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Gas Suppliers: Nigeria Not a Good Destination for Investment

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Stakeholders in Nigeria’s oil and gas industry have passed a verdict that following the slash in domestic gas supply by more than half due to the Niger Delta crisis, Nigeria is no longer a good destination for investment in the sector.

Speaking at a special session of the 2016 conference organised by energy reporters in Lagos, the operators declared that with the renewed attacks on oil and gas infrastructure in the Niger Delta, Nigeria’s operating environment has become a high-risk environment that is not suitable for investment.

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, represented by the Managing Director of National Engineering and Technical Company Limited (NETCO), a subsidiary of the corporation, Mr. Siky Aliyu raised the first alarm when he told the session that militant attacks have curbed gas supply to the domestic market by more than a half.

According to him, the current supply of about 700 million standard cubic feet per day is less than the domestic supply before the militants first bombed the gas infrastructure in February this year.

Also speaking at the session, the Chairman of Geometric Power Limited and former Minister of Power, Prof. Bart Nnaji insisted that Nigeria must secure gas infrastructure to guarantee electricity supply.

“Gas-to-power is critical for electricity generation. Brazil generates 100,000 megawatts. If Brazil has 100,000 megawatts and we aspire to be like Brazil by 2020, then a lot has to be done on gas-to-power,” Nnaji said.

In his contribution to the session, the Chief Executive Officer of Frontier Oil, suppliers of gas to Calabar, Alaoji and Ibom Power Stations, Mr. Dada Thomas said the only solution to the Niger Delta crisis was good governance, which he said was lacking in Nigeria.

Thomas, whose company’s gas supply to the domestic market accounts for 450 megawatts of power generation, advocated for both the use of the full weight of law and the involvement of the political leadership of the oil-rich region in resolving the crisis.

He argued that criminality should not be rewarded to avoid creating more criminality.

“A high-risk environment like Nigeria is not a destination for investment. We are not a fantastic investment destination. Good governance is the only answer to vandalism but this is lacking in Nigeria since independence. The short-term solution is to apply the full weight of law. When you reward criminality, you create more criminality. But the government should also get the political leadership involved in the negotiating table,” Thomas explained.

Thomas argued that Poland had also experienced similar crisis when the people in the eastern part of that country like the Nigeria’s Niger Delta felt that the western part of the country was exploiting their God-given resources.

Thomas further disclosed that the Polish government resolved the crisis through good governance, adding that Scotland also had the same issue.

 

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

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Investment

China’s State-Owned Lenders Allocate $8 Billion to Revitalize Property Market

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General Images Of Residential Property

China’s state-owned lenders have committed a substantial $8 billion in loans to rejuvenate the country’s beleaguered property market, aligning with Beijing’s directives to bolster the sector.

Agricultural Bank of China Ltd. disclosed approving over 40 billion yuan of loans for real estate projects on predefined white lists, signaling a proactive approach towards supporting the housing market’s recovery.

China Construction Bank Corp. also joined the effort, extending 3 billion yuan to five property projects, with plans to greenlight over 20 billion yuan in loans soon.

Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. are among the institutions offering financing assistance, although the exact loan amounts remain undisclosed.

This initiative follows Beijing’s recent call for local authorities to enhance financing support for developers and curate lists of eligible projects.

In response, the big four state lenders pledged to meet reasonable financing demands from developers and projects identified under the coordination mechanism.

However, China’s property market faces challenges despite these measures. New home sales plummeted 34.2% year-on-year, underscoring the ongoing slowdown.

While existing home transactions surged during the Spring Festival holiday, new home sales remained subdued, prompting a cautious outlook among buyers.

The infusion of $8 billion aims to instill confidence and stimulate activity in the property sector, potentially heralding a gradual recovery amid persisting market uncertainties.

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BUA Foods Invests $200m in Lafiagi Sugar Estate Expansion

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BUA Foods, a leading Nigerian food conglomerate, has announced an investment of $200 million in its Lafiagi Sugar Estate located in Kwara State.

The Managing Director of BUA Foods, Ayodele Abioye, revealed this during a press briefing held at the company’s headquarters in Lagos.

Abioye said the leading company plans to enhance its integrated sugar estate project to reduce reliance on foreign exchange for raw materials.

The project includes the construction of a sugar refinery, ethanol plant, and supporting infrastructure aimed at bolstering local production.

The Lafiagi Sugar Estate spans approximately 20,000 hectares and integrates various components such as a sugar refinery with a daily capacity of 20,000 metric tonnes, along with an industrial ethanol plant.

Abioye underscored the importance of reducing dependency on forex for sourcing raw materials, citing challenges faced due to Nigeria’s lack of industrial agricultural production of sugarcane.

BUA Foods aims to bolster its local supply chain by engaging with communities and establishing partnerships in agriculture.

Abioye emphasized the need for sustainable practices and community involvement in fostering self-sufficiency.

The company’s investment reflects its dedication to expanding domestic production capabilities and driving economic growth in Nigeria’s agricultural sector.

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Nigeria’s One-Year Treasury Bill Oversubscribed by 300%

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FG Borrows

Nigeria’s one-year treasury bill was oversubscribed by 300% during the recent Primary Market Auction conducted by the Central Bank of Nigeria (CBN) on Wednesday.

The auction, aimed at rolling over maturing Nigerian Treasury Bills worth N1 trillion, saw unprecedented demand for the one-year T-bill.

Investors offered a total of N1.87 trillion for the N600 billion on offer, indicating a significant appetite for government securities. Out of the total subscriptions, N908.75 billion was allotted, with stop rates set at 19%.

The auction covered maturities across three different tenors: 91-day, 182-day, and 364-day bills, with varying amounts on offer.

While the 91-day bill received N39.90 billion in offers, all were sold, and the 182-day bill garnered N76.83 billion subscriptions, out of which N51.35 billion was allotted.

Managing Director of Arthur Steven Asset Management, Tunde Amolegbe, attributed the remarkable performance of the one-year bills to investor confidence in the current government and its reform initiatives.

He highlighted investors’ preference for higher rates due to signals from the CBN indicating tightening monetary policies amid accelerating inflation.

Experts view the oversubscription as a testament to investors’ trust in the government’s reforms and management of the country’s debt obligations.

The auction reflects a move by the CBN to address liquidity in the financial system while managing Nigeria’s debt obligations effectively.

The significant oversubscription signals robust investor confidence and highlights the attractiveness of Nigerian government securities despite prevailing economic challenges.

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