Dangote refinery to save $7.5bn through import substitution


The construction of the 650,000 barrels of crude oil per day Dangote Refinery is expected to help Nigeria save over $7.5 billion through import substitution.The project, will put Nigeria on the global map as major oil and gas hub in Africa, the Group Executive Director, Devakumar Edwin, has hinted.
Nigeria currently imports large amount of its petroleum products due to the inability of refineries to utilize their full capacity.

For example, the National Bureau of Statistics (NBS) latest data showed that the downstream of the Nigeria oil and gas sector imported N812billion of Premium Motor Spirit (PMS) during the first quarter of 2018.

According to NBS, the country imported N349.45 billion worth of PMS in March 2018, representing the highest volume of petroleum product import during the quarter under review.

Specifically, the petroleum products importation statistics for first quarter 2018 reflected that 5.67 billion litres of PMS, 954.47 million litres of Automotive Gas Oil (AGO); 66.914 million litres of Household Kerosene (HHK); and 5122.067 million litres of Aviation Turbine Kerosene (ATK) were imported into the country in first quarter of 2018.

According to NBS, the months of March 2018 recorded the highest volumes of PMS imported into the country at 2.41 billion litres while the highest volume of AGO and HHK were imported in February and January 2018 respectively.

This continuous importation of petroleum products has exerted undue pressure on the nation’s external reserves and induced depreciation of the naira.

Edwin said that the Dangote Refinery therefore would help the Federal Government create a robust domestic refining sector that could reduce petroleum products imports and save the country from capital flight.

He stated: “The refinery is going to save a huge amount of foreign exchange out flow because, today, forex is being used in the importation of petroleum products and our foreign reserves are being heavily depleted.

And whatever little forex we are earning from the sale of crude oil, is being used to import petroleum products.

Our petroleum refinery is going to have a major beneficial impact on the economy in terms of foreign exchange savings.

“Secondly, the demand for Nigeria’s crude oil has reduced with the introduction of shale oil into the market.

Shale oil is equally as good as the Nigerian crude and it is available in substantial volumes.

Our biggest consumers like China and India have reduced their demand because they could get similar products.

Even earlier, they had started focusing on heavier crudes because they believed that they could make more money.

Our refinery will give an assured market for the Nigerian crude.

Speaking on the refinery update, he said: “We are currently building the world’s largest single line Refinery, Petrochemical Complex and the world’s second largest Urea Fertiliser plant.

“The Refinery will have the capacity to refine 650,000 barrels of crude oil per day.

The petrochemical plant will produce 780 KTPA Polypropylene, 500 KTPA of Polyethylene while the Fertiliser project will produce 3.0 million metric tonnes per annum (mmtpa) of Urea.

“In addition, we are also building the largest sub-sea pipeline infrastructure in any country in the world, with a length of 1,100km, to handle 3 billion SCF of gas per day. We also plan to construct a 570 MW power plant in this complex.

As a matter of fact, gas from our gas pipeline will augment the natural domestic gas supply and we estimate an additional 12,000MW of power generation can be added to the grid with the additional gas from our system.”


Adeosun implores Nigerians to embrace insurance

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The Minister of Finance, Kemi Adeosun, has urged Nigerians to embrace insurance to protect themselves against the eventualities of life and also enhance the sector’s contribution to the country’s Gross Domestic Product (GDP).

Represented at the event, she made the appeal at the 2018 National Conference of the National Association of Insurance and Pension Correspondents (NAIPCO) held in Lagos on Thursday.

Mrs Adeosun, at the conference, said insurance, which remained the greatest panacea to poverty alleviation, had been neglected by many Nigerians.

She, however, said life without insurance was equal to building a house on a shallow ground.

The News Agency of Nigeria (NAN) reports that the theme of 2018 conference is: “The Role of Stakeholders in Developing Insurance & Pension Sectors”.

According to the finance minister, insurance also remained the key to wise financial planning among all Nigerians, including grassroot dwellers.

She urged citizens to key into the various economic developmental initiatives of the National Insurance Commission (NAICOM) to develop a solid financial plan.

Mrs Adeosun, who was represented by the Deputy Commissioner for Insurance, Finance and Administration, NAICOM, George Onekhena, said excuses of non-payment of claims used by Nigerians to avoid insurance policies amounted to “self deceit.”

The minister advised citizens to make enquiries on insurance policies before subscribing to them.

She said anyone in doubt could engage the services of insurance brokers for professional advise.


“Moreover, nobody knows the day of his or her death and it woukd be disastrous for anyone to leave dependents without benefits.

“Insurance is the foundation for every wise financial planning,” she said.

She also said the greatest challenge facing the insurance sector, which was common to the pension sector, was that many people hardly inform others when they benefited from the sector.

“A clear example is the quantum of retirement benefits paid on monthly basis by Pension Fund Administrators (PFAs) to retirees and the quantum of claims paid yearly by insurance firms.

“For instance over N76 billion insurance claims were paid in 2014, close to N90 billion claims were paid in 2015 and over N105 billion claims paid in 2016.

“Rather people react when claims or benefits are not paid,” she said. (NAN)

May & Baker posts N601.37 million half-year profit

For the six-month period ended June 30, 2018, May & Baker Nigeria Plc posted a profit after tax and extra ordinary income of N601.37million against N94.86million recorded in the corresponding period of 2017.

A statement from the company attributed the improved performance to strong growth trend that also saw it increasing dividend payout by 233 per cent for the 2017 business year.

Analysts said the increase in gross margin, operating margin, and pre-tax profit margin showed that May & Baker’s performance in the first half was driven by improved business operations, increased efficiency, and better cost management.

Also, the half-year report showed a well-rounded improvement in the bottom-line of the healthcare company, as key underlying profitability margins improved considerably during the period.

Pre-tax profit margin, which measures average pre-tax profit per unit of sale and serves as benchmark for profitability, tripled from 3.13 per cent in first half 2017 to 8.44 per cent in first half 2018.

Gross profit margin had increased from 30 per cent in H1 2017 to 33 per cent year-on-year, while operating margin also grew to 12.7 per cent in 2018, against 10.11 per cent recorded a year earlier.

The report showed that group’s profit before tax rose by 178.76 per cent to N388.90million in H1 2018 against N139.51million recorded in comparable period of 2017.

Earnings per share also increased from 9.68 kobo in H1 2017 to 26.98 kobo year-on-year.

With the addition of N336.92million gain from discontinued operations of its food business, total net earnings jumped to N601.37million in the review period compared with N94.86million recorded a year ago.

Business segmentation analysis showed the company’s performance was driven by its core pharmaceuticals business, which saw 22 per cent growth in sales during the period.

The Managing Director, Nnamdi Okafor, said the higher turnover in 2018 was achieved despite the discontinuation of a significant arm of its business responsible for about 20 per cent of turnover in 2017.

He said the result demonstrated the long-term sustainability of the growth strategy, and the continuing efficiency of its world-class pharmaceutical manufacturing complex in Ota, Ogun State, while exploring additional opportunities for expansion of the core healthcare business in Nigeria and beyond.

“Our many growth initiatives are paying off and we are happy that the results have proved us right. With improvement in macroeconomic environment, we will continue to improve on our performance with a view to creating greater value for our shareholders,” Okafor said.

He noted that the imminent commencement of operations of Biovaccines Nigeria Limited, and ongoing efforts to turn the company’s world-class manufacturing facility in Ota, into a hub of pharmaceutical manufacturing in West Africa, hold great prospects for the group.

Okomu Oil donates projects to host community in Edo

In line with its Corporate Social Responsibility (CSR), and to improve community welfare, the Management of Okomu Oil Palm Company has donated projects to its host community in plantation extension II, located in Ovia North East Local Government Council Area of Edo State.

The Managing Director, Dr. Graham Hefer, accompanied by the Edo State Commissioner for Physical Planning and Urban Development, Dr. Erimona Edorodion, said the gesture is to uplift the lives of local residents in the company’s host community.

He spoke during the inauguration and hand over of the semi-industrial water borehole, and renovation of the Traditional Head (Odionwere) House Projects in Odiguetue Community.

Hefer, who disclosed that the provision of infrastructure to the local community is part of the company’s way of improving its working relationship with the host communities. He also urged residents to judiciously utilise and protect the projects from vandals, adding that more of such projects will be attracted to the communities to bring about rapid development to the people.

Edorodion while inaugurating the projects, commended Okomu Oil for complimenting the effort of the State Government in job creation, saying it is the largest employer of labour in the state, and demonstrated commitment to international best practices and welfare of its workers.

Secretary, Working Committee, Odiguetue Community, Joseph Abuede Obuele, expressed gratitude to the management of Okomu for its CSR programmes.

Credit Bureaus seek single unique identification for improved access

To further bridge the financing gap for more than 74 per cent of Small and Medium Enterprises (SMEs), the Credit Bureau Association of Nigeria (CBAN), has said a single unique identifier would aid improved access to credit to fund small businesses in the country.

Indeed, the Bureau emphasised the need for investment in infrastructure for Nigeria to attain financial inclusion, stressing that the present administration must prioritise developmental efforts to implement an aggressive means of identification, otherwise, not much would be achieved.

The Chairman, CBAN, Tunde Popoola, at its 5th National Credit Reporting Conference, said access to credit by Micro Small and Medium Enterprises (MSMEs), and consumers in Nigeria is still very low, stressing that despite the country’s huge population of over 190 million people, less than 15 million persons/entities have enjoyed at least one form of credit from banking institutions.

Popoola pointed out that the country has multiple forms of government issued identifiers for individuals, including National Identity Card, Bank Verification Number (BVN), Driver’s Licence, Voter’s Card, and International Passport.

He added that in most countries of the world with successful credit bureau infrastructure, there is always one single means of identification, which Nigeria has to adopt.

Meanwhile, quoting the World Bank access to credit report, he said Nigeria has moved from 37th position in 2017 to 6th in 2018, a feat he said was possible courtesy of Federal Government’s different initiatives aimed at fostering the ease of doing business.

He said the major responsibilities of credit bureaus are data collection, matching and dissemination, maintaining that the value of having a unique identifier cannot be overemphasized in performing these tasks.

He decried that currently, the identifier for corporate entities such as company registration number (RC number) is not readily provided by data furnishers.

“The current situation makes data matching very tedious, cumbersome, and expensive for the bureaus. This is because the bureau relies on identification of data subjects to be able to match and merge data, and develop innovative products for the markets. We, therefore, urge the government to speedily implement a unique identifier for every Nigerian.

“In addition, the entire bank loans to consumers at any given time in a month are less than N1trillion. To underscore the challenge of loan concentration, available data indicate that the total value of credits in the financial sector as of June 2018, corporate entities which represented about 10 per cent of the credit subjects assessed 94 per cent of the loan value. This clearly shows the very low rate of credits to MSMEs and consumers.”

According to him, the credit bureau coverage remains low in Nigeria at eight per cent compared with 64 per cent in South Africa, 25 per cent in Egypt, and 17 per cent in Ghana, and underscores the need to urgently change the narrative of credit concentration and increase access to credit.

Also, the Director, Banking Supervision Department, Central Bank of Nigeria (CBN), Ahmed Abdulahi, said both the financial and non-financial sectors have a crucial role to play to attain more financial inclusion in the country.
He noted that Nigeria’s credit bureau industry has been promoting the use of credit information to make financial decisions, to enable businesses achieve their financial goals thus promoting financial inclusion in the country.

He added that access to credit is crucial to economic growth and has continued to be the catalyst for driving private sector development.

Minister of State for Industry, Trade and Investment, Hajiya Aisha Abubakar, added that credit information would enable Nigerian businesses particularly SMEs to thrive to create jobs.

“It would also impact positively on the Nigerian citizenry by way of identity, where Nigerians can access all financial services in the country. We have put some efforts in achieving milestone in our current drive for financial inclusion and improve the Nigerian economy. It is also noteworthy that the efforts of credit information should not be restricted to financial institutions alone but also non financial institutions.

“Today it is our hope that this forum would proffer innovative ways on how data exchange or sharing to encourage more financial inclusion in Nigeria,” she added.

Sea pirates attack on crude oil tankers rise

The upswing in crude oil prices in the global market may have triggered sharp rise in pirates’ attacks on crude oil tankers in the Gulf of Guinea.

As at yesterday, Bonny light was $73, Brent crude was $72.50. This marks a significant increase from about $55 same period last year.

Latest report from security services company, EOS Risk Group, showed that Nigerian pirates kidnapped 35 seafarers from vessels in the Gulf of Guinea between January and June 2018.

The number of sailors removed from vessels and held for ransom was the same as witnessed during the first half (H1) of 2017, but the report indicated that the spate of attacks on tanker vessels had increased drastically.

According to the report: “Petro-piracy had been dormant for the past two years with only two attempted hijack for oil theft cases reported, but it seems to have returned to the area with the hijacking of the UK-flagged, MT Barrett in Cotonou Anchorage, Benin, on January 10, 2018. The attack, which played out over seven days, saw the pirates siphon off around 2,000MT of gasoline from the tanker via a ship-to-ship transfer (STS) within the Exclusive Economic Zone (EEZ) of Ghana. Following the hijacking of the MT Barrett, pirates attacked three other tankers in Cotonou anchorage in February 2018,”

After a lull in piracy activity off Benin since 2012, EOS recorded seven pirate attacks in the waters of Nigeria’s western neighbour in H1 2018.

The attacks involved several successful tanker hijackings, one of which resulted in the loss of 2,000 tonnes of product. Nigerian pirates also allegedly operated in Ghanaian waters in April, kidnapping five seafarers from two vessels.

Senior Intelligence Analyst at EOS Risk, Jake Longworth, said: “Most concerning this year has been the resurgence of ‘petro-piracy,’ involving the hijacking of tankers for oil theft. The return of petro-piracy has been accompanied by an associated increase in the geographical reach of Nigerian pirate gangs, leading to attacks in the waters of Benin, and Ghana. 95 per cent of attacks we recorded in Nigerian waters occurred near Bonny Island, within 60 nautical miles of the shore. Pirates operating in these waters are focused on the kidnap of seafarers for ransom.”

Longworth said the main threat is still found off the restive Niger Delta, specifically on the approaches to ports and oil terminals in the vicinity of Port Harcourt. It was in this area that heavily armed pirates kidnapped 11 seafarers from the Dutch general cargo vessel, FWN Rapidein, April. This is the highest number of hostages taken by a Nigerian pirate group in a single attack.

Head of Special Risks at EOS, Steven Harwood, who covers kidnap for ransom response, said there are two main pirate gangs in Nigeria, both employing around 16 full time pirates.

He continued: “One is located in the creeks near Yenagoa, Bayelsa State, and the other around Abonnema, Rivers State. Both gangs are in communication, and sometimes subcontract the physical hostage taking to other criminal groups. Since the turn of the Century, this pattern has been visible in Nigeria, ahead of major election periods, evidence of the complex links between piracy and political conflict in the Niger Delta.”

EOS warned that instability in the Niger Delta is likely to increase in the run up to Nigeria’s 2019 general elections, which could result in a spike in piracy activity.

To mitigate the risk of attack, EOS recommended Masters implement Global Counter Piracy Guidance (GCPG) measures, and familiarise themselves with the Guidelines for Owners,
Operators and Masters for protection against piracy in the Gulf of Guinea region – version 3, June 2018.”

NCC offers N3b subsidy initiative for InfraCos

• Operators to lose license after one year
The Nigerian Communications Commission (NCC), said it has made available N3 billion subsidy budget to assist Infrastructure Companies (InfraCos) in the deployment of services in the country.

The N3 billion has been approved by the National Assembly, and would be executed on a yearly basis.

This was disclosed by the Executive Vice Chairman of NCC, Prof. Umar Danbatta, during an interaction with journalists in Abuja.

Although, the NCC said none of the licensed InfraCos have accessed the subsidy, The Guardian however gathered that most of the licensed operators are facing serious challenges in their regions of operations.

Chief of these challenges relate to the issue of Right of Way (RoW), where state governments are demanding huge fees from operators before they can be allowed to roll out their services.

Already, iConnect, a subsidiary of IHS Nigeria, has returned its operating licence for the North Central region, owing also to delays in getting approval for RoW, and cut throat roll out charges by state agencies.

Danbatta revealed that apart from the challenge of RoW for iConnect, “the firm wanted a national licence instead of the regional, but we see that distorting the whole plan if given. That licence will be reissued to another operator that is ready.”

According to him, the InfraCo initiative was targeted at helping Nigeria meet the 30 per cent broadband penetration by the end of the year.
He urged operators to roll out, warning that the one-year grace handed InfraCo licensees may be reduced to six months, saying: “the Commission doesn’t want the operators to become idle with the licence. Any operator, which failed to roll out within one year, may have the licence withdrawn.”

Meanwhile, the EVC has assured that quality of service would improve soon, adding that some infrastructure must be in place for this to happen, as Nigeria needed more Base Transceiver Stations and fibre cables to ensure services become optimal.

Danbatta further said lack of redundancy, erratic power supply, vandalism, lack of required capacity, amidst other technical factors would need to be resolved before services can be optimal.

“That is not to say we are not monitoring the operators, or putting them on their toes to ensure improved services, but we also understand their challenges. The assurance is that NCC would continue to monitor QoS, especially the Key Performance Index (KPI), and when it is necessary to wield the big stick against any erring operator on QoS, we shall not hesitate,” he stressed.