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Senate Asks FG to Stop P’Harcourt Refinery Concession

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  • Senate Asks FG to Stop P’Harcourt Refinery Concession

The Senate on Tuesday asked the Federal Government to suspend all processes leading to the concession of the Port Harcourt refinery to Agip and Oando Plc.

The lawmakers specifically directed the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, to suspend the process based on a motion moved by Senator Sabo Mohammed at the plenary.

The motion was titled, ‘Non-transparent Transaction Relating to the Planned Concession of the Port Harcourt Refinery to Agip and Oando by the Ministry of Petroleum Resources’.

As a result, the President of the Senate, Bukola Saraki, who presided over the plenary, set up a seven-man ad hoc committee led by Senator Abubakar Kyari to investigate the deal and the criteria used to select Agip/Eni and Oando to operate and maintain the refinery.

The panel was also mandated to probe the cost and timeframe of the concession.

Pending the outcome of the probe, the Senate requested that the concession process should be halted.

In the motion, Mohammed said the Senate was worried by the “non-transparent transactions” of the planned concession refinery to Agip and Oando by the ministry.

He said, “The Senate is aware that the Federal Government recently entered into an agreement with Nigerian Agip Oil Company, a subsidiary of Eni, an Italian oil giant, to construct a $15bn refinery in the Niger Delta region. It is a deal that also includes investment by Agip in a power plant, with the Italian company assisting Nigeria in the repairs of the Port Harcourt refinery.”

“The Senate notes that the Minister of State for Petroleum Resources stated that the agreement was part of a broader Federal Government plan to increase capacity for local production and consumption of petroleum products, with the aim of ending fuel importation in Nigeria by 2019.

“It also notes that while the resolve by the Federal Government to increase local refining capacity is laudable and should be applauded by all Nigerians, the observance of corporate governance principles and the country’s extant laws must be followed to the letter.”

The lawmaker said the Senate was concerned that the planned concession of the refinery to Agip/Eni in partnership with Oando Plc “without recourse to due process is illegal and a clear attempt at ridiculing Nigerians, and will definitely create a big hole that will be hard to fill in the anti-corruption crusade of the present administration.”

He said, “The Senate is aware that in such transactions, the best practice is to select partners through open and competitive bids, i.e. prepare the business for sale, market the business, select the buyers and close the transaction.

“The Senate notes that any exclusive arrangement that does not follow the above procedure, hatched in the dark without the knowledge and participation of relevant stakeholders, tends to lead to sub-optimal outcomes for the seller; in this case, the Federal Government.”

Mohammed added, “It is also aware that the major stakeholders such as the Bureau of Public

Enterprises that was empowered by law to conduct such an exercise and labour unions are not aware of the deal that is supposed to be signed fficially in July this year.

“The Senate is concerned that since Agip has no technical record or history in the Port Harcourt refinery that was built by a Japanese firm, one would have expected the concerned authority to look at the Warri refinery that was built by Agip where they have technical record.”

Mohammed stated that the Senate was saddened that on assumption of office as the Group Managing Director of the Nigeria National Petroleum Corporation, Kachukwu declared that by the end of 2015, the Port Harcourt, Warri and Kaduna refineries would be working at 90 per cent capacity, thereby reducing importation and ending the subsidy controversies.

“Up till now in 2017, the refineries have yet to be fixed and cannot even produce at 50 per cent, not to mention 90 per cent,” he alleged.

The lawmaker further said the Senate was concerned that it was not yet clear if the new arrangement was a concession or an agreement to build a new refinery.

“The confusion became obvious following the disclosure on May 11, 2017, by the Chief Executive Officer of Oando Plc on the floor of the Nigeria Stock Exchange that the group had received approval of the Federal Government to repair, operate and maintain the Port Harcourt refinery with its partner, Agip,” he said.

Mohammed noted that the development would have been wonderful as it would mean an end to importation of refined products by 2020, but insisted that many questions were begging for answers.

He asked, “Is it Agip/Eni or Oando Plc that is taking over the Port Harcourt refinery? Was there the observance of the privatisation law as regards due diligence and selection from preferred bidders before ceding of the Port Harcourt refinery to Agip/Oando?”

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.

Economy

Covid-19: African Trade Finance Sees $5B in Portfolio Outflows in Q1 2020

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In a recent report, it was asserted that there has been a massive portfolio outflow of over $5 billion from Africa in the first quarter of 2021, this was a result of Constrained global financial conditions caused by Covid-19.

This report was conducted by African Export-Import Bank (Afreximbank) jointly with the UN Economic Commission for Africa and the African Development Bank-hosted Making Finance Work for Africa Partnership.

The African Trade Finance Survey Report Launched on 15 April 2021, examines how trade finance has evolved during the Covid-19 pandemic and highlights the role it can play in overcoming the social and economic fallout of the disease.

At the launch, the president of Afreximbank, Professor Benedict Oramah said a growing number of international banks were becoming even more reluctant to take on payment risks in countries where economic conditions were deteriorating.

“These massive capital outflows strained African banks, many of which recorded sharp drops in their net foreign assets. This further exacerbated liquidity constraints and undermined the capacity of banks to finance African trade,” he said.

The survey covers the first four months of 2020, including April, when global trade recorded its largest contraction on record. It aims to inform the design of interventions to address market challenges and effectively engage African financial institutions, trade finance intermediaries, regulatory authorities, and national authorities to accelerate efforts to bridge the region’s trade finance gap.

The report made numerous recommendations, including greater engagement between central banks and the industry, a push for increased digitalization and uptake of new technologies, and better data.

Despite the many challenges that came along with Covid-19, some opportunities also arose, the report noted. In fact, a few African countries’ economies showed strong resilience and expansion during the pandemic primarily due to their ability to be agile and to digitalize swiftly over the period.

To mitigate the significant outflows and mobilize for recovery, Vera Songwe, Executive Secretary at the UN Economic Commission for Africa, urged African leaders, especially Central Bank Governors and Finance Ministers and development partners, to further support institutions such as Afreximbank through capital increases and deploy more resources towards Africa’s recovery.

Mervat Soltan, Chairperson and Managing Director at the Export Development Bank of Egypt, said the Bank had seen a significant increase in its digital services during the pandemic downturn. “Digitalization, which sustained business and trade growth during the pandemic, offers a great opportunity to help reduce costs and increase the use of trade finance facilities, and should become an integral part of the strategy to boost African trade post-Covid-19,” she added.

One way to boost African trade is through the African Continental Free Trade Area (AfCFTA), which the UN’s Economic Commission for Africa estimates can improve intra-Africa trade by over 50 percent. Bola Adesola, Senior Vice Chairman for Africa at Standard Chartered, said the AfCFTA can provide an ideal platform to help drive new businesses on the continent, which will help accelerate trade.

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Economy

Customs Realises N446.1 Billion Revenue in Q1 2021

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Nigeria Customs Service

The Nigeria Customs Service (NCS) realised N466.1 billion in revenue in the first quarter (Q1) of 2021, according to the latest data from the Public Relations Officer, NCS, Mr. Joseph Attah.

The data showed NCS realised N157.6 billion in January; N138.9 billion in February and N169.4 billion in March 2021.

A further breakdown showed the agency generated N216.9 billion of the total amount from import duty, while N105.2 billion was realised as Customs VAT and N55.5 billion was generated as a non-federation accounts levies.

Another N50.8 billion was generated from federation account levies while N34.5 billion was gotten from excise duty as well as N2.8 billion from fees.

Similarly, the data showed that within the period under review, the service made a seizure of different contraband goods valued at N1,996,145,258.

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Economy

AfCFTA to Give Nigerian Businesses Access to $504.17 Billion African Market – CBN

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The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said the African Continental Free Trade Agreement (AfCFTA) could give Nigerian businesses access to African markets worth $504.17 billion in goods when fully implemented.

Emefiele, who spoke at the Zenith Bank’s 2021 Export Seminar held virtually in Lagos on Tuesday, said an extra $162 billion in services will also come to the country.

He, therefore, encourage Nigerian firms to seize the AfCFTA opportunity and ensure the nation becomes a significant hub for international and domestic manufacturing companies seeking to serve the country.

I believe the AFCFTA will provide an opportunity for these young talented Nigerians to expand their services across the African region. Developing trade portals that could support instant sales of goods manufactured in Nigeria to consumers in other parts of Africa is one aspect that can help to support the creation of jobs in Nigeria and improve foreign exchange inflows for the country,” he said.

The CBN Boss said financial institutions in Nigeria are already playing a significant role in expanding across the continent.

I would like to encourage them to also leverage their presence in other parts of Africa, to support Nigerian businesses seeking to expand into new markets in Africa, by providing trade facilities to those with strong potentials for growth,” he said.

Emefiele added that the central bank has taken steps to improve productive capacity of businesses, which he said would enable them to take advantage of export opportunities in Africa.

Our intervention programs in the agriculture and manufacturing sectors, are helping to enable businesses expand their scale of production, which is meeting growing domestic demand for goods, but also providing goods for the export market.

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