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Atiku v FG: Controversy trails termination of INTELS’ pilotage contract

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Atiku v FG: Controversy trails termination of INTELS’ pilotage contract

Rift will cost over 11,000 job loss—MWUN•It’ll scare away  investors –Amiwero

 

Nearly two years after the Federal Government commenced moves to cancel its 17-years pilotage monitoring contract with INTELS Nigeria Limited, the Nigerian Ports Authority (NPA) penultimate week finally announced termination of the contract. PAUL OGBUOKIRI reports that the action is being interpreted as a political victimization rather than a move to correct an infraction

 

The pilotage monitoring agreement

 

The NPA on February 11, 2011 entered into a fresh agreement with INTELS Nigeria Limited for the monitoring and supervision of Nigeria’s oil industry related activities in the compulsory pilotage districts of the authority (service boat operator). The agreement had allowed INTELS to receive revenue on behalf of NPA for seven years.

 

Controversy over compliance with TSA

 

NPA had in September 2017 announced suspension of its pilotage monitoring and supervision agreement with Nigeria’s maritime logistics firm, Integrated Logistics Services (INTELS) Nigeria Limited because the firm failed to comply with the Federal Government’s directive on the Treasury Single Account (TSA).

 

 

This came as NPA had insisted that all funds collected on its pilotage agency agreement be remitted into the account, but INTELS had then argued that such directive was in violation of the terms of its contract. The stalemate led the NPA to suspension of the pilotage agreement contract.

 

Then Attorney General and Minister of Justice, Abubakar Malami, said the contract was void ab initio and was reported to have relayed the government’s decision to the Managing Director, NPA, Hadiza Usman, in a letter dated September 27, 2017. Mr. Malami said it was in contravention of the Constitution and that the company failed to comply with the TSA policy of the Federal Government. The NPA in a statement explained that it relied on the advice of Mr. Malami in arriving at the decision to terminate the contract.

 

Constitutionality of the contract

 

However, speaking on the constitutionality of the contract, the Nigerian Importers Integrity Association (NIIA) said that the contract is legal, constitutional and similar to the Joint Venture (JV) agreements signed by the Nigerian National Petroleum Corporation (NNPC) with the International Oil Companies (IOCs). NIIA President, Godwin Onyekazi, also said that termination of the contract will impact negatively on government revenue and on efficiency at Onne Port. “Since the story broke, we have sought legal advise from our lawyers who informed us that the contract is constitutional.

 

“The Nigerian Ports Authority (NPA) outsourced its pilotage services on a mutually agreed profit sharing ratio of 72:28 just like the crude oil exploration contracts with the International Oil Companies (IOCs). “Can the Nigerian National Petroleum Corporation (NNPC) demand that IOCs like Chevron, ExxonMobil, Shell and others pay crude oil sales directly into TSA before deducting what is due to them? “It is the same case with the NPA-INTELS contract. If you now say the NPA-INTELS pilotage services contract violates the constitution, then the same argument must apply to all the crude oil sales contracts with all the IOCs,” he said.

 

Onyekazi further said that Onne Port is the only viable port outside Lagos because of the contribution of INTELS, which “provided an alternative port” to importers especially those doing business in Onitsha, Aba and other cities in the Eastern part of the country.

 

“We want to believe that the Federal Government has been misinformed about the importance of INTELS and of the Onne Port and we urge the powers that be to reconsider their stand on the matter,” he said.

 

Also, a columnist, Mr. Eze Onyekpere said: “If this analysis of the sums due to the CRF (Consolidate Revenue Fund) is right, then the contract cannot be said to be void, unconstitutional and illegal. The illegality would have arisen where a party withholds the actual percentage (in this case 72 per cent) due to the CRF.” INTELS’ effort to placate FG Shortly after the NPA announced suspension of the agreement, Founder of INTELS, Gabriele Volpi flew into the country to apologise to the Federal Government over the dispute that resulted in the termination of contract with the NPA. Volip said INTELS will “comply with the directive of government” and transfer all the revenue collected from the boats monitoring and supervision services in the Nigerian maritime waters to the TSA.

 

“We want to apologise to the Federal Government and NPA over this disagreement with INTELS. I was not personally involved in the negotiations with NPA, but we apologise for what has happened,” Volpi told journalists. “We intend to comply with the directive of government and transfer all the revenue to the TSA because we are a law-abiding company. Furthermore, Volip said INTELS remained committed to the development of the Badagry deep seaport.

 

“We are committed to co-operating with the government and NPA in the development of Nigeria’s maritime sector and this includes the Badagry deep seaport,” he said. Consequently, a fresh agreement signed on August 24, 2018 between the organisations on compliance with the TSA.

 

It was against this backdrop that the contract controversy between INTELS and NPA seemingly eased off following the payment of $42.6 million (N13.2 billion) by INTELS into the NPA’s TSA.

 

The Managing Director of NPA, Hadiza Bala Usman, stated this while addressing members of the House of Representatives Ad Hoc Committee probing into the matter, saying that the company after receiving termination notice from the agency, wrote to apologise for not complying with TSA and the new sharing formula. She said as a result, INTELS has paid the sum $28.1million into the agency’s TSA account with a notice of additional $14.5million said to have been paid, but yet to be confirmed by the NPA.

 

NPA ends agreement over non-remittance of $145m to TSA

 

In this season Atiku Abubakar, co-Founder of INTELS; Nigeria’s former vice president and PDP presidential candidate in the February elections is challenging the President Muhammadu Buhari’s victory at the polls; and the government seems to be fighting him back in all fronts, the NPA announced the termination of the boats pilotage monitoring and supervision agreement with INTELS Nigeria Limited.

 

This is coming after nearly two years of wrangling between the NPA and INTELS and allegation of non-remittance of $145million to the TSA. In a letter dated March 29, 2019, addressed to the Managing Director of INTELS, NPA said that the decision to revoke the contract was taken in line with Article 8 (C) of its agreement with INTELS, dated February 11, 2011.

 

The letter signed by NPA’s Assistant General Manager, Legal Services, read in part, “We refer to the agreement dated February 11, 2011 and August 24, 2018 between the NPA and INTELS Nigeria Limited for the monitoring and supervision of oil industry related activities in the compulsory pilotage districts of the NPA (service boat operator).

 

“The NPA (the principal ) hereby serves on you INTELS Nigeria Limited, (the Managing agent) notice of termination in line with article 8 (C) of its agreement with INTELS, dated February 11, 2011, which said notice shall expire three months from the date of this notice of termination.”

 

In a letter dated March 27, 2019, addressed to the Managing Director of NPA, Hadiza Bala-Usman, NPA’s Executive Director, Finance and Administration, Mohammed Bello- Koko, had accused INTELS of non-compliance with the presidential directive and circular on implementation of Treasury Single Account (TSA) and Article 4.1 of the executed supplemental agreement by refusing to remit the sum of $145, 849,309.33 being outstanding service boat revenue generated from November 1, 2017 to October 31, 2018.

 

According to Bello-Koko, Article 4.1 of the executed supplemental agreement states, “The total revenue generated on behalf of the principal in each of the pilotage districts from the service boat operations shall be paid directly into the principal’s TSA at designated commercial banks which will be swept daily into the principal’s corresponding TSA at the Central Bank of Nigeria (CBN).” He stated that INTELS neither remitted the sum of $55.72 million, which it pledged to remit in a letter dated February 12, 2019, nor the sum of $145.84 million, which it demanded via various letters.

 

NPA owes INTELS $750m

 

But INTELS denied that it is indebted to the NPA to the tune of $145.8 million, insisting that the authority owes it over $750 million.

 

The company, which issued a statement in response to the termination of its boats pilotage monitoring and supervision agreement by NPA, said it was open to an amicable resolution of the contract dispute with NPA. It added that it was willing to proceed in all appropriate directions to protect its interests and its 5,000 employees.

 

The statement added that the company had not breached or violated the agreement with NPA. “INTELS further confirms the correctness of its actions, in line with the agreement signed on August 24, 2018, according to the terms and timing established therein, in compliance with the principle of reciprocity of rights and obligations thereby provided for. “The same agreement supplements the original agreement and reinforced the understanding of the parties that the agency service was entrusted to INTELS, in order to guarantee a repayment plan for the significant investments made.

 

“INTELS reiterates that, overall, it is not in any way indebted to NPA, but it is instead a creditor of NPA for an amount exceeding $750 million against the financing granted by INTELS and associated entities to NPA over time,” the statement says.

 

Stakeholders caution FG

 

Reacting to the development, President, National Council of Managing Directors of Licenced Customs Agents (NCMDLCA), Mr. Lucky Amiwero, said NPA has no right to cancel the contract it signed with INTELS as the NPA Act empowers authority to enter into contractual agreements with its stakeholders and partners for efficient port operations. He called on the Federal Government to resolve the disagreement with INTELS quickly, saying the development would give investors a very wrong signal, if not handled with care.

 

He said in the event of its not been resolved, it will not be easy to get any investor who will be ready to invest as heavily as INTELS has done , knowing fully well that at the end of Buhari administration, the next government will start breading down on him. “We cannot pretend to be looking for investment when we cannot insulate people’s investments from politics.

 

He noted that it is believed that what INTEL is passing through is because of Atiku Abubakar’s political activities in Nigeria today. Also speaking, Mr. Eze Onyekpere, said: “If none of the parties is alleging being shortchanged or withholding of funds due to it by the other and the issue is just one of the TSA versus other accounts, then this seems like a huge storm in a tea cup.

 

Meanwhile, the Maritime Workers Union of Nigeria (MWUN) had earlier appealed for an amicable resolution of the rift, warning that over 11,000 Nigerians will be pushed into the unemployment market if it is unresolved.

 

President-General of the MWUN, Comrade Adewale Adeyanju, said in a statement that INTELS has 5,000 direct and 6,000 indirect workers on its payroll and that if issues were not resolved, the workers risk losing their jobs. Adeyanju added that the cancellation of the contract would send wrong signals to the international community, as it would discourage investors. “We want to advice that the Federal Government should avoid anything that will send wrong signals to investors that Nigeria’s environment was not conducive for business.

 

“Most of these employees are Nigerians with families and responsibilities. We are, therefore, worried that if the issue is not resolved amicably, their jobs could be on line,” he said.

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Business

Samsung Galaxy Fold sells out in Nigeria

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Samsung Galaxy Fold sells out in Nigeria

The highly anticipated Galaxy Fold, a new foldable device creating a new mobile category, is clearly a hit with Nigerians as the first batch released has already sold out with pre-order sales, Samsung Nigeria said on Friday in Lagos.

It said that it was currently working on increasing stock levels to keep up with demand, adding that even after a delayed-release, there was clearly an appetite for this pioneering device.

It said that the next batch of the world’s first AMOLED Infinity Flex Display would be available in the Nigerian market from November 29.

Galaxy Fold features the world’s first 7.3-inch Infinity Flex Display, which folds into a compact device with a cover display.

It said that the device offered a powerful new way to multitask, watch videos, play games, and more – bringing to life new experiences and possibilities years in the making.

“Samsung is proud to introduce a premium foldable device, that goes beyond the limitations of a traditional smartphone,’’ said David Suh, Managing Director at Samsung Electronics West Africa in a statement.

“The pre-order sales are indicative of the public’s affinity for technology that transcends the norm.’’

He added that Galaxy Fold is in a category of its own that delivers a new kind of mobile experience allowing users to do things they couldn’t do with an ordinary smartphone.

“Users now have the best of both worlds; a compact device that unfolds to reveal Samsung’s largest-ever smartphone display, says Adetunji Taiwo, Head, Information Technology and Mobile (IM) at Samsung Electronics West Africa.

He noted that Galaxy Fold brought together material, engineering and display innovations, developed over eight years following the debut of Samsung’s first flexible display prototype in 2011.

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Energy

Why hike in cooking gas price may persist – Marketers

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Why hike in cooking gas price may persist – Marketers

The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) says the current hike in price of cooking gas might persist if activities of Liquefied Petroleum Gas (LPG) Terminal Owners and Off Takers is not checked.

The Executive Secretary of NALPGAM, Mr Bassey Essien told News Agency of Nigeria (NAN) in Lagos on Friday that the development had led to increase in the price of cooking gas from N2, 600 to about N4, 500 in retail outlets.

Essien said that the Nigerian Liquefied Natural Gas (NLNG) vessel on November 13, supplied products to two terminals in Lagos to reduce the scarcity within the South West zone.

He said that this was in line with the Federal Government’s approval for the allocation of about 350,000MT of Gas per annum for local consumption through the NLNG.

Essien said the product was distributed through the terminals/off takers to gas marketers who eventually distribute to end user

“We noticed recently that gas delivered to terminals/off takers sold at N3.2 million per 20 MT a week ago suddenly jumped to between N4 million and N4. 3 million per 20MT at the terminals.

“This singular action has taken cooking gas beyond the reach of ordinary Nigerians who are forced to pay a higher price for product that the price structure from NLNG has not significantly changed.

“We therefore, dissociate our association (NALPGAM) from such exploitative acts of the terminals who are taking the industry and stakeholders for granted,” he said.

Essien said the upsurge in the price of cooking gas was detrimental to the efforts of the Federal Government at deepening cooking gas utilisation in the country.

He said that with this development, many Nigerians would go back to using kerosene and firewood which had attendant health effects.

“A filling station which was selling 300 litres of kerosene a week has seen its sales increased to about 6,000 litres because people who cannot afford gas due to the increment are going back to kerosene.

“This has so many negative effects on the economy, especially as food sellers would have to increase the prices of their food or reduce the quantity not to run at a loss,” he said.

Essien commended the NLNG for its efforts in supplying gas to Nigerians.

He added that the company would improve on its performance to deliver gas to other coastal terminals outside Lagos to reduce the inherent pressure on the terminals in the South West.

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Aviation

SAA workers start strike that could cripple airline

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SAA workers start strike that could cripple airline

Workers at South African Airways (SAA) downed tools on Friday in a strike over wages and job cuts that has forced the troubled state-owned carrier to cancel all flights and left its future hanging in the balance.

SAA, which has not turned a profit since 2011 and is without a permanent CEO, says the strike by unions representing around 3,000 of its 5,000-strong workforce will cost it 50 million rand ($3.36 million) per day and threatens its survival.

The unions rejected SAA’s wage offer late on Thursday, and are also striking over the carrier’s plans to cut more than 900 jobs in a bid to stem financial losses and become viable without the state bailouts it has relied on so far, reports Reuters.

SAA’s acting chief financial officer, Deon Fredericks, told the eNCA news channel that the airline, hurt by past mismanagement, could not just close its eyes and carry on.

“We’ll just go deeper down,” he said.

SAA is trying to negotiate much-needed funding from banks, Fredericks told radio station 702, but added the strike would hurt the talks as it would have a negative impact on cash flow. “If we don’t get that funding we will not be able to continue.”

The National Union of Metal Workers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) called the SAA strike from 0200 GMT on Friday. NUMSA has said it will continue until the unions’ demands, including for an 8% wage increase and job security, are met.

The action is not an attempt to hurt the airline but force the government to intervene so its board and management make the right decisions, SACCA President Zazi Nsibanyoni-Mugambi said.

“In our eyes this is an attempt to save (SAA) from its current management and board,” she told 702 on Friday.

Two other unions at SAA representing about 2,500 employees mostly in technical and mid-management jobs said they would go to the labour court to block the airline’s plan to cut jobs.

SAA, which cancelled all flights on Saturday, is among a number of state-run firms that are battling tough financial conditions after years of poor governance and so-called ‘state capture’ – widespread corruption involving billions of rands worth of state contracts during Jacob Zuma’s presidency.

President Cyril Ramaphosa has staked his reputation on turning them around.

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Business

Stop kids from viewing porn, Pope tells tech companies

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Stop kids from viewing porn, Pope tells tech companies

Pope Francis called Thursday for Facebook, Apple, Microsoft, Google and other tech companies to urgently take measures to remove child porn from the web and prevent children from accessing pornography online.

Francis told a Vatican conference of religious leaders and high-tech representatives that it’s no longer acceptable to merely follow the law in monitoring online content, because technology is fast outpacing regulation, reports The Associated Press.

He said tech and computer software companies should assume a moral responsibility to protect young people from what he said were the ruinous effects of pornography on their emotional and sexual development.

“There is a need to ensure that investors and managers remain accountable, so that the good of minors and society is not sacrificed to profit,” he said.

Francis was addressing participants at the conference “Promoting Digital Child Dignity,” which follows on a 2017 conference hosted by the Jesuit university in Rome and a 2018 meeting in Abu Dhabi.

Francis cited obligatory age verification technology and artificial intelligence to eliminate criminal porn from the web as two concrete measures high tech companies and software-makers could take to protect children.

The Vatican has sought to raise awareness about protecting children online as part of its response to the Catholic Church’s dreadful record with clergy sexual abuse. The issue has hit close to home for Francis, after one of his diplomats was sentenced to five years in prison by a Vatican court for viewing child pornography, and one of his own Argentine bishops was placed under investigation by the church after porn was found on his cellphone.

The two-day conference at the Vatican featured speakers from Microsoft, Apple, Amazon, Google, Facebook and Paramount Pictures, U.N. and EU officials, as well as the spiritual leader of the world’s Orthodox Christians and the grand imam of the Al-Azhar university in Cairo, the seat of Sunni learning. Francis’ secretary of state, Cardinal Pietro Parolin, was to close out the conference on Friday, in an indication of the importance the Vatican placed on it.

In his remarks, Francis said technology has obvious benefits for children, but also poses risks and negative effects that often aren’t apparent until it is too late to remedy them.

He indirectly dismissed claims by Facebook and other social media companies that they are merely “platforms” for others to share content.

“It is now clear that they cannot consider themselves completely unaccountable vis-a-vis the services they provide for their customers,” he said. “So I make an urgent appeal to them to assume their responsibility toward minors, their integrity and their future.”

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Business

Zimbabwe to cut VAT to boost consumer demand

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Zimbabwe to cut VAT to boost consumer demand

Zimbabwe plans to cut value added tax (VAT) from January to stimulate consumer demand in an economy set to a contract this year after a drought and power shortages, Finance Minister Mthuli Ncube said on Thursday.

The southern African nation is in the grips of its worst economic crisis in a decade, marked by shortages of foreign currency, fuel and rolling power cuts lasting up to 18 hours a day.

Presenting the 2020 budget to parliament, Ncube proposed cutting VAT to 14.5% from 15% effective January 2020. He also proposed lowering the corporate income tax rate to 24% from 25%, reports Reuters.

President Emmerson Mnangagwa, who took over from the late Robert Mugabe in 2017, is struggling to convince the population that his economic reforms will work.

Everyday life is increasingly difficult. Prices of basic goods, fuel and electricity have risen sharply while salaries have lagged behind.

That trend could continue after Ncube said he would from next January remove subsidies on maize and wheat, the two most consumed crops in Zimbabwe.

To give some relief to Zimbabweans who have seen their incomes eroded by inflation, which economists estimate at 380%, Ncube also raised non-taxable monthly income to 2,000 Zimbabwe dollars ($130) from 700 Zimbabwe dollars.

Ncube painted a rosier outlook on GDP growth, forecasting that the economy would grow by 3% next year after a projected contraction of 6.5% this year, helped by better agricultural output and electricity supplies.

He also said the country’s budget deficit would narrow to 1.5% of gross domestic product (GDP) in 2020 from 4% of GDP this year as the government keeps spending in check.

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Aviation

Direct Qantas flight completes non-stop journey from London to Sydney

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Direct Qantas flight completes non-stop journey from London to Sydney

A non-stop flight from London to Sydney has landed, 19 hours and 19 minutes after take-off.

The Boeing 787-9 Dreamliner is believed to have set a long-distance record for a passenger jet, reports standard.co.uk.

It left Heathrow around 6am (local time) on Thursday and touching down at Sydney Airport at 12:28pm on Friday (1.30am UK time).

The flight was conducted to research the effects on crew and passengers of ultra-long-haul services which are under consideration by the airline.

It was carrying 40 people, many of them Qantas staffers.

Those on board witnessed two sunrises, the first to the right of the aircraft as it headed north-east after takeoff, and the second to its left as it flew over Indonesia.

Aside from research, the flight kicked off a year of celebrations for the centenary of the airline, which will officially turn 99 on Saturday.

Qantas Chairman, Richard Goyder said the flight continued the airline’s history of helping Australia engage with the rest of the world.

“Qantas is a national icon because it’s been such a big part of Australian life for so long,” Goyder said in a statement.

“Our founders talked about overcoming the tyranny of distance and through the years we’ve moved from bi-planes, to single wing, to jets to help bring things closer.”

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Business

Airtel acquires Intercellular in $70m deal

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Airtel acquires Intercellular in $70m deal

Airtel Africa yesterday announced the acquisition of Intercellular Nigeria in a transaction valued at about $70 million.

The acquisition is aimed at boosting its Nigerian operation, Airtel Nigeria, with additional spectrum to expand its network across the country.

Airtel Africa disclosed this in a regulatory filing to its shareholders through the Nigerian Stock Exchange (NSE).

The telecoms firm, with a presence in 14 countries on the continent, said its Nigerian subsidiary signed an agreement with Intercellular Nigeria Limited to acquire an additional 10 megahertz (MHz) spectrum in the 900 MHz band in Nigeria.

Intercellular Nigeria Limited commenced commercial operations as a public company in 1998 after being awarded a National Fixed License in 1996.

Prior to its acquisition, Intercellular Nigeria operated with a National Unified Access Service License and was able to provide a complete range of telecommunication services to Nigerians.

Airtel Africa said the acquisition of the additional spectrum would allow Airtel Nigeria to expand its operations and strengthen its LTE network across Nigeria, considered the largest market for Airtel Africa.

The deal is, however, subject to regulatory approval by the Nigerian Communications Commission (NCC).

The latest acquisition aligns with the company’s plan to continue to dominate the tele-mobile communications space on the continent.

Last August, the company unfolded plans to roll out its mobile money platform. The company said it was continuing its aggressive investment in its 4G network infrastructure, with nearly 1,500 additional sites across its operational locations, apparently preparatory to the roll out.

In the last six months period ended September 30, 2019, Airtel Nigeria announced a 23 per cent increase in its revenue, with revenue from data sales increasing by about 76 per cent during the period, driven by the accelerated rollout of its 4G network.

The increase in data customer base rose by about 20.8 per cent, with an ARPU growth of about 43 per cent. The report said during the period, 4G data usage by its customers increased by almost 20 folds.

Reacting to the latest acquisition, the Chief Executive of Airtel Africa, Raghunath Mandava, identified data as a key pillar of the company’s growth, driven by increasing 4G networks, supported by the increased affordability and increasing penetration of smartphones.

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Business

ProPetro confirms SEC probe, accounting weaknesses

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ProPetro confirms SEC probe, accounting weaknesses

Oilfield services firm, ProPetro Holding Corp, on Wednesday, said a board of investigation had uncovered material weaknesses in its financial controls and an undisclosed related-party transaction with its former chief accountant.

The Midland, Texas-based company also confirmed Reuters’ report last month that the U.S. Securities and Exchange Commission had opened an investigation in its financial disclosures and reporting.

ProPetro provided the first snapshot of its business since disclosing the departure of its chief accounting officer and the demotion of two top officials amid an internal investigation into its financial accounting and disclosures.

According to Reuters, its board identified weaknesses in internal controls, two of which were material and at least one of which existed since Dec. 31. It plans to amend its 2018 annual report and first-quarter 2019 financial filing to reflect the change, it said in a statement.

The undisclosed related-party transaction involved a business owned in part by former chief accounting officer Ian Denholm that had sold or leased a facility to ProPetro. Denholm resigned in October.

He did not immediately respond to a LinkedIn request seeking comment and attempts to reach him by phone were unsuccessful.

ProPetro also said it would not file its second- and third-quarter reports to the SEC before Dec. 31 due to the continuing investigation. Its internal review, however, has not to date identified anything requiring restatements of its balance sheet, statement of operations, shareholders’ equity or statements of cash flow, it said.

A company spokesman declined a request to interview an executive on Wednesday. ProPetro will hold a conference call on Thursday morning to discuss its results.

The company reported net income fell to $34.4 million, or 33 cents per share, for the three months ended Sept. 30, from $46.3 million, or 53 cents per share, a year earlier.

ProPetro has disclosed real-estate and rental transactions with executives and board members. In addition, Chief Executive Officer and co-founder Dale Redman and former finance chief and co-founder Jeffrey Smith reimbursed the company a combined $364,000 for expenses improperly billed to ProPetro.

Shares of ProPetro, which went public in early 2017, were up about 5.5 per cent at $7.74 in after-hours trading after closing down 4.6 per cent on Wednesday.

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Business

NSE: Investors gain N246bn

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NSE: Investors gain N246bn

Market rises to five-week high

 

Nigerian stock market rose 1.91 per cent to a five-week high yesterday, boosted by demand for stocks in banking and other blue chip firms.

The index, which is down 16 per cent so far this year,  firmed up to a level last seen in October, as most bank shares recorded appreciable growth.

Analysts at Afrinvest Securities Limited had said recent CBN restrictions on Open Market Operations (OMO) would restore confidence in the volatile stock market, considering the low stock prices.

“The CBN recently restricted individuals, local corporates, and non-banking financial institutions from participating in both the primary and secondary markets of Open Market Operation (OMO).

“Following this directive, we expect investors’ focus to shift towards equities due to current low prices and attractive dividend yields,” the analysts said.

The key market performance measures, the NSE All Share Index and market capitalisation, rose by 1.91 per cent as market sentiments returned to gaining streaks following investors’ sustained optimism on undervalued stocks.

Consequently, the All-Share Index gained 504 basis points or 1.91 per cent to close at 26,843.11 as against 26,339.11 recorded the previous day while the market capitalisation of equities appreciated by N243 billion or 1.91 per cent to close at N13.067 trillion from N12.821 trillion as market sentiment returned to the green zone.

Meanwhile, a turnover of 624.8 million shares exchanged in 6,426 deals was recorded in the day’s trading.

The premium sub-sector was the most active (measured by turnover volume); with 368 million shares exchanged by investors in 2,623 deals.

Volume in the sub-sector was largely driven by activities in the shares of Zenith Bank Plc and Access Bank Plc.

The banking sub-sector boosted by activities in the shares of GTBank Plc and Sterling Bank Plc followed with a turnover of 105.5 million shares in 2,668 deals.

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Business

Attaining full-scale groundnut production

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Attaining full-scale groundnut production

In a bid to improve on groundnut production value chain, the National Groundnut Producers Processors and Marketers Association of Nigeria (NGROPPMAN) has revealed plans to boost groundnut production to 17.5 million metric tonnes by the end of 2025. Taiwo Hassan reports

 

 

Nigeria produces 41 per cent of the total groundnut in West Africa. Besides, the groundnut pyramids used to be conspicuous in Kano city of Kano State (northern Nigeria).

The huge piles of sacks that tapered to a point higher than most of the buildings, were a symbol of northern Nigeria’s abundance in an important cash crop.

But today, the dusty yards where the groundnut marketing board stock- piled farmer’s harvest lie mostly empty and have been occupied by buildings.

The history of groundnut in Nigeria dates back to 1912, when most farmers were encouraged by high economic returns from groundnut. The marketing of the crop was well organised at that period.

At the end of each production season, agents moved to various parts of the region to purchase the produce while some farmers preferred to carry their produce by themselves to Kano city, where it was sold at a price fixed by the marketing board. The produce was collected from strategic collection centers and then transported to the port of Lagos by train.

Groundnut production decline

However, groundnut production in Kano and neighboring states has declined significantly. For instance, the total groundnut production up to 1973 used to be more than 1.6 million tonnes, which has come down to less than 0.7 million tonnes in the mid 80’s.

Both farmers and traders shifted to other agricultural (e.g. cowpea, sorghum, millet) and horticultural crops. This decline also affected industries, which used groundnut as raw material. Some even closed down or shifted to other oil seeds.

Reasons

Several factors led to the rapid decline in groundnut production in Nigeria. The major causes were drought, rosette virus, and general neglect of agriculture due to oil boom, lack of organized input and marketing and dissolution of groundnut marketing boards.

There have been adverse changes in rainfall pattern in the last 30 years. Average annual rainfall has reduced drastically from 800 mm to 600 mm and consequently the length of the growing season has become shorter (from 4 to 3 months).

Breakdown shows that drought spells have become more frequent than ever before. This undoubtedly has led to the failure of groundnut, which requires more than 4 months with the currently available cultivars to reach maturity. Drought has also been associated with outbreaks of diseases and insect pests such as aphids. Aphids are carriers of the groundnut rosette virus, which is a devastating disease. It wipes out the entire crop during epidemic outbreak.

For example, in 1975, an epidemic of rosette virus destroyed nearly three quarters of a million hectares of the crop in Nigeria and wiped out regional trade worth estimated at $250 million.

Subsequent epidemics in 1983, 1985 and 1988 had a major impact on farmers’ decisions. Many of the farmers who suffered financial ruin have stuck to other crops such as cowpea, sorghum and pearl millet.

Experiments

As a consequence, groundnut production has not yet returned to the pre-1970 levels of 1.8 million tonnes. Research on fertilizer use in northern Nigeria began in 1925. Experiments have shown that groundnuts respond to added superphosphate. Seed for planting was freely distributed to growers and cash subsidy was later introduced. This encouraged farmers to use high quality seeds and fertilizer.

Boost

However, following the introduction and application of suitable fertilizer, the country’s groundnut production has been steadily since the farmers were taught on the need to use high quality seeds which automatically buoys increased in volume of production.

To consolidate the country’s groundnut production and value chain, National Groundnut Producers Processors and Marketers Association of Nigeria (NGROPPMAN) believes that attaining groundnut production target of 17.5 million metric tonnes by the end of 2025 from its present level can be achieved.

President of NGROPPMAN, Aimu Foni, told newsmen after the conclusion of a stakeholders’ meeting in Abuja that plans were already underway.

He said that the 17.5 million metric tonnes projected was part of the groundnut draft policy, being reviewed by important stakeholders.

Foni stressed that the policy would improve the production of groundnut and help reposition other value chains when adopted by the stakeholders and supported by the Federal Executive Council.

“The objective of the draft policy, which is still under review, is to improve groundnut production and make it a major source of revenue generation for the government.

“The policy when approved will further tackle the problem of training and extension services, critical to agricultural development. Also, the document will help with risk management, marketing as well as competitiveness to ensure robust domestic consumption and high-quality export,” he said.

‘Next level’ mantra

The Secretary-General of the association, Adeniyi Adebayo, said the stakeholders were eager to take groundnut production to the next level.

He said, “We met to see how to contribute meaningfully to the new groundnut policy. As you know, we are into production, processing, and marketing as a sub-sector and the draft policy is focused on these areas.

“In terms of production, it dwells on how the lives of groundnut farmers will be improved. Most times when there is excess production, farmers are often left to bear their losses as they sell their produce at giveaway prices.”

Adebayo expressed hope that when adopted by stakeholders and sent by the Minister of Agriculture and Rural Development to FEC, it would be approved.

Last line

With the groundnut draft policy review underway, agric stakeholders believe seed is basic to agriculture and makes a major contribution to agricultural productivity. Unless groundnut seed is available in the right place, at the right time, in adequate quantities and quality at affordable prices, it will be difficult to meet the target.

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