The Nation Newspaper

Category: Industry

  • Exploit ecotourism, expert urges stakeholders

    Stakeholders in the tourism sector have been advised to exploit ecotourism to develop the host local communities. Giving the advice on Tuesday in Abuja, during an interview with News Agency of Nigeria (NAN), the Special Assistant to Enugu State Government on Tourism, Mr. Manfred Nzekwe, said ecotourism had grown in influence and importance and should be developed in line with global best practices to boost the country’s economy.

    His words: “Ecotourism helps in involving the local community in the conservation of the ecology and biodiversity of the area; this biodiversity, in turn provides the economic incentives to the local community. Ecotourism can help to ensure community development by providing an alternative source of livelihood, which is more sustainable for the people.”

    Nzekwe, however, said exploiting the bountiful opportunities in ecotourism required responsible action on the part of tourists and the tourism industry to promote small and medium tourism enterprises. He said ecotourism is a unique subset of the tourism industry, which focuses on the enhancement and maintenance of natural systems via tourism.

    According to him, ecotourism or nature tourism is a relatively recent development that has become very popular all over the world and man plays an important role in its survival or its demise. “It involves education and interpretation of the natural environment and Nigeria is blessed with beautiful natural environments, which provide interesting sites for leisure, adventure and other tourism related activities,” he noted.

    Nzekwe pointed out, for instance, that the hills, caves, springs, lakes, waterfalls, rivers, forests and wildlife constitute important attractions for people to enjoy. He emphasised the need for Nigeria to preserve its environment and maintain the values left by its ancestors to ensure sustainable development of the country’s heritage.

    “Ecotourism, as an alternative form of tourism, involves visiting natural areas in order to learn about them or simply enjoy the scenery; this enables the economic and social development of the host local community. It focuses primarily on experiencing and learning about nature, its landscape, flora, fauna and their habitats, as well as cultural artifacts from the locality,’’ Nzekwe explained.

    He stated that carefully planned and operated ecotourism sites, especially the village-based type, would provide direct benefits to the communities, thereby protecting the environment and its natural assets.

    “In order for ecotourism to encourage patterns of sustainability, which can benefit local communities, it must be comprehensive and account for the complexities that are associated with tourism. It must account for social, economic and environmental implications in order to succeed. We must therefore, continue to work on and suggest ways to evaluate and grow the practice of ecotourism and sustainable development,’’ he said.

  • Simba Group expands network for power back up products

    Simba Group expands network for power back up products

    Simba Group, distributors of luminous inverters and power backup solutions, on Tuesday rolled out its network of Simba Service Centres across cities in Nigeria. The company, which represents brands such as Luminous, Genus, Epsilon and Exicom, distributes and services power backup products such as Inverters, Batteries, Online UPS and Integrated Power Management Systems.

    Announcing the network roll out in Lagos, Simba Group Managing Director, Chief Vinay Grover, said “We have always believed that a good quality product means very little unless it is supported by a high level of service before, during and after the sales process. It is with this in mind that we recently launched our one-of-a-kind 24*7 nationwide contact centre and exclusive customer-service online portal.”

    Chief Grover explained that as more and more customers turn to the company’s award winning customer care offering, it becomes important that the company brings these services closer to them. “It is with this in mind that we committed to extending our service through the creation of new authorized centres, which I’m happy to announce are fully operational now.”

    Grover invited business owners and aspiring entrepreneurs who want to open such authorized service centres in conjunction with the company to contact them directly. He said Simba plans to roll out a further 20 service centres within the next few months.

    Simba Group, which recently won the Capital Finance International (UK) award for Best Customer Satisfaction in Nigeria, had committed to rolling out service centres beyond their own network which  spans across major cities in Nigeria, including Lagos, Abuja, Port Harcourt, Kano, Ibadan, Maiduguri and Yola.

    The company has now opened further service centres in Ilorin, Akure, Onitsha, Katsina and an additional one in Kano.

  • Stakeholders differ on subsidy removal

    Stakeholders differ on subsidy removal

    Mixed reactions have continued to greet  the call by the Managing Director of the International Monetary Fund (IMF), Ms. Christine Lagarde, on President Muhammadu Buhari’s administration to remove fuel subsidy. For instance, while the call did not go down well with the Nigerian Labour Congress (NLC), the Lagos Chamber of Commerce (LCCI) has thrown its weight behind fuel subsidy removal.

    The IMF boss had during her recent visit to Nigeria recommended the removal of fuel subsidy to the  Federal Government, arguing that “fuel subsidies are hard to defend.” According to her, subsidies “harm the planet,” as “only seven per cent of the benefits go to the poorest 20 per cent.”

    But the NLC disagrees with Lagarde, pointing out that statistics dished out by the IMF MD are at variance with present realities in Nigeria. “I am not sure those statistics are correct. Everyone in Nigeria is depended on oil and gas. Therefore, people will not be able to pay more. Our viewpoint is that the primary purpose of government is comfort. So who will benefit from subsidy removal?” he said.

    Wabba said  the government can do a lot of other things so that Nigerians don’t suffer. While insisting that IMF is about servicing the capitalists, he said the IMF chief’s recommendation for subsidy removal is to make Nigeria  continue to buy refined petroleum products from them (the West).

    Wabba stated that if subsidy is removed, Nigerians would be paying more. While noting that most engagements by IMF chiefs are shrouded in secrecy to the detriment of Nigerians currently facing the brunt of economic hardship, he said Lagarde’s advice to Nigeria would be inimical to the economic well being of Nigerians and will worsen the present situation.

    “Her advice is not going to take us anywhere. IMF cannot point to anywhere in the world where any good example of its policy has worked; either in other parts of the world or Africa where their conditionalities has worked.

    “In most of her engagements, she didn’t make those conditionalities known. The aim is to tie Nigeria to foreign creditors. NLC will not accept this. We want to make it clear that Nigeria is not in short supply of economists who can run our economy,” the labour unionist said.

    However, Lagarde’s advice to Nigeria enjoys the support of the LCCI. Conveying the Chamber’s support for the removal of subsidy, LCCI President, Muda Yusuf, said, “Government should engage NLC for the purpose of proper education and enlightenment on the need to fully deregulate the downstream petroleum sector.”

    He told The Nation that given the  price of crude oil in the global market, petroleum subsidy should not really be an issue at this time.  “At current pump price of petrol, it is doubtful whether any subsidy still exists. Therefore, subsidy debate at this time would at best be academic,” he said.

    The LCCI chief however, said going forward, the government needs to articulate a clearer policy to stimulate investment especially in petroleum refineries. “It would be difficult to attract investors in refineries if Government continues to fix the price of petroleum products,” he stated.

    He further stated that he believes that Nigeria should embrace the modulation model proposed by the Minister of State for Petroleum, Dr. IbeKachikwu. “It is in the interest of this economy and all the citizens that an appropriate policy environment is created to stimulate investment in the petroleum downstream sector. It is important to emphasise that it is these reforms that will attract investors into refineries,” he said.

  • BPP sets December deadline for e-procurement registration

    BPP sets December deadline for e-procurement registration

    The Bureau of Public Procurement (BPP) on Tuesday directed contractors doing business with the Federal Government to register on the e-procurement database by Decem-ber.

    BPE Public Relations Officers (PRO) Mr. Thomas Odemwingie, who said this in Abuja, noted that the e-procurement platform would help fast-track the procurement process and eliminate fraud.

    “We are trying to register, classify and categorise consultants, service providers and contractors who are doing business with or intend to do business with the government. The whole idea is to ensure that all companies with the same level of competence and also with the same resources are clustered in such a way that they can compete with each other,” he explained.

    Odemwingie said the BPP now has a database, and “we encourage you to register on this database and you will get a code so that when you sign in using that code, people will know about your competencies’’.

    He said with the new process, there would be no need for any physical contact with the procuring entity. The process would also eliminate the whole inter-face that predisposes procurement system to corruption.

  • Bol gets Ba3 international issuer rating, stable outlook

    Bol gets Ba3 international issuer rating, stable outlook

    Moody’s Investors Service has assigned first-time ratings of Ba3 to the Bank of Industry (BoI), while affirming the development finance institution’s rating as stable.

    According to Moody’s, the ratings are underpinned by a b2 standalone credit profile and two notches of uplift due to Moody’s government support assumptions.

    The rating agency explained that Bank of Industry’s b2 standalone profile reflects its robust capital buffers, with equity to assets ratio of 30 per cent as of September 2015; a stable liability structure made up of long-term funding at concessional rates; and the tangible improvements to the bank’s governance and risk positioning in recent years.

    In its Global Credit Research report, Moody’s noted that the Bank of Industry’s reported nonperforming loans ratio (NPLs) is relatively low at 4.6 per cent as of November, last year and compares favourably to development bank peers globally.

    “Low NPLs are partly explained by the exposures relating to the CBN intervention fund, which are guaranteed by commercial banks and, as such, have generated close to zero NPLs as Bank of Industry exercises the guarantee immediately after any of these loans become delinquent.

    “That said, the ratings currently assigned to Bank of Industry take into account our expectation of a higher NPL level (between five and 10 per cent of total loans) over the next two years, as we expect asset quality to come under pressure as the bank increases its loan exposure within Nigeria’s challenging operating environment.

    “Bank of Industry plans to double its total loan book size over the next four years and to increase its MSME portfolio by 14 times its currently modest size. This MSME target corresponds to an annual growth rate of 93 per cent, albeit from a very low base (four per cent of total portfolio). Bank of Industry projects that about half of new loans that will be extended in the future will be guaranteed by a commercial bank”, it added.

    Commenting on the bank’s credit profile, Moody’s stated that as of September 2015, tangible common equity as a percentage of total assets stood at 30 per cent, up from 26 per cent in 2014, which is substantially stronger than similarly-rated global peers.

    “Although we expect Bank of Industry’s capitalization to decline going forward due to its planned loan book growth of about 20 per cent annually, we anticipate that tangible common equity as a percentage of total assets will remain above 20 per cent for the next 12 to 18 months, which will still leave the bank with a robust capital cushion that compares favourably to peers internationally.

  • Making non-oil export economy’s heartbeat

    Making non-oil export economy’s heartbeat

    Can the Export Rediscounting and Refinancing Facility (ERRF) and the Non-Export Stimulation Facility (NESF) achieve their aims? Yes, they can, argue  experts, who note that the programmes can boost non-oil export and facilitate diversification of the economy, if properly driven by the government. Assistant Editor CHIKODI OKEREOCHA reports.

    They are coming at an auspicious time. The  Export Rediscounting and Refinancing Facility (RRF) and Non-oil Export Stimulation Facility (ESF) designed to stimulate non-oil export are coming when the economy is perhaps, at its most vulnerable ever. They are coming in the heat of the crisis in the international oil market where the price of crude has been crashing, requiring urgent rejuvenation of the non-oil export sector as wedge.

    Nigeria depends on oil for 70 per  cent and 95 per cent of her revenue and foreign exchange earnings. But global oil prices have been tumbling since June 2014, putting the finances of Africa’s largest economy/oil producer under severe pressure. From over $120 per barrel in December 2013, oil price nose-dived to around $60 per barrel in December 2014. By December 2015 and January 2016, oil price crashed to as low as $32 per barrel and $27 per barrel, respectively.

    Although, oil price went up slightly above  $30 per barrel, Tuesday this week, the unprecedented fall in oil prices necessitated strident calls on the Federal Government to speed up the development of the non-oil sector and the diversification of the economy to mitigate the impacts made worse by over-dependence on proceeds from crude oil. The new export financing programmes are therefore, seen as indication that the Federal Government may have finally seen the wisdom in reducing the country’s over reliance on export of crude oil as a major source of revenue, which price is prone to volatility.

    The Federal Government through the Central Bank of Nigeria (CBN) said last week that it has designed two export financing programmes known as RRF and ESF to improve non-oil export in the country and achieve total diversification of the economy. The move is seen by not a few experts and stakeholders as a short in the arm of real sector operators especially those in the non-oil export business,

    CBN Governor Godwin Emefiele, who made the initiative known in Abuja at the non-oil exports stimulation conference organised by the apex bank and the Nigerian Export-Import Bank (NEXIM), said the CBN and NEXIM came up with the initiative to encourage exporters expand their businesses as well as provide a pool of funds for commercial banks to enable them support exporters.

    According to Emefiele, credit to the non-oil export sector is currently in the decline, constituting a paltry 0.6 per cent of total domestic credit to the private sector in the past five years, while domestic credit to the economy has been on the rise. He blamed low level of export loans for being largely responsible for the decline in non-oil export revenue receipts from $10.53 billion in 2014 to $4.39 dollars in 2015.

    “The impact of these developments on the country’s export growth potentials is quite significant and has become instructive for stakeholders to dialogue on strategies to expand resources for export,” the CBN boss said, adding that the decline also limited the sector’s contribution to foreign reserve accretion.

    Emefiele said volatility in the international oil market s necessitated the renewed focus on non-oil exports as panacea to the nation’s dwindling foreign reserves. He noted that a rejuvenated non-oil export would stimulate economic growth and development, address the challenges of unemployment and target economic rebirth through the diversification of the Nigerian economy.

    At the conference themed ‘Strategies for Growing Nigeria’s Non-Oil Exports,’ Emefiele pledged that CBN will continue to play a catalyst role in improving export and encouraging local production through collaboration with the Ministry of Agriculture.

    Throwing  more light on the new facilities’ NEXIM Managing Director, Mr. Robert Orya, said the funds would be provided to all banks that lend to the export sector and that the banks would be mandated to give loans to exporters at nine per cent maximum. “If a commercial bank gives you a loan to say that you will return it in a year, the bank will not have money to loan out until you return that money.

    “But this window is such that as soon as this money is given to you, they will bring the credit papers and we refinance and give them the same money that they have given you, so they can give to another person. As soon as they finish disbursing to that person, they will bring the credit papers to us again and we will be able to refinance,” he explained.

    Orya emphasised that the facility is to encourage banks to lend by providing liquidity for them and to also enable them give the non oil facility at a moderated rate. He also said CBN and NEXIM would soon meet to finalise on the quantum of funds to be provided for the facilities and also the modalities for the disbursement.

    At the conference, which attracted about 400 participants across all stakeholders in the non-oil sector, the NEXIM MD said the funding would also aid exporters to improve on quality standards, packaging issues, export productions and operational challenges.

    Indeed, lack of quality control measures has been one of the greatest pains in the neck of exporters, which was why CBN’s latest intervention is music in their ears. “Quality is number one. It is the first thing that ought to be considered as the nation focuses on building a robust export-based economy,” the National President, Association of Systems Management Consultants, Mazi Coleman Obasi, said.

    While describing the initiative as a welcome development, the certified Quality Management Practitioner told The Nation that there is need for the authorities to speed up the adoption of the draft document for the proposed National Quality Policy (NQP) for Nigeria. He wondered why the formulation and subsequent adoption of the document is being delayed despite the fact that the European Union (EU) made available 12 million Euros about two years for the establishment of a National Accreditation System in Nigeria.

    He said the fund was supposed to support the enhancement of the national quality infrastructure, with a view to improving the quality, safety, integrity, and marketability of made in Nigeria goods and services. According to him, the intervention by the EU and other international technical partners was to increase the competitiveness of locally made products at the international market place.

    Under the EU-funded National Quality Infrastructure (NQI) project, implemented by the United Nations Industrial Development (UNIDO), with the support of the Federal Ministry of Industry, Trade and Investment, the objective was to improve the quality of products made in Nigeria so that they can be sold internally and in the international market. It was supposed to help develop a National Metrology Institute (NMI) to ensure that instruments are of international standards, improve the capacity of members of the Organised Private Sector (OPS) to conform to standards.

    The initiative, which was expected to produce a legislation that will contain a NQP and establish an internationally recognized National Accreditation Body (NAB) that will vet the activities of regulatory agencies such as the Standards Organisation of Nigeria (SON) and the National Agency for Foods, Drugs Administration and Control (NAFDAC).

    It will also establish conformity assessment bodies as well as enhance the powers of the Consumer Protection Council (CPC) and other consumer organisations to sensitize consumers on quality standards, and ensure improved consumer protection. But these have so far not happened. Yet, experts say that the creation of these key systems and institutions are supposed to boost the competitiveness of locally made products at the international market place and ensure the global acceptance of products and services from Nigeria.

    Failure by exporters to comply with specified standards is said to be responsible for mass rejection of non-oil exports from Nigeria at entry points in many countries in Europe. The Nation learnt that the rejected exports are mostly in the food and beverage segment where items such as beans, sesame seeds, melon seeds, fried fish, meat, peanut chips and palm oil are said to have been banned from entering Europe till June 2016.

    Non-oil products such as cocoa and cashew nuts were also rejected in many other countries, not only in Europe, with the importing countries citing  exporters’ inability to adhere to global standards, poor packaging, and high level of chemicals, poor labeling, insufficient information on nutritional content, and presence of high level of pesticide residue and presence of Mycotoxins.

    While admitting that lack of quality control measures remains a major hurdle on Nigeria’s quest to ride on the back of a robust non-oil export sector to grow and diversify the economy, the Chairman, Export Group, Lagos Chamber of Commerce and Industry (LCCI), Mr. Obiora Madu, identified other challenges facing non-oil exporters to include lack of incentives, logistics/infrastructure deficiency, and high cost of doing business.

    The Director General, Nigerian Economic Summit Group (NESG), Mr. Laoye Jaiyeola, said although policies to address the constraints of the non-oil sector abound, there is need to harmonise and properly implement them to ensure that they work. “People want to invest in the non-oil export sector, but our institutions and infrastructure must be right, our monetary policies must be consistent and macro economy level stable. But we scare them when we say one thing today and another tomorrow,” he said.

    Jaiyeola said the non-oil sector was fundamental to economic diversification, rapid revenue base expansion, sustainable growth and employment generation. He therefore, advised government to harmonise its non-oil export stimulation policies and ensure consistency in the administration of intervention funds to non-oil exporters.

    The Federal Government’s RRF and ESF are additions to previous policy interventions aimed at giving impetus to the emphasis on the non-oil sector in the face of the economic downturn caused by plunging oil prices. Recall that last year, the Federal Government gave vent to its push for economic diversification when it listing 13 National Strategic Export Products (NSEP) to replace oil. The 13 NSEP were listed in three categories including; agro-industrial- palm oil, cocoa, cashew, sugar and rice); mining related- cement, iron ore/metals, auto parts/cars, aluminium and oil and gas industrial products- petroleum products, fertilizer/urea, petrochemical and methanol.

    The former Minister of Industry, Trade and Investment, Dr. Olusegun Aganga, said then that Nigeria could no longer continue to be an import-dependent country. According to him, the nation was wasting its foreign reserves on imported products most of which can be produced locally.

    The Executive Director of Nigerian Exports Promotion Council (NEPC), Mr. Olusegun Awolowo, also said NEPC under his leadership had long recognised the need to develop the non-oil export sub-sector and had in the process held series of strategic meetings with stakeholders for the development of ideas aimed at improving the foreign exchange earnings by Nigeria through different avenues.

    These, he said, include the development of a 4-year Strategic Plan, One State One Product (OSOP), Nigerian Diaspora Export Programme (NDEX) and the development of new markets for new products. But as highly commendable as govern-ment’s moves to diversify the economy by riding on the back of non-oil export are, the political will to carry such policies to their logical conclusion remains the challenge.

    While real sector operators have thrown their weight behind the emphasis on non-oil economy, insisting that it is more inclusive, growth-oriented and characterized by high economic linkages and more sustainable, the consensus is that the success of the latest initiative, like previous ones, depends on the extent government demonstrates political will to carry them through.

  • Experts make case for solid mineral policy

    Experts make case for solid mineral policy

    Nigeria is endowed with a variety of solid minerals. There are about 40  kinds of solid minerals of various categories waiting to be exploited, according to Nigerian Extractive Industries and Transparency Initiative (NEITI). With a robust  policy, experts say that the sector could contribute to Nigeria’s economic growth and development. Assistant Editor OKWY IROEGBU-CHIKEZIE writes.

    The solid minerals sector is acknowledged as a viable alternative to oil & gas sector for foreign exchange earnings. The commercial value of the nation’s solid minerals is estimated to run into trillions of dollars annually, with 70 per cent of it said to be buried in the bowels of Northern Nigeria alone.

    The Minister of Solid Minerals Development, Dr. Kayode Fayemi, admitted this much during his first meeting with media practitioners when he said the solid minerals sector, when properly structured, has the capacity to provide no fewer than a million direct jobs and contribute as much as the oil and gas sector into the national economy.

    According to recent report by the National Bureau of Statistics (NBS), the contribution of the solid minerals sector to the Nigerian economy, which stood at one per cent as at 2014, has the potential to increase to 10 per cent by 2020.  The report further stated that the sector is capable of creating millions of direct and indirect jobs.

    The NBS report stated specifically that 44 solid minerals are found in commercial quantity and are spread across the 36 States and the Federal Capital Territory (FCT), Abuja. Out of these, seven strategic solid minerals are currently prioritized and promoted for private sector participation and investment by the Federal Government. They are gold, coal, bitumen, limestone, iron ore, lead/zinc and barytes.

    To fully exploit the immense potential in the sector, experts say there is need for a solid minerals policy to ensure an orderly development of the country’s mineral resources. Such policy, they noted, would among others, provide clear rules for predictable behavior by the authorities, and a clearly prescribed pattern of developments with roles of the different actors clearly defined.

    Before now, previous administrat-ions had made it a priority to encourage investors to venture into the solid minerals sector in order to diversify the economy. This led to the introduction of the Nigerian Minerals and Mining Regulation 2011 to streamline procedures for granting licenses to investors (both local and foreign) and guarantee access to mining sites with minimal encumbrances.

    The regulation provided for the right to search for, or exploit minerals in Nigeria, and is obtained through any of the following mining titles: Reconnaissance Permit, Exploration License, Small Scale Mining License, Mining License, Quarrying License, and Water Policy.

    The legislation guarantees among other things, security of tenure through mining lease, transparent procedures for granting access to mining titles on a first come first serve basis by Federal Ministry of Solid Mineral Development.

    Others are a pledge to give internationally competitive mining incent-ives and also provide comprehensive geo-science data of mineral deposits and their locations in Nigeria.

    A comprehensive package of incentives have also been put in place to create a favourable environment for investment, some of which are deferred royalty payments, capital allowances of up to 95 per cent of qualifying capital expenditure, exemption from customs and import duties for plant, machinery and equipment for mining operations.

    In addition to three to five years’ tax holiday as applicable; and tax concessions, possible capitalisation of expenditure on exploration and surveys, there is expatriate quota and resident permit in respect of the approved expatriate personnel and personal remittance quota for expatriate personnel, free from any tax imposed by any enactment for the transfer of external currency out of Nigeria.

    In addition to the above fiscal incentives, the Nigeria Investment Promotion Council (NIPC) Act 16 of 1995 allows for 100 per cent ownership of investment, while the Foreign Exchange Miscellaneous Act 17 of 1995, guarantees 100 per cent repatriation of capital, profit and dividends through authorised means.

    Apart from the seven strategic solid minerals that have been prioritized and promoted for private sector participation and investment by the Federal Government, other solid minerals that are found in commercial quantity, making Nigeria haven for investment, include rock salt, gypsum (an important input for the production of cement), gemstones, kaolin, and tantalite.

     

    Experts speak

    Experts have advised on the need to have added value to the numerous minerals in the country. They noted that most of the minerals are sold in raw form without any value addition, depriving the nation of the much needed foreign exchange. They argue that to derive more revenue from the products and create more employment opportunities, there has to be value addition.

    The Kaduna Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA) declared that the solid minerals sector has greater capacity to generate revenue than oil Its President, Dr. Abdul Bello, said Nigeria has large solid mineral deposits in most of the 36 states of the federation. He, however, lamented that the sector had been largely neglected in the wake of the oil boom.

    Dr. Bello said in view of declining revenue from oil, government now has no option than to diversify the economy by focusing on the solid minerals sector.

    KADCCIMA Second Deputy President, Hajiya Muheeba Dankaka, agrees with him. She said the reduction in global crude oil prices is not expected to cease, at least in the short run. While noting that this has necessitated the need to diversify the economy, she said one key sector that offers great potential in achieving this is the solid minerals sector.

    Dankaka and other stakeholders however, pointed out that an industry such as the solid minerals sector that has the potential to be a major cash cow unfortunately lacks adequate regulation and a proper structure.

    They asked government to address the lack of synergy between state Ministries of Mines and the Federal Ministry of Mines and Steel and to create a relationship between mining host communities and the ministry.

    They canvassed the removal of mining from the Federal exclusive list to allow states regulate mining activities in their domain.

    They also  asked that strict adherence to laws guiding environmental pollution and degradation in mining communities should be instituted while ensuring that Environmental Impact Assessment (EIA) is carried out before mining licenses are given to artisanal miners. Government’s efforts

    Dr. Fayemi said the main focus of his ministry is to reposition mining activities in the country and ensure that the sector contributes immensely to economic growth within a decade.

    He said opportunities abound in the solid minerals sector to actualise the current administration’s vision of using the sector to diversify the economy and create jobs.

    According to the minister, any current holder of mining licence who failed to use it would forfeit such from March when the ministry would start enforcing the ‘use it or lose it’ doctrine as enshrined in the Nigerian Minerals and Mining Act.

    While unveiling the roadmap, which the ministry intends to achieve in the short, medium and long term, the Minister pointed out that the country’s solid minerals sector currently makes up about 0.34 per cent of gross domestic product (GDP), which translates to about N400 billion in value to the economy.

    Dr. Fayemi, a former Governor of Ekiti State, said: “While this is a significant role, it is smaller than the true potentials of the sector. In fact, what has been happening is that the sector has been operating sharply below capacity, with many mining operations manned by small scale miners as opposed to large scale players.”

    He, however, said when properly structured, the sector has the capacity to provide no fewer than a million direct jobs and contribute as much as the oil and gas sector into the national economy.

    Although the minister noted the global decline in prices of mining products, he said the good news is that Nigeria has a great deal of domestic demand for industrial minerals and metal. “So we will focus on working with other Ministries, Department and Agencies (MDAs) to ensure the demand is met by Nigerian miners and processors,” he added.

    To achieve the ministry’s set goals, Fayemi said certain steps would be taken in the short term, including undertaking an external audit of revenue receipts in the solid minerals sector for the past years.

    He said the ministry would focus on jobs creation, block all leakages to shore up its revenue generation; build an industry that would support the country’s industrialisation and become sustainable, transparent and environmental friendly.

    “We also want to build an industry that integrates states, communities and existing miners into mining ecosystem. If we deliver on this vision, then we can build a mining sector that Nigerians can be proud of in 30 years or more from now. This sector should deliver double digit growth over the next decade with important direct and indirect economic impacts on households,” he stated.

    The Minister also said the ministry would enter into strategic partnership with the banks to develop interest in the sector and assist investors as well as the National Assembly for legislation and other ministries, National Security Adviser (NSA) and the Nigerian Custom Service (NCS) among others.

  • Fed Govt urged to review GES to boost farmers’ productivity

    Dry season farmers in Sokoto  State on Tuesday called on the Federal Government to review the Growth Enhancement Support (GES) Scheme to boost farmers’ productivity.

    The scheme, introduced by former President Goodluck Jonathan, relied on the use of mobile phone lines for the distribution of fertiliser, improved seeds and other farm inputs to farmers in the country.

    Under the scheme, agro-dealers were engaged for the distribution of the inputs across the country, while about 10 million GSM lines were registered for the scheme.

    A cross section of the farmers in the state said the scheme was the best ever used in the sale of the inputs at subsidised rate to farmers.

    A farmer at Takakume, Goronyo Local Government Area, Alhaji Ibrahim Adamu, said farmers received text messages directing them to collect the inputs at the nearest distribution point.

    “Registered farmers under the scheme are being allocated three bags of NPK and Urea fertilizer each, improved rice and maize seeds and chemicals at the cost of N9,000,’’ he said.

    Adamu said he was engaged in dry season farming for two decades, adding that a review of the scheme would go a long way to improve crop yield. He stressed the need to encourage more Nigerians to engage in farming activities.

    Another farmer at Falaliya village, Goronyo, Alhaji Hussaini Salisu, called on the government to provide more agricultural support services to farmers. “We are also appealing to the Federal Government to come to our aid by addressing the problem of perennial flooding at the falaliya old irrigation scheme,’’ he added.

    Salisu lamented that the area was renowned for the production of rice, cassava, sweet potatoes, water melon, garlic, sweet and hot pepper, among others.

    Malam Aliyu Chika of Yar-Rimawa fadama, Sokoto, however, called for the construction of more access roads in the fadama users’ areas of the state.

  • Why OPS is pushing for deregulation

    Why OPS is pushing for deregulation

    During her visit to the country, International Monetary Fund (IMF) Managing Director Ms Christine Lagarde called for fuel subsidy removal. Her call has reinforced the campaign for deregulation of the downstream oil sector. The Organised Private Sector (OPS), which is leading the deregulation campaign, believes that it will promote investment, stop the subsidy debate and fuel importation. Assistant Editor OKWY IROEGBU-CHIKEZIE reports.

    The Managing Director of the International Monetary Fund (IMF), Ms. Christine Lagarde, has urged President Muhammadu Buhari to tinker with fuel subsidy, arguing that “fuel subsidies are hard to defend”.

    According to the IMF boss, subsidies “harm the planet” as “only seven per cent of the benefits go to the poorest 20 per cent.”

    Although Lagarde’s wise counsel did not go down well with some individuals and groups, particularly the Nigerian Labour Congress (NLC), which argued that “the IMF recommendation for subsidy removal will make us continue to buy refined petroleum products from the West,”   her call for subsidy removal may have re-ignited the campaign for deregulation of the downstream sector of the oil and gas industry.

    Now, the Organised Private Sector (OPS) is leading the  call for deregulation. For instance, the Director-General (DG), Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, said NLC’s reaction has necessitated the need for the government to “engage the labour movement for   the purpose of proper education   and enlightenment on the need to fully deregulate the downstream petroleum sector”.

    He said given the price of crude oil in the global market, petroleum subsidy should not really be an issue. “At current pump price of petrol, it is doubtful whether any subsidy still exists. Therefore, subsidy debate at this time would at best be academic. However, going forward, the government needs to articulate a clearer policy to stimulate  investment, especially in petroleum refineries.”

    Yusuf told  The Nation that it would be difficult to attract investors in refineries if the government continues to the price of petroleum products. His words: “I believe we should embrace the modulation model proposed by the Minister of State for Petroleum, Dr. Ibe Kachikwu. It is in the interest of this economy and all the citizens that  an appropriate policy environment is created to stimulate investment in  the   petroleum downstream sector. It is   important to emphasise reforms that will attract investors into refineries.”

    Immediate past President, LCCI, Mr. Remi Bello, called for the deregulation of the downstream oil and gas sector, saying it is a way out of the problems in the industry. He noted, for instance, that a deregulated downstream will end scarcity of   petroleum  products,  halt   corruption   in the subsidy regime, resuscitate   the collapsed refineries, boost investments and create jobs.

    While insisting that the regime of subsidy and the government’s direct involvement in the operations   of oil and gas sector should be   discontinued, the former LCCI chief   said government’s management of the sector has done a colossal damage to the economy.

    “It is in the overall   interest of the economy and the   citizens that government should   quickly deregulate the sector,” Bello said, urging labour unions and Nigerians to give the reform a chance.

    The LCCI  is not alone in the call for deregulation. The Nigeria Employers’ Consultative Association (NECA) also called for deregulation of the sector. While describing the reduction of the price of petroleum products by the government as a right action within a wrong policy framework, NECA Director-General, Mr. Segun Oshinowo, said government’s action  is begging the more fundamental  issue of appropriate policy  framework that will promote investment in the downstream sector of the oil and gas industry.

    He said appropriate policy framework under a deregulated environment would put a stop to the embarrassing and shameful practice of importing petrol. “Our expectation, therefore, is that the government would seize the opportunity of the current decline in the price of crude oil to commence implementation of the policy on deregulation of the downstream sector of the oil and gas industry,”  Oshinowo said.

    According to him, this is a unique  timing  the   government cannot  afford to miss as full implementation of deregulation, which in time past had led to price increase and reaction by the labour movement in form of industrial action, does not have any negative effect on the masses.

    “We are, indeed, surprised that government’s announcement was limited to just the reduction in the price of fuel (PMS) as one would have expected a far more holistic announcement of a new policy thrust of deregulation of the downstream sector and privatisation of the four refineries, which have now become sink-holes, he said.

    According to Oshinowo, the economy stands to gain from the  deregulation policy. “We, therefore, call on the government to do the needful by coming out boldly and courageously to inform the Nigerian populace that it has deregulated the downstream of the oil and gas sector,’’ he said, in a statement made available to The Nation. 

    The Manufacturers Association of Nigeria (MAN) also favour deregulation.

    MAN President, Dr. Frank Udemba Jacobs, while speaking against the subsidy regime, observed that a major source of Foreign Exchange (forex) wastage in Nigeria is through the subsidy on importation of petroleum products.

    He argued that the country had no business relying on fuel importation to meet the fuel requirement of the nation, given the number of refineries in the country, which are  lying waste. Jacobs said rather than optimising the use of the  refineries, Nigeria turned around to import fuel and pay huge subsidies to fuel importers thereby wasting huge scarce foreign exchange as subsidy.

    He insisted on the  privatisation of the downstream petroleum sector in  order to save the country from wasting the huge forex paid as subsidy. The MAN chief encouraged the granting of licences to private sector   participants and the provision of an enabling environment for them to operate refineries, insisting that   subsidy on fuel importation is ambiguous and not in the interest of the majority of the people.

    “Why does the government have to subsidise fuel imports when such subsidies, some of which are even   ambiguous, would have been   channelled to streamlining the   refining capacities of refineries or even establishing new ones?” Jacobs asked.

    According to him, the solution tilts towards the privatisation of the sector so that government would hands off subsidy payment.

    Investigations by  The Nation  show   that government’s regulation of   petroleum products’ prices and the delay in the passage of the controversial Petroleum Industry Bill (PIB) are two critical issues   frustrating   increased investments that will create jobs in the sector. Most investors are said to be afraid of being asked by the government to sell below production cost.

  • Govt’s economic direction now clearer, says LCCI

    Govt’s economic direction now clearer, says LCCI

    The Federal Government’s direction has become clearer, following its release of the Medium Term Expenditure Formework (MTEF) and the Fuiscal Strategy Paper (FSP), Lagos Chamber of Commerce and Industry (LCCI) Director-General Mr. Muda Yusuf has said.

    Speaking with The Nation, Yusuf said with the release of the MTEF and the FSP, business operators now have clearer indications of the government’s disposition towards the petroleum Industry Bill (PIB) and other reforms in the oil and gas sector.

    He said the 2016 budget has also given some insights into the economic plans of the administration. “Clearly, the situation with regards to the policy direction of the government is much better today than it was few months ago,” Yusuf said.

    He, however, said LCCI still expects further information and insights into the policy framework with regards to public private partnership and the scope for private sector investment in infrastructure provision. “This is very important in the light of the serious revenue constraints that the government is faced with,” he noted.

    Meanwhile, the LCCI chief has described the scrapping of the fixed electricity charge by the Federal Government through the National Electricity Regulatory Commission (NERC) as ‘laudable’. The fixed charge is that component of the tariff that commits electricity consumers to paying an approved amount of money mostly on a monthly basis, irrespective of whether electricity is consumed during the billing period or not.

    But NERC Chief Executive Officer (CEO), Dr. Sam Amadi, while announcing new electricity tariffs in the country recently, said electricity consumers would no longer pay the contentious and vexatious fixed charge included in the monthly electricity bills issued by the 11 DISCOs in the country. He said consumers would now only pay for what they consume monthly (pay-as-you-consume).

    But Yusuf, who lauded the removal of the fixed charge, said the provision of meters to consumers should be accelerated to put an end to the phenomenon of estimated billing. He said the NERC and the Minister of Power, Mr. Babatunde Raji Fashola (SAN)  had argued that the tariff review was a major plank of the Power Sector Reform and is critical to the delivery of power.

    He said the purpose, according to them, is to make electricity tariff cost -reflective to make investments in the sector attractive and sustainable. “It is difficult to fault this position, especially in the light of the clamour by the citizenry for a private sector driven power sector.  In any event, it will still be cheaper (even with the review) than individual firms or households providing electricity through generators powered by diesel, petrol generators or LPFO,” Yusuf said.

    He was, however, quick to warn that “electricity consumers should not be made to pay for inefficiency or corruption costs.  It is important to evaluate the elements of the current costs especially the integrity of procurement processes and other operational expenditure under the current dispensation. The risk of bloated costs exists and should be addressed.”

    The NERC explained that the tariff review was the result of a transparent, rigorous and credible rate review process that will lead to greater reliability in the provision of electricity. The commission added that with the review, “more people will progressively have access to the grid, more meters will be deployed and the need for self generation would be gradually reduced.”

    However, the LCCI chief pointed out that pricing is only one component (although fundamental) in the power delivery chain. “There are other issues such as availability of gas, security of gas infrastructures; adequacy of investment in gas infrastructure; security and adequacy of the transmission lines; huge indebtedness by the Ministries, Departments and Agencies (MDAs) to electricity distribution companies (DISCOs) and the general framework to mitigate the risk of investment in the sector. All these need to be sorted out in order to inspire investors’’ confidence,” he added.

    On the controversial Central Bank of Nigeria (CBN) Foreign Exchange (forex) policy, the LCCI chief said it is notable that President Muhammadu Buhari during his budget address to the National Assembly assured the nation that the forex policy will be reviewed.

    “One of the challenges of the investment environment is the foreign exchange policy especially the liquidity problem in the foreign exchange market,” he pointed out, adding that “Investors have issues with the exchange controls, the restrictions of importers of 41 items from access to the foreign exchange market, the restrictions on export proceeds, restrictions on the use of debit naira card abroad and above all, the liquidity crisis that has been created in the foreign exchange market.”