Snake Island Port Makes History with $1 Billion Private Investment in Concession Agreement
Snake Island Port has achieved a significant milestone by securing a momentous $1 billion private investment through a historic concession agreement.
This landmark agreement is set to transform the port’s operations and propel it to new heights.
The Chairman and Chief Executive Officer of Nigerdock, Maher Jarmakani, expressed his elation over this remarkable achievement. Jarmakani affirmed that the 45-year concession agreement with the Federal Government would not only allow for an expanded operational scope but also attract substantial private investment, amounting to an impressive $1 billion.
Jarmakani conveyed his heartfelt gratitude to the Federal Government for its unwavering support in enabling the expansion of Nigerdock’s operations. This collaboration serves as a testament to the government’s commitment to fostering partnerships that drive economic growth, job creation, and the development of critical infrastructure.
Nigerdock, a multipurpose port facility situated within the Snake Island Integrated Free Zone (SIIFZ), occupies an expansive 85-hectare area and encompasses three terminals. The facility specializes in ship repair, logistics, and free zone solutions. Recognizing the potential of Snake Island Port, the Presidency awarded Nigerdock free zone and port status back in 2005, leading to the establishment of the Snake Island Integrated Free Zone. In subsequent years, the Nigerian Ports Authority and Nigeria Customs Service granted approvals for direct shipping and cargo handling operations, respectively.
With the new concession agreement, Snake Island Port is poised for transformative growth. The extended operational scope and influx of private investment are expected to attract both domestic and international businesses, stimulating economic development in the region. This milestone aligns perfectly with Nigerdock’s long-term vision of becoming a globally recognized maritime operator, further enhancing its contribution to Nigeria’s economy.
The approval of the concession agreement not only emphasizes the Nigerian government’s commitment to public-private partnerships but also underscores its dedication to driving infrastructure projects nationwide. The collaboration between Nigerdock and the Federal Government sets a positive precedent, fostering an environment conducive to investment and economic prosperity.
Nigerian Banks and Telcos Struggle to Resolve N100bn USSD Debt
Nigerian banks and telecommunication firms are currently struggling to resolve a N100bn Unstructured Supplementary Service Data (USSD) debt.
This debt has been accumulating over the past few years due to a disagreement over non-remittance of USSD fees.
USSD services have been essential to financial inclusion in Nigeria, with a large number of Nigerians using it to access banking services through their mobile phones. However, despite its significance, banks and telcos have been at loggerheads since 2019 over the non-remittance of USSD fees.
The accumulated USSD debt was initially estimated at N32bn in 2019, and by November 2022, it had risen to N80bn. Unfortunately, it has now increased to over N100bn as banks and telcos are yet to come to a resolution.
According to Gbolahan Awonuga, the Head of Operations of the Association of Licensed Telecoms Operators of Nigeria, banks and telcos are still locked in discussions with no way forward. He said, “the debt has continued to increase, and it is now over N100bn.”
A source in one of the telecoms companies also disclosed that banks owe one of the telcos about N100bn. This amount, the source said, does not cut it as it could be estimated at N150bn, including debts owed to other telcos.
However, the recovery process has been frustrating for telcos as banks refuse to acknowledge the debt, and the Central Bank of Nigeria (CBN) supports them. The source said, “no progress has been made simply because the banks have dug in their heels and are refusing to accept that they owe us money, not to talk of repaying.”
This issue threatens financial inclusion as many underserved Nigerians rely on USSD services to access banking services. It is essential that banks and telcos resolve this issue quickly to ensure that businesses and individuals can continue to carry out transactions seamlessly.
Foreign Investment in Nigerian Exchange Declines by Over 50% in One Month
The Nigerian Exchange Limited (NGX) has reported a significant decrease in foreign investment in its markets.
According to the Domestic & Foreign Portfolio Investment Report for March 2023, transactions conducted by foreign investors fell by 53.16% from N19.62bn in February to N9.19bn in March, equivalent to about $42.51m to $19.94m respectively.
The decline marks a considerable setback in the efforts to attract foreign investment into Nigeria.
The report shows that total transactions conducted by domestic investors also dropped by 19.06% from N169.29bn in February to N137.03bn in March.
However, the decline in foreign investment was much more significant, with the total value of transactions by foreign investors decreasing by 88% compared to transactions by domestic investors, which stood at 96% in March 2023.
The decrease in foreign investment is attributed to several factors, including the uncertainty around exchange rates and the unfavorable business environment.
Prof Olawale Ajai of the Lagos Business School pointed out that insecurity and the opaque Naira foreign exchange regime have made Nigeria unattractive to foreign investors.
He also noted that low national productivity, infrastructure deficits, and poor human capital development have contributed to the decline.
The Director-General of the Securities and Exchange Commission, Lamido Yuguda, also highlighted the forex challenges facing foreign investors, citing the delay in accessing foreign exchange for the repatriation of their dividends or capital.
He added that the reduced proportion of foreign investors in the Nigerian capital market was not permanent, and he expected the foreign exchange situation in Nigeria to improve substantially.
The decline in foreign investment is a cause for concern for the Nigerian economy, which is heavily reliant on foreign investment to drive growth.
The government must take urgent steps to address the challenges facing foreign investors and create a more favorable business environment to attract more foreign investment.
Egypt Becomes first North African Shareholder in Africa Finance Corporation
Egypt has joined Africa Finance Corporation, the continent’s leading infrastructure solutions provider, as the first North African sovereign shareholder, further diversifying AFC’s expanding equity investor base.
An AFC Member State, Egypt’s equity commitment and its imminent representation on the AFC Board of Directors enhances the Corporation’s pan-African spread of shareholders and diversified Board and management, which now includes governments, development finance institutions and institutional investors.
In 2022 alone, AFC onboarded Sierra Leone, Democratic Republic of Congo, Cote d’Ivoire, South Africa’s Public Investment Corporation, and the pension funds of Mauritius and Seychelles as shareholders. Other sovereign shareholders include Ghana, Gabon, Togo and Guinea.
As the largest North African economy, Egypt’s investment leads the way for other countries and investors from the region to join AFC’s shareholders and use its platform to boost regional trade and co-investment opportunities.
Egypt’s Minister of Finance, H.E. Dr Mohamed Maait, said: “This equity investment is a testament to our confidence in AFC’s role as a trusted partner in delivering transformational impact in Egypt and overall in Africa. We look forward to boosting our partnership with the Corporation as we work together to develop the key infrastructure projects in the pipeline.”
A growing and diversified shareholder base alongside profitable returns and consistent dividends are behind AFC’s A3 investment-grade credit rating, which the Corporation leverages to fulfil its mandate to close Africa’s infrastructure and industrial financing gap. With a membership of 39 countries now and total investments of US$11.5 billion over 16 years, the Corporation continues to deliver on its promise to support sustained robust growth and development in Africa.
AFC focuses on developing and financing sustainable investments in the core sectors of power, natural resources, heavy industry, transport and telecommunications, with a strategy of adding value to exports and creating jobs through the development of industrial ecosystems. The Corporation is committed to making Africa pivotal in the global race to net zero by reducing global shipping through localised production—including in minerals critical to battery production—while preserving Africa’s carbon sinks through optimal utilization of transition fuels and simultaneously developing its formidable renewable energy resources.
AFC has already identified an immediate project pipeline worth over US$1 billion in critical infrastructure across key sectors in Egypt, including renewable energy, natural gas, heavy industries, technology, telecoms, banking and finance. That is in addition to US$265 million of existing investments by AFC in Egypt.
“We welcome Egypt as a highly valued member of our core shareholders, helping us to maximise the impact of investments in systemic solutions within Egypt and across the continent,” AFC President & CEO Samaila Zubairu said. “We look forward to expanding our collaboration to elevate Egypt’s economy through delivering resilient infrastructure, in line with our mandate of catalysing economic growth, value accretion, and industrial development for all African countries.”
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