The Nation Newspaper

Category: Industry

  • ‘12% interest rate will kill SMEs’

    THE pegging of Monetary Policy Rate (MPR) at 12 per cent by the Central Bank of Nigeria (CBN) would hamper the growth of the  Small and Medium Enterprises (SMEs) and eventually kill them if care is not taken, the Executive Secretary, The Nigerian Association of  Small and Medium Enterprises (NASME), Mr Eke Ubiji, has warned.

    He said: “This is because banks will not like to give out the funds to borrowers at the same rate they procure it from the CBN.

    “It, therefore, means that any SME operator who wants to borrow money from the bank must be ready to pay a higher rate than the 12 per cent, in addition to other charges that the banks normally impose on loans,” he said.

    According to him, instead of the monetary authorities using only high interest rate to check inflation for the eighth consecutive time, it would have been better to use other monetary policy instruments. He said reducing interest would encourage business owners to have access to funds, or set up new ones, to create job opportunities, to employ people, and reduce unemployment in the country.

    “There are various methods the government can use to check inflation. One of such, depending on the risk profile on the borrower, is the issuance of treasury bills to mop up excess liquidity in the system. With the rate, no serious entrepreneur can dare to take loan to venture into production in an environment, where one has to provide one’s own electricity, water, security; and at times, construct roads to enable  vehicles to access the business premises to evacuate goods that have been produced to the market place,” he said.

    Recently, the Monetary Policy Committee retained the benchmark lending rate at 12 per cent for the eighth time in a row.

  • Nigeria to save N2tr in raw materials devt

    The development of Nigeria’s intermediate raw materials will save it over N2 trillion in the next 25 years, the Raw Materials Research and Development Council (RMRDC), has said.

    Speaking in Abuja, its Director-General, Prof. Peter Onwualu, said since the council’s inception 25 years ago, it has promoted the exploitation, development and use of local raw materials.

    “Little wonder that after 25 years experience in value addition to local raw materials, the council has emerged as Nigeria’s focal point for the development of Nigeria’s vast industrial raw materials.

    “Our target is to increase the percentage of local content in industrial raw materials utilisation in Nigeria from the 25 per cent to 60 per cent in the next 25 years.

    “This, by our estimation, can save Nigeria over N2 trillion in foreign exchange for the importation of intermediate raw materials, process equipment and impact skills,’’ Onwualu said.

    According to the him, Nigeria is expending foreign exchange to import raw materials and products, which can be sourced from the country, because of lack of awareness.

    Onwualu said the country is processing about 25 per cent of its local cocoa production before the council was born.

    He said because of the council’s efforts over the years, the figure moved to 75 per cent, adding that another 2,000 jobs were created.

    He said over 100 research projects had been funded by the council, and about 50 per cent of research results had been commercialised, while 30 per cent were at various stages of commercialisation through pilot plants and joint venture with SMEs.

    He expressed the council’s belief on the development of the nation’s natural raw materials and investment in people, saying that both were possible and sustainable.

    He said to ensure that both remained a socio-economic vehicle for sustainable national growth and development, the council has embarked on intensive investment promotion campaigns across the country.

    He said the next 25 years, over two million jobs would be created in the area of raw materials production, processing, distribution and final processing of goods and services.

    “We hope to achieve these by consolidating on the council’s information generation, research grants scheme, commercialisation of research results and promotion of investment in resource based industries,’’ he said.

    Onwualu said the council would work with other relevant organisations to see to the emergence of about 5,000 SMEs, adding that this would be done by using research results and technologies developed by the council research institution, universities and other higher institutions.

  • Importers plan to thwart new tariff regime

    MOVES by the Federal Government to help plastic manufacturers, may be scuttled by raw materials importers, The Nation has learnt.

    The importers are said to be working against the government’s plan to ensure that the manufacturers produce without hitch.

    They are scheming to frustrate the five per cent hike in tariff for imported raw materials.

    The hike is aimed at discouraging the importation of some basic raw materials that are available locally.

    “Despite what the government is doing to improve on the industrial climate, some selfish businessmen are bent on ruining the process. Just because of what some people are making through importation of these raw material, they are clamoring for a reversal of the policy, which, according to him is not in the interest of the country,” he said.

    He said those who are calling for the suspension of the new tariff are members of the group, who have international partners that manufacture the raw materials abroad.

    However, he said the operators of Eleme Petrochemicals have invested to ensure that the two basic raw materials, polypropylene and polyethylene, are made available for the use of local manufacturers.

    He said while the Federal Government through its industrial revolution initiative aims at developing businesses to grow compete at the international level, some unpatriotic Nigerians are bent on frustrating the move.

    Though he admitted that one of the groups seeking a reversal of the policy has a case, in the sense that Eleme Petrochemical does not give credit facility, he added that this is not enough reason for them to canvass a review.

    He regretted that the quantity of polyethylene produced by the firm was in excess because the importers claim that the quality of the ones produced locally was inferior. Hence, the need to import.

    This is not acceptable because the company has resulted to exporting the excess left, since they are not getting patronage, a situation, he said.

    “If, indeed, there claims are right, then the right thing to do is to approach the company to improve on its quality. Instead of importing what is available locally. I think government should move in to protect our local industries,” he said.

     

  • Mali: Army, FIIRO collaborate on food for troops

    The Federal Institute of Industrial Research, Oshodi, Lagos (FIIRO) is collaborating with the Research and Development (R&D) Department of the Defence Headquarters to produce varieties of highly nourished food that can sustain troops packaged in Mali.

    FIIRO’s Director-General, Dr. Gloria Elemo, said they would develop food for the management of malnutrition and some health challenges among the troops.

    “The institute has developed over 250 technologies since inception and 50 of the technologies have been packaged and are ready for investment by micro, small and medium entrepreneurs using the country’s agricultural endowments to sustain and quicken the pace of industrialiation in Nigeria.

    “For instance, in tuber processing, we have developed products from cassava such as high quality cassava flour for partial substitution in wheat flour, industrial starch, odourless fufu, cassava chips and pellets, cassava noodles, mechanised garri, Soy-garri and many more,” she said.

    The Chief of R&D Department, Defence Headquarters Forces, Maj.-Gen. Olufemi Adeosun, said: “We don’t really have much time. There is no time to start from scratch; we are looking for people who already have what we want on their shelf that we can collaborate with so that we give them our specifications and things start happening since we have almost 250 technologies to draw from as presented by the director-general.

    “When we were in Liberia, an organisation was with us who packaged different food for us and we enjoyed it. Now that we are moving into a very strange environment, where there is desert, where logistics support maybe a little bit difficult, we should have something that will sustain us for 24 to 48 hours before help can come and that is why this collaboration is necessary.”

     

  • Ministry, ECOWAS, private sector to grow real sector

    How can the Federal Government’s transformation agenda and industrialisation goal best be achieved? It is by harmessing the National System of Innovation (NIS), says the Ministry of Science and Technology, Prof Ita Ewa.

    Speaking at the National Stakeholders’ Workshop on Innovation for the Organised Private Sector (OPS) in Lagos, he said his ministry would collaborate with the Economic Community of West African States (ECOWAS) Commission to achieve the goal.

    According to him, the ministry with the support of the ECOWAS Commission is seeking the private sector’s partnership to drive the real sector’s growth.

    The minister said: “Science, technology and innovation are pillars of socio-economic and environmental development of any nation. Data management and the development of indicators of science, technology and innovation have been identified as major axis of the actions to be implemented in the short-term as they allow government and stakeholders to review the systems in place. It is believed that this innovation will impact on the lifestyle of Nigerians if effectively pursued.”

    He added that the ministry hoped to facilitate public-private partnership (PPP) in research and development and commercialisation of the products.

    Ewa said Nigeria was playing a leading role in the implementation of the initiative, which would contribute to its socio-economic development and that of ECOWAS.

    He said the Science and Technology Ministry is committed to driving innovation.

    “It is hoped that this National System of Innovation (NSI) framework will evolve a strategy to foster innovations at all levels of government from wards, local, state, regional to the federal level.

    “The public and private sectors must be properly engaged to drive sectoral innovation,’’ he said.

    The National Vice-Chairman, Nigerian Association of Small-Scale Industrialists (NASSI), Duro Kuteyi, praised the Federal Government on the initiative. He canvassed more funding to aid food processing in the country.

    He said: “The lack of innovation for processing has continued to affect local production and capacity utilisation in the country. Food security can only be enhanced through an effective food processing initiative. If we must avoid dumping, small and medium enterprises must be empowered for exports. We do not have adequate security to obtain loans for efficient processing of goods for export. If this can be addressed, SMEs would become more pivotal in the growth of the country’s economy, while food security would be assured.”

    Also, the Manufacturers Association of Nigeria (MAN) commended the ministry’s effort in driving development through innovation, noting that there was a need for frequent interaction with the private sector to enhance the innovation and effective implementation.

    MAN’s Director, Corporate Affairs, Rasheed Adegbenro, said the NSI has opened a new vista between the private sector and government and the opportunities therein should be harnessed through improved partnership with the OPS.

     

  • NACCIMA criticises CBN’s monetary policy

    NACCIMA criticises CBN’s monetary policy

    •Single-digit interest rate sought

    The Nigeria Chamber of Commerce, Industry Mines and Agriculture (NACCIMA) has made a case for a single-digit interest rate, describing the Central Bank’s 12 per cent Monetary Policy Rate (MPR) as unhealthy for the economy.

    It also warned the Federal Government against increasing fuel price. Rather than increasing fuel price, it implored the government to recover the $29million the Mallam Nuhu Ribadu-led Petroleum Revenue Special Taskforce said the international oil companies are owing.

    Briefing reporters, NACCIMA President, Dr. Demola Ajayi said: “Avoid fuel price increase. The government should compile actual quantities sold through petrol station pumps and do all that would enable us to compare with total claims of refineries.

    “The government should be determined to recover by legal means funds, such as the US$29 billion,which the Ribadu-led Committee was quoted as recoverable payments from International Oil Companies (IOCs).”

    Ajayi urged the government to privatise the refineries and encourage the establishment of private ones.

    Criticising the MPR of the Central Bank of Nigeria (CBN), Ajayi insisted that the only way CBN could help the economy is to bring the interest rate to a single-digit index.

    He said: “The CBN governor has said the apex bank will still maintain the 12 per cent MPR. I don’t think this is good enough.We have to work with CBN governor as Nigerians and watch it closely because I am sure as things go on, the CBN will want to look at this interest rate thing.

    “We feel that industry can only move forwards, especially in the commercial world, referring to the private sector, when access to fund, cost of borrowing are moderate or they are affordable. It makes the economy to move upwards. So, we are hoping that the interest rate will be examined from time to time, depending on what is happening in terms of Gross Domestic Product (GDP) and other factors.”

    He urged the Federal and state governments to cut down on external borrowing, saying this is necessary to keep the economy on a clean slate.

    He said: “The Federal and state governments must curb the high propensity for borrowing from abroad, except from international institutional lenders, such as IMF, African Development Bank, World Bank and International Finance Corporation and only for specific developmental projects.

    “They must also accelerate payment of local debts owed indigenous businesses to enable them to expand, generate wealth and create jobs. This is only fair if treated with same attitude shown in collecting debts owed governments.”

    Ajayi asked the Federal Government to make its position known on unclaimed dividends, including the establishment of an Unclaimed Dividen Trust Fund.

    The NACCIMA chief, who said there is hope for increased economic fortunes for the country this year, advised the Federal Government to consider friendly incentives to woo companies into the country.

    He said: “The Federal Government should provide adequate industry-friendly incentives to woo back companies that have relocated or are at the verge of relocating to neighbouring ECOWAS countries by boosting the power supply situation and addressing other constraints faced by them.”

    Ajayi said epileptic power supply by the Power Holding Company of Nigeria (PHCN) has increased the cost of doing business in the country to 40 per cent.

    He said: “Recently, we are worried that in spite of the recent high tariff charged by the PHCN, electricity supply is yet to reduce the burden of private generators for businesses and the citizens since the government’s intention to meet the 6,000MW to 10,000MW has been difficult.

    “This has contributed as always to the high cost of doing business estimated at about 40 per cent since real sector operators and citizens alike depend mostly on own provision of alternative sources of electricity through own generating plants.”

    He called on the Federal Government to cooperate with private sector to deliver 10,000MW by the end of this year, as well as make provision for sufficient pre-paid meters to consumers.

  • Nigeria, Canada target N900b trade volume by 2015

    NIGERIA and Canada have agreed to strengthen their trade and investment ties.

    This will be achieved by leveraging on areas of competitive and comparative advantage.

    Both countries also agreed on strategies to double their volume of trade to N900billion ( $6billion) by 2015.

    To stimulate trade and investment, Canada has agreed to review its visa processing time for Nigerians to 10 days.

    Nigeria’s value of merchandise trade with Canada stood at N405billion ($2.7billion) in 2011.

    The trade value consists of N375 billion ($2.5billion) in Nigeria’s exports to Canada and $199million worth of imports.

    The decisions were reached during the Nigeria-Canada Bi-National Commission meeting in Abuja, which was co-chaired by the Minister of Trade and Investment, Mr Olusegun Aganga and the Canadian Minister for International Trade, Mr Ed Fast.

    A joint communiqué issued at the end of the meeting stated: “The two ministers noted the rapidly growing volumes of trade between the two countries and welcomed the commitment by the Canada-Nigeria Business Association to double the volume of trade by 2015 to $6billion.

    “The ministers welcomed the strong role of the private sector in expanding the two countries’ economic ties and agreed on the importance of renewed efforts to ensure that each country’s private sector is more acquainted with the opportunities in the other country.”

    Aganga said the Federal Government would expand bilateral trade relations with Canada, especially in the exportation of non-oil products.

    The move, he said, would help to create employment, generate wealth and enhance economic growth in the country.

    Fast led a delegation of chief executives of 28 Canadian firms operating in the extractive and infrastructure sectors of his country’s economy.

    Aganga said the meeting provided the platform for both countries to review their socio-economic progress to consolidate on gains and re-strategising for enhanced growth.

    “Nigeria and Canada share strong and increasing trade and investment relations. Canada is a top player in international trade, which makes up a large part of the Canadian economy,” he added.

     

  • NEXIM boosts export with N85b

    The  Export-Import Bank (NEXIM Bank) gave over N85 billion in support of 900 export projects last year, its Managing Director, Roberts Orya, has said.

    In a statement, Orya said, the bank created over 300,000 direct and indirect jobs and would help in generating over $1.2 billion in foreign exchange earnings for the country, substantial part of the money, he added was spent on Small and Medium Scale Enterprises (SMEs).

    Orya said, as an export credit bank of the Federal Government, NEXIM is working hard to rationalise its authorisation of diversification of the  economy through the provision of finance, risk bearing, and policy support to the non-oil export sector.

    He said:  ”Given our efforts to develop the high growth sectors and increase employment generation in the country, we have also developed a funding programme for the creative and entertainment industry in addition to a special scheme for SME exporters in the ECOWAS region.”

    Orya said the bank has also issued guarantees worth $27.3milion to some manufacturers some of whom are engaged in greenfield projects.

    The interventions, Orya added, were in its target sectors with high growth potential of manufacturing, agro-processing, solid minerals and services.

    The NEXIM Bank’s chief said as a result of these operational interventions, the bank was able to generate and sustain direct jobs of over 14,358 last year.

    He commended the shareholders for fresh capital injection as well as other institutional support through supervisory and regulatory over- sight and guidance from the CBN and the Federal Ministry of Finance.

    He urged the government and other  stakeholders to make use of small manufacturing industries to boost exports.

  • N5b lost to illegal importation of caps

    The Cotton Textile and Garment (CTG) sub-sector is said to be losing N5billion yearly to the illegal importation of caps, as a result of the porous state of the country’s border posts where about 50 million caps find their way into the country.

    The Head of Operations, Crown Natures Nigeria Limited, Mrs Busayo Gbaluwe, who spoke at the presentation of caps and hats in Lagos, said about 50 million inferior caps are imported yearly, thereby denying local manufacturers of their share of the market.

    Mrs Gbaluwe said the need to transfer technology and bridge the gap, especially for people that go out of the country to import caps, informed the decision of the company to float the outfit with its focus on using traditional African fabrics, such as adire and ankara, to make caps.

    Again, she said the company was floated as an agent of wealth and job creation, as a result of the innovation it introduced in cap making, saying the move by Crown Natures Limited is the first in Nigeria.

    The company, which is a beneficiary of the N100 billion CTG intervention fund, managed by the Bank of Industry (Bol) admitted that without the fund, the project would not have been a success.

    She lamented that prior to the introduction of the fund, their experience with a leading commercial bank in Nigeria was traumatic because the interest rate was high and as such, they could not break even with the funds sourced, which she said, was released for a short tenure.

    The fund has helped her firm to reposition and expand its operations beyond the level it was in 2006 when they started operations, saying the company employs over 64 workers and planning to employ more.

    Besides, she said before the company accessed the CTG, the firm produced about 500,000 units of caps yearly, saying this has shot up to 1.2 million at the moment with more room for improved productivity.

    On local content, she explained that about 45 percent of raw materials are sourced locally while the remaining is still imported because there are no companies producing the items locally at the moment.

    Also speaking, the Managing Director of BoI, Ms Evelyn Oputu, lauded the resolve of the firm to promote local fabrics.

    She tasked the management of the company to look beyond the local market and explore the potential in the export market. She assured that the bank would support the firm

     

  • Indomie gets award

    Indomie Instant Noodles has won the Product Excellence Award organised by the Consumers Protection Council (CPC).

    The firm received the award at the Sheraton Hotels and Towers, Abuja.

    Indomie emerged winner through votes by consumers authenticated by a panel whose members were drawn from the Nigerian Labour Congress (NLC), the Media, Organised Private Sector (OPS), the Standards Organisation of Nigeria (SON), the Nigerian Communications Commission (NCC) and the National Association of Nigerian Students (NANS).

    According to the CPC’s Director-General, Mrs. Ify Umenyi, the Nigeria Consumer Award (NiCA) was instituted by the agency to honour corporate bodies that produced products and services that are of highest standards.

    Umenyi said the maiden edition of the awards featured 14 categories. These include: Service Excellence Awards, Product Excellence Awards, Consumer Rights Advocacy Awards and Corporate Social Responsibility Awards.

    Minister of Trade and Investment Mr Olusegun Aganga, who was represented at the ceremony by the Minister of State in the ministry, Mr. Samuel Ortom, said the need to ensure the protection of consumers cannot be over emphasised.