Nigeria hands state power assets to private buyers

Reuters reports that President Goodluck Jonathan handed ownership of the bulk of the Power Holding Company, the state electricity company to private buyers on Monday, completing one of the final stages of the privatisation process.

“I congratulate our new owners who have taken over the engines and cables that are expected to drive not just the electricity industry but also the socio-economic well-being of the nation,” Jonathan said, after handing the private buyers certificates of ownership.

“To the Nigerian people, who have demonstrated such great patience and confidence, putting up often with darkness… I say better days are coming,” Jonathan added.

Fixing electricity could reduce business costs by up to 40%, add 3% to GDP and cut the mass unemployment that fuels unrest seen in oil theft in the south and the Islamist insurgency in the north, economists say.

The PHCN was split into six generation and 11 distribution firms, all sold separately, for about $2.5 billion.

Private buyers for five generation companies and 10 distribution firms collected their share certificates and operating licenses from Jonathan during the ceremony.

The buyers will take physical ownership of the infrastructure next month, government officials said.

Two remaining companies are expected to be sold within six months.

Nigeria is also planning to sell off 10 newly built state power plants, all gas-fired, by next year.

If competent buyers get the NIPP plants it could be a boost for foreign energy operators with latent gas reserves like Royal Dutch Shell and Chevron.

A lack of investment in the transmission network, which remains in public hands, poor gas supply and labour disputes still threaten to delay progress in boosting power output.

The Federal government has agreed to pay off more than PHCN 14,000 workers with a total of 384 billion naira ($2.4 billion).

Jonathan said on Monday that $750 million had been raised to help improve transmission, some funds coming from a Eurobond.

As well as selling off existing assets, more are planned. Nigeria signed a deal last week for Chinese state companies to build a $1.3 billion power plant.




Nigeria signs $1.3 billion power plant deal with China

Nigeria has signed a deal for Chinese state companies to build a $1.3 billion power plant as part of efforts to end the chronic electricity shortages, according to Reuters.

President Goodluck Jonathan is on a drive to increase investment in the power sector and has nearly completed the privatization of the Power Holding Company, the state electricity company.

A loan from China‘s Eximbank will pay for 75% of the planned 700 megawatt Zungeru hydro-electric power plant, while the Nigerian government has put up the rest of the cash.

The plant would be a boost to the country’s current 4,500 megawatt electricity capacity and is scheduled to be finished in four years.

The building of a hydro plant in Zungeru, Niger state was first announced three decades ago but this is the most significant effort yet to get the project underway, experts say.

“This project will create thousands of jobs for Nigerian engineers, technicians and artisans during the construction phase … It will also boost the economy,” Nigeria’s Finance Minister Ngozi Okonjo-Iweala said in a statement.

Despite holding the world’s ninth largest gas reserves, Nigeria only produces a tenth of the amount of electricity as South Africa for a population three times the size.

NSE introduces new listing rules

Nigerian Stock Exchange building

Nigerian Stock Exchange building (Photo credit: Wikipedia)

The Nigerian Stock Exchange has informed issuers of equities and bonds of new listing rules on board and general meetings.

In a notice to issuers, posted on its website, the NSE said, “The objective of the rules is to establish certain reporting requirements in respect of specific meetings; and institutionalize best corporate governance.”

A summary of the draft rules, among other things, highlight the importance of Annual General Meetings and provide guidelines for notice, date, and venue of meetings as well as the right of attendance.

For instance, a section of the rules titled, ‘Responsibility of the directors/trustees in relation to general meetings,’ sets out the responsibilities of the directors of an issuer or the trustees of a bond.

According   to the NSE, the section indicates persons who must attend general meetings, reports to be presented at the AGMs and the required time to hold an AGM. It also states the manner of dealing with securities holders’ enquiries at the meetings.

With regards to ‘notice of meeting’, the NSE explained that, the draft rule made it mandatory for each issuer to submit to the NSE for review, a draft copy of the notice of meeting, circulars and annual reports, including press releases that will be issued to holders of listed securities.

It added that the draft rule also “provides that the approval of the Exchange must be obtained before making changes in the contents of the notice.

“Where it becomes necessary to postpone or cancel a meeting, the issuer must make an announcement in at least two national daily newspapers and explain the reasons for such decision.”

The NSE, which said the rules were subject to approval by the Securities and Exchange Commission, called on the issuers to go through the rules and make comments.

It said, “We are involving as many stakeholders as possible in this rule-making exercise in order to achieve the aforementioned goals. Please be assured that we shall strive to take as many comments as possible into consideration during the process.”

Stakeholders are expected to send in their comments by October 9, 2010, it added.




The Central Bank of Nigeria cracks down on money laundering

Headquarters of the Central Bank of Nigeria in...

Headquarters of the Central Bank of Nigeria in Abuja, Nigeria (Photo credit: Wikipedia)

Reuters reports that the Central Bank of Nigeria has announced new measures to tackle money laundering which it claims is weakening the naira and risks pushing up inflation, and which it suspects is linked to political campaigning for the 2015 elections.

“Available statistics indicate that Nigeria has become the largest importer of U.S. dollars,” the regulator said in its Friday’s notice explaining that its twice-weekly wholesale foreign exchange auction will be replaced with a retail version requiring dealers to reveal the identity of their buyers.

Corruption in the build-up to the 2015 election is partly responsible for the increase, Governor Lamido Sanusi said at the CBN’s Monetary Policy Committee meeting on Tuesday, adding that it is “absolutely wrong” for bureaux de changes (BDC) to buy hundreds of millions of dollars without accountability.

As part of its efforts to curb money laundering, the CBN has asked Deposit Money Banks to start paying proceeds from international money transfer firms such as Western Union and MoneyGram only in naira.

Already, the CBN has revoked the operating licenses of 20 Bureaux de change operators, which it said purchased “unusually large amounts of foreign exchange from the DMBs and failed to render returns of the utilization.”

The CBN, in a circular on its website, said, “The affected BDCs did not render returns on the utilization of the foreign exchange purchased and also failed to provide documentary evidence that their purchases were utilized for eligible transactions in accordance with the relevant provisions of the Money Laundering Act.

“Consequently, the operating licenses of the 20 BDCs have been revoked by the CBN. Also, the Economic and Financial Crimes Commission has been requested to investigate the matter for the persecution of indicted persons.”

The CBN’s new measures do not affect the $250,000 weekly limit for foreign exchange dealers’ sales to bureaux de changes.

However, dealers will now have to obtain prior approval to import foreign exchange banknotes.

The limit on MasterCard and Visa naira debit and credit card spending abroad has been increased to $150,000 a year, from $40,000 a year, in an effort to increase transparency and reduce black market forex trading.


Brass LNG suffers another setback

Brass LNG Limited, suffered another setback as Oando Plc. terminated the purchase agreement it had with ConocoPhillips.

The Final Investment Decision on the Brass LNG project has suffered several setbacks, especially after one of the project’s promoters, ConocoPhillips, gave indications that it wanted to sell off its Nigerian assets.

Oando had been involved in a $1.5billion transaction to buy ConocoPhillips’ Nigerian assets, including its 17% shareholding interest in Brass LNG, amounting to $198.4million.

The oil company was quoted as saying that it had on Monday entered into  an amendment agreement with ConocoPhillips in relation to the proposed acquisition of the latter’s oil and gas business in the country.

Specifically, Oando was said to have announced the termination of the Brass LNG Purchase Agreement.

Oando was also said to have indirectly entered into an agreement with ConocoPhillips by which it, inter alia, extended the date for the completion of the proposed ConocoPhillips acquisition from September 19 to November 30.

The report stated, “The company has agreed with ConocoPhillips to terminate the agreement to purchase the shares of Phillips (Brass) Limited, which holds a 17% shareholding interest in Brass LNG Limited.”

As such, Oando will no longer have an obligation to pay the purchase price pertaining to the PBL of about $198.4 million.

The report further stated, “As previously announced, in connection with the ConocoPhillips acquisition (including the purchase of PBL), the company paid a $435million deposit, of which $35million was advanced in connection with the Brass LNG Purchase Agreement.

“This deposit will be applied by ConocoPhillips to the purchase agreements pertaining to the acquisition of the balance of the ConocoPhillips Nigerian oil and gas business.”

As a result, the net purchase price payable to complete the acquisition of the remaining assets associated with the ConocoPhillips acquisition is estimated to be about $1.22billion after deducting the deposit and giving effect to adjustments as of the date hereof.

The Chief Executive, Oando, Mr. Wale Tinubu, had in April said the company was not struggling to raise money for the $1.5billion deal.

FG to Phase out Yellow Cards Next Month

The Federal Government said from next month; the old International Certificate of Vaccination and Prophylaxis still in use in Nigeria would be phased out, paving the way for a more sophisticated version that would prevent piracy.

The Minister of Health, Prof. Onyebuchi Chukwu, made this known while inaugurating the new vaccination certificate popularly called ‘Yellow Card’.

He said the introduction of the card was one of the resolutions for implementation by the National Council on Health at its meeting in Abuja last year.

“It was agreed at the meeting that the Federal Ministry of Health proceed with the introduction of the new card which should have an advanced security feature that were lacking in the old ones.”

Chukwu explained that with this development, state governments and private companies are barred from printing the card, adding that “the council also resolved that the card be produced centrally by the Federal Ministry of Health, while a transition period of six months was to be allowed to withdraw the old cards after the introduction of the new card.”

The minister observed that “the new card has been available for some months now, and a lot of Nigerians have availed themselves the opportunity of having the new Yellow Card. We thought it was important for the minister to also do a formal flag-off as the part of the sensitization and creating awareness.”

Giving reasons for the card, Chukwu said: “The new one follow the issue that arose sometimes last year about Nigerians travelling to South Africa, we looked into the issue.

We actually found out that part of the confusion is that years ago, the National Council on Health in their wisdom at that time felt as a way of making it easy for Nigerians to obtain it, they wanted to decentralize, they permitted state governments, even private sector to be able to print their Yellow Card and issue as well as the federal government.”

According to him, the card would be available at Port Health Services in states of the federation.

The move to introduce the new Yellow Card may not be unconnected with last year’s diplomatic row between Nigeria and South Africa, where the latter accused Nigerian citizens on board a commercial flight of entering South Africa with fictitious vaccination card.


Terrorism: CJN Signs Fast Track Practice Direction into Law

The Chief Justice of Nigeria (CJN), Justice Aloma Mukhtar, has signed a new practice direction which will allow the Supreme Court quickly dispense with appeals emanating from trials for terrorism, kidnapping, rape, corruption and money laundering.

The Chief Registrar of the Supreme Court, Mr. Sunday Olorundahunsi, disclosed this while addressing judiciary correspondents at a workshop on “The Role of the Media in the Fight Against Terrorism.”

The Chief Registrar said the CJN was working with chief judges of High Courts, the Abuja High Court, the Federal High Court and the presiding justices of the various divisions of the Court of Appeal to put in place an efficient system that would eliminate delays in criminal trials.

He said “To lead by example, the CJN has already signed the new Practice Direction for the Supreme Court into law and even gazetted”.