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Nigeria Loses $2b to Aviation Sector

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  • Nigeria Loses $2b to Aviation Sector

Over $2 billion generated by foreign airlines, as well as funds expended by domestic airlines for aircraft maintenance, spares and emoluments for expatriate workforce, are repatriated annually.

The Chairman/CEO of Air Peace, Allen Onyema, who stated this, said that is part of the reaon responible for the continous weak naira/ dollar exchange rate, adding that a weakened naira adversely affects the economy as it distorts the prices of goods and services..

Onyema said the difficulty in repatriating airlines’ funds in the past should serve as a reminder that the country should evolve ways to reduce the amount of money repatriated, by empowering local airlines to operate international routes, and as well facilitate the establishment of maintenance, overhaul and repair (MRO) facility in Nigeria.

He lamented that while Nigeria has a huge population of travellers, the country imports every aircraft spare, imports aviation fuel and technical personnel, saying all these mount pressures on the naira.

Onyema said airlines serve as diplomatic tools which countries use to, not only project their image in the international community, but also leverage on to develop and grow their economy. He said for this reason, every country protects its airline industry from being ravaged by foreign competitors.

He said the US, which is the home of aviation globally, has introduced policies that today have curtailed the in-road of such airlines like Emirates, Qatar Airways, Etihadinto the US market.

Onyema said the Nigerian government should take cognisance of this and offer similar protection to the local aviation industry.

Local officials to bear it in mind that every decision they take impacts on the nation’s economy, adding that they should take it as a point of duty to eliminate the exploitation of Nigerian passengers by foreign airlines through exorbitant fares by supporting domestic airlines to join the international and regional market.

He also condemned the too many opportunities given to foreign airlines by the Nigerian government to operate multidesignation in the country, citing example with Ethiopian Airlines, which operates five destinations in Nigeria, noting that in addition to that there is rumour that the Nigerian government wanted to give the East African carrier management contract to take over Arik Air.

According to Onyema, Arik Air’s goodwill and opportunities are worth more than $12 billion, besides its assets, so if Ethiopia wants to manage the airline, it should put such amount of money down before it should be given the opportunity to manage the nation’s major airline.

”Ethiopia Airlines should not be allowed to come through the back door to ravage our country. We have capable Nigerians that can run Arik Air, so Ethiopian Airlines expressing interest to take over Arik Air’s management is not to the best interest of the country. This is similar opportunities that are given to other international airlines like Air France and Lufthansa, which operate from Abuja to Port Harcourt and back to Abuja before they take off to their country everyday; meanwhile, they still operate their Lagos destinations,” he said.

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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Business

NCDMB and NEXIM Sign $30 Million Agreement to Support Oil and Gas Services Firms

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The Nigerian Content Development Monitoring Board (NCDMB) and the Nigerian Export-Import Bank (NEXIM) yesterday signed a $30 million agreement on working capital and capacity building fund to support oil and gas services firms.

Simbi Wabote, Executive Secretary, NCDMB and Managing Director, NEXIM Bank, Abba Bello, signed the funding agreement at the Abuja office of the Nigerian content monitoring agency.

Wabote said the Oil Producers Trade Section, Independent Petroleum Producers Group and Petroleum Technology Association of Nigeria had raised concerns over funding challenges confronting oil services firms, as this had made most of the companies to consider downsizing their staff.

He said, “The OPTS and IPPG had at some point raised before the NCDMB the inability of most indigenous contractors to provide services to them due to challenges of funding.

“This was especially when we got struck by the COVID-19 pandemic. I recall receiving several letters particularly from IPPG trying to see how we can support this.”

He added, “I also recall receiving similar letters from PETAN when the COVID-19 struck and most of their members had nothing to do anymore.

“This is because companies were shut down and their members were threatening on how to downsize and take Nigerians off their payrolls.

“Based on this, we then set up a committee to say how do we support these firms with the provision of working capital.”

Wabote noted the roll-out date for the fund would be July 1, 2021 and that the fund size of $30m would be boosted by matching funds of the same amount to be provided by NEXIM in naira (to be converted at prevailing official exchange rate).

“The scheme shall cover loans for working capital support and capacity building, oil service contracts, invoice discounting including acquisition of low-end equipment to service short-term contracts/service obligations,” he stated.

He said the target market comprised Nigerian oil service providers which belonged to a professional association in the Nigerian oil and gas industry and commercially viable with a business relationship with either an international oil company or a major Nigerian oil firm.

“Maximum amount that can be borrowed by a single obligor is $1m or its naira equivalent at the official exchange rate prevailing at the time of borrowing,” Wabote said.

He added, “Tenor shall be up to 12 months for working capital loans and up to three years for capacity building loans with moratorium of up to 12 months.

“The applicable interest rate shall be five per cent per annum all-in for dollar-denominated loans and eight per cent all-in per annum for naira-denominated loans and the rate shall be fixed throughout the tenor of the loan.”

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Appointments

LivingTrust Mortgage Bank Appoints Mr. Timothy Olorunsogo Gbadeyan as Company’s Secretary

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LivingTrust Mortgage bank has appointed Mr. Timothy Olorunsogo Gbadeyan as company secretary/head of legal services.

The bank disclosed in a statement signed by Ikechukwu Omuku, the Finance Officer/Head, Investor Relations, LivingTrust Mortgage Bank Plc.

The statement reads “We wish to notify The Nigerian Stock Exchange and the investing public of the appointment Mr. Timothy Olorunsogo Gbadeyan as Company Secretary/Head, Legal Services of LivingTrust Mortgage Bank Plc.

“Mr. Gbadeyan is a consummate corporate attorney with experiential background in deals advisory, real estate finance, facioring, general commercial transactions, corporate governance, company secretarial services and regulatory compliance. Until his appointment, he was the Head of Legal Services of Infinity Trust Mortgage Bank Plc.”

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Farmforte, Others Signs MoU To Strengthen and Sustain Growth in Agricultural Sector

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Farmforte Limited has signed a strategic Memorandum of Understanding with the Agricultural Fresh Produce Growers and Exporters Association of Nigeria; HYBR, a pan-African innovation firm; and ALTS, a consulting and strategy development firm.

The firm said in a statement on Sunday that the partnership would strengthen common interest cooperation and stimulate inclusive and sustainable growth within the agricultural sector, by capitalising on the synergy and comparative advantage offered by each organisation.

Speaking during the signing ceremony, Farmforte Co-Chief Executive Officer, Osazuwa Osayi, said, “Our mid to long-term strategic goals are further reaffirmed, as this partnership will facilitate the sharing of knowledge, ideas, and expertise across the agricultural sector.

“We will collectively address initiatives and approaches concerning agricultural investments, food security, and the overall robustness of the value chain.”

He said the collaboration would also unlock the full potential of the sector and place it on a renewed path for success, especially within a post-pandemic economy.

The President of AFGEAN, Tajuddeen Dantata, said, “By creating dialogue and fostering investment in the horticulture sector, this partnership will endeavor to support Farmforte in its exporting efforts by improving operational efficacy and cost-savings, while ultimately driving socio-economic growth in the country.”

The Chief Executive Officer, HYBR, Charles Ojei, said to drive inclusion, sustainability, job creation, and Nigeria’s overall economic growth, the optimisation of the agriculture value chain was critical.

“This collaboration is a fusion of the complementary capabilities of all partners to move a bigger agenda forward.”

The Managing Partner, ALTS, Akintunde Sawyerr, said, “The goal of this partnership is to support Farmforte’s vision of becoming the largest agribusiness by 2035 via scalable and world-class innovation across its enterprise.”

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