NCC sees 70% broadband penetration in five years

Nigeria’s telecoms industry regulator, the Nigerian Communications Commission (NCC) yesterday said with the achievment of 33 per cent broadband penetration now in the country, it is realistic to increase the penetration to 70 per cent over the next five years.

Its Executive Vice Chairman/CEO, Prof Umar Garba Danbatta who spoke while receiving a delegation from Bharti Airtel Group, led by the Chief Executive Officer Airtel Africa, Mandara Raghunath, in his office in Abuja, said the country exceeded the 30 per cent threshold set by the National Broadband Plan last year December.

Danbatta expressed optimism that the country can achieve 70 per cent broadband penetration milestone in the next five years, even though a new national target of the penetration has not been made public yet.

He said: “We exceeded expectation of Nigeria as the broadband penetration was 31 per cent as at December last year. The good news is that we are steadily seeing increase in the penetration.

Court seals Access Bank, Diamond Bank merger

The Federal High Court (FHC) has sanctioned the approved scheme of merger between Access Bank Plc and Diamond Bank Plc, the final seal that effectively brings the merger of the two commercial banks into effect.

Consequently, the Nigerian Stock Exchange (NSE) yesterday suspended trading on the shares of Diamond Bank Plc, which will be dissolved without being wound up and subsequently delisted from the Exchange.

The court sanction, statutorily the final phase of a pre-merger process, which was filed at the NSE, affirmed all the key headlines of the transactions, which had earlier been approved by shareholders of the two banks, the Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC).

The Nation had on Monday reported that financial regulatory authorities had given final approvals to the scheme of merger, paving the way for submission to a Federal High Court for the final court sanction.

Under the terms of the merger, Diamond Bank will transfer all its assets, liabilities and undertakings to Access Bank and the entire issued share capital of Diamond Bank shall be cancelled and Diamond Bank shall be dissolved without being wound up. In exchange, Diamond Bank’s shareholders shall receive a cash consideration of N1 per share and two ordinary shares of the enlarged Access Bank for every seven ordinary shares of Diamond Bank held as at the effective date.

Access Bank will be the post-merger entity while its Group Managing Director, Herbert Wigwe will continue to lead the post-merger management as chief executive. The business combination is expected to leapfrog post-merger Access Bank as Nigeria’s largest bank by total assets and one of Africa’s largest retail banks.

The NSE explained that the full suspension on Diamond Bank, which took effect yesterday March 20, 2019, was sequel to the court sanction, which brought the business combination into effect on Tuesday March 19, 2019.

“The suspension is required to prevent trading in the shares of the bank in order to determine the bank’s shareholders who will qualify to receive the Scheme consideration,” NSE stated.

The NSE noted that the scheme of merger will result in the delisting of Diamond Bank Plc from the Daily Official List of the Exchange.

Directors and management of the banks said the merger will create significant values for all stakeholders, underlining the inherent synergies and value accretion in the business combination.

The business combination is expected to form a leading Tier 1 Nigerian bank and the largest bank in Africa by number of customers, spanning three continents, 12 countries, 3,100 Automated Teller Machine (ATM), more than 33,000 Point of Sales (PoS) terminals, 27 million clients and more than 10 million mobile customers.

Diamond Bank and Access Bank share many of the same areas of focus, including women, youth, entrepreneurs and the financially excluded and will be able to further develop their positioning and market leadership in these growth sectors. Diamond Bank’s corporate customers will also be able to benefit directly from Access Bank’s corporate expertise in trade finance, cash management, treasury and corporate finance.

Group Managing Director, Access Bank Plc, Mr Herbert Wigwe, said the two banks share several common values and technologies that make the business combination a seamless one.

According to him, the merger of the banks will create significant opportunities and benefits to customers, shareholders, staff and other stakeholders.

He noted that the combination of Diamond Bank’s strong retail customer franchise and Access Bank’s proven risk and capital management expertise will create a post-merger bank with strong value creation potential.

He pointed out that while the merger will lead to 19 per cent shareholding dilution, the business combination accelerates Access Bank’s plan to become a leading bank in Nigeria and gateway to Africa.

NCDMB lauds Samsung for FPSO construction in Nigeria

The Nigerian Content Development and Monitoring Board has commended Samsung Heavy Industries, a Korean shipbuilding giant, for transforming Nigeria into a hub for fabrication and integration of Floating Production Storage Offloading unit in Africa.

The Executive Secretary, NCDMB, Mr Simbi Wabote, described SHI’s investment in Lagos as a major breakthrough in the implementation of local content in Nigeria.

Wabote said the successful construction and local integration of the Egina FPSO in the company’s integration and fabrication yard in Lagos was a key success story in the Nigerian content initiative.

“Under the local content implementation, we have seen a major breakthrough with the massive investment by Samsung in Lagos,” he was quoted in a statement as saying while speaking with journalists in Lagos on the local content milestones in the nation’s oil and gas industry.

He said, “The successful construction and integration of the FPSO for the Egina project is worthy of mention, and this is a key success story and this singular asset will bring about massive revenue to the country as we expect other African countries to take advantage of this facility rather than going outside the shores of the continent for FPSO construction.

“Samsung has proved to have efficiently transformed the country into FPSO construction hub, and recall we were doing this in Korea before now.”

According to the statement, a number of records were broken during the construction of the Egina FPSO as the project was the first to meet Nigeria’s new standards for local content as attested to by the NCDMB.

It said, “For instance, out of the 18 modules in the Egina, six modules were fabricated in the various fabrication yards across the country, and integrated locally in the company’s yard in Lagos, unlike the previous FPSOs, which were all fabricated and integrated outside the country.”

The statement said the Korean firm had declared that during the construction phase, “Nigerian parts and expertise were even flown to Samsung’s headquarters in Korea to be installed in the early stages of construction of the Egina before it was sailed to Lagos for final construction.”

“This success story has been made possible through Samsung Heavy Industries’ belief in the potential of Nigerian companies and workers to deliver to their tough, exacting standards. Over 9.7 million hours of time have been spent by the Nigerian workforce, with over 6,000 Nigerians in employment on the project at its peak via Samsung and its partners and subcontractors,” it added.

Insurance industry’s assets hit N1.26tn

The total assets of the Nigerian insurance industry rose to N1.263tn as of the end of the 2018 financial period.

Figures obtained by our correspondent from the regulatory body of the industry, National Insurance Commission, on Wednesday, revealed that the liabilities and equities of the sector stood at N645bn during the period under review.

According to the commission, the insurance industry’s gross premium rose by 22 per cent to N315bn in the third quarter of 2018, from N258bn in the corresponding period of 2017.

It added that the gross claim’s figure rose by 30 per cent to N143bn in the period under review from over the N110bn reported for the same period in 2017.

According to the figure obtained from the Nigerian Insurers Association, the assets of the life insurance companies rose from N430.72bn in 2015 to N476.45bn and N533.51bn in 2016 and 2017 respectively.

The liabilities of the life underwriters, it noted, rose from N430.71bn in 2015 to N476.45bn and N532.97bn in 2018 and 2019 respectively.

According to the association, the total assets of member companies rose from N894.87bn in 2015 to N985.98bn and N1.09tn in 2017.

These figures excluded assets of the takaful and reinsurance companies.

It added that the assets of Continental Reinsurance Plc stood at N34.12bn while assets of Nigeria Reinsurance Corporation stood at N20.31bn in 2017.

In 2017, it noted that the takaful companies which were Jaiz Takaful Insurance Plc and Noor Takaful Insurance Plc had assets of N80.18m and N174.57m respectively.

The association stated in its ‘Nigeria Insurance Digest 2017’ that despite the recession experienced in 2016, the companies continued to improve their drive and commitment to increasing revenue and respective market share amid the recovery of the economy.

It stated that market prospect stagnated due to the decline in the purchasing power of the populace.

First Bank holds walk ahead of anniversary

As part of activities to mark the 125th anniversary of First Bank Nigeria Limited, the bank organised a 125km relay walk across the country and its overseas subsidiaries.

The Chairman of First Bank Plc, Mrs Ibukun Awosika, stated that the 125km relay walk gave the bank an opportunity to look forward to the future.

In a statement, Awosika said this in Lagos at ‘First Bank 125km relay walk’ to celebrate the bank’s unbroken business operations for 125 years.

She noted that it had been a relay of different generation building, adding value and passing the baton forward.

The Chief Executive Officer, Dr Adeshola Adeduntan, noted that the relay walk was very significant and symbolic for the bank.

He also noted that the relay was symbolic because it was a collaborative effort not just for First Bank, but other operating entities within the FBN holdings family such as FBNQuest, and FBN Merchant bank.

Adeduntan stated, “We came together to organise the relay. The significance is that when you think of a relay and you think of 125km, if you want to run 125km as an individual, you can get tired, but when you collaborate, and the bits and pieces of the 125 is accomplished by different individuals, that is the power of synergy in display and it shows you what can be achieved when you walk together as a team.”

Airtel opens discussion on NSE listing

There were indications that the Airtel Nigeria may have opened discussion with the Nigerian Communications Commission and the Nigerian Stock Exchange on the listing of its stock on the Nigerian Stock Exchange.

A meeting held at the headquarters of the Nigerian Communications Commission in Abuja on Wednesday had the henchmen from the three organisations in attendance.

These included the Managing Director/Chief Executive Officer, Bharti Airtel Africa, Raghunath Mandava; Managing Director, Airtel Nigeria, Segun Ogunsanya; Chief Executive Officer, Nigerian Stock Exchange, Mr Oscar Onyema; and the Executive Vice Chairman, NCC, Prof Umar Danbatta.

It was also learnt that two top officials of Stanbic IBTC attended the meeting. The Security and Exchange Commission was also represented at the meeting. Stanbic IBTC Holdings Limited is registered with SEC as an Issuing House and an underwriter. It provides investment banking services to corporate clients.

Our correspondent learnt that Airtel could be pursuing listing in the Nigeria Stock Exchange in response to one of its major competitors in the Nigerian market, MTN Nigeria, which had indicated that it would pursue listing in the market by introduction within the first half of the year.

There is also a bill that seeks to compel operators in the Nigeria telecommunications market to list in the Nigerian Stock Exchange.

Experts see listing as a means by which telecommunications operators can pursue expansion, share their risks with Nigerian investors, dilute ownership and use the proceeds to invest in other markets or sectors.

Briefing the press before entering a closed session with NSE, Airtel, Stanbic IBTC and SEC executives, Danbatta told journalists that the regulatory agency was happy with the expansion programme of Airtel as well as the broadband penetration occasioned by Airtel and other operators.

He said, “It is good to see Airtel providing services, especially 4G services. It is good to hear the level of expansion because we are seeing remarkable improvement in broadband penetration.

“The figures are increasingly going up. We are at about 33 per cent now. This we can attribute to very ambitious expansion of network operators like Airtel in places like Lagos, Kano, Rivers, Ibadan and Abuja. This lends credence to figures we are seeing from broadband penetration.

“We are seeing increase in broadband subscription, especially to services provided by Airtel. It is good for Nigerians to hear that Airtel is helping us to hit the broadband penetration target. All parameters are steadily growing courtesy of expansion programme of 4G operators in the country, especially Airtel.”

Mandava, the Airtel Africa boss, described Nigeria as the fastest growing market and also the biggest market the company has in Africa.

He said, “It (Nigeria) is a critical market for us as we expand broadband penetration. We are impressed about the way Nigerian telecom market is growing.  This is the fastest growing market in Africa.

“We are committed to very heavy investment and to help digitise the country. We are here to thank them for their support and to discuss about future broadband.”

The NSE boss was, however, shielded from making any comment.

Dangote Refinery to empower youths in host communities

Dangote Petroleum Refinery & Petrochemicals Company has inaugurated a vocational training scheme that will instill necessary skills in young men and women from the Ibeju-Lekki area of its operation.

The company said the initiative was part of efforts aimed at making youths from its host communities employable.

The Executive Director, Capital Projects, Dangote Group, Mr Devakumar Edwin, described the initiative as a demonstration of Dangote Refinery’s commitment towards capacity building and youth empowerment in the country.

The programme, which was launched in collaboration with the National Directorate of Employment  and the Nigerian Content Development and Monitoring Board on Wednesday, was designed to cover plumbing, masonry, welding, iron bending, auto mechanics and electrical works.

Edwin said the scheme was geared towards instant value addition to the lives of the youths and their communities as they would be equipped with trade skills that would prepare them for better opportunities.

At a ceremony, which was attended by traditional rulers and community leaders, including the Oba of Lagos, Rilwan Akiolu, the Dangote Group boss said the company would continue to invest in projects that would add value to the lives of the people in the communities hosting its facilities across the country.

He said, “At Dangote Industries Limited, our Corporate Social Responsibility projects are centred around the development and wellbeing of the people, especially our host communities. In Ibeju Lekki, we have executed several projects that are enhancing the lives of the people. We have provided boreholes for all the communities, blocks of classrooms for the local schools, and we just awarded scholarships to 51 secondary school students.

“This programme is another level of our intervention as it is targetted at providing vocational skills to the teeming youth population in our host communities. The youths are veritable assets in any society and the quality of the youths determines the outlook of tomorrow’s society. Therefore, an investment in developing vocational skills among the youths will yield the desired results.”

The Executive Secretary, NCDMB, Mr Simbi Wabote, commended Dangote Refinery on its achievement, saying the Nigerian content was geared towards promoting domiciliation of value-adding activities and utilisation of Nigerian human and material resources.

FG to cut stakes in JV with Shell, Chevron, others

The Federal Government plans to cut its stakes in joint oil ventures with international oil companies to 40 per cent this year, the Minister of Budget and National Planning, Senator Udo Udoma, has said.

The government is pushing ahead with efforts to boost revenue to grow an economy recovering from a recession.

The President Muhammadu Buhari-led administration had in its Economic Recovery and Growth Plan released in 2017, said it would reduce its stakes in JV oil assets, refineries and other downstream subsidiaries such as pipelines and depots.

Oil companies including Royal Dutch Shell, Chevron and ExxonMobil, operate in Nigeria through JVs with the Nigerian National Petroleum Corporation.

The NNPC owns 55 per cent stake in its JV with Shell and 60 per cent stakes with others.

The government has considered reducing its majority stakes in these joint ventures for more than a decade but was under little pressure as higher oil prices boosted state coffers.

Udoma was quoted by Reuters as saying in a statement that the government would intensify efforts to improve its finances including the “immediate commencement of the restructuring of the joint venture oil assets so as to reduce government shareholding to 40 per cent.”

He added during a presentation to lawmakers that Buhari wanted the oil restructuring completed this year.

In 2017, the debt office said the government wanted to raise N710bn ($2.32bn) via restructuring of its equity in JV oil assets and that it had captured the proposals in the 2018 budget.

In the past, Nigeria had held talks with oil companies regarding financing agreements for JVs after it struggled to fund its portion of such partnerships through cash calls, which had often been delayed in parliament.

The government has asked the Department of Petroleum Resources to collect past-due oil license charges and royalties, within three months.

The country has also ordered oil majors to pay nearly $20bn in taxes it says are owed to states.

Buhari has presented an N8.83tn budget for 2019, laying out plans to drive growth. He has directed the NNPC to take measures to achieve the targeted oil production of 2.3 million barrels per day this year, Udoma said.

The NNPC said on Wednesday that the oil industry would achieve the 2.3 million bpd target for the 2019 budget, adding that measures had been taken to attain it.

In his presentation to the Senate Committee on Finance on the 2019-2021 Medium Term Expenditure Framework, the Group Managing Director, NNPC, Dr Maikanti Baru, stated that with improved security in oil-bearing communities as a result of sustainable community partnership, the industry was confident of attaining the production target.

Baru, who was represented by the corporation’s Group General Manager, Corporate Planning and Strategy, Mr Bala Wunti, said although the country had a production capacity of over 2.5 million bpd, the unfortunate security situation of the past in areas of operation made it difficult to achieve desired production targets.

He was quoted in a statement from the corporation as saying, “Thankfully, the current administration is strongly focused on engagement and sustainable community partnership, which has resulted in improved security and production.”

On the possible impact of the Organisation of the Petroleum Exporting Countries’ quota on the country’s production target, Baru explained that the production target of 2.3 million bpd was a combination of liquid hydrocarbon production, comprising of crude oil and condensate, noting that the OPEC quota only covered crude oil production.

He further stated that with condensate production currently oscillating between 400,000 to 600,000 bpd, the country was in a good position to attain the overall production target.

Baru said the corporation was working assiduously with other relevant agencies to ensure the attainment of the 2019 budget assumptions.

Meanwhile, energy and financial experts, who spoke with our correspondents in separate interviews, have hailed the move by the government to sell some of its stakes in JV oil assets.

The Managing Director, Financial Derivatives Company, Mr Bismarck Rewane, said, “I think it is a good thing because I have always championed the cause of government exiting. But who are they going to sell their interest to?

“The fact that it would create some more liquidity so that we can use that to fund infrastructure is good. We should have done it five years ago. The earlier we sell those assets, the better. If we had sold them when oil price was higher, we could have got a better return. But it is better late than never.”

The Chairman/Chief Executive Officer, International Energy Services Limited, Dr Diran Fawibe, noted that the proposed sale of oil and gas assets had been an issue over the past two to three years, saying, “It appears the government is determined to push it through instead of going to borrow money. The level of domestic and external loans has been very much criticised.”

The Chief Executive Officer, Economist Associates, Dr Ayo Teriba, said, “Instead of borrowing money and piling up debt that is difficult to stand, it is better to sell assets to attract equity.

“Debt is a liability, equity is also a liability; debt you have to service and repay, which is not so with equity. So, it makes great sense if the Federal Government does more of it – relies more on equity and less on debt.”

Noting that Nigeria only owns 49 per cent in the Nigeria LNG Limited while foreign investors own 51 per cent, he said, “There are similar valuable assets that the government owns 100 per cent like the Pipelines and Product Marketing Company, the Nigerian Gas Company, and the Transmission Company of Nigeria.

“Instead of talking about reducing the 49 per cent in the NLNG, we should talk about reducing the 100 per cent in those valuable assets to cut it to 49 per cent to raise money to bring in competent foreign technical partners to run them and make sure that the assets work.”

The Director, Emerald Energy Institute, University of Port Harcourt, Prof. Wumi Iledare, said, “I think it is long overdue; we suggested that before the price of oil collapsed. My advice is that the government should be selective of who they sell the assets to; there should be a public offering.

“I am also concerned about the proceeds from the sale. It should not be used for recurrent expenditure; it should be used for infrastructure.”

AMCON seeks reintroduction of Failed Bank Act

Worried by the resurgent huge toxic loans in the banking sector, the Managing Director/Chief Executive Officer, Asset Management Corporation of Nigeria, Mr Ahmed Kuru, on Wednesday, called on the Nigerian authorities to revisit the Failed Bank Act so that operatives in the banking sector would be made to account for their actions.

Kuru made the call when officials of Risk Management Association of Nigeria paid a visit to AMCON’s Lagos office.

In a statement, he urged banks to immediately strengthened their risk management framework to stem the negative growth.

He said the reintroduction of the Failed Bank Act into the country’s financial system would not only curtail the current trend of financial rascality on the part of some bankers, but would bring discipline to the banking industry in general.

Having been privileged to have been on both sides of the divide – as a banker and now on the regulatory side, Kuru explained that given the huge resources that were available to financial institutions and the pivotal role they played in the development of the economy, it made it mandatory for them to take the issues of risk management seriously to prevent what happened during the global financial crisis.

He suggested that in line with the fight against corruption, there was also a need to fight against impaired and arranged credits so that operators were held responsible for booking credits contrary to their credit policy that went bad under their supervision.

He reiterated that one of the reasons for the failure of the banking system during the global financial crisis of 2008/2009, which eventually led to the creation of AMCON was because of the prevalence of weak risk management framework by financial institutions.

He added that the trend became a baggage, which contained all sorts of bad omen for the economy including poor corporate governance structure, lack of robust risk management strategy and adherence to laid down principles that governed credit approvals by financial institutions.

He stated, “I have been on both sides, therefore, I can authoritatively comment on issues relating to risk management. Immediately after the intervention of the Central Bank of Nigeria in 2009, they insisted that risk management must be given prominence right from the board level to the account officer.”

NSE places Diamond Bank shares on full suspension

The Nigerian Stock Exchange has said the ongoing merger scheme between Access Bank Plc and Diamond Bank Plc would result in the delisting of Diamond Bank from the daily official list of the Exchange.

The NSE, on Wednesday, placed the shares of Diamond Bank on full suspension, following the final approval of the Central Bank of Nigeria and the Securities and Exchange Commission on the proposed merger with Access Bank.

The banks received the court sanction on the merger on Tuesday, making it the official date of the merger.

The NSE said in a statement that the full suspension of trading in shares of Diamond Bank was on the back of the court sanction of the merger scheme that was received by the banks.

The statement read in part, “Trading in the shares of Diamond Bank has been placed on full suspension on the Nigerian Stock Exchange with effect from March 20, 2019.

“The suspension is required to prevent trading in the shares of the bank in order to determine the bank’s shareholders, who will qualify to receive the scheme consideration as the bank obtained the court sanction of the scheme on March 19, 2019, being the effective date of the scheme.”

It added that the bank’s shareholders passed a resolution approving the merger with Access Bank at the court ordered meeting of the bank held on March 6, 2019.

Diamond Bank said in a separate statement that shareholders and other investors were requested to note that following the full suspension on March 20, which was the last trade day, there would be no further trades in the shares of Diamond Bank Plc.

The Chief Executive Officer, Access Bank, Mr Herbert Wigwe, said the resulting entity from the merger would maintain the brand name Access Bank but with Diamond Bank colours.