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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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Traders Decry Continuous Increase In Prices Of Foodstuffs

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Some traders at the Rumuwoji Market popularly known as Mile 1 Market have decried the continuous increase in the prices of food stuffs and other items in the ember season.

This was made known by the traders when The Tide  visited the market recently.

The traders revealed varying changes in the prices of foodstuffs, with some commodities recording higher increase than others .

A trader Mrs Charity Obinna, at the market, said the price of yam remained the same last week and this week compared to the prices from last month to this month, adding that only a difference of about N100 to  N200 was seen.

Another trader, Chukwuebuka Livinus who deals on garri, reported that the prices of some food commodities had been changing frequently.

According to him, the price of a bag of garri increased from N45,000 last week to N58,000 this week, representing an increase of  N13,000.

Livinus described the increase as scary and called on the government to do something about it, especially as we get closer to the festive period.

A trader that deals on vegetables, Mrs Joy reported that a significant increase in the prices of pepper rose from N20,000 last week to N40,000 this week.

Similarly, the price of a bag of melon (egusi) increased from N420,000 toN490,000 this week.

In a separate report, Mrs Charity Obinna said that foodstuffs were generally cheaper last month than this month, with price differences ranging from N150 to N200 for some items.

Meanwhile, Giff Okoro reported a decrease in the price of tomatoes. According to her, a quantity of tomatoes that cost N45,000 last month now sells for N25,000, indicating a reduction of N20,000.

Another trader, Usman Ibrahim said the cost of transporting goods from the communities to urban areas where they are sold is one of the major reasons for high cost of goods.

He said transport cost has doubled due to the cost of petroleum products in Nigeria, adding the whole cost is part of the goods because “entrepreneurs must cover their cost and make their gains .

Ibrahim called on the government to help farmers and traders even with little capitals to expand and sustain their business.

Another trader, Mrs Choice Promise a fish retailer said a cartoon which sold at #35,000 last week now sells at #50,000 .

Promise complained that there is no gain or profit because the price has drastically increase and most people cannot afford to buy fish again.

“Mr. President’s Renewed Hope Agenda recognizes that economic ambition requires dependable infrastructure,” Tegbe said.

He added that investments in electricity infrastructure would strengthen the foundations for business expansion, employment and economic growth.

The Kankia substations comprise two 60 MVA, 132/33 kilovolt (kV) facilities designed to strengthen the transmission network serving Katsina State and neighbouring areas.

Tegbe said the infrastructure would improve the network’s ability to distribute available electricity, supporting commercial activities and household welfare.

He also urged residents to protect the facilities against vandalism and other activities that could disrupt electricity infrastructure, asking them to report suspicious activities to TCN or security agencies.

Katsina State Governor, Dikko Umaru Radda, described the project as a significant investment in the state’s electricity infrastructure.

Radda stated that improved electricity supply could support industrial development, economic growth and public service delivery.

He further commended the President, the Federal Ministry of Power and TCN for completing the project.

It would be noted that the latest projects come amid a broader government’s drive to address bottlenecks in Nigeria’s electricity transmission network, which has constrained the amount of electricity that can be delivered to distribution companies and end users.

 

Wali Chioma, Obasi Chidinma & Amarachi Uche

 

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Firm Mulls Crash Down On Vegetable Oil Price Targets Revenue Boost, Job Creation

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A firm, Kompetenz Investment Zentrum Ltd, has said it would crash down the cost of vegetable oil in the market through adequate production and milling of its product for large scale sales in and around the State.

The Head, Human Resource Management of the firm, Mrs Amina Shehu said this in Yenagoa, the State capital, Wednesday while speaking with newsmen on an inspection tour of the company.

She noted that while other firms have previously managed the Palm farm, her company which she described as an experienced manager of palm farms recently acquired right of management of the Bayelsa Government-own palm plantation in September, 2026.

“We inherited a poorly managed farm and machineries from our predecessors, and so we’re working assiduously to overhaul the mills in this firm, more especially the biggest one.

‘’Today we’ve been able to put the small one into use, and it’s functioning well. Some engineering contractors have also came around with their various interest in bidding for the repair and overhaul of the ailing big mill we inherited, but surely the cost of repairs shown to us by the engineers run into billions.We’re however determined to get all our equipments and machinery functioning soon”, she said.

Mrs Shehu bemoaned the dysfunctional State of the farm facilities prior to its acquisition, adding however that there were plans by the company to get all moribund machinery functioning and put them to maximum utilisation and production capacity, while also working towards ensuring revenue boost for the firm and the State in the future.

Speaking on manpower and employment generation, the company’s HRM emphasised that at low peaks, the firm has employed no fewer than 200 staffers, comprising regular, casuals and workers on its daily payroll.

“At peak periods of harvest, more hands would be employed and production and milling capacity will be increased to 10 tons of palm oil per day in order to gradually crash down the soaring price of red oil in and around this State.

“We have just acquired the right of management of the Bayelsa Palm estate in September, 2026. We’re barely two months old as new management of this farm. As you can see for yourselves, a lot of work is currently ongoing in this farm.

“We have borrowed loans to run this farm, and so a lot of work; slashing of the palm fruits and clearing of the farm is ongoing. But upon what we have done which amounts to millions, it’s like we have not yet started because the Bayelsa Palm estate is really big” Mrs Shehu added.

She noted that during the world food day the company “showcased some of our produce and as we speak calls are coming in from far and near placing orders and showing interest in doing business with us.

“Our Director (our boss), has the requisite experience in this business. He has reinvigorated and invested in similar Palm farm businesses in other parts of this country.

“Some contractors have also came around with their various interest in bidding for the repair and overhaul of the ailing machinery we inherited, but surely the cost of repairs shown to us by the engineers run into billions.

‘We determined to get all our equipments and machinery functioning as we progress. For now we have about 105 workers, comprising daily paid harvesters and regular staffs. But aside these 105 staffs we also employ daily slashers who for now are about 100.

“During peak periods, hopefully on or before January 2026 we hope to increase our work force for maximum production”.

The Tide gathered that the firm is the new operator of the Bayelsa Palm estate and managers of the state’s Palm tree plantation.

The Tide spoke with a cross section of traders and consumers in major markets of the State and reports said the price of Palm oil which is botanically referred to as ‘elaeis guineensis’ has increased astronomically in recent months, due to general inflation in prices of commodities.

Ariwera Ibibo-Howells, Yenagoa

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Rising  Food Stuff Costs, Other Items Worries Traders

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Some traders at the Rumuwoji market popularly known as mile 1 Market have decried the continuous increase in the prices of food stuff and other items in the ember season.
This was made known by the traders when The Tide correspondence visited the market recently.
The traders revealed varying changes in the prices of foodstuffs, with some commodities recording higher increase than  others .
A trader Mrs Charity Obinna,  at the market, said the price of yam remained the same last week and this week  compared to the prices from last month to this month, adding that  only a difference of about ?100 to ?200 was seen.
Another trader, Chukwuebuka Livinus who deals on garri, reported that the prices of some food commodities had been changing frequently.
According to him, the price of a bag of garri increased from ?45,000 last week to ?58,000 this week, representing an increase of ?13,000.
Livinus described the increase as scary and called on the government to do something about it, especially as we get closer to the festive period.
A trader that deals on vegetables, Mrs Joy reported that a significant increase in the prices of pepper  rose from ?20,000 last week to ?40,000 this week.
Similarly, the price of a bag of melon (egusi) increased from ?420,000 to ?490,000 this week.
In a separate report, Mrs Charity Obinna said that foodstuffs were generally cheaper last month than this month, with price differences ranging from ?150 to ?200 for some items.
Meanwhile, Giff Okoro reported a decrease in the price of tomatoes. According to her, a quantity of tomatoes that cost ?45,000 last month now sells for ?25,000, indicating a reduction of ?20,000.
Another trader, Usman Ibrahim said the cost of transporting goods from the communities to urban areas where they are sold is one of the major reasons for high cost of goods.
He said transport cost has doubled due to the cost of petroleum products in Nigeria, adding the whole cost is part of the goods because “entrepreneurs must cover their cost and make their gains .
Ibrahim called on the government to help farmers and traders even with little capitals to expand and sustain their business.
Another trader, Mrs Choice Promise a fish retailer said a cartoon which sold at #35,000 last week now sells at #50,000 .
Promise complained that there is no gain or profit because the price has drastically increase and most people cannot afford to buy fish again.
Wali  Chioma/ Obasi  Chidinma,/ Amarachi  Uche

 

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