2016 by low commodity prices, but a modest recovery from slow growth is forecast for 2017. Business Day reports that speaking at the Africa CEO Forum, which kicked off in Geneva on Monday, Africa CEO Forum president Amir Ben Yahmed said: ‘The two biggest economies – Nigeria and SA, which make up 45% – have been very hard hit. There’s concern for the economic situation.’ The report says the conference barometer — a survey of the about 1,000 CEOs attending the conference – showed that 62% of CEOs said their companies had experienced the effects of the economic slowdown in the past few months; 71% were optimistic about business on the continent in 2017; and 92% expressed confidence in economic growth. Yahmed said while progress had been made in the past 15 years, there was still a lot to be done. African states needed to fight against fraud and corruption while pushing for economic diversification and regional integration. The report says global foreign direct investment (FDI) increased by 9% in 2016 but Africa accounted for only 7% of global FDI.
A panel of Nigerian investors attending the meeting have expressed confidence in the country’s resurging economy saying that it is ‘very critical’ to building African companies that could join the league of the global top 500 companies in the next eight years. The Guardian Nigeria reports that the panel, that included CEOs of MTN, Honeywell, KPMG, CFAO and the Casablanca Finance City Authority, said despite the volatility in Nigeria’s economy, ‘it is still an important market’. ‘The fact that it is passing through volatility is not enough to reconsider investment of $16bn invested in the last 10 to 12 years,’ Phuthuma Nhleko, MTN’s non-executive chair is quoted in the report as saying. Chair of Honeywell Group, Oba Otudeko agreed, but added that Africa ‘has the responsibility for its survival.’ On the whole, the investors agreed that African governments needed to create the necessary business environment for companies to grow and that robust stock markets, either on sub-regional or country basis, would be central to the objective.
Business Day
The Guardian Nigeria
Plan to sell oil assets to fund economic programme
Nigeria plans to sell portions of its oil assets to help fund President Muhammadu Buhari’s four-year programme to lift the economy from its worst slump in 25 years, and create 15m jobs. According to the proposal, selling them will ‘optimise their efficiency and reduce the fiscal burden on the government’. Business Day reports that Nigeria has an average 55% stake in joint ventures run by Royal Dutch Shell, Exxon Mobil, Chevron, Total and Eni, which produce about 90% of its crude. The government also owns 49% of Nigeria LNG, a multibillion-dollar company that operates Africa’s biggest liquefied natural-gas plant. The government has also hinted it may award concessions for airports.
Given a militancy escalation that blighted those very assets last year, and previous struggles to privatise state businesses, Business Report reports that analysts inside and outside the west African country say such sales won’t be straightforward. ‘Nigeria’s track record on privatisation and divestments has not exactly been the best, so people are probably going to greet this news with a certain degree of scepticism and I think rightly so,’ Manji Cheto, a West Africa specialist at Teneo Intelligence in London, said. ‘I don’t think this is going to be a process that’s speedy.’ Normally Africa’s biggest producer, Nigeria has been among the world’s hardest-hit supplier nations over the past year due to the militant attacks that crushed its output while prices remained half what they were in mid-2014. At the same time, its reduced flows have helped limit a global crude glut, bolstering Opec and other nations dependent on revenue from selling the commodity. The report says the oil ministry and Nigeria National Petroleum Corporation didn’t respond to multiple calls and emails requesting comment.
The plan also recommends raising the Value-Added Tax (VAT) rate on luxury items from the current 5% to 15%, says a Punch, Nigeria report. The government said it would increase non-oil tax revenues by improving tax compliance and broadening the tax net by employing appropriate technology and tightening the tax code, as well as introducing tax on luxury items and other indirect taxes to capture a greater share of the non-formal economy. The plan envisages that by 2020, Nigeria would have made significant progress towards achieving structural economic change with a more diversified and inclusive economy.
Business Day
Business Report
Punch, Nigeria
Buhari home but Osinbajo still in charge
Nigerian President Muhammadu Buhari has returned home after nearly two months of medical leave in Britain, Business Day reports. He said he would leave his deputy in charge for the time being and not immediately resume power. The 74-year-old said Vice-President Yemi Osinbajo ‘will continue’ in the role of acting-president ‘and I will continue to rest’. The report says no timeline was given for how long Osinbajo would be in charge. Buhari walked unaided from his plane after it landed at an air force base in the northern city of Kaduna – the former military ruler then boarded a waiting helicopter. Details of his condition have not been disclosed. In images released by his office, Buhari looked painfully thin but was smiling as he greeted Archbishop of Canterbury Justin Welby in London. Buhari left Abuja on 19 January for 10 days of treatment in Britain but extended his stay on the advice of doctors.
Buhari said he will continue to rest and undergo further medical tests in Britain within weeks. ‘I deliberately came back towards the weekend, so that the Vice President (Yemi Osinbajo) will continue and I will continue to rest,’ he is quoted in Reuters Africa as saying. ‘All I will need is to do further follow ups within some weeks.’
Buhari marked his return with a rare appearance at a meeting of members of the economic body that advises the government. Polity reports that Buhari attended a meeting of the National Economic Council, which is chaired by Osinbajo and whose members include state governors, the central bank governor and the finance minister. He does not usually attend NEC meetings. The report says during Buhari’s seven-week absence, when Osinbajo was acting president, the central bank devalued the naira for retail customers after the NEC called for an urgent review of the bank’s foreign exchange policy. Buhari has consistently opposed devaluing the naira since taking office in May 2015. Journalists were asked to leave before Buhari spoke.
Business Day
Reuters Africa
Polity
Faster processing of visas to promote ease of doing business
As part of measures to attract foreign investors and guarantee ease of doing business, the Nigerian government has approved processing of visas within 48 hours and given waivers to some countries. Vanguard reports that speaking at the 7th meeting of the Presidential Enabling Business Environment Council, Vice President Yemi Osinbajo noted that although progress had been made in the last 30 days of implementing the National Action Plan, a lot more remained to be done to ensure a better business environment in Nigeria. The council said that the number of documents needed for export and import is higher in Nigeria that in other African countries such as Kenya, Ghana, Rwanda, Benin and South Africa. The report says that if fully implemented, the plan could potentially lead to N2.6bn savings by SMEs in registration costs to start businesses annually; 116,000 minutes of travelling time saved daily; 60% reduction in time to register property; and 23,500 hours saved by exporters annually.
Vanguard
Retiring CBN deputy governor says bank must remain credible
The newly retired deputy governor of economic policy at the Central Bank of Nigeria (CBN), Dr Sarah Alade, has urged the bank’s governor, to uphold the credibility of the bank. According to a Vanguard report, she said the high-point of her career came when she was appointed acting CBN governor, following the suspension of the former CBN governor, Lamido Sanusi. Alade also served on teams on major economic policy studies and was involved in the preparation of CBN’s Monetary and Credit Policy Proposals over the years. She was actively involved in the drafting of the Medium Term Economic Programme for Nigeria and the IMF Staff Monitored Programme/Standby Arrangement.
She was a member of the Technical Committee of the Vision 2010 and currently a member of the Technical Committee of Vision 2020 and the National Economic Management Team.
Vanguard
NNPC investing $15bn on power plants across Nigeria
The Nigerian National Petroleum Corporation (NNPC) has announced that it will invest around $15bn to build several power plants across Nigeria to generate 4,000 megawatts (MW) of electricity in the next 10 years. This is according to NNPC’s chief operating officer in charge of gas and power, Saidu Mohammed, who is quoted in a Nigerian Bulletin report as saying that three of the power plants, with combined output capacity of 3,100MW, would be built in Abuja, Kaduna and Kano, along the route of its Abuja-Kaduna-Kano (AKK) gas pipeline. This would guarantee the supply of gas. NNPC also said as part of the business model for the construction and operation of the power plants, incorporated joint venture (IJV) companies would be set up involving the NNPC, international power companies and other Nigerian investors.
Nigerian Bulletin
Nigerian lawmakers to probe NNPC subsidy scheme
Nigeria’s upper house of parliament will investigate allegations the state oil company illegally inflated funds it collected from an official subsidy scheme to 5.1trn naira ($17bn) between 2006 and 2015, lawmakers said. Reuters Africa reports that the Senate’s decision to launch an investigation followed an emergency motion raised by Senator Dino Melaye, who told the Senate there were possible irregularities in subsidies collected by NNPC from the government between 2006 and 2015 on its 51% market share of fuel imports. He did not name the source of the allegations. The report says NNPC was previously implicated in allegations of fraud in an investigation in 2012 that discovered a $6.8bn fuel subsidy scam, one of the biggest corruption scandals in Nigeria’s history. It was not immediately clear whether the new Senate investigation would include the 2012 allegations or look into entirely new ones. A spokesperson for NNPC said the company would study any allegations if it is formally notified.
Reuters Africa
NCC and CBN step in to help Etisalat Nigeria
Etisalat is considering the sale of its stake in Etisalat Nigeria, but wants to clear-up its financial situation before making any moves, reports Mobile World Live. The business missed a repayment on $1.7bn of loans, which were raised to fund its investments and operations. This was attributed to an economic downturn in the country, currency devaluation, and a shortage of US dollars on the country’s interbank market, reports said. In the meantime, the Nigerian Communications Commission and Central Bank of Nigeria stepped in to prevent Etisalat Nigeria’s creditors taking over the business or placing it into receivership, agreeing ‘concrete actions that will bring all parties closest to a resolution’. This included securing the ‘necessary oxygen’ to enable the business to continue, with the regulator looking to protect both subscribers and potential investors in the country’s telecoms sector. UAE-based Etisalat owns 40% of Etisalat Nigeria.
Mobile World Live
Logistical challenges facing new Kaduna terminal
Two days before Nigeria shut down Abuja’s airport for repairs to its dilapidated runway, workers still needed to fit electrics, seating and toilets to a new terminal at Kaduna, reports Business Day. International airlines that fly into Abuja have already refused to use Kaduna, a provincial city airport, because of security concerns, and domestic passengers could face major delays if the new terminal is not ready, discouraging travel and isolating the capital. Most floor and ceiling tiles have been fitted and all air conditioning units have been installed, but electrical fittings are unfinished, chairs for the arrival and departure areas lie strewn about and a car park expansion is incomplete. The report says in a sign of the logistical challenges ahead, data from Nigeria’s airport authority shows Abuja airport handled 4,859 domestic flights in December compared with the 171 that flew in or out of Kaduna.
Commercial helicopters can, meanwhile, fly in and out of Abuja airport while its runway is repaired, Reuters Africa reports Nigeria’s aviation minister has said. The capital’s airport closed for six weeks on Wednesday 8 March, with flights diverted to Kaduna, a city about 160km (100miles) north of the capital. After landing at Kaduna, passengers travel on guarded buses along a road where kidnappings have taken place in recent years. The report says Nigeria’s road network is in poor condition and more affluent travellers rely on air travel to cover long distances. ‘They have areas where there are no-fly zones but the national security adviser this morning approved that helicopters should enter Abuja airport and out,’ the aviation minister, Hadi Sirika, said. He said guidance would be issued on where they could land. Earlier in the week, the national security adviser issued a memo stating that Abuja’s airspace was subject to security restrictions and commercial helicopters could not fly over the city. Airlines including British Airways, Lufthansa and South African Airways have refused to fly into Kaduna due to security concerns. Ethiopian Airlines is so far the only foreign airline to use the alternative airport.
Reuters Africa
Nigeria permits helicopters to use closed airport – aviation minister
Business Day
Kaduna not ready to pick up slack from shutdown of Abuja’s airport
Reuters Africa
Nigeria permits helicopters to use closed airport – aviation minister
Union threat to shut down Arik Air
Unions including the National Union of Air Transport Employees (NUATE), Air Transport Services Senior Staff Association of Nigeria and the National Association of Aircraft Pilots and Engineers, have threatened to shut down the Arik Air, following management’s failure to reinstate sacked members. According to a Premium Times report increasing bad debt resulted in the Asset Management Corporation of Nigeria (AMCON) taking over Arik in February and appointing Roy Ilegbodu as manager of the airline. The general secretary of NUATE, Olayinka Abioye, has accused the new management of intolerance to unionism. He said that the new management had warned workers not to joins unions and refused to address issues affecting the workers. Staff of the airline has shut down its operations, barricading the entrance of the airline’s office at the Lagos airport. ‘We will resist all forms of intimidation,’ a staff member is quoted in the report as saying.
Premium Times
Mixed reaction to CBN’s new bank charges decision
There has been mixed reaction to the recent decision by the Central Bank of Nigeria (CBN) to reintroduce various charges on large cash transactions in deposit money banks, says a Premium Times report. The director, banking & payments system department of the CBN, Dipo Fatokun, said the new charges approved by the Bankers’ Committee, would affect individual and corporate deposits and withdrawals. The report quotes financial and management consultant, Uju Ogubunka as saying they were not set up to impose such charges on their customers. Ogubunka, a former registrar, Chartered Institute of Bankers of Nigeria, said charging customers for deposits or withdrawals could mean more customers not embracing the banking culture. The CEO, Global Analytics Consult Ltd, Tope Fasua, said the timing of CBN decision was wrong but MD, Cowry Asset Management Ltd, Johnson Chukwu, disagrees. He said charging customers for deposits or withdrawals could help in reducing money laundering in the banking sector as well as acting as a deterrent for people to move large volumes of cash.
Premium Times
IN COURT
Temporary seizure of Nigerian oil block set aside
A Nigerian court has set aside its order for the temporary seizure of one of Africa’s richest oil blocks from multinationals Royal Dutch Shell and Eni. The New Zealand Herald reports that Justice John Tsoho upheld the application filed by Shell and Eni challenging a January court order ceding control of Oil Prospecting License 245 to the government while the Economic and Financial Crimes Commission investigates a $1.2bn corruption scandal. The judge ruled that the forfeiture order was irregularly filed.
Nigeria’s anti-graft agency has, meanwhile, filed new charges against the multinationals, alleging the companies ‘corruptly’ paid $801m in 2011 when acquiring an offshore oil field. Business Day reports that the European oil majors gave that sum to former Nigerian oil minister Dan Etete, his company Malabu Oil & Gas, and others in relation to the purchase of Oil Prospecting License 245, ‘thereby committing an offence,’ according to documents from the Federal High Court in Abuja. ‘Eni re-affirms the correctness of its conduct within the acquisition of the licence’ the company said adding that it hasn’t been notified of any charges relating to the deal. A 2013 report by lawmakers said the $1.1bn acquisition of the deep-water Gulf of Guinea licence – estimated to hold at least 9bn barrels of crude reserves worth $1trn – violated tax regulations and a law promoting Nigerian ownership.
Malabu Oil and Gas has filed a suit against the federal government and six others at the Federal High Court, Abuja, over the re-allocation of OPL 245 to Shell and ENI, reports The Guardian Nigeria. The Minster of Petroleum, Shell Nigeria Ultra Deep Ltd, Shell Nigeria Exploration and Production Company Ltd, Nigerian Agip Exploration Company Ltd, the EFCC, as well as Etete, were also joined as defendants.
The New Zealand Herald
Business Day
The Guardian Nigeria
Former NNPC head charged with fraud and money laundering
The former head of Nigeria’s state oil company has been charged in court with money laundering and five counts of fraud, the country’s anti-corruption watchdog said. Reuters Africa reports that the Economic and Financial Crimes Commission (EFCC) said last month it had arrested Andrew Yakubu and seized $9.8m from the former head of the Nigerian National Petroleum Corporation (NNPC) in the northern city of Kaduna. ‘Former GMD, NNPC, Andrew Yakubu who was arraigned today, 16 March, 2017 before Justice A R Mohammed of the Federal High Court, sitting in Abuja, on a six-count charge bordering on non-disclosure of assets, money laundering and advance fee fraud,’ the EFCC is quoted in the report as saying. Yakubu will remain in custody and reappear in court on 21 March, it added.
Reuters Africa
WEST AFRICA
Pirates release cargo ship and sailors after ransom paid
Nigerian pirates have released seven Russian and one Ukrainian sailors after they were captured last month on the cargo ship the BBC Caribbean, according to a Reuters Africa report. The sailors were released after talks between the owners of the ship and pirates. Human rights activist Pavel Butsay said that a ransom was paid but did not reveal the sum. Security experts class West Africa’s waters, especially off Nigeria where many pirates originate, as some of the world’s most dangerous, with attackers often targeting oil tankers and holding hostages for ransom.
Reuters Africa
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