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Nigeria Records Annual Decline in Skilled Construction Workers



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  • Nigeria Records Annual Decline in Skilled Construction Workers

The Managing Director, Bank of Industry, Mr Olukayode Pitan, has said the stock of competent skilled construction workers is rapidly dwindling, with a 15 per cent annual decline of artisans in the construction sector.

He stated that jobs hitherto meant for Nigerians were gradually being taken by people from other West African countries, leaving the indigenous artisans without work and unable to take on jobs.

Pitan said, “There is a need for the creation and implementation of a deliberate and organised effort to improve the sector. Such effort will, however, commence from identifying and dealing with the different challenges that the sector faces. Among these challenges include shortage of adequately skilled workers, high cost of materials, expensive access to land and limited credible sponsors on large-scale projects.

“For the shortage of skilled workers, I believe we can all agree that one of the major problems facing the construction sector in Nigeria relates to the weak stock of skilled construction workers in the country.”

Pitan spoke at the 10th Distinguished Lecture Series of the Nigerian Institute of Quantity Surveyors, Lagos Chapter, where he was represented by his Technical Adviser and Deputy General Manager, SME (South), BoI, Ayo Bajomo.

According to him, a key strategy to address the challenge and thereby reposition the construction sector to growth is the enhancement of domestic construction skills through educational institutions placing emphasis on providing students with practical training to supplement their theoretical knowledge.

Additionally, he stated that the Federal Government should increase its budgetary allocation to Science, Technology, Engineering and Management courses that would drive the provision of qualitative knowledge to students in the country.

The BoI boss, who spoke on ‘Repositioning the Nigerian industries for economic growth and development: Construction sector viewpoint’, noted that the country had largely depended on crude oil to run the economy rather than developing secondary production activities comprising manufacturing and building and construction, which had higher value and potential for employment generation, broadening the productive base of the economy, and generating sustainable foreign exchange earnings.

He said the government, through the Nigerian Industrial Revolution Plan and the Economic Recovery and Growth Plan, had identified six priority sectors, including construction, to ensure sustainable growth and development within the current Nigerian narrative.

Pitan added, “This identification is based upon the premise of the importance that infrastructure development and housing have on driving economic activities in Nigeria. The construction sector is very crucial in any nation’s social and economic development. Apart from its potential with respect to employment generation, the various activities undertaken in the sector are very germane to foster effective sectorial linkages as well as sustainable development.

“Activities performed within the sector focus on infrastructural development, industrial development, construction of institutional buildings, and provision of housing for citizens. The vital role played by the construction sector cannot be overemphasized. The sector employs about 25 per cent of the nation’s workforce, making it the highest employer of labour after agriculture.

“According to the latest reports from the National Bureau of Statistics, the sector contributes about four per cent to the nation’s Gross Domestic Product and produces approximately 70 per cent of the nation’s fixed capital formation. The sector is also predicted to, in the near future, overtake oil and gas to become the third largest contributor to the GDP after trade and agriculture.”

Pitan stated that despite the sector’s importance to the economy, it had, however, been noted that its contribution to the GDP had in recent times declined due to the recent economic recession the country faced.

“For the fact that there is a strong connection between a well-developed construction sector, poverty reduction and economic development, repositioning the construction sector to one of growth and development is one that is of the utmost importance,” he said.

The Chairman, NIQS Lagos Chapter, Mr Dele Mafimidiwo, said the objective of the Distinguished Lecture Series was to discuss issues that were of great importance to the country in general and the construction industry in particular.

He noted that the first edition of the programme was held in 2009 with the theme, ‘Global financial crisis and Nigerian economy: The real sector perspective’, and since then, eight others had been held with varying themes.

Mafimidiwo stated, “The topical issue in Nigeria is how to restructure the present arrangement for optimal performance. Since we are not a political group, we cannot gather to discuss restructuring of Nigeria. However, we have critically examined Nigerian industries, especially the construction sector, and discovered that there is a need to reposition the sector, which is synonymous with restructuring.

“Nigeria’s industries have not been performing optimally over the years with resultant effect of little contribution to the country’s Gross Domestic Product. The poor contribution of the industries to the GDP is part of what resulted in the economic recession in the last two years.”

Mafimidiwo added that even though the statistics recently released by the NBS indicated that Nigeria had come out of economic recession, the negative impact of the recession on economic growth and development in general and the industries in particular was enormous.

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Company News

Dangote Group Expands Refinery Storage Capacity to 5.3 Billion Litres



Dangote Refinery

The Dangote Group has announced a significant expansion of its refinery storage capacity.

The expansion, disclosed by Alhaji Aliko Dangote, President of the Dangote Group, during his address at the Afreximbank Annual Meetings and AfriCaribbean Trade & Investment Forum in Nassau, The Bahamas.

Currently boasting a storage capacity of 4.78 billion litres, the Dangote Petrochemical Refinery is set to increase this figure by an additional 600 million litres, bringing the total capacity to an impressive 5.3 billion litres.

This expansion underscores Dangote’s commitment to transforming Nigeria into a hub for refined petroleum products and solidifies the refinery’s role as a strategic reserve for the nation.

Addressing stakeholders at the forum, Dangote highlighted the refinery’s pivotal role in addressing longstanding challenges in Nigeria’s energy sector, particularly the absence of strategic reserves for petrol.

“The country doesn’t have strategic reserves in terms of petrol, which is very dangerous. But in our plant now, when you came, we had only 4.78 billion litres of various tankage capacity. But right now, we’re adding another 600 million,” Dangote affirmed.

The expansion comes amidst various operational challenges faced by the refinery, including attempts by international oil companies to hinder its operations.

Dangote asserted that these challenges, aimed at impeding the success of the refinery, were indicative of broader resistance to change within the oil industry.

“We borrowed the money based on our balance sheet. I think we borrowed just over $5.5bn. But we paid also a lot of interest as we went along, because the project was delayed because of a lack of land, also the sand-filling took a long time,” Dangote revealed, emphasizing the resilience required to overcome these obstacles.

Moreover, Dangote expressed optimism regarding the refinery’s capacity to influence regional fuel prices, citing the success story of diesel price reduction following the refinery’s market entry.

He indicated that while petrol pricing remains a complex issue governed by governmental policies, the refinery’s operations would strive to offer competitive pricing and supply stability.

The expansion of the Dangote Petrochemical Refinery not only marks a significant milestone in Nigeria’s industrial landscape but also positions the conglomerate as a key player in reshaping Africa’s energy dynamics.

As construction progresses towards completion, the refinery aims to further consolidate its role in meeting regional energy demands and fostering economic growth across West Africa.

With plans to commence sales of refined products in the coming months, Dangote’s refinery is poised to play a transformative role in Nigeria’s quest for energy independence and regional economic integration.

As stakeholders await the refinery’s operational debut, expectations are high for its potential to drive down fuel prices and enhance energy security across the region.

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Company News

Musk Secures Shareholder Support for Compensation and Texas Relocation



Elon Musk

Tesla Inc. shareholders have voted in favor of Chief Executive Officer Elon Musk’s compensation package and the company’s state of incorporation change to Texas.

The results, announced at Tesla’s annual meeting in Austin on Thursday, reflect shareholder approval despite challenges such as declining sales and a significant drop in stock price.

Musk had hinted at the likely outcome the night before the meeting in a post on X, stating that both resolutions were “passing by wide margins.”

The electric car manufacturer did not disclose the detailed breakdown of the votes.

The approval of Musk’s pay package, although advisory, demonstrates continued investor support for his leadership.

The package had previously been nullified by a Delaware judge in January, but Tesla plans to appeal. Should the appeal fail, relocating Tesla’s legal home to Texas may provide the board an opportunity to reintroduce the compensation plan under potentially more favorable legal conditions.

Originally approved in 2018 with 73% of the vote, Musk’s compensation plan makes him eligible for up to $55.8 billion in stock options if Tesla achieves specific milestones.

Currently, the value of these options is approximately $48.4 billion, according to the Bloomberg Billionaires Index.

Musk’s leadership has been a topic of significant debate, particularly in light of his oversight of six companies and his tendency toward abrupt strategic changes.

Earlier this year, Musk orchestrated Tesla’s largest layoffs to date, only to rehire some of the affected workers weeks later.

In addition to the compensation package, shareholders voted to reelect James Murdoch and Kimbal Musk to Tesla’s board.

Murdoch, son of media mogul Rupert Murdoch, has served on the board since 2017, while Kimbal Musk, Elon’s younger brother, has been a member since 2004.

Tesla’s stock saw a modest increase of 0.3% in extended trading following the announcement, though the stock had fallen about 27% over the year compared to a 14% gain in the S&P 500 Index.

During the annual meeting, held at Tesla’s Austin headquarters, shareholders showed enthusiastic support as Musk took the stage in a black Cybertruck T-shirt.

He shared updates on the company’s progress, including the introduction of three new models, the expansion of the Supercharger network, and record production levels for Cybertrucks.

“A lot of people said Cybertruck was fake, never going to come out. Now we’re shipping a lot of Cybertrucks,” Musk stated.

In addressing his substantial pay package, Musk clarified that it is structured as options requiring him to hold Tesla stock for five years. “I can’t cut and run, nor would I want to,” he said.

The push for shareholder support involved a dedicated “Vote Tesla” website and advertising on X, with Tesla investors and executives vocalizing their backing for Musk.

Despite some opposition from significant investors like Norway’s sovereign wealth fund and the California Public Employees’ Retirement System, the measures passed.

The relocation to Texas has been formalized, with the certificate of conversion available on the Texas Secretary of State website.

However, any future compensation plan will need to be restructured to comply with Texas legal standards, should the Delaware appeal fail.

The recent shareholder vote may enhance Tesla’s position in the forthcoming appeal. Delaware Chancery Court Judge Kathaleen St. Jude McCormick’s January decision to void the compensation package cited conflicts of interest and inadequate disclosure.

The appeal’s outcome, expected later this year, will determine the next steps for Musk’s compensation plan.

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Merger and Acquisition

Exxon Mobil’s Sale to Seplat Progresses After NNPC Drops Legal Challenge




The Nigerian National Petroleum Corporation (NNPC) has withdrawn its legal challenge against Exxon Mobil Corp.’s sale of its oil and gas assets to Seplat Energy Plc.

This decision eliminates a major obstacle that had stalled the completion of the $1.3 billion deal.

The NNPC submitted an application to the high court in Abuja to discontinue the case, as confirmed by its legal firm, Afe Babalola, in an email on Thursday.

This move follows an agreement reached last month between NNPC and Exxon Mobil to finalize the transaction under undisclosed terms.

However, court documents reviewed by Bloomberg reveal that NNPC retains the right to resume its legal challenge if the settlement terms are not honored.

The sale, initially signed in February 2022, still requires approvals from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which has set an August deadline, and from Nigerian President Bola Tinubu.

The NNPC’s withdrawal significantly advances the deal but does not mark its final hurdle.

The addition of Exxon Mobil’s blocks will significantly enhance Seplat’s portfolio, almost quadrupling its output to over 130,000 barrels per day.

This acquisition is set to bolster Seplat’s status as one of the leading suppliers of domestic gas to Nigerian power plants, fortifying its influence in the region.

In a parallel development, Shell Plc’s divestment of its Nigerian onshore oil business to a consortium of local firms, valued at over $1.3 billion, also awaits regulatory approval after being announced in January.

Both deals highlight the ongoing restructuring and consolidation within Nigeria’s oil and gas industry, aimed at increasing efficiency and local participation.

As Nigeria navigates these substantial industry shifts, the successful completion of the Exxon Mobil-Seplat deal will be a critical indicator of the nation’s ability to manage large-scale energy transactions.

It will also set a precedent for future agreements and regulatory processes in the country’s vital oil and gas sector.

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