The dissolution of the previous Federal Executive Council (FEC) by President Muhammadu Buhari might cost the Nigerian Communications Satellite Limited (NigComSat) $150 million Chinese loan.
The change in the Federal Executive Council affected the negotiation process as the loan agreement hadn’t been concluded as the time of the dissolution of the council. The $150 million Chinese loan was for procurement of back-up satellite in the orbit.
Where the problem lies: According to a report, the negotiation had begun under the former Minister of Communications, Adebayo Shittu. However, the Minister didn’t return for a second term to see the deal through. He was replaced by Isa Pantami.
The new minister of communication hasn’t been fully briefed on the negotiation since taking over office, the report disclosed as he has been working on other related issues.
However, on the Chinese loan for procurement of back-up satellite in the orbit, talks have broken down and the NigComSat has reportedly moved on to other projects that relate to infrastructure and improving its commercial operations.
What you need to know: While in office, Shittu stated that the contribution of the Chinese wasn’t a loan but would rather serve as equity, Nairametrics had reported in April 2019. Shittu said it was a loan that was initially proposed but because Nigeria couldn’t afford the required 15% counterpart funding, it was decided that the loan should be converted into equity.
He further stated that when the additional satellites were acquired, it would have the capacity to serve the whole of Africa such that Nigcomsat could provide services to other countries in Africa.
NigComSat future project: NigComSat intends to spend N105 million to bolster its Satellite Control Centre; N369 million on overhauling of its Radio Frequency and Hub Infrastructures; N92.4 million on its Public Access Satellite TV Channel, while also budgeting N112.1 million for improvement of security solutions for teleport, the 2020 budget shows.
Nigerian LNG to increase exports, returns profits despite weak gas prices
The gas firm has been able to sell the excess supply at a discount in the spot market.
Nigeria will most likely increase the export of its Liquefied Natural Gas (LNG) in August and September to the global market if the demand of the commodity goes up despite the crash in prices which is near record lows.
However, in the meantime, the government-owned Nigeria Liquefied Natural Gas (NLNG) company has concluded plans to maintain its current supply level to the global market. This is contrary to what some other exporters like the United States and Australia seem to be doing following low prices.
According to a report from Bloomberg, Nigeria exported over 1.8 million tons in the month of June, which is more than last year’s monthly average of 1.7 million tons.
Some of the country’s buyers have effected clauses in their long-term which allows them to take fewer shipments than was originally agreed. The gas firm has been able to sell the excess supply at a discount in the spot market. Over 50% of Nigeria’s exports in May were sold in Asia as against the about 30% that was sold last year.
Natural gas exports have slowed in June as the coronavirus pandemic has negatively affected global demand. Most of the multibillion-dollar projects in natural gas export terminals have been either halted or delayed as a result of the disruptions by the pandemic.
The damage to the gas trade goes well beyond the Middle East as it is affecting similar businesses in Australia, which is reputed to be the world’s largest exporter of LNG and the United States. With the global exports down by 6.3% from the previous year, only a few exporting countries like Qatar and Algeria, have been able to increase output.
The positive for Nigeria is that the production cost at its LNG facility in Bonny island is so low that it can still turn a profit despite the weak spot prices. The facility has been about the lowest costs when compared to similar projects around the world.
Nairametrics had reported that the NLNG just signed the engineering, procurement and construction contract for its train 7 project, which is a major gas expansion plan. The project is expected to boost the country’s LNG output by more than 30%.
The NLNG is a consortium between the Nigerian National Petroleum Corporation (NNPC), Royal Dutch Shell, Total and Eni. The project is coming at a difficult time when LNG prices in Asia and gas prices in Europe have hit a record low due to the coronavirus pandemic which has weakened demand.
Just In: Opay shuts down other business arms to focus mainly on fintech
The company will now focus on its fintech business which has always been its core.
Opay announced this afternoon that it would be shutting down some of its business units (for now) to focus only on financial technology services.
A press statement by the company, as seen by Nairametrics, primarily blamed the development on the COVID-19 pandemic, as well as a recent regulation by the Lagos State Government which banned commercial motorcycles across much of the Lagos metropolitan area.
The business units that have been put on hold by the company include all its ride-hailing platforms (ORide and OCar), as well as OExpress, its delivery business.
Opay also noted that ride-hailing companies around the world have particularly been hit hard by the pandemic which caused rippling economic effects across the world. The company said it foresaw the negative impacts of the pandemic and had already begun restructuring long before now. According to the statement by the company, this final restructuring is expected to have a very minimal impact on its business as a whole. Part of the statement said:
“We can confirm that some of our business units including the ride-hailing services ORide, OCar as well as our logistics service OExpress will be put on pause. This is largely due to the harsh business conditions which have affected many Nigerian companies, including ours, during this COVID-19 pandemic, the lockdown, and government ban.
“Globally, ride-sharing businesses have been heavily impacted by the pandemic. But several months ago, foreseeing this issue, OPay had already taken pre-emptive steps to restructure our business focus away from rides. It is worthy to note that this final restructuring has minimal impact on OPay as a whole business.”
A Statement From OPay. pic.twitter.com/mjvsKle6yH
— OPay (@OPay_NG) July 2, 2020
In the meantime, Opay will focus on its fintech service, providing payment solutions to Nigerian merchants within the eCommerce space. Interestingly, while the Chinese-owned company is known by most Nigerians because of its ride-hailing services, the core of its business has always been fintech. As a matter of fact, all these other ventures that were just put on hold were established with the intention of consolidating the payments business.
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“It is important to clarify that ride-sharing had always been only one part, and not a major part of Opay’s diversified business in Nigeria, I fact, Opay had been investing more and seeing accelerated growth in its commitment to Nigeria’s financial and technology inclusion,” the company explained.
As a full-fledged fintech firm and already a major player in the space, Opay will now continue to compete with the likes of Paga, Paystack, and even Flutterwave.
Nigerians willing to travel abroad will wait a bit longer – Aviation Ministry
Domestic flights between Lagos and Abuja will resume on Wednesday July 8.
The Federal Ministry of Aviation announced on Wednesday evening that flights will commence with the Nnamdi Azikiwe International Airport, Abuja, and Murtala Mohammed Airport in Lagos on the 8th of July. The Ministry also announced date will be decided for international travel.
Port Harcourt, Owerri, and Maiduguri airport will reopen on the 11th of July, while the other airports in the country are set to restart operations on the 15th of July.’
‘‘Passengers looking to travel out of the country will have to wait a bit longer as the dates for the restart of international flights into and out of the country will be announced later,’’ The Ministry said.
The Minister of Aviation, Hadi Sirika thanked the Nigerian public and stakeholders in the aviation industry “who have had to cope with the adverse effects of the flight suspension” for their cooperation in ensuring the country resumes operations in the airports.
READ MORE: FG acquires profiling robots for airport
Nigeria banned International flights into the country on March 21, after the country’s coronavirus cases doubled from 12-22. The airport closure was meant to last one month but as cases grew globally, the date of resumption got postponed. Domestic flights between Lagos and Abuja will resume on Wednesday, July 8.
Minister of Aviation Sen. @hadisirika who announced on Wednesday, also disclosed that the flights will commence with the Nnamdi Azikiwe International Airport Abuja and the Murtala Muhammed Airport in Lagos.
— Federal Ministry of Aviation, Nigeria (@fmaviationng) July 1, 2020
I am glad to announce that Abuja & Lagos airports will resume domestic operations on the 8th of July, 2020. Kano, Port Harcourt, Owerri & Maiduguri to resume on the 11th. Other airports on the 15th. Date for international to be announced in due course. Bear with us, please 🇳🇬🙏🏽🇳🇬
— Hadi Sirika (@hadisirika) July 1, 2020
Domestic flight operations are resuming in Nigeria, as follows:
Abuja & Lagos Airports will reopen on July 8, 2020
Kano, Port Harcourt, Owerri & Maiduguri: July 11, 2020
Other Airports: July 15, 2020
Please note this applies only to Domestic flights.
— Government of Nigeria (@NigeriaGov) July 1, 2020