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Abia State Governor Proposes Statewide Light Rail Project following Power Generation Milestone

By
Samuel Nwite
-
38

Abia State Governor, Alex Otti, has unveiled an ambitious plan to revolutionize transportation infrastructure with the proposal of a groundbreaking light rail construction project spanning the entirety of the state.

This significant announcement comes hot on the heels of the inauguration of the 181-megawatt Geometric Power plant in Aba, the bustling commercial hub of Abia State.

In an exclusive interview on the Thursday edition of “Politics Today” on Channels Television, Governor Otti disclosed his administration’s ongoing discussions with a prominent Chinese company to materialize the ambitious light rail project, demonstrating his unwavering commitment to fulfilling key campaign promises.

“We are discussing with a Chinese company and the discussions are going on well. It is not going to be easy, but it is going to be done. It is not something that you will just start and finish today,” Otti affirmed during the interview.

The revelation was prompted by a question from the program’s anchor regarding Otti’s electoral pledge to initiate the construction of a light rail system if elected as governor of Abia State.

Governor Otti further expounded on the progress of the project, emphasizing that while challenges may arise, his administration is resolute in its determination to see the project through to fruition.

“Currently, the designs for the light rail project are in the process of being developed. We will move from there to address commercial issues, and at the end of the day, we will do it,” Otti asserted with confidence.

The proposed light rail project is poised to usher in a new era of economic development and connectivity for Abia State, which has long grappled with infrastructural deficits under previous administrations.

Meanwhile, Governor Otti has declared an end to the era of chronic power outages in the state following the recent commissioning of the 181-megawatt Geometric Power plant in Aba.

“Power outage will be the exception rather than the rule,” Otti declared emphatically during the interview, underscoring the transformative impact of the power generation milestone on the lives of Abia State residents.

The $800 million power project, spearheaded by Geometric Power Limited, boasts the capacity to generate and distribute sufficient electricity to significantly ameliorate the state’s power supply woes. A critical component of the project is the 27-kilometer natural gas pipeline vital for the plant’s operation.

Governor Otti recounted the project’s tumultuous history, shedding light on his involvement in securing funding for the initiative back in 2010. Despite encountering unforeseen challenges such as the sale of the Aba Invest Island and shifting priorities in gas supply, Otti remained steadfast in his commitment to overcoming obstacles and delivering on his promise of reliable electricity for Abia State.

Since assuming office in May 2023, Otti has prioritized resolving the lingering issues surrounding the power project and fostering collaboration with the Nigeria National Petroleum Company Limited (NNPCL) to ensure a consistent supply of natural gas.

Currently, the Geometric Power plant generates 141 megawatts of electricity, with plans underway to expand capacity to the full 181 megawatts upon the installation of the final turbine. Residents have already begun to experience the tangible benefits, enjoying extended periods of uninterrupted power supply.

This monumental achievement marks a turning point for Abia State, heralding a future characterized by reliable electricity and the potential for economic growth, particularly in Aba, the state’s industrial nerve center. Governor Otti has been lauded for his visionary leadership and unwavering dedication to progress position Abia State on a trajectory towards prosperity and sustainable development.

Elon Musk Sues OpenAI, Alleging Deviation from Non-Profit Mission

By
Samuel Nwite
-
0

Elon Musk, the billionaire entrepreneur and visionary behind companies like Tesla and SpaceX, has launched a lawsuit against OpenAI, its co-founders Sam Altman and Greg Brockman, and affiliated entities.

Musk’s legal action accuses the renowned AI research organization of straying from its original non-profit mission in favor of profit-driven endeavors, marking a significant escalation in the ongoing debate over the ethical development and deployment of artificial intelligence.

The lawsuit, filed in a San Francisco court, paints a picture of betrayal and contractual breach, alleging that OpenAI has reneged on its founding commitments to Musk and the broader public. Musk, a prominent figure in the AI industry and an early supporter of OpenAI asserts that he was persuaded to contribute to the establishment and funding of the organization in 2015 under the premise that it would operate exclusively as a non-profit entity, dedicated to countering the competitive threat posed by tech giants like Google.

According to legal documents, OpenAI’s founding agreement mandated that its technological advancements be freely accessible to the public, a principle that Musk contends has been disregarded. Instead, he argues, OpenAI has transitioned into a profit-driven enterprise, particularly following its lucrative partnership with Microsoft, the global tech powerhouse that has poured substantial investment into the AI startup.

“In reality, however, OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft,” the lawsuit stated. “Under its new board, it is not just developing but is actually refining an AGI to maximize profits for Microsoft, rather than for the benefit of humanity.”

This shift in focus, Musk argues, constitutes a stark betrayal of the original vision and principles upon which OpenAI was founded. The lawsuit underscores the deep-seated concerns Musk has harbored for the past year regarding OpenAI’s evolving priorities and strategic direction.

“OpenAI, once a beacon of hope for ethical AI development, has strayed from its noble mission,” Musk declared in a statement accompanying the legal filing. “I cannot stand idly by as an organization that I helped nurture and support veers off course, prioritizing profit over the betterment of humanity.”

Musk’s dissatisfaction with OpenAI’s trajectory is palpable, fueled by his significant financial contributions to the organization over the years. According to the lawsuit, Musk donated over $44 million to OpenAI between 2016 and September 2020, making him its largest benefactor during that period.

However, despite his substantial investment and early involvement, Musk distanced himself from OpenAI’s board in 2018, citing fundamental disagreements over its strategic direction.

Sam Altman, one of OpenAI’s co-founders and its current CEO, has previously addressed Musk’s criticisms, defending the organization’s pivot towards commercialization and its close collaboration with Microsoft.

“I like the dude. I think he’s totally wrong about this stuff,” Altman remarked at a conference last year in response to Musk’s concerns. “He can sort of say whatever he wants but I’m like proud of what we’re doing and I think we’re going to make a positive contribution to the world and I try to stay above all that.”

However, Musk’s lawsuit indicates a growing schism between his vision for OpenAI and the direction pursued by its leadership. Central to Musk’s legal challenge is the contention that OpenAI’s transition to a for-profit model, coupled with its partnership with Microsoft, has compromised its ability to fulfill its original mission of advancing AI for the benefit of humanity.

The launch of Grok, a rival to OpenAI’s ChatGPT, by X, the social network owned by Musk, underscores his willingness to challenge OpenAI’s dominance in the AI industry. Grok, which Musk has been promoting – asserting its difference from its woke counterparts, serves as a testament to Musk’s unwavering commitment to ethical AI development and his determination to hold organizations accountable for their actions.

OpenAI’s introduction of ChatGPT in late 2022 triggered an AI arms race, with competitors scrambling to match its human-like conversational capabilities. Microsoft CEO Satya Nadella’s remarks about the superiority of Microsoft’s AI models further underscore the intense competition in the industry.

The legal complaint also draws attention to a recent interview with Nadella, in which he highlighted the close alignment between Microsoft and OpenAI. Nadella stated that if “OpenAI disappeared tomorrow…we have all the IP rights and all the capability. We have the people, we have the compute, we have the data, we have everything. We are below them, above them, around them.”

Nadella’s comments, according to Musk’s lawsuit, serve as compelling evidence of OpenAI’s prioritization of Microsoft’s interests over its original mission.

At the heart of Musk’s lawsuit lies the contention that OpenAI’s latest creation, GPT-4, constitutes Artificial General Intelligence (AGI) – an AI system with capabilities rivaling or surpassing those of humans. Musk alleges that OpenAI and Microsoft have improperly licensed GPT-4, contravening previous agreements that AGI developments would be dedicated to benefiting humanity.

Through the lawsuit, Musk seeks to compel OpenAI to adhere to its original mission as a non-profit organization and prevent it from monetizing technologies developed for the benefit of its executives or partners like Microsoft. He also requests the court to recognize advanced AI systems, including GPT-4, as AGI and enforce restrictions on their use and licensing.

The outcome of the unfolding legal battle could have far-reaching implications for the future of AI research and development, particularly in balancing commercial interests with ethical considerations.

Nigeria Demands $10bn from Binance over “illegal transactions”

By
Samuel Nwite
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0

The Nigerian government appears unrelenting in its crackdown on cryptocurrency exchanges, particularly targeting Binance, one of the world’s largest platforms. Amid these measures, Bayo Onanuga, special adviser on information and strategy to President Bola Tinubu, has revealed that the government is seeking retribution amounting to at least $10 billion from Binance.

This move comes amidst desperate attempts to salvage the value of the nation’s local currency, the naira, fueling the narrative that the government is looking to get as much as it can from Binance to boost its $10 billion forex inflow quest.

In a recent interview with the BBC, Mr. Onanuga claimed that Binance has been making substantial profits from what he termed “illegal transactions” in Nigeria, juxtaposed against the nation’s significant losses. He alleged that Binance, despite lacking registration and physical presence in Nigeria, facilitated practices that adversely affected the Nigerian economy. According to Mr. Onanuga, the platform was utilized for arbitrarily fixing dollar-naira exchange rates, thereby negatively impacting the value of the local currency.

Two senior executives at Binance, one of the world’s largest cryptocurrency exchanges, were reportedly detained in Nigeria after the governor of the central bank Yemi Cardoso alleged that more than $26 billion passed through the exchange in one year.

“We are concerned that certain practices go on that indicate flows, going through a number of these entities and suspicious flows. In the case of Binance, in the last year, $26 billion has passed through Binance Nigeria from sources and users who we cannot identify,” he said.

Addressing the cooperation purportedly initiated by Binance, Mr. Onanuga stated that the platform was already providing useful information to the Nigerian government and had suspended naira-related transactions. Nonetheless, Nigeria remains resolute in its demand for retribution, setting the bar at $10 billion.

Earlier statements by Mr. Onanuga underscored the perceived threat posed by Binance to the Nigerian economy. He warned that failure to curb the platform’s activities could result in catastrophic consequences, with implications for foreign exchange rates and broader economic stability.

Confirmation of the government’s clampdown efforts on Binance and other crypto platforms came from a top official of the Office of the National Security Adviser (ONSA). Zakari Mijinyawa, head of Strategic Communication at ONSA, disclosed that an interagency investigation, in collaboration with the Central Bank of Nigeria (CBN) and other relevant agencies, is underway to scrutinize Binance’s operations.

Sources revealed that Nigerian authorities have demanded extensive transaction data from Binance, spanning the past seven years, specifically about transactions involving the Nigerian Naira. Additionally, requests were made for the deletion of certain data relating to Nigeria from the Binance platform. However, the Binance executives, who are said to be one American and one British-Pakistani, have insisted on diplomatic protocols, asserting their rights to be escorted to their respective countries’ embassies before compliance.

The move may deter FDIs

Economic experts have raised concerns about Cardoso’s approach to the foreign exchange (FX) crisis, noting similarities to the strategy employed by his predecessor, Godwin Emefiele, who opted to crack down on FX rates aggregator AbokiFX and Bureau de Change (BDC) operators. They also express apprehension about the potential consequences of Nigeria imposing a $10 billion penalty on Binance, warning that the ramifications extend beyond immediate financial implications.

These experts caution that such actions could have a significant impact on Foreign Direct Investments (FDIs) into the country. For a country desperately in need of FDIs, they warn that investors may interpret Nigeria’s stringent regulatory measures against cryptocurrency exchanges as a signal of uncertainty and instability, potentially dissuading investment inflows.

Additionally, they say that Nigeria’s regulatory environment could suffer from negative international perception, potentially damaging its reputation in the global financial community. Intensified regulatory scrutiny may convey instability and discourage potential investors, impeding economic growth and development efforts.

Furthermore, they note that the repercussions of Nigeria’s actions on Binance may reverberate throughout the broader cryptocurrency market. Heightened regulatory crackdowns in significant economies might sow uncertainty and volatility, influencing investor sentiment and market dynamics on a global scale.

Shareholders count huge losses as MTN Nigeria loses N177.8bn to forex

By
Samuel Nwite
-
0

Nigeria’s telecommunications giant, MTN Nigeria Plc, has released its financial report for the year 2023, revealing a substantial loss before tax amounting to N177.8 billion.

This stark contrast to the pre-tax profit of N518.8 billion recorded in the previous year marks a significant setback for the company, leading to the complete wipe-out of shareholders’ funds.

The massive losses incurred by MTN Nigeria are primarily attributed to a staggering foreign currency loss of N740 billion, representing a dramatic increase from the N81 billion reported in the preceding year. Such a profound financial blow to the company, which has historically been a profitable entity since becoming a quoted company in Nigeria, has sent shockwaves through the market.

MTN Nigeria attributed these staggering losses to operational challenges stemming from changes in the Nigerian foreign exchange market, particularly the abolition of the segmented/parallel structure announced by the Central Bank of Nigeria (CBN) in June 2023. The company noted the adverse impact of these regulatory changes, which significantly contributed to the unfavorable financial outcomes reported.

“This has resulted in a 96.7% unfavourable movement in the exchange rate against the US dollar from N461.1/US$ in December 2022 to N907.1/US$ (Nigerian Autonomous Foreign Exchange Market (NAFEM) rate) in December 2023,” it said.

However, the company cautioned that the losses could widen if the prevailing exchange rate between the naira and the dollar persists until the end of March when it publishes its Q1 results.

Despite grappling with financial setbacks, MTN Nigeria reported notable operational highlights. Total revenue for the year 2023 amounted to an impressive N2.469 trillion, reflecting a substantial 22.69% year-on-year increase. Operating profit also demonstrated resilience, reaching N773.660 billion, up 5.38% from the previous year. However, finance costs surged to N236.927 billion, and the company incurred a substantial net FX loss of N740.434 billion.

The financial downturn resulted in a significant decline in profit after tax, with a loss of -N137.021 billion recorded for the year, compared to a profit of N348.727 billion in the previous year. Earnings per share also witnessed a sharp decline, falling to -N6.38 from N16.76 in the preceding year.

Furthermore, MTN Nigeria reported an increase in total borrowing, reaching N1.177 trillion in 2023, reflecting a remarkable 70.69% year-on-year increase. Despite these financial challenges, the company reported growth in key operational metrics, including total subscribers, active data users, and active mobile money wallets.

However, the financial downturn has resulted in a depletion of retained earnings and shareholders’ funds, which now stand at negative N208.0 billion and N40.8 billion, respectively. Consequently, the company’s directors announced their decision not to propose a final dividend payment for the year ended December 31, 2023, citing the resultant loss.

Amidst these financial headwinds, MTN Nigeria reiterated its commitment to maintaining strong free cash flow generation, which increased by 11.6% year-on-year to N631.6 billion. Nevertheless, shareholders remain deeply concerned, particularly in light of the company’s declining stock performance. MTN Nigeria Communications Plc (MTNN) closed at N222.90 on the last day of February, reflecting a year-to-date loss of 15.6% for shareholders.

MTN noted in its commentary that the challenging operating environment characterized by rising inflation, currency devaluation, and foreign exchange shortages has posed significant obstacles to its market growth. The company also highlighted geopolitical disruptions and cash shortages in Q1 arising from a redesign of the naira as additional challenges.

The company’s statement: “2023 witnessed a very challenging operating environment characterized by rising inflation, currency devaluation, and foreign exchange shortages, complicated by geopolitical disruptions and cash shortages in Q1 arising from a redesign of the naira.

“These factors created severe headwinds for our customers and our business during the year. The inflation rate increased throughout the year, reaching 28.9% in December 2023 – the highest reading in 18 years – with an average rate of 24.5%.

“This was further exacerbated by higher fuel prices, arising from the removal of the fuel subsidy in May 2023, with the average prices of diesel and petrol up by 66.4% and 257.1% in 2023 to N1,416.8/liter and N600/liter, respectively. In June 2023, the Central Bank of Nigeria (CBN) adopted a more liberal foreign exchange management system and reintroduced the ‘willing buyer, willing seller’ model.

“This has resulted in a 96.7% unfavorable movement in the exchange rate against the US dollar from N461.1/US$ in December 2022 to N907.1/US$ (Nigerian Autonomous Foreign Exchange Market (NAFEM) rate) in December 2023.

“This development contributed meaningfully to the upward pressure on the cost of doing business in Nigeria, and for MTN Nigeria in particular, significantly increased the costs in relation to our tower leases.”

Corporate Nigeria’s Season of Losses and Why The Bleeding Must Stop

By
Ndubuisi Ekekwe
-
0

The minister in charge of tech should be making visits to these companies. Also, the one in charge of investment should also make visits. The numbers I am seeing out of corporate Nigeria (excluding banking) are unprecedented in forms and scales:

“The company disclosed a pre-tax loss of N177.8 billion, in stark contrast to the pre-tax profit of N518.8 billion recorded the previous year. With this report, MTN noted that it grapples with a staggering N740 billion in forex losses, resulting in a complete depletion of shareholders’ funds. Profits fell 139% leading to negative earnings per share of -N6.38.”

During my MBA in University of Calabar (thanks Diamond Bank for that gift), one of my professors attacked Mobil Producing Nigeria Unlimited. The professor was offended by that “unlimited” because he felt it was pure arrogance. Yes,  how can you structure a company for shareholders to have unlimited liability because you want to have unlimited share capital with boys in the creeks watching?

Remembering that, it turns out that your environment can become an unbounded and unconstrained liability to the extent that you can be brilliant and still look like an “ofeke” (feeble, poor, weak) with no value as a business. Corporate Nigeria’s liability right now is the business environment, and not really what the companies are doing. That is scary! May leaders bring calm in the market, urgently.

It seems PZ Cussons has recorded a net asset position for the first time in 125 years.  The company went from a half-year N7.6 billion profit to N74 billion loss (read the letter here). If Nigeria does not stop this trajectory, our economy could  collapse by Q2 2025. Note that by the end of this quarter, some manufacturers could experience more than 2X in losses with a Q3 2023 starting benchmark, and if that continues, many companies will close shops.

Already, Nigerian Breweries has recorded its worst loss since 1946: “Nigeria’s largest beer maker Nigerian Breweries posted N145.3 billion in pre-tax loss for last year, its biggest since opening shop in the country in 1946.”

On MTN Nigeria, it will be fine. But watch out for your neighbour because this result will CHANGE many things over the next 12 months.

Comment on Feed: Ndubuisi Ekekwe if the federal Government reversed the dollar floating while subsidy on fuel is not overturned, can it have at least an optimal effect on the performance of this top Nigerian firm?

My Response: Partially – it will have an optimal effect because MTN and others could recalibrate with the new exchange rate. But on the fuel subsidy, if you keep it, Nigeria will not get out of this paralysis because nearly every country  subsidizes energy for companies. Nigerian firms cannot be competitive without that. My proposal is this: eliminate the corruption in fuel subsidy OR at least keep subsidy for industries in Nigeria. Nigerians like to shout how Dangote cement is cheaper in Ethiopia, etc without knowing that the company’s energy is subsidized by the government.

Forex Crisis: MTN Nigeria Faces N740 billion in forex Losses, Wiping Out Shareholders’ funds

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