₦airaland Forum

In five years, the Nigeria ETF has blown up, now down over 74.5%.
Equity investment between 2013 and 2018 has fallen from around $2.9 billion in 2013 to just $139 million in 2018.


Want to lose money in one of Africa’s biggest markets? Put it to work in Nigeria.


Despite sitting on nearly 40 billion barrels of proven oil reserves and over $48 billion worth of investment opportunities in the oil and gas sector, Africa’s largest economy is mired in problems with big corporate investors as president Muhammadu Buhari readies his second-term after a swearing-in ceremony scheduled for May 29.

Nigeria’s stock index is down 0.4% year-to-date while emerging markets are up 2.3% and the MSCI Frontier Markets 100 is up 10.2%.

As one of the better known, investable African equity markets, anyone who tried their luck with the Global X Nigeria (NGE) exchange-traded fund is down 27.7% over the last 12 months. In five years, the Nigeria ETF has blown up, now down over 74.5%. Frontier and emerging indexes are better than Nigeria. It’s also worse than South Africa, Africa’s largest stock market, and Egypt, Africa’s second largest.

In terms of foreign direct investment, back in 2013 inflows totaled $5.6 billion, most of it in the telecom and energy sectors. Last year, Nigeria’s FDI flattened to $2 billion. Equity investment between 2013 and 2018 has fallen from around $2.9 billion in 2013 to just $139 million in 2018. In the last quarter of 2018, there was the first net pullout of equity capital since records began under the current accounting methodology in 2008, according to data compiled by The Economist Intelligence Unit (EIU).


Nigeria is Africa’s largest economy in terms of nominal GDP. South Africa comes in second, even though its GDP per capita is roughly five times that of Nigeria.

It’s Nigeria’s abundant commodity resources that make it so big. But it’s Nigeria’s government that keeps it from getting bigger, and richer.

“Nigeria has never been a particularly business-friendly place,” says David Bruckmeier, a sub-Saharan business intelligence analyst at London-based political risk firm AKE Group. “Outright hostile action against major foreign investors is rare, but bureaucracy, pervasive corruption, an unfavorable tax system and disputes with investors hurt investment,” he says.

Nigeria’s GDP contracted 13.8% in the first quarter, wiping out last year’s economic gains.

The only country to do that of late is Venezuela. And like Venezuela, Nigeria has also dealt with blackouts in the power grid—six of them this year.

“Electricity price controls are a big problem,” says Benedict Craven, a Nigeria analyst for the EIU. “The private sector is given little incentive to invest.”

According to USAID, the main U.S. government international aid organization, Nigeria has the potential to generate over 12,000 megawatts of electricity daily. On most days, it generates around 4,000 megawatts.

A March 25 documentary by the BBC, Africa Eye, said half of Nigeria’s population has no access to electricity and those that do face daily power cuts that can last for hours.

This is the kind of stuff that happens in Venezuela, a country facing U.S. sanctions, three years of economic depression and a government with dwindling support. Unlike Venezuela, Nigeria is the eighth-largest recipient of international aid. And the second largest in Africa.

Nigeria has Africa’s largest gas reserves, some 190 trillion cubic feet. Yet for all of this great oil and gas wealth, the country’s electrical grid is a charade.

“Perhaps most worryingly of all, the damage being done by a range of investor disputes where basic property and contractual rights are being violated seems to be on the increase,” says Shanker Singham, CEO of The Competere Group, a legal and trade advisory firm in London. “The erosion of Nigeria’s commitment to the rule of law is highly worrying, both from a political and an economic perspective,” Singham says.

The most notable disputes are with South Africa telecom MTN Group, an energy project with Process & Industrial Development (P&ID), and a hydroelectric contract between Sunrise Power and Chinese investors.

In the P&ID case, a London court in January 2017 said Nigeria owed the company $6.6 billion plus interest, a significant percentage of Nigeria’s $44 billion of foreign currency reserves.

Both P&ID and Sunrise have been a thorn in Nigeria’s side, with Nigeria’s government on one side saying they were duped by P&ID as far back as 2012, and courts ruling against their defense on the other. So far, these two disputes alone have easily led to more than $11 billion in international legal awards against the Buhari government.

As for the P&ID saga, the company’s main complaint relates to the government’s failure to complete a pipeline and other critical infrastructure. The project would have generated annually up to 2,000 megawatts of electricity for residential and commercial use. The company initiated arbitration proceedings in 2012, the standard legal set up for international investor disputes.

“Whether its calculations regarding its supposed investments and foregone profits are plausible is a different matter—but the government never made any effort to challenge them anyway. Nor is it surprising that Nigeria failed to show up to court hearings in the case,” says AKE Group’s Bruckmeier. “This is exemplary of the unprofessional and nonchalant attitude Nigeria often displays in such matters.”

P&ID is in limbo.

“We are well aware of the government’s efforts to characterize P&ID, and its founders, as frauds,” Brendan Cahill, the company’s founder, told Nigerian daily This Day Live on May 15 in a Q&A published on its website.

“The arbitrators in London spent five years carefully reviewing the written agreement and all the facts surrounding the deal, and in the end, they unanimously concluded that Nigeria was to blame for the deal’s collapse and had to pay damages to P&ID,” he says. “Not once during those five years did Nigeria present the courts with any evidence that there had been some kind of fraud—because there wasn’t one.”

That battle continues in the courts.

Then there is Sunrise Power.

Sunrise recently brought Nigeria and its Chinese partners before the International Chamber of Commerce in Paris. Nigeria faces another $2.3 billion fine in arbitration over breach of contract. Sunrise was behind the Mambilla hydroelectric dam project. It would have been Nigeria's biggest hydropower plant, capable of generating 3,050 megawatts of power.

There have been no new developments in the arbitration case as of May 20.

Nigeria’s energy woes are costing it a fortune. It is also making some bond analysts nervous , judging by an article in the Financial Times recently saying Nigeria was facing “a looming external debt crisis.” Its external debt increased $12 billion in three years, going from $10 billion to $22 billion between 2015 and 2018.

“Their debt service eats up 60% of their government revenue and is rising according to the IMF,” says Andrew Roche, managing partner at Finexem in Paris. “If they do not raise revenue, and if they can’t continue borrowing for whatever reason, then we are looking at a potential default or at least a period of dried up financing for Nigeria.”

The economy is expected to grow at just 2% this year, according to Fitch. They have Nigeria’s credit outlook as stable. Its bonds are rated B+, a low-tier speculative grade credit.

Nigeria’s general government debt is expected to rise to 292% of revenue, well above the historical B-rated credit, thanks in part to the government’s lack of progress on raising government revenue. Debt-to-GDP is below 30%. But interest payments on the debt owed to bondholders—which includes local banks—is estimated to be around 20% of general government revenue, more than twice that of average B-rated countries.

“Nigeria’s markets are broken, but not in the sense that they don’t work,” says Jan Dehn, head of research for the Ashmore Group, an emerging and frontier market investment firm with holdings in Nigerian stocks and dollar-denominated debt. “Opportunities rise, get exploited, and then they end,” he says, noting that Nigeria was kicked out of the Barclays global bond index due to capital controls in 2015. Much of Wall Street’s institutional client base left.

“I’ve had positive experiences with officials at the central bank and in the banks,” Dehn says. “But the quality of the (federal) government varies.”

Buhari was reelected in February. Investors hope he can signal a new direction for economic policy in the months ahead.

With regards to Nigeria’s investor disputes with the two energy projects, Singham estimates that the P&ID dispute can cost Nigeria nearly 40% of their foreign reserves, calling it “a significant threat to investor confidence” if not settled. Nigeria has yet to pay the settlement.

“P&ID is a bigger deal than MMT and Sunrise,” he says in a phone interview from London. “If I was the Nigerian government trying to signal that we were back in business, I would do something about that case first,” he says.

Global capital moves quickly. These little signals can be a powerful mover in a country that most investors believe is heading in the wrong direction. On the other hand, there is a consensus that Nigeria can transform itself pretty quickly.

“Is there the political will in a new Buhari government? It might just be more of the same,” says Singham. “Change is not always about one leader. When you want to get a country to improve, you need to give oxygen to the reform-minded people in the country. I think we at least have something we can work with Buhari.”

rusher14:
I am acting like your father.

Perhaps one day you would know him.

rusher14:
Continue asking silly questions.

INEC is an independent body.

When INEC sought to introduce card readers for the use of the 2015 elections, the PDP resisted it and even put pressure on the ousting of Jega the INEC chairman.

https://www.google.com/amp/s/dailypost.ng/2015/02/04/plans-inec-use-voter-card-reader-illegal-pdp/amp/

https://www.nairaland.com/2141241/presidency-pdp-reject-card-reader

jemarionilario:
hurry up

basilol01:
Is the illegality the reason Enugu is a backward state without roads, hospitals and schools? Lol

aribisala0:
German current Energy Minister studied Law his predecessor studied..............yea you guessed right law

Incumbent in the UK studied Economics predecessor studied History

Incumbent in Japan studied political Sience

Incumbent in Russia studied Economics

So please tell us what you think our own Minster should have studied and why

Incumbent in US studied Animal Science
In Italy incumbent studied Law


What is your premise and where is the evidence

Lucid1:
Several formats bro. Besides, Why is it editable?

Lucid1:
Lol! Excel sheet na server result?


This is a joke right?

Iamgrey5:
Bro don't be deliberately mischievious

This is an extract of a suit against inec and APC by the PDP published by most national dallies

This isn't a rumor like onnegen's case

Oblang:
Lol..whistleblowing website created by PDP idiots.

Iamgrey5:
This is directly from a poorly designed website that was launched last week when the results was" released" to the media.

The poorly informed people that designed it only added the results inec declared to the new results that emerged.

I have argued on this subject matter last week.

Iamgrey5:
Lol

THIS IS FROM PDP GUYS WHO LATER ADDED THE TOTAL OF INEC RESULTS TO THE ONE ATIKU GOT FROM INEC SEVER.

This is a poor work of a computer iilerrate

I can easily do the same with with the excel spreadsheets in my laptop.

Prompto:
And sensible Nigerians are suppose to trust your website n pictures ?! How come you can not show INEC web page to confirm you got your data from there or you have no idea any lunatic can wake up create a spreadsheet with figures and every other BS desirable to him n claim that as fact just because he successfully uploaded such online ?!

ABUJA – The Presidential candidate of the Peoples Democratic Party, PDP, Atiku Abubakar, has alleged that the Independent National Electoral Commission, INEC, had at various stages of the February 23 presidential election, unlawful allocated votes to President Muhammadu Buhari. Buhari and Atiku Atiku who made the allegation in the petition he lodged before the Presidential Election Petition Tribunal sitting in Abuja, said he would adduce oral and documentary evidence to show that results of the election as announced by INEC, especially the votes credited to President Buhari, did not represent the lawful valid votes cast. He alleged that in some states, INEC, deducted lawful votes that accrued to him, in its bid to ensure that Buhari was returned back to office. Both Atiku and the PDP said they would call evidence of statisticians, forensic examiners and finger-print experts at the hearing of the petition to establish that the scores credited to Buhari were not the product of actual votes validly cast at the polling units.

“The Petitioners plead and shall rely on electronic video recordings, newspaper reports, photographs and photographic images of several infractions of the electoral process by the Respondents”, they added. Specifically, the petitioners serialised results that were recorded from each state of the federation in order to prove that the alleged fraudulent allocation of votes to Buhari and the All Progressives Congress, APC, took place at the polling units, the ward collating centres, local government collating centres and the State collating centres. Atiku contended that proper collation and summation of the presidential election results would show that contrary to what INEC declared, he garnered a total of 18,356,732 votes, ahead of Buhari who he said got a total of 16,741,430 votes. “The Petitioners shall rely on the evidence of Statisticians, Forensic Examiners and other Experts, detailing the data analysis on the votes at all levels of collation, from the polling units to the final return”, he added.

“The Petitioners state that Smart Card Readers deployed by the 1st Respondent, in addition to accreditation, equally transmitted electronically the results of voting from polling units directly to the server of the 1st Respondent. The Presiding Officers of the 1st Respondent directly inputted the results from the polling units at the end of voting and transmitted directly to the server, in addition to manually taking the Form EC8As to the Wards for collation. The 1st Respondent is hereby given notice to produce the records of results from each polling unit uploaded and transmitted electronically by officials of the 1st Respondent through smart card readers to the 1st Respondent’s Servers. Election at six polling units in Ambode’s home town cancelled

“The Petitioners plead and rely on the 1st Respondent’s Manual Technologies 2019, and notice is hereby given to the 1st Respondent to produce same at the trial. The 1st Respondent’s agents at the polling units used the Smart Card Reader for electronic collation and transmission of results. The Petitioners plead and shall rely on and play at the trial, the video demonstration by the 1st Respondent of the deployment of Smart Card Reader for authentication of accreditation and for transmission of data. “The Petitioners hereby plead and rely upon the extract of data as contained on the 1st Respondent’s servers as at 25th February 2019, notice to produce whereof is hereby given to the 1st Respondent. The Petitioners also will rely on the data on the 1st Respondent’s central server between 25th February 2019 and 8th March 2019 and hereby also give notice to produce same before this Honourable Court.

“The Petitioners hereby plead the electronic data on the servers of the 1st Respondent and shall at the trial give evidence of the source of the data analysis and data material, including the website: www.factsdontlieng.com. “The 1st Respondent had on the day of election published the total number of registered voters in the entire Country as 84,004,084. Subsequently, the same 1st Respondent published a different figure of 82,344,107 as registered voters, leading to an unexplained difference of 1,659,977 registered voters. The 1st Respondent equally published the number of permanent voter’s cards (PVC) collected for the purpose of the presidential election as 72,775,502. “The Petitioners state that whereas the actual number of voters accredited at the election was 35,098,162, the 1st Respondent wrongly suppressed and/or reduced the number of accredited voters to 29,394,209 to the detriment of the Petitioners.

“The 1st Respondent had by its Regulations and Guidelines for the Conduct of Elections, 2019 made pursuant to the Electoral Act, 2010 (as amended) provided for the mandatory use of card readers for the said election. The 1st Respondent by its press release on smart card readers issued in February 2019 and signed by its National Commissioner, Barrister Festus Okoye, emphasised and reiterated that “The use of the Smart Card Reader is NOT ONLY MANDATORY but its deliberate non-use attracts the sanction of possible prosecution of erring officials in accordance with the INEC Regulations and Guidelines for the conduct of elections. “This is in addition to the voiding of any result emanating from such units or areas as was done in the Presidential and National Assembly elections of February 23, 2019.” By this stated position of the 1st Respondent, all accreditation not done by smart card reader in the presidential election was and remain void.

“The Petitioners state and contend that the 2nd Respondent was not duly elected by majority of lawful votes cast at the election; and that from the data on each State of the Federation and the Federal Capital Territory, Abuja, in the 1st Respondent’s server, the 1st Petitioner, as opposed to the 2nd Respondent, scored majority of lawful votes cast at the election. “Wherefore, the Petitioners pray jointly and severally against the Respondents as follows:- “That it may be determined that the 2nd Respondent (Buhari) was not duly elected by a majority of lawful votes cast in the said election and therefore the declaration and return of the 2nd Respondent by the 1st Respondent as the President of Nigeria is unlawful, undue, null, void and of no effect.

“That it may be determined that the 1st Petitioner (Atiku) was duly and validly elected and ought to be returned as President of Nigeria, having polled the highest number of lawful votes cast at the election to the office of the President of Nigeria held on 23rd February 2019 and having satisfied the constitutional requirements for the said election. 2019: INEC will use smart card readers – Chairman “An order directing the 1st Respondent to issue Certificate of Return to the 1st Petitioner as the duly elected President of Nigeria. “That it may be determined that the 2nd Respondent was at the time of the election not qualified to contest the said election. “That it may be determined that the 2nd Respondent submitted to the Commission affidavit containing false information of a fundamental nature in aid of his qualification for the said election”. In the alternative, he prayed: “That the election to the office of the President of Nigeria held on 23rd February 2019 be nullified and a fresh election ordered”.

Read more at: https://www.vanguardngr.com/2019/03/presidential-poll-inec-credited-invalid-votes-to-buhari-atiku-tells-tribunal/

drlateef:
Thieves are wailing. Only thieves will wail at this news.

Bluffly:
Witch hunting is only an English term. Like I said support and you will see there'll be a mathematics that will fish out the CCT chairman to show his, but if you want everything in the Saga quenched, corruption will be further stamped

Bluffly:
It will start from somewhere and somehow someday, trap go catch hunter too

Bluffly:
There is nothing like take over. The Judges are dirty. If they can remain clean one can intimidate them.