Nigeria’s MOFI takes full control of government shares in power distribution companies

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Africa Headlines

Nigeria’s MOFI takes full control of government shares in power distribution companies – The Ministry of Finance Incorporated (MOFI) has restructured and assumed full control of the Federal Government's 40 percent equity in 11 privatised electricity distribution companies (DISCOs) that succeeded the Power Holding Company of Nigeria (PHCN), Armstrong Takang, the CEO announced yesterday.  This takeover follows the termination of the power of attorney previously granted to the Bureau of Public Enterprises (BPE) in 2012. MOFI, established by the MOFI Act of 1959, amended in 2023, has been aggregating all federal government assets under one entity. This provides the government a basis to know the assets it has, their values, and for the optimisation of those assets in an asset management fashion. The government is currently looking for ways to securitise or sell some of its assets to raise badly needed revenues.

NNPCL to hand over Port Harcourt refinery to private entities – Nigeria’s National oil company Nigeria National Oil Corporation (NNPC) says it will hand over the revamped Port Harcourt refinery to private sector managers, the CEO Abba Kyari announced yesterday. After a US $1.5 billion rehabilitation programme, the NNPC says a private sector management will enhance the efficiency and productivity of the 210,000 barrels per day facility. The refinery, with two plants of 60,000 (built in 1965) and 150,000 (built in 1989), like other refineries in Warri and Kaduna, has suffered neglect and mismanagement. The NNPC says it has completed 77.4% of the rehabilitation and the remaining work is expected to be completed in the fourth quarter this year. In announcing the planned private sector management, it says its seeking companies with a minimum of US $2 billion (about N2 trillion) in revenues, virtually eliminating 99.99% of Nigerian companies.

Tanzania bans Kenya airways on Nairobi – Dar es Salaam route – In not a friendly neigbourly love affair, Tanzania yesterday banned Kenya airways operating the Nairobi Dar es Salaam route. It follows Kenya’s earlier denial of Air Tanzania, Tanzania’s national carrier cargo flights into Nairobi. The Tanzania Civil Authority (TCAA) the decision by Kenya violated the 2016 Memorandum of Understanding on air services between the two countries. Before the ban, Kenya airways fly 30 times weekly to Dar es Salaam, its most frequent international routes, with estimated 1 million people visiting Tanzania for tourism purposes. Both Kenya and Tanzania are not landlocked countries, with Kenya the largest economy in the region. 

Global Headlines

India and Argentina sign lithium deal – In a race to compete in the energy transition of the future, India’s state-owned joint venture is signing a mining deal with Argentina to secure lithium blocks. Lithium has become one of the most sought minerals because of its uses in the making of batteries. Lithium batteries have revolutionised the way devices and electric vehicle batteries are powered, and its acquisition has become critical to major economies in the world that seeks to dominate the technology underlying energy transition from fossil fuels. India, one of the largest greenhouse gas emitters globally, has been actively seeking overseas partnerships to secure essential minerals in resource-rich countries like Australia, Argentina, and Chile. The focus is currently on critical minerals such as copper, cobalt, and lithium. KABIL, established in August 2019, aims to identify, acquire, develop, and process strategic minerals abroad for use within India. The move aligns with India's efforts to secure key resources and reduce reliance on imports, particularly for minerals crucial to industries like renewable energy and electric vehicles.

Everton and Nottingham Forest in Premiership Trouble – If you are a follower of football and the premier league, you will remember Nottingham Forest signing about 30 players at the start of the 2022 / 23 season after promotion from the Championship. Following the charges by the premier league yesterday, it appears it is now time for reckoning. Yesterday, both Nottingham Forest and Everton (for a second time, already deducted 10 points this season) have been found to be in breach of the premier league’s profitability and sustainability rules for the period ending 2022 / 23. Premier League clubs are allowed a maximum loss of £105 million over three seasons, with a limit of £35 million per season. The cases of both clubs have been referred to the chair of the judicial panel, who will appoint separate independent commissions to determine the appropriate punishment. Possible sanctions include fines, points deductions, or other sporting penalties.

Germany, worst performing major economy in 2023 – Germany, Europe’s production engine and largest economy was the worst performing major economy in 2023, latest data shows. While combined major economies grew by 1.5% and emerging economies by 4%, Germany grew by -0.3%. The economy contracted 0.3% following high levels of inflation, rise in interest rates, and elevated energy costs. The outlook is subdued. The year has started with a train strike and disruptive protests by farmers. Notwithstanding, current GDP level remains above pre-pandemic levels, with a 0.7% increase compared to 2019 after two years of rebounding output. The figures coincide with a third consecutive fall in Eurozone industrial production and may mean a broader Eurozone contraction when data is released later this month. Germany’s export focused manufacturing has been particularly hit by the loss of inexpensive Russian energy and weak demand from China. 

Houthi’s Red Sea interceptions raising regional tensions – The clearest regional fallout of the Israeli / Palestinian crisis is the escalation of the attacks by Houthis on US and Europe targets in the Red Sea. The US and UK have responded with air strikes. However, in the last 36 hours, Yemen's Houthi rebels have targeted a US-owned ship in the Gulf of Aden, just a day after attacking a US navy destroyer in the Red Sea. The Houthis have gained popularity domestically and have found solidarity with Iran-supported groups in the region, forming what is called the "axis of resistance." The Houthis control western Yemen, including the strategically important Bab al-Mandeb Strait that leads to the Red Sea and the Suez Canal. They claim to be intercepting Israel-bound and Israeli-owned ships passing through the strait to pressure Israel into ending its operations in Gaza or allowing adequate humanitarian aid. The attack on the US ship suggests an expansion of their operations beyond the southern coast of Yemen.