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FG Invests N87.2bn in Fertiliser Production



  • FG Invests N87.2bn in Fertiliser Production

The Federal Government through the Nigerian Sovereign Investment Authority, which is the agency managing the Sovereign Wealth Fund, will from next week begin the implementation of a fertiliser project that will enable the country to conserve its foreign exchange by about $1.5bn (about N458bn) in the next three years.

Details of the fertiliser project, which were made available to our correspondent on Friday in Abuja, would see the NSIA and its partners invest a total sum of $286.4m (N87.2bn) in the project for blending of one million metric tonnes of fertiliser.

The SWF, which was set up in 2013 with about $1.55bn, has three pots from which investments can be anchored.

The pots are Future Generation Fund, Infrastructure Fund, and Fiscal Stabilisation Fund.

The NSIA had allocated 20 per cent of the fund to the Stabilisation Fund; 40 per cent to the Future Generation Fund and another 40 per cent to Infrastructure Fund.

Just last week, the National Economic Council gave approval that the sum of $250m (N76.3bn) be injected as additional capital to the SWF.

The fertiliser project, it was learnt, was part of the moves by the agency to increase its investment in domestic infrastructure owing to the immense opportunities in that segment of the economy.

The objective of the project is to deliver fertiliser to farmers in time and at a reasonable price of N5,500 per 50kg bag.

This, according to the project document, is a reduction of between 30 per cent and 40 per cent from current price, with deliveries starting from next week from the blending plants in Kaduna.

This, according to the project document, will enable the Federal Government to eliminate subsidy in the fertiliser sale projected to be about N120bn based on the budgetary provision for fertiliser subsidy in 2017.

Cumulatively, about N720bn is expected to be saved through import substitution on fertiliser within the next three years of the implementation of the project and create thousands of jobs by reviving the local blending plants.

The document read in part, “The objective is to deliver fertiliser to farmers in time and at a reasonable price. The target is N5,500/50kg bag.

“For the wet season, we are targeting one million metric tonnes in five batches of 200,000 tonnes each starting in February this year.”

Speaking on the impact of the project on the economy, the Managing Director of NSIA, Mr. Uche Orji, said the country would begin to see massive harvest of agricultural produce.

He added that the agency would be taking over the Nigerian Commodities Exchange under a pre-privatisation investment arrangement, adding that this would enable the NSIA to inject about $10m into the revival of the exchange.

Orji noted that under the arrangement, the NSIA would revive the commodities exchange by adding value to its operations and making it more attractive to investors before its final privatisation by the Bureau of Public Enterprises.

He said with the taking over of the commodities exchange as well as its investment in the fertiliser plant, the agency would be attracting more investments into the agricultural sector, particularly in the area of storage facilities.

He said, “We are working with the BPE on the commodities exchange. The commodities exchange is not operational; we will invest in its operations and use it as a way of creating infrastructure for agriculture, warehouse, storage, silos and have an exchange that works.

“The privatisation of the Nigerian Commodity Exchange between the BPE and the NSIA is expected to be concluded this year at a cost of $10m.”

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


SEC Warns Against Proliferation of Unregistered Investment Platforms



The Securities and Exchange Commission (SEC) has warned the investing public to be wary of the proliferation of unregistered online investment and trading platforms facilitating access to trading in securities listed in foreign markets.

SEC’s warning was conveyed via a circular issued in Abuja, Thursday to capital market operators.

It advised the investing public to seek clarification as may be required via its established channels of communication on investment products.

The circular read: “The attention of the SEC has been drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign companies listed on securities exchanges registered in other jurisdictions.

“These platforms also claim to be operating in partnership with capital market operators (CMOs) registered with the Commission.”

The Commission categorically stated that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public.

Accordingly, the SEC notified CMOs who work in concert with the referenced online platforms of the Commission’s position and advised them to desist henceforth.

Public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.

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SoftBank Reaps $33 Billion Coupang Windfall



SoftBank Group Corp on Thursday racked up a roughly $33 billion gain on paper through the public market debut of South Korea’s largest e-commerce company, Coupang Inc, the latest sign of a dramatic turnaround for its $100 billion Vision Fund.

Shares of Coupang opened 81% above their offer price on Thursday, after the company raised $4.6 billion in the U.S. stock market’s biggest initial public offering this year.

SoftBank paid around $3 billion for a 37% stake in the company, according to sources familiar with earlier fund-raising, giving it a roughly $33 billion headline profit if prices hold.

Coupang’s hugely successful stock market launch is welcome news for SoftBank, which is grappling with the collapse of billions of dollars worth of funds linked to Britain’s Greensill Capital, a supply chain finance start-up.

Vision Fund is Greensill’s biggest backer.

The Japanese conglomerate last month reported third-quarter net profit ballooned more than 20 times thanks to a recovery at the Vision Fund, a huge venture capital operation famous for investing early in Uber and other tech industry startup successes.

Only a year ago, SoftBank had been smarting from the flopped IPO and collapse in value of office sharing firm WeWork, raising questions over whether Chief Executive Officer Masayoshi Son had lost his midas touch and threatening plans to establish a successor to Vision.

The COVID-19 pandemic has also forced Son to sell assets but a second deal reported by Reuters on Thursday bodes well for VF II, a second, smaller fund.

The $225 million late-stage funding round for healthcare startup Forward Health was its first major investment this year, following a pickup in activity and the group’s fortunes in the second half of 2020.

The Vision Fund also made $11 billion on a blockbuster market launch of DoorDash Inc in December, which valued the food delivery company at more than $70 billion.

It also made gains on home seller Opendoor Technologies Inc’s initial offering in December.

The fund still holds large stakes in China’s biggest ride-hailing firm Didi, as well as Uber’s Southeast Asian rival Grab.

SoftBank is also trying to ride the mania for special purpose acquisition companies, launching a handful of blank-check firms this year, although none of them have found investment targets yet.

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Agence Francaise De Developpement (AFD) To €2 billion in Nigeria



The French Development Agency (AFD) is a development finance institution 100 percent held by the French government.

In Nigeria, it is mainly into financing infrastructure projects (water, energy, transport and agriculture).

It also involves financing related to the banking sector, governance and the cultural and creative industries.

Speaking to the media, the AFD Country Director Nigeria, Pascal Grangereau, said €2 billion was set aside to be sent on mainly road financing, water sector, improvement in electricity and agriculture.

He said €300 million was being spent on the Abuja Electricity Backup, a project in collaboration with Transmission Company of Nigeria (TCN) to improve electricity at the nation’s capital.

Grangereau said a total of €200 million is equally expended on the North West Electricity Backup.

On agriculture, he said vocational training is currently held across the nation to improve the skills of Nigerians.

He added: “We intend to finance agricultural projects in five states, Benue, Imo and three other states to the tune of €50 million.”

He lamented that while it was endowed with reserves of crude oil and natural gas, Nigeria is characterised by power generation considered by the Nigerians themselves as not adequate.

He said concentrating more than half of the installed electricity capacity in West Africa, only half of which was harnessed by the country, implying a very low per capita consumption, limited access to electricity and frequent load shedding.

He added: “The sector is of strategic importance for successive governments, with the launching in the 2000s of a vast reform, supported by a massive investment plan; which reform although supported by the donors is yet to achieve the expected results. The project aims to strengthen the electricity transmission network, natural monopoly under the responsibility of the public company TCN, thus laying the foundations for a long-term partnership with TCN.”

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