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Dangote Refinery: Is NNPC Investing Or Bailing Out The Unbailable

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Dangote Refinery: Is NNPC Investing Or Bailing Out The Unbailable
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Dangote Refinery: Is NNPC Investing Or Bailing Out The Unbailable

DANGOTE REFINERY: BAILING OUT THE UNBAILABLE
Investment or Bailout?

It was hailed as the best thing to happen in the oil and gas sector especially in Nigeria – a serial importer of crude products. The year was 2013 and in September of that year, Aliko Dangote, Africa’s richest man, announced yet another of his gargantuan projects – the construction of the biggest single train refinery in the world with production expected to begin in 2016. Many delays and postponements later, the project has been bogged down by barely serviceable debts, poor planning, lack of centralized project management, mismanagement and has now become a huge albatross on Nigeria’s neck costing the country lots of FX and creating huge problems in return.

VALUATION
A project that started as a 9billion dollars project is now being valued at over 16billion dollars, albeit incorrectly. Sampling expert opinion from leading players in the oil & Gas industry, it is estimated that a refinery of that size should ideally cost within the range of 11 to 12billion dollars to build in Nigeria. Notwithstanding the conflicting figures, it was recently announced that the Nigerian National Petroleum Corporation, NNPC, will be taking a 20% stake in the uncompleted, non-functional Dangote Refinery at the cost of 3.8billion dollars. Whilst this baffled many, NNPC’s actions effectively over-valued the yet to be completed refinery to 19billion dollars.

PROJECT DELAYS OR PROJECT DELAY-ED.
As at last count, the completion of the refinery had been moved eight times. Whilst some might say this is in character for Dangote Industries and their numerous projects across different sectors, the problem is deeper rooted. A contractor at the delayed refinery project, speaking under the condition of anonymity said that poor planning, underpayment of contractors, and a lack of proper project management with over 40 contractors on site has led to most of the delays. He also added that of the 40, none is willing to commission as there is no clear delegation of duty and over-decentralization leading to absolute chaos.

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Dangote Refinery: Is NNPC Investing Or Bailing Out The Unbailable

With these incessant delays, Banks are already calling in their loans. At the announcement of the project in 2013, Mr. Dangote said he had secured financing of 3.3billion dollars. This debt burden has now risen to 7billion dollars with debt servicing of almost 700million dollars per annum. Whilst Mr. Dangote has been able to restructure the facilities from various local and international banks twice so far, most banks have totally refused to restructure for the third time with principal repayment also falling due – as well as the annual interest payments.

Things have gotten so bad for the billionaire that even income from his other businesses are barely enough to cover the interest rates talk less of the principal. This has led Mr. Dangote to seek innovative ways, including state capture, to prop up his business now that the refinery project has been consistently delayed and he has run out of money to repay. Enter the NNPC Connection, Nigeria’s controversial PIB Amendment and the Crude Swap Saga.

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THE NNPC CONNECTION – BAILING OUT THE UNBAILABLE
After taking FX at concessionary rates from the CBN, Nigeria is inexplicably tied at the apron strings to Mr. Dangote’s now-threatened refinery. Estimates by professional industry analysts and those close to the project put its completion date in 2024 or 2025.

Recently, the NNPC announced, under some obscure arrangement, that it was taking a 20% equity in the Dangote refinery at 3.8billion dollars. The NNPC was later to explain that it was giving only 1 billion in cash and the balance in crude.

Whilst this is a welcome development, Mr. Dangote will have a hard time doing anything tangible with the 1billion dollars cash which is barely enough to cover one years’ interest. With some principal payments falling due and the banks’ unwillingness to restructure in the face of an estimated completion timeline of 2024 at the earliest, Messrs. Dangote will need at least 3 to 4 billion to complete the project over the next few years even with this bailout. Both the way the refinery project has been carried out, and this subsequent NNPC bailout for Dangote refinery has turned Nigeria into a laughingstock on the global stage.

As for the controversial PIB bill currently before the Nigerian National Assembly, it is now clear to keen watchers that the reason the government wants to give a monopoly of importation for petroleum products into the country to Messrs. Dangote is so he can make the excessive and extra profits he needs to manage his rising debt profile for the refinery (under the guise of ongoing refinery projects). Guess who will bear the brunt of the higher costs in petroleum products at a time when subsidies are being reduced? The Nigerian people.

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With his refinery project costs way overboard, banks breathing down his neck and NNPC’s strange bailout seemingly meagre to take care of the principal and interest payments for his debts, is the Dangote Refinery a dead project even before it is completed, or will time be kind and permit the completion of this project to which Nigeria has mortgaged huge FX from its treasury to see it kick off in good time? The chicken has come home to roost, it may seem.

Finally, with the one billion dollars going towards the repayment of principal and interests which are falling due in August, the manipulations by NNPC and politicians at the National Assembly has now become clear for all to see… As it stands, some government agencies and politicians are more than willing to mortgage the interests of the nation and masses to bail out the unbailable refinery project. Welcome to the Republic of Dangote!

David Bako writes from Abuja

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Your Breast is for Your Babies Not Your Husbands – Enugu Commissioner

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Your Breast is for Your Babies Not Your Husbands - Enugu Commissioner
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Your Breast is for Your Babies Not Your Husbands – Enugu Commissioner

Commissioner for Gender Affairs Enugu State, Hon. Peace Nnaji, want women to stop ‘breastfeeding’ their husbands and reserve the breastmilk for their babies instead.

The Commissioner made the remark at a UNICEF media dialogue with selected journalists from South East, South-South, and parts of North Central.

She explained that it is wrong for men to be sharing their wives’ breastmilk with the babies while insisting that breastmilk is naturally meant for “the baby and not the man”.

Your Breast is for Your Babies Not Your Husbands – Enugu Commissioner

In her words: ” Breastmilk is meant for babies and not their fathers. Mothers should stop feeding their husbands with their breastmilk, it’s for their babies.

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” It’s wrong for mothers not to breastfeed their babies for fear of having flat or saggy breast.”

The Commissioner also urged mothers to practice exclusive breastfeeding of their babies for at least the first six months after birth because of it has numerous benefits.

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Adamawa court sentences man to death by hanging for killing wife, child

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Adamawa court sentences man to death by hanging for killing wife, child
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Adamawa court sentences man to death by hanging for killing wife, child

A state high court in Adamawa has on Monday passed a death verdict on a 40-year-old man Bangos Adamu by hanging for killing his wife and child.

Pronouncing the judgement, Justice Fatimah Ahmed Tafida ordered the man to be hanged by the neck till he dies.

She said the judgement was premised by the the fact that the two count charges brought by the prosecution against the convict were proven beyond reasonable doubt.

The convict, who hails from Janjaba village in Gombi Local Government Area, Adamawa state, was tried and found guilty for killing his beloved wife, Regina Bangos and her child, Revelation James.

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Nigerian Ex ‘Super’ Permanent Secretary, Ahmed Joda Wrote Malam Muhammad Sanusi II

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Nigerian Ex 'Super' Permanent Secretary, Ahmed Joda Wrote Malam Muhammad Sanusi II
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Nigerian Ex ‘Super’ Permanent Secretary, Ahmed Joda Wrote Malam Muhammad Sanusi II

LETTER TO MY SON, SANUSI LIMIDO SANUSI.

My dear Son, As I write this letter I do not know your address. I am addressing it to you as my son, because I know you understand why. I got to know you when you were a very young person, a boy about to enter Secondary School Before then and, very importantly, I knew your Grand Father, Emir of Kano Sanusi and your uncle the late Ambassador Ado Sanusi. Circumstances had made it possible for me to become very close to both of them. Your late father, Ambassador Aminu Sanusi and I were contemporaries and were also very close. We trusted each other.

He was a man of thought, far sighted, kind, considerate and resolute. You have always, from the first day we met, called me Baba: when you were younger but as the years rolled on you called me Baba Joda. I accept the courtesy and value the respects it conveys. As a very young person, at our very first meeting, the questions you asked me and the points you raised were far and beyond your age and I thought that you possessed a great deal of potential.

Your record in the public domain is proof enough of this assessment. Your departure from the Throne of Kano, was predictable from your very beginning and from the moment you ascended to it. For Kano and for Nigeria, it may well be a blessing in disguise that you may now be able to address issues that are now urgent for our society as a person not encumbered by the burden of office. I believe that your father, a gifted and far sighted man, understood what the future politics of our country portend and decided early not to be part of it. The purpose of this letter to you is not to commiserate with you, because I know that you must have known the likely consequences of the principled position you have taken.

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The reality we must face in Northern Nigeria is that the evil forces of feudalism that have kept us in bondage for so long are still there and fighting. You have been the only voice that has been telling us this truth. These forces will fight you and you know it Also, within me, I feel that you have always known of this possibility and that you would be fully prepared for the consequences. Very often in the years since your accession to the Throne of Kano, I have tried to imagine what would be the best way for you to disengage from the suffocating burden you have inherited that of service to the people you have chosen to lead better. I believe that the reason for my trend of thought is that, from what I know of your grandfather, your father and your uncle Ado and, of course you, it was most likely that you cannot change your beliefs in order to survive in an environment that is alien to all that is fair, good and responsible.

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I believe that for the good of the Kano people, the people of Northern Nigeria and, of course, Nigeria you are now better placed to bring into service to humanity, the intellect that you are endowed with, the education in both the Western and Islamic endeavors to bear in the emancipation of the Talakawas of Northern Nigeria. Your courage and your wide experience in many areas of endeavour place you in an excellent position to influence the effort to emancipate people who, for so long, have been subjugated and deprived by leaderships that are conservative and feudal; unable, unwilling and incapable of seeing the writing on the wall. Leaderships that cannot understand or appreciate that this world we are in is a world that is led by knowledge, by science and technology; none of which cannot be achieved without sound education which were are denying our people. I suggest to you that, if you are contemplating the legal route to right the wrong that has been done to you; you should abandon the thought.

Nigerian Ex ‘Super’ Permanent Secretary, Ahmed Joda Wrote Malam Muhammad Sanusi II

The Judiciary is not the way to go in this country when you are seeking justice. For evidence you have a living example in Jokolo, the Emir of Gwandu. In the circumstances of the present, I suggest that you only take full advantage of the Fundamental Rights guaranteed to all Nigerian citizens by the Constitution and only go to court to enforce those Fundamental Human Rights. Even this route can be frustrating it can serve keep unjust system in the public mind and in the Peoples’ Court. You must protect your right to hold and to express your views; your right to associate with others and to propagate any views that are consistent with the laws of the Federation of Nigeria.

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I believe it is possible for a platform to be created by you and people of like minds to propagate the ideas and ideals that can emancipate Northern Nigeria from the shackles of the visionless leaderships that we have endured for so long. We need a moral leadership that is founded on sound and honest principles; of good education and of justice and fair play. I believe you have the courage and all that it takes to accept the challenge that your new situation has imposed on you. I look forward to your accepting this challenge and to your helping to create such a platform that you can lead towards the moral revolution that we so badly need and deserve. I wish you well. Your affectionately,

Baba Ahmed Joda.
Former Federal Perm Sec.

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