03 Aug

Daily Watch – Import waivers causing harm, Cement production to ramp up

  • Some of the tax incentives offered to encourage Foreign Direct Investments into the country are now doing more harm than good. According to legislators, Nigeria lost N585 billion to import waivers between 2011 and 2015. Also, waivers given to some importers have been abused, as they overshot their quota and now owe the Federal Government duties running into billions of naira.
  • The cumulative capacity of Nigeria’s cement industry is set to hit 45.5 million metric tons per year with the launch of the $600 million Obu Cement Plant owned by the BUA Group. The plant will have capacity to produce 3 million MTPA. The cement industry’s current total capacity is estimated at 42 MTPA with Dangote Cement, the industry leader, accounting for 29 MTPA, while Lafarge Africa’s subsidiaries such as WAPCO, the United Cement Company of Nigeria (UNICEM), Ashaka Cement and Atlas have a combined capacity of 12.5 MTPA. BUA already has a half million MTPA capacity, while Sokoto Cement also has 500,000MTPA capacity.
  • Oil producer Afren says its board has decided to put the company into administration after failing to secure support for a refinancing and restructuring plan. The company board said that discussions failed to deliver support for a revised refinancing and restructuring proposal that would result in Afren being able to pay its debts as they fall due. As a result, it has taken steps to put the company into administration. It appointed Simon Appell, Daniel Imison and Catherine Williamson of AlixPartners as the administrators.
  • OPEC Secretary-General Abdallah el-Badri, says that oil prices would not rise significantly even if the cartel’s daily production quota is reduced by 2 million barrels from the current 30 million. As a result, the organization does not plan to reduce the quota.