BusinessDay 21 Sep 2017

Thursday 21 September 2017
MPC members raise concern on FG
crowding out private sector credit
HOPE MOSES-ASHIKE
Monetary Policy
Committee
(MPC) members
at the last
meeting raised concern on
the crowding out of the private
sector from borrowing
by the Federal Government.
Nnanna Okwu Joseph,
deputy governor, Financial
System Stability, CBN, noted
that credit to the private
sector contracted as a result
of the persisting crowdingout
effect of government
borrowing requirements
driving up interest rates.
Consequently, maximum
and prime lending rate rose
by 0.19 and 0.01 percentage
point, respectively to 30.94
percent and 17.59 percent in
June, from May 2017.
Adelabu Adebayo, deputy
governor, operations, was
Fine & Country, BusinessDay RIS-UK to
give meaning to leadership, economy
CHUKA UROKO
Besides its fundamental
objective of showcasing
the best of the
Nigerian real estate
market and correcting the
myths and misconceptions
that tend to blur the opportunities
therein, this year’s edition
of Refined Investors Series
(RIS) to be hosted by Fine &
Country and BusinessDay in
the UK will also be celebrating
leadership in the country as
well as its economy.
The two companies believe
that apart from its burgeoning
real market, there’s so much
that is positive about Nigeria
while there’s a lot that still
requires correction, leaving
room for growth and, in some
cases, radical change.
“Our aim is to provide accurate
and current insight on
the real estate sector and the
economy as a whole. We want
to help shape the narrative
more accurately by sharing the
positives as well as the areas
of desired growth. No nation
can survive if its nationals are
not proud of their country. We
have a responsibility to deliberately
craft platforms that
enable us to showcase the best
stories of our nation, its people
and the path to greatness.
“That’s why we are kicking
off the RIS with an Independence
Celebration Dinner on
Friday, October 6. We want
to celebrate our country, its
people, both local and in Diaspora
and the initiatives,
brands, and projects that are
contributing to it positively,”
Udo Okonjo, Fine & Country
CEO, noted in Lagos.
Arguably, Nigeria’s governance
structures are a weak
link and the link is such that
organisations such as ANAP
Foundation and many other
non-governmental institutions
are focused on building.
But it is a good thing to have
private sector leaders who
have no desire to play the
ostrich just because they are
not in full-time public service.
worried that the short fall
in government revenue had
increased government demand
for banks financing,
leading to the crowding out
of the private sector in credit
allocation.
Salami Adedoyin, a member
of the MPC, gave highlights
of CBN financing of the
Federal Government since
December 2016. According
to Adedoyin, CBN’s claims
on Federal Government
at N814 billion is twenty
fold higher while the claims
of Commercial Banks rose
marginally by 0.4 percent
to N4.6 trillion; 30 percent
increase to N454 billion
in CBN’s purchase of government
T-Bills; 5percent
increase in FG Overdrafts to
N2.8 trillion, and increase
in the ‘mirror account’ from
N3 billion at the end 2016 to
N1.5 trillion in April 2017.
Private sector leaders realise
that the business climate
and economy play a
major role in their long-term
financial and corporate well
being, but more importantly
for the future generation. Real
leaders think generationally.
And so, through this two-day
event, BusinessDay and Fine
& Country will draw attention
to and celebrate leadership,
both in the private and public
sector. They will highlight the
fact that there are good leaders
in Nigeria, have been and will
continue to be.
Okonjo explained that, by
drawing attention to various
leading corporate brands not
just in Real Estate, but home
grown institutions including
Access Bank, Stanbic, First
Bank, Seplat, Platform, Famfa
Oil, South Energyx, Landmark,
Crown Limited, this epoch
even will demonstrate that
the story of Nigeria cannot be
told without the private sector.
“It’s the leading brands,
the selfless and visionary
leaders in various sectors,
and the innovative and astute
real estate companies
that champion change that
we want to celebrate”, she
assured.
“We have to remember
that most sectors of the economy
interact with real estate
and we have a story to tell
about the real estate companies
setting the pace and
blazing trails even within the
difficult terrain. The public
sector, of course, cannot be
left out, because to a large extent
they set the temperature
and climate of the economy.
“From security to education,
infrastructure, health,
housing, monetary policies,
these are all relevant, and it’s
our intention not to whitewash
the reality of our painful
pathway to development in
all these areas, but we can’t
focus only on the difficulties
or deficiencies without
identifying and celebrating
what’s positive, no matter
how incremental,” she said.
C002D5556
FG agrees final terms with Chinese
firm on Mambilla power plant
The Federal Government
through
the Federal Ministry
of Power,
Works and Housing
Wednesday, communicated
a notification of final
acceptance for Gezhouba-
Sinohydro-Cgcoc, a subsidiary
of China Energy Engineering
Corp, towards the
construction of Mambilla
power plant.
By this action, Nigeria has
committed itself to a contract
to execute 3,050MW of hydropower
in Gembu, Taraba
State, at the cost of $5.792 billion
in six years. The project
will include the construction
of four dams and 700 kilometres
of transmission lines.
According to the terms
of the contract, Nigeria will
provide about $870 million,
representing 15 percent of
the amount while the China
Energy Engineering Corp
will finance the rest through
funding from the China Exim
Bank.
Bogged by funding con-
Take conscious steps to revamp Nigeria’s infrastructure – RMB boss
The Nigerian government
has been urged
by Michael Larbie,
managing director,
Rand Merchant Bank, Nigeria,
who spoke at the 2017 annual
conference of the Finance Correspondents
Association of
Nigeria (FICAN) in Lagos at
the weekend, to take conscious
steps in transforming the state
of infrastructure in the country.
Larbie spoke alongside the
acting director general, Infrastructure
Concession Regulatory
Commission (ICRC), Chidi
Izuwah; president of the Africa
Finance Corporation, Andrew
Alli (represented by Fola Fagbule),
CEO of Viathan Engineering
Limited, Ladi Sanni.
The RMBN CEO pointed out
that Nigeria’s economy was too
big to be ignored in spite of the
recent recession, adding that the
non-oil sector mainly wholesale
straints since the project was
first conceived in 1982, the
Mambilla power project is a
monument to Nigeria’s failed
leadership as previous administrations
frittered away
huge oil incomes while critical
national project suffers.
During the Goodluck
Jonathan administration,
Nigeria earned over $60 billion
every year from crude
oil sales in each of the five
years he spent in the saddle,
but could not deliver on the
project.
Former President Olusegun
Obasanjo, in 2007,
awarded the contract to
a Chinese consortium –
Gezhouba Group and China
Geo-Engineering Corporation
– at the cost of $1.46
billion for an aspect of the
project, according to reports,
and paid $219 million as 15
percent advance fee, but the
project was cancelled.
A German company was
also involved in an aspect
of the project but was enmeshed
in bribery controversy
that got it blacklisted by
the World Bank.
and retail trade, agriculture,
services, telecommunication
propelled economic growth in
the country, and building and
construction.
He noted that deepening
diversification of the Nigerian
economy from oil, and development
of higher value-added
businesses, large consumer
market and growing middleincome
families, are some of the
opportunities in the Nigerian
market. According to him, resolution
of poor electricity output
would result in significant increase
in productivity.
He contextualised infrastructure
into hard and soft infrastructure,
explaining that although
education was infrastructure, but
the key infrastructure he would
be focusing on in his presentation
were energy transport, ICT
and water.
In terms of electricity, he
“Several efforts had been
made to bring it to reality but
I’m happy to announce that
this government approved
the contract today to joint
ventures of Chinese Civil and
Engineering company for the
engineering and turn-key
contract, including civil and
electro-mechanical works
for $5.792 billion,” said Babatunde
Fashola, minister
of power, after the executive
council meeting where the
project was approved last
month.
The Mambilla power project
when completed will
raise Nigeria’s hydropower
capacity to over 4500MW.
Experts say the potentials for
the economy are enormous.
According to the World
Bank Infrastructure Country
Diagnostic (AICD) and a 2015
McKinsey report, African
countries are losing 1% of
gross domestic product per
annum due to poor power
infrastructure. Nigeria’s estimated
GPD loss from 1999
to 2015 is N71 trillion due to
under investment in power
infrastructure.
stated that Nigeria presently has a
cost unreflective tariff in place; insufficient
gas supply to the power
thermal plants; non-bankable
gas supply agreements; bureaucracy
of government agencies;
lack of affordable long-term
financing for sponsors; as well as
low appetite by lenders.
Also, in ICT, Larbie identified
digital divide with lack of
access to ICT across parts of the
country; lack of policy continuity
which has constrained the creation
of ICT parks/hubs; weak
legal framework; as some of the
challenges in the sector.
Furthermore, he pointed out
that the sub-optimal funding
arrangement for highways and
trunk roads; lack of an integrated
inter-modal transport system
across the country as some of
the factors that have continued
to affect the provision of efficient
transport infrastructure.
BUSINESS DAY
7
NEWS
Abdulsamad Rabiu, CEO/executive chairman, BUA Group (m), flanked by Kabiru Rabiu (l), group executive director, BUA
Group, and Chima-Obi Madukwe, group chief operating officer, at the 2016 AABLA.
ISAAC ANYAOGU
Abdulsamad Rabiu,
others lead 2017
AABLA nominees
Nigeria’s fourth richest
man, according
to Forbes, Abdulsamad
Rabiu has
been nominated for the 2017
West Africa Business Leader
of the year at the 2017 CNBC/
All African Business Leaders
Award.
Rabiu, CEO/founder of
BUA Group, a Nigerian food
and infrastructure conglomerate,
was named alongside
other CEOs such as Jennifer
Bash, the CEO AKTZ industries,
and Mwaura Ndichu,
the CEO Interswitch GRP,
Joyce-Ann Jawainaina, the
CEO of Citi Bank, who are
also in contention for various
regional awards.
The CEO of BUA Group
who in 2016 won the CBNC/
AABLA African Industrialist
of the Year Award was among
finalists for this year’s award
barely a month after commissioning
BUA Cement $1
billion plant in Edo State and
signing a $500 million textile
cluster agreement in Katsina
State.
The nomination process
for the annual event in partnership
with CNBC Africa
began on September 14, and
ended on September 20, 2017
with recognition of excellence
across categories including:
Young Business Leader of
the Year; Entrepreneur of
the Year; Business Woman
of the Year; Innovator of the
Year; Industrialist of the Year;
Company of the Year; Business
Leader of the Year and
Philanthropist of the Year.
The AABLA honours remarkable
leadership and salutes
game changers of business on
the continent for their continuing
commitment to excellence,
developing best practices and
innovative strategies.
Winners of the Awards
exemplify the best in African
leadership. They epitomize
the core values of a successful
leader, strength, innovation,
ingenuity, knowledge and
foresight – values that are imperative
to carving out powerful
business in a Pan-African
and global economy.