Showing posts with label Reuters. Show all posts
Showing posts with label Reuters. Show all posts
Saturday, July 7, 2012
Clashes in Nigeria's volatile Jos kill 10
(Reuters) - Clashes between Nigerian security forces and armed Fulani herdsman erupted on Saturday, killing at least 10 people in the ethnically mixed and volatile city of Jos, a government official said.
Jos is the capital of Plateau State in the heart of Nigeria's religiously diverse "Middle Belt", where the mostly Muslim north meets the largely Christian south.
Plateau has for more than a decade been a tinderbox of ethnic and religious rivalries over land and power between local people and migrants from other areas. Hundreds have been killed in ethnic clashes in Jos in recent years.
Islamist sect Boko Haram has claimed several suicide bomb attacks on churches in Jos this year, prompting a Christian backlash against Muslims.
A spokesman for the military Special Task Force, Salisu Mustapha, told Reuters his men engaged the Fulani herdsman, a migrant community, after they attacked local indigenous communities.
But a spokesman for the Fulani said the military instigated the violence. "It was the soldiers that first opened fire," Miyetti Allah, chairman of the Plateau cattle association, told Reuters.
"The soldiers were being used by the government because we are in war with the tribes of the governor."
Mustapha denied his troops started the violence.
Plateau State Information Commissioner Abraham Yiljap confirmed the death toll of at least 10.
Security experts believe Boko Haram's attacks on churches in central and northern Nigeria are an attempt to provoke a wider religious conflict inside Africa's biggest oil producer.
The militant group has killed more than a thousand people since an uprising in 2009 and is maintaining a low-level insurgency against President Goodluck Jonathan's government. The sect wants to carve out an Islamic state in northern Nigeria.
However, much of the violence in Jos is not instigated by Boko Haram and is a result of long-running ethnic tensions and local political power struggles.
(Reporting by Buhari Bello; Writing by Joe Brock; Editing by Pravin Char)
Sunday, July 1, 2012
Nigeria, A Rugged Road To High Returns
By Tim Cooks, Reuters
(Reuters) - Bomb blasts, gun attacks, airline crashes, kidnappings, industrial-scale oil theft, armed robberies and fraud costing billions of dollars.Such things might give pause to anyone thinking of opening a business. In Nigeria, they happen with alarming frequency, and yet investors just keep coming.
The reasons are many: alluring returns in this high-risk frontier market; a huge and growing population with latent potential for a consumer boom; light crude oil ideal for making motor fuel; and sophisticated financial markets.
"We know it's not risk free," says Charles Robertson, global Chief Economist at Renaissance Capital. "But look around the world and find another economy with 160 million people growing at 7 percent with such potential. It's a struggle to find them."
Nigeria can look like it's teetering on the cusp of chaos, but it is also Africa's second biggest economy and top oil producer.
"Nigeria is the best kept secret in the world. Anybody who doesn't invest in Nigeria only has himself to blame, going forward, if he misses out," industrialist Aliko Dangote told Reuters in an interview at his Lagos office.
"I don't really know of any place where you can make as much money as you make in Nigeria."
As Africa's richest man, he should know. Last year, the cement tycoon's Nigeria investments boosted his personal fortune more than fivefold - a bigger rise than anyone else on the Forbes list of world billionaires - to $13.8 billion.
Dangote is from northern Nigeria, where Islamist insurgents of the Boko Haram movement have killed hundreds in daily gun and bomb attacks this year in a bloody anti-establishment offensive.
Dangote, whose interests are mostly in the south, with some exposure to the north, does not let the violence affect his business decisions.
"Boko Haram have not destroyed any business here. They have not gone to any factory and planted a bomb," he said.
"Because of drugs barons fighting with the Mexican government, does it mean no one will go and invest in Mexico? No. People are rushing there."
"DEMOGRAPHIC DIVIDEND" TRUMPS INSTABILITY?
Still, if you want an example of how violence and political instability in Nigeria can slice millions of dollars off your profit margin, look no further than PZ Cussons.
The soap maker announced two profit warnings in the first quarter of this year, blaming a hit to sales from social unrest in Nigeria, its biggest market, where it makes a third of its revenue.
The country erupted into strikes and protests in January when President Goodluck Jonathan's government made an abortive attempt to end a popular fuel subsidy. The strikes lasted only a week, but the central bank said they cost $617 million a day.
The violence in the north also worsened around that time.
"Insurgency in the north clearly had a detrimental impact on PZ's business, and on (food maker) UACN, which has distribution hubs there," Matthew Pearson, Standard Bank's head of African Equity Product, told Reuters on a visit to Lagos.
But in the longer term, both firms are betting Nigeria's big population will turn into a massive consumer market.
"The demographic dividend is colossal," Pearson said.
A failure to recognize such long-term opportunities in emerging markets astounds Stephen Jennings, CEO of investment bank Renaissance Group.
"Whether we are talking about political evolution in Russia, or economic development in Africa, there remains a clear overemphasis on current difficulties and constraints, and an under-appreciation of the pace and magnitude of modernization and structural change," he told an investor conference this week.
Some clearly appreciate it. The CEO of South Africa's Shoprite, Whitey Basson, said in February he saw scope for 700 stores in Nigeria, up from two now, arguing that even if 60 percent live in poverty, the other 40 percent still outnumber South Africans.
And oil companies like Shell are making enormous profits in Nigeria - and renewing onshore licenses - despite the fact that armed gangs steal a growing portion of their oil.
Foreign direct investment into Nigeria has hovered between $6 billion and $8.5 billion since 2007, World Bank figures show, apparently unresponsive to its various crises.
FEAR OF OFFICIALDOM
Business people say the risk from such insecurity pales compared with that of government interference.
Jonathan's administration says it is working to remove impediments such as corrupt officials and onerous bureaucracy, but they admit it is a huge task.
"Look at the port. That's a bigger investor concern than bomb blasts or plane crashes," said Tony Elumelu, chairman of Lagos-based Heirs Holdings, a fund that invests across Africa.
Corrupt officials at Lagos port - one of the busiest in Africa - slow down deliveries to extort money from importers, a bottleneck to growth and cause of Nigeria's high living costs.
"For many businesses, the difficulty of getting goods cleared ... is their biggest complaint," Elumelu said. "The good news is the government is now taking action to improve it."
Such "official risk" is what oligarchs like Dangote can use political ties to mitigate. Not everyone has such connections, but players with dominant positions in markets that don't require much government cooperation can still fare well.
"If you look at Nigeria Breweries, short of expropriation, it's going to continue to effectively print money, because of the size of the market ... irrespective of the management of the country," said Fola Fagbule, Vice President of Origination and Coverage at Africa Finance Corporation.
Other sectors, such as infrastructure, face daunting hurdles from obstructive officials. Telecoms firms need licenses. They need land to put up masts. They need permits to set up base stations.
All complain of extortion by officials to keep stations open.
The downside was enough to persuade Vodacom to pass up investing in Vmobil - now owned by Bharti Airtel - in 2005, citing an "inappropriate level of risk".
Yet telecoms is now one Nigeria's most profitable sectors, and Nigeria is Bharti's most profitable African market.
In his last year as Vodacom CEO in 2008, Alan Knott-Craig said he regretted the decision not to set up shop in Nigeria. Vodacom is now making moves to come back.
Rival MTN had no such qualms, and today it is Nigeria's leading operator.
Among the risks it faces are "poor infrastructure, lack of security, vandalism, multiple taxation, over-regulation ... unlawful interference with telco infrastructure by government agencies and ... prejudicial court judgments," says Funmilayo Omogbenigun, MTN Nigeria's corporate affairs manager.
Despite that discouraging litany, Nigeria remains MTN's biggest cash cow, making $2.5 billion in core profit in 2010 and again in 2011.
The telecoms success has raised hopes for Nigeria's moribund power sector, if the government gets round to privatizing it.
"Nigeria's often surprised on the upside, and telecoms is a classic example. People are looking at power in the same way," Fagbole said.
"It looks messy, it looks difficult, but if you sit on the sidelines and it turns out to be this massive honey pot, you'll live to regret it."
(Editing by Will Waterman)
(Reuters) - Bomb blasts, gun attacks, airline crashes, kidnappings, industrial-scale oil theft, armed robberies and fraud costing billions of dollars.Such things might give pause to anyone thinking of opening a business. In Nigeria, they happen with alarming frequency, and yet investors just keep coming.
The reasons are many: alluring returns in this high-risk frontier market; a huge and growing population with latent potential for a consumer boom; light crude oil ideal for making motor fuel; and sophisticated financial markets.
"We know it's not risk free," says Charles Robertson, global Chief Economist at Renaissance Capital. "But look around the world and find another economy with 160 million people growing at 7 percent with such potential. It's a struggle to find them."
Nigeria can look like it's teetering on the cusp of chaos, but it is also Africa's second biggest economy and top oil producer.
"Nigeria is the best kept secret in the world. Anybody who doesn't invest in Nigeria only has himself to blame, going forward, if he misses out," industrialist Aliko Dangote told Reuters in an interview at his Lagos office.
"I don't really know of any place where you can make as much money as you make in Nigeria."
As Africa's richest man, he should know. Last year, the cement tycoon's Nigeria investments boosted his personal fortune more than fivefold - a bigger rise than anyone else on the Forbes list of world billionaires - to $13.8 billion.
Dangote is from northern Nigeria, where Islamist insurgents of the Boko Haram movement have killed hundreds in daily gun and bomb attacks this year in a bloody anti-establishment offensive.
Dangote, whose interests are mostly in the south, with some exposure to the north, does not let the violence affect his business decisions.
"Boko Haram have not destroyed any business here. They have not gone to any factory and planted a bomb," he said.
"Because of drugs barons fighting with the Mexican government, does it mean no one will go and invest in Mexico? No. People are rushing there."
"DEMOGRAPHIC DIVIDEND" TRUMPS INSTABILITY?
Still, if you want an example of how violence and political instability in Nigeria can slice millions of dollars off your profit margin, look no further than PZ Cussons.
The soap maker announced two profit warnings in the first quarter of this year, blaming a hit to sales from social unrest in Nigeria, its biggest market, where it makes a third of its revenue.
The country erupted into strikes and protests in January when President Goodluck Jonathan's government made an abortive attempt to end a popular fuel subsidy. The strikes lasted only a week, but the central bank said they cost $617 million a day.
The violence in the north also worsened around that time.
"Insurgency in the north clearly had a detrimental impact on PZ's business, and on (food maker) UACN, which has distribution hubs there," Matthew Pearson, Standard Bank's head of African Equity Product, told Reuters on a visit to Lagos.
But in the longer term, both firms are betting Nigeria's big population will turn into a massive consumer market.
"The demographic dividend is colossal," Pearson said.
A failure to recognize such long-term opportunities in emerging markets astounds Stephen Jennings, CEO of investment bank Renaissance Group.
"Whether we are talking about political evolution in Russia, or economic development in Africa, there remains a clear overemphasis on current difficulties and constraints, and an under-appreciation of the pace and magnitude of modernization and structural change," he told an investor conference this week.
Some clearly appreciate it. The CEO of South Africa's Shoprite, Whitey Basson, said in February he saw scope for 700 stores in Nigeria, up from two now, arguing that even if 60 percent live in poverty, the other 40 percent still outnumber South Africans.
And oil companies like Shell are making enormous profits in Nigeria - and renewing onshore licenses - despite the fact that armed gangs steal a growing portion of their oil.
Foreign direct investment into Nigeria has hovered between $6 billion and $8.5 billion since 2007, World Bank figures show, apparently unresponsive to its various crises.
FEAR OF OFFICIALDOM
Business people say the risk from such insecurity pales compared with that of government interference.
Jonathan's administration says it is working to remove impediments such as corrupt officials and onerous bureaucracy, but they admit it is a huge task.
"Look at the port. That's a bigger investor concern than bomb blasts or plane crashes," said Tony Elumelu, chairman of Lagos-based Heirs Holdings, a fund that invests across Africa.
Corrupt officials at Lagos port - one of the busiest in Africa - slow down deliveries to extort money from importers, a bottleneck to growth and cause of Nigeria's high living costs.
"For many businesses, the difficulty of getting goods cleared ... is their biggest complaint," Elumelu said. "The good news is the government is now taking action to improve it."
Such "official risk" is what oligarchs like Dangote can use political ties to mitigate. Not everyone has such connections, but players with dominant positions in markets that don't require much government cooperation can still fare well.
"If you look at Nigeria Breweries, short of expropriation, it's going to continue to effectively print money, because of the size of the market ... irrespective of the management of the country," said Fola Fagbule, Vice President of Origination and Coverage at Africa Finance Corporation.
Other sectors, such as infrastructure, face daunting hurdles from obstructive officials. Telecoms firms need licenses. They need land to put up masts. They need permits to set up base stations.
All complain of extortion by officials to keep stations open.
The downside was enough to persuade Vodacom to pass up investing in Vmobil - now owned by Bharti Airtel - in 2005, citing an "inappropriate level of risk".
Yet telecoms is now one Nigeria's most profitable sectors, and Nigeria is Bharti's most profitable African market.
In his last year as Vodacom CEO in 2008, Alan Knott-Craig said he regretted the decision not to set up shop in Nigeria. Vodacom is now making moves to come back.
Rival MTN had no such qualms, and today it is Nigeria's leading operator.
Among the risks it faces are "poor infrastructure, lack of security, vandalism, multiple taxation, over-regulation ... unlawful interference with telco infrastructure by government agencies and ... prejudicial court judgments," says Funmilayo Omogbenigun, MTN Nigeria's corporate affairs manager.
Despite that discouraging litany, Nigeria remains MTN's biggest cash cow, making $2.5 billion in core profit in 2010 and again in 2011.
The telecoms success has raised hopes for Nigeria's moribund power sector, if the government gets round to privatizing it.
"Nigeria's often surprised on the upside, and telecoms is a classic example. People are looking at power in the same way," Fagbole said.
"It looks messy, it looks difficult, but if you sit on the sidelines and it turns out to be this massive honey pot, you'll live to regret it."
(Editing by Will Waterman)
Sunday, June 24, 2012
Nigeria says it needs new anti-terrorism tactics
(Reuters) - Nigerian President Goodluck Jonathan said on Sunday he sacked his defence minister and national security adviser last week because the government needed new anti-terrorism tactics.
Militant Islamist sect Boko Haram has been fighting an insurgency against Jonathan's government since he entered office over a year ago. Several military crackdowns and a state of emergency have failed to stem the violence.
The presidency issued a statement on Friday saying Jonathan's two top security chiefs had been dismissed but did not give a reason why.
"We think some new persons have to come in to change tactics in our fight against terrorism.... It's not that they were not working but just that we need to change tactics," Jonathan said in a meeting with reporters aired on state television on Sunday.
Boko Haram, which is based in the remote northeast, has rapidly overtaken militants in the oil-producing southern Niger Delta as the country's biggest security threat.
Niger Delta militants gave up arms in return for training and stipends in a 2009 amnesty but brief efforts to hold a dialogue with Boko Haram earlier this year failed.
"Boko Haram has no face and government will not dialogue with a faceless people. They must come out and tell us why they are doing what they are doing," said Jonathan.
Gun and bomb attacks blamed on Boko Haram have killed hundreds since the movement started its uprising more than two years ago.
It is fighting to carve out an Islamic state in Nigeria - a country nearly evenly split between Muslims and Christians. Attacks on churches have intensified this month, sparking deadly religious violence in northern Kaduna state.
(Reporting by Felix Onuah; Writing by Joe Brock; Editing by Ralph Gowling)
Thursday, May 24, 2012
Draft Of Nigeria Oil Bill Being Finalized
ABUJA/LAGOS (Reuters) - A new draft of Nigeria's long delayed oil bill, whose passage is needed to unblock billions of dollars of stalled investment into exploration and production, will be finalized this week, sources close to the matter said on Thursday.
A copy of the 200-page Petroleum Industry Bill (PIB) obtained by Reuters includes plans to partly privatize and list the state oil firm, tax oil company profits at 20 percent for deep offshore and 50 percent for shallow or onshore, and give the oil minister supervisory powers over all institutions in the industry.
Current oil firm profit taxes are not published. A spokesman for Nigeria's leading operator Shell said he did not know what current tax rates were.
The PIB has been years in the making and the delays have caused uncertainty over the future framework of working in Nigeria, costing the industry billions of dollars of potential investment and the government much-needed revenues. Without it, most analysts expect oil production in Nigeria to decline substantially over the next few years.
Nigeria exports more than 2 million barrels a day (bpd) of crude oil popular with U.S. buyers because it is light and easy to refine. China and India are also growing takers of Nigerian crude.
Even when this version gets to parliament, there is no guarantee lawmakers will push it through, as powerful vested interests could block or delay it, as has happened in the past.
President Goodluck Jonathan is explicitly behind this version, and it was drawn up by a taskforce of senators his administration appointed, but even though his party has a majority in both houses of parliament it could still stall.
The bill as drafted would also roll Nigeria's various regulatory bodies for upstream and downstream into one, and give Oil Minister Diezani Alison-Madueke power to pick who runs it. Placing all institutions concerned with oil under her supervision may upset those who hoped the bill would curb her already substantial powers. Previously the downstream regulator was independent of the ministry.
Alison-Madueke signed a 20-year oil license in February with U.S. oil giant Exxon on one of Nigeria's largest oil assets, which produces over 500,000 barrels per day, but the terms were kept private.
This license renewal comes despite the minister saying for years that the delay to the PIB was holding contracts like these up. Alison-Madueke said this week that similar renewals with Shell and Chevron would be signed by June.
It is not clear whether those licenses include exemptions from any change of terms brought about by the new PIB.
(Reporting by Joe Brock and Tim Cocks, editing by William Hardy)
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