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Budget Crisis Puts Foreign Investments on Hold

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Nigeria investment

Following the controversy over the alleged padding and errors in the 2016 Budget, some corporate economics have raised concern on the implication for national economy recovery and foreign capital inflow.

Sunday Vanguard learnt that some Nigerian companies that have been in talks with their foreign partners over counterpart funding of joint ventures have been forced to hold action since mid last year over policy uncertainties following the election of new government.

While many of them expressed satisfaction with the process and outcome of the election, they were non-committal over prospects of funding their Nigerian investments preferring to wait for a clear policy direction from the new government. The first shock was the long delay in rolling out the cabinet which elongated policy positions while also elongating the waiting time for foreign investors’ commitments.

Economy observers were of the view that while there is massive decline in government revenue following the oil price crash, 2016 Budget, which provided for massive economic stimulus, gave hopes of economic recovery amidst the dwindling revenue.

However, a top executive of a Nigerian company whose foreign partners have adopted the waiting position, told Sunday Vanguard, at the weekend, that the companies had thought they would wait for about three months after the take-off of the new government but lamented that ‘’we are now in the tenth month and our partners are still saying they will wait for some more time”.

According to him, the on-going controversy over the 2016 Budget has further complicated the relationship with their partners and the fate of the joint venture as they had hoped that the budget, which they saw as a good one with clear policy positions, appears to have run into a glitch.

Analysing the situation further, chief economist at FSDH Merchant Bank, Mr. Ayodele Akinwunmi, said the controversy over the budget creates more uncertainty for investors who had delayed their decision up till now.

‘’It may also delay the implementation of the projects in the budget which will not make an average Nigerian to feel the impact of the current government,”Akinwunmi said.

However, another notable economist, Mr. Bismarck Rewane who is the Managing Director/Chief Executive, Financial Derivatives Company, is more concerned with the assumptions of the budget which he sees some problems than the issue of errors which he believed would easily be resolved.

‘’The errors in the budget are not an issue, they can be corrected. The real issues are the assumptions of the budget. The crude oil price, the production target, exchange rate and inflation rate, these are the real issues, that determine the effectiveness of the budget,”Rewane stated.

In the same line of argument, the Deputy President of Nigerian Labour Congress, Mr. Issa Aremu, pointed out: ‘’The President has said they (errors) would be corrected, and those responsible would be punished. What we should be concerned about is if the budget would be used to boost the economy and then strengthen the Naira. Will the budget be used to boost local production through patronage of locally produced goods, or it would be spent on imported goods and hence weaken local production? These should be our concerns’’.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Dangote Group Dismisses Rumours of Plan to Rise Cement Price

Dangote Cement says no price increase

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Africa’s leading cement producer, Dangote Cement Plc has dismissed the rumor that it plans to increase the price of its products.

The clarification became necessary following a recent publication that Dangote Cement plans a fresh increase.

Recently, there has been some publication (Not Investors King) about a potential increase in the price of cement. The publications noted that the increase will be a result of the high cost of fuel among other prevailing issues. 

According to the Senior Manager, branding and communication, Dangote Industries Limited, Mr Sunday Esan, “Dangote Cement is not embarking on a price increase”, stating that the increase is mere speculation.

Meanwhile, Dangote Cement in the third quarter of 2022, recorded an increase in the overall volume of cement sales by 6.2 percent to 20.8 metric tons in the third quarter of 2022.

According to the company’s Chief Executive Officer, Michel Puchercos, this was achieved, despite the elevated inflation caused by a very volatile global environment.

Similarly, while speaking on the increase in the price of fuel, Puchercos said “to mitigate the impact of the significant increase in energy and AGO costs, we are strengthening our efforts to ramp up the usage of alternative fuels”.

“We are on track to commission our Alternative Fuel feed system at Obajana lines I and V, and Ibese line II in November. In addition, we are ramping up our investment in Compressed Natural Gas (CNG), to reduce our AGO usage,” he added. 

Investors King understands that Dangote Cement is Africa’s leading cement producer with nearly 51.6Mta capacity across Africa. Although it has a few competitors which include BUA Cement, the company supplies most parts of Nigeria.

In addition, Dangote Cement has operations in 10 African countries. 

Its production plant in Obajana, Kogi state, is the largest in Africa with 16.25Mta of capacity across five lines while the Ibese plant in Ogun state has four cement lines with a combined installed capacity of 12Mta.

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JUST IN: Abuja to Kaduna Train Service to Resume by December 5

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Lagos-Ibadan Train Services - Investors King

The Federal Government has announced that services along the Abuja–Kaduna rail corridor would resume on Monday, December 5, 2022.

This was disclosed by the Managing Director of Nigeria Railway Corporation, Fidet Okhiria. 

While speaking to the News Agency of Nigeria (NAN) yesterday, Okhiria noted that all is now set to open the train corridor to passengers. 

He, therefore, advised passengers wishing to utilise the service to commence updating their mobile app from December 3, to enable them to successfully book the ride. 

Investors King earlier reported that the resumption of the Abuja to Kaduna train service will commence last Monday. The resumption was however postponed due to ongoing security work on the trail track as well as coaches. 

It could be recalled that the Minister of Transportation, Mu’azu Sambo stated during the test run of the train on Sunday that Nigerians without a National Identification Number would not be allowed to board the train.

The Minister added that the government is doing everything to stop a re-occurrence of the event that happened early this year when terrorists attacked Abuja to Kaduna. 

An event that led to the death of no less than nine people while several others were kidnapped. 

Speaking further on the new development, the NRC boss noted that the services will commence with two train rides from Abuja-Kaduna and vice-versa.

Given the train schedule, Okhiria stated that “AK 1 will depart Idu Station at 9:45 am and arrive at Rigasa Station at 11:53 am.

“KA 2 will depart Rigasa at 8:00am and arrive at Idu station at 10:17am.

“AK 3 will depart Idu Station at 3:30pm and arrive at Rigasa Station at 5:38pm.

He added that “KA 4 will depart Rigasa at 2pm and arrive at Idu Station at 4:07pm.

Okhiria noted that the federal government will continue to do all it can to protect both lives and properties on board its train at all times.

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Dominic Pizza Partners 9mobile on Food Service Delivery

The mother brand of Domino Pizza, Eat’N’Go Africa noted that the partnership is a demonstration of the company’s commitment to better serve the Nigerian market.

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Dominos Pizza

Quick Service Restaurant (QSR), Domino Pizza has partnered with mobile telecommunication provider, 9mobile to improve its food service delivery.

The mother brand of Domino Pizza, Eat’N’Go Africa noted that the partnership is a demonstration of the company’s commitment to better serve the Nigerian market.

According to a statement released by the company, the partnership is aimed to increase customer satisfaction and provide quick service delivery to both individuals and retail offices.

Investors King learnt that customers can now easily and swiftly order domino pizza through the newly launched dedicated call center. 

The statement added that the Call Centre service was currently active in all Domino’s branches in Lagos State, with plans underway to activate it in other locations in Nigeria and would provide multi-lingual services.

Speaking at the event, the Group Chief Executive Officer of Eat’N’Go Africa, Mr. Patrick McMichael noted that customers’ orders will henceforth be delivered as much faster as possible. He added that the core responsibility of the company is to attain customer satisfaction through its products and service delivery. 

“As an organization, Eat’N’Go is committed to always being at the forefront of customer satisfaction and by adapting to innovative ways we will keep improving on our service delivery which the call centre avails us,” he said. 

Similarly, the Chief Executive Officer (CEO) of 9mobile, Juergen Peschel who was present at the event expressed delight and confidence in the prospect of the new partnership. 

He noted that with the new partnership, Eat’N’Go will be able to revolutionise delivery. 

The CEO affirmed that the collaboration shows the extent to which technology can be deployed to ease the way business is done.

Meanwhile, Eat’N’Go Africa is the mother company of a number of trademark products which include Domino Pizza, Cold Stone Creamery, and Pinkberry Gourmet Frozen Yoghurt brands. It is one of the leading Quick Service Restaurants (QSR) in Nigeria. 

The company currently has more than 190 outlets across the country with the goal to reach 250 outlets in 2023. 

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