Why Femi Otedola Is Pulling His Company Out Of Ghana
So, one of Africa’s biggest boys, billionaire Femi Otedola has pulled the plug on his investment in Forte Oil Ghana.
The reason is because the unit in Ghana has declared losses over the last three years and has uncollectible trade debts due to tough economic conditions and a currency devaluation in the cocoa-rich country.
Forte Oil said proceeds from the divestment would be used to expand its downstream fuel distribution business and to invest in storage infrastructure.
The energy firm also said it plans to sell its upstream services and power businesses in Nigeria besides divesting from Ghana to focus on its core fuel distribution operation at home.
The move comes as a surprise about-turn for a company whose Chief Executive Akin Akinfemiwa told investors in Lagos in August last year that he wanted to aggressively pursue mergers and acquisition opportunities along the energy value chain.
The company had also been in talks with a major refinery to form a strategic partnership for local refining of petroleum products.
Forte Oil did not give a reason for the change in direction but said the downstream sector in Nigeria had gone through changes in recent years and was expected to evolve further.
It added that the industry has operated under a tightly regulated fixed margin but could be deregulated especially given its impact on the Nigerian currency and import bill.
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