The Nation Newspaper

Tag: investors

  • Why Nigeria’s power is not attractive to investors, by Nnaji

    Why Nigeria’s power is not attractive to investors, by Nnaji

    Harsh operational environment and regulatory challenges are the chief reasons why Nigeria’s power sector is not attractive to investors, former Power Minister Barth Nnaji, said yesterday.

    Nnaji, Chairman of Geometric Power Limited, was the keynote speaker at the Natural Gas Business Forum organised by the Nigerian Gas Association (NGA) in Lagos yesterday. The conference was with the theme: ‘Embracing new realities: Resetting our gas to power industry.’

    He said the Federal Government had not addressed major issues that would guarantee return on investment, citing non cost-reflective tariff as one.

    He said a power summit in Copenhagen, which attracted key industry operators and investors from across the world, the participants at a special session on Nigeria, said they were not willing to make investment in Nigeria’s power sector, citing several challenges.

    According to Nnaji, among the fears expressed by the international investors include lack of cost reflective tariff, gas supply constraints, poor transmission network, non-credit worthiness of distribution companies (DisCos) over leveraged power assets, value chain misalignment and lack of will to enforce agreements.

    Evaluating the issues, the former minister said many projects had been stalled due to finance constraints and tariff issues. He said tariff must reflect currency movement. “There must be attachment of tariff to currency movements and adjustments must be done, and tariff review will help DisCos to recover costs and pay for gas,” he said.

    He also noted that lack of industry deregulation and absence of proper legislation had discouraged investment because it is only deregulation that would allow investors to consider investment in gas production and transportation.

    Nnaji said government does not have the funds to put the transmission network in proper shape. He advised government to consider concessioning the transmission network, which he said should be broken into segments but properly interconnected, adding that the DisCos were facing serious challenges because the technical aspect of the system was still bad leading to 50 per cent of inefficiency in the sector.

    According to him, the investors in the distribution sector borrowed money to buy the assets but did not invest in other supporting infrastructure to make the chain function effectively. “We can reduce losses by investing in technical areas and also there is lack of commercial knowledge among government functionaries on how to do agreement, and again the country lacks the will to enforce agreements,” he said.

    The former Minister of Power also called for the overhaul of the country’s transmission network to address energy leakages. The overhaul would help to boost effective energy evacuation to distribution companies. According to him, transmission network is a major challenge as wheeling power out to distribution companies remains a constraint.

    He urged the government to ensure stable transmission infrastructure before expanding the national electricity generation capacity to 10,000 megawatts (mw). Building generation capacity on weak transmission infrastructure would result in total collapse or destruction of the whole structure. Currently, power generation oscillates between 2,500Mw and 3,500Mw, he said, adding that most of the generated power could not be evacuated due to weak transmission lines.

  • Investors stake N120m to stimulate abattoir business

    Investors stake N120m to stimulate abattoir business

    There are hopes that the N120 million Semi-Mechanised Modern Abattoir in Ashanti Barracks in  Apapa, Lagos, will revive a business line crippled by years of mismanagement. The facility, bankrolled  by private investors with the backing of the Supply and Transport Unit of the Nigerian Army will help in processing over 60 million cows consumed nationwide annually. COLLINS NWEZE writes that the project will not only aid the government’s diversification policy, but save millions of dollars in foreign exchange used by airlines, hoteliers among others, in importing meat for their operations.

    The global meat market is worth $6 billion, and Nigeria has little or no stake in it. But that will soon change with new investments coming from the private sector to bring the business back to life.

    The investment of N120 million in Semi-Mechanised Modern Abattoir by the Ashanti Modern Abattoir Operators, Apapa Lagos, seems a great start in a long journey. The abattoir, which has been commissioned, and ready for takeoff,

    The semi-mechanised modern abattoir is situated at Ashanti Barracks, in Apapa, Lagos. The abattoir is operated under the chairmanship of Alhaji Abudulahi Kotangora, who expressed his satisfaction for the facilities built at the abattoir. “It is a masterpiece and our own contribution to wealth and wellbeing of Lagosians,” he said.

    General Manager, Semi-Mechanised Ashanti Modern Abattoir Operators, Alhaji Aminu Gwadabe explained how the business will run: “The facility received between 200 and 300 cows for processing daily. Once a cow passes any of the two points of no return after the vetenary doctor has screened the cows. Such cow will be butchered and processed immediately. There is running water all over the facility and the floor is tilled, with drainage facility also available to achieve clean processing of the meat”.

    He disclosed that the slaughtering facility can kill up to 500 cows at a time, and  that the cows pass through a separate gate, different from one passed by humans. “With separate gates for humans and the cows, the meat does have contact with the people for the sake of hygiene, food safety and clean product and eliminate contamination,” he said.

    Explaining further, he said the meat is taking out of the facility with galvanized wheelbarrows to the loading beam and finally to the Eko Meat Vans to be taken to different parts of the state. “We expect a bigger meat market in the future, as we are already discussing with the military authority  to achieve that objective,” he said.

    He said the facility is expected to meet the meat demands in Apapa, Ijora, Tego, Boundary, Ijora Olopa, Iganmu, Lagos Island, Dockyard, Idi-Alaba, among other Lagos markets. “The Eko Meat Vans will supply meat from the facility to these markets. This project remains a partnership between the Nigerian Army and private investors with N120 million invested. The Supply and Transport Unit of the Army provided the land and will get monthly rent payment, while the investors provided the funding,” he said.

    Gwadabe, said that abattoir business runs in his family line and he will be bringing his several years of experience to make positive impact in the business.

    Gwadabe explained that his motivation for the job came because of his desire to improve the industry status. “What drives me really, is that overtime, I have seen the slaughtering facilities in Nigeria, the health of the butchers, who happened to be my own people have always been neglected by the successive government. So, when you enter to those abattoir areas, it is very dirty, the butchers are always getting sick, no facility at all. I believe this is the time for me, given the opportunity provided by the military, to partner with my brothers to have this facility,” he said.

    He explained that instead of having the traditional concept of abattoir, there was need to do something better and suits the needs of the people.  “Given our exposure and standards, there is need for something like this to scale up big production, to diversify the economy into agricultural activities. This is still part of agriculture, to scale up food safety, because even the health of the meat being produced in the old abattoirs is not up to standard. The health of the people working there, given the state of the environment, is also threatened,” he said.

    “First and foremost, I am from the family of herdsmen and butchers in Katongora, Niger State. Presently, my senior brother is the Seriki Fulani Butchers, in Kontagora, Niger State. So, I have been involved since when I was a kid, and up till the time I finished university, pending when I started working. I read Economics at Bayero University, Kano. I was a former banker with 15 years of experience in the industry and resigned as Foreign Exchange Manager for my former bank,” he said.

    Gwadabe said the dirty state of the nearby abattoir facility in the Ashanti Barracks prompted him to do something different, in the interest of Lagosians. “The whole environment where the meat is produced in the old abattoir is sickening. The environment is dirty, you can see motor tyres are being used for boiling water used for processing the meat. The meat is thereafter cut in a very dirty table. The environment where the meat is prepared is not hygienic and we needed to give the people a better choice and create opportunity for them to get value for their money,” he stated.

    A visit to the old abattoir within the Ashanti Barracks was an eye sore and confirmed Gwadabe’s fears.  From the shanty structures housing the butchers to dirty tables, and plastics scattered all over the place, it was indeed degrading for both the butchers and customers.

    There was also a thick black smoke enveloping the entire neighbourhood, with mud mixed with animal blood. The animal blood and the entire waste generated in the environment are not being properly disposed because of the absence of drainage facility.

    Speaking further, he said that there is over $6 billion turnover beef market in the world, and Nigeria is not even on the list which countries like Angola, Mozambique, were included.

    “The biggest producer of beef in the world is America, followed by Brazil and Russia, put together they produce about 50 per cent of the world’s meat production. Up till now, Nigeria still imports meat. Go to supermarket, shopping malls, you will see imported meats. There is  need no need to import with facility like this. Instead of hotels and airlines importing their meats, we believe this facility will serve the standard they are looking for,” he said.

    One of the facilitators of the project, Gen. Sule Said, the scheme came as a result of the people demanding for better abattoir services and cleaner meat production to promote better health.

    “The project is timely, and is in direct response to the need and requests of the people. It will help to make people realize their choice,” he said.

    Resident at the Ashanti Barracks, Aminu Abubakar,  said the project was the first time the people are seeing an abattoir, that is neat and well situated. “It is a nice project by all standards and should be supported by the government and the people for it to succeed,” he said.

    An investor in the project, Gadamosi Muritala, wants government to re-engineer a system that supports building of modern abattoirs in Army Barracks. He said the Nigerian Army has seen the business vision, and believes that the project should be replicated across different barracks in the country.

    Project engineer, Abdul Rasheed, said there are hosting machines, cradles and that cylinders will be used instead of tyres. “There are running water taps all over the site. There is also a drainage that channels the animal blood to the cannel. And hat fulfills a major requirement by government in building modern abattoirs,” he said. He expressed happiness that more jobs will be created through the project.

    Gwadabe said the project will create jobs, generate foreign exchange for the country and also save millions used in importing meat from abroad.

    “At full operation, we will be looking at about 3,000 workers all over the slaughtering facility, which will include van drivers, , loading beams, processing labourers, the toilet attendants among others. The Lagos State Government has woken up to its responsibility. The state has the largest population in terms of food safety. They have come out with criteria on how slaughtering houses should be constructed, and how they should be modernised. The edifice you have seen is the proto-design of the Ministry of Agriculture, Lagos State Government,” he said.

    Continuing, he said: “Before you can build any abattoir in Lagos State, one must be able to obtain the proto-design from the state government and that is the design we have exactly put here. We have gotten a very good support, as of now, our approval is even before the Executive Governor of Lagos State, for them to approve, although we have gotten the necessary papers for our operations.  The relationship with the Lagos State government is also very fantastic, and we have also invested in meat safety and things like this, is what they will continue to support”.

  • Expert to Labour: show understanding to investors

    The Chairman of Obijackson Group, indigenous oil and gas conglomerate, Dr. Ernest Azudialu, has advised labour organisations in Nigeria to show understanding to firms’ owners in theri dealings.

    He spoke at an interaction session with reporters in Lagos when the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Lagos branch, planned to picket the company.

    The Lagos PENGASSAN wanted to picket the firm when its members in Neconde Energy Limited, the exploration and production (E&P) arm of the Obijackson Group, demanded  the transfer of their benefits and review of severance benefits to match those of multinational oil firms, such as Shell and ExxonMobil, following the relocation of the head office of Neconde to Warri from Lagos.

    Neconde is one of the 12 subsidiaries in the Group and is the operator of the Oil Mining Lease (OML) 42 located in Delta State. To make the office and workers to be close to their operational area, the head office of the company was moved to Warri, a development which informed the demands of Neconde workers.

    Azudialu urged the labour to consider firms and the prevailing challenges in the sector and the economy. According to him, the management of Neconde, despite the challenges it faced, ensured that salaries and benefits were paid, therefore, it would be unfair to stifle private firms that borrowed money from banks to create jobs for Nigeria and force them out of business.

    He said: ‘’We battled for the operationship OML 42 with our partner, the Nigerian Petroleum Development Company (NPDC) – an arm of Nigerian National Petroleum Corporation (NNPC). Since we bought Shell’s stakes in the oil field in 2012, the battle for operatorship lasted till this year. We were confirmed the operator of the asset in March.

    “As we were about coming out from operatorship battle, the oil price collapsed. At a point, we sold oil at $29 per barrel. Amid fallen oil price, militants blew up the Forcados pipeline, which is the only means of transporting oil from the fields to the terminal on February 13, 2016. With this, the output from the asset estimated to produce 100,000 barrels per day (bpd) at the time of purchase dropped to 15,000bpd and at a point, production dropped to zero.

    “We were lifting our own share of the production with barges just to be able to pay our workers. Therefore, it is not fair to use a national union to bring down a private company. It is a wrong signal to any investor whether foreign or indigenous. The government is wooing investors to come to Nigeria and invest in order to create jobs, so labour should not frustrate this initiative.

    “As I speak with you, the $558million we borrowed from Nigerian banks and other international finance firms to acquire the asset have not been repaid in its entirety and we took another loan, which is almost the same amount, to repair the facilities and we are paying interests on these loans.

    Neconde Energy Managing Director, Frank Edozie, corroborated Azudialu. He said despite the challenges the firm faced from the time Shell’s stakes in the oil field were bought in 2012, it had placed the welfare of its staff a priority.

    He said at the time of purchase the potential production from the asset was 100,000 bpd but on completion of the acquisition, it fell to about 52,000 bpd. Following the long battle for operatorship, attacks on oil facility, especially the Forcados pipeline, production dropped to zero.

    “We produce only 15,000 bpd and we lift the oil with barges to the export terminal just to ensure that our staff salaries are paid. Our workforce has remained a key factor in the evolution of Neconde, and their well-being remains important to us. We are a people-centred organisation, so the value we place on employees is not just because we know that our continued existence is dependent on them, but mainly because every human being deserves a good life, and should be treated fairly.

    “For instance, a component of our strategic goal for the year is to achieve an estimate of 70,000bpd. This has led us to develop “barged production” as an alternative to crude evacuation using the Trans Forcados Pipeline which has been out of service since February 13, 2016. We have also undertaken some strategic steps, such as rehabilitation of Batan and Odidi Flow Stations, to enable the achievement of our targeted peak gross production rate, revamping of Jones Creek and Egwa Fields for workover of existing wells and development of other infrastructure which includes refurbishing a gas Central Processing Facility (CPF) in Odidi as well as commencement of re-entry of Odidi, Jones Creek fields Egwa 1 & 2,” he added

  • Time out!

    •At last, FG withdraws would-be refinery investors’ licences 10 years after

    With nothing to show more than 10 years after handing out the first batch of refinery licences to would-be investors, the Federal Government may have settled on wielding the big stick. At the sidelines of the just-concluded Offshore Technology Conference (OTC) in Texas, United States, Minister of State for Petroleum Resources, Ibe Kachikwu, stated that he had directed the Department of Petroleum Resources (DPR) to ensure the withdrawal of the expired licences immediately. In all, some 25 out of a total of 32 licences said to have exceeded the two-year grace given them by the agency to commence the production of petroleum products are said to be affected.

    While this latest twist was expected, playing the Pontius Pilate as the Federal Government is wont to do in this instance is, quite frankly, opportunistic. To start with, if we understood the business of refining crude petroleum to be a high-tech, highly capital intensive affair, the all-comers affair under which entities that would ordinarily not have emerged as serious contenders in the fuel marketing chain were awarded licences to build refineries, would pass for unspeakable.

    While that represents one side of the matter, the other side is that the Federal Government not only went to sleep after farming out the licences, it also failed to take into consideration the concerns of the hitherto knowledgeable players in the industry – a factor largely blamed for their decision to stay clear.

    Today, we must admit that the terrains have changed considerably from what it was some 10 years ago. One indication is that the issue of cost recovery and the debate on subsidy that it spawned – a major pillar of liberalisation – is certainly far less acrimonious than it was 10 years ago. For, as painful as the last fuel price hike was, a consensus that somewhat emerged was that the old regime of subsidy and its associated corruption is neither sustainable nor desirable any longer.

    That Dangote refinery is pushing aggressively towards the realisation of its 650,000 barrels per day (bpd) refinery has since shifted the debate from whether it is doable to one of how to get it done. This is where the failure to turn the sod would appear to suggest that the licencees have a far lot more to learn about the business than they are willing to admit. We therefore think the Federal Government is right to seek to close the chapter. Part of that would of course mean pushing more aggressively to bring serious investors on board.

    That is why we welcome the announcement by Kachikwu of the decision by Agip to build a 150,000 bpd refinery in Port Harcourt. That, were it to happen, would be a major boost not just to the current efforts towards local sufficiency in refined products but also in the area of deepening the government’s liberalisation efforts. Considering that the decision is strictly a business one, we would have expected the announcement to have come from Agip rather than the minister. All the same, Nigerians cannot wait to see it happen.

    Even at that, nothing in the signal by Agip makes the process a done deal. Indeed, if there is lesson that the matter of botched licences has taught, it is that nothing can be taken for granted.  Government’s responsibility is to continually engage the would-be investors until the final investment decisions are made. It is about time Nigeria began to harness its vast oil reserves and endowment in natural harbors to become a global leader in refining.

  • Zenith Bank notifies investors of $500m Notes Issuance

    Zenith Bank notifies investors of $500m Notes Issuance

    Zenith Bank Plc has notified investors of the $500 million second tranche Global Medium Term Note Programme.

    The lender had earlier in 2014, established $1 billion Global Medium Term Note Programme and subsequently raised $500 million under the first tranche of Notes issued under the programme.

    Zenith Bank Company Secretary, Michael Otu, said the bank now intends to revalidate the programme and raise up to $500 million under the second tranche of notes that will be issued under the programme.

    “The first Tranche Notes has been listed and admitted to trading on the Irish Stock Exchange (ISE) and it is intended that the second tranche notes will also be listed on the ISE and admitted to trading on its regulated market.

    “As was done with the first tranche notes, the bank intends to issue the second tranche notes directly but will retain the flexibility to issue through an offshore special purpose vehicle where market conditions require and allow for same,” he said in a statement.

    The bank, he said, intends to utilize the net proceeds of the second tranche notes for its general banking purposes. The net proceeds from the issue of the second tranche notes will be paid into the bank’s foreign currency domiciliary account and may be converted into naira or retained in foreign currency.

    “The bank does not intend to obtain a certificate of capital importation (CCI) in respect of the proceeds of the notes that are not converted into naira as a CCI is only issued in respect of capital imported into Nigeria and converted into naira,” he stated.

    Therefore, the bank will make principal repayment and interest payments on the notes from its foreign currency reserves as it will not be able to obtain access to the Nigerian foreign exchange market for the purpose of making such payments.

    However, in the event that the bank does not have sufficient foreign currency reserves to meet the principal and interest payments due on the Notes, the bank would be required to obtain the approval of the Central Bank of Nigeria (CBN) to enable it to access the official foreign exchange market.

  • Investors scramble for banks’ shares

    •Equities rally N157b gain

    Investors were all out for banking stocks last week as Nigerian equities sustained all-session bullish rally to reach their highest index point in recent period. Benchmark indices at the Nigerian Stock Exchange (NSE) showed week-on-week gain of 1.85 per cent at the equities market, equivalent to a net capital gain of N157 billion in the four-day trading week.
    The recovery at the stock market was evidently driven by a week-long scramble for banking stocks, which turned the banking sector into a seller’s market with most transactions closing on premium. The NSE Banking Index, which tracks the banking sector, recorded average week-on-week gain of 3.64 per cent, almost a double of the average return at the stock market.
    Banking stocks dominated the activities chart with two of the most capitalised banks-Zenith Bank International and FBN Holdings, accounting for 25 per cent and 30.4 per cent of the total turnover volume and value respectively. The Nation had reported considerable improvement in banks’ corporate earnings in the first quarter of this year, which many analysts believed was the major factor for the renewed investors’ appetite for banks’ shares.
    With nearly three gainers for every loser, aggregate market value of all quoted equities rose from the week’s opening value of N8.913 trillion to close the week at N9.069 trillion, an increase of 1.75 per cent. The All Share Index (ASI)-the benchmark index that tracks prices at the Exchange, also trended from the index on board of 25,758.51 points to close at 26,235.63 points, representing a week-on-week gain of 1.85 per cent. The difference between the market capitalisation and the ASI was due to delisting of four companies during the week. The delisted companies included UTC, MTECH Communications, Beco Petroleum and MTI Plc. With the sustained rally, the negative overhang at the market reduced as the average year-to-date return improved to -2.38 per cent.
    There were 43 gainers against 16 losers last week compared to 38 gainers and 25 losers recorded in the previous week. A total of 114 stocks have remained unchanged for the past two weeks. Fidson Healthcare recorded the highest gain, in percentage terms, of 43.6 per cent to close at N1.58. Oando followed with a gain of 24 per cent to close at N7.17 while Livestock Feeds rose by 16.2 per cent to close at 86 kobo.
    Zenith Bank was the most active stock with a turnover of 176.77 million shares valued at N2.78 billion in 1,957 deals. FBN Holdings followed with 112.18 million shares worth N396.44 million in 1,408 deals. Altogether, the two most active stocks accounted for 288.95 million shares valued at N3.18 billion in 3,365 deals, representing 25 per cent and 30.4 per cent of total turnover volume and value for the week.
    Total turnover during the four days of trading at the NSE stood at 1.15 billion shares worth N10.44 billion in 16,676 compared with a total of 1.33 billion shares valued at N9.67 traded in 16,300 deals two weeks ago.
    Financial services sector, the traditional dominant sector, remained atop activities’ chart with 813.02 million shares valued at N6.90 billion in 10,298 deals; representing 70.45 per cent and 66.13 per cent of the total equity turnover volume and value respectively. The oil and gas sector occupied a distant second with 106.57 million shares worth N1.06 billion in 1,356 deals while the services sector ranked third with a turnover of 90.94 million shares worth N188.20 million in 660 deals.
    Also traded during the week were a total of 20 units of Exchange Traded Products (ETPs) valued at N110,000 in a deal compared with a total of 533 units valued at N32,204 traded in 15 deals two weeks ago.
    In the debt segment, a total of 1,582 units of Federal Government Bonds valued at N1.608 million were traded in 10 deals compared with a total of 4,705 units valued at N3.934 million traded in four deals two weeks ago.
    “The impressive market breadth recorded this week as well as broad-based nature of the two-week long rally – with mid and small-cap stocks also advancing – suggests investor sentiment is beginning to improve,” analysts at Afrinvest Securities stated.
    Analysts said the market could continue on the upswing over in the meantime, although profit-taking transactions could moderate performance in early trades this week.

  • Japanese investors fret over forex restrictions

    Japanese investors have expressed concerns over Nigeria current foreign exchange (forex) restrictions.

    Led by the Japanese Vice Minister for Foreign Affairs and member, House of Representatives, Mr. Shunsuke Takei, the investors appealed to the Minister of Finance, Mrs. Kemi Adeosun to intimate the Japanese trade and investment delegation on government’s measures to address the forex issues “which have not been resolved.”

    Takei made this request yesterday in Abuja when a delegation of Japanese Public and Private Joint Mission promoting Trade and Investment in Nigeria paid a courtesy visit to Mrs Adeosun.

    Takei led  32 private sector and government organisations to the Ministry of Finance for the engagement. 12 private sector firms on the delegation were from the banking, insurance and manufacturing sectors.

    Takei said the delegation was in Nigeria to look for investment opportunities given the country’s huge population and market as well as the new Economic Recovery and Growth Plan (ERGP) which has potential for growth.

    Japanese investors, he said “were desirous of investing in Nigeria, but were also concerned about challenges in the areas of security, legal and power environments.”

    Mrs Adeosun explained to the Japanese delegation that “Africa’s biggest economy is now out of recession and wants to grow again; the Economic Recovery and Growth Plan (ERGP) articulated by the administration of President Muhammadu Buhari was designed to stabilise the economy and propel it into growth.”

    She told the Japanese mission that “the country is open and ready to continue to do business with the rest of the world and urged the big Japanese companies to invest in the country by setting up manufacturing plants, instead of shipping-in finished products.”

    She said Nigeria welcomes Japanese investors in banking, insurance, manufacturing and other sectors. She said: “We will assist you to do well. Many companies came into Nigeria and are doing very well and there is nothing to stop Japanese firms from doing very well.”

  • MMA2 at 10: Lessons for private investors

    The 16th American President, Abraham Lincoln, once said, “It often requires more courage to dare to do right than to fear to do wrong.” This month, Murtala Muhammed Airport Terminal Two (MMA2), Lagos, which is a product of the courage to dare to do right, will be 10 years old.

    This is significant in a way because what started in a modest way in May 2007 has now become a benchmark for measuring how an airport terminal should run. No doubt, the edifice, the first successful Public-Private Partnership (PPP) in the country, has changed the face of the aviation industry in this part of the world. MMA2 has positively affected the psyche of all aviation industry stakeholders with the doggedness, perseverance and the zeal to overcome challenges by its manager. The terminal has disabused the minds of the stakeholders of the usually etched graphics of derelict airport terminals scattered all over the land with dilapidated facilities, often overheated and cloaked in darkness.

    The good thing is that 10 years down the line, MMA2, with its Multi-Storey Car Park (MSCP) and the facilities therein, still glitters in the aviation landscape as if it was built yesterday. Despite all the dream killer challenges, engineered by those who wanted to kill the MMA2 dream from inception, its operator, Bi-Courtney Aviation Services Limited (BASL), has since taken the odds as the tonic needed to “still do it”. According to the words of Elon Musk, “If something is important enough, even if the odds are against you, you should still do it.” That the terminal is still standing today like a solid rock in the midst of an earthquake-pummelled environment is a big plus to its operator, which toils day and night to “still do it”.

    One decade on, the success story of MMA2 is in tandem with the words of the British orator, author and two-time Prime Minister (1940–45) and (1951–55), Winston Churchill, who said, “Success is not final; failure is not fatal: It is the courage to continue that counts.” Therefore, the courage and the resilience to make MMA2 work in the face of stiff opposition from vested interests is what counts to BASL and this is a lesson for private investors. BASL’s attitude is perhaps constantly inspired by the saying of the great inspirational speaker, Will Rogers that, “Even if you are on the right track, you will get run over if you just sit there.”

    Ten aviation ministers have superintended over MMA2 in 10 years. While a few of them respected the concession agreement the ministry signed with BASL, majority of them did everything to strangulate the business: another big lesson for private investors.

    Going down memory lane, Dr. (Mrs.) Kema Chikwe (2001-2003) as Aviation Minister signed the MMA2 concession agreement between BASL and the Federal Government and did everything to ensure that the project got off the ground; Mallam Isa Yuguda (May 2003-June 2005) under whose tenure the structure of MMA2 took shape, was instrumental to the invitation of KPMG, an international consulting firm that recommended a concession period of 36 years; Prof. Babalola Borishade (now late) (July 2005-November 2006), through the Federal Airports Authority of Nigeria (FAAN) offered BASL 36 years as the concession period, which the company accepted; and Femi Fani-Kayode (November 2006-May 2007) was Aviation Minister when MMA2 was inaugurated by former President Olusegun Obasanjo in May 2007.

    Other ministers were: Felix Hyatt (June 2007-October 2008), appointed a Minister of State (Aviation) by the late former President Umar Yar’Adua, who could really not do much because the aviation unions and other interest groups overwhelmed him in a bid to ensure the death of MMA2. And under Hyatt, FAAN began breaching the concession agreement, while some airlines ordered to move their operations to MMA2 from the International Wing refused to do so; Babatunde Omotoba (December 2007-March 2010), who was advised by the then Attorney-General of the Federation, Michael Kaase Andoakaa (SAN), to hand over the General Aviation Terminal (GAT) to Bi-Courtney as part of the Concession Agreement, which Omotoba failed to do; Mrs. Fidelia Akuabata Njeze (April 2010 – May 2011), who was urged by the Airline Operators of Nigeria (AON) to allow regional flight operations take place at MMA2, as part of the Concession Agreement, and who never yielded; Stella Oduah (July 2011-February 2014), who led the greatest assault on the enterprise called MMA2 and the Concession Agreement. Oduah was vehement in her opposition to anything MMA2 and did everything to cripple the terminal and take over its operations, but failed. She was succeeded by the suave Chief Osita Chidoka (July 2014 – May 2015), who on the other hand did everything within his powers to ensure that the provisions of the concession agreement were obeyed to the letter. Chidoka also declared MMA2 the Best Terminal in Nigeria, which unsettled so many vested interests, inaugurated MMA2’s Common User Passenger Processing System (CUPPS) and most importantly, approved the take-off of regional flight operations for the terminal, which agencies in the aviation industry, especially FAAN, did everything to scuttle; and the incumbent, Senator Hadi Sirika (November 2015-to date), who has, so far been unsupportive of the MMA2 Concession Agreement.

    All the ministers have, nonetheless, contributed either positively or negatively to what makes MMA2 stand solid today. But the endurance of the operator for the past one decade is what further makes the terminal tick.

    The ministers’ various contributions and those of FAAN were a reflection of what it takes to do business with the government, even when the administration under which they served had good intentions. Other private investors and prospective ones need to learn a lesson or two from this experience. Besides BASL’s experiences in the hands of these officials, the bitter experiences of politician and businessman, Chief Harry Akande and the Chairman of Virgin Atlantic Group, Sir Richard Branson, among others, who were shoved  aside after investing their billions of naira, come in handy here. They are still licking their wounds till date.

    Indeed, an angry Branson had this to say of his experience in the hands of government officials: “We fought a daily battle against government agents who wanted to make fortune from us, politicians who saw the government’s 49 per cent as a meal (ticket) to seek all kinds of favour, watchdogs (regulatory bodies) that didn’t know what to do and were persistently asking for bribes at any point. Nigerian people are generally nice but the politicians are very insane. That may be an irony because the people make up the politicians.

    “But those politicians are selfish. We did make N3billion for the Federal Government of Nigeria during the joint venture, realising that the government didn’t bring (anything) to the table/partnership except dubious debts by the previous carrier, Nigeria Airways. The joint venture should have been the biggest African carrier by now if the partnership was allowed to grow, but the politicians killed it. Nigeria is a country we shall never consider to doing business again.”

    Despite all this, “MMA2”, according to the chairman of BASL, Dr. Wale Babalakin (SAN) “represents considerable cerebral input into very modest resources.” Some food for thought and lessons, lessons all the way.

     

    • Omolale is Head, Corporate Communications, BASL.

  • Niger woos Chinese investors

    In a bid to rejuvenate the state economy, Niger State Governor Abubakar Sani Bello has said his administration will partner with Chinese investors in the most critical areas of the state.

    The governor was speaking at the just concluded Nigeria-China Governors’ Investment Forum in Guangzhou, China, assuring investors of adequate security, friendly tax regime and protective legislation in his state.

    In a statement issued by the Senior Special Assistant, Media and Publicity to the governor, Mr. Jide Orintunsin, Governor Bello also said he would like the Chinese to re-energise the small and medium enterprise and reposition agriculture in the state.

    The governor held meetings with a vast spectrum of Chinese investors, seeking their cooperation and investment in infrastructure projects such as energy, highways, railways, airport, agriculture, tourism, youth and women empowerment.

    The governor noted that having the largest arable land mass in the country and with the highest collection of water bodies, Niger State is open to investors, even those in agriculture.

    “Ours is an agrarian state. Our land is fertile for virtually all farm produce, the large collection of water bodies make investment in the agricultural sector of the state a viable and profitable one.

  • CBN creates special forex window for investors, exporters

    CBN creates special forex window for investors, exporters

    The Central Bank of Nigeria (CBN) has established a special Foreign Exchange (forex) widow for investors and exporters.

    Its Director, Financial Markets, Dr. Alvan Ikoku, said the purpose of the window was to boost liquidity in the forex market and ensure timely execution and settlement of eligible transactions.

    He listed eligible transactions under the new window to include invisible transactions such as loan repayments, loan interest payments, dividends, income remittances, capital repatriation, management service fees and consultancy fees.

    Other transactions on the eligible list are software subscription fees, technology transfer Agreements, personal home remittances including ‘miscellaneous payments’ as detailed under Memorandum 15 of the CBN Foreign Exchange Manual.

    Ikoku said the invisible transactions under this window excluded international airlines ticket sales’ remittances.

    He said the window covered bills for collection and any other trade-related payment obligations, which are at the instance of the customer.

    The CBN director clarified that the permitted invisible transactions and bills for collection were eligible to purchase forex sourced from the CBN forex window limited to secondary market intervention sales (SMIS) wholesale, which is spot and forwards sales.

    “International airlines ticket sales’ remittances shall only be eligible to access the CBN FX window (SMIS-Retail and Wholesale) spot and forwards. The supply of foreign currency to the window shall be through portfolio investors, exporters, authorised dealers and other parties with foreign currency to exchange to Naira,” he explained.

    Ikoku explained that the CBN shall also be a market participant at the window to promote liquidity and professional market conduct.

    He added that ýparticipants at the new window would trade via telephone until appreciable progress is made with the FX trading systems on-boarding process, which is the FMDQ OTC Securities Exchange (FMDQ) Thomson Reuters FX Trading & Auction Systems.

    He, however, advised authorised dealers to promote market transparency by encouraging their corporate clients to ensure the activities of the window are operated on the forex trading systems.ý

    As part of the operational requirements of the window, the CBN director said the exchange rates of the transactions in the window shall be as agreed between authorised dealers and their counterparties.

    He also said that the CBN reserved the right to intervene as a buyer or seller, as it deems fit, in the window, adding that information on transactions between authorised dealers would be reported to the CBN on a daily basis.