Economy
Oyo, Chinese Firm Seal $2b Investment Deal
By Modupe Gbadeyanka
A $2 billion (about N636 billion) investment deal has been completed between a Chinese conglomerate, China Polaris, and the Oyo State government.
The deal, Business Post learnt, is for the establishment of a free trade zone for the manufacturing of automotive products, solar power generation, among others.
Governor of the state, Mr Abiola Ajimobi, disclosed on Tuesday during the turning of the sod to herald the construction work for the project, tagged Polaris-Pacesetter Free Trade Zone, located along the Lagos-Ibadan Expressway, Ibadan, expressed optimism that the project, which occupies a thousand hectares of land, would be ‘the new hub of African economy’ when completed.
He further disclosed that the first phase of the project comprising five factories is estimated to cost about N159 billion ($500 million) and is expected to be completed before the end of the first quarter of next year, while the entire project is expected to be completed in the next two years.
Mr Ajimobi described the event as the outcome of a journey of five years of intensive hunt for investors in core economic activities in his determination to achieve growth and sustained development in the state.
“During the period, I was in China for two weeks to seal the agreement, which culminated in the ceremony we are having here today (Tuesday).
“I’m happy to announce to the people of Oyo State that today berths the result of a five-year intensive hunt for genuine investors to come and partner us in the state.
“Polaris-Pacesetter Free Trade Zone is an industrial revolution with the total package of $2 billion investment aimed at pushing the state to the top notch, not only in Nigeria but in Africa.
“The multiplier effect of today’s ceremony is the imminent massive job creation and financial freedom for the government and the good people of our dear state,” he said.
However, Mr Ajimobi appealed to the Chinese investors to fast-track construction works at the trade zone, with the target of completing the first phase in the next three months.
Describing China as the fastest growing economy in the world, the Governor said that the industrial template to be propelled by the Polaris-Pacesetter Free Trade Zone would enhance agricultural, commercial, educational and infrastructural development in the state.
He was upbeat that the project would be a source of envy to states that border Oyo when completed.
The Governor said that the time had come for the state to add value to agriculture by ending the regime of wastages besetting the sector and the state’s natural resources.
President of China Polaris, Mr Zhang Wendong, and the leader of delegation, who is the representative of the Chinese government, Ms Zhang Xuemei, were among the top Chinese officials on the train.
Mr Wendong assured the state government of the investors’ irrevocable commitment to the Polaris-Pacesetter Free Trade Zone project, saying that the first phase of the project, which comprised of five factories, would gulp about N159 billion ($500 million).
He hinted that the conglomerate would ensure the completion of the last phase of the project within the next two years timeline that was proposed by the state government, which, he said, would include an assemblage of automotive products and production of solar energy to power.
He said, “Polaris-Pacesetter Free Trade Zone will encompass light, medium and heavy manufacturing lines of $2 billion. The first phase will cost $500 million, which will involve production and assemblage of vehicle parts and solar energy.
“We are targeting solar energy that will power the whole of Ibadan and its environs. This is the first of its kind in Africa and it will be replicated in other African countries.”
By Adedapo Adesanya
The price of Brent crude futures rose by 1.3 per cent or 99 cents to $79.27 per barrel on Thursday as banking crisis fears further eased and no resolution in sight yet for the cut-off of the flow of Iraqi Kurdistan oil to Turkey.
Also, the US West Texas Intermediate crude rose by 1.9 per cent or $1.40 to $74.37 per barrel as producers shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq following a halt to the northern export pipeline.
About 400,000 barrels per day have been cut off with the pipeline shutdown over an international arbitration ruling in favour of Iraq against Turkey, and this continues to put upward pressure on oil prices.
Likewise, fears that may linger about the potential broader economic impact in the aftermath of the failure of Silicon Valley Bank (SVB) and Signature Bank, as well as the share crash and rescue bid for giant Credit Suisse, and pressure on other regional banks in the US appear to be easing.
Also supporting prices was a Wednesday report from the US Energy Information Administration (EIA) that crude oil stockpiles in the world’s largest producer fell unexpectedly in the week of March 24 to a two-year low.
Crude inventories dropped by 7.5 million barrels, compared with expectations for a rise of 100,000 barrels.
These factors offset bearish sentiment after a lower-than-expected cut to Russian crude oil production in the first three weeks of March, as numbers showed that there was a 300,000 barrels per day production decline compared with targeted cuts of 500,000 barrels per day, or about 5 per cent of Russian output.
Markets are now waiting for the US spending and inflation data due on Friday and the resulting impact on the value of the US Dollar, which impacts oil prices.
Also driving oil prices Thursday have been statements ahead of a planned meeting of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) on Monday, where delegates have indicated that the 23-man cartel will likely stick to its current production cut plan.
Despite the low prices prompted in part by the banking crisis fears, analysts noted that OPEC+ would stay the course and not react by reducing output further.
By Aduragbemi Omiyale
The Nigerian Exchange (NGX) Limited witnessed the listing of N318.52 billion worth of securities in the first quarter of 2023, data from the X-Compliance report of the bourse has revealed.
This cut across equities, fixed income, mutual funds and derivatives categories.
The X-Compliance report is a transparency initiative of NGX designed to maintain market integrity and protect investors by providing compliance-related information on all listed companies.
Through the report, NGX ensures that it provides timely information to investors to aid their capital allocation decisions and enable a properly functioning capital market.
According to the report, NGX saw N11.23 billion in Federal Government of Nigeria bond listings which constituted FGN Savings Bonds with maturities ranging between 2024 and 2026.
Lagos State Government issued the only bond by a sub-sovereign entity with its N137.33 billion series 1V, 10-year 13%, Fixed Rate Bonds due 2031 under its N500 billion debt issuance program.
The corporate bond segment recorded N112.42 billion senior unsecured bond listing from Dangote Industries Funding Plc and N31.36 billion in Sukuk Issuances from Taj Bank and Family Homes under their respective Sukuk Issuance programmes.
FTN Cocoa Processors Plc and Neimeth International Pharmaceuticals Plc both did supplementary listings of N850 million and N3.68 billion of shares, respectively.
Africa Plus Partners Nigeria Limited also listed its mutual fund, Africa Infra Plus 1, the first Carbon Plus naira-denominated fund to be listed on the Exchange, at a market value of N21.65 billion.
NGX also continued to drive participation in its derivatives market with the listing of the NGX Pension index Futures Contract and NGX30 Index Futures Contract.
Recall that the Chief Executive Officer of NGX, Mr Temi Popoola, had noted that the Exchange had a renewed focus on listings for the year 2023.
“We will be using listings as a vehicle for meeting strategic aspirations as the new dispensation comes in through increased advocacy and engagements,” he had said.
By Adedapo Adesanya
Nigeria’s total public debt stock increased by 17 per cent to N46.25 trillion or $103.11 billion as of December 2022 from N39.56 trillion or $95.77 billion in 2021.
This information was revealed by the Debt Management Office (DMO) on Thursday.
This means that the country’s debt profile precisely increased by 16.9 per cent or N6.69 trillion or $7.34 billion within one year, as the government borrow funds from various quarters for its budget deficits.
The agency said the new figures comprise the domestic and external total debt stocks of the federal government and the sub-national governments (36 state governments and the Federal Capital Territory).
The DMO statement partly read, “As of December 31, 2022, the total public debt stock was N46.25 trillion or $103.11 billion.
“In terms of composition, total domestic debt stock was N27.55 trillion ($61.42 billion) while total external debt stock was N18.70 trillion ($41.69 billion).
“Amongst the reasons for the increase in the total public debt stock were new borrowings by the FGN and sub-national governments, primarily to fund budget deficits and execute projects. The issuance of promissory notes by the FGN to settle some liabilities also contributed to the growth in the debt stock.
“On-going efforts by the government to increase revenues from oil and non-oil sources through initiatives such as the Finance Acts and the Strategic Revenue Mobilization initiative are expected to support debt sustainability.”
“The total public debt to gross domestic product (GDP) ratio for December 31, 2022, was 23.20 per cent and indicates a slight increase from the figure for December 31, 2022, at 22.47 per cent.
“The ratio of 23.20 per cent is within the 40 per cent limit self-imposed by Nigeria, the 55 per cent limit recommended by the World Bank/International Monetary Fund, and the 70 per cent limit recommended by the Economic Community of West African States,” the debt office said.
