Nigeria
Tag Archive

Is time the only thing that Buhari needs to rebuild Nigeria?

Comments (0) Africa, Featured, Politics

Muhammadu Buhari

Nigeria’s president inherited a multitude of problems from the previous administration. Does he have what it takes to overcome them?

Nigeria’s President, former military ruler Muhammadu Buhari calls for time and space to achieve the objectives he laid out upon his election last year.

Buhari has openly declared his intentions for Nigeria’s future. He wants to build a country that future generations will be proud to inherit. This is rare in a continent where leaders frequently think in the short term – often selling off natural resources for instant personal gain, rather than investing in long-term solutions for Africa’s economic problems. Buhari’s Nigeria, he claims, is “for its children.” Whether these promises will materialize will depend on his ability to identify and build upon his past mistakes, and those of his predecessor.

Muhammadu Buhari comes from a large family; he was his father’s 23rd child, born in 1942 in Daura, Katsina state. He ruled Nigeria for 20 months in 1985 and has since lost three general elections to the People’s Democratic Party, which has dominated the political landscape in Nigeria since the end of military rule in 1999.

Winds of Change for Nigeria

Buhari’s perseverance has paid off and after waning public support for Goodluck Jonathan, he became the first opposition candidate to de-throne an incumbent leader in Nigeria. The issues inherited from previous governments will not be easy to overcome however, and continuing President Jonathan’s battle to contain the Islamic militants in the north will be Buhari’s biggest challenge.

Originally from Nigeria’s Islamic North, Buhari has alienated many from the mainly Christian south of the country by giving his support to Sharia law. Subsequently, he has had to strongly deny having a radical Islamist agenda. Deep-seated suspicion regarding his religious background and suggested support of Boko Haram has been quelled by a recent failed assassination attempt that left 82 dead, apparently orchestrated by Boko Haram forces.

Boko Haram, unemployment and rampant corruption to fight

Boko Haram

Boko Haram

He was previously mistrusted by the voting populace in the south, but President Jonathan’s failure to overcome the jihadi militia left Buhari with an opportunity to exploit. The 276 Chibok girls missing since 2014 have piled local and international pressure upon Nigeria’s administration. The Boko Haram crisis has left more than 20,000 dead and over 2 million displaced since 2009. Since his inauguration there has been a lot of posturing and even claims to have “defeated” the militant group, but terror attacks, kidnappings and suicide bombings are still rife, particularly in the North of the country. With an agenda to meet, but what appears to be little structural planning, it will take more than time or crude military suppression to overcome “the most deadly terrorist group in the world.”

Boko Haram is unfortunately not Nigeria’s only crisis. Buhari will also have to tackle large scale unemployment and rampant corruption. Buhari’s Deputy Prime Minster estimated that 110 million of Nigeria’s 170 million inhabitants are living in extreme poverty. He also noted that the majority of the wealth is going into the pockets of the nation’s privileged few. For Africa’s most populous nation, these economic issues add stress to the fractures caused by religious extremism and recent spates of violence. Making progress with these issues may also be the key to undermining the militant support among the population, with rampant unemployment being a key factor in their recruitment campaigns.

Buhari: an incorruptible and converted democrat for Nigeria

His biggest election promise is to tackle the fuel shortages that have blighted the population and stagnated the economy over the last several years. His plans are to increase production and improve distribution, while renegotiating terms with the rebel forces. In 2009 President Jonathan’s government agreed to pay militants $400 per month to stop their attacks on the fuel supplies. Once the money inevitably dried up, the attacks recommenced and the supply problems are now worse than ever. On paper, Buhari seems to be well placed to handle this crisis: he was the Minister for Petroleum and Natural Resources in 1976 and during his tenure heavily invested in pipelines and created 21 new petroleum storage units across the country. But his ability to negotiate with the Nigeria Delta Avengers is in contention; his rigidity and stubbornness are well known within the administration and beyond. Striking a balance between tackling the underlying issues, negotiations and strategic military moves will be key to eradicating the extremist violence that have dominated the political horizon in Nigeria.

Buhari claims to be a “changed man” and a “converted democrat,” taking full responsibility for all that happened during his short military rule in the mid-80s, and the part he played in the military coup that overthrew the democratically elected leader, President Shehu Shegari. If Buhari’s “incorruptible” and rare reputation for honesty holds true, he may be able to usher in a wave of change, washing away the culture of injustice and corruption, both in businesses and in government. He has appealed for time and patience, but will this be enough, or will the multitude of problems he faces just be too much to overcome?

Read more

Nigeria says it paid contractors to finish economy-boosting projects

Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – A Nigerian minister said on Friday the government had paid contractors 63.16 billion naira ($200 million) to finish delayed infrastructure projects, in an apparent bid to ease fears over the future of the schemes meant to boost the struggling economy.

Work on a series of road, power and other programmes had slowed or halted as the government struggled to make payments, amid delays in passing the national budget and foreign currency shortages.

Power, Works and Housing Minister Babatunde Fashola told an infrastructure conference in London that “63.16 billion naira have been paid out to contractors to finish infrastructure projects since the budget” was passed in May.

He did not say whether that covered all the outstanding payments. But the comments will come as a relief to contractors, many of whom were not paid for months.

They will also signal to foreign investors that there is some movement in the supply of money, which has been problematic over much of the last year due to foreign currency curbs introduced to conserve forex supplies.

The 6.06 trillion naira ($19.24 billion) budget tripled capital expenditure from the previous year in a bid to stimulate Africa’s biggest economy which is going through a crisis caused by low oil prices.

Nigeria’s economic development has been held back by erratic electricity provision and a poor road network, all of which falls under Fashola’s remit.

It was not clear whether the funds referred to by Fashola were part of the budget allocation.

Earlier this month the budget minister said Nigeria’s first quarter revenues reached only 55 percent of the government’s target due to recent attacks on oil and gas facilities in the southern Niger Delta energy hub.

 

($1 = 315.0000 naira)

 

(By Karin Strohecker. Writing by Alexis Akwagyiram; Editing by Andrew Heavens)

Read more

MTN Nigeria on track to list on local stock exchange in 2017

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Africa’s biggest mobile phone operator MTN Group said on Thursday its Nigeria unit is on track to list on the Nigerian Stock Exchange (NSE) in 2017 as part of an agreement with the Federal Government.

MTN had said in June its local unit would list on the NSE after agreeing to pay a reduced fine of $1.7 billion in a settlement with the Nigerian government of a long-running dispute over unregistered SIM cards.

MTN Nigeria aims for the listing to take place during 2017, subject to market conditions.

MTN is the largest mobile phone operator in Nigeria with 57 million subscribers, and the country accounts for about a third of its revenue.

MTN Nigeria appointed Stanbic IBTC Capital, Standard Bank of South Africa and Standard Advisory London, and Citigroup Global Markets, as joint transaction advisors and global coordinators, with Stanbic acting as lead issuer.

 

(Reporting by Nqobile Dludla; Editing by David Holmes)

Read more

Nigerian naira hits all-time low of 334.50 per dollar

Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Nigeria naira weakened to an all-time low of 334.50 against the dollar on the interbank market on Wednesday, a day after the central bank hiked interest rates to try to lure foreign investors back into local assets, traders said.

The naira fell 5.8 percent on Wednesday from its opening rate, and $10 million was traded at the new record low.

Traders said investors were pushing the currency lower to test the limit of how far it can fall, given a spread of almost 12 percent between the official and black market naira rates.

“If we have more people trying to buy the naira then it should strengthen. I think we will keep seeing the trickles … I don’t think we will see large inflows until the fundamentals of the economy improves,” one trader said.

 

(Reporting by Chijioke Ohuocha; editing by John Stonestreet)

Read more

Nigeria’s central bank raises benchmark rate to 14%

Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigeria’s central bank raised its benchmark interest rate by a surprise 200 basis points to 14 percent on Tuesday and maintained its existing cash reserve ratios for commercial banks in a bid to stabilise the naira.

In a Reuters poll, the median forecast of 13 analysts taken July 18-21 predicted that Nigeria would raise interest rates by 100 basis points to 13 percent.

 

(Reporting by Ulf Laessing and Alexis Akwagyiram; Editing by Ed Cropley)

Read more

Nigerian oil executive to lead OPEC

Comments (0) Africa, Business, Featured

Mohammed Sanussi Barkindo

The oil cartel appoints Mohammed Sanussi Barkindo to a three-year term as secretary-general beginning Aug. 1.

A Nigerian oil executive who helped develop key global climate change initiatives is the new-secretary general of OPEC.

The Organization of Petroleum Exporting Countries named Mohammed Sanussi Barkindo to a three-year term as secretary-general beginning Aug. 1. Barkindo replaces Abdallah Salem e-Bardri of Libya in the cartel’s top job.

Barkindo is an experienced oil executive who has worked for the Nigeria National Petroleum Corporation for more than two decades and was its director in 2009-10.

He also has deep experience with the oil cartel, including service as its acting secretary-general in 2006 and 15 years on OPEC’s Economic Committee.

Climate change work cited

According to Francis Perrin, Chairman of Energy Strategies and Policies, Barkindo’s work on climate change was also a decisive factor in his appointment.

Barkindo helped produce the United Nations Convention on Climate Change and the Kyoto protocol as the leader of Nigeria’s technical delegation to UN climate change talks.

Perrin said the appointment reflects growing recognition among cartel members of the importance of initiatives to stall climate change as OPEC struggles to find its footing on a shifting global energy landscape.

Barkindo is also seen as a neutral party in simmering regional political tensions between OPEC members Saudi Arabia and Iran as well as disagreements about oil production limits.

Long career as oil executive

Barkindo earned a bachelor’s degree in political science from Ahmadu Bello University in Zaria, a post-graduate diploma in the economics of petroleum from the College of Petroleum Studies at Oxford University in the United Kingdom, and a graduate degree in business administration from Southeastern University in Washington, D.C.

He has also been deputy managing director and chief executive of Nigeria Liquefied Natural Gas and managing director and chief executive of the international trading division of the Nigeria National Petroleum Corporation as well as general manager of the corporation’s London office.

El-Badri had been set to retire in 2013, but stayed another three years because cartel members were unable to agree on a replacement amidst Middle East political tensions and discord within OPEC about whether to limit oil production as prices dropped.

Venezuela, hard hit economically by the oil slump, put forth a candidate, Ali Rodriguez, its long-serving OPEC representative. Indonesia also considered fielding a candidate.

Neutral candidate

Saudi Arabia and other Gulf members said they supported Barkindo for his experience and because Nigeria doesn’t take sides in Middle East power struggles.

While the secretary-general does not have executive power in OPEC, the official often plays the role of a neutral mediator when there are differences within the group.

It likely will fall to Barkindo to mediate ongoing conflict in the oil cartel over whether to limit production to prop up oil prices.

OPEC has seen its influence on global oil prices waning amidst an oil glut coupled with the growth of production outside the cartel, including in the United States and Russia.

OPEC member countries produce almost 37 million barrels a day compared to non-OPEC production of 57 million barrels daily, according to Global Risk Insights.

Disunity amid oil slump

Despite waning influence, OPEC’s unwillingness to set production limits has played a major role in creating an oil surplus, which has precipitated a two-year crisis. The price of oil plummeted to a low of $26 per barrel earlier this year. The current price is about $45 a barrel, less than half price of $110 per barrel in 2014, when the crisis began.

Richer OPEC nations, led by Saudi Arabia, have been willing to take financial hits of low oil prices in order to preserve market share. OPEC has rebuffed calls to limit production by poorer members including Algeria and Venezuela, which have been hard hit by the slump.

After OPEC members again failed to agree on limits in June, experts said the discord underscored the cartel’s waning ability to influence oil prices.

Read more

ExxonMobil declares force majeure on Nigeria’s Qua Iboe crude oil: spokesman

Comments (0) Africa, Business, Latest Updates from Reuters

LONDON (Reuters) – ExxonMobil subsidiary Mobil Producing Nigeria has declared force majeure on exports of Nigeria’s Qua Iboe crude oil, the country’s largest export stream, a spokesman said on Friday.

The declaration came after the company observed a “system anomaly” during a routine check of its loading facility on July 14.

“We are working to ensure loading activities at the facility return to normal. We cannot speculate on any timeline for repairs,” the spokesman said. “Qua Iboe Terminal is operating and production activities continue.”

Nigeria has struggled to maintain its crude oil production following a spate of militant attacks and technical problems that in May pushed production briefly to 30-year lows. While the cause of the latest issue was not immediately clear, traders said it would take least two to four weeks to repair.

Earlier this week, Exxon denied claims from militant group the Niger Delta Avengers to have blown up the Qua Iboe 48″ crude oil export pipeline operated by the company.

Spokesman Todd Spitler said on Friday there was no connection between the force majeure and militant attacks.

Exxon has struggled to bring production of Qua Iboe back to normal after an accident in May on a drilling rig that damaged a pipeline, after which the company also declared force majeure.

Since lifting that declaration in early June, there have been roughly three revisions to loading schedules, attributed to a slower-than-expected resumption of flows, with loading delays of at least five days.

 

(Reporting by Libby George; editing by David Clarke and David Evans)

Read more

Keeping House: Cleaning Up Nigeria’s Oil Industry

Comments (0) Africa, Business, Featured

Nigerian Oil Industry

After the rollout of a $1 billion cleanup plan for Ogoniland, Nigeria–a region that has been severely damaged by the oil extraction industry–Nigeria’s state-owned petroleum corporation has voiced its support for environmental reform within the sector.

Nigeria is Africa’s largest producer and exporter of crude oil, and is estimated to have one of the world’s largest oil reserves. Unfortunately, Nigerians have yet to reap the benefits of such a potentially lucrative industry due to historically lax regulations. Nigeria has not been a competitive operator in the oil industry due to its historically bad practices, such as lack of oversight in production, virtually non-existent environmental regulations and not infrequent oil spills.

In early June 2016, Nigerian Vice-President Yemi Osinbajo set a $1 billion project to clean up Ogoniland, a part of the Niger Delta that has been intensely contaminated by the oil extraction industry. Following the example of the federal government, The Nigerian National Petroleum Corporation (NNPC) has decided to voice its concern for Nigeria’s environment as well. Following the federal roll-out of the massive internationally-funded cleanup plan, the NNPC announced their intention to reform the oil sector, although did not provide any details on how this would be done. The NNPC did, however, encourage members of the corporation to support conservation centres and parks.

Why Now?

Following an expansive 2011 study by the UNEP on the impact of oil extraction in the Niger Delta, Nigeria has been in the spotlight as one of the industry’s worst environmental offenders. The report found severe and widespread contamination of groundwater and soil across Ogoniland. In a number of areas, public health was compromised through contaminated drinking water and the presence of unnatural levels of certain carcinogens associated with oil extraction. Ecosystems unique to the delta region, such as mangroves, have been decimated by the virtually unregulated operations of the petroleum industry. All of the report’s findings pointed to a lack of institutional control within the oil industry and within the regulatory systems of the government. The report recommended that an initial investment of $1 billion would be needed to begin the restoration process.

It has taken more than five years to establish the infrastructure and amass the funding necessary to begin what is considered the “world’s most wide-ranging and long-term oil cleanup exercise ever undertaken,” but the project is finally underway. Experts estimate that it may take up to 25 years to restore the Ogoniland ecosystem to its pre-contamination status, but that such a long-term commitment is the only way to reverse the damage caused to the region.

Healthy on the Inside, Healthy on the Outside

A cleanup is a good place to start, but in order for the $1 billion investment to really contribute to positive change, a complete overhaul of Nigeria’s oil industry is vital.  Recognizing its role in the project, the NNPC announced its “20 Fixes” plan, aimed at reforming the chronically mismanaged oil industry. Among these “20 Fixes” were goals such as reducing and auditing costs, restructuring corporate centres and staffing, renegotiating existing contracts, unbundling the Nigerian Gas Company and improving information technology, among others. Reducing environmental impact was, surprisingly, not among these 20 top-concerns. Following the announcement of Ogoniland project, however, the NNPC voiced its support for the project, encouraging its workers to support environmental conservation, and committed to improving its environmental protection policies. A concrete plan to turn verbal commitments into action has yet to materialize.

Kachikwu pointed to the Lekki Conservation Centre, established in 1990, as an example of its commitment to conservation efforts. The NNPC claims that, with the support of Chevron Nigeria and others, it has contributed to the creation of the 78-hectare conservation centre, although no evidence for that is available.

This is not to say that the NNPC is not making a positive change, because it is. Recently appointed Managing Director Dr. Ibe Kachikwu has been hard at work to bring transparency to one of the world’s murkiest oil production lines. The World Bank, which committed more than $1 billion to a variety of projects in Nigeria for 2016, applauded the efforts of Dr. Kachikwu for the initiatives outlined in the aforementioned “20 Fixes.” Dr. Kachikwu urged the World Bank to offer additional support for an institutional framework “and training for the ministry and NNPC, [because] the training would provide the necessary skill sets that are required to grow Nigeria’s oil and gas industry.” With such financial support, the NNPC may be able to make the reforms necessary to clean up its act.

Time for Change

After decades of mismanagement, Nigeria’s oil industry may finally be at a turning point. Under the new direction of Dr. Kachikwu, the NNPC may be able to institute real, positive change that will make the cleanup efforts long-lasting. It is only with the moral and financial investment of the oil industry that the environment can be protected. Ogoniland will not be restored overnight, and it is of the utmost importance that the oil industry do its part to ensure it does not simply move the problem elsewhere.

Read more

GoMyWay – the Nigerian company reinventing hitch-hiking for the 21st century

Comments (0) Africa, Business, Featured

Traffic in Nigeria

Nigeria’s GoMyWay looks to reduce travel costs and pollution, with its ridesharing service.

Hitch-hiking may seem like a quite outdated and unsafe idea, but one Nigerian startup is revolutionizing the practice, by bridging the gap between a free ride with a stranger and a paid taxi cab. “Ridesharing” itself is not a new concept, as people have shared journey costs or hitchhiked for as long as cars have been widespread. However, GoMyWay aims to make a safe, organized network of road users who can all benefit from sharing journeys with strangers.

Reducing more than one cost

The costs of travelling by car are more diverse than simply the cost of the fuel. The driver has to consider fees for parking at their destination, car insurance, and toll roads. Therefore, any driver who could regularly charge a percentage of their costs to a passenger would clearly benefit. Likewise, while taxi cabs are expensive for any long journey, paying a driver only a percentage of their fuel cost would clearly save the non-driver money.

This is the crux of GoMyWay’s business model. Drivers can offer to take as many passengers as they have spare seats for, and potential passengers agree to a fee that covers their proportion of the journey’s cost. Users put their planned journey into the system, GoMyWay works out the suggested fee, and drivers are put into contact with people wishing to share a ride. The result is a democratized taxi service that saves all those concerned money, and reduces the number of cars on the roads too.

Damilola Teidi, of GoMyWay, said there were “too many cars on the road and lots of them with one person driving and empty seats,” adding, “It is ecological and economical nonsense. Ride-sharing is the perfect solution for these problems.”

Building a safe network

For many people, the prospect of getting into a car with a stranger, or having a stranger get into their car, might be unnerving. However, GoMyWay has worked to create a sense of security about those registered to use the service, and allows a community of users to self-govern through reviews and feedback.

GoMyWay ad

GoMyWay ad

Users have 4 levels of verification to go through, including their Facebook profile, cell-phone number, email address and a valid form of ID. Both the driver and the passenger can write a review of their experience, and users can customize their profiles to reflect certain preferences, such as no smoking in their car.

GoMyWay’s verification system ensures that the more stages a person has completed, the more likely they are to be chosen for a journey share.

Moreover, Teidi points out that ridesharing in Nigeria already occurs, but with none of the security in place that GoMyWay provides. Teidi explained, “Ride sharing happens offline with no safety measures in place. You pass by certain roads in Lagos or at the tollgate, and you see people offering and joining rides. No verification done at all. Same thing when you flag a regular taxi on the road, no one verifies the driver.”

Driving Forwards

GoMyWay is a service on the move. Within a year of its launch, there were more than 4,000 registered members, offering 30,000 seats across 20 Nigerian states. The organization has financial backing from successful business figures, including Konga founder & CEO Sim Shagaya and former Amazon executive Bill Paladino.

GoMyWay has plans to launch its service in Kenya, South Africa and Ghana. Unlike taxi services such as Uber, GoMyWay is simply connecting people – with the same planned journey – in order to reduce financial and environmental costs.

Currently any journey arranged via GoMyWay results in the fee being paid (in cash) by the passenger to the driver. However, as the business expands, the company plans to charge a percentage fee to registered drivers for each transaction. This system will ensure that GoMyWay generates its own profits, while the service still reduces costs for its users.

GoMyWay is proving to be an affordable, convenient choice for many people, but the company has grander hopes. With a focus on city-to-city journeys, and expansion into other countries planned, Teidi states that GoMyWay can grow to such an extent that it changes the face of transport in Africa: “We are building the new African rail network…except we are doing it on roads.”

Read more

Nigerian militants say they blew up oil facilities near Warri

Comments (0) Africa, Business, Latest Updates from Reuters

LAGOS (Reuters) – Nigerian militant group the Niger Delta Avengers said on Tuesday it had blown up a Chevron well and oil pipelines near the city of Warri in the country’s southern oil hub.

The group, which says it wants a greater share of oil wealth to go the impoverished Niger Delta region, the source of most of the country’s crude, has pushed production to 30-year lows in the last few weeks through a spate of attacks.

It said it blew up a NPDC (Nigerian Petroleum Development Company) manifold, close to Banta, and two crude pipelines operated by the state oil company NNPC, adding that it also blew up “Chevron Well 10”, close to Otunana flow station. Chevron and NNPC were not immediately available to comment.

A remote manifold platform (RMP) is where small oil or gas pipelines converge before connecting to a larger storage hub.

The statement, carried on the group’s website, said the attacks happened shortly before midnight, but did not make clear whether the strikes were on Monday.

On Sunday the Avengers claimed responsibility for five attacks – the first such claim since June 16. Petroleum ministry sources said in late June a month-long truce had been agreed with militants, but the Avengers said they did not “remember” agreeing to a ceasefire.

 

(Reporting by Shalini Nagarajan in Bengaluru, and Alexis Akwgyiram in Lagos, editing by David Evans)

Read more