Displaying items by tag: Nigeria

Nigeria has not increased gasoline pump prices, its fuel regulator said on Friday, after sparking confusion at fuel stations and a public backlash by apparently flagging a big rise was on the cards.

"There is no price increase. The current (gasoline) price is being maintained while consultations are being concluded," the Petroleum Products Pricing Agency (PPPRA) said in a statement.

On Thursday, the regulator posted an online notice listing the "guiding price" for "ex-depot", or wholesale, gasoline at 206.42 naira per litre - well above the previous pump prices of around 167 naira.

After local media reported the post, some consumers flocked to fuel stations, prompting a sharp rise in prices at some, and others to stop selling amid the confusion.

In Lagos, at least two stations were charging 248 naira per litre, compared with 167 naira on Thursday.

Nigeria is struggling to balance a promise to eliminate costly fuel subsidies with public anger over more expensive fuel.

Oil prices have risen about 25% since the beginning of February, but state oil company NNPC vowed prices would not increase in March, meaning that it could be losing millions daily on gasoline imports.

Following the public backlash - and statements from NNPC, the petroleum minister and a presidential spokesman that higher prices were not approved - PPPRA removed its post about the guidance for ex-depot prices.

NNPC is currently the only gasoline importer due to the state-controlled ex-depot price that is keeping levels artificially low. It has said it is consulting with unions to agree a formula that allows gasoline prices to float, but still protects consumers.

In mid February, fuel marketers estimated gasoline was costing NNPC some 1.2 billion naira ($3.2 million) per day, a huge risk to government finances. Eliminating subsidies was among conditions for a $1.5 billion World Bank budget support loan.

 

Reuters

Published in Engineering

Nigerian troops have rescued 10 expatriates and four Nigerians in Rivers state.

The victims, including six Chinese, three Indonesians, one Gabonese and four Nigerians, were abducted around the coast of Gabon in February.

They were rescued on Saturday in Tombia, a creek in Bille waterways in Degema LGA of Rivers state.

Mohammed Yahaya, commanding officer of the battalion, while handing over the rescued persons to the Department of State Services (DSS) said they had paid their abductors $300,000 ransom before the troops moved in to rescue them.

“From preliminary findings, they were kidnapped off the coast of Gabon 7 February and brought into Nigerian creeks,” he said.

“A ransom of $300,000 was paid to secure their release before we came in.

“After that settlement, as they were about bringing them out of the creeks, they had issues that made them even susceptible to kidnapping again.

“So, men of the 29 Battalion, under the 6 Division, in conjunction with local vigilante launched that operation and were able to rescue them.

“They have a trolley, Socipeg, registered in Gabon. It was in course of their fishing activities that they were kidnapped.”

Yahaya added that the DSS is expected to do further investigations to unravel the circumstance and enable the army go after the abductors.

 

NAN

Published in Business

The Nigerian-Canadian company, mining gold in Nigeria’s Osun State is to start exporting the precious metal in June this year.

The Minister of Mines and Steel Development, Mr Olamilekan Adegbite, made the announcement in Abuja on Sunday.

Speaking at a forum of the News Agency of Nigeria (NAN), Adegbite described the Segilola Gold Project as a strategic investment for Nigeria’s economic diversification.

He described the company as a ‘poster child’ and the first foreign investor that was doing genuine and serious business in Nigeria.

Adegbite said that the firm was supposed to have started gold exportation in the first quarter of 2021 but that the date was shifted, due to the COVID-19 pandemic.

“The company will start exporting gold from Nigeria in June,’’ he stated.

According to the minister, the project is being executed by Segilola Resource Operating Ltd., a licensed operator and Canadian company, located in Iperindo in Osun.

He said that the company was listed and quoted on the Toronto Stock Exchange in Canada, the eighth largest exchange in the world by market capitalisation, commanding some 3.1 trillion dollars.

Adegbite said that the company was making a positive impact, borne out of its desire to ensure compliance with the economic diversification agenda of the Federal Government.

“Mining is a bit capital intensive. So, we need to attract serious players, people who can put in the money and then of course, begin to make money after some investment because it has gestation period.

“Mining is not like trading where you put in your money today and then realise profit tomorrow.

“When you do exploration, it can take a year to three years, then you discover the mineral and then start the exploitation before money begins to roll in.”

 

(NAN)

Published in Business
Thursday, 25 February 2021 05:55

Nigeria successfully exits recession

Nigeria’s economy has bucked a global trend and has successfully exited recession in the fourth quarter of 2020.

According to data from the country’s National Bureau of Statistics, GDP increased by 0.11% in the period October-December, supported primarily by growth in agriculture and telecommunications, which expanded by 3.4% and 17.6% respectively.

While increased global oil prices contributed to the growth, the figures also demonstrate the increasing importance of the non-crude sector for Africa’s most populous nation and the diversification of the country’s economy. Analysts note that the figures may indicate a sustained period of faster growth, as the world watches on to see which countries achieve a V-shaped recovery following the pandemic.

Growth in domestic product was also supported by the country’s Economic Sustainability Plan, an ambitious set of policies announced by President Buhari’s administration in June 2020 to address the immediate challenge of the COVID-19 pandemic.

Already, the focus on infrastructure and job creation in the agricultural and other labour-intensive sectors have borne fruit, and the Economic Sustainability Plan is soon to enter a new phase, with the installation of solar power in 5 million homes further boosting employment opportunities and access to power.

Femi Adesina, Special Advisor to President Buhari on Media, said “Infrastructure is where Buhari will leave his biggest footprints. Bridges. Rail. Airports. AKK gas pipeline. All to be delivered before the administration exits in 2023.”

In parallel, a new job creation initiative aimed at the country’s youth was launched in January, providing placements for over 700,000 unemployed young people.

Nigeria’s GDP numbers at the end of 2020 challenged the expectations of international organisations as well as global trends. Countries with larger stimulus packages, such as the USA and Japan, saw lower quarter on quarter growth than Nigeria over the period. In Europe, Spain and Germany also experienced unexpected increases of 0.4% and 0.1% respectively, while France’s GDP fell less than was forecast but remained negative.

This week also saw reports that corruption in Nigeria has fallen dramatically, with BudgIT, a civic advocacy organisation focused on budget and public finance issues, reporting the payment of public funds into personal accounts has declined by 94.75 percent.

While the trend in Nigeria is no doubt positive, risks of further waves of infection and a slow vaccine roll-out threaten the country’s sustained recovery, and are difficult to mitigate. Nigeria’s National Agency for Food and Drug Administration and Control (NADFAC) recently approved the AztraZeneca vaccine for the country and has requested 10million doses from the World Health Organisation’s Covax programme. However, it is unclear when these vaccines will arrive and be rolled-out across Nigeria.

 

Credit: EU Reporter

Published in Business

In countries with weak governance institutions, natural resource wealth tends to be a curse instead of a blessing. Where citizens are relatively powerless to hold ruling elites to account, resource wealth undermines development prospects.

On the contrary, where citizens are able to exert constraints on executive power, resource wealth can generate development that benefits ordinary citizens.

Development scholar Richard Auty first coined the term ‘resource curse’ in the early 1990s. He used the phrase to describe the puzzling phenomenon of resource wealthy countries failing to industrialise. Manifestations of the ‘curse’ now range from widespread corruption to civil war to deepening authoritarian rule.

Literature on the resource curse has done an adequate job of describing the general nature of the relationship between resource dependence and underdevelopment. It now needs to focus on understanding specific manifestations.

In my latest book, I detail what these are in relation to oil in Nigeria and Angola, sub-Saharan Africa’s two largest oil producers.

My book shows that the resource curse manifests differently in different contexts.

Why does this matter?

If governance interventions are to be useful, it’s important to understand the context. Otherwise, policy interventions won’t gain traction. If political dynamics play a determinative role in long-run economic outcomes, we must understand them better.

Two countries, two stories

In 2018, Angola’s fuel exports constituted 92.4% of the country’s total exports. Oil rents – the difference between the price of oil and the average cost of producing – accounted for 25.6% of the country’s Gross Domestic Product (GDP). In 2019 the country ranked 148th out of 189 countries in the UN’s Human Development Index.

Nigeria’s oil exports in 2018 were 94.1% of total exports, oil rents amounted to 9% of GDP. In 2019 it ranked 161st on the human development index . As is clear from the graph above, sub-Saharan Africa’s major oil producers are clustered around the lower end of the human development spectrum and are mostly autocratic.

Both Nigeria and Angola have been characterised by one form or another of autocratic rule for most of their post-independence histories. Autocracy invariably undermines a country’s development prospects.

Angola was plunged into a civil war shortly after independence in November 1975. It then suffered an unsuccessful coup attempt in 1977.

In Nigeria, the balance of power at independence in 1960 was just as precarious as Angola’s. Nigeria suffered two military coups in 1966, and a civil war from 1967-1970.

But why does oil fuel the consolidation of autocratic rule in one context, but not necessarily in another?

It all comes down to how the leader of the ruling coalition extracts and distributes the oil rents. In my book, I employ a game theory model developed by Princeton political scientist Milan Svolik to explain these divergent political outcomes.

Angola

Jose Eduardo dos Santos came to power in 1979 as served as president until 2017, grabbing power early and repeatedly. Svolik’s model predicts that rulers who can do this at the same time as limiting the probability of a coup being against them manage to entrench their rule.

Within six years, dos Santos had consolidated power. He eliminated internal threats by subverting power sharing institutions and purging key individuals. For instance, in 1984 the central committee of the ruling Movimento Popular de Libertação de Angola (MPLA) – created a ‘defence and security council’, chaired by dos Santos. As I note in the book, it became an inner cabinet, “effectively eclipsing the Political Bureau as the country’s top decision-making body”.

A year later, dos Santos dropped Lúcio Lara, the party’s stalwart intellectual, from the Political Bureau, thus removing the last potential threat to his rule. Simultaneously, he used the extensive oil rents at his disposal – and the cover of civil war – to either co-opt or eliminate opposition.

He did so by ensuring that the state oil firm, Sonangol, was proficiently run. It soon became Angola’s shadow state through its vast web of subsidiaries. After the civil war - 1975 to 2002 - Sonangol became the driver of (limited) development, but also the key distributor of patronage to cement dos Santos’s power. He not only bled it to enrich his family dynasty; he also used it to appease his inner circle.

Dos Santos ended up ruling for 38 years. But, his key strategic mistake was placing his children in plum Sonangol positions ahead of loyalists.

In 2017, João Lourenço, a former Defence Minister, became the new Angolan president. Dos Santos was to remain head of the MPLA until 2022. But, he was ousted through what was essentially a bloodless coup in 2018, engineered by his former loyalists like Manuel Vicente, the long-standing former head of Sonangol.

The Politburo appointed Lourenço president of the MPLA. He has since purged the dos Santos children from plum positions. Angola is still heavily dominated by the ruling MPLA, though. Prospects for a more competitive political settlement appear limited.

The case of Nigeria

Within six years of independence from Britain on 1 October 1960, the military launched a coup. This initiated a long period of military rule. Seven coups occurred between 1966 and 1993. Military rule was largely uninterrupted from 1966 to 1999.

But neither the coups nor the civil war were driven by oil.

Oil wealth only became a major factor in Nigeria’s political economy in the early 1970s, when the price rocketed as a result of the global supply crisis. Windfall oil wealth exacerbated the preexisting fragility. The state run oil firm, the Nigerian National Petroleum Company, was inefficient compared to Sonangol. Nonetheless, it served as the country’s cash cow, milked to extend patronage.

But, unlike in Angola, no aspirant Nigerian autocrat was able to monopolise personal control over the national oil company. As I detail in the book, oil exacerbated fragility in Nigeria. While Angola’s dos Santos maintained a stable bargain among elites, Nigeria’s balance of power remained precarious.

In 1975, another military coup toppled Yakubu Gowon who had ruled Nigeria through the civil war. Murtala Muhammed came to power but was assassinated in a coup attempt six months later, which brought Olusegun Obasanjo to power in 1976. Obasanjo guided a transition to civilian rule in 1979 but this only lasted four years.

A 1983 coup brought current President Muhammadu Buhari to power and another ousted him two years later. Ibrahim Babangida then ruled until 1993. After a brief attempt at civilian rule, Sani Abacha came to power through yet another coup that same year. He died in office in 1998. His successor, Abdulsalami Abubakar, returned the country to civilian rule a year later.

Former military ruler Obasanjo – who had been imprisoned by Abacha – won the 1999 elections but attempted to grab a third term as president in 2006. Despite alleged oil-funded bribery to lobby party members to support his cause, they held fast to the constitution’s term limits.

The importance of that moment cannot be overstated. It has resulted in a more open and competitive political settlement in Nigeria. Maintaining constitutional term limits can stop autocratic entrenchment in its tracks. Unfortunately, this has not guaranteed stability in Nigeria. Post-2015 fragility has deepened considerably.

Where to from here?

As my book shows, oil rents grease the wheels of political dynamics very differently in Angola and Nigeria.

Existing explanations for different manifestations range from ethnic fragmentation, inherited colonial structures, the role of foreign actors and how lootable the oil is.

More attention now needs to be paid to how aspirant autocrats use natural resource rents to accumulate power for themselves. This can lead to policy practitioners developing an early warning system that may help citizens to nip power-grabs in the bud.

This may serve, in conjunction with other policy interventions, to ultimately reverse the curse.The Conversation

 

Ross Harvey, Senior Research Associate, Institute for the Future of Knowledge, University of Johannesburg

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Opinion & Analysis

Nigeria’s President Muhammadu Buhari cleared the way for the launch of an infrastructure company with initial seed capital of a trillion naira ($2.4 billion) as Africa’s largest oil producer attempts to steer itself out of a likely economic contraction.

The company, named Infraco, which is being set up in partnership with the private sector, is expected to grow its capital and assets to 15 trillion naira over time to fund public projects like roads, rails and power, Laolu Akande, the vice president’s spokesman, said in a statement on Friday.

The government of Africa’s most populous country is seeking to expand investments to stimulate recovery in an economy facing its second recession in four years. Nigeria requires at least $3 trillion over 30 years to close its infrastructure deficit, Moody’s Investors Service said in a November report.

The start-up funding will come from the Central Bank of Nigeria, the Nigerian Sovereign Investment Authority, and the Africa Finance Corporation.

Vice President Yemi Osinbajo will head a committee charged with getting the company started, while central bank Governor Godwin Emefiele will chair Infraco. The managing director of the NSIA, the president of the AFC, representatives of the Nigerian Governors Forum, and the ministry of finance will also help form the board, along with three independent directors from the private sector.

Published in Engineering

The Securities and Exchange Commission (SEC) has joined the Central Bank of Nigeria (CBN) to ban crypto trading.

SEC has stopped admittance of affected persons into its Regulatory Incubation Framework for Fintech firms.

In a statement on Thursday, SEC said it received inquiries on a perceived policy conflict between its September 11 statement on Digital Assets, Classification and Treatment and the February 5 CBN circular.

The commission stressed that there were no contradictions or inconsistencies.

It clarified that last year’s statement was to provide regulatory certainty within the digital asset space, due to the growing volume of reported flows.

SEC said as the regulator of the banking system, the CBN has identified certain risks that threaten investors’ protection.

The commission disclosed that it engaged with the CBN and agreed to work together to further analyse and better understand the risks.

“For the purpose of admittance into the SEC Regulatory Incubation Framework, the assessment of all persons (and products) affected by the CBN Circular of February 5, 2021, is hereby put on hold until such persons are able to operate bank accounts within the Nigerian banking system”, it announced.

It said planned implementation of the Regulatory Incubation Guidelines for FinTech firms who intend to introduce innovative models for offering capital market products and services will continue.

SEC added that it would keep monitoring developments in the digital asset space to create a regulatory structure that enhances economic development and promotes a safe and transparent capital market.

Published in Bank & Finance

The path has been cleared for Nigeria's Ngozi Okonjo-Iweala to become the first woman and the first African to lead the World Trade Organization after South Korea's candidate pulled out of the race for the job.

Yoo Myung-hee, the South Korean trade minister, announced her decision to withdraw in a televised briefing on Friday.

Okonjo-Iweala, an economist and former finance minister of Nigeria, already enjoyed broad support from WTO members, including the European Union, China, Japan and Australia.

However, the United States, under the Trump administration, had favored Yoo, complicating the decision-making process since the selection of a new leader requires all WTO members to agree. Okonjo-Iweala's formal selection may have to wait until after the United States appoints a new trade representative.

Yoo said that her decision had been reached after "close consultation" with the United States. The WTO had been without a leader for too long, she added.

The Geneva-based body, tasked with promoting free trade, has been without a permanent director general since Roberto Azevêdo stepped down a year earlier than planned at the end of August after the WTO was caught in the middle of an escalating trade fight between the United States and China.

The Trump administration was highly critical of the WTO and undermined its standing by imposing tariffs on Canada, Mexico, China and the European Union. Okonjo-Iweala will thus assume control of an organization that has struggled to prevent trade spats between its members.

While US President Joe Biden has already taken steps to restore support for multilateral institutions, he is expected to proceed with caution when it comes to signing any new trade deals.

In a speech to the State Department Thursday, Biden pledged to put diplomacy back at the center of US foreign policy, but was also careful to emphasize that foreign policy should benefit middle-class Americans.

Okonjo-Iweala, who hails from one of the few parts of the world where free trade is ascendent, told CNN in August that trade would play an important role in the recovery from the coronavirus pandemic.

"The WTO needs a leader at this time. It needs a fresh look, a fresh face, an outsider, someone with the capability to implement reforms and to work with members to make sure the WTO comes out of the partial paralysis that it's in," she said in an interview.

Okonjo-Iweala spent 25 years at the World Bank as a development economist, rising to the position of managing director. She also chaired the board of Gavi, which is helping to distribute coronavirus vaccines globally, stepping down at the end of her term in December.

 

Credit: CNN

Published in World

When Nigeria's then-head of state Sani Abacha stole billions of dollars and died before spending his loot, it prompted an international treasure hunt spread over decades. The man hired to get the money back tells the BBC's Clare Spencer how the search took over his life.

In September 1999, Swiss lawyer Enrico Monfrini answered a phone call that would change his next 20 years.

"He called me in the middle of the night, he asked me if I could come to his hotel, he had something of importance. I said: 'It's a bit late but OK.'"

The voice on the end of the line was that of a high-ranking member of the Nigerian government.

'Can you find the money?'

Mr Monfrini says the official was sent to Geneva by the Nigerian president at the time, Olusegun Obasanjo, to recruit him to get hold of the money stolen by Abacha, who ruled from 1993 until his death in 1998.

As a lawyer, Mr Monfrini had built up a Nigerian client base since the 1980s, working in coffee, cocoa and other commodities.

He suspects those clients recommended him.

"He asked me: 'Can you find the money and can you block the money? Can you arrange that this money be returned to Nigeria?'

"I said: 'Yes.' But in fact I didn't know much about the work at that time. And I had to learn very quickly, so I did."

Sani Abacha2 AFP

o get started, the Nigerian police handed him the details of a few closed Swiss bank accounts, which appeared to be holding some of the money Abacha and his associates had stolen, Mr Monfrini wrote in the book Recovering Stolen Assets.

He said that a preliminary investigation published by the police in November 1998 found that more than $1.5bn (£1.1bn) was stolen by Abacha and his associates.

'Dollars by the truckload'

One of the methods used for accumulating such a colossal sum was particularly brazen.

Abacha would tell an adviser to make a request to him for money for a vague security issue.

He then signed off the request which the adviser would then take to the central bank, which would hand out the money, often in cash.

The adviser would then take most of that money to Abacha's house.

Some was even taken in dollar notes "by the truckload", Mr Monfrini wrote.

This was just one way Abacha and his associates stole huge amounts of money. Other methods ranged from awarding state contracts to friends at highly inflated prices and then pocketing the difference and demanding foreign companies pay huge kickbacks to operate in the country.

This went on for around three years until everything changed when Abacha died suddenly, aged 54, on 8 June 1998.

It is unclear whether he had had a heart attack or was poisoned because there was no post-mortem, his personal doctor told the BBC.

Abacha died before spending the stolen billions and a few bank details served as clues as to where that money was stashed.

"The documents showing the history of the accounts gave me a few links to other accounts," said Mr Monfrini.

Armed with this information he took the issue to the Swiss attorney general.

And then came a breakthrough.

Mr Monfrini successfully argued that the Abacha family and their associates formed a criminal organisation.

This was key because it opened up more options for how the authorities could deal with their bank accounts.

The attorney general issued a general alert to all the banks in Switzerland demanding that they disclose the existence of any accounts opened under the Abachas' names and aliases.

"In 48 hours, 95% of the banks and other financial institutions declared what they had which seemed to belong to the family."

This would uncover a web of bank accounts all over the world.

"Banks would deliver documents to the prosecutor in Geneva and I would do the job of the prosecutor because he didn't have time to do it," Mr Monfrini told the BBC.

'Bank accounts talk a lot'

"We would find out on each account exactly where the money came from and/or where the money went to.

"Showing the ins and outs on these bank accounts gave me further information regarding other payments received from other countries and sent to other countries.

"So it was like a snowball. It started with a few accounts, and then a large amount of accounts, which in turn created a snowball effect indicating a huge international operation.

"Bank accounts and the documents that go with them talk a lot.

"We had so much proof of different money being sent here and there, Bahamas, Nassau, Cayman Islands - you name it."

The size of the Abacha network meant a huge effort for Mr Monfrini.

"Nobody seems to understand how much work it entails. I have to pay so many people, so many accountants, so many other lawyers in different countries."

Mr Monfrini had agreed a commission of 4% on the money sent back to Nigeria. A rate he insists was comparably "very cheap".

Finding the money turned out to be relatively quick in comparison to getting it returned to Nigeria.

"The Abachas were fighting like dogs. They were appealing about everything we did. This delayed the process for a very long time."

Further delays came as Swiss politicians argued over whether the money would just be stolen again if it was returned.

Some money was returned from Switzerland after five years.

Mr Monfrini wrote in 2008 that $508m found in the Abacha family's many Swiss bank accounts was sent from Switzerland to Nigeria between 2005 and 2007.

By 2018, the amount Switzerland had returned to Nigeria had reached more than $1bn.

Sani Abacha3 AFP

Other countries were slower to return the cash.

"Liechtenstein, for instance, was a catastrophe. It was a nightmare."

In June 2014, Liechtenstein did eventually send Nigeria $277m.

Six years later, in May 2020, $308m held in accounts based in the Channel Island of Jersey was also returned to Nigeria. This only came after the Nigerian authorities agreed that the money would be used, specifically, to help finance the construction of the Second Niger Bridge, the Lagos-Ibadan expressway and the Abuja-Kano road.

Some countries are yet to return the loot.

Mr Monfrini is still expecting $30m he says is sitting in the UK to be returned, along with $144m in France and a further $18m in Jersey.

That should be it, "but you never know", he says.

In total, he says his work secured the restitution of just more than $2.4bn.

"At the beginning people said Abacha stole at least $4-$5bn. I don't believe it was the case. I believe we more or less took the most, took a very large chunk, of what they had."

He has heard rumours that the Abacha family are not so wealthy any more.

Or, as he puts it: "They are not swimming in money like they used to do in the past."

When he looks back, he seems satisfied with his work.

"When I speak to my very many children about this case, I tell them I found money and I blocked the money, I persuaded the authorities to go after these people and get the money back to the country for the good of the Nigerian people.

"We did the job."

 

Source: BBC

Published in Economy
Saturday, 26 December 2020 12:03

Nigeria, Jamaica launch inaugural direct flight

Nigeria and Jamaica completed a direct flight from Nigeria’s largest city Lagos to Montego Bay on Monday as the two nations attempt to pave way for a regular direct airline route between the two destinations.

“As part of the activities to commemorate 50 years of good bilateral relations between the Federal Republic of Nigeria and the Republic of Jamaica, an inaugural direct flight, Air Peace, departed from Lagos and has landed in Montego Bay, on Monday 21 December 2020,” the ministry said in a statement.

Nigerian Minister of Foreign Affairs Geoffrey Onyeama was on board the flight, accompanied by a delegation of government officials and members of the private sector.

The delegation was received at Sangster International Airport in Montego Bay by Jamaica’s Minister of Transport Robert Montague and other leading state officials.

According to the statement, the event will strengthen relations between the two countries in several areas, among them tourism, education and economic activities.

 

Source: Ministry of Foreign Affairs Nigeria/Xinhua

Published in Travel & Tourism
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