Nigeria

A judge in London said on Friday he would grant an Irish-owned company the right to seek to seize some $9 billion (€8.1 billion) in assets from the Nigerian government over an aborted gas project, The Irish Times reported. Process and Industrial Developments Ltd (P&ID) was awarded $6.6 billion in an arbitration decision over a failed project to build a gas-processing plant in the southern Nigerian city of Calabar. With interest payments, the sum now tops $9 billion – some 20 per cent of Nigeria’s foreign reserves.

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The collapse of the oil price that began in 2014 was bad news for Nigerian banks, The Economist reported. A quarter of their lending was to oil and gas firms. Many businesses were left reeling after a currency crisis. The economy stuttered, then plunged into recession. Before the oil slump just 3% of loans were not being paid back. By 2017 some 15% had gone sour. The oil shock underscored an old truth: in choppy waters, it helps to be a big ship. The country’s large banks made tidy profits and now sit on sufficient capital.

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Nigeria expects to raise around 750 billion naira ($2.45 billion) from tax defaulters by the end of the first half of this year, the country’s tax chief said on Tuesday. The OPEC member, which has Africa’s largest economy, in 2017 emerged from a recession brought on by low oil prices and authorities have in the last few years sought to boost non-oil revenues, Reuters reported. Crude sales make up two-thirds of national revenue.

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Abraaj Group, the private-equity firm that collapsed after defaulting on debt, will get a 70 percent stake in C&I Leasing Plc by converting a $10 million loan into equity in the Nigerian company, Bloomberg News reported. “Abraaj knows that pulling out $10 million will be detrimental to the growth of the business, so rather than cash out, they decided to convert,” C&I Chief Executive Officer Andrew Otike-Odibi said by phone from Lagos. Once done, C&I plans a rights issue or an initial public offering that may dilute Abraaj’s stake to about 30 percent, he said.

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Nigeria’s fourth-biggest wireless carrier 9mobile, formerly known as Etisalat Nigeria, repaid part of a loan taken from a group of banks following its acquisition by Teleology Holdings Ltd, Bloomberg News reported. “The money has been distributed to the banks,” Abiola Rasaq, head of investor relations at Lagos-based United Bank for Africa Plc, one of the institutions that received a payment, said by phone. The reimbursement is expected to improve the asset quality of the creditor banks that had classified the loan as non-performing, he said.

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The Nigerian government faces a daunting challenge to close a shortage of 17 million houses, Bloomberg News reported. Gripped by poverty, Nigeria has no formalized title-deeds registry and most homes consist of informal structures on land passed down through generations. Rapid urbanization is also causing a proliferation of slums and shanty towns. Buhari’s drive to clear a backlog of mortgage applications comes ahead of a tough re-election bid next year and as the economy struggles to recover from 2016’s contraction.

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Nigeria’s Finance Minister Resigns

Nigeria’s finance minister, Kemi Adeosun, has resigned following allegations that she used a forged certificate to avoid participating in the country’s mandatory year of youth service, the Financial Times reported. President Muhammadu Buhari accepted her resignation and appointed Zainab Ahmed, minister of state budget and national planning, to oversee the finance ministry in Africa’s largest economy.
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Rivers State Internal Revenue Service, RSIRS, has again sealed off the Port Harcourt head-office of Niger Delta Development Commission, NDDC, over alleged tax liabilities, disrupting activities at the commission, yesterday. The state government had in April picketed the commission for allegedly owing her withholding tax estimated at over N600 million according to the RSIRS chairman, Adoage Norteh, but the tax body had backed down after a settlement understanding was reached between parties, Vanguard reported.
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A consortium led by top oil trader Vitol has entered exclusive talks to acquire stakes in Nigerian offshore fields that are held by Brazil’s Petrobras and its partners, industry sources said, Reuters reported. The assets are estimated to be worth up to $2.5 billion, the two banking sources and one industry source told Reuters. The buyers are talking to state-controlled Petroleo Brasileiro SA, known as Petrobras, which is leading the sale, the sources added.
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Nigeria is reducing its domestic borrowing after government debt reached 22 trillion naira ($61 billion) in 2017, with most of it made up of high-interest, locally-acquired credit, the country’s debt office said. The government is working on a strategy to reduce domestic debt to 60 percent of the total, from 73 percent, Patience Oniha, director general of the Abuja-based Debt Management Office, told reporters on Wednesday, Bloomberg News reported.
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