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Nigerian Government To Pay $496M For Contract Violation

The Federal Government of Nigeria is set to settle a long-term business dispute with Global Steel with a sum of $496 million

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Steel sector

The Federal Government of Nigeria is set to settle a long-term business dispute with Global Steel with a sum of $496 million. Global Steel is a foreign investor group with an interest in steel production. 

Between 1999 and 2007, the Nigerian government under former President Olusegun Obasanjo gave complete dominance over the Nigerian steel space to Global Steel Group.

Global Steel Group was to develop the Ajaokuta Steel Mill and make it operational. 

Ajaokuta Steel Mill which is located in Kogi State was conceived to start as the pillar of Nigeria’s industrialisation. Built by Russia between 1979 and the mid-1990s, the steel mill never reached the production stage. 

When Late President Umar Musa Yaradua took over from President Obasanjo in 2007, the contract was terminated contrary to legal advice offered by the Federal Ministry of Justice which cited termination cost in form of damages. 

The Federal Ministry of Justice had advised the government to wait for 55 days which would have allowed the contract to expire lawfully with a claim cost of $26 million in favour of the Federal Government. 

According to Ummar Gwandu, the spokesperson for the Minister of Justice, Abubakar Malami; ” This would have given Nigeria a right to over $26m as liquidated damages under cl.12 of the Ajaokuta Share Purchase Agreement. Because the company appeared unable to pay the first tranche for the Ajaokuta shares before the first anniversary of the agreement (25 May 2008)”. 

In response to the termination by the federal government, Global Steel Group took the Nigerian Government to the International Court of Arbitration in Paris with claim damage of $10-14 billion. 

The federal government however agreed to settle the case out of court with a claim damage of $496 million after engaging PwC Nigeria to do a comprehensive review of the contract. 

If honoured, this settlement could rescue Ajaokuta Steel Mill from the long dispute that has bedevilled it and save Nigeria from paying billions of dollars in damages. 

 

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Economy

Lagos State to Generate at Least N240 Billion From Metro Train in One Year

Lagos State Government will likely generate at least N240 billion from the metro rail when it becomes fully operational. 

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Lagos Train

Lagos State Government will likely generate at least N240 billion from the metro rail when it becomes fully operational. 

In the wee hours of yesterday, Lagos State Government took delivery of about 20 modern coaches and two motors of its red rail. The coaches were reportedly shipped from Milwaukee USA. 

In January 2022, Lagos State Governor, Babajide Sanwolu visited the factory of Talgo Inc, a train manufacturer in Milwaukee where the coaches for the red line train were purchased. 

It will be recalled that the Lagos metro train is being constructed in two phases, the red line and the blue line metro rail. 

The red line part of the project which is scheduled to fully commence operation within the first quarter (Q1) of 2023 will traverse 37 kilometres. 

No doubt, apart from the transportation benefit, many businesses will spring up along the rail corridor while old businesses will be positively impacted. 

Meanwhile, Investors King’s investigation shows that Lagos State Government will generate about N240 billion every year from both the red and blue lines of the metro rail. 

Both the Red and Blue are expected to lift at least 2.2 million passengers daily when they become fully operational. Using an average price of N300 per trip, Lagos State is expected to generate N660 million every day and a culmination of N240.9 billion in one year. 

Early this year, Lagos State Governor, Babajide Sanwolu disclosed when featured on a Channels TV program, Sunrise Daily that the train ticket will cost between N200 to N300 per trip.

“Time is money and we need to move millions of people in Lagos from one corridor to another. The vision is to reduce travel time and gridlock on the road”. 

“Instead of you staying one hour on the road, it’s going to take you 20 minutes which comes with a lot of benefits. Affordability is critical, it’s not going to be in the thousands. So, you will still be in your regular N200, N300 per journey and that is what we are looking at”. He said.

Lagos Metro Rail is being constructed by China Civil Engineering and Construction Corporation (CECC). 

 

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Economy

Nigerian Cocoa Farmers to Benefit From United States’ $22 Million Food Project

About 68,000 Cocoa Farmers in Osun, Ekiti, Abia, Cross River, Akwa Ibom and Ondo States will benefit from the United States $22 Million Food Project.

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About 68,000 Cocoa Farmers in Osun, Ekiti, Abia, Cross River, Akwa Ibom and Ondo States will benefit from the United States $22 Million Food Project 

The United States Department of Agriculture has announced a $22 million food project for Nigerian Cocoa farmers. The project which is known as Food for Progress will be launched in six states of Southern Nigeria where Cocoa production is relatively prevalent. 

Investors King learnt that the Cocoa project would be implemented over the next five years. 

The programme will help beneficiaries access better agricultural input, improved technical resources, capacity building, post-harvesting processing and export marketing.

According to a statement released by the United States Consulate, the project will be implemented in partnership with an international non-governmental organisation, Lutheran World Relief. 

The US consulate further stated that the Food for Progress Program will target farmers in low productivity but highly promising areas, as well as farmers in high-density, high-productivity communities. 

“The primary objective of the Food for Progress programme is to increase cocoa productivity by leveraging climate-smart agricultural measures”. The consulate noted.

Similarly, Gerald Smith, the counsellor for Agricultural Affairs, U.S. Mission, said the project would employ an approach that would enable farmers to produce more cocoa and preserve the land’s fertility and biodiversity. 

The Food for Progress program is an initiative of the United States to help developing countries improve their agricultural enterprise. 

This cocoa intervention programme is coming at a time when the Cocoa Farmers Association of Nigeria (CFAN) pledged to meet the 500,000-tonne production of cocoa beans in the next two years and make Nigeria the highest cocoa producer in West Africa in the next five years.

Cocoa production is a critical component of the Nigerian economy. Nigeria is the fourth largest producer of Cocoa in the world. The country, however, produces far below Ivory Coast and Ghana which both account for more than 50 percent of the world’s production.

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Economy

FG Expresses Readiness Towards The Realization of The 2030 Agenda For SDGs

The federal government of Nigeria has revealed its readiness and commitment to Sustainable Development Goals (SDGs) for 2030.

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Sustainable Development Goals

The federal government of Nigeria has revealed its readiness and commitment to Sustainable Development Goals (SDGs) for 2030.

Nigeria’s finance, Budget, and National Planning minister Mrs. Zainab Ahmed disclosed this while speaking at the 77th United Nations General Assembly.

The Minister said: “This financing strategy is backed by a Medium-Term Revenue Strategy and a Medium-Term Expenditure Framework. It is further supported by a clear roadmap and monitoring framework and includes guidance on governance and coordination to provide a holistic approach with the necessary transparency and accountability measures to make this a successful initiative.

“What do we aim to achieve with the INGFF? We hope to improve on our revenue collection both at the national and sub-national levels. To this end, we plan to digitalize, optimize, and generally make our tax system much more effective, better coordinate the budget processes and generally make public spending much more effective.

“We also aim to make Nigeria a hub for private investment both at the international and local levels. We will work with banks and local investors – including institutional investors by creating a more conducive environment for them to operate.

“For international private investors, priority will be given to designing policies and instruments that could positively promote their interest in Nigeria. We are already working towards improving remittance flow, foreign direct investments, venture capital, and angel investment among others into the Nigerian economy.

“We would be relying on the continued support of our international partners such as donor organizations, International Financial Institutions (IFIs), multilateral development banks (MDBs), and Development finance institutions (DFIs) to provide grants and concessional loans that will enable us to build our infrastructure and generally improve our economy.”

Towards the actualization of the Sustainable Development Goals (SDGs) for 2030, it was reported that the President Buhari-led administration, launched Nigeria’s SDG financing framework with $100bn.

The president had disclosed that the various developmental plans and programs for Nigeria, have all been aligned with the SDG and are poised to improve the economy, despite the myriad of problems ravaging the country.

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