NIGERIA: Ecobank sets up department to finance SMEs

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Read Time:1 Minute, 44 Second
In its bid to boost the Nigerian economy, Ecobank Nigeria Plc has concluded arrangement to set up a microfinance department to support small business owners in the country.
These groups of people constitute the unstructured market and are small entrepreneurs whose businesses are below the range of a million naira.
According to a statement from the bank, the Development Finance Department of the Bank would give out small loans to this category of entrepreneurs at special and flexible rates and the use of identification methods.
Ecobank Head, Development Finance, Felix Oyakhamoh who stated this during a chat with the media in Lagos, said small business owners that cut across artisans, traders, small time farmers amongst others qualify for this special window. The beneficiaries do not necessarily need collaterals, but guarantors to collect the loans.
According to Oyakhamoh, the Bank has dedicated staff in select branches of the bank in the six geo-political regions of the country to attend to customers who fall within this loan bracket. In his words “We are dedicated to rejuvenation of the wealth creation process in Nigeria. Our ultimate goal is to empower as well as provide financial services to the otherwise down trodden, being part of our financial inclusion drive.”
He encouraged small business owners to embrace the opportunity by walking into any Ecobank branch for detailed information on how to benefit from the special scheme. Oyakhamoh noted that the beneficiaries will also get all other bank incentives like debit cards, mobile banking and all other e-banking services that go with being a customer of the Pan African Bank.
He reiterated that this gesture by the bank is in line with its vision to build a world class pan-African bank and contribute to the economic development and financial integration of Africa. “Ecobank is a full service bank that caters to the corporate, small and medium sized enterprises (SMEs), the micro, and the growing middle class. The bank has something for everyone’s needs; that is why we are the pan-African bank”

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Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Complaints and Investigations

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Read Time:3 Minute, 7 Second
I need advice on my late mother’s shares
Please I need to know what to do concerning my late mother’s shares in UACN. Since she passed on, there has been no follow up. Please what is the procedure and how do we ascertain the exact amount of shares she has. Thank you (Mrs. J. Obi)
Investors Forum
The first thing is to visit the registrar of UACN, and inform the company about her death. However, her shares can only be accessed by whoever she indicated as her next-of-kin, and the process is usually a long one. You will need the services of a stockbroker in this regard, preferably the one your mother patronised
No communication from Daar Communication
I bought shares of Daar Communication sometime ago and I’m yet to get my share certificate or any mail from them. Please how do I go about this? Thanks (chidiruth49@yahoo.com )
Investors Forum
Please contact First Registrars at Plot 2 Abebe Village Road, Iganmu or call
08033018295, 08191410456
I need advice on unclaimed dividends
I sold my shares in January 2013 but I have a backlog of unclaimed dividends from 2010.
Kindly advice me on how to reclaim my dividends as I have the warrants with me. (Ade Osemudiame)
Investors Forum
Take the dividend warrants to the registrars of those companies. They will revalidate the warrants. Thereafter, you can pay them into your account. However, you should also register for electronic dividend, so that future dividends can be paid directly into your account.
I want to invest N5000
Please what kind of investment can I do with N5000?
Investors Forum
You can invest in shares. There are good companies with share price less than N3 per share. With N5000 you can buy about 1500 shares of such companies. But you need a stockbroker for professional advice. Visit www.nse.com.ng for list and addresses of licensed stockbrokers.
My Union Bank shares were understated
I used to have 42,333 shares of Union Bank before the 3:16 share reconstruction in 2011. After the reconstruction I was credited with 5000 instead of 7937 Union Bank shares. Please help me correct this mistake unless it is an intentional attempt to defraud me. (Amilo Charles Chudu)
Investors Forum
Please contact Union Registrars Ltd at No. 2, Burma Road, Apapa, Lagos. Tel: 2793160 – 2; 0700 826 7341
No communication from Afroil, IPWA
I bought shares of Afroil and IPWA  but I have not received any dividend or update on my account, please help me out. (A. Isaac)
Investors Forum
For Afroil Plc contact, Unity Registrars Limited, Unity Bank Building, (2nd Floor) Plot 1683, Sanusi Fafunwa Street Victoria Island, Lagos. Tel  0803-3006-038, 01-7408123, 01-8418765. For IPWA contact Union Registrars Ltd
2, Burma Road, Apapa, Lagos. Tel:  2793160 – 2; 0700 826 7341
No communication from Daar Communication
I bought shares of Daar Communication sometime ago and I’m yet to get my share certificate or any mail from them. Please how do I go about this? Thanks (chidiruth49@yahoo.com)
Investors Forum
Please contact First Registrars Plot 2 Abebe Village Road, Iganmu or call
08033018295, 08191410456
I need advice on unclaimed dividends
I sold my shares in January 2013 but I have a backlog of unclaimed dividends from 2010.
Kindly advice me on how to reclaim my dividends as I have the warrants with me. (Ade Osemudiame)
Investors Forum
Take the dividend warrants to the registrars of those companies. They will revalidate the warrants, thereafter you can pay them into your account. However, you should also register for electronic dividend, so that future dividends can be paid directly into your account.

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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Investor Protection Fund: SEC delays compensation of investors

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Read Time:2 Minute, 40 Second
The delay in approval of the draft rules for the implementation of the Investors Protection Fund (IPF) by the Securities and Exchange Commission (SEC) has been a stumbling block to compensation of investors, who fell victim of unscrupulous dealings by some registered stockbrokers.
Recently, a group of investors lodged complaints with  the NSE, demanding their money trapped in one of the stockbroking firms suspended by the Exchange. The Exchange, however, told them that their complaints would have to wait until SEC approves the modalities for the implementation of the IPF.
The group, which identified itself as Retirees from Delta Steel Company Ltd, Warri Delta State, stated in their complaint to Investors Forum, “ We all gave our share certificates to our stockbroker, Securities Solution Ltd (Member of The Nigerian Stock Exchange), which they verified with our CSCS Account in 2008 and sometimes in Jan., 2012.
We mandated them to sell some of our shares and pay the proceeds to our bank accounts; we waited for payment and they never paid  and we got to know later that they have been suspended by the Nigeria Stock Exchange for misconduct and wrong practices in February 2012.That is  after much pressure to get our money from them.
“We wrote NSE with attention  to Mr. Adebisi Onipede, Head Stockbroker/Dealer Regulation  and forwarded the letter to the NSE head office in Marina, Lagos. In the said letter, we informed them about what happened and how our money is yet to be paid by SECURITIES SOLUTION LTD, after selling our shares. The  NSE replied and told us in a letter that they are still working on it and they did promised  us they are going to do something about it.
But till date, they are yet to resolve the matter and the information we heard was that NSE Lagos had  frozen  the account of the stockbroking firm concerned, Till date, nothing meaningful has been put together by NSE to pay us since the money is in their custody and they are aware the money is in their account till date.” In its response to investigation by Investors Forum, NSE stated “We acknowledge receipt of your email with respect to the above subject matter. Unfortunately, your complaint has remained unresolved because Securities Solution Limited (SSL) is currently on suspension and has been in an inactive capacity since April 2012.
The firm is currently before the Disciplinary Committee of the Council of The Exchange for their consideration. In the interim, please be informed that the Board of Trustees of the Investors Protection Fund (IPF) of the Exchange has recently been constituted and is currently considering the modalities for the operation of the Fund regarding compensation to investors, who suffered losses in the capital market.
Be assured that your complaint will be promptly resolved when the Board concludes on these modalities. The Exchange appreciates your concerns and patience in our bid to get a resolution to your complaint. Please be assured that we take all complaints from the investing public seriously and will do all within our capacity to ensure that your complaint is resolved.”
 

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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NIGERIA: SEC, IFC hold joint debt market conference

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Read Time:1 Minute, 20 Second
The Securities and Exchange Commission (SEC) and the International Finance Corporation (IFC) are organizsing a Nigerian Bond Market Conference on Wednesday 7th August 2013 in Lagos. The event is coming at a time of increasing realisation by the international investor community of the immense potential that the Nigerian bond market offers following a series of reforms and initiatives aimed at enhancing the regulatory framework and increasing market depth and liquidity. “This conference provides our market a unique opportunity to leverage the IFC’s wealth of experience in both developed and developing markets to boost capacity while highlighting some of our key achievements and challenges within the last few years.”
 
The SEC and the IFC have enjoyed a close relationship and strong partnership over the years and we are pleased to note that the IFC has been very supportive of our work from the outset of our reform initiatives. We benefited from the expertise of a Resident Bond Advisor sponsored through the Efficient Securities Markets Institutional Development (which the IFC hosts) from 2010 to 2011. The IFC has also shown leadership by being the first multi-lateral institution to access the Nigerian domestic bond market by issuing a $50 million naira-denominated bond to help deepen the domestic bond market in February 2013.
The highpoint of the event will be an on-the-record interview session featuring the Director General of the SEC, Ms. Arunma Oteh, and Mr. Jingdong Hua, Vice President and Treasurer, IFC with Mr. Andrew Cross, the IFC Treasury’s Head for Africa, Latin America and Caribbean as moderator.
 

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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NIGERIA: Why Cooking Gas Price May Hit N7,000

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Read Time:2 Minute, 17 Second
Price of Liquefied Petroleum Gas (LPG), otherwise known as cooking gas, remained astronomically high despite the resolution of the tax-induced row between the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigeria Liquefied Natural Gas Limited (NLNG) by a High Court in Lagos State.
 
The protracted legal battle forced NIMASA to detain vessels of NLNG at the Bonny Terminal preventing them from lifting LPG until it settled unpaid levies and other charges that run into billions of naira.
Investigations by Daily Sun in Lagos metropolis revealed that the 12.5kg gas cylinder, which hitherto sold for between N2,500 and N2,800 now goes for over N4,000 and may hit N7,000 soon if government fails to intervene.
Gas dealers who spoke with Daily Sun said the product remained scarce for about a month running, stressing that the price might go beyond the current level if the scarcity persisted.
 
 
Wale Olowojoba, a major gas dealer in Ikeja said all his supply channels had run out of stock: “We thought the row between these two bodies will be resolved in a short while but it actually took weeks. Now all major gas dealers have run out of stock. It’s a serious matter and the price is increasing almost everyday. The effect of the resolution of the tax war is yet to be felt.”
To meet local demand for the commodity, Nigerian importers and marketers of LPG had reportedly stormed the neighbouring Niger Republic to purchase the product.
Though NLNG accounts for 150,000 metric tonnes of LPG yearly from its Bonny Island plant in Rivers State, the blockade of NLNG ships, LPG terminals in Lagos have exhausted their supply leading to artificial scarcity. This has left dealers with no option than to import from Niger Republic.
Daily Sun gathered that 10 of the companies appointed as off-takers to lift the product in vessels and sell to the local market had paid for the products but are yet to receive them as the post-rift bliss between NIMASA and NLNG is yet to translate into adequate product supply to meet local needs.
 
"As we speak, none of the terminals have supply in Lagos since NLNG was not allowed to sail from Bonny to Lagos and the owners have paid for their products to be supplied here in Lagos. The prices of the little stock left has since sky-rocketed. NIPCO will run out of stock very soon, if they have not already run out, and we are left with the option to import a product we are abundantly blessed with. But we hope that the Federal Government will relax the rules guiding the import."
 

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Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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CCECC Plans $1bn Investment in Cement Factory, Tin Can Port

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Read Time:4 Minute, 19 Second

The China Civil Engineering Construction Corporation (CCECC) has unveiled its plan to invest about $1billion in Nigeria towards the construction of cement factory, the modernisation of Tin Can Port, saw mill factory, funding for the construction of investment in real estate and in manpower development.

President of CCECC, Yuan Li, disclosed this to THISDAY Tuesday in Beijing in an interview after the company hosted Nigerian delegation that accompanied President Goodluck Jonathan on a state visit to the world’s most populous country.

Li said the company, which has the highest number of on-going construction work in Nigeria, planned to move from being a mere construction company to becoming an investor and would soon start commercial production of cement for the Nigeria market.

In real estate the company said it was already developing 110 houses (villas) somewhere around the Lagos-Epe expressway near the Lekki Free Trade Zone, which would be completed by the end of this year at the cost of $10 million.

“In the past Chinese Civil Engineering Construction Corporation was mainly in construction work and now I think we have already become one of the largest construction companies in Nigeria and we are competing with any other big construction company in the country, like Julius Berger. Since we have become one of the biggest construction companies in Nigeria, we need to find some other ways of development.

“The company said that before now it was manufacturing the cement it needed for its construction work, but it would expand the factory and begin to manufacture cement for the Nigerian market so that the pricing of the product would be competitive, adding that it would build plazas in Abuja and Lagos that would have hotels, shopping malls, offices and other businesses.

“We are looking for a land in Lagos and also in Abuja where we will build the CCECC plaza in the two cities. Each one of the lands will be about 50 square metres that will have hotels, offices. Each project will cost $100 million. We already have CCECC plaza in Beijing, in Shanghai and in Macau. We want to have several others in Africa, staring with Nigeria.”

The company also said it would offer scholarship to Nigerians to study technical courses in China, especially railway engineering in the Chinese Railway University, adding that Nigeria’s management of its railway system is weak due to dearth of technical manpower; that it would help the country by developing the needed manpower for the sector and acquiring and managing the locomotives (rail cars).

“We found that Nigerian students are not studying about railway transport in your country, even in Britain, but in China I graduated from the China Railway University. So we studied railway transport for four years in the university as major course of study. So we think that it is our duty to help you to train such engineers in China. Then they can go back to work for us or work for Nigerian Railway Corporation. That will be good. We are not doing this only for your country; we are also going to do it for Ethiopia.”
CCECC is also building four international terminals at the four major airports in Nigeria at the cost of $600 million with a loan from China Exim Bank that would be paid back with two per cent interest after seven years with 22 years moratorium.

“The four terminals will be located in the Lagos, Abuja, Port Harcourt and Kano airports and the projects would be completed in 20 months. It will also provide jobs for 6000 indigenous workers with Chinese expatriates as supervising engineers.”

While welcoming the Nigerian delegates, including ministers, directors and other top officials of some ministries, Li said that the company had employed over 20,000 local staff in all its construction and other operations in Nigeria, adding that it would embark on construction of highways, development of the Tin Can Port under Public Private Partnership (PPP) and assist Nigeria in the modernisation of its railway infrastructure.

Meanwhile, President Goodluck Jonathan  will Wednesday be formally welcomed to China by his host President Xi Jinping at a grand ceremony scheduled to hold at the Great Hall of the People.

Thereafter, the two leaders and their official delegation will hold bilateral talks at the end of which new agreements and Memoranda of Understanding (MoU) will be signed.

Jonathan arrived Beijing at about 17.30hours (local time) Tuesday to begin a state visit to China to boost bilateral cooperation between the two countries in areas such as defence, finance, trade, agriculture and communications.
But already, Nigeria has commenced strategic moves to improve  trade and investment ties with the Asian tiger and reappraise the level and quality of trade between both countries.

A high-level business and investment forum to leverage the strength of both countries for win-win trade and investment positions, will be declared open by Jonathan in Beijing as part of his state visit.

The business forum, which is expected to attract top Chinese and Nigerian companies and investors,  is being organised by the Ministry of Industry, Trade and Investment.

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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PPPRA laments domination of Nigeria’s freight sector by foreigners

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Read Time:2 Minute, 9 Second

The Petroleum Products Pricing Regulatory Agency, PPPRA, has expressed dissatisfaction over foreign ship owners’ domination of Nigeria’s oil maritime and petroleum products freight services.

Speaking at the inauguration of two double hulled oil vessels — MT Adeline and MT Emmanuel — acquired by Rainoil Limited, Mr. Reginald Stanley, Managing Director, PPPRA, called for increased patronage of local fender providers in Ship-to-Ship operations, saying this will help build a strong synergy among local ship operators.

He said, “The domination of the oil maritime services by foreign fender providers is not in the best interest of the country, given the Federal Government’s transformation agenda, aimed at boosting the capacity of indigenous operators to play active role in Nigeria’s economic development.

According to him, a situation where foreign fender providers dominate the market should be discouraged, adding also that the new acquired vessels would boost maritime operation and reduce the unit cost of freight.

Stanley said the investment in the acquisition of the vessels is a significant milestone and a big boost to the nation’s economy, especially in the areas of foreign exchange conservation, reduction in the cost of freight of petroleum products, employment opportunities and speedy distribution of products across the country.

Also speaking, Hon. Dakuku Peterside, Chairman, House of Representatives’ Committee on Petroleum (Downstream), assured the organised private sector that the National Assembly will ensure that the needed legislative framework to make businesses thrive would be provided.

He charged industry operators to imbibe value-addition and forthrightness as essential ingredients for their success in business, describing the new vessels as another value-creation worthy of emulation by other operators.

Mr. Gabriel Ogbechie, Managing Director/Chief Executive Officer, Rainoil, said, “The vessel business in Nigeria has over the years been heavily dominated by foreigners because they are the ones who, over the years, agreed to invest in vessels that meet very stringent international standards.

“Running vessels do not come cheap. So for us it is a major milestone and I can tell you that in the last one year, apart from Rainoil I know that a lot of other Nigerian companies decided to take the bull by the horn and invest in getting vessels that are of world class standard.”

Continuing, he said, “Maritime is one area where this country bleeds a lot of foreign exchange. This business is practically more than 95 per cent dollar denominated and a lot of this money, when you are hiring foreign vessels, practically leaves the country in foreign exchange.

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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NIGERIA: Court to Rule on NLNG/NIMASA Face-off Monday

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Read Time:2 Minute, 16 Second

A Federal High Court has delayed a ruling on a tax dispute between Nigeria’s Liquefied Natural Gas Company (NLNG) and the Nigerian Maritime Administration and Safety Agency (NIMASA) over taxes till Monday, extending a deadlock which an economist said has resulted in a loss of gas export worth $22 million a day.

Since June 21, NIMASA has barred LNG cargoes from entering or leaving the loading bay at the Bonny terminal in the Niger Delta because it says NLNG is not paying a 3 per cent levy, from which the NLNG argues it is exempt.

A report by Channels Television Saturday said the parties were in court in Lagos on Friday to try to resolve the dispute over the lawfulness of the blockade and the levies, which NLNG spokesman, Kudo Eresia-Eke, had earlier said he hoped would be resolved. The court adjourned the case until Monday.

The Nigerian National Petroleum Corporation (NNPC) owns 49 per cent of NLNG with Shell holding 25.6 per cent, Total 15 per cent and Eni 10.4 per cent.

NLNG accounted for 9 per cent of Nigeria’s exports in 2012, said economist Bismarck Rewane, CEO of Lagos-based consultancy Financial Derivatives, or roughly $8.1 billion a year, a quarter of Nigeria’s federal fiscal budget for 2013.

“That’s about $155 million a week, of which 51 per cent belongs to the Nigerian government,” he said. “That is a lot of money to the finance ministry.”

NLNG declared force majeure on gas exports on June 28 because of the blockade.

Mr Ereia-Eke declined to give figures for NLNG losses, and finance ministry officials were not immediately available.

NIMASA spokesman Isichei Osamgbi said the agency was seeking cumulative levies of $158 million.

“Our business is not to cause any crisis to the gas sector. We just insist on our dues. Why shouldn’t they pay the levies that are applicable to anybody?” he said.

NLNG argues that the act that established it makes it exempt, but Osamgbi said the exemptions expired after the first year of profit, following a 5-year holiday.

A shipping source said NIMASA already charges LNG tankers $600,000 per berth to load at the NLNG bay, four times higher than the average among the highest fees of any LNG port.

NLNG says a court order was issued on June 18 preventing NIMASA from blockading the port until a resolution was found, but the maritime agency denies that.

Buyers of Nigeria’s LNG include Spain’s Repsol, Italy’s Enel, Britain’s BG Group France’s GDF Suez and Portugal’s Galp.

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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NIGERIA: Community Gives Mobil 21 Day Ultimatum to Pay N4bn Oil Spill Compensation

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Read Time:2 Minute, 9 Second

Oil producing communities of Eket local government area, Akwa Ibom has given a 21 day ultimatum to Mobil Producing Nigeria (MPN) Unlimited and affiliate of America oil giant, ExxonMobil to pay them the oil spill compensation or risk closing shop.

Also involved in the issuance of the ultimatum are Association of Akwa Ibom Villages Chairmen (ASSAVIC), Eket youths Chapter and stakeholders  who are demanding the payment of over N4billion from various oil spills recorded in the territory.

Thisday gathered that the 21 day ultimatum on MPN came just as activities of the Universal Energy Resource were temporarily halted on Wednesday when its host community staged a peaceful demonstration at its corporate headquarters in Uyo, Akwa Ibom State.

Legal adviser to Eket community, Mr. Akpa Akpa in a letter to MPN alleged that there was an attempt to divert the over N4 billion compensation meant for the community to the State Government.

The people regretted that in spite of the fact that Mobil had acknowledged that the November 2012 oil spill which caused devastation, injuries and losses to the community, nothing has been done in spite of  promises for immediate payment of compensation to affected local government areas.

“But now, information making rounds in Eket and beyond is that there is a grand plan to divert to Akwa Ibom Government over N4 billion November 2012 oil spill compensation due to Eket Local Government Area,’’ the letter stated.

The Eket community, accordingly directed MPN to pay the amount due the people over the spillage through a properly constituted committee including accredited members of ASSAVIC, youths and stakeholders of the community within 21 days.

Reacting, Manager, Public and Government Affairs, Qua Iboe Terminal, Eket, Mr Akaninyene Esiere, said ExxonMobil had nothing to do with compensation over oil spill as it was the responsibility of the National Oil Spill Detective and Responsive Agency (NOSDRA), and the Department of Petroleum Resources (DPR).

According to him, these agencies will do a thorough investigation to show that the farms were actually affected by the oil spills before the payment was made.

Meanwhile, the protest at the premises of the Universal Energy Resource was to press for non-implementation of the 2012 development projects and other sundry issues as contained in the Memorandum of Understanding signed between the company and host community in July, last year.

The protesters carried placards that read “Universal Energy implement the provisions of the MOU”, We reject injustice, we reject oppression, we reject divide and rule”, “No community development, no Universal Energy Resources”, etc.

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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External Reserves Declined by $532m in Second Quarter

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Read Time:2 Minute, 54 Second

Nigeria’s external reserves, which upswing had been restrained due to the volatility in crude oil prices as well as recent pressure faced by the naira, dipped by a total of $532 million to $48.150 billion in the second quarter of 2013.

Data compiled from the Central Bank of Nigeria’s (CBN’s) website showed that the amount represented a decline by 1.09 per cent in the second quarter, compared to the $48.682 billion the reserves which are mainly derived from the proceeds of crude oil earning stood as at April 2nd.

The naira continued its downward slide against the dollar last week as it was hurt at the interbank market. Specifically it fell by N3.50 to close at N162.50 to a dollar at the interbank on Friday, lower than the N159 to a dollar it attained the preceding Friday.  The naira recently suffered its biggest year-to-date loss.

The external reserves were almost stagnant in June as it fluctuated within a band of $48.150 billion and $48.49 billion. But the level of the external reserves is expected to cover about 11 months of imports.

The Financial Derivatives Company Limited (FDC) noted that the inertia in external reserves accretion could be attributed to the increased usage of the reserves to support the exchange rate, as well as a decline in forex inflows from offshore investors.

The Lagos-based financial advisory firm warned in its latest monthly report for June that: “Growth in external reserves may remain a challenge if the naira continues to face downward pressure on the back of increased dollar demand.”

The report showed that from March 2013, global oil prices began to fall noticeably to an average of $111.67per barrel (Bonny light), which was five per cent lower than the previous month’s average of $117.67pb.

The Organisation of Petroleum Exporting Countries (OPEC), the global oil cartel, the report said, had attributed this fall to renewed euro-zone fears as well as a reduction in refinery demand caused by substantial maintenance worldwide. It explained: “Since March, oil prices have continued to fall every month. As Nigeria is dependent on oil for about 80 per cent of its revenues, the development has intensified warnings from analysts about a possible relapse in the economy.

“In the forex market, an increasing demand for dollars, attributed to increased appetite by foreign investors, continuously put downward pressure on the naira and caused it to trade close to the upper limit of its three per cent band. Despite increased forex sales by the CBN, the naira traded at its weakest level of N162.3/$ and N164/$ in the interbank and parallel markets respectively on the 17th of June. The CBN is expected to continue its intervention to keep the naira stable.”

Nonetheless, the FDC report stressed that the production of oil needs to be bolstered in order to compensate for the fall in oil price. The activities of pipeline vandals and oil thieves, it also noted had resulted in loss of crude oil produced.

However, the CSL Stockbrokers, a division of FCMB (UK) Limited argued in a separate report that the CBN has continued to express its willingness and ability to maintain a stable exchange rate. It added that the reason the recent depreciation of the naira appeared large was because the country had become accustomed to an unusual degree of stability.

About Post Author

Anthony Claret

Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.
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