Category: Industry

FOREIGN Direct Investments (FDIs) in the country have dropped by more than 53 per cent, a Central Bank of Nigeria (CBN) report has said.

In a document entitled: Developments in the external sector, the CBN said FDI inflows went down from $1.72 billion in the first quarter to $0.80 billion in the second quarter of the year.

The aggregate foreign capital inflows also dropped by 37.79 per cent and 13.78 per cent to $3.44 billion, compared with the preceding quarter and the corresponding quarter of last year.

Of the total capital inflows, FDI accounted for 23.22 per cent, portfolio investment, 76.78 per cent. CBN traced the decline in FDI inflows to insecurity and slow pace of global economic recovery. However, the continued dominance of portfolio investment in the aggregate capital flows reflected the attractiveness of the domestic financial assets.

Also, portfolio investment inflows dropped from $3.82 billion recorded in the preceding quarter to $2.64 billion.

Available data indicated that foreign exchange inflows dropped by 2.44 per cent from $28.19 billion in the first quarter to $27.50 billion in second quartrer. However, total outflows increased marginally by 0.32 per cent from $10. 09 billion in quarter one to $10.11 billion. Consequently, a net inflow of $17.38 billion was recorded in quarter two as against $18.10 billion in quarter one.

Further analysis revealed that the inflow through the CBN declined by 17.07 per cent from $12.11 billion in the preceding quarter to $10.05 billion in the review period. Similarly, outflow through the bank, declined marginally, by 1.70 per cent, from $9.76 billion in quarter one to $9.59 billion in quarter two.

Total foreign exchange transactions through the apex bank resulted in a substantially lower net inflow of $0.46 billion in the review period. This was reflected in the marginal accretion to the stock of external reserves registered in the review period.

However, Nigeria’s trade balance declined to $6.85 billion in quarter two from $10.34 billion recorded in quarter one following the contraction in merchandise exports and expansion in imports.

Aggregate exports declined by 9.80 per cent from $24.97 billion quarter one to $22.53 billion, while aggregate imports on the other hand, increased by 7.57 per cent to $14.49 billion.

Meanwhile, the Canadian High Commissioner to Nigeria, Chris Cooter has said his country was working on strategies aimed at increasing its FDI in Nigeria.

At a meeting with the Minister of Trade and Investment, Dr. Olusegun Aganga, in Abuja, Cooter said his country was planning to increase its investment within the next few years and had confidence in the economy.

The envoy said as part of efforts to strengthen trade and investment relationship between the two countries, more Canadian firms had indicated their willingness to invest in infrastructure in the country.

He explained that the move was a follow-up to the Nigeria-Canada Bi-National Commission meeting in Abuja with Nigeria’s Ministers of Foreign Affairs and Trade and Investment and their Canadian Foreign Affairs counterpart.

“Two weeks ago, the Nigeria–Canada Bi-National Commission met in Abuja and the centre-piece of that Bi-National Commission was how to build and strengthen economic relationships between Nigeria and Canada.

“Therefore, we are looking at areas where Canadian companies can invest in Nigeria and how they can form partnerships in Nigeria in line with the Nigeria-Canada Bi-National Commission,” Cooter said.

Aganga said the Federal Government would partner with genuine investors who were willing to invest in critical sectors of the economy.

The sectors, he said, include infrastructure, mining, petro-chemical and agri-business.

“We have a big infrastructure deficit in Nigeria and that is why the Federal Government is concerned and determined to bridge the gap by developing the critical infrastructure required to drive our industrial development.

“Especially in those areas where we have comparative and competitive advantage such as mining, petrochemical, agribusiness and even the Small and Medium Enterprises sector.

“We are ready to work with foreign investors who are interested in investing in infrastructure projects. For those who are interested in public-private partnership in infrastructure development.

“We will link them up with key government agencies, such as the Infrastructure Concession and Regulation Commission and other ministries or agencies for the necessary action,” Aganga said.

THE Federal Government has been urged to design a blue print to enable the manufacturing sector to contribute significantly to the Gross Domestic Product (GDP), and enhance the entrepreneurial base for industrialisation.

At the 50th Anniversary Lecture and book presentation of Vitafoam Nigeria Plc in Lagos, a member of the Nigerian Economic Summit Group, Prof Pat Utomi, argued that Nigeria cannot claim to have an economy when the manufacturing sector contributes only four per cent of the GDP.

In a lecture entitled: Strategic policy options for Nigeria’s industrial growth, explained that Nigeria, which is growing by six to seven per cent annually, has the capacity to grow by 16-17 per cent without any challenge. He lamented that factors, such as industrial policy failure, declining institutions and lack of human capital development, among others, remained the bane of industrial growth.

The manufacturing sector, he noted, plays strategic roles in every economy, as it remains the engine of economic growth, adding that sustainable development can only be achieved if resources are efficiently mobilised and transformed into productive activities that engender growth and generate employment.

“For the country to move forward, the manufacturing sector need to account for a significant percentage of output of about 35 per cent but currently, we are less than three per cent of GDP in Nigeria whereas Nigeria has the capacity of growing at 16 to 17 per cent per annum without any challenge because we have the ingredients but how do we offer leadership to take us where we are going.

“Our economic policies, our human capital, entrepreneurship, leadership, institutions and access to capital are not sufficient enough to make us competitive and advance,” he said.

The expert added that when the sector is revived, it would help to actualise a long-term strategic development plan that would stimulate economic growth and reposition the country onto a path of sustainable economic growth and rapid development.

He commended the management of Vitafoam for its doggedness and commitment, adding that the company has helped to develop entrepreneurship in the country.

Earlier, the Chairman of the company, Mr Samuel Bolarinde, said the success recorded by the company was as a result of commitment, dedication and loyalty of the workers.

NIGERIA has attracted N930 billion ($6billion) worth of Foreign Direct Investment (FDI) into Onne Oil and Gas Free Zone since inception in 1997, according to Trade and Investment, Minister Olusegun Aganga.

Speaking during the just-concluded 2012 Oil and Gas Trade and Investment Forum in Onne, Rivers State, Aganga said: “The Onne Oil and Gas Free Zone is today adjudged the single largest and fastest growing Free Zone in the world dedicated to the oil and gas industry.

The establishment of FTZs in Nigeria is in consonance with the globally-accepted new strategy for engineering industrialisation and the promotion of sustainable economic growth and development. Free Zones are an integral part of Nigeria’s Trade Facilitating Mechanism and are designed to stimulate trade and export activities and attract Foreign Direct Investment (FDI).

“Globally, FTZs are known to have the largest job creation capacity. Records have shown that every job in a Free Trade Zone creates two additional jobs through a multiplier process.

For us in Nigeria, Free Trade Zones (FTZs) are strategic in facilitating the growth of the economy and attracting Foreign Direct Investment (FDI) cannot be overemphasised.

“I am particularly pleased with the technology brought into the country through Onne Oil and Gas Free Zone, the jobs that have been created and investments that came with it.

The Onne oil and Gas Free Zone has been playing this role since its establishment vide the Free Zone Decree no. 8 of 1996 and its official opening in March 1997.

This culminated to the registration of about 150 investors in the zone with a cumulative investment to date of US$6 billion (N930 billion) and creation of well over 30,000 direct and indirect jobs for our people, both skilled and semi-skilled.”

UNEMPLOYMENT is rising with 22 out of every 100 Nigerians out of job, the Manufacturers Association of Nigeria (MAN) has said.

Speaking at the 16th Triennial Symposium of the International Tropical Roast Crops at the Federal University of Agriculture, Abeokuta, Ogun State, MAN President, Kola Jamodu said, unemployment was getting worse.

The rising unemployment, he said, was being compounded by under-employment, which he described as more dangerous.

“Nigeria is witnessing very daring state of unemployment. Statistics shows that 22 out of 100 Nigerians are out of job. It is even worse with under-employment, and it is not acceptable. Under-employment is even dangerous.

“If we succeed in what we are doing today, it will generate employment,” he said.

He said if the country utilised its naturally endowed capacity in root crop production, especially cassava, its economic and industrial fortunes could be turned around.

Jamodu said: “We are blessed to have over 200 scientists from over 30 countries willing to share experiences, build collaborations and develop strategies to contribute to sustainable root and tuber development.

“Root crops, naturally domiciled in the tropical region, have lots of socio-economic importance for both household and industrial users worldwide.

Apart from meeting the food, health and nutritional needs of the people, the economic importance of the crops cannot be over-emphasised.”

Manufacturing, as a critical sector, he said, needed attention because of its central role in economic repositioning.

He said: “The only way to solve problems in a sustainable way is to encourage manufacturing to thrive. Manufacturing is the only sector that has the capacity to generate the most jobs and ensure economic turnaround.

“We want to be a producing nation, and not an importing nation. What happens when we remain an importing nation is to create jobs for citizens of other nations. This is what the report is out to stop.”

Jamodu said actions that would enhance the productive capacity and capacity utilisation of the various sub-sectors of the manufacturing sector needed to be taken in order to ensure that the sector played its role of job creation, poverty reduction and general economic development.

“The current administration is working on some of the addressed problems. We are all concerned about the fortune of manufacturing because it is the only sector, whose prospect can determine the fortunes of the people and the economy.

A healthy manufacturing sector means more jobs for the people, and less poverty in the land,” he said.

Polo Nigeria Limited has entered into partnership with Piaget International, maker of luxury items and accessories, on the merchandising of its products, such as wristwatches in the country.

Speaking during a visit to the Polo Head Office in Lagos, Piaget International‘s Area Manager Mr Mathieu Delmas praised the firm for promoting Piaget brand.

His words: “We had to take our time to arrive at Polo Nigeria being our representatives because we needed the best partner that can understand and deliver the story of our brand in Nigeria.This of course will lead to job creation.

“ The Nigerian market and indeed Africa is strategic to Piaget as a brand. Nigeria is the center of economic growth in the African continent, a country with huge potentials that cannot be ignored by any brand”.

To achieve its business goal, the firm is reinventing the rules to showcase its strength in promoting superior service delivery to its high end customers.

He said some of the measures being put in place to support Polo in meeting customers’ expectation include provision of training materials and knowledge transfer on watch making, communication and merchandising support.

Managing Director of Polo Limited Mr John Obayuwana, said the Piaget brand is targeted at the dynamic and upwardly mobile individuals with preference for wristwatches that fit their lifestyle.

‘’What the Piaget proposition brings is not merely telling the time but more of prestige, status and style. It is here to find ways of using its partnership with us to enhance and deepen consumers experience through superior customer service delivery and also ensure that they are educated on the gains of acquiring authentic products.’’

Polo Executive Director Ms Jennifer Obayuwana said: ‘’With its reputation for creativity and attention to details, the Piaget brand offers great value. Piaget possesses a full integrated watchmaking expertise enhanced by the finest craftsmen in the world.’’

She also stated that Piaget items can be found in Lagos and Abuja offices of Polo Limited.

The Nigerian Export-Import Bank (NEXIM) disbursed N23.33 billion for the financing of non-oil exports in the last two years, its Managing Director, Robert Orya, has said.

Briefing reporters in Abuja on the three-year turn-around performance of the bank, Orya said the interventions were targeted at sectors that had great potential in growing the economy.

The sectors are manufacturing with N11.343 bilion (48.6 per cent); agro-processing, N5.033 billion (21.6 per cent); solid minerals, N2.069 billion (8.9 per cent); and services, N4.879 billion (20.9 per cent).

Orya said the non-oil sector has begun to reap the gains of the bank’s transformation.

The exercise, he noted, has repositioned the bank to deliver on its mandate through a robust strategy, efficient operations and motivated personnel.

He said: “Within 16 months of assumption of duty, the management turned around the fortunes of the bank and ensured that it is a profit rather than a loss-making outfit, with an impressive performance of N189 million in 2010 as against the loss of N5.46 billion in 2009.

“The bank, through its various operational interventions, generated direct jobs of over 14,358 as at August 31, 2012 and estimated foreign exchange earnings of $189.2 million.”

Orya said the bank had recovered N1.3 bllion from its non-performing loan portfolio, adding that with the renewed and aggressive measures put in place, other delinquent loans would soon be recovered.

“A remedial management department has been specifically created to intensify the bank’s debt recovery drive and ensure that its portfolio remains healthy,” he said.

On the $200 million entertainment fund, he said N700 million had been disbursed, adding that despite its high prospects, the industry was still faced with some challenges militating against the realisation of its full potential.

Some of the challenges, according to him, are; low production for theatrical releases; inadequate exhibition, lack of adequate digital production infrastructure; gross violation of intellectual property rights; low access to finance; weak distribution channels and poor corporate structure.