By Ruth Olurounbi
As Nigeria tackles regulatory challenges and bureaucratic constraints, and deepen multiple reforms for creating conducive business environment in Nigeria, here are top business activities that made headlines in 2018.
Dangote lost $2bn in 2018
This year, Aliko Dangote, the President of Dangote Group dropped a whopping $2 billion from his wealth, leading the pack of seven African billionaires who recorded loses in personal wealth in 2018. Dangote remains Africa’s richest man and stand currently at $10.3 billion on the Bloomberg Billionaire Index.
Dangote is the biggest business brand on the African continent. It’s owner, Aliko Dangote has interests in commodities in Nigeria and other African countries.
The $8.1bn MTN scandal
In a shock announcement in September, the Central Bank of Nigeria (CBN) ordered MTN to repay $8.13 billion because for illegally repatriating the funds between 2007 and 2015. Four banks were alleged to have been involved in helping the South African company and were fined a combined N5.87 billion ($16.2 million or 14 million euros).
The banks, including Standard Chartered Bank, Stanbic-IBTC, Citibank and Diamond Bank were accused of “flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and the Foreign Exchange Manual, 2006,” according to Isaac Okorafor, director of Communications for CBN.
While MTN was trying to sort its $8.1 billion dispute with the Nigerian authority, the central bank slammed the company with a $2 billion tax demand for allegedly withholding the said amount in taxes in the same month of September.
It will be recalled that the company was in 2015, fined $5.2 billion by Nigeria’s telecoms regulator for failing to disconnect unregistered SIM cards on its network. The fine was later reduced to $1.7 billion after a series of negotiations with the Nigerian government.
The African continent’s largest telephony carrier has however settled the $8.1 billion dispute with the Nigerian authority at a cost of $52.6 million. The settlement came in four months of dispute from both parties.
Nigeria’s regulatory bank cleared the South African company of all charges in the allegedly moving $8.1 billion from Nigeria, but said the telecoms company will still have to pay up to $52.6 million in notional reversal of a 2008 private placement having found that MTN’s private placement remittances of about $1 billion in that year were irregular.
Minister of finance resigns amid fake NYSC certificate scandal
In a major scandal that gripped the Nigeria’s finance ministry since President Muhammadu Buhari took office on the anti-corruption crusade, his minister of finance, Kemi Adeosun, was forced to resign amid National Youth Service Corps (NYSC) forgery scandal. She was Nigeria’s 23rd finance minister.
Adeosun’s resignation came months after months after an online news platform, the PREMIUM TIMES broke the story that she did not participate in the mandatory one-year national youth service scheme, but presented a forged an exemption certificate many years after graduation.
In her defense, Adeosun wrote in a resignation letter to the presidency that it came as a “shock” to her that the Certificate of Exemption from National Youth NYSC that she had presented “was not genuine.” She explained her resignation as being “in line with this administration’s focus on integrity,” and therefore, “I must do the honourable thing and resign.”
Diamond Bank acquired by Access Bank after weeks of “dispelling rumours”
After weeks dispelling “rumours” of acquisition talks between Diamond Bank and Access Bank, the two banks announced this month that Diamond Bank is being acquired by Access Bank, although the former would rather want the public to believe that it was being merged with the latter.
“We wish to state categorically that the Bank is not in discussions with any financial institution at the moment on any form of merger or acquisition. We trust that the above clarifies the position of the Bank with regards to the rumor on the various media platforms,” Diamond Bank had said in a brief statement.
But a short few weeks after, Diamond Bank made a U-turn on its stance, and announced that it was merging with Access Bank. “The Board of Diamond Bank believes that the merger is in the best interest of all stakeholders including, employees, customers, depositors and shareholders and has agreed to recommend the offer to Diamond Bank’s shareholders,” the bank said in a statement.
The merger/acquisition, once completed, makes Access Bank the largest retail bank in Nigeria and in Africa as its customer base would span three continents, 12 countries and 29 million clients.
Herbert Wigwe, Access Bank’s Chief Executive Officer, at a joint press conference to announce the “merger” expected to be completed the second half of 2019, would deepen financial funding as its customer base increase.
Otedola divests struggling Forte Oil
Nigeria’s billionaire and Chairman, Forte Oil, Femi Otedola made headlines a few days to Christmas when he announced he was selling all his shares in the firm’s downstream business. This came more than three years after the firm sold 17% of its equity to a Swiss oil trading firm and almost 18 months of struggling in at the stock market.
In July this year, Bloomberg reported Forte Oil shares fell to lowest in almost five years with, falling 9.7% to 29.65 naira at close of trading in Lagos, its lowest level since July 22, 2013, months after the oil company sought to divest from Ghana, and to also sell some Nigerian assets.
“Forte Oil Plc hereby notifies the Nigerian Stock Exchange, Securities and Exchange Commission, shareholders and the investing community that its majority shareholder, Mr Femi Otedola, has reached an agreement with the Prudent Energy team, investing through Ignite Investments and Commodities Limited, to divest of his full 75 per cent direct and indirect shareholding in the company’s downstream business.
“Mr Otedola’s divestment from the downstream business is pursuant to his decision to explore and maximise business opportunities in refining and petrochemicals. The transaction is expected to close in the first quarter of 2019 subject to the satisfaction of various conditions and receipt of applicable regulatory approvals,” Forte Oil disclosed its majority shareholder’s divestment plan in a notice signed by its General Counsel, Akinleye Olagbende.
It will be recalled that Forte Oil’s management and board in May sought the approval from shareholders to sell its upstream and power-generating businesses in Nigeria to focus on distribution, as it also sought to exit from Ghana where it owns AP Oil and Gas Ghana Limited, according to a meeting notice published in local newspapers
Although news of Otedola’s divestment plans made the news, many analysts were not surprised given the oil company’s struggle over the years. The company in September last year put a N20 billion offering at the Nigerian Stock Exchange on hold “pending the conclusion of an ongoing corporate restructuring,” less than a month after it had announced the offering through book-building method to qualified institutional investors and high net-worth individuals.
Opec cut Nigeria’s oil output to 1.6 million bpd
The Organization of Petroleum Exporting Countries in December cut Nigeria’s daily crude oil output by 3.04% to 1.685 million barrels per day for the first half of next year, as part of its efforts to reduce oversupply.
The cut puts Nigeria in a difficult position. The 2019 budget proposal presented President Muhammadu Buhari to the National Assembly proposed an oil production of 2.3 million barrels per day. Many analysts have said this development might push Nigeria to further borrow to meets its obligations.
The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, earlier in December 7, had said how very difficult it would be for Nigeria to reduce its crude oil production.Speaking on ‘Bloomberg Daybreak: Europe’ ahead of the OPEC meeting in Vienna, said: “It is very difficult to do that but where we are now, everybody must be seen to contribute. Obviously, the smaller it is, the more amenable we are to participate; the larger it is, the more we will struggle to participate. We have got exemption three times understandably. This time round, I think there is a decision that everybody should be seen to chip in.”
Mike Adenuga’s GLO allegedly fired 90 married women
Controversy trailed Nigeria’s indegenious telcoms company, Globacom, for an alleged sack of 90 staff members, who are exclusively married women.
Ninety (90) of the company’s female staff in various Glo Friendship Centres across the country were terminated earlier in the year, but the laid off workers alleged discrimation not only against their gender, but their marital status as well.
Although an official of the company said the retrenchment exercise was “routine” and devoid of prejudice against gender and/or marital status, a former top management staff of the company told Per Second News that the new was true.
The development trigger a massive online backlash against the company after the report went viral; forcing the head of Public Relations, Andrew Okeleke, to hold a press briefing denying the reports on circulating in the media.
According to him, some of the 90 staff laid off were let go based on performance issues.