News in Nigeria

FCMB, Stanbic IBTC syndicate FHN’s $280m oil block acquisition – Businessday

First City Monument Bank and Stanbic IBTC Bank are providing a $280 million (N44.8 billion) syndicated loan for the acquisition of 45 percent interest in OML 26 (an oil block) from Shell Petroleum Development Company of Nigeria Limited( SPDC) Total E and P Nigeria and the Nigeria Agip Oil Company, by First Hydrocarbon Nigeria (FHN). According to a release by FHN, the first facility provides up to $230million ( N36.8 billion) on acquisition and development finance over five years, with FCMB Capital Markets Limited as a global co-ordinator and First City Monument Bank and Stanbic IBTC Bank, as mandated Lead Arrangers and book runners. The second facility provides $50 million ( N8 billion ) of mezzanine finance over six years, from the Pan- African Investment Partners Fund. The Pan –African Investment Partners Fund is managed by Kingdom Zephyr African Management. FHN announced the deal yesterday, following the agreement signed in October 2010 and the receipt of all necessary Government and customary approval. According to the terms of the deal, the Nigerian Petroleum Development Company , the oil and gas exploration and production subsidiary of the Nigerian National Petroleum Corporation (NNPC) the operator of OML 26, will partner with FHN in the re-development of the block. The partnership, according to the announcement, re-enforces the Memorandum of Understanding and confidentiality agreement, signed between NPDC and FHN’s Technical Service Partner, Afren Plc in November 2009.

Dangote Cement Signs Contract to Expand Ibese Plant – BusinessNews

Dangote Cement Plc , Nigeria’s biggest company by market value, signed a contract to expand its Ibese plant, Chief Operating Officer Joseph Makoju said. The expansion will double output at the 6 million-metric ton plant in southwestern Nigeria, Makoju said today at a conference in Lagos. Signing the agreement early helped Dangote get “a good price for the construction for almost half of the price,” Makoju said, without specifying the cost of the project or saying with whom the contract was signed. Construction will be completed in three years, he added later at a meeting with investors.

Nigeria lower house passes fiscal plan, no subsidy – Reuters

Nigeria's House of Representatives on Thursday approved the government's medium-term fiscal framework (MTFF) but refused to include plans to remove fuel import subsidies in a major setback for the controversial proposal. Ngozi Okonjo-Iweala, the finance minister and coordinator of the economy, delivered the MTFF to the national assembly in September, including planned savings of about $7 billion a year from removing petrol import subsidies. The plan is unpopular with Nigerians who believe cheap fuel is the only benefit they get from living in an oil-rich state. Lawmakers said she will have to find savings elsewhere. "The proposal on fuel subsidy as contained in the revised fiscal strategy paper is premature. Sources other than relying on savings from the proposed subsidy removal as part of financing items for expected deficits should be explored," the house's joint committee on finance said in a statement.

Dansa Foods to cut cost of production by 35% - Businessday

Dansa Foods Limited, a member of the Dangote Group, one of Nigeria ’s largest manufacturing conglomerates has disclosed plans to begin export of some its products to other African countries in the first quarter of next year, as well as reduce cost of production with the use of gas to power its factory. The managing director of the company, George Eremionkhale, revealed in a chat with Business Day, that in by next one year, they would begin to use gas to power their power their plants, in a bid to reduce the cost of production by 35 percent. According to George, the capacity utilisation of the company is about 60 percent to 90 percent. “We have exceeded 90 percent capacity of water and juice. Juice is about 60 percent while the market-share for juice is about 10 percent based on the region”. As part of efforts to achieve this, the company has invested several millions of Euros to boost its production capacity for other markets. He further said, that within its five years of operation, it has been able to make its products known as it is spread all over major cities in Nigeria.

Okonjo-Iweala gets ultimatum on fuel subsidy report – The nation

The Senate ad-hoc Committee probing the management of fuel subsidyfund  yesterday asked Finance Minister Dr. Ngozi Okonjo-Iweala to tender before it details of the audit report of fuel import in the last 11 months. The demand is coming even as the Nigeria Extractive Industries Transparency Initiatives (NEITI) faulted the management of the fuel subsidy fund. Chairman of the committee, Senator Magnus Abbe, gave the directive during its resumed public hearing at the National Assembly. Abe warned that should the minister fail to produce the required documents within seven days, the committee might be forced to issue a subpoena to that effect. Mrs. Okonjo-Iweala told the committee that the quantum of fuel import is being recorded by auditors engaged by the Federal Government, but the panel insisted on access to the report to enable it carry out an inquest. She requested for time to  tidy up the records. But the committee insisted she will be given only seven days. The committee also took up issues with the difference between the amount voted for fuel subsidy for 2011 - about N245.9bn - and the N1.34bn so far spent. Mrs. Okonjo-Iweala told the committee that the Ministry of Petroleum would be in a position to explain the difference. The Minister insisted that the removal of the fuel subsidy remains the best option in the circumstance.

Pension fund assets hit N2.4t, says D-G – The Nation

Pension fund contribution has grown to N2.4 trillion as at November, 2011, the Director-General, National Pension Commission (PenCom), Mohammad Ahmad, has said.  Ahmad, who disclosed this yesterday at a workshop organised by PenCom for journalists in Enugu, said  4.92 million Nigerians have registered for the scheme, adding that presently, about 40,794 retirees from the public and private sectors are collecting their monthly pensions either by programmed withdrawal or annuity.   He stated that over N115.6 billion has been paid to retirees as lump sum at the point of retirement and that about N 1.284 billion is collected as monthly pension.

Nigeria debt hits N6.189 trn – Vanguard

Nigeria’s foreign and domestic debt stock jointly held by the federal and state governments has hit N6.189 trillion. Director General of Debt Management Office, DMO, Mr. Abraham Nwankwo, who made the disclosure to the House of Representatives Committee on Aids, Loans and Debt Management put Federal Government external debt stock at $3.316 billion while state government’s external debt stock was put at $2.317 billion as at 30th September 2011. Nwankwo, briefing the committee led by Hon Adeyinka Ajayi, pointed out that the establishment of the DMO hasd led to drastic reduction of the external debt from over $35 billion (41.86 per cent) of GDP in 2004 to $3.55 billion (3.7 per cent) of GDP in 2006. The figure represents 58.87 per cent owed by the Federal Government while states owed $2.317 billion (or 41.13 per cent) during the period under review.