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BoI Disbursed N66bn to SMEs in 2016

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  • BoI Disbursed N66bn to SMEs in 2016

The Bank of Industry (BoI) recorded its most impressive performance in 2016 by posting double-digit growths in almost all aspects of its operations with about N66 billion disbursed to hundreds of small, medium and large scale businesses.

This was disclosed on Thursday at the 57th annual general meeting (AGM) of the bank in Abuja.

The Minister of Industry, Trade and Investment, Mr. Okechukwu Enelamah, said that the bank was able to consolidate on its developmental impact during the year under review, despite the general economic downsides across the country.

Enelamah, who was represented by the Protem Chairman of BoI, Mr. Olufemi Edun, said it was highly commendable that while several institutions in the country experienced a downgrade in their credit ratings in the year, BoI got a reaffirmation of its AA+ National Credit Rating accompanied by a stable outlook by Fitch Ratings.

He noted that Moody’s, which is another international rating agency also assigned Aa1.ng/NG-1 rating, the second highest of national scale rating categories to the bank.

He added: “Augusto, the foremost Nigerian rating agency similarly upgraded the bank’s domestic rating of A+ to AA- in 2016. This is a testament of the strong corporate governance and enterprise risk management practices that the bank has integrated into its operations.

“In the year under review, the bank disbursed N65.9 billion to 737 micro, medium and large enterprises, which helped to create over 500,000 direct and indirect jobs.”

In the same vein, the acting Managing Director/Chief Executive Officer of BoI, Mr. Waheed Olagunju, said that the bank has within its 15 years of establishment, “invested over a trillion naira in more than 25,000 small, medium and large enterprises”.

Olagunju said that BoI had also assisted ventures spanning several sectors of the Nigerian economy including agro and solid minerals processing, petro chemicals and polymer, cotton textile and apparels, automobiles, creative industries as well as Information Communication and Technology.

According to him, “These enterprises have had considerable impact on Nigeria’s economy including the generation of more than five million direct and indirect jobs.”

He said that the bank recorded outstanding improvements across board including a 44 per cent increase in profit before tax (PBT) over the previous year 2015.

He added: “For instance, while the volume of new loans rose by 10 per cent to N171 billion, from N156 billion in 2015, disbursements to SMEs similarly went up by 42 per cent within the same period to N8 billion from N5.64 billion. More than 800 enterprises that could potentially generate over 1,000,000 jobs benefited from BoI’s facilities last year.

“The quality of the bank’s risk assets improved phenomenally as the ratio of non-performing loans dropped to 3.72 per cent in 2016 from 5.87 per cent in 2015. The average ratio of non-performing loans in Nigeria’s banking system rose to 14% in 2016 which is beyond the Central Bank of Nigeria’s threshold of 5%. The bank also posted an operating Profit Before Tax of N17bn, which represents a 44% increase over 2015’s N11.9bn.”

Olagunju said that BoI in its bid to ensuring the MSMEs account for at least 30% of its projected risk assets of N1.2 trillion by 2019, as at April 30, 2017 the bank had already exceeded last year’s disbursement to MSME’s by disbursing more than N13 billion as against last year’s N8 billion which represents 62% increase.

Accordingly, he said, BoI has embarked on a N1 trillion fund mobilisation drive within and outside the country to part finance the industrial component of the Economic Recovery and Growth Plan (ERGP) as well as support ventures that would fast-track Nigeria’s realisation of the Sustainable Development Goals (SDGs) and also rev BOI’s risk assets up to N1.2 trillion by 2019 in line with its revalidated strategic plan (2016-2019).

“Under the plan, it is envisaged that enterprises financed by BoI would generate more than 5 million jobs. In this regard, the Bank of Industry has commenced discussion with the Development Bank of Nigeria and some foreign national as well as multilateral development finance institutions,” he added.

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.

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NNPC and TotalEnergies to Invest $550 Million in Rivers State Gas Facility

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The Nigerian National Petroleum Corporation (NNPC) Ltd and TotalEnergies have announced a joint investment of $550 million in a new gas processing facility in Rivers State.

The project aims to enhance gas exports and boost domestic supplies, a source within NNPC revealed on Wednesday.

The planned investment encompasses the construction of a state-of-the-art gas processing plant and an extensive pipeline network.

The facility will be situated on the Ubeta onshore gas field, which is co-owned by TotalEnergies and NNPC.

The gas processed at this facility will be supplied to the Nigeria Liquefied Natural Gas (NLNG) plant, a consortium involving NNPC, Shell, TotalEnergies, and Italy’s Eni.

Upon completion, the Ubeta gas processing plant is expected to produce 350 million standard cubic feet of gas per day, alongside 10,000 barrels of associated liquids daily.

This development comes as Nigeria seeks to capitalize on its vast natural gas reserves, estimated at over 200 trillion cubic feet, which remain largely untapped due to inadequate processing infrastructure and capital limitations.

An official announcement regarding the investment is anticipated later this week. Although TotalEnergies has declined to comment, sources close to the agreement confirm that the project reflects a renewed effort by President Bola Tinubu’s administration to attract substantial investment into Nigeria’s energy sector.

“This investment is a clear indication of confidence in Nigeria’s resource potential and the government’s commitment to improving the ease of doing business,” commented Clementine Wallop, Director for Sub-Saharan Africa at political risk consultancy Horizon Engage.

The initiative also aligns with Nigeria’s strategic goals to increase its gas exports, especially to the European Union, which has been seeking alternative energy sources in the wake of reduced imports from Russia due to the ongoing conflict in Ukraine.

Domestically, the project is expected to alleviate some of the supply issues faced by Nigeria’s gas power plants, which are crucial for the country’s electricity generation.

Energy analysts highlight that this project could signify a turning point for Nigeria’s energy landscape, offering a much-needed boost to the country’s economic stability and energy security.

As Nigeria continues to grapple with the challenges of gas flaring and underutilization of its natural gas reserves, the NNPC and TotalEnergies’ investment in the Rivers State gas facility represents a strategic step forward in addressing these longstanding issues.

The successful implementation of this project could pave the way for further investments and advancements in Nigeria’s energy sector.

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Escravos Seaport: $27.29 Billion Seaport Project in Jeopardy Amid Bureaucratic Stalemate

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Nigeria is on the brink of losing a $27.29 billion investment earmarked for the development of the Escravos Seaport Industrial Complex (ESIC) in Delta State.

The ambitious project, championed by the Mercury Maritime Concession Company (MMCC) and backed by foreign investors, is stalled due to prolonged delays in securing final governmental approvals.

Rear Admiral Andrew Okoja (rtd), the chairman of MMCC, voiced his concerns during a recent press briefing.

He emphasized the urgency of obtaining the necessary governmental consents, warning that the delay could result in the forfeiture of the crucial investment.

“EDIB International of Hong Kong has expressed readiness to inject $27.29 billion into the deep seaport project located in Escravos. However, without the required approvals from both federal and state governments, we risk losing this investment,” Okoja stated.

The ESIC project is poised to be a significant economic catalyst, promising to transform Delta State and its neighboring regions.

Modeled after the successful Lekki Deep Seaport and Free Trade Zone, the ESIC is expected to spur trade, commerce, and industry across eight states, including the Federal Capital Territory, Abuja.

“This project is not just about developing a seaport; it’s about creating an economic hub that will drive growth and development across a broad spectrum of sectors,” Okoja explained.

In a letter dated January 19, 2024, EDIB International Ltd., through its chairman Kwame Springer, reiterated its commitment to the project. The letter, addressed to MMCC, highlighted the need for a federal government guarantee to protect the investment.

“We require a guarantee from the Nigerian government to secure our investment. The time frame given to secure these approvals is three weeks, beyond which we might have to consider alternative locations for our investment,” the letter stated.

The Escravos Seaport project has seen provisional approvals from both federal and state governments in the past.

In November 2020, the Federal Government granted a provisional approval for a 50-year renewable concession agreement under the Build, Own, Operate, and Transfer (BOOT) model.

Similarly, in May 2022, the Delta State Government agreed to lease 31,000 hectares of land for the project.

Despite these provisional nods, the final approvals remain elusive.

“We have met all regulatory requirements and are ready to proceed. The delay now lies with obtaining the final consent from the government,” Okoja noted.

He urged the federal and state governments to expedite the approval process to avoid losing the investment to other African nations.

The development of the ESIC encompasses not just the construction of a seaport but also the integration of road, rail, and marine connectivity aimed at optimizing cargo flow.

The project includes the construction of the Warri-Sapele Expressway, linking it to key trade routes.

“This infrastructure will significantly reduce congestion at Lagos ports and open up new economic opportunities for the Niger Delta, Eastern, and Northern States,” Okoja highlighted.

The Escravos Seaport Industrial Complex represents a transformative opportunity for Nigeria’s economic landscape.

However, bureaucratic inertia threatens to derail this landmark project. As the clock ticks, the onus is on the federal and state governments to act swiftly and secure the future of this pivotal investment. Without immediate action, Nigeria stands to lose a monumental opportunity to boost its economy and create thousands of jobs.

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Crude Supply Concerns Stall Nigeria’s Modular Refinery Construction Projects

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The ambitious plans for constructing modular refineries across Nigeria, aimed at bolstering domestic refining capabilities, are encountering significant roadblocks due to apprehensions surrounding crude oil supply guarantees.

Despite the country’s aspirations to become self-sufficient in refining, the reluctance of international oil companies (IOCs) to commit to supplying crude to these facilities has left many projects hanging in the balance.

Presently, only a handful of the planned 20 modular refineries are operational, with the remaining projects either stalled or facing financial uncertainties.

This predicament stems from investors’ demands for assurances regarding crude oil availability before releasing funds for construction.

Eche Idoko, the publicity secretary of the Crude Oil Refinery Owners Association of Nigeria (CORAN), highlighted the pivotal role of guarantees in securing financing for refinery projects.

He emphasized that without a guarantee of feedstock, investors are understandably hesitant to proceed with funding.

Idoko further elucidated that the absence of a regulatory framework mandating IOCs to provide such assurances exacerbates the challenges faced by modular refinery operators.

Despite repeated pleas from industry stakeholders, regulatory bodies have yet to enforce provisions ensuring crude supply to indigenous refiners, adding to the uncertainty surrounding these projects.

The ramifications of this impasse extend beyond the economic realm, as Nigeria’s aspirations to emerge as a regional refining hub are jeopardized.

With the potential to significantly reduce the country’s reliance on imported petroleum products, modular refineries represent a critical component of Nigeria’s energy security strategy.

Furthermore, the synergy between modular refineries and larger-scale projects like the Dangote Petroleum Refinery could position Nigeria as a key player in West Africa’s refining landscape.

By addressing the continent’s substantial deficit in refined petroleum products, Nigeria has the opportunity to assert its leadership in the region’s energy sector.

However, unlocking the full potential of modular refineries hinges on overcoming the current challenges surrounding crude supply guarantees. With concerted efforts from regulatory bodies, IOCs, and industry stakeholders, Nigeria can navigate these obstacles and realize its vision of a vibrant and self-sustaining refining sector.

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