Author: The Nation

The Managing Director of FrieslandCampina WAMCO Nigeria Plc, Ben Langat, said the company’s push to leverage backward integration to transform the dairy sector, empower local farmers and contribute to national food security has reached advanced stage. He, however, said consultation with the stakeholders was critical in driving backward integration in dairy. Langat also spoke with reporters on the need to review Nigeria’s fiscal policy to ensure anything that affects food and nutrition is given the right tax break; challenges facing manufacturers, especially shortage of forex and insecurity, and the company’s staying power in the past 50 years. Assistant Editor CHIKODI OKEREOCHA was there.

To what extent has FrieslandCampina WAMCO Nigeria Plc developed local content for its products after 50 years of corporate existence?

From a milk production point of view, Nigeria has a hot, humid environment which typically is very good for beef cattle and that is why you see a lot of the Fulani cows doing very well. To grow high milk-yielding cows, you have to put in extra effort and this is what we have been doing for many years.

For over 12 years, FrieslandCampina WAMCO has continued to invest in the Nigerian dairy sector as it has been sourcing raw milk locally for manufacturing. We are also the highest off-taker of fresh milk produced locally from five states in Nigeria. Right now, we are running several factories – the Evaporated Milk Factory, Powder Factory, Yoghurt Factory and the Mobile Yoghurt Factory. The Yoghurt Factories are running on local milk, so we can say we have brands that are 100 per cent Nigerian in our portfolio.

Read Also: FrieslandCampina WAMCO records 35% revenue growth

However, to meet the total dairy nutrition demands in a country as large as Nigeria, the local milk available is still very much inadequate. So, the model that the country will run will still have a reasonable mix of importation of some of the raw materials, while local content is developed over a period of time.

What sustainability steps are you taking to improve local sourcing of milk while promoting animal welfare, protecting the environment and promoting conservation within Nigeria?

The cattle population in Nigeria is about 20.7 million and they are well scattered across the country, which means that from a density point of view, it is not a major threat to the environment. The cattle numbers are not as high as what is seen in other countries like The Netherlands that are small yet have lots of animals. Having said that, our dairy development initiative is  ongoing in Oyo, Osun, Ogun, Ondo, Kwara states and in the North. In these locations, we are working with about 12,000 farmers. Most of them are pastoralists who have cows that roam about. This means that in terms of carbon footprints, there are no major issues.The issues to focus on are resources like water, afforestation, grass and pasture use, and the like.

To this end, we train and support these farmers; to help them grow trees within their communities, which form part of our dairy development sites. When these farmers deliver milk during the rainy season, we plan to give them seedlings from our farm in Fashola where we do pasture development in collaboration with Barenbrug, one of the world’s leading hybrid pasture seed production companies.

We also help them with pasture development and show them how to use the pasture for cattle grazing in sustainable ways that do not encourage soil erosion or any form of deforestation. All this is coming at a time when the world has moved so high up on the sustainability agenda and thus there is already a lot of knowledge on what to do.

How do you deal with forex rationing and scarcity for purchasing dairy raw materials and equipment, and what really is the percentage of local content in your products?

We are proud to say that some of our products are 100 per cent locally sourced and very well- priced like NuNu Yoghurt, which comes in sachets that mothers can easily add to their children’s school lunch boxes. However, in terms of the dairy nutrition needs of the country, local milk sourcing is still at a very low level. It’s such a big task that we have ahead of us as a nation. That notwithstanding, at FrieslandCampina WAMCO, we want to prove that it is doable, as we source about five million litres of milk per annum locally. We are the highest as no other organisation has reached that number. However, we’re talking about a country that requires more than 100 million litres of milk, so when you do the calculations, you would see that the percentages are still low. There is still a long way to go. Countries like Kenya and South Africa started local dairy development way back and they have continued on that journey. Nigeria kind of left this topic for a long time and that is why we are still in this phase of backward integration.

What impact do your dairy activities have on employment in your host communities?

We are doing all the right things if you look at it from the employment perspective. Among the 12,000 farmers we work with, there are about 1500 Fulani women, who basically have been at home not fully engaged.Today, they are productive and have an occupation for which they are being paid regularly and their families are much more prosperous than before – the farmers, their wives and children. In some cases, their mud huts have been rebuilt to brick houses and their children now go to school, which they could not afford before. We have 29 milk collection centres (MCCs) in the country. These are physical locations with an average of five people who are directly employed.

 The farmers producing the milk are different from the riders who deliver the milk to these MCCs. Then we have the extension officers and milk truck drivers. If you go on the routes to Oyo, Abeokuta or Ibadan and stand somewhere along the road, you would see quite a few of our milk trucks carrying raw milk from the MCCs. That said, there are tens of thousands of people who are engaged in all of these activities both directly and indirectly.

What have been your biggest challenges and how are you dealing with them?

We have two very big challenges from a manufacturing point of view. The first is the forex shortage. Any manufacturer in Nigeria even with the best backward integration strategies will need substantial foreign exchange. We don’t produce the required machinery locally neither do we produce all raw materials locally; so there will always be something that needs to be imported. The low amount of forex available in the market is enough to shut down many businesses as we are already seeing.

When a country is having such a huge forex shortage, the price would be paid somewhere along the line. Eventually, businesses shut down, impacting employment. Forex supply is extremely important. Actually, you can only develop local industries if you have enough forex to bring in technology and equipment and then generate the profitability to be able to run your own training schools and build technical capabilities until you have the industry. So, one is an enabler for the other. I believe forex is a big issue, not just for FrieslandCampina WAMCO, but for every other big company. For us specifically, the second threat is insecurity within our dairy development host communities. In 2021, we had a big issue when there was insecurity around the Southwest and some of our milk collection centres were vandalised as a result of clashes between the pastoralists and local people.

We had to shut down some of our milk collection centres. Our milk collection in the first quarter of 2023 is 42 per cent above last year’s figure for same period because there is better security this year. So, you can see that when it comes to expanding our milk collection, security alone can have a big impact. So, forex and insecurity are the biggest challenges we face, however we have others like poor infrastructure, poor electricity supply, and bad roads amongst others.

So, how have you been dealing with the paucity of forex and threats of insecurity?

We have had to restrict our forex needs as much as we can and also source it by any means legal. We sometimes source from commercial banks in addition to whatever the Central Bank is able to make available.

Also, some of our service providers are able to source forex and supply us products in Naira. This invariably means that the cost of raw materials will go up and, ultimately, affect the retail prices of our products.

On insecurity, we have regular conversations with relevant government security agencies. We will never risk the lives of our people. Where we have security challenges around areas where we operate, we pull out for the time being. For instance, a large farm was given to us in the North, the Bobi Reserve, by the Niger State Government for dairy development. However, after two years, we were faced with the issue of banditry and so we had to withdraw from the location in order not to risk the lives of our people.

As competition intensifies and consumer spend dwindles, how are you able to cope?

In the face of the dwindling purchasing power of consumers, we try to play with Revenue Growth Management. Sometimes we reduce the size of the packs. Other times we try to price our products in ways that keep them affordable for our customers or change the configuration of the product to make it more affordable. We also play along innovation just like you see in the case of NuNu Yoghurt, which we launched last year at N50 per sachet.

 We have many brands like Peak, Three Crowns, Infant Nutrition and others; now we are looking at products that can be locally sourced so that we can take away or significantly reduce the forex implication. NuNu Yoghurt is made from 100 per cent local milk and is produced in a unique mobile factory; the first of its kind in Africa. Thus from local milk, we have been able to produce this nutritious and healthy yoghurt for school children. What has happened in the market is that the N50 price point has been vacated as very few people still produce anything worth N50. We are, however, able to achieve that with locally sourced milk.

 It’s not everywhere yet; it’s predominantly in Lagos but we are ramping up. The more local milk we are able to collect, the higher the quantity we would produce of this affordable yet highly nutritious yoghurt. We also introduced Milky Pap which is a tasty and nutritious multigrain cereal with milk; another innovation which is also affordable. What makes us stand out from competitors is that we have very strong brands as well as strong execution in trade.

One of the biggest strengths we have as a company is our Route to Market. It has to do with the way we distribute our products across the country. At the moment, we have reached more than 320,000 active outlets in the country. Very few competitors have that reach and that is why you can go to any part of the country and find Peak Milk, Three Crowns or a brand from us. So we have a combination of strong brands, a strong distribution network and great marketing communication which in my view is probably one of the best. Innovation then comes in. We have been able to get the basics right.

Additionally, talking about our backward integration, we are in eight states in Nigeria; we work with over 12,000 farmers of which about 1,500 are women; we work with 23 dairy cooperatives; we collect more than 40,000 litres of milk daily at peak periods and we have best-in-class raw milk quality, one of the best in Africa. We have 29 milk collection centres and our own locations where we do dairy development. demonstration farm in Oyo State which is near completion and is going to be open soon.

We also have another large farm, about 300 hectares, which we are developing in Fashola, Oyo State. We recently just signed another MoU for a big farm in the North, Jos to be precise which interestingly is where we started our dairy development in the 80s and now we are going back there.

The farm sits on 172 hectares. These are all locations where we carry out or will carry out best-in-class dairy development. In addition, we are introducing crossbreeds into this market with a cow called Girolando from Brazil.

 As I stated earlier, the reason dairy has not been successful in Nigeria in the past is partly because of the hot and humid environment, unlike places like the Netherlands or Denmark for instance. So if you bring a cow from such climes to Nigeria, the cow will struggle to survive.

 In Brazil, they were able to successfully crossbreed a local cow with Holstein Friesian until they produced the breed called Girolando which is very hardy, with a big body size and high milk production. So armed with this knowledge, under the Value4Dairy Consortium, we are working with Urus, the world’s largest cattle genetic company to improve the milk yield in our local cows through crossbreeding. In 2022, 1400 Girolando semen straws were produced and 610 artificial inseminations were achieved.

30 crossbreed Girolando calves have been birthed till date, the first of its kind in Nigeria. Now this is different because we do not have to worry about the cows because the weather in Brazil and Nigeria are quite similar; hot, humid and tropical. We are rolling out this programme across the 12,000 farmers we work with. The crossbreed Girolando cows are also what we will have on our own farms. In terms of volume, the yield of a Fulani cow which has not been crossbred is about one to two litres per day. The Girolando cows can do an average of 20 litres per day. We have to continue crossbreeding to improve the productivity of more cows in the country. This is a real game-changer I am happy to share.

Talking about how you coped with economic headwinds, could you give us a kind of recommendation in terms of fiscal policy, maybe taxes and all that?

The ease of doing business in Nigeria can be better. There are lots of difficulties and it is not improving to be brutally honest. I already talked about the challenges we face in sourcing forex. Forex is not about exporting jobs and importing products. It is about building capability locally so that you are able to produce and create local jobs and also create wealth to be able to produce. In addition, every now and then, we have new policies, taxes and duties that we have to deal with. For example, our basic packaging materials are food grade. If you classify them otherwise and charge high excise duties on them, it increases the cost of food packaging. A good example is the lacquered Tinplate that we use for Peak Milk; if it is classified same as Tinplate used for other purposes, the cost of nutrition would go up. These are the kind of taxes that we face in the country. So, I will say the entire fiscal policy needs to be reviewed to ensure anything that truly affects food and nutrition is given the right tax break. The efficiency of tax administration is another issue. I think the interpretation of the taxes as it is laid down is sometimes subjective. So, you can have two people interpreting the same thing differently, assigning different Customs HS codes to the same item. This sometimes ends up stalling business purely as a result of poor coordination.

Then there are knee-jerk reactions. If you are doing something like backward integration, it needs to be done after due consultation. It needs to be systematic, strategic and should include all the stakeholders. If you want to talk to organisations about dairy development, start with FrieslandCampina WAMCO. We have been here and our products have been here since 1954. Our factory was built in 1973. You can’t do a short business trip to Denmark and come back to announce a ban on the importation of milk because there are cows around. There has to be a reason why things are the way they are. So consultative positioning is very important. That is really my hope for the current government; that they are going to consult us as industries and manufacturers, and listen to us.

Now that there is a new government, what is your expectation?

I expect that they would consult FrieslandCampina WAMCO on dairy development topics because we are a subject matter expert on local milk sourcing and knowledge transfer. They can engage us on some of these topics leveraging forums like MAN – Manufacturers Association of Nigeria, NECA -Nigeria Employers’ Consultative Association as well as the Food and Beverage Associations, AFBTE etc. We are there as industry leaders. Let them consult us before taking sharp policy decisions

Lagos State Building Control Agency (LASBCA) has said it would demolish the 349 distressed buildings earmarked  in the state to avert their collapse and save lives.

Its General Manager, Gbolahan Owoduni Oki, stated this at the weekend.

He recalled that the houses spread across the state where published in the newspapers and social media to warn their owners of the impending  government’s action.

He said the exercise would include the 16 distressed buildings at Alaba International Market, Ojo. They included Good Seasons Shopping Complex, Innotex Micro Plaza as well as Oba Oseni Plaza owned by about seven families.

Oki said there were no sentiments, religious or tribal, about the exercise. Rather, he said, they were only trying to do the right thing by correcting the wrongs made by house owners in the past, save lives and keep to the government’s mantra of the state as a Centre of Excellence.

Read Also: Lagos demolishes 17 distressed buildings at Alaba market

Specifically, Oki noted that though owners and occupiers of the marked buildings at Alaba  International Market had been served due notices since 2016 with the last “Quit Immediately Notice” at the weekend, informing them that the houses were inhabitable and liable to come down as they suffer from shifting, faulty foundations, lack construction permits and certificates of occupancy, among others, they remained adamant.

Instead of taking the right steps, the GM accused the occupiers of engaging hoodlums to harrass the agency’s officials who were only doing their jobs.

To protect the officials, Oki said, he had to invite in the taskforce for their safety.

He said there was no going back on ending building collapse and ridding the state of illegal structures.

He warned Lagosians against patronising quacks to avoid procuring fake papers as such would not be recognised.

He said the agency has districts and offices in all the local governments, urging the citizens to use them if they could not come to its headquarters.

Oki advised new builders to embrace the necessary steps in construction to avoid the wrath of the agency. He listed these as: acquisition of building plan approvals and certificates of occupancy, payment of the land assessment fees and involvement of the agency’s officials in every stage of the construction, among others.

Ecobank Group has opened application for innovative African fintech entrepreneurs to apply for its Ecobank Fintech Challenge.

Successful applicants on reaching the last stage, will also have the opportunity to join the Ecobank Fintech Fellowship programme.The highly anticipated grand finale and awards are scheduled for late September. For the second year, the overall winner will be awarded a grand prize of $50,000. Applications are open until July 21.

Chief Executive Officer, Ecobank Group, Jeremy Awori, said over the past six years, the Fintech Challenge has welcomed many fintechs, with six participants  partnering Ecobank to launch innovative products that have been rolled out across the group’s markets.

He said the collaborations have played a significant role in transforming Africa’s digital landscape and driving financial inclusion.

Read Also: Ecobank, Dashen Bank launch remittance app

Tomisin Fashina, Operations and Technology Executive, Ecobank Group, said that the Ecobank Fintech Challenge has become Africa’s premier fintech competition, driving scalability for African fintechs.

He added that ‘through this challenge, we identify talents who can support Ecobank’s mission to remain bold and innovative, driving pan-African prosperity for the continent.

The Ecobank Fintech Challenge was designed in partnership with international advisory firm, Konfidants, and is supported by various partners.

The coast is clear for Airtel Nigeria to launch services using the fifth generation (5G)  today.

The launch will increase the number of 5G deployments in Nigeria to three.

In 2021, MTN Nigeria and Mafab Nigeria Communications Limited won the two available lots of 100 megahertz (MHz) TDD slots of 3.5 gigahertz (GHz) band.

MTN Nigeria pioneered the technology last year followed by Mafab Communications Limited early this year.

The event will be held in Lagos. Airtel Networks Limited had earlier in January announced the payment of $316.7 million for 100 MHz of spectrum in the 3500MHz band for the deployment of fifth-generation network and 2x5MHz of 2600MHz to boost its fourth-generation coverage in the country to the Nigerian Communications Commission (NCC).

Read Also: NCC licenses 25 for mobile virtual operations

Chief Executive Officer, Airtel Africa, Segun Ogunsanya, said: “Investment in new technologies and local infrastructure to enable this growth is a strategic priority for the Group and will ensure we are able to provide reliable and affordable services to local communities across the country. 5G is critical to these ambitions, and we look forward to launching new services to drive further digitalisation across the country, facilitate economic progress and transform lives across Nigeria.

Ogunsanya had said in an announcement on the Nigerian Exchange entitled: ‘Nigeria 4G and 5G Spectrum Acquisition.’

According to telecoms industry group, Global System for Mobile Communication Association (GSMA), 5G adoption has continued to rise due to new network deployments and cheaper devices. As of January 2023, there were 229 commercial 5G networks around the world and over 700 5G smartphone models had been launched, including more than 200 in 2022.

The number of connections on legacy networks (2G and 3G) will continue to decline in the coming years as users migrate to 4G and 5G, resulting in more network shutdowns. To date, operators have announced plans to shut down 96 2G networks and 107 3G networks around the world, according to GSMA.

In the coming years, operators will shift their focus to driving 5G adoption, following significant capital outlays. The technology has already become main stream in several markets, notably South Korea and the United States (US) where the technology now accounts for more than 40per cent of total connections.

Elsewhere, 4G still has plenty of room to grow and will remain the dominant technology by the end of this decade. In Sub-Saharan Africa, 5G rollout will likely take a phased approach, as opposed to the fast population coverage approach that has been adopted in more advanced markets.

Gas Suppliers Association of Nigeria (NOGASA) has moved against the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) over outstanding claims for bridging the Premium Motor Spirit (PMS) petrol before the removal of subsidy.

Its National President, Benneth Korie, who, at a briefing in Abuja, who said the debt has affected his members in Warri and Port Harcourt, could not give the total figure of the debt.

He however cited his company that the Authority owes N300 million.

He said: “At the moment, there is riot in Port Harcourt and Warri. They are not happy…

“Before now, we had Petroleum Equalisation Fund (PEF). It was not paying marketers. The money is there.’’

“Therefore, we want to use this opportunity to appeal to the government to please pay marketers their PEF claims so that we continue in business. Otherwise, I don’t think we will get fuel to sell. Subsidy or no subsidy. They need to pay this PEF.”

Besides, he revealed that marketers are aggrieved over the Nigerian National Petroleum Company Limited (NNPCL) manner of refusing to supply them PMS for tickets they purchased at the old rates before the removal of subsidy.

Read Also: Marketers to NNPCL: release petrol we paid for

He expressed worry that the money was borrowed from the bank at 30% interest rate and the marketers must repay their creditors.

He noted that it is not possible for marketers to raise N20 million for 45,000 litres that used to be N7 million.

NOGASA insisted that NNPCL must supply them the product at the rate they paid for it before the removal of subsidy.

Korie said, “The issue of interest in the bank. I am talking about 30% to borrow money from the bank. The marketers are working for the banks. Where are they going to get N20 million to pay. Differential issue.

“ I want to use this opportunity to appeal to NNPC to load the marketers product that had been paid three months before the subsidy removal.

“Now you are talking that marketers should come and pay the difference.  Where are they going to get that money?

“ Allow us to load our product at the price that we paid for because it is expected that when you pay you load. So allow us to have our product at the old price.”

He warned that without the payment of the outstanding claims from NMDPRA and supply at the old rate, they cannot remain in business.

The National President said, “We are talking about three months. We didn’t pay that day it (subsidy) was removed.

“Interest, how do you recover it. Do you want them to die because they are doing oil business? If we don’t bring that product to stations what do you do?,”

Asked whether the members would down tool as a result of the crises which he noted that the association will take the decision at its next National Executive Meeting (NEC) in July 2023.

The National President also urged the Federal Government to look into ways of reducing the prices of the Automotive Gas Oil (AGO) diesel as part of the palliatives for ending petrol subsidy.

Stressing that the price of PMS can never fall without a crash of diesel price, he explained that trucks for petrol haulage are fueled by diesel.

“Priority should be given to diesel importation. We want the price of PMS to come down, and the only way is to reduce the price of diesel,” he said.

Benneth who called on the Federal Government to fix the highways as part of the palliative, noted that the road projects the NNPCL is implementing are too slow.

The National President asked the Federal Government to intervene in the exchange rate challenge.

He advised the Federal Government to rehabilitate its own refineries instead of depending solely on the Dangote Refinery.

He dropped the hint that owing to the cash paucity in the petrol industry, there is no fund to develop the Compressed Natural Gas (CNG).

Former managing director, Nigerian Electricity Services Management Agency (NEMSA),  Peter Ewesor has called for the development of local grids to relieve the national grid of stress.

His call followed President Bola Tinubu’s assent to the Electricity Act 2023 that  allows state governments to generate, transmit and distribute power.

 He advised Tinubu to ensure he appoints a Minister of Power, who has in-depth knowledge and understanding of the technicalities and workings of the power sector or industry who does not depend on advice from others only.

According to him, the President needs a  Minister of Power with the requisite  knowledge of the subject matter, the Nigerian Electricity Supply Industry (NESI), and not otherwise.

Speaking with The Nation in Abuja, Ewesor, who was also the pioneer Chief Electrical  Inspector of the Federation, for eight years, insisted thatTinubu needs a dedicated expert, whose attention is not diverted by ambition.

He noted that integrity and dedication to duty should be the hallmarks of the next Minister of Power.

He depicted the industry as a highly technical one that needs a lot of planning and other requirements.

His words: “I keep telling people not to think that power will just come like that. It has a lot of technicalities and planning requirements.

Read Also: Economy loses N10.1tr yearly to shortage of electricity, says MAN

“And that is why I said whoever will be Minister of Power should be somebody who has in-depth knowledge of the subject matter, who is not just going to be dependent only on advice from people like us. He must be somebody who is not going to start learning.”

Asked to state the qualities of the Minister of Power, Tinubu needs to succeed. He noted that the would – be minister of Power must be abreast with the technical, financial, and legalities of the industry as well.

He dropped the hint that the challenge in the industry has been  superintended over by those who have either no knowledge of it or with knowledge of an aspect of it.

“He (Tinubu) should not just bring in somebody who knows just one aspect of power.

“ If you know just one aspect of power industry, I am sure you will just be dealing with just that aspect which will not deliver enduring power sector or industry.

“ I can say probably that has been the challenge in the country, whereby the man just picks one aspect to concentrate on,” said the erstwhile NEMSA boss.

Having been in the industry in the last 42 years, he disclosed that in order jump – start  the economy with increased and affordable power supply, there must be sustainability of the available capacity in the industry.

He admonished the President to ascertain the available capacity and work on how to sustain and exceed it.

He said,  “There is a big lacuna. So what government should do at this stage is to find out what the installed capacity is now.

“When you know your installed capacity, you can then find out what the available capacity that is derivable from it now.

“Then after you have known the available capacity, then you find out what can we do quickly to actually ensure that we fast tract and get even over the available capacity of power generation which must equally align with transmission, distribution, and along the power value chain inclusive of utilisation end.

According to him, previous power generation targets were not realistic because they were not backed up by strategic implementation plans.

Ewesor advised that for the new Electricity Act to achieve its aim, objective, and desired results, especially in States, Governors must base the appointments of Electricity Regulatory Commissions on competence.

He explained that the new law has now relieved the national grid since it has provided for the development of local grids.

Ewesor urged the government to encourage private investors who can produce power from sources other than the conventional hydro, gas, and steam.

Citing an example, he said if investors are able to produce power and sustain it from other sources for estates, industrial parks, etc, such could be removed from the national grid.

He added that, by this, “You are already removing stress from the national grid and you can now deploy its power to other areas for strategic development and you find out as you are growing the national grid, you are growing the renewable energy sector and the system will be balancing on gradual basis.”

He suggested that Nigeria can have a recourse to coal with clean coal technology like some advanced countries do.

According to him, until there is energy security – having power from different sources – Nigeria will continue to move one step forward and two steps backwards.

He advised the government to constitute a crack technical team to discuss all possible areas of getting power at all costs.

He insisted that the country is completely endowed to the extent that no state does not have the potential to generate at least 10,000MW from solar or renewable energy.

He, however, sought the application of comparative advantage in the deployment of the different energy mix.

“Until we have power generation from all parts of the country, there is imbalance in the grid in itself,” said Ewesor.

Managing Director, Transafam Power, Vincent Ozoude, has said there is an urgent need to effectively address challenges affecting power generation companies.

He noted some of these challenges to include gas supply for gas-fired thermal power plants; the need for transmission and distribution infrastructure improvement, foreign exchange (forex) constraints for offshore components and maintenance and liquidity issues.

Ozoude, who spoke during the Twitter Spaces session, warned that to effectively address these challenges, it is of extreme importance to resolve outstanding payments to power generation companies; creating a self-sustaining electricity market; improving transmission and distribution infrastructure and addressing the forex constraints faced by the sector.

 “These steps will ensure stability, increase efficiency, and attract further investment in the power sector,” Ozoude said.

Read Also: Access Free Power Without Refueling Your Generator With Pricey Petrol

He however envisioned a future where the power sector experiences significant growth, leading to improved per capita income, Gross Domestic Product (GDP) growth, and job creation.

He sees the sector playing a vital role in driving industrialisation, infrastructure development, and overall economic progress.

According to him, the recent signing of the new electricity bill by President Bola Tinubu has also brought optimism to the power sector. The liberalisation of the sector, recognition of renewable energy, and the wider stakeholder participation allowed by the new legislation will pave the way for increased collaborations, consumer benefits, and accelerated development.

Besides, he noted that one of the significant contributions of Transafam Power to the power industry is the concept of Fast Power. This, he explained, allows for the rapid deployment of power generation to any location, addressing the urgent need for increased electricity supply. He explained that the recently commissioned Afam III Fast Power plant, with its 240MW capacity, adds a substantial boost to the country’s national grid, insisting that this leap in power generation capacity not only powers millions of homes but also supports the growth of small and medium-scale enterprises, manufacturing industries, and the overall economy.

“Transafam Power, guided by Transcorp’s vision of improving lives and transforming Africa, aims to be a key player in realising this vision. Transcorp’s investments in the power sector are aligned with its overall mission of transforming lives and driving economic development in Nigeria and Africa as a whole. By focusing on power generation, Transcorp aims to address one of the critical challenges hindering economic growth and development in Nigeria – the inadequate power supply,” he added.

Shortage of electricity supply has been taking a huge toll on the profitability of manufacturers, with a yearly economic loss valued at about N10.1 trillion or two per cent share of Nigeria’s Gross Domestic Product (GDP).

Making this known over the weekend, the Manufacturers Association of Nigeria (MAN) lamented that the unfavourable situation in the power sector has positioned Nigeria among the worst countries to do business with a rank of 171 out of 190.

MAN Director-General Segun Ajayi-Kadir, while reacting to the June 9 signing of the Electricity Act 2023 by President Bola Tinubu, however, said the Electricity Act 2023, if well implemented, promises to be a major game-changer for the manufacturing sector as it would address the numerous constraints within the sector.

Read Also: How Electricity Act will impact sector, by experts

According to Ajayi-Kadir, the Electricity Act 2023 has favourable implications for the manufacturing sector. He listed some of them to include reduced cost of alternative energy, competitive and lower electricity tariff, improvement in inflow of Foreign Direct Investment (FDI) and manufacturing performance. 

Others, he said, include increase in Internally Generated Revenue (IGR), improved infrastructure and less tax burden on manufacturers, more investment in renewables, backward integration and energy security, and stable power supply and proper planning. 

In response to the huge energy deficit forced by the age-long challenges in the power sector,Tinubu signed the Electricity Act 2023 on June 9, this year, replacing the Electricity and Power Sector Reforms Act 2005.

The Electricity Act 2023 is aimed at providing an all-inclusive framework which will serve as a guide to the decentralization of the power sector in order to encourage private investment and build a competitive electricity market.

Under the Electricity Act 2023, States, private companies and individuals are now legally permitted to generate, transmit and distribute electricity.

Reacting to the development, MAN described the Electricity Act 2023 as “a more crucial milestone for the operations in the power sector.”

MAN, in a statement which was made available to The Nation, noted that it was sequel to the constitutional amendment signed during the last days of the Muhammadu Buhari-led administration which allows states to generate, transmit and distribute their own electricity.

Ajayi-Kadir recalled that over the past decades, the Nigerian power sector has encountered much turbulence in its electricity value chain due to poor policy enforcement, over-regulation, instability of gas supply and bottlenecks in its transmission network.

According to him, “These problems have culminated into erratic electricity supply, frequent power outages and persistent collapses of national grid. For many years, the situation has stunted the growth of the economy.

“Consequently, access to electricity has remained a hurdle for millions of Nigerians. According to the 2021 report by the International Energy Agency, Nigeria’s 86 million is the largest number of people in the world without access to electricity.”

The MAN boss said no doubt, the current power supply is apparently inadequate to satisfy the energy requirements of the manufacturing sector and the entire population.

“As the largest energy access deficit in the world, Nigeria’s shortage of electricity supply has been identified as a hindrance to the profitability of manufacturers with an annual economic loss valued at about N10.1 trillion or two per cent share of the country’s GDP,” he said.

Ajayi-Kadir, however, stated that notwithstanding, the Electricity Act 2023, if well implemented promises to be a major game changer for the manufacturing sector through some favourable implications.

He said for instance, that it will reduce cost of alternative energy, pointed out, for instance, that last year, total amount spent by members of MAN on alternative energy surged from N77.21 billion in 2021 to N144.47 billion.

“If fully implemented to the letter, the new Electricity Act will see to the drastic fall in the cost of alternative energy incurred by our members and we expect this to boost our profit margin,” Ajayi-Kadir said.

While also noting that the new Act will usher in a regime of competitive and lower electricity tariff, the MAN Chief said as an advocacy Association, MAN has always pushed for the need to charge cost-reflective electricity tariff to avoid extortion of its members.

“Fortunately, it is of great delight that this new Act fits like a glove as it will help actualize a cost –reflective tariff considering the healthy price competition it will bring between the states and private investors,” he stated.

He also said the country’s epileptic power supply is one of the prominent reasons for the relocation of some of MAN members.

Ajayi-Kadir, however pointing out that provided the new Act adequately addresses the challenges in the power sector, “we are quite optimistic that such development will encourage the inflow of manufacturing FDI, boost the performance of the sector and increase the sectoral contribution to the economy.”

He further said the new Act will open greater investment opportunities in renewable energy, noting that for manufacturers, investment in renewables like solar will not only promote cleaner climatic environment but ensure that energy consumption is cost efficient.

“The cost savings will directly improve profit margin and promote further manufacturing investments,” he said.

 Ajayi-Kadir further expressed confidence that the new Act will stabilize power supply and also encourage proper planning.

His words: “The country’s epileptic power supply often destabilizes daily business plans of many of our small and medium members that cannot afford or maintain alternative sources of energy. A distorted business plan can be highly detrimental for manufacturing operations.

“Apart from causing sub-optimal capacity utilization, the amount of wastage can be highly unbearable. The new Act if fully implemented can re-write the story by stabilizing the supply of electricity to infant manufactures and aid their planning for optimal delivery.”

Ajayi-Kadir also said it will lead to increase in IGR, improved infrastructure and less tax burden on manufacturers. According to him, Nigeria’s electricity market is one of the biggest in the world because of its massive population and growing demand for energy by households and businesses.

“Therefore, the amount of IGR that each state stands to accrue from the decentralization of the power sector is delightful. If properly utilized, such huge revenue can bridge the infrastructure deficits in many states without imposing further tax burden on manufacturers,” he pointed out.

The MAN DG, while noting that energy is the most vital input of manufacturers, said the empowerment of private manufacturing companies to generate their own electricity will unleash massive investment in backward integration activities which will no doubt be a major enabler of energy security within the sector.

The figures of the volume of the Premium Motor Spirit (PMS) petrol daily supply and consumption volume in the country still remained a mystery several weeks after the removal of subsidy.

Although the Nigerian National Petroleum Company Limited (NNPCL), which was the sole supplier the product, said the country was consuming about 60 million litres daily before the stoppage of subsidy, it noted that it had no idea of daily consumption volume.

It is assumed that with the removal of subsidy and the resultant higher rates, the demand has declined as marketers have cried out that there is no market for the product.

Though stakeholders are eager to know the new figures, especially to measure the gains from phasing out subsidy, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and company are not opening up.  

While the Authority has not updated its website for several months, its Corporate Communications, General Manager, Mr. Kimchi Apollo,  did not answer the phone calls  or reply the text messages, by The Nation on the matter.

Read Also: Marketers demand release of N30.96tr worth of petrol from NNPCL

Also, NNPCL’s Chief Communication Officer, Malam Garba Deen, refused to speak on the matter via a text message and phone calls.

But, Independent Petroleum Marketers Association of Nigeria (IPMAN) National Vice President, Alhaji Abubakar Maigandi told The Nation on phone that the demand has crashed by over 60 per cent since the phasing out of subsidy.

Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Mr. Clement Isong told The Nation on phone that their members were yet to import the product because they were still strategising on how to do so.

According to him,  MOMAN has commenced negotiation with the suppliers of the product.

He noted that the members need to research to know the exchange rate, landing cost, selling price and the volume to import before placing an order for the importation.

His words: “We are looking at the numbers. We are trying to source foreign exchange.  We are looking the number they will produce.

“You have the price. You have to source for dollars and now buy the product. If I buy the product how much am I selling to Nigeria? What is the average price in Nigeria?

“I will say we are negotiating. We are looking for the product.  We are talking to the suppliers. How soon, some are very fast. It is sooner than later.”

Isong said the market is yet to stabilize since the removal of subsidy on May 2023.

He projected that calm can only return to the market at the end of June since a lot of factors are still affecting it.

The Executive Secretary said prices of the Automotive Gas Oil (AGO) diesel  are declining in Nigeria due to the fall of the prices in the international market.

On the Compressed Natural Gas (CNG), he said customers are you demand the product from MOMAN.

Isong suggested there should be a trade corridor for gas fired vehicles.

He stressed that as deregulation has come it is enough to restore investors and vehicle owners confidence for conversion to gas.

About 60 per cent of the Microfinance Banks (MFBs) recently shut by the Central Bank of Nigeria (CBN) were not paying their deposit insurance premiums to the Nigeria Deposit Insurance Corporation (NDIC).

An official told The Nation that the Corporation would go ahead to pay claims to depositors of these failed microfinance banks.

According to the official, “these microfinance banks, about 60 per cent of them don’t pay premium but NDIC will pay the insured sum because it is statutory on us”.

He noted that “on the average, 75 per cent of the MFBs are paying premium while 25 per cent are in default. Meanwhile, some of the MFBs closed on their own without dime”.

It was also disclosed that the NDIC has started settling depositors of these microfinance banks, one month after their licence were revoked.

Read Also: CBN lifts restrictions on domiciliary account operations

This is the first time the NDIC is settling claims from deposit of failed banks in one month.

The NDIC, the official said, will overlook the indiscretions of these erring microfinance banks and pay their depositors “because they assist our rural communities to have financial inclusion”.

By settling the depositors of these distressed microfinance banks, the NDIC official said the Corporation hopes to build trust with the rural communities as well as promote financial inclusion.

“Many of these micro finance banks must have closed shops on their own, but we must pay the insured sums.

“One thing people don’t know is that the premium that is collected is supposed to be a fallback for occasions like this.

“Any bank that is in trouble or whose licence has been revoked, the NDIC is expected to pay the insured sum.

“These are the issues; that is why they (microfinance banks in rural areas) have no Know Your Customer (KYC).

“People in the rural communities don’t have collaterals, among others and the loans that are supposed to be granted to the rural dwellers, how much is it?,’’ the official added.

“Instead they get loans through group lending, cooperatives and associations so that they can monitor themselves to improve their lives.

The Central Bank of Nigeria revoked the operating licences of 132 microfinance banks, in May.

The revocation exercise was disclosed in the official gazette of the Federal Government published on the website of the CBN on Tuesday.

The licences of the financial institutions were revoked because they ceased to carry on in Nigeria, the type of business for which their licences were issued for a continuous period of six months.

They were also alleged to have “failed to fulfil or comply with the conditions subject to which their licences were granted; or failed to comply with the obligations imposed upon them by the Central Bank of Nigeria in accordance with the provisions of Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5.”

On its part the NDIC assured depositors of these distressed banks of speedy settlement of their claims.

Managing Director of NDIC Mr. Bello Hassan said, as deposit insurer, the NDIC has started the process of payment of the insured sums immediately with the verification of eligible depositors at the respective premises of the closed banks.

He enjoined such depositors to get the required documents for the exercise such as proof of account ownership, verifiable means of identification and alternate bank account to facilitate their seamless verification and payment of their insured deposits.

The NDIC Boss stated that the insured deposit is the first claim that the Corporation pays to depositors upon revocation of bank’s license by the CBN, adding that the maximum specified limits for the MFB is N200,000.

As liquidator, Hassan said the corporation has also set machinery in motion to commence sales of assets of the defunct banks as well as recover debts owed to them in order to declare liquidation dividends on pro rata basis to the affected depositors with claims exceeding the maximum insured sums.