Chinese firm to invest $550m in Nigeria Communications Limited

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The Minister of Communications, Mr. Adebayo Shittu, has said that Chinese satellite manufacturer, Great Wall Industry Corporation of China, will make $550m equity investment in the Nigeria Communications Limited.

According to the minister, a committee is currently evaluating the assets of the Nigerian communications operator to determine what percentage of equity that the Chinese firm’s $550m will translate into before a deal is signed between the two entities.

 

He said that Nigeria wanted to take a loan from the EXIM Bank of China for the construction of the two satellites but had to renegotiate with the Chinese when it became obvious that the country could not afford the counterpart funding of 15 per cent required.

 

Shittu stated, “In the area of satellite communications, we have one satellite in the orbit. Today, rather than one satellite, we are looking at acquiring two more satellites. We were not only able to get the China EXIM Bank to procure two more satellites, we have got them to agree to fully finance the satellites.

“It is not a loan. We have a policy of discouraging taking of loans in this government unless it becomes extremely inevitable. For NigComSat 2 and 3, it is not about a loan; it is about equity participation.

“We will have to quantify all the ground equipment and one satellite. The two satellites they are bringing in cost $550m. Now, we will have to quantify the cost of one satellite that we have and the cost of the ground infrastructure. A committee is looking into all of that before we sign the deal.”

Justifying the acquisition of two more satellites, the minister said, “we are looking at a business whose potential is limitless if we have these extras.

“The good thing now is that the company, which is sponsoring it, is bringing the satellites without our government having to spend a kobo. They are coming in with those two satellites as their equity participation in the running of NigComSat-1R.”

“By the time we acquire those two satellites, we will have the capacity to cover the whole of Africa. We will also get customers from outside the country. Today, millions of dollars are being spent on satellite companies abroad. Customers do not have confidence in a company that has only one satellite.”

Shittu added that the absence of redundancy capacity was responsible for lack of patronage of the existing communications satellite operated by NigComSat Limited.

“We had NigComSat-1, which crashed. If we don’t have a backup, naturally people will not have confidence because they will think that, if they put their data in it, it can crash and they will lose all their data, and that is why they go overseas. I believe that if we have a backup, we can have the whole of the African continent and even beyond as a potential market,” he noted.

Speaking on the Nigeria Postal Service, the minister said the postal organisation would soon diversify its operations in accordance with the government’s commercialisation programme.

“In NIPOST, we are embarking on rapid modernisation and commercialisation. We will have a NIPOST banking and insurance company, a property and development company, transport and logistics company, an e-commerce service company, and e-government services company,” he stated.

 

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