Economy
Rail Concession: FG Signs Deal With GE-led International Consortium
By Modupe Gbadeyanka
Nigerian authorities have signed an interim phase agreement with an international consortium led by General Electric.
With this deal, the group can now go ahead with the interim phase of the Nigerian narrow-gauge railway concession.
A statement issued by GE disclosed that the agreement was reached between both parties last Friday in Washington DC, USA, where Nigeria’s President, Mr Muhammadu Buhari, is having talks with President Donald Trump.
Initiated by General Electric (www.GE.com), the world’s premier digital industrial company, the Consortium is comprised of SinoHydro, a leading infrastructure construction services corporation, Transnet, a leader in transportation and logistics infrastructure management and APM Terminals, a global port, terminal and intermodal inland services provider.
In the interim phase of the rail concession, Remedial Works will be carried out on part of the narrow-gauge rail line system to make it technically and economically operable. Additionally, a joint operation will be established between the Consortium and the Nigeria Railway Corporation (NRC) with an initial supply of 10 locomotives and 200 wagons to augment the existing rolling stock in Nigeria.
This program is expected to deliver an increase in the number of available locomotives, thus increasing the frequency of passenger and freight rail services. In addition, freight haulage capacity by the end of the first 12 months of the interim phase is expected to increase roughly ten-fold, from its current less than 50,000 metric tonnes per annum to about 500,000 metric tonnes per annum.
Speaking on the occasion, Lazarus Angbazo, CEO of GE Nigeria said “GE is committed to the sustainable development of Nigeria and as such we are delighted to have reached this crucial stage of the project to revamp and revitalize the country’s legacy rail infrastructure system.
The consortium looks forward to commencing execution of this Interim Phase with the continued support of the Federal Government and the Ministry of Transportation. As operations begin, our strong partners, such as Transnet and SinoHydro, will bring their strong operating and development skills to the forefront.”
Following the commencement of the Interim Phase, the consortium will conclude negotiations with the Federal Government on the terms of the substantive phase of the concession agreement that will expand service to up to 200 locomotives and associated rolling stock. This will see to the comprehensive rehabilitation of Nigeria’s narrow-gauge rail infrastructure and the return of rail transport as a key element in enabling the country’s socio-economic development.
Chief Executive of Transnet International Holdings Mr Petrus Fusi said, “We are pleased to be a partner in this ground-breaking concession and look forward to the successful execution of the Interim Phase with the government and the opportunity to add value.”
Similarly, SinoHydro Chairman, Mr. Ding Zhengguo mentioned, “This announcement is a step closer to the opportunity to transform rail infrastructure and transportation logistics in Nigeria; a country with huge potential.” He added “We are very excited to partner with this resourceful consortium to deliver value.”
APM Terminals has been actively investing and participating in Nigeria’s logistics infrastructure since 2006, and we are proud to be a part of this project to improve access for the Nigerian hinterland to the global logistics chain.” – David Skov, Head of Terminals IMEA added to the statements.
According to the Minister of Transportation, Mr Rotimi Amaechi, “This milestone project is an unprecedented commitment by the Federal Government of Nigeria, which, combined with the GE-led Consortium’s drive to modernizing Nigeria’s rail infrastructure, will add immense value to Nigeria’s long term economic growth and productivity.”
“This will be an important catalyst for small and medium enterprises and a key provider of almost incalculable socio-economic benefits for the many Nigerian towns and villages through which the rail network passes,” he added.
By Adedapo Adesanya
Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.
The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.
Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.
The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.
Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.
During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.
InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
By Adedapo Adesanya
The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.
The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.
Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.
Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.
As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.
However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.
As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.
With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.
Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.
Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
The oil market was up on Friday on increasing expectations the US Federal Reserve will cut interest rates next week, which could boost economic growth and energy demand.
Brent futures rose by 49 cents or 0.8 per cent to $63.75 per barrel and the US West Texas Intermediate (WTI) futures expanded by 41 cents or 0.7 per cent to $60.08 per barrel.
Investors digested a US inflation report and recalibrated expectations for the Federal Reserve to reduce rates at its December 9-10 meeting.
US consumer spending increased moderately in September after three straight months of solid gains, suggesting a loss of momentum in the economy at the end of the third quarter as a lackluster labor market and the rising cost of living curbed demand.
Traders have been pricing in an 87 per cent chance that the US central bank will lower borrowing costs by 25 basis points next week, according to CME Group’s FedWatch Tool.
Investors also focused on news from Russia and Venezuela to determine whether oil supplies from the two sanctioned members of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) will increase or decrease in the future.
The failure of US talks in Moscow to achieve any significant breakthrough over the war in Ukraine has helped to boost oil prices so far this week.
A loss of Venezuelan oil production in case of a US military intervention will materially impact global benchmark prices as the market will have to replace Venezuela’s heavy crude.
Venezuela is estimated to pump about 1.1 million barrels per day of crude oil at present, so if the US-Venezuela tension escalation into an invasion in the South American country, this volume of crude would be at risk.
Reuters reported that the Group of Seven countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban in a bid to reduce the oil revenue that helps finance Russia’s war in Ukraine.
Any deal that could lift sanctions on Russia, the world’s second-biggest crude producer after the US, could increase the amount of oil available to global markets, weakening prices.
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