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Dangote Speaks About Investing in Edo State



  • Dangote Speaks About Investing in Edo State

CNBC Africa’s Onyi Sunday caught up with Africa’s richest man, Aliko Dangote, President of the Dangote Group, at the just concluded Edo Investment Summit in Benin City and discussed what this summit means for the State.

I think the summit went very well even though they had a short period of time inviting people and also arranging it’s a situation where they want to show that the public sector is ready to partner and do business with the private sector. You can see that the hall was filled to the brim and they invited a lot of people and majority of them really paid attention to the conference, and these are big investors. They are taking people who have $500 million and above and I think this will open up the state to job creation and it will enlighten people of the opportunities Edo State has. They are here ready to do business and I think the state has a lot of advantages in terms of agriculture and agro-allied industries which I think is their own oil. If they can really focus on that and harness it they will be able to do something great.

In your speech at the event, you spoke about the need for better collaboration between the public and private sectors. How important is this and what has been the situation been from your perspective?

The relationship has been okay to a certain extent. There are a couple of different people in government. Some are pro business and others are anti-business. The ones that are against business have never really taken a good look to see the opportunity for government, because there are taxes. People in business pay taxes. Even if they have a 3-5 year tax holiday, by the time that you start paying taxes, you end up seeing that the government makes more money than the owners of the business, including the reserves of the company. We have that case in our sugar business. The government takes more money, when you take the VAT and everything into account, the government takes 42 per cent and we take 48 per cent.

It is a win-win situation. Apart from that, you’ll create a lot of jobs because it isn’t the duty of the government to create jobs. The government is meant to facilitate and make sure there’s an enabling environment. We the private sector are the ones that will actually take the risks. We risk our money, risk our resources, borrow more money from the banks and now go on a trajectory. If it fails we’re on our own. If it succeeds, then government comes in and shares the profits. However, the main thing isn’t only about money or profit making. Of course you have to make money, but the most important thing for us today as a nation is how do we create jobs.

Based on my own estimations Nigeria should be creating something like about 5 million jobs every year for us to become prosperous. The only way we can create this high number of jobs is to go and concentrate on agriculture. In my speech I said, “how many barrels of oil do you need to make up for one tonne palm oil.” A tonne of palm oil can actually buy almost 8 barrels of oil and 8 barrels of oil is more difficult to get than palmoil because we have the land, we have the water, our climate is excellent, so that’s what going on.

What do you think of the calls for restructuring and how significant are investment summits like this one to states and their development?

When you look at things as they exist today, majority of the people who call for restructuring don’t understand what restructuring is all about. And majority of the states in Nigeria are not viable. You have to run government like a business. You cannot continue to just keep running government in deficit when most states are not able to pay salaries. We have an income of N3 billion and then you have salaries and other expenses without even projects. So it means that even if you ignore capital projects and take care of only recurrent, you will always be N1 billion short.

If you run this for 5-10 years, where in the hell are you going to get the money to pay off that debt which you are creating? To do well, states don’t need to wait for restructuring. A state like Edo should move on and concentrate on agriculture, bring prosperity to your people better than oil can. With oil you don’t get the revenue, but with agriculture, the prosperity starts from the state and then it spreads to the rest of the country. This is what I think they should do. Edo can mobilise and the governor is capable. He is one of the best governors that we have in Nigeria.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.


Germany Advances as Major Player in Pan-African Trade and Investment




Germany Emerges as Major Player in Pan-African Trade and Investment

“Investment and Trade for Africa’s Economic Development” – a public webinar held on Wednesday – targeted opportunities for cross-border collaboration between Africa and Germany; the African Export-Import Bank announced its plans to sign a Memorandum of Understanding with German car manufacturers to establish an automotive industry in Africa; the Germany-Africa Business Forum (GABF), Africa Oil & Power and the African Energy Chamber co-hosted the webinar, as part of a GABF cooperation-focused series.

The Germany-Africa Business Forum (GABF) hosted its second installment of its German-African cooperation-focused webinar series on Wednesday, aimed at outlining the opportunities for sustainable FDI between Germany and the African continent.

The panel comprised H.E. Günter Nooke, Africa Envoy to German Chancellor Angela Merkel; NJ Ayuk, Executive Chairman of the African Energy Chamber; and Rene Awambeng, Global Head Client Relationship at the African Export-Import Bank (Afreximbank).

Anchored by the theme of investment and trade for African economic development, the opening keynote was delivered by H.E. Nooke, and outlined four key success factors in driving Africa’s economic development: investment and business climate, transport, energy and technological infrastructure, available workforce, and access to markets.

Digitalization and green energy were advanced as two of the critical sectors for facilitating Africa’s economic and social development. Africa contains a young, tech-savvy population, noted H.E. Nooke, translating to smooth technological adoption and enhanced opportunities for both consumers and businesses.

Highlighting efforts to expand global market reach, H.E. Nooke noted the anticipated benefits of the recently adopted African Continental Free Trade Agreement, signed by 53 African countries and already implemented by 30. The agreement is set to boost intra-African trade, with the ultimate objective of creating a common market that empowers African nations.

Meanwhile, cross-border developments in clean energy have already been progressing. This month, a German delegation visited the Democratic Republic of Congo to study opportunities related to the Inga III hydroelectric dam project. Germany is eyeing major opportunities for hydrogen production, a clean fuel alternative, as well as wind, solar and hydropower resources scattered across the continent.

Germany is currently active in a range of investments across the continent. The European leader played a major role in securing a $300 million facility from the United Nations Economic Commission for Africa. The funds are aimed at creating jobs, reviving economies in a post-COVID-19 environment, and encouraging investment reforms to boost FDI.

Furthermore, Afreximbank will imminently announce the signature of a Memorandum of Understanding with German automotive manufacturers, such as Volkswagen, intended to create an African-driven automobile manufacturing strategy.

“We are looking to create a holistic approach to automotive manufacturing,” said Rene Awambeng. “Our goal is to build an entire value chain, with the support of Germany and Europe, in order to be able to design, build and market cars across Africa.”

In a bid to drive investor engagement in a variety of sectors, NJ Ayuk called for a change in the perception of risk associated with investing in Africa.

“We need to create an enabling environment for banks, financial institutions and investors to perceive Africa as a safe and profitable destination,” said Ayuk. “Rwanda paved the way and we have seen outstanding results. We have an obligation to make the change.”

Ayuk also appealed to Europeans nations, such as Germany, to focus on investment rather than aid. Investment enables the creation of synergies and partnerships and places project leaders in a position of accountability. While aid is welcome in periods of crisis, noted Ayuk, it must not be the standard for sustainable, long-term business.

Awambeng underscored that long-term, affordable financing is available for Africa’s investment opportunities, combined with technical capacities and business support.

“Huge amounts of capital are available across the continent in all forms: equity, bank debt, development financial institutions, sovereign funds, among others. All we are missing are the people to make the transition happen.”

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Africa Offers Asian Business an Abundance of Investment Opportunities, Webinar Participants Learn




The African Development Bank today held a workshop to convey the continent’s immense investment and partnership opportunities to Asian business leaders, particularly as the continent seems poised to return to economic growth in 2021 following the impact of the COVID-19 pandemic.

The two-hour virtual event, held in English, Korean, and Chinese, offered participants an opportunity to learn more about the Bank and its operations. The webinar comes on the heels of the recently launched African Economic Outlook 2020 -Asia Supplement, which revised growth projections and outlook for Africa for 2020 and 2021.

“I take this opportunity to strongly encourage Asian private sector entities gathered here today, to partner with the Bank to take advantage of the multiple investment opportunities that exist on the continent,” said Samuel Higenyi Mugoya, the Bank’s Director for Syndication, Co-financing and Client Solutions Department, which co-organized the event, together with the Bank’s Asia External Representation Office.

In introducing the Bank, Takashi Hanajiri, Head of the Asia External Representation Office, provided an overview of the Bank and its history and components before providing a summary of its flagship Africa Investment Forum initiative and the opportunities it offers. Referring to the AIF event held in Johannesburg in 2019, he said “So far the largest deal was a LNG project in Mozambique with a total cost of $24.6 billion,” adding, “many Asian institutions, both public and private, are sponsoring the project.”

Following a discussion of the Bank’s responses to the COVID-19 pandemic, Hanajiri concluded on a positive note, noting “Africa’s growth will rebound to 3% in 2021 from -3.4% in 2020.”

Bank staff presented on the Bank’s non-sovereign operations and financial product offerings. Other sessions covered Africa’s immense potential in energy, particularly renewable energy, as well as agriculture, which remains the continent’s most important economic sector.

Director Mugoya praised Asian countries’ ongoing support for the Bank and Africa’s development. “There are four Asian member countries in the Bank, namely China, India, Japan, and Korea, that have been long-standing and strategic partners for almost 40 years. The Asian member countries have consistently contributed to the Bank’s capital requirements and supported the African Development Fund’s successive replenishments.” The African Development Fund is the Bank’s concessional window.

The webinar, which drew around 300 participants, closed with a question and answer session. Queries addressed such issues as the Bank’s representation in India, trade financing offerings and access to financing for women. Participating corporations and institutions included Industrial and Commercial Bank of China, China Export & Credit Insurance Corporation, Export-Import Bank of India, JICA, Korea Eximbank, Korea Trade-Investment Promotion Agency (KOTRA), and Korea Overseas Infrastructure & Urban Development Corporation (KIND).

Africa’s huge and highly diverse continent has the second-largest population in the world and the second-largest land mass after Asia, offering tremendous investment opportunities for the Asian private sector. The Bank views Africa’s private sector as a critical engine of economic growth and development but Asian companies often lack information about the business climate.

Until the COVID-19 pandemic, Africa was the second-fastest growing continent outside Asia. Over the past decade, the continent has experienced the longest period of unbroken growth in per capita incomes since the 1960s.

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FG Bonds’ Investors to Reap N160bn Interest Payment in 2 Weeks




Investors to Get N160bn Interest Payment in 2 Weeks

Federal Government of Nigeria (FGN) bonds’ investors are expected to reap N160 billion as interest (coupon) payment in two consecutive weeks even as the Debt Management Office (DMO) auctions N145 billion worth of bonds on behalf of the federal government.

Checks revealed that FGN bond investors last week received N142 billion as coupon payment from the federal the government investment instrument and will this week receive another N18.2 billion, hence coupon payment of N160.2 billion in two weeks. Further analysis showed that the N160.2 billion represents 68 percent of the N234 billion investors received as coupon payment in the second quarter (Q2’2020), and 33 percent of the N488.9 billion received in the first quarter (Q1’2020) according to the DMO.

Data from the debt agency showed that investors in FGN bonds received N723 billion as coupon payment in the first half of the year (H1’2020).

The DMO also showed that FGN bond coupon payment constituted 78.5 percent of the N921.9 billion spent by the FG on domestic debt service in H1’2020.

Meanwhile the DMO will this week offer N145 billion worth of FGN bonds to investors during its September monthly auction to be conducted on Wednesday. According to the agency, the bond auction comprises N25 billion worth of 10 years bonds, N40 billion of 15-year bonds, N40 billion worth of 25-year bonds and N40 billion worth of 30 years bonds.

At the last auction conducted in August, the DMO sold N116.65 billion worth of bonds. This was in spite of the N242.23 billion worth of bonds demanded by investors, representing 86 percent oversubscription when compared to the N130 billion worth of bonds auctioned by the DMO.

Also in a bid to further lower FG’s borrowing cost, the DMO slightly reduced the stop rate on the 15-year, 25-year and 30-year bonds by 15 basis points (bpts), five bpts and five bpts respectively to 9.35 percent, 9.75 percent and 9.9 percent in August from 9.5 percent, 9.8 percent and 9.95 percent in July, while the stop rate on the 10-year bond was raised by seven bpts to 6.7 percent from six percent in July.

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