Business

Akeem ReachnaijaMarch 1, 2019
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2min480

Nigeria has lost over N1.81 trillion ($5 billion) over the years resolving contract disputes that could have been resolved at less cost using alternative dispute resolution (ADR) mechanism.

This was revealed by the President of Abuja Chamber of Commerce and Industry (ACCI), Prince Adetokunbo Kayode, yesterday, while inaugurating the planning committee for an upcoming government contract dispute resolution workshop in Abuja.

Prince Kayode said most of the contract disputes were related to contract cancellations, cost adjustments and delays.

He said there was need for contractors and government agencies to explore alternative means of dispute resolution such as that being provided by the ACCI’s Dispute Resolution Centre (DRC) to save cost and time.

He said contract disputes dragged for about five to eight years in court and cost huge amount of money for parties involved.

The ACCI boss said the DRC, which has been approved by the Attorney General of the Federation and Minister of Justice, has adopted the latest guidelines on global alternative dispute resolution to, not only resolve disputes on time but on reduced cost to all parties.

He decried situations were parties in a dispute sought alternative resolution means abroad at high cost.

He said the ACCI DRC has the capacity to dispense all contract disputes using alternative dispute resolution mechanism without the parties seeking such solutions abroad.


Akeem ReachnaijaFebruary 28, 2019
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Power generation in Nigeria lost 1,108MW in seven days, leaving the country with just 3,456 megawatts since Tuesday.

A new report obtained by Punch, showed that the total power generation dropped from 4,564.60MW as of 6.00am on February 19 to 3,456.20MW on February 24, a day after the presidential and National Assembly elections. It however stood at 4,358MW as of 6.00 am on Saturday.

Data from the Nigeria Electricity System Operator, an arm of the Transmission Company of Nigeria, showed that generation fell further to 3,456.60MW as of 6.00 am on February 26.

The system operator put the nation’s installed generation capacity at 12,910.40MW; available capacity at 7,652.60MW; transmission wheeling capacity at 8,100MW; and the peak generation ever attained at 5,375MW.

The nation generates most of its electricity from gas-fired power plants, while output from hydropower plants makes up about 30 per cent of the total.


Akeem ReachnaijaFebruary 27, 2019
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AS Nigeria’s stock market turn positive with significant capital gains ahead of official conclusion of the general elections, oil prices, yesterday shot up, apparently over uncertainty over the outcome of the election’s as well as the political tension in Venezuela. Also the pressure on oil price appears to be coming from a positive sentiment over United States–China talks.

International Brent crude oil futures were at $67.28 a barrel, up 16 cents, or 0.24 percent, from their last close, while U.S. West Texas Intermediate (WTI) crude futures were at $57.39 per barrel, up 13 cents, or 0.23 percent, from their last price.

“Risk appetite across global markets should improve as President Trump extends the deadline of trade talks with China,” Harry Tchilinguirian, global oil strategist at BNP Paribas in London, said.

“Supply risk is ever present with Venezuelan tensions brewing a notch higher, the National Oil Corporation in Libya refusing to start production at the El Sharara field,” he added, while also citing uncertainty over elections in top African oil exporter, Nigeria. U.S. sanctions on Iranian and Venezuelan crude plus involuntary curbs in Nigeria and Libya are lending support to efforts to balance the market and support prices, efforts led by member of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers such as Russia. Further brightening the global economic picture, U.S. President Donald Trump on Sunday signalled a potentially bruising trade war with China could be averted.

Trump tweeted he would postpone a March 01, 2019 deadline for higher tariffs on Chinese goods and looked forward to a meeting with Chinese President Xi Jinping when a Sino-American deal was sealed.

Goldman Sachs analysts said that “the near-term outlook for oil is modestly bullish over the next two to three months”, but added that the outlook for later in 2019 was weaker due to a surge in U.S. exports and an “an increasingly uncertain economic, policy and geopolitical backdrop”.

Meanwhile, Trump resumed his attacks on the Organisation of Petroleum Exporting Countries, OPEC, saying the world is too fragile to handle a price hike and urging the cartel to “relax and take it easy.” Trump’s war of words with the OPEC punctuated big price swings in 2018, as he pressured the group to keep the taps open to help consumers. The president’s intervention follows a price rally of about 25 percent this year due to production cuts from OPEC and its allies, diminishing fears about the economic impact of the US-China trade war and Washington’s imposition of sanctions on Venezuelan oil shipments.

“We might see a less aggressive stance on supply cuts from the Saudis, this might stop them from cutting deeper,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.

“But I still think Saudi Arabia has the incentive to see higher oil prices, and deliver the cuts agreed in December, when OPEC and its partners agreed to remove 1.2 million barrels a day’’, he added.

NOPEC risk

The risk to OPEC comes in the form of the so-called ‘No Oil Producing and Exporting Cartels Act’, or NOPEC, an act resurrected by US lawmakers that proposes making the organization subject to the Sherman antitrust law, used more than a century ago to break up the oil empire of John Rockefeller. Congressional support for the bill intensified last year as oil prices neared a four-year high, and Trump publicly blamed OPEC for high pump prices in the US In the past, the White House has opposed the NOPEC legislation – both George W Bush and Barack Obama threatened to use their veto.

OPEC’s concern now is that Trump may break with his predecessors, and angering him by not going “easy,” as he requested in his tweet, raises the stakes. Trump, before becoming president, didn’t just support the NOPEC bill, he was a cheerleader for it. “We can start by suing OPEC for violating antitrust laws,” he wrote in his 2011 book “Time to Get Tough: Making America #1 Again.”

Whether by coincidence or design, Trump’s latest tweet comes on the eve of International Petroleum Week, which opens in London on Tuesday. The annual event gathers the who’s who of the oil market and industry for several days of conferences, deal-making and cocktail parties.


Akeem ReachnaijaFebruary 27, 2019
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3min220

The market capitalisation of listed equities on Tuesday shed N85 billion in six hours of trading to what traders attributed to profit taking as a result of the presidential poll.

Specifically, the market capitalisation, which opened at N12.194 trillion, shed N85 billion or 0.69 per cent to close at N12.109 trillion.

Also, the All-Share Index lost 226.30 points or 0.69 per cent to close at 32,473.82, compared with 32,700.12 recorded on Monday.

Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., attributed the market pullback to profit taking embarked by some smart investors.

Mr Omordion said the smart money that pushed the market up with expectations that the opposition would win the presidential election were leaving the market.

He said some investors who entered the market in anticipation that the opposition economic policy and reforms would support market growth were taking profit ahead of earnings season.

“This pullback may not last as a result of 2019 dividend declaration season as dividend yield of financial service stocks are high and attractive due to low prices,” Mr Omordion stated.

Nestle dominated the losers’ chart, dropping by N70 to close at N1,510 per share.

Union Bank of Nigeria trailed with a loss of 60k to close at N6.65, while FBN Holdings was down by 30k to close at N8 per share.

Conversely, Guinness led the gainers’ table during the day, gaining N2.05 to close at N67.15 per share.

Dangote Flour followed with a gain of N1 to close at N12.05, while Oando gained 65k to close at N7.25 per share.

Air Services added 60k to close at N7.05, while Africa Prudential increased by 44k to close at N4.84 per share.

A breakdown of the activity chart indicates that the volume of shares traded rose by 46.57 per cent with an exchange of 322.18 million shares worth N2.43 billion in 4,066 deals.

This was against 219.81 million shares valued at N5.55 billion transacted in 2,999 deals on Monday.

Sunu Assurances recorded the highest volume of activity, trading 50.81 million shares worth N10.16 million.

Access Bank traded 32.30 million shares valued at N203.09 million, while Diamond Bank sold 28.60 million shares worth N70.10 million.

United Bank for Africa accounted for 19.02 million shares valued at N153.66 million, while Guaranty Trust Bank sold 17.77 million shares worth N677.66 million.


Akeem ReachnaijaFebruary 22, 2019
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As Nigeria continues to clamp down on tax defaulters, it has ordered some foreign oil and gas companies to pay nearly $20 billion in taxes owed to states, industries and government.
A letter sent to the companies earlier this year via a debt-collection arm of the government, Nigerian National Petroleum Corporation (NNPC), cited what it called outstanding royalties and taxes for oil and gas production.
Specifically, Royal Dutch Shell, Chevron, Exxon Mobil, Eni, Total and Equinor were each asked to pay the federal government between $2.5 billion and $5 billion, said the sources.

Norway’s Equinor, which produced around 45,000 barrels per day (bpd) of oil in Nigeria in 2017, confirmed the request. “Several operators have received similar claims in a case between the authorities in Nigeria and local authorities in parts of the country,” an Equinor spokesman said. Exxon “is currently reviewing the matter”, a spokeswoman for the U.S. company said.

Shell, Total, Eni and Chevron declined to comment, as did the Presidency, petroleum ministry and NNPC. The charge came after the federal government and states settled a dispute over the distribution of revenue from hydrocarbon production. The sides agreed last year that Abuja would pay the states several billion dollars, three company and government sources said. The companies were expected to dispute their respective payment claims. “Equinor sees no merit to the case,” the company spokesman said.

A source at another company said: “This looks like an internal dispute between the federal and local governments. The central government is simply trying to shift to the IOCs (international oil companies) money it owes.”

The tax demand adds a fresh challenge to energy companies investing in Nigeria, which have been negotiating production-sharing agreements with the government to develop and operate giant offshore fields.

Nigeria uses several types of contract with energy companies including the establishment of joint ventures and production sharing, the two most common partnerships for international oil companies in the country. The companies pay the government in the form of royalties and tax as well as providing the state with oil and gas.


Akeem ReachnaijaFebruary 20, 2019
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The Central Bank of Nigeria (CBN) has injected 210 million dollars into the various segments of the market to sustain its intervention in the Inter-Bank Foreign Exchange Market.

The CBN Director, Corporate Communications, Mr Isaac Okorafor made this known in a statement on Tuesday in Abuja.

Mr Okorafor revealed that the apex bank offered 100 million dollars as wholesale interventions and allocated 55 million dollars to Small and Medium Enterprises (SMEs).

He further said that another 55 million dollars was allocated to customers requiring foreign exchange for business and personal travels, tuition or medical fees.

The director explained that the Tuesday’s interventions were in continuation of the bank’s resolve to sustain the high level of stability in the foreign exchange market.

According to him, it is also to continue to ease access to the currency by customers in different sectors.

Okorafor said the CBN was optimistic that the Naira would sustain its run against the dollar and other major currencies around the world, considering the level of transparency in the market.


Akeem ReachnaijaFebruary 20, 2019
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2min430

The Arab Bank for Economic Development in Africa (BADEA) and Sterling Bank PLC (Nigeria), signed today Monday, February 18, 2019, in Cairo, two loan agreements: the first one is a Line of Credit, which amounts to US $ 15 million to finance private sector projects, and the second one, which amounts to US $ 50 million, is a Line of Credit for financing Arab Exports to African importers, as part of BADEA’s program for financing Foreign Trade.

H.E. Dr. Sidi Ould TAH, Director General, signed on behalf of BADEA, while Mr. Adeyemi Odubiyi, Executive Director, Corporate & Investment Banking, signed on behalf of Sterling Bank.
The first Line of Credit aims to help the Bank to finance private sector projects in Nigeria by re-lending its resources to its customers. The loan also aims to enhance the role of the private sector in the country’s economic and social development, to contribute to the mobilization of the production and service sectors, creating job opportunities, providing and delivering various goods and services and supporting the country’s budget, through tax revenues, which will enhance opportunities for economic growth and improving the living standards of the population.

Within the same context, the two parties also signed a loan agreement to finance a Line of Credit that will be allocated to Trade Finance Operations. This Line of Credit aims to bring Arab goods and products to Nigeria by re-lending its resources to beneficiaries in the country. The Line also aims to encourage and promote trade exchanges between Arab and African countries and help to define African markets for Arab products, and thus help in the growth of Arab Exports destined for Sub-Saharan Africa.


Akeem ReachnaijaFebruary 16, 2019
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Okonjo Iweala was pictured with former Chelsea strike Didier Drogba at the launch of the new Africa Business Coalition for Health in Addis Ababa.She wrote…..

‘In Addis at the launch of the new Africa Business Coalition for Health championed through a partnership of the United Nations Economic Commission for Africa [UNECA] and the Aliko Dangote Foundation under the chairmanship of Mr Aigboje Aig-Imoukhuede.

The ECA has estimated a $66 billion per annum financing gap for healthcare in Africa. The public sector alone cannot cover this. There is a need for smart partnerships with the private sector and for their investments in pharmaceuticals, logistics, supply chain management, capacity support, technology, innovation, and other areas. The Africa Business coalition encourages the private sector to invest, to partner and be a more effective part of the solution to the continent’s health challenges.

With Didier Drogba, Véra Songwe, Aig Imoukhuede, Halima Dangote, Zouera Youssoufou, Michel Sidibe, Joseph Muchera , Dere Awosika among others’.