Category: Industry

  • Nigeria targets single digit inflation rate by 2020

    The Federal Government is targeting a single digit inflation rate by 2020, the Minister of Budget and National Planning, Mr. Udoma Udu Udoma, has said.

    The National Bureau of Statistics (NBS) in its Consumer Price Index (CPI) May 2017 report, released in Abuja, during the week, indicated that the country’s inflation dropped to 16.25 per cent in May, from 17.24 per cent in April.

    According to the report, this is the fourth consecutive decline in the rate of inflation since January.

    The Bureau stated that the headline index increased by 1.88 per cent in May 2017, 0.28 per cent points higher than the rate of 1.60 per cent recorded in April 2017.

    But Udoma said government was committed to containing the inflation rate so as to make life more meaningful to the citizens.

    According to him, the Central Bank of Nigeria (CBN) is saddled with the responsibility of achieving the single digit inflation rate by 2020.

    “We are targeting to bring the inflation to single digit by 2020 and it is the role of the CBN to do that,’’ Udoma said.

    He expressed optimism that the single digit inflation rate would be achieved in spite the allegations of policy inconsistencies being leveled against the CBN in some quarters.

    The minister said: “I don’t think there are inconsistencies, you have different objectives and you have to balance, it’s a balancing thing, there are no inconsistencies.’’

    On plans to submit the 2018 budget to the National Assembly by October, the minister said government was determined to return to the January-December Budget Year cycle.

    He said: “We want to move back into a January-December budget year because even though the Act that the National Assembly (NASS) passed and signed into law allows 12 months, which means that this budget just signed has a 12-month lifespan, it is not the best.

    “People need to plan carefully with the January-December budget cycle.

  • CWAY restates commitment to quality

    •Celebrates 10 yrs of CWAY Nutri-Milk

    CWAY Nigeria has reiterated its commitment to the production of quality goods as it celebrates a decade of producing CWAY Nutri-Milk.

    The company began production in 2007.

    At a conference to mark the 10th anniversary in Lagos, the Deputy Director Administration, Tony Ojuomola, said the company will continue to build on the successes recorded in the last one decade.

    “We are happy that one of our top brands is clocking 10. The product that has stood the test of time and made us develop a good relationship with our business partners, loyal consumers and has also brought profit and growth to the company and created employment for many,” he said.

    Ojuomola said Nutri-Milk is not just a brand but a premium brand of an idea that translated into a brand in the line of production in CWAY that calls for celebration.

    On the brand impact on host communities since 2007, he said: “CWAY has been known not only for production of quality products, but also giving back to the host communities, especially in the area of Corporate Social Responsibility (CSR).

    “We have two caregivers home that get our support on monthly basis namely, Ijamido Children Home in Ota, Ogun State, and SOS Children Village, Isolo, Lagos,” he said.

    Ojuomola explained that the CWAY product line was established in 2007. He said shortly after its introduction into the Nigerian markets, the company was thrilled and surprised how fast it gained market acceptance

    He attributed the brand’s acceptability to the favourable government policies of both Lagos and Ogun State at that time.

    The General Manager, Figo Zheng, said: “As we appreciate our numerous partners and consumers for their unwavering belief in our products for the last 10 years, we assure everyone that we will continue to make sure that the quality of Nutri-Milk is sustained in spite of the dwindling exchange rate in the country.

    “We encourage our customers to continue to stand for a united Nigeria by joining our campaign in this time, ‘sharing Nutri-Milk, and sharing love.’

  • Guidelines for raw sugar allocation out

    To boost its Backward Integration Programme (BIP), the Federal Government has released new guidelines and benchmarks for raw sugar allocation to operators in the sector.

    National Sugar Development Council (NSDC) Executive Secretary Dr. Latif Busari  said under the guidelines, operators would be required to submit their requests for sugar in December.

    Busari, who made this known in Abuja, through the Council’s Senior Information Officer, Mr. Yunusa Abdullahi, said this year’s allocation would be the last based on the old criteria, including market and share refinery capacity.

    He said from next year, allocation would be based on quantitatively- verified improvement in performance.

    Busari, however, added that the Sugar Roadmap Implementation Committee (SURMIC) and Sugar Industry Monitoring Group (SIMG) were expected to monitor all BIP projects quaterly.

    According to him, the outcome of each monitoring will be forwarded to all operators with copies sent to the Council and to the Office of the Minister of Industry, Trade and Investment.

    Busari explained that the Key Performance Indicators (KPIs) for assessing and scoring BIP’s performance shall be the size of the land developed and target for the year.

    Other indicators include mill development and factory operation, sugar produced in tons and jobs created for the year.

    The NSDC boss said that to ensure compliance, government would put in place sanctions for poor BIP performance.

    “Any operator that fails to achieve performance target for the year, based on BIP commitments as released by the Joint Harmonisation meeting, shall be penalised for poor performance, with reduction in quota commensurate with performance scores,” Busari said.

    He added that scores by operators shall be in percentages and an operator shall be allocated the percentage of its score in the year’s projected allocation.

    Busari also said there would be sanctions for quota infringement by any of the BIP operators.

    He explained that any operator who abused allocated quota through excess importation would pay for the excess sugar imported, calculated on the extant tariff indicated in the Nigerian Sugar Master Plan (NSMP).

    Busari said: “Erring operator must pay the duty penalty for excess importation before it can be allowed by the Nigerian Customs Service to discharge its raw sugar cargo.

    “The Council reserves the right to recommend additional sanction if the above appears not effective in ensuring compliance.

    “It is hoped that these measures, if adopted and strictly implemented, shall bring some sanity to the implementation of the sugar BIP programme and enhance the performance of operators.’’

    According to him, the Federal Government had, following the official take-off of the NSMP in January 2013, began the implementation of the Sugar Backward Integration Programme.

    He said three refineries were approved as BIP operators and were made to sign formal commitments detailing a number of indicators by which their performance would be measured.

    Busari explained: “As part of the arrangement, raw sugar quotas at the concessionary tariff of five per cent duty and five per cent levy, was to be allocated to operators on the basis of performance of their BIP projects.

    “It will also act as incentive to encourage operators to plough back profits to their BIP projects.’’

    He added that the concessionary tariff would last for three years in the first instance, and that operators’ performance would be assessed by two special committees – SURMIC and SIMOG – set up by the NSMP.

  • Nigerian Breweries partners entrepreneurs

    Nigerian Breweries partners entrepreneurs

    Nigerian Breweries (NB) Plc  has deepened its partnership with indigneous entrepreneurs and farmers to harness the huge value chain from its backward integration policy, its Corporate Communications and Brand Public Relations Manager, Mr. Patrick Olowokere, has said.

    Speaking during a tour of Psaltry International Limited, one of Nigerian Breweries’ major raw material suppliers, in Alayide Village, Ado Awaiye near Iseyin in Oyo State, he said the company was consolidating its local sourcing of input for its operations.

    He said the company has fast-tracked its plan to attain 60 per cent local input sourcing  by 2018 as against the initial 2020 target.

    Olowokere said the strategy was to identify organisations that could produce raw materials and ancillary products as input for its business.These organisations, Olowokere explained, would be  provided with a market for their products.

    He said the value chain model has been experimented in packaging material, sorghum and cassava development models.

    Olowokere  said the company had increased the supply of sorghum used for some of its beverages as more than 100,000 metric tonnes of the cereal are sourced yearly.

    “Over 250,000 farmers spread across agronomic zones in the North have been impacted by our sorghum value chain programme as at 2013,” he said.

    The company’s brands are packaged using locally-sourced packaging materials, such as bottles, cans, crates, cartons, crown corks, and labels. As at last year, 99 per cent of these packaging materials were locally sourced, opening opportunities to indigeneous entrepreneurs.

    Similarly, the company has since 2015 been working with Psaltry International, a local cassava processing company, to optimise the cassava value chain by providing industrial quality cassava starch to extract maltose syrup for use in its brewing process.

    NB, according to Olowokere, would strengthened local ancillary businesses, particularly the  procurement of raw materials, such as starch input and identify Psaltry, as a supplier of high-quality cassava starch.

    He maintained that the initiative was part of the company’s corporate philosophy of “Winning with Nigeria” and in line with its backward integration.

    The Managing Director/Chief Executive Officer of the firm, Mrs. Oluyemisi Iranloye, said the company has created a supply chain of 5,000 farm families, which included more than 2,000 outgrower farm families, marketers, transporters and retail input suppliers.

    She added that the company has saved the nation more than $7 million in foreign exchange in the past two years through local provision of processed cassava starch for industrial use.

    The deal between the firms is also impacting socio-economic development of small scale farming communities in Nigeria. For instance, Chief Busari Amusa, Baale of Alayide, the host community of Psaltry International Limited, was full of gratitude for the new infrastructural transformation that had come to his community. “It is a dream come true. We have electricity, boreholes for water and the roads are also opening up for accessibility between our farms and the factory. My story has changed.”Today, and less than two years of this cassava business, I have a new house, a car and four of my children are in higher institutions of learning. This is unbelievable,” he revealed during the tour of the community,” he said.

  • Boost for non-oil sector as Nigeria exports yam to US, UK, others

    Boost for non-oil sector as Nigeria exports yam to US, UK, others

    Nigeria plans to export 72 metric tonnes of yam to Europe and the United States (US). It is targeting a yearly revenue of $8 billion from the export. This is seen as a boost for non-oil export, which will help in diversifying the economy. But, there are fears about quality and standards, which caused the rejection of Nigeria’s agro-allied products in Europe and the US. Can these fears be addressed? Assistant Editor CHIKODI OKEREOCHA asks.

    Minister of Agriculture and Rural Development Audu Ogbeh is upbeat. Under him, Nigeria’s push to build a robust export-based economy appears to have started.

    Barring last-minute hitches, Nigeria will, this week, export 72 metric tonnes of yam to Europe and the United States (US). The shipment, according to Ogbeh, will be in three containers of 24 metric tonnes each; one container will go to the United Kingdom (UK); the rest, US.

    Ahead of the planned shipment, the Minister has announced that the Federal Government targets about $8 billion annually from yam export.

    Ogbeh, who made this known when he received the Technical Committee on Nigeria Yam Export Programme in Abuja, said yesterday’s launch of the programme would enable the country earn foreign exchange from agric produce to substitute the oil and gas sector.

    The Nigerian Yam Export Programme is a private sector initiative aimed at taking yam processing to the next level. It was inaugurated in February this year. Its Technical Committee was made up of representatives from the Nigerian Customs Service (NCS), Nigeria Agricultural Quarantine Service (NAQS) and the Nigerian Ports Authority (NPA), among others.

    The Committee’s mandate was to sensitise farmers and exporters on the required international standards for yam before export, and facilitate acquisition of warehouses at the receiving destinations, among others.

    The Yam Export Programme, The Nation learnt, became necessary because of Nigeria’s comparative advantage in yam production. Ogbeh put it in perspective when he said despite accounting for over 60 per cent of global yam production, “people do not know that we grow yam”.

    While admitting that Ghana’s projection on yam export was impressive, the Minister expressed optimism that Nigeria can quadruple Ghana’s. “We should keep pushing to become number one in yam export,” he said.

    As part of strategies to surpass Ghana in yam export to Europe and other continents, Ogbeh tasked the NAQS on reducing the inspection charges, pointing out that it will make the country competitive in the export market. He also tasked the Technical Committee on Yam Export on mechanised heap making to work for the design of a plough that can make yam heaps.

    Ogheh, who pledged that government will work on the packaging and use of the right type of trucks for transportation of yam, also assured yam exporters of government’s support, assuring that government will refund everything they spent on the venture.

    The Committee Chairman, Prof Simon Irtwange, said the committee was working with the International Institute of Tropical Agriculture (IITA) to train farmers and improve some yam varieties.

    While stating that the committee had prepared a four-year action plan for the yam value chain programme in the country, he solicited better funding for the committee.

    “We have standards that we are following and they have to do with pytho-sanitary requirements to meet international standards. We have combined the standards of Ghana and Nigeria to make sure our yams are not rejected at the international market,” Irtwange said.

     

    Why govt, operators are excited

    It is easy to see why the Minister and indeed, operators in the non-oil export business are excited over Nigeria’s prospects of reclaiming her prime position in yam export. For one, the cheery news came at a time the nation was losing the US’s patronage of its crude oil, forcing her to focus on agric produce to penetrate the US market.

    Most importantly, the development came after a barrage of import ban on Nigeria’s agro-allied products into the EU and US markets over quality and standard-related issues, which left the authorities and Nigerians thoroughly embarrassed. It also dealt severe blows to Nigeria’s push to boost non-oil export and facilitate economic diversification.

    For instance, last year alone, the EU rejected 24 exported food products from Nigeria for not meeting standards. Some of the food items denied entry, according to the National Agency for Food, Drug Administration and Control (NAFDAC), included groundnut, palm oil, sesame seeds, melon seeds, dried fish, meat and beans.

    NAFDAC spokesperson, Dr. Abubakar Jimoh explained that information made available to the agency showed that groundnut was rejected because it contained aflatoxin, which made the quality substandard.

    He said the exported palm oil, on the other hand, did not scale through the EU’s test because it also contained a colouring agent that was carcinogenic. Jimoh also said Nigeria’s beans were banned by the EU sometime ago, but they were illegally exported to European countries.

    The EU had in June 2015 banned the importation of Nigeria’s dried beans on grounds that it contained high level of pesticides considered dangerous to human health. This came after the Republic of Ireland rejected and returned five containers of beans exported from Nigeria to the country.

    The products were said to have been received with heaps of weevils. Apparently embarrassed by the development, the relevant government agencies said they were working to get the EU lift the ban. But as it turned out, the European body was not impressed by measures taking by Nigeria to resolve the issue.

    Accordingly, the EU extended the ban by another three years, citing the continued presence of dichlorvos (pesticide) in dried beans imported from Nigeria.

    “The continued presence of dichlorvos (pesticide) in dried beans imported from Nigeria and maximum residue levels of pesticides shows that compliance with food law requirement as regards pesticide residual cannot be achieved in the short term.

    “The duration of the importation prohibition should therefore, be extended for an additional period of three years to allow Nigeria implement the appropriate risk-management measure and provide required guarantees,” the EU said.

    The extension of the ban is expected to expire next year, with Jimoh noting that NAFDAC and other regulatory agencies are working round the clock to ensure that when the ban is lifted, “we can then begin to export more agricultural products to the EU”.

     

    Cocoa also banned

    While Nigeria was still rattled by the extension of the ban on beans, the US added to her woes by banning the importation of Nigeria’s cocoa into its market. The US authorities were said to have taken the action because Nigeria’s cocoa did not satisfy the standard required for exportation into the US.

    These were major setbacks for Nigeria currently struggling to boost non-oil export and diversify her economy severely battered by the crashing oil prices. The situation was more worrisome, especially considering the fact that international attention was shifting to Ghana’s and Côte d’Ivoire’s cocoa.

     

    Quality, standards take center stage

    Although, experts and industry operators say Nigeria’s plan to export yam was an indication that the nations’ drive for a non-oil economy was on course, they noted that sustaining the current tempo required addressing the fundamental issues of quality and standards that cause Nigeria’s exports rejection in the first instance.

    Some of them, who spoke with The Nation, specifically said apart from the need to put in place functional laboratories for testing and certifying products before export, synergy amongst standards regulatory agencies was imperative.

    Founder, Centre for Cocoa Development Initiative, a non-governmental organisation (NGO), Mr. Robo Adhuze, observed that lack of seriousness by the Federal Produce Inspection Service (FPIS), the agency responsible for checking and certifying agro-allied products leaving the country, was robbing Nigeria the benefits of a vibrant non-oil export-based economy.

    “Quality standards have moved from physical standards to biological standards, but FPIS appears not be up to speed with this reality,”he said, recalling that Ghana suffered the same fate about five years ago  when over 2, 000 metric tonnes of her cocoa beans were rejected by Japan.

    He said the Chocolate and Cocoa Association of Japan appealed to Ghanaian authorities to take immediate steps to reverse the excessive agro-chemical residues found in cocoa beans exported to the Asian country.

    He said Ghana’s standards regulatory authorities rose to the challenge by putting in place appropriate and adequate measures to guarantee the quality of her cocoa products for export.

    Adhuze expressed disappointment that while Ghana’s standards regulatory authorities took steps to reverse the excessive agro-chemical residues found in their cocoa beans, Nigeria was unable to do so, resulting in the harvest of import ban that threatened the non-oil sector, especially agro-allied products.

    The expert also pointed out that Nigeria’s lack of seriousness is underscored by the fact that despite exporting cocoa for over 100 years, the country has no defined cocoa policy to identify the basic links in the cocoa value chain.

    According to him, there was need for a policy on cocoa farming with appropriate institutional framework to boost its production through proper identification of all the actors, who have stake in the industry, from farmers to processors, marketers and exporters, among others.

    Agencies move to halt export rejections

    As part of efforts to sustain the current tempo, NAFDAC has urged exporters to subject their products to its standard and internationally accredited laboratories for proper certification.

    Screening and certification of any product for export by NAFDAC, he said, was free of charge in spite of facilities, personnel and chemical reagents being used to conduct such tests.

    “The Federal Government is doing this as a deliberate policy to encourage our exporters and to satisfy international standards for exports. We are now appealing to our exporters not to run away from product certification of NAFDAC.

    “It is free and we don’t charge anything for such service. We have adequate personnel and equipment to carry out such responsibility in the country,’’ Jimoh said.

    He lamented that the exporters action has put the country’s image in bad light and caused a huge loss to exporters themselves, which negatively impacted the economy.

    According to him, NAFDAC had six functional laboratories across the country, which conduct various types of products tests.

    NAQS Co-ordinating Director, Dr. Vincent Iseghe, on his part,  has called for effective collaboration amongst export processing agencies to ensure efficient, result oriented and 100 per cent acceptance of Nigerian produce at the global markets.

    Similarly, the Agro-Allied Group of Lagos Chamber of Commerce and Industry (LCCI), has called for stricter issuance of phytosanitary certificates for export-bound agricultural produce.

    Speaking in Lagos, its Chairman, Mr. Tunji Falade, canvassed intensified collaboration between export regulatory agencies, organisations, exporters and farmers, adding that the rejection of the commodities by the EU should not be seen as victimisation, but an opportunity to reposition Nigeria’s export system. “What we should be trying to do now is to ensure that we get this export issue right, in terms of all the standards involved,” he said.

    Right now, we have some agencies that are supposed to be involved in the regulation of this process. Apart from the Nigerian Export Promotion Council (NEPC), we have NAQS

    “All of these organisations and agencies really need to collaborate with exporters, farmers, agronomists and stakeholders to ensure that before the products leave the country, all the standards are met. The issuing of phytosanitary certificates to export-bound agricultural produce should be very strict,’’ Falade said.

  • ‘Manufacturers can’t survive 20 to 30% interest rate’

    ‘Manufacturers can’t survive 20 to 30% interest rate’

    Sona Agro Allied Foods Limited, a biscuit manufacturing company and subsidiary of Sona Group of Industries, has exported its products to Ghana and other West African countries. In this interview with OKWY IROEGBU-CHIKEZIE, its Chairman, Mr. Arjan Mirchandani, says the company achieved this feat because it sources over 90 per cent of its raw materials locally. He also says there is a need to encourage indigeneous industries with cheaper funds and favourable policies, urging the government to engage more with local manufacturers.

    What is the significance of the inauguration of Sona Agro Allied Foods export?

    The significance it supports  the government’s policy on backward integration and local farmers. It is important to help farmers. We believe they are the future of this country. We also believe that aside farmers, Nigerians can decide their future. It is not the business of any foreigner to decide the future for Nigerians. Foreigners could bring investments, technology and all the talents to make sure goods produced here are comparable to those from Europe and the United States, so that at the end of the day, one can take the products to other markets not only within Africa. It is necessary  to look at the opportunities. This is one of the reasons we started this journey using local raw materials.

    We started with just two containers for export, which in our estimation equals 200 containers, because when one has faith and takes a step at a time, one will reach one’s goal. Nigeria has an opportunity to grow, and to replace all imports with locally-manufactured goods and save foreign exchange. We cannot rely only on oil money. When you have too much of oil money, people get spoilt; when you have little, you start looking at what you have at home. Thus, taking one step is better than not starting at all.

    What drives you as a businessman?

    Every step we have taken has been guided by God. It is also our belief that you don’t ask your country what it will do for you, but what you can do for it. We make sure that we do our part for the society.

    Many companies have been affected by the economic downturn, with some either downsizing or producing at less than installed capacity. What has been your solution to this crisis?

    Probably. companies that are downsising were not able to get their acts together. Banks are also not helping the sector as their interest rates are between 20 and 30 per cent, which no manufacturer can survive on. With an interest rate of that nature, no business can survive. In India and other countries, interest rates are two, three or four per cent maximum. In Switzerland, you will get money at one per cent rate. When you have cheap money, you are encouraged to invest more. Nevertheless, we are still expanding, with no reason to downsize and deny workers their livelihood; we are doing everything possible to keep our staff even in the toughest season.

    How do you comply with quality standards, especially getting certification from the regulatory bodies?

    We adhere to quality standards in our production processes and have obtained certification from the International Organisation for Standardisation. We have complied with all the regulations from the Standards Organisation of Nigeria  (SON), National Agency for Food and Drug Administration and Control (NAFDAC) and other government agencies. We are a responsible company and we are encouraged, despite the situation which makes us to be bringing in newer technologies. We are working with the Bank of Industry (BoI) and the International Institute of Tropical Agriculture to achieve this. We are grateful to some of these government agencies because they encourage growth in investments. If the cost of funds is not made cheaper more industries will die in Nigeria. I don’t believe that should mortgage the future of the country. We should encourage local industries that source raw materials locally.  Nigeria got her independence in 1960, but we are not free until we are free by being self-sufficient. We need to start immediately.

    How should the government assist investors?

    We want the Federal Government to make cheaper loans available for the industries. We also believe that government officials should visit industries more often and encourage them, especially during moments of difficulties. It is the duty of every one of us to join hands together to grow Nigeria. That is why we think the Federal Government needs to engage manufacturers and ask them what their problems are. We have written many letters but we don’t get response from the government and this is very unfortunate. At Sona Group of Companies, we are producing with 100 per cent local raw materials, yet the Federal Government allows people to import commodities that can be sourced locally and they are charged only five per cent duties. For instance, some people are importing sorghum when we have enough of it in the country. We need to make policies to support local companies.

    What are your investment plans?

    At Sona Agro Allied Foods, we’ll like to see 100 per cent capacity utilisation. In the next 15 months, we are hoping to grow by 200 per cent. We feel that import reduction and government’s policies are helping to grow the industries and so automatically, employment will grow and the ordinary Nigerians will be proud that he is contributing to the growth of the economy. We have thousands of vibrant Nigerians in our work force and they are doing well.

    What efforts are you making to ensure proper branding of your products to make them more acceptable in the market?

    Great products are made of great quality. If you don’t do quality but you have great packaging, you won’t sell. The customer must get value for his money. Our belief is that people must get value for their money. That is important for us and we have obligation to our customers. We are also not relenting in our efforts to promote the products by building awareness.

    What is unique about your products?

    We are not doing anything extraordinary, but one thing I know is that when you produce quality goods, you don’t have to show off. Consumers themselves will determine what the market of the products should be.

    Which of your subsidiaries is your flagship and what are the different market shares of your firms?

    There is no discrimination in our organisation. Our industry is viable based on availability of local raw materials. I am all for it and I will do whatever it takes to replace imported products. Daily, we put millions of products into the market and we make sure that no problem or complaint comes to us because of our products. And we also pay close attention to our customers because we believe that the customer is always right and we ensure we give them value for money.

  • ‘Niger Delta peace critical to delivering budget 2017’

    The sustenance of the relative peace in the oil-rich Niger Delta is critical to the achievement and delivery of the 2017 budget.

    The Federal Government must therefore, take the current peace in the restive region seriously by ensuring that the promises it made to the people are kept particularly with regards to fulfilling its side of the agreement on modular refineries.

    The Chairman, Petroleum and Natural Gas Senior Staff Association of Nigeria and National Union of Petroleum and Natural Gas Workers (PENGASSAN & NUPENG) Petroleum Industry Bill (PIB) Committee, Comrade Hyginus Onuegbu, said this was necessary to avoid any disruption in oil and gas operations.

    Speaking with The Nation, at the weekend, he noted that there was nothing in the 2017 budget that inspired hope that Nigeria will pull out of recession, adding that what will pull the country out of recession are basically happenings in the oil and gas industry where there is need to sustain the current relative peace in the Niger Delta to ensure continued oil production.

    Acting President Osinbajo had on Monday last week, signed the N7.44 trillion 2017 budget, which he said was designed to bring the Nigerian economy out of recession onto a path of sustainable and inclusive growth.

    Osinbajo said the budget has a revenue projection of N5.08 trillion and an aggregate expenditure of N7.44 trillion, and that the projected fiscal deficit of N2.36 trillion is to be financed largely by borrowing.

    But Onuegbu said the budget was merely an estimate, and that its revenue targets are based on assumptions hence, “if there is crisis in the Niger Delta, the nation’s oil production target will not be met, and of course, its revenue target will not be met, forcing the nation to resort to borrowing.”

    Onuegbu, who was immediate past Chairman, Rivers State chapter, Trade Union Congress (TUC) of Nigeria, expressed regrets that Nigeria’s debt service obligation was too high.  “It’s a big challenge. One third of the budget is to be financed by borrowing.

    “And when you borrow, the reason for which you borrow the money must be economically viable to be able to repay the loan otherwise that loan will become a big burden on you,” he noted.

    The PIB Committee Chairman, therefore, said for Nigeria to avoid the debilitating effects of plunging into another debt trap, the government must take the current relative peace in the Niger Delta seriously by ensuring that promises it earlier made to the people of the region are honoured.

    He argued sustaining the peace in the region was necessary to wad off disruption in oil and gas operations.

    “Oil production is up now, getting to 1.8 million barrels per day; it was very low last year because of militant attacks. Besides, oil price is better this year than last year. The Federal Government should understand that critical to the achievement and delivery of the 2017 budget is the maintenance and sustenance of the peace in the Niger Delta so as to engender increase in oil & gas production that we are witnessing now,” he said.

    Onuegbu noted that a combination of the agreement signed on the December 16 last year between the oil companies and the Ministry of Petroleum Resources on existing cash call and funding of more oil and gas projects will lead to increased production, if there is continued peace in the Niger Delta.

    He also said there is need for oil price to rally round $60 per barrel before Nigeria’s hope of coming out of recession can materialise, not necessarily because of any special aspect of the 2017 budget.

    “As a matter of fact, the 2017 budget should not be celebrated. This is a budget that was signed in the middle of the year,” Onuegbu argued.

  • Pharmacists laud Fed Govt, M&B on vaccine production

    •Seeks ExpeditedMedicines’ Access Programme (E-MAP)

    The Pharmaceutical Manufacturing Group of the Manufacturers Association of Nigeria (PMG-MAN) has praised the Federal Government for supporting local production of vaccines.

    The Federal Ministry of Health and May & Baker (M&B) have entered into partnership on vaccines production in the country.

    In a statement, PMG-MAN Executive Secretary, Dr Obi Peter Adigwe, said the partnership was the most sustainable and effective approach to ensuring national security and self-sufficiency in this critical area.

    Adigwe said: “Local medicines’ manufacturers in Nigeria have long been associated with the production of high quality, affordable medicines. It is on record that Nigeria still has the biggest cluster of World Health Organisation (WHO) certified companies in Africa, and incidentally, May & Baker is one of them.

    “Local medicines’ manufacturers are also at the forefront of innovative and contextual solutions to local healthcare issues, such as this commendable partnership that you have initiated. This is evidenced by our robust and comprehensive engagement with a wide range of policymakers and stakeholders”.

    Adigwe further canvassed the Expedited Medicines’ Access Programme (E-MAP), a proposed collaborative contractual partnership between the health ministry and local manufacturers.

    He said the E-MAP was in line with the administration’s vision and aspirations aimed at providing affordable, high quality medicines in a sustainable and cost efficient way.

    Adigwe said the programme design involved combining innovative manufacturing practices with contextual logistics and supply chain management that would achieve effective, cost efficient and timely provision of high quality medicines.

    He drew the attention of the Health Minister, Prof Isaac Adewole, to Acting President ‘Yemi Osinbajo’s Executive Order on local content in public procurement mandates to all Ministries, Departments and Agencies (MDAs) to give preference to local manufacturers.

    Adigwe stressed that Osinbajo specified locally manufactured medicines in Section 4F and the need to patronise them extensively.

    He said it was on account of this that his association was appealing to the health ministry to begin the relevant processes for the implementation of E-MAP. He added that the implementation will not only grow the capacities of local manufacturers, but also increase the possibility of job creation.

    The proposed vaccine production has been on hold since 1991, but was reactivated and upgraded to establish a company called Bio-vaccines LTD, which will be jointly owned by the Federal Government and May & Baker Plc.

    At the signing ceremony by the Federal Government and May & Baker Plc, last month, Adewole said it would further secure lives since the production of vaccines was now considered a security issue.

    He said: “We have considered vaccines as a security issue, it is not only health but we need to consider the security of all Nigerians particularly our children. So, with this agreement, we will be able to produce those command vaccines and from 2021 and beyond, every other vaccine that is necessary will also be out on board for administration to Nigerians”.

  • UNIDO: global manufacturing rose 3.7% between Jan and Mar

    UNIDO: global manufacturing rose 3.7% between Jan and Mar

    •Africa’s manufacturing output hits 5.7% 

    Global manufacturing output rose by 3.7 per cent in the first quarter of 2017, compared to the same period of last year – a rate  higher than the average rise observed in 2016, a United Nations Industrial Development Organisation (UNIDO) report, has said.

    The report, which was signed by UNIDO Chief Statistician Shyam Upadhyaya and made available to The Nation, said global manufacturing gained strength in 2017 and the prospects for sustained industrial growth are improving in industrialised and developing economies.

    According to the report released during the week, improved growth figures were observed across all country groups. It said manufacturing output of industrialised economies rose by 1.9 per cent in the first quarter of 2017, compared to the same period of previous year.

    “Manufacturing output rose in all major industrialised economies with a significant share of global manufacturing output, namely the United States of America, Japan, Germany and the Republic of Korea,” the report said.

    It added that among the industrialised regions, Europe’s manufacturing output grew by 1.4 per cent in the first quarter of 2017, and that positive trends were widespread throughout Europe.

    “Manufacturing output rose by 3.5 per cent in Netherlands, 2.7 per cent in Belgium, 2.6 per cent in Finland and 1.7 per cent in Austria. Similarly, manufacturing output rose by 6.6 per cent in Poland, 6.7 per cent in Romania and 3.5 per cent in Bulgaria,” the report said.

    It, however, stated that the repercussions of lower global energy prices were still present in Norway and the Russian Federation, where manufacturing output was yet to achieve growth.

    The report also noted that emerging industrial economies showed much higher growth – 6.0 per cent – during the same period. For instance, Latin American economies showed early signs of recovery, achieving positive growth rates for the first time since a prolonged recession in recent years.

    Higher growth rates were achieved by developing economies in Asia, while the manufacturing output of Africa rose by 5.7 per cent.

  • OPS differs on 5% Road Fund

    Members of the Organised Private Sector (OPS) seem to differ on the merits of the proposed five per cent Road Tax aimed at revolutionalising the road sector.

    While some agree that it is a global best practice to ensure sustainable funding of roads and the most viable model of generating development fund, others say the additional petroleum levy will further escalate the already high cost of living.

    The reports of the Senate Committee on Works recently came out with a Bill for an Act to establish the National Roads Fund. The report stated that it would be used to finance the sector.

    The N5 petroleum levy per litre on any volume of petrol and diesel products imported into Nigeria and on locally-refined petroleum products will be used to partly fund the proposed National Roads Fund.

    The Director-General, Lagos Chamber of Commerce & Industry (LCCI), Mr. Muda Yusuf, said the concept of a road fund was desirable, noting that one of its advantages is the easy collection.

    Besides, the fund, he said, is progressive because the rich consume more fuel than the poor and will, therefore, pay more.

    Yusuf, however, said the dilemma is Nigerians’ perception of fuel as a social product because of the long history of government involvement in pricing.

    He said: “Economic rationality is one thing, political expediency is another. But ultimately this is the way to go. Funding the road infrastructure through the annual budget will not give the economy the quality of road infrastructure that we deserve.

    “The truth is that the economic cost of poor road infrastructure in Nigeria is phenomenal. The Small Medium Enterprises (SMEs) and the generality of the citizens will gain more from the creation of a road fund and the consequential impact on road infrastructure.”

    The LCCI boss said that presently, over 90 per cent of freight and the movement of persons in the country are by road. According to him, poor road infrastructure is a major factor in the current high cost of goods and services in the country, especially agricultural products.

    He argued that good roads would improve the linkages between the rural areas and the cities, and between the various economic zones in the country.

    He also stated that it would facilitate the integration of the domestic economy, spur growth, increase incomes, enhance productivity and lead to the creation of more jobs.

    But the President, Manufacturers Association of Nigeria (MAN), Dr. Frank Udemba Jacobs, disagreed, citing harsh economic environment.

    He said, for instance, that given the current macroeconomic challenge of high inflation rate, negative national output growth and dampened aggregate consumption due to erosion in real income of the consuming public, additional petroleum levy will further escalate the already high cost of living.

    Jacobs said: “This (5% road fund) will further depress aggregate consumption as real income of Nigerians will further decline. The effect will be a slowdown in business activities across all categories – Micro, small, medium and large businesses alike.

    “I would therefore, advise the government to have a re-assessment of the implications of the proposed action on the fragile and slowly recovering economy.”

    The MAN president advised government to engage the private sector more in infrastructure development through concessional arrangement such as Build, Operate and Transfer (BOT) especially in road and rail construction and operations. This, he said, will free some funds for other fiscal responsibilities.

    Jacobs, however, stressed that the importance of infrastructure to the development and growth of the economy cannot be over-mentioned. According to him, good roads and other economic infrastructure are no doubt critical to the manufacturing sector.