The Nation Newspaper

Category: Industry

  • Africa Free Trade deal: Why manufacturers are adamant

    The Nigerian Office for Trade Negotiations says Nigeria is almost ready to sign the African Continental Free Trade Area Agreement. But this flies in the face of the stiff opposition of the Organised Private Sector (OPS), particularly manufacturers, against the deal. The OPS is worried by what it calls the absence of a study to determine the impact, benefit and downside of the agreement, among others. Assistant Editor CHIKODI OKEREOCHA writes.

    His expertise in trade policy and negotiations is widely acclaimed. Prior to his appointment as Director General/Chief Negotiator, Nigerian Office for Trade Negotiations (NOTN), Ambassador Chiedu Osakwe was Trade Adviser at the Ministry of Industry, Trade and Investment, where he provided technical advice on trade policy and structural reforms to the Federal Government.

    He was also a diplomat in the Ministry of Foreign Affairs, during which he served at the Permanent Missions of Nigeria to the United Nations (UN) and other international organisations in New York and Geneva.

    Educated at the University of Ibadan (Nigeria), Oxford (United Kingdom) and New York University, from where he obtained his PhD, Osakwe is also an Adjunct Professor on a leave of absence from the International University in Geneva on International Trade Policy, Diplomacy and Negotiations.

    With such intimidating resume and wealth of experience, Osakwe’s charge at NOTN, where he is expected to coordinate the formulation of a cohesive negotiating strategy for Nigeria especially in the controversial African Continental Free Trade Area (AfCFTA) agreement, ordinarily, should be easy.

    But it is doubtful if his efforts at NOTN to harvest interests and concerns of various stakeholders and actors on trade and turn them into technical positions and national agenda at the negotiation tables are enjoying a smooth sail.

    Already, there are indications that NOTN, which was established by the Federal Government in May, last year, as the standing negotiating body for Nigeria, may not be on the same page with members of the Organised Private Sector (OPS) especially the Manufacturers Association of Nigeria (MAN) with regards to Nigeria joining the AfCFTA.

    The Nation learnt that convincing the OPS to endorse the controversial trade liberalisation deal appears to have remained a hard nut to crack for the renowned international diplomat. The deal may have become a hard sale to the OPS.

    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 Gross Domestic Product (GDP) of about $3 trillion.

    The agreement was seen as an important milestone in promoting Africa’s regional integration and helping to increase intra-African trade, which was about 17 per cent, by more than 52 per cent, worth about $35 billion yearly.

    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.

    Forty four out of 55 African leaders ratified the AfCFTA at an Extra-ordinary Summit of the AU Assembly in Kigali, Rwanda, on March 21. Nine other AU members, including Nigeria and South Africa delayed accent to the treaty.

    President Muhammadu Buhari was earlier scheduled to travel to Kigali to ratify the trade deal, which is easily the largest trade agreement since the World Trade Organisation (WTO) in 1994. But he backtracked on the opposition of the OPS who said they were not consulted.

    Specifically, the OPS decried poor preparations, lack of consultations, and non-inclusion of inputs by key stakeholders as regards market access and enforcement of rules of origin as major reasons why signing the agreement will jeopardise the nation’s economy.

    Consequently, the president, on March 27, set up a committee to review the CFTA framework agreement. The committee has since swung into action to strengthen its consultations with critical stakeholders and determine how various sectors of the economy will benefit from the proposed agreement.

    The committee is said to have explained to the various stakeholders the contents of the 250-page document, which some of them did not read. It has also been working assiduously to allay the fears of the private sector, specifically on issues dealing with the particular tariff lines that shall be liberalised.

    “What we are doing is to establish a technical working group on goods market access, consisting MAN, Ministry of Finance, National Bureau of Statistics, NACCIMA. We asked MAN to give us the list of products they would like to see in the 10 per cent. They have sent since last May 11.

    “In other words, everything MAN asked to be included in the exclusive and sensitive list (10 per cent not for liberalisation) has been done,” Osakwe told reporters, in Abuja.

     

    Manufacturers fault NOTN, renew opposition

    However, with regards to its ongoing consultation with critical stakeholders particularly manufacturers, NOTN, which is the institutional framework and foundation for Nigeria’s trade policy infrastructure, appears not to be on the same page with the OPS.

    Indications to this emerged at last month’s 51th Annual General Meeting (AGM) of the Ikeja branch of MAN. At the AGM, which held in Lagos with the theme: “African continental free trade agreement: Impact on the Nigerian manufacturing sector.”

    At the AGM, Jacobs emphasised that as a concept and in principle, MAN was not against the AfCFTA, reiterating that the association’s original contention was that the NOTN did not undertake adequate consultation with relevant stakeholders.

    The MAN president said although, that is being done now, “We still have the big issue of the absence of a country specific study to determine the possible impact, benefit and downside of the Agreement on the Nigerian economy in general and the manufacturing sector in particular.”

    Continuing, Jacobs charged: “We hasten to observe that the NOTN version of the outcomes of the stakeholders’ engagement and sensitisation, as reported in the news media, does not adequately reflect the overall proceedings and factual expressions at those meetings.”

    He, therefore, said MAN was worried that “This could be misleading and, more importantly, may not put Nigeria in good stead and could inexorably put the nation in a disadvantaged position under the AfCFTA.”

    Jacobs in his address at the AGM held on Thursday, July 19, assured that MAN will continue to engage the NOTN and the Federal Government to ensure that the concerns of manufacturers are addressed. “We are adequately represented at the negotiations that may ensure, if and when Nigeria decides to sign on to the AfCFTA,” he said.

    He described the theme of the AGM as “Quite apt,” considering the level of high inventory and unemployment in the country and the efforts of real sector operators to reposition themselves in the post-recession era.

    Recall that a groundswell of opposition by MAN and other OPS members, such as Nigeria Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMMA), labour movement, particularly the Nigeria Labour Congress (NLC) had trailed the AfCFTA.

    Manufacturers have been the most vociferous in the campaign, which has now gained momentum, with Jacobs expressing worries that the agreement will open the floodgate for the influx of the European Union (EU) and other foreign goods into the local market and turn the country into a dumping ground.

    According to him, the Rules of Origin (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, Jacobs fears that the ROO cannot be adequately enforced because goods from the EU can find their way into one of the African countries that have bilateral agreement with the EU.

    He 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,” Jacobs said.

    The alleged lack of inputs of critical stakeholders in the proposed agreement also did not go down well with the OPS. They argued that ordinarily, proponents of the trade document ought to have consulted all relevant stakeholders because of its likely implication on the economy.

    While the OPS noted that intra-African trade could bring economic benefits to member states, they insisted that there should be broad consultations and participations in the AfCFTA negotiations. This, according to them, was necessary to avoid “pitfalls of past trade agreements, which turned to be more devastating and negative.”

    These were some of the concerns that forced down the hand of President Buhari to boycott the Extra-ordinary Summit of the AU Assembly in Kigali, Rwanda, on March 21, where 44 out of 55 African leaders ratified the AfCFTA.

    However, both the committee to review the CFTA framework agreement, and the NOTN to undertake consultations with critical stakeholders, appear not to have been able to convince the OPS on the benefits accruing from the agreement to the economy generally and the manufacturing sector in particular.

    The OPS has kicked its heels in, insisting that the NOTN undertake a wider stakeholders’ consultation for a holistic analysis of the impacts of AfCFTA to the Nigerian economy, and to do specific study to determine the possible impacts of the trade liberalisation deal to the economy and the manufacturing sector.

    The Nation, however, learnt that beyond the fears expressed by real sector operators, is the more critical issue of lack of infrastructure. The dearth of supportive infrastructure is said to have put fears of competitive disadvantage in the minds of Nigerian manufacturers against their counterparts from other African countries.

    At the core of the infrastructure deficit that has put fear in manufacturers is the lack of steady and reliable electricity supply, which is a key factor in the cost of doing business.  “We need to intensify efforts in what government is doing across the board to ensure predictable cost effective power supply,” Osakwe said.

    He noted that on the enabling environment for business, a lot of progress has been made as registered in the 2017 World Bank report, where Nigeria went up 24 places and in the top 10 reforming countries in the world, “A lot still needs to be done to scale-up, deepen, and intensify.”

    Another long-standing issue agitating the minds of members of the OPS was the need for more effective border controls. Some of them insisted that Nigeria should be able to close and open her borders whenever she wants.

    While some of the issues and concerns of the OPS are not for NOTN to resolve, what is not in doubt is that there has been significant nationwide support for Nigeria to go ahead with the agreement initiated by the AfCFTA.

    However, the consensus of various interest groups is that the pace of work by government, in partnership with the private sector, should be accelerated with regards to this range of long standing issues.

  • Minister: Nigeria spends $22b yearly on food import 

    The Minister of Agriculture and Rural Development, Mr. Audu Ogbeh, has lamented the huge funds spent on importation of food. Efforts were ongoing to reverse the trend, he said.

    Ogbeh, who spoke at the 19th  Catholic Brothers United in Lagos, said Nigeria’s yearly food import stood at $22 billion. He lamented that the situation was unsustainable as it poses danger to the nation’s economy.

    His words: “Nigeria spends almost $22 billion every year on food importation. If we don’t fix agricultural problems in the country where families can feed on less than 15 per cent of their budget, then the country is in trouble.”

    Speaking on the topic “Technology and agricultural revolution: A tool for economic growth,” Ogbeh said efforts were ongoing to close Nigeria’s borders against rice importation.

    He projected that “In two years from now, we should put an end to rice importation.”

    Catholic Brothers United President, Emmanuel Okoro, said the country can attain self sufficiency in food production if she strengthens her entire agricultural sector.

    He identified the current challenges facing the sector to include poor infrastructure, dormant research facilities, and limited food processing and inconsistent government policies, among others.

     

  • New vista for African agri-business

    A fresh opportunity has been created for Nigeria and other African countries seeking finance to showcase their fertiliser and agri-business projects to global investors and financiers.

    CRU Events and the African Fertiliser and Agri-business Partnership (AFAP) are working with partners across Africa to offer brownfield projects seeking capital investment the chance to make a showcase presentation to an audience of global investors and financiers.

    CRU offers unrivalled business intelligence on the global metals, mining and fertiliser industries through market analysis, price assessments, consultancy and events.

    Founded by a partnership of African development organisation, AFAP is an independent non-profit organisation that provides services to the private and public sectors on sustainable development projects and policies focused on market-driven business solutions in fertiliser and agribusiness.

    CRU and AFAP announced, during the week, that they are working with partners across Africa to offer brownfield projects seeking capital investment the chance to make a showcase presentation to an audience of global investors and financiers.

    This opportunity to raise finance, named the “Investment Showcase” will take place at the CRU Africa Fertiliser Agri-business 2018 Conference.

    The conference, now in its fourth edition, will be held from September 24 to 26, 2018 in Cape Town, South Africa.

    The event typically attracts more than 400 senior fertiliser executives and agri-business stakeholders from across the global fertiliser and agri-business supply chain.

    Portfolio Director for Fertiliser Events at CRU, Tom Willatt, said, “Through our unique partnership with AFAP, the conference provides unrivalled networking opportunities with senior decision-makers from the biggest fertiliser buyers and manufacturers in some of the world’s fastest growing fertiliser markets.

    “The event has gone from strength to strength, and CRU and AFAP are both delighted to be able to build on the success of the event by creating the opportunity for brownfield projects in Africa to meet with and present to the investment community and increase their chance of securing funding.”

    Willatt explained that qualified and categorised projects seeking investment of over $1 million in brownfield projects will be selected, adding that they are projects focused on fertiliser, agri-inputs supply chain, agriculture, agro-processing and/or value addition sectors.

    He also said projects will be selected on the strength of the proposal, with the intention to provide a diverse geographic range and representation from across the fertiliser and agri-business supply chain.

    According to him, investors that attend the showcase will be provided with a full package of information and will have the opportunity to meet and discuss with the project leaders seeking finance.

     

     

  • ‘Manufacturing, agric hold key to economic growth’

    The Executive Director, Dangote Group, Hajiya Halima Aliko-Dangote, has urged youths in Nigeria and across Africa to diversify from service-oriented enterprises to manufacturing and agriculture.

    She said both sectors hold immense potential to fast-track the development of the continent and better the lives of its nationals.

    Halima Dangote said the economic realities around the world have shown that the way to go is agriculture and that the youths must take the lead more when most African countries are still grappling with low economic growth.

    Speaking at a forum in Abuja, during the week, Halima Dangote said African countries have groped in the dark for too long and it was high time the millennials stood up to be counted as the future of the continent.

    In her paper titled: Roles of Millennials in transition and institution building, the Dangote Group Director explained that the youth have the potentials to turn around the fortunes of the African continent.

    She said: “Millennials are young ones born between 1980 and the mid-2000s, who account for 27 per cent of the global population (about two billion people), and Sub-Saharan Africa alone is home to 13 per cent of the entire millennial population, ranking second to Asia.”

    According to her, statistics have also revealed that by 2025, 75 per cent of the global workforce will be millennials, large enough to influence consumer spending patterns, change consumer business models and impact the global economy.

    She said most members of this generation are at the beginning of their careers and so will be an important engine for economic growth in the decades to come.

    Halima Dangote stated that the theme of the conference, which is “Transition, Transformation, and Sustainable Institutions”, could not have come at a better time than now. She, therefore, lauded the association for coming up with a subject that Nigeria and Africa needed to discuss.

    The Executive Director also urged millennials and other relevant stakeholders to exercise restraint in the face of common desperation for wealth by their contemporaries, adding that “Success in entrepreneurship takes time, dedication and hard work.”

    She said there was the need for youths to disabuse their minds from the concept of overnight success. “Industrialisation requires patience and perseverance,” she stated.

    Halima Dangote also spoke extensively on the successes recorded by the Dangote Group, founded by her father, Aliko Dangote, in creating numerous jobs and establishing value-adding industries and contemporary businesses.

    According to her, the company did these through importation, manufacturing and backward integration to generate and highlight local content for overall development.

    While noting that the group’s achievements did not come easy, Halima Dangote said “the Millennials should see these opportunities and diversify from service-oriented enterprises to manufacturing enterprises.

    “Manufacturing has the capacity to create numerous jobs, develop an economy, sustain jobs and open other linkages.”

    She noted that millennials are leaders in transition and are evolving. To her, “With smart phones and connections, the Millennials can exert much influence and swing the outcome of a situation. This confers on them great role and responsibility in shaping the outcome of policies and politics in a nation.

    “Economic sentiments have turned sharply since 2015. The general consensus across sub-Saharan Africa’s two largest economies is that lack of employment opportunities poses a very big problem amongst other key societal issues identified through the Sustainable Development Goals (SDGs).”

    She, however, stated that despite these concerns, there is considerable optimism about the future, and millennials are increasingly getting more active in influencing and energising public opinion through social networks and creating mass movements.

    Halima Dangote also said they are actively leveraging digital fluencies to improve public sector accountability; address global societal problems and drive civil society engagement.

    According to her, “Dangote Industries Limited is one of Nigeria’s foremost conglomerates with interests in cement, sugar, salt, flour, pasta, noodles, poly products, real estate, agriculture, logistics, telecommunications, steel, oil and gas, and beverages, among others.

    The group has over 15,000 direct employees. It provides indirect employment to tens of thousands of others who are engaged in activities relating to its businesses.

    Dangote Cement has presence in 18 African countries (Nigeria, Ghana, Ethiopia, Tanzania, Cote d’Ivoire, Senegal, Cameroon, Liberia, South Africa, Kenya, Zambia, Sierra Leone, Congo, Zimbabwe, South Sudan, Chad, Mali and Niger).

     

    Also, the Managing Director of Mojec Holdings, Chantelle Oluwabumi Abdul, said despite being a young person, her company controls about 80 per cent of metering in the power sector in West Africa.

    She said youths should look into creating ideas and as well executing the ideas promptly.

    “I believe in the Nigerian dream. I believe in Africa. Young people now look at creating real wealth in billions and not millions again,” she added.

    According to her, the sheer size of this demography, which is already about half the size of world population and the democratisation of information using technology, is a warning sign to future politicians and the future of politics.

     

  • Nigerian Breweries empowers 100 artisans, SMEs with N30m

    Life Continental Lager Beer, a beverage brand in the stable of Nigerian Breweries (NB) Plc, has voted N30 million for empowerment of 100 artisans and small businesses.

    The Portfolio Manager in-charge of Mainstream Lager and Stout of NB, Mr. Emma Agu, made this known at the launch of the 2018 Life Beer Empowerment Scheme in Enugu.

    The empowerment programme was titled: “Life Progress Booster 2018’’ with a slogan “Small Business, Big Progress.’’

    Agu said each of the 100 artisans and small or growing businesses would get N300, 000 each in the empowerment package to boost their ventures to the next level and make progress.

    “The empowerment was meant for seven states, which include the five South-East States of Abia, Anambra, Ebonyi, Enugu and Imo States, which are predominantly Igbo indigenous states.

    Agu also said Rivers and Delta States were among the seven states since a large chunk of Igbos also hail from the two South-South states.

    He noted that the empowerment was meant for Igbo artisans and small businesses, whose businesses and ventures were domiciled in the seven states and could be physically verified.

    The manager said that the company was targeting Ndi-Igbo as the beverage brand, Life Beer, was being sold massively in Igbo speaking predominant areas.

    According to him, one out of every three beer served in drinking joints and social gatherings, is Life Beer.

    “Beer originates from our breweries in Onitsha, economic capital of the South-East and South-South regions,’’ he said.

    The manager encouraged progressive and aspiring artisans and small/growing business concerns to apply by writing a simple business proposal on how to expand their existing businesses, services and ventures.

    On how the money will be disbursed, he explained that a panel of three business and venture judges will look into it and find out how suitable and practical their proposals will be and would later visit their shops or business places to verify and ask the applicant questions directly.

    Agu said the process was clear as well as unambiguous to understand and follow by all with little education prowess needed on it.

    He further explained that Life Beer empowerment had started and continued yearly since 2014; but previously it was for young people who have new business ideas getting N250, 000 each.

    “The empowerment programme has benefitted hundreds of new businesses before now in the seven states, it is the time to already establish small artisans and businesses,’’ Agu said

     

  • National Assembly endorses NSE demutualisation bill

    •Stakeholders await president’s assent

    Operators in the capital market have hailed the National Assembly for the passage of the bill on the demutualisation of the Nigerian Stock Exchange (NSE), describing the development as both timely and reasonable.

    They  urged President Muhammadu Buhari to speedily  assent the bill in view of what they described as its “huge benefits to the nation’s economy”.

    The bill seeks the conversion of the NSE from a company limited by guarantee to a company limited by shares.

    Titled: “An Act to Facilitate the Development of Nigeria’s Capital Market by Enabling the Conversion and Re-registration of the Nigerian Stock Exchange from a Company Limited by Guarantee to a Public Company Limited by Shares and for related Matters, 2017″ (Otherwise called “Demutualisation Bill”), it was passed by the Senate  last December 22 and the House of Representatives on February 1.

    However, following differences in the long title of the Bill, a conference committee was subsequently constituted by both chambers, the report of which was approved last May 30 and 31, by the House and Senate.

    Justifying the essence of demutualisation, NSE Chief Executive Oscar Onyema said the bill, which is awaiting presidential assent, would give the NSE the flexibility to respond to industry shifts and economic headwinds/tailwinds.

    He said it will also ensure faster and more real-time trading operations, fostering more effective competition on a global scale. Besides, it will make for better positioning for the listing of large multinationals and local corporates in Nigeria, as well as ensure better positioning to innovate, embrace market changes and meet customers’ demands.

    Onyema further said NSE’s conversion and re-registration into a public company limited by shares was essential to develop and strengthen the capital market and enhance the formation of capital for the expansion of the Nigerian economy.

    He said the move was in line with the 2015-2025 Capital Market Master Plan, stressing that the proposed demutualisation would promote efficiency in the creation and harnessing of capital, as well as creating liquidity in the market and adopting and strengthening corporate governance best practices.

    “It is anticipated that the demutualisation of the Nigerian Stock Exchange will reinforce the continuous growth and development of a dynamic, fair, transparent and efficient capital market and thus significantly contribute to Nigeria’s economic development,” Onyema said.

    Praising the courage and foresight of federal lawmakers, a Stockbroker and Managing Director, Centrepoint Investments Limited,   Emmanuel  Awure, said the bill, when functional, would result in an increased value of the NSE.

    He said the bill will enable the NSE to compete favourably in the global market, open the doors for significant investment into Nigeria and ultimately, enhance the nation’s capital market.

    Furthermore, he said: ‘’The demutualisation of the Exchange will bring the capital market at par with other international jurisdictions, result in enhanced governance, transparency and visibility whilst attracting strategic partners, investors and good quality issuers.”

    Ms Elizabeth Okolo of Capital Assets Limited Lagos, also congratulated both the Council and members of the NSE on the passage and urged President Buhari to expeditiously consider and sign the bill into law.

     

     

     

    She stressed that the demutualisation when implemented, would give the Exchange the ability to take a number of strengthening actions that will promote transparency and increase efficiency in its operations.

    “The demutualization holds a number of significant benefits for the Nigerian economy including augmentation of Nigeria’s debt profile, increase capital raising capabilities, capital support for government initiatives, attraction of foreign and local investors and assisting corporate and financial institutions to raise capital,” she added.

     

  • African youths decry poor access to agri-business loans

    African young agricultural entrepreneurs on Tuesday decried poor access to soft agricultural loans, which, according to them, was hampering the growth of their agri-businesses.

    They made this known at a session panel on the sidelines of the Africa youth event in the Rwandan capital Kigali, with the theme: “Youth Employment in Agriculture as a Solid Solution to Ending Hunger and Poverty in Africa.”

    Rwanda hosted the conference fromn August 20-21 with much emphasis on engaging African youths to take part in agricultural transformation on the continent through Information and Communication Technologies (ICT) and entrepreneurship.

    “Poor access to agricultural loans has become a big challenge to our agricultural businesses due to high interest bank rates and demands for collaterals from financial institutions,” the founder of Rwanda-based Gashora Farm Ltd, a chilli pepper processing company, Mr. Dieudonne Twahirwa, said.

    He called on African governments to allocate funds to support young people in agri-business in order to address challenges associated with access to bank loans.

    The two-day conference brought together participants from across Africa and beyond including representatives from governments, development partners, the private sector, youth and women organisations, civil society organisations, research and academia.

    According to the organisers, the high-level youth event also aimed to foster exchange among stakeholders on knowledge and best practices regarding the interfaces between agriculture, youth employment, entrepreneurship and ICT innovations.

    The Chairperson of the youth wing of Zimbabwe farmers union, Ruramiso Mashumba, said African youths are looking forward to starting agri-business ventures, but are let down by financial institutions that are reluctant to release money to finance farming ventures.

    “African governments should put in place a youth entrepreneurship policy to tackle challenges affecting young people who are creating jobs through agri-business enterprises”, he said.

    According to him, young entrepreneurs have limited capacity and quite often run short of money to improve their small businesses either in the agriculture sector or other sectors, resulting into business closure.

  • Ease of doing business: Cautious optimism over fresh reforms

    Nigeria has moved from 169 to 145 in the World Bank’s 2018 Ease of Doing Business Index. Encouraged by the 24-point jump, the highest in the history of the rankings, it is planning to move 45 steps up in the next two years, with the ultimate goal to hit the top 100 by 2020. But the real sector is sceptical about the realisation of this target, via intensified reforms, to make the business environment more conducive. Assistant Editor CHIKODI OKEREOCHA examines the sector’s fear.

    The Federal Government’s renewed push to move 45 steps upwards in the World Bank’s ‘Ease of Doing Business Index’ in the next two years is both timely and legitimate.

    The move, which seeks to haul Nigeria to the top 100 by 2020, came at a time real sector operators are screaming blue murder that various regulations and policies being implemented by the government are undermining the ease of doing business initiative.

    It also drew its legitimacy from the fact that Nigeria’s enormous opportunities and business potential due, in large part, to her population and abundant natural resources, have not translated to a better economic fortune as a result of the challenges to the ease of doing business. So, the aspiration, which harbours hopes of making the business environment more conducive and boosting Nigeria’s global competitiveness, was a welcome development.

    However, when the Senior Special Assistant to the President on Industry, Trade and Investment, Dr Jumoke Oduwole, spoke glowingly, almost convincingly, of the government’s plan, through reforms, to improve the country’s ranking by 45 places in the World Bank Ease of Doing Business Index in the next two years, it was received with measured optimism by real sector operators.

    Although the latest ambitious target, ultimately, hopes to propel Nigeria to the top 100 by 2020, many real sector operators are skeptical. Some of them argue, for instance, that while the new target is an impetus to the Executive Order on Ease of Doing Business earlier signed by Vice President Yemi Osinbajo, there is need to holistically address the plethora of challenges to the ease of doing business in the country beyond the confined prism of the executive order.

    In a bid to address some of the identified challenges to the ease of doing business, Osinbajo last year issued an Executive Order with the aim of creating an enabling environment for business and entrenching measures and strategies aimed at promoting transparency and efficiency.

    The executive order also sought to promote domestic and foreign investments, create employments and stimulate the economy. The initiative was also expected to promote made in Nigeria products and services by supporting local contents in public procurement by the Federal Government, and fast-track country’s transition to a non-oil economy.

    But the initiative has since come under intense scrutiny, with real sector operators pointing out, for instance, that their operations are hurting from multiple taxes and levies by government at all levels. They have been lamenting that the barrage of taxes and levies by various tiers of government, which came in the wake of the high revenue drive by the federal, state and local governments, is affecting their profitability.

    The Chairman of Manufacturers Association of Nigeria (MAN), Ikeja Branch, Otunba Francis Meshioye, put this in perspective when he said that the cost of the heavy tax regime propelled by the revenue drive by the three tiers of government was being borne principally by businesses, adding that it was threatening the manufacturing sector’s survival.

    Meshioye, who spoke at a breakfast meeting for MDs/CEOs organised by the branch in Lagos, recently, said the uncertainty arising from regulatory burden and complexities in government’s tax drive were undermining the manufacturing sector’s ability to successfully launch new businesses, expand existing ones, and create jobs.

    At the meeting with the theme, “The Impact of Legislation, Regulations and Policies on the Ease of Doing Business in Nigeria,” Meshioye lamented that these negate the objectives of the ease of doing business initiative and other reactionary interventions by the federal and state governments.

    However, the heavy tax burden is not operators’ only grouse. The Founder and Senior Partner of Paul Usoro & Co, Mr. Paul Usoro (SAN), also said lack of synergy among various government Ministries, Departments and Agencies (MDAs) was not helping matters and may hurt the realisation of the new target.

    The expert in Communication Law added that decrepit infrastructure, particularly, inefficient power supply remains clog in the wheel of progress. He said, for instance, that power supply in Nigeria still falls short of the megawatts required to power the economy.

    He said while the country reportedly generates about 7, 000 megawatts, this falls short of the required 10, 000 MW as envisioned in the Economic Reforms and Governance Project, which seeks to improve government’s economic and financial management systems and processes.

    As if lack of access to steady and reliable electricity to real sector operators was not bad enough, the unpredictability or lack of continuity of government policies, freeze in the lending activities of banks, lack of maintenance culture and macro-economic instability, among others, are raising the blood pressure of operators.

    For instance, many manufacturers have been agonizing over the high inflation, interest and exchange rates. For instance, many of them are unable to sustain or expand production at the prevailing interest rate of between 20 -27 per cent, depending on the borrower’s perceived risk level.

    As Usoro and indeed, other operators observed, the major source of capital for businesses in Nigeria still remains bank loans, which come at high interest rates. Inflation and exchange rate have also been trending upwards to the chagrin of real sector operators especially the Medium, Small and Micro Enterprises (MSMEs).

    The fear is that with the afore-mentioned issues largely unaddressed, the fresh target to improve the country’s ranking by 45 places over the next two years may not be realised.

    While admitting that in setting the new target, government drew its strength from Nigeria’s ranking for 2018, which placed it at 145th position out of 190 countries, with the nation moving up by 24 points from the 169th position on the 2017 ranking, they argue that there is need to first address these issues.

    Indeed, Nigeria’s rise by 24 places from 169 to 145 in the World Bank’s 2018 Ease of Doing Business Index was her highest jump in the history of the rankings, which provide a global snapshot of a country’s business environment in comparison to its peers.

    The feat is said to be fallout of the work of the PEBEC, which is the administration’s flagship initiative to reform the business environment, attract investment and diversify the economy. The council’s principal goal is to make it easier for MSMEs to do business, grow and contribute to sustainable economic activity, and create jobs.

    PEBEC was inaugurated in July 2016 and chaired by Osibanjo. Its reforms as well and the signing of the Executive Order on ease of doing business last year are said to earned Nigeria the rise by 24 places on the ease of doing business ladder.

    It was against this backdrop that Oduwole, said “All of the reforms introduced over the past 24 months are reversing decades of neglect and internal governance roadblocks, and improving Nigeria’s business environment.”

    The PEBEC scribe, who spoke after the Council’s recent meeting where it presented its “2018 Making Business Work Report,” however, said the ambitious target requires accelerated and focused execution of government Executive Order and National Action Plans (NAP).

    Although Oduwole, who doubles as Secretary of PEBEC, announced that the PEBEC will continue to work closely with the public and private sectors to institutionalise its reforms, cascade them to state level, and refine and improve the business environment,” real sector operators appear not particularly swayed.

    Not a few operators especially manufacturers have kicked their heels in, insisting that one of the critical starting points to achieving the new target and making the business environment friendly should be the immediate harmonisation of taxes and levies by the three tiers of government.

    They also argued that the nation’s decrepit infrastructure must be fixed to unleash the potentials of the productive sector if the target must be achieved. They also pointed out that the concerns of operators earlier mentioned must be holistically addressed.

     

    PEBEC promises

    fresh reforms

    To boost the confidence of real sector operators and other stakeholders in the Federal Government’s push to move to the top of the rankings, Oduwole said the government would introduce an omnibus bill on business facilitation in the second half of this year and early 2019.

    The Council, she added, will consolidate gains for the economy through the deepening of the sub-national ease of doing business project. She also said the government was putting measures in place with the aim of making the reforms sustainable, as well as provide support reforms with a robust operating model to accelerate change and build capacity within the MDAs.

    On operators’ outcry over lack of synergy among MDAs, Oduwole said: “The Council is also fostering cooperation between the MDAs and across states, the National Assembly and the private sector; ensuring effective coordination among all the relevant agencies to provide a unified view of implications and improvements; and ensuring proper planning to eliminate the critical binding constraints.”

    The PEBEC secretary stated that Nigeria has come a long way over the past two years, bouncing back from significant macro-economic distress, and is on the way to becoming a textbook example of how an African country can turn its business.

    According to the “2018 Making Business Work Report” presented by Oduwole, the current reform cycle is focused on three pillars to accelerate and expand the impact of completed reforms.

    The first one is deepening  existing reforms through the completion of pending initiatives and ensuring implementation of completed reforms launched last year, including communication and consequence management.

    The second is making the reforms sustainable through several measures being put in place to ensure progress is sustainable, while the third is providing support reforms with a robust operating model to accelerate change and build capacity within MDAs.

     

    PEBEC’s reforms

    The PEBEC on February 21, last year approved a 60-Day National Action Plan, an inter-ministerial and inter-governmental plan drawn by the Enabling Business Environment Secretariat (EBES) for implementation by various MDAs.

    The EBES was set up in 2016 with the mandate to implement the reform agenda of the PEBEC. The EBES identified six broad challenges affecting the ease of doing business in Nigeria, all of which were to be addressed within the 60 days implementation timeframe.

    According to the “2018 Making Business Work Report,” in 2017 the PEBEC through EBES implemented the first 60-day NAP that contained reforms across seven World Bank indicators and one home-grown indicator.

    The indicators include Starting a Business; Registering Property; Dealing with Construction Permits; Getting Credit; Getting Electricity; Paying Taxes; Trading Across Borders; and Entry and Exit of People.

    Although The Nation learnt that the Council’s reforms have, indeed, yielded positive results, the consensus of operators is that consolidating the reforms and achieving the new target require that the government must muster the political will to match words with action by addressing the challenges facing the real sector.

  • Mining ministry accesses N15b intervention fund

    The Ministry of Mines and Steel Development has accessed N15 billion from the N30 billion Mining Intervention Fund, the Minister of State, Mines and Steel Development, Alhaji Abubakar Bwari, has said.

    The Federal Executive Council (FEC) in November 2016 approved N30 billion intervention fund for mining exploration.

    Speaking in Abuja, Bwari said the fund was drawn from the Natural Resource Development Fund and given to the ministry as intervention fund to focus on exploration, which were the heart of mining.

    He explained that the natural resource fund was meant primarily for the agriculture, mining and water resources sectors.

    Bwari further said the N30 billion was meant to focus on exploration of minerals and other activities in the sector. He said with the release of the fund, the ministry would be awarding N14 billion contract for exploration of strategic minerals.

    The Minister also stated that the ministry will be awarding another contract to cover minerals such as triphat and Phosphate among others that were not on the list of minerals that are currently being explored.

    According to him, the ministry will also look at the possibility of Nigeria using its huge phosphate mineral deposits for fertilier to boost agricultural products.

    The minister of state said that exploration would be conducted on the mineral to ascertain its quantity.

     

  • Minister: why we’re committed to transport sector’s growth

    The Federal Government remains committed to enhancing the transportation sector’s capacity because of its contribution to the nation’s Gross Domestic Product (GDP), Transpor-tation Minister Rotimi Amaechi has said.

    The Minister spoke at a workshop organised by the Science, Energy and Technology Committee of the Lagos Chamber of Commerce and Industry (LCCI) in Lagos.

    The workshop was themed: “Capacity Building in the transportation industry vis-a-via the maritime, railway and aviation sub-sectors”.

    Amaechi said the government would continue to provide the needed support in the areas of investment, training and policies that would boost the growth of the sector.

    Represented by the Executive Director, Maritime and Operations, Nigerian Ports Authority, Dr. Sokonte Davies, Amaechi said the transport sector was key to the sustenance of the nation’s socio-economic development.

    He said: “In this regard, this administration places a huge premium on the revival of the transport sector in its entirety through the rehabilitation of existing transport infrastructure and the provision of new ones.

    “We are also committed to ensuring capacity building while finding ways to improve the financial capabilities of the citizenry.”

    According to the Minister, the contribution of the transport sector to the GDP, which is only 1.41 per cent, was low and unacceptable.

    He said there was an urgent need to exploit untapped opportunities that abound within the sector towards improving its contribution to the national economy.

    Amaechi said: “This administration is determined to fully exploit the potential of the transportation sector and would pursue the enactment of laws that would open up the sector to new investments and economic prosperity.”

    He said the government was determined to revamp the railway sector with a view to enhancing national integration by encouraging mass transit of passengers and goods across the geographical regions of the country.

    The Minister, therefore, urged the private sector to deepen its partnership with government towards improving infrastructure and capacity in the nation’s transportation sector.

    The Managing Director, Nigeria Railway Corporation, Mr. Fidel Okhira, said the Corporation has adequate capacity and manpower to lift the sector.

    According to him, the railway transports over 18000 passengers daily. He advised that if the tempo of investment was sustained with adequate funding on a long term basis in the next 25 years, the sector will attract huge investment from the private sector.

    Nigeria Airspace Management Agency (NAMA) Managing Director, Captain Fola Akinkuotu, said the sector contributes $8.2 billion to the GDP.

    He said in 10 years, the passenger traffic would grow by seven per cent. He, however, called for a systematic overhaul of the system with modern navigational infrastructure.

    The Lagos State Commissioner for Transportation, Ladi Lawanson, said the state would proffer the required solutions to the perennial traffic challenges, improve connectivity of bus and better waterways transport.

    He, however, regretted that the state has no control over tank farms that constitute the transportation challenge in the state.

    Speaking on the Apapa articulated trucks-induced traffic gridlock, the Commissioner said  efforts with other stakeholders, especially the Federal Government and the Nigerian Ports Authority, was the solution.

    Lawanson called for innovation in the sector, noting that it remained the way forward. He  stressed that the state was poised to take advantage of its natural resources to boost the sector.

    He said the state was working on building a truck Terminal Park at Ijora that would take between 5000- 10,000 trailers and work with relevant agencies to ensure the success of the call-up system.

    The President of LCCI, Babatunde Ruwase, said the theme of the workshop was germane at this critical stage of the economy, and with the role of transportation to promote economic development.

    Ruwase said: “When the sector is vibrant, it provides economic and social opportunities with benefits that result in positive multiplier effects on the entire economy.”

    He said that it was necessary to provide an enabling environment with appropriate policy and legal frameworks, institutional and human resources development to increase the efficiency and social impact of transport sector.

    LCCI Science, Energy and Technology Committee Chairperson, Dr Joan Maduka, said the transport sector is the backbone of any economy, especially as economic opportunities had been related to mobility of people, goods and information.

    Maduka said: “The development of this sector through capacity building is critical and essential for the nation to enhance quality of life, stimulate wealth or assert its competitive edge in the global arena.”