- Terminal Operators Lose N75bn to Naira Fall
The continuous adjustment in exchange rates, loss in the value of the naira against major foreign currencies and forex scarcity have all combined to bring about loss of revenue for terminal operators, who since the 2006 concession agreement have been paying their dues in dollars, ANNA OKON writes
Terminal operators at the nation’s seaports have lost N75bn to currency adjustments due to the loss in value of the naira against major foreign currencies.
This is due to the fact that the operators pay their concession dues and meet other obligations in dollars.
It was gathered that the loss in the value of the naira coupled with the scarcity of dollars had overtime led to an increase in expenses and put a huge pressure on the income of the operators.
According to a 2017 report by Akintola Williams Deloitte, the foreign exchange challenges that Nigeria is facing as a result of the fall in global oil prices are further pronounced for terminal operators as a large part of their costs, including equipment and maintenance costs, lease fees to the Nigerian Ports Authority and operational costs are in dollars.
The report noted that in order to take care of their costs and dues, the terminal operators had to constantly source for dollars from the parallel market at very high rates.
Confirming this, the spokesperson for the Seaport Terminal Operators Association of Nigeria, Mr. Bolaji Akinola, who spoke to our correspondent on behalf of the operators, said that they were currently spending three times the amount they paid 10 years ago as dues owing to the continued fall in the value of the naira.
“In 2006 when we took over operation at the various terminals in the port, the exchange rate was N125 to the dollar. Now, it is about N400,” he stated.
He added that for every one dollar paid out, an operator lost N275.
“About 85 per cent of our commitments are in dollars. The tenure of the concession agreements ranged from 15 to 25 years and the estimated revenue to government is $6.54bn (N2.6tn) over the period,” Akinola stated.
Due to the challenges, the concessionaires have made several appeals to the government, asking to be allowed to pay their dues in naira.
In response to their pleas, the Managing Director, NPA, Ms. Hadiza Usman, said that the agency would take a second look at the dollar payment policy during a general review of the concession agreement.
She said, “We will look into the dollarisation of payments. This will not be clear until we do a realistic review of the concession agreements.
“Some of our obligations that we pay in dollars, we are looking to see how we can stop paying for everything in dollars. As we review the inflow of dollars, we will also review the outflow of dollars.”
Meanwhile, 83 per cent of port revenues are said to be received in naira from clearing agents; these include terminal handling charges, storage charges, customs examination fees, and others, while the remainder of the revenue is received in dollars, including stevedoring charges from shipping companies.
In addition to exchange rate fluctuations, the Central Bank of Nigeria’s restriction of importers of 41 select items from accessing foreign exchange through the official foreign exchange window as well as the 2014 hike in the import duty of vehicles affected the volume of cargo at the ports, resulting in further revenue loss to operators and government.
According to analysts at Deloitte, between 2006 and 2016, the port business was adversely impacted by the rise in Consumer Price Index or inflation, with the CPI rising to over 177 per cent since 2006, adding that foreign exchange fluctuations also impacted the value of the terminal handling charges with over 224 per cent forex depreciation between 2006 and 2016.
They argued that although the naira value of the THC increased from N31,850 in 2006 to N80,000 in 2016, the THC dollar value equivalent decreased from $232 in 2006 to $180 in 2016.
A maritime expert with the Lagos Chamber of Commerce and Industry, Mr. Vincent Nwani, suggested that since the terminal operators were earning part of their revenue in dollars, they should pay the appropriate dues in dollars to the proportion of that revenue, while settling other obligations in naira.
He said in order to do that, they had to go back to the original agreements that they signed with the Federal Government, adding, “In some of those agreements, there may be clauses that the price of foreign exchange should determine the dues.
“They collect some fees in dollars; they don’t have to pay all their fees to the government in dollars.
MTN Nigeria, Gameloft Partner to Increase Access to Variety of Exciting Games
MTN Nigeria announced it has partnered with Gameloft, a leader in the development and publishing of games, to increase access to a variety of fun and exciting games online.
The telecommunications giant in collaboration with its new partner, Gameloft announced the launch of MTN Gameworld, a new gaming platform for its subscribers.
According to MTN, the new platform will allow the Nigerian growing gaming community access to a lot of unique games online through an extensive premium catalogue from Gameloft and other renowned publishers.
Commenting on the partnership, Srinivas Rao, the Chief Digital Officer, MTN Nigeria, said, “We are constantly seeking to deliver innovative products that support the aspirations of our customers, whilst delivering superior user experience. This partnership allows us to provide our customers with access to a variety of exhilarating games from Gameloft and other leading publishers at an affordable rate.”
MTN Gameworld will allow subscribed customers access to a variety of games, which they can play at subsidised data rates through the MTN Gameworld app. Android, iOS and Windows phone users can subscribe via SMS, app, web, USSD menu (*447#), 131 USSD menu and any other MTN customer channel.
President Buhari Commissions 5,000bpd Modular Refinery Built in Imo State
President Muhammadu Buhari on Tuesday commissioned the 5,000 barrels per day modular refinery built by Waltersmith Group in Imo State.
President Buhari, who commissioned the new modular refinery virtually, said the refinery will enable Nigeria to export petroleum products to neighbouring countries and other markets.
The 5,000 barrels per day Waltersmith Modular Refinery is the first phase of 50,000 barrels per day combined capacity plant planned for Imo State, according to the Group.
Buhari commended Waltersmith Group, an indigenous oil firm, and the Nigerian Content Development and Monitoring Board for the collaboration that led to the actualisation of the modular refinery.
President Buhari, therefore, directed the Ministry of Petroleum Resources, the Nigerian National Petroleum Corporation, the Department of Petroleum Resources and all other relevant government agencies to provide Waltersmith all the necessary support in terms of access to crude oil and condensate feedstock.
Buhari said, “We rolled out our refining roadmap in 2018, to address challenges in the downstream sector. After many years of government giving out modular refining licences without any coming on-stream, we are today seeing a commissioning within two years.
“The plan to commence the expansion of this refinery to 50,000bpd capacity, to refine crude oil and condensate, is a demonstration of the economic reform Nigeria is undergoing.
“The realisation of the refinery roadmap will ultimately lead us to becoming a net exporter of petroleum products, not only to our neighbouring countries but to other wide markets,” he said.
Elon Musk Net Worth Jumps by $100 Billion this Year to Topple Bill Gates, Mark Zuckerberg, Others
Elon Musk, the Chief Executive Officer and founder of Tesla, is now the world’s second-richest person following another surge in the price of Tesla share.
Musk total net worth jumped by $7.6 billion to $110 billion between November 16 and 17 to dethrone Facebook founder, Mark Zuckerberg, from the third position.
Since then, Tesla stock has been on a bullish run and in the last 24 hours added $7.24 billion to Elon Musk’s total net worth, according to Bloomberg Billionaire Index. Bringing the billionaire’s total net worth to $128 billion.
Elon Musk’s net worth rose from just $28 billion in January 2020 to $128 billion on November 24, 2020, representing an increase of $100 billion, the highest by any billionaire.
Musk has finally toppled Bill Gates as the second richest person and for the first time, Bill Gates is the third richest man in the world. This is the first time in almost 40 years that Gates will be in the third position.
Billionaires listed on Bloomberg Index have collectively gained $1.3 trillion this year.
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