AIIM invests in Nigerian gas assets, Accugas and Seven Uquo Gas Limited

Brand Spur
-
0
AIIM invests in Nigerian gas assets, Accugas and Seven Uquo Gas Limited

African Infrastructure Investment Managers (AIIM) has acquired minority interests in gas assets in Nigeria majority-owned by Savannah Petroleum Plc. This comprises a 20% stake in Seven Uquo Gas Limited, the entity that holds a 40% participating interest and a 100% gas economic interest in the Uquo gas field located in South-East Nigeria and a further 20% stake in Accugas, the integrated processing and distribution infrastructure for Uquo gas. AIIM purchased the interests of Savannah Petroleum Plc, which owns the remaining 80% of each company.

AIIM, one of Africa’s largest and most experienced infrastructure-focused private equity fund managers and a member of Old Mutual Alternative Investments (OMAI), invested USD54 million of equity into the transaction through its flagship pan-African infrastructure fund, AIIF3.

Accugas has a 200 mmscf/d gas processing capacity plant and a pipeline network of over 250km. The investments will enable the company to continue to support critical power plants that generate more than 10% of Nigeria’s on-grid power supply as well as other leading industrial off-takers.

AIIM’s West African Director Olusola Lawson, said: “This deal firmly supports AIIF3’s investment strategy, which targets significant influence investments across the power, transport and midstream energy sectors – three focus verticals across sub-Saharan Africa where AIIM sees the greatest disconnect between the demand for critical infrastructure and available capital for these projects. In Nigeria, estimated peak energy demand is estimated to be over 20,000MW, but this is only met with less than 5000 MW of peak supply. This highlights the power demand gap on the national grid, which is partially due to the unavailability of gas to some of the existing generation plants. AIIM’s investments will help to bridge this gap, creating positive impact outcomes for businesses, communities and individuals on the ground.”

Andrew Knott, CEO of Savannah Petroleum, said: “We are very pleased to be working with AIIM, as they have an impressive track record in the African power sector. The gas to the power sector in West Africa is primed for considerable growth over the coming years, so we believe that both Accugas and Uquo offer investors exposure to a fast-growing economy in need of additional power supplies. Both AIIM and Savannah are fully aligned and remain focused on delivering sizeable growth and cash flows at these high margin assets.”

AIIM is pleased with the deployment of AIIF3 to date, with two-thirds of the fund already committed to a diversified portfolio of assets across the thermal power, renewable energy, ports & logistics and airports sectors. This portfolio of assets provides the fund with exposure to operations across 13 African countries. AIIM has concluded nine other investments through the AIIF3 portfolio, including Starsight Power Utility, a leading off-grid energy company in Nigeria, Albatros Energy, a thermal power IPP in Mali, DSM Corridor Group, a bulk handling facility in Tanzania, and BBOXX a next-generation utility platform company.

Shacman Sends GM to Nigeria, Mulls CKD Assembly Plant

Brand Spur
-
0
Shacman Sends GM to Nigeria, Mulls CKD Assembly Plant

As the popularity of its heavy-duty vehicles continues to spread in Nigeria through the efforts of its franchise company, Transit Support Services Ltd (TSS), there are indications that the Chinese manufacturer is desirous of consolidating on the remarkable success so far achieved by the brand.

Part of the plan is the expansion of the existing sales and after-sales network and the establishment of a Shacman assembly plant in Nigeria to produce the heavy and medium-duty trucks, as well as road tractors which have endeared themselves to the local market.

Towards achieving this goal, the General Manager of Shaanxi Heavy Duty Automobile Import & Export Co. Ltd, manufacturer of Shacman heavy and medium-duty vehicles, Mr. Tian Chao, will be arriving Nigeria this week to meet the brand’s distributor, TSS and some major customers.

A statement issued by Transit Support Services shows that as part of his itinerary, Tian will meet with Shacman dealers and customers, as well as discuss plans to build the complete-knocked-down (CKD) plant in collaboration with TSS.

Both Shacman and TSS believe that a CKD plant assembling the vehicles locally will contribute to the development of the country’s automobile sector and encourage the transfer of technology from China to Nigeria.

Shacman held its assembly line opening ceremony at the ANAMMCO auto plant in January 2015 and has since produced over 1,800 trucks from the factory located in Enugu.  The roll-out marked a significant breakthrough in Nigeria’s localisation project.

Since the brand’s entrance into the Nigerian market through TSS {Shacman Nigeria}, no fewer than 3,000 vehicles wearing its badge have been sold.

Ride the wave of the African Continental Free Trade Area, AfDB President Adesina Urges United Kingdom (UK) investors

Brand Spur
-
0
Ride the wave of the African Continental Free Trade Area, AfDB President Adesina Urges United Kingdom (UK) investors

The Bank’s chief argued that Africa and the UK should be significant trading partners

LONDON, United Kingdom, January 22, 2020,/ — Africa is on the cusp of unmatched economic transformation, and the UK must engage in a “partnership of change,” African Development Bank President Akinwumi Adesina said Tuesday in a keynote address at a UK Parliamentary Symposium. “The Africa of the 21st century is very different. The Africa of the 21st century is new and more confident,” he said.

The Symposium was co-organized by the All-Party Parliamentary Group for Africa with the Royal African Society, Oxford Brookes University, and the Trade Justice Network under the theme UK-Africa Trade and Brexit. 

The Bank’s chief argued that Africa and the UK should be significant trading partners. “The reality, however, is that UK’s trade with Africa is trending downwards. From a $49 billion peak in 2012, trade decreased to $30.6 billion in 2018,” he noted.

The decline in UK trade and investment in Africa is against a backdrop of projected business-to-business and consumer-to-consumer expenditures of $5.6 trillion by 2020, and a food and agriculture market worth $1 trillion by 2030.

“The fact that we are having this conversation in the UK Parliament is a great start. The convening of this Summit by Prime Minister Boris Johnson is an even greater start,” he acknowledged.

President Adesina used his engagement at the House of Commons to share Africa’s investment opportunities, “which speak for themselves.” Trading under the African Continental Free Trade Agreement, which represents a market of more than 1.3 billion people and a gross domestic product of $2.5 trillion, and is the world’s largest free trade area since establishment of the World Trade Organization, starts in July.

Speaking earlier in the morning at the UK-Africa Investment Summit Sustainable Infrastructure Forum, the Bank’s chief said: “Investing in quality and sustainable infrastructure can spur Africa’s economic transformation.”

The Forum, organized by the Department of International Development (DFID) and Her Majesty’s Trade Commissioner for Africa, seeks to facilitate new investment and commercial opportunities for the UK and promote quality infrastructure to deliver better services to African citizens.

The Bank has been a forerunner in the race to rapidly close the continent’s infrastructure gap, which Adesina suggested be renamed “Africa’s infrastructure demand opportunity.” Investors who tapped early into information and communications technology infrastructure in Africa have seen those investments become game-changers for Africa, he noted.

“Just under two decades ago, Africa had fewer telephones than Manhattan in New York. Today, Africa has over 440 million cell phone subscribers. Returns on digital infrastructure are very high as the continent expands broadband infrastructure to boost connectivity and improve services,” Adesina said.

The African Development Bank has been a major investor in infrastructure development in the electricity, transport, and water sectors across Africa. Cumulative Bank funding for infrastructure on the continent rose by 22% from $66.9 billion in 2016 to $81.6 billion in 2017. During the same period, the value of infrastructure projects with private sector participation has increased from $3.6 billion to $5.2 billion.

To meet Africa’s unmet infrastructure needs, project preparation is critical, the Forum heard.

The Bank has established several project preparation facilities to address the lack of bankable projects and ensure a robust pipeline of projects. These facilities collectively provide $30-50 million annually in support for project preparation.

The African Development Bank and DFID are collaborating to explore how to better support fragile states, which are facing huge financing needs. DFID has been the Bank’s key strategic partner since it joined the Bank group in 1983. And its “strong and consistent” support for the African Development Fund has helped the development of low-income states, especially the fragile states.

Instruments, such as the Private Sector Credit Enhancement Facility, a credit-risk participation vehicle from the African Development Fund, (ADF)’s concessional window to support Non-Sovereign Operations in low-income countries, are showing tremendous results.

With $500 million in credit guarantees, provided through ADF, the Bank has leveraged $2.5 billion of financing into fragile states, with a zero default rate.

“We are committed to quality infrastructure and ensuring that no one is left behind!” Adesina concluded. 

The Bank’s chief is on a three-day visit to the UK. On Monday, he joined African Heads of States at a reception at Buckingham Palace after taking part in a presidential panel at the UK-Africa Investment Summit convened by British Prime Minister Boris Johnson.

National Sports Festival: Lagos to host South-West Zonal Elimination Stage

Brand Spur
-
3
National Sports Festival: Lagos to host South-West Zonal Elimination Stage

The Chairman, Lagos State Sports Commission, Sola Aiyepeku has disclosed that the Lagos will host the South-West Zonal elimination competition ahead of the 20th National Sports Festival holding in Benin, Edo State in March.

Aiyepeku said the two-day event will have participants drawn from the six states that make up the zones battling for slots in Team events such as Football, Basketball, Cricket, Handball, Hockey, Volleyball and Rugby, stressing that representatives of the Federal Ministry of Youths and Sports were in Lagos on Friday to inspect facilities and hostel accommodation for the competition scheduled to begin next week.

He revealed that the Zonal Coordinator, Mr. Olufemi Ajao and the Lagos Liason Officer, Ministry of Youth and Sports, Mr. Bode Durotoye and staff of the Lagos State Sports Commission inspected the accommodation for Athletes and Officials of the participating teams.

While confirming that facilities are already in place for the competition, Aiyepeku said arrangements have been completed for hostel accommodation, just as the participants are expected to start arriving on Tuesday ahead of the commencement of rivalry at different venues across the State.

According to him “The Venues for the events are Agege Stadium for Football; Teslim Balogun Stadium will play host to Basketball and Volleyball; the Cricket Oval, Tafawa Balewa Square for Cricket; Handball and Abula will hold at the Rowe Park Sports Centre, Yaba; Beach Volleyball and Rugby will take place at the Ram Field and Main Bowl, National Stadium, respectively; while Hockey will take place at the Elegbata Mini Stadium”.

Expressing the State’s readiness to stage a befitting competition, Chairman, Lagos State Sports Commission, Sola Aiyepeku was optimistic that the Lagos Athletes are well motivated to do well at the qualifying tournaments.

Lekki/Ikoyi Bridge Cashless Policy: Sanwo-Olu commends Motorists, Encourages More Compliance

Brand Spur
-
0
Lekki/Ikoyi Bridge Cashless Policy: Sanwo-Olu commends Motorists, Encourages More Compliance

Lagos State Governor, Mr. Babajide Olusola Sanwo-Olu has commended motorists in Lagos for their role in ensuring the successful implementation of the cashless initiative at Lekki/Ikoyi toll plaza.

Sanwo-Olu said the impact of the initiative to remove bottlenecks was already being felt, thanking motorists for their cooperation with the government and seeking more compliance.

Speaking through his Commissioner for Transportation, Dr. Frederic Oladeinde, on the implementation, the Governor stated that the cashless policy which commenced on 2nd January 2020, became necessary in order to address constant traffic gridlocks often experienced at that corridor due to the slow process of cash payments at the toll plaza.

He encouraged those who have not yet obtained their e-tags to comply as enforcement will commence after expiry of the two-week extension granted motorists to abide by the new requirements.

The Governor warned that anyone who turns up with cash at the Lekki-Ikoyi toll gate would pay a stiff penalty of N1,000 and not be granted access until completion of the compliance process.

He also cautioned against corrupt practices such as photocopying of payment vouchers for multiple usage or presentation of fake e-payment devices, saying that the State Government would not hesitate to apply the law on any motorist that attempts to frustrate its efforts at improving traffic situation along the Lekki-Ikoyi Bridge corridor.

Recall that the State Government last year announced that it would go cashless on payments at the Lekki/ Ikoyi toll plaza effective from 1st January 2020 due to the excessive delays experienced along the corridor during cash payments.

Rising debt: A further cause for concern?

Brand Spur
-
0
Rising debt: A further cause for concern?

Nigeria has run budget deficits for decades, which have been primarily financed by new borrowings, Coupled with subnational borrowings has led to a growth in the national debt stock. According to the latest data published by the Debt Management Office (DMO), national debt stock as at 9M-19 stood at N26.2tn (up 16.9%y/y). Yet, the country’s debt to GDP ratio remained comfortable, at c.18.5% (Target: 25.0%), and the domestic/external debt mix stood within the target ratio of 60.0/40.0 (9M-19: 68.4/29.6).

While the need to continue to spend to improve the state of the country’s decrepit infrastructures and a below target debt-to-GDP ratio suggests Nigeria still has room for new borrowings in 2020. However, reluctantly high debt service to revenue ratio (above 50.0% — implying that the nation spends above N50.0 out of every N100.0 revenue on debt servicing)suggests otherwise.

In our view, the above realities provide a strong justification for the current FG’s drive to increase oil and non-oil revenues significantly. However, we believe more needs to be done in terms of clarity and accountability for new borrowings.

United Capital Research

Airtel Money and Western Union partner to facilitate mobile remittance service

Brand Spur
-
0
Airtel Money and Western Union partner to facilitate mobile remittance service

London and Lagos, 22 January 2020: Airtel Africa plc (“Airtel Africa” or “Group”), a leading provider of telecommunications and mobile money services, with a presence in i4 countries across Africa, has signed a strategic partnership with Western Union, a global leader in cross-border, cross-currency money movement and payments.

Through this partnership, Airtel Money customers will be able to reliably send and receive international money transfers directly from their phones, using the AirtelAfrica mobile money wallet. This paves the way for Airtel Africa to further cater to the needs of local and global community members to move money and enable international cross-border payments.

This partnership helps Airtel Africa to take an active part in the international money transfer business that happens to and from its operating countries.

Commenting on the partnership, Raghunath Mandava, CEO of AirtelAfrica, said: ‘We are very excited to partner with Western Union to enable Airtel Money customers to access a world-leading money transfer organisations. International remittances into Africa are a lifeline to some of our customers. This partnership gives our customers the convenience of directly receiving and sending remittances from their Airtel mobile money wallets. They will now be automatically credited and debited via their Airtel mobile money wallets on their phone and can immediately access the funds to pay bills or merchants and transfer funds to family and friends or convert to cash from the widespread Airtel Money agents, kiosks and branches.”

British Prime Minister, African Leaders urge Investors to accelerate Economic Role on the Continent

Brand Spur
-
0
British Prime Minister, African Leaders urge Investors to accelerate Economic Role on the Continent

The UK-Africa Investment Summit, the first of its kind hosted by the UK Government, was attended by the foreign secretary, Dominic Raab, the international development secretary, Alok Sharma, and Prince Harry.

UK companies must leap at the chance to deepen economic ties with Africa, a continent with unmatched investment opportunities, several African leaders said at a high-level panel.

At an oversubscribed opening ceremony for the 2020 UK-Africa Investment Summit, Monday, attended by dignitaries and delegates from 16 African countries, including President El Sisi of Egypt, British Prime Minister Boris Johnson made the case for bigger investments in Africa and called for increased and renewed partnership between the UK and Africa.

Referring to Africa as a booming continent with “staggering levels of growth,” Prime Minister Johnson said: “Look around the world today and you will swiftly see that the UK is not only the obvious partner of choice, we’re also very much the partner of today, of tomorrow and decades to come,” he said in his opening address.

The UK-Africa Investment Summit, the first of its kind hosted by the UK Government, was attended by the foreign secretary, Dominic Raab, the international development secretary, Alok Sharma, and Prince Harry.

The President of Ghana, Nana Akufo Addo, of Kenya, Uhuru Kenyatta, of Mauritania, Mohamed Ould Cheikh el Ghazouani, African Development Bank President Akinwumi Adesina, and Secretary of State for International Development, MP Alok Sharma, addressed a plenary panel discussion on ‘Sustainable Finance and Infrastructure – Unlocking the City of London and UK financial services for growth in Africa.’

President Kenyatta who rang the opening bell at the London Stock Exchange (LSE) marking the launch of Kenya’s first green bond at the LSE, made the case for innovative and sustainable investments in energy infrastructure. “We all must think out of the box in terms of energy…to ensure we produce more green energy. This first-ever sovereign green bond of $41.45 million will be used to build environmentally-friendly student accommodation in Kenya.”

Responding to a question about UK-Ghana partnerships, President Nana Akufo-Addo said in a world where Africa’s wealth is undisputed, “the City of London can play a significant role in bridging Africa’s huge infrastructure gap… and LSE can be a pivot in the new relationship with the continent. Indeed, 1 in 4 consumers will live in Africa by 2030,” President Akufo-Addo said.

African Development Bank President Akinwumi Adesina announced a new $80 million Bank-DFID infrastructure financing partnership.

According to Adesina, the continent’s $68-$108 billion infrastructure investment gap per year is massive, but it depends on how you look at it. “Either the cup is half full or half empty. To us, that is a $68-$108 billion opportunity.”

Adesina added, “The issue of risk in Africa is exaggerated. The risk of loss is lower than in Latin America. Yet, funds are not being channelled into Africa. There are $8 trillion of assets under management in London, but only 1 percent is invested in Africa.”

The Bank president urged investors to look to Africa and recalled the achievements of the Africa Investment Forum – a game-changing initiative led by the African Development Bank and key partners, to accelerate investment in the continent. The unique multi-sector platform is designed to advance bankable deals to financial closure. At the 2019 Forum, which took place in Johannesburg, South Africa, deals valued at $40.1 billion secured investment interest.

President Mohamed Ould Cheikh el Ghazouani of the Islamic Republic of Mauritania shared opportunities offered by the blue ocean economy and substantial reforms currently underway to attract foreign investors.

“We have reinforced security along our coasts. Other measures include the establishment of a Council on Investment. These huge efforts are showing tremendous results and it is giving comfort to investors,” he noted.

The African continent is home to eight of the 15 fastest-growing economies in the world. By 2030, 42% of the world’s youth will be African and will constitute an incredible workforce and potential consumers.

In his concluding remarks, UK Secretary of State for International Development, MP Alok Sharma expressed confidence in the continent. “Africa has a fabulous future,” Sharma announced five partnerships to mobilise private sector investment in quality infrastructure on the continent. “The City of London can play a role in mobilizing resources for Africa,” Sharma said.

Speaking earlier, Prime Minister Boris Johnson made a major announcement on the UK’s policy on climate change.

“From today, the British government will no longer provide any new direct development assistance for thermal coal mining or coal power plants overseas,” Johnson said.

The declaration aligns with the African Development Bank’s green agenda aimed at increasing investment in renewable energy. President Adesina announced last year at the UN General Assembly that the Bank was moving away from investing in coal.

Headline Inflation in 2020: a cocktail of negative pressures?

Brand Spur
-
0
Headline Inflation in 2020: a cocktail of negative pressures?

After moderating to a 43-month low of 11.02%y/y in Aug-2019, the direction of the headline inflation rate turned northwards, spiking to 11.85%y/y in Nov-2019. This was as the Nigerian Government ordered the complete shutdown of all land borders, to check activities of smugglers, which had kept the local price of staple foods relatively low.

Ahead of the publication of the Dec-19 inflation report, we expect the inflation rate to trend northwards to 12.1% due to the border closure. Also, increased spending linked to the year-end festivities is likely to pressure general price level northwards.

Looking into 2020, the headline inflation rate is likely to climb in H1-2020, even if m/m inflation moderates from 1.0% to 0.8%. The structural issue that may sway the increase remains tighter conditions around all land borders. Also, possible implementation of minimum wage and cost-reflective electricity tariffs in Q1-2020, as well as monetary expansion by the CBN during the period, are negative pressures to watch. As such, we estimate headline inflation to peak at 12.16% in H1-2020 and potentially moderate to an average of 11.06% in H2-2020. This is, however, in the absence of further structural changes that may trigger a fresh uptick in m/m inflation. In all, we expect headline inflation rate to average 11.9% in 2020.

United Capital Research

The Equities Market in 2020: A return to glory?

Brand Spur
-
0
The Equities Market in 2020: A return to glory?

From a glorious performance in 2017 to a sustained downward spiral in 2018 and 2019, one of the major questions from our clients, as we headed into the new year, was whether the equities market is going to return to its glory days or remain out of grace in 2020?

In our recently published 2020 outlook report ” A different playing field” we had noted that technical and fundamental analysis supports the return to glory narrative. This was as we estimated the potential for a downtrend on a technical basis to -16.3% in 2020 and the potential for uptrend at +67.6%. Meanwhile, based on the fundamental analysis we projected a +5.3% gain in 2020 (base case) or +23.6% upside (bull case). So far, the performance has exceeded our base case scenario but remain in line with our bull case scenario for the year.

This is as the NSE-ASI have chalked a YTD gain of 10.7% amid rising interest from the local investors – spurred by the currently low rate environment and increased system liquidity. Accordingly, we reiterate our position that 2020 will see equities return to its glory days, especially if conditions in the macroeconomics space remain supportive.

United Capital Research

1...4,1744,1754,176...5,527Page 4,175 of 5,527