Monday 20 February 2017
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After quite a long break, DB Records is out with the official video to his latest song which features DMW’s lead act,
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Posted by Editor. at 19:12
Minister of Finance, Mrs. Kemi Adeosun, in this interview with selected journalists speaks on the prospects of the $1billion Eurobond by the federal government and more. Excerpts:
Outcome of the Eurobond programme
The Eurobond is part of our funding strategy for our 2016 capital expenditure and will be spent on key infrastructure projects, in line with our economic plan.
Over the last two weeks I have been privileged to lead a strong delegation including the Minister for Budget and National Planning, the Central Bank Governor, the DG of the Debt Management Office, the DG of the Budget Office and representatives of the National Assembly to engage international investors and we’ve been very pleased with the response. The investment community understands the strategy we are adopting and have been positive. That is reflected in the bond being almost eight times oversubscribed.
Terms of the Eurobond
We have borrowed US$1 billion over a 15-year period, with an annual coupon of 7.875%. That compares to an average Naira borrowing rate of 15%. The international capital markets are a key source of capital for us and our sovereign issuance provides a key benchmark for corporate borrowers looking to tap the ICM. Ultimately, we want to achieve an optimal mix of borrowing from the ICM and other external sources, including concessional funding from the World Bank and China, as part of the 2017 budget process.
What Eurobond means to the man on the streets
We know that the state of the economy is creating challenges for people across the country. Inflation is high and so prices are rising. That’s why we have been working to ensure our social intervention programmes are prioritised, and we have already started the conditional payments programme. But we also know that the reason we are in this situation is because we have not taken the hard decisions to re-structure our economy and we must do so now, if we are going to offer the prospect of long term improvements in quality of life for all Nigerians.
How government raise further foreign debt
The simple reality is that international debt is considerably cheaper than domestic debt and while we extensively utilise domestic debt instruments, we need longer term and cheaper debt to allocate to infrastructure spending. That is available from international sources, and we are seeking to maximise the tenure and minimise the cost of this debt so we get the best deal for Nigeria.
Justification for Eurobond
The Eurobond programme was approved as part of the 2016 budget, but that process began late, with final budget approval only delivered in May 2016. We’ve extended the 2016 budget spending cycle through to the end of March 2017. The Eurobond, and the AfDB loan we secured late last year, are allocated to capital projects identified in that budget.
The government’s debt strategy has been well defined and approved by the National Assembly. We are focused on re-balancing our debt profile to ensure we have longer term debt that can be used to fund infrastructure development. You can expect to see us continue to raise international funds over the coming two years as we work towards an optimal debt profile.
Can we afford that level of debt?
Yes. We have one of the lowest debts to GDP ratios amongst emerging economies. We have the headroom to borrow, but we must not be complacent. We must ensure that we are rapidly increasing government revenue at the same time to give us enhanced resources to deliver growth.
he economic recession notwithstanding, the country was able to raise over $7.8billion of the proposed $1 billion in the Eurobond market, in what signifies a global investors’ endorsement of the federal government’s economic recovery initiatives and growth.
The issue was 750 percent oversubscribed; underscoring buoyant investor appetite for Africa’s largest emerging market.
The bond, issued under Nigeria’s newly established Global Medium Term Note programme, is the third in the series after the ones in 2011 and 2013.
The note which has February 16, 2032 as maturity date for repayment on the principal is expected to yield interest at a rate of 7.88 percent.
The roadshow to London and other major economic cities in the U.S was led by the Minister of Finance, Kemi Adeosun accompanied by her counterpart in the Ministry of Budget and National Planning, Udo Udoma; Central Bank of Nigeria governor, Godwin Emefiele and Director-General of the Debt Management Office (DMO), Abraham Nwankwo, as well as the Director General of the Budget Office, Ben Akabueze.
“Nigeria is implementing an ambitious economic reform agenda designed to deliver long-term sustainable growth and reduce reliance on oil and gas revenues while reducing waste and improving the efficiency of government expenditure,” Mrs. Adeosun said of the bond.
Also commenting on the notes’ pricing, the DMO Director-General, Abraham Nwankwo, said: “Nigeria is delighted to have successfully priced its third Eurobond issue. We have successfully extended the tenor of our borrowing programme in the international capital markets to 15 years, at a price that reflects belief in the quality of Nigeria’s cash flows and government.”
He said the Eurobond is the latest step in a broader debt strategy designed to significantly re-balance our debt profile towards longer term financing and reduce the burden of interest on our annual budget.
Initial fears over the $1b Eurobond
It would be recalled that major market players had queried that the Eurobond issuance will meet brick wall due mainly to the country’s Foreign Exchange policy which has seen the Central Bank of Nigeria controlling the exchange regime.
Thus, many stakeholders and international financial market analysts had argued that the Eurobond Roadshow in London, Los Angeles and New York due to government’s control of the Forex regime will adversely impact on the fortunes of the Eurobond. This is the first time Nigeria is issuing a $1b Eurobond in a single tranche. In 2013 the federal government issued a $1b Eurobond but in two tranches of $500million each for five and ten years’ maturity each. 2011 was the debut outing of $500million with maturity period of ten years.
But the government said the offering attracted significant interest from leading global institutional investors.
What this means for Nigerians
The euphoria generated by the Eurobond notwithstanding, the average man on the streets hardly knows what this whole thing translates to in terms of impact.
Speaking on what lies in store for Nigerians, a cross-section of respondents expressed serious misgivings over the development as they presented nuanced view of what they think the bond issue portends.
To many of these respondents, the assurances of a better future promised by government hardly inspires because nothing on ground seems to point to that future.
“We/re been taken for a ride by this government. It is really painful to hear that all the government has done is to mortgage away our future with this Eurobond,” lamented Alabi Moyosore, a public affairs analyst.
In the view of a financial analyst, Kunle Orebe he is optimistic that the federal government will do what it says it will do. “I believe in this government because Rome was not built in a day. The government is trying to raise money. I may not be able to talk about the past government. But this government believes they must not misuse tax payers’ money anyhow. This is a democracy and as such, people in power should expect criticism because of opposition. I believe criticism is not limited to bad ideas, good things too need criticism, and we should applaud them. I believe they will use the bond rightly. They will get it right. At least with the way they’re fighting corruption and they get it right in economy-wise, things will get better.”
Odunaye Babatunde, a charted accountant however has a different view. According to him, it is tough to believe in this government because of the rather slow pace of progress being made in the key sectors of the economy.
“My own is that until we see them doing things like power, works, etc, that’s when we can say they’ve gotten it right. But for me I don’t understand this government and what they have to offer. But let us see what they have to offer Nigerians first then we can give make our assessment.”
For Adeleke Sunday, who himself is a chartered accountant, holds the view and very strongly too that the federal government’s intention is suspect still because it leaves little to cheer about.
“It can never be a yes or no answer because this government has told us it is going to use debts to finance the budget, whereas opportunities abound in this country. One thing about Nigeria is that we don’t believe in ourselves because of the past governments. Let’s just give them benefit of doubt. Those investors believe that the government can’t die that is why they invest in the bond. Another major problem in this government is the economic team. I have doubt in the team. I think we should have a good economic team that will make this government and the economy well.”
Echoing similar sentiments, Olu Adeleke, an economist, in his view, said the team as currently assembled lacks what it takes to lift the economy out of recession. “The current economic challenges facing the nation pre-dates President Muhammadu Buhari’s administration. But in Buhari, Nigerians see a changed agent. They trust his pedigree and reputation, which was why he was massively voted for. However, the biting economic woes leading to shutting down of firms, job losses, high cost of living have heightened fresh calls to rejig his economic team.”
Gains and prospects of Eurobond
Many equally believe that the Eurobond signifies hope in the horizon. Firing the first salvo, Mr. Olusola Oni, a stockbroker and Chief Executive Officer of Sofunix Investment Limited told The Nation the best to understand the gains of the investment to the average Nigerian is to first have a grasp of what the bond is all about.
According to him, “What this means to an average Nigeria is that there is faith in our economy. When you are buying into a financial asset like the Eurobond, it means you are buying into the future of that asset. By implication, those who subscribed to that Eurobond believe and have confidence and prospect in the economy. That is what they are buying to generate bountifully harvest or profit for them at the end of the day. If it is not subscribed, it will have been the reverse. If that had been the case, that means they lack confidence in our economy they don’t want to take the risk.”
The Eurobond, Oni emphasised: “Is backed up by our federal government it means there is faith in what the federal government is doing. Even with the current situation of our economy those who invest still believe and that confidence in our economy that means the economy has direction that means they can identify with what we are doing and also invest in our economy.”
Like Oni, Johnson Chukwu, who sits atop as the Managing Director of Cowry Asset Management Limited, said the success of the Eurobond offer indicates that international investors still have some level of confidence in the Nigerian economy and would be willing to invest in Nigerian instruments that meet their risk acceptance criteria and offer them commensurate return.
“In effect, despite the challenges of our economic situation, should our economic managers evolve appropriate policies, foreign investors would be willing to return to the country,” he said.
Expatiating, he said: “If foreign investors resume their demand for Nigerian assets including local currency assets, the associated dollar inflows will help boost our foreign reserves, stabilise the exchange rate and possibly lead to appreciation of the Naira. This will turn lead to reduction in prices of goods and services. An increase in foreign reserves will also make it easier for Nigerian companies to access foreign exchange for importation of raw materials and equipment which will then improve their manufacturing activities with consequent increase in employment for Nigerians.”
At the macroeconomic level, Nigerian foreign reserves, the Cowry Asset boss said, have been boosted by the proceeds of the Eurobond offer. “Beyond that, the success of the offer will also help the government meet its budgetary plan. The government has indicated in its 2017 budget that it will build part of the Lagos to Kano standard gauge rail line with the bond proceeds. The government now has the financial resource to embark on this all important infrastructure development.”
Posted by Editor. at 19:08
No fewer than 21 persons have been reported killed in fresh attacks on villages of Kaura and Jema’a Local Government Area, in the southern part of Kaduna State.
The state government on Monday confirmed the renewed attacks, as it said that the Garrison Commander of the 1 Division of the Nigerian Army and the state’s Commissioner of Police have relocated to the troubled areas.
The Nation gathered that, gunmen suspected to be Fulani herdsmen, despite presence of security agents deployed by the federal government to end the incessant killings in the area launched attacks on four communities, killing 21 people.
Many houses were also reportedly set ablaze during the Sunday and Monday attacks on Ashim, Nissi and Zilan in Atakad District, Kaura local government and Bakin Kogi in Goska District of Jama’a local government.
The attacks in Ashim, Nisi and Zilan according to eye witnesses occurred on Monday at about 6:00pm, claiming 15 lives with over 50 houses burnt, while that of Bakin Kogi occurred on Sunday at about 5:00pm, claiming seven lives and many houses set ablaze.
According to the President of Atakad Community Development Association, Mr. Enock Andong who confirmed the attack on the three villages in his area, the herdsmen were heavily armed and that in spite of the security presence, they were able to launch the attack.
Posted by Editor. at 18:58
ABUJA- FOLLOWING the upward trend in global price of mineral commodities for the past two years as oil prices went down, a mining expert and Director of Exploration at Orbitwaves Geosciences Ltd, Jerry Solomon, has decried the unexplored 230 million tonnes of iron ore deposit in Nigeria. Solomon made the assertion while appraising activities in the country’s solid minerals sector, which largely has not been harnessed to begin the diversification of the economy.
According to him the ferrous (Fe) content of the ore ranges from 35-50 per cent and could be up to 70 per cent in places. He said: “While the price of oil have been persistently low for close to two years now, the price of mineral commodities have sustained an upward trend for the same period with a very high jump recorded after the announcement of China’s economic stimulus package. Following the increased metal demand and analysis of commodity market outlook, an 11per cent rise in the price of mineral commodities has been forecasted for year 2017.
“Nigeria sits on many unexplored iron ore deposits of diverse origin and quality out of which the purest and largest known reserve is in Itakpe, Kogi State. A pessimistic preliminary estimate of iron ore reserves of the deposit suggests excess of 200 million tonnes. The ferrous (Fe) content of the ore ranges from 35 – 50 per cent and could be up to 70 per cent in places. “In addition to Itakpe deposit, large reserves of sedimentary iron ore are exposed at Agbaja area in Kogi State, holding excess of 30.5 million tonnes of iron with an average assay of 50 per cent and a high of 85 per cent Ferrous content.
Economic percentage of phosphorous and alumina occurred in associates with iron in the ore and can be processed as by-products. “Ore from most of Nigerian iron ore deposits qualify for direct export Direct Shipping Ore (DSO) as they meet the 62 per cent Fe content benchmark even without beneficiation. The common gangue material in Nigeria iron ore is mostly cherty and shale which can be washed off through simple beneficiation process to upgrade them to DSO.
“While the government intensifies effort on instituting processes that will take the various mineral commodities through their value chains to end-user products, a quick win opportunity exists in mining and exporting ore as DSO to earn Foreign Exchange and a significant source of revenue that can be used to further develop the mining sector and build the required infrastructures required for economic operation of the processing plants to boost the dwindling Nigerian economy.”
However, he said the reserve figures stated here are ballpark pessimistic estimates as the true reserve of iron ore in Nigeria remains unknown due to inadequate drilling data required to conduct a standard compliant resource estimate. Also speaking on the untapped Lead and Zinc mineral deposits the mining expert said government needs to critically look into and explore them for export. “Lead price rose from $0.8 per pound in January 2016 to $1.08 per pound in early February 2017. Nigeria is underlain with commercial deposit of lead and zinc which mostly co-exist as Lead-Zinc ore in Northern, Central and Eastern part of the country.
“While most of the deposits remain largely unexplored, the few ones that are operated are in the hands of illegal miners and funded by foreign syndicates who recover the resources and smuggle them out of the country without report and given no credit to Nigeria. “The Direct Shipping Ore (DSO) grades of Lead-Zinc ore typically range from 19-35% Zn, 6-20 per cent Pb, 1-4 per cent Cu, and 1-90oz Ag. While ore from most Nigerian lead-zinc deposits do not naturally meet these grades, beneficiation and upgrading ore is not a difficult feat to achieve”, he stated.
Posted by Editor. at 18:41
ABUJA – Erstwhile Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mr. Andrew Yakubu, has asked a Federal High Court sitting in Kano to order the Federal Government to return to him, over N3billion that was found in his home in Kaduna.
Yakubu, in a motion on notice with suit number FHC/ICN/CS/24/2017, filed by his lead counsel, Mr. Ahmed Raji, SAN, asked the court to set aside the forfeiture order that granted FG ownership of the money which was discovered by operatives of the Economic and Financial Crimes Commission, EFCC, on February 9. Specifically, he wants the court to set aside the order and return the $9,772,800 and £74,000,000 which he said belongs to him.
The former NNPC boss insisted that the court lacked the jurisdiction to grant FG ownership of his money. According to him, the court, was bereft of the territorial jurisdiction to entertain the motion that culminated to the forfeiture order since it related to a crime that was alleged committed in Abuja. Raji, SAN, contended that going by section 45 of the Federal High Court Act, an offence should be tried only by a court exercising jurisdiction in the area or place where the offence was committed.
“No aspect of the perceived offence in respect of which the Order of February 13, 2017 was made, was committed within the Kano judicial division of this Honourable Court”, Raji argued. He further maintained that FG lacked the locus-standi to seek the interim order of the court granted on February 13. “By Section 28 of the EFCC Act, only the commission, i.e. the EFCC has the vires to seek an order for the interim forfeiture of property under the Act.
“The power of this Honourable Court to make interim forfeiture order(s) pursuant to sections 28 & 29 of the Economic and Financial Crimes Commission Act, 2004 (herein after referred to a “EFCC Act”) is applicable ONLY to alleged offences charged under the EFCC Act and not to offences cognizable under any other law. “The ex-parte order of this honourable court dated February 13, 2017, was made in respect of alleged offences under the Independent Corrupt Practices and other Related Offences Commission Act (herein after “ICPC Act”) and not the EFCC Act as prescribed by section 28 & 29 thereof.
“The conditions precedent to the grant of an interim forfeiture order under sections 28 & 29 of the EFCC Act were not complied with by the Applicant (FG) before the Order was made”, he submitted. Besides, he argued that the combined effect of sections 28 and 29 of the EFCC Act was that a charge alleging infractions against the provisions of the EFCC Act ought to be brought against a suspect before the powers of the court under cections 28 & 29 of the EFCC Act, to order interim forfeiture of property, could be activated.
He insisted that without a formal charge, no prima-facie evidence could be established in order for the provisions of section 28 and 29 of the EFCC Act to be activated. “In the instant case, no charge was brought against the Respondent/Applicant before the provisions of section 28 and 29 of the EFCC Act were activated to grant the ex-parte Order of February 13, 2017”, he stated. Yakubu was Group Managing Director of the NNPC between 2012 and 2014.
He was sacked by the administration of former President Goodluck Jonathan for alleged insubordination and corruption. EFCC operatives raided his house situated in Sabon Tasha, Kaduna State, following a tip-off by a whistle-blower. The agency disclosed that it discovered the sum of $9.7m and £74,000 that Yakubu hid in a fireproof safe inside the house.
Posted by Editor. at 18:16
The Lagos State Government on Monday handed over keys of 100 housing units to successful allottees in its “Rent-To-Own” Housing Scheme.
The allottees took possession of their units located at Epe, Ikorodu, Agbowa and Ojokoro at an event held at the state Secretariat in Alausa, Lagos. Mr Gbolahan Lawal, the state Commissioner for Housing, who handed over the keys to the allottees said that the state government considered housing as a basic necessity of man.
“Of the three basic necessities of man, housing is one of the most cardinals. “This has necessitated the need for every responsible government to give utmost attention to housing.
“The need to create a new face of accommodation for Lagosians, especially the low and middle income earners has become imperative due to the ever increasingly population.” According to him, every interested resident is qualified to apply without having to know anyone in government.
“Under this policy, all that prospective home owners need to do is to make a five per cent commitment fee, take possession and pay up the remaining balance towards ownership over a period of 10 years,” he said. He stated that the handing over of apartments to successful allottees would take place on a monthly basis.
In his address, Mr Dehinde Tunwase, General Manager, Lagos State Mortgage Board, said that 4, 355 housing units had been earmarked for the Rent-To-Own scheme. He assured that the apartments were well located, urging Lagosians to take advantage of the scheme to become home owners.
“Our estates, which are located in serene and beautifully gated communities, are usually equipped with modern facilities like water treatment plants, healthcare centres, and adequate parking spaces among others,” he said. Gov. Akinwunmi Ambode of Lagos state launched the scheme on Dec. 8, 2016 as a way of bridging the huge housing deficit in the state.
Posted by Editor. at 17:59
With the economic crisis in the country hitting businesses hard, telecommunication firms are opting for drastic measures to boost revenue, OZIOMA UBABUKOH writes
Telecoms companies in the country are hoping to address concerns over revenue loss from international calls and hit a revenue target of N20tn by blocking subscribers from accessing Skype and other Over-the-Top services, The PUNCH learnt on Sunday.
It was reliably gathered that subscribers might also be prevented from performing certain functions like voice and video calls on WhatsApp and Facebook, among other OTT services.
Skype is a proprietary Voice-over Internet Protocol software for calling other people on their computers or mobile phones.
Phone calls using the Skype software can be placed to recipients on the traditional telephone networks; and calls to other users within the Skype service are free-of-charge, while calls to landline phones though reasonably priced, are charged via a debit-based user account system.
“It is an aggressive approach to stop further revenue loss to OTT players on international calls, having already lost about N100tn between 2012 and 2017,” a manager at one of the major telecos in the country said.
Speaking on the condition of anonymity, the manager said, “If we fail to be pro-active by taking cogent steps now, then there are indications that we may lose between N20tn and N30tn, or so, by the end of 2018.”
The source added that the increasing rise of the OTT players, who provide voice and Short Message Services, or apps such as WhatsApp, Skype, Facebook, BlackBerry Messenger and Viber, was eating deep into the voice revenue of telecommunications companies in the country by more than 50 per cent.
A United Kingdom-based research and analytics company, Ovum, stated in a report recently that $386bn loss would accrue over a period of six years – between 2012 and 2018 – from Nigerian customers using the OTT voice applications.
“Generally, the main fear of the telecoms operators here will be that customers will increasingly use Skype as a substitute for conventional international calls,” the Principal Analyst at Informa Telecoms and Media, Matthew Reed, said.
Telecoms operators in the country said that international calls made up a critical part of their revenue because of Nigeria’s large expatriate and Diaspora population.
The apprehension over shift from voice call, according to them, is worsened by the steep decline in voice revenue.
The operators stated that at the start, they were looking to offset the fallout of intense competition by closing gaps that were spurring revenue leakage in the business.
They blamed the Nigerian Communications Commission for not properly regulating the sector in order to protect and keep them in business.
But reacting to the development, the Director, Public Affairs, NCC, Mr. Tony Ojobo, said, “We don’t have any evidence of that. We do not regulate the Internet.”
The Managing Director, TechTrends Nigeria, Mr. Kenneth Omeruo, said, “I am not aware of this development but globally, operators and network equipment makers don’t really embrace Skype.
“They liken Skype to an individual who takes undue advantage of other people’s generosity without giving anything in return. Globally, there is this apprehension among telecoms operators that Skype only steals their customers, while they invest billions of dollars to build, expand and upgrade networks.”
Major operators in the country’s $38bn telecoms market such as MTN, Globacom, Airtel and Etisalat said if the NCC failed to take decisive actions, they would keep struggling to counter a trend in which the prices of basic voice and data services were declining.
For instance, MTN Nigeria said that the OTT content services had a “cannibalising effect” on network operators’ voice and data revenue, because they provide “free” services, which duplicate those already provided by network operators such as voice calls and the SMS.
According to the firm, a ready example is WhatsApp, which provides free instant messaging services as an alternative to text messaging services provided by mobile network operators.
“It (WhatsApp) has also launched a free voice service,” the Public Relations and Protocol Manager, MTN Nigeria, Mr. Funso Aina, said, adding, “The point to note in this argument is that the OTTs allow users to send unlimited texts, images, video and audio messages free of charge, using their current data plans.”
According to him, the problem is that these services are provided using network infrastructure of the operators, but without commensurate compensation to operators.
Aina added, “At the same time, they are denying operators of revenue to grow their networks, thereby impacting on service delivery and long-term sustainability.
“For instance, to date, MTN has invested over $15bn in building its network in Nigeria. You can now imagine an OTT leveraging the network to deliver its content without investing a kobo locally. The impact on revenue is huge.
“Furthermore, because these entities are not licensed, and because they have not built any infrastructure locally, they do not have the same costs as the licensed operators.
“They do not pay taxes, they do not employ any people locally, and indeed, they have no local presence whatsoever, meaning they do not make any contribution to our economy and their services are denying those who make contributions of income.”
The MTN public relations manager stated that it was the view held by most within the industry, but noted that “at MTN, we are looking to find win-win solutions for all stakeholders.”
Aina, however, dismissed the allegation that some telecoms operators had continued to dispute a view that they were making enough money from their higher paying data services to offset the loss of voice and messaging revenues.
He explained, “Every service is provided at a cost, and we cannot subsidise one service through revenue from another; so, the argument as to whether loss of revenue from one is being offset by another is really not a fruitful argument.
“The important thing is that services must be produced efficiently and all stakeholders, including our customers, must get fair value for their investments.”
Checks by The PUNCH showed that in the United Arab Emirate, Etisalat and Du had recently lifted a ban on Skype services. Both telecoms companies had announced that their subscribers could now download the application online and make Skype-to-landline or mobile calls, which were not previously permitted.
Many telecoms operators worldwide, including some companies in the United States, the United Kingdom, France and Spain, prohibit their mobile phone customers from downloading Skype’s software, or outlaw the use of voice over the Internet phone services in their standard sales contracts.
Other carriers have imposed fees to undermine Skype’s attraction. Moreover, barriers to Skype software and similar Internet calling services are coming under increasing scrutiny as the Internet goes mobile.
In 2013, the number of Internet-ready mobile phones surpassed the number of computers in the world for the first time, according to Gartner, a research firm.
Posted by Editor. at 17:26
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