The Nation Newspaper

Category: Industry

  • ‘How Jumia is sustaining jobs’

    ‘How Jumia is sustaining jobs’

     

     

    One of the major fallouts of the COVID-19 pandemic is the massive restriction of human and vehicular movements in the most affected countries of the world.

    Governments, to contain the spread of the disease, have enacted various laws that affect, not only movements, but also most economic activities in their areas of jurisdiction, leading to what is now ubiquitously referred to as the lockdown.

    In Lagos State, for instance, when Governor Babajide Sanwo-Olu initially announced a series of restrictions, including the closure of markets and stores around the state at the escalation of the number of confirmed cases of the disease in the state, people went into a frenzy.

    Many of them besieged the markets and supermarkets to stock up  with products they think would be needed over the period the order was to subsist. The governor’s order that exempted those shops and markets that sell foodstuffs, medicines, water and other essential commodities did not deter the impulsive buyers.

    This led to various outcomes including increase in prices of items, hoarding and scarcity of food items. Then came President Muhammadu Buhari’s address reinforcing the governor’s order, and  even expanded both the restriction and its enforcement.

    The concept of lockdown and the experiences of other countries that had earlier implemented such measures, made Nigerians very apprehensive of the state of affairs in the period the order would be in effect.

    How would they buy their personal and household needs – food, water, medicines, petroleum products and other essential commodities during the period of the lockdown? How would people in the country, especially day-pay earners and small-scale business owners survive during this period?

    Being at home could be very boring and challenging for the average Lagosians whose lives have always been mobile – various scenerios, meeting various people, various menus from assorted caterers, et cetera and the excitement such variety brought.

    For instance, a senior civil servant resident in Lagos, but who asked not to be identified, recalled that for more than one week, people were subjected to one scene – the home food from one caterer – the wife.

    The civil servant said: “Most of us are adopting many suggestions on how to cope with the new realities that come with the lockdown, daily indoor exercises and so on and so forth.

    “Recently, I stumbled on one reality. Looking out from my window, I noticed a heavy presence of delivery men on the roads as they moved around the town delivering peoples’ orders – food, medicines, water and other essential goods.

    “I quickly did some google search and found out that most of the e-commerce operators are very much in operation and that I could order for my needs and have them delivered to my house even in this period of lockdown.

    Read Also: Abia relaxes lockdown for Easter celebration

     

    “I found out that Jumia Nigeria, for example, was not only in full operation, but has even expanded its scope of operations in order to satisfy its customers during the period of the lockdown.

    Jumia’s customers can log on to its platform and do all the shopping they needed, including food, medicines, water and other essential goods, pay for them and have them delivered to their doorsteps using a contactless approach, all in the comfort of their homes.

    “I called on other members of my family and we logged on to the Jumia food App and placed orders for our individual favourites away from the home cook which was becoming routine – main dishes and desserts and made the payment online.

    About one hour later, I heard a knock on my gate and it was a box containing our orders and the delivery man, standing about three meters away.”

    She said the delivery man explained that the distance was in compliance with the social distancing rule by the Nigeria Centre for Diseases Control (NCDC).

    “From the way my family members relished their meals that day, it was obvious everyone was tired of the home dishes that we all used to look forward to. Variety is the spice of life, they say,” she said.

    According her, the experience also exposed her to another reality – how Jumia and, maybe, other e-commerce platforms, are assisting owners of Micro, Small and Medium Enterprises (MSMEs) stay afloat in this period of the lockdown – running their businesses and providing for their families by doing so.

    The civil servant added that another reality was how the operations of the online platforms provide sustenance to the citizens doing daily paid jobs. Most of the delivery men are paid daily and would have lost out on providing for themselves and their families, were it not for the operations of Jumia and its likes.

    According to her, the operations of the online trading companies and their logistics partners are one of the major reasons Nigerians are not feeling the negative impacts of the lockdown like their contemporaries from most other countries of the world.

    “It would be a reason some MSMEs may not record much losses as a result of the lockdown,” she added.

     

  • SON: combatting COVID-19 with standards

    SON: combatting COVID-19 with standards

    The Standards Organisation of Nigeria (SON) has joined the fight against the coronavirus pandemic. The stadndards body is deploying 29 free international standards on essential products, writes Franca Ochigbo.

     

     

    The Standards Organisation of Nigeria (SON) is supporting the manufacturing and importation of essential materials to combat the challenges of COVID-19 through the deployment of 28 relevant international Standards from the International Organisation for Standardisation (ISO) and one from the African Organisation for Standardisation (ARSO) on alcohol-based hand sanitisers.

    According to a statement from the office of the Director-General, SON, Osita Aboloma, the deployment of the standards is to meet emergency needs occasioned by COVID-19 globally while the process for the adoption would continue unhindered in spite of the lockdown.

    The standards, which are being provided free to local manufacturers, are being made available to the National Committee on Sustainable Production and Delivery of Essential Commodities during the COVID-19 Pandemic of which SON is a member. This is to guide local manufacturers as well as provide a benchmark for adjudging all imported products in the category during the pandemic.

    The statement disclosed that SON has received free, unlimited usage of the ISO web conferencing system (Zoom) for national standards development work only.

    “With this offer, Nigeria as an eligible member will be assigned a Zoom account for developing countries, which we can share with our Technical Committee (TC) members and experts, creating the equivalent of a “virtual conference room” at the national level, the statement clarified.

    Aboloma said further that with this, Nigeria’s TC meetings could continue largely, while its stakeholders and experts keep safe in this time of bans on gatherings and travels.

    The SON chief called on TC members across the nation to expect invitations from the Secretariat for participation in the consideration and adoption of several international standards from ISO resources to support global efforts in dealing with the COVID-19 crisis.

    He listed some of the international standards compiled by ISO to support global efforts in dealing with the COVID-19 crisis as follows:

    • ISO 374-5:2016 Protective gloves against dangerous chemicals and micro-organisms – Part 5: Terminology and performance requirements for micro-organisms risk.
    • ISO 10651-3:1997 Lung ventilators for medical use – Part 3: Particular requirements for emergency and transport ventilators.
    • ISO 10651-5:2006 Lung ventilators for medical use – Particular requirements for basic safety and essential performance – Part 5: Gas-powered emergency resuscitators.
    • ISO 13688:2013 Protective clothing – General requirements.
    • ISO 17510:2015 Medical devices – Sleep apnoea breathing therapy – Masks and application accessories.
    • ISO 19223:2019 Lung ventilators and related equipment -Vocabulary and semantics.
    • ISO 22301:2019 Security and resilience – Business continuity management systems – Requirements.

    ¶ISO 5356-1:2015 Anaesthetic and respiratory equipment – Conical connectors – Part 1: Cones and sockets.

    • ISO 80601-2-12: 2020 Medical electrical equipment – Part 2-12: Particular requirements for basic safety and essential performance of critical care ventilators.
    • ISO 80601-2-80: 2018 Medical electrical equipment – Part 2-80: Particular requirements for basic safety and essential performance of ventilatory support equipment for ventilatory insufficiency.

    The SON Chief Executive stated that the TC would also considered the adoption of a French National Standard “AFNOR SPEC S76-001 Barrier Masks – Guide to minimum requirements, methods of testing,  making and use” to provide necessary quality guidance for mass production of face masks in the country especially by Micro, Small and Medium Enterprises (MSMEs).

    Aboloma commended the past efforts of members of various National Technical and Mirror Committees in ensuring development, adoption, adaption and review of market driven standards for use in the counry.

    According to him, their patriotic efforts have helped in great measure to promote the competitiveness of Made-in-Nigeria products  locally and for export, safety of consumers and steady growth of the economy.

  • Covid-19: Fresh impetus to walk the diversification talk

    Covid-19: Fresh impetus to walk the diversification talk

    The Covid-19 pandemic has given rise to challenges and opportunities. It has inflicted incalculable damage on the world economy, including Nigeria’s. But, it has also brought to the fore the vulnerability of Nigeria’s oil-dependent economy to global shocks, thus throwing up an opportunity for relevant authorities working with operators in various sectors to rev up the ongoing diversification drive. Assistant Editor CHIKODI OKEREOCHA reports.

     

    Despite the unprecedented disruption in business, economic and financial activities by the Covid-19 pandemic, one reassuring thing is, perhaps, that all the stakeholders in the economy are on the same page on the urgent need to take advantage of the crisis to diversify the economy.

    Stakeholders, including economic managers, operators in various sectors and Nigerians agree that the ravaging coronavirus has, inadvertently, opened a fresh window of opportunity for Nigeria to once again vigorously pursue economic diversification.

    The Covid-19 outbreak has dealt a severe blow to the global economy, including Nigeria’s, with experts and industry operators warning that if the pandemic is not brought under control, at least in the near term, the economy might slip into another recession. But to those pushing the diversification option, it is the tonic to ward off an impending recession.

    It is also the assured route to wean the economy from its over-dependence on oil and gas and shield it from vulnerability to global shocks. That the oil price has, in recent times, been trading below the budget benchmark of $57 per barrel in the international market has re-enforced the position that diversification is the way to go.

    Aliko Dangote
    Aliko Dangote

    For instance, Benchmark crude oil rose 48 cents to close at $24.49 per barrel on Wednesday, last week. Brent crude, the international standard, rose 24 cents to $27.39 per barrel. With oil price falling below $30 per barrel, last week, the sharp drop in revenue could cause significant dislocations in the 2020 budget.

    The dislocations are already manifesting. For instance, the Federal Government, on Wednesday, last week proposed a slash of the oil benchmark from $57 to $30 per barrel in the 2020 budget, with Minister of Finance Zainab Ahmed citing unstable price of oil in the wake of the coronavirus pandemic as reason.

    The dramatic dip in oil price is not entirely caused by the pandemic though. Oil prices have been hit hard due to a drastic cut in global oil consumption, compounded by the ongoing price war between Saudi Arabia and Russia.

    The price war said to have been triggered by Saudi Arabia, the largest crude oil exporter, according to the Director-General of Lagos Chamber Of Commerce and Industry (LCCI), Dr. Muda Yusuf, portends ominous signs for the economy. This, he said, is on the back of the collapse of the OPEC-Russia alliance, with Saudi Arabia offering significant discounts to its customers and also increasing output.

    Yusuf said the revenue effect of the coronavirus, which is related to the drop in oil price, is unsettling, because oil revenue  accounts for between 50 per cent and 85 per cent of government’s revenue and foreign exchange earnings. This means that a drastic reduction in government’s revenue is inevitable in the near time.

    “This has implications for the level of fiscal deficit in the budget, budget implementation will be constrained, infrastructure financing will be affected, borrowing may increase, and the capacity to fund capital project will be severely constricted. With this scenario, the outlook for oil dependent economies (Nigeria inclusive) looks rather gloomy,” he said.

    The effects of the crisis on foreign reserves are no less unsavoury. Oil revenue is the major driver of accretion to the foreign reserves. Yusuf said the slump in oil price and the adverse expectations would put fresh pressures on the reserves, which is at all-time low of $36.2 billion as at  March 3.

    He listed some of the obvious implications of the low accretion to this fiscal buffer to include weakening of investors’ confidence, generation of speculative pressures on the currency, likely depreciation of the naira exchange rate, heightened inflationary pressures on the back of currency weakening.

    For a country already grappling with challenges of weak revenue performance and an erosion of her fiscal buffers, other possible implications of the situation include likely increase in production and operating costs for businesses, weakening of purchasing power with adverse implications for the welfare of the citizens.

     

    How Nigeria shot itself in the foot

    The preponderance of opinion is that the revenue effect of the Covid-19 pandemic, which is related to the drop in oil price, would not be this devastating if successive administrations had pursued diversification with vigour.

    The belief is that there is nothing abnormal in the rise and fall of oil prices; prices are expected to move up and come down in any normal market. In other words, Nigeria lacks control over oil price, which is internationally determined by market forces.

    However, experts and stakeholders argue that the colossal management failure of the economic mangers and gross negligence of the ruling class prevented the country from anticipating issues that will drive oil prices up or down.

    Now, the chickens have come home to roost. The consensus is that Nigeria shot herself in the foot by not taking advantage of periods of high oil prices in the past by applying the nation’s oil wealth to the provision of infrastructure to support high growth non-oil sectors such as manufacturing and agriculture and diversify the economy.

    Indeed, since the discovery of oil in commercial quantity in 1956, successive governments have failed to invest the oil revenue windfall to close the huge infrastructure gap and also diversify the economy.

    If the nation’s earnings from oil had been invested in critical infrastructure such as steady and reliable electricity supply, the economy and Nigerians would have been reaping the benefits now that oil prices have tumbled in the wake of the coronavirus outbreak.

     

    The case for diversification

    According to experts at PricewaterhouseCoopers (PwC Nigeria), oil & gas jobs account for less than one per cent of total employment and the young population can no longer be absorbed by the sector.

    The experts said apart from the need to insulate the economy from the risk of being vulnerable to a single commodity, job creation was another core reason Nigeria needed to pursue diversification.

    The consulting firm identified the real sector as one of the priority sectors that Nigeria should target for diversification, apparently because of its job creation potential and dominant transmission link to the economy.

    However, a combination of inadequate infrastructure, particularly electricity supply, and the nation’s challenging fiscal and monetary policy environment have continued to weaken the real sector’s capacity to stimulate diversification and create jobs.

    Read Also: Ekiti confirms second coronavirus case

     

    Had the Federal Government summoned the political will and vigorously pursued economic diversification after the economy’s exit from the last recession, the real sector would have been sufficiently galvanised to help mitigated the impacts of the current slump in oil prices.

    Recall that diversification became the government’s buzzword after the economy was first hit by a debilitating recession, following a sharp slump in oil prices at the international market, which started mid-June 2014.

    From over $120 per barrel in December 2013, oil price fell to around $60 per barrel in December 2014. It later crashed to as low as $28 per barrel, the lowest in 12 years.

    This set off a major crisis in Nigeria’s finances, which later forced the country into a recession. The economy managed to exit recession in 2017, but it has yet to recover fully. Her over-dependence on oil revenue has not continued to weaken the economy but, made it vulnerable to global shocks.

    However,despite the emphasis on leveraging the non-oil export sector particularly the real sector to diversify the economy, earn foreign exchange and create jobs, the implementation of the diversification agenda has continued to lack steam. Relevant government agencies have failed to improve the quality of export products. The decrepit infrastructure has not been fixed.

     

    The sunny side of Covid-19

    Despite the outcry over the impacts of the Covid-19 outbreak on the local economy, experts and key stakeholders believe that the crisis has again underscored the need to prioritise diversification. “The crisis has given rise to both challenges and opportunities …,” says Partner at KPMG, Mr. Ajibola Olomola.

    The import of Olomola’s assertion is not lost on the authorities, which appears poised to grab the opportunity thrown up by the crisis to renew the push for economic diversification. For instance, the Central Bank of Nigeria (CBN) said it was considering adding sanitisers to the list of products on foreign exchange restriction.

    Making this known at a consultative roundtable meeting organised by the CBN in Abuja, a fortnight ago, with the theme “Going for Growth 2.0,” the CBN Governor, Mr. Godwin Emefiele, said Nigeria must take advantage of the crisis created by coronavirus to diversify its economy.

    He wondered why Nigerians do not patronise made-in-Nigeria sanitisers, and urged owners of patent outlets and pharmacies to buy such products being produced in the country.

    “Giving the impact of coronavirus, I heard some countries are trying to ban export of some pharmaceutical products. We must look inward at this time. CBN is also working to support the pharmacy and pharmacology industry,” Emefiele said.

    He stated that the country’s reliance on proceeds from crude oil since the 1970s had become a problem hence something must be done to change the trend.

    Africa’s richest man President, Dangote Group, Alhaji Aliko Dangote, could not agree less. He said: “The crash in oil price has become very important for us to have a solution and the solution is by diversification of the economy.

    “There are two ways to diversify the economy, which can be driven through agriculture and manufacturing. However, to achieve inclusive growth, there must either be backward integration or import substitution.”

    Dangote described as disturbing the fact that Nigeria cannot produce what it consumes. “Only in 2019, our exports were about $42 billion, which is not sustainable and we cannot continue like this. To have a population of 200 million and grow at 2.7 per cent cannot be sustained,” he said.

    The billionaire businessman, who spoke at the CBN consultative roundtable meeting, echoed the collection position of Nigerians and operators in various sectors when he said: “We have been singing about diversification, but we haven’t done anything yet. We need to make our country a producing country and act now.”

    According to Dangote, one area government needs to look at is the cost of doing business, which is too high. “Government must look at improving power supply and infrastructure because these are the areas that will boost the Small and Medium Enterprises (SME).

    “It is impossible to diversify without taking consideration of certain things, including interest rate, long-term funds and the support by the CBN to create enabling the environment,” he added.

    Will the government muster the political will to address the afore-mentioned issues, which, according to Dangote and, indeed, other industry operators, are key to the successful implementation of the ongoing diversification programme?

    While answer to this remains a conjecture, what is however, clear is that diversification is the only way to go not only to avert another recession staring the economy and Nigerians, in the fact, but also insulate the economy from distortions that may arise in the future when oil prices slump at the international market.

  • Women entrepreneurs hold their own despite odds

    Women entrepreneurs hold their own despite odds

    Women account for 41 per cent ownership of micro-businesses in the country, with 23 million female entrepreneurs operating within that segment. This, according to PricewaterhouseCoopers’ (PwC Nigeria’s) latest report, places Nigeria among the highest entrepreneurship rates globally. The report, which analysed women’s participation and representation in the private and public sectors, however, said on average, the country has not improved in closing the gender equality gap. Assistant Editor CHIKODI OKEREOCHA reports.

     

    It wasn’t by chance that the fifth Nigeria Manufacturing and Equipment Expo (NME) co-located with the Sixth Nigeria Raw Materials Expo (NiRAM) held in Lagos, last week, dedicated a session to “Women in manufacturing.” It was in recognition of the growing influence of  women entrepreneurs and their contributions to development.

    This year’s edition of the NME/NIRAM Expo with the theme “The Fourth Industrial Revolution and the Nigerian Manufacturing sector” was organised by the Manufacturers Association of Nigeria (MAN), in collaboration with Raw Materials Research and Development Council (RMRDC).

    The expo was a platform for manufacturers to source raw materials and also benefit from Research and Development (R&D) breakthroughs. It also allowed stakeholders in the manufacturing sector to critically discuss how to tap into the opportunities presented by the fourth industrial revolution.

    However, a significant session of the expo was on “Women in Manufacturing,” which, according to MAN President Mansur Ahmed, afforded amazons the opportunity to share their experiences with intending women manufacturers who are prospecting to venture into the sector, but have reservations on their expectation.

    Although the special session was chaired by  Chief Executive Officer of Sokoa Chair Centre Limited, Mrs. Ibukun Awosika, other women manufacturers were on hand to share their experiences and exploits in various sectors of the economy.

    Stella Okoli
    Stella Okoli

    While the session, undoubtedly, underscored the fact that Nigerian women entrepreneurs have come of age and have shown incredible capacity to hold their own in the world of business, latest report by PricewaterhouseCoopers (PwC Nigeria) may have brought to the fore the need to close the gender gap to unleash the immense potential of women entrepreneurs to further contribute to development.

    In its report entitled: Impact of Women on Nigeria’s economy, PriceWaterhouse said that Nigerian women account for 41 per cent ownership of micro-businesses, with 23 million female entrepreneurs within that segment.

    The report, which was released last week and made available to The Nation, said this placed Nigeria among the highest entrepreneurship rates globally. But, it was, however, quick to add that, on average, the country had not improved in closing the gender equality gap.

    For instance, Nigeria, according to the report, ranked 128th out of 153 countries and 27th out of 53 countries in Africa, on the World Bank’s Global Gender Gap Index 2020 – which implies that the country still has a long way to go in attaining gender equality and equal representation for women.

    Chief Economist & Partner, West Africa Financial Services Leader, PwC, Dr. Andrew S. Nevin, said the Impact of Women on Nigeria’s economy was the first of two reports highlighting the impact of women on Nigeria’s economic development in March – being the Women’s Month.

    March 8 yearly is celebrated globally as International Women’s Day (IWD). It celebrates the social, economic, cultural and political achievements of women – while also making a call to action for accelerating gender equality.

    Nevin said PwC, in the first paper, assessed the impact of women on Nigeria’s economic development through analysis of women’s participation and representation in the private and public sectors. The second paper will explore the barriers and challenges women face in the formal services sector with emphasis on ICT, financial services and higher education.

    Describing the entrepreneurial spirit of Nigerian women entrepreneurs as strong, Nevin, who is lead author of the publication, said Nigerian women entrepreneurs account for 41 per cent ownership of micro-businesses in the country, with 23 million female entrepreneurs operating within this segment.

    He, however, said the high-level participation of female entrepreneurs was driven mainly by necessity, which is the norm in emerging markets where there is insufficient formal employment.

    “Necessity-driven entrepreneurs are those who are pushed into starting businesses because they have no other source of income. Consequently, despite the high-level of female entrepreneurs relative to most countries, there are challenges and barriers in the country that limit women from scaling-up their businesses,” Nevin explained.

    He said in the formal sector, very important results are emerging. “At the lower levels in formal employment there is almost an even 50-50 split in the workplace between men and women. However, as both sexes climb up the corporate ladder, women begin to decline in representation on the senior leadership teams and at the board level.

    “As a result, women own only 20 per cent of enterprises in the formal sector in Nigeria. Furthermore, only about 12 per cent of directors on corporate Boards of Directors are women. And taken all together, at the rate Nigeria is changing on these critical dimensions, the Nigerian gender gap in the economy will only close in about 100 years.”

    Given more details, the report said over the past decade, the share of female in the total employment figure for Nigeria has marginally increased. Last year, for instance, about 51 per cent of females were employed among the total female labour force, compared to 59.8 per cent of males (as a proportion of the total male labour force).

    It, however, pointed out that the participation of females in the services-oriented sectors, such as transport, education and medical services, was a major factor driving the marginal growth of females in the active labour force.

    Assessing women’s participation and representation in the private sector, the report, co-authored by Economist/Manager for PwC Nigeria, Omomia Omosomi, stated that female board members made up 19 per cent of the total board composition across the various sectors listed on the Stock Exchange.

    Among the 11 sectors analysed, the report said construction, industrial goods and consumer goods sectors had the highest representation of female board members, with 24 per cent, 22 per cent and 20 per cent.

    “In absolute terms, the financial services sector accounted for the highest number of female board members (81 in total) compared to the other sectors,” it added.

    Also, female management team members made up 23 per cent of the total board member composition across the various sectors listed on the Stock Exchange. The conglomerate, financial services and construction sectors had the largest composition of female board members with 27 per cent, 25 per cent and 25per cent. Across all the sectors, the representation of women increased from 2016 to 2019. The largest increase of 19 per cent was in the construction sector, from five per cent in 2016 to 24 per cent in 2019.

    Overall, the growth of women on boards increased by 41 per cent, from 160 in 2016 to 226 in 2019.The report said African countries are taking small strides to achieve gender equality in the boardroom, as the average across African countries for representation of women on the board of directors is 25 per cent.

    At 24.6 per cent, South Africa has the highest percentage of women on its board of directors, due to policies in place for companies to achieve a certain target of women on boards. Nigeria’s was 19 per cent, while Egypt was seven per cent.

    Going by the report, Nigeria also has a lot of work to do with regards to women’s participation in the public sector. For instance, the report, which benchmarked Nigeria against four selected  African countries namely, Rwanda, South Africa, Ethiopia and Sudan, said Nigeria has the lowest representation of women on the executive cabinet.

    For instance, while Nigerian women account for only 11 per cent of cabinet ministers, Rwandan women account for 65 per cent; South Africa, 50 per cent; Ethiopia, 50 per cent; Sudanese women account for 28 per cent of ministers in the country’s executive cabinet.

    Nigeria also has the lowest representation of women in the lower House of Assembly, with women accounting for only six per cent of the 359 seats in the House of Representatives, for instance. In Rwanda, the lower house comprises 80 seats with women representing 61 per cent of the total elected representatives.

    South Africa’s House of Representatives holds 393 seats with women accounting for about 43per cent, while Ethiopia accounts for 547 seats in the lower house, with 39 per cent of elected female representatives. In Sudan, the lower house comprises 488 seats with 28 per cent of women represented.

     

    Nigeria on gender gap index

    PwC said Nigeria has remained within the 100th and 130th position out of 153 countries, over the last 10 years (2010-2019), reflecting low level of gender equality compared to peers. “By 2019, the country ranked 128th in the world and 27th in Africa out of 153 countries (and 53 in Africa) surveyed. It is expected that the overall global gender gap will close in 99.5 years,” the report said.

    The report, however, stated that Nigeria has had varied performance across the various sub-indexes: education, economic opportunity, politics and health. It added: “While Nigeria has done well in bridging the gender gap in economic participation and opportunity, her performance in political empowerment has been very low – only three per cent of the gender gap has been closed in this area.”

    Although there are many gender-mandated regulations in Nigeria to help close the gender gap, especially in economic participation, enforcing such regulations remained a challenge. For instance, the Central Bank of Nigeria (CBN) mandates a minimum of 30 per cent of females on boards of Nigerian commercial banks.

    Also, the guideline for the Micro, Small and Medium Enterprises (MSMEs) Development Fund mandates that 60 per cent of the loans be given to women, just as the National Financial Inclusion strategy recommends increasing female staff members of microfinance banks to 30 per cent.

    Similarly, the Securities and Exchange Commission (SEC) Code only recommends that publicly listed companies consider gender when selecting board members, but does not have any specific gender based rule or regulation.

    Also, the Nigerian Code of Corporate Governance (CCG) by the Financial Reporting Council (FRC) encourages corporate boards to set diversity goals and be mindful of them when filling board vacancies.Unfortunately, there is no enforcement of such regulations.

    For instance, despite CBN’s mandated regulation for the banking industry, stating that there should be at least 30 per cent of women on the board, the PwC report said only 30.7 per cent of banks adhere to the instruction; 69.3 per cent of commercial banks have not met the CBN regulation.

    Citing the World Economic Forum (WEF) Global Gender Gap 2020 report, the Managing Partner, Prosperar Consulting, Ms. Modupe Ladipo, said globally, the average gender gap score is at 68.6 per cent, which means there is still a 31.4 per cent average gender gap that remains to be closed globally.”

    Political Empowerment has the largest gender disparity, with a score of 24.7 per cent; Economic Participation and Opportunity – has the second largest gender disparity, with a score of 57.8 per cent; Health and Survival  –  gender gap score of 95.7 per cent and Educational Attainment  – gender gap score of 96.1 per cent,” she said.

    Also, citing McKinsey Global Institute Report on the ‘Power of Parity’, Ladipo said women represent 50 per cent of the global population and closing the gender labour gap could add $28 trillion, or 26 per cent, to yearly global Gross Domestic Product (GDP) by 2025.

  • Reclaiming Nigeria’s status as mining hub

    Reclaiming Nigeria’s status as mining hub

    The mining sector, in its heydays, was a major contributor to the economy, with as much as 5.6 per cent to the Gross Domestic Product (GDP) and catalysing industrial and infrastructural developments. Several downstream mining industries sprang up and created jobs. Sadly, however, the discovery of oil in the 1950s blighted this rich history of mining. Now, a push to reclaim Nigeria’s position as an hub of mining is on course, driven by sector development initiatives targeted at re-launching the country into global reckoning. Assistant Editor CHIKODI OKEREOCHA reports.

     

    These are interesting times for the mining sector and, by extension, the economy. The sector has probably never been this close to being transformed into a strategic catalyst for growth, in terms of job creation and increased revenue, while achieving a high optimal level of global relevance.

    This came on the strength of the implementation of the “Roadmap for the Growth & Development of the Nigerian Mining Industry”.

    Launched in 2016, the mining roadmap aspired to build a world-class minerals and mining ecosystem to serve a targeted domestic and export market.

    Its short-term goal, potentially, was to raise mining’s contribution to Gross Domestic Product (GDP) from about 0.33 per cent in 2016 to three per cent by 2025.

    Ultimately, the endgame was to leverage mining to give fillip to the campaign to transition to a non-oil economy, following the decline in oil revenue.

    Indeed, the crisis in the international oil market, where the price of crude has been declining, has forced a strategic refocus on other sectors considered as high growth sectors, particularly the solid minerals sector.

    The sector is credited with having immense potential to fast-track inclusive growth and meeting the government’s  objectives of creating jobs and wealth, alleviating poverty and driving industrialisation.

    With 44 minerals found in commercial quantities in 450 locations across the country, Nigeria, according to experts and industry operators, literarily sits on a goldmine. Some of the proven solid minerals include gold, iron ore, tin, gemstones, columbite, topaz, limestone, uranium, laterite, gypsum and kaoline, among others. In fact, there is hardly any state without mineral resources sufficient to power the economy, if fully exploited.

    Interestingly, in time past, mining of these minerals was the government’s major revenue source. The Permanent Secretary, Ministry of Mines and Steel Development, Dr. Abdulkadir Muazu, recalled, for instance, that Nigeria was the largest exporter of Columbite, eight producer of tin, and a major exporter of coal to Europe.

    In addition, Nigeria, he said, was also able to produce quite a number of industrial minerals for local industrial consumption.

    Muazu, however, regretted that all of these changed after the discovery of crude oil in 1958, which created a windfall in foreign exchange.

    Since then, Nigeria has been perceived to be an oil economy where attention and investments should, consequently, be concentrated.

    This created a huge gap in her solid mineral management, which cost Nigeria over 30 years of stagnation in the mineral industry.

    To further compound the sector’s woes, Muazu said the price of tin collapsed in the international commodities market in the 80s. The indigenisation decree of the late 80s also forced out majority of the foreign firms engaged in the mining of Cassiterite and Columbite in Jos, Plateau State. The sector was, thereafter,

    left in the hands of artisanal and small scale miners.

    However, these groups of miners do not have the capacity to go through the sustainable processes of the mineral value chain for the delivery of optimum economic benefits to themselves or the nation.

    As a result, much of the mineral commodities mined are exported in crude form to European and Asian countries at give-away prices, without any value addition, to the disadvantage of the national economy.

     

    Push to change the narrative

    The good news, however, is that the prevailing economic realities have forced a strategic refocus on the mining sector, where concerted efforts to restore Nigeria as a mining nation have taken centre stage.

    And at the heart of the on-going drive to reposition the sector is the push to open the sector to foreign investments via the implementation of the mining Roadmap.

    Minister of Mines and Steel Development Arch Olamilekan Adegbite put the ongoing investment drive in perspective. He said it was in line with the mandate of the ministry under the stewardship of President Muhammadu Buhari to scale-up the capacities of the sector by transforming it into a strategic catalyst for domestic growth, in terms of job creation and increased revenue, while achieving a high optimal level of global relevance.

    Adegbite said in the last four years, the ministry has progressively followed the implementation of the comprehensive Roadmap carefully developed for the sector’s accelerated growth. According to him, the Roadmap targets to increase the sector’s contribution to GDP from 0.33 per cent to three per cent by 2025.

    Adegbite spoke at the “2020 Prospectors and Developers Association (PDAC) Convention” held in Canada, last week. It was the 18th Annual Investment in African Mining seminar with the Canada-Africa Chamber of Business 21st Annual African Mining Breakfast seminar. The Minister led a contingent of Nigerians to the world’s premier mineral exploration and mining convention.

    While in Canada, the Minister held meetings with several foreign investors most of who expressed commitments to investing in Nigeria.

    He was also present at the signing of a Memorandum of Understanding (MoU) between Olympus, an equipment maker and Dukia Gold, who have gotten license to build a gold refinery in Nigeria.

    Adegbite also met with government officials from Canada, particularly the Canadian Minister for Small Businesses and Enterprises, Mary NG.

    He met with World Bank officials and other top foreign government officials, during which he intimated prospective investors that Nigeria was ready to do business.

    In his address at the convention, copy of which was made available to The Nation, Adegbite informed the audience that the Mining Roadmap upon which Nigeria hopes to re-launch itself into global reckoning in mining, builds on a decade of legal, regulatory, institutional, governance, and private sector development reforms underpinned by an investor-friendly law, regulations, and incentives.

    He said the Buhari administration, realising the enormous potential in mining, started the restoration agenda to turn the industry around and make it internationally competitive, in line with the Federal Government’s diversification programme.

    Adegbite articulated the sector’s restoration agenda thus: “Nigeria was one of the world’s largest tin and columbite producers in the glorious past.

    During that time, the commercial production and export of tin, columbite, and coal contributed up to five per cent of the nation’s GDP. They also catalysed Nigeria’s industrial and infrastructural development.

    “Several downstream mining industries were established while power stations, railway lines, and ports were established.

    We see immense economic potential from reopening those abandoned tin, columbite, and coal mines, as well as finding new discoveries. Commercial discovery of other mineral commodities is also evident from our on-going geoscience data generation work.”

    Already, the restoration agenda appears to be showing promises, drawing strength from recent strategic initiatives put in place by the ministry.

    Some of them include the provision of geological information on minerals to support investment decision making and seamless online mineral title application and administration.

    Others are the transformation of the ministry’s processes by digitising its key activities; formalisation of artisanal miners through improving their organisation, incentivising their participation, and transforming their trading channels. Efforts are also ongoing to automate the ministry’s activities with the provision of an eGIS web portal and electronic submission of licences, permits and certificates.

    Read Also: COVID-19 taking huge toll on economy, says Buhari

     

    This was to improve efficiency and speed-up the processing of transactions. And the result has been telling. For instance, Adegbite, exuding confidence, told investors in Canada that today, they can be anywhere in the world and in the comfort of their rooms apply for mining titles and licenses in Nigeria without going through a third party.

    The Nation learnt that in a bid to usher in a regime of efficient mineral titles administration, the ministry had, with the support of the World Bank, engaged a German firm, GAF-AG, to automate the Mining Cadastre Office (MCO) to meet international standard and make it more efficient and transparent. This was to ensure a seamless process for obtaining exploration licenses, permits and approvals.

    MCO was established by the Nigerian Minerals and Mining Act (NMMA) 2007 to administer and manage mineral titles in Nigeria. MCO Director-General, Obadiah Nkom, said the Office has undergone major upgrade and reformation targeted at developing and mainstreaming a transparent, accountable, people-oriented and environment-friendly governance model for the sector.

    As at last month, about 40 technical staff members of the MCO has been trained on the newest Electronic Mining Cadastre (eMC+) system in Cadastre management architecture. “With this now in place, I encourage all prospective and credible international investors to take advantage of this and invest in Nigeria,” Adegbite said, in Canada.

    The eMC+ system software is the latest in the administration and management of mineral titles for prompt, efficient and transparent management. The eMC+ has been implemented in some other countries.

    The system encompasses the digitalisation, automation, recording and archiving, as well as the establishment of six zonal offices across the country.The training was one of the components of the MCO upgrade contract with GAF AG of Germany.

    The ministry has also prioritised geo-scientific data collection and timely dissemination of geological information to support investment decision making, through the on-going National Integrated Mineral Exploration (NIMEP) programme.

    Embarked upon in 2018, NIMEP is the government’s flagship rapid response to the dearth of investible geoscience data. Under NIMEP, the ministry is identifying and targeting prospective mining fields for the purpose of generating integrated geoscience information that will help de-risk the mining sector.

    With the support of the World Bank, the government also moved a notch, engaging the British Geological Survey (BGS) to build a national electronic geo-data archiving management system (Nigerian Geo-data Center) at the Nigerian Geological Survey Agency (NGSA).

    The NGSA is the nation’s custodian of geosciences information. It is a parastatal under the Ministry of Mines and Steel Development.

    The Agency, established by an Act of the National Assembly on May 22, 2006, has the statutory role of providing relevant and up-to-date geosciences information necessary for economic development of Nigeria.

    Under the arrangement with BGS, the British agency is integrating historical geo-data of Nigeria in the UK, NGSA and the National Steel Raw Materials Exploration Agency (NSRMEA) into the system.

    This is to provide easy access for prospective investors to geoscience data on potential areas to target for exploration and mining within and outside Nigeria.

    Encouraged by what has been put in place so far, Adegbite drew the attention of global investors who converged in Canada that investments in exploration and mining are not the only areas of focus for those interested in coming into the sector.

    He also informed them that vast investment opportunities exist along the various linkage points in the mineral value chain. “In the upstream supply chain, there are opportunities for drilling service providers, mining contractors, and other service providers.

    Going downstream, there are increasing opportunities for production of intermediate products from our mineral resources,” he pointed out.

    Also, there is need for financial services, utilities, logistics, as well as Research and Development (R & D), technology and skills development to enhance the growth of the mining sector.

    “Nigeria’s growingly diverse and large economy provides an opportunity to also service other sectors not directly related to mining,” the Minister said.

    However, last week’s investment drive to Canada was the latest in several others aimed at opening the floodgate of investments in the nation’s mining sector.

    Before his team berthed in Canada, Adegbite had led a similar delegation to South Africa. It was the 26th edition of Africa’s leading mining investment forum, also known as “Mining Indaba” held from 3-6 February, 2020.

    Nigeria’s participation at Mining Ndaba, South Africa, came shortly after a similar “Investors’ Forum in London,” where Adegbite also led a high-powered team of experts and top officials of agencies under the ministry to United Kingdom (UK) to showcase Nigeria’s mineral and mining potentials to prospective global investors.

     

  • ‘How to rejuvenate industrial sector’

    ‘How to rejuvenate industrial sector’

    The fifth Nigerian Manufacturing and Equipment Expo (NME 2020), co-located with the Sixth Nigerian Raw Materials Expo (NIRAM Expo 2020), will kick off in Lagos next Tuesday. It has as theme: “The Fourth Industrial Revolution and the Nigerian Manufacturing Sector.” While NME was a response to the government’s commitment to industrialisation and  diversification, NIRAM was designed to create a platform for manufacturers to source raw materials and also benefit from research and development breakthroughs. How has the expo’s previous editions impacted the industrial sector and the economy? Assistant Editor CHIKODI OKEREOCHA asks.

     

    Nothing will gladden the hearts of Nigerians, particularly manufacturers, than to see a more productive and competitive industrial sector capable of holding its own.

    Considering the historic African Continental Free Trade Area (AfCFTA), which will take off in July, as well as the opportunities presented by the  Fourth Industrial Revolution expo, the high hopes of Nigerian manufacturers can be understood.

    aSimilarly, the industrial sector and the economy, generally, stand to reap bountifully from the emerging fourth industrial revolution, powered by disruptive innovation to positively impact core industries and sectors, such as education, health and business. Disruptive innovation will reshape how businesses operate.

    Under the fourth industrial revolution, disruptive technologies and trends, such as Blockchain, Internet of Things (IoT), Machine Learning, Robotics, Artificial Intelligence (AI), 3D printing technology, and Driverless car, would dictate the pace of development among nations.

    However, much as Nigerian manufacturers are desirous of playing dominant roles, either in the context of the AfCFTA or the fourth industrial revolution, they are aware that the road to increased productivity and competitiveness cannot be a walk in the park; that it requires hard work and commitment by all stakeholders.

    This was perhaps, why the Manufacturers Association of Nigeria (MAN), in collaboration with Raw Materials Research and Development Council (RMRDC), chose the  “The Fourth Industrial Revolution and the Nigerian manufacturing sector” as the theme for this year’s Nigeria Manufacturing and Equipment Expo (NME) and the Nigerian Raw Materials (NME/NIRAM Expo).

    The NME/NIRAM Expo will  hold at Landmark Event Centre, Victoria Island, Lagos, from March 10 to 12. The NME Expo,  fifth edition, has been the Federal Government’s tool for driving industrialisation and economic diversification since its inception in 2016.

    On the other hand, the NIRAM Expo, which is the sixth in the series, was conceived by the RMRDC in 2012 to create a unique platform for manufacturers to source raw materials and also benefit from research and development breakthroughs.

    Describing the theme of the co-located events as “instructive and appropriate,” MAN President, Mansur Ahmed, said they came at a time stakeholders in the manufacturing sector needed to critically discuss how to tap into opportunities the fourth industrial revolution presents.

    ‘How to rejuvenate industrial sector’ - The Nation Nigeria
    Director General and CEO of RMRDC Prof Hussaini D. Ibrahim

    Ahmed said there was the need for manufacturers to remain competitive in a fast-developing industrial space, where disruptive technologies and trends, such as Blockchain, IoT, Machine Learning; AI, and Driverless car, would dictate the pace of development among nations.

    “Therefore, the need to start using technology to produce our own food, products and other indigenous innovations becomes imperative so that we do not end up dependent on developed countries,” he said, at last week’s press conference in Lagos, to announce the 2020 NME/NiRAM Expo.

    It is easy to see why manufacturers are determined to hold their own. For instance, in the fourth industrial revolution, experts say robotics can and will change peoples’ lives in the near future.

    Technically, robots are automated motorised tools. They cook food, play music, record shows, and even run cars. Consequently, robots have the potential to improve the quality of lives at home, work, and many other places. Customised robots will create new jobs, improve the quality of existing jobs, and give people more time to focus on what they want to do.

    Similarly, increasing trends in AI point to significant economic disruptions in the coming years. According to experts, artificial systems that rationally solve complex problems pose a threat to many kinds of employment, but also offer new avenues to economic growth.

    For instance, a report by McKinsey & Company found that half of all work would be automated by technologies, thereby enabling companies to save billions of dollars and to create new types of jobs.

    Also, IoT, which is the internetworking of physical devices, is typically, expected to offer advanced  connectivity  of  devices,  systems,  and  services  that  go  beyond  machine-to-machine  (M2M) communications  and  cover  various  protocols,  domains,  and  applications.

    The interconnection of these embedded devices is expected to usher in automation in nearly all fields, while also enabling advanced applications like a smart grid, and expanding to areas, such as smart cities.

    The fourth industrial revolution is also said to have the capacity to raise income levels by allowing entrepreneurs to “run” with their new ideas. It will improve the quality of life for many people around the world.

    Consumers  are  likely  to  gain  the  most  from  the  fourth  industrial  revolution. Transportation and communication costs will drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will open new markets and drive economic growth.

    Beyond manufacturers’ resolve to grab the opportunities presented by the fourth industrial revolution, the MAN chief said manufacturers must also not lose focus from latching on locally sourced raw materials and other support facilities like the needed financing and logistics services, which, according to him, will be central to the March 10 engagement.

    He stated that this year’s NME/NIRAM Expo will be unique in many ways. According to him, one of its striking new features is the collaboration between MAN and RMRDC to sustain the running of the expo after the exit of Clarion Events West Africa, a South African Company, as event organisers.

    Ahmed explained that because of the significant impact the expo has had on the industrial sector and the economy at large, both organisations deemed it necessary to build on successes so far recoded and present an improved expo this year, which would be highly beneficial to all participants.

    He said the expo, which is considered as the leading and most comprehensive event encompassing every aspect of the manufacturing value chain, has this year been designed to address pertinent concerns for the eventual take-off of the AfCFTA come July.

    The MAN chief, therefore, urged large, medium and small manufacturing organisations to take advantage of this year’s edition to explore new production processes that will increase production output, reduce costs, improve product quality and diversify into new products.

    Read Also: Industrialist seeks increase in education sector budget

     

    Assessing the expo’s impacts

    Ahmed was not alone when he described the impact of the expo, over the years, on the industrial sector and the economy at large as “significant.”

    The Director-General/CEO of RMRDC, Prof. Hussaini D. Ibrahim, also said the sixth NiRAM Expo co-located with the fifth NME Expo for the fourth time consecutively, will build on its successes in the last eight years.

    Highlighting some of its achievements on the industrial sector and the national economy, he said, for instance, that the programme has created awareness on agricultural and mineral resources for which the country was endowed and has comparative advantage in value addition, such as cassava, maize, sorghum, limestone, gypsum, tropical fruits, kaolin, phosphate, iron and steel.

    Ibrahim also said there has been noticeable increase in capacity utilisation of many manufacturing industries under the 10 sectors of MAN, particularly those in Food, Beverages & Tobacco Sector, Chemical & Pharmaceutical Sector, Basic metal, iron & steel & Fabricated metal sector, Pulp, paper & paper products, printing & publishing sector, among others.

    The RMRDC DG also pointed out that NIRAM Expo, in particular, has brought about sustainable balance of resource-based Micro, Small and Medium Enterprises (MSMEs) having access to research and development findings from the nation’s reservoir of knowledge.

    Ibrahim, represented by the Lagos State Coordinator, RMRDC, Tokunbo Habeeb, described the theme of this year’s expo as “apt.” According to him, “It underscored the imperativeness of industrialisation to national development.”

    He said in co-locating the NME/NiRAM Expo, both RMRDC and MAN demonstrated rare confidence and camaraderie among themselves for the purpose of hastening national industrial development.

    Ibrahim said after eight years and a strategic co-location of NME Expo, which brought in its stride the formidable membership Partnership for African Development (mPAD), both events now connect the entire manufacturing value chain.

    mPAD is a strategic gathering for thought leaders in the manufacturing sector, policy makers and government regulatory agencies to discuss solutions for existing challenges and carve out ideas for growth and development of the manufacturing sector.

    The Nation learnt that in line with MAN’s previous practice, the NME will run side by side with a conference on mPAD. On the sideline, RMRDC will also host master classes on latest research findings delivered by carefully selected resource persons.

    Ahmed added that another significant session will be the “Women in Manufacturing” session, which affords Amazons the opportunity to share their experiences with intending women manufacturers who are prospecting to venture into the sector but have reservations on their expectation.

    The Chief Executive Officer, Sokoa Chair Centre Limited, Mrs. Ibukun Awosika, will chair this session. The renowned manufacturer will be sharing her experience alongside selected women manufacturers that have confirmed attendance at the event.

    Last year’s NME/NiRAM Expo with the theme “Optimising the value chain in the manufacturing sector to ensure industrialisation” showcased exhibitors, brands and the latest technological solutions, including B2B matchmaking networking section.

  • Cautious optimism over AfCFTA

    Trading under the African Continental Free Trade Agreement (AfCFTA) begins on July 1. The trade deal is expected to open the wider African market for local manufacturers, creating a market of 1.2 billion people with a combined GDP of about $2.5 trillion. However, five months to its implementation, manufacturers are cautiously optimistic. They fear: without addressing the dearth of infrastructure and market information asymmetry, they may not be competitive under the deal, Assistant Editor CHIKODI OKEREOCHA reports.

     

     

    The momentum is building up. Across the 55 African countries, manufacturers’ anticipation of the phenomenal opportunity for increased global competitiveness promised by the African Continental Free Trade Agreement (AfCFTA) is palpable, as trading under the historic agreement takes off in about five months, precisely July 1.

    But, while manufacturers in other African countries are hopeful and gearing up to compete under a liberalised African market, Nigerian manufacturers appear less excited by the prospects of leveraging the trade deal to become globally competitive.

    The Nation learnt that manufacturers’ optimism over the soon-to-be-implemented AfCFTA may have, indeed, been measured, largely due to fears that the country’s decrepit infrastructure and market information asymmetry may hurt their chances of benefiting optimally from the agreement.

    The Manufacturers Association of Nigeria (MAN) President, Mansur Ahmed, confirmed this fear when he said as the continent awaits the take-off of AfCFTA in July, the Federal Government must address the supply side constraints of lack of infrastructure if the gains of the AfCFTA must be realised.

    Ahmed, who spoke at the “2020 MAN Annual Media Luncheon” in Lagos,  also said policies and regulations must be business-friendly in order to assist businesses to grow and ultimately, enhance competitiveness and boost the economies of Nigeria and other partnering African countries.

    AfCFTA seeks to create a continental trade bloc of 1.2 billion people, with a combined Gross Domestic Product (GDP) of about $2.5 trillion.

    The deal, seen as an important milestone in promoting Africa’s regional integration and helping to increase intra-African trade, commits countries to removing tariffs on 90 per cent of goods and to liberalise services.

    Its main objective was to create a single continental market for goods and services, with free movement of business persons and investments.

    President Muhammadu Buhari signed the Agreement on July 7, last year in Niamey, Niger Republic, at the 12th Extraordinary Session of the Assembly of the African Union (AU) on AfCFTA.

    It was signed after 16 months of foot-dragging, during which the government said it needed to thoroughly consider the deal and country-wide sensitisation and consultation of stakeholders.

    The delay in signing the deal came after members of the Organised Private Sector (OPS), particularly manufacturers, opposed the move.

    Cautious optimism over AfCFTA
    Afreximbank President Prof Benedict Oramah

    They had warned the Federal Government not to sign the policy document as doing so will cripple the economy and leave more Nigerians unemployed.

    Many of them expressed fears that the deal will be injurious to the nation’s industrial sector and the economy generally.

    They argued, for instance, that the agreement will turn Nigeria into a dumping ground for imported foreign goods. They insisted that the likely negative impacts of the agreement on private businesses and the economy far outweigh its supposed benefits.

    However, proponents of the free trade deal kicked their heels in, insisting that AfCFTA – the world’s largest free trade area since the creation of the World Trade Organisation (WTO) in 1994 – will, for instance, boost intra-African trade by about 60 per cent by 2022. Currently, intra-African trade is put at just 16 per cent of its total trade, compared with 19 per cent in Latin America, 51 per cent in Asia, 54 per cent in North America and 70 per cent in Europe.

    African countries, according to experts, are not trading among themselves; their fundamental role in global trade has been to provide raw commodities in exchange for manufactured goods.

    For instance, the President of African Export-Import Bank (Afreximbank), Prof Benedict Oramah, said Africa is the continent that trades the least with itself, despite the strong relationship between intra-regional trade and industrial development and economic progress.

    Oramah, who spoke at a meeting of MAN in Lagos, said AfCFTA is expected to bring the share of intra-African trade to 22 per cent by 2022, up from about 16 per cent.

    It will also bring total intra-African trade to about $250 billion, from about $160 billion. Speaking on: From commodities to a global manufacturing hub: The road ahead for Nigeria, the Afreximbank boss added that since manufactures account for about 60 per cent of total intra-African trade, intra-regional trade in manufactures can rise to more than $150 billion by 2022.

    While noting that “The opportunity for African manufacturers is, therefore, phenomenal,” Oramah specifically said that the preferences that AfCFTA offers can make Nigerian manufactured goods more competitive in many African markets and can also make it possible for integration into regional and global supply chains.

    He said: “A cotton yarn producer in Nigeria can, for example, become a supplier to a fabric manufacturer in Senegal, replacing yarn imports from Asia.

    And as capacity is gained in the context of intra-regional trade, manufacturers can expect to gradually become competitive globally.”

    That is not all. The president of the premier institution driving African integration and trade also said the rising middle class in the country and Africa, as well as the rapid urbanisation will expand demand for manufactured goods.

    According to him, it is projected that Nigeria’s urban population will reach 264 million by 2030, which is equal to 15 per cent of the projected population in that year. “These will spur demand for critical infrastructure, housing, processed food, fast moving consumer goods (FMCGs) and a host of other light manufactures.

    “It is the manufacturing industry that will supply these items. Related to the foregoing is the gradual exit of China from labour intensive light manufacturing. Today, Nigeria and Africa import $1 billion and $43 billion of light manufactures from china.

    Read Also: ‘Infrastructure key to realising gains of AfCFTA’

     

    “As China shifts to more capital-intensive manufacturing due to rising labour costs, those goods have to be supplied by somebody. Nigeria and indeed, the entire African continent will have themselves to blame if this projected supply gap is filled from outside the continent,” Oramah said.

     

    Dearth of infrastructure, others

    Given the fragile nature of Nigeria’s economy, it is doubtful if the manufacturing sector is in any position to fill the projected supply gap.

    With the economy lacking in key infrastructure, the sector is too fragile to become competitive under the AfCFTA or even withstand competition from other countries.

    Ahmed perhaps, put the situation in perspective when he said: “We cannot achieve competitiveness without the provision of infrastructure such as good road networks and electricity, not only within African countries, but also across the borders.

    “There is also the aspect of provision of soft infrastructure – like visa, tariffs, and foreign exchange – that will help ease the process of carrying out business transactions between countries.

    We must address all these issues since the AfCFTA is not just about trade in goods, but also trade in services.”

    According to him, modern industry competitiveness depends to a great extent on provision of adequate and efficient infrastructure. “From the availability of power and energy to transport and logistics, the role of infrastructure cannot be overemphasised in trade and economic development on the continent,” he said.

    For instance, while pointing out that transportation is vital to enhancing competitiveness in trade, the MAN chief said due to poor infrastructure, it will cost a business owner in Nigeria more to transport goods from Lagos to Kano than it will cost a Chinese business owner to transport the same goods from China to Lagos.

    The MAN boss also said electricity is a vital input for manufacturing process to the extent that it constitutes up to 40 per cent of  production cost.

    He, therefore, said increasing the tariff of this core input will have drastic negative effect on the Gross National Product (GNP), GDP, disposable income, consumption, consumer price index, employment, and government revenue from corporate taxation and others.

    However, the lack of infrastructure is not peculiar to Nigeria; the problem cuts across most, if not all the 55 African countries.

    The continent’s infrastructure needs, according to Afreximbank, is between $130 and $170 billion yearly, with a financing gap in the range of between $70billion and $110 billion.

    Yet, Nigeria’s share of the continent’s huge infrastructure gap is mind-boggling. For instance, the Financial Derivatives Company (FDC) said the country requires $15 billion, about N4.59 trillion, worth of investments yearly for 15 years to adequately develop her infrastructure nationwide.

    The research firm, in its bi-monthly Economic and Business report for February 2018, said: “Nigeria’s under-investment in infrastructure has left it with a core stock of infrastructure of just 20 per cent to 25 per cent of GDP, compared to an average of 70 per cent of the GDP for more advanced middle-income countries of similar size.

    The FDC said bridging this gap will require investing about $15 billion yearly for the next 15 years, asking: “Given the government’s limited access to international debt, revenue constraints and competing priorities, the major question is where will funding be sourced?”

    The  firm said: “One of the biggest constraints to Nigeria’s competitiveness, economic growth and diversification is the crippling infrastructure deficit, estimated at $300 billion, about N30 trillion, by the African Development Bank (AfDB).”

    When considered that Nigeria, according to the Vice-President, Prof Yemi Osinbajo, spent N2.7 trillion on infrastructure in 2016 and 2017 fiscal years, for instance, the challenge   infrastructure gap poses to Nigeria’s competitiveness in global trade comes into bold relief.

    The Senior Manager, Intra-African Trade Initiative, Afreximbank, Gainmore Zanamwe, said because of the poor state of trade-related infrastructure and weak transit and logistics infrastructure, transport costs  are 63 per cent higher in Africa, compared to the average in developed economies.

    Zanamwe also said poor trade facilitation was responsible for the low intra-African trade. According to him, it takes up to 12 days to clear goods in some African borders as compared to an average of two days in developed countries and costs around $450 per day.

    He added that because of supply side constraints, the continent’s level of industrialisation remained low and as a result, the range of goods available for trade is limited and this gap is then filled by other countries outside the continent.

    Zanamwe listed other constraints to include lack of internationally accredited quality infrastructure and harmonised trade standards, low implementation of regional trade commitments, and limited access to trade finance, among others.

  • N200b inventory of unsold goods unsettles manufacturers

    Manufacturers’ inventory of unsold goods stood at N200. 26 billion in the first half of last year. It was an increase of N51.03 billion (34.19 per cent) from N149.23 billion recorded in the corresponding half of 2018. The huge stock of unsold manufactured goods, according to manufacturers, was as a result of delay in capital budget implementation caused by untimely passage of the budget for the year, as well as high inflation and smuggling. Experts say that addressing the lack of infrastructure, poor regulation and unstable macro-economic ambience will help stem the tide. Assistant Editor CHIKODI OKEREOCHA reports.

     

    For long, development experts and economic actors in various sectors have been clamouring for Nigeria to adopt the standardised budgetary calendar for public budgeting.

    They argue that since public budget is an important policy document that provides the roadmap for government activities and programmes for a fiscal year, there is need to operate within a defined time horizon to engender economic stability, ensure discipline and coordination.

    They had warned that Nigeria’s failure to adhere to a rigid budgetary timeframe causes delay in the signing and subsequent implementation of the budget, which invariably, hurts the economy.

    This means that if policymakers had heeded this warning, appropriation bills would have been passed before the beginning of a financial year, as provided for in Section 82.1 of the 1999 Constitution. In other words, the budget circle will have been from January 1 to December 31.

    The consensus is that a defined timeframe for each budget process would save the economy and operators the unsavoury consequences of budget delay, which has been the norm in the past two decades of democratic governance in Nigeria.

    Now, the chickens have come home to roost. The endless dragging of the budget process, against wise counsel, has continued to put capital expenditures on hold and needlessly imposing substantial economic costs on operators in various sectors.

    For instance, private sector operators, particularly manufacturers, are  counting their losses from the delay in the signing of the 2019 budget. With an inventory of unsold manufactured goods standing at N200.26 billion in the first half of last year, manufacturers are screaming blue murder over the delayed passage and implementation of the 2019 budget, which, according to them, largely caused the huge inventory of unsold goods.

    The figure, which was contained in the Manufacturers Association of Nigeria (MAN’s) “Executive Summary” of the first half of 2019, represented N51.03 billion (34.19 per cent) increase from N149.23 billion recorded in the corresponding half of 2018.

    It, however, declined by N25.63 billion (11.34 per cent) when compared with N225.89 billion recorded in the second half of 2018.

    Although MAN Director-General Segun Ajayi-Kadir, in the “Executive Summary,” made available to The Nation, said: “The high inventory in the period under review can be attributed to untimely passage of national budget for the year, leading to delay in capital budget implementation.”

    He also said the inventory of unsold goods in the sector was also influenced by high inflation and smuggling of contraband products into the country in the review period.

    MAN’s analysis, based on sectoral group, showed that inventory of unsold manufactured goods was high in Food, Beverage and Tobacco group, which stood at N37.43 billion; Chemical & Pharmaceutical, N37.43 billion; Domestic/Industrial plastic group, N22.46 billion; and Basic Metal, Iron & Steel Fabricated Metal group, N58.19.

    It, however, said that inventory of unsold finished goods in Food, Beverage and Tobacco sectoral group increased to N37.43 billion in the first half of last year, from N19.52 billion recorded in the corresponding half of 2018.

    This indicated N17.93 billion (91.94 per cent) increase over the period. It also increased by N2.41 billion (6.9 per cent) when compared with N35.02 billion recorded in the second half of 2018.

    In the first half of last year, inventory of unsold goods stood at N30.1 billion in Chemical & Pharmaceutical sectoral group, indicating N5.73 billion (23.53 per cent) increase from N24.36 billion recorded in the corresponding half of the previous year.  It also increased by N5.08 billion (14.44 per cent) when compared with N35.18 billion recorded in the second half of 2018.

    Domestic/Industrial Plastic, Rubber & Foam sectoral group recorded inventory of N22.49 billion in the first half of last year, as against N18.96 billion of the corresponding halves of 2018.

    This indicated N3.53 billion (18.61 per cent) increase over the period. It also increased by N4.01 billion (21.69 per cent), compared with N18.48 billion recorded in the first half of 2018.

    Across industrial zones, the association said Ikeja recorded the highest inventory of unsold manufactured goods in the first of last year, with inventory worth of N70.31 billion, representing N35.55 billion (91.26 per cent) increase from N36.76 recorded in the corresponding half of 2018.  It also increased by N17.48 billion (19.9 per cent), compared with N87.79 billion recorded in the second half of 2018.

    Ogun zone trailed Ikeja with an inventory worth N59.65 in the first half of last year, representing N2.35 billion (4.1 per cent) increased from N57.3 billion recorded in the corresponding half of 2018.  It, however, declined by N28.65 billion (92.4 per cent) when compared with N31.0 billion recorded in the second half of 2018.

    Inventory of unsold goods in Apapa zone stood at N47.52 billion in the first half of last year, as against N35.76 billion recorded in the corresponding half of 2018; thus, indicating N10.76 billion (30.1 per cent) increase over the period. It, however, declined by N4.91 billion (9.4 per cent), compared with N52.43 billion recorded in the second half of 2018.

     

    How delayed passage of budget hurts manufacturing

    It is easy to see how the untimely passage of national budgets, particularly the 2019 budget, which led to delay in capital budget implementation, contributed to the high inventory of unsold manufactured goods in the period under review.

    Read Also: Reps to MDAs: no audited accounts, no budgetary allocations

     

    First, the situation affected domestic investment negatively, as investment decisions by private sector operators are usually influenced by government’s fiscal plan (the budget). Without a signed budget, which articulates the government’s policy direction, investors are wary of making major investment decisions.

    The uncertainty induced by the budget delay may have forced investors to put their investment decisions on hold. And because of the crucial role the private sector, particularly manufacturers, play in job creation, the budget delay indirectly affected employment level.

    Also, with budget delay, which affects capital expenditure, infrastructural development, which is a key enabler for growth, is significantly constrained. And the manufacturing sector, which needs robust infrastructure to be competitive, appears to be worse hit.

    Besides, private sector operators, including manufacturers, believe that the government is the biggest spender in the economy.

    According to them, the government contributes directly to the economy through spending (transfers and capital expenditure). This means that budget delay depresses the government’s contribution to the Gross Domestic Product (GDP).

    Experts also say when budget signing is delayed, capital expenditures are put on hold, which means that money meant for the payment of vendors and contractors are owed for months thereby delaying the execution of projects.

     

    Inflation, smuggling, others also

    However, budget delay was not the only factor responsible for the high inventory of unsold goods in the first half of last year. MAN’s unsettling half-year 2019 manufacturing sector performance scorecard showed that high inflation and smuggling of contraband products also contributed to the high inventory of unsold goods in the sector.

    While the International Monetary Fund (IMF) estimated the world’s inflation for last year at 3.58 per cent, with Venezuela as the major contributor of rising world inflation, MAN, in its “Executive Summary,” said in Nigeria, year-on-year, inflation consistently slowed to 11.37 per cent in January; decline slightly to 11.31 per cent in February; and 11.25 per cent in March.

    It, however, rose to 11.37 per cent in April; 11.40 per cent in May and declined to 11.22 percent last June. The country’s high inflation rate is believed to be responsible for the low purchasing power of consumers.

    The low real consumption due to inflationary pressure, coupled with smuggling across the nation’s numerous porous borders as well as high cost operating environment are said to have resulted in manufacturers’ warehouses stocked with unsold goods.

    For instance, manufacturers lamented the high cost of funds. According to them, high cost of borrowing continued to be a perennial challenge to the manufacturing sector.

    “In the first half of 2019, interest rate charged to manufacturers stood at 22.5 per cent; it stood at 23.01 per cent and 21.4 per cent in the first and second halves of 2018,” MAN said.

    The high cost operating environment in the period under review is also said to have contributed to the decline in the manufacturing sector’s capacity utilisation, which slowed to 54.1 per cent in the first half of 2019, from 54.50 per cent recorded in same half of 2018. This indicated 0.4 percentage point decline over the period.

    It also declined by 6.9 percentage point when compared with 61.0 per cent recorded in the second half of 2018. “The fall in the sector’s capacity utilisation in the period was as a result of poor macroeconomic, regulatory and infrastructure conditions in the economy,” the association said.

    Similarly, manufacturing production value slowed to N4.61 trillion, which indicated N0.15 trillion (3.2 per cent) decline from N4.76 trillion recorded in the corresponding half of 2018. It also slowed by N0.61 trillion (11.6 per cent), compared with N5.2 trillion recorded in the second half of 2018.

    According to manufacturers, manufacturing production in the first half of last year was affected by the same challenges that hindered capacity utilisation in the period such as poor macroeconomic ambience, infrastructure issues and poor regulation by government agencies.

    They added that analysis based on sectoral group performance showed that production value in almost all the groups slowed in the first half of 2019.

    The sector’s poor performance scorecard underscores the need for urgent policy measures to turn things around, by addressing the nation’s macroeconomic instability, weak regulatory framework, and huge infrastructure deficit, which collectively fuel the high inventory of unsold manufactured goods now giving local manufacturers sleepless nights.

    Addressing these issues has become imperative in view of the fact that the real sector, particularly manufacturing, is acknowledged as the engine of economic growth and a key driver of government’s ongoing economic diversification.

    Perhaps more importantly, it has become pertinent to halt the seemingly endless disagreement between the legislature and the executive on the expenditure items and level in the national budget, which often drags the budgetary process in Nigeria.

  • Showcasing Nigeria’s mining potential to global investors

    The Federal Government recognises mining as a strategic income stream in the face of dwindling oil revenue. It is also working to boost its contribution to GDP from1.5per cent to three per cent  by 2025. To make these happen, the Ministry of Mines and Steel Development seized the opportunity of last week’s “Investors’ Forum in London” to showcase Nigeria’s mineral and mining potential to prospective global investors. The positive responses by would-be investors, following the outing, are seen as signals of a new dawn for the sector, Assistant Editor CHIKODI OKEREOCHA reports.

     

     

    The Minister of Mines and Steel Development, Olamilekan Adegbite, and other heads of agencies under the ministry are upbeat. To them and indeed, other industry stakeholders, a new dawn is in the offing for the mining sector, particularly from the investment point of view.

    This, The Nation learnt, followed the overwhelming interest shown by international mining firms – both majors and minors – to invest in data generation as well as mining in the country.

    However, it took a team of top officials from the ministry led by Adegbite, who, at an “Investors’ Forum in London,” put up a presentation for a group of top investors in the United Kingdom (UK) to wet the appetite of prospective investors now wishing to be part of the exploration and mining revolution. The team seized the opportunity of the forum to showcase Nigeria’s mineral and mining potential.

    The ministry, which had a panel consisting of experts in mining, showcased to the international investment community Nigeria’s mineral endowments, including the latest developments in the minerals sector particularly government’s efforts to generate credible geo-science data and de-risk the sector.

    It also dangled to investors some of the mouth-watering incentives put in place to make mining more attractive for them.

    Adegbite had last week led a high-powered team to the “Investors’ Forum in London.” It was an opportunity for a one-on-one interaction with investors in the UK.

    Other heads of agencies under the ministry in the team included the Director-General of Mining Cadastre Office (MCO), Obadiah Nkom; his counterpart at Nigerian Geological Survey Agency (NGSA), Dr. Abdulrazaq Garba and Project Coordinator, Mineral Sector Support for Economic Diversification Project (MINDIVER), Mr. Linus Adie.

    The Nation learnt that the team visited various destinations in the UK, where it brought would-be investors up to speed with the regulatory framework, favourable investment climate as well as various fiscal regimes available to prospective operators in Nigeria’s mining sector as enshrined in the Nigerian Mineral and Mining Act 2007.

    For instance, there was a presentation by the Minister at the Hogan Lovells, Holborn Viaduct, London, in which he addressed several UK investors who had interest in the mining sector, but were quite unaware of how to go about it or were scared of the sector.

    Adegbite allayed their fears and assured them that the mining sector was very friendly and that the government had put in place incentives that would favour investors in the sector.

    The minister also met the British Ambassador to Nigeria and officials from the British Trade Department to speak about mining in Nigeria.

    He also visited the House of Lords to see Lord Benjamin Mancroft to discuss mining in Nigeria and to consider the possibilities of training collaboration with the Mining Institute in Jos, Plateau State. There was also a visit to the British Geological Survey Agency to firm up the collaboration between it and the NGSA.

     

    Push for non-oil economy

    The central message of Adegbite’s speech at the Investors’ Forum was Nigeria’s transition to a non-oil economy. The Minister, in his speech, said in line with the Federal Government’s strong commitment to diversifying the economy and providing jobs, the ministry, under his charge, continues to promote platforms to highlight reforms in the sector that will attract investments.

    Read Also: Fed Govt eyes N20 billion in mining

     

    According to him, Nigeria has been perceived to be an oil country where all attention and investments should, consequently, be concentrated. Describing the country as an unwilling victim of the oil mineral curse, which created a huge gap in her solid mineral management, he said this cost Nigeria 30 years of stagnation in the mineral industry.

    While noting that the President Muhammadu Buhari-led administration, at inception, met serious challenges in the mining sector caused by years of stagnation and neglect, he said“it was apparent that we must re-enact the “Nigeria before Oil” policies, when the sector contributed as much as 5.6 per cent in 1980 to the national Gross Domestic Product (GDP).”

    However, a renewed push to return the sector to its glorious days by opening the sector to foreign investments has taken centre stage. Adegbite put the new investment drive in perspective when he said: “The agenda of the present administration recognises mining as a strategic income stream in the face of dwindling oil revenue and looks towards to increasing its contribution to the national GDP to three per cent by 2025.”

    He explained that the focus of the Federal Government, through the ministry, was on de-risking the mining sector. This, according to him, was by the provision of more up-to-date and comprehensive data on mineral occurrences in Nigeria. The other aspect, he said, was by enabling a more investor-friendly environment through favorable incentives.

    The minister informed his audience that some significant milestones have already been achieved within a remarkably short time, expressing hope that such achievements will trigger investors in the mining world a desire to be part of the exploration and mining revolution in Nigeria.

    One of the developments that have buoyed Adegbite’s hope of a sector on an imminent rebound is the ongoing National Integrated Mineral Exploration Project (NIMEP). NIMEP is government’s flagship of rapid response to the dearth of investible geoscience data.

    “We are continuing to upgrade and expand our data base to de-risk the Nigeria mining jurisdiction to make our potentials more palatable to investors,” he said, adding that contracts have been awarded to five certified exploration companies for further investigation into gold, lead, zinc, iron ore and rare earth metals.

    Interestingly, these are minerals considered priority minerals along the identified mineral corridors in Nigeria. The minister stated that at the end of the exercise, the viable areas or corridors will be delineated into concession blocks for interested investors to bid.

    Also, the NGSA, which coordinates the NIMEP project, has undertaken more ground investigations nationwide to upgrade the national minerals data base to a more investible level. Furthermore, all existing geological data are being archived in a digitalisation programme handled by the British Geological Survey.

    An obviously excited Garba told The Nation that judging by the huge volume of inquiries from international mining companies – both majors and minors – regarding the NIMEP programme, it would be right to say that the interest has been overwhelming.

    While confirming that there have been a number of commitments from mining companies, largely on the NIMEP programme, Garba said quite a number of these companies have already indicated interest to partner with the ministry and the NGSA to invest in both data generation as well as mining.

    With some of them signifying interest to enter into some Memorandum of Understanding (MoUs) with the ministry, the NGSA boss said: “The Ministry was also eager to follow-up on all the requests made at the conference. It was also generally agreed at the fora that Nigeria seems to be getting it right now and all eyes are on us.”

    The delegation to London also included a visit to British Geological Survey (BGS) at Nottingham. Already, BGS is undertaking a MINDIVER project of digitalisation of colonial documents and maps that are hosted by them on behalf of the NGSA.

    The upgrading and automation of the Nigeria Mining Cadastre Office for online operations may have also contributed to the growing interest of investors in the sector.

    The major objective of this project, which will be completed this year, is to make online application for titles seamless. This will cut down the time for processing licenses from 45 to 15 days.

    Apart from ease of mineral title administration, the minister announced to his audience in London that the development of the new Mineral Export Guidelines has reached final stages and is expected to be implemented this year. “This will ensure transparent and timely issuance of export permits of minerals from Nigeria,” he said.

    Also, to boost production of raw materials for the local industries, Adegbite said the ministry has developed a road map for the nation’s industrial minerals.

    The focus of the initiative, he said was to attain self-sufficiency in the production of industrial minerals in which Nigeria has comparative advantage.

    Describing the Investors’ Forum in London as hugely successful, the Senior Special Assistant Technical to the Minister, Olu Adedayo, expressed joy that many foreign investors are now showing interest in Nigeria.

    He also said with Brexit on the horizon and the UK willing to negotiate trade with non-European countries, the UK now wants to get close to Nigeria and the mining sector.

    However, as encouraging as the growing interest of investors in the global mining industry may be, following the Federal Government’s aggressive investment drive, the consensus of experts and stakeholders in the local mining sector is that its sustainability will depend largely on policy consistency.

    They, therefore, pointed out that there is the need for the government, through the ministry, to ensure that the current incentives put in place to woe investors are sustained, even as various executive orders on ease of doing business are effectively monitored and fully implemented.

  • Illegal miners’ gain, Fed Govt’s pain

    Nigeria has about 44 commercially viable minerals in 450 locations across the country. If properly exploited, these could be the wedge for an economy in search of alternative revenue source besides oil and gas. Sadly however, much of her mineral wealth is being plundered by illegal miners, said to be operating in about 1,759 mining sites. Stakeholders fear that without reining in illegal miners, hopes of leveraging mining to earn foreign exchange, create jobs and boost the sector’s contribution to GDP to three per cent by 2025 will not be achieved. Assistant Editor CHIKODI OKEREOCHA reports.

     

    The launch in August 2016 of a new “Roadmap for the Development of the Solid Minerals Sector” gladdened the hearts of many Nigerians and industry stakeholders.

    For one, the level of detail contained in the Roadmap and its precise ambitions were encouraging; it also re-enforced hopes of positioning mining to dislodge oil as Nigeria’s major revenue earner.

    For instance, the Roadmap which built on its predecessor, the old 2012 Roadmap, envisaged a mining sector worth $27 billion in direct and indirect contributions – a figure that represented about three per cent of Gross Domestic Product (GDP) by 2025, up from a meagre 0.33 per cent in 2015- and over $5 billion in new investments in the intervening years.

    However, the Federal Government did not stop at expressing its commitment, within the roadmap, to growing the contribution of mining to GDP to three per cent by 2025.  It also went a notch higher, identifying seven  strategic minerals of commercial quantity to be accorded priority development.

    The seven minerals include coal, limestone, lead/zinc, bitumen, barite, gold and iron ore. The new roadmap, which came after the Federal Government in 2015, identified the solid mineral sector as one of the key sectors to drive economic diversification, was followed through with the constitution of the Mining Implementation and Strategy Team (MIST).

    The team’s duty is to coordinate the implementation of the roadmap and programme-manage its execution. This, The Nation learnt, came after the Ministry of Mines and Steel Development took series of pragmatic steps to redefine the policy and regulatory framework for the sector.

    As leading advisor to the mining industry globally and in Nigeria, PricewaterhouseCoopers (PwC) Nigeria, put it in its report titled: “Unlocking the Potentials of the Mining and Steel Sector in Nigeria,” the new mining Roadmap aspired to “build a world class minerals and mining ecosystem designed to serve a targeted domestic and export market…”

    PwC Nigeria’s Head Advisory and Consulting/Mining Sector Leader, Cyril Azobu, and its Associate Director and Head Mining Sector Business Development, Habeeb Jaiyeola, said: “Ultimately, the endgame was to position the sector to contribute three percent to GDP by 2025.”

    However, the achievement of this ambitious target by leveraging the 2016 mining Roadmap to force a rebound of the sector has come under serious threat by the activities of informal or illegal miners.

    The illegal miners, allegedly with their foreign collaborators, seem to have perfected their own ‘Roadmap’ to pillaging the nation’s solid mineral commonwealth, much to the chagrin of the Federal Government, the Ministry of Mines and Steel Development and Nigerians generally.

    For instance, a recent report by the Nigeria Extractive Industries Transparency Initiative (NEITI) put the situation in perspective when it said illegal mining was thriving in six states in the country. The states include Niger, Plateau, Zamfara, Ebonyi Enugu and Imo.

    The NEITI report titled: “Improving Transparency and Governance for Value Optimisation in Nigeria’s Mining Sector” indicated that Niger and Plateau states topped the illegal mining list. While Niger State had 10 illegal mining sites, Plateau had seven.

    Ebonyi and Imo states had five illegal mining sites while Enugu and Zamfara states had four sites. The exploited minerals included gold, silver, lead, zinc, tantalite, tin, columbite, barites, gypsum, sapphire, emerald, granite tourmaline, sandstone and others.

    The Director, Artisanal and Small Scale Mining, Ministry of Mines and Steel Development, Mr. Patrick Ojeka, put the number of Nigerians directly involved in small sale mining operations across the country at over 500, 000.

    He gave this figure in Calabar, Cross River State, during a five-day training for 150 registered and performing mining cooperatives and quarry associations in the Southsouth and Southeast regions.

    Ojeka said the number was on the increase in view of the Federal Government’s strategy in harnessing the potential of mining to address poverty in rural mining communities.

    The Minister of Mines and Steel Development, Mr. Olamilekan Adegbite, brought the reality of the thriving illegal mining business nearer home when he said illegal miners were operating in about 1,759 mining sites across the country.

    The minister, who gave this figure at an event that brought stakeholders in the sector together in Ekiti State, had earlier alleged that some governors were behind the illegal mining of some solid mineral resources in the country.

    Adegbite, at a recent interactive session, told the Senate Committee on Solid Minerals, Mines, Steel Development and Metallurgy, that illegal mining was allegedly being supported by some state governors, as demonstrated by their provision of police escort for unlicensed foreign miners in their jurisdictions.

    Read Also: Experts seek involvement in Ajaokuta steel resuscitation

     

    Although, the minister did not specifically mention the governors behind the illegal act, he condemned the “unholy” alliance of the governors with some foreign miners who were operating illegally in the country.

    Adegbite said: “You will find foreign nationals encouraged by our people. Without naming them, we have some state governments that are encouraging these foreign nationals that we are talking about. That is why you see them with security (operatives).

    “When they send them to go and do this, they need police. What do you expect a mining officer to do when the state government is backing illegal mining?”

    However, as part of efforts at curbing illegal mining activities, the minister noted that the government had been engaging mining operators in the communities to lure them into formally registered cooperatives for the purpose of safely mining the nation’s resources.

    Indeed, the ministry, under Adegbite’s charge, had as part of the re-launch of Nigeria as a mining destination, not only moved to formalise artisanal miners, but also committed to helping artisanal and small-scale miners to access funds.

    The move appears to be bearing fruits. For instance, Adegbite said more than 1, 500 Artisanal Mining Cooperatives (AMCs) have been registered nationwide, just as about 250 Private Mineral Buying Centres have been registered to facilitate trading in mineral commodities.

    Also, to ensure environmental mitigation in the mine fields, Adegbite said Environmental Laws and Regulations are being enforced to the letters.

    According to him, the recent second International Conference on Artisanal Gold Mining with Lead, organised alongside with Medicines San Frontiers (MSF), provided the platform to strategise on how to prevent lead poisoning associated with artisanal gold mining.

    The ministry’s efforts have not gone unnoticed. Azobu and Jaiyeola, in the PwC report earlier cited, admitted that efforts to curb illegal mining have been ramped up by the provision of surveillance vehicles for Mines Inspectors across the country and increased inter-agency co-operation.

    PwC also said the issue of illegal mining is being tackled through the establishment of the Mines Police Division, as well as the emergence of the Joint Task Force on Mines surveillance including officers of the Police and the Nigeria Security and Civil Defence Corps (NSCDC) working closely with all the state mines offices.

    This, according to the multinational mining industry advisor, was “to put an end to criminal activities in the mines and ensure safety of lives and investments including compliance with laid down procedures and environmental standard requirements.”

    The company noted that this has led to some arrests of local and foreign illegal miners, adding that there has also been support for revamping the operations of Mineral Buying Centres across the country.

    PwC was, however, noted that “unfortunately, solving the menace of illegal mining in Nigeria also requires efforts by the international community in stifling illegal sale cartels majorly driven by foreign interests.”

    PwC no doubt, laid credence to fears that the thriving illegal mining activities in the country enjoy the strong backing of some foreign interests. The local perpetrators of the illegal act, The Nation learnt, are mostly poor, unemployed rural dwellers.

    They also use crude methods and household implements to exploit the solid minerals. Besides, they do not have the expertise or capacity to go through the sustainable processes of the mineral value chain for the delivery of optimum economic benefits to themselves or the nation.

    As a result, much of the mineral commodities illegally mined are exported in crude form to European and Asian countries at give-away prices, without any value addition, to the disadvantage of the national economy.

    What this means is that the economies of other nations are being developed, both in terms of revenue earnings and job creation, at the expense of Nigeria’s. The absence of globally recognised mining companies in Nigeria is widely believed to be partly responsible for the upsurge in illegal mining activities.

     

    Digging hole in govt’s purse

    Currently, about 80 per cent of mining activities in the country are said to be illegal, depriving the various tiers of government of billions of Naira in supposed royalties annually.

    For instance, between 2016 and 2018 alone, Nigeria lost about N353 billion in gold smuggled out of the country and sold in the international market without any revenue accruing to the government.

    Within the three-year period, about 18 tons of gold were smuggled out of the country and sold in the international market, according to  the former Minister of Mines and Steel Development, Alhaji Bawa Bwari.

    Bwari, who confirmed that six tons of gold originating from the country  were traded in the international market on an annual basis, said the trade did not benefit the country as it made no impact on the nation’s GDP.

    When added the billions of naira government spends on remediation processes on lead poisoning and other environmental hazards caused by illegal mining in various states of the federation, the cost is indeed, humongous.