19 Jan

Nigeria Moves Closer to Energy Overhaul With New Oil Bill

Nigeria’s House of Representatives passed a bill governing the country’s energy sector after the Senate did so in May, taking Africa’s top oil producer one step closer to a much-awaited overhaul of the key industry.

The Petroleum Industry Governance Bill now awaits President Muhammadu Buhari’s signing to become law.

The bill will “promote openness and transparency in the industry by clarifying the rules, processes, and procedures that govern the oil and gas sector,” Senate President Bukola Saraki said in a statement Thursday.

“After nearly two decades of back-and-forth, near-misses and ‘near-passages’, the 8th National Assembly finally reached a milestone.”

Delays in passing the new laws created a climate of uncertainty that has cost the country as much as $15 billion a year in lost investment, the Petroleum Ministry has said.

Lawmakers still need to pass two more pieces of legislation to complete an overhaul that will replace current laws. One focuses on new oil taxes and the other seeks to address longstanding grievances by oil-producing communities in the Niger River delta.

Saraki promised to pass those “very soon.” He said in June that the two related bills would be enacted by last month.

Nigeria holds an average 55 percent stake in joint ventures run by Royal Dutch Shell Plc, Exxon Mobil Corp, Chevron Corp., Total SA and Eni SpA. These account for more than 80 percent of total oil production, which generates at least two-thirds of government revenue.

The West African country pumped 1.68 million barrels of crude per day in December, according to its oil ministry, and is yet to reach full capacity of 2.2 million daily following disruptions caused by militant attacks from 2016.

Source: https://www.bloomberg.com/news/articles/2018-01-18/south-africa-holds-rate-as-downgrade-inflation-risks-persist

15 Jan

Nigeria’s World-Beating Stocks Are Riding on Oil

The world-beating rally in Nigerian stocks may not be over yet.

The main equity index in Africa’s biggest economy has surged 12 percent this year in dollar terms, the most among 96 major bourses tracked by Bloomberg, pushing it to the highest level since 2008. Dangote Cement Plc, controlled by Africa’s richest man, Aliko Dangote, and the largest company on the exchange, has climbed to a record high.

The advance will probably be sustained thanks to rising prices for oil, Nigeria’s main export, and as investors look to increase their holdings of what remain among the cheapest stocks in Africa, according to the asset management arm of South African lender FirstRand Ltd.
“For investors wanting more exposure to consumers in Africa and Nigeria, in particular, the outlook is good,” said Paul Clark, a money manager in Johannesburg at Ashburton Investments, which owns Nigerian stocks including Seplat Petroleum Development Co. “The banking sector is probably the most attractive at the moment, especially the tier-2 lenders.”
Foreign investors have been crucial in driving the market higher. The New York-based Global X MSCI Nigeria ETF attracted record weekly net inflows through Thursday. That helped to increase the exchange-traded fund’s market capitalization to almost $90 million, double the level in May last year.
Even after the gains, Nigerian valuations are the cheapest among the major African equity indexes. Nigerian stocks trade at a forward price-to-earnings ratio of 10.2, while South Africa’s are at 14 and the MSCI Emerging Market Index is at 13.
That suggests there’s further upside, according to Cape Town-based fund Allan Gray. While foreign investors turned negative on Nigeria after following the 2014 oil crash and subsequent recession, the economy picked up last year and growth is forecast by the International Monetary Fund to accelerate to 2.1 percent in 2019.
“For long-term investors, Nigerian equities were a screaming bargain,” said Nick Ndiritu, co-manager of Allan Gray’s $389 million Africa equity fund, which doesn’t include South Africa. “Investor sentiment has turned more bullish on Nigeria and a re-rating of the Nigerian stock market is now under way.”
To read the full article, click here.
03 Jan

Top five trends that will drive Africa’s private equity market in 2018

While the rest of the world battles a series of economic and political difficulties, Africa is looking forward to a year of growth and increased private equity investment.

For a general view on the likely global trends in the private equity market in 2018, we need look no further than the developments of the past few years. As growth rates around the world declined, Africa and other emerging markets took on ever-greater significance, and are now pivotal in global private equity activity.

According to Quantum Global’s Africa Investment Index, in 2015, the top five African investment destinations – including Botswana, Morocco, South Africa and Zambia – collectively attracted foreign direct investment of $13.6bn. This was a testament to international players’ growing interest in the continent.

It is true that some of the world’s developed markets will return to growth in 2018, and private equity investors will turn their attention towards them once more. However, Africa’s long-term growth and increasingly transparent and stable geopolitical and economic landscape will continue to support the expansion of private equity across the region.

Private equity has also taken on a greater share of public sector financing in developing markets. Some of Africa’s largest economies have ventured into their first ever public-private partnerships (PPPs), and interest from limited partners and general partners has grown significantly over recent years.

However, the importance of private equity in Africa’s economic development is underpinned by an annual funding gap of around $100bn in the region, along with a soaring youth population. Private equity has also helped to drive much-needed development of the region’s capital markets, which are slowly maturing.

1 – Increased deal flow

Despite political uncertainty in countries such as Zimbabwe and South Africa, there is significant deal appetite and interest in quality assets in Africa. Further north and west, democratic elections have passed in multiple countries, including Angola, which saw its first transfer of power to the opposition party since peacetime in 2002. This should provide investors in those countries with much greater confidence than in previous years.

Deal flow remains high and, given the region’s economic growth, is likely to remain so in 2018. The challenge is one of quality and bankability: management in Africa remains complex for financial, structural and political reasons. These complexities are inherent in all developing markets and will continue in 2018 and beyond. Growth trends in 2018 will demand that general partners deploy highly specialised teams with expertise in specific sectors, in addition to a deep understanding of African markets.

2 – Economic recovery in West Africa

Improvements in commodity prices combined with the region’s expected economic recovery will drive further investment in West Africa. Nigeria and Angola will benefit from analysts’ forecasts that oil prices will rise to around $58 per barrel in 2018, easing public expenditure pressures. Private equity investors and other state players, such as China, will also benefit from a potential uptick in public sector spending on important infrastructure works, and we may see greater appetite for PPPs and general private capital in government-led projects.

GDP figures also recovered across most of West Africa in 2017, and in some cases are forecast to surge in 2018. The IMF’s most recent World Economic Outlook (released in Q3 2017) has projected growth of almost 9% for Ghana in 2018, with an overall rise of around 3.4% for sub-Saharan Africa.

3 – Improved global liquidity conditions

With projected higher oil production and oil prices predicted to rise throughout 2018, foreign exchange liquidity rates are also expected to grow globally. Private equity in Africa will therefore offer a much higher rate of return compared with cash and fixed income assets.

Around the world, borrowing rates and inflation remained stable throughout 2017. This was also the case in many parts of Africa – even in countries that struggled with low forex reserves and the slump in oil prices. Some of the region’s biggest economies, such as Angola and Nigeria, have reined in spending and demonstrated fiscal restraint, including introducing currency controls. These measures have contributed to greater liquidity.

4 – Nigeria attracting more investments

With the value of Nigeria’s economy projected to grow to $650bn by 2022,medium to long-term prospects look optimistic, with solid fundamentals underpinning growth expectations, particularly in the non-oil sectors of the economy. However, the country also faces an $878bn infrastructure investment gap between now and 2040. This figure (which pertains only to infrastructure) is based on forecasts of an annual GDP rise of 4.1% and a population that is rising by 2.4% per year at current trends.

5 – Chinese asset diversification

The slowdown in China’s economy is likely to lead to Chinese investors further exploring opportunities in emerging markets like Africa. Such investors are also likely to pursue increased collaboration with credible private companies and institutions. China has a track record of investing across diverse asset classes in Africa, particularly in infrastructure: as far back as the 1970s, China helped to build one of Africa’s longest railways, the 1,860km TAZARA Railway from Tanzania to Zambia. China is already investing heavily in diverse asset classes across the continent, including Angola’s first ever PPP. The inherent Chinese appetite for diverse assets in Africa spells good news for African governments, many of which have redoubled their efforts towards major infrastructure works over recent years.

As we look ahead to 2018, there is clear evidence that the global economy is improving, even though there are new geopolitical issues on the horizon: namely Brexit, the Chinese slowdown and Middle Eastern security concerns. Despite these issues, Africa faces a year of growth, and will continue to act as a promising destination for private equity investors.

Source: How We Made It in Africa

15 Dec

Nigeria Takes $1 Billion From Oil Savings to Fight Militants

Nigeria will take $1 billion from a special account for oil-revenue savings to boost its war against Boko Haram Islamist militants in the country’s northeast.

Governors of the country’s 36 states met with the federal government as the National Economic Council to deliberate on the expenditure, according to Godwin Obaseki, governor of southern Edo state.

“The governors have given permission to the federal government to spend the sum of $1 billion in the fight against the insurgency,” he told reporters in Abuja after the meeting on Thursday. That will leave $1.32 billion remaining in the excess crude account, where oil income above budgeted estimates are saved, according to figures provided by the government.

Boko Haram militants, who are opposed to Western education and seek to impose their version of Islamic law in Nigeria, are in the eighth year of an insurgency that has left at least 20,000 people dead, according to the government. President Muhammadu Buhari won elections in 2015 with the defeat of the group among his key campaign pledges.

“We are getting closer to the elections and defeating Boko Haram was a major campaign promise; going in these elections without delivering on that promise will be tough,” said Freedom Onuoha, a senior political science lecturer at the University of Nigeria, in the southeastern town of Nsukka.

With a new vote approaching, some of these funds for security may find their way into the election campaign, Onuoha said. “The details of spending aren’t usually made public. That creates an opportunity, a smokescreen, that can be used to fund elections and other hidden spending,” he said.

Ambushing Troops

Concerns the government may misuse the money are misplaced, according Laolu Akande, a spokesman for Vice President Yemi Osinbajo, who represented the federal side at the meeting with governors. “Nigerians have come to appreciate that the Buhari administration is as one that is judicious with the management of the country’s resources and actively fighting corruption,” he said.

To read the full article, click here.

07 Dec

Power Brokers Start to Gear Up for Nigeria’s 2019 Elections

As Nigeria begins to gear up for general elections in February 2019, five senior politicians appear to be key players in Africa’s top oil producer.

President Muhammadu Buhari, a 74-year-old former military ruler, will start as one of the favorites if he seeks re-election after becoming the first opposition candidate to win power in Nigeria’s history in 2015. A health scare this year — he spent more than five months in London receiving treatment for an undisclosed medical ailment — convinced some observers that he wouldn’t serve more than one term. But he returned in August with renewed vigor, regularly traveling on official trips both at home and abroad.

Buhari has pledged to boost investments to spur growth after presiding over an economic recession, exacerbated by falling crude prices and production and a currency policy that starved factories, airlines and fuel importers of dollars. While his administration has slowed the advance of Islamist militants in the northeast, it faces renewed unrest in the oil-rich Niger River delta and the southeast, where secessionist sentiments are on the rise.

To win again, he’ll need to rebuild the coalition that formed the ruling All Progressives Congress and guaranteed him votes in his northern base and large parts of the southwest and center.

Former Vice President Atiku Abubakar, 71, effectively signaled he’s considering another run for the presidency when he announced in November that he was leaving the ruling APC, accusing it of imposing a “draconian clampdown on all forms of democracy.” A few days later, he rejoined the opposition People’s Democratic Party, which he had previously quit twice to pursue his presidential ambitions elsewhere.

Abubakar has been a presidential aspirant in three different parties since Nigeria returned to democratic rule in 1999. He lost to Buhari in the APC primaries but supported him as the candidate.

A former Nigerian Customs Service top official who became a major shareholder in Intels Nigeria Ltd., an oil-service company, he favors regional autonomy and power devolution, a stance that has popular appeal particularly in southern Nigeria.

To read the full article, click here.

05 Dec

Nigeria: FG – 3,000 Nigerian Migrants Repatriated From Libya

Abuja — The federal government has revealed that no less than 3,000 Nigerians have so far been repatriated from Libya in the wake of recent slave trading in that country.

The government said only last week, 250 Nigerians were repatriated also from Libya.

Charge d’Affaires of Nigeria in Libya, Mr Illiya Danladi Fachano, made the disclosure yesterday in Abuja, while addressing the Charles Oputa, alias Charly Boy-led group, “OurMumuDonDo”, who had converged on the Ministry of Foreign Affairs, Abuja, to urge the government to act quickly in order to save the lives of Nigerians trapped in Libya.

“Good morning everybody. Like the man introducing me, I am the Charge d’Affaires. In other words, the Nigerian Head of Mission to that country. “I exist there to serve the interest of Nigerians. I am here by this opportunity you have created to tell you that the mission repatriates migrant Nigerians; every week, 250,” Fachano said.

The envoy disclosed further that another batch of 250 Nigerian migrants would be repatriated to the Nigeria tomorrow. “They are going to arrive Lagos at 7p.m. If it is not 7p.m, it is because the plane is delayed for one reason or the other,” he added.

He disclosed that the mission usually visits every week, the detention camps where illegal Nigerian migrants are detained. He added that other nationalities such as Ghanaians and Gambians, were also detained at the camps, saying that the mission visits the camps to identify Nigerian citizens and get them registered.

To read the full article, please click here.

 

04 Dec

Nigeria: No Cause for Alarm Over Terror Attack Alert – Govt

Abuja — The federal government yesterday calmed frayed nerves over the latest travel advisories by some Western countries alerting on impending attacks in Nigeria.

It assured Nigerians of adequate security measures to thwart any possible terror attack in the Federal Capital Territory (FCT) and the 36 states of the federation.

In a statement he issued yesterday, the Minister of Information and Culture, Alhaji Lai Mohammed, said there is no cause for alarm despite the latest travel advisories by some Western countries.

He said security agencies in the country have not let down their guard, despite the fact that there has been no terror attack in the FCT since the Buhari administration assumed office.

Mohammed stated: “We know that the terrorists, who have been massively degraded and put on the run, have been looking for soft targets to attack. This is the nature of terrorism all over the world, as can be seen in recent attacks in the UK, France and Egypt, among others.

“That is why the Nigerian security agencies have continued to be on the alert, even if their efforts have been largely unobtrusive so as not to disrupt the daily activities of the citizenry,” he said, adding: “Such efforts are routinely stepped up during religious festivals”.

The minister assured that the federal government will continue to take adequate measures to protect the lives and properties of citizens and non-citizens alike, even as the military remains unrelenting in ensuring that the terrorists neither regroup nor regain the capacity to carry out organized attacks.

He said the federal government’s sensitization campaign on security, with the punch line, “if you see something, say something”, would be stepped up on national radio and television.

Accordingly, he advised citizens to be security conscious and to report suspicious people and object to the security agencies. Govt Needs To Tighten Our Borders – Ladaja

Meanwhile, a presidential aspirant on the platform of the All Progressives Congress (APC), Ibrahim Abubakar Ladaja, has urged the federal government to tighten its borders and create an enabling environment to discourage migration.

To read the full article, click here.

30 Nov

Buhari’s Graft War Stumbles as Nigeria Security Chiefs Feud

When agents of Nigeria’s financial crimes body arrived this month to arrest a former intelligence chief fired by President Muhammadu Buhari for stashing $43 million in cash in his wife’s apartment, they were stopped by armed secret policemen.

After a 10-hour standoff, the Economic and Financial Crimes Commission backed down in the upscale Asokoro district of the capital, Abuja, with its boss, Ibrahim Magu, vowing his agents would be back to arrest former National Intelligence Agency boss Ayodele Oke.

It was the latest in a string of incidents that have dented the credibility of Buhari’s war on graft. Propelled by pledges to tackle corruption, the 74-year-old former military ruler became in 2015 the first opposition candidate in Nigerian history to defeat an incumbent at the ballot box. The West African nation ranked 136 out of 176 countries in Transparency International’s Corruption Perception Index in 2016, the same as the year before.

Inter-agency rivalry has been a consistent feature of Buhari’s graft war. Twice he sent the nomination of Magu as head of the financial crimes commission, known as the EFCC, to lawmakers for approval, and on both occasions they rejected him based on state security police reports of alleged prior wrongdoing. That’s left the president’s anti-corruption czar in a weakened, acting capacity more than halfway into his tenure.

Lack of Clarity

“This clearly shows the lack of tactics and strategy in the approach of fighting corruption by the current administration,” said Oluseun Onigbinde, head of Lagos-based BudgIT, a civic group that lobbies for government transparency. “There’s no clarity on who’s directly responsible for arresting or prosecuting people.”

Presidential spokesman Garba Shehu said he couldn’t comment on the clash between the two security agencies over the attempted arrest of Oke when contacted by phone, saying he hadn’t been briefed on the matter. Buhari says his administration is making progress.

To read the full article, click here.

10 Nov

Exporting to Nigeria: Tips and insights

Nigeria is still, by a slim margin, the biggest economy in Africa, despite the economic woes of the past two years. A population of anything between 180 million to 200 million people makes its consumer market in particular of great interest to investors, manufacturers and exporters around the world. The country manufactures relatively few of the products it consumes and despite efforts to increase local industry, it remains largely import dependent.

However, despite the multitude of opportunities that Nigeria presents to exporters, getting a product into the market can be a challenging exercise.

Nigeria’s main port complex is in the commercial capital of Lagos, a city of an estimated 20 million people – a major market in itself – but also the shipping gateway for imports and exports for the whole nation.

The facility, comprising the Lagos Port Complex and Tin Can Island Port in the Apapa area of Lagos city, is one of the busiest in Africa. It is also by far the main portal for trade into and out of this large country, processing 97% of containers. The only other port of size, Onne, is focused on the oil and gas industry around Port Harcourt, and there are a few other, smaller, ports.

As a result, there is usually serious congestion at Lagos. The high volumes are just part of the problem. Other challenges include poor infrastructure, inadequate and often poorly functioning equipment, the demands of different agencies located there, onerous bureaucracy and general issues related to officialdom.

Clearance time in Lagos port is between seven and 14 days. Once clearance is complete, it takes, in a best-case scenario, 48 hours to get the product out of the port. However, this can take longer depending on other factors, as currently being experienced with the rebuilding of the access road to the port, and any problems in the manifest or other documents.

Having a competent cargo clearing and forwarding company is vital to navigate the process. Exporting to Nigeria requires detailed knowledge of requirements. A simple mistake in documentation or process can lead to cargo sitting in port for weeks or even months, with hefty demurrage charges.

It is important for an exporter to be on top of any changes in documentation and import requirements. Do not wait for the importer in Nigeria to alert you to what is needed; rather do your own homework.

Read more: Exporting to Nigeria

11 Oct

Eterna Plc Gets Exclusive Rights For Distributing Castrol Oil in Nigeria

Eterna Plc. has officially launched Castrol Oil into the market of Nigeria. This follows the company’s 2015 distribution agreement with Castrol. It is also worthy to note that Eterna was granted the license to blend and distribute Castrol Automobile and Industrial lubricants at its Sagamu, Ogun state facility.

Some of the Castrol products launched into the market include Castrol Edge- fully synthetic oil with fluid strength technology. Castrol Magnatec- semi-synthetic oil instant protection from the start and Castrol GTX Essential-trusted protection for your engine.

“I am proud to announce that the latest addition to the Castrol GTX family “Castrol GTX Essential” was produced for the first time in the world at our plant in Sagamu this August. This is a clear demonstration of the confidence reposed in our manufacturing capabilities by Castrol,” said Mahmud Tukur, Managing Director of Eterna PLC.

Eterna and Castrol’s journey

According to Mahmud Tukur, the journey began as far back as 1991 through the vision of the company’s founder, Otunba Tunji Lawal Solarin, when Eterna started importing and distributing Castrol Lubricants in Nigeria. A robust marketing structure was set up and with increased market sales, Eterna began to manufacture lubricants locally through a third-party facility on an interim basis.

The aim was always for the company to own its blending facility and this dream became a reality when Eterna secured a US $940,000 loan from the International Finance Corporation (IFC) in 1995 to construct what was to eventually become one of the best and most modern lubricant manufacturing plants in Africa. Castrol designed the plant and provided the required technical support during construction ensuring that the plant met global standards.

Twenty years later, Eterna’s 15,000MT capacity state-of-the-art lubricant manufacturing plant, which is fully owned by its subsidiary, Eterna Industries Limited, is one of the only three Castrol accredited blending plants in Africa. The plant is located in Sagamu, Ogun state on a sprawling 5 hectares of Prime Industrial Real Estate.

 

Read more: ETERNA PLC GETS EXCLUSIVE RIGHTS FOR DISTRIBUTING CASTROL OIL IN NIGERIA

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