Nigeria’s President Muhammadu Buhari cleared the way for the launch of an infrastructure company with initial seed capital of a trillion naira ($2.4 billion) as Africa’s largest oil producer attempts to steer itself out of a likely economic contraction.
The company, named Infraco, which is being set up in partnership with the private sector, is expected to grow its capital and assets to 15 trillion naira over time to fund public projects like roads, rails and power, Laolu Akande, the vice president’s spokesman, said in a statement on Friday.
The government of Africa’s most populous country is seeking to expand investments to stimulate recovery in an economy facing its second recession in four years. Nigeria requires at least $3 trillion over 30 years to close its infrastructure deficit, Moody’s Investors Service said in a November report.
Vice President Yemi Osinbajo will head a committee charged with getting the company started, while central bank Governor Godwin Emefiele will chair Infraco. The managing director of the NSIA, the president of the AFC, representatives of the Nigerian Governors Forum, and the ministry of finance will also help form the board, along with three independent directors from the private sector.
The Securities and Exchange Commission (SEC) has joined the Central Bank of Nigeria (CBN) to ban crypto trading.
SEC has stopped admittance of affected persons into its Regulatory Incubation Framework for Fintech firms.
In a statement on Thursday, SEC said it received inquiries on a perceived policy conflict between its September 11 statement on Digital Assets, Classification and Treatment and the February 5 CBN circular.
The commission stressed that there were no contradictions or inconsistencies.
It clarified that last year’s statement was to provide regulatory certainty within the digital asset space, due to the growing volume of reported flows.
SEC said as the regulator of the banking system, the CBN has identified certain risks that threaten investors’ protection.
The commission disclosed that it engaged with the CBN and agreed to work together to further analyse and better understand the risks.
“For the purpose of admittance into the SEC Regulatory Incubation Framework, the assessment of all persons (and products) affected by the CBN Circular of February 5, 2021, is hereby put on hold until such persons are able to operate bank accounts within the Nigerian banking system”, it announced.
It said planned implementation of the Regulatory Incubation Guidelines for FinTech firms who intend to introduce innovative models for offering capital market products and services will continue.
SEC added that it would keep monitoring developments in the digital asset space to create a regulatory structure that enhances economic development and promotes a safe and transparent capital market.
Air Namibia has announced the cancellation of all its operations, effective February 11, as the country’s government is poised to announce its flag carrier's voluntary liquidation.
In a late-night notice on social media, the 75-year-old airline announced that all its aircraft would be grounded. Its reservations system was suspended with no new bookings being accepted from February 11, 2021. Passengers have been advised to register claims for refunds.
Air Namibia spokesperson Twaku Kayofa told ch-aviation the government was expected to make an announcement on to explain its decision.
Kayofa confirmed that trade union representatives had informed the company’s 636 employees on February 10 that they would receive an ex gratia pay-out equal to 12 months of salary, but no benefits.
The government, the airline’s executive, and unions are to meet on Thursday to discuss the liquidation's finer details. Cabinet has already approved the voluntary liquidation of the airline with a three-person board of directors now appointed to prevent the airline’s assets from being attached in case of failure to pay creditor Challengair its first instalment next week.
According to the Namibian Sun newspaper, the board includes lawyer Norman Tjombe, businesswoman Hilda Basson-Namundjebo, and economist James Cumming who will collectively assist interim CEO Theo Mberirua in running the company.
The decision to shutter the 75-year-old carrier follows the airline’s board's resignation on February 3, after the government did not oppose an application in the Namibian High Court to have the airline liquidated. The application was made by the estate of former Belgian operator Challengair over outstanding payments on legacy debt of 1998 concerning the lease of a B767-300(ER). Lawyers representing both parties reached an 11th-hour out-of-court settlement on January 28 for EUR9.9 million (USD11.9 million), but without the government's apparent support, who said it could not afford to bail out the airline, nor had it managed to find it a strategic equity partner. The first installment of EUR5 million (USD6 million) on the settlement was due on February 18. Kayofa told ch-aviation Challengair would join the list of creditors following liquidation.
Finance Minister Ipumbu Shiimi earlier said a turnaround plan for the cash-stricken flag carrier would cost taxpayers significantly more than NAD7 billion Namibian dollars (USD461.6 million), after already spending NAD8.4 billion (USD554 million) in the past 10 years to bail out the airline. He said Air Namibia had been loss-making since its inception, plagued by a flawed business model that rendered 15 out of its 19 routes unprofitable. A combination of the types of aircraft, routes, high employee numbers, and other structural inefficiencies had contributed to the financial distress of the company.
At the time of its collapse, Air Namibia's fleet entailed four A319-100s (of which two are owned and two are leased from Deucalion Aviation Funds), two A330-200s (both leased from Castlelake), four EMB-135ERs (financially leased from HOP! (A5, Paris Orly) but unencumbered since October 2020), and one inactive B737-500 (owned). The Namibian government has been in contact with the lessors, Kayofa said.
Bitcoin was driven to new record highs Tuesday morning – trading above $48,000 – as investors continue to pile in on the news that Tesla bought $1.5bn worth of the cryptocurrency.
A filing with the U.S. financial regulator on Monday reveals that the electric car company run by the world’s richest person, Elon Musk, has made the massive purchase of the digital asset which has jumped more than 300% in a year.
The surge in the price of Bitcoin and other cryptocurrencies, including Dogecoin – which was also fuelled by an endorsement by Musk on Twitter over the weekend - comes as digital currencies become mainstream due to soaring interest from both retail and institutional investors, increasing levels of mass adoption, and as global interest rates remain at historic lows.
But how does a new crypto investor choose a platform on which to buy, sell, hold and exchange?
Nigel Green, an influential cryptocurrency expert and CEO of deVere Group, one of the world’s largest independent financial advisory and fintech organizations, says there are five fundamentals.
He says: “More and more people are wanting to invest into cryptocurrencies, knowing that they are the future of money.
“But many, even those who have extensive knowledge of the stock market, have concerns about selecting the right cryptocurrency exchange.
“The total capitalisation of the cryptocurrency market is now an estimated $1.2 trillion, but it is still lightly regulated. This means that it’s vital that investors know what to look for in an exchange.”
He continues: “There are five fundamentals for your checklist.
“First, security. The system of a private exchange for saving consumer documents as well as funds should be as decentralised as possible as if it’s all on a couple of web servers, that makes them easy hacking targets.
“Investors should also look for a system that utilises two-step verification throughout login, such as a password, and also quick-expiring codes received through the app.
“Avoid exchanges which offer cheap trade costs or services but are based in areas around the world where investor security is weak.
“In addition, investors ought to assess exchanges as well as the businesses behind them as they would certainly do with any other organisation that they would depend on to protect their money.”
“Second, costs. Some exchanges are proficient at addressing costs in advance, while others hide them. Go for the exchanges that are upfront and transparent.
“Third, simplicity and ease of use. Take into account that you’re not always going to trade from your desktop. In fact, finding an exchange that focuses on 'on-the-move' trading via a secure app is often a better option.
“Fourth, dependability. Does the exchange run efficiently when trading quantity is high, or when the currencies rate is see-sawing? Some exchanges are notorious for their system accidents and trading stops.
Fifth, client service. Make sure an exchange has a chat or fast communication service integrated.”
Mr Green concludes: “Whilst Elon Musk’s Tesla, and other institutional investors, including PayPal amongst others, will have teams of crypto experts behind them, retail investors can also get involved.
“Investing in cryptocurrencies remains highly speculative and it is not for everyone - but one of the keys to success would be selecting the right crypto exchange.”
African Development Bank (AfDB) President Akinwumi Adesina said he was optimistic about the outlook for Africa’s economic recovery despite the current challenges facing the continent, particularly the coronavirus pandemic.
Adesina made the comments during a virtual ceremony of the African Leadership Magazine’s African of the Year valedictory meeting.
“There is a light at the end of the tunnel. I’m very positive that African economies will bounce back over the next two years,” he said.
“As we look forward to the future, we will do so with confidence, hope, and a sharper focus.”
Africa’s economy, like much of the world’s, has taken a battering by the effects of the pandemic with trade and supply chains being disrupted, and some industries such as aviation and tourism being among the worst affected.
A report by the AfDB last year said Africa stood to lose between 25 and 30 million jobs in 2020 depending on the level of economic contraction due to the effects of the pandemic.
Even as he projected a recovery in the near future, Adesina pointed out that Africa should also build “forward and faster”.
Adesina said it was crucial to empower the continent’s youth and women to ensure it reached its full economic potential.
“Together we will create new opportunities for Africa’s youth and trigger a youth-based wealth system in Africa. Together we will ensure that growth delivers financing for women of Africa,” he said.
Despite boasting the largest population of young people in the world, youth unemployment is a major challenge the continent still grapples with.
He also called on stakeholders to invest in the youth rather than offer them handouts in order to “unlock entrepreneurship and put their skills to work”.
“I see the youths as an asset to Africa. That’s why AfDB is going full steam ahead with our Jobs for Youth strategy, aiming for 25 million new positions before 2025.”
Angola has asked a Dutch court to hand over a half-billion-dollar stake in the Portuguese oil company Galp linked to ex-first daughter Isabel Dos Santos, its lawyers told Reuters.
Angola’s government says top officials under former president Jose Eduardo dos Santos took advantage of high oil prices in the last decade to spin a global web of business deals that led to their personal enrichment at the country’s expense.
Battered by COVID-19 economic fallout and mired in foreign debt, Angola is seeking to recover assets it says were siphoned off.
Its prime focus is Isabel dos Santos, the ex-president’s daughter, a business tycoon who became Africa’s richest woman.
The legal bid for the Galp stake has not previously been reported.
Dos Santos briefly ran state oil company Sonangol from 2016 until 2017, when her father’s four-decade rule ended.
Representatives for Isabel dos Santos, who lives outside Angola, did not reply to a Reuters request for comment.
She has denied any connection to the holding company at the centre of the case - Exem - which she says was owned by her late husband, rejects charges of wrongdoing and says she faces a political witch hunt by Angola’s new leadership.
Representatives of Exem did not reply to a request for comment. Dutch law firm Van Doorne, which represents Exem in the lawsuit, also did not respond to a request for comment.
The legal claim by Sonangol is due to be heard in the last week of May in the Amsterdam court of appeal, the 100%-state owned company’s lawyer Emmanuel Gaillard of law firm Shearman & Sterling said.
It will argue that Exem’s stake was acquired through embezzlement and money laundering.
“It’s all corruption ... you (Exem) owe us the shares, the indirect participation in Galp, because it’s theft. It’s illegal, therefore you have to pay it back,” Gaillard said.
Sonangol’s lawyers say the sale by Sonangol of part of its stake in Esperaza to Exem made no business sense for Angola and was made to enrich the former first family.
Under President Dos Santos, Sonangol sold a 40% stake in an offshore holding company, Esperaza, to another holding company - Exem - owned by Isabel’s husband Sindika Dokolo, a Congolese businessman who died in a diving accident last year.
Esperaza, in which Sonangol retained a 60% stake, in turn partnered with the business empire of Portugal’s Amorim family to form yet another holding company, Amorim Energia, which is the largest shareholder in Portuguese oil company Galp Energia with a 33.3% stake.
The value of holding company Exem’s indirect stake in Galp fluctuates with oil prices and is currently worth about $500 million.
A source with knowledge of the Amorim family’s position, who declined to be named, said its main interlocutor in the joint stake was not Exem but Sonangol, calling their partnership with the state firm “good and close”.
“(The case) does not affect these relations, it does not change anything”, the source added.
A representative of Esperaza did not respond to a request for comment.
Galp has said it has no dealings with Dos Santos. It declined further comment for this story.
The dispute, which is being heard in Amsterdam after both sides agreed on arbitration, already resulted in a ruling last September that removed Exem’s representative from Esperaza’s board and put its stake under the control of a court-appointed trustee.
The path has been cleared for Nigeria's Ngozi Okonjo-Iweala to become the first woman and the first African to lead the World Trade Organization after South Korea's candidate pulled out of the race for the job.
Yoo Myung-hee, the South Korean trade minister, announced her decision to withdraw in a televised briefing on Friday.
Okonjo-Iweala, an economist and former finance minister of Nigeria, already enjoyed broad support from WTO members, including the European Union, China, Japan and Australia.
However, the United States, under the Trump administration, had favored Yoo, complicating the decision-making process since the selection of a new leader requires all WTO members to agree. Okonjo-Iweala's formal selection may have to wait until after the United States appoints a new trade representative.
Yoo said that her decision had been reached after "close consultation" with the United States. The WTO had been without a leader for too long, she added.
The Geneva-based body, tasked with promoting free trade, has been without a permanent director general since Roberto Azevêdo stepped down a year earlier than planned at the end of August after the WTO was caught in the middle of an escalating trade fight between the United States and China.
The Trump administration was highly critical of the WTO and undermined its standing by imposing tariffs on Canada, Mexico, China and the European Union. Okonjo-Iweala will thus assume control of an organization that has struggled to prevent trade spats between its members.
While US President Joe Biden has already taken steps to restore support for multilateral institutions, he is expected to proceed with caution when it comes to signing any new trade deals.
In a speech to the State Department Thursday, Biden pledged to put diplomacy back at the center of US foreign policy, but was also careful to emphasize that foreign policy should benefit middle-class Americans.
Okonjo-Iweala, who hails from one of the few parts of the world where free trade is ascendent, told CNN in August that trade would play an important role in the recovery from the coronavirus pandemic.
"The WTO needs a leader at this time. It needs a fresh look, a fresh face, an outsider, someone with the capability to implement reforms and to work with members to make sure the WTO comes out of the partial paralysis that it's in," she said in an interview.
Okonjo-Iweala spent 25 years at the World Bank as a development economist, rising to the position of managing director. She also chaired the board of Gavi, which is helping to distribute coronavirus vaccines globally, stepping down at the end of her term in December.
The board of Air Namibia has resigned after launching a scathing attack on the Namibian government for “usurping its functions” and interfering in the management of the state-owned airline, making it “extremely difficult for the board to execute its fiduciary role” as it sought to save the airline from liquidation.
All four board members tendered their resignations to Public Enterprises Minister Leon Jooste on February 3 after earlier issuing a statement that revealed they were at loggerheads with the government over efforts to rescue the airline. Air Namibia spokesperson Twaku Kayofa said the airline was now awaiting guidance from the government on the way forward.
Clarifying its actions concerning a EUR9.9 million (USD24.2 million) out of court deal on January 28 that averted Air Namibia's liquidation, the board earlier underlined it had always acted in the best interest of the airline and the shareholder.
This followed after the Finance and Public Enterprises Ministries last week appeared blindsided by the 11th-hour settlement reached with the liquidator of defunct Belgian lessor Challengair, which, if it had failed, would have resulted in the liquidation of the flag carrier on January 29 over outstanding payments of a 1998 lease of a B767-300(ER). The government had decided not to oppose the court case, and thereby the possible liquidation, saying it could not afford to fund the airline's turnaround, nor had it found a strategic partner for the carrier.
The board reacted with all guns blazing, saying the relationship between the two parties had degenerated to the point where the Ministry of Public Enterprises:
The board believed it was in the best interest of the airline and the shareholder to avoid liquidation and to implement the re-start plan, adding it had always been clear that Air Namibia would require a “significant capital injection from the shareholder”.
However, the impression created that it needed NAD7 billion (USD461.6 million) to restart operations was incorrect, as this figure included forward debts until 2025 that were not payable now.
Instead, the airline’s restart plan would result in a “leaner, competitive, and sustainable airline” following the termination of all aircraft leases and non-profit-making routes, and the re-negotiation of most contracts. The airline’s paid-for fleet of six aircraft could be used to generate revenue without the burden of lease costs. The restart would preserve at least 50% of 636 jobs, which would otherwise be lost.
The board revealed the Namibian government had not agreed to support the settlement deal with Challengair financially. “Late evening of January 28, 2021, the shareholder communicated that it would not avail funds for Air Namibia to settle with Challengair. It had also become clear at the time that the Ministry of Public Enterprises, as the second respondent, had also taken the decision not to defend the matter. The inevitable consequence was, in all likelihood, a liquidation with all its disastrous consequences. Faced with the real prospect of liquidation, Air Namibia engaged and reached a settlement with Challengair for the debt owed to the latter,” the board explained. “The board considered the fact that the outstanding debt owed to Challengair was significantly lower than the assets of the company and that even if the most valuable asset was attached, the company would still continue operating.”
“The company had no direct position from the shareholder on their views regarding liquidation,” the board revealed. “The shareholder was engaged, and their position was to leave the matter to the board, so long as the impression was not created that the settlement agreement would bind the shareholder. The board signed with the full understanding that the agreement had no guaranteed backing of the state, and there is no single mention of the government/state/Ministry of Public Enterprises in the agreement. It should also be noted that the window of opportunity to file for liquidation still remains open.”
With the first EUR5 million (USD6 million) instalment due on February 18, there was sufficient time to explore alternative funding, the board said. It believed the payment plan had secured a window in which the government could finalise ongoing efforts to save the airline.
The board said liquidation would trigger defaults under lease agreements guaranteed by the government, which in turn would nullify all future options the government was considering, as insolvency constituted a breach of lease agreements. It said historical debts dating back 23 years would also need to be serviced, whether the airline was liquidated or not.