SEC Arraigns BGL Officials

The police unit of the Securities and Exchange Commission has arraigned the BGL Group and its officials at the Chief Magistrate Court Zone 6, Abuja on charges of  criminal conspiracy, breach of trust and cheating.

The offences are contrary to Sections 96, 312, 322 and 323 of the Penal Code Law, Chapter 89.

SEC, in a statement on Thursday, described the development as a major lift for the Nigerian capital market in the bid by the apex regulator to check and discourage infractions in the market.

The Deputy Managing Director of the company, Chibundu Edozie, was docked along with three others.

They were alleged to have conspired among themselves with some other staff members of BGL and committed the offenses against the investing public which includes Mahmoud Usman, Ann Awase Orsule, and Sylvanus C. Ghasarah.

Others are Eno Efanga, UN Staff Thrift Credit Cooperative Society of Anambra State Abuja Office  and Adejoke Atte, among others who filed complaints against them before SEC.

The Managing Director of the company, Mr. Albert Okumagba, was not in court and had no representation.

However, Edozie was granted bail in the sum of N1m with one surety in the like sum who should not be less than a level 12 officer in public service and resident in Abuja.

The Presiding Magistrate, Chief Magistrate Chinyere Nwecheonwu , after the arraignment,  adjourned the hearing to November 6, 2017.

SEC said in exercising its responsibility as enshrined in the Investments and Securities Act, in tackling civil cases through its Administrative Proceedings Committee, it recently banned Okumagba and Edozie, from participating in capital market activities for 20 years.

The commission also ordered Okumugba’s companies to refund to investors over N2bn.

The ban followed complaints by investors against Okumagba and his company over failure, refusal and or/neglect to liquidate their investments in both the Guaranteed Consolidated Notes and Guaranteed Premium Notes, among others.

SEC said in a bid to obtain justice for the complainants and grant all parties fair hearing, it presented the matter before its APC which sat and decided on the matter.

“During the proceedings testimonies and documentary evidence were tendered by various parties and upon conclusion of the proceedings its APC arrived at a decision which has been approved by the relevant authority,” SEC stated.

The APC decided that by their actions and/or omissions, BGL Securities Limited, BGL Asset Management Limited, Okumagba, Edozie and other respondents engaged in acts capable of adversely affecting investors’ confidence in the capital market.

It added that the APC decided that the registration of BGL Securities and BGL Assets Management be cancelled, while Okumagba and Edozien be banned from capital market operations for a period of 20 years.

It stated further that the two companies would also pay a fine of N25m for breaching Rule 1(iii) of the Code of Conduct for capital market operators.

“Other than Okumagba and Edozie, Peter Adebola and Ashley Osuzoka have also been banned for five years and four years respectively,” it added.

The APC, apart from the ban placed on them and some monetary fines, directed the companies to refund N24.03m to the National Open University Staff Cooperative Multipurpose Society.

Top US Investors show Interest Nigeria’s Technology Industry

Top United States investors, under the US-Nigeria Council platform, are looking at exploring market opportunities domiciled in the Nigerian economy.

Their intentions were made known at the just concluded 72nd United Nations General Assembly in New York, which convened a high powered business dinner with top US investors with interest in Nigeria, a statement by USNC on Monday indicated..

 The USNC is a business-to-business organisation that works to promote partnerships between Nigerian and American companies and to strengthen US-Nigeria commercial relations.

It had its exclusive dinner at the forum co-hosted by the Chairman of Flour Mills Nigeria Plc, John Coumantaros; Chief Executive Officer of the Nigeria Sovereign Investment Authority, Uche Orji, and the Vice-Chairman of McLarty Associates, Ambassador John Negroponte.

The council gathered leaders of Nigerian and American businesses to discuss how to build on to deepen Nigeria’s return to economic growth and diversification. In particular, the council members and dinner participants focused on the need to create a competitive Information and Communications Technology cluster that will further develop Nigeria’s growth into a digital economy.

The US businesses present at the dinner included Chevron, Google, Walmart, IBM, Tetra Tech,American Tower Corporation. Some of the leading investors at the event included Citi, Denham Capital, Fairfax Africa, CRE Ventures, Development Partners International, Atlas Mara, Greylock Capital, Greenwish Partners, Smith Graham, Prince Street Investment Management and Zephyr Management.

The dinner was attended by the US Ambassador to Nigeria, Stuart Symington; Deputy Counsel-General of Nigeria to the US, Ambassador Hassan Mohammed; Executive Secretary of the Nigerian Investment Promotion Council, Mrs. Yewande Sadiku, and Ambassador Chiedu Osakwe, representing the Ministry of Industry, Trade and Investment.

The commitment of Nigerian businesses to the USNC was demonstrated by the active participation of the Chairman of Zenith Bank Plc, Jim Ovia; Group Chief Executive Officer, Oando Plc,  Adewale Tinubu; Managing Director, Yinka Folawiyo Group, Tunde Folawiyo; Director at Seplat Plc, Basil Omiyi; Gbenga Oyebode of Aluko & Oyebode Partners; Chief Executive Officer, Nigerian Stock Exchange, Oscar Onyema, among others.

The co-chair of the USNC, John Coumantaros, noted that the, “USNC is a premier business organisation catalysing tangible joint ventures and partnerships that develop capacity and accelerate economic diversification in Nigeria,” adding that “the ICT cluster is a major priority of the business community.”

Orji, who oversees Nigeria’s $2bn Sovereign Wealth Fund, described the work of the council as bringing together “a wide spectrum of stakeholders critical to building Nigerian-American business relations.” The Executive Director of the USNC, Eliot Pence, in his remarks, noted that the council’s unique focus was on “facilitating transactions between young entrepreneurs, investors and companies.”

Saraki Promises Passage of PIB before End of 2018

The President of the Senate, Dr. Bukola Saraki, has said the upper chamber of the National Assembly is working to ensure the completion of the passage of the Petroleum Industry Bill in the fourth quarter of this year.

Saraki stated this in Lagos on Monday at the Nigeria Oil and Gas Industry Research and Development Fair and Conference 2017 organised by the Nigerian Content Development and Monitoring Board.

The PIB, which has been in the works since 2008 when it was first introduced to the legislature, suffered setbacks in the 6th and 7th National Assembly.

Saraki said the PIB was split into four parts – Petroleum Industry Governance Bill, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill – to fast-track its passage into law.

The Senate, on May 25, 2015, passed the PIGB, which seeks to unbundle the Nigerian National Petroleum Corporation and merged its subsidiaries into an entity.

Saraki, who was represented by the Chairman, Senate Committee on Petroleum (Upstream), Senator Tayo Alasoadura, said the PIB established clear rules, regulations, procedures and institutions for the efficient administration of the petroleum industry.

He stated, “This bill establishes the legal and regulatory framework, institutions and regulatory authorities for the Nigerian petroleum industry. It also stipulates deadline for operations in the upstream, midstream and downstream sectors.

“Given the high expectations for the PIB and the long controversy that had surrounded the passage of the bill for over a decade, we needed to break it into four parts to enable its passage into law within the short time frame we have.”

He noted that the Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill had all gone through second reading.

“We expect the report from the committees in no distant time and hope to pass the bills into law within the next quarter,” Saraki added.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said the nation’s oil and gas industry had operated for about 60 years, but sufficient attention had not been paid to the development of local research capabilities.

He stated, “Over the years, international oil operating and service companies in Nigeria took all their research problems back to their home countries or to centres across the globe without recourse to our involvement by local universities and research centres.”

23 States Surpass Borrowing Limits– FRC

Contrary to the guidelines of the Debt Management Office on subnational borrowing, 23 states of the federation exceeded their borrowing limits in 2015, the Fiscal Responsibility Commission has said.

In a report on the states and indebtedness, the FRC said Lagos, Kaduna, Cross River, Gombe, Ekiti, Edo, Ondo and Imo states had borrowed more than 50 per cent of their annual statutory allocations by 2015.

Other states in the same boat are Zamfara, Adamawa, Oyo, Abia, Ogun, Taraba, Kebbi, Enugu, Bauchi, Nasarawa, Kano, Benue, Kwara, Katsina and Sokoto.

The FRC added that when total revenue (gross statutory allocation plus Internally Generated Revenue) was used as the yardstick for measuring the level of indebtedness of the states, a total of 20 states borrowed more than their total revenues in 2015.

The report read in part, “In the light of the DMO’s Guidelines on Debt Management Framework, particularly as it pertains to debt sustainability, the debt to income ratio of states should not exceed 50 per cent of the statutory revenue for the preceding 12 months.

“In effect, state governments have a subsisting, though not in line with FRA, 2007, loan policy, which requires states governments not to owe more than 50 per cent of their statutory revenue for the previous 12 months.

“The Federal Government, on the other hand, is expected not to accumulate debt more than 40 per cent of the national Gross Domestic Product. Bearing this in mind, 23 states exceeded the threshold of 50 per cent of their gross/net statutory allocations during the year 2015.

“However, out of the 23 states, only 20 states exceeded the threshold of 50 per cent of their total revenue – gross statutory allocation plus Internally Generated Revenue.”

The report also stated, “Lagos exceeded the threshold of 50 per cent of its gross statutory allocation by well over 300 per cent; Kaduna, Cross River, Gombe, Ekiti, Edo, Ondo, Oyo, Abia and Ogun exceeded the 50 per cent of their gross statutory allocations by well over 50 per cent but less than 100 per cent.

“Imo, Zamfara, Adamawa, Taraba, Kebbi, Enugu, Bauchi, Nasarawa, Kano, Benue, Kwara, Katsina, and Sokoto states exceeded the 50 per cent of their gross statutory allocations by less than 50 per cent.

“On the basis of total revenue rather than gross statutory allocation, 20 states exceeded the threshold of 50 per cent. Of the 23 states that exceeded the threshold of their gross/net statutory allocations, Kwara, Katsina and Sokoto states did not exceed the 50 per cent threshold of their consolidated debt to total revenue.

“From 2012 to 2015, five states consistently exceeded the threshold of 50 per cent of their gross statutory allocations. The states are Kaduna, Lagos, Ogun, Cross River and Osun.”

The commission, however, said it was not safe to conclude that the states over-borrowed because the debt data had not been compared to the Gross Domestic Product of the states.

FG to Reintroduce Tolls on Federal Highways

The Federal Government on Monday said it would reintroduce tolling on the nation’s highways to raise the much needed funds to maintain the roads.

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, stated this while addressing members of the Manufacturers Association of Nigeria, who visited him in his office in Abuja.

The minister’s position may be an endorsement of the Senate’s proposal in July for the return of tolls on federal roads and the setting aside of 0.5 per cent of transport fares paid by passengers on inter-state trips to generate funds for the rehabilitation and maintenance of roads in the country.

Fashola said that the tolling system would only be introduced to road projects that had been completed by the government.

The minister, according to a statement by the Director of Information in the ministry, Mohammed Ahmed, also said the government would spend N100bn to be raised from the issuance of the sukuk bond for the reconstruction and rehabilitation of 25 arterial roads.

The sukuk bond, which has been described as a safe and low-risk investment, is being issued by Debt Management Office with a seven-year tenor.

He explained that the sum of N16.7bn would be allocated for each geo-political zone across the country.

Fashola gave some of the prioritised road projects as the dualisation of Ibadan-Ilorin road, Suleja-Minna road, Kano-Maiduguri road and Lokoja-Benin road, as well as the rehabilitation of the Enugu- Port-Harcourt Expressway and the construction of the Kaduna Eastern Bypass.

The statement read in part, “The Federal Government is reconstructing and rehabilitating 25 arterial roads with an aggressive plan to spend about N16.7bn for each geopolitical zone across the country.

“The Minister of Power, Works and Housing, Babatunde Fashola, also stated that the ministry was in the process of re-introducing the tolling system on completed federal highways in order to sustain the maintenance of these roads.”

The President, MAN, Dr. Frank Jacobs, commended the minister for the ongoing rehabilitation of the Lagos-Ibadan and Onitsha-Enugu expressways as well as other strategic roads across the country.

He also expressed delight with the approval of N213bn Nigerian Electricity Market Stabilisation Facility aimed at easing some of the challenges in the electricity industry value-chain.

States, LGs Owe Larger Chunk of N90bn MDAs Debt to Discos

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, has said that states and local governments, not the federal government owe the larger parts of the Ministries, Departments and Agencies (MDAs) debts the 11 electricity distribution companies (Discos) have frequently claimed.

Fashola, stated that out of the about N90billion the Discos have often said was owed them by government MDAs, the federal government’s share of it has been verified to be just N27 billion, with the balance owed by states and local governments.

He stated this at the just concluded annual National Council on Power (NACOP) which held in Jos, the capital of Plateau state.

According to him, “Out of the estimated MDA debts of about N90 billion claimed by the Discos, only about N27 billion has been verified as debts owed by the FGN. There are invoices which show that other parts of the debt are attributable to service points at states and local governments.”
He then urged the states and local governments to meet up with the Discos and work out a debt repayment plan, as against threats issued to the Discos.

The minister equally asked the states and local governments to request from the Discos that meters be installed at their service points to allow for precise and economic use of electricity.
This, he noted would keep the Discos in operation, as well as sustain electricity supplies to the MDAs of the states and local governments.

“I will urge first that states and local governments insist that their buildings are metered so that they can budget for and pay for energy they use. It will turn out to be cheaper than diesel generated power. It will also help reduce loss of income by Discos.

“Furthermore, I urge state governments to set up small teams with audit capacity to verify debts owed by them and their local governments, ascertain the quantum and develop a payment plan which can then be budgeted for. This will help to reduce the liquidity issues and contribute to the reforms,” he said.

Calling on states and local governments to show more interests in the power sector, Fashola said: “More importantly the challenges of inadequate power manifests itself in households, businesses, service centres and other points of need that are located in states and local governments. Therefore, the impact of insufficient power is manifest at municipal level and so will be the benefit of improved power.

“Therefore, it is only logical and necessary for states and local Governments to own and participate in the implementation of the 2005 Law and the PSRP.”
“Therefore instead passing votes of no confidence on the Discos who serve them, I will urge that they take a more important role of engagement and consultation to help the Discos serve them better. Communities and states who want to see improved power must also sacrifice and contribute some of their land for this service to be provided.”

Kaduna, PH, Kano Worst-Performing Discos in Q2 2017

Kaduna, Port Harcourt and Kano Electricity Distribution Companies were the worst-performing companies among the 11 distribution companies, according to the second quarter 2017 performance scorecards released by the Nigerian Electricity Regulatory Commission (NERC).

The scorecards of the 11 distribution companies showed that the regulatory agency ranked the companies based on six criterion or performance indices.

These indices included: the companies’ remittance to the Nigerian Bulk Electricity Trading Plc, metering commitment, remittance to the market operator, collection of revenue from customers, reduction of Average Technical Collection and Commercial losses (ATC &C) and fault clearance.

Kaduna Disco ranked least with weighted score of seven per cent out of 100 per cent; followed by Port Harcourt Disco, which scored 26.9 per cent and Kano Disco, which got 32.3 per cent.
The ranking showed that Eko Disco was the best-performing Disco with weighted score of 44.4 per cent; followed by Yola Disco, which scored 44.1 per cent and Jos Disco, which came third with 40.4 per cent.

Abuja Disco took the fourth position with 40 per cent, while Ikeja and Ibadan Discos scored 36.6 per cent and 36.3 per cent to take fifth and sixth position, respectively.
NERC’s second quarter scorecards for the discos also showed that Enugu Disco took the seventh position among the 11 discos with a score of 35,2 per cent, followed by Benin, which came eighth with a score of 34.6 per cent.

In terms of commitment to metering, Benin Disco scored zero out of 20 per cent to emerge the worst among the discos by showing no commitment to provide prepaid meters to customers, according to NERC findings.
Abuja Disco was the worst performer in terms of reduction of ATC & C losses with a score of 0.02 per cent out of a maximum point of 10 per cent.

The ranking showed that Eko Disco’s performance in collection of electricity bills surpassed NERC’s target for the Disco’s as the company scored 11 per cent against NERC’s 10 per cent maximum score set for the Discos.
Eko Disco’s performance in remittance to market operator also surpassed NERC’s maximum score as the company scored 20 per cent against 15 per cent maximum score set by NERC.

In terms of clearance of fault reported by customers, Ibadan, Yola and Ikeja Discos took the first position with a score of nine per cent each out of a maximum score of 10 per cent, while Port Harcourt and Eko discos were the worst with three per cent and four per cent scores, respectively.

FG Open to Divestment of 40% Shares in Discos - Fashola

The Minister of Power, Works and Housing, Mr. Babatunde Fashola, Monday stated that the federal government would be open to welcome new and tangible offers that would lead to it divesting its 40 per cent shares in the 11 electricity distribution companies (Disco) in the country.

Fashola said the government would look forward to having private investors bring before it good proposals that would convince it to divest part of its shares in the Discos.

He also disclosed that negotiations for the finance of the 3050 megawatts (MW) Mambilla Hydro Power Project would soon kick in following the government’s award of the contract for the $5.72 billion project.
He said: “Certainly, the government wants to see more investments in the sector, you would have heard from the president and from the vice president that our role really is to enable private sector lead our economy.

“So, I would like to see an offer on the table, and you will see how I will respond to it. There is an assumption that there is an investment we are turning aback and if there is one that I am missing, please show me the direction to it.”
He further said to buttress the government’s willingness to have more private sector investments in the power sector, “At the National Council on Privatisation recently, we approved the privatisation of another of the power plants – the Afam Power Plant.

So it shows you government wants to see investment, but the investments that are coming into the country are first and foremost portfolio investments on the stock market and over time you will see larger footprints settling in the real sector and infrastructure and that is when you know the economy is really back on the swing,” he asserted.

The government had in 2013 sold 60 per cent of the shares of the Discos to preferred investors during its privatisation of successor generation and distribution assets of the defunct Power Holding Company of Nigeria (PHCN).
Speaking further on government’s plans in the power sector, Fashola said the plan for the Transmission Company of Nigeria (TCN) would eventually lead to it getting a new board and properly staffed.

He said the delay in the confirmation of the chairman-designate for the Nigerian Electricity Regulatory Commission (NERC) was caused by the stalemate between the Senate and the executive over the interpretation of the powers of the president with regards to appointments into executive bodies not listed in the constitution.
But he said the stalemate had not necessarily stopped the NERC from regulating the sector.
Fashola said: “The role of the government in power has been largely limited. The role of government is policymakers and enablers.

“So, there is a lot of investment coming on stream in generation, gas. New IPPs are coming up and old ones are being made efficient and so we must help the distribution companies to raise their games. One of the things we are doing is to verify their claims to debts and determine how much we are owing them and pay them.

“The other point is to ensure that government, going forward, would not owe Discos. It must budget for power in the way that it budgets for diesel and travels. We have done that in the 2017 budget, we will do it again in the 2018 budget, and enforce compliance by agencies to pay their debt.

“This will help in bringing stability to the liquidity in the power sector, ultimately for the benefit not only of the Discos and entire value chain because government as 40 per cent part-owner makes money if the Discos make money, we will get N4 out of every N10 dividend that they declare.”

On how much the government has invested so far in the power Discos considering its 40 per cent share in them, he said: “I honestly can’t tell you the exact money but I think that the answer would need to be verified from the Bureau of Public Enterprises who supervises the interest of the government in those companies, I don’t have those figures, but clearly you hit the nail on the head – the entire value chain has to run in sync.”
He equally claimed that he did not state that he would make the power sector work within six months as frequently alleged in public space.

On this he said: “I remember where I made that statement, I did not say the words they said I said, I was responding to residents who, after we commissioned a power plant in Lekki to serve the water works and street lights in Lekki and Victoria Island, asked me when they can get powers in their homes, and my answer to them was that we would be encroaching the jurisdiction of the Disco without permit from NERC and that if NERC gave us the permission to provide power for them, the plant was there, connecting to them was a matter of six months.”

Seven Energy Begins Full Supply of Gas to Calabar Power Plant

Meanwhile, two wholly-owned subsidiaries of Seven Energy International Limited have commenced the full supply of gas to the 561-megawatt capacity Calabar Power plant built by the Niger Delta Power Holding Company (NDPHC), under the National Integrated Power Project (NIPP) at Ikot Nyong, near Calabar, Cross River State.
The two subsidiaries — Seven Energy Finance Limited and Accugas Limited — said in a statement Monday that Accugas Limited commenced the supply of gas to the power station after all the conditions precedent to the long-term Gas Sales Agreement (GSA) for the supply of gas to the plant have been satisfied.
Calabar Power Station is one of the 10 medium-sized power plants built by the NDPHC to deliver 4, 2771 megawatts of electricity to the national grid.

The other NIPP power plants include the 451MW-capacity Ihovbor Power Plant in Benin, Edo State; the 451MW-capacity Sapele II Power Plant in Ogorode, Sapele in Delta State; and the 434MW-capacity Geregu II Power Station built in Ajaokuta, Kogi State.
Others include: the 676MW-capacity Olosunsogo II Power Plant built in Olorunsogo in Ogun State; 451MW-capacity Omotosho II Power Plant in Okitipupa Local Government Area of Ondo State; 961MW-capacity Alaoji Power Plant in Abia State; 225MW-capacity Gbarain Power Plant in Gbarain Ubie, Bayelsa State; 338MW-capacity Egbema Power Plant located near Owerri in Imo State and the 225MW-capacity Omoku II Power Plant located near Port Harcourt in Rivers State.
However, the operations of the plants have been constrained by gas shortages.
Seven Energy’s midstream gas infrastructure assets, focused in the southeast Niger Delta, include the 200 million standard cubic feet per day (mmscf/d) capacity Uquo gas processing facility and a gas pipeline network of 227 kilometres with distribution capacity of 600 mmscf/d.

The Calabar GSA is supported by a World Bank Partial Risk Guarantee (PRG), a federal government-backed financial instrument that will secure the supply of up to 131 mmscf/d of natural gas under the Calabar GSA to guarantee the consistent generation of up to 561 MW of electricity to the national grid, representing around 15 per cent of current power generation in Nigeria.
“This arrangement, which guarantees payments to Accugas for gas supply, is backed by the federal government of Nigeria and the International Development Agency of the World Bank. It is the first of its kind for gas supply in Nigeria and is a demonstration of the federal government’s commitment to increasing power supply in the country and stabilising the ‘gas to power’ value chain,” the statement explained.

Before Accugas commenced the full supply of 131mmscf/d of gas to the Calabar Power Station, it has been supplying gas to the plant under an interim gas sales agreement, with average deliveries in 2017 to date of 45 mmscf/d.
According to the statement, the Calabar GSA includes a 90-business day grace period during which the PRG cannot be called upon.

In a related development, there have been changes in the board of Seven Energy in order to strengthen the board with independent expertise and knowledge to guide the Group in evaluating and implementing its restructuring.
Under the new changes, David Duggins, David Lovett, Oluseyi Bickersteth and Ken Igbokwe have been appointed independent non-executive directors; while the Group’s Chief Executive Officer, Manish Maheshwari, has also been appointed to the Board.
Also, Stephen Vineberg and Matthew Harwood have stepped down from the board as shareholder representatives of IDB Infrastructure Fund II and Petrofac respectively, with Satjeet Sahota replacing Stephen Vineburg.

Dangote Group to Invest $4.6bn in Agriculture

The Chief Executive Officer, Dangote Group, Aliko Dangote, has said that the company would invest $4.6 billion in nation’s agricultural sector in the next five years.

He listed sugar, rice, tomatoes and oil palm as some of the agricultural sectors where the monies would be invested.

Mr. Dangote said this at the 6th edition of the 2017 AgrikExpo and NABG Conference in Abuja on Monday while appealing to government at all levels to rehabilitate and construct feeder roads to facilitate movement of farm produce to markets.

Represented by Mansur Ahmed, the Executive Director, Stakeholder Management and Corporate Communications of Dangote Industries Limited, the industrialist said that rehabilitating rural roads would help to reduce costs of production and prices of goods.

He also said that improving technology in agriculture would guarantee improved inputs (seeds, fertilisers), and also help farmers improve yields.

According to him, if agriculture must succeed in the country, our farmers must be young and active which means that youths must be involved.

“We need to improve human capital in every aspect of the farm value chain.

“There is need for infrastructure to be in place to enable farmers transport their produce from farm to markets.”

He called on state governments to initiate programmes that would promote areas of their comparative advantage in agriculture to boost food security and assist Federal Government’s agriculture efforts.

He called for adequate cooperation between the public and private sector to enable agriculture thrive in the country.

“Agriculture cannot thrive in this country except there is a better partnership, collaboration between the private and public sectors,’’ Mr. Dangote said.

State-Owned NPDC now Nigeria’s Fifth Largest Oil Producer

The Nigerian National Petroleum Corporation, NNPC, on Monday named its upstream oil exploration and production subsidiary, the Nigerian Petroleum Development Company, NPDC, as the fifth largest oil producer in Nigeria.

The NPDC Managing Director, Yusuf Matashi, said in Benin that the company which currently produces 180,000 barrels per day, bpd, plans to grow its equity production to 300,000 bpd by 2018; 400,000 bpd by 2019 and 500,000 bpd by 2020.

“Having attained the position as fifth largest Exploration and Production Oil Producer in the Nigeria, due to the ongoing transformation in NNPC, I am confident the NPDC will efficiently manage its portfolios to achieve the new targets,” he said.

Mr. Matashi did not mention the four companies ahead of NPDC.

Industry data list Shell Petroleum Development Company, SPDC as accounting for Nigeria’s highest oil production capacity among the joint venture operating companies with the NNPC, over 900,000 bpd.

The others include Exonmobil Corporation, with about 600,000bpd; Chevron Nigeria Limited, CNL, with over 400,000 bpd and Nigerian Agip Oil Company, NAOC, with about 250,000 bpd.

The NPDC, he pointed out, controls 55 per cent equity in nine Oil Mining Leases, OMLs in the country, namely 4, 26, 30, 34, 38, 40, 41, 42 and 55, apart from non-equity operations in three oil blocks of selected NNPC Joint Venture fields.

Besides, there are also 60 per cent participatory interest in four OMLs, including 60, 61, 62 and 63, in addition to 100 per cent ownership of seven OMLs, including 11, 13, 64, 65, 66, 111 and 119.

This brings to its involvement in a total of 29 oil concessions, comprising 22 OMLs and seven Oil Prospecting leases, OPLs.

The NPDC, he said, with varied interests in seven deep-water concessions, also successfully executed a Global Memorandum of Understanding, GMoUs, with communities in OMLs 30 and 34.

Again, he said the company achieved a major feat recently by successfully drilling and completing five horizontal wells in nine months, in OML 26, leading to the production of an additional 7,000 bpd.

Other achievement included successful turnaround of OML 40 asset from zero to 12,000 bpd to underline the company’s rising profile as the seventh largest owner and operator of Floating Production Storage and Offloading, FPSO in Nigeria, with FPSO Mystra having 1.03 million of crude production capacity.

In addition, Mr. Matashi said the NPDC also carried out some intervention activities which led to the peak production of approximately 10,000 bpd in OML 65 in June 2017.

In the gas sector, he said the NPDC at the moment was not only the country’s largest gas producer but also the highest supplier to the domestic market.

“NPDC aggressive gas pursuit since 2009 has also raised its profile as the highest single supplier of gas to the domestic market with an average of 700 million standard cubic feet per day,” Mr. Matashi said.

“With the recent completion of the Utorogu non-Associated Gas 2 plant, about 150 million standard cubic feet of gas per day, mmscf/d added to the system; the Oredo 2 gas plant also added 100 mmscfd, while the successful re-entry of Odidi gas plant brought additional 40 mmscfd of gas,” he said.

Ogunbanjo Replaces Aig-Imoukhuede as NSE President

The Nigerian Stock Exchange (NSE) on Monday announced the emergence of Abimbola Ogunbanjo as the new President of National Council of the Exchange.
The exchange, in a statement, said that the election of Mr. Ogunbanjo was reached at its council meeting immediately after its 56th Annual General Meeting in Lagos.

It stated that Mr. Ogunbanjo would replace Aigboje Aig-Imoukhuede, who bowed out after completion of his three-year tenure as president.

It added that Aig-Imoukhuede would continue to serve on the National Council as an ex-officio member, pursuant to its Article of Association.

The added that Mr. Ogunbanjo, who joined the council in 2011, had been the First Vice President since 2014.

He is the Chairperson of the demutualisation Advisory Committee of the NSE and currently serves as the Managing Partner of the renowned leading corporate law firm of Chris Ogunbanjo & Co (Solicitors).

The statement said that Abubakar Balarabe Mahmoud, SAN, current President of the Nigerian Bar Association (NBA) and one of the founding partners of the law firm of Dikko & Mahmoud, was elected first vice president.

It added that Catherine Echeozo (former deputy managing director of GT Bank) was elected as Second Vice President.

Commenting on the recent development, Mr. Aig-Imoukhuede was reported by the statement as saying that robust succession planning framework ensured the emergence of Mr. Ogunbanjo.

“I am delighted that our robust succession planning framework has ensured the emergence of a worthy successor in the person of Abimbola Ogunbanjo.

His background as a legal practitioner and successful corporate player, combined with years of meritorious service as a council member, has equipped him with the knowledge and experience required to take the Exchange to higher levels of performance and development,” he said.

Oscar Onyema, NSE Chief Executive Officer, also commended the outgoing President for his contributions, commitment and distinction in service.

“Aig-Imoukhuede brought hands-on experience and business expertise to the council which contributed to the development of the Exchange despite the harsh economic and policy environment that characterised his tenure.”

He also said “the election of Ogunbanjo brings continuity and ensures that the Exchange would continue to deliver on its strategic objectives.”

Cashew Exports Soar Amidst Price Increase

Gains on global cashew prices have jumped by 85 per cent in the past two years and Nigeria is gradually tapping into the windfall.

Prices have increased from $750 per metric tonne in 2015 to $1,800/MT in 2017.

Amidst the global commodity price increase, export of Nigeria’s cashew suffered a decline in 2016 when the country made N954.2m ($3.1m) in the last quarter of the year. At the market price of $1,600/MT, export volume was a mere 1,937MT.

By the first quarter of 2017, however, there was an improvement in the export volume.

Nigeria exported 4,444MT of cashew in the first quarter, earning N2.4bn or $8m at the market value of $1,800/MT. This, it was learnt, increased dramatically by the second quarter of the year to 25,555.5MT. Nigeria’s earnings subsequently rose to a record high of N13.5bn ($44.2m).

Several factors have been attributed to the improvement in the performance of cashew and other agro exports.

The government, towards the end of 2016, had embarked on an aggressive investment to boost the agricultural sector.

Farmers were encouraged to plant improved cashew seedlings with higher yields. Along with other initiatives by the Federal Government that targeted farmers with fertilizers and other materials.

The result was an increase in the local production of cashew crops.

According to the National President, National Cashew Association of Nigeria, Mr. Tola Faseru, 25,000MT has been added to the cashew production this year, bringing it to 175,000MT annual production from the former figure of 150,000MT.

Faseru explained that improvement in packaging and other practices had increased the value of Nigerian cashew.

He said that whereas people preferred to price Nigeria’s cashew very low in the past, the crop was now being reckoned among the top valuable offerings along with other countries.

He said, “Our insistence on the abolition of the use of propylene bags in packaging cashew and settling for the use of jute bags improved the quality and market value of the cashew.

“The problem with the former packaging system is that it caused the crop to retain moisture and moisture is not good for cashew.”

Faseru added that he had advised exporters on proper drying methods, which led to some firms investing in drying facilities.

In the finance sector, the Central Bank of Nigeria relaxed its export proceeds repatriation policies and in April, created a special investors/exporters’ foreign exchange window.

Whereas the export repatriation policy mandated exporters to sell their proceeds at the official exchange rate, the investors/exporters’ window opened an avenue for them to exchange their money at an amount that is almost as high as the parallel market rate.

At the investors/exporters’ window, dollar currently exchanges for N360, about N55 higher than the official exchange rate of N305.

The government had positioned cashew as one of the strategic crops that would fetch Nigeria foreign exchange from the non-oil sector.

According to the Chief Executive Officer of the Nigerian Export Promotion Council, Mr. Segun Awolowo, a lot of investment has gone into building capacity for exporters and boosting the export of cashew and other crops.

The agency has also ‘midwifed’ the revival of the suspended Export Expansion Grant, an incentive that helps reduce some of the cost incurred by exporters. It was suspended in 2014 following allegations of widespread abuse.

Faseru is confident that with increased production volume and better farming methods, storage and packaging methods, and incentives for farmers, Nigeria will be able to realise her aim of earning foreign exchange from the non-oil sector.

Pension Assets Rises to N6.7tn in May 2017

The total assets under the Contributory Pension Scheme rose to N6.7tn as of the end of May, this year.

Figures obtained from the National Pension Commission on Friday showed that 73.14 per cent of the total funds had been invested in the Federal Government of Nigeria’s securities.

The FGN investments are N3.8tn and N1.12tn, amounting to 56.47 per cent invested in the FGN bonds, and 16.67 per cent of the funds invested in the FGN treasury bills, respectively.

According to the figures, N539.78bn, which is 8.02 per cent of the funds, was invested in domestic ordinary shares; while N385.08bn, totalling 5.72 per cent of the funds, was invested in banks.

The pension operators invested N258.2bn, N216.07bn, N106.2bn and N93.4bn, totalling 3.8 per cent, 3.2 per cent, 1.5 per cent and 1.3 per cent in corporate debt securities, real estate properties, state government securities and foreign ordinary shares, respectively.

PenCom said the aggregate pension assets under the CPS grew from N4.61tn as of the end of December 2014 to N5.3tn in 2015.

Earlier in the year, the commission reviewed the regulations of investment of pension funds.

In the reviewed regulations, PenCom stated that the Pension Fund Administrators must offer the multi-fund structure for the Retirement Savings Account and that there would be a transition period of six months, effective from the commencement date of the multi-fund structure for all the PFAs to restructure their respective portfolios.

It stated, “The multi-fund structure shall comprise Fund I, Fund II, Fund III and Fund IV (retiree fund). Funds I, II, III and IV shall however differ among themselves, according to their overall exposure to variable income instruments.”

The commission said the exposure to variable income instruments was defined as the sum of a PFA’s investments in ordinary shares and participation units of open close-ended and hybrid funds; real estate investment trust; infrastructure funds; and private equity funds comprising its current holdings and any future financial commitments to the acquisition of participation units in the funds.

Under the Pension Reform Act, the PFAs administer the funds, which are kept in the custody of the Pension Fund Custodians.

PenCom stated, “The requirements of the regulations are consistent with the provisions of the Pension Reform Act, 2014. The purpose of the regulations is to provide uniform rules and standards for the investment of pension fund assets.”

Nigeria’s Auto Assembly Plants sSubstandard – Experts

Some auto experts have poured scorn on the current state of automobile assembly plants in the country, about four years after the introduction of a policy by the Federal Government aimed at making Nigeria a major vehicle producing nation.

An automobile expert, Dr. Oscar Odiboh, said many of the automobile assembly plants operating in Nigeria were below standard and might not take the industry anywhere.

The Covenant University lecturer, who spoke at a transport forum in Lagos on Friday, also called on local vehicle assemblers to focus on the production of budget cars, adding that only the availability of affordable new vehicles could halt the growth of the used vehicle market.

This view was also echoed by the Chairman, Naja, an auto forum, Frank Kintum, who stressed the need to rejig the auto policy in order to accelerate the development of the industry.

The National Automotive Design and Development Council, the government’s agency implementing the policy, recently said 53 auto assembly plants had been approved to operate in the country, many of which were already running.

Although the council said the installed production capacity of the auto assembly plants had hit 408,870 automobiles, only 10,673 vehicles were assembled at the end of 2016. Local automakers have been complaining of poor patronage of the vehicles coming from their factories, a situation that has reportedly slowed down their operations.

Odiboh said almost mid-term into the 10-year plan of the auto policy, most of the local assembly plants lacked the standards to compete globally.

“What we have at the moment are not real assembly plants; they are glorified joineries. About 65 per cent of our assembly operations are manual; and 70 per cent of their employees are casual,” he stated.

Compulsory Insurance’ll Improve Cities' Safety – LCCI

The Chairman Insurance Group, Lagos Chamber of Commerce and Industry, Mr. Gboyega Olanbiwoninu, has said that full implementation of the compulsory insurance policies will boost the safety of cities.

He said this during an insurance stakeholders’ forum organised by the LCCI Insurance Group in Lagos.

A statement from the LCCI said the forum was a strategic partnership between Lagos State Safety Commission and the LCCI to enlighten insurance stakeholders on the road map towards the successful implementation of the compulsory insurance policies such as third party motor; occupiers’ liability; building under construction, health insurance.

Olanbiwoninu said, “Implementation of the compulsory insurances will help Lagos State towards its vision in ensuring that the state is enlisted as one of the safest cities to live in the world. And at the same time, it will help grow the insurance industry’s contributions to the Gross Domestic Product, which is currently at an abysmal level of about 0.8 per cent.”

The chairman observed that the low contribution of insurance to the GDP may not be unconnected with the apathy to insurance products by the insuring public, lack of awareness and demonstrated value.

He said that the joint task force set up the Nigerian Insurers Association and the Nigerian Council of Registered Insurance Brokers to implement the compulsory insurance policies had put in place marketing campaigns to enlighten the insuring public and present value on the policies.

Olanbiwoninu expressed optimism that with the support received so far from Lagos Sate and its various enforcement agencies, the success of the implementation of the compulsory insurance was palpable.

Power firms Disagree with Gas Producers on Dollar-Denominated Pricing

The denomination of the price of gas sold to electricity generation companies in the United States dollars is sending ripples across the entire value chain of the Nigerian electricity supply industry.

The Gencos have raised concern about the issue, with the distribution companies also worried that it has contributed to a major mismatch between the invoices they receive and the revenue they collect from consumers.

But gas producers said their contracts should be denominated in dollars because their plants were executed in the same currency.

They also said being paid in naira, using the prevailing official exchange rate, had exposed them to significant foreign exchange risk, which was threatening the continuity of their businesses.

About 80 per cent of the electricity generated in the country is from gas-fired power plants, with hydro plants contributing the rest.

The President, Nigerian Gas Association, Mr. Dada Thomas, said the nation could be plunged into darkness if the forex risk remained unresolved amid a debt of over $500m owed gas producers by the power sector.

He stated, “The gas contracts are denominated in US dollars but are paid in naira at the CBN rate. What it means is that gas suppliers are being made to bear the foreign exchange exposure for the entire power sector.

“We are the ones being punished by the entire electricity value chain for taking a risk in putting down gas plants to feed the Gencos.”

Thomas, who is the Chief Executive Officer of Frontier Oil Limited, described the situation as unfair, saying gas producers should be paid in dollars, because “we spend dollars to generate the product.”

“My preference is that we get paid in dollars. But if that is not doable, let the central bank provide a platform for gas producers to be able to source dollars at the same rate at which we are paid our gas invoices so that we don’t lose any money,” he added.

According to him, gas producers are being paid at N305/dollar and then they have to go and look for dollar at N365.

The NGA president said, “We lose N60 for every dollar sale we made. That means the business will go bankrupt; it is just a matter of time. We are drowning.

“If that happens, Nigeria will be plunged into darkness because we will all stop supplying gas. It means that no new gas project can be undertaken because the investors know that they cannot get their dollars back.”

The Nigerian Electricity Regulatory Commission in 2014 approved a new gas-to-power pricing benchmark of $2.50 per thousand cubic feet from $1.5 per mcf, and $0.80/mcf as transportation costs for new capacity.

The Executive Secretary, Association of Power Generation Companies, Dr. Joy Ogaji, said the Gencos would like the price of gas being sold to them to be denominated in naira.

She said, “Why should we pay for gas in dollars? Don’t you see the challenges of foreign exchange? You have to go to the black market to be able to change naira to dollars before you can buy gas.

“We pay the naira equivalent and some of the companies expect that we pay in dollars.”

The government-owned Nigerian Bulk Electricity Trading Plc buys electricity in bulk from the generating companies and sell to the Discos, which then supply it to the consumers.

“Clearly, it (dollar-denominated gas pricing) has an impact on the retail end of the value chain,” the Chief Executive Officer, Association of Nigerian Electricity Distributors, an umbrella body for the Discos, Mr. Azu Obiaya, said.

According to him, under the minor review of electricity tariff, there is a requirement that gas prices flow through to consumers and the tariff be adjusted for any forex impact.

“So, if the tariff is not adjusted under the minor review, it means that the NBET will continue to bill the Discos for energy that has increased by the cost of that forex impact; but the Discos cannot recover it from their customers,” Obiaya said.

He stressed the need for an adjustment that would put everything in realignment.

The Multi-Year Tariff Order for 2015 to 2018 authorised NERC to provide for minor reviews of the tariff to be conducted bi-annually to update the total cost of electricity.

The variables that are to be considered during the review are the cost of fuel (gas price), foreign exchange rates, inflation rate, and actual available generation capacity.

Obiaya stated, “You have gas prices in dollars but you have your electricity tariff in naira, which is not reflecting the devaluation of the naira. There is a major mismatch, which is contributing significantly to the inflated invoices that the Discos are receiving.

“We have always agreed with the Gencos’ position that the government needs to give consideration to pricing gas in naira, because it will do two fundamental things.”

According to the ANED CEO, it will make the market more aligned and minimise the impact of price increase on the consumers at the retail end.

The regulator, NERC, said in February this year that it had proposed to the government the option of pricing gas in the local currency in order to mitigate the foreign exchange risk, which it described as the major cause for the gap in tariff.

“But we haven’t heard anything specifically in terms of government’s position on this proposal,” Obiaya said.

The spokesperson for NERC, Mr. Usman Arabi, did not immediately respond to an emailed message sent to him on Friday seeking comment on the outcome of the proposal.

The Chief Executive Officer, Eko Electricity Distribution Company, Mr. Oladele Amoda, told our correspondent that there had been several tariff reviews, which were not implemented.

Amoda explained, “We still charge the customers on N197 to a dollar; they (Gencos) charge us on N305/dollar every month. If it goes up, they use the prevailing exchange rate. That is why we are saying let us have a tariff review to reflect this.

“Then, we are also saying that the government should see to it that dollar-denominated invoices should be converted to naira. They are looking at finding a lasting solution.”

The NGA president said the association met with the CBN governor in March; had made representations to the Federal Ministry of Investment, Trade and Industry; and presented many papers to the Minister of Power, Works and Housing, Mr. Babatunde Fashola, that it was not right for the gas supplier to bear the forex risk.

“They have not yet come up with a solution,” he said.