Business News
Rotimi Amaechi accuses Chinese firm of breaching railway contract
The Minister of Transportation (@MinTransportNG), Rotimi Amaechi (@ChibuikeAmaechi), has accused the China Civil Engineering Construction Corporation of breaching a railway contract after the delivery date passed without delivery of the ordered coaches.
The Minister of Transportation, Rotimi Amaechi, has accused the China Civil Engineering Construction Corporation of breaching a railway contract after the delivery date passed without delivery of the ordered coaches.
FG condemns slow delivery on contract: The coaches are supposed to be manufactured by the Chinese Railway Rolling stock Corporation (CRRC). The contract was signed in December 2017 and was supposed to expire in February 2019. However, the delivery date has since elapsed, even as Amaechi has condemned the pace of the work and demanded for improvement.
The Minister visited China to express his displeasure: Amaechi made the statement during a visit to China where he led a delegation to inspect the pace of work at the CRRC. Nigeria had requested for the production of 64 coaches which are to be deployed on the Abuja-Kaduna and Lagos-Ibadan rail lines.
“The pace of construction is slow and they need to improve on it. In fact, the contract has expired; we may not have paid all the money but we paid quite a substantial sum and, therefore, they should construct speedily.
“The contract was signed in December 2017 and was supposed to expire in February 2019. The time has expired and there is a breach of contract but we will look at what the law says because more than one third of the money has been paid.”
New deadline for delivery of some coaches: Amaechi gave a new directive, stating the deadline for the deployment of ten coaches out of the 64 coaches should not be more than June this year. He said ten coaches were requested first to improve on the Kaduna-Abuja line.
“We need the coaches by June latest. We need coaches that can carry men from one point to another and we need a minimum of 10 coaches now out of the 64. I requested for 10 coaches now because we need to improve on the Kaduna-Abuja line.
“If the 10 (coaches) don’t come, there is nothing I can do but they have to come because they have to manufacture for us to use in Kaduna-Abuja and again Lagos-Ibadan, which will soon be ready. We also have to ensure that we get coaches that we can use pending when they finish the construction of the 64 coaches.”
Coaches and wagon factory to be built in Nigeria: Amaechi said a verbal agreement was made with CCECC to establish a factory that will be used to manufacture coaches and wagon in Nigeria in order to create job opportunities for Nigerians.
He also disclosed that the Chinese firm opted for Ogun State as the location for the factory despite Amaechi favouring Zaria.
“We had a verbal agreement for them to produce 15 per cent of the coaches, locomotives and wagons. They came back and said it was too expensive to establish locomotives and coaches factory and that we can start with the wagon and do 100 per cent assembly in Nigeria for the first five years. After the first five years, they will now build a factory that will manufacture wagons in Nigeria.
“It is not part of the contract we signed in 2017 but I insisted that for me to sign, they must localise it to create more jobs and reduce the expenditure of foreign exchange. Instead of going to buy dollars, you pay the Chinese in their local currency.
“We have to go further to ask them if we can own it. We have not talked about ownership but what we said was localise it. Although they are using their profit to build it, you can make them hand over the ownership to Nigeria. As for the assembly plant, I intended for Zaria but they chose Kajola in Ogun state.”
Meanwhile, the Nigerian Railway Corporation has been informed by Amaechi to provide land for the wagon factory to CCECC before May 8, 2019.
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.
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:
“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.
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.
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.
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.
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
“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.”
Download the Nairametrics News App
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.
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.
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.
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
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.
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.
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.
Download the Nairametrics News App
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.
Shell considers relocating its headquarters to the UK
Governor David Umahi of Ebonyi tests positive for COVID-19
Nigeria’s debt rises to $79.5 billion, as debt to revenue ratio worsens
Nigerian crude grades yet to rally because of U.S Shale
CBN imposes fresh CRR debits on banks to the tune of N118 billion
COVID-19 Update in Nigeria
Earning BTCs without Having To Pay Money
Top Nigerian FinTech Apps that are leading the competition
Update: Lagos to reopen schools on August 3
Hushpuppi conspired to steal £100 million from English Premier League club
