As the Asset Management Corporation of Nigeria (AMCON) prepares for a winding down of its operations, aviation enthusiasts are closely scrutinizing its significant influence on two major players in the Nigerian aviation industry: Aero Contractors and Arik Air.
Aero Contractors, a venerable airline with over six decades of history, was on the brink of extinction before AMCON’s intervention.
Plagued by mismanagement and financial woes, the airline faced bankruptcy due to costly acquisitions of aging aircraft.
In February 2016, AMCON stepped in to rescue Aero Contractors, absorbing its debts and striving to rejuvenate it.
Under the leadership of Captain Ado Sanusi, Aero Contractors rebuilt its Maintenance, Repair, and Overhaul (MRO) facility, becoming capable of performing C-checks on Boeing B737 aircraft.
Today, the airline is gradually regaining its strength, with plans to expand its fleet to four aircraft by September.
While AMCON still holds a 60% stake in Aero Contractors, it no longer provides funding. The expectation is that AMCON will divest its shares before winding down its operations, potentially opening opportunities for new investors to support the airline.
In contrast, AMCON’s management of Arik Air has been a contentious issue. Critics argue that AMCON lacked the expertise to oversee the airline effectively, resulting in its decline.
Renowned lawyer and activist Femi Falana claimed that AMCON’s mismanagement led to the loss of valuable assets and incurred fraudulent debts of around N120 billion. A comprehensive investigation by the Economic and Financial Crimes Commission (EFCC) into Arik Air’s affairs highlighted these concerns.
The future of Arik Air, once Nigeria’s largest airline, remains uncertain. While its founders have sued AMCON over its management, many believe government intervention is necessary to ensure the airline’s survival.
The broader debate around AMCON’s actions revolves around the impact on investment in Nigeria. Critics argue that the agency’s approach, which sometimes led to the decline of companies, discouraged investors.
Nonetheless, AMCON maintained that its interventions prevented the complete collapse of several firms.
As AMCON heads towards its wind-down phase, a change in leadership is expected, with a new “Sole Administrator” tasked with overseeing the agency’s closure. This move will likely reignite discussions about the fate of companies affected by AMCON’s actions.
In its more than ten years of existence, AMCON has recovered approximately N1.6 trillion from debtors, addressing a significant portion of Nigeria’s debt challenges.
However, the legacy of AMCON’s interventions, especially in the aviation industry, continues to raise questions about the balance between debt recovery and industry sustainability.
Manufacturers Cut Spending on Alternative Energy Sources as Electricity Supply Improves
Nigerian manufacturers reduced their spending on alternative energy sources by 21.25% to N60.4 billion in the first half of 2023, according to the Manufacturers Association of Nigeria (MAN).
This decline is attributed to the increased availability of electricity from the national grid, which improved to 11.3 hours per day, up from 10.2 hours in the same period of 2022.
The report also indicated a slight increase in daily power outages to 4.7 times from 4.4 times in H1 2022.
These improvements in grid electricity availability have positively impacted the manufacturing sector’s energy expenditure, leading to a significant drop from N76.7 billion spent in the second half of 2022.
However, the initial high expenditure on alternative energy sources was driven by skyrocketing diesel prices.
The cost of diesel had surged due to foreign exchange challenges and the implementation of a 7.5% Value Added Tax on Automotive Gas Oil (diesel).
Diesel prices in many states had risen to between N900 and N950 per liter, which threatened the production capacity of numerous manufacturing entities.
The Nigerian Textile Manufacturers Association expressed concerns about the potential closure of textile factories and job losses due to rising energy costs. Textile manufacturers, in particular, found it challenging to afford diesel at such prices.
The Chief Executive Officer of Coleman Technical Industries Limited also highlighted the increased production costs associated with higher diesel prices.
While the improvement in electricity supply is a positive development for manufacturers, the industry remains vigilant about energy costs and their impact on production.
Dangote Group Subsidiaries Contribute N474 Billion in Taxes to Federal Government Over Three Years
In a significant testament to its commitment to corporate citizenship and financial responsibility, three subsidiaries of the Dangote Group have revealed that they paid a substantial total of N474 billion in taxes to the Federal Government over the past three years.
The disclosure was made by Hashem Ahmed, an official representing the multibillion-dollar conglomerate, during the opening ceremony of the 18th Abuja International Trade Fair, which focused on the theme ‘Sustainable financing and taxation as drivers of the new economy.’
The Dangote Group, led by its President Aliko Dangote, stands as not only the largest private-sector employer but also the country’s leading taxpayer. The remarkable N474 billion contribution was primarily made by Dangote Sugar, Dangote Cement, and Dangote Salt.
Also, the group has a longstanding history of extensive financial support, empowerment initiatives, corporate social responsibility programs, sponsorships, and philanthropic endeavors, amounting to several billions of naira.
Hashem Ahmed also expressed the group’s satisfaction with the Federal Government’s commitment to tax reform policies aimed at broadening the tax base and providing essential funding for infrastructure development in the country.
The Minister of Industry, Trade, and Investment, Doris Uzoka-Anite, who spoke at the event, announced the government’s comprehensive plan to support small businesses and startups amid Nigeria’s economic challenges.
The plan includes a N75 billion investment by March 2024 to bolster the manufacturing sector, grants for microbusinesses in every local government, and a N75 billion fund to support up to 100,000 startups and MSMEs at favorable interest rates repayable over 36 months.
The government has also initiated partnerships with tech giants like Microsoft and the African Development Bank, signaling a bright future for Nigeria’s economic growth and innovation.
Dangote Industries Set to Revolutionize Agriculture Industry with Mega Merger, Creating Dangote Foods Plc
Dangote Industries Limited has unveiled plans for a merger that will give rise to a formidable entity known as Dangote Foods Plc.
This colossal conglomerate is poised to transform the agriculture industry and enhance food security across the nation.
The merger will combine three subsidiaries of Dangote Industries Limited, including Dangote Sugar Refinery, Dangote Salt, and Dangote Rice, resulting in a diversely profitable mega-company.
The fusion, scheduled for completion by the end of 2023 pending regulatory approvals, promises to yield significant benefits for all stakeholders, notably shareholders.
Dangote Sugar Refinery’s Group Managing Director and CEO, Mr. Ravindra Singhvi, highlighted the merger’s strategic importance, stating its potential to create substantial shareholder value.
The amalgamation will not only generate cost-saving synergies but also expand product offerings and revenue streams.
Dangote Foods Plc is set to become a powerhouse in the market, boasting a wide array of products, including sugar, salt, tomato, and rice, among others. This merger will facilitate broader distribution capabilities and increased operational efficiency through synergy.
The journey towards this monumental merger began when Dangote Sugar Refinery notified the Nigerian Exchange Limited of its intention to merge with NASCON Allied Industries Plc and Dangote Rice Limited, both subsidiaries of Dangote Industries Limited.
This move marks a pivotal moment in the corporate history of Nigeria, with Dangote Industries Limited reaffirming its commitment to driving growth, innovation, and food security for the nation.
As regulatory approvals progress, Dangote Foods Plc is poised to emerge as a prominent player in Nigeria’s agricultural landscape, ultimately paving the way for a brighter and more sustainable future for the country.
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