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South African Airways Faces Bankruptcy

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South African Airways
  • South African Airways Faces Bankruptcy

South African Airways (SAA) is on the edge of bankruptcy, information made available to the country’s parliament has revealed.

According to the BBC, “The national carrier may soon be unable to pay salaries”, adding, “The cash-flow statement shown to MPs and seen by the BBC paints a picture of an airline haemorrhaging cash”.

It says that matters may improve by October, but only if it gets a 792m-rand (£45m) bailout from the government.

Even then, the situation is expected to deteriorate again by December with a forecast cash outflow in that month of £38m.

The airline has lost money in each of the past seven years. Acting chief executive Musa Zwane, who has led the company for the last 18 months, has been trying to put together a recovery plan since January.

“Essentially insolvent”

Last month, the Treasury paid out £125m to settle a loan from Standard Chartered Bank‚ which the bank had refused to extend.

South Africa’s Finance Minister, Malusi Gigaba, has disclosed that SAA asked the Treasury in March for a £560m recapitalisation. He is expected to give an answer by October.

Alf Lees, the deputy finance spokesman of the opposition Democratic Alliance, said: “Essentially they are insolvent and should have filed for liquidation.

“We believe that the directors are in breach of the South Africa companies act by continuing to trade recklessly knowing that SAA will not be able to meet its financial commitments and without any guarantee that the shareholder (the South African government) will be prepared to continue to bail them out.”

Unions marching

In 2015, consultants Ernst & Young presented a report to the government into 48 of the largest contracts awarded by SAA. The report showed that 28 of them, or 60%, were improperly negotiated, poorly contracted or weakly managed.

The airline is also facing pressure from its unions. The National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) are planning a march on Friday to SAA’s Johannesburg headquarters.

An NUMSA spokesperson said: “Corruption at SAA is rife, it’s clear that the state owned entity is being looted.

“The report by Ernst & Young paints a picture of rampant mismanagement, fraud and corruption. SAA has lost billions because of tender irregularities.”

The unions are also threatening strike action over pay, claiming that pilots have been getting generous pay awards while cabin crew, ground staff, cargo staff and technical staff have been refused wage rises.

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.

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FG Reopens Osubi Airport Warri for Daylight Operations

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FG Reopens Osubi Airport Warri for Daylight Operations

The Federal Government on Monday said the Osubi Airport in Warri has been reopened for daylight operations.

The Minister of Aviation, Hadi Siriki, disclosed this in a tweet.

The airport was closed in February 2020 over mismanagement and debt allegation involving aviation service providers and airport management.

However, Oberuakpefe Afe, a lawmaker representing Okpe/Sapeie/vaie federal constituency, recently moved a motion for the Federal Government through the ministry of aviation and relevant authorities to reopen the airport for flight operations.

On Monday, Hadi Siriki said “I have just approved the reopening of Osubi Airport Warri, for daylight operations in VFR conditions, subject to all procedures, practices and protocols, including COVID-19, strictly being observed. There will not be need for local approvals henceforth.

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

JR Firms, an agribusiness firm with headquarters in Nigeria, has announced partnership with Sanit Wing Rwanda through the acquisition of 11 per cent stake in the company.

The CEO of the company, Mr Rotimi Olawale, explained in a statement that the partnership was in furtherance of its goals to ensure food security, create decent jobs and raise the next generation of agrarian leaders in Africa.

The stake was acquired through Green Agribusiness Fund, an initiative of JR Farms designed to invest in youth-led agribusinesses across Africa.

Sanit Wing Rwanda is an agro-processing company that processes avocado oil and cosmetics that are natural, quality, affordable, reliable and viable.

The vision of the company is to become the leading producers of best quality avocado and avocado by-products in Africa by creating value across the avocado value chain.

With focus on bringing together over 20,000 professional Avocado farmers on board and planting of three million avocado trees by 2025 through contract farming, the company currently works with One Acre Fund in supply of avocado to its processing facility.

The products of the company which include avocado oil, skin care (SANTAVO), hair cream and soap are being sold locally and exported to regional market in Kenya.

With the new partnership with JR Farms- the products of the company will enjoy more access to markets focusing on Africa and the European Union by leveraging on partnerships and trade windows available.

Aside funding, the partnership comes with project support in areas of market exposure, capacity building, exposure and other thematic support to grow the business over the next four years.

JR Farms has agribusiness operations in Nigeria, Rwanda, United States and Zambia respectively.

In Nigeria, the company deals in cassava value chain processing cassava to national staple “garri” which is consumed by over 80 million Nigerians on daily basis, while in Rwanda, it works in the coffee value chain with over 4,000 coffee farmers spread across the East Central African country.

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Shut Down Depots Selling Petrol Above Approved Price – Marketers

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Shut Down Depots Selling Petrol Above Approved Price – Marketers

The Federal Government should close down depots that are selling petrol above the approved price, oil marketers said on Thursday.

National President, Independent Petroleum Marketers Association of Nigeria, Sanusi Fari, said the sale of petrol above government approved price by depot owners would soon lead to a hike in the commodity’s pump price.

Fari told journalists in Abuja that the government through its agencies such as the Department of State Services and the Department of Petroleum Resources should curb the development to avoid crisis in the downstream oil sector.

He said some private depot owners were selling at N165 per litre to independent marketers, way above the government stipulated price of N148 per litre.

Fari said, “Our challenge is the inconsistency in the pricing of petrol. Up till a week ago, government was still insisting that the February price for petrol remained unchanged.

“And most of the private depot owners are selling above the government stipulated price. As at today ( February 25, 2021) private depot owners are selling at N165 per litre to independent marketers.”

He added, “In the last six years, only NNPC imports refined products into this country and these tank farms buy their products from NNPC under a controlled price.

“This has affected our businesses seriously because government is insisting that we sell at the rate of N165, which is not going to work.”

The IPMAN president said filling station owners buy the product at N165 per litre from the private depots and incur other expenses such as transportation, rent, etc.

“So government cannot expect us to sell less than what we buy,” he said.

Fari added, “This is why we are calling on government and agencies that are saddled with the responsibility to control petrol pricing to urgently clamp down on depots that are selling above the stipulated price.”

The Nigerian National Petroleum Corporation, the country’s sole importer of patrol, recently stated that it never hiked the cost of petrol to depots.

It also enjoined the depot owners to sell the product at the approved rate and called on the DPR to enforce the stipulated price across the depots.

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