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Air Peace acquires B777 Aircraft, defends order of banned B737-Max8

In preparation for its international operation, Nigerian carrier, Air Peace, has taken delivery of its third Boeing 777-300 aircraft.

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Air Peace, Aviation in Africa

In preparation for its international operation, Nigerian carrier, Air Peace, has taken delivery of its third Boeing 777-300 aircraft. This acquisition comes days after Air Peace defended its order of the B737-Max 8 aircraft which has been banned globally.

The Boeing 777-300 aircraft arrived the Murtala Muhammed International Airport, Lagos at about 3.20p.m on Wednesday. The aircraft, which has been christened “Anuli Peggy Onyema” has 374 capacity.

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The Chairman of Air Peace, Allen Onyema, who was on the ground to receive the aircraft said Air Peace had taken delivery of its first and second B777 aircraft in February and August 2018 respectively – making the Boeing 777-300 aircraft (from Texas, USA), the third in the company’s fleet.

“We thank God that we have taken delivery of the third B777 aircraft in preparation for our international operations.

“We hope to begin our flights to Dubai and Sharjah within the next two months. From there, we will proceed to Johannesburg, Mumbai and Guangzhou in that order.”

Air Peace has received approval from the Federal Government to begin flights to six international destinations including: London, Dubai, Sharjah, Guangzhou-China, Mumbai, and Johannesburg. He added that one more aircraft was being expected before the end of the year to boost the airline’s international operations.

Impact of Air Peace operation on the economy: Onyema said that Air Peace had created 3,000 direct jobs and 6,000 ancillary jobs for Nigerians, stressing that the newly acquired B777-300 aircraft would create an additional 1,500 jobs.

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Response to criticism over order of B737-Max8 aircraft

Despite the ban by various countries on the Boeing 737-MAX 800 jets following the crash of Ethiopian Airlines B737-Max8, which killed all 157 passengers on board, there’s a possibility the Nigerian airline operator will go ahead to add the Boeing 737-MAX 800 to its fleet.

Air Peace had stated that it has no intention to cancel the order the company made earlier last year. The company is expected to take delivery of the aircraft in 2023, but Nigerians have called on Air Peace to cancel the order.

Air Peace and the American aircraft manufacturer, had on September 13, 2018 signed agreement for the delivery of 10 brand new B737 MAX 800 aircraft.

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In response, Onyema said it ordered for the embattled aircraft long before the technical issue arise because the plane was the toast of the global aviation industry, and it’s only normal for the company to align with such development.

“When we placed a firm order for the 10 brand new B737-Max 800, it was the toast of the global aviation industry.

“We were only responding to the yearnings that Nigeria airlines should be flying modern planes.

“It is unfortunate that Air Peace is being criticised for an aircraft that will not be delivered until 2023.

“We believe it is the work of our detractors, but we will not be deterred.”

Air Peace awaiting probe of Ethiopian Airlines B737-Max8 crash

Following safety concerns originating from the recent crash, a spokesman for the company, Chris Iwarah, said it is rather premature to start considering cancelling the orders. He said Air Peace will not take any action until investigation has been concluded on the Ethiopian Airlines B737-Max8 crash.

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Patricia

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Around the World

Shell considers relocating its headquarters to the UK

Royal Dutch Shell has consistently pushed for the Dutch Government to stop taxes on dividends.

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GLOBAL GAS vs SHELL: COURT SETS ASIDE AWARD OVER BREACH OF CONTRACT, Investors, shareholders shocked as Shell reduces dividend

Oil and gas giant, the Royal Dutch Shell, is considering moving its corporate headquarters from The Netherlands to Britain. This could be a move against the implementation of dividend tax in The Netherlands.

The move was disclosed by the oil company’s Chief Executive Officer, Ben Van Beurden, during an interview with a Dutch newspaper on Saturday, July 4, 2020. According to him, the oil giant is not ruling out relocating its headquarters from the Netherlands to Britain. He said:

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You always need to keep thinking. Nothing is permanent and of course we will look at the business climate. But moving your headquarters is not a trivial measure. You cannot think too lightly about that.”

Further confirming the Chief Executive Officer’s comment, a Shell spokesman told Reuters that the oil giant is looking at ways to simplify its dual structure, as it had been doing for many years.

Royal Dutch Shell has consistently pushed for the Dutch Government to stop the tax on dividend paid to shareholders, as this makes financing dividend, share buy-backs and acquisition a lot more difficult.

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An earlier attempt by the Dutch Government to stop the dividend tax as an incentive to convince Unilever to unify its dual structure in Rotterdam, was met with an outcry by the public, who see that as a gift to rich foreigners.

It can be recalled that Shell had announced a few days ago that it might likely write down between $15 billion-$22 billion in post impairment charges for the second quarter of 2020. The impairment, which is its largest since the merger with Shell Transport and Trading Company Ltd in 2005, shows the huge adverse impact that the coronavirus pandemic has had on the oil giant’s businesses.

Also, in a move that shocked investors, Shell for the first time since the Second World War, cut down the dividend that it paid to its shareholders by two-thirds due to the negative impact of the pandemic. The decision came as a surprise to many including shareholders of the oil company which is by far the biggest payer of dividend in the FTSE 100.

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Coronavirus

Governor David Umahi of Ebonyi tests positive for COVID-19

Umahi has directed those who worked in the budget review for 2020 to immediately test for COVID-19.

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David Umahi, Ebonyi State workers will not get salaries for this reason

The Governor of Ebonyi State, David Umahi has tested positive for COVID-19, reported on Saturday afternoon.

Umahi’s Special Assistant on Media, Mr. Francis Nwaze, confirmed the news and also revealed that some associates of the governor also tested positive.

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He also said that the Governor is not showing any symptoms of the disease, though he has isolated himself in line with the NCDC protocols.

“The governor has directed his Deputy, Dr Kelechi, to coordinate the state’s fight against the disease and appealed to the citizens to take the NCDC protocols seriously.

READ MORE: Governors may push for 42% of federal allocation in new sharing formula

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“He will currently be working from ‘home’ and will be conducting all meetings virtually,” Nwaze added.

David Umahi becomes the sixth Nigerian governor to test positive for the disease, Governors of Kaduna, El- Rufai, Bauchi, Bala Mohammed and Oyo, Seyi Makinde have fully recovered while the recent cases have been the Governors of Ondo, Rotimi Akeredolu and Delta, Ifeanyi Okowa.

On Thursday, Governor Umahi announced that the state’s Executive Council was finalizing the budget review required by World Bank and said “most us broke down and are being treated of malaria.”

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He also directed those who worked in the budget review for 2020 to immediately test for COVID-19 and admitted he is expecting a second test result after he initially tested negative in March.

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Economy & Politics

Nigeria’s debt rises to $79.5 billion, as debt to revenue ratio worsens

According to data obtained from DMO, $27.66 billion (N9.9 trillion) is the total external debt.

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Nigeria's Debt to revenue ratio, DMO suspends April 2020 FGN savings bond offer

Nigeria, Africa’s largest economy’s total public debt rose to $79.5 billion (N28.63 trillion) as of the first quarter of 2020, which is March 31, 2020. This represents a 15% increase from the figure that was recorded for the corresponding period in 2019, which was about $69.09 billion (N24.94 trillion).

This was disclosed in a latest publication by the Debt Management Office (DMO) on Friday June 3, 2020.

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Nigeria has seen its debt stock rise sharply in recent years as the country tries to fund infrastructural and developmental projects and boost its fragile economy, which has been in and out of recession. The country’s economy has been projected to fall into recession again, due to the adverse impact of COVID-19 that has seen oil prices crash globally.

According to data obtained from DMO, $27.66 billion (N9.9 trillion) is the total external debt. This represents 34.89% of the total public debt stock. Whereas, $51.64 billion (N18.64 trillion) is the total domestic debt, which represents 65.11% of the total public debt.

READ MORE: Nigeria borrows N754 billion in 3-month, total debt now N25.7 trillion  

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The Federal Government accounts for 50.77% of the total domestic debt, which is $40.26 billion (N14.53 trillion), whereas the State Governments and Federal Capital Territory account for 14.34% of the total domestic borrowing which is $11.37 billion (N4.11 trillion).

Nigeria has been under a lot of fiscal crisis following the crash of oil prices triggered by the coronavirus pandemic. The oil sector accounts for about 90% of the country’s foreign exchange earnings and about 60% of its total revenue.

The country, which had lined up a series of debt issue this year, had to halt the external commercial borrowing due to oil price collapse. The Minister for Finance, Zainab Ahmed, had last week disclosed that the country would no longer go ahead with its Eurobond debt issue.

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READ ALSO: Lagos debt hits N39.6 billion, to borrow N97 billion more

The Nigerian government, for now, is focusing on the domestic markets and concessionary loans to help fund the 2020 budget deficit which is made worse by drop in revenue. In the recently approved 2020 revised budget, the federal government is expected to borrow N850 billion from the domestic market.

This rising debt has put a lot of pressure on the government’s resources as it spent $1.69 billion (N609,13 billion) to service its domestic debt in the first quarter of 2020 alone.

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Nairametrics had reported that Nigeria’s global rating is at risk due to the sharp rise in the country’s sovereign debt and a growing finance gap. According to a report from the global rating agency, Fitch Ratings, this could trigger a rating downgrade as policymakers struggle to stimulate growth and deal with the impact of low oil prices and sharp drop in revenue.

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According to Fitch, the country’s debt to revenue ration is set to deteriorate further to 538% by the end of 2020, from the 348% that it was a year earlier.

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