Thursday, February 4, 2016
Video - Nigeria president Muhammadu Buhari still promises to rescue the 276 kidnapped schoolgirls
Nigeria's president Muhamadu Buhari said his government was doing everything necessary to rescue the Chibok girls. Speaking to the European Parliament Buhari reiterated his commitment to finding the girls alive and returning them to their families. .Its been almost two years since some 276 were kidnapped by militants in Nigeria's northern town of Chibok .Despite worldwide condemnation and campaign to have the girls released their whereabouts still remains unknown.
Supercar sellers in Nigeria hit by economic slow-down
Nigeria's wealthy elite would be hard pushed to find a clear road in this traffic-clogged city that would allow them to floor the pedal and get anywhere near approaching top speed.
But now sales of luxury sports cars have slumped as Africa's biggest economy and largest oil producer is battered by the fall in global crude prices.
A Porsche showroom in Lagos is full of top-of-the-range models selling from $100,000 (£70,000) and upwards.
In the good times, high-spending Nigerians would roll into the garage with fat wallets and drive out in a Porsche - now the showroom is deserted.
The managing director, Parvin Singh, told me that sales were down 50% last year compared to 2014. He blames the crash on the crude oil crisis.
While gas and oil sales only account for around 15% of the country's GDP - "Nigeria is not Saudi Arabia," as one analyst put it to me - the industry has a disproportionate effect on the economy as a whole.
Oil revenues account for 75-80% percent of the government's budget and if it does not have cash, it cools overall spending.
"The government is Nigeria's biggest spender," says Mr Singh. "When the government stops spending, it has a cascading effect on the corporate sector."
Nigeria's new government - elected last year - has grand plans to diversify the economy. It wants to invest in infrastructure such as power plants, roads and bridges, to boost growth.
But without oil revenues, the money is not there for this investment, even if government officials say that they will claw back cash by cracking down on corruption.
President Muhammadu Buhari finds himself battling rising inflation, a currency that has collapsed to record lows on the parallel market, a stock market slump, and the slowest pace of economic growth in more than a decade.
The government has started talks with the World Bank and African Development Bank with the hope of raising some money to help it fund a forecast $11bn (£7.7bn) budget deficit.
All this means this nation of entrepreneurs will continue doing business while battling against extraordinary odds.
One of them is Gbolahan Eyiowuawi, who runs a catering company after studying at a cooking school in the UK.
In order for Mr Eyiowuawi to run his business he needs a generator for his fridges because of power cuts.
He must constantly explain to furious customers they have to pay more because of fluctuating prices. And, then, when he has cooked the food, he needs to negotiate Lagos' notorious traffic.
His worst disaster: He turned up at a wedding two hours late.
"The person hiring our services got really mad as people were already leaving," he told me.
"At first I couldn't face the bride but then I gave her a vacuum cleaner and water dispenser and she seemed OK."
The hungry bride may have been happy with her vacuum cleaner but many Nigerians are not happy with their lot.
Millions live in poverty and an astonishing two million young people are entering the job market every year.
Economist Bismarck Rewane says the government faces enormous challenges.
"If the youth see some hope and direction they will put their energies to positive use," he said. "But if they see hopelessness and despair then you will have militancy, insurgency and social breakdown."
"It's either you win big or you lose big time."
It is a stark warning. Oil may have once buoyed Nigeria but now the slump in global prices is proving extremely painful to Africa's largest economy.
BBC
But now sales of luxury sports cars have slumped as Africa's biggest economy and largest oil producer is battered by the fall in global crude prices.
A Porsche showroom in Lagos is full of top-of-the-range models selling from $100,000 (£70,000) and upwards.
In the good times, high-spending Nigerians would roll into the garage with fat wallets and drive out in a Porsche - now the showroom is deserted.
The managing director, Parvin Singh, told me that sales were down 50% last year compared to 2014. He blames the crash on the crude oil crisis.
While gas and oil sales only account for around 15% of the country's GDP - "Nigeria is not Saudi Arabia," as one analyst put it to me - the industry has a disproportionate effect on the economy as a whole.
Oil revenues account for 75-80% percent of the government's budget and if it does not have cash, it cools overall spending.
"The government is Nigeria's biggest spender," says Mr Singh. "When the government stops spending, it has a cascading effect on the corporate sector."
Nigeria's new government - elected last year - has grand plans to diversify the economy. It wants to invest in infrastructure such as power plants, roads and bridges, to boost growth.
But without oil revenues, the money is not there for this investment, even if government officials say that they will claw back cash by cracking down on corruption.
President Muhammadu Buhari finds himself battling rising inflation, a currency that has collapsed to record lows on the parallel market, a stock market slump, and the slowest pace of economic growth in more than a decade.
The government has started talks with the World Bank and African Development Bank with the hope of raising some money to help it fund a forecast $11bn (£7.7bn) budget deficit.
All this means this nation of entrepreneurs will continue doing business while battling against extraordinary odds.
One of them is Gbolahan Eyiowuawi, who runs a catering company after studying at a cooking school in the UK.
In order for Mr Eyiowuawi to run his business he needs a generator for his fridges because of power cuts.
He must constantly explain to furious customers they have to pay more because of fluctuating prices. And, then, when he has cooked the food, he needs to negotiate Lagos' notorious traffic.
His worst disaster: He turned up at a wedding two hours late.
"The person hiring our services got really mad as people were already leaving," he told me.
"At first I couldn't face the bride but then I gave her a vacuum cleaner and water dispenser and she seemed OK."
The hungry bride may have been happy with her vacuum cleaner but many Nigerians are not happy with their lot.
Millions live in poverty and an astonishing two million young people are entering the job market every year.
Economist Bismarck Rewane says the government faces enormous challenges.
"If the youth see some hope and direction they will put their energies to positive use," he said. "But if they see hopelessness and despair then you will have militancy, insurgency and social breakdown."
"It's either you win big or you lose big time."
It is a stark warning. Oil may have once buoyed Nigeria but now the slump in global prices is proving extremely painful to Africa's largest economy.
BBC
Wednesday, February 3, 2016
Video - Global oil price decline affecting Nigeria's economy
Nigerian business are beginning to feel the effect of shrinking revenue as oil prices continue to tumble at the world market. The government has imposed quotas on the amount of hard cash Nigerians can spend abroad amidst scarcity of dollars in Africa's biggest economy.
Nigeria ends cruid oil swaps
The Nigerian government has jettisoned its policy of exchanging crude oil with refined petroleum products, from foreign suppliers, the Minister of State for Petroleum Resources, Ibe Kachikwu, has said.
The controversial crude-for-products arrangement, popularly called crude swap, catered for a part of the country’s domestic need for petroleum.
Mr. Kachikwu, who is also the Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, said in its place the government was adopting Direct-Sale–Direct-Purchase (DSDP) arrangement billed to take off from March 2016.
The Minister announced the new arrangement while appearing before the House of Representatives Ad-Hoc Committee set up to investigate NNPC’s offshore processing and crude swap arrangements for the period between 2010 to date.
The new DSDP arrangement, he said, was adopted to entrench transparency into the crude oil-for-product transaction by the corporation in line with global best practices.
Under the old order, crude oil was exchanged for petroleum products through third party traders at a pre-determined yield pattern.
The minister stated that the DSDP option would save the government over $1 billion, as all cost elements of middlemen would be eliminated, giving the NNPC the latitude to control crude oil sale and purchase transactions with its partners.
“On assumption as the GMD of NNPC, I met the Offshore Processing Arrangement (OPA). There is always room for improvement. My team and I came up with the DSDP initiative with the aim of throwing open the bidding process. This initiative has brought transparency into the crude-for-product exchange matrix in tandem with global best practices,” Mr. Kachikwu said.
“The DSDP initiative whittles down the influence of the Minister in the selection of bid winners as it allows all the bidders to be assessed transparently based on their global and national track record of performance before the best companies with the requisite capacities are selected,” he added.
Mr. Kachikwu said the introduction of the DSDP was necessary to reduce the gaps inherent in the OPA and the losses incurred by the NNPC in the past.
The new arrangement, he explained, would help the NNPC to grow indigenous capacity in the international crude oil business and generate employment opportunities for indigenous companies selected.
The DSDP initiative would also give other government agencies, such as the Bureau of Public Procurement (BPP) and Nigeria Extractive Industry and Transparency Initiative (NEITI), the opportunity to be a part of the bidding process in order to engender adherence to due process.
On the alleged non-transparent nature of previous crude oil-for-products exchange arrangements, the Minister assured that the reconciliation process was on-going, adding that going forward the Ministry would deploy technology to track cargoes and trans-shipment at the reception depots in order to forestall any incidence of round tripping.
On the price modulation policy introduced by the Federal Government, the Minister said this would eliminate the burden of subsidy on imported petroleum products.
Premium Times
The controversial crude-for-products arrangement, popularly called crude swap, catered for a part of the country’s domestic need for petroleum.
Mr. Kachikwu, who is also the Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, said in its place the government was adopting Direct-Sale–Direct-Purchase (DSDP) arrangement billed to take off from March 2016.
The Minister announced the new arrangement while appearing before the House of Representatives Ad-Hoc Committee set up to investigate NNPC’s offshore processing and crude swap arrangements for the period between 2010 to date.
The new DSDP arrangement, he said, was adopted to entrench transparency into the crude oil-for-product transaction by the corporation in line with global best practices.
Under the old order, crude oil was exchanged for petroleum products through third party traders at a pre-determined yield pattern.
The minister stated that the DSDP option would save the government over $1 billion, as all cost elements of middlemen would be eliminated, giving the NNPC the latitude to control crude oil sale and purchase transactions with its partners.
“On assumption as the GMD of NNPC, I met the Offshore Processing Arrangement (OPA). There is always room for improvement. My team and I came up with the DSDP initiative with the aim of throwing open the bidding process. This initiative has brought transparency into the crude-for-product exchange matrix in tandem with global best practices,” Mr. Kachikwu said.
“The DSDP initiative whittles down the influence of the Minister in the selection of bid winners as it allows all the bidders to be assessed transparently based on their global and national track record of performance before the best companies with the requisite capacities are selected,” he added.
Mr. Kachikwu said the introduction of the DSDP was necessary to reduce the gaps inherent in the OPA and the losses incurred by the NNPC in the past.
The new arrangement, he explained, would help the NNPC to grow indigenous capacity in the international crude oil business and generate employment opportunities for indigenous companies selected.
The DSDP initiative would also give other government agencies, such as the Bureau of Public Procurement (BPP) and Nigeria Extractive Industry and Transparency Initiative (NEITI), the opportunity to be a part of the bidding process in order to engender adherence to due process.
On the alleged non-transparent nature of previous crude oil-for-products exchange arrangements, the Minister assured that the reconciliation process was on-going, adding that going forward the Ministry would deploy technology to track cargoes and trans-shipment at the reception depots in order to forestall any incidence of round tripping.
On the price modulation policy introduced by the Federal Government, the Minister said this would eliminate the burden of subsidy on imported petroleum products.
Premium Times
MTN hires top US fomer attorney to help fight Nigeria fine
MTN Group has hired a former top United States (US) law enforcement official to help challenge a $3.9 billion fine imposed by Nigeria for failing to disconnect unregistered users, the Financial Times reported on Wednesday.
Citing people familiar with the situation, the newspaper said former US Attorney General Eric Holder pleaded with Nigerian officials last month on behalf of the telecoms company.
Africa’s largest mobile phone company was handed a $5.2 billion penalty in October, prompting weeks of lobbying that led to a 25 percent reduction to $3.9 billion.
MTN, however, was still not prepared to pay the fine and launched a court challenge in December, saying the Nigerian telecoms regulator had no legal grounds to order the penalty.
A judge in Lagos, Nigeria’s commercial capital, last month gave MTN until 18 March to try to reach a settlement over the fine, which equates to more than twice MTN’s annual average capital spending over the past five years.
MTN spokesman Chris Maroleng was not immediately available to comment.
Holder, who led the US Justice Department from 2009 to 2015 and was one of President Barack Obama’s longest-serving cabinet members, returned to law firm Covington & Burling, where he was previously a partner from 2001 to 2009.
EWN
Citing people familiar with the situation, the newspaper said former US Attorney General Eric Holder pleaded with Nigerian officials last month on behalf of the telecoms company.
Africa’s largest mobile phone company was handed a $5.2 billion penalty in October, prompting weeks of lobbying that led to a 25 percent reduction to $3.9 billion.
MTN, however, was still not prepared to pay the fine and launched a court challenge in December, saying the Nigerian telecoms regulator had no legal grounds to order the penalty.
A judge in Lagos, Nigeria’s commercial capital, last month gave MTN until 18 March to try to reach a settlement over the fine, which equates to more than twice MTN’s annual average capital spending over the past five years.
MTN spokesman Chris Maroleng was not immediately available to comment.
Holder, who led the US Justice Department from 2009 to 2015 and was one of President Barack Obama’s longest-serving cabinet members, returned to law firm Covington & Burling, where he was previously a partner from 2001 to 2009.
EWN
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