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NSIA, Old Mutual, UFF Agri-Fund Sign $700m Deal on Agric, Real Estate

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Kemi Adeosun

The Nigeria Sovereign Investment Authority (NSIA) yesterday signed a total of $700 million-agreement with Old Mutual Investment Group (OMIG) South Africa, and UFF Agri-Fund for the establishment of real estate and agriculture co-investment vehicles, with massive direct investments expected in both sectors.

The signing came on a day the Minister of Finance, Mrs. Kemi Adeosun disclosed that the federal government had commenced discussions on the privatisation of the country’s railway system to provide necessary infrastructure for agriculture to thrive.

Under the real estate agreement signed, $500 million is expected to be invested in commercial and retail assets with an initial commitment of up to $100 million each from NSIA and Old Mutual, with deal origination and execution to be undertaken jointly by both parties.

The agricultural component of the deal will require both parties to make commitments for an initial vehicle size of $50 million ahead of the targeted $200 million, with deal origination and execution also expected to be undertaken jointly by NSIA and UFF Agri-Fund.

Speaking at the ceremony in Abuja, Adeosun said the agreement marked a critical milestone towards delivering on NSIA’s broader mandate to invest in key sectors of the Nigerian economy.

She said the privatisation of the rail system would help address storage issues relating to farm produce, boost competition and ensure that farmers can move goods from the farm to where they can be sold efficiently.

She said lack of infrastructure remained a key challenge to investments in agriculture.
The minister also said the federal government is currently examining the agricultural book with the Asset Management Company of Nigeria (AMCON) with a view to discounting some asset books in a bid to attract foreign investors.

She said: “One of the biggest problems with agriculture is infrastructure and it’s not that we don’t grow enough, it’s that very often, it (farm produce) rots in the fields because it’s so difficult to move it out or to store it.

“So, there is a lot of investments that need to go in before you go directly into agriculture. As far as our diversification plans are concerned, agriculture is absolutely critical and we are focused on it both in the budget and other areas both directly and indirectly.

“But the most important thing is infrastructure because until you can move goods from the farm to where they are being sold efficiently, we would not be able to be competitive.

“Our fields are as good and fertile as anybody’s else’s one in the world but the problem is that it’s cheaper to move goods from China to Lagos than moving it from Kano to Lagos and that’s because we don’t have the infrastructure. We’ve got to get our rail moving and then, we can begin to scale up direct primary agriculture.”

She noted that the agreements signed was in line with President Muhammadu Buhari’s administration’s concerted efforts to diversify the economy away from oil and attract investments into other core sectors which can stimulate sustainable growth.

Managing Director/Chief Executive, NSIA, Uche Orji said the deals would have multiple effects on agriculture and real estate as institutional investors from outside the country would be involved.

Deals with the proposed investors are expected to be closed and announced soon.
Orji said: “We believe that the real estate and agriculture sectors offer considerable potential for economic growth in Nigeria. Our commitment in these sectors is underpinned by the economic imperatives of urbanization, population growth and enhancement of liquidity for the sectors.

“The real estate vehicle once created alongside the Agriculture Vehicle will be configured to address some of these issues. The NSIA will continue to serve as a catalyst for private sector involvement in key sectors of the economy by exploring partnerships with credible entities such as Old Mutual Investment Group and UFF Agri-Fund.”

Also, Chief Executive, OMIG, Diane Radley, said that the partnership with NSIA was critical step in its plans for commercial real estate and agriculture strategies in Africa.

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

Government

FG Puts Nine-year Presidential Jet Up For Sale

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president buhari

The Federal Government has put up for sale a jet in the presidential fleet, Hawker 4000 aircraft with registration number, 5N-FGX/: RC 066.

The business-size jet which entered into service in December 2011, has capacity for nine passengers and three crew members.

Findings indicate that only 73 Hawker 4000 aircraft were manufactured by Hawker Beechcraft between 2001 and 2013 and they were sold for $22.91m each as of 2012.

The FG in a published advert on Wednesday disclosed that the aircraft with a range of 3,190-nautical mile had flown for 1,768 hours.

It said the aircraft could be inspected at the Presidential Air Fleet’s hangar located at the Nnamdi Azikiwe International Airport, Abuja.

Interested buyers were requested to submit their closed bid to the Chairman, Committee for Sale of Aircraft, Office of the National Security Adviser, care of Special Services Office, Office of the Secretary to the Government of the Federation.

In an advertisement published in some national dailies on Wednesday, prospective buyers were directed to submit a refundable bank draft for $50,000 to the committee with the bid.

It also said that all the bids should be quoted in dollars.

The notice read, “Please note that all bids must be submitted within one week of this publication.

“Background check is required as a pre-qualification for the bid. Prospective bidders who want to inspect the aircraft will be granted access within one week from this advertisement.”

The Presidency had similarly in 2016 put up for sale two presidential aircraft, a Falcon 7X executive jet and Hawker 4000, in line with the directive of the president, Major General Muhammadu Buhari (retd.), that aircraft in the Presidential Air Fleet should be reduced to cut down on waste.

The government also said some aircraft in the fleet would be handed over to the Nigeria Air Force for its operations. It could not be confirmed if this had been done.

According to the Presidency, the PAF has 10 aircraft and they include Boeing Business Jet (Boeing 737-800 or Air Force One), one Gulfstream 550, one Gulfstream V (Gulfstream 500), two Falcons 7X, one Hawker Sidley 4000, two AgustaWestland AW 139 helicopters and two AgustaWestland AW 101 helicopters.

Reports said each of the two Falcon 7X jets were purchased in 2010 for $51.1m, while the Gulfstream 550 costs $53.3m.

The Senior Special Assistant, (Media and Publicity) to the President, Garba Shehu, had yet to respond to inquiries on the number of presidential aircraft sold so far, as of the time of filing this report.

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Coronavirus – Angola: Confronting the COVID-19 Pandemic and the Oil Price Shock

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COVID-19 Vaccine

The COVID-19 pandemic and the shock from the falling price of oil have put severe pressure on Angola since the country’s second review under the Extended Fund Facility (EFF) in December 2019.

Only months after the conclusion of the second review in December 2019, the COVID-19 pandemic reached Angola, ushering in economic and health crises. The decline in oil prices further strained the economy, which is heavily reliant on oil exports. The economic downturn and social distancing to contain the spread of the virus have been damaging, especially given the large informal sector.

A swift response to the crisis

The Angolan authorities adopted timely measures to tackle the challenges arising from the COVID-19 shock. Measures to protect public health included quarantine, social distancing, closing of borders with limited exceptions, closures of schools, restaurants, and public events, and limited transportation. The government recently approved a prudent supplementary budget for 2020 using a conservative oil reference price. It has also introduced a comprehensive set of fiscal and monetary measures to support economic activities.

Fiscal measures

On relief to help vulnerable people:

• Tax exemptions of value-added tax (VAT) and customs duties on goods imported under humanitarian aid and donations.

• VAT tax credit for imported capital goods and raw materials for producing essential consumption goods.

• Interest-free, deferred payment option for social security contributions.

• Regulation of prices for a list of medical goods.

On government spending:

• Freeze of 30 percent of purchases on nonessential goods and services.

• Reduction in the number of ministries from 28 to 21.

• Suspension of selected, nonessential capital expenditures.

• Decrease in travel and real estate investments.

Monetary measures

• Additional liquidity support to banks and a liquidity line to buy government securities from nonfinancial corporations.

• A credit-stimulus program.

• Temporary suspension for debt service payments.

• Requirement for banks to provide credit to importers of essential goods.

A proactive external debt management

The government needs to safeguard its ability to continue to service its debt on schedule, even under the current trying circumstances. The government has therefore availed itself of the G20 Debt Service Suspension Initiative. They have also secured selected debt reprofiling operations with some of their large creditors.

Financial support from the IMF

On September 16, 2020, the IMF’s Executive Board approved the third review under the EFF and additional financial support to Angola to help mitigate the impact of the crises. Accordingly, the IMF has provided $1 billion to Angola, bringing its total expected financial support to about $4.5 billion under the three-year program. The authorities are strengthening their public financial management to improve accountability for the funds received from the IMF and debt relief from creditors.

The path to recovery

It is important for Angola to continue to stabilize the economy, control inflation, keep the reform momentum, and safeguard financial stability. It is also crucial to persevere with structural reforms, such as privatization, improvement in governance in state-owned enterprises, and strengthened legal frameworks. These reforms will help improve the business environment and pave the way for foreign direct investment and growth-enhancing economic diversification.

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Republic of Korea Contributes Rice and Cash to Assist Ugandans threatened by locusts

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The United Nations World Food Programme (WFP) today welcomed 5,000 metric tons of rice and US$300,000 in cash from the Republic of Korea to provide much-needed relief assistance to 781,000 people including refugees and Ugandans threatened by locusts.

“WFP is extremely grateful for the continued generosity of the Republic of Korea since 2018 and its appreciation of the immense humanitarian needs in Uganda, which were suddenly made even more complicated by COVID-19,” said WFP Officer in Charge Ryan Anderson.

”This contribution of 5,000 metric tons of rice found us at a crossroads when we were considering whether to make deeper ration cuts for refugees because of a shortage of funding, even as we have evidence that they already face high food insecurity,” he added.

Combined with other contributions, the rice may allow WFP to maintain rations for 1.26 million refugees at the current 70 percent of a full ration for a while. Valued at US$4.3 million, it will also meet cereal needs of 614,000 refugees in seven settlements towards the end of the year.

The additional US$300,000 in cash will enable WFP to meet the relief needs of 167,000 people in the northeastern region of Karamoja, which is the most food-insecure region in the country and is threatened by a combination of malnutrition among its residents, locusts, floods and animal diseases.

“The Republic of Korea is committed to supporting vulnerable groups of people in Uganda, especially refugees fleeing conflict and nationals faced by chronic food shortages and malnutrition,” said Ambassador Ha Byung-Kyoo.

“We also are very pleased to continue making contributions of rice, which we have heard is appreciated by the refugees and contributes to much needed dietary diversity,” he added.

WFP was forced to reduce rations for refugees in April to 70 percent of a full ration because of funding shortages. The economic pressures that COVID-19 has brought on donor capitals has further complicated funding to feed refugees. WFP is putting in place safety measures in 13 refugee settlements to prevent the spread of COVID-19 during food and cash distributions.

The Republic of Korea has contributed rice to WFP in Uganda annually since 2018 in support of 1.43 million refugees – the highest number of refugees hosted by any country in Africa.

The US$300,000 contribution will also contribute to supporting WFP assistance in Karamoja. Even though families in the region were able to harvest some crops in August, despite repeated sightings of locusts between February and July, the very presence of the pests in the region threatens both agriculture and vegetation needed for animals. Relief food helps to cushion families as the government and UN partners work to control the impact of locusts.

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