- P&ID to Seize $9b in Nigeria’s External Reserves
A British court has finally granted an Irish firm, Process and Industrial Developments Ltd (P&ID), request to seize $9 billion of Nigeria’s external reserves as an equivalent amount of a failed gas deal signed under Nigeria’s former President Goodluck Jonathan in 2010.
Justice Butcher, British Commercial Court, granted P&ID request on Friday.
Going by Nigeria’s current external reserves of $44.43 billion as of 16th, August 2019, the $9 billion is equivalent to 20.27 of the country’s total foreign reserves.
Therefore, if the court order is successfully implemented, it won’t just chase the already sceptical investors further away, it would also hurt the entire economic outlook for the rest of the year as the Central Bank of Nigeria’s ability to intervene in the foreign exchange section of the economy will be greatly affected. The only strategy employed by the apex bank in stabilizing and sustaining the Nigerian Naira and economic activities.
In March, VR Capital Group, a hedge fund company with the knowledge of the situation, acquired 25 percent stake in P&ID and immediately started pulling power in the U.S and the U.K to compel Nigeria to settle based on the $6.6 billion granted P&ID in January 2017 or forfeit her oversea assets.
Fast forward to 2019, the total amount has risen to $9 billion due to a daily interest rate of $1 million.
In the past, Paulson & Co., Elliott Management, Pershing Square Capital Management and other asset management companies have taken stakes in embattled companies that most investors won’t near and used their position like VR Capital Group to hire world-class lawyers and lobbyists to influence things in their favour.
This time, Nigeria is on the receiving end and if not carefully managed, it will hurt the Nigerian economy as long term investors will start pulling back henceforth.
The company’s lawyer Andrew Stafford said: “P&ID is committed to vigorously enforcing its rights, and we intend to begin the process of seizing Nigerian assets in order to satisfy this award as soon as possible.”
“We are pleased that the Court has rejected Nigeria’s objections both to the arbitration process and to the amount of the award, and that it will grant permission to P&ID to begin enforcement of the award in the United Kingdom.”
Poor leadership and gross mismanagement have led Nigeria to the current situation where foreign fund managers are now positioned to profit from a failed deal that could have been easily resolved two decades ago.
IATA Says Nigerian Airlines Loses $2.09bn in April and June
Airlines in Nigeria Loses $2.09 Billion in April and June
The International Air Transport Association (IATA) has estimated that Nigerian airlines lost about $2.09 billion in the month of April and June due to COVID-19 lockdown.
In its report titled ‘Quarantine measures threaten aviation restart in Africa and the Middle East,’ IATA stated that the aviation sector in Africa and the Middle East was the worst-hit.
According to the report, the aviation sector in the two regions provides over 8.6 million direct and indirect jobs.
While the report did not provide data for the month of May, it stated that the number of Nigerian passengers declined by 4.7 million in April and 5.32 million in June when compared with the same period of 2019.
Similarly, the report said 125,400 jobs were at risk in April and 139,500 jobs were at risk in the month of June.
Muhammad Albakri, the Regional Vice President for Africa and the Middle East, IATA, said governments in Africa and the Middle East must devise alternative methods to the current quarantine measures in place, saying the two regions have the highest number of government-imposed quarantine measures on arriving passengers.
He said, “It is critical that AME governments implement alternatives to quarantine measures. AME has the highest number of countries in the world with government-imposed quarantine measures on arriving passengers.
“The region is effectively in complete lockdown with the travel and tourism sector shuttered. This is detrimental in a region where 8.6 million people depend on aviation for their livelihoods.”
Oando Partners Oilserv to Build Ajaokuta-Kaduna Portion of AKK Project
Oando, Oilserv to Construct Ajaokuta-Kaduna Portion of AKK Project
Oando Plc has partnered Oilserve Limited to construct a 303.4km linear pipeline system for the Ajaokuta to Kaduna portion of the $2.8 billion, 40 inch by 614km Ajaokuta-Kaduna-Kano Gas Pipeline Project, the AKK Pipeline.
According to a statement released by Oando through the Nigerian Stock Exchange, the construction of the AKK Pipeline Project approved in 2018 has commenced on Tuesday, June 30, 2020.
The statement reads “Oando PLC (referred to as “Oando” or the “the Company”), is pleased to announce to the Company’s attendance as a consortium partner at the flag-off ceremony for the construction of the $2.8billion, 40 inch by 614km Ajaokuta-Kaduna-Kano Gas Pipeline Project (the “AKK Pipeline”), by the President of the Federal Republic of Nigeria, Muhammadu Buhari GCFR on Tuesday, June 30, 2020.
“The AKK Pipeline Project, championed by two consortia comprising select indigenous and international companies commenced in 2013 with the announcement for tenders by the Nigerian National Petroleum Corporation (NNPC). In April 2018, the Company announced that following an extensive due diligence and bid process, the Oilserv-Oando PLC consortium was awarded the Engineering, Procurement, and Construction (EPC) mandate for segment 1, accounting for 40” by 303.4km linear pipeline system for the Ajaokuta to Kaduna portion of the AKK Pipeline Project by the NNPC.”
Speaking on the project, Jubril Adewale Tinubu, the Group Chief Executive, Oando PLC, said: “As a proudly Nigerian company, focused on driving indigenous participation we have always been proponents of public private partnership in accelerating the actualization of the nation’s goals.
“We have aspired to play an integral role in the building out of the National Gas Infrastructure and Pipeline Grid, as evidenced by our efforts in 2009, post the Nigerian Gas Masterplan when we participated in the unrealized Calabar- Ajaokuta- Abuja-Kano (CAAK) line.
“We have developed strategic partnerships with both private sector players and the NNPC in bringing sustainable solutions to spur the development of the country via our numerous gas development and distribution projects. We commend the NNPC for spearheading projects that will soften the headwinds occasioned by the global COVID-19 pandemic.
“We are proud to be active participants in driving the country’s industrialization and actualization of the Gas Master Plan which will undoubtedly create employment opportunities and ultimately generate as well as enhance value for the nation.”
Ethiopian Airlines Sustain Profitability Despite COVID-19
Despite COVID-19, Ethiopian Airlines Stay Afloat
Africa’s largest airline, Ethiopian Airlines, manages to stay afloat during the peak of COVID-19 pandemic, Tewolde Gebre-Mariam, the airline CEO, stated.
The Chief Executive Officer said “We may not be as profitable as we expected but we registered some profit. The first half of the year was good and the cargo business has also done very well.”
While the airline is expected to be down by almost $1 billion in ticket sales in the current year ending July 7, it generated enough revenue from the transportation of goods to finance monthly fixed payments between $120 million to $150 million for loans, aircraft leases, salaries and rentals.
According to Gebre-Mariam, the airline is still flying about 40 charter repatriations per week despite other flights completely grounded.
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