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Recession: Dangote sacks 36 Expatriates, 12 Nigerians

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  • Dangote sacks 36 Expatriates, 12 Nigerians

The current recession rocking the Nigerian economy has hit one of the biggest employers of labour in the country outside of the government as the Dangote Group, belonging to Africa’s richest man, Aliko Dangote, has fired 48 members of staff.

Our correspondents gathered that those sacked were made up of 36 expatriate and 12 Nigerian workers from the group’s headquarters and one of the subsidiaries, Dangote Cement Plc.

Though no official of the group was willing to speak on the matter on Sunday, one of our correspondents gathered from highly placed sources that the decision to sack the workers was not unconnected with the current high cost of running business in the country occasioned by the unavailability of foreign exchange and the unprecedented hike in the naira to dollar exchange rate.

It was further gathered that the huge amounts in foreign currencies being paid to the expatriate workers had become a burden on Dangote due to the steady depreciation in the value of the naira and the difficulties of raising enough dollars.

Consequently, the industrialist, according to sources, has decided to replace the expatriates with Nigerians, who have acquired the requisite experience on the job, as paying them in naira will be less problematic.

For the affected Nigerians, it was gathered that most of them had disciplinary issues, which made it easy for the group to do away with their services.

When contacted on Sunday, the Group Head, Corporate Communications, Dangote Group, Tony Chiejina, said he could not speak on the development.

However, in a letter signed by the President/Chief Executive Officer, Dangote Group, Aliko Dangote, dated Thursday, October 20, 2016,the firm stated that it was constrained to take the “tough” decision as economic factors had affected the cost of production.

The letter, which was titled: ‘Recent Retirement Exercise’, however, appreciated those affected for their contributions to the growth of the group.

The letter read in part, “This year has been a very challenging year for us as a business. The unavailability of foreign exchange coupled with an unprecedented hike in the exchange rate has resulted in increased costs across the organisation.

“This called for a proper review and adjustment of our costs across board to ensure efficiency and effectiveness in the deployment of our factors of production in a bid to eliminate redundancies that we know exist, which resulted in some tough decisions, which means losing staff, including some of our colleagues.

“On Friday, October 14, 2016, we began the process of staff cutbacks as it is imperative to review our human capital deployment for the required cutbacks that would ensure efficiency and eliminate redundancies in the allocation of human resources.

“This first phase of this exercise involved the cutback of 36 expatriate staff across the Dangote Cement Plc and Dangote Industries Limited, and 12 local staff members in Dangote Industries Limited.”

As an organisation with international operations, the group promised that it would continue to review and restructure its human capital deployment to ensure “optimal allocation of skill sets and size of the workforce each function requires.”

The group urged the workers to shun lateness, improper dressing and other unsavoury behaviours in the workplace.

Bloomberg had in its latest ‘Billionaire Index’ reported that Dangote had lost $5.4bn of his fortune this year due to the fall in the value of the naira and the decision of the Central Bank of Nigeria to ration dollars to stem huge capital outflows in the wake of Nigeria’s worst economic crisis.

Dangote had recently urged the Federal Government to sell off the Nigerian Liquefied Natural Gas Company and other dormant but huge capital-generating enterprises and reinvest the proceeds in the economy to bring the country out of the current economic recession before the end of the fourth quarter.

Dansa Foods Nigeria Limited, which claims to be a member of the Dangote Group, has reportedly been unable to pay its workers for the past six months.

The company is being run by Alhaji Sani Dangote, a brother of Aliko, who is the Executive Chairman, with Aliko’s shares embedded in the firm.

Multiple sources in the Dangote Group claimed that Dansa Foods was not part of the group but was an independent company owned and run by Aliko’s brother.

However, in a statement announcing its participation at the just concluded Lagos International Trade Fair, the group listed some of its subsidiaries as Dangote Sugar Refinery, Dangote Agrosacks, NASCON Allied Industries Plc (Dangote Salt), Dangote Rice Limited, Dangote Cement Plc and Dansa Foods Limited.

It was reported that the company, which produces Dansa Juice and other goods, had laid off more than half of the workforce following dwindling sales and high cost of production caused by high exchange rate of the naira.

It was gathered that the company had suspended the production of Dansa Juice and other products, and was only producing Mowa Bottle Water.

As a result, the workers have reportedly embarked on a strike to press home their demand.

 

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Crude Oil

Oil and Gas Companies in Nigeria

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Oil - Investors King

Nigeria is an oil reach nation with several oil and gas companies operating in Africa’s largest economy.  However, only ten oil and gas companies are listed on the Nigerian Exchange Limited (NGX).

Before we discuss in detail each of the listed oil and gas companies in Nigeria. A short background on Africa’s largest economy will help throw more light on the significance of the oil and gas companies or the entire oil sector to the Nigerian economy.

Nigeria is a petrol-dollar economy, which means Africa’s most populous nation, sells crude oil and use its proceed to service the economy. In fact, the Nigerian Naira is backed by crude oil like Canadian Dollar and other commodity-dependent economies.

But because the Central Bank of Nigeria (CBN) pegged the Naira against its global counterparts, the local currency does not reflect succinctly the fluctuation in global oil prices like other crude oil-dependent currencies.

Since global oil prices rebounded with the gradual reopening of economies, the oil and gas companies in Nigeria have also rebounded from the 2020 record low of $15 per barrel. The oil and gas sector has gained 62.76 percent from the year to date, according to the NGX Oil and Gas Index.

The index gauge price movements in 10 listed oil and gas companies in Nigeria.  However, there are several oil and gas companies in Nigeria not listed on the Nigerian Exchange Limited.

Oil and Gas Companies Listed on the Nigerian Exchange Limited (NGX)

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Crude Oil

Oil Prices Extend Gains on Friday After Saudis Dismiss Supply Concerns

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Oil prices extended gains on Friday after Prince Abdulaziz bin Salman, Saudi Energy Minister dismissed calls for more crude oil supply on Thursday.

Brent crude oil, against which Nigerian oil is priced, rose to $84.92 per barrel at around 8:31 am Nigerian time. The U.S West Texas Intermediate crude oil also responded positively to the comment, rising to $81.56 per barrel on Friday.

Prince Abdulaziz had stated on Thursday that OPEC plus efforts were enough to protect the oil market from wild price volatility seen in coal and natural gas markets.

“What we see in the oil market today is an incremental (price) increase of 29%, vis-à-vis 500% increases in (natural) gas prices, 300% increases in coal prices, 200% increases in NGLs (natural gas liquids) ….”

He further stated that the Organization of the Petroleum Exporting Countries and allies led by Russia, have done a “remarkable” job acting as “so-called regulator of the oil market,” he said.

“Gas markets, coal markets, other sources of energy need a regulator. This situation is telling us that people need to copy and paste what OPEC+ has done and what it has achieved.”

Prince Abdulaziz explained that OPEC plus will add 400,000 barrels per day in November and do the same in December and subsequent months. The increase will be gradual he said.

“We want to make sure that we reduce those excess capacities that we have developed as a result of COVID,” he said, adding that OPEC+ wanted to do it “in a gradual, phased-in approach”.

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Energy

Lack of Investment in Clean Energy Compromising Fight Against Climate Change and Poverty

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Renewable Energy - Investors King

New research highlights a chronic lack of finance that will leave billions of people in Sub-Saharan Africa and Asia without electricity or clean cooking by 2030; Urgent action to accelerate investment in clean energy for developing countries is needed from global leaders assembling at COP26 to ensure a just energy transition.

This year’s Energizing Finance research series – developed by Sustainable Energy for All (SEforALL) in partnership with Climate Policy Initiative (CPI) and Dalberg Advisors – shows the world is falling perilously short of the investment required to achieve energy access for all by 2030 for the seventh consecutive year.

In fact, tracked finance for electricity in the 20 countries that make up 80 percent of the world’s population without electricity – the high-impact countries – declined by 27 percent in 2019, the year before the onset of the Covid-19 pandemic. The economic strain caused by Covid-19 is expected to have caused even further reductions in energy access investment in 2020 and 2021.

Energizing Finance: Understanding the Landscape 2021, one of two reports released under the series, finds committed finance for residential electricity access fell to USD 12.9 billion in 2019 (from USD 16.1 billion in 2018) in the 20 countries. This is less than one-third of the USD 41 billion estimated annual investment needed globally to attain universal electricity access from 2019 to 2030.

Meanwhile, there is an abysmal amount of finance for clean cooking. Despite polluting cooking fuels causing millions of premature deaths each year and being the second largest contributor to climate change after carbon dioxide, only USD 133.5 million in finance for clean cooking solutions was tracked in 2019. This is nowhere near the estimated USD 4.5 billion in annual investment required to achieve universal access to clean cooking (accounting only for clean cookstove costs).

These findings have been released just ahead of COP26 in Glasgow, where global leaders will focus on how to spark meaningful progress on fighting climate change. As part of this, they will need to consider how to reduce global emissions from the energy sector while also increasing energy access in developing countries to support their economic development.

“We are at a critical moment in the energy-climate conversation,” said Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All and Co-Chair of UN-Energy. “What is clear is that the path to net zero can only happen with a just and equitable energy transition that provides access to clean and affordable energy to the 759 million people who have no electricity access and 2.6 billion people who lack access to clean cooking solutions. This requires resources to mitigate climate change and create new opportunities to drive economic development and enable people everywhere to thrive. Energizing Finance provides an evidence base of current energy finance commitments and the finance countries require to meet SDG7 energy targets.”

In 2018, 50 percent of total electricity finance flowed to grid-connected fossil fuels in the high-impact countries compared to 25 percent in 2019. While this is a positive trend for the climate, tracked investment in off-grid and mini-grid technology also declined and represented only 0.9 percent of finance tracked to electricity.

Dr. Barbara Buchner, Global Managing Director at CPI, who partnered with SEforALL on Energizing Finance: Understanding the Landscape 2021, said: “Achieving both the Paris Agreement and universal energy access requires far greater investment in grid-connected renewables and off-grid and mini-grid solutions than what has been tracked in Energizing Finance. These solutions are essential to helping high-impact countries develop their economies without a reliance on fossil fuels.”

To better illuminate the challenges high-impact countries face, the second publication in the series, Energizing Finance: Taking the Pulse 2021, offers a detailed look at the estimated volume and type of finance needed by enterprises and customers to achieve universal energy access for both electricity and clean cooking by 2030 in Mozambique, Ghana and Vietnam. Importantly, it illustrates the energy affordability challenges people face in these countries and the need for financial support for consumers, such as subsidies.

The report finds that providing access to clean fuels and technologies, i.e. modern energy cooking solutions, in Ghana, Mozambique and Vietnam will cost a total of USD 37-48 billion by 2030; 70 percent of which will be for fuels (e.g., LPG, ethanol and electricity). A more achievable scenario would be for all three countries to deliver universal access to improved cookstoves at a total cost of USD 1.05 billion by 2030.

“Ghana, Mozambique and Vietnam each have unique challenges to achieving universal access to electricity and clean cooking,” said Aly-Khan Jamal, Partner at Dalberg Advisors, who partnered with SEforALL on Energizing Finance: Taking the Pulse 2021. “This research digs deep into these national contexts to identify solutions that can make Sustainable Development Goal 7 a reality.”

Providing results-based financing for energy project developers and exploring policies that facilitate demand-side subsidy support and reduce taxes on solar home systems are among several policy recommendations presented for Ghana, Mozambique and Vietnam.

Energizing Finance also advocates for increased innovation in financial instruments to reach the scale of finance needed for universal clean cooking access; for integration of electricity access, cooking access and climate change strategies; and for national governments, bilateral donors, philanthropies, and DFIs to all increase their efforts to mobilize commercial capital to Sub-Saharan African countries.

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