Category Archives: Business

NIGERIA UNVEILS NEW NATIONAL CARRIER

Farnborough, England

Nigeria’s Aviation Minister Hadi Sirika has revealed the name and logo of Nigeria’s new national carrier Wednesday. Nigeria said last week that its planned national carrier would be unveiled July 18. The airline will be run as a public-private partnership and should become profitable in three years, according to the government. 

Aviation Minister Hadi Sirika tweeted Tuesday from Farnborough that he held talks on sourcing jets from Airbus SE and planned to meet with Boeing Co. and other suppliers.

Africa’s most populous nation has struggled to support a viable home-grown airline for decades, with a succession of carriers collapsing or slashing routes. This has left the oil-rich country dependent on services provided mainly by European and Persian Gulf carriers for trips beyond the region.

Nigeria’s Former flag-carrier Nigeria Airways collapsed in 2003 with successor Air Nigeria founded as a joint venture with Richard Branson’s Virgin Group folding in 2012. Private operator Arik Air was taken over by Asset Management Corp. of Nigeria last year, leading to the suspension of long-haul flights.

NIGERIA ALLOCATES $630 MILLION IN SUPPLEMENTARY BUDGET

Nigeria’s President Muhammadu Buhari asked lawmakers to reallocate 229 billion naira ($630 million) in a supplementary budget, less than a month after he signed 2018’s spending plans into law.

The transfers are necessary partly to help the government prepare for general elections that’s scheduled for February and is expected to cost 242 billion naira, according to a letter from Buhari to the Senate. Buhari proposed the reallocation of funds for the budget of 9.1 trillion naira that he approved on June 20. He is opposed to increasing spending any further, according the letter.

Buhari said in June he would consider a supplementary budget after lawmakers submitted a spending framework that was 5.8 percent bigger than what he proposed to them in November. “Implementing a budget of 9.12 trillion naira will be extremely challenging and therefore, I do not consider it expedient to propose a further increase to the size,” he said in the letter.

For the election in which he will seek another term, Buhari wants this year’s budget to allocate 164 billion naira and the balance should come from next year’s spending plan. He also asked lawmakers to amend spending cuts and new allocations amounting to 578 billion naira that they made to the budget he proposed initially.

LIBYAN EASTERN OIL EXPORTS TO RESUME IN HOURS ON PORTS DEAL

Libya’s eastern oil ports will resume shipments within hours after the state energy producer regained control of the terminals following clashes in the region last month.

National Oil Corp. lifted force majeure at the ports of Ras Lanuf, Es Sider, Hariga and Zueitina after forces loyal to eastern military commander Khalifa Haftar handed the facilities over to the state producer early Wednesday, according to an emailed statement from the Tripoli-based NOC. Force majeure is a legal clause protecting a party from liability if it can’t fulfill a contract for reasons beyond its control.

“Production and export operations will return to normal levels within the next few hours,” the NOC said. A separate statement from a security force guarding the ports confirmed that exports will resume there, according to a person familiar with the relevant order sent to all companies and terminals. Brent crude futures fell by as much as 2.7 percent.

The imminent re-opening of the four ports marks another abrupt turnaround in Libya’s fortunes as a global supplier of crude since the 2011 Arab Spring revolt left the country divided into western and eastern regions under competing administrations. Haftar, after clashing with a rival militia last month, had transferred control of the ports to an oil authority in the eastern city of Benghazi that isn’t recognized internationally. A political standoff with the NOC in Tripoli in the west led to a halt in exports of some 850,000 barrels a day.

Instability and supply halts in Libya are complicating OPEC’s drive to pump more crude and setting back United Nations-backed efforts to hold elections this year. Brent crude tumbled by as much as $2.10 after the NOC’s announcement. The benchmark pared losses and was trading 1.8 percent lower at $77.44 a barrel in London at 3:06 p.m. local time.

The tanker Maran Homer is set to lift 1 million barrels from Hariga port near the Egyptian border later Wednesday, enabling storage tanks there to be filled with more crude pumped from fields feeding the port, according to a person familiar with the situation who asked not to be identified due to a lack of authorization to speak to news media. The ship is anchored in the Mediterranean near Hariga, Bloomberg tanker tracking data show.

Deterioration in the economy has stoked anger in eastern Libya over a perceived misuse of funds and a view that too much wealth is concentrated in the west. Haftar’s forces say they never received any money or thanks from the Tripoli NOC for protecting oil facilities. The oil company’s chairman, Mustafa Sanalla, counters that crude revenue goes to the central bank and that he’s not responsible for how it gets distributed.

“We need a proper national debate on the fair distribution of oil revenues” Sanalla said in the statement. “It is at the heart of the recent crisis. The real solution is transparency, so I renew my call on the responsible authorities, the Ministry of Finance and Central Bank, to publish budgets and detailed public expenditure. I will work with other national stakeholders to enhance transparency and resolve this crisis — for the benefit of all our citizens.”

While Libya holds Africa’s largest oil reserves, years of conflict among armed groups competing for influence over its energy riches have hobbled production and exports since a 2011 revolt. Output has dropped to 527,000 barrels a day, Sanalla said on July 9. The country was pumping about 1.3 million barrels of crude a day in February before militias closed the ports, he said at the time.

 

 

1 KILLED AND 20 INJURED AS CHARTERED PLANE CRASHES IN SOUTH AFRICA

JOHANNESBURG

A charter plane crashed in South Africa on Tuesday, killing one person and injuring 20 others. The injuries in Tuesday’s crash in the capital, Pretoria range from minor to critical, according to Russel Meiring, a spokesman for paramedic company ER24.

The crash occurred near an airport in the Wonderboom area. Video of the plane’s takeoff shows smoke streaming behind it. Photographs from the scene of the crash show the damaged aircraft in a field. “Martin’s Air Charter” is written on the side of the fuselage.

Authorities are investigating the cause of the crash.

DANGOTE CEMENT LOOKS TO LISTING ON THE LSE

Jereaghogho Efeturi Ukusare

Africa’s biggest producer of cement, Dangote may carry out its long-planned listing of shares in London after the elections in Nigeria early next year. Dangote cement is considering expansion through takeovers.

“We are working on it and we’ll look at it in 2019,” Edwin Devakumar, group executive director at Dangote Industries Ltd. said in an interview near Lagos, Nigeria’s commercial capital, on Wednesday. “We have grown to this extent mostly via greenfield investments. To grow much more, we’d probably have to do it via acquisitions.”

Some UK banks have approached Dangote Industries to arrange the initial public offering. At the moment, no one has been mandated and no decision has been reached on how much to raise. About 15 percent of Dangote Cement’s shares are listed in Lagos, where it has a market value of 3.9 trillion naira ($10.8 billion). The stock is down 0.9 percent this year. Controlled by Africa’s richest man, Aliko Dangote,  the company considered raising equity in London back in 2010. At the time, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley helped it prepare a sale that could have raised as much as $5 billion before the move was abandoned.

Dangote Cement is looking to expand outside Africa into markets such as Brazil, Peru and Nepal, according to Devakumar. Dangote Industries is a holding company for billionaire Aliko Dangote’s interests which include sugar, flour, oil refining and petrochemicals as well as cement.

The revival of the IPO plans led to Dangote Cement appointing former Xstrata Plc CEO Mick Davis and Cherie Blair, a British lawyer, to its board in April. “That was another step toward the listing,” said Devakumar.

NIGERIA OFFERS 12.7 BILLION NAIRA MINING CONTRACT TO EIGHT FIRMS

ABUJA (Reuters)

Nigeria will offer a 12.7 billion naira ($41.6 million) mining contract to eight companies in exploration and consultancy, its junior mining minister said on Wednesday, adding both foreign and local firms were encouraged to participate.

Nigeria’s economy, one of Africa’s largest, has been built largely on its rich crude oil reserves, leaving other sectors to stagnate. In an attempt to diversify, President Muhammadu Buhari’s administration is now seeking to build up other sectors, including mining, though results have been mixed, according to economic data.

“Today the Federal Executive Council (Nigeria’s cabinet) approved the contract for exploration and consultancy on some of our targeted minerals – like gold, industrial minerals, earth metals, iron ore – for four companies in exploration and four companies in consultancy,” Abubakar Bawa Bwari, the minister of state for solid minerals, told reporters after the cabinet meeting.

Bwari said the exploration and consultancy work would result in data that would encourage potential mining firms to invest in Nigeria.

“Our major challenge is the bankable data, most mining companies will not want to come into your country when they are not sure of what they are going to meet,” he said. ($1 = 305.2000 naira)

SOUTH AFRICA SIGNS AfCFTA AGREEMENT

Jereaghogho Efeturi Ukusare

South Africa has become the latest country to sign the Africa Continental Free Trade Area (AfCFTA) agreement . The country currently battles with poor economic data, an emerging market selloff and trade wars orchestrated by the United States.

South Africa’s President Cyril Ramaphosa signed the AfCFTA agreement during the 31st Ordinary Session of the Assembly of Heads of State and Government in Nouakchott, Islamic Republic of Mauritania.

Talks to start the free trade pact began in 2015 and were finally realised in March. But among the initial holdouts were Africa’s largest economies, Nigeria and South Africa, as a result of legal and local issues in both countries. Some felt that this would be a stumbling block for AfCFTA. However, this has changed as South Africa now a signatory to the agreement.

The pact aims at creating a trade bloc, which experts estimate will have a combined gross domestic product of more than $3 trillion. According to Bloomberg, “Intra-Africa trade currently stands at about 16 percent of the continent’s total, compared with 19 percent in Latin America and 51 percent in Asia.” The United Nations Economic Commission for Africa estimates that this agreement could increase this by half.