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Banks have opposed a proposal by Etisalat Nigeria to convert part of a $1.2 billion loan from dollar to naira.

Etisalat had proposed that the Abu Dhabi telecommunications group and its other shareholders should recapitalise it instead.

It was revealed that the seven-year syndicated loan, on which Etisalat missed a payment, has a dollar portion of $235 million, which the firm wants to convert to naira to overcome the hard currency shortages in the Nigeria’s interbank market.

Meanwhile, a meeting that was brokered by the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC), which was to hold yesterday, was shifted.

A source at the NCC said yesterday that the meeting was shifted due to some unforeseen circumstances.

“It would now be held at an agreed date next week, and will include the CBN, NCC and Etisalat’s shareholders. The major thing for now is that discussions are on-going,” the source said.

It was further learnt that Etisalat is asking the banks to convert the dollar component to naira “but the banks don’t want that option and have told them to talk to their parent body to settle the loan.”

Banks have opposed a proposal by Etisalat Nigeria to convert part of a $1.2 billion loan from dollar to naira.

Etisalat had proposed that the Abu Dhabi telecommunications group and its other shareholders should recapitalise it instead.

A banker, who confided in Reuters, revealed that the seven-year syndicated loan, on which Etisalat missed a payment, has a dollar portion of $235 million, which the firm wants to convert to naira to overcome the hard currency shortages in the Nigeria’s interbank market.

Meanwhile, a meeting that was brokered by the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC), which was to hold yesterday, was shifted.

A source at the NCC said yesterday that the meeting was shifted due to some unforeseen circumstances.

“It would now be held at an agreed date next week, and will include the CBN, NCC and Etisalat’s shareholders. The major thing for now is that discussions are on-going,” the source said.

It was further learnt that Etisalat is asking the banks to convert the dollar component to naira “but the banks don’t want that option and have told them to talk to their parent body to settle the loan.”

 

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Aero Contractors yesterday said it has sacked 60 per cent of its total workforce due to poor financial state of the airline.

However, the effected workers will be paid their pension and gratuity. The management of the airline was taken over last year by Asset Management Company of Nigeria, AMCON, as a result of the heavy indebtedness of the airline to the company.

But, aviation unions yesterday reacted angrily to the sack of Aero Contractors workers saying they will not accept the reasons advanced by the airline for the retrenchment exercise.

Early this year, a new Managing Director, Captain Ado Sanusi was appointed by AMCON after the former Managing Director, Captain Akin Akinkuotu was appointed the Managing Director of Nigeria Airspace Management Agency, NAMA.

The decision to reduce staff strength, according to AMCON, will immediately reduce the whooping operational cost, which has been stifling the airline and enable the management bring in more aircraft through savings from overheads

A statement from the airline yesterday said: “Aero Contractors of Nigeria Limited during the week issued letters of redundancy, which affected about 60 per cent of its total workforce. The airline had been grappling with huge and unrealistic personnel cost as well as other operational challenges worsened by lack of enough aircraft to keep all the workers meaningfully engaged.

“The issuance of notification of redundancy is a business decision that will ensure Aero’s survival. The current situation where over a thousand people are basically not engaged due to lack of serviceable aircraft is not sustainable for the airline. The huge monthly salary associated with a bloated workforce will eventually kill the airline, which is not the intention of the current government.Aero Contractors currently has aircraft-to-employee ratio of 1:500, which analysts believe is perhaps the worse in the history of global airline industry.

 

“Government’s intervention in Aero was to save it from total collapse therefore, all steps such as this (issuance of redundancy letters) to ensure its survival must be put into consideration to save the airline.”

Meantime, aviation unions  reacted angrily to the sack of Aero Contractors workers saying they will not accept the reasons advanced by the airline for the retrenchment of the workers.

The President of Air Transport Services Senior Staff Association of Nigeria, ATSSSAN, Mr Ahmadu Ilitrus, said he was not aware of the purported redundancy notice to workers and advised workers not to collect any letter from the management of Aero airline.

He added that a meeting to discuss the unions’ next line of action has been fixed for today.

The statement however added that those in Maintenance Repair and Overhaul (MRO) and other essential staff in critical departments will not be affected by the notification. The management has also ensured that the affected workers will be able to access their full gratuity as well as a part of their pension just to immediately cushion the effect of the development. They also stand a chance of being recalled as soon as Aero increases the number of aircraft in its fleet in the near future.

According to the ATSSSAN president; “We are not against redundancy but what we are saying is that before you sack them, there must be money to pay them and I know Aero does not have the money to pay them”

He cautioned management of Aero Contractors not to give room for industrial unrest warning that money due to “all affected workers must be ready at the point of the collection of their letters”.

 

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Aliko Dangote has set a new pace in the business industry as Tanzania has offered his Dangote Cement Company in the southeastern town of Mtwara, land to mine coal for its operations.

Tanzania’s Ministry of Energy and Minerals at the weekend handed a 10-square-kilometre plot of land to the $500 million cement factory set up in 2015 by Aliko Dangote, Africa’s richest man.

The factory has an annual capacity of 3 million tonnes.

According to NAN and local media The Citizen, the coal concession was sanctioned by President John Magufuli to allow the company get a reliable supply of coal to fuel its activities.

Tanzania has banned the importation of coal from South Africa and Tancoal, the only one coal producing company in the country, cannot meet the entire market demand.

Dangote runs on expensive diesel generators and requested Tanzanian government support last year to supply natural gas at a reduced price.

President Magufuli later intervened after a meeting with Nigerian billionaire and the company’s owner Aliko Dangote over stalled negotiations on prices.

He blamed middlemen for the delay in supply plans and said Dangote “will now buy natural gas directly from the state-run TPDC (Tanzania Petroleum Development Corporation)”.

Dangote, Africa’s biggest cement producer, is seeking to double Tanzania’s annual output of cement to 6 million tonnes.

It plans to roll out plants across Africa.

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The minister of state for Petroleum Resources, Dr Emmanuel Ibe Kachikwu, has described the nation’s importation of petroleum products as a fraud and must be put to an end if the nation was to make progress in the oil and gas sector.

He added that the act was also shameful, stressing that the system has been opaque for a long period hence despite having abundant oil resources, the country has been importing finished petroleum products over the years.

Speaking at the ongoing Nigeria Oil and Gas Conference in Abuja, Kachikwu said the government through the Nigerian National Petroleum Corporation (NNPC) must meet its target of ending petroleum products’ importation between 2018 and 2019.

Presenting his ministerial address titled: “Reforming and Repositioning the Oil and Gas Industry in Nigeria,” the minister said “Importation of petroleum products will have to cease. There’s absolutely no reason why a country with the resources that we have will continue to import petroleum products. It is a shame on this country, it is a fraud on the system and we are going to end it.

“We are committed to the 2018/2019 template, because it is something we have to do. The refineries are not performing to capacity and it is not going to be easy, but we have to end importation of petroleum products.

“If we do that, the downstream will survive; but if we don’t, then by the first quarter of 2020, the Dangote refinery will come on board. And if that happens, it then means we will have scraps in our hands as refineries. Therefore, there’s the urgency of now to end importation.”

The minister noted that despite these, Nigeria remained a leading producer in Africa with the potential to boost production to the neighbourhood of three million barrels of oil per day by 2020 once the required investments flowed in and the planned deep-water projects were fully realised.

This, he said, was aimed at achieving an incremental reserve of at least one billion barrels and half a million barrels in production capacity per day.

“For example, the opening up of the Dahomey Basin with the coming on stream of the Aje field is certainly a major milestone for the industry,” he stated.

Kachikwu also noted that the engagements with state governments and groups in the Niger Delta had started yielding positive results, as over the last 60 days, the activities of militants in the region had dropped to near zero.

 

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Investors in the generation companies (GenCos) have warned of an imminent blackout nationwide if the N601 billion debts owed them by consumers through the off-taker, the Nigerian Bulk Electricity Trading Plc (NBET) – a Federal Government’s owned public liability company.

The investors spoke yesterday at the Nigeria Power Summit, part of the ongoing Nigeria Oil and Gas Conference (NOG) holding in Abuja.

The Managing Director and Chief Executive Officer of Mainstream Energy Solutions Limited, Mr. Lamu Audu, stated that only 20 percent of the cost of power produced across the supply value chain is being paid for.He noted that foreign exchange (forex) challenge also remains a major bottleneck for power investors as a result fluctuating exchange rates, which was less than N200 to a dollar when the power assets were bought, and currently above N350.

He said: “Virtually all the spare parts used in the power sector are imported and we need foreign exchange to procure them. But, unfortunately, the fluctuating exchange rate has made planning difficult for investors.”

Another worrisome trend in the sector, according to Audu, is the issue of ageing transmission infrastructure, which most time leads to rejection of generated power by the Transmission Company of Nigeria (TCN).

Investors in the generation companies (GenCos) have warned of an imminent blackout nationwide if the N601 billion debts owed them by consumers through the off-taker, the Nigerian Bulk Electricity Trading Plc (NBET) – a Federal Government’s owned public liability company.

The investors spoke yesterday at the Nigeria Power Summit, part of the ongoing Nigeria Oil and Gas Conference (NOG) holding in Abuja.

The Managing Director and Chief Executive Officer of Mainstream Energy Solutions Limited, Mr. Lamu Audu, stated that only 20 percent of the cost of power produced across the supply value chain is being paid for.He noted that foreign exchange (forex) challenge also remains a major bottleneck for power investors as a result fluctuating exchange rates, which was less than N200 to a dollar when the power assets were bought, and currently above N350.

He said: “Virtually all the spare parts used in the power sector are imported and we need foreign exchange to procure them. But, unfortunately, the fluctuating exchange rate has made planning difficult for investors.”

Another worrisome trend in the sector, according to Audu, is the issue of ageing transmission infrastructure, which most time leads to rejection of generated power by the Transmission Company of Nigeria (TCN).

“This is a major loss on the part of power generation companies. When the generated power is rejected, who bears the loss? I think government should be in a position to pay for this. And going forward, I think TCN should be privatised,” he advised.

Also the Managing Director of Sahara Power, Mr. Kola Adesina, lamented about the paucity of funds for power investors. H e noted that lack of fund remains a stumbling block to the growth of the sector, adding that power sector being a cycle feeds from four sources; gas, generation, transmission and distribution. He said when one leg of the cycle is stifled of fund, all other segments are affected from functioning at optimal level.

According to him, the inability of consumers to pay for power consumed ultimately affects payment to gas producers, GenCos and the transmission company. He also noted that lack of adequate gas supply to the generating companies is also a major issue hindering the smooth operation of the sector, adding that constant attacks on gas infrastructure by agitators remains an issue that government must address for the sector to move forward.

 

 

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The World Bank has offered to give Nigeria a $500 million-loan to assist out -of-school children, according to an official of the bank.

The News Agency of Nigeria (NAN) reports that a Senior Education Specialist with the bank, Dr Olatunde Adekola, disclosed this in Sokoto on Sunday. Adekola, who led a five-man team of the bank on a courtesy call on Gov. Aminu Tambuwal of Sokoto State, added that the loan would be given under its `Better Education-For-All (BEDA)’ Project.

He said that the project would, specifically, focus on the northern parts of Nigeria, specifically to bolster the girl-child education.

Adekola said: “The project will be results oriented, ensure that children are able to read and write,

“This is to help the government to strengthen its service delivery mechanisms to children, girls, women and other vulnerable groups.

“Most of the challenges in the country are education related and the five-year project is aimed at reversing the ugly trend.”

The World Bank official, however, expressed satisfaction with the efforts so far made by Tambuwal to move the education sector forward in the state.

Adekola lauded the state for allocating about 27 per cent of its annual budget to education in 2016 and 2017 fiscal years.

He said: “The state government also deserves a pat on the back for ensuring the prompt payment of teachers’ salaries.

“We have also noted an unlimited appetite by parents in the state for the education of their children.”

Responding, Gov.Tambuwal promised to sustain the existing partnership between the bank and the state government.

“ We will continue to honour our own side of commitments to such agreements in terms of finances and other issues.

“We have begun the process of creating an agency to be in charge of the education of the girl-child.

“We will ensure the effective utilization of the funds, to avoid any infractions,” the governor said.

 

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In order to cut the cost of maintaining government quarters, the Kaduna State government has decided to sell about 1,990 of its non-essential residential quarters.

The full list of available properties placed on the state website indicates that about 1,990 houses are to be sold by means of a public auction based on their open-market value.

The decision to sell the houses was endorsed by the State Executive Council.

The approved guidelines contained in an advertorial placed by the secretary, committee on the sale of government residential quarters in Kaduna State, said only persons and corporate bodies resident in Kaduna State are eligible to submit bids for the properties, and each property will be sold at the highest price offered.

The guidelines also stipulated that no property will be sold for less than its reserve price and that every bidder is restricted to only one property.

The guidelines further indicates that, “The public servants that currently occupy those properties have the first right of refusal to match the winning bid. The sale excludes all government quarters in schools, hospitals and similar public institutions.”

It was gathered that, the government houses which numbered about 3000 residential quarters were not enough to accommodate the teeming civil servants of the state as they accommodated only a minority of public servants but with a disproportionate impact in terms of resources devoted to their maintenance and renovation.

 

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Three years after it stopped the charges, the Central Bank of Nigeria announced the reintroduction of bank charges on certain categories of cash deposits and withdrawals.

The reintroduction of the charges was contained in a circular to all Deposit Money Banks posted on the website of the CBN.

The apex bank in the country said the decision to reintroduce the charges on cash deposits was part of the review of charges on deposits and withdrawals under the cashless policy.

The decision, the CBN said, was taken at the Bankers’ Committee meeting, which held in Abuja two weeks ago.

The circular was signed by the Director, Banking and Payments System Department, CBN, Dipo Fatokun.

The circular said the committee decided that the cashless policy should be extended to the remaining 30 states of the federation.

Only six states have been operating the cashless policy before now.

These are the Federal Capital Territory, Lagos, Ogun, Anambra, Abia, Kano and Rivers States.

The CBN also directed that with effect from April 1, 2017, banks in the states where the cashless policy was already operating would begin to impose charges on deposits and withdrawals above N500,000.

Banks will from that date begin to charge individuals 1.5 per cent and two per cent for deposits and withdrawals between N500,000 and N1 million.

The circular said individuals depositing or withdrawing between N1 million and N5 million will be charged two per cent and three per cent respectively.

Any amount above N5 million will for an individual attract three per cent and 7.5 per cent for deposits and withdrawals respectively.

For companies, deposits and withdrawals under N3 million would not attract any charge, but that such customers depositing or withdrawing between N3 million and N10 million would be charged two per cent and five per cent respectively.

Also for deposits and withdrawals between N10 million and N40 million, customers will be charged three per cent and 7.5 per cent respectively.

Deposits or withdrawals above N40 million by corporate customers will attract a charge of five per cent and 10 per cent respectively.

According to the CBN, the new policy on charges will be implemented in selected states on May 1 and August 1, while the total implementation will become effective on October 1.

The regulator noted that the committee agreed that income generated from the processing fees above the allowable cash limits would be shared between it and the banks in the ratio of 40:60.

However, the CBN said that existing exemptions to the policy such as revenue generating agencies of the federal, state and local governments (for lodgments) will be sustained.

Also exempted from the processing fees are embassies, diplomatic missions, multilateral and aid agencies.

 

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The Awka Ibom state government is set to commission the first ever pencil factory in the country.

In its commitment aimed at re-awakening the spirit of enterprise among the youths and position them to benefit from the industrialization programme of the state, government of Akwa Ibom State would soon commission its multibillion naira pencil and tooth pick factory.

The factory which is wholly-owned by the state government was floated in 2015 under the Akwa Ibom Enterprises and Employment Scheme (AKEES).

The Administrative and Utility Manager of the factory, Miss. Nsisiong Umoh, told newsmen in Uyo that although the factory is currently on a test run with staff strength of over 60, all drawn from AKEES database, it has been producing for two months now.

The factory she said is currently producing about 100,000 per month and intends to increase drastically when the factory is finally inaugurated.

Umoh added that government’s plan is to also build pen, matches and sagged bag factories within the premises, thereby creating more employment opportunities for the teeming youths.

She said the factory is yet to start selling its products, revealing that so many companies have already indicated interest to act as their marketers/distributors.

Meanwhile, the pencil and tooth pick factory has received orders from the Sokoto State government to supply 144,000 pencils every three months.

 

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The slide in the value of the naira against the dollars has caused the price of aviation fuel, known as Jet A1, to skyrocket.

 

The price which stabilized in recent times, selling between N220 to N255 per litre, has increased to N265 following acute dollar scarcity.

 

The naira hit an all-time low last week exchanging for between N507 to N510 to a dollar. This, coupled with the scarcity, has taken effect on the prices of aviation fuel with airline operators lamenting over the weekend.

Findings have showed that a litre of fuel which sold for N230-N240 in Lagos few weeks ago has now increased to N245-N250 per litre.

 

However in other airports across the country, it has skyrocketed to about N265-N280.

Director of Flight Operations, Azman Air, Capt. Tanko Afegbua, confirmed the development, He said, “I can tell you that in Kano, the price has gone up to N280 per litre and we don’t have option than to buy it in order to keep the operations running.”

He attributed the development to dollar shortage, saying fuel marketers were complaining that the landing cost has increased.

 

There are fears in the industry that the price may soon hit N300 if the naira continued to depreciate against the dollar which will in turn increase the cost of air tickets which has gone up enormously with a one-hour ticket from Lagos to Abuja now costing about N50,000 from N20,000 to N25,000 it used to be for a one way trip.

 

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