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Category: Business and Economy

Chinese loans offer best terms says Ameachi
Transport minister insists Nigerian has capacity to pay back Loan in 20 years at 2.8% interest
Minister of Transportation, Rt. Hon.Chibuike Rotimi Amaechi has reiterated that the Nigerian government has the capability to pay back the loans collected for the construction of rail projects within the stipulated period of twenty years, while noting that Chinese loans offers the best terms and conditions.
Amaechi stated this when he appeared on a live television programme (Democracy Today) aired on AIT in Abuja, Friday.
He said China was the only country given out loans with a low interest rate of 2.8 percent as no country in the world would give out a loan without a guarantee to pay back such loans.
“The trade agreement between Nigeria and China: The first thing is that the ministry of transport doesn’t take loan, everything about loan is directed to the ministry of finance, so I couldn’t have signed any loan because I don’t take loan. What I signed is what is called commercial contract, which is contract between the federal government and CCECC as a contractor, the contract between Nigeria and China is usually signed by the ministry of finance.
“Whether is the ministry of finance that signed it or the ministry of transportation, the issue is that nobody will give you loan free of charge , there must be an agreement and such agreement must contain some terms, that doesn’t mean that you are signing away the sovereignty of the country, no country will sign out its sovereignty.
“What clause 8 does is to say to you, I expect you to pay according to those terms we have agreed, if you don’t pay, don’t throw your immunity on me when I come to collect back the guarantee that was put forward, that is all.
“We are paying the loans. In the same National Assembly sitting, they were told that the 500million dollars loan, we have paid 96 million dollars already, Nigeria is already paying and the 500 million dollars was not taking by us, it was taken by President Goodluck Jonathan in his term and that clause was there.
“Nigeria has the capacity to pay back for the period of 20 years at 2.8 percent, which country will give you that loan? secondly , these loans are not giving to us, they are paid directly to the contractors, once they sign that the job has been done , they pay the contractors and that has never happened before and this project are in place, are they trying to rubbish the fact that there is a railway from Abuja-Kaduna?
“There is no loan in Nigeria either internal or external that is not approved by the National Assembly, none. Chinese government will not even give you a loan without an approval by the National Assembly because if they give you a loan without the approval from NASS that is no loan,” he explained.
Reacting to fears by Nigerians that the country is being sold out to China because of the loans, Amaechi said ” when we stop collecting the loans, then we stop developing because there was no money by the time we came into government, by the time we came the money has been blown away”, he said.
Amaechi further said that the sovereign guarantee and sovereign immunity clause raised by the National Assembly was just a term used to ensure that loans collected were paid back and in the case of a default only the assets constructed with such a loan would be taken back.
According to him, even commercial banks would not give anybody a loan without an asset that can be used to pay back the loan collected, same with the Chinese loan or any other loan in the world.
Hear him, “What you do is you give a sovereign guarantee and that guarantee is the immunity clause they are talking about. When we say I give you a sovereign guarantee and we get immunity clause, the immunity clause is that if tomorrow am not able to pay you and you come to collect the items that we have agreed upon, that these are items that am putting down as guarantee, I can waive my immunity and say no you can’t touch it am sovereign country.
” So, they are saying if you are not able to pay, don’t stop us from taking back those items that will make us recover our funds, so is China our father that will give us money for free? It is a standard clause in every agreement whether is America we signed it with, whether is Britain, any country would want to know that they can recover their money.
“Anybody that is saying he doesn’t know what a sovereign guarantee or immunity is, too bad for the person, because it simply means in trade that I am not giving you this loan free of charge, just like you go to the bank to collect a loan, the moment you don’t pay they go after your assets you put down, that is all about the clause, the Chinese can never come and take over Aso rock and become President or Minister.
” And if the assets you put down become depreciated then you negotiate which assets they can go after. Chinese will never take over what was not constructed with the loan.”
Amaechi said it would be unconstitutional to take a loan not approved by the National Assembly, but for the issue of confidentiality in government he would have published the clauses generating the dusts.
“The National Assembly are aware of all these loans, we can’t take loan without the National Assembly, so ask why they are investigating? The Chinese is just asking us to show them the evidence that we will pay back which is the immunity clause. If we don’t pay, they can take back their assets,” he noted.
Speaking about the Zambia experience, where the country could not meet up with its loan agreement, the minister said that the Chinese government will never take over infrastructure that was not constructed from the money taken.
He also acknowledged that the finance ministry in a payment plan had started paying back some of the loans collected.
“The payment plan is the responsibility of the ministry of finance, ours is to implement the contract. They are meeting the requirements, at any point in time that we need to pay, we’ll pay, adding, “1.6 billion dollars was taken to fix Lagos to Ibadan, we are asking for 5.3 billion dollars to fix from Ibadan to Kano, 3.2 billion dollars to fix Port Harcourt to Maiduguri, then Lagos to Calabar which is about 11.1billion dollars, if those things were done when we had money, will we be here today? The answer is no.”
Amaechi who also called on the National Assembly and Nigerians to appreciate government effort in providing infrastructure said the Itakpe /Warri rail project in the South South which was abandoned for thirty four years by successive governments was fully rehabilitated by the present administration without seeking for loan.
August 1, 2020
Tony Elumelu implicated in N41 bn NITEL fraud
By Lawrence Ekwonu
Tony Elumelu, former Managing Director of the United Bank for Africa (UBA), Chairman of the Tony Elumelu Foundation and the heirs Holding group, has been indicated in a N41 billion naira fraud, when he was the Managing Director of the bank.
According to the Senate Commitee Chairman on Ethics, Prividleges and Public Petitions, Senator Ayo Akinyelure, ”the N41billion alleged fraud was commited against the defunct Telecomunications compoany and National Carrier, NITEL”
Acoording to the SenatorAyo Akinyelure, ” the said sum was withdrawn systematically from NITEL for nine years under Tony Elemelu watch and two other former Managing Directors of United Bank for Africa.
According to the Senate, United Bank for Africa withdrew the whopping N41 billion from the N42billion the liquidator of the defunct government owned telecommunications company deposited with the United Bank for Africa after being sold to MTEL by the by the Bureau for Public Enyterprise.
Acting on a petition a petition by counsel to NITEL, J.U Ayogu and Co, the Senate Commitee has summoned the Group Managing Direct( GMD) and Chief Executive Officer, CEO of the United Bank for Africa, Kennedy Uzoka to appear before the committee on August 5, 2020.
Senator Akinyelure disclosed that United Bank for Africa made several unathorised withdrawals from the accpunts of the liquidated Telecomunications companies at four different times by systematically stealing whopping sums in billions.
SenatorAyo Akinyelure stated that the petition revealed United Bank for Africa’s withdrawal of N29 billion, N1 billion and N22 billion intermittently for the nine years without authorisation
August 1, 2020
GBfoods relaunches Bama Product with new factory in Nigeria
The management of GBfoods, producer of Bama Mayonnaise, says it has completed its state-of-the-art production factory in Sango, Ado-Odo Ota Local Government Area of Ogun to improve local manufacturing.
The Chief Executive Officer, GBfoods Africa, Mr Vicenç Bosch, told newsmen on Wednesday that the company had developed and unveiled a new packaging design, featuring a quality stamp to reiterate the product’s category-leading position.
Bosch said that the state-of-the-art factory, which would support the local manufacturing of Bama mayonnaise, with its original recipe, had successfully rolled out its first batch of products.
According to him, the investment was an added assurance of the company’s commitment to continually contribute to Nigeria’s economic and social development through the localisation of its products.
“The factory draws from a blend of GBfoods rich global practices and regional experiences to support consumers growing needs, whilst highlighting the opportunity for their communities to be part of the long-standing heritage.
“Our priority, when building this international standard production facility in Nigeria, was to make sure we were able to meet the demands of our customers, not only in Nigeria, but also in other African countries.
“This will, in turn, make Nigeria a key export hub for Africa, and will further lead to the creation of jobs and the development of human capital in the country.
Bosch reiterated Bama’s commitment to maintaining its original recipe developed over 80 years ago in the U.S, while being produced in Nigeria.
“The tradition and origin of American recipes is what makes Bama unique and superior in comparison with our competitors.
“With the quality stamp feature, customers are now able to identify and purchase original Bama products.
“The new design stays true to the corporate colors, brand characters, and label art that is synonymous with Bama Mayonnaise, while making the self presence and overall impact much stronger,” he said.
Speaking at the inauguration of the factory, Mr Vincent Egbe, the Managing Director, GBfoods Africa, Nigeria Business Unit, said the company’s growth and expansion plans for Nigeria were long-term.
“This investment is a testament to the industrial and infrastructure advancement that GBfoods was bringing not only to Nigeria, but to Africa as a whole.
“We aim to make Nigeria an archetype in food security, and also to become the food basket of Africa.
“Over the last couple of years, one of the things that we have ensured is to establish Bama as the gold standard of Mayonnaise, not just in Nigeria, but across Africa,” he said. (NAN)
July 29, 2020
Dawanau International Food Market Gets New Leadership.
By Jabiru Hassan, Kano.
A new leadership emerged at Dawanau international food market in Dawakin Tofa local government area, where Alhaji Sani Ahmed Kwa was appointed to lead the caretaker committee last week.
Speaking to Daybreak news at the market, grains and other food items dealers disclosed that the new chairman will bring progress and more conducive business environment especially at present when the Covid-19 pandemic threatened the global economy.
Malam Bako Santar Lili, a maize and millet dealer said that” from the date our new chairman started his duties, we realized that there change at Dawanau International food market, and we are happy that the rest members of the caretaker committee are those who really knows how to makes business environment more conducive “. He said.
Similarly, Alhaji Usman Adamu, a dried cassava dealer said that Alhaji Sank Ahmed Kwa is a good leader who is working selflessly towards the progress of Dawanau food market, and from what we are witnessing, the market under his care would become more developed in order to retains it’s global standard.
In his remark, the new chairman, Alhaji Sani Ahmed Kwa disclosed that ” we are trying our best to ensure that Dawanau international food market under our committee would continue to fly it’s flag despite so many challenges that we may encounter, and I thank the executive chairman of Dawakin Tofa local government council, Alhaji Ado Tambai Kwa for giving me an opportunity to contribute to the progress of Dawanau food market “. He concluded.
July 29, 2020
Nigeria stock market loses N70bn, amid losses by blue chips
The nation’s bourse returned to negative territory on Tuesday with the market capitalisation shedding N70 billion due to losses by some blue chips.
The market capitalisation was down 0.54 per cent to close at N12.858 trillion compared with N12. 928 trillion on Monday.
Also, the All-Share Index (ASI) dipped 133.45 points or 0.54 per cent to close at 24,650.16 against 24,783.61 recorded on Monday.
The downturn was impacted by losses recorded in large and medium capitalised stocks, amongst which are; Seplat, Total, MTN Nigeria Communications (MTNN), Julius Berger and Guaranty Trust Bank.
Analysts at Afrinvest Limited believed the performance of the market this week would be largely dictated by the trend in earnings released in the market.
Market breath remained negative with 14 gainers in contrast with 17 losers.
Total dominated the laggards’ chart in percentage terms, dropping by 9.95 per cent, to close at N87.80 per share.
Seplat came second with a loss of 9.82 per cent to close at N282, while NPF Microfinance Bank 7.75 per cent to close at N1.31 per share.
UACN shed 6.85 per cent to close at N6.80, while Julius Berger depreciated by 6.25 per cent to close at N15, per share.
Conversely, Berger Paints and Mutual Benefits Assurance led gainers’ chart in percentage terms, gaining10 per cent each, to close at N6.05 and 22k per share, respectively.
Unity Bank followed with a gain 8.77 per cent to close at 62k per share.
Okomu Oil improved by 6.31 per cent to close at N74.95, while Oando appreciated by 5.58 per cent to close at N2.27 per share.
Also, the volume of trade dropped by 11.53 per cent as investors bought and sold 150.39 million shares worth N1.98 billion exchanged in 3,780 deals.
This was in contrast with a total of 169.99 million shares valued at N2.39 billion achieved in 4,336 deals on Monday.
Transactions in the shares of Mutual Benefits Assurance topped the activity chart with 26.92 million shares worth N5.56 million.
FBN Holdings accounted for 17.04 million shares valued at N84.16 million, while Access Bank traded 11.24 million shares worth N69.79 million.
Lafarge Africa transacted 10.61 million shares valued at N130.78 million, while Guaranty Trust Bank transacted 8.45 million shares worth N190.44 million. (NAN)
July 29, 2020
(Re-issue) FG plans to train Nigerians on art of making Gold Jewellery
The Federal Government says it is making plans with foreign experts to train some Nigerians in the art of Gold Jewellery making.
Mr Olamilekan Adegbite, Minister of Mines and Steel Development, made this known while briefing newsmen on the recently launched Presidential Artisanal Gold Mining Development Initiative (PAGMI) on Tuesday in Abuja.
The News Agency of Nigeria (NAN), reports that PAGMI is a comprehensive artisanal and small scale gold mining development programme.
The initiative which was recently launched, was to foster the formalisation and integration of artisanal gold mining activities into the country`s legal, economic, and institutional framework.
Adegbite said that the initiative was designed to integrate social, environmental health and safety, economic, commercial, and technical considerations.
“We are making efforts as a ministry through the MinDiver project; experts would be coming into the country shortly once the ban on international air travel is lifted.
“We are selecting about 40 persons to be trained in Jewellery making, we are bringing in international experts and we would be picking one person per state, including the Federal Character Territory (FCT).
“Essentially, they are going to be training the trainers who will also train others across the federation. Apart from the gold itself, we are also looking at turning gold to Jewellery,“ the minister said.
He added that the essence was to add value to the country`s gold, create employment and boost the economy in line with Federal Government’s economy diversification programme.
The minister, however, called on interested investors to invest in the Presidential Artisanal Gold Mining Development Initiative (PAGMI), adding that it was open to interested investors.
“While the government’s proof of consent goes on, we encourage individuals, especially Nigerians who are interested in mining to put their monies into the initiative,“ Adegbite said.
He expressed optimism that because government was a continuum, the initiative would outlive the present administration.
Adegbite stressed that the underlining principle of every government project should be the impact it had on the people and the benefits so derived.
The minister added that it should not be about the government that initiated a particular project, saying that once a project was beneficial to the people it should be sustained even when there was a change of government.
“Because this gold economy is good for our country, no matter the administration that comes after President Muhammadu Buhari-led administration, I believe the initiative will be continued, “ he said.
Also speaking at the event, Hajiya Fatima Shinkafi, PAGMI Executive Secretary, said the initiative was aimed at formalising the value chain from the artisanal miners’ perspective.
She said that the initiative would ensure value addition to both the private sector investors and government as well as increase the country`s foreign reserve.
According to her, Osun and Kebbi has been approved as pilot states for the initiative while bio-metric exercise has been carried out in the states.
She said about 50 gold buying centres were established across the country at the moment, while efforts were on to equip the centres.
She added that the buying centres would serve as aggregators and would be accredited by the Ministry of Mines and Steel Development in partnership with PAGMI, keeping to international best practices guidelines for responsibly-sort gold.
“We want them to be profit driven, we want to bring the artisans from the dark into the light so that they don’t operate under the radar and are cheated by middle men,“ she said.
NAN further reports that the first time ever artisanal-mined gold was processed and refined according to the London Bullion Market Association (LBMA), standards in Nigeria was in June.
The standards are required for the use of gold as a reserve instrument by the Central Bank of Nigeria (CBN).
By the PAGMI initiative, the CBN will be purchasing gold that has been mined, processed and refined from miners as part of the country`s external reserves rather than allowing them sell same through meddle men.(NAN)
July 29, 2020
OPSN endorses Okonjo-Iweala for post of DG, WTO
The Organised Private Sector of Nigeria (OPSN) says it has endorsed and encouraged worldwide support for the election of Dr Ngozi Okonjo-Iweala for the position of Director-General of the World Trade Organisation (WTO).
The endorsement is contained in a statement signed by Amb. Ayoola Olukanni, the Director-General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), on Friday in Lagos for members of the OPSN.
Olukanni stated that the former Minister of Finance, Okonjo-Iweala, a world acclaimed economist, had distinguished herself at both national and international levels as a trade and development expert.
He added that in the search for a new Head of WTO, she was very qualified and suitable especially during the current global economic and trade challenges occasioned by the COVID-19 pandemic.
He furthered that her knowledge of world trade and financial systems had endowed her as consultant to several governments across the world.
“Dr. Okonjo-Iweala is a world acclaimed economist, adept in the workings of international financial and development systems as an Innovative Manager with a good grasp of the world economy and most importantly, trade, as a tool of development.
“Her knowledge of world trade and financial systems has endowed her as consultant to several governments across the world.
“In the search for a new Head of WTO, Dr Okonjo-Iweala is very qualified and suitable especially during the current global economic and trade challenges, occasioned by the Covid-19 pandemic.
“Dr Okonjo-Iweala sits on the Boards of many International Organisations.
“Her performance on the Boards of these organisations show her as being effective and forthright with the required diplomatic skills and a mastery of the intricacies and politics of international trade.
“At this period when the international community is pondering which direction to go, on international trade, the WTO needs an internationalist, a world class diplomat with an understanding of the world trade system.
“Okonjo-Iweala would help steer the WTO in a new direction for the benefit of the global community and the recovery by nations, from negative economic impact post-Covid-19.
Dr Ngozi Okonjo-Iweala will bring to the WTO her knowledge as well as her experience and negotiating skills gathered from years of service.
“She served as a former Finance Minister, Foreign Affairs Minister, Managing-Director Operations of the World Bank, Special Envoy of the African Union for international financial support for Africa, WHO Special Envoy for access to COVID-19 support and Board membership.
“We commend and recommend Dr Okonjo-Iweala to all members of the World Trade Organisation for endorsement and support as the new WTO Director-General.
“We vouch for her preparedness to take up the challenges of a balanced, inclusive and effective WTO, good for the developed and developing world,” he said. (NAN)
July 27, 2020
Dignity Finance posts N84.5m PAT in 2019
By Lawrence Ekwonu
Financial services provider, Dignity Finance and Investment Ltd, DFIL, has declared a profit after tax, PAT, of N84.45 million for the year ended December 31, 2019.
This was even as the company has approved the payment of N50 million dividend to its shareholders.
The announcement, which was made by the Chairman of the Board of Directors, Engr Ahmed Ibrahim, at its 10th annual general meeting, AGM, represent a 150 per cent growth from the previous year’s figure of N33.84 million.
Ibrahim also announced that the company’s gross earnings in the year under review hit N539 million.
The above figure is N98 million more than its gross earnings of N341 million in 2018.

The meeting, which was attended by the directors, shareholders, customers and staff of the company, was held physically and virtually – in line with COVID-19 response protocols.
In his opening remarks, Ibrahim thanked the shareholders, staff, customers and directors for their trust, hardwork, commitments and resilience in the last 10 years, and for sustaining and growing the institution to its enviable position.
He particularly thanked the Managing Director, Mallam Yahaya Yusuf, for the growth trajectory which has placed the company as one of the biggest and strongest finance companies in Nigeria.
Ibrahim also announced the Board’s approval of the appointment of Dr Chijioke Ekechukwu as the incoming MD/CEO, subject to CBN’s approval.
Before his appointment, Ekechukwu was a director of the company.
In his speech, Yusuf thanked the board, shareholders, staff and customers of DFIL for the confidence reposed in him by trusting his leadership with their investment.
He also thanked them for their support, without which the company wouldn’t have achieved the milestone it attained.
The following financial highlights, as presented by Yusuf, are:
Gross earnings: N539 million (2019), N341 million (2018) and N262 million (2017)
Profit before tax: N123 million (2019), N48 million (2018) and N24 million (2017)
Profit after tax: N84 million (2019), N33 million (2018) and N16 million (2017)
Customers’ borrowing: N894 million (2019), N814 million (2018) and N814 million (2017)
Net loans and advances: N896 million (2019), N563 million (2018) and N284 million (2017)
Shareholders’ funds: N292 million (2019), N157 million (2018) and N132 million (2017)
Total assets: N1,500 million (2019), N1,209 million (2018) and N955 million (2017)

Meanwhile, the AGM approved the payment of dividend to its shareholders to the tune of N50 million.
The above sum translates to 40k per share, which excited the shareholders.
In response, some shareholders thanked the Board, staff and management for the huge dividend proposed for payment and for their hard work.
DFIL is a non-banking financial institution licensed by the Central Bank of Nigeria, CBN, since 2009 with approved share capital of N500 million.
The company with very astute, qualified and experienced top ex-bankers on the board as directors, two of who were past MDs/CEOs of top flight Nigerian banks engages in various financial services of funds management, wealth management, LPO financing, leasing, invoice discounting, financial advisory services, debt factoring etc.
End
July 26, 2020
Itakpe-Ajaokuta-Warri Railway: Any Cause to Cheer?
By Tony Iyare
Ordinarily, we should be celebrating, popping wine and dancing ourselves lame that the administration of President Muhammadu Buhari has finally completed the 276 kilometer standard guage Itakpe-Ajaokuta-Warri Railway which construction started in 1987.
But apart from haven fallen short of delivering this project on time, we have again largely kept to our sordid image of some costing abracadabra that merely flies in the face of what happens elsewhere.
Finished After 33 years
Is it not really tragic and intriguing that what was initially slated to be completed in 5 years has taken us 33 years to accomplish, recommending the project highly for the inglorious section of the Guinness Book of Records?
Almost akin to the pitiable story of the 27 kilometer Lagos mono rail project, yet to be finished after 11 years, we seem unperturbed about our snail stride in a world where many countries including the United Arab Emirate (UAE), have joined the exploration to Mars.
Missing a Milestone
If we had kept to schedule, the Itakpe-Ajaokuta-Warri line would have been the first standard guage railway in Africa but we opted to play the Russian roulette and missed that. Even countries like Ethiopia and Kenya, which started their standard guage railway many years after, had long completed their projects.
The protracted Itakpe-Ajaokuta-Warri railway line has a total length of 276 km and links Warri in Delta State to Ajaokuta, in Kogi State. The rail line now has a total of 12 stations in its new design. The line was originally conceived to transport Iron Ore from Itakpe to Ajaokuta and Aladja Steel Rolling Mills. It was also designed to transport processed steel to the port in Warri, Delta State.
Abandoned After Massive Work
It was unfortunate that successive governments could not pull through the initial vigour with which the project took off in 1987. After construction works were performed for 254 km, the project was abandoned. It was only in 2009 that it was again brought on stream with the Federal Government agreeing to pay $92.45 million (NGN 33 billion) for the design and completion of the outstanding 22 km.
The contract was then awarded to Technique Engineering, Architecture, Marketing (Team Nigeria) and Julius Berger, which were responsible for the construction of Ajaokuta-Warri section and construction of six stations and for the rehabilitation of the completed section.
A Funding Revival
In 2017, the Buhari administration announced that it was funding revival of the Itakpe-Warri rail line at a cost of $200 million (N72 billion). The plan was to get it ready for commercial operations by 2019. The project was then re-awarded to three construction firms – Julius Berger, China Civil Engineering Construction Corporation (CCECC) and ZTE.
Minister of Transport, Mr Rotimi Amaechi, who spoke during a tour of the project facility in Agbor and Warri, Delta State on Saturday, commended the contractors, CCECC, TEAM Nigeria and Julius Berger for living up to expectations in terms of quality delivery on the project.
“We are planning for the President to perform a virtual commissioning of this project. The contractors have since concluded their jobs and left the site, the only contractor left is the CCECC, and they will soon leave as well and hand over to NRC. We’ll know if NRC has done a good job when they manage it properly because the issue is maintenance. I am satisfied with the job done by CCECC, TEAM and Julius Berger. The contractors must be commended for a good job delivery,” he said.
The New Design
It’s quite upbeat that the Buhari government has not only redesigned it from its initial vision of a goods train to a central railway line that will also ferry passengers. It could therefore be understandable why many big cities in the axis were not initially linked.
The new design provided for 12 new stations between Itakpe and Warri in a new arrangement. Two stations are located between Itakpe and Ajaokuta with the remaining 10 stretching between Ajaokuta and Warri. They include Itakpe, Eganiy, Adobe, Itogbo, Agenebode, Uromi, Egehen, Igbanke, Agbor, Abraka, Okpara and Ujewu stations.
Abuja-Itakpe-Lokoja Line
A whooping $3.9 bn (N1.4 Trillion) contract was also signed in October 2019 to extend it to Abuja, the Federal Capital Territory. The contract for the new 252.6 kilometer Abuja-Itakpe-Lokoja rail line was awarded to China Railway Construction Corporation (CRCC) under a public-private partnership. Expected to pass through Baro, which now has an inland port, the rail line will also link Lokoja, the Kogi State capital. As part of the agreement, the Chinese firm will also construct a link to the Warri seaport.
Amaechi stated that Nigeria will contribute 15% of the project cost, CRCC will invest 10% while CRCC will borrow the remaining 75% from Special Purpose Vehicle (SPV). The company will also be responsible for managing the rail network until the loan is repaid, after which the project will be handed over to the federal government.
“We will give them sovereign guarantee and they will give us performance bond that protects our sovereign guarantee. When they finish construction, they will manage for 30 years,” he explained.
A Viable Line
But until the Itakpe-Ajaokuta-Warri railway is linked to Abuja, it may not be really viable as a passenger line. The rail line also needs to be connected to Benin City, Asaba/Onitsha and perhaps Akure and Ado Ekiti to further boost its commercial value.
The eventual connection of Benin City, Asaba/Onitsha to the proposed Lagos-Calabar Coastal Railway and Akure and Ado Ekiti to the Western line would be the nadir for the industrial transformation of many of the adjourning cities.
Addis Ababa-Djibouti Line
While we played chess with the Itakpe-Ajaokuta-Warri railway, Ethiopia and Djibouti launched the first fully electrified cross-border standard guage railway line in Africa which links Ethiopia’s capital, Addis Ababa, to the Red Sea port of Djibouti – a stretch of more than 750km (466 miles).
Travelling at 120km/h, the new service cuts the journey time down from three days by road to about 12 hours. The $3.4bn (£2.7bn) project was built with the help of funding from a Chinese bank.
In 2011, one year after finalizing the plans on the national railway network, financing was secured for ERC-Route 1 (the Addis Ababa–Djibouti Railway) and construction was awarded to Chinese construction firms. In October 2016 and January 2017, the railway was completed and inaugurated.
The 759 km railway cost around US $3.5b (US $4m per km of railway) with the Exim Bank of China facilitating a package, that resulted in loans of about US $2.5b in total for the Ethiopian section of the railway plus another US $500m for the Djiboutian section.
A later survey revealed that the actual costs were around US $5.2m per km of railway, around 30% more than planned, resulting in total costs of around US $4.5b. As the loans came from China, most contractors were from China. The construction was an EPC/Turnkey project (FIDIC). Djibouti is particularly important to landlocked Ethiopia which currently imports and exports nearly 90% of its goods through its port.
Nairobi-Mombasa Line
In 2011, Kenya signed a memorandum of understanding with the China Road and Bridge Corporation to build a 609 kilometer standard-gauge railway between the Indian Ocean port city of Mombasa and Nairobi, the country’s capital. The US$3.6 billion railway was the largest infrastructure project ever undertaken in Kenya since independence.
Financing was finalised in May 2014, with the Exim Bank of China extending a loan for 90 percent of the project cost and the remaining 10 percent coming from the Kenyan government. 25,000 Kenyans were hired to work on the project. Track laying was completed by December 2016 while Passenger service was officially inaugurated on 31 May 2017, eighteen months ahead of schedule. Even the extension from Nairobi to Naivasha was completed in October 2019.
Comparing Rail Contracts
Although it may be too simplistic, to compare two rail contracts only on the basis of distance. The terrain and other factors can also significantly affect the cost. Even the 392 km Awash–Weldiya Railway which connects the whole north of Ethiopia, with almost a third of the Ethiopian population, with the main line and additionally through the Addis Ababa–Djibouti Railway with Ethiopia’s lifeline, the port of Djibouti is way below the Nigerian costing.
The construction contract assumes costs per km of railway to be US $3.8m, which is surprisingly low for a challenging terrain with 56 bridges and 12 tunnels (tunnels: 10 km length) with theoretical calculations amounting to $7m per km in 2015.
Nigerian Democratic Report (NDR)
July 25, 2020
Block makers eye millions in Dangote Cement promo
The Block Makers Association says the ongoing Dangote Cement Bag of Goodies Season 2 promo, expected to produce 1,000 millionaires, provides an opportunity for palliative in the period of COVID-19 scourge.
The News Agency of Nigeria (NAN) reports that the Dangote Cement’s ‘Bag of Goodies’ Promo Season 2, which opened on July 15 is to run till Nov, 15, and produce nine millionaires daily for four months.
Consumers also have chances to win tricycles, motorcycles, television sets, refrigerators, Dangote Food Goodies packs, recharge cards and many other gifts.
The President of Block Makers Association of Nigeria, Chief Rashidi Adebowale, in a statement on Tuesday, said the association looked forward to benefiting from the ongoing promo.
Adebowale said that the association planned to send out circulars to its members notifying them of the promo and the need to check every cement bag purchased during the promo period.
According to him, many members of the association, who are major users of cement, benefited from the Season One promo.
“This time around, we are going to ensure close monitoring of every Dangote Cement bag that we will purchase during this promo period.
“This will enable our members to feel the impact of the promo”, he said.
Adebowale commended the management of Dangote Cement for investing in its consumers through such promotion.
He said the company had proven to be truly Nigerian, for always having the interest of the block makers at heart.
According to the statement, a block maker in Ihiala, Anambra, Mr Emeka Okike, described the promo as a way of allowing consumers of cement gain from the company while working on their projects.
Okike said that he won a lot of airtime in the last promo, and hoped to win either the star prize of N1million or at least a tricycle to help him in his business.
He said that one of the star prize winners in the last promo bought the winning bags from a dealer not far from his block industry premises.
According to him, the promo is a welcome development which will help block makers a lot, especially in the rainy season when the building sector experiences a lull. (NAN)
July 22, 2020