Nigerian property group Persianas is buying Shoprite’s business in Nigeria as the South African retailer retreats from other African markets, three banking sources told Reuters on Wednesday.
Shoprite, with more than 2,300 stores across Africa, is awaiting regulatory approval on the sale of its Nigerian supermarket operation, though no further details have been disclosed.
Banking sources told Reuters that Persianas Properties emerged as the buyer after a bidding process and the company is arranging debt for the buyout. The Palms shopping mall, Persianas’ flagship mall, houses a Shoprite store in the West African country’s commercial capital, Lagos.
Shoprite has more than 25 retail stores across Nigeria, including some of the largest in West Africa.
Persianas and Shoprite declined to comment on the deal.
MBO Capital and KPMG advised Persianas while FBN Quest, a unit of FBN Holdings, is arranging debt, the sources said, adding that Investec advised Shoprite.
Shoprite shares were down 1.20% by 0903 GMT.
South Africa’s biggest grocer has been reviewing its long-term options across Africa as currency devaluations, lower commodity prices and high inflation have hit household incomes and weighed on earnings.
This has led to the company exiting Kenya and Nigeria, restricting capital allocations to its supermarkets outside South Africa and instead investing that money in its home business to take advantage of its dominance in the discount grocery market and growing share in premium food.
Nigeria, Africa’s most populous country which has the continent’s biggest economy, is grappling with double-digit inflation. Galloping food prices have heaped financial pressure on households already faced with a shrinking labour market and a stagnant economy at a time of mounting insecurity.
Shoprite has said it is in the process of concluding a franchise agreement for the brand to remain in Nigeria as well as a services agreement to provide support to the new shareholders with operating the outlets.
“I want to make sure there are boost vaccines available in the fall so that we protect people as we go into the next fall and winter season in the U.S.,” Bancel said in an interview on “Squawk Box.”
The Food and Drug Administration’s approach to authorizing modified Covid vaccines is similar to that of annual flu vaccines, meaning they could be cleared for emergency use without lengthy clinical trials.
Massachusetts-based Moderna hopes to submit data to regulators within a few months, Bancel added. “Our goal is to work really hard to get this ready before the fall,” he reiterated.
Bancel’s comments came one day after Moderna announced its existing vaccine was more than 90% effective at protecting against Covid up to six months after the second dose. It was more than 95% effective against severe disease within that same time frame, the biotech firm said in its update, which could bring it closer to obtaining full regulatory approval.
There are currently 453 reported cases in the U.S. involving the B.1.351 variant, according to data compiled by the Centers for Disease Control and Prevention. That variant, in particular, has concerned public health experts. It’s been shown to reduce the effectiveness of existing Covid vaccines, including from Moderna.
“I anticipate in the next year or so, we’re going to see a lot of variants. But as more and more people get vaccinated or naturally infected, the pace of the variant is going to slow down and the virus is going to stabilize like you see with flu,” he said.
Eventually, Bancel added, Moderna hopes to be able to have a two-in-one vaccine of sorts that protects against seasonal flu and Covid. The company in September announced its intentions to make a flu vaccine.
“What we’re trying to do at Moderna actually is to get a flu vaccine in the clinic this year and then combine our flu vaccine to our Covid vaccine so you only have to get one boost at your local CVS store ... every year that would protect you to the variant of concern against Covid and the seasonal flu strain,” Bancel said.
“We believe we can get to a high efficacy flu vaccine,” he added. On any given year, current flu vaccines are roughly between 40% and 60% effective, according to the CDC.
Bancel also weighed in on U.S. regulators recommending Tuesday that states pause using Johnson & Johnson’s single-shot Covid vaccine after concerns arose around rare but severe blood clots developing in recipients.
The move shows “the FDA will not hesitate to be very cautious to analyze the data, to take the time required to do so, to protect the safety of the American people,” he said, contending that the way regulators are handling the J&J situation would reduce vaccine hesitancy not increase it.
Macau has moved a step closer to the potential introduction of a digital currency, as it seeks to better combat money laundering and tax evasion in the world’s biggest gambling hub.
The government plans to amend laws to regulate the issuance of a virtual legal tender, chief executive Ho Iat Seng told lawmakers Tuesday. The government will work with China’s central bank to “study the feasibility of issuing a digital currency,” he said.
Although no formal plans have been announced on whether or how a digital currency would be implemented, some junkets – businesses that act as middlemen for Chinese high-rollers who make up half the city’s gambling revenue – are worried the imposition of a traceable, government-linked currency will be the death knell for an industry already hobbled by the virus and stricter rules around high-stakes gambling. A number of casino operators have been approached by Macau’s regulator to discuss the feasibility of using a digital yuan to buy gambling chips, Bloomberg News reported in December.
The aim of introducing a virtual currency is to improve effectiveness in reducing money laundering, tax evasion and terrorism financing, according to Ho.
The plan comes amid a slow recovery from the slump in casino revenue caused by the pandemic travel curbs that kept lucrative Chinese gamblers away.
Casino analysts still need more details to evaluate the impact of the potential launch of a digital yuan. The mandatory use of a digital currency as the only option for buying gambling chips would be negative for Macau casinos, by essentially eliminating the junket system, according to an earlier note by Sanford C. Bernstein analysts, led by Vitaly Umansky. However, it would be a long-term positive, especially for the premium mass-market, if a digital yuan becomes one of the options that offer easier access to money in the city, the analysts said.
A Bloomberg index of Macau casinos rose 0.2% at the noon trading break in Hong Kong on Wednesday, trailing the benchmark Hang Seng’s 1.2% gain.
The People’s Bank of China has trialed a digital yuan in several cities, putting it on track to be the first major central bank to issue a virtual currency. A broader rollout is expected for the Winter Olympics in Beijing in February 2022, giving the effort international exposure. The development of a digital yuan has raised US concerns of a potential threat to topple the dollar as the world’s reserve currency in the long term.
SOURCE: The Edge Market
The UEFA Champions League semifinal fixtures are out, pithing former Spanish giants Real Madrid against Chelsea and French champions Paris Saint Germain (PSG) against Manchester City.
Both matches are to be played on Tuesday April 27th with Real Madrid and PSG hosting the first legs of both ties.
While PSG avenged their last season’s final loss by knocking out defending champions Bayern Munich (agg: 3-3) by the away goals rule, Chelsea knocked out Porto.
Yesterday, Real Madrid held their nerves to force a 0-0 draw thereby knocking out Liverpool by 3-1 aggregate scoreline from the first leg. Manchester City ended Borussia Dortmund’s dream by beating them 4-2.
The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has called on governments and individuals to adopt digital money for “faster, easier and cheaper” remittance and cross-border payments.
Georgieva stated this at a virtual workshop on how digital money can facilitate remittances. At the meeting, she spoke extensively on the potential of decentralised money to increase remittance flows to developing countries and “reshape cross-border payments”.
The IMF boss’ call came on the heels of the historic disruption of the traditional payment by digital currencies. The disruption is considered a major threat to traditional payment channels.
Georgieva said the adoption of digital currencies as an option for sending and receiving money is a “revolution” that leaves many countries with little or no choice.
“Last October, The Bahamas launched the Sand Dollar, the world’s first central bank digital currency. Many other economies are exploring their pilot programmes. Other forms of digital money, such as privately issued stable coins, are increasingly being used for cross-border payments. We are witnessing a revolution in digital money that could make remittances easier, faster and cheaper,” she said.
According to her, a cheaper remittance transfer would help poor households across the world to cope with the impacts of COVID-19 and the danger “we face from growing divergence across countries”.
Divergences in access to vaccines, in recoveries from the pandemic and access to a digital future, she noted, are key challenges the world must find a smart way to address, stressing that remittances have always played a key role in improving the lives of people in developing economies and supporting economic activity.
“As we look for ways to address the challenges of economic divergences across countries, we need to use every tool we can to support those most affected by the pandemic. And with the risk of a growing digital divide between rich and poor countries, we must also ensure that all countries benefit from the latest innovations in digital money and payments, particularly remittances,” she said.
The IMF chief executive said that “new forms of digital money could provide a parallel boost to the vital lifelines that remittances provide to the poor and to developing economies”.
She said the right frameworks are required for peer-to-peer transfers of central bank digital currencies or privately-issued stable coins, which “could lead to shorter payment chains, faster transactions and more competition among remittance providers”.
She said the biggest beneficiaries would be vulnerable people sending small value remittances: those most at risk from being left behind by the pandemic.
Georgieva added: “With such digital disruption, however, also comes risk. We can address the risks posed by digital money by focusing our efforts on three areas. First, new forms of money must remain trustworthy. They must protect consumers, be safe and anchored in sound legal frameworks, and support financial integrity.
“Second, domestic economic and financial stability must be protected by carefully designed public-private partnerships that underpin the provision of digital money, including fair competition. Third, frameworks should be geared toward ensuring the international monetary system remains stable and efficient.”
She said the world must do everything to build a payment system that works for all countries and avoid a “digital divide”. She suggested that reserve currency configurations and backstops would necessarily evolve smoothly.
The IMF, she noted, would offer itself as a transmission line of best practices, capacity building and policy development as the world transitions into a decentralised money era.
“With our mandate to safeguard monetary and financial stability, the IMF has an important role to play in supporting our members to deliver on these priorities, and we are ramping up our capacity. In doing so, we will continue our close collaboration with key stakeholders – including the Financial Stability Board, the Bank for International Settlements, the World Bank and industry players and each must leverage its comparative advantages,” she noted.
The rumoured presidential bid of Bukola Saraki, former Senate President, is already causing ripples in Nigeria’s major opposition party, the Peoples Democratic Party (PDP), Daily Independent reports.
Even though he has not signified intention to contest, Saraki, who came third behind Sokoto State governor, Aminu Tambuwal, and former Vice President Atiku Abubakar (the eventual winner) in the 2018 presidential primary of the PDP is said to be nursing the amin Port Harcourt, Rivers State, bition to occupy the highest political office in the land in 2023.
In November 2020, Saraki, a former two-time governor of Kwara State, was appointed as the chairman of the PDP’s Reconciliation and Strategy Committee with the main responsibilities of reconciling aggrieved members and wooing new members into its fold ahead of the 2023 general elections.
The efforts of the committee, which crisscrossed the length and breadth of the country and held meetings with various stakeholders, paid off with successes recorded in the just concluded zonal congresses, especially in the South-West where the two major gladiators, Governor Seyi Makinde of Oyo State and Ayo Fayose, immediate past governor of Ekiti State, embraced and pledged to work together for the success of the party.
This earned the Saraki-led committee praises from notable stakeholders in the party, particularly from Chief Olabode George, a former deputy national chairman of the party.
However, tongues were set wagging early this week when campaign posters announcing Saraki’s presidential aspiration flooded the streets of Abuja.
Some party members said Saraki shouldn’t contest as his position as the chairman of the reconciliation committee had given him an edge over other likely aspirants in the race.
This was the opinion of a party chieftain from the North-Western state of Kano, who asked not to be named.
He said: “Yes, Saraki did a great job with the reconciliation process but I believe he should be barred from contesting for presidency in 2023.
“That position, which allowed him to meet with our party members across the country, has given him an edge over others and, to me, that is unfair.
“I am not the only person who holds this view in the party.”
Efforts made to reach Alhaji Yusuph Olaniyonu, Saraki’s media aide, proved abortive as at the time of going to press.
However, a former federal lawmaker from Kwara State, who spoke on condition of anonymity, said the argument that Saraki could not contest based on his position as the reconciliation committee chairman was not valid as that was not part of the conditions given to him by the party leadership.
According to him, having served as a governor for two terms and Senate president, Saraki is eminently qualified to occupy the highest political office in the land if he so desires.
“That argument does not hold water because the party did not give him that condition that being the chairman of the reconciliation committee excluded him from seeking the PDP’s presidential ticket,” he said.
Going down memory lane, he said there was nothing wrong if Saraki benefitted from his efforts in putting the party in good shape ahead of the 2023 presidential election, as it was the case with Richard Nixon, a former president of the United States.
He added: “If they claim his being chairman of the reconciliation committee would help his chances, there is nothing wrong in that because you can only contest on a platform that is strong to win.
“Also, if you look at the story of former President Richard Nixon of the U.S., you will see that people appreciate those who sacrifice their time and resources in making their party stronger so as to win elections.
“You know, he (Nixon) was vice president to Dwight Eisenhower from 1953 to 1960.
“He then contested the presidency in the 1960 elections and lost to John Kennedy.
“He went back in 1962 to contest for the governorship of his state, California, and he lost again to Pat Brown of the Democratic Party, who was then the incumbent governor.
“After that, he shifted his attention to rebuilding the Republican Party. He would campaign for the party’s candidates in all elections.
“He was a damn good campaigner and smooth talker. By 1968, the party leaders saw him as the Number One Republican and they gave him the party ticket.
“He defeated incumbent vice president, Hubert Humphrey, in the presidential election and went on to win pre-election in 1972.
“He was, however, forced to resign in 1974 due to the Watergate Scandal.
“So, if PDP leaders believe Saraki has done well to reposition the PDP ahead of the 2023 presidential election and feel he has what it takes to get the party ticket, why not?”
Also speaking, a member of the party’s Board of Trustees (BoT), who also spoke off-record, said Saraki’s position as reconciliation committee chairman does not clash with his presidential ambition if he decides to run.
“How is he conflicted? He has a right to run. Is chairing a peace committee an elective party office?
“Those saying he is ineligible to run because of his current role in the party are talking balderdash.
“In any case, in discussing peace, ambition is pushed behind. So, what are they saying? Individual ambition has never been on the card,” he said.
Kola Ologbondiyan, the PDP’s National Publicity Secretary, said it was too early for anyone to say whether someone was eligible or not to contest as the party was yet to decide where it would zone the presidential ticket to.
“How do they know if he (Saraki) is ineligible to contest or not? The party is yet to decide where we will zone the presidency to.
“After that is done, that is when we can say whether somebody is eligible or not.”
Also reacting to Saraki’s campaign posters, he said: “On the issue of the campaign posters, we don’t know those behind it, though we have had cases in the past where posters were posted on behalf of people and pasted without the knowledge of the person they claim is contesting.”
“I think the media aide of the former Senate president has denounced the posters as the handiwork of mischief-makers.
“But as far as we are concerned in the party, our focus is on our off-season elections.
“We are concerned with engendering unity and peace among our members and leaders, and we are also concerned about reconciliation.
“These are the challenges before the party now and these are what we are working on.”
Five days after Edo State Governor, Godwin Obaseki, released a bombshell, saying Nigeria was in huge financial trouble after the Federal Government printed N60 billion as part of federal allocation distributed to states for March, the Presidency yesterday described the statement as complete falsehood.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, at a briefing after the 41st virtual Federal Executive Council meeting chaired by the Vice President, Prof. Yemi Osinbajo, described the governor’s claim as very sad and untrue.
According to her, monies distributed at Federation Account Allocation Committee (FAAC) are revenues generated from the Federal Inland Revenue Service (FIRS), Nigeria Customs, Nigerian National Petroleum Corporation (NNPC), adding that revenue distribution is information that can be publicly accessed at the ministry’s website.
“The issue that was raised by the Edo State governor, for me, is very sad because it is not a fact. What we distribute at FAAC is revenue that is generated and in fact, distribution revenue is public information. We publish revenue generated by FIRS, the Customs, and the NNPC and we distribute at FAAC. So, it is not true to say we printed money to distribute at FAAC. It is not true,” she said.
The minister added that despite Obaseki’s alarm over the country’s rising debt profile, the nation’s debt was still within sustainable limits. “On the issue of the borrowing, what we need to do, as I have said several times, is to improve our revenue to enhance our capacity to service, not only our debt obligations, but the needs of running government on day to day basis. So, our debt, currently at about 23 per cent to GDP, is at a very sustainable level. You can look at all the reports that you see from multilateral institutions, those facts are stated.”
ACROSS the world, many times, governments have two basic choices for financing their deficits: they can borrow (issue debt) or raise taxes. And with economists estimating that the coronavirus recession will cost the world’s governments more than $11 trillion, governments are looking towards a third option, which is the unconventional ‘ways and means’ of printing money.
In a recent paper in the Yale Journal of Financial Crises, the third option was proffered where central banks were advised to consider bona fide debt monetisation – money printing – to help their governments cover some costs.
Money printing, more technically known as monetisation or “money-financed fiscal programmes” occurs when the government finances itself by issuing non-interest-bearing liabilities. Those liabilities could be currency or they could be reserves that banks hold at their central bank.
BUT despite the disclaimer, economists and financial experts have warned that Nigeria faces the risk of falling off the fiscal cliff if the Federal Government continues its reckless reliance on ‘Ways and Means’ to fund its widening deficits. The experts said Obaseki’s revelation reflects the sad reality of the economy and that the future appears increasingly bleak except the trend is reversed.
While every country prints money, the experts are concerned that with an inflation rate that is tending towards 20 per cent and extremely low productive capacity, the economy cannot absorb a reckless money supply expansion.
Reacting to the controversy, Dr. Bongo Adi, an economist at the Lagos Business School, said it is difficult to determine the extent of mess Nigeria’s ‘Ways and Means’ financing has caused as nobody knows the amount printed so far. He, however, warned that the economy cannot bear an unrestrained expansion of the money supply, which he blamed for the current stagflation and associated challenges.
He said Nigeria faces the risk of hyperinflation on a medium to long-term basis except the trend is reversed. “The economy is shrinking while the inflation rate is extremely high. There is also a high unemployment rate just as taxes are a serious burden. When you go ahead to print money, you are complicating the issue. That is what the current challenge has caused,” he said.
But Ken Ife, a professor of economist and consultant to the Economic Community of West African States (ECOWAS), said Obaseki’s allegation should be taken with a pinch of salt as every country prints money at some point “as long as the underlying conditions” are met.
According to him, the N60 billion the governor accused the Federal Government of printing in March amounts to less than 10 per cent of the money the federating units share monthly and par into insignificance when weighed against the country’s gross domestics product (GDP). Ife said the country’s economic fundamentals are strong, hence the bond listing for the first quarter was oversubscribed.
On how the alleged printing of money would affect inflation, the economist attributed the increasing inflation to cost-related issues, over-reliance on importation and insecurity. He referenced the high differential between core and food inflation to the role banditry and kidnapping plays in the rising inflation.
Ife argued that money supply contributed only about 20 per cent to the inflation. With the current high unemployment rate, he argued that it was illogical to attribute the high inflation rate to demand and high money supply.
Another economist, Johson Chukwu, said the Central Bank of Nigeria (CBN) has been providing financial support to the Federal Government to boost its revenue and that the government has overdrawn its account with the monetary authority. Chukwu, who described the fiscal situation as precarious said the country’s revenue could not support its total debt and that something urgent must be done to boost income generation.
He pointed out that the fiscally unsustainable development, is contrary to the government’s pledge to deploy all borrowed funds to the development of critical infrastructure to expand the productive capacity of the economy.
Chukwu noted that with the dwindling revenue and increasing debt profile, the government must hasten to tackle the economic challenges by providing the infrastructure to Nigerians to walk their way up to a better future.
“Government is in a difficult position. That the government prints is a statement of fact but what I cannot vouch for is how much that is involved. The CBN has been providing financial support to the Federal Government but that support has been overdrawn.
“Assuming the figure the governor quoted is correct, the figure is not up to a quarter of what it borrowed last year. The government borrowed N5.3 trillion at the end of November 2020, it could only borrow N2 billion by the issuance of the bond and the balance from the CBN. Government must recognise that it does not have revenue profile to fund infrastructure,” he said.
Hence, he urged the government to seek alternative funding sources for infrastructure development, noting that the amount available for allocation for infrastructure development is abysmal.
“Government must look for alternative funding sources for infrastructure development and the best way is to hand over the management of infrastructure to the private sector to expand the economy. We should also reduce the consumption of items that are not critical to local economic growth,” he advised.
Also speaking, a professor of capital market at the Nasarawa State University, Uche Uwaleke, said Nigeria cannot afford uncontrolled printing of the currency to finance the budget because the economy cannot absorb it.
According to him, the United States, Japan and other developed economies can engage in quantitative easing given the low inflation rates in those economies.
He insisted that the continuous resort to Ways and Means would worsen inflationary pressure and lead to further depreciation of the naira because the production capacity is low.
However, Sheriffdeen Tella, a professor of economics at Olabisi Onabanjo University, said printing of currency is the most reliable but inflationary way of financing deficit after all other sources have dried up.
“I am not sure Nigeria’s economy is that bad to warrant printing of currency to finance the budget deficit. It is the most inflationary way of financing deficit after all other sources have dried up.
“I suspect the CBN has been using treasury bills proceeds to finance the government. To monetize oil proceeds or change bad currencies, the CBN would need to print new notes. Maybe that is what the governor meant,” he said.
MEANWHILE, the Senate Committee on Public Accounts has summoned the Minister of Finance, Ahmed Zainab, and Accountant General of the Federation, Ahmed Idris, over secret withdrawals of N7.5 billion from the two per cent National Automotive Design and Development Council Levy Account domiciled with the Central Bank of Nigeria (CBN).
The report indicated that first N3.8 billion was withdrawn in two installments of N2.8 billion in 2005 and N1 billion in 2006. This was contained in the report of the Auditor-General of the Federation, which is being considered by the Senate committee, chaired by Senator Matthew Urhoghide.
The second N3.7 billion, the report said, was withdrawn between March and December 2000 in three separate payments of N725 million, N1 billion and N2 billion.
When the Committee asked the Director General of National Automotive Design and Development Council, Jelani Aliyu, about the withdrawal, he said the money was withdrawn without the knowledge of the agency. He said the Agency has been writing to the Accountant General and Ministry of Finance on the need to refund the money but there was no response.
Apparently piqued by the development, Senate Committee on Public Accounts resolved to summon the Minister of Finance and Accountant General of the Federation to give explanation on the fund.
SOURCE: The Guardian
Yobe Governor Mai Mala Buni on Wednesday married Gumsu Sani Abacha in the Federal Capital Territory (FCT).
The marriage was held at the Abuja residence of the new wife’s brother, Mohammed Abacha.
Buni is the All Progressives Congress (APC) Caretaker National Chairman; Gumsu is a daughter of former Head of State, Sani Abacha.
Notable personalities and government officials, including the Comptroller-General of the Nigeria Customs Service (NCS) Hameed Ali attended.
In 2019, shortly after he assumed office, Buni tied the knot with Ummy, a daughter of his predecessor and incumbent Yobe East Senator Ibrahim Gaidam.
Gumsu, 45, is the governor’s fourth wife. Her marriage to Cameroonian multi-billionaire, Bayero Mohamadou crashed in 2020.
In the last one year, Cross River State chapter of PDP has been in the eye of the storm. The party, hitherto known for peaceful co-existence among party faithful and in the conduct of party affairs, has been enmeshed in litigations, leading to unending enmities among the key political actors. These actors have been torn apart as they are engaged in the ding-dong battle for the control of party structures ahead of 2023.
All these have led to obvious factionalisation in character, actions and in words as evident in the plethora of court cases and judgments emanating therefrom. The bellicose supporters are seen these days in political and even in social gatherings, fighting and quarrelling than playing the game according to the rules.
The National Working Committee, NWC, of the party is in between the devil and deep blue sea arising from their inconsistencies in pronouncements regarding the contentious and vexatious congresses and the outcome of Cross River North senatorial by-election, which has become inconclusive of sort.
Ayade’s dancing-on-the-fence politics
Recently, Ayade’s highfalutin speeches in any gathering or event are usually an omnibus look at the issues confronting the party in the state. In any political forum especially, Ayade offers profound insights into what he wants and looks towards getting from the PDP leadership at all levels.
But more worrisome is the recent outbursts during the Bauchi Governor, Alhaji Bala Mohammed’s visit to Cross River in March 2021. Ayade cashed in on the visit and lashed out at the PDP national leadership for what he described as injustice meted to him. According to him, the party has refused to “hand over the party structures to him after leading it to a successful outing in 2019 general election and, therefore, frowned at moves by some external forces to cause problems and disunity in the party. He threatened to take a drastic action that may not augur well for the party if the national PDP leadership don’t retrace their steps.
In a diatribe about how unfair the party has been to the state, he said: “I have always played politics with ethics, but in the course of time, I have realised that ethical politics is mistaken for weakness. Time has come when we will put our foot down and take a decision on the basis of which will prosper their collective well-being”.
”I cannot blind myself to the challenges of PDP and decide not to know what to do at the right time for their sake. So let me say this as a very clear warning. I am a very smart person, but I carry humility.
“One single injustice, they will see a new Cross River State. I say it as a warning because it thus appears that your party (PDP) seems to celebrate people who threaten and stress them. Today, I am seated and dancing on the fence”.
”All the councillors, chairmen, commissioners, House of Representatives members, Senators are all PDP apart from one and all of them under my leadership into the elections. So, it is not now that somebody can discuss what structures and strategy I need,” adding that “time has come where all of us will gather and say enough is enough.”
Also speaking at the solidarity rally in his support organised by the 18 chairmen of the councils, Ayade said the social contract he signed with the people was to lift Cross River out of the doldrums and pledged to continue to create jobs through industrialisation.
He expressed concern over the influence of external forces in the state’s politics, enjoining Cross Riverians to unite and protect the state and its infrastructure from divisive and destructive agents.
A visibly excited Ayade said the solidarity rally came to him as a surprise as he had no inkling of it and commended the council chairmen for standing with him.
Lending support to the ‘dance’, the chairman of Akpabuyo council and chairman of the chairmen, Emmanuel Offiong Bassey, said they would swim and sink with Ayade until justice is seen to have been done.
Bassey: “Since God sent Governor Ayade to salvage the state, Cross River people would support his move, programmes and policies to the end. Ayade‘s administration is a grassroots movement that is ready to swim and sink with the governor in his political voyage.
“We, the eighteen council chairmen have come here with one hundred and ninety-six councillors and hundreds of other political office holders in the council in solidarity with the purposeful leadership you have provided and assure you of our continued support.
“Therefore, anyone who does not work for the good of the state should have a rethink. With the rally, we are sending a message that we are behind Ayade and we will stop at nothing to ensure that we give him necessary support to succeed.
“Our leader should go to sleep because his foot soldiers are on ground. Ayade is the leader of the PDP in Cross River State and whosoever plays with this fact does so at his or her own peril,” he stated.
Senior Special Adviser to the governor on political matters, Peter Ojie, said Ayade’s ability to industrialise the state in spite of lean resources, showed competence.
He added that “the rally is also meant to demonstrate that the support we gave him in 2015 and 2019 was not in vain,” appealing to all Cross Riverians to continue to support the governor so that he can finish strong”.
Even the 7-ALIVE group has joined the dancing-on-the-fence-song. The group made up of the seven local government areas of the South senatorial district of the state, has declared absolute loyalty and support for the governor just as they made a clarion call that it would be a disservice and a political miscalculation to deny Ayade the party structures in whatever guise.
Speaking on behalf of the group in one of the interviews, the former PDP state chairman, Ntufam Achort Okon, recalled that during the past administrations of Donald Duke and Liyel Imoke, they were totally in charge of political power including party structures, wondering why Ayade’s case should be an exception. Okon, therefore, advised the NWC committee to retrace its steps on the issue of who leads the party as anything to the contrary may spell doom for the party in the state.
However, others view the governor’s statement as not only being combative and an affront to the party that brought him to limelight, but a clear signal that defection is imminent. They argue that the present deposition of the governor is not surprising as he (Ayade) plays APC in Abuja and PDP in the state. They, therefore, further argued that defecting to APC is long overdue considering his body language all this while. To them, Ayade’s sitting on the fence is an old story as they had expected the governor and his supporters to stop organising rallies and holding nocturnal meetings with some critical stakeholders across the country and just take a causal amble through to another party.
Kicking against the rally and dance-on-the-fence, a party stalwart from Obanliku local government area, Ntufam Justine Agba, said PDP in the state is like a catholic church which has branches in all the villages in Cross River and therefore an indispensable party.
Agba, a former chapter caucus member of PDP, said pouring invectives on party leadership and perceived political opponents have become otiose, calling on Cross Riverians to stand with PDP amid speculations of massive defection.
He blamed the PDP NWC for their prevarications on the issue of ward and chapter congresses as well as Cross River North senatorial by-election until courts gave the final seal and the state congress, calling on them to stand firm and implement all court decisions and take necessary steps towards ensuring party discipline.
He further called on the like of former governor Imoke and other senior citizens to stop sitting on the fence with Governor Ayade and had better wade into the rifts in the party as the ‘dance-on-the-fence may eventually consume everybody and destroy the legacies laid down and gains the party had recorded in the past twenty-one years.
Describing the latest moves by the governor as expected having lost the structures, Bassey Bassey Asuquo, from Calabar South, said: “the like of former Vice President Atiku Abubakar, former Senate President, Bukola Saraki, former Governor of Kano state, Rabiu Kwankwaso, and recently Jerry Gana left for APC and saw light and returned. So, we advise the governor to also go there and experience a different political setting just as Governor Dave Umahi of Ebonyi has just done.
Bassey said: “All these sponsored rallies and sitting on the fence are geared towards Ayade’s senatorial ambition ahead of 2023. He is an open secret that the governor wants to return to the Senate after leaving Peregrino Government House, Calabar in 2023.
“Rather than appealing to his people and work towards it in a manner that would not throw up much blood and disunity among the North, he decided to intimidate every perceived opponent and throw darts at the party hierarchy.”
Contending that the governor’s outburst could send the wrong signals to those who are ignorant of the goings-on in the state PDP, Jarigbe Agom Jarigbe, representing Ogoja/Yala Federal constituency, in a statement made available to journalists in Calabar, wondered how the governor played politics of ethics when he (the governor) handpicked those to be ward and chapter executives to the exclusion of National Assembly members, some stakeholders and some serving commissioners.
Explaining how he was treated with levity when he complained of moves to impose party officers in his own ward and local government, Jarigbe stated that it was a premeditated move to throw them out of the politics even when they were in the forefront of Ayade’s emergence as governor.
Maintaining that the claim of ethical politics does not hold waters as the party was not run in tandem with what Ayade inherited, the lawmaker said: “As the leader of the party, the governor has been unjust as he appropriates every opportunity to suit him.
“We are in a democracy and this affords us the opportunity to challenge non- participatory and dictatorial decisions. We did not give you the party as a franchise. As leader of the PDP in CRS, the governor is not a franchisee. We got stakeholders.”
Recalling an old aphorism that he who goes to equity, must go with clean hands, Jarigbe said: “We cannot be fooled. The way forward is to come back as a family and discuss. No one intimidates anyone in a democracy just as they are natural laws that govern our co- existence as humans, not money, contacts or power.”
Political observers react
No doubt, Ayade’s stance has been viewed with mixed feelings by watchers of state’s politics. Some agree wholeheartedly that the foregoing statements lend credence to the fact that PDP in Cross River is at the verge of implosion; as a posteriori that Ayade is set to leave PDP if his demands of handing over party structures to him, as was the case with his predecessors, are treated with levity.
To them Ayade’s statements, actions and inactions so far are ventilations of his turbulent mind and innermost feelings at the moment, which should not be toyed with as the leader of the party. Therefore, the now popular Ayade’s-dance-on-the-fence-song is akin to macabre dance, which is a signal that the party maybe singing its Nunc Dimities ahead of 2023 if all the critical stakeholders failed to rise to the occasion.
However, others view the governor’s statement as not only being combative and an affront to the party that brought him to limelight, but a clear signal that Ayade’s defection is imminent. They argue that the present deposition of the governor is not surprising as he (Ayade) plays APC in Abuja and PDP in the state.
They, therefore, further argue that defecting to APC is long overdue considering his body language all this while. To them, Ayade’s sitting-and-dancing-on-the-fence is an old story as they had expected the governor and his supporters to stop organising rallies and holding nocturnal meetings with some critical stakeholders across the country and just take a causal amble through to another party.
On Tuesday, the French Minister for Foreign Trade and Attractiveness, Mr Franck Riester was in Lagos for the unveiling of the Full Flight Simulator at the Maintenance, Repair, Overhaul (MRO) and training facility of Caverton Helicopters. With that, the Thales Reality H full-flight simulator, regarded as one of the most advanced commercial helicopter simulators in the world, is now operational at the company’s Ikeja base. The first Level D full flight simulator in Africa allows pilots to train in complete safety for a variety of complex situations, including adverse weather conditions, helicopter failures and such other emergencies that could occur during flight operations. Besides, it will not only provide the needed services to helicopters that operate in Nigeria, it will also save our country over $500 million foreign exchange in maintenance, training and spares annually.
Peter Hitchcock, Vice President of Training & Simulation at Thales, said that working with Caverton, despite uncertainties brought about by the COVID-19 pandemic, “We have safely finalized the shipping, commissioning and acceptance of the first level D full flight helicopter simulator in Africa, representing a major milestone in the continued effort to improve the efficiency and safety of flight operations.” This was reaffirmed by Riester who represented the French government: “This amazing simulator is another illustration of a success story between France and Nigeria and the strength of the partnership between Thales and Caverton. Supported by Bpifrance on export credit, this project involves unprecedented top technology at the scale of Africa, allowing Nigeria to fulfill its ambition to become the training hub of the region.”
Having followed the business trajectory of Caverton for the past 16 years, I am delighted at what has turned out to be a Nigerian success story. It all started in 2005, at the prompting of Mr Tayo Amusan who said “Segun, you cannot only be using your popular column to attack (President Olusegun) Obasanjo every week; you need also to look at the business environment and begin to promote game-changing entrepreneurs in our country. Come and see what I am doing at The Palms. There is a change of guards going on.” That was how I started the monthly series titled ‘The Change of Guards’ where I first featured The Palms Shopping Mall (which houses the first Shoprite in Nigeria) before I wrote on the acquisition of the United Bank for Africa (UBA) by Mr Tony Elumelu’s Standard Trust Bank (STB) at about the same period. But of all the companies I profiled at that period, it is Caverton Helicopters (then about three years old), that has refused to let me go. The chairman, Mr Remi Makanjuola, insists that I am part of their success story, having given them unsolicited but major media exposure at a time of small beginning.
Now with operational bases across Nigeria and Cameroon and a staff strength that includes about 200 pilots and engineers, the company has been able to provide a wide array of services to the offshore oil and gas industry as well as other business sectors including marine and coastal surveillance, emergency medical evacuation, search and rescue. From one Agusta 109 Helicopter in September 2002, Caverton currently operates a mixed fleet of 24 modern aircraft across multiple locations in West Africa. And since inception, Caverton has successfully operated for major International Oil Companies with a combined contract value of over $2 billion.
Makanjuola has no doubt done well with Caverton but one man who deserves to be proud is Mr Babs Omotowa, former Chief Executive Officer and Managing Director (CEO/MD) of Nigeria Liquefied Natural Gas (NLNG) Limited. Omotowa spent 18 years at Shell where he reached the peak as Vice President for Shell companies across Africa, responsible for Infrastructure, Logistics, Health Safety and Environment. He was the person who, in applying the local content law, took perhaps the biggest gamble of his career that has now paid off in spades. There are several lessons from the story but for me the most significant is that we must create an enabling environment for our entrepreneurs to thrive. That is the only way to create wealth and take many of our young people off the street.
Back to Omotowa. At Shell, one of the portfolios he managed was helicopter services to the company’s platforms and locations. As he explained in a recent interview, “We had this helicopter contract that had been with an international company for decades. They had been running that helicopter contract long before I joined Shell. They became a monopoly, and they were milking that. They would usually come with increases, and it was ‘take it or leave it’, and I felt this was not the right way to run a company. At the same time, I thought, ‘why don’t we even have local companies who could do this service?’ Considering that transporting people in helicopters was high risk, and we didn’t have Nigeria companies working in the oil industry at that time, I decided to work with my team. I said, look, let’s find the best Nigerian companies. Let’s encourage them to invest in themselves, find overseas partners, and stand the test of what an oil company will require in terms of standards. And as we were working with these local companies, two of them took the challenge. They found partners in Denmark and Canada and started to develop their management system, their technical capacity, and all of that. At some point, we felt that they had started to have the kind of capacity that we could make use of.”
Omotowa continued: “So, I got the Shell technical authority to come and audit and assure that they can perform to the sort of challenges that we had in the oil and gas industry. And so our experts came from London, assessed them, and they passed the companies that they could indeed provide the services with the partnerships they had formed. So, we went for a tender, and as I expected, the incumbent did not win because they had become quite expensive. The first time they were facing competition, they didn’t win. So, this local company won, and of course, it became a pause time for everyone. Now that the local company has won, what’s going to happen? Of course, it was evident to me what was going to happen. We were going to go forward with that company. They had won the tender. We had assessed them. So, when I started the (contract) award I was summoned to my boss’ office. He was an expatriate who had just resumed about a few months before. He asked me about the contract. First, I said, ‘you must be asking because someone was asking since you’re relatively still new’. He said, ‘yes, there’s a concern from the aviation team in the head office’. I said, ‘well, they cannot be concerned because I called them in to audit this company and they gave a pass mark, so I have their approval of the company as capable. Then he said, ‘but Babs, you know this is a high-risk area and this company has never worked in the oil industry, why would you want to go forward?’ and I said, not only am I prepared to take the risk and go forward, I am also even going to ask for more things. And he said, ‘what do you mean?’ I said, ‘I have looked at their plan. They plan to lease helicopters for the seven-year contract’. I said ‘that’s not acceptable. I want them to buy helicopters. But they cannot buy helicopters because they don’t have enough funds. So I am going to ask Shell to lend them the money to buy new helicopters’. He said, ‘Babs, you must be out of your mind, I have not even accepted that we should go forward with this contract, and now you’re asking for more!’
That unnamed company is Caverton Helicopters.
Demonstrating what a Nigerian with character in the right place at the right time can achieve, especially while working with multinational companies in the country, Omotowa decided he would not allow Caverton to be muscled out: “I said, ‘There is absolutely no reason not to go forward. They have been assessed, and they have provided the best bid. It fits into our Local Content Development Plan as a company. We’ve been working here for 56 years. We cannot continue to say a local company cannot provide this type of service’.”
That was how Omotowa convinced Shell to secure a loan of $85 million to enable Caverton to purchase, rather than lease, helicopters after the company had won the bid for a logistics contract in the sum of $630 million. “Of course, when I first brought the proposal everybody refused. The finance team in the head office refused and I justified why we had to lend them money. One, it was for our own safety. Two, we had committed as a company to develop local capacity, so why not put our money where our mouth was?” he asked. “They said ‘but you know this is unprecedented for a company to lend a contractor money. Besides, this is Nigeria and the risks are too high; they won’t pay back’. I said they will pay back because I have asked them to bring a bank guarantee. So if they default, we will call on the bank guarantee.’”
With that $85 million, Caverton purchased six aircraft, paid back the loan and from there began to expand not only within the country but also across West Africa. And Omotowa feels justified: “The company ran for seven years, there was no accident. The safety performance was about the best in the industry, and their service performance was better than the previous company and they repaid back all the money within the seven years we wanted. Not only did they do that, they developed capacity, they went on to win contracts of other international oil companies (IOCs) in Nigeria. They even won contracts of IOCs outside Nigeria. Now we have a local company that is able to provide that service to Nigerian companies.”
What is particularly instructive is that Omotowa took the decision following the formal enactment of The Nigerian Oil and Gas Industry Content Development (Local Content Act) 2010 which states that “all regulatory authorities, operators, contractors, subcontractors, alliance partners and other entities involved in any project, operation, activity or transaction in the Nigerian oil and gas industry shall consider Nigerian content as an important element of their overall project development and management philosophy for project execution”. The Act defines Nigerian content as “the quantum of composite value added to or created in Nigeria through the utilization of Nigerian resources and services in the petroleum industry resulting in the development of indigenous capability without compromising quality, health, safety, and environmental standards”.
Meanwhile, Makanjuola once told me that Omotowa and his team at Shell were so professional in their dealings with Caverton that they would even come to meetings with their own bottled water. Incidentally, Simbi Waribote, the present Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), was on Omotowa’s team in Shell at that period.
I congratulate Makanjuola for what Caverton has turned out to be. When he started almost two decades ago with just one helicopter, he could not have envisaged he would go this far. On a regular basis in the past 16 years, Makanjuola has kept me abreast of the success story of his company just as he never forgets a prayer of the then President Olusegun Obasanjo following a chance encounter: “Won ni iwo lo ni helicopter company yen. Eyokan yen si ma pe ogorun lojo kan (they say you own that helicopter company. That lone helicopter will multiply into a hundred one day.)
However, Makanjuola’s success is not accidental. I once used the Biblical story of talents to demonstrate how many Nigerian business people have been given ‘talents’ which only a few have bothered to judiciously utilize. Unlike those who fritter their ‘talents’ on frivolities, Makanjuola grabbed the opportunities available to him with both hands and now he reaps enormous rewards. With 24 aircraft now in the fleet and two more expected, Caverton has made good in a critical sector but the MRO is the real deal. The multifaceted maintenance facility can carry out major checks on engines, main gearbox, tail rotor gearbox and other parts of aircraft. It is also expected that Caverton facility will be the maintenance hub for West and Central Africa, as there is no other major maintenance for choppers that provide oil and gas shuttle and other services in Gabon, Ghana, Equatorial Guinea, Cameroon and Cote d’Ivoire.
To the extent that present economic realities and escalating foreign exchange rates are making it increasingly challenging for Nigerian airline operators to carry out proper maintenance on their aircraft, the Caverton MRO project has come at a most fortuitous moment for the nation. With the average cost of a C or D check running into hundreds of thousands of dollars, there are already serious concerns for flight safety since airlines could, counting cost, begin to cut corners. The biting economic situation has already led to some airlines either being grounded or taking their services out of the country. The Caverton example has shown that with government’s support, local investors can create businesses that add value to our society and provide needed jobs.
The lessons from the Caverton story are many but two will suffice. Affirmative action, when well designed and accessed by genuine beneficiaries, can actually work in Nigeria. Had the federal government not put the local content law and policy in place, Caverton Helicopter might probably have remained another air-shuttle company. Credit is therefore due to President Goodluck Jonathan who signed the bill into law. Much more importantly, while Caverton needed that window to take off as a big company, I am aware it has also not rested on its laurels. It has grown beyond a one-off contract with Shell and a marginal player in a sector dominated by two expatriate companies, to becoming a major player, while expanding outside of Nigeria into other areas of opportunity within the space. So beyond being a testimonial to local content, the continuing odyssey of Caverton is a tribute to the ingenuity of Nigerian enterprise!
All said, the future of Nigeria as a free-market economy depends on the seriousness of our private sector. Makanjuola provides a clear example of the main ingredients that serious minded businessmen need to succeed: tenacity, integrity and purposeful risk taking. This combination has made Caverton a clear leader in its field – to the glory of the nation. But the ultimate lesson for those in authority is this: There are many Cavertons waiting to fly if only the government will pursue the right policies and create the environment to give them wings!
• You can follow me on my Twitter handle, @Olusegunverdict and on www.olusegunadeniyi.com