Economy
IMF Predicts 4.3% Growth for Madagascar in 2017
By Dipo Olowookere
The International Monetary Fund (IMF) has disclosed that Madagascar’s recent economic performance had been encouraging, with GDP growth reaching 4.2 percent in 2016.
From March 9–22, 2017, a team from the IMF led by Mr Marshall Mills, Mission Chief for Madagascar, visited Antananarivo from to conduct the 2017 Article IV Consultation and hold discussions on the first review of Madagascar’s economic reform program supported by the IMF’s three-year Extended Credit Facility (ECF).
At the end of the mission, Mr Mills said the macroeconomic outlook in the near term was generally positive, aided by growth in public investment, continued strength in export processing zones, and a recovery in mining.
He said this outlook was diminished by a drought in the central plateau and the cyclone that hit the northeast, saying the full impact was not yet clear, and the Fund was continuing discussions with the authorities and development partners to help identify the scale of the damage and financing to address urgent needs.
Growth is currently projected to reach 4.3 percent in 2017, while inflation is expected to remain contained at 7.7 percent. Positive external developments prior to the cyclone enabled the central bank to boost reserves significantly, reaching USD 1.12 billion at end-February 2017, he said.
“The authorities have achieved significant progress under the ECF-supported program, although challenges remain. All quantitative performance criteria for end-December 2016 were met, supported by prudent monetary policy and improving revenue collection that surpassed targets. The government also implemented the measures envisioned in most of the program’s structural benchmarks, although some with a delay.
“Difficulties at state-owned enterprises, especially JIRAMA and Air Madagascar, continue to weigh on the budget and the economy. The difficulties of the public utility JIRAMA, aggravated by drought, will require additional transfers of around 0.5 percent of GDP. However, new management is developing a business plan to restructure operations, which will reduce costs, improve revenue, and contain transfer needs. Air Madagascar is negotiating a strategic partnership, which is expected to involve a substantial, one-off transfer from the government to offset past losses. Staff and the authorities are continuing discussions on recapitalizing Air Madagascar, including obtaining financial assurances, and on restructuring JIRAMA.
“In the medium-term, the authorities aim to break Madagascar’s pattern of low growth by scaling up priority spending and accelerating structural reform. Drawing on substantial pledges of grants and concessional loans at the donor conference of December 2016, the authorities intend to boost investment and social spending steadily from 2017 to 2019, while maintaining a moderate risk of debt distress. To ensure the success of the scaling up and to minimize risks, the authorities are enhancing their investment management and monitoring capacity. Revised frameworks to encourage private investment are also under consideration for mining, petroleum, and special economic zones. Staff stressed the need to incentivize private investment efficiently, without undermining the government’s key objectives of enhancing revenue and containing fiscal risks.
“The authorities continue to make progress in strengthening the legal and institutional framework for enhancing governance and fighting corruption. The government is committed to submitting draft laws on asset recovery, international cooperation, and combating anti-money laundering to the next parliamentary session. It remains important to follow through with implementation.
“The central bank has successfully maintained stable inflation while pursuing reforms to improve monetary policy effectiveness and financial stability. Enhancing the effectiveness of policy instruments, which requires an efficient interbank and repo markets, is a priority. Reforms are being put in place to deepen financial intermediation and inclusion, such as the new law on electronic money. Revisions under preparation to banking and microfinance laws will reinforce stability, as will the ongoing audit of two government-owned non-bank financial institutions.
“The mission met with President Hery Rajaonarimampianina, Speaker of the National Assembly Jean Max Rakotomamonjy, Prime Minister Olivier Solonandrasana, Minister of Finance and Budget Gervais Rakotoarimanana, Minister of Economy and Planning and interim Minister of Energy and Hydrocarbons Herilanto Raveloharison, Central Bank of Madagascar Governor Alain Rasolofondraibe, Commissioner General Léon Rajaobelina, and other members of parliament, senior officials, as well as private sector representatives, civil society and development partners,” Mr Mills said.
By Adedapo Adesanya
Seplat Energy Plc will revive hundreds of Nigerian oil wells laying fallow after completing the acquisition of Mobil Producing Nigeria Unlimited (MPNU) from ExxonMobil.
The company said it aims to lift oil output to about 200,000 barrels a day, a move that will help boost Nigeria’s oil production levels, as it aims to reach 2 million barrels per day next year.
The transaction, according to Seplat, “is transformative for Seplat Energy, more than doubling production and positioning the company to drive growth and profitability, whilst contributing significantly to Nigeria’s future prosperity.”
The completion of the Seplat-ExxonMobil deal has created Nigeria’s leading independent energy company, with the enlarged company having equity in 11 blocks (onshore and shallow water Nigeria); 48 producing oil and gas fields; 5 gas processing facilities; and 3 export terminals.
Recall that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in October approved the deal as part of a series of approvals, while it blocked Shell’s asset sale of up to $2.4 billion to the Renaissance consortium.
The acquisition of the entire issued share capital of MPNU adds the following assets to the Seplat Group: 40 per cent operated interest in OML 67, 68, 70 and 104; 40 per cent operated interest in the Qua Iboe export terminal and the Yoho FSO; 51 per cent operated interest in the Bonny River Terminal (‘BRT’) NGL recovery plant; 9.6 per cent participating interest in the Aneman-Kpono field; and approximately 1,000 staff and 500 contractors will transition to the Seplat Group.
MPNU adds substantial reserves and production to Seplat Energy; 409 million barrels of oil equivalent (MMboe) 2P reserves and 670 MMboe 2P + 2C reserves and resources as at 30 June 2024 and 6M 2024 average daily production of 71.4 kboepd (thousand barrels of oil equivalent).
Business Post reports that Seplat will be part of the payment this year, and will defer some to next year,
Speaking on the transaction, the Chairman of Seplat Energy, Mr Udoma Udo Udoma commended President Bola Tinubu for supporting this transaction and appreciated the support and diligence of the various ministries and regulators for all the work to reach a successful conclusion.
“We are delighted to welcome the MPNU employees to Seplat Energy. We are excited to begin our journey in a new region of the country, and we look forward to replicating the positive impacts we have achieved within our communities in our current areas of operations.
“Seplat’s mission is to deliver value to all our stakeholders, and we treasure the good relationships we have developed with the government, regulators, communities and our staff.”
On his part, the chief executive of Seplat Energy, Mr Roger Brown, described the acquisition as a major milestone, adding, “I extend my thanks to the entire Seplat team for their hard work and perseverance to complete this transaction.
“MPNU’s employees and contractors have a strong reputation for safety and operational excellence, and I welcome them to the Seplat Energy Group.
“We have acquired a company with one of the best portfolios of assets and related infrastructure in a world-class basin, providing enormous potential for the Seplat Group. Our commitment is to invest to increase oil and gas production while reducing costs and emissions, maximising value for all our stakeholders.
“MPNU is a perfect fit with our strategy to build a sustainable business that can deliver affordable, accessible and reliable energy for Nigeria alongside attractive returns to our shareholders”.
By Adedapo Adesanya
The National Pension Commission (PenCom) is projected to close the year with over N22 trillion in pension assets impacted by challenges like inflation and monetary policies.
This is according to PenCom Director-General, Mrs Omolola Oloworaran, at a press conference in Abuja on Thursday.
She said as of October 2024, the Contributory Pension Scheme (CPS) had 10.53 million registered contributors and pension fund assets worth N21.92 trillion.
Speaking at the conference-themed Tech-driven Transformation Shaping the Pension Landscape, which showcased PenCom’s strategic commitment to innovation, she said that the numbers reflected the agency’s unwavering commitment to fund safety, prudent management, and sustainable growth.
She explained that the pension environment was impacted by the wider economic challenges facing the country, noting that the sector battled multi-year high inflation, Naira devaluation, and the lingering effects of unorthodox monetary policies by the Central Bank of Nigeria (CBN).
Business Post reports that the apex bank hiked interest rates by 875 basis points this year alone to tackle persistent inflation which peaked at 33.8 per cent as of October.
She said that these challenges eroded the real value of pension funds and impacted contributors’ purchasing power.
“To address these issues, the commission has initiated a comprehensive review of its investment regulations.
“It is focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign currency-denominated investments.
“The goal is to safeguard contributor savings and ensure resilience against future economic volatility,” she said.
She restated the commission’s commitment to expanding pension coverage, particularly through the advanced micro-pension plan designed to encourage participation from the informal sector using technology.
“This initiative will make it easier for everyday Nigerians to save for retirement, aligning with our vision of inclusive growth and financial stability for all.
“The backlog in retirement benefits for retirees of the Federal Government’s Ministries, Departments, and Agencies (MDAs) will soon be settled.
“The federal government recently disbursed N44 billion under the 2024 budget to settle approved pension rights.
“We are collaborating with the Federal Government to institutionalise a sustainable solution to ensure retirees receive their benefits promptly, eliminating delays,” Mrs Oloworaran said.
She said that PenCom’s technology-driven transformation aimed to make the CPS more accessible, reliable, and sustainable.
“From data management to seamless contributions and regulatory supervision, we are paving the way for a future where the pension industry serves all Nigerians effectively,” she said,
Mrs Oloworaran also said that the e-application portal for pension clearance certificates has replaced the manual processes and enhanced the ease of doing business in the sector.
“Since its deployment, 38,528 pension clearance certificates have been issued. This initiative ensures compliance and secures the future of Nigerians working in organisations that interact with the government,” she said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.
As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.
However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.
In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.
But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.
When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
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