Jide Ajia

Nigeria records over 70pct oil production cost reduction, $3bn savings

By Jide Ajia

The Nigerian National Petroleum Corporation (NNPC) has recorded a significant drop on cost of oil production from $78 per barrel to $23, representing 70.5 percent reduction.

The Group General Manager, National Petroleum Investment Management Services (NAPIMS), NNPC, Dafe Sejebor, disclosed that the services arrived at the figure after looking at difference between the $78 and $23 which represent old and new cost of production in relation to the present daily average production in the country.

Speaking during inauguration of Anti-Corruption Committee of the unit on Thursday, Sejebor hinted that effect of development yielded the nation $3 billion saving, just as he proved that more could be achieved as time goes on.

 

The GGM stated that the target was to bring the cost of production to between $17 and $19 for onshore and offshore production respectively.

He commended the Federal Government for its support to the NNPC management in tackling challenges within petroleum industry, especially that of cash call exit agreement signed in 2016, alongside reduction of contracting circle from three years to six months.

On the new Petroleum Policy, Sejebor said it was necessitated by the increasing difficulty in operating the petroleum industry within the framework of the old Petroleum Act in the face of the delayed passage of the Petroleum Industry Bill (PIB).

However, the development was said to had came in right moment the Minister of State for Petroleum Resources, Ibe Kachikwu, maintained believes that the $23 per barrel cost could still be further brought down in an effort to attract new investments into the oil and gas sector.

Kachikwu, had during his visit to Dangote refinery recently, expressed worries that Nigeria’s cost of oil production remains absolutely high when compared with other OPEC countries including Saudi Arabia which produces at $9 per barrel

In real term, it means that the NNPC’s acclaimed 70. 5 percent cost reduction achieved in two year, the estimated $3 billion saving per annum, could still be improved and bring in line with global best practices.

Investors lose N342bn as bearish trading wanes

By Jide Ajia

Equity investors on the floor of Nigerian Stock Exchange (NSE) has recorded another whooping losses of N342.677 billion at the close of daily trading on Wednesday.

The Market Capitalisation, which tells the total value of shares bought and sold closed at N12.443 trillion as against N12.786 trillion recorded on Tuesday.

A total of 224.773 million units of listed companies shares valued at N5.090 billion were transacted by investors in 4,822 deals.

Trading data from NSE showed ten companies gained against 30 losers as the Year-to-date returns (Ytd) stood at 34.34 percent.

Specifically, FBN Holdings led activity chart as stock traders exchanged 34.466 million shares worth N206.834 million.

Access Bank  followed by less than half trading 27.425 million shares worth N276.911 million; Guaranty Trust Bank; followed with 25.150 million shares valued at N970.777 million; while 15.082 million units of Jaiz Bank shares worth N11.992 million were traded.

Also traded were 12.655 million units of Zenith Bank shares valued at N284.670 million.

Nestle Nigeria Plc, led the gainers’ table adding N11.9 to close at N1220, from N1208 per share recorded Wednesday.

Nascon Allied Industries, followed with a gain of N0.31 from day open level of N11.69 to close at N12, while Union Bank Nigeria appreciated by N0.21 to close at N6 per share, up from N5.79. Dangote Sugar Refinery gained N0.13 to close at N12.8 from N12.67, while Vita Foam Nigeria increased by N0.12 to close at N2.83 per share, from N2.71.

Conversely, Dangote Cement, Total Nigeria, Nigerian Breweries, Guinness Nigeria and Stanbic IBTC Holdings led the losers as Dangote Cement share price declined by N11 to close at N214 per share, down from N225.

Total Nigeria lost N9.55, from N236.55 to N227; while Nigerian Breweries declined by N5, from N190 to N185. Guinness declined by N1.93 to close at N87.96 from N89.89; while Stanbic IBTC Holdings depreciated by N1.92 to close at N37.08 per share, down from N38.95.

Jigawa earmarks over N1.3bn for water, schools projects across villages

By Abdulwaheed Usamah, from Jigawa State

Towns and villages across Jigawa State may soon start receiving face lift on focal developmental areas as government disclosed its concluded plans to spend over N1.3 billion on water, building of classrooms and other educational infrastructure projects in the state.

The resolve, as it was learnt, was said had been teach at the state executive council weekly meeting where the board approved, awarded contract of 100 hand pumps and 25 water connection points; building of 100 Islamic classrooms across the state’s 18 constituencies; and other schools and areas projects within the state.

Through a statement released on Wednesday by the Commissioner, Jigawa State Ministry of Information, Youth, Sports and Culture, Bala Ibrahim, the State government disclosed that the executive council approved award of contract for construction of 110 hand pumps and 24 water connection points in different towns and villages across the state at sum of N119,216,536.

According to the statement, for purpose of addressing issues relating to Islamiyya Quranic and Tsangaya Education, was also to reduce large numbers of out of school children and generally improve teaching and learning in the state, the state’s executive consented to awarding contract for construction of 100 classrooms across 18 constituencies across Jigawa which was estimated to N170,023,626.

Placing high premium and given top priority to the education, the state government  hinted that for its “Education Change Agenda” which is major concept is to address daunting challenges of congestion in schools, dearth of teachers both in terms of quality and quantity, inadequate instruction materials, infrastructure, decay and large number of out of school children among others, the meeting concluded plans to also awarded commencement of various projects in different areas and schools across the state of which is to cost the government N1,025,470,582.

TCN secures ‎$1.55bn to revive transmission projects, expand grid

By Jide Ajia

The Transmission Company of Nigeria (TCN) has secured $1.55 billion from multilateral donors to revive some transmission projects and expand the grid.

The Interim Managing Director, Usman Gur Mohammed, made the development known on the sideline of the 18th Monthly Power Sector and Stakeholders meeting on Wednesday, in Kumboso, Kano State.

He said in a statement that the intervention came from the World Bank, African Development Bank, Islamic Development Bank, European Union and JICA.

According to him, the funding is to resuscitate transmission projects and further expand the transmission grid. Projects to be executed include the Abuja transmission project which would provide sub-stations as well as another transmission line for supply to Abuja from Lafia; we have also resuscitated the JICA project that has been on the drawing board for a long time now, these projects, plus others are being executed around the country.

He recalled that when he assumed office he discovered that TCN’s capacity to wheel power was actually higher than that of the distribution companies (DisCos).

According to him, there was need however for further expansion of the grid which made it expedient for TCN to seek the support of the Federal Ministry of Finance and Ministry of Power, Works and Housing to raise funding from donor agencies.

“On growing the load and avoid load rejection, we are working with Discos to see how to improve their capacity and we have appointed, Interface focal officers to help the DiSCos pick more load.”

On TCN’s part, he said that TCN was working towards realizing 20,000 megawatts of transmission capacity in the next few years.

The Interim Managing Director pointed out that Right of Way is a crucial challenge in the power sector which has resulted in a study by the West African Power Pool on the international transmission lines.

He pointed out that since the payment of compensation for Right of Way in Nigeria has become a crucial problem, TCN started collaborating with state governments.

“We are collaborating with states in every area that we are putting a significant transmission capacity and we are working to expand several transmission lines in the country the MD said. In the Northern axis for instance, the lines from Shiroro to Kaduna, from Kaduna to Kano, and we are putting a cord line that will carry 2,400MW capacity, we have never had that kind of line in Nigeria. But we need to collaborate with satets to ensure prompt execution of the projects and we have started with Kaduna”, he said.

He states that, for instance, the governor of Kaduna is the one that was paying the compensation for some of the places where we are putting sub –stations in Kaduna.

The Governor of Kano State, is also supporting TCN on the rights of way between Kano and Kaduna border.

The company, he added, was also working with the Governors of Abia, Lagos, Imo and Ogun states among others, to also deal with the issues of rights of way as it concerns them, in order to enhance transmission capacity nation-wide.

Oyo releases N13bn for LG workers, pensioners arrears

 

By Jide Ajia

The Oyo State Government has disbursed over N13 billion to settle five months salaries owed local government workers and primary school teachers as well as pensioners in the state.

The State Commissioner for Local Government and Chieftaincy Matters, Bimbo Kolade, made the revelation in Ibadan on Wednesday.

He explained that the N13.7 billion released to the ministry from the office of the State’s Accountant General comprised the April, May and June allocations for local governments in the state and a share from Paris Club refund.

Kolade stressed that the N13.7 billion was inclusive of Oyo State Universal Basic Education Board (SUBEB) funds, adding that N3.088 billion was released for April, N3.396 billion for May and N5.255 billion for June while N2 billion was released for Local government workers and pensioners’ welfare by Governor Abiola Ajimobi from the refunded second tranche of N7.9 Paris Club fund.

The commissioner charged all caretaker chairmen to be prudent with the fund, expressing optimism that outstanding salaries of some 15 council areas put at an average of two months would be paid.

He cautioned the caretaker chairmen against over bloated staff strength which he said always made it difficult for them to offset their wage bills promptly, urging that they should limit their ad-hoc staff to only those they could afford to pay their bills as at when due.

Lagos lauds Sterling Bank’s sustainability campaign

Jide Ajia

In a massive show of endorsement of Sterling Bank’s sustainability campaign known as Sterling Environmental Makeover (STEM), senior officials of the Lagos State Government have paid glowing tributes to the initiative, saying it was in line with the state government’s vision of encouraging residents to show respect for the environment.

The Commissioner for the Environment, Lagos State, Dr. Babatunde Adejare, commended Sterling Bank for its outstanding show of commitment to the campaign for a livable environment.

Addressing the mammoth crowd during flag off of mega cleaning exercise which took place at the Computer Village in Ikeja, Adejare said, there was need to have more respect for our environment than we do now.

He stressed that the state government cancelled the monthly sanitation exercise because it believed that cleaning the environment should be part of our daily lives and not just a monthly routine.

The commissioner disclosed that the state government recently introduced the Cleaner Lagos Initiative in a bid to better manage solid waste and urged participants in the cleaning exercise to extend the practice to their different homes as part of their contribution to the emergence of a cleaner Lagos that is fit for human habitation.

Adejare enjoined residents in Lagos not to block drainages with their refuse but to put them in bags and tie the mouths before leaving them in front of their houses for officials of Lagos State Waste Management Authority (LAWMA) to pick up.

The Chief Executive Officer of Sterling Bank, disclosed that the STEM programme was being held simultaneously in eight other locations across the country to include: Ogun, Oyo, Kwara, Rivers, Enugu, Plateau, Kano and in Abuja, the Federal Capital Territory (FCT).

In his welcome address, Adeola explained that STEM was the bank’s corporate social responsibility initiative which promotes sanitation and helps to reduce the impact of human activities on the environment with the aim of making planet earth a clean and safe place for all.

He added that the STEM programme covered partnership with waste management agencies in 14 states, planting of trees in Bauchi, Gombe and Plateau to combat desertification and an annual national cleaning exercise.

He said the phenomenon of global warming which triggers flooding, earthquakes, tsunamis and volcanoes, among other natural disasters can no longer be denied.

According to him, global warming is not primarily an act of nature. Human activities that lead to the emission of greenhouse gases such as carbon dioxide, methane and nitrous oxide are dominant influence. These activities are ensuring that global temperature is rising at the fastest rate in 50 years with oceans getting warmer and expanding, thereby causing climate change, expansion of deserts and rise in sea levels.

Calling on Nigerians to treat the environment with care, the Sterling Bank Chief Executive observed that cases of flooding, especially the types experienced in urban neighbourhoods in Nigeria during the wet season, were the result of poor sanitation practices and not acts of nature.

He advised Nigerians to pay better attention to the state of their immediate environment and desist from indiscriminate dumping of refuse, plastic bottles, empty cans, water sachets and nylons in drainages, canals and highway man-holes.

Also speaking, the Chairman of Ikeja Local Government, Engr. Mojeed Babajide, thanked Sterling bank for the initiative, adding that the local government was very happy to partner with it; he re-echoed the commissioner’s plea for refuse to be properly packed for officials of LAWMA to pick them up in a bid to ensure a cleaner Lagos.

Among other highlights, Olamide Adedeji, a popular hip-pop artiste known as Olamide Badoo, the brand ambassador of STEM thrilled the audience with entertainment and encouragement on the need to keep the environment clean.

FG shows commitment to agro-allied sector, revive 5 fertiliser plants

 

By Jide Ajia

The Federal Government says five fertiliser blending plants would be revived by the end of August to complement the existing 11 under the Presidential Fertiliser Initiative (PFI).

The President, Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN), Thomas Etuh,  said in Lagos on Wednesday during a facility tour of ENL terminal and Tak Logistics warehouses at Apapa and Tin Can Ports, where raw materials for fertiliser production were been discharged.

Etuh explained that work to revamp the five plants located in Benue, Edo, Zamfara, Plateau and Kano had neared completion.

According to her, five plants would join in fertiliser production by the end of August and that would ensure that fertiliser gets closer to the domain of agro dealers and farmers.

“Eleven plants located in eight states are already producing fertiliser and by August the number of functional plants will be put at 16. The Federal Government targets to have 20 fertiliser plants working by the end of this year (2017),’’ Etuh said.

The FEPSAN president also said that efforts were being made to accelerate the ongoing discharge of fertiliser blending materials (phosphate and potash) at the Lagos ports to ensure plants get delivery for production as soon as possible.

Etuh attributed the delay in the discharge of the materials to constant rainfall in Lagos.

Also, the Executive Director, Tak Logistics, (the company providing logistics for the discharge of the fertiliser blending materials), Ankush Arora, assured that more machines and workers would be deployed to enable them discharge the materials.

“About six vessels berthed here in Apapa and Tin Can ports respectively and each of the vessels carries about 33,000 tonnes of phosphate and potash.The vessels are from Morocco and Spain. “We are working hard to see that all these vessels are discharged within the next three weeks,’’ Onyebara said.

The Managing Director, Tak Logistics, Kelvin Onyebara, explained that security agents have been deployed to the discharging terminals at the ports to ensure a 24-hour service.

Onyebara said that company had resolved to put everything into use for a successful implementation Presidential Fertiliser Initiative (PFI) under the Buhari-led administration.

Reps grill NPA boss over N5bn hqtrs renovation contract

By Jide Ajia

The House of Representatives Committee on Public Accounts has expressed reservations over the award of N5.1 billion contract for renovation of the Headquarters of the Nigerian Ports Authority (NPA) in Lagos.

A report from office of the Auditor-General obtained by journalists on Wednesday had alleged that there were some infractions in the process of awarding the contract.

The report stated that while the contract was awarded in March, 2011, the contract agreement was signed in 2012.

It also accused the NPA of violating the extant rules by expanding the contract by additional work worth N54 million on the building without approval.

The Managing Director, NPA, Hadiza Usman, while responding, said that the authority got an approval from the Federal Executive Council.

She said NPA also got a certificate of no objection from Bureau of Public Enterprise and other relevant documents for the award of the contract, adding that the authority did not have the mandate so that decision should not have been done by those who did it.

While expressing dissatisfaction over the conduct of Sageto Contractors, the contractor handling the renovation work, Usman said that she instructed the firm to vacate the NPA premises.

She said that so far N4.1 billion was paid for the renovation work that was about 97 per cent completed.

However the General Manager, Physical Planning, NPA, Idris Abubakar, said that NPA embarked on the additional work due to discovery of electricity cable underneath the construction area, explaining that the cables affected the initial design.

In his ruling, the Committee Chairman, Kingsley Chinda, mandated the NPA to furnish the committee with some documents relating to the contract, some of which were bill of quantity, copies of authorised expenditure from the contingency fund, performance certificate for the work and details of procurement process.

Others were evidence of tax remittances to the Federal Inland Revenue Service, details of all payments made in the contract and copy of approval of design by the Lagos state government.

Chinda said that the committee would beam more light on the contract to ensure transparency and accountability.

“We want to confirm that the contract was actually and duly executed,” Chinda said.

The Committee also invited Sageto to appear before its members to throw more light on the alleged irregularities surrounding the award of the contract.

$500bn global shipping industry embraces consolidation as firms get bigger

By Jide Ajia

The $500 billion world’s shipping industry appeared to be rising well from the ashes of the sector’s worst-ever crisis a year ago with a consolidation mission that is seeing operators determined to get bigger and bigger, according to a report.

Container ships used in the transportation of sneakers, bananas, and dolls to different parts of the world along with the companies that own them were also getting bigger, the report noted.

As a result, consolidation was seen as survivors from the crisis of last year are now enjoying big economies of scale along with increased demand; last year, excess capacity had plunged the industry into its worst-ever crisis, involving the bankruptcy of South Korea’s Hanjin Shipping Company.

Last month, China’s Cosco Shipping Holding Company, Asia’s largest container line, said it would pay more than $6 billion for rival Orient Overseas International, owner of the world’s biggest vessel, a carrier longer than the Empire State building. Denmark’s A.P. Moller-Maersk A/S was also in the process of buying a German competitor and boasts its own fleet of mega ships, including one that could carry about 180 million iPads.

According to data provider,  Alphaliner Shipping, those super-sized shipping companies wield much more pricing power over manufacturers and retailers like Wal-Mart Stores Incorporated and Target Corporations with the five biggest container lines control about 60 percent of the global market.

The Chief Executive Officer at Crucial Perspective, a Singapore-based transportation research firm, Corrine Png, said container shipping was now a game only for big boys with deep pockets, adding that the rising market concentration would give the liners greater pricing and bargaining power.

However, Hanjin’s collapse, in August last year, upended the industry in much the same way that the bankruptcy of Lehman Brothers roiled the financial sector during the 2008 crisis, even as one of the world’s largest shipping firms at the time, Hanjin faced a cash crunch as supply outstripped demand in the industry, weakening pricing power and profits for carriers, which is now in the process of being liquidated after a South Korean court declared it bankrupt in February.

“Since the demise of Hanjin Shipping, flight to quality has become more noticeable in the container shipping business,” said,

An Analyst at Shinyoung Securities Corpoation in Seoul, Um Kyung-a, also said growing use of mammoth ships was key to the turnaround and companies who own them were able to deploy fewer vessels and move more cargo on a single journey to benefit from higher rates.

By her estimates, there are now about 58 of these huge carriers worldwide that could transport more than 18,000 containers, and the number was expected to double in two years, about half of the new vessels would be added by the biggest firms.

Meanwhile, the excess supply that derailed growth last year has not completely disappeared as new entrants expanded and as older vessels still remained with capacity in the container shipping industry was expected to grow 3.4 percent this year and 3.6 percent in 2018, according to Crucial Perspective.

Still, recovery in demand seems to be on track, especially after posting losses in 2016, companies were seeing signs of business picking up.

Earlier this year, Maersk, South Korea’s Hyundai Merchant Marine Corporation and other shipping lines reached agreements with their customers to raise annual rates from May for cargo headed from Asia to U.S. stores like Wal-Mart and Target.

Already, retailers in the U.S. usually increase inventory during the third quarter, ahead of the year-end holidays, and Lee said freight rates are expected to rise further as the peak season for the container shipping industry kicks off.

Nonetheless, a number of deals have been consummated since 2015 that were clear signal to the effort at creating super-sized companies in the industry and the deals include: in 2015, Cosco Group and China Shipping Group announced a merger to create Asia’s biggest container line, Cosco Shipping Holdings Corporation.

In addition, Maersk agreed to buy Hamburg Süd and Japan’s three shipping companies agreed to consolidate their container shipping businesses; in 2017, Hapag-Lloyd AG completed its acquisition of United Arab Shipping Corporation and Cosco Shipping offered to buy Orient Overseas International of Hong Kong.

SEC faults 2017 budget appropriation, analyses negative impact on capital market

By Jide Ajia

Despite delay that characterized passage of 2017 budget, the Security and Exchange Commission (SEC) has picked holes in appropriation of the yearly spending plan that, it has harmful effects in operation of the Capital Market.

SEC, the apex regulator of Nigerian Stock Exchange (NSE), disclosed the economic undesirable effects while briefing finance and investment journalists after at its quarterly Capital Market Committee Meeting (CMC) held on Wednesday in Lagos.

The Director General, SEC, Munir Gwarzo, said indirect effects of budgets on the capital market could be negative when the federal government put upward pressures on inflation and interest rates, or cause uncertainties in the foreign exchange market.

He hinted further that inflation spiral could be a cause and consequence of exchange rate bubbles and the net effect of such pressures could be negative on the stock market, if urgent attention was not paid to correct it.

Gwarzo stressed the commission has looked at the theoretical links between the capital market and budget with the aid of historical microeconomic data for Nigeria, adding that expenditure has correlated with the nation’s Gross Domestic Product (GDP) growth.

He, however, recommended the federal government to keep a tab on deficit financing, adding that high budget deficits tends to increase cost of borrowing for any given country.

The SEC boss also canvassed that investor education efforts particularly on the role of capital market in economic development should be strengthened and widened to include targeting the policy makers, practitioners and academics.

In addition, Gwarzo averred that the National Pension Commission and Pension Funds Administrators (PFAs), should take active steps to encourage creation of pension investments portfolios that were more diversified by exposing younger workers to take a greater percentage of equities since they have a longer time horizon to invest.

The Head, Vertical Market Group, Nigerian Inter-Bank Settlement System (NIBSS), Samuel Goriola Oluyemi, on e-dividend mandate, stated that registrants stood at 2.1 million, while investors captured through NIBSS account currently stands at 838.68 million and total unique investors identified through Bank Verification Number (BVN) moved to 433.16 million.

While given further analyses of active investors in Nigerian capital market through e-dividend mandate, Oluyemi explained the ratio of male to female investors in the country was approximated at 2 to 1, while male investors constituted 65 per cent, the female counterpart contributed 35 per cent.

Oluyemi also disclosed to the financial press that investment statistics based on states of residence showed that investors in Lagos contributed 38 per cent, followed with Abuja based investors with eight percent and Rivers (6 per cent), Ogun and Oyo State (5 per cent) respectively.

Other investment statistics based on state of origin included investors who hailed from Anambra (10 percent), Imo (9 per cent); Ogun (9 percent); Delta (7 per cent) and Edo State contributed six per cent to the investment window.

Based on nationality, the NIBSS expert stated that investors in Nigeria, based on figures, were put at 421.37 million; Indian (146m); British (142m); Ghanaians (109); Lebanese (46m) and American investors in Nigeria capital market were 32 million.