The Nation Newspaper

Category: Business

  • Nigeria’s oil production crashes below 1.5 m barrels per day

    Nigeria’s oil production crashes below 1.5 m barrels per day

    Daily oil production from Nigeria yesterday crashed below 1.5 million barrels, representing a loss of over 1 million barrels as ExxonMobil on Wednesday became the fourth oil major in a month to warn customers over delays to Nigerian oil and gas exports.

    Nigeria, which produces about 2.4 million barrels daily, depends largely on proceeds from oil to service over 85 per cent of its annual budget and this loss of over 1 million barrels poses a fresh threat to the country’s budget.

    Already, Exxon’s Nigerian unit, Mobil Producing Nigeria, operator of the Nigerian National Petroleum Corporation, (NNPC)/MPN Joint Venture declared on Wednesday it would not be able to meet its contractual agreement with its traders as it declared a force majeure on Qua Iboe crude oil exports.

    A statement by its General Manager, Public and Government Affairs, Paul Arinze, said the action was due to outages caused by a pipeline oil spill on November 9, which witnesses said had spread 20 miles down the coastline.

    Royal Dutch Shell lifted on Wednesday its force majeure on Nigeria’s benchmark Bonny Light crude oil exports, easing some of the supply concerns.

    But three of Nigeria main oil grades; Qua Iboe, Brass River and Forcados are still under force majeure. These oil streams together account for around 700,000 barrels per day (bpd) or around a third of total Nigerian exports.

    France’s Total and Italian oil firm Eni have also declared force majeure, on gas and oil supplies, respectively.

    These developments have added to a raft of problems caused by oil spills, theft and flooding.

    A huge fire on an oil tanker being used to steal oil last month prompted Shell’s outages. The Anglo-Dutch, major shut another pipeline in Imo River on October 31 due to theft damage and deferred 25,000 bpd.

    Oil theft is a major problem in the winding creeks and waterways of the Niger Delta, where it is easy to conceal boats and illegal refineries in the dense mangroves. Nigeria estimates around 150,000 bpd is stolen, much of which is sold abroad.

  • Senate gives wake-up call on Nigerian vehicles

    Senate gives wake-up call on Nigerian vehicles

    Senate President David Mark yesterday said the country should take advantage of the National Automotive Design Bill when signed into law to design and build Nigerian made vehicles.

    Mark spoke after the consideration and adoption of the report of the Senate Committee on Investment on a Bill for an Act to repeal the Centre for Automotive Design and Development Act, 1992, the National Automotive Council Act, 1993.

    The repeal of the two Acts paved the way for the establishment of the National Automotive Design and Development Council and for other matters connected therewith, 2012.

    The Senate President said the essence of the Bill is to de-emphasise heavy importation of goods, especially vehicles.

    He said: “With the passing of this Bill, the business of emphasising so much on importation should be reduced drastically. The essence of this Bill is that things should be designed and produced in Nigeria .”

  • Tribunal penalises stock broking firm

    Tribunal penalises stock broking firm

    The Investments and Securities Tribunal sitting in Abuja has penalised Davandy Finance and Securities Limited and its Abuja branch manager, Mr. Abodunde Abiodun, for culpability in a multi-million naira fraud and breach of the code of conduct for capital market operators.

    The penalties include repayments of N98.8 million, shares buy-back,  N2.5 million damages, debarment of the company and manager from market operation, as well as prosecution by police and the Economic and Financial Crimes Commission (EFCC) for fraud, amongst others.

    The tribunal ‘s Head, Public & International Affairs, Mr. Kenneth Ezea,  in a statement, yesterday said aside  the stringent penalties, the 35-page judgment signed by the Chairman, Dr. Nnenna A. Orji, looks to entrench new mandatory improvements of the principles, processes  as well as regulatory fundamentals of the capital market.”

    It pointed out that  the company and its officer were jointly and vicariously found guilty of fraudulent sale of 500,000 Wema Bank Plc’s shares belonging to an investor without authorisation, and also for fraudulent conversion of another N117million invested with them.

    Ezea said: “Giving judgment in an appeal filed by Mrs. Olabisi Titiola and eight others against the Securities and Exchange Commission (SEC), Davandy Finance and Securities Limited and 11 others, the Tribunal found that the company violated the provisions of Rule 182 (a)(1) of the SEC Rules and Regulations and article 1(v) of the code of conduct for Capital Market Operators by disposing of the 500,000 units of Olayinka Temitayo’s Wema Bank Plc shares without authority.

  • Korean firm to build $30b solar power plant

    A Korean firm has shown interest in investing $30billion to build a 10,000 megawatts solar power plant in the country, the Nigerian Investment Promotion Commission (NIPC) has disclosed.

    The Chief Executive Officer of HMC, the Korean firm, Mr. Kin Moon, broke the news during his meeting with the management of NIPC in Abuja. He said the construction of the plant should begin in January 2014, with a target of 1000 megawatts every year for 10 years.

    He said: “The company has plans to build 300megawatts of photophobic panel plants and other solar thermal technology and 10,000 jobs are expected to be generated when the project takes off, while $1.8billion will be generated annually from the project.

    “The company will need at least 83, 999.99 hectares of land to actualize the project in the country. The firms visit to NIPC is to seek assistance and support in the area of facilitation, gather relevant information, legislative and regulatory framework to enable the firm commence operation,” describing Nigeria as a fertile land for investment.”

  • Tiger Brands to up stake in Dangote Flour

    Tiger Brands to up stake in Dangote Flour

    South Africa’s consumer goods group,Tiger Brands, is offering to buy out some minority shareholders in Dangote Flour Mills as it expands in fast-growing African markets.

    Earlier this year, Tiger Brands bought a 63 per cent stake in the flour and pasta maker in its third and biggest deal yet in Nigeria, Africa’s most populous country and second-largest economy, which is seen as a growth area for consumer and food products.

    Owner, Aliko Dangote’s holding firm, Dangote Industries Limited kept a 10 per cent shareholding in the flour mill after Tiger Brands’ purchase.

    Tiger Brands, according to Reuters, said in a presentation on its full-year earnings, it is making an offer to minorities in Dangote Flour which is expected to be completed by March, next year.

    “We will go up to a maximum of 70 per cent in total, leaving the balance in Nigerian hands,” Tiger Brands’ Chief Cxecutive, Peter Matlare told Reuters after the presentation.

    Tiger Brands, a maker of bread, breakfast cereal and energy drinks, expanded outside its home base last year with acquisitions in Nigeria and Ethiopia.

  • MAN urges govt to expedite action on tax waiver

    The Manufacturers Association of Nigeria (MAN) has urged the Federal Government to quicken its plan to grant tax waiver to firms that generate their electricity to resuscitate the ailing sector so as to improve the economy.

    MAN President, Mr Kola Jamodu, made the call at the Nigeria Economic Management Team (NEMT)meeting which was attended by President Goodluck Jonathan and Minister for Trade and Investment, Dr Olusegun Aganga, in Abuja.

    According to him, despite the improvement in power supply in recent weeks, which has increased capacity utilisation to about 54 per cent, some manufacturers are still generating their own electricity to ensure that they remain afloat.

    He called on the government to execute the relief package meant to assuage their problems.

    “These are things that would normally have been provided by government. In the last few weeks, we have noticed improvement. What has happened today is that a lot in the manufacturing sector are generating their personal electricity supplies to sustain production,” Jamodu said.

    Aganga described the industries as being in disarray and experiencing decreasing productivity.

    He said: “There is no country that moves from being a small nation to a big one without industries. That is what Nigeria and Africa has not done for many years. That is why Africa contributes only three per cent to the global trade.

    “We already have an Industrial Revolution Plan (IRP), which is based on three main pillars: moving our industries to areas where we have big comparative advantage, industrial skills development, and innovation.”

    He said with enhanced attention given to agriculture,mining and petroleum, an effort which has saved the country over N200 billion in the cement industry alone, the government is set to focus on iron and steel production to galvanise the economy by going into automotive production.

    The Federal Government has approved a National Policy on Public-Private Partnership (PPP) as part of efforts to address infrastructure deficit in the country.

    Vice-President Namadi Sambo announced the approval while declaring open the Fourth African Public-Private Partnership Conference in Abuja.

    He said the policy was meant to complement the Infrastructure Concession Regulatory Commission Act of 2005, and to provide the legislative, regulatory and institutional framework for PPPs to thrive.

    According to him, the policy will also help boost investors’confidence in the economy.

    Sambo said the government is committed to promoting PPP as a viable business model, adding that government’s transformation agenda placed a high premium on PPP for the rapid modernisation and expansion of the country’s infrastructure.

    He said: “Our goal has consistently been to work with the private sector to close the capital investment and financing gaps that continue to encumber our determined efforts to meet the growing infrastructure needs of our people.

    “Due to its viability, we are also focused on applying the Public-Private Partnership approach to developing other vital sectors of the economy. We are confident that through this measure, we will eliminate bureaucratic bottlenecks and reduce direct government involvement in management activities.

    “Overall, we are creating an enabling environment for the operation of an efficient and effective private sector economy.”

    Sambo said the annual African PPP conference had evolved into a platform for governments to address the continent’s infrastructure deficit and showcase Africa’s investment potential to the outside world.

  • SON, firms sign MoU

    The Standards Organisation of Nigeria (SON) has signed a Memorandum of Understanding (MoU) with four Independent Accredited Firms (IAFs) to reduce the importation of sub-standard products into the country. The firms will test the products and ensure the sealing of the container before shipping.

    The MoU is to rejig the objectives of SON Conformity Assessment Programme (SONCAP) which, observers say, failed in the past few years.

    The new process entails testing the products before they are loaded into containers, sealing the containers, issuance of SONCAP certificate by SON, and re-testing the products on arrival in the ports before clearance.

    SON’s Director-General, Dr. Joseph Odumodu, said the challenges of implementing the SONCAP objectives over the years bordered on less monitoring of the programme.

    He added that the processes for monitoring imported goods did not give the desired results.

    He said loopholes in the SONCAP programme would be plugged, adding that this would stop the importation of sub-standard products.

    The programme, he said, is being renewed to meet the increasing expectations of Nigerians and contribute its quota to the realisation of the broad economic programmes of the Fed Government.

    “For several times in the past, we have called to question the effectiveness of SONCAP for a number of reasons. Apart from the initial successes we recorded, the programme started having some challenges because we have not monitored the programme effectively, to ensure that we cover loopholes that are normally created by those who would rather prefer that such a programme does not exist. We have tried to address the challenges with the new SONCAP we are launching today. The new SONCAP will ensure the integrity of products that are imported by people in Nigeria and we will guarantee the integrity of these products.”

    The changes, according to him, will include sampling of most of the items that will be imported into the country.

    “Containers will be sealed in such a way that when they get to Nigeria, we will be able to establish the integrity of the goods before the containers leave the ports; and also the SON will be in the position to issue the SONCAP certificate here in Nigeria.

    “We went through rigorous process of accreditation to get the IAFs who have the technical competence to deliver the best for Nigerians, before we could shortlist four companies as service providers to handle the monitoring of products in which Intertek International Limited, SGS and Cotecna Trade Services are part of the four companies,” Odumodu said.

    Also, SON has also appointed four firms to accredit imported goods in line with the global best practices.

    He said they would not tolerate lapses by service providers.

    “They must adhere to the terms of agreement reached because our 2012 stance as far as this campaign is concerned is to reduce the incidence of substandard products by 30 per cent and if we are to achieve this target, all hands must be on decks. This means all service providers must play their parts effectively”, Odumodu warned.

    The Chief Operating Officer, Cotecna Trade Services, Mr Mattheiu Delorme said: “In the old system, goods that were checked are substituted but now the goods will be sealed and confirmed on arrival in Nigeria. It is a big challenge to us but we will be working with SON to block any loopholes as soon as we discovered. We are not new in Nigeria and we are conversant with the situation. We intend to protect Nigerians.”

  • Cash-less policy : CBN promises traders incentives

    The Central Bank of Nigeria (CBN) will soon introduce incentives for traders (Point Of Sales terminals) through commercial banks to drive the cash-less policy, its Deputy Governor Mr Tunde Lemo, has said.

    The CBN also said the cash-less policy, which started in Lagos State, will soon be implemented in other states, adding that this would be kicked off with aggressive campaigns.

    Lemo spoke during a cash-less policy seminar organised by the Lagos Chamber of Commerce and Industry (LCCI).

    Lemo said CBN has appraised Lagos for the implementation of cashless policy and based on the report it got, some far-reaching decisions would be taken to improve the effectiveness and ease of the policy on the economy.

    The Deputy Governor, who was represented by Eric Yaduma of the Shared Services Sector of CBN, said a draft report had been presented to management and after the review of the report, some changes would be effected before the policy was rolled out to other states.

    “What CBN is thinking right now is to encourage banks to introduce some incentives to merchants. We are trying to determine the best incentives schemes for stakeholders,” he said.

    He said the CBN is planning to perfect the cash-less policy, adding that there were 5,000 Point Of Sales (POS) outlets at inception and that this has increased to about 200,000.

    “We are working with the Nigerian Inter-Banks Settlement Services (NIBSS) to address some of the challenges we are experiencing in Lagos which are out of service/network problems, low awareness, among others. We are also engaging telecommunications companies to give priority to data services to eradicate the network challenges,” he said.

    He disclosed that the CBN is also partnering with the National Orientation Agency (NOA) to improve on the awareness adopted in Lagos because awareness was key to the success of the policy.

    He said CBN created a Consumer Protection department to address issues related to the cash-less policy and an e-payment fraud forum to handle fraud-related cases, adding that the Nigerian Postal Services have been approached to promote mobile money transactions under thecashless policy.

    The President of LCCI, Goodie Ibru, said the introduction of the cash-less policy in Lagos in April, this year has brought many challenges and opportunities in doing business in the state.

    “To help improve the policy as CBN gets set to extend it to other states, they, as regulators should pay more attention to developing business in the e-payment sector because it is a critical sector that will drive Foreign Direct Investments (FDIs), international trade and trade integration,” he said.

  • ‘NCC regulation is weak’

    An indigenous submarine cable company, MainOne, official has accused the Nigerian Communications Commission (NCC) of looking the other way when major operators engage in anti-competitive practices that are capable of killing small players.

    Telecoms sector analysts complain of the weak regulation, insisting that the regulator is a toothless bulldog that could only bark.

    An official of the firm,Kemi Adeyanju, who spoke in Lagos, lamented that in the submarine cable market, there are other operators providing the same services, arguing that these operators have core retail and wholesale businesses integrated. He added that they also have infrastructure.

    “The challenge we face regarding last mile services puts us at a disadvantage and indicates that our segment is not competitive. We have had experience where our competitors sell services in Abuja and Lagos at the same price, they refuse to share infrastructure with us, and most times give infrastructure away to other players in the market,” she lamented.

    According to her, the refusal to share infrastructure is one way of ensuring that the competitor is driven out of business, adding that this could take the form of deliberately increasing the price of access to infrastructure – bearing in mind that the central objective of most interconnection policies is the principle of non- discriminatory.

    She lamented that the various anti-competitive practices being carried out with impunity despite the existence of rules and regulations barring such. She urged the NCC to demonstrate commitment to restore the confidence of operators in the market.

    “Rules currently exist in the Acts and Regulations but needs to be enforced. The Commission needs to demonstrate commitment to restore operator’s confidence as they are reluctant to come forward not to ruffle any nest of the big operators whilst nothing will be done to the big player and the complaining operator will then be victimised by the big operator,” she said.

    Adeyanju wants the NCC to invoke its investigative responsibility, set up Special Competition Tribunal, simplify the procedure for complaining and resolving issues in realistic timelines and put punitive remedies such as fines, compensation, suspension of licences, publication of names of operators engaging in these acts among other recommendations.

    She identified increased costs of providing services by way of high price to end users, duplication of infrastructure, creation of a dominant operator, erection of barrier to market entry and enhancement of the quick exit of smaller/new operators as the evils of anti-competitive practices. These, she said, also discourage investment, impact the quality of service and is responsible for low level of broadband penetration in the country.

    Adeyanju said the laws cover all these areas but only needed to be enforced by the NCC.

    But the NCC said it has engaged the services of foremost consultancy firm, KPMG, to carry out an assessment of the current level of competition in the telecoms industry.

    Executive Vice Chairman of the NCC, Eugene Juwah, said at a forum that the commission was committed to remaining vigilant to ensure sustainability and fair competitive practices in the industry.

    Juwah, who was represented by a Commissioner from the commission, Mrs. Biodun Olujimi, said: “Obtaining empirically verifiable information on this competition issue is fundamental to the development of regulatory initiatives to prevent anti competitive practices and deepen competition in the industry. The result of the study will go a long way to ensuring confidence and certainty in all players in the various markets over unfair practices of their competitors.”

  • Airtel, Ericsson partner on network upgrade

    Bharti Airtel is undertaking networking transformation programme in its mobile operations in 16 African countries. The programme, according to a statement, is the largest on the continent. It involves the upgrade and expansion of network elements on Airtel’s African operations, including switching, radio, network management, data, charging, and consumer-services platforms and systems.

    This transformation, in which Ericsson is a partner, has deployed the latest wireless technologies, would enhance Airtel’s network capacity and robustness and help deliver best-in-class services to customers at affordable rates. This also makes Airtel’s networks ready for next generation services that include high speed data and value added services.

    Also, an upgrade of the charging platforms in its operations was implemented, introducing the latest version of Ericsson’s Charging System, enabling Airtel to offer subscribers new and innovative value-added services, such as mobile wallets. This project will result in Airtel’s 60+ million customers having a better experience on their networks.

    Chief Technical Officer, Airtel Africa, Eben Albertyn, said: ”The customer is at the core of everything we do at Airtel. The implementation of this transformation programme will enable us to further enrich our customer experience across the region. It allows us to provide Airtel subscribers with the best network possible while meeting the growing usage of mobile data.

    “Our long-standing relationship with Ericsson gave us confidence in their ability to manage and deliver such a large and complex project.”

    Backed by 12,000 consulting and systems integration professionals across the world, over 100 Ericsson resources worked onsite to ensure successful delivery of this complex project – the largest network modernisation programme in Africa’s telecom history. Ericsson’s systems integration organisation according to the statement, delivers more than 1,500 systems integration projects per year in multi-vendor and multiple-technology environments. Projects range from single-solution integrations to end-to-end solution transformation projects such as this one.