Abdullahi Bashir Haske is the founder and Chief Executive Officer of AA&R Investments, an indigenous oil exploration company. In this interview, he highlighted how the oil and Gas has faires and how it would survive and importance of creating an enabling environment for the non-oil sector to thrive. Excerpts:
• How would you access the oil and gas industry in the heat of global crude oil prices crises?
Normally when there is price crash of crude, investments in the oil and gas sector will be affected especially the capital projects. That said, from what we are seeing lately, the prices are beginning to go up again with the opening of major economies such as the U.S.A and China which were closed because of the global pandemic. This is going drive demand and continue pushing prices up.
However, for a country like Nigeria which is largely dependant on revenues from the sale of crude any negative shock to prices will affect the entire economy. Now due to the current situation we are sweating over how to fund the country’s budget.
This is the more reason why this country must urgently develop the non-oil sector and reduces the cost of running the government. They must also provide enabling environment for private businesses to come and invest in the economy to create jobs and generate revenue.
• The oil prices recorded a surge yesterday, what are the factor responsible for that and how sustainable are they?
Oil prices began facing some shocks sometime in late February and early march when Saudi and Russia fell out and were unable to reach an agreement to cut their output. Over the past three years the two countries had agreed to be part of an agreement to sustain an increased production. However, when the Saudi Government requested for production to be cut by over a million barrels, the Russians refused. Saudi was requesting for the cut to keep oil prices high because demand was slowing down from china (the world’s largest importer of oil) who were already in the middle of the covid-19 crisis.
So, we found ourselves in a situation where the market was flooded with excess oil thereby causing prices to crash. So, while demand was falling rapidly, supply was increasing. Then in the months that followed, the pandemic took a toll on the global economy and virtually every country was closed this further compounded the problem.
• AA&R Investments found oil in Bauchi. How did you feel about the feat and kindly share your experience with us?
For the records, AA&R investment is the group company where we have all our subsidiaries including Etihad Oilfield Services Limited which was the contractor for the drilling campaign in Bauchi.
I must say it was a long journey getting to where we are now, very tough, and challenging. Firstly, when we first conceived this idea and wanted to be part of the story, most people never believed our vision for this project some told me that it was never possible, and it will never work.
Secondly due to the security challenges in the region, it was difficult to convince service providers and investors to take part in the project similarly, there was the fear that we will not find anything even after drilling.
But we never gave up we kept pushing and trying to set up a project team and we eventually got there we mobilized to site and commenced operations. It was the first-time a project of this magnitude has ever been carried out in the northern part of this country as result we faced many challenges.
We thank God after several months of operations we hit, and it was a success. I felt fulfilled and excited about it for the fact that I come from the north east region and I have seen how for many years the region has become backward as result the terrorist attacks. Secondly that we achieved this feat as an indigenous company the first of its kind.
It is my hope that the opportunities that will come with this project and future projects because of the success of our operations will be put to the good use of the country and her people.
• What is your level of investment in the agriculture sector and what was the attraction?
Agriculture is one area I have much interest in now we have two projects we are working on. The first is setting up of a modern 12 ton/hour rice mill in Adamawa state which we intend to expand to 24 ton/hour as time goes on and we expect to complete the rice mill by end of third quarter 2020.
We also intend to set up rice irrigation farm project on 5000 Hctr land close to mill to ensure we have adequate supply of raw materials and optimize production. The second project is cassava starch processing plant in Kwara sate which we also hope to commence development within the year.
As for what attracts me to agriculture, I would say that it is one huge sector with very little investments in it. It also has the potential to employ millions of people in this country and provide food sufficiency to the country.
• Do you think the sector is really lucrative considering several challenges facing it now?
The sector is promising and has huge potentials to make it lucrative. As you rightly noted, the sector has several serious challenges this has made it impossible to succeed in the sector and until these challenges are addressed professionally, the sector will continue to suffer
You know the agriculture sector has a long value chain, expensive to run at commercial and industrial levels and highly risky. From the upstream where raw materials are produced to mid-stream where you look at aspects such as storage to the downstream where these raw materials are processed into finished products.
• You are a self-made serial entrepreneur. Do think Nigeria space is really encouraging entrepreneurs/SMEs, regarding access to fund?
No, I do not think so, on the contrary the business environment is very tough despite the huge business opportunities out there. We hear of so many initiatives to provide access to credit for businesses but accessing them is difficult, you have to go through series of bureaucratic and outdated ways of getting your documentations which takes so much time and by the time you get them your ideas have become obsolete, either your financial analysis and projections have been affected by one government policy or inflation or even currency fluctuations.
So really, a lot of work has to be done for entrepreneurs to get access to credit, I can understand that we do not have a robust credit rating system due to a poor database. Therefore credit facilitators are left with no option but to put high risk management requirements to mitigate the chances of default by borrowers which is already a problem.
• Tell us about Etihad Group, subsidiaries, feat achieved over the years?
As I said earlier, AA&R investment is the group and we have about eleven subsidiaries under it of which Etihad Oilfield Services is one of them. Our business interest as you are aware is Oil and gas, marine services, agriculture, information technology and logistics services. The Oil and gas sector of our business have seen some tremendous success of which the Drilling project in the north east is one of them.
In the information technology space, we have recently been successful in getting a Value-Added Service (VAS) licence as an aggregator by the Nigerian Communications Commission (NCC). In the agriculture sector, we expect to commence operations of our rice mill in the Adamawa state by end of 3rd quarter or beginning of 4th quarter this year.
When completed, it will the first of its kind the entire north-east region of Nigeria. We also have in the pipeline a cassava starch processing plant in Kwara state. So, in general we have achieved a lot and still working to do more.
• What are the main challenges you faced that almost made you turn back?
As I always say all the time, the major challenge I faced was getting your partners and people you work with to believe in your dreams and vision. This has been tough especially at the beginning when you first start. The moment we achieved that and had a team that was driven by a shared vision we were set and never looked back.
• If there are, what are your driving forces amid the challenges?
The driving force is to remain positive during the difficult times and never give up.
• How do you adjust to the new industry realities?
To see every challenge or problem as an opportunity to develop new ideas and solutions to current problems through research and innovation to meet with the new realities.
• What are your projections for Post-COVID-19?
The pandemic has changed the way we do things possibly for the rest our lives, and its normal when things like these happen that businesses try to adjust to these new realities. My projections post the pandemic is that we need to design and improve current business continuity strategies on how to minimize the impact of such problems on businesses.
• Who are your mentors and do you mentor some?
My father remains my biggest mentor, we lost him when I was very young but my memories of him and the legacies he left in the minds of people as I grew up and got to realize have been a driving force in my life and my aspirations.
NOVA Merchant Bank’s debut N10bn bond oversubscribed by 300%
The offer closed with a bond yield guidance of 12 percent to 12.50 percent.
NOVA Merchant Bank, a leading merchant bank in Nigeria, has announced the successful issuance of its N10 billion 7-Year Subordinated Unsecured Bond under its N50 billion debt issuance programme. The transaction represents NOVA’s first bond issuance in the debt market and was oversubscribed by 300 percent.
The offer which opened on June 30, 2020 following relevant approval from the Securities & Exchange Commission (SEC) and the Central Bank of Nigeria (CBN), closed on July 8, 2020 with a bond yield guidance of 12 percent to 12.50 percent.
In spite of volatility in markets due to the COVID-19 pandemic, the transaction was highly demanded with a diversified order book made up of discerning investors including asset managers, insurance companies, domestic pension funds, non-financial institution corporates, high networth individuals as well as international fund managers.
The lead issuing house, United Capital Plc, described the transaction as unprecedented while the joint issuing houses Stanbic IBTC Capital, UCML Capital Limited, Emerging Africa and Greenwich Trust Limited jointly stated it was a remarkable deal.
This is one of the major corporate bond issuances by a Merchant Bank in Nigeria’s capital market, thus reflecting NOVA’s strong credit quality as well as the resilience of its business model despite current global challenges.
The Chairman, NOVA Merchant Bank, Mr. Phillips Oduoza expressed excitement over the success of the company’s debut issue as it places the Bank on a firm footing to achieve its short-term and long-term goals.
He said, “The oversubscription of this bond offer is yet another significant milestone in the history of the Bank and represents a vote of confidence by the investment community in the resilience of our business model. We will continue to march forward with confidence in the realisation of our strategic objectives.”
Oduoza added that the bank is well-positioned to fulfil its promise to focus on providing long-term funding which is critical to the economic development of the country.
The Bank’s Managing Director, Anya Duroha said, “The resounding success of this bond offer helps us achieve our goal to re-establish merchant banking as a key economic driver by providing long-term funds. It will also help us better meet the financing needs of our clients”.
NOVA Merchant Bank Limited is a licensed, investment-grade rated merchant bank in Nigeria. It offers an integrated suite of financial solutions covering Wholesale Banking, Investment Banking, Asset Management, Securities Trading, Wealth Management, Trade Services, Deposit-Taking, Lending Activities, Transaction Banking, Cash Management and Digital Banking.
Coronation Merchant Bank partners Union Systems to commence full automation of its Trade Finance Operations
Coronation Merchant Bank has continued to make giant strides in Trade financing.
Leading financial institution in Nigeria, Coronation Merchant Bank, has partnered with Union Systems Limited to fully automate its Trade Finance Operations. The trade finance software, Trade-XTM comes with a front-end portal, OptimusTM that empowers corporate clients to initiate and manage their trade transactions from both web and mobile platforms from anywhere in the world.
Earlier this year, the Bank announced its partnership with IFC (a member of the World Bank Group) to provide a $40 million Trade Finance Guarantee facility. In addition to this, the Bank has continued to make other strides in Trade financing such as its recent appointment as a designated bank for the collection and remittance of all Revenue Payments (i.e. Import, Excise and other duties) by the Nigeria Customs Service.
Commenting on the partnership with Union Systems, Banjo Adegbohungbe, Managing Director/CEO of Coronation Merchant Bank stated that, “We are delighted to partner with Union Systems in providing an automated platform to help our trade clients achieve their business objectives. Leveraging this platform, we hope to further improve our clients’ end-to-end experience in their trade-related transactions”. He further stated that, “the launch of the automated trade platform is in line with the Bank’s strategy of becoming a foremost financial institution in trade financing in Nigeria and across Africa”.
Also commenting on the partnership, Chuks Onyebuchi, CEO Union Systems said, “We are very pleased to be the preferred partner to automate the bank’s trade operations using our products, Trade-XTM and OptimusTM. We will be bringing to bear our over 20 years’ experience of successful implementation of trade finance solutions across Africa. Our software will provide a seamless experience to the bank’s clients on all their trade finance activities from the comfort of their home and office.”
About Coronation Merchant Bank
Coronation Merchant Bank was established in 2015 to provide wholesale banking to a long under-served market. The Bank offers Investment and Corporate Banking, Private Banking/Wealth Management and, Global Markets/Treasury Services to its clientele.
This year, the Bank has received numerous awards from international organizations for product innovation, sound corporate governance structures and commendable financial performance. Some of the international awards received by the Bank include Best Investment Bank in Nigeria by Global Finance Magazine, Best Investment Bank in Nigeria by World Finance, Best Investment Bank in Nigeria by Global Banking & Finance Review and Best Investment Bank by Global Business Outlook,
About Union Systems Limited
Union Systems Limited (USL) is an Information Technology Company that provides financial software solutions and professional services to major banks in Africa. The company provides software solutions to financial institutions to enhance their software capabilities, effectively scale processes, improve compliance and drive operational efficiencies.
With headquarters in Lagos, Nigeria, the company has a deep understanding of the African market and has a team of highly qualified consultants that have real-world experience in the delivery of complex software solutions. Top banks in Africa rely on Union Systems to deliver growth, profitability and regulatory compliance in financial software applications.
Multichoice Nigeria: How investing $2.1 billion in Nigeria’s media and entertainment value chain impacts national economy
Multichoice’s commitment to enriching lives, as their mantra says, has never been in doubt.
Through MultiChoice Nigeria’s socio-economic investment, for 27 years, the company has made significant contributions to the growth of the Nigerian economy. At the heart of this investment is entrepreneurship and employment opportunities through multiple channel distribution platforms and a commitment to the continuous growth of the sports, technology, film and video sectors through infrastructural development.
In 2015, when a set of big goals called the Millennium Development Goals that were set two decades ago reached their ‘expiry date’, with some of the key objectives still unmet, a new 15-year timeline was set for yet another group of goals, this time called the Sustainable Development Goals. From eight goals to seventeen new goals, five years in, the world can say that a major shift seems to be happening.
One clear indication of this is in the way business operations for many organizations around the world have evolved. With many companies becoming more conscious of how their affairs affect the environment, how consumers interact with their products, and how much value they really add to society, corporate social responsibility or value, has moved from being an item on the checklist to become a business core.
Now, while many businesses seem to be playing catch-up, there are others even in Africa, who unknowingly, but with great startup vision, had laid the foundation and built a template for what a socially responsible company should look like.
Established in 1993, Multichoice Nigeria had a 7-year lead time, before the MDGs became a guide and used those years to build a solid business that combines profit and purpose. Today, that business represents what shared prosperity is, having created the right mix of opportunities for its people to grow, while helping to build an industry that ranks as the second-largest in the world and the most loved in Africa.
As people say, if content is king, distribution is definitely queen, and this thinking remains why Nollywood owes a lot of the accolades it gets today to Multichoice Nigeria. Between 2015 and 2019, Accenture in its new report for Multichoice, estimates that about $428million has gone into the local content production business of Multichoice, mostly in developing local creativity and building the production infrastructure to support it. To put this investment in more perspective, it directly translates to 117,459 hours of local content. That’s huge, on both an African and global scale, even huger given that it’s only from 5 years of enriching lives; definitely more if the organization’s 27 years is brought into view.
These sorts of investments rarely occur without a ripple effect on human capital development, but leaving things to chance isn’t the Multichoice way. The Multichoice Talent Factory further drives the local content goal for Multichoice, as they welcome a cohort of 20 students who after one year graduate, are better equipped to keep the African film industry innovative and constantly growing. It is an intentional play at giving equal opportunities to anyone with film and broadcast dreams to pick the skills they require to make a mark in the industry.
On one hand, as Multichoice continues to build more credibility for the entertainment and media industry in Africa, through its investment in local content, future talents, even award shows, it is also ensuring the market for the content they produce grows on the other hand. This process has required a strong supply chain and Multichoice Nigeria has proven equal to the task investing over $1 billion in their distributor, supplier, even installer network in just the last 5 years. With further investment in their 961 employees, in the areas of training and other benefits, it is safe to say they have gone beyond building a business, to building an ecosystem.
Whether this ecosystem model works is a question their recently released socio-economic value report put together by Accenture and covering the last five years of operations answers perfectly. The contribution of an estimated US$2.1bn to the Nigerian economy between that 5-year period, shows that they understand the role they play in achieving a prosperous Africa based on inclusive growth and sustainable development.
In Multichoice’s 27 years of operating in Nigeria, their commitment to actually enriching lives as their mantra says, has never been in doubt. Beyond the strides their video content business has made in employing people directly, creating jobs for even more people in adjacent industries, training talents and building infrastructure; the company has always still found a way to give back to the different communities where they operate.
With a portfolio of grassroots sporting programs, various awards that recognize great work from inspiring Africans, essential care for people with sickle cell disorder and investments in education and educational content, Multichoice Nigeria shows it is more than just business.