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Why Fitch Is Impressed With Rivers Financials

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Rivers Opens For Business With Ibim Semenitari

On March 1, 2013, one of the world’s most respected rating agencies, Fitch, released new rating for Rivers State in both London and Milan. This was immediately echoed around the world by Bloomberg of  London. Rivers State is one of the few states in Nigeria that have the guts to join the global rating system that tells you the truth in your face about your financials. The state is rated by both Fitch and Standard & Poor’s. The latter had earlier in November 2012, upgraded the financial rating of the state. Now, Fitch has come out with its own version and this has been causing positive ripples in investment circles around the world. The moment this latest rating was flashed by Bloomberg, some financial journalists began asking questions. Below are some of the questions they asked and the answers they got.

We hear Rivers State has received new rating, what are the details?

Yes, Fitch has upgraded Rivers State long-term foreign and local currency rating to a BB- stable from the previous B( +). This rating was released on March I, 2013, and so, Rivers State is one notch higher, as it were. This rating admits that there is a lot of stabilisation, and growth of the non-oil sector has played a key role in this. They do believe that our IGR has continued to grow, especially with the new measures put in place by the Ministry of Finance such as digitalisation of tax administration, tax harmonisation, autonomy for the Revenue Board, the one-stop-shop concept, and all efforts to reduce error. Basically, one of the things we clearly see is that Fitch is impressed with the financials of Rivers State.

When an organisation such as Fitch is impressed with a state, how does the citizen care about this?

Everybody knows that it means big. First, it means that people are looking to do business in an environment that is peaceful and conducive. The rating is interpreted to mean, ‘it’s good to do business with you: That is quite a message, especially in an era where people hardly understand the dynamics of an economy. Now, an agency like Fitch says it is good to do business with you. Remember that this is happening at a time most other economies especially in Europe and America are being down-graded by these top rating agencies. This shows that the ratings are no manipulation.

This rating has been consistent in the past couple of years. What could be those things that the administration is doing to sustain this rating?

You are aware of such measures as sanitising our financial system, trying to ensure that all the ministries reduced wastages, leakages and reduced cost especially by cleaning up our financial processes. There is also the biometric system which ensures that the real workforce is captured appropriately to reduce the incidence of ghost workers. There is effort in terms of how the budget is managed in relation to fiscal disciple. Yes, we are not there yet and nobody is, but every year we improve the system. This year, the governor has said it would be stricter, more improved fiscal discipline to ensure that, again, we are able to render accountable stewardship.

Are there tangible points of evidence to show that the investment community out there around the world is reacting to these positive ratings?

Yes, I will like to go by the rule of the thump. If you checked the hotels in Port Harcourt in 2007/8, they returned not more than 25 per cent occupancy rate. National average is about 51 per cent. But in Port Harcourt, by 2011 survey reports, it moved to over 65 per cent. Now, in fact, some hotels are recording 98 or 100 per cent occupancy rate. Novotel is at 100 per cent, Le Meridien and Golden Tulip are at 98 per cent. That tells you what is happening to this economy because the hotels are a good reflection of an economy.

When you look at air travel into the city and out, you hardly will be able to get a seat any day of the week. Clearly, you can see a reflection. Before, you would see an empty plane coming into Port Harcourt but now, most persons have to fight to get a ticket, including the international flights. In January 2013, when I was travelling for a conference outside Nigeria, I could not get a seat, and this was not the boom period, it was the middle of the month. Some persons had to fly to Lagos to get a flight. It was as bad as that. So, you have a situation where seats in airplanes are being sold out and hotel rooms are being sold out. Clearly, these ratings are doing something good for us.

Again, next year, Port Harcourt is the World Book Capital, that is something huge. We were pitched against Oxford, Moscow, etc, but Port Harcourt won. It is the first in Sub-Saharan Africa. The nearest that won it was Cairo, but it was during the system of handpicking. In 2014, Port Harcourt is hosting the Crans Montana Forum (May 2014). It is the first time it is going to be leaving Europe and this is heading to Port Harcourt . Investors are going to come along. Clearly, we have got to be doing something right here.

Culled from Business Day

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NSIB, AAAU Sign MoU On Air Safety Training

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As part of efforts to curb mishaps in the aviation industry, the Nigerian Safety Investigation Bureau (NSIB) has signed a Memorandum of Understanding (MoU) with the African Aviation and Aerospace University (AAAU) to deepen training on preventing and reducing accidents in Nigeria’s air transport.
Director, Public Affairs and Consumer Protection of NBIS, Mrs Bimbo Olawumi Oladeji, in a statement, said NSIB granted AAAU access to its facilities to facilitate an efficient exchange of resources and expertise.
According to the statement, the Director-General/Chief Executive Officer of NSIB, Captain Alex Badeh, who spoke at the ceremony held at the NSIB Training School, noted that the MoU sets the stage for facility sharing, capacity building, and collaboration between the Bureau and AAAU.
“I am confident that this MoU will enhance the effectiveness of our collaboration and commitment to promoting safer skies and operational excellence in the aviation industry in Nigeria and beyond”, Badeh said.
Registrar of AAAU, represented by the Director of Physical Planning and Works, Engineer Masud Aliyu Yerima, was also quoted in the statement, saying, “The journey of AAAU’s establishment and progress would have faced considerable challenges without NSIB’s generous support”.
He commended Badeh for his exemplary leadership and steadfast dedication in propelling NSIB to greater heights, and affirmed AAAU’s readiness to engage in mutually beneficial endeavours with NSIB.
“This partnership marks a significant milestone in fostering a culture of safety and excellence within Nigeria’s aviation sector, and both NSIB and AAAU are poised to leverage this synergy for the benefit of the industry and the nation at large.
“The African Aviation and Aerospace University, AAAU, is the first Pan-African university dedicated to aviation, aerospace, and environmental science.
“Addressing two critical needs within the continent’s industry, AAAU tackles the research and development gap in Africa’s aviation and aerospace sector while simultaneously cultivating a skilled workforce to propel it forward”, the statement added.

By: Corlins Walter

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Naira Rebound, Air Peace’s Expansion Deepens International Route Competition 

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he commencement of flights operations on the London route by an indegenous Carrier, Air Peace Airline, and the recovery of the local currency have sparked fresh competition on international routes.
Air Peace, Nigeria’s outstanding indigenous airline, may face a prolonged market battle with many foreign airlines with decades of experience in the industry following its entrance on the Nigeria-London route.
Some of the industry’s experts say the airline required support from the government and a strategic approach to stay competitive.
Analysts have also stated that the strategic move has garnered high praise from stakeholders in the aviation sector, considering that Nigerians were paying exorbitant prices to travel from Nigeria to London, but that sustaining this momentum will require more than just offering low prices.
On March 31, 2024, the 11-year-old airline made a bold statement with its inaugural flight, using a Boeing 777 aircraft, offering a capacity of 274 seats and carrying 260 passengers from Lagos to London.
It sold its tickets for N1.2m, a price way lower than the rates offered by most foreign airline operators plying the same route.
Just two weeks after entering the market, Air Peace’s Chief Executive Officer, Allen Onyema, complained on Arise TV that foreign airlines were undercutting prices in an attempt to push Air Peace out of the market.
Onyema said, “We are aware that there are devilish conspiracies. All of a sudden, airlines are pricing below the cost. One airline is advertising $100  and the other $350. If you peel up your entire aircraft and carry people on the wings, it is not even enough to buy fuel.
“Why are they doing that? Their government is supporting them because Nigeria has been a cash cow for everybody. The idea is to take Air Peace out, and the moment they succeed in taking Air Peace out, Nigerians will pay 20 times over. It would happen, God forbid, if they were able to take Air Peace out”.
It was gathered that an economy ticket for a flight scheduled for April 29, 2024, from Lagos to London costs about N679,375 on Ethiopian Airlines, an operator with 75 years of experience.
Air Peace priced the same ticket at N1,090,750. The difference is that on Air Peace, it will be a 6-hour non-stop flight, while on Ethiopian Airlines, it will take 16 hours with one stopover.
Last Friday, Ethiopian Airlines reduced the price of its London ticket by 0.77 per cent to N1,628,660 from  N1,641,249 two weeks ago.
In the same period, Air France’s price dropped to N1,687,824, nearly halving from last month’s N2,482,138.
On March 4, 2024, Lufthansa offered the Lagos-London route for N1,966,165. Qatar Airways provided the same ticket for N2,016,824, and KLM priced it at N2,448,740.
This continuous decline in air ticket prices was also driven by the strengthening of the naira against the US dollar and the payments of airlines’ trapped funds by the Central Bank of Nigeria.
Minister of Aviation and Aerospace Development, Festus Keyamo, had confirmed that the Federal Government, through the CBN, had cleared all the trapped funds (foreign exchange backlogs) to the tune of about $160m.
Beyond the ongoing price war, the Air Peace Chairman had also lamented the challenges with ground handling and space allocation at the London Gatwick Airport, adding that no airline has faced such obstacles before.
He noted, “On the inaugural flight out of London, 24 hours before departure, the management of Gatwick Airport moved us to another checking area instead of the designated one.
“The area they provided had a malfunctioning carousel, forcing us to manually transport luggage 50 meters away, causing delays”.

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PH Airport Users Lament Down Turn In Flight Operations 

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Users and business operators at the Port Harcourt International Airport, Omagwa, have decried the downward trend in flight operations at the airport.
Some of the users and operators told The Tide that flight operations at the airport, rather than go upward, have steadily been irregular, and diminishing steadily.
A regular air passenger of the airport, Simeon Echeonwu, in a chat with The Tide, said many airlines, both domestic and international operators, that usually operate at the Port Harcourt airport, have stopped operations, whereas others that are still operating are no longer very stable as before.
Echeonwu noted that airlines such as Aero Contractors, United Nigeria, and Green Africa airlines, now operate about one flight, twice a week, unlike before that they flew every day on Lagos and Abuja to Port Harcourt.
Also speaking, former Chairman of the FAAN Accredited Car Hires Association, Clifford Wahunoro, lamented that the down turn in Operations has affected the business of car hires.
“If you have noticed, I have not been regular at the airport for some time now, because business is no longer flowing at the airport as before. I will not fold my hands and be sitting down doing nothing, so I have to look for other things, so I come when I think there will be something.
“You can see that between 12noon and 1pm, after that segment of flights, when you have few flights arrival, many people will close for the day, and when you wait till evening, flight like Dana may come very late at night, and sometimes, it will not arrive, and by that time, many people will not like to book for commercial vehicle”, he said.
Meanwhile, a travel agent, who wished to be anoyimous, decried the rate at which the airport is going down in terms of flights operations, noting that Port Harcourt airport ought to be competing with the other major airports like Lagos and Abuja.
He queried if such was a calculated attempt to bring the airport to its kneel in terms of flight operations, while other major airports have steady flow of flight operations both for domestic and international.
TheTide observed a continuous distortions in flight movement at the airport. Some of the airlines, like Max air, which many passengers patronize, have completely stopped operations, and no new airline has been added.
Apart from the Air Peace Airline that has maintained some level of stability in operations, other few operators have been involved in either steady rescheduling of flights, cancellation and regular delay, resulting in poor and unpredictable flight movement, which affects or determine other businesses in the airport.

By: Corlins Walter

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