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Boardroom of Mess…. How Tinuade Sanda crisis tears Eko DisCo apart, Otubu, Egeregor, Etomi double standards’ and can of worms



As the nation grapples with electricity challenge, Eko Electricity Distribution Plc’s (EKEDP) boardroom crisis is deepening. Directors are
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As the nation grapples with electricity challenge, Eko Electricity Distribution Plc’s (EKEDP) boardroom crisis is deepening. Directors are bickering over what they described as undue personalisation of board authority, abuse of due process and vested interests.

From a managerial crisis around alleged ghost workforce and call for proper investigation, the crisis has engulfed the entire company and its private holding company.

The Federal Government, which controls 40 per cent equity is now being looked upon to intervene before things fall totally apart.

EKEDP, one of the 11 DisCos controls one-sixth of power distributed from the national grid. It covers several major commercial centres within the Lagos-Ogun axis. Its business covers three geographical areas, segmented into 11 districts, including highbrow southern part of Lagos State – Lekki, Ibeju, Islands, Orile, Ijora, Apapa, Mushin, Festac, Ojo, Ajah and Ogun State’s economic cluster of Agbara.

According to documents obtained, the crisis has become a polar fight between the chairman, Mr. Oritsedere Otubu and few directors on one side and majority of other directors on the other side, with accusations and counter-accusations of underhand dealings and impropriety.

Last year, many whistleblowers alerted the management to an entrenched malfeasance including ghost workforce, misappropriation and diversions. At the centre of this was a top official. After incessant pressure, the managing director, instituted a process for thorough investigation of the allegations, but this ran into a boardroom storm of tricks as directors openly alleged plans by certain vested interests to cover up the misdeeds.

Some directors felt Otubu, a non-executive chairman, was usurping the authority of the board and acting like an executive chairman.

Citing several documents to back up their claim, they alleged that Otubu, a minority shareholder who also represents the interest of West Power & Gas (WPG) Limited, was acting as a sole business owner and against all boardroom ethos and standards. EKEDP is a subsidiary of WPG, the core private sector majority shareholder.

Battle of wits

The simmering battle of wits snowballed into direct confrontation with the unilateral decision of Otubu to countermand the recall of EKEDP’s chief legal officer, Wola Joseph to WPG and subsequent redeployment of the managing director, Tinuade Sanda, to WPG. Most board members felt Otubu was allegedly acting a script.

Integrity is the first of the six corporate values of EKEDP, which included excellence, responsiveness, value-driven, safety and empathy.

In some of the documents, Otubu and the chairman of WPG, George Etomi, stoked a long-running boardroom intrigue, with other board members joining the fray. While Otubu authorized the recall of suspended CLO, Wola Joseph on December 5, 2023, Etomi and other directors fumed such undermined the integrity and authority of the EKEDP board and its parent company, WPG.

Otubu had written against the recall of the CLO thus: “Dear Wola, I was copied in a letter from Chairman of WPG dated 5th of Dec 2023 recalling you from the position of Chief Legal Officer to EKO DISCO. Kindly disregard this letter in its Entirety. Eko Disco will continue with its process of looking into the matter. Eko DISCO MD, Dr. Tinuade Sanda who is copied should note accordingly.”

Etomi fired back in a memo circulated to all directors thus: “Dear Dere, my attention has been drawn to a recent email sent by you to the Chief Legal Officer (CLO) and the MD/CEO EKEDP, among others, instructing that the WPG email containing the CLO’s Letter of Recall from EKEDP be disregarded in its entirety.

“I am very surprised at this turn of events because instructing the CLO to disregard a directive from the Chairman of WPG, her employer, can be considered an act of encouraging insubordination. This may easily be construed as setting a wrong precedent that could empower management staff to undermine the directors of the board at all levels.

“As you are aware, WPG is well within its rights to recall any of its staff based on the operations and management agreement executed between WPG and EKEDP.

“The rights to recall and/or discipline staff are consequential rights of WPG as the CLO’s employer. The Letter of Recall to the CLO constitutes standard practice in such cases, pending the conclusion of the investigation and determination of the matter.

“Kindly be aware that the issues that have necessitated the recall are very grieveous and nothing whatsoever should be done to condone or cover them up. Without prejudice to whatever action you want to take, WPG will go ahead to conduct a full investigation into the matter and I advise all our nominees on the EKEDC Board not to lend themselves to any cover up. The instruction to recall stands and ignoring It will be at the peril of whoever does so.”

However, not satisfied with the content of Etomi’s reply, Otubu responded insisting that the recall of the CLO to WPG was a nullity as far as he was concerned. Otubu wrote: “Dear Chairman, I’m kindly surprised at your letter as I had spoken to you on why your “Letter of Recall”’ should never have been issued in the first place and was therefore disregarded.

“I had pointed out to you that it was clearly improper for you to ‘singlehandedly’ issue instructions of such significance on behalf of WPG and on a matter that relates to you without wide consultations.

“Furthermore, these instructions are to officers in a separate company, Eko Disco, with significant government shareholding and its own processes. Issuing threats to Eko Disco staff is kindly ill-advised and of no value.

“I would therefore kindly request you to allow us the space to conduct the investigations properly. Without prejudice, I will no more be joining issues with you on this matter as you are expected to recuse yourself.

“Be that as it may, you can kindly rest assured that this matter would be handled fairy and with the seriousness it deserves. I would also kindly assure you that we will not protect anyone found guilty of wrongdoing.”

Etomi responded with a stinker that opened a can of worms. He wrote: “Dear Dere, Let me remind you that when you spoke to me it was more about how this matter can be suppressed and I told you very clearly that I would not stand for that.

“Given the reference to GEP of course I will recuse myself from any investigative panel that will be set up to look into this matter. I do not see how recalling a WPG employee that serious allegations have been made against can be wrong. On the contrary, your assumption of my guilt is what shows your bias and I do not trust any process in this matter that is chaired by you.

“I know of people you have spoken to insinuate my culpability. I will not allow you or anyone else use this inexcusable action of the CLO to tarnish my hard earned reputation.

“Thankfully, a thorough investigation will reveal the truth. The federal government participation in our business is all the more reason why nothing should be swept under the carpet. You can do whatever you like but it will not be at my expense.”

Few against many

Most other board members felt there were untoward abrogation of due process and board authority. A director, Simon Ani, in a document circulated to board members, detailed their concerns. Ani wrote: “Dear Ernest (Oji) and Chairman Dere (Otubu), I want to respond to both your e-mails regarding the matter of Eko’s CLO Wola, as follows:- “Re Ernest’s below mail.

“Ernest (Oji), you have a good point and I agree with you, but you will also note that George (Etomi) has called for a WPG Meeting on the 19th and this matter is already listed on the Agenda. And in one of George’s mails to Dere, George has already said he will recuse himself. But your point was in order.

“Re Chairman Dere’s Mails of 05th December 2023 to Wola copying Eko Directors and 06th December 2023 responding to George and copying WPG Directors and shareholders.

Charman D (Otubu),

“I’m sorry to say, but honestly, I think your mails are ill-advised and inappropriate For two reasons:- (a) WPG have written earlier this year to all of us directors on Eko’s board, clarifying that we are there representing WPG’s interest. We are not there for any other purpose. We are not there representing our own shareholdings. WPG nominated us to sit there to look after WPG’s interests.

“Also, WPG have written clarifying that we are all ‘non- executive directors’ including you, Chairman, you are a ‘non-executive charman’. As such, none of us, including you chairman, has the authority to unilaterally issue orders and directives. We can only do so as part of the Board Meeting Process.

“Therefore, it is wrong for you to unilaterally countermand Chairman WPG’s e-mail bringing the Wola matter to WPG board. If we feel strongly about it and disagree, the WPG boardroom is the time and place to put those arguments forward. WPG employed all senior management, Wola is one of them. And, under the O & M (Operation and Management) Agreement, WPG has overall supervisory responsibilities for Eko.

“The moment we undermine constituted authority we also in the process create room for our own authority to be undermined. Very serious allegations have been made against Wola, as a WPG employee it now becomes a WPG matter.

“And Dere (Otubu) you cannot openly and brazenly disrespect our holding company chairman and expect people to respect your chairmanship of Eko. Given that you didn’t consult with or include your colleagues in your persona feud against Mr. Etomi, you are equally culpable of the acts you accuse him of.

“Like Mr. Etomi and myself, you are also a minority shareholder, yet you acted and wrote in your email as the sole proprietor of the business, so what’s good for one is good for all.

“You also have to disqualify yourself as well because it is clear that you are more interested in the accused Wola, or in the matter, than meets the eye. Moreover Mr. Etomi stated in one of his mails that you appealed to him to kill the matter. That alone stops you from any role in the investigation.

“As a result of your alleged interference and approach to Etomi you have exposed yourself to allegations of unprofessionalism and inappropriate behaviour as a non-executive chairman. I therefore implore you Dere (Otubu), for the sake of safeguarding your credibility as a non-executive chairman and to preserve our institutions, that you please urgently recall your e-mails and recuse yourself from the matter”.

Ani stated that EKEDP directors had been inundated with anonymous messages from whistleblowers calling out the company on the ghost workforce scandal, with the general staff of the company also keenly following the ugly development.

“Everything we do is being watched by over 5,000 staff, who have seen a lot of very poor governance from their leaders (all of us), over the past decade. Morale is low. Theft is high. Resentment is even higher now!

“For once, please let us do things the right way, and at least come out of this with a little respect in front of all our staff and our stakeholders, even if we cannot recover our money, which we should!

“I believe Wola’s recall is the right thing to do in a matter of the gravity. Her subordinates will need to be interviewed and some of them taken on record. Her presence will intimidate them and she can interfere with the investigation process. It is the norm (standard practice) everywhere in the world where there is serious allegations of malfeasance or misconduct or misdemeanour, that such persons steps aside for thorough investigations to be carried out.

“I am shocked that anyone of us will try to interfere in this matter, considering the potential consequences of the allegations. The real issue is how much more of these acts have gone undetected. How many ghost workers do we have in our over 5,000 staff and who are their sponsors or fellow conspirators,” Ani stated.

According to Ani, what should concern the directors as investors should be stopping the rots in the company rather than bickering over a petty show of power – Eko vs WPG, while investors are losing money.

“The far-reaching consequences of Chairman D’s (Otubu) countermand of George’s (Etomi) letter, I believe wasn’t properly thought through. The sooner we retrace and harmonize positions, the better for us all. My view is that the WPG letter should remain and NOT be withdrawn since it’s her staff that is being called to question.

“A WPG committee should immediately be set up to investigate the allegations whilst Wola remains recalled until conclusion of investigations. Lastly Unity and Integrity should be our guiding principle in these very trying times,” Ani stated.

Rancour over investigation committee

Board members also felt dissatisfied with the way Otubu carried on with the constitution of a “Human Resources Investigation Committee”, raising objections to the terms of references, which were allegedly drawn up unilaterally by Otubu.

In response to a document circulated by Otubu titled, “Terms of Reference for Investigation Committee,” a board member and Chairman, Legal, Corporate Governance and Regulatory Compliance Committee, Babor Egeregor, objected to the terms, accusing Otubu, like others, of usurping the authority of the board and acting as an executive chairman.

Egeregor wrote: “Dr. (Dr. Tunji Olowolafe), please, deliberating on this extraneous Terms of Reference as singularly and surreptitiously introduced by Mr. Otubu, who openly admitted to being conflicted will be tantamount to deliberating on falsehood and illegality.

“As Chairman, Legal, Corporate Governance and Regulatory Compliance Committee, I am obligated not just to my shareholders, but also to the company (partly Federal Government owned) and my God, to stand on the side of truth at all times.

“We must be governed by the resolutions of the board, which is the highest decision making body of the company. Mr. Otubu is acting as an executive chairman, which he is not and definitely not an emperor as he is attempting to be.

“When we do things like this then we are saying we have thrown caution, corporate and good governance out of the window. When we get to that meeting, I won’t be a part of this fake and fabricated terms of reference”.

Egeregor, a life coach who specialises in leadership coaching and values reorientation, did not let the matter rest. He followed up with another lengthy response to board members on reasons for his objection to the terms of reference while advocating for the board to operate within the guidelines of the decisions reached at WPG’s board meeting.

Egeregor wrote: “Dr (Dr Tunji Olowolafe, Chairman, Investigation Committee). I feel I should urgently raise my objections on the email you sent to us which had an email trail from Mr. Dere Otubu highlighting what he (Otubu) referred as “Terms of Reference”.

“I actually wanted to await the commencement of the meeting tomorrow before raising my concerns; but thought against that position as this pertains to falsehood and outright miscommunication of what we discussed at the board meeting, hence, this mail.

“It might interest you to know that this supposed Terms of Reference emanating from Mr. Otubu is at best his sole idea and completely at variance with the board resolution asking us to investigate the CLO and the allegations of ghost workers as raised by the MD.

“I am therefore at a loss to Mr. Otubu’s reference to investigation of any other parties outside of the board resolution. Also recall, that Mr. Otubu had earlier made moves to kill/cover up this matter by reaching out to George Etomi as captured in Mr. Etomi’s mail to us all. I also recall that Mr. Otubu confirmed at the last board meeting that he was conflicted and me and your good self vehemently denied being conflicted in any way. Hence, the committee cannot in all good conscience accept a term of reference solely crafted by him from whatever source that didn’t emanate from our board meeting.

“At best, other parties can be invited to testify if and when the need arises. These extraneous allegations against persons not discussed nor named in our very detailed and extended meeting now being introduced into this otherwise simple matter is at best kicking the can down the road.

“Ultimately the truth will prevail. Please kindly consider my concerns and take appropriate measures to allow us abide by the board resolution on this subject matter”.

Olowolafe carefully responded: “Dear Babor (Egeregor), I am sure there is a misunderstanding. I sent to all members of HR committee a memo sent to me by Chairman Eko disco. When we meet tomorrow, we will deliberate on how we intend to handle the assignment from the board. I am not in a position to comment further”.

The intrigues around Sanda’s recall

With tempers high at the board level, the uncompromising stand of Managing Director of EKEDP, Dr. Tinuade Sanda, placed her in the battleground. Otubu allegedly worked to send Sanda back to WPG because of her insistence on due process.

Taking advantage of escalating media reportage of the scandalous issues emanating from the board crisis as well as agitations from staff union on the need to the right part in resolving the controversial issues of corruption, in January, Otubu warned Dr. Sanda of his displeasure at her inability to manage these developments.

In a document, Otubu expressed worries about the crisis coming to limelight and its consequences, calling on her to put a stop to it.

Otubu wrote: “Recall that we have been under unprecedented assault from whistle blowers, the union and the press since the matter (ghost workforce) came up. You are kindly instructed to take action and protect the integrity and image of the company, the directors, shareholders and all stakeholders from such attacks.

“Kindly show leadership and competence and treat this matter as extremely important and urgent. The board will take all necessary action to protect the company if management fails to do its job”.

Dr. Sanda, with an outline of a preferred course of actions based on the company’s rules and regulations, wrote: “As the MD, I have at all times taken steps to ensure the protection of the company’s integrity and brand, which was why, I initiated the ghost workers queries in the first place after I was alerted by a whistle blower within the company and did some investigations:

“(A) On 27th Nov, when the email from a “Third Eye” was sent to the board, I immediately forwarded the email to JP Attueyi to trace it and unravel the source. Unfortunately, the email was traced to an IP address in US (USA).

“(B) On Friday, 12th, when another email was received from a whistle blower claiming himself/herself to be a staff, I requested JP to do a similar search, and he has now requested the originating email which I will forward to him shortly.

“(C) I discreetly and carefully managed the Vice Chairman of NERC when he reached out on the matter to avoid any outburst or unwanted action from NERC. (D) On 10th Jan, when received the letter from NUEE, I immediately forwarded it to the board and sought guidance on what response to provide or how to deal with the matter, and I am yet to get guidance in this regard”.

Dr. Sanda outlined that she had internally managed several staff who have come into her office at different times requesting updates and justice on the matter without escalating this to the board as her automatic reflex instincts was always to defend and protect the company.

“There can be no doubt whatsoever of my understanding of the MD’s role and my consistent defense of the company at all times, whether in cases such as the present matter or in reaction to NERC or any other party. I always protect the integrity and image of the company at all times and continue to do so unflinchingly. However, it is clear that the staff are anxious to know how the matter will be investigated and decided. This has been their clamour since this matter was escalated to me in November 2023.

“There is a feeling of resentment amongst staff at the way the company handled previous instance of job abandonment for relatively small amounts, yet here, a senior officer has been accused on a similar issue, and for much larger sums of money, yet no visible actions. There is a strong and growing perception of injustice and double standards”, she wrote.

On how to protect the integrity and image of the company, the directors, shareholders, and others from the brewing public attacks, Sanda recommended that the relevant provisions of the company’s rules and regulations be applied.

She said: “My recommendation to ‘protect the Company from such attacks’ would be that Chapter 10 of the Company’s Conditions of Service (CoS) should be applied. Please note that Paragraph 10, page 40 (new CoS) and page 38 (old CoS) state that an employee may be interdicted from his/her duty if he is suspected to have committed an offence which under this chapter attracts dismissal as the penalty, provided that disciplinary proceedings have been or are being instituted against him.

“This would send a clear message to all staff and external observers that the company does not have double standards, that the same process that has been applied to junior staff in the past is being applied today to senior staff, etc.

“This will go a long way to assuage and pacify feelings which will give the time needed for the HR Committee to complete their investigation and submit their report to the board.

“You would agree with me, Sir, that this is not an operational matter, hence, authority on matters such as this clearly lies with the board. Therefore, I kindly await your further directives, sir(s)”.

Misdirection of energy

Many board members were worried about seeming misdirection and openly raised concerns. In one of such relating to the way and manner Otubu continued to run the company, especially fixing board meeting of EKEDP where the decision to redeploy Dr. Sanda to WPG, Ani listed a lot of concerns on the probity of recent actions.

Ani wrote: “I was surprised and appalled to wake up this morning to see the below mail calling an emergency Board meeting to deliberate on the special HR investigation committee’s report, for the following reasons:-

“Our Committee are yet to meet and review a report which I believe is a draft only submitted in the last day or so, how can we call a board meeting to deliberate on a report which is yet to be finalized and submitted? Except if the outcome has already been decided and these meetings are all only a smokescreen? Is this the message we really want to send out to the many interested observers of this matter sir?

“The person at the center of the allegations being investigated has recused herself from the company’s affairs, in area of invoking the Company’s CoS disciplinary measures, interdictment, Etc. In this context, her recuse from the company’s affairs should be absolute, so how can you now copy this person openly in a Board Meeting to discuss the allegations against her?

“I think the correct protocol, which we have followed as long as I have been a Director, is that we copy the DG of BPE, I do not recall multiple persons at BPE being copied into any previous calls for meetings or Notices, etc. Why are we now deviating from this protocol?

“I thought there are rules governing how to call meetings, even emergency meetings, certain time needs to be given, Etc. Why are we now waiving our own constituted rules? The above are formal thoughts occurring to me.

“In addition, on a practice level, how do you think it looks to the outside word, that the HR Meeting to review the 1st draft of their investigation report is called for 2pm today, then at midnight last night, an e-mail goes out can go for an emergency board meeting to review the committee’s report at 3 pm today? Even to the most disinterested observer, don’t you think we are sending a clear signal that this whole process is contrived, that the desired outcome has already been decided. And this after so many warning signals from the NLC, from NERC, Etc . . .

“Please sir, recall the call for an emergency board meeting, allow the committee to do their work and submit their report to the board, circulate the report to the board members, then call for the board meeting allowing sufficient time for the report to be digested. At least let us pretend that we are observing minimum due process and governance protocols

“Lastly, please recall my earlier mail where I cautioned against actions which may damage our company, individual shareholders will take steps to safeguard their investments”.

With the lingering crisis snowballing into increasing poor performance at the disco, stakeholders said the matter might force the federal government to intervene to protect its significant 40 per cent equity stake and the general interest of the Nigerian public.



Manufacturers wail as unsold goods pile up in warehouses



767 manufacturing companies
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Manufacturers of fast-moving consumer goods, FMCG are in dire agony over the continued rise in unsold goods in their warehouses, a development which would lead to a further significant decline in output level in the sector.

The continued rise in unsold goods is caused by two factors namely the rising cost of living and the declining purchasing power of the citizens.

Financial Vanguard’s findings show that due to the downturn in the consumers’ disposable income, the stock of unsold goods for manufacturers in the fast-moving consumer good, FMCG, sector of the economy rose Year-on-Year (YoY) by 27 per cent during the financial year ended December 31, 2023. The sector operators also indicated that the situation is worsening in 2024 as they expect to report over a 30 per cent rise in unsold goods in the first quarter of the year, Q1’24.

Consequently, they hinted that the output levels have been going down steadily since mid-last year, when the Central Bank of Nigeria (CBN), the report showed that capacity utilisation in the food and beverages sector fell to 49 per cent from 61 per cent in the corresponding period in 2022, indicating a 20 percentage point decline.

Nigerians have been battling with inflationary pressures with its curtailing effect on consumers’ purchasing power in the last eighteen months.

The headline inflation rate has been on a constant increase, rising to 28.82 percent in December 2023 from 21.34 per cent in December 2022, triggered by various factors including high energy cost, and insecurity, especially in the farming communities in Nigeria, among others.

Within the same period also, food inflation surged to 33.93 percent from 23.75 percent a year ago.

The trend has continued unabated in 2024 with headline and food inflation moving further up to 33.69 per cent and 40.53 percent in April from 29.90 percent and 35.41 percent at the beginning of the year respectively.

A combination of the massive increase in inflation coupled with naira devaluation had resulted in price mark up by manufacturers to cover high input costs.

But this cost coverage measure has also alienated many of their consumers, thereby slowing down sales.

Financial Vanguard’s findings from the operations of 15 major FMCGs clearly show a burdensome price index escalating the stock of unsold goods amounting to N104.45 billion despite the huge cut in production quantity.

The companies are BUA Foods Plc, Dangote Sugar Refinery Plc, Nestle Nigeria Plc, Presco Plc, Cadbury Nigeria Plc, Okomu Oil Nigeria Plc, NASCON Allied Industries Plc, May & Baker Nigeria Plc, Fidson Healthcare Plc, and Neimeth Pharmaceuticals Plc.

Others are Guinness Nigeria Plc, Champion Breweries Plc, Flour Mills of Nigeria Plc, Nigerian Breweries Plc and Honeywell Flour Mills Plc.

Companies’ records

The breakdown shows that while a number of the companies recorded a reduction in the level of their stock of unsold goods, palm oil producers – Okomu Oil Palm Plc and Presco – took the biggest hit. Industry observers believe the oil palm industry should not be recording such poor performance given how essential the product is to the average Nigerian family.

Presco, the leading palm oil producer, recorded the highest stockpile of unsold goods as the inventory of finished unsold goods rose by 249.4 per cent to N1.45 billion, followed by May & Baker Plc and Okomu Oil Palm, the second largest palm oil producer, with 160.2 per cent and 124 percent increase in their inventory of unsold goods respectively.

Dangote Sugar Refinery Plc, Flour Mills of Nigeria Plc and Cadbury Nigeria Plc also ranked among the worst with record increases of 92.9 percent to N9.76 billion, 74.1 percent to N30.75 billion and 71.5 per cent to N3.55 billion in their stock of unsold goods respectively.

Strangely, all brewers in the report recorded reduction in their unsold goods.

Reacting, Director General of the Nigerian Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), Sola Obadimu, said the findings are not surprising, adding that until economic indices are stable, the situation may persist.

His words: “As I always say, we’re in a ‘stagflation’ situation, meaning – persistent rising inflation and high unemployment rates in a static wage situation. The wages are not just static, they’re declining in value in real terms as a result of inflation. Consumers (and industries as well) are also vulnerable/defenceless victims of rising energy costs, unstable forex rates and debilitating infrastructure generally, etc. So, it’s no surprise that inventories are growing.

“We’re all aware of the fact that some major multinationals declared losses for 2023 as a result of the unfavourable economic climate and some chose to leave while others are contemplating. It’s easier for local industries and businesses whose owners can quickly take decisions in the face of constantly changing critical economic indices. These multinationals sometimes have to seek aporovals for some major situations from their global Head Offices which may take a while to come due to lack of adequate understanding of the local environment.

“So, unless we get some sort of stability in critical economic indices and consumer purchasing power increases in value terms, the story may not agreeably be too different in 2024.”

Consumers preference has shifted — Muda Yusuf

Muda Yusuf, Director General, Center for the Promotion of Public Enterprise (CCPE), who blamed the mounting inventory of unsold goods on depreciation in the value of the naira, and high energy cost among others, said that consumers are now reviewing their preferences and are shifting to cheaper substitutes where available.

He said there’s a need to bring down the exchange rate and energy cost to effect a reduction in companies’ cost of production.

He said: “The high level of inventory of finished goods, particularly the unsold inventory, are the consequences of high production cost and the high operating cost that the manufacturers in the FMCG sector have been grappling with over the last one to two years.

“There have been challenges of escalation of cost arising from exchange rate depreciation, high energy cost, high cost of logistics and challenges around the high cost of funds.

“These are the key issues and, naturally, when the production and operating costs increase, the natural thing is for the increase in cost to be passed on to the consumers in the form of high prices.

“So, what we are seeing is that the prices of some of these products have gone up significantly and some by as high as 50% and in some cases, even 100% in the last year.

“And in an environment where the purchasing power is also weak, where the level of poverty is also high, naturally, these inventories will be very slow in terms of outflow from the warehouses because of the weak purchasing power of the consumers.

“There’s also an element of consumer resistance due to this high cost of production. There is also an element of substitution. For some of those products that have substitutes, consumers may decide to go for cheaper substitutes because of the high prices.

“So, basically, these are the factors that are responsible for the high level of inventory of finished goods that we have seen in recent times.”

Speaking on the way out, Yusuf said there’s a need to put strategies in place to ensure a reduction in operating cost, a reduction in logistics costs and a strengthening of the purchasing power of the citizens.

Need to stabilize FX market

He expressed the need to stabilize and boost supply in the foreign exchange (FX) market in order to moderate the depreciation of the currency.

According to him, this will result in a reduction in operating and production cost.

“Once the currency strengthens, the cost of production will, naturally, be less; the cost of logistics, if the energy crisis goes down, will also begin to decelerate.

“Then, of course, there’s also the element of the cost of clearance of cargo.

“These cargoes could be raw materials, it could be intermediate products, and it could be machinery that is used by any of these manufacturers.

“The current methodology of determining the exchange rate for the computation of import duty has made the cost of cargo clearance very prohibitive.

“So, if the government through the fiscal and monetary authorities could do an adjustment to this by fixing the exchange rate for the computation of import duty to between N800 – N1,000/$ and this is fixed for may be three months, that will also help to bring down some of this cost and make the products a lot more affordable because the key issue here is the affordability of these products.

The more affordable they are, the lesser the level of unsold goods,” Yusuf added.

According to him, “The danger in the level of this unsold inventory is that some of these products have expiry dates, which is another risk to these businesses.

It is a good thing that the government is talking about minimum wage. If the workers are empowered, we are likely to see an improvement in demand for some of these products.

“So, there’s a supply side issue to bring down the costs of production, operation and logistics and cost of funds.

“There’s also the demand side issue of empowering the consumer to have the purchasing power to buy these products.”

Rise in unsold goods weakens profitability — FSL Securities

Commenting also, Victor Chiazor, Head, Research at FSL Securities, said: “The 27% rise in inventory for players in the fast-moving consumer goods sector could be attributed to two factors.

“The first could be that the rise is a result of the company’s inability to drive sales due to the rising cost of goods which may have slowed down the volume of goods sold during the period, leading to a rise in inventory.

“Also the second reason for the increase in inventory could be deliberate and the company may decide to increase its inventory position to enable it to plan around the significant volatility in the cost of goods which has remained unpredictable in recent times.

“This helps the company manage the risk around a possible increase in production cost.

“However, whatever the case may be, it has a terrible effect on the course of operation for the business as a slowdown in sales will weaken profitability and a deliberate strategy to increase inventory also ties down capital which could have been raised via borrowing at a high-interest rate given the interest rate environment.

“The government will have to deal with issues around FX volatility, rising energy cost, rising cost of borrowing, bad infrastructure amongst other issues, all of which increase input cost for the manufacturer.”

Source: Vanguard

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Oil & Gas

Dangote petrol supply: FG may slash N6tn fuel import



Dangote Petroleum Refinery has announced a further reduction of the price of diesel from 1200 to 1,000 naira per litre.
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The Federal Government may cut its approximately N6.2tn yearly fuel import bill if the Dangote Petroleum Refinery begins the sale of premium motor spirit as promised by the Chairman of the Dangote Group, Aliko Dangote.

Dangote, while speaking at the Africa CEO Forum Annual Summit in Kigali, Rwanda on Friday, assured Nigerians that following the laid-down plans of the Dangote refinery, Nigeria would no longer need to import petrol starting next month.

The country’s petrol import was reduced to an average of one billion litres monthly after President Bola Tinubu removed fuel subsidy on May 29 last year, according to a report by the National Bureau of Statistics.

According to Dangote, the $20bn refinery can meet West Africa’s petrol and diesel needs, as well as the continent’s aviation fuel demand.

He said, “Right now, Nigeria has no cause to import anything apart from gasoline and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre.

“We have enough gasoline to give to at least the entire West Africa, diesel to give to West Africa and Central Africa. We have enough aviation fuel to give to the entire continent and also export some to Brazil and Mexico.

“We have started producing jet fuel, we are producing diesel, and by next month, we’ll be producing gasoline. What that will do is it will be able to take most African crudes.”
The assurance by Dangote, if realised, would reduce the country’s approximately N6.2tn annual spending on PMS import.

With an average pump price of N670/litre, marketers put the average landing cost of petrol currently at N520/litre, considering the price of the Nigerian National Petroleum Company Limited, which is the only importer of the product.

Operators also put the average difference between the landing cost and pump price of PMS at N150/litre.
With an average monthly consumption of 1 billion litres, Nigeria currently spends approximately N520bn on the importation of PMS every month. This is N6.2tn annually.

Going by the planned June supply of PMS by Dangote, the country is expected to save a substantial amount from the elimination of shipping and other charges attached to importation, according to operators and industry experts.

The difference between the landing cost and the pump price of petrol is N150 per litre, according to operators.

Landing cost is the total cost of delivering the shipment to Nigeria from a foreign country, including all expenses incurred from the point of production to the point of delivery.
Refined petroleum products often arrive in the country via the Atlas Cove, from where it is transferred to jetties via daughter vessels. From jetties, the fuel is moved to various tanks.

Marketers say this difference of N150 between the landing cost and the pump price has to do with the cost of moving PMS from the port to various filling stations across the country. This also includes marine costs, and the Nigerian Ports Authority charges, among others.

The PMS landing cost is different from that of diesel, aviation fuel, and other petroleum products.

In foreign currency, the country spends an average of $4.16bn annually if converted the N6.2tn at the rate of N1,520 per dollar. However, there are arguments that the NNPCL spends more than this on PMS importation.

The actualisation of Dangote’s promise is expected to strengthen the naira.
According to industry reports, Nigeria spends at least $10bn annually on the import of PMS, aviation fuel, diesel and other petroleum products.

Analysts believe that not less than one-third of the country’s annual foreign exchange expenditure goes into fuel imports.

Importation stoppage
A reliable source at the Central Bank of Nigeria said that the anticipated commencement of fuel supply by the Dangote refinery in June would herald a positive shift in the nation’s economy.
According to the source, the move to halt fuel imports will lead to a substantial reduction in the demand for foreign exchange, thereby strengthening Nigeria’s economic position.

The source further noted that, with the demands on forex reducing, the naira would regain strength.”As the dollar demand reduces, the naira will rebound and that is good for the economy,” the CBN source said.

Soneye said the NNPCL is no longer a corporation and could not comment on Dangote refinery’s impact.
The Director of Press and Public Relations, Ministry of Finance, Mr. Mohammed Manga, could not be reached for comments on Sunday as calls and messages sent to him went unanswered.
Also, the Director of Corporate Communications, Central Bank of Nigeria, Hakama Sidi Ali, did not respond to calls to her phone. She had yet to respond to a message sent to her line.
But the Director-General of the Centre for the Promotion of Public Enterprise, Dr Muda Yusuf, said the commencement of refining of petrol by the Dangote refinery would be a game changer for the Nigerian economy, especially from the perspective of the effect on the foreign exchange market and domestic energy cost.
Yusuf noted that, currently about 30 per cent of Nigeria’s import bill is on petroleum products.
“This has been estimated at between $10bn and $15bn annually over the decade. This would amount to a substantial easing of demand pressure on the foreign exchange market,” he stated.
Yusuf added further, “Already we have seen the impact of the domestic refining on diesel and aviation fuel importation. Even the prices have dropped. I therefore expect to see a major impact on the exchange rate.
“However, this positive outlook would depend on how much of the feedstock of crude can be sourced locally by the refinery. If the refinery has to resort to crude oil importation, the optimism about the foreign exchange impact may have to be moderated. Because that would imply some significant forex outflows for crude importation.”
He added that Nigeria is likely to see less importation of petrochemical products and other associated by-products from the refining process.
During an energy conference in Abuja recently, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, opined that Nigeria does not need to import fuel, expressing concerns that the bulk of the country’s foreign exchange goes into fuel importation.
“We must find a solution to our forex problem. Nigeria does not need to import fuel. We should free our scarce forex for other sectors of the economy. I am aware that the bulk of our forex goes to the importation of refined oil products.” Lokpbiri stated, expressing optimism that home-based refineries would put an end to fuel importation.

Marketers plan meeting
Meanwhile, fuel marketers said plans had been concluded to meet Dangote for discussions on possible price cuts as his refinery begins the production of PMS next month.

The marketers, under the aegis of the Independent Petroleum Marketers Association of Nigeria, told The PUNCH on Sunday they would meet with Dangote to negotiate a discount through bulk purchases.
Dangote’s 650,000 barrels per day refinery has been trying to secure crude supplies from the United States following the inability of Nigeria to ramp up production.
The refinery, which is the largest in Africa and Europe when it reaches full capacity, has since commenced the sale of diesel and aviation, but its petrol is yet to hit the market.
In April, Dangote crashed the price of diesel from around N1,500 to N1,000 per litre.
But Nigerians are currently eagerly waiting for petrol, which is the major fuel used by transporters, small-scale businesses and individuals for alternative power generation.
The promise of Dangote to end fuel import may be a relief to marketers and Nigerians, who are yet to fully recover from the recent fuel scarcity that nearly brought the economy to a halt in Lagos, Abuja and other parts of the nation.
Speaking in an interview with our correspondent, the National Vice President of the IPMAN, Hammed Fashola, disclosed that the marketers had requested a meeting with the Dangote Group chairman.
According to Fashola, there will be a follow-up to a letter written to Dangote earlier to fast-track a meeting and reach an agreement before the commencement of the sale of PMS.
Fashola had earlier called on the company to consider working directly with the association instead of individuals.
He noted that IPMAN should be a beautiful bride before Dangote for being in control of over 80 per cent of the filling stations in Nigeria.
The IPMAN leader said, “We have our letter with them, we are expecting their response, and we will surely do a follow-up. The letter was sent about a month ago and we are going to follow up. We are just like a ready-made market for Dangote. It is an advantage for him to have us in his programme. I believe that he would like to have us.
He added that the association would request a discount during the meeting with Dangote.“You know when you come together as a group, you have that negotiating power on your strength. There is no way we will not negotiate for a discount. That is why we don’t encourage individual company participation,” he stated.

Source: ThePunch

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MMA2 Training Academy: Elevating learning standards in aviation security



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Over 3,000 individuals graduate from MMA2 Training Academy

The Murtala Muhammed Airport Terminal 2 Training Academy, since inception, MMA2 Training Academy has trained over 3,000 individuals, with a significant number benefiting from instruction by certified and authorized trainers affiliated with the academy, while others have been trained by external authorized trainers.

MMA2 proudly announces its establishment as a premier training institution, strategically located on the third floor of the domestic terminal 2, offering cutting-edge facilities and accredited courses in aviation security.

The Head Creative Services Department, Bi-Courtney Aviation Services Limited, Korede Ogunseinde, said, “The industry is a regulated field, combined with the strict regulatory requirements, necessitates standardized training throughout the sector. We have successfully created an avenue for all professionals to acquire more knowledge and skills through accredited training and successfully trained over 3,000 persons since inception .”

Established in July 2019, the academy offers a comprehensive range of Aviation Security Courses, including but not limited to: ASTP 123 (BASIC), Aviation Security Awareness Training, Xray Interpretation and Screening.

Head of Corporate Communications, BASL, Ajoke Yinka-Olawuyi said, “Cultivating a culture of security consciousness is paramount in our industry, as such, all concessionaires are required to undergo aviation security awareness training. This initiative not only fortifies our terminal’s security protocols but also empowers participants with invaluable knowledge, ensuring a safer and more resilient operational environment. Together, we stand to gain enhanced vigilance and preparedness, safeguarding both our assets and the traveling public.”

Notably, MMA2 Training Academy has attained accreditation and approval from the Nigerian Civil Aviation Authority (NCAA Avsec Department) as a Certified Aviation Security Training Provider, underscoring its commitment to meeting stringent regulatory standards.

The head of Aviation Security at MMA2, Monica Oguta, is quotd as saying, “I commend the MMA2 Training ’s noteworthy impact in advancing aviation security training. Since opening in July 2019, the academy has skillfully trained over 3,000 individuals, underscoring our commitment to high learning standards within the industry.

“Located strategically within the domestic Terminal 2, the academy boasts cutting-edge facilities, offering a wide array of aviation security courses. The recognition by the Nigerian Civil Aviation Authority as a Certified Aviation Security Training Provider validates our dedication to maintaining strict regulatory standards and ensuring our trainees achieve both professional growth and global recognition.

“Looking ahead, the MMA2 Training Academy will continue to lead in shaping a secure and competent aviation security workforce.”

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NAHCO chairman, Fadeni, donates library building to Joseph Ayo Babalola University



The Chairman, Board of Directors of Nigerian Aviation Handling Company Plc, Dr. Seinde Oladapo Fadeni, has donated a multi-million naira
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…… This Magnificent Edifice Stands out on Campus, says VC

The Chairman, Board of Directors of Nigerian Aviation Handling Company Plc, Dr. Seinde Oladapo Fadeni, has donated a multi-million naira library block to the Joseph Ayo Babalola University, Ikeji – Arakeji, Osun State.
The three-storey structure, the biggest on campus, will cater for the library needs of all departments in the school.

Speaking at the hand-over of keys of the Library to the President, CAC Nigeria & Overseas, Pastor Samuel Oladele, during the weekend, Dr. Fadeni said it is important that students be assisted to learn especially with the high level of distractions in the modern world.

He stated, “The students don’t want to read anymore; and you can’t really blame them. In someone’s phone alone, you can find about ten social media apps. The world is becoming something else. But those who are ready to read, who are ready to study and to focus, we should assist them in achieving what they want to achieve.”
The NAHCO Chairman further promised to make the library conducive and equipped as a modern learning facility for all cadres of students from undergraduate to doctorate levels.

Fadeni assured the CAC hierarchy including the President, Oladele; Pastor E O Adejobi, the General Superintendent and Prophet Hezekiah Oladeji, the General Evangelist, all present at the occasion, that he would still do more than just donate the building.

He declared: “The physical body is there. I have given you my word; by the grace of God, whatever is supposed to be in a modern library, the computers, the shelves, and other things would be provided.”

The Vice Chancellor of the University, Prof Olasebikan Alade Fakolujo, extolled the virtues of the NAHCO Chairman pointing out that such acts of kindness and generosity that Dr. Fadeni exhibited exemplify his commitment to education and societal progress.

The VC said, “Today, we have this magnificent edifice, which stands out of all the structures on campus and compares favourably with some of the best library building in the first – generation universities in Nigeria, as fulfilment of the promise made by the donor.

The Dr Seinde Oladapo Fadeni Library is a multi-million naira three-storey building which at this particular time is praiseworthy. The gesture is dear to us as a university community.”

Fakolujo pointed out that there was no iota of doubt that one of the critical challenges facing Nigeria today is the lack of modern library facilities that support development and strengthen the country’s university education system. He noted that by investing in a library for Joseph Ayo Babalola University, Dr. Fadeni is indirectly also contributing to the strengthening of not only the country’s university system, but also the very bedrock of nation building.

Dr Fadeni was accompanied to the event by his wife, Mrs. Ebundola Fadeni, his sister, Mrs. Funmilayo Olowogunle and Director, International Business & Corporate Services, NAHCO Plc, Dr. Sola Obabori.

The full array of the leadership of Christ Apostolic Church, owner of JABU present at the occasion, in addition to the President, the General Superintendent and the General Secretary, includes the Pro-Chancellor, Prof. Joash Amupitan.

Others are the General Secretary, Pastor EA Mapur; the Regional Superintendent, Pastor GO Obiwale and the University’s Registrar, Mr. Dapo Ajayi.

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FG urges helicopter companies to comply with landing levy



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The Federal Government has urged helicopter companies operating into aerodrome, helipads and other platforms to comply with the payment of landing levy to the concessionaire mandated to carry out the assignment because it is in line with international best practices.

Spokesman of Ministry of Aviation and Aerospace Development, in charge of Press / Public Affairs (HPPA), Odutayo Oluseyi , said the government recognizes the importance of chopper operations , as it continues to restate commitment to best practices.

The concessionaire: NAEBI Dynamic Concepts Limited , he said is working with the Nigeria Airspace Management Agency (NAMA), to achieve the task of seamless collection of the landing levy.

He said :” The introduction of helicopter landing levies, which is in line with international best practices to enhance the quality of helicopter operations is a cost recovery measure.”

Helicopter landing levies, he said are commonplace in countries such as the United States, the United Kingdom, India, and various regions worldwide.

He cited the Tallahassee International Airport in Florida, which began implementing helicopter landing levies under Vector Airport Systems since October 1, 2022.

Helicopter landing levies, he said are common across airfields in the United Kingdom, ranging from major commercial ones to small general aviation fields.

“Typically, helicopter levies match or exceed those for fixed-wing aircraft, varying based on factors like location and services provided,” he said.

The Federal Government granted NAEBI Dynamic Concepts Limited exclusive rights to collect helicopter landing levies in line with the MoU between NAEBI Concept and NAMA (focal Agency), Federal Airport Authority of Nigeria (FAAN) and the Nigeria Civil Aviation Authority (NCAA).

He further said:” It is instructive to note that NAMA under the Act as amended in 2022 is empowered to collect aeronautical revenues in both the upper and lower airspace to support her self-sustainability.

“However, over the years NAMA has predominantly relied on the upper airspace for her revenue generation. Government in her wisdom having discovered a lacuna on the lower airspace where helicopter operations is dominant directed NAMA to live up to her responsibilities to enable them generate enough resources to sustain their aeronautical architecture, enhance security and surveillance, and improve the overall quality of helicopter operations in Nigeria.

“We are confident that this move will improve capacity, efficiency, safety, security, and attract more investment in the aviation industry. We encourage all stakeholders to be committed to this laudable initiative that has followed due processes and procedures, and should embrace the new normal.”


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Oil & Gas

Annual OGTAN awards holds May 24



The 2024 prestigious Oil and Gas Trainers Association of Nigeria (OGTAN) will be held on Friday, May 24, 2024, at Muson Center, Lagos.
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The 2024 prestigious Oil and Gas Trainers Association of Nigeria (OGTAN) will be held on Friday, May 24, 2024, at Muson Center, Lagos.

According to the statement released by the National Publicity Secretary of the association, Dapo Omolade, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Felix Omatsola Ogbe will deliver a keynote address while major industry players and companies have been nominated for different award categories.

OGTAN is the independent umbrella Group of Training Services Providers in the Oil and Gas Sector established by the Nigerian Content Development and Monitoring Board in 2010, representing the Education and Training Sectoral Group of the Nigerian Content Consultative Forum (NCCF) under Section 58 of the NOGICD Act (2010), with the purpose to build local human capital capacity in the Nigerian Oil and Gas industry and act as a business group that interfaces with Operators, International Organizations and the Nigerian government.

OGTAN presently has more than 400 companies as members that cut across all training and human capacity development value chain for the energy industry and other sectors. OGTAN, as a body has demonstrated excellence in her strides to ensuring that competence and industry is developed in-country while upholding global best practices. This explains its acceptance in the industry as a one-stop shop for all training needs.

Awardees for 2024 include industry giants and individuals from the private and public sectors such as CHEVRON, FIRST E & P, PTDF ES, SEPLAT Energy, NINAS, OILSERV, TOTAL ENERGIES, Prime Atlantic Group, CHARKINS Maritime, TOLMANN, CMD, ITF, SON, PTI and Samsung.

Omolade disclosed that the event will experience a night of recognition of excellence, achievements, fun and glamour.

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