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60% Forex Allocation to Manufacturers Poorly Implemented – MAN

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Steel Manufacture At Evraz Plc West-Siberian Metallurgical Plant
  • 60% Forex Allocation to Manufacturers Poorly Implemented

The Manufacturers Association of Nigeria has faulted the implementation of the Central Bank of Nigeria’s directive on 60 per cent forex allocation to manufacturers, describing it as very poor.

The President of the association, Dr. Frank Jacobs, stated this in Lagos on Thursday during the MAN Annual Media Luncheon.

MAN, Kwara and Kogi branch also on Thursday urged the Federal Government to boost industrialisation of Nigeria through good policies.

In August last year, the Central Bank of Nigeria had directed banks to allocate 60 per cent of their total forex purchases from all sources (interbank inclusive) to manufacturers and 40 per cent to other users for the purpose of trade and other obligations.

The move was aimed at ameliorating the forex challenges faced by manufacturers who needed to purchase critical raw materials for production processes.

But Jacobs said the 60 per cent allocation had not been forthcoming from the banks, resulting in manufacturers turning to the parallel market for dollars while others had shut down operations completely.

He said commercial banks had refused to comply with the directive on the basis of the fact that they were not getting dollar allocations from the CBN.

“The banks say that if the CBN has given them dollars and directed them to allocate 60 per cent to manufacturers, they will do that, but they will not allocate 60 per cent of the forex they have sourced independently.

“Most of our members have been buying dollars from the black market, making their products very expensive and less competitive than ever.”

According to him, the advocacy programmes of the association have achieved a lot in the past year, resulting in some of the friendly policies that the Federal Government had initiated in recent times to favour the manufacturing sector.

He added that the advocacy programmes would continue in 2017, noting that the association would keep advocating a review of some of the policies that were constituting challenges to the sector, such as the inclusion of critical raw materials in the CBN’s list of 41 items restricted from forex; development of Nigeria’s abundant natural resources for industrial input; enactment of relevant manufacturing capacity utilisation to meet local and export market demands as well as concessionary interest rate of five per cent for manufacturers.

Meanwhile, the Chairman of the branch, Alhaji Kamaldeem Yusuf, who spoke with journalists in Ilorin, the Kwara State capital, also stated that there would be no economic and national development without a strong indigenous manufacturing base.

He added that the Federal Government should give priority to indigenous manufacturers.

Yusuf, who is also Chief Executive Officer of KAM Industries

Nigeria Limited, warned that it would be detrimental to national development not to encourage industrialisation.

He warned against policy summersault, which could discourage investment in industrial sector.

He said, “When the government during the former administration of former President Goodluck Jonathan said it wanted Nigeria to be one of the most industrialised nations in the world, it made a law to increase capacity in cold rolling mill, by that time, there were only three players but before the end of this year, there would be about 10 players.

“Manufacturers borrowed heavily to do the project. Now, the government came up with ECOWAS tariff and crashed the duties of cold roll from 45 per cent to 15 per cent. They failed to protect the industry. It is now easier to import it than to manufacture it.

“What is the hope for all the industrialists that took loans and invested to make the policy real? Policy summersault is something that will not make Nigeria move forward. Government should consider the impact.”

He also urged the government through the Central Bank of Nigeria to reduce interest rates on loans to manufacturers.

According to him, banks should make loans accessible and at reasonable interest rates to genuine manufacturers.

He stated that one of the big mistakes that the present government was making was enriching financiers while manufacturers were being wrecked.

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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Tony Elumelu Acquires Shell, Total, ENI Stakes in OML 17

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Shell

Tony Elumelu Acquires Shell, Total, ENI Stakes in OML 17

Tony Elumelu owned Heir Holdings Limited and its related company Transnational Corporation of Nigeria Plc on Friday announced it has completed the purchase of 45 percent stake in Oil Mining Lease (OML 17) through TNOG Oil and Gas Limited.

The acquisition includes all assets of Shell Petroleum Development Company of Nigeria Limited (30 Percent), Total E&P Nigeria Ltd (10 percent) and ENI (five percent) — in the lease.

It was further stated that TNOG Oil and Gas Limited will also have the sole right to operate OML 17.

The field presently has a production capacity of 27,000 barrels per day. Also, there are estimated 2P reserves (proven and probable) of 1.2 billion barrels and an additional one billion barrels in possible reserves — all of oil equivalent.

A consortium of global and regional banks and investors provided a financing component of $1.1 billion for the largest oil and gas financing in Africa in over a decade.

In a statement released on Friday, Shell said the completion was after all the necessary approvals have were received from authorities.

“A total of $453m was paid at completion with the balance to be paid over an agreed period. SPDC will retain its interest in the Port Harcourt Industrial and Residential Areas, which fall within the lease area,” the SPDC said.

Speaking after the completion of the deal, Elumelu said “We have a very clear vision: creating Africa’s first integrated energy multinational, a global quality business, uniquely focused on Africa and Africa’s energy needs. The acquisition of such a high-quality asset, with significant potential for further growth, is a strong statement of our confidence in Nigeria, the Nigerian oil and gas sector and a tribute to the extremely high-quality management team that we have assembled.

“As a Nigerian, and more particularly an indigene of the Niger Delta region, I understand well our responsibilities that come with stewardship of the asset, our engagement with communities and the strategic importance of the oil and gas sector in Nigeria. We see significant benefits from integrating our production, with our ability to power Nigeria, through Transcorp, and deliver value across the energy value chain.

“I would like to thank Shell, Total and ENI, for the professionalism of the process, the Federal Government of Nigeria, the Ministry of Petroleum Resources, and the NNPC for the confidence they have placed in us.”

Tony Elumelu is the Chairman of Heirs Holdings Limited, Transcorp and United Bank for Africa Plc.

Also, read Transcorp Plc Acquires FGN’s 100% Equity in Afam Power for N105 Billion

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Exporters Say CBN Pre-export Requirements is Frustrating Export of Goods

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Institute of Chartered Shipbrokers

Exporters Say CBN Pre-export Requirements is Frustrating Export of Goods

Exporters have said the recently introduced pre-export requirements by the Central Bank of Nigeria is creating unnecessary bottlenecks for exporters and the movement of goods out of the country.

Exporters, who spoke under the aegis of the Network of Practicing Non-oil Exporters of Nigeria (NPNEN), said the electronic Nigeria Export Proceed Form now required by financial institutions from exporters had come with so many challenges.

Ahmed Rabiu, the President, NPNEN, explained that the new policy had several requirements that often led to delays and loss of income on the part of exporters.

He said, “We acknowledge the CBN’s desire to ensure that all exports out of Nigeria are documented in order to ensure that the proceeds of such exports are repatriated.

“However, the reality on the field shows that the process is causing undue delays and consequently, encouraging corruption.

According to them, in the new pre-export requirements, the Central Bank of Nigeria wants an export transaction to be initiated through eNXP processing on the trade monitoring system.

After which exporters are expected to have a pre-shipment inspection agent, the Nigeria Customs Service and other designated government agencies carry out their pre-export inspections.

The exporters said the pre-shipment inspection agent was expected to issue a clean Certificate of Inspection while Customs would issue the Single Good Declaration. All these they said takes time and delay goods from leaving the country on time.

Pointing to a recent report, they said about N868 billion worth of goods bound for export were stuck at the ports due to the new policy.

Speaking further Rabiu said, “For example, for the PIA to issue the CCI, the exporter is required to upload a certificate of origin as one of the supporting documents for the eNXP.

“The PIA is also required to upload the CCI to the TRMS(M) and until this is done, the Customs service will not issue the Single Good Declaration.”

He added, “After issuing the SGD, the customs is further required to upload it into the TRMS before the goods are allowed to be gated into the port and loaded on the vessel by the shipping line.

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Ardova Plc in Talks to Acquire Enyo Retail and Supply Limited

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Ardova Plc in Talks to Acquire Enyo Retail and Supply Limited

Ardova Plc, Nigeria’s leading integrated energy company, has commenced discussions to acquire Enyo Retail and Supply Limited.

According to the statement issued and signed by Oladehinde Nelson-Cole, Ag. Company Secretary/General Counsel, Ardova Plc, Enyo is one of the newest and fastest-growing retail and supply companies in the downstream sector.

It stated, “This announcement is pursuant to the acceptance in principle of AP’s offer and acquisition framework by the shareholders of Enyo, it is subject to the successful completion of a due diligence exercise and the receipt of all required regulatory approvals.”

“This announcement is pursuant to the acceptance in principle of AP’s offer and acquisition framework by the shareholders of Enyo, it is subject to the successful completion of a due diligence exercise and the receipt of all required regulatory approvals.

Speaking on the yet to be completed deal, Mr. Olumide Adeosun, CEO, Ardova Plc, said upon completion, Ardova will retain the Enyo branded stations which will operate side by side with the Ardova brand while simultaneously leveraging on the strengths of Ardova and its group companies.

He added that the two companies are determined to conclude the deal by the end of Q1 2021.

Enyo presently operates over 90 stations across the nation and attends to over 100,000 retail customers on a daily basis.

Ardova Plc and Enyo Retail & Supply Limited promised to furnish stakeholders with more information on the progress of the deal.

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