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Senate Backs AMCON on Debt Recovery

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  • Senate Backs AMCON on Debt Recovery

The Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Rafiu Ibrahim, has said that time will soon run out on recalcitrant obligors of the Asset Management Corporation of Nigeria.

He said this was because of the renewed commitment of the Senate to build strategic collaboration with AMCON to develop greater capacity for debt recovery and sustained development in the country.

Members of the Senate committee are in Uyo, the Akwa Ibom State capital, for a three-day retreat to deliberate on the best approaches to be adopted to help the Nigerian economy to recover from recession.

The theme of the retreat is: ‘Economic rebuilding through eligible assets recovery’, with the management of AMCON led by its Managing Director/Chief Executive Officer, Mr. Ahmed Kuru, among other stakeholders, in attendance.

Welcoming participants, Ibrahim stated that the Senate was committed to helping in stabilising the economy, but added that was no how this would be achieved without collaborating with key institutions of government like AMCON, which he argued carried a huge burden on behalf of the government.

Ibrahim said, “This retreat for the Senate Committee on Banking, Insurance and other Financial Institutions is in keeping with our commitment to build strategic collaborations in order to develop greater capacity for sustained development. It is my hope that we will fully achieve the objectives of this retreat, thereby strengthening the relationship between AMCON, this committee and indeed the entire hallowed upper legislative chamber.

“It is my expectation that at the end of the day, this committee will have identified new legislative support frameworks for AMCON, where necessary, as well as more efficient ways to consolidate on already existing support legislation and frameworks so that AMCON can be strategically positioned to optimally perform its uniquely important responsibility of asset recovery and management.”

“AMCON, since its founding, has been a key stabilising and revitalising force in the Nigerian financial system, and requires vital support from the legislature to achieve its statutory objectives.”

Earlier in his remarks, Kuru described AMCON as a child of necessity in the development of Nigeria’s financial system and needed the support of other critical stakeholders to cover significant ground in its debt recovery mandate.

Similarly, the Senate Committee on Privatisation has promised to assist electricity distribution companies and other relevant organisations in the sector to ensure that Nigerians enjoy regular power supply.

The Chairman of the committee, Senator Ben Murray-Bruce, who made the promise when he led other members of the committee on a fact-finding mission to the Port Harcourt Electricity Distribution Company on Thursday, said the committee was in the Rivers State capital to see how it could help in solving the problems of the PHED.

Murray-Bruce, who spoke after a closed-door meeting with the PHED management, explained that the committee would work with the Ministry of Power and the four states that the firm was covering to ensure that the problem of energy theft, ageing cables and low return on investments were resolved.

He stated, “The privatisation committee in the Senate is on a fact-finding mission across the country to look at industries that have been privatised in the last 10 years, particularly the power sector, to find out what problems they have and how we can assist in solving the problems.”

“The PHED has listed their problems, which include low tariff that is too low to get return on investment, energy theft, ageing cables, etc. But we understand the consumers’ plight because if you don’t have light, but you are expected to pay three times of what you used to pay before, of course it agitates. So, we are not here to blame anybody, but to find a peaceful way to resolve the problems.

“We are going to study the problems and find solutions to them. We are going to work with the Minister of Power and the four state governments in the region.”

Murray-Bruce called on the electricity distribution companies to be transparent in their dealings with the Federal Government, which still has 40 per cent stake in the firms.

He said, “On the issue of transparency, the Discos need to be transparent. If they are collecting N10 and say they are collecting N5, that’s a fraud. They have to be audited to ensure credibility.

“But if they commit fraud, they lose their status. The government will take out their business. Anyway, those are allegations, but I don’t think anybody will invest billions of naira and then turn around to do such.”

In his remark, the Managing Director of 4Power Consortium Limited, owners of the PHED, Mr. Matthew Edevbie, called on the Federal Government to address the problem of scarcity of foreign exchange.

He observed that while the cost of production was increasing for the Discos, they could not increase electricity tariff.

Edevbie said, “So, we are saying to the government that this issue of foreign exchange has to be stable for us because our income is not variable. You can imagine that a bottle of beer, which was previously N200, is now N350.

“As the prices of raw materials increase, the producers are also increasing their prices. But in my own case, our cost of production is increasing, but we cannot increase the tariff, because if we do, there is going to be a problem. So, who should take that loss? The government should please stabilise the foreign exchange rate.”

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.

Crude Oil

A Threat to Revenue As Nigeria’s Largest Importer of Crude, India slash Imports By $39.5B

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Nigeria’s revenue earning capacity has come under threat following the reduction of importation of crude oil by India.

India, Nigeria’s largest crude oil importer, reduced crude oil imports by $39.5bn in April, compared to the same time the previous year, data from India’s Petroleum Planning & Analysis Cell showed.

According to the Indian High Commission in Nigeria, India’s crude oil imports from Nigeria in 2020 amounted to $10.03bn.

This represented 17 percent of Nigeria’s total crude exports for the year according to the Nigerian National Petroleum Corporation, as quoted by OilPrice.com.

As Nigeria’s largest importer of crude oil, lockdowns in India’s major cities from the COVID-19 surge in April had ripple effects on Nigeria’s oil sales.

The NNPC was prompted to drop the official standard price of its main export streams, Bonny Light, Brass River, Erha, and Qua Iboe, by 61-62 cents per barrel below its April 2021 prices. They traded at $0.9, $0.8, $0.65, $0.97 per barrel respectively, below dated Brent, the international benchmark, as Oilprice.com showed.

India had been buying the not-too-light and not-too-heavy Nigerian crudes that suited its refiners.

Reuters reported that the Indian Oil Corporation’s owned refineries were operating at 95 percent capacity in April, down from 100 percent at the same time the previous month.

An official at the IOC was quoted as saying, “If cases continue to rise and curbs are intensified, we may see cuts in refinery runs and lower demand after a month.” Hundreds of seafarers risked being stuck at sea beyond the expiry of their contracts, a large independent crude ship owner reportedly told Bloomberg.

India reportedly bought more American and Canadian oil at the expense of Africa and the Middle East, reducing purchases from members of the Organisation of the Petroleum Exporting Countries to around 2.86 million barrels per day.

This squeezed the group’s share of imports to 72 percent from around 80 percent previously, as India’s refiners were diversifying purchases to boost margins, according to Reuters.

India also plans to increase local crude oil production and reduce import expenses as its population swells, according to Bloomberg.

A deregulation plan by the Narendra Modi-led government to boost national production to 40 million tonnes of crude oil by 2023/2024, an increase of almost eight million tonnes, had already been initiated.

According to Business Today, an Indian paper, the country currently imports 82 percent of its oil needs, which amounted to $87bn in 2019.

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Energy

Invest Africa and DLA Piper Partner to Support ESG Best Practice in African Renewable Energy Projects

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Invest Africa - Investors King

The global law firm, DLA Piper, has partnered with Invest Africa, the leading trade and investment platform for African markets, to support the development of ESG best practice in African renewable energy projects.

Clear Environmental, Social and Governance (ESG) targets and measurements have become an increasingly important part of fundraising as investors seek to align their portfolios with sustainable growth. For a continent boasting ample natural resources, this presents a significant opportunity for Africa’s green energy sector. However, renewable does not always equal sustainable and developing and articulating ESG metrics can pose a significant challenge to projects as they prepare investment rounds.

The project will assemble experts from the worlds of impact investment, development finance and law. Across a series of online meetings, participants will discuss strategies to improve ESG practices in African renewable projects from both a fundraising and operational perspective.

Amongst those speaking in the inaugural session on Thursday 13th May are Cathy Oxby, Chief Commercial Officer, Africa GreencoDr. Valeria Biurrun-Zaumm, Senior Investment Manager, DEGOrli Arav, Managing Director – Facility For Energy Inclusion (FEI) – Lion’s Head Global PartnersBeatrice Nyabira, Partner, DLA Piper Africa, Kenya (IKM Advocates) and Natasha Luther-Jones, Partner, Global Co-Chair of Energy and Natural Resources, International Co-Head, Sustainability and ESG, DLA Piper.

Veronica Bolton-Smith, COO of Invest Africa said, “Africa is particularly vulnerable to the impact of climate change despite contributing very little to global emissions. As the price of renewables fall, they will form an ever more important part of Africa’s electrification. In this context, it is essential that projects be given the tools to apply best practice in ESG not only from an environmental perspective but also in terms of good governance, fair working conditions and contribution to social inclusion. I look forward to working closely with DLA Piper on this important topic.”

Natasha Luther-Jones, Global Co-Chair Energy and Natural Resources and International Co-Head Sustainability and ESG at DLA Piper also commented, “Climate change is one of the biggest challenges companies, and people, face today and when we look at its reduction – whether that be in how we power our devices, what we eat or how we dress, where we live or how we work – all roads come back to the need to increase the amount of accessible, and affordable, clean energy. However, renewable energy companies are not automatically sustainable as sustainability is a focus on all ESG factors, not just environmental. We know the need for renewable energy is only going to continue to rise, and therefore so will the number and size of renewable energy companies. The additional challenge is to make sure they are truly sustainable organisations and that’s what we’re excited about discussing during the webinar.”

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Crude Oil

Oil Posts 2% Gain for the Week Despite India Virus Surge

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Crude Oil - Investors King

Oil prices steadied on Friday and were set for a weekly gain against the backdrop of optimism over a global economic recovery, though the COVID-19 crisis in India capped prices.

Brent crude futures settled 0.28% higher at $68.28 per barrel and U.S. West Texas Intermediate (WTI) crude advanced 0.29% to $64.90 per barrel.

Both Brent and WTI are on track for second consecutive weekly gains as easing restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations pave the way for a revival in fuel demand.

In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activity.

However, crude imports by the world’s biggest buyer fell 0.2% in April from a year earlier to 40.36 million tonnes, or 9.82 million barrels per day (bpd), the lowest since December.

In the United States, the world’s largest oil consumer, jobless claims have dropped, signalling the labour market recovery has entered a new phase as the economy recovers.

The recovery in oil demand, however, has been uneven as surging COVID-19 cases in India reduce fuel consumption in the world’s third-largest oil importer and consumer.

“Brent came within a whisker of breaking past $70 a barrel this week but failed at the final hurdle as demand uncertainty dragged on prices,” said Stephen Brennock at oil brokerage PVM.

The resurgence of COVID-19 in countries such as India, Japan and Thailand is hindering gasoline demand recovery, energy consultancy FGE said in a client note, though some of the lost demand has been offset by countries such as China, where recent Labour Day holiday travel surpassed 2019 levels.

“Gasoline demand in the U.S. and parts of Europe is faring relatively well,” FGE said.

“Further out, we could see demand pick up as lockdowns are eased and pent-up demand is released during the summer driving season.”

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