Month: October 2017

Nigeria: World Bank Predicts Further Rise in Commodity Prices in 2018

The World Bank has predicted that oil prices would rise to $56 a barrel in 2018 from $53 this year, as a result of steadily growing demand, agreed production cuts among oil exporters and stabilising United States shale oil production.

In addition, the Bank predicted that the surge in metals prices was expected to level off next year.

Oil prices rallied on Friday, sending the global crude benchmark above $60 a barrel for the first time in more than two years and lifting the U.S. benchmark for the commodity to its highest finish in nearly eight months.

Prices found support on speculation that the Organisation of the Petroleum Exporting Countries and other major producers would agree to extend their production-cut deal through the end of the next year. To this end, Brent, the global benchmark rose 1.9 per cent to close at $60.44 a barrel. That was the highest settlement for a front-month contract since July 2015. The contract rose about 4.7% for the week.

But the World Bank in its October Commodity Markets Outlook, pointed out that prices for energy commodities – which include oil, natural gas, and coal — were forecast to climb four percent in 2018 after a 28 percent leap this year.

The metals index was expected to stabilise in the coming year, after a 22 percent jump this year as a correction in iron ore prices is offset by increased prices in other base metals.

Also, prices for agricultural commodities, including food commodities and raw materials, were anticipated to recede modestly in 2017 and edge up next year.

“Energy prices are recovering in response to steady demand and falling stocks, but much depends on whether oil producers seek to extend production cuts,” the Senior Economist and lead author of the Commodity Markets Outlook, John Baffes said.

“Developments in China will play an important role in the price trajectory for metals.”

The oil price forecast saw a small downward revision from the April outlook and is subject to risks.

Supplies from producers such as Libya, Nigeria, and Venezuela could be volatile.

“Members of the Organisation of the Petroleum Exporting Countries and other producers could agree to cut production further, maintaining upward pressure on prices.

“However, failure to renew the agreement could drive prices down, and could increase production from the U.S. shale oil industry. Natural gas prices are expected to rise 3 percent in 2018, while coal prices are seen retreating following a climb of nearly 30 percent in 2017.

“China’s environmental policies are anticipated to be a key factor determining future trends in coal markets.

Iron ore prices are forecast to tumble 10 percent in the coming year but tight supply should push up prices for base metals including lead, nickel and zinc,” it added.

According to the report, downside risks to the forecast include slower-than-anticipated demand from China, or an easing of production restrictions on China’s heavy industries. Gold prices were anticipated to ease next year on expectations of higher U.S. interest rates.

Agriculture prices were however expected to edge up in 2018 due to reduced supplies, with grain and oils and meals prices rising marginally. “Agricultural commodities markets are well-supplied and the stocks-to-use ratios (a measure of how well supplied markets are) of some grains are forecast to be at multi-year highs.

“However, favorable weather patterns, well-supplied global food markets, and relatively low world prices do not necessarily imply ample food availability everywhere.

“Drought conditions that are by some accounts the worst in 60 years, have caused crops failures in parts of Ethiopia, Somalia and Kenya and led to severe food shortages. Conflicts in South Sudan, Yemen and Nigeria have driven millions of people from their homes and left millions more in need of emergency food,” it added.

The World Bank’s Commodity Markets Outlook provides detailed market analysis for major commodity groups, including energy, metals, agriculture, precious metals, and fertilizers.

The report includes price forecasts to 2030 for more than 45 commodities. It also provides historical price data and supply, demand, and trade balances for most commodities.

Interbank Market

After rising to as high as 148 per cent last Monday, the overnight tenor of the Nigerian Interbank Offered Rate (NIBOR) reduced significantly to 18..75 per cent on Friday, reflecting the improved liquidity position in the interbank naira market.

The overnight tenor had risen to as high as 148 per cent last Monday, before dropping to 120 per cent on Tuesday as news of a Federal High Court ex parte order instructing all Nigerian banks to forfeit all monies held in accounts without bank verification numbers (BVNs) to the federal government in 14 days from the date the order was given, filtered into the market.

But the inflow from Federal Accounts Allocation Committee (FAAC) helped to ease the tight naira liquidity of the market. Traditionally, FAAC allocation passes through the banking system.

The Accountant-General of the Federation, Mr. Ahmed Idris, disclosed that the federal government, states and local governments shared N558.082billion in October compared to N637.704 shared in the previous month. Idris made this known at the end of the monthly FAAC meeting in Abuja. According to him, the sum was inclusive of Value Added Tax (VAT).

CBN Injects $481m in One Week

The Central Bank of Nigeria (CBN) last week injected a total of $481 million into the interbank foreign exchange market.

A breakdown of this showed that while $195 million was pumped in at the beginning of the week, the banking sector regulator injected an additional $285,759,449, to meet requests in four sectors of the economy.

Details obtained from the CBN indicated that the agricultural, airlines, petroleum and raw materials were the four sectors that received various sums of allocation forex allocation from the CBN based on requests put forward by their respective banks.

Confirming the figures, the acting Director, Corporate Communications Department, CBN, Isaac Okorafor, said the intervention underlined the high levels of transparency of the Bank in foreign exchange management.

According to him, the CBN would continue to play its role in easing the foreign exchange pressure on manufacturing and agricultural sectors through sales under the new flexible Foreign Exchange regime.

The CBN has consistently injected funds into in the interbank foreign exchange market to ensure liquidity, thereby easing pressure on the local tender currency.

Meanwhile, the naira closed at N360 to the dollar on the Bureau De Change segment yesterday.

Adeosun Clarifies Borrowing

The Minister of Finance, Mrs. Kemi Adeosun, last week explained that the federal government was not desirous of borrowing fresh loans, but seeking to refinance what is known as legacy or inherited debts.

Her explanation was sequel to reactions trailing the request by the executive arm of government to the National Assembly seeking approval of the sum of $5.5 billion to help finance the 2017 Budget.

The minister, who featured on an Arise TV programme, the broadcast arm of THISDAY Newspapers, said the APC-led government would channel $3billion of the $5.5 billion into refinancing inherited debts from the previous administration.

She stated: “Let me explain the $5.5 billion borrowing because there have been some misrepresentations in the media in the last few weeks. The first component of $2.5 billion represents new external borrowing provided for in the 2017 Appropriation Act to part finance the deficit in that budget.

“The borrowing will enable the country to bridge the gap in the 2017 Budget currently facing liquidity problem to finance some capital projects.”

She added: “For the second component, we are refinancing existing domestic debt with the $3 billion external borrowing. This is purely a portfolio restructuring activity that will not result in an increase in the public debt.

“What we are simply doing is moving that debt from owing naira to owing dollars, but because it’s an external borrowing, we have to go back to the National Assembly for approval.

Code of Corporate Governance

The Financial Reporting Council of Nigeria (FRC) last week opened up on plans to reintroduce its proposed harmonised National Code of Corporate Governance (NCCG) that was suspended by the federal government early this year due to controversies surrounding the policy.

The NCCG was suspended following concerns raised by private sector operators with certain aspects of the code and the announcement by the General Overseer of the Redeemed Christian Church of God (RCCG), Mr. Enoch Adeboye that he was stepping down as head of the church in compliance with the tenure limit stipulated by the code of conduct not-for-profit bodies.

Adeboye’s decision to step down as head of the church also prompted President Muhammadu Buhari to sack the former executive secretary of FRC, Mr. Jim Obaze.

However, the incumbent executive secretary and chief executive of the FRC, Mr. Daniel Asapokhai, revealed the decision to revisit the corporate governance code during an interview. According to him, a draft document would be presented to members of the public in the next six months for input and suggestions by stakeholders.

The new FRC boss, in his response to a question from THISDAY, said a board committee to supervise the planned reintroduction of the code has been constituted.

He, however, did not disclose details of the framework of the NCCG that his organisation intends to bring back to existence.

Asapokhai explained: “On revisiting the code, the work has started. The board committee to supervise that work has been constituted. They have had their first meeting and they understand the scope of work that needs to be done.

Kenya: Mash Buses Stop Services in Kisumu, Kakamega Over Post-Election Insecurity

A bus company has closed its offices in parts of Western and Nyanza due to insecurity after the repeat presidential election.

Mash East Africa stopped operations to and from Kisumu, Mumias, Kakamega and Malaba towns last Saturday.

SAFETY

The management said the move was meant to protect passengers’ lives and also prevent the possible destruction of the vehicles.

The towns experienced protests after the repeat presidential election conducted last Thursday.

Speaking to the Nation at the bus’s Mwembe Tayari office in Mombasa County, General-Manager Lennox Shallo said the offices had to be closed and the buses withdrawn.

“We have closed to secure our buses and also the lives of the passengers. If my property is destroyed, no one will pay me,” he said.

Mr Shallo said the business is also performing poorly as the number of passengers has dropped drastically.

FEW TRAVELLERS

A day before the October 26 repeat presidential poll, the company had two buses full with passengers.

“We had two buses operating to and from Nairobi carrying the many passengers before the recently concluded election. However, we now only have a few people travelling. Like now [Saturday] only 10 people are travelling to Nairobi,” he said.

Mr Shallo added that people have stopped travelling from Mombasa as it is safer in the county than other parts of the country.

“Mombasa is safer. This may be the reason why people have postponed travelling,” he added.

Bus operations from Mombasa to Nairobi have also been affected by the Madaraka Express as most passengers prefer the train services due to safety and speed.

Nigeria: Middle East Investors Move to Take Over Nigerian Airports

Some stakeholders in the aviation sector, including members of the National Assembly, are worried that investors from some Middle East countries are expressing interest in the planned concession of Nigerian airports.

The Guardian learnt that the interests thus far received from countries like Turkey, Saudi Arabia and Qatar are bothering the stakeholders because of the security implication for Nigeria and alleged “northern agenda” currently put forward either by coincidence or deliberately in the concession buildup.

The Federal Executive Council (FEC) recently granted approval for the concession of the four international airports in Lagos, Abuja, Port Harcourt and Kano. The approval, currently being worked out by the Ministry of Aviation, is the first phase of the plan to concession all the 22 Federal Government-owned airports nationwide.

Senior Special Assistant to the President on Media and Publicity, Garba Shehu, last week recounted the gains of President Muhammadu Buhari’s recent visit to Turkey and among the mentioned is the expression of interest by Turkish investors.

Besides Turkey, Saudi and Qatari investors have also shown interest in the multi-million dollar concession arrangement.At one of the public hearings held last Thursday, members of the National Assembly joint committee on aviation got worried about the antecedent of a country like Turkey that has lately been embroiled in political unrest, as well as serving as a channel through which arms and ammunition were smuggled into Nigeria.

While the Turkish authorities have denied having a hand in the arms-trafficking saga, aviation experts are wary of future transactions with investors with Turkish interests.

A member of a civil society organisation, who was at the hearing, said some lawmakers were of the view that if the biddings were restricted to the middle east, then it will not get the buy-in of Nigerians who “will see it as coloured by a northern and religious agenda.”

Aviation union members present at the meeting said it was to prevent the airports from falling into the wrong hands that they demanded to be part of the concession process for transparency. The unions were, however, happy that the Federal Government has promised to ensure transparency by involving them.

On the implication of such concerns for the concession plan, aviation security consultant, Group Capt. John Ojikutu (rtd), said he was as disturbed as the lawmakers, though he was quick to add that it was still early to conclude.

Ojikutu told The Guardian that “whereas we cannot but be skeptical with the biddings, expression of interest is also coming from Europe and Canada, and all need to be patient.”

He said from his conversation with the Minister of State for Aviation, Hadi Sirika, there were several hurdles in the concession process and it was less likely that the wrong bidders would be able to grab a pie in the exercise.

Ojikutu, who is also the Secretary General of the Aviation Safety Round Table Initiative (ASRTI), said: “I am as worried as you, no doubt about that. The National Assembly is also as worried. I think, from what I’ve heard, the minister too is very cautious with what he is doing. Just the way he handled the Abuja airport’s runway is the way he is handling this.

“From the look of things now, they have not left the level of getting the consultants of about three or four to package things together. When they get to that stage, there must be a stakeholders’ meeting, and there would be. It is not only the concession, but also the national carrier, maintenance facility and aerotropolis that are being packaged.

“So, it is too early to start speculating because in any case, all these things will still have to go through the infrastructure concession commission, the PPP, Ministry of Justice and then the Federal Executive Council for approval.

“But in lieu of the security concerns, I have advised them to focus on concession of the terminals, cargo sections and car parks among others, but not the aeronautical side. The International Civil Aviation Organisation (ICAO) has even warned African countries since 2009 not to concession aeronautical side in the light of security issues around us,” Ojikutu said.

Tanzania: Bagamoyo Port Set to Start Operations By 2020

THE much anticipated Bagamoyo Port that is expected to boost the country’s economy and attract big investments in the country is expected to kick off operations between 2020 and 2021, Deputy Minister for Trade, Industries and Investment, Engineer Stella Manyanya has confirmed.

Eng Manyanya who was addressing a Parliamentary Standing Committee on Industries, Trade and Environment in Dodoma yesterday said the 6.9bn/- project for a modern port was being carried out through a collaboration of China and Oman, expressing optimism that over 190 industries will be constructed on the Bagamoyo area, including the manure processing industry that will be put up by the government of Oman.

At a committee meeting led by Mvomero MP, Suleiman Sadiq, the deputy minister said when the port becomes operational, it will attract more investors who will equally help the country to attain its industrial economy agenda, currently being propagated by the fifth phase government.

Eng Manyanya who was appointed by president John Magufuli as deputy minister in the ministry in the recent cabinet reshuffle told the committee that the 6.9bn/- project was being carried out by the Chinese based company– Merchants Holdings International Company Limited (MHICL), and State General Reserve of Oman.

On February 16 this year, the then Chinese Ambassador to Tanzania, Dr Lu Youqing, said the Bagamoyo project would turn Bagamoyo into Shenzhen, a city in China which was transformed into a Special Economic Zone area.

Dr Youqing noted that MHICL, which is implementing the Bagamoyo project, developed Shenzhen. He further said that Tanzania had attached great importance to the Bagamoyo project which is a joint project of Tanzania, China and Oman.

“The government of Tanzania has attached great importance to the Bagamoyo Port and adjacent Industrial Park, and it has listed it in the second five-year national development plan.

“This is a mega project, it is a huge work to turn Bagamoyo into Shenzhen of Tanzania,” he explained, noting that the Chinese developer wanted to implement the project in phases. “With regard to the port, the three parties have reached a general consensus on construction and operation of the port. The port consists of eight kilometres Port Zone and a logistics centre… there will be dredging water channels to the port,” he explained.

According to the Tanzania Investment Centre (TIC) statistics, by the end of June 2016, Chinese investment in Tanzania had reached 6.62 billion US dollars, with about 600 Chinese companies operating in Tanzania.

Oman on the other hand, has had profitable diplomatic relations with Tanzania, investing in various projects including that of Bagamoyo. “The strategy that we have in our government is that by 2020, the Bagamoyo Port should start offering services and it will be receiving big cargo vessels.

Oman will offer a good assistance to our government in helping our people in the country,” said the deputy minister yesterday.

Eng Manyanya was quick to point out that by 2025, Tanzania would realise its industrial economy agenda, insisting that the Bagamoyo port would similarly put up proper infrastructure, including roads and electricity, adding that even the gas pipeline would cross over the port.

South Africa: Leave Your Apartheid Flags At Home, Say Anti-Farm Murder Organisers

No apartheid memorabilia or flags would be welcomed at an anti-farm murder gathering in Klapmuts, Cape Town, on Monday morning.

The gathering will rather focus on unity among all South Africans, ‘Genoeg is Genoeg’ [Enough is Enough] organiser Talita Basson told News24.

“We are against everything that is a part of the old South Africa. We won’t be singing Die Stem , we won’t be carrying the apartheid flag and we won’t allow any hate speech.”

“What we are doing is about the new South Africa, from the farmer to the farm worker.”

She said farm workers have been approached to do one of the prayers at the gathering.

“We are doing everything in the name of the Lord.”

Between 500 to 1500 people are expected to gather at Kanonkop, Klapmuts, from 06:00.

From there at 08:00, participants would drive along the R44 to the Cape Town Green Point Park where a prayer gathering will be held.

On Facebook, 1 400 people indicated that they’ll be attending the gathering.

Basson, 21, an education student at Stellenbosch University said she was inspired to organise the event after she drove past Joubert Conradie’s farm.

Conradie died on Tuesday last week after he was shot on his farm in Klapmuts.

“At first I wanted to just ignore it and drive away, but when I saw people praying I decided to stop. I knew I wanted to do something; I needed to do something.”

Basson said farm manager Chris Loubser is also in support of the gathering.

A video of Loubser was widely shared on social media the past week where he made an emotional plea for South Africans to stand together against farm murders.

A separate gathering by Johan Willemse is being held in front of the National Assembly on Monday morning, but Basson said ‘Genoeg is Genoeg’ is not aligned with Willemse.

Willemse previously chained himself to a Jan van Riebeeck statue in the Cape Town CBD over concerns of its removal.

“We are strictly a non-political gathering,” Basson said.

Western Cape Police Spokesperson Colonel Andrè Traut said police are aware of the ‘Genoeg is Genoeg’ gathering and will deploy an “adequate number of police officers”.

Basson and her co-organiser Daniel Briers approached the City of Cape Town for event approval, but on Friday afternoon it had not yet been granted.

Briers, 44, a farmer outside Paarl said the gathering is “not a call for chaos, but a call for love”.

“We are wearing black on Monday for every daughter [who] is raped on a field, for every murder that occurs in this country. We are saying enough is enough,” he said.

“We are not calling for division, but we are calling everyone to unite for love, joy and peace for this country.”

News24

Nigeria: Brick Walls of Russia-Nigeria Bilateral Trade Relations

Abuja — The Russian Federation is without a shadow of doubt, an economic powerhouse in Europe and the world at large as well as Nigeria is the giant of Africa, which means that the bilateral cooperation of both continental giants will position properly in the comity of nations especially Nigeria that is still a developing nation.

But in spite of these underlying similarities between the two nations, their trade relations have continued to be up against a brick wall due to the inability to ratify some frameworks that will streamline and enhance the trade cooperation between Russia and Nigeria.

Pundits have already started calling on the Federal Government of Nigeria to waste no time and ratify the agreement on the promotion of investment with a view to strengthening bilateral trade relations with the former Soviet Union nation.

Apparently, the inability of the Federal Government of Nigeria to ratify the framework, which it signed with the Russian Federation some years ago, has continued to hamper the growth of trade between the two countries.

Reports have shown that lack of political will and support by both governments, are also some reasons for the low volume of trade. Trade volume between the two countries currently stands at 400 million US dollars, which authorities in both countries have repeatedly said that it should be many times larger, given that Russia is the biggest market in Europe and Nigeria the biggest market in Africa.

Foreign affairs commentators have stressed the need for the speedy expansion of bilateral trade, adding that both countries have enjoyed very cordial relations over the past 50 years with cooperation in education and other technical areas.

Emphasizing Russian hospitality and friendliness, A Russian-based Nigerian scholar, Dr. Charles Peters, said that many Nigerians have benefited from Russian training programmes and scholarship, and that Russia has a prison exchange agreement “which allows Nigerians, who violate its laws, to be repatriated”.

“Today, there is no Nigerian serving jail term in any part of Russia. More than 5,000 Nigerians reside in Russia peacefully,” Dr. Peters said.

Early this year, Russia affirmed that Nigeria was one of its strongest trade partners and hoped to strengthen such relationship in the coming years.

During the Russian Federation National Day celebration at the Russian embassy in Abuja, Russian Ambassador to Nigeria, Nikolay Udovichenko, said that the country hopes to strengthen bilateral trade and investment cooperation with Nigeria.

He also said that Russia would continue its educational programme to Nigerian students on scholarship basis.

“Nigeria is one of our greatest trading partners and we have had a strong relationship in the last years but hope to strengthen it and do a lot more together in the future.

“We would continue to support Nigeria in achieving economic and social development by helping Nigeria to utilise its resources in more effective ways.

“We are glad that we can celebrate our national day in a country that has been very supportive.

“The Russian government has offered many Nigerians scholarships to study in Russia and we extend our gratitude to those who have studied in Russia for always being supportive and cooperative,” he said.

Russia and Nigeria had taken steps to deepen their economic and political ties when on May 30, Geoffrey Onyeama, Nigeria’s minister of foreign affairs, held diplomatic talks with Sergei Lavrov, his Russian counterpart, during an official working visit to Moscow.

The foreign ministers had discussed issues pertaining to the steady development of bilateral ties in political, trade, economic and humanitarian areas.

Analysts described Onyeama’s official working visit to Moscow as a step in the right direction and more concerted efforts should be made towards bolstering up diplomatic ties of both countries.

Also, Udovichenko said that his country would build a strong economic relationship with Nigeria.

Receiving the Managing Director, News Agency of Nigeria (NAN), Mr Bayo Onanuga, at the embassy, Udovichenko said Russia was ready to partner with Nigeria in its efforts to rebuild its economy.

He said that a Russian delegation, to be led by the Minister of Agriculture, was due in Nigeria in November to discuss areas of cooperation between the two countries.

The envoy said similarly, Russian major oil company, Gazprom, had entered into a joint venture partnership with the Nigeria National Petroleum Corporation (NNPC) to exploit abundant gas resources in the country.

Udovichenko also recalled the agreement signed between the two countries for the setting up of a nuclear research centre in Nigeria which would eventually lead to the building of a nuclear plant within the next seven years.

He said that Russian companies were ready to give more favourable terms to Nigeria and work toward transferring technology to build the capacity of Nigerians.

The envoy said 10 Nigerians were receiving training in Russia in nuclear technology as part of the agreement signed in June.

He stressed the need for closer cooperation between the media of the two countries so as to create better understanding and protect the image of both countries.

Analysts have also recalled when Nigeria was seriously grappling with the fight against Boko Haram, which hit its nadir, and turned to supposed allies for assistance but was abandoned to its fate; Russia was the only available country to render that much needed assistance by selling arms, tanks and helicopter to the Boko Haram-ridden country.

Nigeria is considered the economic powerhouse in the West Africa region. It is one of Africa’s fastest growing economies and has the largest population in the continent, which is why the giant of Africa should strain every sinew to take practical steps to bolster economic and strategic ties with Russia.

However, Ibrahim Usman Gafai, Charge d’Affairs at the Embassy of the Federal Republic of Nigeria in Moscow, said in an interview that economic relations between both countries have steadily developed during the past few years with a number of leading Russian companies establishing their presence in Nigeria.

Russian investment in Nigeria covers such areas as energy, iron and steel and hydro carbon. Over the years, the diplomatic relationships have also witnessed the establishment of Russia-Nigeria Business Council (RNBC) which oversees economic activities between the two countries.

So far, the two countries have held three meetings of the Joint Commission, the last being in 2009. The Joint Commission is the platform for the two countries to sit down and draw up agreements and Memorandum of Understanding (MoU) on how to conduct businesses and investment in each other’s country.

One of the strategies is to encourage trade promotion through solo exhibitions of good made in each other’s country. Nigeria businesses are encouraged to carry out such solo exhibitions in Russian cities such as Moscow, Saint Petersburg, Krasnodar and Kuzbas regions.

On the other hand, Russian businesses are also encouraged to participate in various annual trade fairs organized by different Chambers of Commerce in Nigeria. In addition, the Moscow’s Nigerian Embassy will continue to call on the two countries to create an investment forum to showcase their potentialities in each other’s territory. The major challenge facing investors from both sides of the divide is dearth of information on each other’s business environment. This has, over the years, created a condition of uncertainty and misgivings among prospective investors.

As part of the initiatives to contribute to revamping the Nigerian economy, Nigerians under the auspices of Nigerians in Diaspora Organization in Europe (NIDOE), the Russian Chapter in collaboration with Russia-Nigeria Business Council, Institute of African Studies and Russian ministries and agencies have adopted corporate strategies in identifying and wooing potential Russian businesses and industry directors to invest in Nigeria.

Nigeria: Army Ends Operation in Niger Delta, Refits Nigeria’s First Oil Well

Yenagoa — The Nigerian Army at the weekend rounded off its Crocodile Smile II Operation in the Niger Delta with the rehabilitation of the abandoned Oloibiri Oil Well 1 in Ogbia Local Government Area, Bayelsa State, where crude oil was first discovered in the country in 1956.

Shell Darcy, now Shell Petroleum Development Company, (SPDC), had started the drilling of 5,000 barrels per day at the oilfield, but was abandoned after it stopped flowing about two decades ago.

The event which was conducted by 16 Brigade, Yenagoa, led by Brig. Gen Kevin Aligbe, had earlier witnessed the cleaning of major streets in the state capital and donation of hospital equipment to the Federal Medical Centre, Yenagoa.

The Chief of Army Staff (COAS), Lt Gen. Tukur Buratai, who was represented by the Commander, 6 Division of the Nigerian Army, Maj Gen. Enobong Udoh, said the operation was part of the efforts at making sure that the army was ready and fit to respond to any threat, whether economic or criminal.

“The Nigerian army in consonance with the vision of the current Chief of Army staff to have a professionally responsive army in the discharge of its constitutional role continues to conduct these operations and training exercises in order to position itself to be able to respond to the threats that we have across the country.

“There are so many of them: Cattle rustling, kidnapping, cultism, militancy, pipeline vandalism, oil theft and the rest. We had Operation Harbin Kunama in the North West, Egwu eke ( python dance) in the South-east and we have been running operation crocodile smile 11.

“All these operations are conducted to position the Nigerian army so that we can have a conducive environment for business activities and for law-abiding citizens to go around without let or hindrance,” the military chief said.

He said the operations also afford the army the opportunity to move closer to the people and carry out community relations exercise, including the environment where the oil well is located so as to make it viable for tourism and to “keep the bad boys away.”

In his comments , Brig Gen Aligbe, said the job of the military in the region remains to protect critical oil and gas infrastructure in the Niger Delta, ending illegal oil bunkering, sea piracy and sundry crimes.

He said: “We sought permission to touch base in a symbolic manner in Oloibiri Oil Well 1, being the first commercial oil well in this country. What we are doing today will add tourist value to this iconic monument and encourage tourism enthusiasts in the country and outside and make here a destination of first choice.”

Governor Seriake Dickson, who was represented by his deputy, Rear Admiral John Jonah (rtd), noted that the military will continue to soar despite all the distractions and praised them for their resilience under very difficult terrains where they work.

“Tourism is one area that can generate funds. This is an area we are very interested in because it can generate funds. The army has taken the initiative.”

While defending the military on the rumoured deadly injection, he added: “Let me use this time to dispel rumours of (a deadly) vaccination. The Nigerian army as constituted now can never, because I will always speak for them, can never indulge in such a thing. This is not the first time the army is carrying out its medical outreach.

“Let’s not allow some disgruntled elements in our society to tarnish the image of those that are fighting so hard trying to keep the country together and making sure there is peace for businesses to prosper.”

Tanzania: Barrick in $11m Loss After Securing Money for Tanzania

Dar es Salaam — Barrick Gold Corporation has reported a net loss of $11 million in the third quarter after increasing a tax provision related to the “good will” payoff of $300 million agreed with Tanzania.

The mining giant made a net income of $175 million over the same period last year. Barrick produced 1.243 million ounces of gold in the third quarter, at a cost of sales of $820 per ounce compared to 1.381 million ounces, at a cost of sales of $766 per ounce in the prior-year period.

Barrick blamed the decrease in net earnings on the impact of the concentrate export ban by the government and also lower gold production and prices.

The company’s existing tax provision was $128 million but the financial results announced on Wednesday night indicated to have increased by $172 million to $300 million – the amount it agreed would be paid by its subsidiary Acacia to Tanzania as part of the proposed framework reached last week.

Barrick’s move is proof of securing the money due to the government and puts to rest any fear that the funds may not be released. However, the mining company appeared to place a catch on the release of the funds, tying it with Acacia’s business flow and the outcome of talks to lift the ban on concentrate export.

“Given Acacia’s current financial position, these payments would be made over time, using Acacia’s ongoing cash flows. As such, payment would be also conditional on Acacia’s ability to sell doré (gold bars) and concentrate,” Barrick said in its statement.

Shares in Acacia were up 3 per cent to 190.14p on Thursday morning, still down more than two thirds since 1 March when the concentrate ban was imposed by the government to push for negotiations of several tax income and other economic benefit issues.

Barrick’s tax provision announcement drew the now familiar wait and see approach from its subsidiary in London and who will be expected to shoulder part of the cost to pay Tanzania. Barrack owns 63.9 per cent stake in Acacia.

In its rejoinder, Acacia which operates Buzwagi, North Mara and Bulyankulu mines said it does not intend to make any changes to its own provision of $128 million in likely back tax charges as a result of Barrick’s own announcement.

“Once Acacia has received and had the opportunity to assess a detailed proposal, Acacia will also be able to assess the potential impact on Acacia’s historical uncertain tax positions,” the London Stock Exchange-listed company said in its market updates.

Barrack Gold was locked in negotiations with the government for about three months since two presidential committees accused Acacia of cheating in taxes and reportedly operating illegally in Tanzania.

In July this year, Tanzania Revenue Authority (TRA) slapped Acacia with a jaw-dropping $190 billion (Sh418 trillion) in revised taxes, interests, and fines following the committees’ reports.

The two negotiating teams led by the Minister for Justice and Constitutional Affairs Prof Palamagamba Kabudi on the side of Tanzania and Barrick executive chairman John Thornton on the other side, came out last week announcing to have struck a deal.

The Toronto-based company said it will pay the government $300 million as part of the deal, give the government a 16 per cent stake in its mines, and will equally split “economic benefits” from the mining operations.

Under the proposed 50/50 economic benefit sharing, the government’s portion will be delivered in the form of royalties, taxes, and a 16 per cent free carried interest in Acacia’s Tanzanian operations, in line with the country’s new mining law, Barrick noted in continuation of a line that is starkly different from that of the government. Prof Kabudi has proffered that Tanzania’s share will be received after all taxes, royalty and all other payments due are made.

The two parties have created a working group to resolve outstanding tax matters relating to Acacia’s operations even as the London-based firm says it will also push on with the arbitration case it has filed at the international court against Tanzania move to ban concentrate export.

“Barrick and the Government of Tanzania will now work to complete detailed documentation and final agreements for review and approval by Acacia. We expect this work to be completed in the first half of 2018. Barrick has engaged with independent directors of Acacia during this process, and will continue to do so,” Acacia said in the statement.

Zimbabwe: All Gold Belongs to Chiefs, Says Chief Charumbira

Chiefs are demanding powers to issue gold mining permits in areas which fall under their jurisdiction as well inclusion in various indigenisation boards.

Speaking at the just ended chiefs’ annual conference in Bulawayo, Chiefs Council leader, Fortune Charumbira said the Mines and Minerals Act should be repealed so that chiefs are also involved in the process of granting gold mining licences to prospective miners within the chiefs’ respective areas.

According to the current Mines and Minerals Act, mining licences are applied for through the Mining Commissioners from the mining districts in which the resource is located.

“As custodians of the land, chiefs are the ones who are supposed to allocate mining claims. We are not happy with the current situation where gold prospectors just invade our areas armed with licences from the ministry of mines without our knowledge. As chiefs, we own that gold and we should be consulted,” said Charumbira.

He also claimed that several gold prospectors were living in constant conflict with the local communities because chiefs were not involved in the issuance of gold claims processes.

Charumbira also demanded the inclusion of chiefs and headmen in indigenisation and economic empowerment boards under the community share ownership trust scheme which was set up by the government through sourcing funds from foreign-owned mining companies operating in various parts of the country.

“Chiefs are left out in community share ownership trust. Only one mining company, Ngezi platinum, has embraced chiefs in this project. We all want our chiefs to be directors of the community share ownership trust scheme. These companies should be forced to accept us as the trustees,” said Charumbira.

Officially opening the chiefs’ indaba on Saturday, President Robert Mugabe promised the chiefs farms and other luxuries, saying the traditional leaders deserved to be pampered with all kinds of niceties because they play a very “important role”.

The president also assured the chiefs that within a fortnight the chiefs will take delivery of brand new Isuzu Double Cab vehicles.

“If we promise people, we always make sure that the promises are fulfilled and in two week’s time, the chiefs will be coming to get their vehicles in Harare. (Kasukuwere) make sure these chiefs are given their cars. These cars should be quality cars that are in good condition so that they carry out their duties,” said Mugabe amid unrestrained cheers from the chiefs and their spouses.

Ethiopia: Micro-Finance Institutions Proliferating Business Enterprises

Small and Medium Enterprises are contributing to the import substitution efforts.

Obviously, most sophisticated private industries which sell their brand products in almost all parts of the globe had once been confined to small manufacturing sheds and at a local market.

The silver bullet to the success of these businesses might be a mix of two factors – the hard work of the individuals or the team that has started the businesses and the enabling ground their governments created. For instance, governments that have paid due attention to Small and Medium Scale Enterprises (MSEs) have championed in nurturing private innovations to a high-tech based industrialization.

The government of Ethiopia has recognized the role of MSEs in the socio-economic development of the society. Hence, due to its increased supports to the Enterprises, a number of MSEs have transformed themselves to large scale industries.

Availing the required finance to entrepreneurs and innovators is the pillar to the translation of the innovations from a business proposal to real business activities.

Ethiopia, with its 70 percent young demographic base, has bright ambitions of becoming stable and strong nation in Africa both economically and politically. Its huge youth population is, therefore, the main driver of the attainment of the ambition. That is why it has established microfinance institutions which enable the youth businesses to flex their muscles financially.

The MSEs and the financial institutions have also been made to feed on one another.

Federal Micro and Small Development Enterprises Agency (FMESDA) as well as many other micro-finance institutions are supporting the youth entrepreneurship to come to fruition.

The loan and saving services are benefiting the youth, including women, who have limited financial access. These segments of the society have in turn secured jobs to themselves and other fellow citizens as well.

Owing to this, the youth have been engaging in a range of sectors such as manufacturing, service, and industry. And the amount of finance needed to set up the enterprises also varies.

Micro scale business enterprises in the industrial sector–manufacturing, construction and mining–comprise up to five persons including the owner and/or has total asset not exceeding Birr 100,000.

Similarly, if the enterprise operates in the service sector–retailer, transport, hotel, tourism, Information Communication Technology (ICT) and maintenance–five persons can establish it while the asset cannot exceed 50,000 Birr. If it operates in the industrial sector, it can employ from 6 to 30 persons or can have a paid-up capital or total asset not exceeding 1.5 million Birr.

A small service sector enterprise is one that has between 6 and 30 persons and or has total asset or paid-up capital of 500,000 Birr.

Nowadays, the number of MSEs is increasing at a faster pace in Ethiopia. When we see the production of MSEs in Addis Ababa, it is accounted for over 15.2 % of Ethiopia’s total GTP employment opportunity plan in 2015/16 fiscal year, FMESDA discloses.

The unbearable collateral requirement of private and state banks used to discourage small business from thriving. But, the loaning systems of the financial institutions have helped to bridge this gap.

Numerous SMEs which operate throughout the country have created over 1.7 million jobs to citizens, discloses Abozenech Negash, Deputy Public Relations Coordination Office with the Federal Urban Job Creation and Food Security Agency.

The institutions played a huge role in curbing poverty and unemployment says Mesfin Fituma, Business Development Head of Addis Credit and Saving Institution (ADCSI). “Quite many of the operators have transformed both their enterprises and lives.”

The linkage between SMEs and micro-finance institutions has also grown meaningfully. Many of them have built good reputations in repaying their debts and growing their savings, he adds.

“For instance, 250,000 customers have saved seven billion Birr. This saving in turn has also gone to the enterprises in the form of loan.”

In a nutshell, the micro-finance institutions have been playing massive roles in baking the youths to realize their vision. MSEs have been proven to be very important in many ways like promoting youth innovation, creating employment, diversifying businesses and increasing youth income as well as in fostering asset creation, import substitution, among others, he explains.

“We have understood that our clients are changing their livelihood. We always inspect and supervise micro and small enterprises. Based on that, most of them have achieved great success; even there are MSEs which have transformed their business into industry level. Not only this, there are enterprises that employs 50-60 people,” the manager discloses.

To back his assertion, Mesfin indicates as quite many of the MSEs have already started exporting their products. “Especially those who involved in leather and leather products have penetrated the international market. There are also people who bake Injera (staple food made from Teff flour.) and export it to the Ethiopian Diaspora communities in North American and European countries.”

In addition, Saudi-repatriates have also created their own business in their country.

Besides exporting products, enterprises are enjoying the local market opportunity.

The construction sector’s huge appetite has become the largest local market opportunity to the enterprises, he points out, mentioning the massive construction of industrial parks, condominium houses as well as mega projects’ undertakings.

As a result, enterprises, which previously took small amount of loans, have dramatically scaled up their loan demands. “We are striving to satisfy their growing demands.”

Amara Credit and Saving Institution (ACSI), General Manager Mekonnen Yelewumwosen for his part notes as the micro-finance institutions have become reliable financial source to MSEs which operate in the areas of agriculture and trade activities.

ACSI was founded in 2006 to create financial access to urban and rural low income society, he says. “The enterprises’ growth has increased the financial capacity of our institution too.”

Various segments of the society such as the youth, women, elderly people and people with disabilities have got the opportunity to run their own businesses. Beekeeping, animal fattening, poultry production, and retail businesses are some of the areas the MSEs operators have engaged, Mesfin adds.

The General Manager indicates that ACSI has enhanced the number of its clients to five million. Customers have also saved 350 million Birr only in 2016.

Apart from providing loan and saving services, ACSI also consults its customers on the feasibility of their business plans, he adds.

“We often go to the business areas and witness their day-to-day activities first hand.”

Regarding the major challenges facing the micro-finance institutions, he says that some operators fail to repay loans timely. On top of this, most micro-finance institutions are subjected to extra expenses for office rent.

Having realized this, state banks and Ethiopian Microfinance Institutions (AEMFI) are applying various endeavors.

The government is also providing every necessary support to step up the efforts of micro-finance institutions.

The government envisions increasing the accessibility of micro- finance institution during the second growth and transformation plan (GTP II). During this period, the institutions attempt to reach 50 percent of the rural community. By so doing, the rural community will have reliable access to finance to run on-farm and off-farm business. Side by side with this, the effort will help the same community to nurture its culture of saving, which in turn will put its impact on the domestic saving at national level.