By Dipo Olowookere
The New Partnership for Africa’s Development Infrastructure Project Preparation Facility (NEPAD-IPPF) has continued to support African countries to strengthen regional infrastructure connectivity by providing grants for project preparation and development for complex, cross-border regional infrastructure projects in energy, transport, ICT and trans-boundary water.
This directly supports Africa’s integration and industrialization efforts as well as trade in goods and services and helps to improve the quality of lives of Africans by improving access to infrastructure services – electricity, transport, communications and water.
NEPAD-IPPF provides grants to African countries through Regional Economic Communities (RECs) and specialized regional infrastructure institutions such as Power Pools to undertake feasibility, technical and engineering designs, environmental and social impact assessment studies, as well as preparation of tender documents and transaction advisory services to make projects bankable for financing and implementation in support of Africa’s socio-economic transformation.
Taking stock of achievements during 2016 at the Business Strategy Workshop for NEPAD-IPPF held at the headquarters of the African Development Bank (AfDB) in Abidjan, Côte d’Ivoire, on Friday, February 3, 2017, Shem Simuyemba, NEPAD-IPPF Fund Manager, informed the gathering that during 2016, NEPAD-IPPF had approved a total of $14.83 million for the preparation of eight regional projects covering energy, transport and water.
Five energy/power projects were approved, two in West Africa, two in Southern Africa and one in East Africa. In West Africa, these were, the Nigeria-Benin 330 kV Power Interconnector Reinforcement Project executed by the West African Power Pool (WAPP) and the Feasibility Study for Women in a Changing Energy Value Chain in West Africa under the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREE) intended to unlock business opportunities for women entrepreneurs in the energy value chain. In East Africa, NEPAD-IPPF funded the Uganda-Tanzania Refined Oil Products Pipeline Project with oversight from the East African Community Secretariat.
In Southern Africa, approved projects were, the Zambia-Mozambique 400 kV Power Interconnector Project and the Kolwezi (DRC)-Solwezi (Zambia) 330 kV Power Interconnector Project linking the two copper-mining belts of Katanga in the Democratic Republic of Congo (DRC) and Northwestern Zambia.
The Executing Agency for the two projects is the Southern Africa Power Pool (SAPP). The Zambia-Mozambique Power Interconnector Project is co-financed with the US Trade and Development Agency (USTDA).
Project preparation and development work undertaken by NEPAD-IPPF has had a major impact in generating bankable projects, which have attracted financing for implementation.
An example is the Power Interconnector, 330 kV North Core Project involving Nigeria, Niger, Benin and Burkina Faso. NEPAD-IPPF provided $5.9 million for the preparation of this project (one of the largest grants for a single project).
The estimated financing cost of the project was $681.67 million.
However, at the North Core Financing Roundtable held on November 9, 2016, under the auspices of WAPP and the countries concerned, the project attracted $1.205 billion in financing pledges.
The two transport projects approved were the Route Multinationale, Kribi-Campo-Bata, the road/bridge over the Ntem River linking Cameroon to Equatorial Guinea, for a grant of $3.04 million under the Economic Community of Central African States, an important transport and trade corridor in Central Africa.
The other was in East Africa, the Lamu Port Development: Transaction Advisory Services and Technical Assistance – Phase 1 for a public-private partnership (PPP) to develop the new Port of Lamu in Kenya to serve the countries of Ethiopia, South Sudan and Kenya under the $20-billion LAPSEET mega infrastructure project.
One trans-boundary water project, the Multinational, Orange-Sengu River Basin Project, was also approved in 2016.
The purpose of the grant is to assist in the preparation of a Climate Resilient Water Resources Investment Strategy and Plan and Multipurpose Project for the Orange Senqu River Basin.
The project is co-funded by the Africa Water Facility and the Global Water Partnership (GWP) and is managed by the Orange River Basin Commission.
It will benefit the four countries of Lesotho, South Africa, Botswana and Namibia as it serves, among others, Africa’s most dense economic space, the Gauteng Province of South Africa with its mining, agricultural and industrial activities.
NEPAD-IPPF is a multi-donor Special Fund hosted by the African Development Bank (AfDB), established under the G8 as part of the support to the NEPAD African Action Plan and is managed in close partnerships with the African Union Commission (AUC) and the NEPAD Agency. Donors supporting NEPAD-IPPF include Canada, Denmark, Germany, Norway, Spain and the UK.
Since its establishment in 2005, NEPAD-IPPF has approved 72 grants for complex, cross-border regional infrastructure projects resulting in downstream financing of $7.88 billion, demonstrating the high leverage effect of well-prepared projects.
Under its current Strategic Business Plan (SBP) for the five-year period, 2016-2020, NEPAD-IPPF requires funding of about $250 million to prepare 80 to 100 regional infrastructure projects expected to generate $25 billion in infrastructure investments.
NEPAD-IPPF is also increasingly linking its project preparation work to financial closure and part of the thrust of its new business orientation is to engage early with project developers, financiers and investment houses to ensure that NEPAD-IPPF prepared projects respond better to investor needs.
“NEPAD-IPPF is a tested brand across Africa in supporting African countries to prepare complex, cross-border regional infrastructure projects and to bring them to bankability and therefore offers a total-project-development-solution,” said Simuyemba. He also observed that NEPAD-IPPF unlocks business opportunities across the “infrastructure value chain”, not just in advisory services, but also financing, construction, equipment supply, technology and skills as well as operations and maintenance.
Investors Count N11.92bn Loss in One Week at NASD Exchange
By Adedapo Adesanya
Investors at the NASD Over-the-Counter (OTC) Securities Exchange lost N11.92 billion in value last week, marred by losses recorded by a few market bellwethers.
As a result, the total value of unlisted securities on the exchange reduced to N500.32 billion from the previous week’s N512.24 billion.
In the same vein, the NASD Security Index went down by 2.33 per cent or 16.61 points to close the week at 697.3 points as against 713.91 points of the preceding week.
It was observed that Niger Delta Exploration and Production (NDEP) Plc and Central Securities Clearing System (CSCS) Plc were largely responsible for the bearish outcome seen in the ninth trading week of this year on NASD.
The share price of NDEP depreciated by 7.8 per cent to settle at N270.00 per unit in contrast to the previous N292.82 per unit, while CSCS Plc lost 4.7 per cent to close at N15.72 per share versus N16.50 it ended a week earlier.
Despite the poor performance of the market last week, two companies recorded growth in their equity prices.
Friesland Campina WAMCO Plc gained 0.8 per cent to trade at N120.34 in contrast to the previous N119.43, while Acorn Petroleum Plc appreciated by 6.3 per cent to 17 kobo from 16 kobo.
On the activity chart, there was a 106.1 per cent increase in the trading value to N65.2 million from N31.6 million. The trading volume also rose in the week by 561.6 per cent to 2,449,670 units from 370,270 units, while the number of deals appreciated by 34.6 per cent to 35 deals from the previous week’s 26 deals.
Acorn Petroleum Plc was the most traded securities by volume with 1.1 million units. It was followed by Industrial and General Insurance (IGI) Plc (611,050 units); FrieslandCampina WAMCO Plc (509,904 units); Food Concepts Plc (125,000 units) and CSCS Plc (81,650 units).
However, Friesland Campina was the most active by value with N61.4 million; NDEP Plc trailed with N2.2 million; CSCS Plc with N1.3 million; Acorn Petroleum Plc with N188,496, and Food Concepts Plc with N100,000.
On a year-to-date basis, investors have traded 26.7 million units worth N667.2 million in 275 deals.
Nestle, Nigerian Breweries Stocks Get Sell Rating
By Dipo Olowookere
Analysts at Greenwich Merchant Bank have placed sell rating on the shares of Nestle Nigeria and Nigerian Breweries.
However, they put a buy rating on Ecobank, Zenith Bank, FBN Holdings and UBA, while GTBank, Cadbury Nigeria, PZ Cussons, Guinness Nigeria and Unilever Nigeria all have hold rating.
In a report released over the weekend, the firm said Nestle, which has traded as low as N764.90 per unit in the last one year and as high as N1,505.00 per unit, can be sold by holders at the present value of N1,350 because it has surpassed the target price of N963.87.
The company further said Nigerian Breweries, which had a target price of N43.57, can be offloaded now that it is selling at N49.50.
For Ecobank, it said investors can buy at the current value of N5 because it has a 12-month target price of N14.51, while Zenith Bank could reach N31.26, higher than the present N25.30.
It further said FBN Holdings and UBA have the tendency to reach N13.06 and N12.55 respectively, higher than the current respective price of N7.10 and N7.95.
Greenwich also said investors with GTBank could still hold the stocks because it has the tendency to sell at N32.75, while Cadbury Nigeria, PZ Cussons, Guinness Nigeria and Unilever Nigeria could sell for N9.26, %.77, N21.19 and N13.60 respectively.
Meanwhile, the company said the dampened sentiments may likely continue as a result of “the rising yields in the fixed income space.”
“In the new week, we expect the market sentiment to remain weak, although we do not rule out the possibility of an uptick by the end of the week,” it projected.
At the fixed income market, Greenwich said news that the Central Bank of Nigeria (CBN) was planning to phase-out the participation of international players in the OMO-bill market caused some investors to selloffs their holdings.
The CBN, however, debunked the information and the average yield closed flat at 5.6 per cent.
This week, the firm expects “market players to continue to trade cautiously with mixed sentiment across the curve while seeking opportunities to cherry-pick higher-yielding papers across the curve.”
Oil Looks Positive as Saudi Terminal Attacks Spur Price Above $70
By Adedapo Adesanya
The Brent crude edged closer to $71 per barrel on Monday morning after oil giant, Saudi Arabia, confirmed that one of its facilities, which is the world’s largest crude terminal, was attacked.
As at the time of this report, the global crude benchmark, which most countries prices their futures against, was trading at $70.50 per barrel, while the United States’ benchmark, the West Texas Intermediate (WTI), was up by 1.66 per cent to sell at $67.19.
Saudi had said a storage tank at Ras Tanura located in the country’s Gulf coast was attacked on Sunday by a drone from the sea but output appeared to be unaffected after the missiles and drones were intercepted.
The terminal is capable of exporting roughly 6.5 million barrels a day, which is nearly 7 per cent of oil demand and is considered as one of the worlds’ most protected installations.
The assault follows a recent escalation of hostilities in the Middle East region after Yemen’s Houthi rebels launched a series of attacks on Saudi Arabia.
The latest attack has been viewed as the most serious in the last two years since a key processing facility and two oil fields came under fire in September 2019, cutting oil production for several days.
Although the Houthi rebels claimed responsibility, the Kingdom pointed its fingers at its Gulf rival, Iran, as the culprit, further adding to tensions in the region.
Notably, the new Joe Biden administration of the US has also carried out airstrikes in Syria last month on sites it said were connected with Iran-backed groups.
Oil climbed last week after the Organisation of the Petroleum Exporting Countries and allies (OPEC+) made a surprise pledge to keep output steady in April, boosting oil prices to their best in more than 13 months.
The move prompted a number of investment banks to raise their price forecasts, with Goldman Sachs Group estimating global benchmark Brent will top $80 a barrel in the third quarter of 2021.
Oil prices are expected to perform at their best this week as President Biden is on the point of his first legislative win with the House ready to pass his $1.9 trillion COVID-19 relief plan, the second-biggest economic stimulus in American history.
Morison Manages 20% Weekly Gain in Depressed Stock Market
By Aduragbemi Omiyale
For those keenly following happenings in the Nigerian stock market, they will observe that things have not been too smooth this year.
The market has been struggling to replicate the sterling performance it put up from the second quarter of last year. Share prices have been depleting, no thanks to rising yields in the fixed income market, causing investors to divert their funds to the environment.
Last week, the Nigerian Stock Exchange (NSE) suffered a weekly loss of 1.18 per cent as the All-Share Index and market capitalisation depreciated to 39,331.61 points and N20.578 trillion respectively.
Similarly, all other indices finished lower with the exception of industrial goods and NSE Sovereign Bond indices, which appreciated by 1.39 per cent and 0.07 per cent while the ASeM index closed flat.
Business Post reports that in the week, only 14 stocks closed on the price gainers’ chart, lower than 20 stocks of the previous week.
Leading the chart was Morison Industries, which appreciated by 20.00 per cent to 66 kobo per share and was distantly followed by SAHCO, which gained 9.54 per cent to settle at N3.33 per share.
Unity Bank grew by 8.96 per cent to 73 kobo per share, BETA Glass gained 8.00 per cent to sell for N54.00 per share, while Lasaco Assurance appreciated by 5.69 per cent to N1.30 per share.
On the losers’ log, there were 71 members last week, higher than 43 in the previous week, with Champion Breweries taking the top spot after a 33.33 per cent decline in its share price to N1.68 per unit.
Japaul lost 28.99 per cent to trade at 49 kobo per share, Ardova declined by 25.21 per cent to N13.50 per share, Oando fell by 23.19 per cent to N2.65 per share, while NASCON dropped 19.00 per cent to trade at N13.00 per share.
Also in the week, a total of 77 equities remained unchanged, lower than 99 equities recorded in the previous week.
A look at the level of trading activities in the week showed that financial stock dominated with the sale of 1.6 billion units worth N10.7 billion executed in 13,269 deals, contributing 78.06 per cent and 36.06 per cent to the total trading volume and value respectively.
Shares in the consumer goods industry followed with 92.0 million units valued at N4.5 billion carried out in 4,168 deals, while the third place was energy equities with a turnover of 91.3 million units worth N10.5 billion transacted in 1,471 deals.
Wema Bank, Axa Mansard Insurance and Zenith Bank were the most active stock by volume with a turnover of 903.6 million units valued at N5.6 billion executed in 4,017 deals, contributing 43.19 per cent and 18.71 per cent to the total trading volume and value respectively.
At the close of transactions for the week last Friday, investors traded a total of 2.1 billion shares worth N29.7 billion in 24,238 deals as against the 1.9 billion shares worth N20.7 billion transacted in 24,687 deals a week earlier.
New FX Policy Will Cut Cost Burden of Remitting Funds—CBN
By Dipo Olowookere
The Central Bank of Nigeria (CBN) has explained the reason it came up with a new foreign exchange (FX) policy on diaspora remittances.
On Saturday, the apex bank, under the leadership of Mr Godwin Emefiele, announced a new forex promo tagged CBN Naira 4 Dollar Scheme, an incentive for senders and recipients of International Money Transfers.
The campaign, which will last for two months from March 8 to May 8, 2021, will enable “all recipients of diaspora remittances through CBN licensed IMTOs [to] be paid N5 for every $1 received as remittances inflow.”
After the circular was issued, the central bank explained the reason behind the policy, noting that it was to make it possible for Nigeria to tap into the booming remittances industry.
The apex bank said a forecast by PwC suggests that Nigeria’s remittance flows could reach $34.89 billion by 2023 and to meet this target, there must be channels put in place.
“This can only be accomplished if remittance infrastructure improves and if the right policies are put in place,” the central bank explained in a separate post.
It further said this new policy was also in line “with the global trend [as] Nigeria aspires to ensure that remittance flows and diaspora investments become a significant source of external financing.”
The apex bank expressed optimism that the rebate of N5 for every $1 of fund remitted to Nigeria “will help to make the process of sending remittance through formal bank channels cheaper and more convenient for Nigerians in the diaspora.”
It also noted that the “new FX policy will create an easier, more flexible, and more transparent, system of remittance administration, it will greatly enhance the benefits of diaspora remittances in supporting investments and growth in Nigeria.”
“[The] policy on the administration of remittance flows is aimed at increasing the transparency of remittance inflows, reducing rent-seeking activities, and providing Nigerians in the diaspora with cheaper and more convenient ways of sending remittances to Nigeria,” it added.
Concluding, the CBN said, “The use of reimbursements of remittance fees has been critical in supporting improved inflow of remittances to countries in South Asia and in improving their balance of payments position following the COVID-19 pandemic.”
Business Post reports that since the new policy was announced yesterday, some economists have suggested that the apex bank was in desperate need of Dollars.
In recent time, the price of crude oil, Nigeria’s main source of FX earnings, has been on the rise, trading close to $70 per barrel at the global market.
In the 2021 budget signed into law by President Muhammadu Buhari in December 2020, the crude oil benchmark price was $40 per barrel, implying that Nigeria is earning more than it projected.
However, instead of the nation’s external reserves to rise as a result of more FX inflows from oil sales, the account balance is shrinking. The FX reserves currently stand at $34.9 billion as against $35.1 billion on February 26, 2021.
SEC Secures $400,000 for Nigerian Capital Market
By Adedapo Adesanya
A grant worth $400,000 has been granted to the Securities and Exchange Commission (SEC) by the African Development Bank Group (AfDB).
The financing package was approved to allow the apex capital market regulator in Nigeria to strengthen securities market regulation and broaden market instruments.
The funds will go towards strengthening the risk-based supervision framework, regulation of derivatives and green bonds, and build capacity for green finance.
The grant will be sourced from the Capital Markets Development Trust Fund, a multi-donor fund administered by the regional lender.
Speaking on the agreement at the virtual signing, Mr Lamido Yuguda, the Director-General of SEC, said, “This collaboration further underscores our mutual goal to grow our markets and create viable avenues for sustainable economic development for Nigeria and the region.”
The grant is aligned with the priorities of the bank’s country strategy for Nigeria, which envisages measures to stimulate capital market development to unlock financial resources for productive sector investments, infrastructure development and private sector growth.
On his part, Mr Lamin Barrow, Senior Director of the bank’s Nigeria Country Department, noted the urgency of the implementation of the project.
“At a time when countries are striving to build back better from the ravages of the COVID-19 pandemic, improvement of the enabling regulatory and supervision framework will boost domestic resource mobilisation efforts and leverage private sector contributions to achieve a greener, more environmentally sustainable and inclusive post-pandemic recovery,” Mr Barrow said.
Adding his input, Mr Oscar Onyema, the Chief Executive Officer of the Nigerian Stock Exchange (NSE), thanked both the AfDB and SEC “for this historic event and partnership, to build in-house capacity at SEC, the Nigerian Stock Exchange, issuers and investors in the sustainable finance space, which will help to meet climate finance commitments in Nigeria.”
The project is expected to support the implementation of the SEC’s Nigeria Capital Market Master Plan 2015-2025 and its vision to position Nigeria’s capital market as a competitive and attractive destination for portfolio investments.
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