The Nation Newspaper

Category: Business

  • Investment & Allied Insurance shops for N4b

    Investment and Allied Assurance Plc is shopping for N4billion to meet the minimum capital requirement for its operations, the Managing Director, Abayomi Rufai, has said.

    “A minimum capital injection of N4billion is required to meet the statutory capital level set for Non life insurance business in view of the present negative shareholders funds,” he added.

    He said the firm is seeking new investors.

    For these investors to come in with their funds, one of the things the firm must do is to reconstruct its shareholdings to create a window for new funds.

    He explained that it became imperative to put in place a new board, which includes members of the interim management.

    Rufai said the intervention by the National Insurance Commission (NAICOM) has helped the firm to restructure for better performance.

    “NAICOM’s intervention has impacted positively on the company, and the Commission has given assurance to potential investors that their investments are in safe hands,” he said.

    In February 2011, NAICOM took over the firm because of some irregularities, and put in place an interim management to take charge of the company’s operations.

  • FAAN, concessionaire bicker over land

    FAAN, concessionaire bicker over land

    There was confusion at Murtala Muhammed International Airport, Ikeja , yesterday as officials of the Federal Airports Authority of Nigeria (FAAN), and representatives of a concessionaire-AIC Limited  clashed over a parcel of land proposed for a  five star hotel .

    FAAN, speaking through its General-Manager, Corporate Services, Yakubu Dati, said the land does not belong to the Concessionaire, while the  firm argued that the  lease concession on the land had  been granted to it by FAAN since 1998.

    The firm insisted that the land was leased to it in 1998, saying the agreement to that effect was registered as NO 55 at page 55 in Volume 2010 of the Land Registry of Lagos State.

    Addressing the media yesterday, the General Manager, Administration and Business Development, Chief Niyi Akande, said the land was leased to AIC for 50 years to build a five star hotel that will be linked to the international terminal.

    He said: “There is a court injunction which is still subsisting. We did not go through the back door .They leased the land to us for 50 years, we signed an agreement and we did not just come here to take the land. FAAN should obey court decisions,”he said.

    “On 18the February, 2002, Justice R.O Nwodo granted AIC Limited an injunction restraining FAAN from disturbing AIC Limited from conducting its legal business on the land.” He added that at Arbitration headed by Justice Friday Esun, AIC was also awarded a fine to FAAN to pay A.I.C Limited $46 million for lost of profit and income that A.I.C had suffered for the hotel that should have been built and opened 10 years ago.

    Chief Akande said that five companies bidded for the five hotel project, saying when AIC’s bid was examined, it was discovered that its project was more feasible..

    The General Manager stated that it was based on that FAAN signed a 50 year leased agreement with  AIC. He said the company was shocked to find the caterpillars hired by FAAN clearing the land, which lawfully belong to AIC.

    Akande said when he and other staff of AIC got to the site at MMIA, yesterday, FAAN had pull down the fence separating the property from the Diplomatic Car Park, adding that he reported the case to the Airport Police Command, who sent a Deputy Commissioner of Police, Alhaji Haliru Gwandu to the scene to maintain peace.

    In a swift reaction, FAAN, in a statement signed by the General Manager, Corporate Services, Yakubu Dati said : “ The attention of the Federal Airports Authority has been drawn to a recent altercation over a parcel of land owned by the Authority and presently being used as a temporary car park to ease up the traffic at the Murtala Mohammed International Airport, Ikeja, Lagos.

    We wish to state in unequivocal terms that the parcel of land in question which is situated beside the international airport belongs to the authority and not to any concessionaire as claimed.

    About a decade ago, a concessionaire had requested for land for the development of a hotel and such was granted. However the transaction was subsequently enmeshed in controversy which resulted in arbitration.

    The arbitrator awarded damages to the said concessionaire while the land remained FAAN property.

    The concessionaire cannot therefore exercise legal right over the land but can pursue their interest i.e. monetary compensation as contained in the arbitral award.

    The Lagos airport premises and land situated therein are sole property of the Federal Republic of Nigeria, and by their location are of security significance.The on-going development around the airport environment is for the general benefit of all and therefore overrides any personal or group interest.

    FAAN remains committed to fulfilling its mandate of providing a secure, safe and comfortable airport experience.”

     

  • NNPC seeks stakeholders’ support for $1.5b loan

    NNPC seeks stakeholders’ support for $1.5b loan

    The Nigerian National Petroleum Corporation (NNPC) has begun to engage stakeholders in its bid to secure a $1.5 billion loan to offset creditors’ debts..

    The Group Managing Director of the Corporation, Andrew Yakubu, while fielding questions, told reporters that the organisation needs the money badly to remain credit worthy, saying all stakeholders should endeavour to approve of it.

    Yakubu, who was in Lagos yesterday to inspect the vandalised NNPC pipeline at Arepo, said the corporation was very much indebted and has been discussing with the creditors over time on how to make repayment.

    The planned loan has been severely criticised by Nigerians, including members of the National Assembly and the Debt Management Office which said it was unaware of the loan arrangement. Yakubu, however said a lot of engagement is currently on-going to resolve the issue and secure public understanding.

    He said: “We are discussing. We have quite a lot of indebtedness and this has affected our credit rating. We have had a lot of meetings with the creditor. Arrangement have been put in place to resolve the issue through the current intervention we are about to embark upon. We are discussing with all stakeholders to let them understand that NNPC is taking the loan to solve its credit worthiness. We have been trying to be as open as possible on the issue.”

    The NNPC is currently working to obtain a $1.5 billion syndicated loan to enable it pay debts to its international fuel traders.

    The deal, according to reports, was struck at the end of last year. The loan which was brokered by Standard Chartered Bank, the report noted, will be provided by Nigerian and international banks.

    Currently, the NNPC lawyers and those of the creditor banks are looking at the terms of the transaction to tidy up the deal.

     

  • ECOWAS urges reduction in cost of governance

    ECOWAS urges reduction in cost of governance

    • Seeks more tax 

    The Economic Community for West African States(ECOWAS) Commission has ordered all member states to reduce their cost of governance and look for addditional sources of taxation.

    The Director of Multilateral Surveillance, ECOWAS Commission, Lassane Kabore, who represented the President of the ECOWAS Commission, said this yesterday in Abuja at the 34th Technical Committee’s meeting of the West African Monetary Zone (WAMZ).

    He urged “all ECOWAS member States, including the WAMZ countries, to increase domestic revenue mobilisation through effective implementation of programmes aimed at ensuring improved tax payer voluntary compliance, effective tax administration and broadening of the tax base, as well as minimising the operational cost of governance.”

    He was unhappy that the performance of the WAMZ member countries with regards to the secondary convergence criteria, “was slightly above 25 per cent, bringing to the fore the problems of low tax yield and high operational costs of governance in the entire ECOWAS sub- region.”

    Kabore, said as the sub-region moves towards the agreed launch date of 2015 for the second regional currency, the ECOWAS Commission expects “that the WAMZ Member States satisfy the macroeconomic convergence criteria, especially the primary criteria, and sustain their performance on the convergence scale.”

    Though he admitted that achieving this goal has been a daunting challenge for the six member countries of the WAMZ, he lamented that “none of the six WAMZ countries met the required targets of the four primary criteria.”

    The ECOWAS commission was also displeaed that only “three member countries satisfied both the inflation and fiscal deficit criteria, while five countries met the Central Bank deficit financing criterion. With respect to the gross external reserves criterion, no country satisfied the criterion.”

    He described this development as “a dismal performance, compared to the situation in the first half of 2011. In percentage terms, the performance score of the WAMZ countries on the convergence scale during the first half of 2012 was 62.5 per cent, compared to 79.2 per cent during the corresponding period in 2011.”

    ECOWAS Commission, he said, “is committed to the establishment of a credible and sustainable monetary union in the sub-region with the ultimate goal of improving the standard of living of the entire ECOWAS citizenry.”

    In this regard, the ECOWAS Convergence Council (Ministers of Finance and Governors of Central Banks) , “gave the ECOWAS Commission the overall responsibility of coordinating the activities in the Roadmap on the implementation of the ECOWAS Single Currency Programme, in collaboration with all the regional institutions involved in the implementation of the monetary cooperation programme.”

    ECOWAS Commission is working to effectively implement the Roadmap activities, he said, and listed the activities to include, harmonisation and adoption of convergence criteria, harmonisation of statistics, and harmonisation of domestic tax policies as well as harmonisation of public procurement, public debt, accounting and statistical frameworks of public finance.”

    Other activities include removal of all tariff and non-tariff barriers to free movement of goods, persons and services within ECOWAS, and financial market integration (money and capital markets and non-bank financial institutions insurance, Pension/Social Security Funds and industries).

    Earlier, the Deputy Governor, Economic Policy of the Central Bank of Nigeria (CBN), Mrs Sarah Alade, cautioned WAMZ member countries to “avoid taking hasty decisions that will lead to the failure of the planned monetary union.”

    She said it was important for ECOWAS, the West African Monetary Authority (WAMA) and the West African Monetary Institute (WAMI) to “escalate their collaborative efforts  in order to identify areas of improvement in addressing sound monetary, fiscal and exchange rate policies which will promote macro economic stability.”

     

     

     

  • Miners seek single digit interest rate

    Miners seek single digit interest rate

    The President of the Miners Association of Nigeria, Alhaji Shehu Sani, yesterday called the Federal Government to lower the interest rate for mining loan to a single digit as it is applicable to the agricultural sector.

    His words: “We are also advocating that a single digit interest charges should be applicable to mining loans as it is the case with agriculture.”

    While urging President Goodluck Jonathan to fast-track the process for the establishment of Solid Minerals Development Fund, he said : “We want to see the actualisation of this Solid Minerals Development Fund because it is enshrined in the Mineral and Mining Act 2007. We are calling for quicker actualisation of that fund.”

    He said the provision of Special Intervention Fund, that as presently enjoyed by the textile industry could boost the mining industry.

    Sani, who spoke with The Nation at Abuja, recalled that President Jonathan had during his presentation of the 2013 Appropriation Bill to the National Assembly, removed import duty on mining machinery. He urged the agencies involved in the collection of the duties to abide by the pronouncement.

    The miners helmsman, urged mining companies to take advantage of the pronouncement to import the relevant equipment for their operation.

    He said Nigerians should be apprehensive that the foreign consumers of the country’s oil are planning to exit oil importation, stressing that the US, EU and Australia have concluded plans to stop oil importation by 2025.

    “It is therefore strategically important for the Federal Government to start developing critical sectors, like the solid minerals to gradually take over from oil. They should invest the present oil revenue in mining to save the future . “

    The miners boss, said investment in mining would create more money and jobs than what is obtainable in the present oil dependent economy.

    Sani revealed that the association is presently made up of over 500 Cooperative Societies, adding that plans are underway to register additional 5000 Cooperative Societies this year.

    He explained that the registration would result in the reduction of illegal mining activities in the country, adding that the association has already invited large scale miners in Nigeria the Dangote Group of Company and Julius Berger Nigeria Plc to join the association.

     

  • Omatek boss lists challenges of local manufacturers

    Omatek boss lists challenges of local manufacturers

    Group Managing Director of Omatek Venures Plc, Mrs Florence Seriki, has identified funding from financial institutions, home paronage and the government policy as the major contraints bedeviling indigenous original equipment manufacturers.

    She urged the government to get serious about job creation by addressing these issues..

    Seriki, who is also the President of Information Technology (Industry) Association of Nigeria (ITAN), said the Federal Government should rise up to the occasion and implement the local content policy in the information communication technology (ICT) sector. She spoke in Lagos yesterday.

    According to her, it is only when local patronage are sold across board that employment could be created and research and development (R&D) encouraged, adding that the communication technology minister should liaiase with other minstries and do private public partnership (PPP) and make ICT the major driver of the nation’s economy.

    She said it is only through this way that ICT sector can contribute significantly to the growth of the nation’s gross domestic product. “The minsiter should liaise with other minstries and do PPP. The government should make ICT the major driver of the economy. That is the way to go. India used software while Taiwan used hardware. Tolerance of local products is also important,” she said.

    Seriki who disclosed that the firm’s new factory in Lagos has seven bays out of which three are currently being used, said with the factory and conveyor belt in place, R&D would continue while the firm will not compromise on the qaulity of its products.

    On funding, she said the Bank of Industry (BoI) has promised to come to the aid of the ICT sector, adding that the managing director of the bank has already created a desk for ICT with the promise of making funding available. “Funding manufacturing is more difficult than funding finished products. That was why we brought the BoI. The MD has created a desk for ICT and promised to make loans available at single digit interest rate (to ICT industry),” she said.

    According to Seriki, appropriate policies are also vital to the survival of small and medium scale businesses (SMEs) in the country, aclling on the Federal Government to revisit the local content policy of former President Olusegun Obasanjo so that the growth and evolution of the ICT sector could be accelerated.

    Recaalling the decisions that the firm had taken to enable it function well, she said the firm had undertaken an overhaul of its psersonnel to make it function in the mould of world class technology firm, adding that though the decision was met with resistance, she said it was an advantage for the firm. She promised that when ongoing programmes put in inplace by the management are carried out, shareholders would be in for good times.

  • Why govt is acquiring 30 planes, by Minister

    Why govt is acquiring 30 planes, by Minister

    •Aircraft acquistion won’t solve domestic carriers’problem’

    THE Federal Government has spoken on why it is buying 30 planes to aid domestic carriers.

    Minister of Aviation Princess Stella Oduah said the government’s gesture was informed by the need to revitalise ailing airlines

    Her media aide Joe Obi said the modality for buying the planes and the mode of distribution were being worked out.

    The government he, said, would contact the Airlines’ Operators of Nigeria (AON) to determine the needs of each operator.

    Denying reports that the planes would be acquired with a $500million loan from China, Obi said: “The fact of the matter is that the said amount was the loan secured from China for financing the remodelling of airports in the country.”

    two experts have suggested ways of utilising the aviation intervention fund.

    Managing Director Capital Airlines, Captain Amos Akpan and the Assistant General Manager, AON Mohammed Tukur, said a careful application of the funds would solve many problems.

    According to him, the buying of aircraft by the government for domestic operators, may not yield the desired result, if operational demands of the affected carrier are not considered.

    He suggested the financing of aircraft acquisition by financial institutions, which will be guaranteed by the government.

    There is, he said, stunted development in the sector because the players and the regulator are not using the best model.

    Akpan said before the government facilitates the purchase of aircraft for any airline, some issues must be clarified.

    These are analysis of the aircraft, its proposed route and the operator, or the funds deployed could be misapplied, he said.

    He said: “The N300 billion intervention fund that the government made available through the Bank of Industry was wrongly applied because there was no need to give individuals or institutions funds that its use could not be monitored.

    “The intervention procedure of buying aircraft for domestic airlines, as we heard the government is proposing is not clear. I perceive this is another wrong application of good intentions. Aircraft acquisition is a product of fleet expansion, upgrade, or additions based on specific airlines need at a stage. What type of aircraft is required? For what route? And for which operator?

    “If an operational module has been identified; research of availability of passengers and cargo identified. The frequency and capacity required must be determined. These, then, determine the size and type of aircraft. The safety envelope of categories of airports and the facilities they offer must be critical input too. We should not jump into lopsided amelioration again.”

    He explained that the option of the government acquiring aircraft for private operators is no longer fashionable.

    Akpan said: “No person or institution should be given money to buy an aircraft. When the operator identifies the aircraft that soothes its operations, the operator should get NCAA to inspect and approve it; the government should pay through its bank and retain the title of ownership while the airline is only the operator.

    “The insurance must be paid by the title owner and he retains the right of first loss payee. Furthermore, the scheduled maintenance checks must be financed or funded by the owner when the maintenance by calendar or by hours is due.”

    He said payments for salaries, training, spare parts, and line maintenance must be on an open requisition programme to avoid default as these are budget items. Fuel credit scheme must be such that payment is automated between the banks and the fuel company on presentation of audited vouchers.

    ‘’Monthly payment on the aircraft from the sales must be automated to avoid default on lease rentals.

    “All of these will ensure there is no hiding to create excess capacity in one route because of high traffic while under developing other routes,” he said.

    Tukur called on the government to carry airline operators along in the proposal to buy aircraft for domestic airlines.

    Tukur said for such plan to sail through, there was the need to let the operators know the type of aircraft that would be deployed and the modalities for accessing.

    “We actually requested for bailout but the Ministry is packaging another one but I am afraid, it is not being handled well”, he said.

     

  • ‘Nigeria needs aircraft maintenance hangar’

    Chief Executive Officer Belujane Konzults Mr Chris Aligbe has canvassed the setting up of a maintenance facility for aircraft repairs in the country.

    Aligbe said such a facility would reduce operating costs for domestic carriers that fly their planes overseas for major repairs.

    If the facility is established here, it would create jobs for the industry’s professionals, he said.

    Aligbe, a former spokesman of the liquidated Nigeria Airways Limited, said to make the project viable, the facilitators must adopt measures to sustain patronage for the project.

    He said: “A maintenance facility in Nigeria is long overdue. The government should facilitate the establishment of such a project, and ensure that the airlines have enough aircraft in their fleet to ensure that it is profitable.

    “If there are not enough aircraft to sustain the maintenance, repair and overhaul facility, it could be a failure. Above all, there must be competence in fleet and aircraft type to make it work.

    “One sure way of achieving this is the entrenchment of standardisation of fleet and line management to boost the competence of such a facility.”

    He affirmed that without standardisation of aircraft type, the industry could have issues with growth and development, as major aircraft repair facilities are driven by the development of competences in aircraft types.

    He said: “Most of the airlines in Nigeria do not have commonality of aircraft type to drive maintenance and repair overhaul facilities.”

  • NIPCO moves to check sharp practices in filling stations

    To ensure that customers get value for their money for purchases at the retail outlets, the management of NIPCO has created a unit in the company that will oversee activities at its filling station across the country.

    Managing Director of the company,Mr Venkataraman Venkatapathy, who spoke with reporters, said the essence of the unit is ensure that no sharp practice is carried out in any of its filling stations.

    He said: “A department was set up in October last year to monitor activities at the stations, ensure that calibrations are properly done and right pump price and right practices always maintained.”

    Venkatapathy, who spoke on other activities of the company slated for this year, confirmed that it has not been easy for the downstream sector of the petroleum industry especially last year.

    He said: “Since the past two years, the industry has been undergoing challenges. Last year was particularly a difficult year because the industry is going through transformation and I must say that the government meant good and doesn’t have any negative intention.”

    He noted that NIPCO had been stable and stronger because it applies world best practices in its operations.

    He highlighted some of the projects the company plans to accomplish this year to include expansion of its compressed natural gas (CNG) for fuel programme. The first CNG programme approval given to the company is Benin but it has got approval to extend the programme beyond Benin.

    Venkatapathy, however, noted that the areas that should benefit from the expansion is still being kept secret and would be made known to the public in two months.

    He also said the company would increase its retail outlets this year as well as its liquefied petroleum gas (LPG) retail outlets. He said company plans to increase its LPG retail outlets from six to 20 this year, adding that it has the largest LPG retail outlets in Abuja.

    The company is also setting up LPG plants in Yola and Abeokuta and looking at setting up one in the east but the eastern plant arrangement hasn’t be concluded, the NIPCO boss said.

    NIPCO has been in the forefront of campaign for increased consumption of LPG (cooking gas) in Nigeria. Venkatapathy had at a summit held in Abuja, said his company supported the meetings and summits as part of its conscious initiative of deepening the LPG market through a well-articulated policy for the benefit of stakeholders.

     

  • Delta Airlines announces Business Elite

    Delta Airlines has announced the selection of wines to be served on board its Business Elite cabin in 2013.

    The selection profiles wines from four continents including wines from four European countries: Italy, Spain, France and Portugal; as well as from California, Australia, Chile and South Africa. The new wines will be served on board this year. Delta chooses its Business Elite wine cellar each year in a rigorous weeklong process during which Delta Master Sommelier Andrea Robinson evaluates and samples more than 1,600 different wines from more than 50 wineries worldwide.

    Numerous factors are considered including: the complexity and intensity of the wine; aesthetic details such as the image of the bottle and its label; and logistics such as the amount of production necessary to fulfill Delta’s requirements.

    Twenty-two winning labels are profiled in cycles throughout the year, including eight red wines, eight white wines, four dessert selections and sparkling wines. Approximately 1.5 million bottles of each wine are served worldwide in Delta’s Business Elite cabin every year.

    “Delta wants to offer an exclusive experience to its Business Elite customers who tell us they truly appreciate a great wine,” Robinson said. “This year I have made two selections label as ’discoveries’ – Banfi Rosa Regale dessert wine and Barco Reale di Carmignano. These wines are exciting because, while they are classic Italian wines, they are styles few people have tried. The Rosa Regale is a unique sparkling rose dessert wine, and the Barco Reale could be considered Italy’s first Super Tuscan.”

    Wine is an important part of Delta’s overall BusinessElite offering and the airline has launched a Sky Sommelier programme for pursers to provide a deeper insight into the wines served on board.

    “We want to inspire our customers to discover the world through our selection of wines and meals. Our global selections for the Business Elite cabin have heart and soul and represent the rich cultural heritage of all the countries selected,” Robinson said.