The Nation Newspaper

Category: Industry

  • Power, infrastructure should take centre stage

    Members of the Organised Private Sector (OPS) contended with the typical constraints of the business environment in 2018. The high interest rate, weak GDP growth, dearth of infrastructure, particularly power supply, among others, resulted in high production cost and slowed down the manufacturing sector’s capacity utilisation. But, operators are optimistic of a better outing in 2019, because of the huge emphasis on infrastructure development, especially power, as well as Nigeria’s potentially robust economy with a large market, abundant natural resources and a productive population. CHIKODI OKEREOCHA and OKWY IROEGBU-CHIKEZIE report.

    The economy’s fragility was in full glare in 2018, but prospects of a better outlook this year are also too obvious to ignore. For a start, the recovery of oil price for most part of last year, no doubt, boosted Nigeria’s macro-economic fundamentals. But the momentum was rather short-lived.

    This followed a sharp drop in oil price to $54 per barrel, from a peak of $86 in early October. This, understandably, posed a risk to the nation’s macro-economic stability, leaving operators in diverse sectors, especially members of the Organised Private Sector (OPS) worried.

    The Director-General of the Lagos Chamber of Commerce & Industry (LCCI), Mr. Muda Yusuf, put the situation in perspective. He said the economy remained fragile with the high dependence on oil for revenue and foreign exchange earnings.

    He said although oil revenues increased with recovering oil prices in 2018, the impact on the economy was subdued by the huge foreign exchange commitments to petroleum product importations and the inherent subsidy.

    The LCCI chief also said the high debt service obligations were also major constraints to the economy’s growth. ”With the limited progress in the ongoing effort to diversify government revenue sources, the performance of the oil and gas sector would remain a critical factor that would shape the outlook for the economy in 2019,” he said.

    Yusuf in his projection for 2019 added that given the challenging economic conditions, key policy reforms would be imperative to support and sustain macro-economic stability.

    He listed the envisaged reforms that would put the economy on the path of sustainable recovery in 2019 to include, among others, a foreign exchange management framework that reflects the market fundamentals, the acceleration of the economic diversification agenda, normalisation of Lagos ports environment, the oil and gas sector reform and especially the Petroleum Industry Bill (PIB).

    Others are the reduction in the cost of governance at all levels; improvements in the domestic revenue to reduce volatilities of government revenues, among others.

    It is easy to see why the LCCI was pushing these far-reaching reforms. It was borne out of the economy, particularly the manufacturing sector’s lack-lustre performance in 2018 and hopes that if the reforms are conscientiously implemented they are the much-needed tonic to galvanise the manufacturing sector this year.

    For instance, capacity utilisation in the manufacturing sector slowed to 54.6 per cent in 2018, from 57.14 per cent in 2017, while the aggregate local sourcing of raw materials by the sector also dropped to about 57.87 per cent in 2018, from 63.21 per cent in 2017.

    The LCCI and indeed, other members of the OPS, including Manufacturers Association of Nigeria (MAN), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), as usual, contended with the typical constraints of the business environment.

    Some of them include high interest rate, weak Gross Domestic Product (GDP) growth, weak consumer demand, deficient infrastructure, particularly power, traffic gridlock on Lagos port roads and insecurity in some parts of the country.

    For instance, the perennial power supply shortage remained a pain in the neck of operators. According to Yusuf, the power situation posed severe challenges to the private sector operators, impacting adversely on productivity. He said throughout last year, the Chamber received complaints across sectors about high energy costs especially high expenditure on diesel, higher cost of and scarcity of gas, and payment demand by electricity distribution companies (Discos) for power that was not supplied.

    The LCCI DG further stated that the epileptic electricity supply took its toll on the bottom line of investors and Small and Medium Enterprises (SMEs). In fact, some real sector companies, according to him, reported that they spend as much as 20-25 per cent of their total operating cost on provision of alternative power supply and payment to Discos. He also said the provision of power was at the heart of ease of doing business in Nigeria.

    Apart from inadequate power supply, other issues that contributed in forcing the industrial sector’s contribution to the GDP to decline from 24 per cent in first quarter 2018, to 21.97 per cent in third quarter 2018, included poor patronage of Made-in-Nigeria products, high inventory build up, which forced manufacturers to reduce volume of production; overlap and harassment of manufacturing companies by the regulatory/monitoring agencies at the federal and state governments with overlapping functions.

     

    The hopes, the expectations

    For NACCIMA and MAN, the capital expenditure component of the 2019 budget and government’s efforts to improve power supply by expanding the energy mix hold immense promises.

    For instance, the National President of NACCIMA, Iyalode Alaba Lawson, said steady and reliable power supply was crucial to the sustained growth of the manufacturing sector.

    “The power sector is of keen interest to the private sector especially to manufacturers. Though the power sector has had a boost in the area of generation, we are concerned about the issues of “stranded power” and the hampered capacity to distribute due to obsolete and inadequate transmission and distribution equipment,” she said.

    She therefore, called for more urgent steps to resolve these challenges especially in the areas of metering, reduction in estimated billing, transmission and distribution.

    “We nonetheless welcome the innovative solutions being put in place to resolve the issues surrounding power, such as the Nigerian Electricity Regulatory Commission mini-grid regulation and the Energising Economies Initiative (EEI) of the Rural Electrification Agency,” Lawson stated.

    She also said the capital component of the 2019 budget, if religiously implemented, will be the elixir to sustainably put the economy on the recovery track. “The Chamber looks forward to the prompt passage and implementation of the programmes and capital projects outlined in the 2019 budget,” Lawson said.

    The NACCIMA chief, who applauded the Federal Government and the National Assembly for the concerted efforts in ensuring that the budget cycle returns to the January to December period, however, wants government to redouble fforts in promoting agriculture to ensure food security and promote import substitution.

    The Federal Government, she also said, must redouble its efforts in improving infrastructure, such as power, roads and rails, as well as its efforts at improving the ease of doing business. These will bring about positive change in the manufacturing sector (as Nigeria is still a net importer in manufactured goods,” she added.

    She, however, expressed concern with regards to the $60 per barrel crude oil price benchmark on which government budgeted revenues are based, given the well known burst and boom cycle of crude oil prices and volatility of the crude oil market. “Indeed, the oil price is hovering around $53 per barrel in the past few days, this portends serious problems for the effective implementation of the budget,” she said.

    Lawson added that although, President Muhammadu Buhari had in his speech to the National Assembly given assurances that the administration will continue to monitor the international oil price situation and will respond to any changes in the international oil price outlook for 2019, NACCIMA was of the view that government should begin  to create contingency plans to source alternative non-debt funding for its budget expenditure.

    MAN also aligned with NACCIMA, urging the Federal Government to revisit the assumptions of the 2019 budget, particularly crude oil production and price. “The crude oil price has a $60 per barrel benchmark, while oil production has a 2.3 million barrel per day projection. These assumptions should be revisited to reflect present economic realities,” the Association said, in its review and projection for 2019.

    According to MAN, this was necessary to achieve sustainable economic growth and budgetary objectives of the fiscal proposals for this year. MAN also recommended that government ensure an upward review of education and health allocations before appropriation. It also called for caution in the country’s rising debt profile in view of the associated services charges and future economic burden that it would exert on the nation.

    Manufacturers further called for the cutting down on government recurrent expenditures to reduce fiscal deficit, borrowing and service charges. It also canvassed shedding the current borrowing size of the government in the domestic financial market so as not to completely crowd-out the private sector.

    To reposition the manufacturing sector for increased productivity and competitiveness in 2019, MAN also recommended the commencement of the implementation of the harmonised taxes and levies and to allow the Joint Tax Board (JTB) monitor and enforce compliance by states and local governments.

    The association also urged the government to re-classify the manufacturing sector into strategic gas users from the current commercial gas user’s classification. Besides, the Federal Government, it advised, should continue to entrench better foreign exchange rate management while allocation should tilt more to the industrial sector, including the SMEs, among others.

    Perhaps, as signs of better things to come this year, the Federal Government has announced the allocation of N42 billion allocation for the development of the Special Economic Zone Projects across the geopolitical zones to drive manufacturing/exports.

    Other major policy interventions that have positioned the sector for better performance this year include the N15 million allocation for the recapitalisation of Bank of Industry (BoI) and Bank of Agriculture (BoA); N10 billion grant to BoI to subsidise interest rate charged on loans to SMEs.

    More importantly perhaps, members of the OPS believe that Nigeria remains a potentially robust economy with a large market, abundant natural resources and a productive population. Many of them encouraged by Nigeria’s 180 million population and a growing middle class with spending power are eager to invest in Sub-Saharan Africa’s largest economy, with GDP size of $405 billion.

    However, as promising as this year may be, the possibility of a slowdown in economic activities may not be ruled out. Being an election year, the performance of the economy in 2019 would, to a large extent, depend on the transparency and credibility of the election.

    The fear is that distractions from political activities may slow down infrastructure spending and the performance of the manufacturing sector being a sector whose operations rely heavily on infrastructure.

    Besides, there are fears that inflation rate might slightly increase due to electioneering spending, resulting from heightened political activities and lack of proper policy coordination.

  • LCCI blames CBN’s interventions for pressure on external reserves

    The  Central Bank of Nigeria’s (CBN’s) interventions in the foreign exchange (forex) market last year put pressure on the country’s external reserves, the Lagos Chamber of Commerce and Industry (LCCI) Director-General (DG) Muda Yusuf has said.

    According to him, this made the external reserves to drop from $47.5 billion in July to $43 billion as at December 20, 2018.

    In a statement on the review of 2018 economic indices, Yusuf maintained that increasing pressures on the nation’s currency may not be unconnected with the sell-off in fixed income securities and equities by foreign investors, resulting from the rising rates in advanced economies.

    He, however, contended that the reserves are still robust enough to support the nation’s international trade transactions at this time.

    The LCCI boss observed that after 18 consecutive months of decline, inflation rate began to rise in August 2018, with headline inflation of 11.26 per cent in October 2018, compared to 15.13 per cent in January 2018 and 18.7 per cent in January 2017.

    He argued that following the diminished high base effect in August 2018, the country is likely to see headline inflation trending up in the early part of 2019.

    The LCCI in its review of the economy in 2018 said business environment issues are as critical to the progress of the economy as the macroeco-nomic conditions.

    These are issues of infrastructure, policy, tax, regulatory environment, institutional, security situation, policy consistency and many more.

    On some of the  major business environment issues that impacted on businesses in 2018, he said, included but not limited to  the 2018 World Bank Ease of Doing Business report that  ranked Nigeria 146 out of 190 countries.

    He said the report showed that the country took a step backwards from the 145th position it ranked in 2017.

    According to Yusuf, the ranking took into account trading regulations, property rights, contract enforcement, investment laws and availability of credit.

    He acknowledged the efforts of the present administration through the Presidential Ease of Doing Business Council (PEBEC) and series of Presidential Executive Orders targeted at improving the business environment.      Yusuf said: “In 2017, there was record leap of 24 steps in the ease of doing business ranking for the country, from 169 to 145. However, the government still has enormous task of ensuring much better performance to enhance the productivity of businesses in 2019.

    “This calls for a sound and result oriented business regulations and innovative implementation in 2019.”

    He further stated that the provision of power remains at the heart of ease of doing business in Nigeria. “We note the efforts of the government in addressing the perennial power supply shortage and deeper commitment to alternative sources of power, including off-grid initiatives.

    “However, the power situation continues to pose severe challenges to the private sector operators, impacting adversely on productivity. Throughout the outgoing year, we received complaints across sectors about high energy costs, especially high expenditure on diesel, higher cost of and scarcity of gas, and payment demand by Discos for power that was not supplied.

    “These continued to take its toll on the bottom line of investors. SMEs and some real sector companies reported that they spent as much as 20-25 per cent of their total operating cost on provision of alternative power supply and payment to Discos,” he said.

    Projecting into 2019, the review said: “The Nigerian economy remained fragile with the high dependence on oil sector for revenue and foreign exchange earnings.

    “Although, oil revenues increased with recovering oil prices in 2018, the impact on the economy was subdued by the huge foreign exchange commitments to petroleum product importations and the inherent subsidy.”

  • Governorship candidates debate economy in Lagos

    The Lagos Chamber of Commerce and Industry (LCCI) is set to host another edition of the “Private Sector Interaction” with governorship candidates in Lagos State.

    The interaction is aimed at providing a platform for the candidates to discuss their manifestoes and programmes for private sector development in the state.

    The event, according to LCCI, is scheduled to hold on January 11, at the LCCI Conference and Exhibition Centre, Alausa, Ikeja, Lagos.

    LCCI Director-General Mr. Muda Yusuf said due to the strategic position of Lagos, the Organised Private Sector (OPS) is interested in having insight into the thinking of the candidates on the trajectory for the Lagos economy.

    Yusuf said: “The business community cannot continue to be passive in the political and electoral process. The reality is that the quality of economic policies is impacted by the quality of political governance.

    “It is the economic policies that determine the prosperity or otherwise of our businesses, hence our participation at this point in time. It is the economic policies that will determine how equitable the society will be and the capacity of the economy to create jobs.

    “It is the social and economic policies that will determine the degree of social justice that we experience as a people. For these and other reasons, we need to play a more active role in influencing the choice of political leaders at all levels of government.”

    He maintained the need to have a political leadership that will build institutions and promote policies that are supportive of investment.

    Yusuf also spoke of the need to position the private sector as a true engine of growth and development of an economy that rewards hard work, creativity, innovation, wealth creation and entrepreneurship.

  • Manufacturers back Fed Govt on AfCFTA

    The Manufacturers Association of Nigeria (MAN) has backed the Federal Government’s move not to sign the African Continental Free Trade Area Agreement (AfCFTA).

    It insisted that government should ensure that the economic interests are projected and protected in arriving at the decision to sign or not to sign, or when to sign.

    The association, in its “2019 Economic Outlook” said as a necessary part of the readiness assessment and the resulting action plan, the government should put in place the necessary framework to protect and boost the manufacturing sector’s capacity to thrive in the continental free trade area .

    MAN in the review recommended measures the government should take to achieve sustainable economic growth and budgetary objectives of the fiscal proposals for next year. For instance, it urged the government to revisit the 2019 budget assumptions, particularly crude oil production and price.

    “The crude oil price has a $60 per barrel benchmark, while oil production has a 2.3 million barrel per day projection. These assumptions should be revisited to reflect the present economic realities,” the Association said.

    In the review released in Lagos during the week, MAN also recommended that government should ensure an upward review of education and health allocations before appropriation.

    It also called for caution in the country’s rising debt profile in view of the associated services charges and future economic burden that it would exert on the nation.

    The Association urged on cutting down on recurrent expenditures to reduce fiscal deficit, borrowing and service charges. It also canvassed shedding the current borrowing size of the government in the domestic financial market so as not to completely crowd-out the private sector.

    MAN also called for the commencement of the implementation of the harmonised taxes and levies and allow the Joint Tax Board (JTB) monitor and enforce compliance by states and local governments.

    It said the government should be more interested in result-oriented spending with frugality, be more transparent and accountable in order to assuage the psychology of taxpayers for improved tax compliance.

    Man also urged the government to re-classify the manufacturing sector into strategic gas users from the current commercial gas user’s classification.

    The association urged the government to continue to entrench better foreign exchange rate management while allocation should tilt more to the industrial sector, including the Small and Medium Enterprises (SMEs).

    It also urged the government to fast-track the development of key selected mineral resources through backward integration, especially those with high inter-industry linkages.

    “Government should continue to support the resource-based industrialisation and backward integration in the country through appropriate incentives and funding support to investors,” it said.

    MAN further urged the government to expand the tax net to capture the non-tax-paying firms, particularly those operating in the informal sector and not increase the tax burden on the already tax compliant businesses.

    It, however, acknowledged the government’s recognition of the need to develop a digital economy and the fourth industrial revolution in order to enhance productivity.

    The Association, however, said the safety nets were not captured in the budget proposal nor in President Muhammadu Buhari’s budget speech.

  • Why Nigeria may sign free trade deal

    The report of the Presidential Steering Committee on African Continental Free Trade Area (AfCFTA) Impact and Readiness Assessment will be submitted to President Muhammadu Buhari next month. The report, which comes on the heels of pressure by local and international development experts on Nigeria to endorse the free trade deal, is seen as an indication that the proposed deal may eventually get the Federal Government’s nod, despite the sustained opposition by manufacturers and other members of the Organised Private Sector (OPS). Assistant Editor CHIKODI OKEREOCHA reports.

    The picture is getting clearer. And it took the inauguration of the Presidential Steering Committee on African Continental Free Trade Area (AfCFTA) Impact and Readiness Assessment to prepare the ground for Nigeria’s possible endorsement of the hotly-debated free trade deal, which seeks to create a continental trade bloc of 1.2 billion people, with a combined Gross Domestic Product (GDP) of about $3 trillion.

    The committee, which was inaugurated on October 12, 2018 by President Muhammadu Buhari, was charged with assessing the extent to which Nigeria is ready to join the agreement and what the impact of joining would be.

    The committee’s report on AfCFTA, which seeks to remove all forms of restrictions to trade and investment flows within the African continent, will be submitted to the president in January 2019.

    Senior Special Assistant to the President on Media and Publicity, Mr. Garba Shehu, said the committee consulted widely with industry groups and collaborated with the Manufacturers Association of Nigeria (MAN) in gathering information on the implications of Nigeria signing or not signing the agreement.

    The Presidency said, for instance, a recent MAN report dwelt largely on the import implications of the AfCFTA, which was not sufficient to enable Nigeria make any final conclusions. It added that to arrive at a definitive conclusion, another study was commissioned to cover the export aspects of AfCFTA and how they would affect Nigeria should it join.

    Shehu said upon receiving the report of the second study, the presidential committee would be in a better position to make appropriate recommendations to President Buhari on the way forward for Nigeria in January.

    The Nation learnt that the report by MAN, which forced the Federal Government to hold back, among others, noted that if Nigeria ratifies the agreement, imports surge will range from 27.6 per cent for textile, apparel and footwear sub-sector to 180.7 per cent for chemical and pharmaceutical products during the three phases of liberalising tariff lines with five per cent tariff rates.

    According to MAN, in contrast, the imports surge will be as high as over 2,000 per cent in motor vehicle assembly sub-sector over 15years when 10 per cent tariff rates are liberalised. This, MAN argued, will instantly spell doom for the automotive aspect of Nigeria’s National Industrial Revolution Plan (NIRP).

    “The key message from the MAN’s study is that despite challenges, Nigeria should go ahead and sign the AfCFTA agreement with an informed mindset, committing itself to engage in negotiations of the AfCFTA, embed itself in the process and ensure that the AfCFTA delivers good results for its manufacturers, especially as it relates to taking benefits of the market access opportunities on the rest of the continent,” Shehu said.

    Recall that 44 of the 55 African countries had on March 21, 2018, signed the AfCFTA agreement in Kigali, Rwanda. As at this month December, 49 countries have already signed the AfCFTA agreement and 13 countries have already ratified it. The agreement will become binding and implementation can begin once 22 states have ratified it.

    Buhari refused to sign the AfCFTA agreement, 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.

    However, in boycotting the trade liberalisation deal, the president buckled under intense pressure by MAN, Nigeria Labour Congress (NLC), the academia and stakeholders, who vehemently kicked against the deal.

    While MAN hinged its opposition on issues of market access and enforcement of rules of origin, among other concerns, the NLC President Comrade Ayuba Wabba expressed fears that the trade liberalisation will lead to the collapse of the manufacturing sector and loss of jobs.

    However, with the report of the Presidential Steering Committee expected to be submitted to the president in January next year, the hope is that the coast may have become clear for Nigeria to sign the free trade deal.

    This followed the argument by not a few development experts that never in the history of Nigeria’s Afro-centric foreign policy had a Nigerian government, out of self-doubt and narrow self-protection, abdicated its responsibility to the continent by pandering to vested domestic interests.

    Such vested interests, according to those pushing for AfCFTA, often try to minimise Nigeria’s strategic interests to fit their narrow group and individual interests. Those in favour of the deal argued that the supposed benefits of the trade pact are too good for Nigeria to ignore.

    Apart from its inherent capacity to promote economic growth and development, reduce poverty in the partnering countries (Nigeria inclusive), the promoters believe it would expand and diversify trade and increase domestic and foreign investment.

    Africa, according to experts, is not trading within itself, despite its potential in terms of population and rich agricultural and mineral endowments. Trade among African countries accounts for a meagre 10 per cent of their total external trade, the lowest of any world region, according to United Nations (UN) Economic Commission for Africa (ECA).

    The continent’s share in world trade is also not impressive, standing at less than three per cent. It was in a bid to stimulate intra-African trade by at least 25-30 per cent and raise the continent’s share in global trade and competitiveness that African leaders came up with the idea of establishing AfCFTA.

    Essentially, their hope was that AfCFTA would lead to a significant growth of intra-Africa trade and assist Africa to use trade more effectively as an engine of growth and sustainable development. It was expected to help Africa participate in global trade as an effective and respected partner.

    Other expected deliverables by the agreement include enhancing competitiveness at the industry and enterprise level, through exploitation of opportunities for scale production; continental market access and better re-allocation of resources; provision of a comprehensive framework to pursue a developmental regionalism strategy for the continent.

    Interestingly, the expected submission of the committee’s report, which appears to have brightened hopes that Nigeria may sign the deal, is coming on the heels of intense pressure and superior arguments by concerned stakeholders and technocrats.

    For instance, Former President Olusegun Obasanjo has been quite vociferous in his campaign to get Nigeria sign the trade deal, which, according to him, promises $27 billion investments.

    At the recent opening of the Intra-African Conference prior to the unveiling of the first Intra-African Trade Fair (IATF) in Cairo, Egypt, Obasanjo, as Chairman, Advisory Board of the First IATF, advised African leaders to sign the ACFTA.

    Obasanjo, who stressed that ACFTA was vital for the continent’s transformation, said:. “It is, therefore, imperative that all African governments, who believe in Africa’s progress, should not only sign the ACFTA, but should ratify it at once, making a way for its implementation.”

    The former president and strong critic of Buhari tagged ACFTA as a landmark agreement in the context of its value in economic integration, transformation and progress in Africa’s development. He noted that AfCTA is the economic salvation that Africa needs to redeem the wrong perceptions of it left by colonialism.

    Before the conference in Cairo, Obasanjo had also taken a swipe on Buhari for not signing the deal in Rwanda. He said the presidential candidate of the People’s Democratic Party (PDP), Atiku Abubakar, will sign the ACfTA once he emerges as Nigeria’s president.

    He made the assertion while speaking at the Babacar N’daiye Lecture by the Africa Export-Import Bank (Afreximbank) bank on the sideline of the International Monetary Fund (IMF/World Bank meeting in Bali, Indonesia.

    Condemning Buhari’s failure to sign the AfCFTA, Obasanjo said: “We will have a president who will be able to sign the Africa Continental Free Trade Agreement, not the one whose hands is too weak to sign.”

    Afreximbank, Dr. Benedict Oramah, also said AfCFTA will lead to Africa’s economic development and bring about a better future for the continent.

    At a panel discussion on “Financing Intra-African Trade” during a recent Business Forum in Kigali to mark the launch of AfCFTA, he said as part of its drive to promote intra-African trade and regional integration, Afreximbank had identified several countries that served as hubs for trade among African countries.

    According to him, those hubs were already playing significant roles in their sub-regions in supporting cross-border trading and were critical in AfCFTA implementation. They included South Africa in Southern Africa, Nigeria and Cote d’Ivoire in West  Africa, Kenya in East Africa and Egypt in North Africa.

    Oramah said Afreximbank was working on the establishment of export trading companies, which would aggregate products from small traders for export across the continent and beyond.

    He said the operation of such companies would remove the need for individual small traders, who were not equipped for such trade, to try to export the products by themselves.

    Abuja Chamber of Commerce and Industry President, Mr. Adetokunbo Kayode, also said the CFTA represents a major opportunity for Nigerian businesses to gain greater access to the fast-growing African market.

    His words: “It is vital that Nigerian businesses continue to diversify their export markets and with this agreement, trade barriers for companies across a number of sectors will be reduced thereby creating access to new markets within Africa.

    “Intra African trade as a driver for economic diversification can help to harness the unexploited opportunities that exist in many product categories, particularly food and agricultural products.

    “I am optimistic that the Africa CFTA will increase intra-Africa trade by about 52 per cent, resulting in an increase of African manufacturing exports from the current average in which manufacturing only represents about 10 per cent of total GDP in Africa.”

    Kayode added that the potential for CFTA is big for both structural transformation and poverty alleviation in Africa. “Nigerian businesses will have access to nearly 1.2 billion consumers through this agreement and Nigeria’s engagement in this region is important as it builds our presence in markets where we should be doing much more business,” he said.

    AfCFTA, as 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, was designed to create a continental trade bloc of 1.2 billion Africans, with a combined 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 by more than 52 per cent, worth about $35 billion per year.

    AfCFTA commits African countries to phasing out tariffs on 90 per cent of goods, with 10 per cent of “sensitive items” to be phased out incrementally. It will also liberalise trade in services, while also signaling a step towards building strong regional value chains.

  • SON flays circulation of substandard lubricants

    •Reassures compliant firms of protection

    The Standards Organisation of Nigeria (SON) has vowed to fight manufacturers of substandard, fake and adulterated lubricants.

    Its Director-General Mr. Osita Aboloma, who made this known in Lagos during a meeting with stakeholders in the lubricant sub-sector, said the move was to protect the people, the environment and the  economy

    He stated that no business interest is worth the life of one Nigerian. “Keeping quiet in the face of injustice is as bad as taking part,” Aboloma told the stakeholders.

    According to him, the meeting was called as a follow-up to the nationwide clampdown on suspected, substandard, fake and adulterated lubricants by SON, following intelligence reports on the massive influx of the life threatening products into the country.

    Aboloma said his agency has  received complaints from consumers about failure of machinery occasioned by substandard, fake and adulterated lubricants, lack of value for money, as well as unwholesome practices by some licensed blenders in Nigeria.

    Other areas of concern, according to him, include abuse and faking of the quality marks, cloning of popular brands and misleading labelling to confuse consumers of lubricant products particularly during the yuletide season.

    Aboloma reiterated the agency’s determination to remain fair and firm in dealing with stakeholders whose facilities were shut down for suspected substandard lubricants, insisting that lubricants must meet requirements of the Nigeria Industrial Standards (NIS), including  traceability, performance and guarantee of value for money.

    The SON boss urged the stakeholders to join in the crusade to confront the menace of life-endangering lubricants frontally, promising to protect compliant businesses and prosecute offenders.

    Aboloma said the registration of lubricants with SON has increased by about 28 per cent, following the raid. This, he said, confirmed the suspicion that many unregistered products were in circulation.

    Responding, the stakeholders commended the SON for embarking on the exercise and pledged their cooperation to tackle the menace.

    They listed steps to sanitise the lubricant subsector to include quality checks at seaports and land borders by relevant regulatory agencies, mandatory spot checks on licensed blending plants in Nigeria by SON under the Mandatory Conformity Assessment Programme (MANCAP).

    Others steps include a crack down on unlicensed lubricant blending plants, including prosecution, and improved synergy between SON, the Department of Petroleum Resources (DPR) and Nigeria Customs Service in plant licensing and import regulation of lubricants.

    At the event were executives and members of Major Oil Marketers Association of Nigeria (MOMAN), Lubricant Producers Association of Nigeria (LUPAN) and major importers of base oil and lubricants in Nigeria, including chief executives of Dozzy Group, Lubcon Oil, Seahorse, Double One Plc (Formerly Mobil Oil), A-Z Petroleum, OVH EM (formerly Oando Plc).

    Others were AMMASCO International, Obitech Oil, Lawmaco Group Royal Merenge, Necit Nigeria Limited and Petrozy, among others.

     

  • ‘Infrastructure deficit major impediment to growth’

    Lacklustre approach to investment in infrastructure remains a major impediment to Nigeria’s growth and development, a chartered stockbroker and Chief Executive Officer of Sofunix Investment and Communications, Mr. Sola Oni, has said.

    Speaking in Lagos, Oni said the sluggish approach to infrastructure investment was affecting economic activities with dire consequences for the real Gross Domestic Product (GDP).

    “A nation without infrastructure like energy, roads, rails and waterways cannot create an enabling business environment,” he said.

    The expert noted that top-notch, consistent investment in infrastructure will have multiplier effects of creating an enabling environment for businesses to thrive and also enhancing employment opportunities.

    According to him, conscious and constant investment in roads, rails, utilities, water and airways, among others, would aid job creation.

    Oni pointed out that if these measures were backed with appropriate fiscal incentives, there would be increase in spending.

    “Sadly enough, at 58, Nigeria is still contending with infrastructure deficit. This must be tackled with dispatch in order to ensure sustainable growth in our GDP.

    “The growth of GDP at 1.81 per cent in Q3 is tenuous. Concerted efforts are required to make the growth sustainable,” Oni said.

    Commenting on the 2019 budget, he said the 2019 fiscal budget had taken into consideration the challenging operating environment.

    “This is noticeable in the Federal Government’s deliberate reduction of the key drivers of the economy to ensure inclusive and sustainable growth.

    “The total budget estimate of N8.83 trillion is down from N9.01 trillion of 2018,” he said.

    According to him, security breaches, governance issues and vagaries in the international oil market, among others, created an atmosphere of uncertainty that enveloped the entire economy in 2018.

    Oni said the 2019 budget must be fairly conservative for effective implementation.

    “The benchmark price of crude oil at $60 per barrel and production of 2.3 million barrels per day are subject to controversy in view of the signals from the international oil market.

    “But the good thing is that the government is not unmindful of these and there are plans to switch gear in the event of unforeseen risks. The heart of 2019 budget is the cautious management of the economy by reducing the weight of debt burden and expanding the income generating streams,” he added.

    The expert also said the exchange rate of N305 per dollar was conservative, noting that the critical challenge was how to grow the GDP on sustainable basis and boost the external reserves.

    President Muhammadu Buhari had on December 19, 2018 presented a N8.83 trillion budget for 2019 before a joint session of the National Assembly.

    The fiscal plan for next year is smaller in size compared with N9.12 trillion budget for 2018.

    The proposed budget shows that about a quarter of the sum, N2.14 trillion, will be spent on debt servicing, while capital expenditure is expected to gulp N2.03 trillion.

    The government also plans to spend N4.04 trillion on recurrent expenditure and N492.36 billion on statutory transfer in the course of the 2019 fiscal year.

    The fiscal policy is predicated on crude production of 2.3 million barrels a day, an oil price of $60 per barrel and exchange rate of N305 to the dollar.

  • Dankwambo praises Fed Govt’s SIP

    Gombe  State Governor  Ibrahim Dankwambo has praised the Federal Government’s Social Investment Programme (SIP) in the state.

    He gave the commendation during the presention of the state’s 2019 budget to the House of Assembly.

    “I commend the Federal Government for funding youth empowerment and poverty alleviation programme in the state.

    “The activities of Youth Empowerment and Social Support (YESSO), the social investment programmes and the contributions of international development partners have significantly contributed towards reducing youth unemployment, restiveness and poverty in Gombe,” he said.

    Dankwambo said N1.3 billion had been earmarked in the 2019 fiscal year for youth empowerment and poverty alleviation programmes.

    The governor praised President Muhammadu Buhari for the establishment of Northeast Development Commission (NEDC), adding that the commission would address the challenges of insurgency and underdevelopment of the region.

    Dankwambo said as at October 31, 70.08 per cent of the 2018 budget had been expended as recurrent and 30.55 per cent represented capital expenditure. The performance of the budget was 49.77 per cent.

    The proposed budget of N118.7 billion comprises  N60.6 billion as recurrent and N58.1 billion as capital expenditure.

     

  • Ex-NSE chief seeks proper waste management

    Former National Vice Chairman, Nigerian Society of Engineers (NSE), Mr. Odumeru Musiliudeen, has called on manufacturing firms and households to manage their waste to prevent pollution.

    Speaking in Lagos, Musiliudeen said proper waste management by firms could curtail arbitrary disposal of toxic waste and pollution.

    According to him, due to the hazardous nature of chemicals from industrial activities, there is need for companies to go the extra mile to dispose the effluents appropriately.

    “Poorly managed waste spreads disease, contaminates water resources, increases the cost of potable water, increases flooding, pollutes the air, and repulses tourists.

    “Manufacturing processes can generate chemical wastes, which could be toxic and pose threats to the environment and human health. Manufacturing industries should look for a way to recycle their wastes because all waste is recyclable,” he advised.

    Musiliudeen also said residue needs to be channeled into the effluent treatment plants where it will be treated and re-used, adding that this could form an additional source of income.

    He stressed that industries that did not have effluent treatment plant should endeavour to get one or register with waste management authorities.

     

     

  • Jigawa offers women N187m grant

    The Jigawa State Government has  disbursed over N187 million grant to 35,810 women as part of its Women Empowerment Programme in the state.

    The Special Adviser to Governor Muhammed Badaru on Economic Development, Alhaji Abba Mujaddadi, broke the news in Hadejia.

    He said N176.35 million was disbursed to a set of 35, 270 women by the wife of  the state governor, Hajiya Magajiya Badaru.

    Mujaddadi said the women, who were drawn from the 3,527 polling units in the state, received N5, 000 each, adding that 10 women were selected from each polling unit.

    The Special Adviser said another set of 540 women, who owned eateries, got N10.8 million grant and 1,080 firewood stoves.

    He explained that each beneficiary  received N20, 000 and two stoves to enhance her cooking business.

    On the Goats Breeding Micro-finance Scheme, Mujaddadi said 8,535 women had received 25,605 goats.

    He noted that the programme was the most successful micro credit scheme in the state, with 92 per cent retention and 79 per cent repayment level.

    The Special Adviser said the empowerment was borne out of the government’s desire to create job opportunities for women to be self-reliant.

    “This government is committed to empowering women to make them become productive and self-reliant.

    “It is our firm belief that if a woman is in a good financial standing, there will be peace and stability in the family,” he said, urging the beneficiaries to use the grants wisely to improve their living conditions.