Rising inflation in Nigeria is reported to be pushing up the prices of building materials and housing. According to data from Nigeria's Bureau of Statistics, inflation jumped to an 18-year high of 25.8 percent in August which has seen building materials, mostly imported, become more expensive. Developers are calling on the government to address this problem, possibly by facilitating more local manufacturing of these inputs.
Friday, September 22, 2023
Video - Nigeria eyes local production of building materials
President Tinubu urges UN to help curb exploitation of Africa's resources
Nigerian President Bola Tinubu urged the United Nations to become more proactive in addressing his African nation's poverty and security issues and helping to fight illicit resource extraction, his spokesman said on Thursday.
Tinubu raised the issues when he met U.N. Secretary-General Antonio Guterres on Wednesday on the sidelines of the U.N. General Assembly in New York, his spokesman Ajuri Ngelale said in a statement.
The Nigerian leader said malign actors who engage in illicit activities, including resource and weapons smuggling, exploit Africa's vast mineral wealth and undermine its stability.
"We are facing the great challenge of scavengers ravaging our lands and oppressing our people on illegal mines, taking our gold and mineral wealth back to developed economies by stealth and violence," the statement cited Tinubu as saying.
"We will now be aggressive and we will question motives. We will stop what is happening," he said, urging "effective collaboration" with the U.N.
Tinubu called for the United Nations to evolve from a global discussion platform into a proactive coordination centre, highlighting the urgency of addressing poverty and security issues.
In response, Guterres acknowledged the need for comprehensive reform within the U.N. to address institutional weaknesses and improve decision-making power for developing nations, according to the statement.
"We now recognize the need to reform the institution to represent the world as it is today," Guterres was quoted as saying.
In a speech at the U.N. General Assembly on Tuesday, Tinubu, who chairs the West African bloc ECOWAS, assailed military coups that have swept through West Africa and pledged to help re-establish constitutional order in Niger.
By Felix Onuah, Reuters
Related story: Video - President Tinubu Address At The 78th Session Of The UN General Assembly
Former government official to share in $11bn gas scandal damages
A former Nigerian civil servant could receive a portion of an enormous sum of damages if a British court rules against the West African nation, in a landmark case centred on a multi-billion dollar gas deal.
As part of an arrangement that Nigeria’s government calls “extraordinary” and “corrupt”, Grace Taiga, the petroleum ministry’s former head lawyer, hopes to share in the record-breaking $11.4bn awarded to the offshore company Process & Industrial Developments (P&ID) before England’s High Court.
Court filings and testimonies seen by Al Jazeera show that Taiga is one of three Nigerians who stand to make money if the court orders Nigeria to pay the award – an outcome that could severely damage the country’s economy. The other two are the businessmen Adetunji Adebayo and Mohammed Kuchazi.
In January 2017, a London-based arbitration panel ruled that Nigeria pay $6.6bn to P&ID as compensation for breaching the contract awarded in 2010. That amount has since ballooned to $11.4bn with interest. But Nigeria has refused to pay, claiming P&ID bribed officials including Taiga to secure the gas contract.
In an eight-week trial that ended in March this year, the government petitioned the High Court to invalidate the arbitration award. The court’s decision is expected within weeks.
Analysts say if Nigeria is ordered to pay the damages, its economy could be severely damaged.
“The negative shock would be monumental,” Olusegun Vincent, associate professor of finance at Pan-Atlantic University in Lagos State, told Al Jazeera. “It may take us back to the pre-1999 military era, when Nigeria wasn’t creditworthy,” he said, pointing to the risk that the government would be unable to pay its debt.
‘The P&ID scam’
This scandal began in the late 2000s when the administration of then-President Umaru Musa Yar’Adua planned to address Nigeria’s energy supply crisis by exploiting vast untapped gas reserves in its mineral-rich Niger Delta region.
Seizing the opportunity, P&ID pitched an ambitious project to the petroleum ministry, to build and operate a gas-processing plant near the southern city of Calabar despite having never undertaken a project like that before.
Taiga was at the centre of negotiations: She worked on the contract wording, recommended to the late Rilwanu Lukman, the petroleum minister then, that he sign a memorandum of understanding with P&ID in 2009, and witnessed his signing of the gas contract the following year.
Under the terms of the agreement, the government would provide wet gas to P&ID for free over 20 years. The two parties would then split the processed resource, with the government using its share to help power the country’s energy grid.
But the project never got off the ground. P&ID never built the plant and Nigeria never provided the company with any gas. P&ID blamed the government for the failure and convinced an arbitration panel it had been wronged.
The panel awarded the company damages equivalent to the total hypothetical profit the company would have made over the lifespan of the contract – $ 6.6bn plus interest of $1.3m per day from the time the contract was breached.
Evidence later emerged that Taiga had received close to $10,000 from individuals and companies linked to P&ID ahead of the contract signing. Before the High Court, Taiga acknowledged having received money but said that these payments were merely gifts from a family friend, P&ID co-founder Michael Quinn.
P&ID said it had done everything in its power to make the project work. However, its inexperience and Taiga’s receipt of undisclosed funds eventually led the Nigerian government to believe that it had been the victim of an elaborate fraud.
Addressing the United Nations General Assembly in 2019, then-President Muhammadu Buhari vowed to confront “the P&ID scam”, which he said was “attempting to cheat Nigeria of billions of dollars”.
Anticorruption campaigners seem to agree with him.
“The story of how a small offshore company with no meaningful track record, no website, and only a handful of employees managed to win a multibillion-dollar gas contract raises red flags for corruption that call for careful scrutiny,” Helen Taylor, senior legal researcher at the British NGO Spotlight on Corruption, told Al Jazeera.
The High Court will adjudicate these points. If Nigeria loses the case, the country would be legally bound to pay P&ID what amounts to eight times its 2023 federal health budget.
‘Part of the family’
How the proceeds would be divided, meanwhile, has long remained confidential. Taiga, who had previously denied in affidavits that she would receive any money from the award, finally told the High Court under oath on February 16: “I do have expectations.” Asked by Nigeria’s lawyer how much she expected P&ID co-founder Brendan Cahill to share with her, she said: “I did not put my mind on a particular ceiling.”
In one document dated October 2017, Cahill recorded a “commitment” of $200,000 to Taiga; in another, dated May 2019, the figure was put at $500,000. Al Jazeera has seen both documents, which form part of the evidence before the High Court. Cahill, an Irish businessman who founded P&ID alongside the now-deceased Michael Quinn, said that these were not firm commitments. “I sought to reassure her that she would be looked after to some degree,” he told the court. “I didn’t specify how or when.”
In court, Taiga denied having secretly helped Quinn and Cahill when she handled the gas contract at the petroleum ministry. But she added that she now saw herself as “part of the family” that is P&ID.
“It’s remarkable that this Nigerian government official who helped broker the controversial gas deal with P&ID now belongs to the close-knit beneficiaries of this opaque offshore company,” said Taylor. “Far from clearing up this conflict of interest, the obscure arrangements for paying her a cut of P&ID’s profits are deeply compromising to her credibility as a former public official.”
A billion-dollar promise and ‘lots of uncertainty’
For his part, Adetunji Adebayo, executive chairman of Nigerian gas company GFD Energy and middleman for P&ID during settlement negotiations with the government, could be entitled to $1.4bn. In an affidavit dated May 2022, Cahill wrote that “Mr Adebayo was promised 10 percent of the income from the arbitration” but added that there was still “a lot of uncertainty around the amount, if any, that will be paid out.”
Adebayo did not appear before the High Court.
Mohammed Kuchazi, who as P&ID’s commercial director assisted the firm in its relationship with the petroleum ministry, told the court that he believes himself to be entitled to 3 percent of the award – some $340m – as per an agreement he said he reached with Quinn. Cahill confirmed the existence of that deal in his affidavit.
In his own affidavit, Kuchazi wrote that he had been friends with Lukman, the minister, since the 1960s. Before entering business, Kuchazi had been a Nigerian politician.
Asked for further comment, Kuchazi’s lawyer Eric Ifere told Al Jazeera that his client’s entitlement to “a 3 percent commission” was supported by a written agreement with P&ID. He declined to share that document.
The Nigerian government has accused Adebayo and Kuchazi of having bribed Nigerian officials on P&ID’s behalf. The company and Kuchazi denied the accusations before the High Court.
Adebayo, Taiga, and P&ID did not respond to Al Jazeera’s requests for comment.
Finance Minister of Nigeria Blames Naira Dive on Overdue Payments
Nigeria’s finance minister Adebayo Olawale Edun said up to $6.8 billion of overdue forward payments in the foreign exchange market need to be addressed before the naira stabilizes.
The currency of Africa’s largest economy extended a months-long slide and hurtled toward the 1000-per-dollar mark in street trading on Thursday, as the central bank held back from supplying dollars to a panic-stricken market.
Read more: Naira Plunges Toward 1,000 on Street Amid ‘Stampede’ for Dollars
Edun, who was named to his role last month, said resolving the overdue contracts would allow the naira to strengthen and “pave the way for additional foreign exchange flows.
“The issue we have now is that the market is not liquid enough,” Edun saif in an interview in New York. “We are committed to encouraging liquidity based on reforms that have been made at the moment, on the fiscal side and the monetary side. And together with the restoration of trust and confidence we think the FX flows will return.”
Nigeria’s central bank on Thursday postponed a rate-setting meeting scheduled for Sept 25-26. Its new governor, former Citigroup executive Olayemi Cardoso, is yet to be confirmed in his role, while the acting governor and four deputy governors have resigned, effectively leaving a policy-making vacuum at the top.
The central bank has mostly been on the sidelines this month, according to market players, with one person saying it has barely supplied dollars to the official window. That has helped accelerate the naira’s slide, pushing it down from around 900 per dollar at the start of September.
Shrinking dollar supply from the central bank is forcing buyers onto the streets for hard currency. Inflation in Africa’s biggest economy is also at the highest in more than 18 years, prompting economists to predict that the central bank would raise interest rates again at its next meeting, which for now has been deferred to an unknown future date.
“The commitment is to maintain the existing reforms and improving them. Improving the FX market further so the gap narrows,” the finance minister said. “Looking at all options for boosting supply so the one-way bet of speculators that we are seeing at the moment is reversed.”
By Henry Meyer and Ezra Fieser, Reuters
Thursday, September 21, 2023
Video - Saving history of Nigeria through the News
Newspapers that once delivered news big and small are invaluable windows into our past. They risk being lost forever if not properly preserved and archived. Meenakshi Ravi reports on a project in Nigeria started by journalist Fu’ad Lawal - to rescue old newspapers from dust and decay and digitise decades worth of the country’s front pages in a freely accessible online archive.
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