The Nation Newspaper

Category: Industry

  • ‘Ban on vehicle import through land border ’ll cost 3m jobs’ 

    About three million people would lose their jobs following the Federal Government’s ban on the importation of fairly–used vehicles through the land borders, the Association of Motor Dealers of Nigeria, has said.

    Making this known in Gusau, the Zamfara State capital, its National Organising and Social Secretary, Alhaji Bashir Idris-Ataka, warned that the policy would further worsen Nigeria’s unemployment problem.

    Na’ala Motors Company Managing Director, Gusau, Idris-Ataka, said those likely to lose their jobs as a result of the policy include dealers, middlemen and drivers. “We are appealing to the government to look at the policy again and change it  to  a better alternative, considering its effect on the economy,” he said.

    Idris-Ataka advised the government to reduce the customs duty charges, saying the high charges were responsible for the high cost of fairly used vehicles being imported into the country.

    His words: “We have met with the Comptroller-General of the Nigeria Customs Service and the House of Representatives Committee on Customs Service. And we have laid our complaints before them. We are hoping it will yield positive results”

    Idris-Ataka said that government should look into the complaints carefully and see the problems that the policy may cause and provide possible solutions to them.

    He described the association as a law-abiding one that had been contributing immensely to the economy by providing employment opportunities to millions of Nigerians.

    “We are ever ready to cooperate with government at all levels to improve the socio-economic development of the country. We also contribute to the nation’s income, as we pay revenue to government at all levels. We are, therefore, appealing to government to listen to our complaints,” the auto dealer said.

  • Forces against CBN’s 60% forex allocation policy

    Forces against CBN’s 60% forex allocation policy

    To help manufacturers, the Central Bank of Nigeria (CBN) dirceted banks to allocate 60 percent of their foreign exchange to them. But, months after, manufacturers are still running around for forex because of what some call “ineffective monitoring and enforcement” of the policy. Assistant Editor CHIKODI OKEREOCHA reports. 

    It took sustained push by members of the Organised Private Sector (OPS) and others to get the Federal Government to heed the call for a 60 per cent special foreign exchange (forex) allocation window for manufacturers. The intervention was supposed to allow manufacturers fund importation of critical raw materials, plants and machinery not available locally.

    Specifically, it was envisaged that the preferential forex allocation window would help cushion the effects of forex scarcity, which hit real sector operators, particularly import-dependent manufacturing businesses, following the Central Bank of Nigeria’s (CBN’s) policy that restricted importers of 41 items from accessing its official forex market.

    Manufacturers kicked against the policy, describing it  as “obnoxious, superfluous, and ill-conceived”. They argued, for instance, that apart from not being consulted, those who needed the raw materials and products restricted from the forex market as their primary products in the manufacturing process were adversely affected.

    The inclusion of essential raw material input for manufacturing in the CBN import prohibition basket forced many firms to shutdown, leading to massive job losses. So, manufacturers were relieved when the CBN, last August, directed commercial banks and other authorised dealers in the forex market to allocate 60 per cent of their total forex purchases from all sources (interbank inclusive) to them.

    But five months after, manufacturers are still running around for forex The forex scarcity persists, forcing some firms to shut down, relocate to other  countries or scale down their operations. Many of them still complain of inability to access forex to import critical raw materials.

    For instance, Erisco Foods Limited, one of the key players in the tomato paste industry, has since relocated to China, citing lack of forex access. That move alone cost about 1,500 workers, mostly Nigerians, their jobs. Only 40 members of staff are left to run the Nigerian company.

    The company’s President/CEO, Chief Eric Umeofia, lamented: “My business has been deliberately frustrated by the way the CBN has managed forex bidding and allocation. They won’t give us forex to import machinery, machine spare parts and raw materials for processing Nigerian fresh tomatoes into paste in our Lagos factory and they won’t give us approval to use our own money generated from our foreign operations to import our raw materials.”

    Umeofia’s decision to vote with his foot by relocating the manufacturing aspect of his business to China from where finished products would be imported and sold to consumers in Nigeria and other parts of the world was pre-warned.

    The relocation of the $150 million tomato paste processing plant came after the expiration of a 30-day ultimatum he handed down to the Federal Government to compel the CBN to make available enough forex to import raw materials and equipment to keep the plants run profitable.

    Before shutting down the Nigerian plant, with a production capacity of 450, 000 metric tons of tomato paste yearly, Umeofia said the company, which had 22 brands with over 2,000 workers in Nigeria, lost over N3.5 billion in Nigeria. This was partly why he made relocation as his final option.

    “This decision is final and there is no going back on it; nothing will make us come back even in the future because we have found out that we can import tomato paste into Nigeria and still make huge profits,” the obviously embittered and frustrated entrepreneur said, at a briefing in Lagos.

    Umeofia is not alone in his agony over lack of access to forex despite CBN’s 60 per cent preferential forex allocation to manufacturers. Nigerian Textile Manufacturers Association (NTMA) Director-General, Mr. Hamma Kwajaffa, also lamented that no textile manufacturer had accessed forex in spite of the $660 million earmarked for manufacturers at the official interbank market.

    It would be recalled that the CBN, in keeping with its promise to strengthen the real sector by ensuring that 60 per cent of available forex goes to manufacturers, made available $660 million worth of forex to manufacturers through the inter-bank market for the purpose of procuring industrial input.

    The injection of the fund was expected to provide a new lease of life in the manufacturing sub-sector, thereby boosting industrial output and employment. But Kwajaffa said despite this gesture, the textile industry nearly went into extinction due to inability to access foreign exchange for critical raw materials.

    Similarly, May and Baker Managing Director, Mr. Nnamdi Okafor, said manufacturers’ inability to access forex through the interbank had affected industrial production and contributed to inflation. “It’s been a herculean task running any business in Nigeria, especially import-dependent manufacturing business.

    “I can confirm to you that as a company, we have not been able to access official forex allocation in the past six months. In fact, some of the Letters of Credit (LCs) we opened as far back as the fourth quarter of 2015 have not been funded by the banks,” he said.

    Okafor and, indeed, other operators’ outcries over banks’ refusal to fund LCs have been on since June, last year when the apex bank announced the flexible, market-driven forex regime. Manufacturers had hoped that this policy would drive down the exchange rate of the naira to the dollar, spurred economic growth and development, and encouraged more Diaspora remittances, among others.

    But, as it turned out, the new forex policy appeared to have left the real sector operators worse than it met them. For instance, the Apapa branch Chairman of Manufacturers Association of Nigeria (MAN), Mr. Babatunde Odunayo, said manufacturers had lost N500 billion to CBN’s implementation of the flexible forex policy.

    Odunayo, who spoke in Lagos at the Annual General Meeting (AGM) of the branch with the theme: “Economic recession and the future of manufacturing in Nigeria”, said the losses arose from the exchange rate difference between the approved Form ‘Ms’ and LCs before the CBN introduced the new flexible exchange rate system on June 20, last year.

    According to him, the LCs and approved Form Ms were documented at the CBN intervention rate at about N197/US$, but affected manufacturers are now expected to redeem them at the flexible exchange rate of N320/US$.

    “The pricing of related manufactured goods was made at between N197 and N198 to a US dollar at the time the Form Ms was approved and LCs established,” Odunayo said, lamenting: “Unfortunately, this unfolding situation posed a great burden on manufacturers.”

    He added that the huge exchange rate loss of N500 billion, which must now be reflected in manufacturers’ profit and loss accounts, was already leading to factory closures, loss of unemployment and investments in the sector.

     

    Good policy marred by lack of enforcement

    To manufacturers, the CBN’s 60 per cent preferential forex allocation was a ruse. “As far as I am concerned, it hasn’t worked. Our members have not benefited from it… It was something they dangled on our face without substance,” MAN President Dr. Frank Jacobs reportedly said.

    Indeed, findings by The Nation showed that the policy intervention described as revolutionary by some operators might have failed to make any significant impact on manufacturers because of the CBN’s lack of proper monitoring, supervision and enforcement to ensure that banks and other authorised dealers in the forex market comply with the directive.

    “Of course, the challenge, as always, is how to enforce the directive. This is always our default line. Good policies, good intentions, good pronouncements and launching ceremonies, but after that, the Nigerian factor steps in,” former President/CEO, Neimeth International Pharmaceuticals PLC and Managing Consultant, Starteam Consult, Mazi Sam Ohuabunwa, said.

    The industrialist, who spoke at an event organised by the Ikeja branch of MAN, said for the palliative to work, the CBN would have to watch the backs of banks and analyse their monthly returns and publications on forex utilisation.

    Ohuabunwa also said manufacturers also have a role to play. “They (manufacturers) have to set up a mechanism to monitor weekly allocations and provide feedback to the CBN and Nigerians because emergency manufacturers will arise, which will not be entirely bad, if only they will actually manufacture. Industry groups have to authenticate their memberships,” he said.

    He did not stop there. Ohuabunwa also said to eliminate possible abuse by manufacturers , the CBN and banks must ensure that forex allocated is used strictly to import manufacturing input only and not finished goods or diverted to other uses. “We must have a way of assessing the impact of this initiative to be sure it is achieving the intended objective,” he recommended.

    For the immediate past President of National Union of Textile Garment and Tailoring Workers of Nigeria, Comrade Oladele Hunsu, the 60 per cent forex benchmark for manufacturers, ab-initio, should not have been in place if the government was serious to drive Gross Domestic Product (GDP) growth through the real sector, which is economy’s growth engine.

    “Who measures the benchmark,” Hunsu asked, insisting: “Manufacturers must be allowed unfettered access to the CBN official forex window rather than the 60 per cent special forex allocation”. He told The Nation that rather than a piecemeal approach, a holistic review of the nation’s monetary and fiscal policies had become imperative to eliminate ill-conceived ones that are inimical to manufacturing sector’s growth.

  • ‘Lack of monitoring, infrastructure hurting ‘Buy Nigeria Campaign’

    The Federal Government’s renewed push to encourage locally produced goods and services patronage is a step in the right direction, but failure to complement the campaign with adequate monitoring and supportive infrastructure remains an impediment, former Nigerian Textile Manufacturers Association Director-General, Mr. Jayeola Olarewaju, who spoke with The Nation has said.

    According to him, the campaign has the capacity to galvanise the manufacturing sector and, ultimately, stimulate economic growth and development while creating jobs.

    He, however, expressed regrets that the government had not done much in effective monitoring of the campaign and provision of critical infrastructure.

    “Encouraging patronage of locally produced goods and services is a sure way to incentivise manufacturing, but I am not sure the government is doing enough in the area of monitoring to ensure compliance,” he said.

    Olarewaju said apart from the military that demonstrated the commitment to the ‘Buy Nigeria campaign’, through the purchase of military boots made in Aba, the government had not been able to monitor other Ministries, Departments and Agencies  (MDAs) to ensure that they patronise indigenous goods and services.

    He also said the government had not done much to close the nation’s huge infrastructure deficit, particularly power, which has been a pain in the neck of operators in various sectors of the economy.

    He said, for instance, the provision of steady and reliable electricity as well as good roads and rail would go a long way to encourage local production.

    Though not new, the Federal Government at the 22nd Nigeria Economic Summit (NES) held in October last year in Abuja with the theme: “Made in Nigeria”, renewed the initiative as a way of revitalising the manufacturing sector and boosting its competitiveness. It also envisaged that consuming locally manufactured products and services would significantly reduce the pressure on Foreign Exchange (forex).

    Besides, the initiative, according to its promoters, would help reinvigorate moribund industries, which would in turn, help fasttrack the ongoing economic diversification agenda, promote the Federal Government’s Backward Integration Policy (BIP) and boost non-oil exports. Ultimately, he said, this would help pull the economy out of recession.

    But Olarewaju observed that despite the campaigns’ good intentions, monitoring and infrastructure stand in the way.

    He said for the initiative to make the desired impact, the government must match words with action by providing supportive infrastructure for local production and monitoring its agencies to ensure compliance with the Buy Nigeria Campaign.

  • Focus on mines, steel development, Fed Govt urged

    Minister of Mines and Steel Development Dr. Kayode Fayemi has urged the Federal Government to give special attention to the development of eight critical areas to improve the mineral and mining sector.

    This is contained in the Ministry’s Roadmap where the Minister said the government should focus on investor-friendly regulatory environment by conducting reviews its tax system, licensing fees and other fees.

    According the document, Nigeria neglects the investor friendliness of its mining sector after the shift to a state-led mining development model. It said significant infrastructure investments would be necessary to unlock mining full value chain potential in Nigeria.

    “This will include the development of power plant, rail, roads, water processing plants among others in the country,’’ the report said, warning that failure to take proper action and structure to protect and promote these capital investments appropriately would constrain mining sector’s growth rate.

    According to the report, the success in Nigerian mining sector requires partnership across multiple communities, stakeholders and institutions; the role of state governments as co-investors and sector champions are critical.

    It also stated that success in mining would require that Nigeria as a society interface with other branches of government, community activists, professional, societies, and investors.

    “The high risk allocation in the early phase of mining projects means that activities such as exploration and ore reserve estimation have difficulty in obtaining funding from standard project finance sources.

    “The Solid Minerals Development Fund (SMDF) envisioned in the mining act would be operationalised and made available under well defined terms to help de-risk activities in the sector, the report added.

    The roadmap said the ministry anticipates that the various initiatives that will emerge from financial sponsors and other market actors will receive support from the SMDF to broaden its capacity to support both exploration and development activities.

    The document, which was launched last December said institutional reform, geo-scientific value add and mining as development catalyst, were among the critical factors needed to move the sector forward.

  • Inflation is out of control, says expert

    The rising inflation rate in the country has gone beyond the Central Bank of Nigeria’s (CBN’s) control,  Head of Research, Nigerian Economic Summit Group (NESG), Mr. Olusegun Omisakin, has said.

    Speaking in Lagos, Omisakin said the rising inflation had defied CBN’s monetary policy measures, adding that policy tools adopted by the apex bank were only effective in taming inflation arising from demand-supply imbalances.

    “In this case, inflation is cost-push. Production cost is high because producers, who want to import intermediate goods for production, do not have access to foreign exchange. Most of them go to the black market and definitely the product from this would be expensive, thereby increasing inflation,” Omisakin said.

    According to him, the CBN could not do anything through the monetary policy rate to arrest inflation. He said even if the CBN increased the Monetary Policy Rate (MPR) to 20 per cent, inflation would not come down.

    His words: “The inflation we are experiencing now is out of the control of the CBN. The CBN can only address issues that have to do with availability and circulation of money and credit control. It cannot address cost-push inflation, because it cannot provide energy, roads, transport. There are fiscal issues.”

    The economist urged the CBN to formulate policies that would boost industrial production and economic growth in view of the economic recession. He also called for co-ordination of fiscal and monetary policies to check the rising inflationary trend in the country.

    He pointed out that rising cost of food, transport and energy would reduce if the Federal Government created  fiscal policies with effective implementation to address the situation through increased investment in infrastructure and agriculture.

    The expert said speedy passage and effective implementation of the 2017 budget would stimulate economic activities.

  • N20b lifeline coming for Anambra MSMEs

    The Anambra State Government has said it is targeting N20 billion to boost Micro, Small and Medium Enterprises (MSMEs).

    Anambra State Small Business Agency (ASBA) Managing Director, Mr. Clement Chukwuka, who who made this known in Awka, the state capital, said the agency targets N20 billion in the next seven and half years with the hope of generating over N3 billion this year to assist entrepreneurs.

    According to Chukwuka, the agency was already working with the Central Bank of Nigeria (CBN) to raise more funds.

    “In the past 19 months, the agency had so far funded in excess of 15, 000 people directly in the micro credit schemes and close to 200 for the Small and Medium Enterprises (SMEs), which had further created chains of employment,” he said.

    Chukwuka added that the agency had also put in place shoe manufacturing cluster in conjunction with the Standards Organisation of Nigeria (SON) with over a thousand shops built with little funds. He said they are expected to begin manufacturing of shoes for export.

    Apart from providing finance to entrepreneurs at nine per cent interest rate, the ASBA boss said the agency was also mentoring and planned to open up opportunities for fashion designers, mechanics and artisans this year.

    He said since June 2015, the state government in conjunction with the CBN had disbursed about N2 billion loans through the agency to revive moribund industries.

    While reiterating the state’s commitment to remain the choice destination for commerce in the country, Chukwuka said the agency also plans to establish ASBA Business Academy.

    The Academy, he said, would train and certify artisans with the state Ministry of Science and Technology. “Our aim is to ensure that paper qualification becomes a thing of the past because we want people to make a living despite the economic recession,” he said.

    ASBA is a state-owned development financial institution created to cover areas of industrialisation, value added chain programmes, artisans, science and technology, oil and gas, and manufacturing sectors.

    “Major Anambra rice millers and the clusters that export vegetables from the state overseas are funded by the agency to boost the agricultural sector,” the ASBA helmsman said.

    He added that micro-credit entrepreneurs, who applied for funds received between N1, 000 and N500, 000, while between N5 million and N50 million was approved for successful applicants under the SMEs programme.

    Chukwuka stressed that ASBA had impacted over 60, 000 businesses directly and indirectly in the state, adding, however, that the agency had strict policy for recovering every loan.

    He also said Governor Willie Obiano  was determined to encourage investments and build institutions that would not only promote MSMEs, but outlive his administration.

  • ‘Ban on vehicle importation through land borders ’ll not succeed’

    The Federal Government should reconsider its policy banning importation of vehicles through the land borders, as the policy will not be successful, the National President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA) Mr. Lucky Amiwero has said.

    Speaking on a radio programme in Lagos, he said there was need for the government to properly look into the implementation of the policy as, according to him, “it lacks some ingredients that will make a successful regime”.

    Amiwero said the government should extend the deadline for importers whose vehicles are currently trapped at the border posts, pointing out that the notice it gave on the new policy was too short.

    According to him, many importers had placed orders before the directive was announced.

    The NCMDLCA chief also said the government’s action was against international convention, which places high consideration for grace period when a major policy is to be taken.

    “The implementation should be properly looked into because it lacks some ingredients that will make a successful regime. The policy is a major decision, but the time is very short.

    “All the border posts are entry points, so, the government must give enough time if it wants to implement any policy. That is not how it is done internationally,” Amiwero stated.

    He urged the government to extend the deadline because “we are not in a military era”.

    “The cars cannot just remain there; they are Nigeria’s assets. These vehicles are not smuggled, but were imported legally as authorised by the government under the Federal Government import regime,” he said.

    Their importation, he said, was done after the import duty was assessed and paid into Federal Government’s account legally. “So, they (importers) should be made to pay duty and clear these vehicles,” he added.

    Amiwero pointed out that vessels coming from China and other places can take six months before arriving, noting that the policy will be a threat to Customs officers except the government tackles the issue of tariff on vehicles, as the rate of smuggling will increase.

    He called on the government to set up a committee to holistically look at the auto policy and review it as it had not impacted positively on Nigerians. “The government should make sure the ban will not create revenue for other countries by reviewing its tariff and also look at the auto policy holistically and review it,” he said.

    Amiwero expressed doubt if a common Nigeria could buy those vehicles that are said to be manufactured in Nigeria. “They must tackle the issue at our ports where duties are collected. It is going to be a threat to Customs officers and we are going to lose a lot of revenue if we don’t put in the right perspective,” he said.

  • Will budget 2017 stimulate real sector?

    Will budget 2017 stimulate real sector?

    The stage appears set for real sector’s rebound. With N20 billion for reviving the Export Expansion Grant (EEG) in the N7.3 trillion 2017 budget proposal and plans to resume payment of accumulated Negotiable Duty Credit Certificate (NDCC) estimated at over N300 billion as well as increased focus on infrastructure development, the sector looks good to rescue the economy from recession. However, some operators are cautiously optimistic, fearing that shoddy implementation and the government’s silence on the controversial foreign exchange policy may throw a spanner in the works, CHIKODI OKEREOCHA reports.

    President Muhammadu Buhari came across as an incurable optimist when he presented the 2017 budget proposal of N7.3 trillion to a joint session of the National Assembly on December 14, last year. Despite the growing anxiety, particularly among real sector operators over the direction of the recession-battered economy, he spoke glowingly of his administration’s commitment to “make Nigeria a new manufacturing hub.”

    Perhaps, reading the doubts in the minds of operators and, indeed, Nigerians on his capacity to pull this through, Buhari while presenting the “Budget of Recovery and Growth,” backed his avowed commitment to turn the country into a manufacturing hub with a number of policy pronouncements. Hopes were raised that a new deal was perhaps, in the offing for the real sector, which comprises manufacturing and agriculture.

    For instance, the president noted that because of the emphasis on industrialisation and supporting Small and Medium Enterprises (SMEs), the Federal Government  set aside N50 billion as contribution for the development of new Export Processing and Special Economic Zones. Old ones are to be expanded.

    Before the budget presentation, The Nation learnt from sources close to the Minister of Industry, Trade and Investment that the industrial sector would receive a major boost this year, as funding had been included in the budget to reflate the sector. The ministry was said to have secured funding in the budget for the development of six  Special Economic Zones (SEZs).

    The SEZs, according to the sources, who declined to be mentioned because they were not authorised to speak, are expected to be launched this month, with Afrexim Bank and EXIM Bank of China committing $1 billion to the project. According to Buhari, the SEZs will be developed in partnership with the private sector, as the government continues to promote and protect Nigerian businesses.

    Expectedly, the N50 billion earmarked in the budget for the SEZ project has earned Buhari the commendation of the Lagos Chamber of Commerce and Industry (LCCI).

    Its Director-General, Mr. Muda Yusuf, said it will boost manufacturing and SMEs. The LCCI and indeed, other members of the Organised Private Sector (OPS) were no less gladdened by the N20 billion voted in the 2017 budget for the revival of the Export Expansion Grant (EEG) programme.

    According to the president, as the benefits of agriculture and mining are  becoming visible, the EEG will be revived in the form of tax credits to companies. This, in his view, will further enhance the development of agriculture and mining, bringing in more investments and creating more jobs.

    The Federal Government introduced the EEG in 1999 to encourage non-oil exports and cushion the effects of cost disadvantages faced by local exporters due to infrastructural deficits. The grant was disbursed in the form of the Negotiable Duty Credit Certificate (NDCC) and was utilised by beneficiaries for the payment of customs and excise duty on their export shipments.

    However, the extant policy on EEG and the utilisation of NDCC was suspended in January 2014. Minister of Finance Kemi Adeosun recently cited abuse of the export grant as a reason. Since then, many exporters have been screaming blue murder that the suspension of the scheme impacted negatively on their non-oil export activities. They complained that the huge backlog of unutilised NDCCs amounting to over N300 billion, according to the Nigerian Export Promotion Council (NEPC), paralysed their operations.

    They, therefore, intensified push for the return of EEG and settlement of backlog of unutilised NDCCs to drive the non-oil export sector.

    The Executive Secretary, Organised Private Sector Exporters’ Association (OPEXA), Mr. Jaiyeola Olarewaju, said the only way out for Nigeria to disentangle itself from the shackles of mono-economy was for the government to diversify the country’s export sector.

    This was why the inclusion of EEG and the NDCC in the 2017 budget proposal, with commitment that payment will resume soon, was music in the ears of OPS members including the  Manufacturers Association of Nigeria (MAN).

    Its President, Dr. Frank Udemba Jacobs, has been in the forefront of the agitation for the review of the  policy on EEG and the utilisation of the NDCCs.

    To unlock the huge, but largely untapped potential in the SME sector, this year’s budget proposal also sought to address the difficulties faced by SMEs in accessing longer term, more affordable credit. To address this situation, President Buhari said N15 billion has been provided for the recapitalisation of the Bank of Industry (BoI) and Bank of Agriculture (BoA)

    He also said the Development Bank of Nigeria will soon start operations with $1.3 billion focused exclusively on SMEs. The president noted that agriculture remained at the heart of his administration’s efforts to diversify the economy. And to underscore this, he said the proposed allocation to the sector this year was N92 billion.

    “This sum will complement the existing efforts by the Federal Ministry of Agriculture and Central Bank of Nigeria (CBN) to boost agricultural productivity through increased intervention funding at single digit interest rate under the Anchor Borrowers Programme, commercial agricultural credit scheme and the Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending,” Buhari said.

    He explained that, his administration’s agricultural policy will focus on the integrated development of the agricultural sector by facilitating access to inputs, improving market access, providing equipment and storage as well as supporting the development of commodity exchanges.

    Buhari also noted that achieving this goal required improving the skills of the labour force, especially young people. He, therefore, said government has made provision to establish and operate model technical and vocational education institutes, working with the private sector and state governments.

    His emphasis on local content and encouraging patronage of locally produced goods rather than imports was also seen as shot in the arm of real sector operators. In doing so, he regretted that Nigeria wasted her large foreign exchange reserves to import nearly everything it consumed.

    He said this was why low oil prices in the past 18 months saw the nation’s foreign exchange earnings cut by about 60 per cent, and her reserves eroded. Consumption also declined, as Nigeria could not import to meet her needs.

    “By importing nearly everything, we provide jobs for young men and women in the countries that produce what we import, while our own young people wander around jobless. By preferring imported goods, we ensure steady jobs for the nationals of other countries, while our own farmers, manufacturers, engineers, and marketers, remain jobless,” Buhari stated.

    He therefore maintained that under his watch, the old Nigeria will disappear and a new era will rise in which “we grow what we eat and consume what we make. We will increasingly grow and process our own food…we will buy ‘Made-in-Nigeria’ goods… We will patronise local entrepreneurs.

    “We will promote the manufacturing powerhouses in Aba, Calabar, Kaduna, Kano, Lagos, Nnewi, Onitsha, and Ota. From light manufacturing to cement production and petrochemicals, our objective is to make Nigeria a new manufacturing hub,” he declared.

    Infrastructure is game changer

    The role of infrastructure in creating inclusive growth was not lost on the president. This was why he said this year, government will focus on the rapid development of infrastructure, especially rail, roads and power.

    He added that efforts to fast-track the modernisation of railway system are priorities. He specifically announced the allocation of N213.14 billion as counterpart funding for the Lagos-Kano, Calabar-Lagos, Ajaokuta-Itakpe-Warri railway, and Kaduna-Abuja railway projects.

    According to development experts and operators in various sectors of the economy, massive infrastructure deficit remained one of the stumbling blocks to Nigeria’s road to economic growth and development.

    They argue that reducing the country’s huge infrastructure deficit estimated at $350 billion will be a game changer to unlock productivity, improve business competitiveness and create employment.

    In tackling the infrastructure deficit, The Nation learnt that government plans to actively partner the private sector by using new funding platforms including the Road Trust Fund, which will develop potentially tollable roads, and the Family Homes Fund, which is an on-going Public Private Partnership (PPP) initiative for funding of affordable housing.

    Budget size

    Under the proposed N7.3 trillion budget for 2017, N2.24 trillion, representing 30.7 per cent of the budget, would be committed to capital expenditure aimed at pulling the economy out of recession.

    Capital expenditure was increased from N1.8 trillion in 2016 to N2.24 trillion in 2017 and N2.98 trillion as recurrent expenditure for the 2017 fiscal year.

    While the 2016 Budget was predicated on a benchmark oil price of $38 per barrel, oil production of 2.2 million barrels per day and an exchange rate of N197 to the dollar, the 2017 budget moved higher, proposing an oil price benchmark of $42.5 per barrel as well as using a more realistic exchange rate of N305 to the dollar.

    Experts say apart from the fact that the 2017 oil price benchmark of $42.5 per barrel was achievable, given the Organisation of Petroleum Exporting Countries (OPEC’s) agreements on production cuts, its output projection of 2.2 million bpd was also realistic.

    They hinge their position on the fact that the Federal Government had since stepped up efforts at addressing the restiveness and agitations in the oil-rich Niger Delta, where activities of militants and pipeline vandals have seen crude oil production reducing to almost half.

    Other initiatives

    Apart from announcing that the Ministry of Industry, Trade and Investment will get N81 billion, Buhari also established the Presidential Enabling Business Council (PEBEC) to be chaired by Vice President Yemi Osinbajo.

    PEBEC will have the mandate to make doing business in Nigeria Buhari said that with the council, which has Industry Minister Okechukwu Enelamah as vice-chairman, getting approvals for business and procurements will be simplified and made faster.

  • Miners await disbursement criteria for N30b intervention fund

    Miners await disbursement criteria for N30b intervention fund

    Miners under the aegis of the Miners Association of Nigeria have called on the Federal Government to state how it will disburse the N30 billion Mining Intervention Fund released in 2016 for exploration.

    The association’s National Secretary, Mr. Dele Ayanleke, told newsmen in Abuja,that the government would release the criteria and that miners would be involved in the fund’s disbursement.

    Ayanleke recalled that some years back, the World Bank released funds for the mining sector, but they were used for other purposes. He said  2016 was a year full of challenges for miners. According to him, some were attacked and killed during mining. Illegal miners also hampered mining.

    Ayanleke said the Mines Inspectorate Department of the Ministry of Solid Minerals saddled with  monitoring mine sites was incapacitated by lack of funds.

    According to him, the department was willing to work, but lacked empowerment to conduct their oversight functions and to monitor mining sites to know what challenges miners were facing on fields.

    He called on government to provide infrastructure such as access roads and electricity to all mining sites to lessen the burden on miners.

    “Government is meant to construct roads to all mining sites across the country because it is their primary responsibility to do so and miners are to provide educational and health facilities to their host communities,” Ayanleke said.

    He, however, said that the association achieved a huge success in its maiden mining week organised last year.

    A barite miner, Mr. Patrick Odiegwu, also called on government to support miners with mining equipment to ease minerals exploration, adding that lack of equipment had made miners to operate on small scale.

    He said if mining continues on small scale, government would not be able to achieve its diversification plan through the sector.

    “We need world class mining equipment if government wants to diversify the economy through mining sector; no miner can afford to buy one equipment worth N600 million.

  • CBN’s Anchor Borrowers Programme berths in Delta

    CBN’s Anchor Borrowers Programme berths in Delta

    More than 30, 000 farmers across the selected enterprises of cassava, oil palm, rice and fisheries have been registered for the Central Bank of Nigeria (CBN) Anchor Borrowers Programme (ABP).

    Delta State Commissioner for Agriculture and Natural Resources Mr. Austin Chikezie, who broke the news in Asaba, the state capital, said the aim was to boost the production of fisheries, cassava, oil palm and rice production under the CBN‘s ABP in the state.

    The commissioner explained that the state policy on agriculture was directed at achieving agricultural growth and development. He said the state government would focus on providing food in excess for local consumption and industrial raw materials for agro-industries, employment and poverty alleviation.

    While noting that the CBN’s ABP would be used as a financial model for small holder farmers in those selected enterprises, Chikezie said about 30,000 farmers have been registered, and that high quality inputs and technical assistance would be provided for the farmers.

    The Commissioner, who emphasised that the scheme was designed to increase production and supply of raw materials to food processors, said through the programme, qualified commodity out growers are assisted to identify an anchor firm (off taker or processor) and supported with loan at nine per cent interest rate to increase their farm holdings in the state.

    Chikezie said for oil palm, the state government had commenced the raising of 220, 000 improved oil palm seedlings for distribution to 250 farmers for cultivation on 500 hectares of oil palm plantations.

    He added that five mini-oil mills have been fabricated and ready for distribution to farmers, and that the mills cost the state government about N115 million to execute. According to him, the oil palm programme will create 100 direct jobs and over 300 indirect jobs in the state.

    “In rice production, plans are on to ensure that rice cultivated in the state meets international standards, even as the state government has approved N51 million to boost its production by ensuring all season farming,” the Commissioner said.

    Similarly, government’s intervention in fisheries, particularly in aquaculture, he said, has yielded results with more than 5,000 being engaged in various clusters across the state through cooperatives societies. Annual fish production has also increased from 15,273 metric tonnes in 2008 to 24, 413 metric tonnes in 2016.

    The state government had last February inaugurated an agricultural marketing coordination committee, with a charge to reform the agriculture sector in the state. The committee would focus on developing the agricultural sector in line with the Governor Ifeanyi Okowa administration’s objectives of economic diversification, food security, self-reliance and prosperity for all.