Connect with us

Finance

Court Adjourns $16.4m Debt Suit Against Stella Oduah

Published

on

repatriation
  • Court Adjourns $16.4m Debt Suit Against Stella Oduah

The Federal High Court in Lagos has adjourned till May 30, 2017 to hear pending applications in an alleged debt recovery suit filed against a former Minister of Aviation, Stella Oduah, by Sterling Bank Plc.

The bank alleged that Oduah and four companies linked to her owed it $16,412,819.06 and N100,493,225.59.

According to the court papers, the companies involved are Sea Petroleum and Gas Company Limited; Sea Shipping Agency Limited, Rotary Engineering Services Limited, and Tour Afrique Company Limited.

Sterling Bank had on February 22 obtained an interim order freezing the accounts of the companies in 21 commercial banks in Nigeria pending the outcome of the case.

Justice Abdulaziz Anka, who made the freezing order, barred Oduah and the directors of the four companies from making any withdrawal from their bank accounts pending the determination of the suit.

At the Tuesday proceedings in the case, counsel for Sea Petroleum and Gas Company Limited, Mrs. Ijeoma Esom, told the court that she had not been served with the court processes, but said she had filed a preliminary objection to the suit.

Oduah’s lawyer, Mr. A. Nweke, told Justice Ayokunle Faji, who is now hearing the case, that he had also not been served, adding that the defendants had filed an application seeking to discharge the freezing order.

But counsel for Sterling Bank, Mr. Kemi Balogun (SAN), recalled that the court had already granted his client’s application to serve the defendants through substituted means by newspapers publications.

He said his client had complied with the order, exhibiting two national dailies, in which the court order was published.

In response, the defence counsel urged the court to grant them extension of time to file their processes.

Justice Faji adjourned till May 30.

The bank, in an affidavit deposed to by one of its managers, Mr. Segun Akinsanya, averred that the debt stemmed from a loan of $10,069,620.25 granted Sea Petroleum and Gas Company on October 8, 2012, to finance one unit 5,000MT tanker vessel.

Adesanya further averred that the company also obtained other loans of $449,600.00, $642,954.00 and $350,000.

He said the bank resorted to filing the suit following the alleged refusal of the oil company to liquidate the loans, which, he said, stood at $16,412,819.06 and N100,493,225.59 as of November 2016.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Finance

Decent Trade Surplus Recorded in FY2023 – Coronation Economic Note

Published

on

Institute of Chartered Shipbrokers

The latest report from the National Bureau of Statistics (NBS) in its series on foreign trade in goods shows the total value of trade grew by +128.6% y/y to N26.8trn in Q4 ’23 vs +53.2% y/y in Q3 ‘23.

The total export value increased by 22.7% q/q to N12.7trn compared with N10.4trn recorded in Q3 ‘24. This can be partly attributed to c.20% depreciation of NGN/USD recorded in Q4 ‘23.

For FY2023, total exports increased by 34.2% y/y to N35.96trn. The import value increased by 56.04% q/q to N14.1bn from N9.0trn in Q3 ‘23. We note that imports were affected by the weaker naira following the fx liberalization policy.

For FY2023, imports increased by 40.4% to N35.92trn. Total trade as a percentage of nominal GDP (2023) stood at 30.4% in 2023, compared with 26.3% in 2022. In FY2023, Nigeria recorded a surplus of +N44.8bn.

According to the NBS report, the top six import sources were China N6.6trn (19.5%), India N2.8trn (N8.5%), USA N2.2trn (6.6%), Netherlands N1.8trn (5.3%), Brazil N810bn (2.4%), and the UK N688bn (2.0%). These countries collectively accounted for 44.4% of total imports in 2023. Imports from ECOWAS stood at N168bn, representing 19% of total imports within Africa.

Manufactured goods accounted for the largest share of imports, 51.2% and its import value grew significantly by 66.9%y/y. Following closely, petroleum oil products accounted for 33.42% of imports, and grew by 18.8%y/y. Raw materials accounted for 8.4%. Conversely, solid minerals registered a modest share of 0.53%. Agricultural goods followed suit with a 6.35% share, experiencing a notable growth in value of 22.3% y/y.

Regarding exports, the top six export destinations include Netherlands with exports valued at N4.5trn (12.6%), Spain N3.3trn (N9.4%), India N3.0trn (8.4%), the United States N2.6trn (7.3%), France N2.3trn (6.5%), and the Economic Community of West African States (ECOWAS) N2.2trn (6.2%). These destinations collectively accounted for 50.4% of total exports in 2023.

Crude oil accounted for 80.6% of total exports in 2023, its export value grew by 37.4% y/y to N29trn vs +46.4%y/y recorded in 2022. Based on a separate data from the NURPC, average crude oil production (condensates inclusive) in 2023 was 1.47mbpd compared with 1.38mbpd in 2022.

This is lower than the OPEC production quota for Nigeria which was 1.7mbpd.

Non-oil exports grew by 22.2% y/y to N6.9trn and accounted for 19.4% of total exports. Superior quality cocoa beans, cut flowers, sesamum seeds, soybeans, natural cocoa butter, soya beans, crude groundnut oil, frozen shrimps and prawns, shelled cashew nuts, crude palm kernel oil, and ginger among others were featured as top export commodities in 2023.

Nigeria exported goods worth N2.2trn to ECOWAS, compared with N1.7trn in 2022. This represented 60.2% of total exports within Africa. The most adopted port for exports in Q4 ’23 was the Apapa Port. Goods worth N11.9trn exited the country through this port which accounted for 94.4% of total exports. Other ports widely used include Tin can Island N(386.8bn), and Port Harcourt (N241.3bn)

GLOBAL FOCUS/REGIONAL TRADE

According to data from the World Trade Organization (WTO), merchandise trade declined by -8.2% y/y to US11.8trn in Q3 ‘23 compared with USD12.9trn recorded in the corresponding period of Q3 ‘22.

Meanwhile, on a q/q basis, total merchandise trade declined marginally by -1.4%. The decline can be partly attributed to weakened global demand as well as shifts in its composition toward domestic services, the effects of a stronger USD and rising trade barriers.

The Black Sea grain deal was terminated by Russia in July ’23, leading to rising food prices in import-dependent countries. However, Ukraine discovered a new corridor (the Danube River) to export its grains. As at end ’23, Ukraine had exported over 5.6 million metric tons of grain and other products through this corridor.

As at end-February ’24, the price of wheat moderated by -8.5% m/m to close at USD576.3/MT. The price of wheat recorded a downward trend m/m.

This was largely due to increased Russian exports, competitive pricing in the Black Sea region, abundant global stocks, diminishing international demand, and the prospect of another massive Russian crop.

Maize prices also moderated by -4.8% m/m to close at USD189.1/MT. Meanwhile, Cocoa prices increased by +34.1% m/m due to a decline in the supply prospects on the back of poor harvests in West Africa.

The El Niño weather phenomenon has been causing drier weather in Ghana and Ivory Coast, which are the world’s two biggest producers of cocoa beans.

Turning to China, despite the challenges posed by the property sector, trade exports increased by 0.9% q/q to USD861.6bn in Q3 ’23 compared with USD853.6bn recorded in Q2 ’23.

Notably, China’s PMI increased marginally to 50.9 in February ’24 from 50.8 in January ’24. We expect a loosening or a hold stance in the near term as China continues to seek ways to bolster its economy amid the downturn in its property sector.

In Africa, total merchandise trade declined by -3.3% q/q to USD312.6bn in Q3 ’23, compared with USD323.3bn in Q2 ’23. It is worth noting that the region recorded a trade deficit of -USD23.1bn in Q3 ’23. It is worth highlighting that resource rich economies like South Africa recorded a trade surplus in Q3 ’23.

Meanwhile, non- resource rich economies like Kenya and Egypt recorded trade deficits in Q3 ’23. The United Nations Conference on Trade and Development disclosed that, in 2019, intra-African trade accounted for less than 15% of total exports among African countries.

This suggests that there are potential benefits from increased regional trade. Overall, we expect the country’s external position to remain vulnerable to fluctuations in global oil price and weak domestic oil production.

Continue Reading

Finance

CBN’s Proposed Capital Hike Threatens Stability, Ernst and Young Report Warns

Published

on

Central Bank of Nigeria (CBN)

A storm is brewing in Nigeria’s banking sector as the Central Bank of Nigeria’s (CBN) proposed capital hike threatens to destabilize the industry, according to a recent report by Ernst and Young.

The report, titled “Navigating the Horizon: Charting the Course for Banks amid Plans for Recapitalisation,” paints a grim picture of the potential fallout from such a move.

Ernst and Young’s analysis suggests that if the CBN increases the minimum capital base for commercial banks by 15-fold, from the current N25 billion, only seven out of the existing 24 Deposit Money Banks may survive the upheaval.

This revelation underscores the magnitude of the challenge facing the banking sector and raises concerns about the stability of the financial system.

The proposed capital hike comes in the wake of the CBN’s efforts to bolster banks’ capacity to support Nigeria’s ambitious goal of becoming a $1 trillion economy by 2026.

However, the report highlights the significant hurdles that lie ahead, particularly for smaller banks that may struggle to meet the new requirements.

The last major banking reform in 2004 saw a similar increase in the capital base, resulting in massive mergers and acquisitions that reduced the number of banks from 89 to 25.

Now, nearly two decades later, history seems poised to repeat itself, with the potential for widespread consolidation and restructuring in the industry.

Industry experts have expressed mixed reactions to the proposed capital hike. While some welcome the move as necessary for ensuring financial stability and supporting economic growth, others caution against the potential negative impact on smaller banks and urge the CBN to consider alternative strategies.

As the debate intensifies, all eyes are on the CBN to see how it will navigate the delicate balance between regulatory requirements and industry resilience in the face of mounting challenges.

Continue Reading

Loans

Nigeria in Talks with World Bank for $1bn Loans to Aid Displaced Persons and Rural Development

Published

on

world bank - Investors King

In a bid to tackle the challenges confronting internally displaced persons (IDPs) and bolster rural development initiatives, the Nigerian government has entered negotiations with the World Bank for loans totaling $1 billion.

This financial infusion aims to address the pressing needs of IDPs and uplift rural communities across the nation.

The proposed loans, detailed in World Bank documents titled ‘Solutions for the Internally Displaced and Host Communities Project’ and ‘Rural Access and Agricultural Marketing Project – Scale Up,’ signify a concerted effort by the government to provide comprehensive support to vulnerable populations and enhance economic opportunities in rural areas.

With an allocation of $500 million earmarked for IDP assistance and an additional $550 million dedicated to rural access and agricultural marketing, these loans underscore the government’s commitment to fostering inclusive growth and resilience within communities grappling with displacement and economic challenges.

The World Bank’s involvement underscores the global community’s recognition of Nigeria’s efforts to address humanitarian crises and promote sustainable development.

The loans are poised to fund initiatives aimed at improving access to basic services, fostering social cohesion, and enhancing livelihood opportunities for IDPs and their host communities, particularly in conflict-affected regions of the country.

Furthermore, the infusion of funds into rural access and agricultural marketing endeavors is poised to unlock new pathways for economic growth, empower local farmers, and bridge the gap between rural communities and broader markets.

As negotiations progress, stakeholders anticipate transformative impacts that will propel Nigeria towards a more prosperous and inclusive future for all its citizens.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending