Business News
Delays in negotiating PSCs may have cost Nigeria $16 billion
The Nigeria Extractive Industries Transparency Initiative (NEITI) disclosed that Nigeria had lost at least $16 billion over a ten-year period (2008 – 2017) due to non-review of the 1993 Production Sharing Contracts (PSCs) with oil companies.
NEITI said in a statement by its spokesman, Dr. Orji Ogbonnaya Orji, that it arrived at the figure from a quantitative study which was done in conjunction with Open Oil (a Berlin-based extractive sector transparency group).
In its latest publication titled, “1993 PSCs: The Steep Cost of Inaction”, NEITI called for an urgent review of the PSCs to stem the huge revenue losses to the Federation.
The study indicates that the losses could be up to $28b if, after the review, the Federation were allowed to share profit oil from two additional licenses.
As noted in the brief:
“Between 1998 and 2005, total production by PSC companies was below 100,000,000 barrels per year while JV companies produced over 650,000,000 barrels per year’’. By 2017, total production by PSC companies was 305,800,000 barrels, which was 44.32% of total production. Total production by JV companies was 212,850,000 barrels, representing 30.84% of total production.”
NEITI in the policy brief stated that the Deep Offshore and Inland Basin Production Sharing Contracts provided for a review of the terms on two conditions:
The first review was to be triggered if oil prices exceeded $20 per barrel. Section 16 (1) of the Deep Offshore and Inland Basin Production Sharing Contracts specifies that:
“The provisions of the Act shall be subject to review to ensure that if the price of crude oil at any time exceeds $ 20 per barrel, real terms, the share of the Government of the Federation in the additional revenue shall be adjusted under the Production Sharing Contracts to such extent that the Production Sharing Contracts shall be economically beneficial to the Government of the Federation.”
The second review was to be activated 15 years following commencement of the PSC act.
Business
Burger King to open first outlet by Q4 2021- Franchisee
Burger King is expected to employ about 6,000 people (direct and indirect) in Nigeria between 2021 and 2026.
Burger King, an American multinational hamburger fast food chain, is expected to start its operations in Nigeria by the fourth quarter (Q4) of 2021.
The company is also expected to employ about 6,000 people (direct and indirect) in the country between 2021 and 2026, other things being equal.
These were disclosed by Antoine Zammarieh, the Franchisee of Burger King in Nigeria and Managing Director, Allied Food & Confectionary Services Limited, in an interview with Nairametrics on Tuesday.
He said, “Burger King will start operations by Autumn, i.e between September and November 2021. We have set up the Quality Control unit and have met some of our local suppliers to seal the deal. Also, we have sent some of the ingredients to America to test quality.
As a company, we are delighted to enter this new market being the largest country in Africa and are looking forward to serving our future guests with our world-famous Burger King meals.
Most importantly, our goal is to positively contribute to the economy by creating more jobs and employment opportunities. In five years, we hope to directly or indirectly employ between 5,000 and 6,000 people in Nigeria.”
Zammarieh added that the hamburger maker, in a show of interest in the Nigerian market, had signed a development agreement for the Nigerian market.
He explained that the development agreement of the chain in Nigeria, which was recently signed, would give more confidence to the Nigerian market and consumers in general, especially during these hard times.
What you should know
Nairametrics had reported, three weeks back, when Zammarieh said, “I always believed in Nigeria and in its people. I am confident this venture will go a long way and prove successful for Burger King, Nigeria, and our company.”
“I believe this will be a tremendous step towards giving more confidence to the Nigerian market and consumers in general.”
What to expect
The first outlet of the hamburger chain in Nigeria is expected to be launched in Lagos.
The Florida-based restaurant chain is set to join the likes of Dominos Pizza, Krispy Kreme, KFC, and Chicken Republic (pieXpress) in a stiff competition for market share and dominance in a saturated market, with hundreds of other traditional restaurant chains.
Burger King is expected to dig deep into its quiver of strategies to ensure an impressive performance and success in its first year of operation, as other players have been having it tough following their respective launches into the Nigerian market.
The COVID-19 pandemic however has affected the fast-food industry severely, as the disruption to the industry’s supply chain, especially the on-trade channel, which accounts for a significant percentage of restaurant sales, triggered declines in their profits in 2020.
Billionaire Watch
Here is the exciting 2021 list of the richest football clubs in the world
Here’s Forbes 2021 list of the most valuable clubs in the world.
Billionaires are fond of investing in sports franchises. This is because there is a lot of money in it and the income stream is pretty consistent. Authoritative wealth watch magazine, Forbes yesterday released its official list of the most valuable clubs in the world.
It also gave a summary of the business side of the football world which we found quite interesting.
Nairametrics did a thorough review of the list and highlighted the parts which we believe will resonate well with our readers. Let’s get to it!
Top 10 richest clubs in 2021 by value
Tottenham (2.3bn)
Tottenham hotspur comes in at the 10th position with a valuation of $2.3bn. The English club is owned by Joseph Lewis and Daniel Levy. They generated $494m last year.
PSG (2.5bn)
Paris St Germaine comes in at 9th position with a valuation of $2.5bn. The French league 1 giants generated more money than arsenal last year. They generated $599m. PSG is owned by an investment group, Qatar Sports Investments.
Arsenal (2.8bn)
Arsenal football club, another London side club comes in at 8th position with a valuation of $2.8bn. The club is solely owned by Stan Kroenke, an American Businessman who invests in sports and media. Arsenal generated $430m in 2020 making it the 8th most valuable club.
Chelsea (3.2bn)
Chelsea football club comes in 7th on the list with a valuation of $3.2bn. The London side club has retained its longstanding owner Roman Abramovich, a Russian Oligarch. Chelsea generated $520m last year.
Manchester City (4bn)
Manchester City, an English club with a long history of billionaire owners comes in at 6th position. The very successful English club generated total revenue of $609m last year. The club is valued at $4bn and is owned by Sheikh Mansour bin Zayed Al Nahyan.
Liverpool (4.1bn)
Liverpool comes in 5th at a $4.1bn valuation. The English club is the second wealthiest in England with a generated revenue of $619m. The club is owned by a joint partnership between Billionaire, John Henry and Tom Werner.
Manchester United (4.2bn)
Manchester United is the wealthiest English club on the list. The club is valued at $4.2bn, taking up the 4th position on the list. The club has been owned by a Jewish business family, the Glaziers for years. They are the largest shareholders and practically own the club. They generated $643m last year.
Bayern Munchen (4.215bn)
Bayern Munchen comes in at the third position with a value of $4.215bn. The German giants have bossed the German league for years. They generated $703m last year, coming in at the 3rd position.
Real Madrid (4.75bn)
Real Madrid Fc comes in at the second position. The football club which had previously dominated this list was edged out by bitter rivals, Barcelona. Real Madrid is valued at $4.75bn and the club is also owned by the club members. Real Madrid generated $729m, the same amount of revenue as Barcelona last year.
FC Barcelona (4.76bn)
Fc Barcelona is the most valuable football club in 2021 with a market value of $4.7bn. The club sits gallantly in the first position.
The Spanish giants generated a massive $792m in revenue last year and succeeded in holding on to their key player Lionel Messi. They also edged out Real Madrid and Man Utd who have dominated this list for 16 years. FC Barcelona is owned by the club supporters. It has no major shareholder or billionaire financier. The club has over 160,000 members forming its governing body.
What you should know
- 6 of the 10 richest clubs in the world are owned by billionaires; the rest are owned by club members and an investment group.
- In the last 16 years, the world’s richest football clubs list has been topped by only two clubs – Real Madrid and Manchester United.
- Football clubs generate revenues through advertisements, sponsorship deals, jersey deals and ticket sales. These are the 4 major revenue streams of a football club.
- The top 3 teams on the list – Fc Barcelona, Real Madrid and Bayern Munchen generated a combined revenue of $2.3bn in 2020.
