Year: 2017

Africa: Connecting Africa’s Ships, Ports and People

ANALYSIS

Today South Africa celebrates World Maritime Day, with the theme of ‘connecting ships, ports and people’. Maritime trade is Africa’s lifeblood, and for this day to have meaning for the continent, its people and industry must benefit from the ever-increasing global maritime connectivity and growth.

African Union (AU) policies recognise the need to overcome historical marginalisation and better connect the expected growth of African ships, ports and people. These include the 2050 Africa’s Integrated Maritime Strategy (2050 AIM Strategy) and the AU’s Agenda 2063. Countries such as South Africa are also introducing a Comprehensive Maritime Transport Policy, and road maps to become well-connected maritime nations.

Present connections have left Africa largely marginalised and dependent, so the continent is missing out on controlling its vital maritime trade. African populations and economies will grow – creating new markets and greater demand for resources, services and development. Better connections are needed as there will be increased numbers of African-built, -crewed, -owned, -flagged and -operated ships, carrying both intra-African and international trade into and out of African ports. These must have positive economic impacts on the port states and surrounding communities.

People are arguably the most important part of the maritime connection

The current picture of African-owned or -operated ships at sea can seem discouraging. The 2050 AIM Strategy says African-owned shipping accounts for only about 1.2% of world shipping and about 0.9% by gross tonnage.

Few African countries operate large shipping registries. So ships carrying trade are often owned elsewhere and African countries, even when their flags are being used, cannot effectively control how they operate. Increasing the number of ships flying your flag is seen as one way of being more in control, but the risk is that some countries operate ‘flags of convenience’ or open registries. By lowering the regulatory costs associated with flying that flag, these countries offer, for a fee, the use of their flag to shipowners worldwide, providing them with affordable and easy shipping options.

While this means goods and services can be supplied cheaply as there might be fewer costly regulations, ships are often unregulated in environmentally harmful ways or without good regard to crew welfare.

Whatever the flag or nationalities of owners and crew, more ships will struggle to be accommodated in most African ports. Yet African ports are currently handling only 6% of worldwide water-borne cargo traffic and about 3% of global container traffic.

Present maritime connections have left Africa largely marginalised and dependent

Many of Africa’s biggest ports were founded or developed by colonial powers, as sites to export slaves and/or natural resources to the rest of the world – they were never intended to support present-day priorities. Many of these ports can’t get much bigger as surrounding communities and cities have limited the space to expand, and several have morphed into megacities.

Challenges facing ports are being met mostly through efforts to enhance their management and efficiency. But other more spectacular solutions are also being sought. Megaports can handle the envisioned volumes of trade needed to uplift African populations, but some are being built far from existing transport infrastructure. So the end project may be more oriented towards the efficient export of resources rather than national development plans.

The Port of Lamu in Kenya is an example of such a megaport. Kenya is developing this area to be the centre for the trade of goods from landlocked Horn of Africa countries, especially oil from South Sudan. It also wants to construct a transport corridor that goes through the country to the South Sudan-Ethiopia border. This has had a number of setbacks, such as the deterioration of security in the region, the ongoing conflict in South Sudan and historically low international oil prices affecting potential revenue and benefits.

Ports are needed to increase shipping, but not at the expense of ensuring good inland infrastructure, such as roads and railways that end at port facilities. Better inland and regional connectivity can prevent future ports from being merely nodes for exporting resources in ways that don’t benefit surrounding communities.

Maritime policies must prioritise the training and education of more African seafarers

And while ships may increase in number, and port facilities expand, the same isn’t happening for African seafarers and maritime professionals such as shipowners and entrepreneurs. People are the third, but arguably most important, part of the maritime connection.

It is ironic that maritime labour shortages are seen as driving the development of remotely piloted, crewless and autonomous ships – especially considering that few people have been enabled to pursue maritime as a livelihood.

Maritime policies must prioritise the training and education of more African seafarers. One way of enabling this is to increase the number of available training berths for cadets. This can occur if a state has more ships flying its flag, but ensuring that these training opportunities are created must be a policy priority.

Gender equality must also be considered, as women make up only a small percentage of seafarer numbers. This needs to change as building good capacity relies on recruiting from the entire population – not half of it.

World Maritime Day is more than a celebration of the maritime networks and connections that we rely on and that bind us together. It represents an opportunity to reflect on how to make these connections better and fairer for Africa.

And as that is the clear destination, it is time to set course and weigh anchor.

Timothy Walker, Researcher, Peace Operations and Peacebuilding Programme, ISS Pretoria

Nigeria: Cash Requirement for Forward Dollar Purchases Causes Naira Shortage

A Central Bank of Nigeria (CBN) requirement that companies back forward dollar purchases with naira is drying up supply of the local currency, a report by Bloomberg stated Thursday.

This is just as the chief executive officer of Financial Derivatives Company Limited, Mr. Bismarck Rewane, told THISDAY Thursday that the continuous and massive injections of cash by the central bank to fund the federal government’s expenditure through ways and means (or quantitative easing) would help reflate the economy, stressing that there was no easy way out of a recession.

Increased government borrowing has also spurred banks to invest in FGN bonds and treasury bills rather than lend to customers, and also drained cash out of the system.

Some banks demand naira deposits of as much as 1.5 times the amount of dollars sought in the 60-day forwards market to guard against fluctuations in the currency, the chief financial officer of May & Baker Nigeria Plc, Ayodeji Aboderin, said.

That is pressuring the company’s own cash flow, he told Bloomberg.

The difference is returned to the company on the delivery of the contracts, with the amount depending on how the currencies have moved.

“Money you would have used as working capital will be taken upfront by the bank,” Aboderin added.

“Last year, it was more of dollar illiquidity. This year, it is naira illiquidity.”

May & Baker, which is building Nigeria’s first vaccine plant, is responding by cutting production at its water bottling and instant-noodles units, and focusing on more profitable pharmaceutical lines, Aboderin said.

Interest rates on loans have also soared to as high as 25 per cent, more than double the rate May & Baker is comfortable paying, he said.

Nigerian inflation eased to 16.01 per cent last month after reaching a record 18.7 per cent in January.

The currency rule, introduced in February, is one of a series of measures aimed at managing dollar flows after a decline in the price and output of crude oil, which accounts for about two-thirds of government revenue.

The CBN sells dollars directly to lenders on an almost weekly basis, which then supply these to their customers.

According to the chief executive officer for Stanbic IBTC Holdings Plc, Yinka Sanni, by depositing cash with lenders, companies are able to assure the regulator that they have the money to buy the currency,

The amount of naira required depends on the customer’s balance sheet strength, he said.

“It is within the rules. It is a product that is acceptable and endorsed by the regulator,” Sanni said.

“No bank is doing anything outside the rules. If they were, the CEO would have been cautioned by the central bank,” he stated.

Speaking on the central bank’s quantitative easing, Rewane disclosed that the central bank last year spent N950 billion funding the federal government.

“This year, so far it has exceeded N1 trillion. So, if you are spending N1.2 trillion a year to fund the federal government, that means you are creating liquidity and you have to mop up the liquidity.

“The cost of that mop up is about 18 per cent of that money. The total fiscal deficit of this country is about N2.7 trillion in a year and now you are spending another N1 trillion.

“So it is one of those things that we are going to see to take the economy where it ought to be. There are no easy answers,” Rewane said.

According to him, the central bank has to keep lending to government to keep the government’s expenditure funded and to keep the currency at the level at which it is.

“It is part of the paths out of a recession. There is no easy way out. That is the price you pay to ensure productivity.

“But in the end, I believe they should allow the direction of the interest rate to change from going upwards to actually going down,” he said.

Also, a banking analyst at Afrinvest West Africa Limited, Omotola Abimbola, said the central bank’s efforts have in many ways helped stabilise the foreign exchange market.

“But the unintended consequence has been that banks have restricted credit extension to the private sector due to the high yields on government securities as well as low risk appetite,” Abimbola added.

Growth in credit extended to the private sector slowed to 0.9 per cent this year through July, compared with 19.8 per cent in 2016, according to central bank data.

Policy makers need to tackle a lot more than dollar liquidity to bolster economic growth and reduce the country’s dependence on oil, Abimbola said.

This would include easing monetary policy by lowering interest rates from a record high, addressing infrastructure shortcomings, and improving the productivity of state institutions, he said.

Nigeria’s economy expanded 0.55 per cent in the three months through June, ending five straight quarters of contractions that saw gross domestic product shrink 1.6 per cent in 2016, the first drop since 1991.

The improvement came after oil output increased and authorities boosted the supply of foreign currency needed by manufacturers to import supplies.

Flour Mills of Nigeria Plc, the country’s biggest miller by market value, is planning to issue as much as N40 billion in bonds next year and is also considering a rights issue to enable it to deal with funding challenges arising from a scarcity of naira and high interest rates, its Managing Director, Paul Gbededo, said.

“Continued tightening in the market will keep interest rates high,” an analyst at Vetiva Capital Management, Pabina Yinkere said.

“High interest rates increase the probability of default and make banks cautious in growing loans, particularly to SMEs. If banks do not lend it affects overall economic activity and stalls growth,” he noted.

Namibia: Kapena Ilonga but Construction Union Demands 70 Percent – Negotiations in Deadlock

Negotiations to determine the increase of minimum wages and minimum employment conditions for the Namibian construction sector have reached a deadlock, the Construction Industries Federation of Namibia (CIF) announced on Thursday.

In a statement release early on Thursday, the CIF indicated that it has started a process of consultation with its members for a negotiation mandate on future minimum wage increases and minimum employment conditions for selected job categories.

As from 1 January 2017, the gazetted minimum wage in the construction sector is N$16.04 per hour, which is the result of two big increases of 10% each, of the minimum wage of N$13.26 in 2014/2015, and the minimum wage of N$14.59 in 2016, respectively.

According to the CIF, MANWU demands a minimum wage increase of 13% for 2017/2018 and a further increase of 13% for 2018/2019. In addition, demands listed by the union include an increase of minimum employment conditions, which – if agreed – would be new additions to the Collective Agreement, and would have serious cost implications for the employer. The total of MANWU’s initial demands constituted an increase of over 70%. These demands included inter alia: a housing allowance, a meal allowance, a transport allowance, an extension of the statutory maternity leave of 12 weeks to 14 weeks for the industry and negotiating with Nam-mic for loans for employees.

“With regard to the minimum wage increase, the CIF, representing employers in the construction sector, feels it would be irresponsible to increase the minimum wages during the current economic downturn, in particular as the construction sector is hit the hardest and the entire supply chain is experiencing large-scale retrenchments, and as it is not clear when the economy and specifically the construction sector will revive,” the federation stated.

Bärbel Kirchner, consulting general manager of the CIF explained: “According to research conducted by the CIF in June 2017, 47% of employees in the industry have lost their jobs. The situation is likely to have worsened since then. Yet, despite large-scale retrenchments since September 2016, the CIF, for now, very reluctantly made an offer of an increase of 2.5% of the minimum wage, in response to the outrageous demands of the 13% by MANWU and their very extensive list of demands.

“In fact, since we have commenced with the negotiations, the situation has worsened. We started negotiating in April 2017 when we had made an offer of minimum wage increase of 2.5% for when a new agreement would be promulgated. The situation is far less hopeful now than it was in April, however in order to honour what already had been agreed and in order to keep negotiating in good faith, we have not retracted that offer. Moreover, it is important to note, any increase would only become relevant once a Collective Agreement would be promulgated in the government gazette. The industry is also adamant that any agreed increase would not be back-dated.

“We are very disappointed that our industry, in addition, is now also facing such demands from MANWU, who is representing workers in the industry.

“Revenues in the industry are extremely low, if not non-existent. Many employers keep their teams employed with the hope of work and projects in the near future. If minimum wages were to increase even further, then many will not be able to continue keeping members of their teams employed. It can have devastating effects, especially if you think, that eight dependents will be affected for every job that will be lost. Many SME’s in our sector will also be badly affected.

“It simply must be in everybody’s interest to keep as many people employed and not to hike up the increase of only a few remaining employees. We must remember, what we are negotiating is the minimum wage increase for the respective categories for semi-skilled and artisans for the entire industry. If we are to concede to the demands of MANWU, it is likely that many workers will lose their jobs”.

Under current economic conditions, the CIF feels it is more realistic to agree to demands that are for the larger construction businesses a matter-of-course, such as provision of drinking water and separate toilets for male and female employees, and the promotion of health and safety education for employees.

Other demands of the union further included an extension of shop steward days from currently seven to a total of 10 days, an increase of pension fund contributions, an increase in Service Allowance and increase in the Living Away Allowance.

MANWU’s original proposal/demands were presented on 15 April 2016. However, in 2016, the CIF had on several occasions raised their concern with MANWU about the timing of their proposal to negotiate for construction wage and substantive proposal increments, in particular as it was soon after the implementation date of the previously negotiated and gazetted two-year collective agreement (gazetted on 31 December 2015).

Negotiations had commenced in April 2017, after the CIF had sought a mandate from its members. Meetings were held on the following days: 7 April 2017, 21 April 2017, and on 9 June 2017. As the two parties were not able to move forward, MANWU had declared a dispute of interest. After two conciliation meetings at the Labour Commissioner’s Office, on Tuesday, 5 September 2017 and on 15 September 2017, a certificate of an unresolved dispute was issued.

The federation and the union meet again this Friday 22 September to negotiate strike or lockout rules in accordance with the Labour Act, 2007; the Code on Good Practice on Industrial Action, 2009; and the Code of Good Practice on Picketing, 2009.

Zimbabwe: Inflation Under Check, Claims Chinamasa As Prices Sky-Rocket

FINANCE Minister Patrick Chinamasa has denied claims that soaring prices of basic commodities could spike country inflation, insisting price increases would end the year at a manageable three percent.

The minister said this in parliament this past week as under-fire central bank governor John Mangudya also moved to distance the premier bank from any culpability in the price hikes.

Fears are mounting that the country’s volatile economy could soon implode under an unsteady pricing regime which has seen commodities priced differently depending on whether one was paying in cash or through electronic cash transfers.

This has further been evidenced through panic buying among locals throughout the week after retailers abruptly increased prices of basic commodities.

Legislators demanded answers Wednesday from the Treasury boss on why the economy was beginning to show signs of distress as evidenced by sudden prices increases.

One of them was Zanu PF Zvishavane-Ngezi MP, John Holder who said prices of basic commodities were going up “at a very high rate”.

“If we look at sugar, rice, flour and green soap, the price for rice has increased from $1.80 to $2.63, flour from $1.71 to $2.10, brown sugar from $1.85 to $1.95.

“What policy has government put in place to control inflation since we see this happening nowadays,” Holder said.

But a cornered Chinamasa, apparently desperate for time to think over the mess, refused to commit himself to an immediate response, preferring to address the matter in a ministerial statement he promised to deliver this week.

Ministerial Statement

Earlier, he told MPs that government was keeping the country’s inflation well under check.

“I think the question will be dealt with more comprehensively under my Ministerial Statement because it covers very much the issues of inflation.

“However, I must say that as at end of August this year, inflation is at 0.14% and we anticipate that maybe by the end of the year, it will be around 2 to 3%, which still remains the lowest inflation within the SADC region,” Chinamasa said.

The country’s economy took a big knock for the first time since the central bank went against strong public sentiment to introduce bond notes in 2016 on a promise the currency would trade at par with the United States dollar, the country’s de facto currency since 2009.

There were reports the sudden price hike was triggered by a clandestine decision by the central bank to mint and further release loads of bond notes into a forex rich black market to mop up scarce foreign currency.

This forced a tumble in the value of the bond note and a knock-on effect on prices.

But Mangudya said in a central bank statement weekend, claims of looming scarcity in basic commodities and the printing of more bond notes was false and intended to cause “panic and despondency” into the economy.

“The Bank also wishes to advise that neither it nor the Ministry of Finance and Economic Development did not and will not print bond notes to buy U.S dollars from the streets as suggested in social media and other reports.

“Such malicious statements are counterproductive and are meant to sabotage the economy that is on the rebound on account of the good agricultural outturn, strong performance of the mining sector and the recovery of the manufacturing sector,” he said.

Kenya: Brazil Sugar Raises Kenya Stockpile to Cover Five Months

Kenya has amassed sugar stocks to run for the next five months, raising hopes for stable prices of the commodity for the rest of the year.

The Sugar Directorate said traders and millers imported 300,000 tonnes of sugar last month alone ahead of the August 31 expiry window of a duty waiver on cheap sugar from Brazil.

The August imports are an equivalent of the country’s six-month sugar demand. The country consumes about 50,000 tonnes of sugar monthly.

Agriculture and Food Authority (AFA) director general Alfred Busolo says the imports, coupled with local production is sufficient to service demand between now and February next year.

“We now have enough stocks of sugar in the market and this should last the country the next five months and help to lower the cost further,” said Mr Busolo.

Mr Busolo pointed out that local production has improved, attaining 20,000 tonnes a month and boosting domestic supplies.

The Treasury had scrapped duty on imported sugar from outside the Common Market for Eastern and Southern Market (Comesa) in May following a severe shortage of the commodity in the country that saw a kilo of sugar cross the Sh200 mark.

The increased imports, mainly from Brazil, have helped pull down sugar prices to about Sh100-110 a kilo.

“Basically, Comesa sugar is very expensive compared with the ones that traders have been importing from Brazil,” Solomon Odera, head of the Sugar Directorate said.

Mr Odera says a tonne of sugar from Brazil costs $400(Sh41, 200) per tonne against $700(Sh72, 100) for the same quantity of sweetener sourced within Comesa states.

Stakeholders had raised concerns that Kenyans were staring at higher prices of the commodity in the coming months after the duty window on imports outside Comesa came to an end on August 31.

Zimbabwe: Government-Owned POSB Open to Goat Use As Security for Loans

THE government-owned Post Office Savings Bank (POSB) says is ready to accept goats and other livestock as security for loans.

CEO Admore Khandlela was speaking at a Small to Media Enterprises Development Forum organised for local entrepreneurs by the bank in Harare on Thursday.

He said parliament is in the process of finalising the Movable Property Security Interests Bill to pave way for the introduction of the new bank lending model.

“When you look at it (Bill), it’s actually simplifying the whole process of doing business. I know people joked so much about it before the Bill was actually being crafted but it’s now out,” said the POSB boss.

The use of cows, goats and sheep as collateral was first suggested by Finance Minister Patrick Chinamasa in parliament in April this year as part of efforts aimed at reviving the country’s credit-starved economy.

Chinamasa told MPs that the assets would “include any property such as machinery, motor vehicles, livestock, and accounts receivable”.

The proposal however, met with a lot of anxiety by locals who felt the country’s governors were fast running out of ideas to manage a stubborn economy run down by poor policies and high-level corruption.

Zimbabwean banks are desperate to lure a largely unbanked Zimbabwean population into the formal banking system.

But they come unstuck when most of the money spinning business owners operating at small scale are still without immovable properties to register in order to access elusive bank credit.

In his remarks, Khandlela said his bank was amenable to the envisaged break from tradition.

“I don’t know how many of us have seen it (Bill); that you can now use your goat, any of the movable assets.

“I know people literally even talked about goats. Yes, it was a joke but it’s fact. If you have animals out there, it’s happening in Australia by the way. In Ghana, in Kenya, those things are happening and they are working.

“Although some banks may resist because it’s happening against traditional factors, some of us have had experiences; we won’t bother much with that. We will actually move with it and time will actually catch up with it.”

When the use of livestock comes into fruition, Khandlela said, banks would easily log onto a website that would indicate if a goat that has been pledged as collateral security by a client was not being used for the same purposes with different lenders.

He said the animals pledged would most probably have an electronic chip pinned on their bodies to allow lenders to track the assets.

Nigeria: Jim Ovia Recognised in America As Africa’s Business Leader

Chairman of Zenith Bank Plc, Jim Ovia, was, Tuesday night, recognized as a leading entrepreneur in Africa by the African-American Institute, AAI.

Ovia, in what is a reward for his business leadership and philanthropy, received the AAI 2017 Business Leader Award at a ceremony held on the sidelines of the ongoing United Nations General Assembly in New York, the United States.

He was recognized for impacting hugely on enterprise and human resource development on the continent.

Ovia, founding Group Managing Director and CEO of Zenith Bank, was honoured along with President Nana Akufo-Addo of Ghana (National Achievement); Nicole Amarteifio, (Leadership in African Media and Arts); and Bozoma Saint-John, Chief Brand Officer, UBER (Innovation & Technology) as Africa’s best.

The Africa-America Institute was set up in 1953 to help increase Africa’s human capacity for development through training and education and recognizes Africans who have demonstrated remarkable achievements in various fields, the intention being to present the award winners at the high profile stage of the UN General Assembly as representatives of the great work going on in Africa.

The AAI awards, which is announced annually and showcases Africa’s best, has honoured individuals who are working to fulfill AAI’s mission of increasing Africa’s human capacity for development and promoting engagement between the African continent and America.

The awards are presented at a special gala night bringing together African Heads of State and diplomats, international and senior U.S. government officials, business and civil society leaders, educators, journalists, philanthropists and other prominent figures who are working towards advancing economic and development progress in Africa.

Ovia was at the helm of affairs at Zenith Bank, from inception, for 20 years until his resignation in July, 2010 but was reappointed chairman of the bank in 2014.

He was a member of the National Economic Management Team of Nigeria and he is a member of the Honorary International Investors’ Council.

Jim Ovia is a philanthropist and the founder and proprietor of James Hope College, Agbor, Delta State.

His foundation, the Jim Ovia Foundation, which focuses on providing scholarship to the less-privileged, has a number of beneficiaries that are now qualified medical doctors, engineers, etc.

He is also the Founder of several enterprises and philanthropic institutions including the Youth Empowerment & ICT Foundation, which focuses on improving the socio-economic welfare of Nigerian youths by empowering them to embrace Information and Communication Technology.

In recognition of his achievements particularly in support of the Nigerian economy, Jim Ovia was conferred with the national award of Commander of the Order of the Niger (CON) in November, 2011.

Jim Ovia holds a Master’s degree in Business Administration (MBA) from the University of Louisiana, Louisiana, USA (1979) and a B.Sc. degree in Business Administration from Southern University, Louisiana, USA (1977). He is an alumnus of Harvard Business School (OPM).

Nigeria: Inside the Multi-Million Dollars Shady Alscon Negotiation Brokered By a Nigerian Minister

The Nigerian government has, through the Minister of Mines and Steel Development, Kayode Fayemi, been mediating in a multi-million deal that apparently violates a Supreme Court ruling, PREMIUM TIMES has learnt.

The deal is to get a Nigerian-American firm, BFI Group, to surrender to a Russian firm, UC RUSAL, its win of the 2004 bid for the multi-billion Aluminium Smelter Company of Nigeria, ALSCON.

BFIG has, however, rejected a $35 million offer to forfeit its legal rights after meetings by all parties.

The firm also communicated its position to both the Bureau for Public Enterprises, BPE and the National Council on Privatization, NCP.

Its Chairman/Chief Executive, Reuben Jaja, accused Mr. Fayemi of compromising his office by “continuously jumping in bed with the Russians to subvert rule of law, in defiance of two subsisting Supreme Court rulings” pending federal government’s implementation on the matter.

The spokesperson to the minister, Yinka Oyebode, in response to PREMIUM TIMES’ inquiry on Thursday, not only denied knowledge of the deal, but also exonerated his boss.

“I don’t think my ‘Oga’ will be part of that kind of deal. The much interest I know he has is to resolve this issue. I don’t think he will sit down with anybody to ask anybody to pay off anybody or stuff like that. This idea of somebody offering anybody money, I don’t think he will be involved in it,” Mr. Oyebode said on telephone.

He, however, said he would not comment further, as the minister was outside the country attending the United Nations General Assembly in New York.

PREMIUM TIMES also sent emails to both the minister’s official and private mails as well as text messages to his known telephone lines requesting his reaction.

He was yet to respond to any of the messages at the time of publication of this story.

HISTORY

In 2004, UC RUSAL had lost out in the bid to acquire ALSCON after it was disqualified by the NCP, for violating bid guidelines.

Although BFIG was later declared the winner of the bid with a $410 million offer, the BPE later cancelled the results in controversial circumstances.

BPE later reinstated UC RUSAL and handed over the plant to it in 2006 on the orders of then President, Olusegun Obasanjo, triggering a protracted legal battle that dragged till July 6, 2012 when the Supreme Court ruled in favour of BFIG as the recognised winner of the bid and owner of ALSCON.

On July 11, 2016, the apex court reaffirmed its ruling through a unanimous verdict dismissing for lack of merit an application by UC RUSAL on November 4, 2015, seeking a review and vacation of the previous judgment.

In each of the two separate rulings, the Supreme Court ordered the federal government, through its agencies – BPE and NCP, to invite BFIG and negotiate a mutually agreed share purchase agreement, SPA, with a view to handing over ALSCON to the rightful winner.

Curiously, in April 2017, in apparent in defiance of the Supreme Court directives, Mr. Fayemi visited ALSCON and was received by UC RUSAL’s managing director, Dimitriy Zaviyalov, whom he promised to work with to reactivate the plant.

Yemi Osinbajo

During the visit, the minister also assured the Russians of the federal government’s commitment to “encourage the Supreme Court to expedite action on the ruling,” and to “free the complex of any encumbrances,” in a move that appeared ignorant of the fact that the apex court already ruled twice on the matter.

Following the visit, Mr. Jaja accused Mr. Fayemi of perpetrating illegality, by “contemptuously romancing with UC RUSAL on a matter the Supreme Court had already ruled on two occasions.”

THE NEGOTATIONS

However, ahead of the first meeting of the reconstituted NCP scheduled for September 26 in Abuja, Mr. Jaja has again accused Mr. Fayemi as the unseen hand behind UC RUSAL’s latest clandestine plot to hijack the ALSCON ownership in defiance of rule of law and subsisting Supreme Court orders in favour of BFIG.

To get BFIG to accept to participate in the out-of-court settlement deal, PREMIUM TIMES investigations revealed on Wednesday that Mr. Fayemi reportedly asked his kinsman from Ekiti State, Wole Olanipekun, whom he believed could influence BFIG, to be involved.

Mr. Olanipekun has been a long-standing counsel to the consortium throughout its legal tussle to reclaim ALSCON.

Consequently, the minister, along with BPE Director-General, Alex Okoh, and other officials, held a secret meeting on August 21 with UC RUSAL agents, Danba & Associates Limited, led by its Chairman/CEO, Saadina Dantata, to compel BFIG to accept an offer for the relinquishment of its legal rights guaranteed by Supreme Court ruling of July 6, 2012.

Earlier, UC RUSAL had written to BPE to confirm its appointment of Mr. Dantata as its representative and leader of delegation for negotiations in the disputes over the ownership of ALSCON.

It was gathered that at a meeting brokered by Mr. Fayemi and attended by BPE DG, an initial $30 million offer was tabled by Mr. Dantata on behalf of UC RUSAL payable to BFIG over 20 years, after agreeing to sign off all settlement agreements to terminate all outstanding legal cases in court in relation to the deal to acquire ALSCON.

A source close to the meeting said BFIG officials had made their stance known clearly that they were not interested in the offer, insisting on the minister to rather advise the federal government to uphold rule of law by implementing the pending Supreme Court orders in their favour.

Also, the company (BFIG) in turn offered to refund to UC RUSAL the $130 million the Russians said they paid to BPE when ALSCON was handed over to them in 2006.

The source, who asked not to be named, because of the sensitivity of the matter, said the Russians rejected the proposal and demanded that BFIG paid to them additional $550 million instead.

The source said Mr. Fayemi was so incensed with BFIG’s rejection of the offer that he threatened to invoke government’s powers to revoke the entire ALSCON sale transaction if by the next meeting they refused to change their mind.

During a follow-up meeting on August 28, 2017, UC RUSAL’s representative was said to have made an adjusted final offer of $35 million, consisting $20 million initial payment, plus another $10 million spread over 20 years, on the same conditions “in the spirit of an amicable settlement.”

Although BFIG officials were said to have been absent, it was gathered that the outcome of the meeting was later sent to BFIG through BPE on September 13, 2017.

But, in a written formal response dated September 18, 2017 and addressed to the BPE Director-General, copy of which was obtained exclusively by PREMIUM TIMES, BFIG reaffirmed its earlier rejection of the offer by UC RUSAL representatives.

The company described the offer as not only insulting and denigrating, but also an attempt to lure it into becoming complicit in a violation of the U.S. anti-corruption law.

“We continuously maintain the belief that our acceptance of the offer can be interpreted as our direct or indirect assistance for a person to secure an improper advantage in a business transaction”, BFIG General Counsel, Jimmie Williams, said in the letter.

“This acceptance (means) our relinquishment of the binding 6 July 2012 Supreme Court judgment and the discarding of our legal rights, can be viewed as making us complicit in a violation of the United States Foreign Corrupt Practices Act of 1977, 15 U.S.C,” he added.

Copies of the response, which were sent to both the Vice President, Yemi Osinbajo, who is the NCP Chairman, and Mr. Fayemi, reiterated BFIG’s readiness and willingness to commence the initial takeover inspection of ALSCON aborted unilaterally at the last minute by BPE in 2012.

The inspection visit approved by the NCP at its sixth meeting in November 2012 was part of the process to finalise the mutually agreed SPA towards the takeover of ALSCON.

The visit was to enable BFIG conduct a complete site, engineering, technical, environmental, management and financial review of ALSCON to determine the final price following the Supreme Court ruling.

A senior official in BPE, who is familiar with the ALSCON sale controversy, said the rejection of the latest deal by BFIG was a major blow to the scheming by “a shadowy interest group angling to hijack the ALSCON sale.”

The group is said to have consistently advised the federal government to explore other ways of resolving the ownership impasse in ALSCON outside the rulings of the Supreme Court which ordered that the plant be handed over to BFIG.

The outcome of the failed deal, which the official said was part of the scheming, was expected to be presented by Mr. Fayemi at the NCP meeting scheduled for Tuesday ostensibly as a way of resolving the lingering ALSCON sale logjam.

All the officials linked to the failed deal refused to respond to calls by PREMIUM TIMES on Friday seeking their reactions.

Mr. Dantata of Danba Associates did not pick calls to his telephones lines, while a text message was not responded to. Equally, an email to the firm’s official email addressinfo@danbanigeria.com returned undelivered.

An email to Elena Morenko, Head of International Communications, UC RUSAL, seeking confirmation to the deal and the appointment of Mr. Dantata as the company’s representative, was not responded to at the time of publishing this report.

Former President Olusegun Obasanjo [Photo credit: dailypost.ng]

Besides, Mr. Okoh of BPE neither answered calls to his telephone, nor responded to a text message and email sent to him.

The NCP meeting would be coinciding with the date the Federal High Court, Abuja is also scheduled to deliver judgment in a $2.8 billion suit filed in 2013 by BFIG against UC RUSAL for its undue interference and conspiracy to frustrate its acquisition of ALSCON.

BFIG REACTS

When PREMIUM TIMES sought BFIG’s reaction on why it rejected the $35 million offer by UC RUSAL, Mr. Jaja said, apart from its illegality, acting otherwise would have portrayed the consortium as “a bunch of greedy, unserious and hungry people who do not know what they want.”

“How would anybody in his right senses think BFIG would invest billions of dollars of private resources in an attempt to acquire ALSCON and use to contribute to the development of the impoverished Niger Delta people, only for it to be subjected to over 13 years of legal battles traversing all levels of courts in Nigeria and abroad, then accept to trade all that off for a mess of $35 million?” Mr. Jaja asked.

Apart from the inherent corruption and travesty of justice, Mr. Jaja said, by refusing to uphold the two pending Supreme Court rulings on ALSCON, the federal government and some of its officials have given themselves away as economic saboteurs and “part of the grand conspiracy with foreign collaborators against the interest of the Niger Delta people.”

A 2011 financial report on ALSCON prepared by KPMG had revealed massive asset strippingof the plant allegedly perpetrated by UC RUSAL since 2006 when the plant was handed over to it by BPE.

The report showed how the $3.2 billion plant, valued at over $1.1 billion in 2004 when the bid was held, and $1.03 billion when UC RUSAL took over in 2006, dropped in asset value to less than $73 million by 2012 when the Supreme Court sacked the Russians from the plant.

Zimbabwe: ZSE Falls for Second Day in a Row As Profit-Taking Creeps in

The Zimbabwe Stock Exchange (ZSE) on Tuesday eased for the second consecutive day, dropping 4,94 percent to 371,31 points as profit-taking took hold among punters.

The industrial index broke a two-month rally — which started on July 18 — on Monday after peaking at 400,03 points last Friday.

Delta led the fallers, dropping 15,05 percent to 229,37 cents dragging the stock exchange. The company’s capitalisation at $2,87 billion, accounts for 27,32 percent of the ZSE total market capitalisation which declined 4,6 percent to $10,5 billion from $11,03 billion on Monday.

About $1,17 million worth of the beverage maker’s shares were traded, representing 39 percent of the turnover for the day, which amounted to $2,97 million.

Dairibord and Hippo Valley eased 9,38 percent and 9,86 percent to 14,5 cents and 130,25 cents respectively.

NMBZ Holdings lost 11,11 percent to settle at 8 cents while Innscor lost 0,13 percent to settle at 150 cents.

Partially offsetting the losses was Ariston, which gained 19,84 percent to 3,02 cents. Financial service group, CBZ gained 10,44 percent to 17,99 cents while Old Mutual advanced 7,28 percent to 729,5 cents.

Zimpapers also gained 1,90 percent to trade at 1,07 cents.

The mining index gained 5,93 percent to 96,89 points as Riozim advanced 9,57 percent to close at 80 cents.

Foreigners were net sellers in the day, disposing of shares worth $827,087 and buying shares worth $656,448.

Africa: Afreximbank to Mobilise U.S.$1 Billion for Region’s Trade

Multilateral trade financier African Export-Import Bank (Afreximbank) is seeking to mobilise up to $1 billion in equity from new and existing investors over the next five years to finance more trade deals on the continent.

The bank hopes to disburse $90 billion for industrialising Africa, boosting trade among countries as well as with the world in an era of rising protectionism.

World Bank data shows that intra-African trade has increased over the past decade, currently accounting for about 15 per cent of the continent’s total trade.

However, it remains the lowest of any continent, considering that intra-trade in Asia and Europe stands at 50 per cent and 70 per cent respectively.

Afreximbank has launched the capital drive in Nigeria and Kenya, seeking to raise $300 million through the issuance of depositary receipts. The minimum investment amount is $30,000.

“The depositary receipts will be listed on the Mauritius Securities Exchange, enabling investors to benefit from a liquid and freely transferable instrument said Afreximbank executive vice-president George Elombi.

An advisory syndicate made up of SBM Group of Mauritius as lead arranger and Kenya-based CBA Capital and Lions Head Capital as co-advisors will handle the issuance.

According to Afreximbank, the size of intra-African trade could be doubled from the current $170 billion per year to almost $400 billion.

The level of intra-Africa trade compares poorly with Europe, where it is estimated at a staggering $6 trillion.

Apart from financing setbacks, the lack of market information on the continent has also been cited as a key impediment to the growth of intra-Africa trade.

Established in 1993 with the main objective of financing and promoting intra and extra African trade, Afreximbank shareholding mainly comprises of African governments, African private and institutional investors and non-African investors.

The lender has approved more than $51 billion in credit facilities for African businesses, including about $10.3 billion in 2016. By the end of last year, the bank boasted a total asset base of $12 billion.