Cloned Nigerian Anchor

Author: Chike Ozohili

NCAA lifts suspension on XEjet operations

The Nigerian Civil Aviation Authority (NCAA) said it lifted the suspension on the operations of XEjet Airline following the resolution of an aircraft insurance challenge with one of the airline’s planes.

According to a letter signed by Director General Civil Aviation, Capt Musa Nuhu, after considering the submission of the airline and confirming it met regulatory compliance, the suspension was lifted.

The document titled: Lifting Of Suspension On Your Air Transport Licence (Atl) And Air Operators Certificate (AOC) reads: Further to the NCAA’s letter on the above subject matter referenced NCAA/DGCA/GC/8/16/628 and dated 30 August, 2023, the Authority hereby lifts the suspension on your ATL and AOC after considering your submissions.

“Consequently, you have been cleared to exercise the privilege of your ATL and AOC.”

Speaking on the issue, Chairman and Chief Executive Officer of XEjet, Mr. Emmanuel Iza said: “The suspension is within the regulatory framework and we want to thank the Authority for diligently doing its work. We are happy to be back and we will continue to deepen our safety consciousness.

“We sincerely thank you all for your patience, unwavering support, understanding and cooperation. We look forward to continuing delivering our premium services to you. Your safety and security is always of utmost importance to us.”

09/08/2023
Capital market can act as financing tool for PPP projects –Yuguda

The Director-General, Securities and Exchange Commission (SEC) has stated that the Nigerian Capital Market has the capacity and is well positioned to finance Public-Private Partnership (PPP) infrastructure projects in the country.

Yuguda made this remark at the 2023 Chartered Institute of Stockbrokers (CIS) National Workshop which was held in Abuja on Thursday.

Speaking on the theme; leveraging the capital market to drive public-private partnership for effective national economic growth, Yuguda, citing a World Bank report, pointed out that Nigeria’s current level of public spending on infrastructure is one of the lowest globally and added that this lack of investment has resulted in a significant infrastructure gap, which has adversely affected the quality of infrastructure and limited access to essential services.

The SEC DG who was represented by the Executive Commissioner, Corporate Services, Ibrahim Boyi, highlighted that given the current rate of capital expenditure, it would take approximately 300 years to bridge Nigeria’s infrastructure gap.

He stressed the need for a new approach to financing infrastructure development in Nigeria to stimulate economic growth and argued that leveraging public-private partnerships is essential, and the capital market can play a crucial role in this regard.

The Director-General explained that the capital market, with its patient capital and established project financing options, is well-suited to finance PPP infrastructure projects at various levels. He cited the common model used in many developed countries, where governments and private sector partners raise debt capital for PPP projects through bonds and loans.

His words, “This is an infrastructure financing model that is a common choice in many developed nations of the world. Capital markets allow governments and private sector partners to raise debt capital for PPP projects. Governments can issue bonds to finance their share of the project costs while private companies can secure loans or issue corporate bonds for their contributions.

The capital market’s ability to provide funding, risk management tools, liquidity, and efficient allocation of resources make it a crucial partner in the success of PPP projects. It allows governments and private sector partners to leverage their strengths and resources to deliver essential public infrastructure and services”.

He thereafter commended the CIS for its role in developing the economy by equipping individuals and organizations with the necessary skills and expertise in the financial sector, which is crucial for the success of PPP projects.

09/07/2023
Banks, telcos settle USSD billing rift after N120bn debt

Telecommunications companies and Deposit Money Banks (DMBs) have resolved their disagreement over the debt rising from the billing of the Unstructured Supplementary Service Data (USSD).

The banks were owing the network providers N120 billion from the use of the USSD platform, which is charged on a corporate billing rather than end-user billing as preferred by the DMBs.

On Thursday, the Executive Vice Chairman of the Nigerian Communications Commission (NCC) Umar Danbatta, stated that the intervention of the Governor of the Central Bank of Nigeria (CBN), Fola Shonubi, led to the settlement.

Speaking at the Telecom Executives and Regulators Forum (TERF) held in Lagos, Danbatta said Shonubi assisted in resolving the confrontation because he knows that without the telcos, the CBN’s financial inclusion programme would not have achieved about 70 per cent.

According to the NCC chief, disagreement over the billing system led to the increase in the debt, “The USSD service is being provided to the banks, who in turn provide the service to their customers. The question was who should be paying for the service.

“They wanted end-user billing, but we said the service is being provided to the banks, not to their customers.

“The banks charge their customers for the service, and they are to pay the telcos in the form of corporate billing, which is neat.

“Then along the way, there was a misunderstanding and the debt kept piling until it reached a humongous amount of over N100 billion.

“Even at that, the service was still being provided to customers by the banks using the telecom infrastructure and the telcos were being paid nothing. This was despite the intervention of the immediate past Minister,” he noted.

Revealing the reason the CBN and the banks came to an agreement with the telcos, Danbatta stated: “Digital financial inclusion index or penetration is currently about 70% because it is telco driven.

“And as such, there shouldn’t be any problem paying for the service. No service is free. Pay the telcos, that’s all we ask. Okay, and as we’re saying, Now, pay them for the debt, the accumulated debt, and then pay them for the service they are rendering as we speak.

“At a meeting between the acting CBN governor, the NCC, the telcos and the banks, it was acknowledged that the debt exists, that going forward, the service has to be paid for by the banks through corporate billing.

“It is an important development for the telecoms industry that we have found an amicable resolution to the problem because we’re all serving the same government. We do not want to disrupt financial services in the country.

“We want to see the financial inclusion penetration to even go higher. We want it to be ubiquitous, but we cannot do this without settling the legacy debt, as well as paying for the service that is being provided.”

09/07/2023
Oil price to hit $100, analysts forecast

As Brent crude oil price continued to rise and trading on Wednesday around $90 a barrel for the second straight day, and now up 25 per cent since June due to the prospect of more production cuts by leading oil exporters, analysts have predicted the price may hit $100 a barrel.

The surge is sending ripples through the global stock and bond markets and the prospect of higher prices at the pump and throughout manufacturing may spur diplomatic efforts to increase supply and tamp down any inflationary effects on the global economy.

The two countries behind the price hike Saudi Arabia and Russia said on Tuesday that they would extend their oil production cuts equivalent to a combined 1.3 million barrels a day through year-end.

The duration of the cuts surprised market watchers, as did Saudi Arabia’s hint that it may make even deeper cuts in the coming months.

Nadia Martin Wiggen, a commodities analyst at Pareto Securities, told Bloomberg that Brent could hit $100 a barrel, a level it frequently surpassed in the first months following Russia’s invasion of Ukraine.

China’s sputtering economy could sap demand for oil, keeping prices down and Saudi Arabia has little interest in seeing triple digit crude prices crash the global economy, Jorge León, an economist for the research firm Rystad Energy, told DealBook.

“Higher oil prices will only increase the likelihood of more fiscal tightening, especially in the U.S., to curtail inflation,” León said.

Investors have sold off government bonds, including 10-year Treasury bills, over the past two days on fears that central banks will be forced to stay hawkish on interest rates to blunt the inflationary effect of higher energy prices.

Means, Iran’s oil exports have surged since Saudi Arabia began cutting its production this summer, and Bloomberg reported last week that Tehran and Washington have held back-channel talks to keep crude flowing to make up for supply reductions elsewhere. Venezuela, another exporter under sanctions, has reportedly turned to Beijing to help it revive production.

In the US the Biden administration, “the only thing they can pretty much do to counteract Saudi cuts is to bring more oil into the market from other countries,” León said. “Iran and Venezuela are the best candidates,” he added, even if it’s politically unpalatable to fully reopen talks with them.

The United States may have few other options as domestic producers of oil from shale won’t fill the void in the short term and Washington is unlikely to tap the nation’s strategic petroleum reserve, after doing so last year brought it down to levels last seen in the 1980s, León said.

09/07/2023
As profit taking persists, Nigeria’s equity market sheds N112bn

Trading activities on the floor of Nigerian Exchange (NGX) Thursday continued on a negative note, shedding N112 billion as profit taking by investors persisted in the market.

Profit taking in the shares of Dangote Sugar, Dangote Cement, Nascon impacted on the market at the end of the trading session.

Specifically, market capitalisation of listed equities declined by 0.30 per cent to N37.261 trillion from N37.373 trillion reported the previous day.

The NGX All Share Index also depreciated by 204.17 basis points to 68082.11 points from 68286.28 points reported on Wednesday.

Betaglass led gainers table, gaining 9.97 per cent to close at N51.85 per unit, Cadbury Nigeria Plc followed with a gain of 9.86 per cent to close at N15.60 per share, CWG gained 9.81 per cent to N5.26 per unit, Tantalizer gained 9.52 per cent to close at N0.46 per share, Guinea Insurance added 9.09 per cent to close at N0.36 per share.

On the contrary, Morison Industry recorded the highest loss with 9.89 per cent to close at N2.55 per unit, Courtvellle Business Solutions trailed with a loss of 7.69 per cent to close at N0.60 per unit, Nascon dipped by 6.83 per cent to close at N56.60 per unit, RTBriscoe went down by 6.82 per cent to close at N0.41 per share while Wema Bank dipped by 6.42 per cent to close at N5.10 per share.

Investors traded 378.089 million shares valued at N8.376 billion in 8106 deals against 378.654 million shares valued at N5.482 billion in 7671 deals.

Transactions in the shares of Oando led market activities with 91.635 million shares valued at N678.965 million, Omatek trailed with account of 29.972 million shares valued at N19.207 million, Dangote Sugar Refinery traded 23.393 million shares valued at N1.483 million, Fidelity Bank exchanged 22.165 million shares cost N193.576 million, AccessCorp exchanged 20.803 million shares cost N361.865 million.

09/07/2023
NNPCL raises concerns over Eni Sale

Nigeria National Petroleum Corporation Limited (NNPCL) has raised reservations about Eni SpA’s sale of a subsidiary to local producer Oando Plc which could complicate the transaction.

The Italian firm announced on September 4 an agreement to sell to Oando one of its units that has a 20 per cent operating stake in four onshore oil and gas blocks. The deal is the latest in a string of asset sales concluded by international producers in onshore and shallow-water areas of the Niger Delta.

The failure to obtain the NNPCL’s prior authorization for the sale “constitutes a grave breach” of the contract governing the joint venture that holds the four permits, the state-owned company said in a letter to the Eni subsidiary, which was dated September 4 and confirmed by Bloomberg. The NNPCL “reserves its rights in relation to the said breach” including an entitlement to invalidate the agreement, the letter said.

The letter is “not an objection to the transaction,” NNPCL spokesman Garba Deen Muhammad said by text message on Wednesday. It is “only drawing attention to certain important clauses” in the joint venture agreement that “might have been overlooked in error,” he said. “Adherence to those clauses will protect the transaction now and in the future.”

Oando already had a 20 per cent interest in the licenses before the deal was agreed, while the NNPC holds a 60 per cent stake.

An Oando spokeswoman declined to comment on the letter because it was addressed to Eni. She said the companies had agreed to the sale of shares in a subsidiary rather than the assignment of an interest in the joint venture.

Eni denied committing any breach of the joint venture agreement in selling the subsidiary to Oando. While NNPC has pre-emption rights, Eni had no obligation to inform the state firm in advance of the announcement, the Rome-based company said in a statement Thursday. “Preemption procedures and other consents will be duly and carefully followed,” it said.

Oando said in a statement on September 4 that completion of the transaction is subject to ministerial consent and other regulatory approvals. The Nigerian Upstream Petroleum Regulatory Commission and a spokesman for President Bola Tinubu didn’t immediately respond to requests for comment.

Oil majors have been offloading onshore and shallow water blocks — located in a challenging operating environment where infrastructure damage from crude theft is a regular occurrence — to domestic producers for more than a decade. The trend is accelerating as international firms focus on deep-water projects in the West African country.

Shell Plc and Exxon Mobil Corp. are also working to finalize sales that stalled under former President Muhammadu Buhari, who was succeeded by Tinubu in late May. A lawsuit over alleged pollution in the Delta is holding up Shell’s deal, while the NNPCL has opposed Exxon’s agreement with Seplat Energy Plc and asserted a right to acquire the permits itself.

09/07/2023
Umahi stops payments to South East road contractors

The Minister of Works, Dave Umahi has stopped some road construction in the South East pending the review of the existing and additional contracts.

Umahi gave the directive on Thursday in Enugu during the inspection of some ongoing construction/rehabilitation of federal roads across states in the South-East.

The minister expressed dismay that four bridges and three kilometres of additional work were costing N15 billion.

“I have directed directors in the ministry to sit with the contractors and review it.

“I strongly believe that there is no way that the project will cost us more than three to four billion naira, and when a project is too expensive, and the budgeting process is very low, then contractors will remain on site for 10 to 15 years,” he said.

Some of the roads inspected included the Ozalla- Akpugo-Amangunze-Isu Onicha (Enugu-Onitsha) with a spur to Onunwere in Enugu State done by Arab Contractors and rehabilitation of Old Enugu- Onitsha Road also done by Arab Contractors.

Others were the construction of the Nenwe-Nomeh-Mburubu -Nara Road with a spur from Obeagu-Oduma road, Enugu State, Rehabilitation of Nsukka -Ikem, Eha Amufu – Nkalagu in Ebonyi State among others.

Umahi commended the quality of work done on some of the roads in Enugu, adding that he stopped certain payments until contractors, and the ministry reviewed the existing contracts and additional works.

The former Ebonyi governor said he stopped payment of RCC and Arab Contractors until they all sit down to review the cost of the projects and methods of construction.

He also said because of funding he had directed works on spots should come in the second phase to enable contractors to complete carriage ways first.

He equally directed the contractor handling the Mmaku road seven days to return to the site to cover the binder course.

He also directed that the right-hand side of the Enugu-Onitsha expressway be done with concrete to save costs.

“I discovered something unprofessional where contractors put a binder course and leave it up to five to eight years, and within that period, the binder course fails.

“Henceforth, no contractor will leave the binder course for more than one month without covering it because the binder course admits water which affects subgrade.

“It is not healthy for contractors as they lose money for the equipment they are using to maintain the work,” he said.

The binder course is an intermediate, bitumen-bound aggregate layer placed between the base layer and the surface of an asphalt pavement.

The minister explained that Nigerian roads failed because of the bad asphalt placed on them as a result of adulterated bitumen imported into the country.

According to him, most of our roads are not failing because of sub-base or subgrade but fail because of bad asphalt placed on them.

“So the fight of turning to concrete is a continuous one, and we will not give up until our roads are able to last up to 30 years to 40 years without maintenance when built.

“At Enugu section three to Port Harcourt section 3, I have also directed that the second carriage be totally done on concrete as we are safer with concrete in southeast roads,” he said.

To buttress his point on the concrete road, Umahi, who took newsmen to Nigercem – the first cement factory in Nigeria, said the factory road built in 1950 with concrete was still stable as well as other roads in Nkalagu built with concrete seven years ago.

“This is what we are advocating and basically, South East, South-South, and South-West roads shall be on concrete because of their terrain,” he said.

09/07/2023
CBN to clear $10bn forex backlog in 14 days

The Central Bank of Nigeria (CBN) has promised to inject more foreign exchange into the market to clear the backlog as scarcity persists.

Acting Governor of the CBN, Folashodun Shonubi, who disclosed this recently said banks will be vital in clearing the backlogs, considering the DMBs control 75 percent of forex transactions.

Breaking down the applications that will be sorted after being stalled for years due to a drop in Foreign Direct Investments (FDIs), Foreign Portfolio Investments (FPIs) inflows and international reserves, the apex bank chief mentioned manufacturers and importers of raw material inputs.

Other applicants listed are requests for dollars to pay international school fees, and medical bills abroad, as well as Business Travel Allowances (BTAs) and Personal Travel Allowances (PTAs).

Explaining the situation around the forex backlog, Shonubi said: “As matter of fact, there is a large amount of the obligations that the banks in Nigeria have already taken on. So, what happened was that at maturity, they actually made the foreign exchange available for those who needed to use them like importers and what have you.

“There are some customers who still have their obligations and part of the restructuring with the banks in Nigeria, is also to clear that backlog. That is something we have been discussing for a while. I expect that we will do that, within the next one or two weeks.

“What that means, therefore, is that this obligation that people keep on talking about will not be left. Today, we still intervene in the market, so it is not as if it has affected our ability to make monies available to banks in the Investors and Exporters foreign exchange market.

“When we look at the volumes, the Central Bank of Nigeria today contributes less than 25 per cent into the forex market. And the aim if you remember about a year and a half ago, was that the Central Bank did not want to be a regular player, but more of intervening to stabilise the rates and that is where we are going.

“There are so much more foreign exchange that people don’t talk about, that is being made available through the banking system and banks are selling to their customers. It doesn’t come to the Central Bank, it doesn’t appear as part of the demand that comes to us. And it is significant. It is almost three times what we as a Central Bank make available.”

09/06/2023
Nigeria’s equity market sheds N27bn

The local equity market on Wednesday returned to negative trend shedding N27 billion or 0.07 per cent to N37.373 trillion from N37.400 trillion reported the previous day.

The NGX All Share Index also depreciated by 48.40 basis points to 68286.28 points from 68334.68 points reported the previous day.

Volume of shares traded during the day declined by 179.198 million, representing 47.32 per cent as investors traded 378.654 million shares valued at N5.482 billion in 7671 deals against 557.852 million shares worth N10.210 billion exchanged hands the previous day in 9818 deals.

Meanwhile, the domestic equity continued in positive trajectory for the fourth straight month to August with 3.44 per cent growth month on month gains to close at 66,548.99 points, beating a 15-year high since March 2008. The bullish performance was spurred by strong investor sentiments in the consumer goods and Insurance sectors.

Capital market operators also said that the positive interim dividend payments by corporates and strong search for gains by investors drove the rally which gave equity investors a total of N1.4 trillion in the month while the market capitalization of listed equities closed at N36.42 trillion and then the year to date return printed at 29.8 per cent.

However, an analysis of the investment showed that Guinea Insurance led gainers table with 10 per cent to N0.23 per unit, Betaglass followed with a gain of 9.91 per cent to close at N47.15 per per share, Caverton gained 9.84 per cent to close at N1.34 per unit, Oando Plc added 9.70 per cent to close at N7.35 per unit, CWG added 9.11 per cent to close at N4.79 per unit.

On the contrary, Vitafoam Nigeria Plc topped losers chart, declining by 10 per cent to close at N22.50 per share, Veritas Kapital trailed with a loss of 7.69 per cent to N0.24 per share, Linkage Assurance fell by 5.56 per cent to close at N0.85 per unit, Dangote Sugar Refinery dipped by 4.76 per cent to close at N66.65 per unit while International Breweries down by 4.35 per cent to N4.40 per unit.

Transactions in the shares of Oando Plc led market activities with 83.526 million shares valued at N609.377 million, United Bank for Africa followed with account 35.627 million shares cost N533.748 million, Transnational Corporation of Nigeria exchanged 26.657 million shares cost N177.694 million, AccessCorp traded 18.534 million shares cost N321.080 million while Omatek exchanged 15.729 million shares cost N9.437 million.

09/06/2023
CSOs call for debt rescheduling with China, others

Over 50 civil society Organisations have called on President Bola Ahmed Tinubu to reschedule Nigeria’s debt with China.

In a communiqué signed by Action Aid Nigeria, BudgIT Foundation, Centre for Social Justice (CSJ), Civil Society Legislative Advocacy Centre (CISLAC), Heinrich Boell Stiftung Nigeria, OXFAM Nigeria, Natural Resource Governance Institute (NRGI), and 48 others, the CSOs noted that the present situation where the country was spending 80 per cent of its resources to service debt was unsustainable.

Analysts have said that the country spends over 90 per cent of its revenue on debt servicing.

The federal government has put Nigeria’s debt profile at N77 trillion including the Ways and Means from the Central Bank of Nigeria (CBN).

The group noted that the huge debt burden has put the country in a position where it would be difficult to fulfill its commitments to achieve the Sustainable Development Goals (SDG) and contribute to the attainment of the climate goals of the Paris Agreement.

According to them, instead of making accelerated progress, the country, like many others on the continent, is regressing.

They therefore urged the National Assembly to review the existing debt management strategy with a view to strengthen it.

“Adhering to relevant legal and institutional fiscal frameworks is important in the context of high and rising debt levels. Although the country has a comprehensive legal framework that specifies processes and obligations of government entities to manage debt, these are not always complied with. For example, annual borrowing plans are not made available to the public and borrowing occurs without being attached to any particular projects, contributing to a lack of transparency and accountability.

“National Assembly should review the existing legal and institutional frameworks relevant to debt management with the view of closing existing loopholes and strengthening transparency and enforcement. For example, the Fiscal Responsibility Commission and Debt Management Office should be empowered to sanction breaches of existing laws and regulations.

“Lawmakers should carry out loan approvals with proper scrutiny and approvals be subject to public hearings and input. Public disclosure of, for example, the terms and conditions of loans, and borrowing plans are critical steps to increase transparency and accountability in Nigeria.

“The Nigerian government and its decision-makers should reduce its reliance on borrowings from the international capital market and commercial loans. There is a need to more strictly adhere to the provision of the law on maintaining concessional loans,” the group said.

While noting that Nigeria’s high debt levels is a function of poor revenue mobilisation through taxes and other means, they urged the federal government to introduce measures that would address the country’s revenue challenge.

“An enhanced Debt Sustainability Analysis that integrate climate and other sustainability risks, and climate resilience benefits, as well as estimates of a country’s financing needs for climate change adaptation, mitigation, and achieving the broader goals set out in the 2030 Agenda for the SDGs;

“Access to debt restructuring for all debt-distressed, climate-vulnerable low and middle-income countries, and a speeding up of debt relief talks;

“A debt restructuring framework that incorporates adequate incentives to ensure private creditors participate and bear a fair share of the burden;

“A departure from regressive conditions attached to debt restructuring frameworks (i.e. cutbacks on social spending), giving room to countries to develop their own plans to advance development and climate resilience (guided by SDG commitments and NDCs);

“The inclusion of disaster clauses in lending deals with public and private creditors to allow countries to divert debt payments to disaster relief;

“The possible establishment of a new Global Debt Authority, designed to operate in an inclusive manner, independent of creditors or debtors, and the development of an international legal framework for sovereign insolvency,” the communiqué read.

09/06/2023