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Abdul Samad Rabiu: “Entire Industry Business Models are Going to Have to Change” in Nigeria

There are no defensive postures here. Undaunted by the potential for pandemic induced collapse in demand for commodities like sugar and cement, Nigerian billionaire Abdul Samad Rabiu sees only possibility – especially in agriculture, especially in Nigeria.

Not only is agribusiness relatively simple in terms of its business model, but it is urgent to save needed foreign exchange and to boost employment, he explains. Rabiu’s major focus is on promoting more production and processing to meet national demand and make more profits for his conglomerate BUA Group. BUA listed its subsidiary BUA Cement in January to raise capital for industrial projects in the glass, steel and oil sectors, citing the rigour and “scrutiny” of the process as a way of “de-risking” Nigerian opportunity for investors domestic and foreign.

“The opportunities are here,” enthuses the group chairman and chief executive during our videoconference, a portrait of South Africa’s former president Nelson Mandela beaming over his shoulder. That has not really been the case for the man on the Lagos Danfo, to twist a phrase – the city buses were restricted due to measures against transmission of COVID-19.

Most Nigerians are still reeling from the economic impact of the pandemic. Traders have ceased operation, farmers have thrown away produce due to the lack of transport, and businesses have mothballed investment projects. Most of BUA Group’s expansion programme remains undisturbed. Chief executive Rabiu unveiled plans for 3 million tonnes per annum (mtpa) in cement capacity and 50MW of power in Adamawa State in July.

However, he put off the announcement of a glass project that was slated for the postponed June France-Africa summit. While COVID-19 disrupted most firms, greater automation in BUA Group’s agribusiness and cement plants allows them to operate at about 40-50% of their normal capacity. “We are lucky for the fact we are even at 50%. Many others have not been able to work at all,” says Rabiu.

The ban on travel between Nigeria’s states was the greater challenge, “and that is lifting now”. He argues that “the impact [of the coronavirus] is going to be with us for quite some time” and that “entire industry business models are going to have to change.”

Better than 2019

Learning from operating his family business as a young man, Rabiu has built up his empire slowly but surely. BUA Group has moved from a trading company importing commodities to a manufacturing powerhouse in agribusiness and construction materials. From edible oils, through sugar and cement projects, the group also operates a shipping terminal in the oil town of Port Harcourt and owns a real-estate portfolio.

Cement is the industrial star. BUA Cement had a solid first quarter in 2020, banking nearly $60m in profit. This means, according to Rabiu, that it can absorb the slowdown from April to June, and have year-end results that may be “better than 2019”. That is not something many other Nigerian companies are predicting. It is bullish given the record year the company had in 2019; a 47.5% increase in turnover, with profit jumping nearly 70%.

He attributes the leap to the launch of a second line at the Obu plant in March 2019, adding 3mtpa to BUA’s output, and the first full year of the Kalambaina plant’s second line operations. The cement expansion does not stop; while BUA Cement currently has capacity for 8mtpa, Rabiu is targeting 14mtpa over the next few years.

Analysts do not share Rabiu’s optimism about the sector in the short term. “We expect the deterioration in the macroeconomic conditions – caused by the outbreak of COVID-19, which triggered a sharp decline in oil prices – to constrain activities in the construction industry as fiscal spending on capital projects weakens,” wrote Nigeria’s CSL Stockbrokers.

The scars will remain for some time for the Nigerian economy at large, Rabiu says, with the damage hitting the poorest first. “The price of goods has gone up, especially food items,” he says, partly as a result of the devaluation of the naira but also because the virus has hurt port logistics, making the clearance of imports difficult. That could be seen as an opportunity to intensify Nigeria’s great push to support food production, something that the government of President Muhammadu Buhari has supported for rice in particular.

As part of Nigeria’s CACOVID (Coalition Against Covid-19), an organisation of private-sector operators pooling funds to help relief efforts, BUA has put money into feeding programmes in Lagos and other cities, to cushion the blow of the pandemic. Fundamentally, Rabiu is unhappy about the high level of food imports. “It should not be happening at all, not only here in Nigeria, but generally in Africa. We have 60% of the world’s arable land. We have the people [to farm]. We have the climate. We have everything it takes.”

He is keen for that opportunity to go beyond food crops to cash crops, and again focus on keeping value in Africa. “The US, Germany, Switzerland and Belgium produce 75% of the entire chocolate production worldwide. And if we look at the cocoa industry worldwide, what are we talking about, $150bn-$160bn? And Africa gets maybe $10bn-$15bn of that?”

Sugar for resilience

He expects agriculture to provide the resilience that Nigeria needs in the post-COVID-19 era. Next year, for example, will see the ramping up or opening of operations at three major sugar plantations, including BUA’s own in Kwara State, as well as projects for Dangote Sugar and Golden Sugar.

BUA is Nigeria’s second-largest sugar producer after Dangote Sugar. “With that plantation, we will be able to produce 150,000tn of white sugar with millions of litres of ethanol, employing over 10,000 people in direct jobs,” says Rabiu.

He was inspired by a visit to Uganda’s Kakira sugar estate, run by the Madhvani family: “It was the most impressive sugar plantation I had ever seen.” And Mayur Madhvani told Rabiu that while he could get yields of 9tn per hectare in Uganda, the soils and potential in Nigeria were far greater.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Nigeria Update: Guidelines for Visa Re-validation and Migrant Travels

Lynn Mackenzie, J.D., LLM

Courtesy of  Advocaat Law Practice

Upon resumption of international flights in Nigeria on September 5, 2020, the Nigeria Immigration Service (NIS) issued guidelines for visa revalidation and migrant travels affected by the suspension of international flights and closure of airspace. The guidelines provide as follows:

  1. All migrants in Nigeria, whose Permit expired between March 23, 2020 to September 5, 2020 will upon presentation of their confirmed return tickets, be granted a free extension to enable them to depart the country on, or before September 15, 2020.
  2. All migrants in Nigeria, whose Permit or Visitors’ pass expired before March 23, 2020 will pay overstay penalty for the number of days stayed before the suspension of international flights and border closure, which commenced on March 23, 2020.
  3. All resident migrants whose residence permits expired, while outside the country from March 23, 2020 shall be allowed entry into Nigeria with the expired permit on or before September 25, 2020. These returning migrants are required to renew their residence permit within thirty (30) days of their arrival in Nigeria to avoid sanctions under the relevant Immigration laws.
  4. All migrants who processed payments for Visa on Arrival (VOA) and other categories of visas from the Nigerian Missions before March 23, 2020 are to apply for revalidation. A copy of the previous payment must be sent to; Cisevisa@immigration.gov.ng no later than September 15, 2020.
  5. All migrants who obtained VOA pre-approval Letters and other categories of visas from the Nigerian Missions before March 23, 2020, whose approvals/visas expired before September 5, 2020, are to also apply for revalidation. The revalidation process requires that copies of the expired pre-approval letters/visas be sent to cis-evisa@immigration.gov.ng not later than September 15, 2020. These categories of migrants will not be required to make fresh payments.
  6. VOA and e-Visa payment portals have been activated to enable intending migrants to Nigeria process entry visas as from September 5, 2020.
  7. Migrants who have obtained Temporary Work Permit (TWP) approval addressed to Missions that are closed for visa issuance should submit a complaint through cisevisa@immigration.gov.ng. The NIS will, upon receipt of the complaint, revert with appropriate options for visa issuance.
  8. All intending passengers are required to register via a Nigerian International Travel Portal online accessed through https://nitp.ncdc.gov.ng/onboarding/guidelines.
  9. While on the portal, passengers are required to complete the ‘Health Declaration/SelfReporting’ form, upload COVID-19 Polymerase Chain Reaction (PCR) test conducted in the country of departure and make payment for a repeat PCR test to be done upon arrival in Nigeria, with the options of where and when to carry out the test.

The content of this article is provided for general information purposes. The provision of this article does not constitute legal advice or opinion of any kind; no advisory or fiduciary relationship is created between Relocation Africa and any other person accessing or using this article. Relocation Africa will not be liable for any damages or loss arising from using any part of this article.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Nigerian Government Shifts Resumption of International Flights to September 5

The Federal Government of Nigeria recently announced a shift in the resumption of international flights to September 5.

According to the Nigerian Civil Aviation Authority (NCAA), the federal government postponed the resumption date, earlier fixed for Saturday, because of its inability to put in place non-aviation logistics for flights resumption.

The government has also said it has deployed a Gene Expert machine at the National Hospital Abuja and University of Abuja Teaching Hospital Gwagwalada (UATH) to reduce the turnaround time for COVID-19 diagnosis to one hour.

It has also unveiled two transparency dashboards to enhance accountability in national COVID-19 response.

Minister of Aviation, Senator Hadi Sirika, had said international airports in the country would reopen effective August 29 to resume international flight operations.

But at a press briefing of the Presidential Task Force on COVID-19 yesterday in Abuja, NCAA Director General, Capt. Musa Nuhu, said there were non-aeronautical logistics that needed to be put in place before the country’s airspace could be reopened to international flights.

He said: “Since the announcement by the honourable minister of aviation a few weeks ago that international flights will resume anytime from 29th of August, the aviation sector has worked assiduously to be ready for this date.

“The aviation sector, including the airports, is ready to resume on the 29th. However, we have other non-aviation logistics we are still working on mostly to do with the COVID-19 protocols, tests and online platforms. We need to get this in place so that we will have a smooth and efficient resumption of international flights without difficulties for all the passengers.

“So, for this reason, unfortunately, I have to let you know that the resumption date has been shifted by one week to the 5th of September, which is now a sacrosanct date. “The initial announcement was anytime from August 29. Now we have fixed a date – 5th of September- ensure that resumption of international flights.

“In due course, once these logistics are done, we will be announcing the protocols for the resumption and also we will be giving further details on the principle of reciprocity we have mentioned. So, hopefully, early next week, we will release this.”

Minister of Health, Dr. Osagie Ehanire, also said the federal government had deployed a Gene Expert machine in the National Hospital Abuja and University of Abuja Teaching Hospital, to shorten the turnaround time for COVID-19 diagnosis.

He said with the new development, cases of suspected COVID-19 emergencies could now be diagnosed on-site, thereby “reducing the turnaround and waiting time to one hour.”

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Relocation Africa Nigerian Immigration Interview With Kunle Obebe

Lynn Mackenzie, our Immigration Lead, recently had the privilege of interviewing Ola Alokolaro, from Advocaat Law, about Cameroon and Sierra Leone’s immigration landscape.

To listen to Lynn and Ola’s conversation about immigration in the current context, click here to view the recording, or view it below.

Kunle’s bio

Kunle is recognized as the foremost Nigerian lawyer in immigration, employment and labor matters and is frequently sought after as local counsel for large international companies. He is said to be the “the first port of call” and has a “long standing reputation” in the market (Who’s Who Legal – Nigeria 2014).

Kunle advises multi-national corporations, Fortune 500 companies, high net-worth individuals and Nigerian companies on issues relating to regulatory compliance with particular reference to expatriate and Nigerian employee work authorization in and out of Nigeria and corporate and commercial law.

He is a certified Global Mobility Specialist and a regular speaker at Nigerian and international conferences/seminars on regulatory compliance and emerging corporate immigration issues in Nigeria.

He is the Managing Partner and Chair of the firm’s Dispute Resolution, Immigration and Employment & Labour Practice Groups at Bloomfield Law Practice.

 

We would like to say a huge thank you to Kunle for his insights. We hope you enjoy the recording.

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].  

Nigeria to Reopen Airports for International Flights From 29 August

Nigeria will reopen its airports for international flights from Aug. 29, its aviation minister said on Monday.

The airports have been closed since March 23 to all but essential international flights as part of the country’s efforts to combat the COVID-19 pandemic.

Aviation Minister Hadi Sirika said four flights would begin landing daily in Lagos, and four in Abuja, with strict protocols. He did not say where they would be coming from.

“It is safe to fly, if we observe all those protocols in place,” Sirika said at a briefing in Abuja.

Africa’s most populous nation, which recorded its first confirmed coronavirus case in late February, now has 49,068 confirmed cases and 975 deaths.

It resumed domestic flights on July 8 and Sirika said there had been no confirmed virus transmissions on flights.

Passengers on international flights will need to provide a negative COVID-19 test in order to board and pay for another test after they arrive in Nigeria, Sirika said. They will also be required to fill in an online health questionnaire and present it to authorities when they land.

Those currently returning to Nigeria aboard repatriation flights are required to self-quarantine for 14 days, and authorities retain passports for that period. Sirika said on Monday they could “gradually” stop keeping passengers’ passports.

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].