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Tuesday, 05 March 2019
The Federal Government of Nigeria is again offering for subscription savings bonds with a tenor of two and three years, a circular on Monday from the Debt Management Office, DMO, has urevealed.
According to the DMO, it was authorised to receive applications for the savings bond on behalf of the Federal Government.
The statement also disclosed that the two-year savings bond will be due on March 13, 2021 and has an interest rate of 11.62 per cent per annum, while the three-year savings bond, which has an annual interest rate of 12.62 per cent, will be due on March 13, 2022.
The DMO statement also said the offer for subscription opened on Monday and will close on Friday, March 8, adding that the settlement date had been scheduled for March 13, while the coupon would be paid on June 13, September 13, December 13 and March 13, 2019.
The statement reads: “The bonds are offered at N1,000 per unit, subject to a minimum subscription of N5,000 and in multiples of N1,000 and a maximum subscription of N50m.
“The bonds, which are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of the country, qualify as securities in which trustees can invest under the Trustee Investment Act. Interest is payable quarterly and the bullet repayment is on the maturity date.”
According to the DMO, the bonds also qualify as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds, among other investors, adding that the bonds would also be listed on the Nigerian Stock Exchange and would qualify as a liquid asset for liquidity ratio calculation for banks.
“Interested investors should contact the stockbroking firms appointed as distribution agents by the Debt Management Office,” the statement added.
Published in Business
Electricity generating companies in Nigeria, GenCos, has identified inaccurate date, government interference and inefficiency as a he major factors responsible for the sorry state of power supply in the country.
The power generating companies stated this in a report by them on the power sector, explaining that there is an urgent for the total overhauling of the sector.
It stated: “From research, developed nations differ from underdeveloped (third world) countries of the world majorly on data.
“Investments for the growth of the generation sub-sector did not depend on the returns from the distribution sub-sector. Investments to improve data quality and adequacy in all sub-sectors of the industry, with the priority being the distribution sub-sector for obvious reasons will solve a number of issues inhibiting the growth of the sector, especially the inability of the DISCOs to make capital investments.
“Government’s intervention through the Central Bank of Nigeria (CBN) to continue market interventions without seeking first a better understanding of the market through bankable data will be an effort in futility.”
The report also insisted that the sectors’ development was tied to the demand chain.
“The determinant of whether power generation should increase or not, is the demand side of it. Electricity supply is closely tied to demand and facilitated through a pool where the output from all generators are aggregated and scheduled to meet demand.
“This is because the storage mechanism for electricity generated is in view. Hence supply must vary dynamically with changing demand. Statistics from the Nigerian system operator on load demand over the last three months average over 22,000MW. 
This means that there is a suppressed demand of over 17,000MW compared to what is being generated today. This could potentially escalate when there is stability of supply and high ticket consumers who are self-generating decide to join up. 
How do we plug this gap?”
Revealing what seems to be an unfortunate power situation in the country, the report stated: “Currently Nigeria has installed capacity that is over 13,000MW, available generation that is over 7,500MW and average generation that is about 4,000MW.    On October 22nd 2018, average energy sent out was 3,854MWh/hour peak Generation attained on October 22nd, 2018 – 4,729MW.
“This shows low/minimal optimization of generation capacity due to constraints on the transmission and distribution networks. Without these constraints, additional 3,000MW could be made available to customers, and also serve as an incentive for GENCOs to recover the unavailable capacity of over 5,000MW.”
The report however stated that the electricity market has the potential to absorb significant investments and provide rewarding returns on those investments provided government interference is stopped and the market is allowed to run competitively.
“The lack of sanctity of contracts has resulted in huge debt burden on the GENCOs who are never fully paid for power generated and supplied to the market. In addition to the points above, it is imperative to note, that: “Successor/Legacy GENCOs, signed a performance agreement with the Bureau of Public Enterprises (BPE) with performance targets in recovering capacity.
“All Generation companies signed Power Purchase Agreement (PPA) with the Nigerian Bulk Electricity Trading Plc or Bulk Traders (NBET) with associated obligations on contracted quantities. Hence, the market should be very much aware of these obligations so as to enable performance of all parties.”
On the transmission aspect of the power situation, the report stated: “To optimize the current generation capacity, planning becomes pivotal, taking into cognizance the gestation period for power development.
“There is a need for massive investment in transmission and distribution networks in the country. Power GENCOs have the capacity to increase their output in the near term.
“However, an increase in power generation without a resultant increase in TCN’s wheeling capacity and improved distribution infrastructures will continue to lead to stranded power generation. Nigeria has about 13,000, MW, of installed capacity, a transmission capacity of about 5,000MW and distribution that hovers between 3,500 and 4,200MW.
“A further challenge is the constant request from the System Operator to make the GENCO power plants operate at base load contrary to their design to operate optimally and efficiently at base load. Operations of these turbines far away from their base loads imply a reduction in efficiency or in other words an increase in consumption of gas (for the thermal) by as much as 15-20percent!, a cost not captured or contemplated by MYTO.
“Electricity generating companies are faced with: financial, operational, construction, market, macroeconomic, contract and regulatory risks in the NESI today.
“GENCOs are caught in the middle of a weak transmission network and a poor commercial market structure. If answers can be given to GENCOs most pressing/pertinent questions such as; can we be fully dispatched? Can we get gas? Who is paying for the power?  What is the clear line of sight for collection and remittance? Then, power supply issues of the nation will be a thing of the past.”
Published in Engineering
Sentiments, speculation and rumours have been identified by the Organization of Petroleum Exporting Countries, OPEC, as some of the major determinants of developments in the global oil market.
OPEC’s Secretary General, Dr. Mohammed Barkindo, revealed this in a paper he presented at the Ninth IEA-IEF-OPEC Symposium on Energy Outlooks in Saudi Arabia.
According bto him, it was unfortunate that the oil market can be subjected to forces which are not often grounded in facts.
Barkindo said: “Unfortunately, the oil market can often be subjected to forces which are not grounded in fact, especially at times of disconnect between prices and market fundamentals.
“Sentiment, speculation and even rumours have been known to drive the market. The situation can be further complicated by computerised or automated trading, with algorithms, Big Data and AI playing important roles.
“Energy outlooks are an antidote for this post-factual age. Indeed, our common currency, as it were, is fact-based data. Our industry is currently under siege from multiple fronts. Yet, some of these comments have tended to mischaracterise our objectives and misrepresent market realities.
“A classic example of this is the persistent notion that oil is on the verge of demise. According to this belief, renewables are about to completely replace hydrocarbons and those who seek to discuss the nuances of this idea are downplaying the climate challenge.
“At OPEC, we are acutely conscious of the challenge of climate change. Our member countries continue to take appropriate policies, implement programmes and projects to tackle the challenges of climate change.
“At the most recent UN Climate Change Conference, COP24 in Katowice, OPEC reiterated that it remains fully engaged and supportive of the Paris Agreement.
“Indeed, some of our member countries heavily invest in alternative sources of energy. For example, Saudi Arabia plans to generate some 59 gigawatts (GW) of electricity from solar and wind by 2030, and eventually produce upward of 200 GW from renewable sources.”
Continuing, the OPEC scribe said: “However, this is not a race to renewables alone; it’s a race to lower greenhouse gas emissions. For this reason, OPEC emphasizes the importance of energy efficiency and its great enabler, technological innovation.
“Given how our industry can be mischaracterised, the need for dialogue is all the greater. Consider the Ancient Greek roots of the word: ‘dia’ meaning through and ‘logos’ meaning reason or speech. And reasoned discussion, based on factual analysis, is crucial in this age of ‘alternative facts.’
“Dialogue fosters transparency, which is another priority for our organisation. OPEC truly is an ‘open book.’ All our publications and data are available online, accessible via digital Apps to the general public free of charge.
“Dialogue and transparency are indispensable to the multilateral system. OPEC will always align with the values at the heart of the multilateral system and affirms absolute conformity between its activities and principles, and the ideals of the UN. We are an intergovernmental organisation which has been registered at the UN Secretariat since 6 November 1962.
“These noble principles manifest themselves in the historic new chapter heralded in the oil industry through the ‘Declaration of Cooperation’ process. A win-win situation has developed and made a substantial contribution to the synchronous global economic growth seen in 2017-18.
“Intensive discussions on further institutionalizing our cooperation are currently underway, as we finalize the draft ‘Charter of Cooperation.’
“Given the achievements to date, it is no wonder that all parties are enthusiastic to further cement our cooperation through a collaborative approach. Looking forward, there can be no doubt that with the GCEF, IEF, IEA and OPEC working together, guided by reason, supported by facts, we can continue to meaningfully contribute to the industry and the global economy.”
Published in Business
The prices of crude oil rose on Monday as hopes for an end to the year long tariff row between the United States and China approached a close.
Also the production cut deal by members and allies of the Organization of Petroleum Exporting Countries, OPEC, contributed to price rally.
International Brent futures were at 65.25 dollars a barrel at 07:13 GMT, up 18 cents, or 0.3 per cent, from their last close, while US West Texas Intermediate crude futures were at 55.94 dollars per barrel, up 14 cents or 0.3 per cent.
There are indications that US and China are close to a deal that would roll back US tariffs on at least 200 billion dollar worth of Chinese goods, just as Beijing has also pledged structural economic changes and elimination of retaliatory tariffs on US goods, a source briefed on negotiations said on Sunday in Washington.
The “substantive progress” China and the US have made in their trade talks has been “well-received” in both countries and around the world, a senior Chinese official said on Monday.
According to a Reuters’ survey, Supply from OPEC fell to a four-year low in February, as top exporter, Saudi Arabia and its allies over-delivered on the group’s supply pact while Venezuelan output registered a further involuntary decline.
“OPEC exports are off by over 1.5 million barrels per day (bpd) since November,” Barclays bank said in a note released on Sunday.
“The supply picture looks generally tighter this year,” said energy analysts at Fitch Solutions in a note on Monday, adding they expected Brent to average 73 dollars per barrel in 2019.
There are also indications that Oil prices have been further pushed up by US sanctions against OPEC-members Iran and Venezuela. Barclays bank is of the view that this has resulted in a reduction of around two million bpd in global crude supply.
There are also signs that the US oil production boom of the past years, which has seen crude output rise by more than two million bpd since early 2018 to more than 12 million bpd, may slow down.
Published in Business
The Nigerias capital market on Monday closed in the positive as Bank stocks on the Nigerian Stock Exchange, NSE, rallied to reverse some of the losses recorded in the last trading day in February.
Though it emerged the biggest loser on Thursday, after declining 4.56 percent, the banking sector came tops on Monday, rising by 2.66 percent.
This performance of the sector is attributable to the major gains recorded by Guaranty Trust Bank Plc and Zenith Bank Plc.
The All Share Index gained 0.95 per cent, increasing from 31,827.24 basis points on Friday to 32,129.94bps on Monday, while the year-to-date return improved to 2.2 per cent.
Market capitalization of stocks listed on the Nigerian Stock Exchange increased from N11.869 trillion on Friday to N11.982 trillion on Monday, as investors gained N112.9 billion.
Activity level, however, weakened as 228.484 million shares valued at N2.615bn exchanged hands in 3,544 deals, compared to the 341.954 million shares valued at N3.752bn that exchanged hands in 4,513 deals on Friday.
Top traded stocks by volume were Diamond Bank Plc (33 million units), United Bank for Africa Plc (31.1 million units) and Zenith Bank Plc (28.9 million units) while the top traded stocks by value were Zenith Bank (N703.1m), Dangote Cement Plc (N510.8m) and GTB (N391.0m).
Performance across sectors was majorly positive as three sectors closed on a positive note.
The banking sector saw buying interest in GTB and Zenith Bank stocks, while consumer goods sector was the second highest gainer, up by 0.43 per cent on the back of major gains recorded in International Breweries Plc.
Also, the industrial goods sector increased by 0.31 per cent, prodded by gains in Dangote Flour Mills Plc, Dangote Cement, Lafarge Africa Plc and Cement Company of Northern Nigeria Plc.
However, the insurance sector emerged the biggest loser for the day as a result of losses recorded in NEM Insurance Plc and Law Union and Rock Insurance Plc, while the oil and gas sector remain unchanged.
Investor sentiment, as measured by the market breadth (advance/decline ratio), stood at 0.3x as 25 firms gained against the 10 losers that emerged.
Mcnichols Plc, Cutix Plc, NPF Microfinance Bank Plc, Wema Bank Plc and Sovereign Trust Insurance Plc, were the top five gainers as their respective share prices gained 9.80 per cent, 9.76 per cent, 9.72 per cent, 9.09 per cent and 8.70 per cent.
The losers were led by PZ Cussons Nigeria Plc, Livestock Feeds Plc, Chi Plc, Law Union and Rock and United Capital Plc, with their share prices declining by 9.67 per cent, 8.96 per cent, 7.14 per cent, 5.45 per cent and 2.99 per cent, respectively.
Published in Bank & Finance

The borderlines separating Kenya and Somalia were first drawn in the late 19th century. Like everywhere else on the continent, this was the work of cartographers working for European colonial powers. Across the continent they replaced porous spaces in which people engaged openly across culture, language, religion, kinship, and ethnicity with straight-line geometrics.

East Africa was no exception. For ages, the borderlands in the Horn of Africa conformed to the adage:

Wherever the camel goes, that is Somalia.

Colonial border lines met with fierce resistance. In Kenya the line delineating the Northern Frontier District produced an immediate reaction, sparking the Shifta War soon after Kenya’s independence in 1963. The area is ethnographically dominated by Somalis.

The legacy of that unfinished business has now migrated to the Indian Ocean.

Kenya and Somalia are at loggerheads about the location of their maritime boundary. The claim that Kenya is making cuts off Somalia’s claim. And Somalia’s claim cuts off Kenya’s claim.

At stake is control over a 100,000 square kilometre triangle in the Indian Ocean proven to contain large deposits of oil, gas and tuna.

Legacies of imperial line drawing

Lord Salisbury, the three-times British Prime Minister who presided “over a vast expansion of the British Empire in Africa”, once noted the absurdity of the line drawing undertaken by Europeans to accomplish the scramble for Africa. Colonial powers ceded

mountains and rivers and lakes to each other, only hindered by the small impediment that we never knew exactly where the mountains and rivers and lakes were.

Lord Curzon, Queen Victoria’s Viceroy of India and the man who in 1905 split Bengal into hugely contentious and imperfect Muslim and Hindu areas, called the resulting cartographic Githeri

the razor’s edge on which hang suspended the modern issues of war or peace.“

European line drawing accomplished a kind of economic efficiency in pursuit of colonial administration. But it was indifferent to the huge diaspora and human drama provoked by bisecting and trisecting East Africa.

Winston Churchill as a British parliamentarian and before becoming Prime Minister, justified it in terms of Europe’s civilising mission. In 1907 he rode the 600-mile railway that had been built as part of Britain’s efforts to consolidate the East Africa Protectorate by connecting the port of Mombassa to Lake Victoria Nyanza. He marvelled in his 1908 travelogue,My African Journey, over the engineering masterpiece, which signalled to him

a slender thread of scientific civilisation … drawn across the primeval chaos of the world.

In fact imperial line drawing minted another kind of chaos. This chaos would pit Kenya’s post-colonial state building against Somali’s self-determination and identity politics while spreading tendentious seeds of division across the map of East Africa. Frontier fighting took hold in the Northern Frontier District, and has followed every kink and turn in the borderland, which now finds expression in a simmering dispute out into the sea.

Somalia versus Kenya at the World Court

In 2014 Somalia took Kenya to the Word Court after Kenya failed to attend a third round of delimitation talks.

Somalia wants its sea border to extend the frontier line of its land border in a southeast direction. It bases its claim on the equidistance principle derived from the United Nations Convention on the Law of the Sea.

Kenya claims the border follows along the parallel line of latitude directly east of its shared land terminus with Somalia. The claims overlap contested legal regimes involving the continental shelf, the Exclusive Economic Zone, and extended continental shelf claims beyond 200 nautical miles from the coast.

Kenya has regarded the line parallel to the line of latitude as the border demarcation for almost 100 years. The line mimics the sea border maritime demarcation separating Tanzania and Kenya.

Kenya argued that the two countries had agreed in a 2009 Memorandum of Understanding to settle this dispute outside of the World Court, once the United Nations Commission on the Limits of the Continental Shelf had concluded its examination of separate submissions made by each coastal state.

Counsel for Somalia argued that the memorandum of understanding never created a binding commitment to an alternative method of dispute settlement.

In February 2017, the Court agreed with Somalia and proceeded with the case. Counsel for Somalia claimed that the court has never delimited a boundary on the basis of Kenya’s approach, nor are Kenya’s arguments supported by decisions of other international courts or arbitral tribunals. Rather, owing to its lack of confidence in the merits of the case, Somalia claims

Kenya is looking for a way to avoid the Court’s exercise of jurisdiction.

A few weeks ago, Nairobi abruptly recalled its ambassador to Mogadishu and sent back the Somali ambassador. Kenya’s claim: Somalia purportedly auctioned off shore oil blocks in the disputed sea region to European energy companies.

Diplomats are now working to describe the incident as something of a misunderstanding. European oil companies have also disputed the procurement of such licenses, fully aware that the case is sub judice and the outcome is anything but determined.

A deeper subtext

The bottom line is that Kenya and Somalia are intertwined and need one another.

Some analysts attribute the current diplomatic row to short-term political posturing as Somali regional and presidential elections approach in 2020. However, the longstanding tension over terrestrial divisions bodes ill for a settlement of the sea dispute as long as the adjoining states overlay the problems of colonial cartography with a firm commitment to eating their sovereignty cake and having it too.The Conversation


Christopher R. Rossi, Lecturer in international law, University of Iowa

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Economy
Tuesday, 05 March 2019 08:41

N12.6tn generated as tax under Buhari

The Federal Inland Revenue Service of Nigeria (FIRS) has disclosed that a total of N12.62 trillion was generated as revenue from  2016 to 2018.
This was revealed in a document made available to newsmen by the Head of Communications and Servicom Department of the agency, Wahab Gbadamosi.
N3.3 trillion was generated in 2016, N4.02 trillion in 2017 and N5.32 trillion was realised in 2018, making it the highest revenue generated in the last three years.
The document stated that this was made possible as a result of several initiatives designed by the agency to ensure a robust tax administration that is beneficial to all stakeholders.
It explained that non-oil tax revenue increased to N2.149 trillion in 2016, N2.5 trillion in 2017 and N2.852 trillion in 2018.
The document quoted the Executive Chairman of the agency, Babatunde Fowler saying the achievement was a reflection of the diversification of the Nigerian economy by the Federal Government.
“This does not mean that we have left behind the oil tax revenues. It grew from N1.15 trillion in 2016 to N1.52 trillion in 2017 and N2.52trillion in 2018. Non-oil tax revenue is still over in excess of the oil tax revenue.
“We also do collect four per cent in terms of cost of collection but only for non-oil revenue collected. On oil revenue collection, we do not get any commission and we have been able to make sure that our services are more efficient and convenient to taxpayers.
“This has brought about a considerable reduction in the cost of collection of actual taxes.
“In 2016, it was 2.6 per cent, 2017, 2.49 per cent and 2018, 2.14 per cent, meaning that our actual cost of collection is heading downwards based on the efficiency and technology that we are deploying to tax collection.
“Some of the ICT initiatives that we have continued to build on are the e-payment channels which make it convenient and easy to pay taxes anywhere in the world and to also download receipts of payment from any point one so desires,” he said.
Published in Bank & Finance

The deported chief executive officer (CEO) of telecommunications company MTN Uganda, has sued the country's attorney general.

Mr Wim Vanhelleputte, a Belgian national married to a Ugandan, is challenging his deportation on grounds that it was irrational and illegal.

In his affidavit, a copy of which was seen by this reporter, Mr Vanhelleputte says he is entitled to fair and just treatment and due process before an administrative body and/or any person, and also has a right to be heard.

"The applicant has never committed any offence or criminal act under the laws of Uganda and neither is he responsible for breaking any law. That there's no lawful reason whatsoever for his deportation. That it is in the interest of justice that his deportation be quashed," the affidavit reads in part.

Mr Vanhelleputte further contends that he has been a regular visitor to Uganda since 1993. He further avers that he has been married to Babra Adoso Vanhelleputte, a Ugandan citizen since April 29, 2000.

"Our marriage was celebrated both in Uganda and Belgium. That I and my wife have two children namely Vanhelleputte Jonathan aged 17 and Vanhelleputte Jason 13," reads his affidavit.

Mr Vanhelleputte now wants the High Court in Kampala to declare that his deportation by the Internal Affairs minister, Jeje Odongo, was arbitrary, irrational and illegal. He also wants court to quash his deportation and order for general damages for illegal detention and deportation and any other relief that court shall deem fit.

This comes amid reports that MTN Group Chief Executive Officer Rob Shuter is one of the high profile guests expected to attend the Africa Now Summit in Munyonyo, Kampala which will take place from March 12 to March 13.

Museveni last met the MTN group boss in January in Davos, Switzerland, where they discussed an array of issues. At that meeting, Museveni advised MTN to work towards floating shares on the Uganda Stock Exchange so that Ugandans can partly own the company.

Rwanda's President Paul Kagame (EAC-Chairman); South Africa's Cyril Ramaphosa; and Egypt's Abdel Fattah Saeed Hussein Khalil El-Sisi (AU-Chairperson) are also expected to attend the two-day event.The summit is an initiative of Africa Strategic Leadership Centre (ASLC) and will be conducted under the theme, "Towards a secure, integrated and growing Africa".

Source: Monitor Uganda

Published in Telecoms
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