The Nation Newspaper

Category: Industry

  • Producers lament illegal palm oil import

    The National Palm Produce Association of Nigeria (NPPAN) has raised the alarm over illegal importation of palm oil (CPO).

    The body, in a letter to President Muhammadu Buhari, entitled: “SOS to the Federal Government on illegal entry of Crude Palm Oil (CPO) into Nigeria,” said the product was being smuggled into the country to the detriment of local investments.

    “Many of us who heeded calls by the Federal Government in the last three years for private intervention in the oil palm industry are at the risk of losing billions invested in the sector.

    “Virtually all of our businesses are at the verge of collapse because of unbridled corruption culminating in smuggled palm oil into Nigeria due to porous borders.

    “Also, banks have tightened the noose around the investors over unsettled credits and loans running into billions of naira.

    “The jobs of millions of Nigerians are at stake if immediate positive steps are not taken to stop illegal entry of Crude Palm Oil (CPO) to Nigeria before it is too late,” the association said, in the letter jointly signed by its Ambassador, Dele Olanubi; Chairman Ondo State Chapter, Bolarinwa Adetula and Oyo State Coordinator, Abiodun Adejo.

    NPPAN lamented that the country was losing more than $500 million worth of palm oil yearly owing to the worsening situation in the industry, which is affecting local production.

    “Our members had taken the risk to obtain loans running into billions of naira from commercial banks and micro-finance banks to reactivate abandoned plantations.

    “CPO output increased tremendously within the last 24 months. The price was stable at N300, 000 to N350, 000 per metric tonne within the last 18 months up to October 2018.

    “Since November 2018, we have noticed a downward slide in the price of CPO. In January 2019, we have the price drop to between N220, 000 and N240, 000 per metric tonne, even when the February to June season is yet to commence.

    “We then wonder what the price would look like during the season, when CPO production is at peak. The local demand has waned,” it said.

    The association said buyers from the northern part of the country were no longer seen in the CPO producing states of the South, wondering if CPO was no longer used by industries or domestically in such places.

    NPPAN recalled that the Central Bank of Nigeria (CBN) Governor Mr. Godwin Emefiele had once raised similar alarm over the increasing threats to investments of critical stakeholders in the sector.

    The palm producers also made reference to the early 1950s, when Nigeria controlled 43 per cent of the global market and derived 82 per cent of its export revenue from the sector.

    It said Malaysia and Indonesia, the two leading palm oil producers now, obtained the seedling from Nigeria at the time it was the number one palm oil-producing nation in the world.

    The association, however, regretted that their human and capital outlays were currently threatened by increasing hostile business climate.

    “Three years down the line of the life of this administration, we were called upon to go back to the land to produce food and agro-allied input for our industries so as to give life to our economy.

    “Our association mobilised all its members to go back to all abandoned plantations and also encouraged the planting of new fields so as to increase the palm oil output of Nigeria.

    “The effort was to also reduce the outflow of hard foreign exchange and unemployment. Today, we got little or no leverage from the government.

    “Critical among the expected leverage from the government are bank loans to our members nationwide,” it added.

     

  • Fresh impetus to tame poverty, malnutrition

    More than 240 Nigerian children die of hunger daily, according to the United Nations Children’s Fund (UNICEF). One in three Nigerians also lives below the poverty line, with children and women more vulnerable. But an empowerment scheme to push back the scourge of malnutrition and poverty is on course. Tagged Noiler Bird Initiative, its promoters have been distributing dual purpose breed of chickens to small-holder poultry farmers, especially women across the county. Assistant Editor CHIKODI OKEREOCHA reports that with more public-private sector partnerships, the initiative could be the template to banish or, at least, significantly reduce poverty and malnutrition.

    The walked up to the stage beaming with smiles and exuding as much confidence as her new-found financial freedom could allow. The occasion was the media campaign launch of Noiler Bird Initiative in Lagos, where Mrs. Olabisi Adepoju, a retiree from Osun State, Southwest Nigeria, gleefully annlounced that her emergence as one of the beneficiaries of the empowerment initiative marked a dramatic turnaround in her life and business.

    The retiree, who could barely hold her excitement, said, for instance, that she makes between 20 and 25 per cent profit from poultry farming since she embraced the programme, which distributes dual purpose chickens with very low maintenance to women in rural areas. “As a retiree, Noiler chicken farming pays me more than putting my money in investment houses. I make more in five weeks than I made while still working,” she said

    The Noiler Bird Initiative is a private sector-led empowerment programme aimed at taming and possibly, eradicating poverty and malnutrition among rural dwellers, especially women and youths in Nigeria. The scheme is being promoted by Amo Farm Sieberer Hatchery (AFSH) Limited, an agro-allied company based in Awe, Oyo State.

    Under the initiative, dual purpose breed of chickens developed for small-holder poultry farmers are distributed to rural dwellers especially women and youths. This was aimed at addressing their challenge of food insecurity and financial dependence.

    The Noiler bird has all the attributes of a native chicken, albeit with additional benefits of faster growth, less fat, tasty meat and more eggs. They also thrive on low inputs and can adapt to any environment, while also meeting the gap of nutritional security of Nigeria and other developing countries.

    The Group Managing Director (GMD), AFSH, Dr. Ayoola Oduntan, was emphatic that the programme was the solution to poverty and malnutrition currently ravaging Nigeria and hurting her chances of meeting the United Nations (UN) Sustainable Development Goals (SDGs) and the 2030 Development Agenda.

    The SDGs are a collection of 17 global goals set by the UN General Assembly in 2015 for the year 2030. Among the 17 SDGs, ending extreme poverty is goal number one; achieving zero hunger is number two. Oduntan said the Noiler bird, which his company developed through years of research from 2003 to 2014, would held address the challenge of poverty, malnutrition, high maternal and child mortality faced essentially by women in the rural areas.

    According to him, the company’s research started when it began looking into the production of a dual purpose bird with very low maintenance, which can sustain the people and tackle the challenges they faced.

    “The initiative was developed for the grass root level in Nigeria and Africa at large. The bird is for backyard poultry production and they are developed to provide readily available source of egg and meat to tame malnutrition for households across the length and breadth of Nigeria and Africa,” he said.

    The Amo Farm GMD explained that the birds are affordable, enduring, and easy to handle. “They (Noiler birds) produce eggs four times more than their native counterparts. While the male matures to table weight of between 2.5kg 14 weeks, the native bird will take 10 months to get 1.5kg body weight,” Oduntan added.

    He reiterated that the objectives of the Noiler Bird Initiative are to curb hunger, give back impactfully and practically to the society at large; reduce maternal mortality; create additional income opportunity for women and youth in the rural areas, contribute to global food security, and encourage gender equality.

    The Nation learnt that as at March 2019, Amo Farm, in partnership with some local and international Non Governmental Organisations (NGOs) and some State Governments, has distributed over 12 million birds across the 36 states and the Federal Capital Territory. The company also targets to distribute about 10 million Noiler birds this year.

    Adepoju, who is one of the lucky beneficiaries, admitted that the Noiler birds meant financial freedom for her and other rural women across the country. “It’s a very good deal,” she said, adding that apart from being a form of nutrition to rural women, many of them have become successful poultry farmers.

    Similarly, Mrs. Comfort Shalangwa, another beneficiary from Taraba State, has never looked back since the programme came on stream. She said she has been selling Noiler chicks to Almajiri boys in Taraba State order to empower them, even as internally displaced women in Borno state are also being trained on poultry farming in a bid to restart business activities.

    But beyond empowering women and youths, Oduntan, a graduate of Veterinary Medicine, said the gesture will help ensure that the estimated 90, 000 Nigerian children or more, whom the United Nations Children Fund (UNICEF) said could die of severe malnutrition, are safe and the quality of life in the rural areas in Nigeria, especially women, was improved by enhancing their income opportunities while providing quality source of proteins for them.

    Citing UNICEF statistics, which said more than 240 Nigerian children die of hunger each day, the GMD said: “It is the duty of all of us to ensure the figure is drastically reduced. We can’t continue to approach the international community cap in hand, begging for alms when we have all it takes to curb hunger and poverty in a nation described as the giant of the continent.”

    The Chief Operating Officer (COO), AFSH, Dr. Anand Burra, expressed optimism that the initiative would help eradicate poverty and malnutrition in Nigeria, especially in the rural areas where chicken and egg are still considered luxury foods.

    Indeed, majority of poor households in Nigeria cannot afford to buy chicken and eggs. According to experts, estimate of per capita egg consumption in the country is just60 eggs/person/year, while poultry meat consumption is about 2.3 kg/person/year. This is meager compared with the recommended daily protein intake requirement per person, which is put at 20grm/person/day.

     

    Push for more partnerships to stem poverty,

    malnutrition

    Although AFSH has so far reached 12 million women across the country with its dual purpose Noiler birds, while targeting to empower 10 million others this year, the intervention is still considered a drop in the ocean. The consensus of experts is that for Nigeria to close the poverty gap and halt malnutrition, more public-private sector partnerships are required.

    This must be why Oduntan passionately called on corporate organisations and individuals to join hands and end hunger and poverty, which, according to him, have eaten deep into the fabrics of Nigeria. He warned that the scourge may consume the nation if not addressed head on.

    Noting that the success of the initiative so far was anchored in his company’s resilience to make huge impact with its goals, he said “The overall achievement of these goals will be dependent on collaboration, partnerships with institutions with the same goals, armed with the Noiler as an effective tool to surpass these goals.”

    He added that “to reach more people, we will need more institutions to join the Noiler Movement; we already staffed and equipped representatives who train and assist the women and recipients within 36 states in Nigeria and so we are equipped to produce results.”

    It is easy to see why the initiative is key to the fight against poverty and malnutrition, and why Oduntan believes that all hands must be on deck to tame the scourge. For one, the consensus of development experts is that Nigeria’s rankings on global poverty and malnutrition are scary and unenviable.

    For instance, one in three Nigerians lives below the poverty line, according to UNICEF. American research group Brookings Institution brought the reality nearer home when it said that with over 87 million people living in poverty, Nigeria has overtaken India as world’s poverty capital.

    The non-profit public policy organisation based in Washington, DC said Nigeria, as at the end of May 2018, had about 87 million people living in extreme poverty, compared with India’s 73 million. As if that was not unsettling enough for Africa’s largest and most populous economy, the report added that six Nigerians become poor every minute.

    This translates to 8, 640 Nigerians becoming poor every day. This, no doubt, explains why hunger and malnutrition have become endemic in Nigeria, with children and women said to be more vulnerable to these two greatest enemies of humanity.

    UNICEF’s Chief of Communications in Nigeria, Mr. Doune Porter, said 13 million Nigerians suffered from acute hunger in 2018 and that more than half of the population suffers hidden hunger, otherwise called malnutrition.

    The Fund also said malnutrition kills more people than some deadly diseases, with 40 per cent of infant deaths caused by malnutrition and hunger. It also said with newborn mortality rate of 29 deaths per 1, 000 births, Nigeria ranks 11th position on newborn deaths globally.

    Oduntan also said because of acute malnutrition, Nigeria’s burden of stunted growth among children is the second highest in the world. With 16.5 million affected, her burden of severe malnutrition is high, with an estimated 2.6 million children said to be malnourished.

    While these figures are no doubt, unacceptable for Africa’s largest and most populous nation desirous of joining the rest of the global community in meeting the SDGs, the consensus is that the situation has made the need for more collaborations and partnerships locally and globally more compelling.

     

  • Industrialists, experts seek probe of SMEs’ funds

    Industrialists and experts have urged President Muhammadu Buhari, the Federal Executive Council (FEC) and the Federal Ministry of Finance (FMoF) to investigate funds disbursed by the Central Bank of Nigeria (CBN) to the banks for the development of Small and Medium Enterprises (SMEs) in the last four years.

    Some of the industrialists and experts, including SME owners who spoke with The Nation in separate interviews, said most of the banks demanded a lot of documentation and collateral from SMEs; that after meeting and satisfying their requirements, the banks allegedly allocated the funds to big investors and companies.

    They noted that the development was detrimental to the economic diversification agenda of the Federal Government anchored on the SMEs and urged the president, the FGEC and the ministry of finance to investigate the matter.

    A financial expert and Chief Executive Officer, Golden Hameed Venture, Mr. Gbolahan Adegbesan, said in view of this, there was need for President Buhari and the FEC to direct the CBN to open a window to allow SMEs access funds at lower rates.

    He also called for a downward review of CBN’s Monetary Policy Rate (MPR) to enable the real sector to access more credit from banks and other financial institutions.

    Adegbesan said a review of the MPR would bring about the desired results, considering the fact that the Federal Government needs the small and medium scale industries to boost the economy. He also pointed out that the high interest rates were limiting access to credit by manufacturers and SME owners.

    A small business owner and former staff member of FirstBank Plc, Mr. Sunday Olusoga, said many banks were reluctant to lend to SMEs because many of them could not contain the difficulties of running their businesses profitably, particularly due to the high cost of energy and transportation facilities.

    According to him, “If the lending rates remain high, banks will likely not give credit to SMEs; they will prefer to give to institutional borrowers who have stronger cash flows. For SMEs to become attractive to banks for lending purposes, a lot more needs to be done by the CBN.

    “This is the time for the CBN and the Federal Government to evolve a risk-sharing arrangement to mitigate risks involved in lending to SMEs. This will encourage banks to lend to SMEs because they will not be solely responsible for their weakness and liability.

    “The notion that there would be a lot of spending during the last general elections and increased liquidity in the economy and make it difficult to manage the economy was defeated by the way and manner the administration managed the election. For the first time in the history of our nation, there was no spending spree before, during and after the last general elections.”

    Olusoga said a review of the interest rate would not put pressure on inflation and exchange rates. He urged the CBN to focus more on policy interventions, saying, the CBN needed to come up with policies that will assist the economy to grow above its population growth rate, adjust the MPR and ensure that it reduces the lending rates.

    He said apart from clamouring for a reduction in interest rate, small business owners should synergise and call for an investigation into funds disbursed in the last four years to banks by the CBN for SMEs.

    “We need banks that will target the SMEs alone. The Federal Government should mandate the CBN to empower microfinance banks, exclude big banks from having microfinance banks, monitor the money disbursed and make sure it gets to the SMEs to create massive jobs across the country,” Olusoga said, urging the government to create an enabling environment for the real sector to thrive.

    A lecturer, Dr. Maroof Animashaun, said there should be policies to create linkages between the SMEs and other sectors, such as banking and manufacturing.

    He suggested measures, such as dedicated institutional financing mechanism for the SMEs and the real sector, a comprehensive regulatory policy to delineate the role and responsibilities of the government and the manufacturing sector in the development of the economy.

    A vibrant manufacturing sector, Animasahun said, would also provide jobs for millions of Nigerians and the restive youths across the country.

    He said there was need for a sustained partnership between the banks and private sectors for effective funding of SMEs.

    According to him, the country has not enjoyed the commercial benefits of SMEs because its owners lack the necessary capital.

     

  • LCCI calls for review of automotive policy

    Six years after the introduction of the Automotive Policy, it has failed to achieve the desired outcomes and also adversely impacted the cost of doing business, the Director-General, Lagos Chamber of Commerce & Industry (LCCI),  Muda Yusuf, has said.

    Yusuf said the welfare of the people, government revenue and the capacity of the economy to create jobs has been affected by the policy, besides causing massive trade diversion to neighbouring countries.

    He regretted that high compliance cost has put enormous pressure on firms, moving them into uncompetitive positions in the face of weak institutional capacity to enforce the extant tariff regime.

    Yusuf told The Nation that the cost of vehicles has risen beyond the reach of most citizens and corporate bodies, while impacting negatively on businesses.

    He reiterated that the automobile sector was hit by the double shock of currency depreciation of over 80 per cent over the last six years and an import duty hike to 70 per cent on new cars and 35 per cent on used vehicles and commercial vehicles.

    Yusuf said: “The auto policy was an import substitution industrialisation strategy to reduce importation of vehicles and incentivise domestic vehicle assembly.  However, import substitution strategy would only thrive in the context of high domestic value addition.

    “It is within such a frame work that the economy could benefit from the inherent values of import substitution, which includes backward integration, economic inclusion, multiplier effects, and conservation of foreign exchange, job creation and reduction of import bills.”

    The LCCI boss maintained that the automotive policy, in its current form, is not in consonance with the Nigeria Industrial Revolution Plan (NIRP), which is the main industrial policy document of this administration.

    According to him, the NIRP espouses the strategy of resource-based industrialisation. He regretted that six years into the implementation of the auto policy, not much progress has been made, even though over 50 vehicle assembly plants licences have been issued with total yearly assembly of new cars in 2017 and 2018 estimated at less than 10,000 units.

    Yusuf observed that the high cost of vehicles has taken a severe toll on the economy, from a logistics cost and welfare point of view. ”Practically, all aspects of our economic and social lives had been negatively impacted by the situation,” he stated.

    He also said since over 90 per cent of the country’s freight and human movements are done by road, it implies heavy dependence on cars, commercial buses and trucks.

    On the challenges for manufactures, Yusuf explained that manufacturers and other real sector investors suffer from high cost of delivery vehicles, sharp increases in haulage cost because of the high cost of trucks.

    Furthermore, he stated that school buses have become unaffordable for many institutions, even as many hospitals cannot afford ambulances, with  many corporate organisations drastically cutting down on their fleet while vehicle ownership is beyond most of the middle class.

    According to the LCCI boss, these unintended consequences and collateral harmful effects on the economy and welfare of citizens are incalculable and underscore the strategic importance of road transportation to domestic economic integration and connectivity.

    He said though the economy has witnessed an increase in the price of vehicles by between 200 to 400 per cent over the last five years, not many investors and the citizens have the capacity to pay these outrageous prices.

    He regretted that even prosperous corporate organisations are now buying used vehicles for official use, noting that the implication of the scenario for operational costs of organisations was worrisome.

    Yusuf also stressed that the auto policy in its present form is most inappropriate for an economy that is heavily dependent on road transportation.

     

  • Fatal Shooting at LADOL free zone threatens Nigerian economy

    Can LADOL be trusted to run a private Free Zone or should the state intervene?

    On April 8, 2019, an operative of Nigeria Security and Civil Defence Corps (NSCDC) guarding LADOL Free Zone shot and killed his Nigerian colleague, and then went on to shoot a Korean SHI-MCI employee who died on April 10, from the severe injuries he sustained.  Eye-witness accounts describe the incident as an entirely unprovoked and deliberate attack.

    Due to investment by SHI-MCI/ Samsung Heavy Industries (Nigeria) in world-class CCTV security cameras, a crystal-clear picture of the tragedy is available.

    This shocking footage shows the gunman shot his colleague dead with three shots. He then calmly walked to the crawler crane where a Korean SHI-MCI employee was working and raised the gun upwards and shot him. The Korean employee died in hospital a few days later.

    The police have reportedly confirmed that the gunman will be prosecuted for his crime of murder. However, the investigation and accountability must not stop with him.

    Who is primarily responsible for these senseless killings and how can reoccurrence be prevented?

    Unless these vital questions are answered, there is an unacceptable risk to Nigerian and foreign workers in the LADOL Free Zone. Foreign investment in Nigeria will be at risk unless the Federal Government can guarantee the safety of expatriate employees working in the country.

    NEPZA Regulations and LADOL Regulations require that the LADOL Free Zone Manager, Global Resource Management Free Zone Company (GRMFZC) – a LADOL subsidiary, is required to provide security over the LADOL Free Zone. SHI-MCI had previously argued that armed guards were unnecessary and presented risk to Korean and Nigerian employees and to the guards themselves. However, the condition of armed guards was imposed by LADOL, nonetheless.

    The gunman was deployed to GRMFZC/LADOL by the NSCDC. However, as the zone manager, LADOL/GRMFZC is fully responsible for the security provided to occupants of the Free Zone.

    LADOL has so far failed to take any responsibility for this tragedy. On the contrary, in a press statement issued to media on April 18, 2019, LADOL still makes several false claims.

    First, it still claims that the shooting was in error despite the CCTV and eye-witness accounts demonstrating that this was a deliberate shooting.

    Secondly, it described this incident as an ‘isolated incident’ when SHI-MCI had filed several complaints of disorderly and intimidating conduct of armed security guards towards its Korean and Nigerian employees.

    Finally, LADOL also claims that the incident was contained entirely within the fabrication and integration shipyard in LADOL.

    This is false as the CCTV shows that the gunman claimed the lives of two people at SHI-MCI yard and was able to escape into an open area of LADOL Free Zone while still carrying his gun.

    He presented serious risk to all workers in the LADOL Free Zone, local and international had he not been detained by SHI-MCI FZE employees and other LADOL guards.

    LADOL’s false statements to the media seem to be designed to downplay the seriousness of this incident. They have been repeated even when shown to be false by incontrovertible CCTV evidence that this shooting was deliberate and that the gunman left the fabrication and integration yard of SHI-MCI FZE. If LADOL continues to issue false statements about this incident, then the risk to Nigerian and foreign workers at the yard remains high.

    What was the root cause of this shooting and what can be done to address the cause?

    The police investigation into this matter continues. SHI-MCI had reportedly paid an annual salary of $181,606.33 for six LADOL armed guards to the LADOL management before LADOL halted all service provisions to SHI-MCI in September 2018. However, it has been alleged that the gunman had mentioned about unpaid wages during the police interrogation. It makes one to wonder if the money that was paid by SHI-MCI for the armed guards provided by LADOL had really been paid to the armed guards properly-also what has LADOL done for the welfare of Nigerian workers in their company?

    In the weeks running up to this incident, SHI-MCI employees reported hungry Nigerian guards approaching them and asking for food, as they had not been fed properly and had no money to buy food. Sources close to the incident say that the shooting was an unavoidable consequence of years of mismanagement and mistreatment of Nigerian workers by LADOL.

    Any independent or Government investigation must look at whether there is a connection between LADOL’s possible mismanagement or ignorance of the Free Zone, alleged maltreatment of Nigerian workers, and the murders on April 8, 2019.

    Will LADOL take responsibility and address the cause of this incident to reduce risk of reoccurrence to Nigerian and foreign workers?

    The day after the shooting, SHI-MCI wrote to Dr Amy Jadesimi, the Managing Director of LADOL asking LADOL/GRMFZC to take responsibility for the incident and for a thorough investigation into those who might have committed criminal acts, including vicarious responsibility.

    In 2018 LADOL became the first company in West Africa to be awarded International Organisation for Standardisation (ISO) certifications recognising international best practice in areas including risk-based thinking and occupational hazards.

    Commenting on these certifications at the time, LADOL’s Managing Director, Dr Amy Jadesimi said that soon LADOL will not only, “exceed international standards, it will set them.”

    Many feel Dr Jadesimi’s words now have no meaning – she has been totally silent since the shooting. Other than the formal statement expressing mere condolences to the victims, she has failed to admit or accept the responsibility for the occurrence of the shooting incident, nor made any statements providing fundamental measures to prevent the tragic incident from happening again.

    There were also no remarks about extending compensation to the victim’s families. She has not visited the Free Zone to review security or to reassure workers. She has done nothing to ensure that the risk of a further incident of violence against Nigerian or foreign workers in the LADOL Free Zone is reduced.

    LADOL top management and the Board of Directors did not visit the crime scene or the hospital where the victim was battling for his life from the injuries he sustained from the gunshot. There was no direct initiation from LADOL to pay condolences or give word of comfort to the victim’s family nor to Samsung.

    Questions will surely be asked about whether LADOL meets international standards of risk management and the requirements of ISO certification.

    Dr Jadesimi was named a Young Global Leader by the World Economic Forum in 2013. Many now view her silence, and LADOL’s false statements and refusal to accept responsibility, as outright failure of leadership and a failure to meet international standards of safety for Nigerian and foreign workers.

    SHI-MCI has repeatedly called for justice for the victims, demanded that LADOL take responsibility, and for measures to improve safety and security in the LADOL Free Zone.  LADOL refuses to take responsibility. It is therefore impossible to see how there could be improved safety and security at the LADOL Free Zone without Government intervention.

    Sweeping this tragedy under the carpet risks a repeat of the incident.  If LADOL continues to make false statements, refuses to take any responsibility, and address the cause of these horrific killings, the risk of violence will continue. If this continues, SHI-MCI has indicated that it will be compelled to reveal the CCTV footage to public. Only a fair, transparent and timely investigation by the Nigerian Government into what took place and how to reduce risk to Nigerian and foreign employees will reclaim Nigeria’s imminent reputation damage in the international community.

    ..Akpan-Etukudo, an investment advisor, writes from Warri

  • AfCFTA: Pressure mounts on Nigeria to sign deal

    Of 55 African countries, 49 have signed the African Continental Free Trade Area (AfCFTA) agreement; 20 others have ratified the deal, which seeks to create a continental trade bloc of 1.2 billion people, with a combined Gross Domestic Product (GDP) of about $3.3 trillion. But, Nigeria has yet to muster the political will to sign the treaty. However, experts and stakeholders have mounted pressure on President Muhammadu Buhari to sign. They note that the agreement holds the key to maximising Nigeria’s economic potential, Assistant Editor CHIKODI OKEREOCHA reports.

    He spoke with the verve and bluntness of an expert schooled in the dynamics of the African economy, particularly Nigeria’s. And by the time the President of African Export-Import Bank (Afreximbank), Professor Benedict Oramah was done reeling out some of the obvious benefits of the African Continental Free Trade Area (AfCFTA) agreement, it was clear that Nigeria may have been shooting herself in the foot by her continued delay in signing and implementing the agreement.

    The AfCFTA was adopted by the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union (AU) in Addis Ababa, Ethiopia in January 2012, and was expected to create a continental trade bloc of 1.2 billion people, with a combined Gross Domestic Product (GDP) of about $3 trillion. The agreement is seen as an important milestone in promoting Africa’s regional integration and helping to increase intra-African trade.

    AfCFTA commits countries to liberalising services and trade and removing tariffs on 90 per cent of goods. Apart from its inherent capacity to promote economic growth and development, reduce poverty in the partnering countries, it was also expected to help expand and diversify trade and increase domestic and foreign investment. The AfCFTA was signed in Kigali, Rwanda on March 21, 2018 by 44 of 55 African countries.

    But President Muhammadu Buhari cancelled his earlier scheduled visit to Rwanda to sign the AfCFTA, citing the need to allow for more consultations with stakeholders in Nigeria over the trade agreement, and the need for his administration to be circumspect in entering into any agreement that would make the country a dumping ground and jeopardise its security.

    In boycotting the trade liberalisation deal, the president buckled under intense pressure by members of the Organised Private Sector (OPS), which included Manufacturers Association of Nigeria (MAN), Nigeria Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMMA), and the labour movement who vehemently kicked against the proposed agreement.

    For instance, MAN hinged its opposition on issues of market access and the enforcement of Rules of Origin (RoO), among other concerns. It said, for instance, the RoO in the AfCFTA cannot be adequately enforced to guard against the influx of goods into the Nigerian market.

    The RoO are used to determine the country of origin of a product for the purpose of international trade. But, MAN expressed fears that the RoO cannot be adequately enforced because goods from the European Union (EU) can find their way into one of the African countries that have bilateral agreement with the EU.

    MAN also said the agreement’s market access was a concern to manufacturers as it leaves low protection to locally produced goods. “The agreement says that 90 per cent of the tariff plan would be liberalised, leaving only 10 per cent to protect manufacturers. That 10 per cent is too low,” MAN said.

    On its part, the NLC expressed fears that the deal will lead to the collapse of the manufacturing sector and loss of jobs. It also raised the alarm that if signed, the CFTA will turn Nigeria into a dumping ground for repackaged and re-bagged foreign goods from Europe and other developed countries.

    The alleged lack of inputs of critical stakeholders in the proposed agreement also did not go down well with the NLC. Its President, Comrade Ayuba Wabba, argued that ordinarily, proponents of the trade document ought to have consulted all relevant stakeholders because of its likely implications on the economy.

    Consequently, the president set up a committee to review the CFTA framework agreement. And the committee said it has since moved to strengthen its consultations with critical stakeholders and determine how various sectors of the economy will benefit from the proposed agreement.

    Despite setting up the committee, the Federal Government has continued to foot-drag on the signing of AfCFTA more than one year after its inauguration in Rwanda. Obviously, this has not gone down well with Oramah and indeed, other experts and critical stakeholders in the economy. They have, therefore, intensified pressure on Nigeria to sign the treaty.

    Oramah, for instance, rode on the platform of this year’s Bullion Lecture organised by the Centre for Financial Journalism (CFJ Nigeria) to speak of his disappointment that Nigeria, which hosted the forum that gave birth to the AfCFTA initiative was yet to decide on what to do with it.

    At the lecture, which held in Lagos, Oramah, who spoke on the topic: Leveraging the African Continental Free Trade Agreement to boost Nigeria’s economic development, said given Nigeria’s vantage position as Africa’s largest and most populous economy, AfCFTA actually handed her a window of opportunity to maximise her economic potential almost on a platter.

    He regretted Nigeria’s inability to sign the agreement more than a year after 49 out of 55 African countries signed it, even as 20 other African countries have ratified it. He urged the Federal Government to take urgent steps to sign and implement AfCAFTA in order to take advantage of its numerous benefits.

    According to the Afreximbank chief, one of the benefits of the deal waiting for Nigeria to grab, if it summons the political will to sign it, was the possibility of taking over from China as the world’s manufacturing hub.

    He said while China exports $45 billion of light manufactures into Africa, Nigeria and other African countries can expect to fill that void if they take advantage of the tariff and non-tariff reductions in the AfCFTA.

    Tracing the historical and economic imperatives that necessitated the birth of the AfCFTA, Oramah noted that Africa benefited a little from many years it was ruled by colonial powers whose main focus was to draw the raw materials it needed for its home industries while it dumped its own manufactured goods in return.

    He said the AfCFTA was meant to change the narrative, as a continent that was called the “Basket Case”, is on the path to becoming the “Bread Basket” of the world. He said AfCFTA will create the environment for the continent to chart a new development path.

    It will also eliminate the causes of weakness while upholding the areas of strength among the 55 countries of the continent. This, according to him, will be by creating the required economic integration that would promote sub-regional and continental supply chains such as the automotive industry.

    Experts say that the deal presents an attractive domestic market base for foreign investors interested in manufacturing for exports to the rest of Africa. “Today, Foreign Direct Investment (FDI) inflows to Nigeria amount to about $3 billion, 90 per cent of which goes to the oil sector. This can change positively with the AfCFTA”, Oramah stated.

    He further stated that a survey conducted by Afreximbank showed that 69 per cent of Nigerian businesses believed that AfCFTA would be advantageous to the country in three main areas, namely creating a better business environment, promotion of local businesses and business growth and expansion.

    The Director General/Chief Negotiator, Nigerian Office for Trade Negotiations (NOTN), Ambassador Chiedu Osakwe, could not agree less. He projects that with the trade liberalisation deal, an economy like Nigeria would be larger than that of Australia in 32 years.

    The acclaimed international trade policy expert added that intra-African trade, which was  at 16 to 17 per cent, would be increased to 52 per cent with a corresponding GDP growth and increase in employment and job creation on the continent.

     

    OPS, others push for Nigeria to sign

    Some members of the Organised Private Sector (OPS) particularly Lagos Chamber of Commerce and Industry (LCCI) have also thrown their weight behind the push to get the Buhari-led government to do the needful and sign the free trade treaty. For instance, LCCI President Mr. Babatunde Ruwase described the AfCFTA as an economic game-changer.

    Speaking at the 2019 Founders Day Lecture of the Nigerian Institute of Advanced Legal Studies (NIALS) with the theme, “Inclusivity and the Transformational Potentials of the AfCFTA for African Countries,” Ruwase said Nigeria stands to benefit from the continental economic integration. “The reality is that there is a great deal of value in economic integration, but as a country, we need to position ourselves well to take advantage of the opportunities it offers.

    “The AfCFTA is an age-long dream of the continent with regards to the promotion of trade and investment among African countries. As a country, our decision on the AfCFTA could be a game-changer for the Nigerian economy if we do the right thing at the right time,” the LCCI president said.

    The guest lecturer, Adjunct Professor at the Centre of Comparative Law in Africa, University of Cape Town, South Africa, Prof Faizel Ismail, also said AfCFTA has the prospect of catalysing the process of transformative industrial development, cross-border investment, democracy and governance in Africa.

    Similarly, the President and Chairman of Council, Chartered Institute of Bankers of Nigeria (CIBN), Uche Olowu, noted that Nigeria being the biggest economy in Africa ought not to lag behind in ratifying the trade agreement, but should be at the fore front.

    He lamented that Nigeria is one of the very few countries yet to sign the treaty, despite her large number of manufacturing companies and other small and medium enterprises.

    Olowu’s worry was that if Nigeria does not sign the continental agreement, it will not only be a dumping ground for substandard products, but a final destination for totally rejected goods and services from other African countries.

     

    The challenges

    Despite experts’ superior argument in favour of signing AfCFTA, signing and implementing the treaty will not be a walk in the park. The belief is that there are still a number of hurdles to cross if Nigeria and other African countries must reap the benefits the AfCFTA offers.

    Some of the major challenges ahead in terms of implementation and pushing the AfCFTA agenda forward to meet the goal of increasing intra-African trade to 25 per cent by 2023, from between 15 and 18 per cent currently, include weak productive capacity, high production costs, and large infrastructure deficits.

    Oramah said, for instance, that the challenge of creating conducive macroeconomic policies that support increased regional trade remain. He said strategic steps should be taken to introduce policies that encourage FDI flows to sectors that have the highest potential for foreign trade, namely light manufacturing and agriculture.

    He also said lack of appropriate financing should be addressed through specific monetary and trade policies that target the potentials of each country towards maximising the competitive advantage inherent in each economy.

    Oramah, however, said Afreximbank had supported African businesses to overcome their growth challenges, noting that Nigeria was among the key beneficiaries of these measures, one of which was the elimination of the poor product quality of many African businesses by instituting appropriate quality assurance centres.

    The other, according to him, was offering guarantees for facilities given by local banks to Small and Medium Enterprises (SMEs).

  • How women entrepreneurs can access funds, by NACCIMA

    The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and its Business Women’s Group (NAWORG), during the week, rolled out recommendations to ease loan application processes for women entrepreneurs in the country.

    NACCIMA National President Mrs. Alaba Lawson recommended that the Central Bank of Nigeria (CBN), Federal Ministry of Industry, Trade and Investment, and the Federal Ministry of Women Affairs set aside funds for additional investment in financial literacy initiatives for women and to simplify the application process for obtaining loans.

    In addition, she urged the CBN to publicly share data pertaining to women’s access to all available financial opportunities, including loans and grants.

    According to Lawson, making this data public will allow women’s business organisations to analyse the data and issue periodic reports to highlight the need to increase access to finance for women entrepreneurs.

    She gave the recommendations at the NACCIMA/NAWORG media briefing for the up-coming conference tagged “Women empowering Nigeria’’ in Lagos.

    According to her, women entrepreneurs across the country were faced with several barriers to accessing finances, despite the existence of several federally-sponsored loan programmes for small businesses and women entrepreneurs.

    The NAWORG also advised the government to create a Public-Private Financial Inclusion Committee within all Ministries, Agencies, and Departments (MDAs) to make decisions on financial policies and management affecting women’s access to finance.

    The group said the committee should review the current criteria for allowing women applicants to access loans and grants in an effort to reduce barriers for women entrepreneurs.

    Lawson, in reiterating the fact that Nigerian women play an increasingly important role in generating wealth and creating jobs in the economy, said the conference served to build the momentum of advocacy activities to encourage key government officials and commercial banks in women empowerment.

    “During this campaign, NAWORG will carry out financial literacy workshops in Oyo, Imo and Kano states. These workshops are scheduled to hold in Ibadan from April 16 to 17, Owerri from April 23 to 24, and Kano from  May 2 to 3.

    “The workshops will be immediately followed by a Pubic/Private Dialogue Session in Abuja, where NAWORG will present an updated policy paper and have opened discussions to improve the existing loan application process.

    “All of this is to ensure that women entrepreneurs can better access finance through these programmes,’’ she said.

    The Project Director, NAWORG, Mrs. Afolake Jimoh, said the empowerment of a woman ensures the stability of the family nucleus, and by extension, the society.

    She, therefore, urged the government to ensure the implementation of policies on ease of access to loans and finance to enable better empowerment for women.

    The programme is being executed with the support of the Centre for International Private Enterprise (CIPE), in collaboration with the Association of Nigerian Women Business Network (ANWBN).

  • Assist unlock SMEs’ value chain, experts urge govts

    Experts in the Small and Medium Enterprise (SME) sector have called on the Federal and state governments to assist Nigerians in unlocking the sector’s full potential to create jobs and grow the economy.

    The experts, who spoke at a two-day workshop organised by SME owners in Akure, the Ondo State capital, said government at various levels needed to come up with policies and programmes to help develop relevant expertise and priorities that will help SMEs to flourish.

    For instance, a financial expert, Mr. Folarin Omoyelu, said lack of sound financial management was stunting the growth of operators in the SME space, urging the Federal and Governments  to assist in that direction.

    Omoyelu said the SME sector was pivotal to the economic growth of any nation and Nigeria was no exception, especially now that the government has moved to diversify the economy away from oil by turning to opportunities in the SME sector.

    He said there was need for governments at all levels to expose SME operators to modern and innovative marketing, financial, and management skills, which are useful to their operations and which will help them attract the necessary funding for growth.

    The Federal Government, Omoyelu said, must show serious commitment to building a strong SME base in the country. According to him, this could be done by empowering operators with the right business skills and adequate funding through the financial sector.

    “This is the time for the government at various levels to collaborate with banks and other financial institutions with the right pedigree to build the capacity of SMEs and provide them the needed support in terms of funding and skills acquisition.

    “The government must understand the important linkages provided by SMEs to industries and employment generation for the youths,” Omoyelu said.

    Another expert, Mr. Kingsley Adefala, said small scale entrepreneurs must have vast and keen knowledge of the environmental indices and how they can affect the growth and sustainability of their business before venturing into it.

    He argued that the quest for diversification and capital inflow from the non-oil sector can be realised if the nation taps into the huge potential in the small and medium scale businesses.

    He pointed out that for decades, economists have created models to determine what best drives economic growth in an attempt to help policy makers know where best to focus their efforts.

    Adefala stressed that SMEs will create major economic activities, generate employment and empower Nigerians economically, while reducing the nation’s huge import dependence and the attendant capital flight.

    “The development of the SME sector holds the key to the much talked-about diversification of the nation’s mono-economy centred on oil,” Adefala said.

    Other issues highlighted at the workshop to help the growth of the SME sector include book keeping and financial management; operational efficiency; people management; customer relationship management and the state of the economy.

  • ‘How we‘re curbing dumping of sub-standard steel in Nigeria’

    The Permanent Secretary, Ministry of Mines and Steel Development, Dr Abdulkadir Mua’azu, said the ministry was collaborating with the Nigeria Customs Service (NCS) as part of efforts to curb the incessant dumping of sub-standard steel from abroad in Nigeria, as well as export of banned scrap metals.

    Mua’azu made this known at the second Nigeria Metallurgical Industry Stakeholders Forum (MISF) held in Asaba, the Delta State capital. The  theme was:  Development of Nigeria’s metal sector – A panacea for national development and imperative for economic diversification.

    The permanent secretary also said the ministry had articulated some strategies and activities for the development of the metallurgical sector to take it to the next level. Some of the strategies include recovery and re-operationalisation of Ajaokuta Steel Company, Aluminum Smelting Company of Nigeria (ALSCON) and Nigerian Iron Ore Mining Company (NIOMCO).

    Mua’azu also announced that the ministry would build the confidence of private metallurgical plant operators in the country, among others.

    He added that the ministry would ensure that President Muhammadu Buhari assent to the Nigerian Metallurgical Industry Bill when passed by the National Assembly.

    The permanent secretary, who was represented at the forum by the Director, Reform Coordination and Service Improvement, Mr. Zachius Atte, urged stakeholders to bring their experiences to bear as well as their natural comparative advantage towards rebuilding the steel sector.

    The Director, Metallurgical Inspectorate and Raw Materials Development, Mr. Victor Ihebinike, said Nigeria’s metal sector was lagging behind other countries due to failure to reposition it. He said failure to reposition the sector in the past made other countries that started metallurgical sector the same time with Nigeria to make more progress.

    Ihebinike said South Korea, India, Iran, Iraq, Libya, Algeria, Tunisia, and Egypt, among others, had been able to lift their economy from starvation into industrialised nations through consistent commitment and doggedness in pursuant of their objectives.

    “We are self-centered and lack commitment; we visited some of the countries mentioned above to learn from them, but we are still operating in our old ways,” the director said, noting that there was need for political to move the sector forward.

    Citing data, Ihebinike said the Nigerian economy with a Gross Domestic Product (GDP) of $3.75.77 billion was unarguably, the largest in Africa. He, however, regretted that the country spends about $3.3 billion on steel importation yearly.

    “Nigeria, which is Africa’s largest economy, has 30 steel manufacturers but they can only produce 2.2 million tons a year using scraps and billets imported mainly from China,” he said.

    The director explained that the ministry organised the all-inclusive stakeholders forum to avail metal operators in the Southsouth and others the opportunity to interface with the Federal Government to address all of these challenges.

     

  • Communication Excellence: The Missing Gap in Oil & Gas Sector

    In this interview, Brands, public relations and reputation management advisor, Meka Olowola, shares insight how to bridge the communication gap among stakeholders in Nigerian Oil and Gas Sector. The Managing Partner of Zenera Consulting Limited; also has advice for the industry regulator.

    In your view negative public perception remains a major challenge among oil and gas companies, how is this come about and what do you think could be done to change this?

    The oil and gas industry has a public perception problem globally. Most times, companies struggle with challenges ranging from carbon emissions, oil spills, regulatory bottlenecks to fractured relationships with important stakeholders, especially in host communities.  In recent times, with the harp on sustainable development, companies in the sector have also come under more regular scrutiny, becoming particularly vulnerable to the market forces of public opinions.

    For organisations that want to get ahead in the tough terrain, strategic communications in all its forms—public relations, investor relations, advertising, branding, crisis management, internal communications—must remain at the core of all activities. 

    Contrary to what a lot of people think, public relations and reputation management are not ‘green washing’ strategies.  They are integral to business continuity and acceptance. No oil firm can survive without public acceptance, and this is exactly why we work with them to strike a mutual understanding with all stakeholders in a sustainable way, irrespective of their level of interest and influence. We work to improve the public image and enhance bottom line of our oil and gas clients by accentuating the positive stories around their brand and projecting them as industry leaders operating with a purpose beyond profit. Even for those who are already immersed in controversies, our time-tested recovery strategies ensure they gradually win back the trust of society and the confidence of all shareholders.

     What is the interplay between media, technology advancement and the oil and gas sector?

    The relentless pace of change and innovation birthed by technological advancement and environmental awareness place pressure on oil and gas companies. A pressure to evolve and adapt to an age of Artificial Intelligence and machine learning, to embrace sustainability and ‘green’ initiatives across board, to trump competitors, while also advancing and safeguarding a solid corporate reputation, which is an intangible, yet the most important asset.

    Whether upstream, midstream or downstream, companies in the oil and gas sector must continually present themselves as uniquely positioned change-drivers. However, when it comes to perception management, technology is a double-edged sword for companies. While it has opened up a plethora of channels through which they can connect with stakeholders and showcase activities, it can also expose companies to complex reputational risks because of the way technology escalates crises.

    Oil and gas companies must build credible relationship with neighboring communities, the government, and other relevant stakeholders, with a full understanding of the media as an amplifier of both the good and the bad. In the same vein, all efforts geared towards contributing to human development, as well as energy systems that are cleaner, better and kinder to the environment must be told in the media through compelling narratives.

    Why should companies pay more attention to perception, considering that there are many challenges plaguing the oil and gas sector?

    We have realized that members of the general public who are interested in energy and the environment have become the most important target audience and arming them with the right information about our clients is our prerogative.

    Public perception does not exist in a vacuum, it is formed from various interacting factors within and outside the sector itself. Challenges in most oil companies are both internal and external, and how these are handled, reflect on companies’ reputation. Zenera Consulting understands how the oil sector works, its current challenges and future opportunities. In working with some of the biggest oil companies in sub-Saharan Africa, we have mastered the art of helping companies win advocates, drive conversations in their industry, influence policies, attract investment opportunities and navigate through catastrophic events. We place them at the fore-front of conversations in the industry, leveraging on a robust database of key media influencers, editors and correspondents, both mainstream and new media. With our media monitoring and social intelligence tools we are also able to predict sentiments towards our clients and turn the tide of negative media reportage to positive reportage.

     Tell us about Zenera Consulting’s major services

    Zenera Consulting offers services that include advertising, branding, crisis communications, media relations, reputation management, public relations, investor relations and digital marketing. We have a practice that focuses on investor relations- ZeneraIR and a partner firm fully focused on advancing sustainability in business- CSR-in-Action. CSR-in-Action is one of the foremost sustainability consulting firms in Africa, offering end-to-end CSR implementation and training programmes. BuzzDigital, our digital marketing arm, help corporate and retail brands optimize conversion online, earn positive perception and greater mindshare across all new media platforms. Zenera Consulting also owns RedBee, a high-end creative event solutions company, which delivers strategic planning, and flawless production for our clients.

    At Zenera Consulting, how do you help companies in this sector navigate challenges relating to communication with relevant stakeholders?

    Our dedicated team of sector-focused professionals bring to the table over 45 years of combined experience in providing an array of strategic communications services to help our clients establish and maintain close relations with those who matter to their business and to help them propel themselves to the modern-day playing field. We have a thorough understanding of our clients’ businesses and leverage on our knowledge of the business terrain to deliver clear-cut key messages adaptable to a myriad of platforms.

    What we have done over the years working with clients in the oil and gas sector in Africa is to help them build brand loyalty, improve their brand equity, increase share of voice, boost positive perception and effectively manage crises in a proactive rather than reactionary custom. We create captivating messaging and identify opportunities for clients to tell stories in ways that best resonate with key audiences.