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Afreximbank Board Retains Nigeria as Chairman *Shareholders to Enjoy $69m Dividends

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By Tony Obiechina, Abuja

The African Export-Import Bank (Afreximbank) will pay a total of $69 million to its shareholders as dividend from its 2018 earnings, according to decisions reached during the Annual General Meeting of Shareholders (AGM) of the Bank which ended in Moscow on Sunday.

The shareholders also appointed one new member to its Board of Directors and decided to retain Nigeria, which has been its Chairman since the last meeting in Abuja in 2018, in that position for one more year.

According to a statement from the Bank made available to Daily Asset in Abuja on Sunday, the AGM also approved the Bank’s 2018 Annual Report which includes the 2018 Financial Statements.

In his report to the AGM, Prof. Benedict Oramah, President of Afreximbank, said that the Bank’s total revenues rose by 24 per cent in 2018 to reach $806 million while the net income increased to $276 million, representing a 26 per cent increase on the level in 2017.

The Bank’s total assets, including contingent liabilities, went up by 15 per cent from $13 billion in 2017 to $15 billion in 2018, said President Oramah. That profit performance reflected strong growth in interest and fee income from diversified sources by geography and financial products.

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He informed the shareholders that during its extra-ordinary session in Nouakchott in July 2018, the African Union Heads of State Summit had approved the accreditation of the Bank to the AU, allowing the AU to adopt most of the Bank’s flagship initiatives as continental initiatives. That action would help to accelerate adoption of such initiatives at the national level, thereby improving the pace of implementation at lower cost.

Prof. Oramah explained that the accreditation was a privilege which was previously enjoyed only by the African Development Bank and the United Nations Economic Commission for Africa.

The end of the AGM marked the conclusion of the Bank’s 2019 Annual Meetings (AAM2019) which started on 20 June with the seminar and meeting of the Advisory Group on Trade Finance and Export Development in Africa, declared open by Russian Foreign Minister Sergey Lavrov.

On 21 June, Dimitri Medvedev, Chairman of the Government of the Russian Federation, had addressed the opening session of the AGM.

AAM2019 was held under the theme “Harnessing Emerging Partnerships in an Era of Rising Protectionism” and deliberated on such topics as: How South-South trade can be a path to Africa’s integration into the global economy; Multilateralism in the current global economic order of protectionism; and The role of investing in Africa’s infrastructure in accelerating intra-African trade and economic development.

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Highlights of AAM2019 include the launch of the African Trade Report 2019; the launch of the Afreximbank Export Trading Company Strategy; and a half-day programme of activities dedicated to Russia–Africa investment cooperation. A number of trade agreements were also signed at the event.

AAM2019 marked the second time Afreximbank Annual Meetings would take place outside Africa. The 2012 Annual Meetings were held in Beijing.

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ICRC Gazettes 53 PPP Projects Worth $22bn for Investors

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By Tony Obiechina, Abuja 

The Infrastructure Concession Regulatory Commission is set to gazette a total of 53 eligible and bankable Public Private Partnership projects, worth about $22bn for investors.

Already, the Commission has published 51 eligible and bankable PPP projects, worth over $17bn from different economic sectors which have been granted the Outline Business Case Compliance Certificates, but which did not have identified bidders.

The Director-General of ICRC, Mr Michael Ohiani made these disclosures at the Africa Public Private Partnership Network Investment summit with the theme: “Financing Africa’s infrastructure through Public Private Partnership”, in Abuja on Monday. 

He told participants at the event that as of May 2022, there are 77 post-contract PPP projects under implementation at the ICRC Projects Disclosure Portal.

The portal is the first disclosure portal in the world, established by the ICRC in collaboration with the World Bank.

The ICRC DG pointed out that the Commission has about 197 pre-contract projects at different phases of project development and procurement.

Similarly, he said the agency since it was created has achieved a lot, noting for instance that between 2010 following the inauguration of its Governing Board and 2021, under the regulatory guidance of the ICRC, the federal government has approved PPP projects worth more than $9bn.

The ICRC Boss also disclosed that the agency has issued 128 Outline Business Case Compliance Certificates to date, stating that these projects have been certified bankable projects, to enable them proceed to procurement phase.

He said, “This Investment Summit is coming at a time when the continent is gradually coming out of the COVID 19 pandemic, which dealt series of blows to investment portfolios and decisions; as well implementation of on-going infrastructure service delivery projects.

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“The Pandemic also affected the ability of governments to finance the much-needed public projects, with its attendant record of dwindling revenue.

“Our country was not spared from these challenges; however, there is the growing need to salvage our projects which are under implementation on one hand while developing bankable and viable PPP projects for investment on the other hand.

“The innovative structuring of PPP transactions through globally accepted competitive and transparent processes cannot be over-emphasized; especially as the initiative is in support of our 2021 to 2025 Mid-Term National Development Plan, which projects the use of private sector financing to achieve about 85 per cent of our N348.1trn Plan.”

He said as countries look towards infrastructure financing, the key in the 21st century is for governments to enhance the investment environment for national level investment for local and foreign investors, and look to innovative financing mechanisms that promote local capital markets, private sector risk, and rely on regulatory systems to balance investor and consumer requirements.

With fiscal and budgetary funding constraints plaguing governments across the continent, the ICRC DG told participants that private participation in infrastructure has become an economic necessity, rather than an optional financing solution, as hitherto considered.

“Partnership between the public and private sectors for the financing, design, build, maintenance of infrastructure and delivery of associated services is absolutely necessary for Africa governments to meet the need for modern and efficient infrastructure, and for reliable cost-effective delivery of public services.

“Governments all over the world, including the Africa continent, have come to recognize that the collaboration between public and private sectors is crucial to securing dependable and sustainable funding for infrastructure and reducing the pressure on fiscal budgets.

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“PPP arrangements have engendered acceleration of infrastructure provision, faster implementation of projects, and reduced whole life costs of projects,” he added.

He expressed optimism that the Summit on financing Africa’s infrastructure through PPP would provide the unique opportunity to have the details, the direction, the options, and focus on infrastructure financing to boost the African economy.

In his keynote address at the event, the Secretary to the Government of the Federation, Mr Boss Mustapha, stated that Africa faces huge infrastructure gaps.

However, he pointed out that these infrastructure gaps also present huge opportunities for private investment through public-private partnerships, especially in sectors such as energy, housing, transportation, agriculture, technology, waste management, and social services and amenities.

According to him, the continent requires energy, transportation, and new satellite cities to accommodate millions of people moving from rural to urban areas.

He said, “The current economic growth pattern on the continent stresses the importance of private sector investment through PPP in promoting Africa’s growth and structural transformation.

“Hence, identifying the private sector development as an engine of sustainable structural transformation through PPPs is of critical importance to the continent.

“Indeed, to release the potential of Africa, there is the need to develop and imbibe a resilient and vibrant PPP framework as a means of facilitating rapid infrastructure transformation of the continent.”

To be able to stimulate and create a vibrant private sector on the continent and accelerate infrastructure development, the SGF stated that a number of issues must be addressed.

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“There is definitely the need to create a welcoming investment climate. This can be achieved by reducing risks and costs of doing business and by securing private property rights, improving governance, fighting corruption, simplifying regulations, and promoting competition.

“African governments must also resist pressure to erect trade barriers for intra-African trade to flourish. Currently, intra-African trade amongst African states is about 10 per cent of total exports. This is the lowest amongst other regions in the world.

“But we strongly believe that with the initiative of the African Continental Free Trade Agreement the situation will drastically improve,” he added.

Mustapha said there is also the need for financial sector development by strengthening regulatory and institutional frameworks to improve governance and increase competition, improving access to finance and financial literacy, developing payment systems, and enhancing creditor rights.

In his goodwill message, the Director-General of the Nigerian Governors Forum (NGF), Mr Asishana Okauru, said the Public-Private Partnerships (PPPs) have shown that if properly structured, could be an effective infrastructure financing and delivery tool.

“In Nigeria, proactively we have already begun this process as the Nigeria Governors’ Forum in collaboration with the ICRC has established the Nigeria Public-Private Partnership Network to address the issues and bottlenecks towards Infrastructural development of strategic sectors of the subnational economy by public-private partnerships”, he stated.

He noted that the NGF believes that improving the capacity and resources of State governments to prepare PPP pipelines and bankable PPP projects, offers a sustainable long-term approach to improving social infrastructure, enhancing the value of public sector assets, and making better use of taxpayers’ money

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FCTA Warns Apo Pantaker Market Plot Owners to Develop or Risk Revocation

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By Laide Akinboade, Abuja

The Federal Capital Territory Administration (FCTA), yesterday warned owners of plots in Apo-Dutse pantaker site to develop their plot within one month or risk revocation of their plots.

The Senior Special Assistant on Monitoring, Inspection and Enforcement to the minister of FCT, Ikharo Attah, lamented that after the administration spent the state resources to clean up the market, most of the owners of plots in the site haven’t taken possession of the plots.

He revealed that about 150 illegal shanties and shops were removed yesterday. 

“We returned back to Apo-Dutse pantaker market to after spending several days to remove the illegalities on plots of land and we return back for a mop up exercise but somehow we are not too please that most of the allottees have not taken over their land, the Minister of FCT Malam Muhammad Bello,  is very bitter and unhappy, because most of the allottees have not taken over their land and   he is spending state resources to do the cleanup exercise in terms of buying diesel and paying personnel allowances, servicing the machines etc.

What we are hearing is that some of the allottees are speculating with their land and this cannot continue and is unacceptable.

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“People who have gotten land in this place and are waiting for us to clear it should immediately report to Development Control, within the next one month. Not just fencing the land but also getting building plan approval and building on it.  They should not leave the land vacant for too long, people are going to go in here, we will be recommending to the FCT Minister and pleading with him that if in the next one month we do not see meaningful development in terms of fencing and ground breaking for structures because the Minister is spending huge amount of state resources to cleanup.  And those who have properties are not taking it over. The Minister should revoke the land.

“The only way you can get them to move out of here is for the plot owners to take over their plots and start development. As long as the plot owners are speculating then pantaker and miscreants will take over their plots,” Attah stated.

On allocation of alternative to the Association of scrap dealer, Apo-Dutse pantaker market, he noted that the Minister is considering it and they should be patient.

But he warned them against operating with babanbola because it paints them in bad light.

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The chairman Association of scrap dealer, Apo-Dutse pantaker market, Anas  Ismail, while fielding questions from journalists, he said his people are not regrouping rather they are packing their belongings.

He said they have already written to the Minister to please give them more time to pack their things.

Bala Haruna, Secretary General Apo Dutse pantaker market, also collaborated with what their Chairman said he said nobody came back, that they are dealing with so many things which include cars and others and it will take them some time to pack them.

He also appealed to the Minister to consider their request of allocating a land to do their business.

He also revealed they are over 10,000 scrap dealers in the market.

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Downstream Sector:  FG’s Deficit Spending to Rise by 106%

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There were indications over the weekend, that the Federal Government’s deficit spending in the downstream sector will increase by 106 per cent as landing cost of petrol rise to N315.46 per litre, from N295 per litre.

The most recent driver of the trend is the recent increase of freight rate to N20.46 per litre, from N10.46 per litre.

At the current price of N165 per litre of petrol, the government through the Nigerian National Petroleum Corporation, NNPC Limited, pays about N295 per litre as an under-recovery or subsidy.

But the level of government exposure would hit the roofs at N315.46 per litre, as the government has already expressed commitment to paying the new rate from June 2022.

Already the petroleum industry authorities are said to be racking their heads on ways and means to pay the new freight rate which was not provided for in the 2022 budget.

A top industry source, who pleaded anonymity, said: “The government has made a pronouncement after considering different options. Consultations are still ongoing. Let us wait and  see what happens.”

The officials of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, created in August 2021 in line with the Petroleum Industry Act 2021, did not respond, at the weekend.

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NMDPRA, had earlier stated: “President Muhammadu Buhari has considered and approved the upward review in freight rate for transporters to alleviate the challenges associated with the distribution of Premium Motor Spirit (PMS) nationwide.

“The approval was after due consultations with industry-wide stakeholders at the instance of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (the Authority).

“The review was necessitated by the upswing in the global price of petroleum products especially Automotive Gasoil (Diesel) and its implication on the cost of transporting Premium Motor Spirit (PMS) nationwide.

“Consequently, the Authority wishes to advise that in line with the mandate of the Authority as prescribed in the PIA (Section 31(i)) to develop and enforce a framework on tariffing and pricing for natural gas and petroleum products, the transporters freight rate has been reviewed to reflect current market realities.

“The revised freight rate takes effect from 1st June 2022 while still maintaining the current regulated PMS pump price of N165.00/Litre.

“An Inter-agency Team is being constituted to ensure reconciliation and payment of outstanding transporters claims in line with established payment procedure under the Bridging Fund Scheme. NNPC, the sole supplier of PMS, has maintained over 32 days of sufficiency in-country.

“We believe the increase in transporters freight rate will further encourage Nigerian Association of Road Transport Owners (NARTO) and other stakeholders to deploy more trucks to transport PMS nationwide to ensure adequate supply of the product”.

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In any case, the Independent Petroleum Marketers Association of Nigeria (IPMAN), has blamed ongoing petrol scarcity across the country on supply shortage and the high cost of running their operations.

IPMAN Public Relations Officer, Chief Chinedu Ukadike in a chat said most inland depots were dry and had no product from Lagos and other coastal depots.

Chief Ukadike stated that the high cost of freighting the product from the southern depots has also made it impossible for marketers to operate profitably despite the recent N10.46 per litre rate hike by the government.

According to him, “Depots in Makurdi, Enugu, Mossimi and Owerri cannot access petroleum products because they cannot be pumped. Since our refineries are bad, products are no longer being pumped through the pipelines. It cost marketers close to N40 per litre to freight the product to the stations from the South and that is after buying it for N162/litre from the private depot owners.”

The Executive Director, NMDPRA, Ugbugo Ukoha, who inspected facilities in Lagos, had said: “When we observed that the high price of diesel poses a big challenge in the movement of other products, we made the representation to the minister of state for petroleum and Mr. President graciously approved that the freight rate for trucks is increased.”

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 ”There is an addition, which we will apply to the different routes to enable trucks to move to docks easily with less burden. With these kinds of efforts from the government, we can only continue to appeal to operators within this industry to play by the rules.

“PMS is a regulated product and the prices are fixed. The ex-depot price is known. The pump price remains N165 and the authority is ever ready to enforce those rules. So, we will continue to urge Nigerians to keep within these operating rules.”

But industry leaders, who pleaded anonymity, said the government must have made adequate plans before declaring its commitment to paying the new freight rate.

Also, in a telephone interview over the weekend, the President, NARTO, Yusuf Othman, said: “The situation in the downstream sector is very critical, due mainly to the high cost of diesel. We thank the government for coming up with the new freight, which we hope will go a long way to enhancing operations.”

“Indeed, we are hopeful that it will enable our members to deliver petrol to all parts of the nation, which has been constrained in the high price of diesel.”

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