The Nation Newspaper

Tag: foreign investors

  • Foreign investors pump N86b into Dangote Cement

    Foreign investors pump N86b into Dangote Cement

    Dangote Industries had a roaring time yesterday on the Nigerian Stock Exchange (NSE), selling 410 million shares of Dangote Cement valued at N86.1 billion to some foreign investors at N210 per share.

    The transaction was crossed at off-market price of N210 in six deals.

    Mallam Garba Kurfi,  the Managing Director,  APT Securities and Funds Ltd. , told NAN that the details of the foreign investors were yet to be revealed.

    Kurfi said that the transaction was perfected at N210 against the normal market price of N222.22 per share.

    He said some foreign investors were taking position in the company due to its capacity building and high investment yield.

    Kurfi recalled that the company, in 2013, sold 1.5 percent of its 95 per cent stake in Africa’s biggest cement producer to South Africa’s Public Investment Corporation (PIC) for 289.3 million dollars.

    Consequently,  Dangote Cement became the most traded with a turnover of  417.76 million  shares valued at N87. 76 billion.

    It was followed by FBN Holdings with 61.01 million shares worth N367.53 million.  Access Bank exchanged 39.86 million shares valued at N399.59 million.

    United Bank for Africa (UBA) sold 38.43 million shares valued at N371.84 million.

    The volume of shares traded improved by 73.33 per cent as investors staked N94.05 billion on 849.60 million shares transacted in 5,602 deals.

    This was against the 490.16 million shares valued at N5.27 billion achieved in 5,558 deals.

    The All-Share Index closed upbeat, increasing by 876.62 points or 2.45 per cent to close at 36,720.62 against 35,844.00 on Monday.

    The market capitalisation, which opened at N12.353 trillion, inched N302 billion or 2.44 per cent to close at N12.655 trillion.

    Nestle recorded the highest gain to lead the gainers’ table with N21.30. It closed at N102.50 per share.

    Dangote Cement followed with a gain of N16.25  to close at N240 and Guinness appreciated by N1.50  to close at N66.55 per share.

    PZ Industries increased by N1.15  to close at N24.15. Stanbic IBTC rose by N1.09  to close at N36.99 per share.

    Forte Oil topped  the losers’ chart, shedding N4.70  to close at N57 per share.

    Okomu Oil trailed with a loss of N4 to close at N76.03 and  Lafarge Africa was down by N2.72  to close at N55 per share.

    Julius Berger dropped by N1.80  to close at N34.20.  7UP declined by N1.59  to close at N90.30 per share.

     

  • Foreign investors stake N430b on equities

    Foreign investors have increased their participation in Nigerian equities market by 60 per cent. This brings their level of holdings to over  N430 billion in the first half of the year, according to  the Nigerian Stock Exchange (NSE).

    An update on foreign portfolio transactions in the Nigerian equities showed that foreign investors were investing more in Nigerian equities than they are taking out. While Nigerian domestic investors remain the larger bloc of investors, foreign portfolio investments (FPIs) at the stock market have significantly increased in  the past three months.

    The FPI report by the NSE, showed positive net foreign inflow in the first half of the year, compared with the negative net foreign investment position in the same period last year. The six-month FPI report for the period ended June 30, 2017, obtained at the weekend indicated that total foreign transactions rose to N430.23 billion in the first half of the year compared with N269.22 billion traded in first half of last year.

    The FPI report used two key indicators-inflow and outflow, to gauge foreign investors’ mood and participation in the stock market as a barometer for the economy. Foreign portfolio investment outflow includes sales transactions or liquidation of equity portfolio investments through the stock market while inflow includes purchase transactions on the NSE.

    The NSE report is regarded as a credible gauge of foreign portfolio investments in Nigeria as it coordinates data from nearly all active investment bankers and stockbrokers.

    Total foreign inflow rose to N215.97 billion in first half 2017 as against N121.29 billion recorded in corresponding period of 2016. While outflow also increased from N147.92 billion in first half last year to N214.26 billion in first half of theis year, it represented a modest positive net FPI position of N1.71 billion in first half 2017 as against a deficit of N26.63 billion in period last year.

    The six-month report indicated that while inflow grew by 78.1 per cent over the comparable period, outflow only rose by 44.85 per cent. Foreign investors accounted for 46 per cent of total transaction value at the Exchange in first half of last year compared with 43 per cent in first half of last year.

    Total transactions in first half of the year stood at N935.26 billion compared with N624.41 billion in first half 2016. Nigerian domestic investors had accounted for N505.03 billion in first half 2017 as against N355.19 points in comparable period last year.

    Year-on-year, the report showed that foreign transactions have since 2011 consistently outperformed domestic transactions. However, domestic transactions marginally outperformed foreign transactions in 2016, accounting for 55 per cent of the total transaction volume in 2016. Also, foreign transactions have further declined by 66.34 per cent from N1. 54 billion in 2014 to N518 billion in 2016, representing about 45 per cent of total transactions last year.

    Over the 10-year period between 2007 and 2016, domestic transactions have significantly decreased by 85.43 per cent from N3.56 billion in 2007 to N634 billion in 2016.

    Month-on-month analysis indicated that total transactions at the equities market increased by 7.1 per cent from N205.61 billion recorded in May 2017 to N220.27 billion in June 2017. Domestic investors outperformed foreign investors by 7.82 per cent. Total domestic transactions increased by 7.53 per cent from N110.42 billion recorded in May 2017 to N118.74 billion in June 2017 while foreign transactions also increased by 6.66 per cent from N95.19 billion last May to N101.53 billion last June.

    Monthly foreign inflows outpaced outflows. However, foreign inflows decreased by 10.95 per cent from N73.15 billion in May 2017 to N65.93 billion in June 2017 while foreign outflows increased by 38.09 per cent from N22.04 billion last May to N35.60 billion the following month.

  • ‘I’ll bring in foreign investors to boost revenue’

    ‘I’ll bring in foreign investors to boost revenue’

    All Progressives Congress (APC) chairmanship aspirant Oladipupo Okeyomi has promised to develop Ojokoro Local Council Development Area (LCDA).
    Speaking at a briefing in his office, Okeyomi said: “Every serious government at all level should put the interest of the people first and serving the people must be considered the most important assignment.”
    He denied the allegation of possessing fake results, it a ploy to tarnish his reputation.
    He said: “My opponents failed to realise that no amount of plans or machinations can bring truth to disrepute. Everything about me is by the grace of God. So, how would you then curse what God himself has blessed.”
    He stressed the need to increase the council revenue through sports, partnership with the private sector to create jobs, and investment in some strategic areas.
    He promised to woo foreign investors to the council.
    “I have had arrangement with some international private investors to invest in the council. My government would enhance Information Technology (IT) to train youths on using internet as a source of legitimate wealth creation.
    “Provisions for the aged, disabled and widows are also part of my priorities and we have outlined various programmes on how to achieve it.
    ‘’Primary health care and primary education are other areas my administration will give adequate attention to.
    ‘’I will complement the efforts of the Lagos State Governor Akinwunmi Ambode passion to turn the state to a mega city and a better place to live and do business,’’ he added.

  • Foreign investors wary of Nigeria’s forex situation

    Foreign investors wary of Nigeria’s forex situation

    The courier and logistics industry contributes five per cent to the country’s gross domestic product (GDP). The Group Managing Director/CEO Red Star Express Plc, Sola Obabori, says with insecurity, poor state of road infrastructure, insurgency in the Northeast, and kidnappings in the Niger Delta, driving growth in the sector will remain tough even in the foreseeable future. He says the diminishing investment in the aviation sector with consequences of delays, cancellations and shutdowns all combine to further weaken the supply chain process. LUCAS AJANAKU met him. 

    What is your assessment of the courier and logistics industry in the last one year?
    The industry is managing to ride above the economic storm as it has done in previous business cycles. Because of the low entry barriers, we have over 290 registered courier companies in the country and in between the top 10 companies in the country, there is a turnover of over N100 billion yearly. Our industry oils the wheels of manufacturing, distribution and service provision across the various service sectors and it is, therefore, not immune from the economic disturbances. Nigeria has always been import-dependent for decades. Refined oil is supposed to be what we produce in sufficient quantity to cater for our local needs but we are still importing it. Most high profile manufacturers import raw materials, which will continue to put pressure on our foreign exchange requirements and for players in our industry with foreign affiliations and obligations, we have the same scenario to contend with. The year 2016 witnessed one of the most unpredictable forex situations in the country with adverse consequences on organisations and household spending, but, above all, we have managed to navigate the curves.
    Investment valued at over N300billion from 293 operators came to the industry in 2014, according to Mrs Omobola Johnson, former Communications Technology Minister. What is the situation now?
    Investors are being wary now because of the forex situation and other reasons. If you offer services today or invest today and you are not sure of being able to repatriate your profits, you will have to think twice. The news was in the public domain that some foreign airlines insisted on charging in US dollars as a response to their inability to source for forex through the banking system. However, for long term investors, some of which we are witnessing lately, there’s been a couple of new entrants in recent times which is a signal of some trust in the capacity of the country to overcome the current challenges.
    The industry is said to be contributing less than five per cent to the GDP. Why is it so and what are the steps to take to improve this?
    Quite a number of factors are responsible for this. Chief among which will be insecurity and poor state of road infrastructure. With insurgency in the Northeast, Niger Delta and pockets of kidnapping here and there, driving growth in our sector will remain tough even in the foreseeable future. The typical average in most countries in terms of contribution of the logistics industry to GDP is mostly between 8 and 16 per cent. Most of these countries are 24/7 economies as compared to a 9-5pm economy that Nigeria is. The situation here will improve when the state of road infrastructure gets better and people feel safe travelling overnight, then, there can be faster turn around times for road truckers connecting points of importation or production to points of consumption.
    In addition to that is the diminishing investment in the local aviation sector with consequences of delays, cancellations and shut downs all combine to further weaken the supply chain process. We are witnesses to the pressure being faced by that industry lately with acute shortage of foreign exchange to support their operations and maintenance obligations, let alone allow foreign investors repatriate their profits, if any. Quite a lot of intervention of the government will have to continue in this arena as a catalyst for growth.
    We hope that as the railway projects are being expanded and become more functional for movement of passengers and goods as obtainable in countries with better results, the contribution of the logistics industry should also get better in Nigeria.
    To what extent can the reform in NIPOST be a catalyst to the rebirth of the courier industry?
    We are aware of the government’s desire to separate the regulatory function from the operator’s function which has been going through some legislative process for some time. That will be a welcome development, when completed,as it will conform with global practice while presenting a levelled playing field for all and sundry. The Nigerian Broadcasting Commission (NBC), the Nigerian Communications Commission (NCC) both provide us with good examples of what has been well executed before now.
    Some of the roles of the regulator usually centre around licensing of new entrants, setting consumer protection conditions, universal service access conditions, accounting guidelines for operators and many others which in some ways are being enforced by the Courier Regulatory Department (CRD) of NIPOST and other government agencies at the moment, while the customers and the vagaries of the economy define who survives and who disappears from the marketplace.
    e-commerce is taking firm footing in the country. Is this not a threat to conventional courier business, such as Red Star?
    My response would be that the world remains in a permanent flux. As new developments occur, they come with diverse opportunities. The evolution of e-commerce is not a threat but the new face of opportunities. With the deepening of the internet access and better payment systems, both young and old can do a whole lot of buying and selling from the comfort of their homes. In advanced economies, the online sales have far overtaken the brick and mortar shops in sales volumes and revenues at lesser costs.
    Red Star is a major delivery backbone for quite a number of the large e-commerce organisations. One of our key initiatives is the ‘SME1000’, which is a project targeted at small and medium organisations who are being supported with delivery services at low costs. That helps to avoid all their concerns regarding meeting their delivery timelines while they focus on building robust trading platforms.
    Stakeholders in the industry represented by Nigerian International Air Courier Association (NIACA) and Association of Nigeria Courier Operators (ANCO) were rooting for an independent regulator for the courier industry, how would this improve the fortunes of the sector?
    As previously stated, this is the normal practice in other places. In Ghana, for example, they established the Ghana Postal and Courier Commission as far back as 2003. The functions of the Commission include promoting and encouraging the expansion of postal services for the social and economic development of Ghana; promoting an efficient system for the delivery of mails countrywide in a manner responsive to the needs of mail users; promoting fair competition among persons engaged in the provision of postal and courier services and protecting licensees and consumers from unfair conduct of other licensees, among others.
    Also, it will enhance the collaboration with sister regulatory agencies, such as those of Ghana, thereby helping to work with governments in removing some of the trade barriers and boosting trade along the West African corridor.
    The issues of dumping of mails, underpricing and outright quackery bedeviled the industry in the past. How would you rate the level of confidence level the public reposed on the industry?
    I guess you would have also read that the CRD on a continuous basis does a lot of sanitisation exercise by withdrawing licenses of erring companies and shutting down many offices of illegal courier companies in order to protect the public. The issue of quackery is not synonymous with the courier industry alone.
    Everywhere you turn, you see them – in the medical profession, in the real estate environment and so many others. The laid down procedure for would-be industry player is clear in terms of licensing fees and personnel requirements and depending on resources available, you can position your business appropriately rather than being on the wrong side of the law.
    With the appointment of a new Postmaster-General, what are the expectations by the industry, especially by those on international courier operations?
    We believe this will go a long way to help address a lot of the issues being raised. From his profile, he is a man with vast public and private sector experience and we believe he will consult widely in order to bring positive changes to our industry.
    Companies that engage in international business like yours have decried the consequences of forex impasse on their operations, can you estimate/quantify the losses recorded by the industry in the last one year?
    Well, the Central Bank of Nigeria (CBN) will be able to put a figure on the estimated impact of the dollar scarcity and the impact of the terrible erosion of the value of the naira. By the end of 2016, the dollar that exchanged for N198 to the dollar had been pushed to between N496 and N500 in the parallel market, which is where the ordinary man can source his forex for his small to medium business. In simple terms, that is more than 100 per cent devaluation and you can confirm that by checking the prices of vehicles in the car lots, the cost of tickets for international travels, the cost of foreign tuition for students and even the cost of energy, which have more than doubled in the last one year. If you have a dollar denominated loan or periodic remittances in dollars, you will be needing more than double of the naira amount you needed just about a year ago. Many of the big conglomerates have given profit warnings to the public while some have declared outright losses.
    Recently, the shareholders confirmed your appointment as GMD of Red Star Express. How has it been since then?
    My appointment was done in April 2016 and was ratified at the Annual General Meeting last August. Thus far, I will say it’s been very well and we are hopeful that we can have landmark business opportunities, despite the global and local challenges we are all witnessing in this new season. I came in with a new management team and we are geared up to deliver on our mandates.
    Let’s look inwards. How is Red Star positioning itself in the market?
    We have become more innovative with the unbundling of our activities to allow each business maximise its growth potentials. We have four business divisions focusing on the four segments of our business. We have the Express, Logistics, Freight and Support Services.
    Red Star Express operates our overnight domestic services and holds the licences of two of the world’s largest delivery companies, FedEx and TNT.
    Red Star Logistics is the haulage arm with trucking capabilities for manufacturers, importers and we run several warehouses all over the country for large and small businesses.
    Red Star Freight handles air and sea cargoes while Red Star Support Services is the outsourcing arm of the group, with several premium services to virtually all the financial institutions in the country.
    Red Star will continue to seek ways of strengthening the fundamentals, supporting export expansion opportunities for Nigerian businesses into over 214 countries served by our international networks and ensuring value is not only preserved but enhanced for our investors on a long-term basis.

  • ‘Why foreign investors shun power sector’

    Foreign investors have rejected the invitation of the Federal Government to invest in the  power sector because of its low prospects.

    This happening as the country is seeking ways to invest $20billion yearly in the sector over the next five years  to generate 20,000 megawatts (Mw) of electricity to boost power supply.

    It was gathered that the investors, mainly from United States, China, Korea, United Kingdom, Germany and other countries from Europe, are seeing Nigeria as an investment risk nation. As a result of this,  they not ready to invest in the country.

    A source, who pleaded anonymity, said many investors, who attended the recent World Bank conference in Washington, United States, discussed the possibilities of investing in the sector and concluded that it was not safe.

    The source, a management staff of one of the eleven power distribution companies (DisCos) and participant at the conference, said foreign investors saw the country’s electricity industry as lacking prospects.

    The source said: “The prospects of recouping money spent on investment in the power industry is increasingly dimmed by factors such as pipeline vandalism, inability of the power generation companies (GenCos) to access gas for production, poor supply and collections rates.’’

    Chief Executive Officer, Mojec International Limited, Ms Chantelle Abdul, said foreign investors would have loved to invest in the power industry were it not its lack of investible prospects.

    She said: “The sector is one of the most attractive aspects of the economy.  I just came back from Washington, and investors there said the sector lacked investible propositions. The investors, like many others, considered parameters such as patronage, yielding point,  profit margin and others, and concluded they may not be able to recover their investments as at when due. For millions of dollars invested at the top of the chain, there were no commensurate collections at the bottom chain.’’

    She said investors were aware of the potential in the sector, but are not ready to invest, until the industry overcame its many fundamental problems.

    Nigeria, Africa’s largest economy, hardly generates 5000Mw of electricity. Peak generation hovers around 2000Mw and 4000Mw.

    This development has led to the near extinction of the manufacturing sector as companies that could not cope with the crushing cost of generating power to run their plants have either closed shops or relocated to neighbouring West African states.

  • Foreign investors renew interest in economy with $327m trades

    Foreign investors renew interest in economy with $327m trades

    •NBS Q2 GDP data out tomorrow

    The currency market registered $327 million worth of trades yesterday, about six times more than its usual volume, the Central Bank of Nigeria (CBN) has said.

    This is coming as the Nigeria Bureau of Statistics (NBS) is set to release the Gross Domestic Product (GDP) and foreign trade estimates for the second quarter tomorrow. Also expected to be out are unemployment and underemployment watch, July 2016 Consumer Price Index and Inflation, Capital Importation and Foreign Direct Investment (FDI) report.

    Of these, focus will mostly be on the GDP report and July 2016 inflation.

    The transaction from investors included a single $270 million deal at N345 per dollar, by foreign investors buying local currency bonds, Bola Onadele, the managing director of FMDQ OTC Securities Exchange, told Reuters.  Other transactions were carried out from N314.50 to N317.34 per dollar.

    He explained that average trading is around $50 million a day on normal days and might reach $100 million on days the CBN intervenes in the currency market.

    Traders also said the CBN sold an undisclosed amount of dollars, close to the end of market session, to help prop up the naira. The currency closed at N305.50, around the level where it’s closed for the past week.

    Yesterday’s surge in trading came after the CBN said it will offer N212.85 billion in treasury bills maturing between 91 days and one year tomorrow. The debt would be sold tomorrow.

    The bank has been selling short-dated open market bills at yields as high as 18 per cent in an effort to attract offshore funds, most of who fled Nigeria’s bond and equity markets during a financial crisis that began when oil prices plunged.

    The Managing Director, Afrinvest Nigeria Limited, Ike Chioke said the downtrend in growth of the economy which began in late 2014 due to falling oil prices, has persisted into this year as foreign exchange (forex) market illiquidity, downtime in power supply and depressed real consumer income continue to weigh on productivity, investment and consumer spending.

    “Developments in the forex market, which has seen the naira depreciate significantly against a host of foreign currencies, as well as increases in power and fuel tariffs have had passed through on consumer prices with Inflation rate in June 2016 far above the CBN’s allowable band of six to nine per cent and an eight – year high of 16.5 per cent from 9.6 per cent in January.

    Ahead of tomorrow’s data release, Chioke said in the first quarter, GDP contracted 0.4 per cent Year-on-Year (Y-o-Y) as both oil (-1.9 per cent) and non-oil (-0.2 per cent) sectors contracted. The services sector, which held aggregate growth all through last year as the industrial sector entered a recession, recorded its worst quarterly performance with a minimal 0.8 per cent Y-o-Y expansion relative to 4.7 per cent Y-o-Y growth in similar period of 2015, while industrial sector contracted 5.5 per cent Y-o-Y and agricultural sector grew 3.1 per cent Y-o-Y.

    “We expect a further rise in inflation rate for June 2016 driven mainly by increases in both the food sub-index (on account of higher domestic and imported food prices) and the core sub-index (driven by higher energy prices) within the period.

    “As a result we forecast M-o-M inflation growth in July at 1.6 per cent moderation from 1.7 per cent in June, implying a 17.6 per cent headline Inflation rate and 1.1 percentage points increase from June 2016,” he said.

  • Expert calls for enabling environment to attract foreign investors

    A financial expert has urged the Federal Government to create an enabling environment and stable policy to attract foreign investors.

    The Chief Executive Officer, SOFUNIX Investment and Communications Ltd., Lagos, Mr Sola Oni, made the plea in an interview with the News Agency of Nigeria (NAN) on Tuesday in Lagos.

    Oni advised government to put in place an enabling environment that would also assist manufacturers to grow the nation’s Gross Domestic Product (GDP).

    According to him, if manufacturers operate optimally, there will be employment opportunities and this will boost the GDP.

    “If we have enabling environment and stable policy, foreign investors would bring hard currencies and the exchange rate would be moderated positively.

    “The way forward is for the Federal Government to create an enabling environment for manufacturers to operate effectively.

    “They (manufacturers) are crying under the yoke of high exchange rate and inability to source dollars for raw materials,’’ he told NAN.

    Oni, who is also a stockbroker, said that there was no magic to strengthen the naira and ensure availability of dollars, when the country had been import -dependent.

    He attributed the downward trend at the equities market to investors’ obligations such as selling shares to pay school fees and hike in interest rate.

    Oni said that unimpressive corporate results released by some companies also contributed to the market downward trend.

    “Corporate results are not exciting because of the high cost of doing business and low return on investment, among others,’’ he said.

    Oni said that most speculators preferred fixed income securities to take advantage of the high interest rate.

    “Foreign portfolio investors are still on the sidelines as they are watching very closely the implications of the new flexible exchange rate recently introduced by the Federal Government,’’ he said.

    An analysis of the market indices for last week showed that the All-Share Index lost 584.07 points or 2.09 per cent to close at 27,425.86 compared with 28,009.93 posted in the previous week.

    Also, the market capitalisation, which opened at N9.620 trillion shed N201 billion or 2.09 per cent to close at N9.419 trillion due to price depreciation.

    NAN reports that 22 equities appreciated in prices, lower than 35 equities that recorded price growth in the preceding week.

    Seplat topped the losers’ chart in percentage terms by 18.54 per cent or N55.23 to close at N242.60 per share.

    Fidelity Bank trailed with a loss of 14.63 per cent or 18k to close at N1.05, while Diamond Bank shed 13.84 per cent or 22k to close at N1.37 per share.

    On the other hand, Total led the gainers’ table in percentage terms by 33.34 per cent or N60.52 to close at N242.02 per share.

    Airline Services and Logistics followed with a gain of 22.94 per cent or 39k to close at N2.09 while Eterna appreciated by 14.47 per cent or 34k to close at N2.69 per share.

    A turnover of 1.19 billion shares worth N13.03 billion were exchanged by investors in 18,548 deals last week.

    This is against the 1.87 billion shares valued at N16.33 billion traded by investors in 21,584 deals in the corresponding week.

    The Financial Services Industry led the activity chart in volume terms by 882.91 million shares valued at N6.53 billion traded in 10,186 deals.

    The Conglomerates sector followed with 89.43 million shares worth N159.46 million achieved in 890 deals.

    The third place was occupied by the Consumer Goods Industry with a turnover of 75.38 million shares worth N2.12 billion transacted in 3,635 deals.

  • Ambode: activities of local, foreign investors crucial for growth

    Ambode: activities of local, foreign investors crucial for growth

    Lagos State Governor Akinwunmi Ambode said yesterday that the activities of local and foreign investors were key indicators that would trigger economic growth and enhance the emerging opportunities in the socio-economic landscape.

    The governor, who spoke at the City Hall, Lagos, venue of the 2016 Stakeholders Forum organised by the Office of the Special Adviser to the Governor on Central Business District (CBD), hailed the enthusiasm of investors and entrepreneurs to put their money in worthwhile investments.

    He said his administration is providing opportunities to investors and entrepreneurs in the emerging economic profile of the Lagos Mega City in sectors of real estate development, marine transportation, commercial and business activities.

    Governor Ambode, who was represented by the Secretary to the State Government (SSG), Mr. Tunji Bello, said the focus of his administration since inception was to put in place structures that would sustain a 24/7 economy in the “New Lagos”, adding that despite the global economic challenges, “we have ensured that the business districts function to move the wheel of economic growth in the Lagos Mega City”.

    The Special Adviser to the Governor on CBD, Mr. Agboola Dabiri, reiterated the readiness of the government to return the lost glory of Lagos Island by bringing back corporate organisations and companies to the district as it was in the 80s.

    He said the government had committed resources in re-branding, painting, beautification and general uplift of the axis to ensure it was conducive for businesses to thrive.

     

  • FOREIGNERS WON’T RUN NIGERIA’S REFINERIES, SAYS KACHIKWU

    FOREIGNERS WON’T RUN NIGERIA’S REFINERIES, SAYS KACHIKWU

    •We won’t sell refineries  •Kachikwu apologises again for fuel scarcity, says it’s easing off

    The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who is also the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), has stated that foreign investors are not going to run the refineries in the country.

    They are only going to provide funds and technical support, he said.

    He declared that he would never give up in the discharge of his duties, while urging Nigerians to give change the opportunity to work, while assuring that the refineries would not be sold.

    Kachikwu also apologised again to Nigerians on fuel scarcity, saying it had started easing off in Abuja, Lagos and some other cities.

    He confirmed that Port Harcourt and Warri refineries had started refining, while Kaduna refinery had been receiving crude oil and would be back in production (refining), within one week to ten days.

    The petroleum minister stated these yesterday at the Port Harcourt Refining Company Limited (PHRC) in Rivers State, a subsidiary of the NNPC, shortly after re-commissioning of the crude line of the PHRC.

    Kachikwu was received by the Managing Director of PHRC, Dr. Bafred Enjugu, in company with other officials of the company. Enjugu stressed that the refineries (two – old and new – in Port Harcourt, but one currently working and one each in Warri, Delta State and Kaduna) had come up, because crude oil was now available, and gave an assurance that the refineries would no longer come down, unless by circumstances beyond their control.

    The minister of state for petroleum resources hinted that the refineries currently had capacity of 12 million litres of refined petroleum products per day, but could go up to 20 million litres per day, when all the refineries would be working optimally, but he put the national total consumption at 45 million litres of petroleum products per day.

    Kachikwu said: “I have always believed in the capacity of our people to deliver and I have always encouraged them. Port Harcourt and Warri refineries are back in production. Kaduna today is receiving crude and should be back in production, sometimes very soon, within one week to ten days. It is something of joy, because one is taking a lot of attacks on this thing, but these are problems that existed before we came. These are what we set out to correct and we are correcting them one by one.

    “I thank Nigerians for their patience and I urge them to remain resilient and support what we are doing, because it is the only way to change the system. I do not focus on the attacks and all kinds of publications. I focus on the results, which are coming out one by one.

    “We are not inviting foreign partners to take over the refineries. We do not have the funds. Even now that they are working, they are probably working at about 60 per cent or less below capacity. We need to upgrade the refineries and get them to a level where they will be at least 90 per cent performance, which requires money. Total investment for that is in the excess of $700 million and we do not have it. Let us be honest about it.”

    He added, “What we have now done is to find a very creative way of bringing in investors, who will work with our teams who have skills, reactivate and operate the facilities in these refineries and help us to provide technical support and they will be paid through the flow out of the refined products, over a period of time, while we have also changed the refining model, in such a way that refineries pay for their crude into the federation account, whatever they produce will be sold to the PPMC and the marketers themselves, for which we should be praised actually.

    “The feat recorded will not end fuel importation. Even if the refineries are working at 100 per cent installed capacity, they will provide only 20 million litres daily. Our daily consumption is about 45 million litres. If the three refineries are now functioning, we will have about 12 million litres, far below the 45 million litres. The advantage they bring is distribution. From Port Harcourt refinery, we can distribute to the East. From the Warri refinery, you can distribute to the West. From the Kaduna refinery in the North, you can distribute to the farther areas of the North.”

    In addressing this, Kachikwu observed that “It does not solve the problem completely, but two things will happen. When the upgrade and repairs, led by the foreign investors, with our joint team, are concluded, our capacity will move from about 50 per cent to about 90 per cent, resulting in movement from 12 million to slightly excess of 20 million litres production per day. The co-located refineries that we have also advertised, which will be private sector-led, by the time they are attained in about two years, there will be excess of 750,000 barrels refined petroleum production capacity per day. Our hope is that by 2018, fuel importation will be reduced by at least 60 per cent, because of the upgrade that would have taken place. By 2019, when the co-located refineries are in place, we will actually be exiting importation and begin to export refined petroleum products. That is the strategic way. That is what we are working on.”

    The minister of state for petroleum resources also stated that to secure the pipelines would be a collective responsibility.

    He said: “Securing our pipelines from vandalism is a call to all Nigerians to secure their own assets. We must ensure that the pipelines are protected. Federal Government cannot do it alone. Military has done a yeoman’s job, in terms of supporting us. From the environmental point of view, we must also ensure that we provide things in the communities, that will shift the people’s attention from pipeline vandalism.”

    Kachikwu also thanked God for making the day possible, in spite of all the challenges, while lauding President Muhammadu Buhari, who he said through all the trying times, continued to be with the minister and his team, as well as encouraging them to keep going.

    He said: “I apologise to Nigerians, who have suffered all this time, because of products’ supply, especially those in the North, who bearing a big brunt of this (fuel scarcity), particularly Abuja and Lagos, who are the key consumer cities; Abuja, Lagos and Kano, but we are beginning to recognise now that Lagos is easing off and Abuja is doing the same thing. Once Kaduna begins to produce, the North will see a lot of improvement. Over and above that, we are putting long term policies in place to ensure that while smaller marketers go out and do their stuff, we can then be the key suppliers for the rest of the country.  I told you I will never give up. We have signed the advertisements for investors to come in. There is no confusion about what they are coming to do.

    “We owe Nigerians the duty to ensure that the refineries are working. We cannot give up. I visited a refinery in Cote d’Ivoire, a smaller refinery. One of the things I will hope is to take some of the leadership team to Cote d’Ivoire, spend some time and see the processes that are there and they are almost 100 percent Ivorians-led. So, if they can, we started first and we have the larger profile in terms of refining. So, we will like to see us do the same thing. We will be there and bring in some of that into our system.”

    Also speaking at the commissioning of the multibillion naira crude oil underground pipe line from Escravos to Warri and Port Harcourt, which is expected to deliver crude directly to the refineries rather than the use of marine vessels, he emphasized that fuel queues will soon be a thing of the past in the next one week.

    He thanks the president and said, “This underground pipeline will check sabotage and I can tell you the sufferings of people will soon be a thing of the past.”

    He lauded the contractor, Ocean Marine Solution, chaired by Capt. Hosa Okunbo, saying that despite the fact that the contractor has not been paid before embarking on the job, they did a good job that will help solve the problems confronting the oil sector.

    Capt. Okunbo who attributed the completion of the multi-billion naira project to President Buhari’s determination to bring total reform in the oil and gas sector noted that this was the first time in the last ten years that crude will be delivered to the Warri and Port Harcourt refineries through pipe-lines.

    According to Okunbo, “As I speak to you there is no contract in place because in our industry there is something you call proof of concept and Q and pay. In our company we believe that everything is possible when you have the will, there must be a way and that is what we have achieved today.”

    He lauded the community because they “are able to cooperate with us. We used carrot and stick approach and our security surveillance and also the contract of actually doing the job and replacing the contract. It was very tedious and sometime we almost got killed and threat to our lives which inform why you see all these security around us.”

     

  • MAN seeks foreign investors for growth

    MAN seeks foreign investors for growth

    The Manufacturers Association of Nigeria (MAN) has called for massive investment in the manufacturing sector to take the sector to the next level.

    MAN is set to collaborate with more foreign investors to actualise the dream.

    Its President, Dr Frank Jacobs said the expected investment should come from two fronts, adding that the investment will assist local investors to expand their existing businesses through the various policies of the Central Bank of Nigeria (CBN) and Bank of Industry (BoI).

    He said MAN is collaborating with foreign investors who will want to take advantage of new government policies and the nation’s investment climate to invest in the country, stressing that members of the association are ready to move into new areas of manufacturing through such partnership.

    Jacobs said the country is full of business opportunities that investors can tap into to offset the current economic crunch in the country.

    He said MAN’s experience last year was the most difficult due to the fact that government attention was not properly given to local manufacturers as a result of electioneering activities.

    He urged the government to focus on the manufacturing sector this year to improve the nation’s economy stressing that members of the association would work with government to boost the real sector/manufacturing and agriculture.

    He added that the nation has a lot of unexploited business prospect ranging from solid minerals exploitation to agro-allied and others to tap into, to create employment opportunities for Nigerians.

    On the new electricity tariff, he said the implementation of the new tariff would force some manufacturers out of business, stressing that not all the manufacturers can afford to set up a power plant, as many today are using power from the grid for production together with generators.

    The MAN boss said the situation is appalling for manufacturers as the 45 per cent increase in tariff translates to the closure of the few existing manufacturing outfits as many them have even been forced out of business in the last 10 years, due to inadequate power supply.

    He said despite the removal of fixed charges by the Nigeria Electricity Regulatory Commission (NERC), manufacturers are still groaning under huge cost of accessing electricity for production activities.

    He called on NERC to review the new tariff to save the consumers and the Organised Private Sector (OPS) from unnecessary high charges.

    The manufacturers’boss said the new tariff would result in loss of jobs by many Nigerians as many companies would be forced out of businesses when the new tariff is implemented.