The Nation Newspaper

Category: Industry

  • Enabling environment panacea for economic growth, says Minister

    Enabling environment panacea for economic growth, says Minister

    •LCCI gets commendation 

    A conducive environment is panacea to economic growth, the Minister of State, Industry, Trade & Investment, Mrs. Aisha Abubakar, has said.

    She said the government had acknowledged the role of local and foreign investments in lifting the economy out of the doldrums, and is relentlessly channelling efforts to ensure ease of doing business.

    The Minister spoke at the Lagos Chamber of Commerce and Industry (LCCI) Investment Conference with the theme “Positioning the Nigeria economy for diversification and sustainable growth.”

    She said the government has embarked on review of limiting factors, including incentives and tariff that have stunted the growth of Small and Medium scale Enterprises (SMEs).

    Mrs. Abubakar added that the government was closing infrastructural gaps and creating free trade zones to make the operating environment friendly.

    She said: “Under the current administration, it behoves on us to come together and articulate pragmatic strategies that will arrest the obstacles that hinder developmental efforts.  The administration has continued with the Nigerian Industrial Revolution Plan (NIRP) as a strategy to drive the economy.

    “The President has also approved the establishment of a Presidential council on the ease of doing business. We have put plans in motion to attract domestic and foreign investments by reviewing incentives and supporting Micro, Small and Medium Enterprises (MSMEs).”

    Mrs. Abubakar said a review of the document has been concluded by the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) and other agencies, including the National Agency for Food, Drug Administration and Control (NAFDAC), Standards Organisation of Nigeria (SON) and Corporate Affairs Commission (CAC), to ensure a holistic framework that would addressing the challenges of MSMEs.

    She urged private sector players on the need for periodical engagements to attune themselves to initiatives on ease of doing business. She said contributions from the private sector are not only necessary, but imperative to assist the government to create an enabling environment to promote sustainable economic development.

    Mrs. Abubakar spoke of the government’s readiness to bridge the infrastructure gap to attract more investments, adding that there was a need for continuous dialogue between the government and private sector to ensure seamless collaboration.

    Speaking on “Policy Environment for Private Sector-led Market,” Director, International & Bilateral Relations, European Union (EU), Mr. John Clarke, advised the country to key into the Economic Partnership Agreement (EPA) to successfully drive the diversification campaign.

    He argued that the adoption of a pact like the Chinese model may streamline local production for exports to certain areas.

    “What we see in the Chinese model is the conversion of large expanse of land into monoculture for exporting commodities to China because China cannot feed its population. So the export model is not always good for the host country because it doesn’t create much employment,” he said.

    He said the model moves agriculture away from mixed farming, which has proven unsustainable in the long term.

    “It is recommended that Nigeria should not adopt it. We can learn from the Indonesia model what to do and what not to do. But it has been adjudged unsuccessful because their production for export is at a massive human and environmental cost,” he said

    Clarke pointed out that if Nigeria wished to develop the formal sector for export, there is a market in Europe that would ensure sustainable production.

    “If there is no EPA, Nigeria’s export to Europe will face World Trade Organisation (WTO) tariff, which is high. This will result to an overwhelming comparative advantage over Nigeria,” he said.

    Lagos State Governor Akinwunmi Ambode urged the international committee on the need for partnership in the non oil sector.

    He said:“It is obvious the private sector is a critical partner in the implementation of diversification strategies and policy framework for sustainable economic growth. Therefore, I urge participants to take out time to explore opportunities for economic benefits in the agricultural value chain, green energy, ICT and tourism.”

    He praised LCCI for the successful hosting of the just-ended Lagos International Trade fair, saying the fair has promoted trade and investment in the state.

    Ambode said activities, including the International Investment Conference, which charted a course to check trade volatility between Nigeria and the international community; Lagos Creative Industry exhibition, Business to Business fair raised the standards of the fair.

    Ambode said efforts were on to address challenges facing  businesses, particularly creatiing a conducive environment. He pledged to ensure improved facilities for effective coordination of furure fairs.

    Represented by the Deputy Governor, Alhaja Idiat Adebule, said:

    “Although LCCI has carved a niche in the organisation of high quality trade fairs and exhibitions, I am not unaware that the chamber is being inhibited by lack of purpose-built world-standard exhibition facilities that would engender the staging of a more-befitting international trade fair.

    “Our government is already looking in that direction and making concerted efforts towards delivering a standard centre in the state. We shall continue to place priority on key infrastructure and ensure the state is secure, functional and productive through a highly motivated and vibrant private sector.”

    Earlier, LCCI President Mrs. Nike Akande urged the government on the need for an industrial revolution to drive the influx of foreign investments. She harped on the need for strong institutions and strict adherence to corporate governance.

    She said despite the recession, the 30th edition of the trade fair attracted 550 international and local firms.

    “We recorded 427 local exhibitors, three state governments – Lagos, Kaduna and Kwara – and 120 foreign countries, including China Egypt, Japan, India, European Union, Indonesia, Ghana and Pakistan,”she said.

    Mrs. Akande said diversification  should emphasise value-addition because of its potential for increased revenue.

    “The chamber is drawing attention to the need to reposition and diversify the economy. In addition, it wishes to address value addition in the non oil sector with a view to achieving industrialisation.

    “This will enable the government to earn more foreign exchange from commodities and processing. We are moving from over-dependence on oil to agriculture, solid minerals, renewable energy and others,” she said.

    Reiterating the need to support private sector players, Mrs. Akande said: “We would always advocate for a conducive business environment, where private business can thrive. The private sector has a bigger capacity to create jobs and lift people out of poverty.”

    The Chairman, LCCI Trade Promotion and Investment Board, Mr. Sola Oyetayo, thanked participants, institutions and bodies who partnered with the chamber to ensure a hitch-free fair.

    He said: “Overall, we have received commendations that, despite all odds, this year has been adjudged as one of the best in recent years.

    ‘’We have done our best to deliver value to our customers within the limits of prevailing limitations. We assure you all that we will continue to ensure improvement in subsequent fairs.”

  • Banks not co-operating with CBN on forex, says MAN

    Banks not co-operating with CBN on forex, says MAN

    Banks are not co-operating with the Central Bank of Nigeria (CBN) on forex policy, Manufacturing Association of Nigeria (MAN) President Dr. Frank Udemba Jacobs has said.

    Dr Jacobs said the CBN was sensitive to the plight of the manufacturing sector, but it was unfortunate the apex bank’s good intention were being frustrated by those who didn’t share the same passion for manufacturers, in particular, or the nation.

    He cited the CBN’s directive to banks to allocate 60 per cent of available forex to manufacturers for the importation of raw materials and spare parts, which the banks had not implemented.

    He told The Nation that the CBN also released about $414 million  recently, with provisions for another $500 million for allocation to manufacturing and other critical sectors, but regretted that banks were not co-operating, thereby frustrating a critical policy.

    Jacobs debunked the allegation that the CBN ‘settled the manufacturing sector with $330 million, saying the CBN announced the release of $314 million but he did not know who benefitted from it.

    Acknowledging that manufacturing was the worst hit by forex scarcity, Jacobs said the case of those included in the list of items excluded from the inter-bank forex was more worrisome.

    But manufacturers and the Organised Private Sector (OPS) had argued that the CBN should not have excluded  the 41 items as some  things in the list were actually raw materials and input for industries.

    On the embedded power supply proposed  by manufacturers  to save their businesses, he said the project was ongoing as planned.

    “We have made remarkable progress in this direction by receiving bids from power companies, and have carried out tariff evaluation following the opening of the bids from which we have shortlisted three companies that we’ve adjudged to be competent. We have also selected four clusters for the pilot project. They are Henry Carr Street, Isolo, Amuwo Odofin and Ilupeju. As I said, these are tentative arrangements which have not been finalised. It must be said that we have not started actual operations yet.”

    On the implication of the planned relocation of a major tomato paste manufacturer, Erisco Foods Nig. Limited to China and some other African countries, the MAN boss said the issue of closure and planned relocation was for the company alone to decide.

    He said the decision of the company to shut its operations in Nigeria would have serious implication for the economy in terms of further job losses at a time that the unemployment rate was soaring.

    He said the planned closure would send wrong signals to potential investors, adding that the action would lead to loss of revenue.

  • Be proactive on service delivery, LCCI urges firms

    Be proactive on service delivery, LCCI urges firms

    Lagos Chamber of Commerce and Industry (LCCI) has asked companies and service providers to ensure they render quality service and products to their customers.

    LCCI President, Mrs. Nike Akande, who spoke at the presentation of Cornerstone Insurance’s new products and services at the 30th edition of the Lagos International Trade Fair,  urged  the CEO, Cornerstone Insurance, Ganiyu Musa to ensure pro-activeness and quality of service in celebrating the advancement of Islamic finance and Takaful insurance in Nigeria.

    She said the nation’s economy is resilient and attractive to investors as a result of high return on investments, saying the fair which has attracted numerous local and international companies from China, Egypt, Japan, Ghana, India, European Union, Indonesia, Ghana and Pakistan holds a lot for Foreign Direct Investment (FDI).

    Mrs. Akande said this year’s fair parades improved facilities, including adequate security arrangement, conveniences, stable power supply and cooling systems to enhance both exhibitors and visitors’ satisfaction.

    She said the theme of theffair is intended to draw attention to the need to reposition and diversify the Nigerian economy. In addition, the Chamber wishes to address the issue of value addition in Nigeria’s non-oil sector, with a view to achieving industrialisation, which will enable the nation to earn more foreign exchange from commodities and processing in Nigeria, she stated.

  • Unemployment: ITF to fill youths’ skills gap

    Unemployment: ITF to fill youths’ skills gap

    About 18 states and the Federal Capital Territory (FCT) will benefit from the National Industrial Skills Development Programme (NISDP) of the Industrial Training Fund (ITF), its Acting Director–General Dickson Chinedum, has said.

    He listed some of the beneficiaries as Sokoto, Kwara, Ogun, Katsina, Cross River, Lagos, Adamawa and Ebonyi. Others are Abia, Anambra, Borno, and Plateau.

    The ITF chief said NISDP was aimed at closing the skills’ gaps in youths which made them unemployable. This, according to him, has made it mandatory to equip the youth with skills for employment and entrepreneurship.

    Chinedum further said the NISDP, which began in 2012, would furnish the human capacity requirements of the National Enterprises Development Programme (NEDEP), a scheme put in place by the Federal Ministry of Industry, Trade and Investment to fast-track the Nigeria Industrial Revolution Plan (NIRP).

    The ITF chief explained: “In the light of the result of the interim report of ITF/United Nations Industrial Development Organisation (UNIDO) Skills Gap Survey, management has set in motion process to commence graduate up-skilling programme for the purpose of re-skilling 3,000 graduates of engineering and technology with vocational and entrepreneurial skills in the six geo-political zones.

    “This is aside from the ongoing review of the ITF/DVT (GERMAN chamber of Crafts and Commerce) collaboration, which seeks to train apprentices in line with the German dual system. The programme matches skills development with market needs and contributes in reducing unemployment by providing competences for job creation.”

    Chinedum said ITF entered into a deal with the Nigeria Employers Consultative Association (NECA) in 2009 to provide technical and vocational skills training to young Nigerians using ITF facilities and those of members of the organised private sector.

    He said to provide opportunity for evaluation and validation of skills requirement at national and state levels, ITF was collaborating with UNIDO to establish Sector Skills Councils (SSCs).

    He said 9,500 youths, translating to 500 youths per state and the FCT, aged between 18 and 35, would be trained in 38 trade and craft areas.

    He explained that this would be based on their projected value addition to citizens of the states and their potential to provide a sustainable means of livelihood for youths in their states.

  • ‘Non-passage of PIB hurting economy’

    ‘Non-passage of PIB hurting economy’

    The delay in the passage of the Petroleum Industry Bill (PIB) is hurting the economy and stunting progress in the extractive sector in particular, experts have said.

    The experts, who spoke with The Nation in separate interviews, lamented that, despite being touted as the best thing that would happen to Nigeria’s oil and gas industry and also the economy, the PIB has remained stagnated at the National Assembly (NASS) since 2007.

    The PIB, introduced in 2007, was expected to produce a dynamic policy framework for massive reforms in the oil & gas industry. The reforms were expected to form the nucleus of Nigeria’s aspiration of becoming one of the most- industrialised nations by 2020.

    For the country to realise this dream, it was envisaged that the major source of revenue to the Federation Account, the oil and gas sector, must be repositioned for greater efficiency, openness, and competition built on corporate governance as obtained in other resource-rich nations.

    Sadly, the PIB, which is the vehicle to achieving these goals, is yet to be passed into law, with experts noting that the industry and the economy would continue to lose with the its non-passage.

    “It is unfortunate that the PIB, which is touted as the best thing that would happen to Nigeria’s oil industry and also boost the economy has been stagnated at the National Assembly,” the Chief Executive Officer, Holistic Security Background Checks Limited, Don Okereke, lamented.

    The security expert attributed the non-passage of the PIB to high-wire politics. “It appears some powerful cabals are opposed to it, he told The Nation, pointing out, however, that the  Senate is reportedly making arrangements to expedite or fast track its passage.

    Also, the Director, Health of Mother Earth Foundation (HOMEF), Mr. Nnimmo Bassey, said: “When a suitable PIB is passed into law, it will provide a good playing field for all stakeholders in the sector.”

    Bassey, a renowned international environmentalist, told The Nation that if Nigeria valued its people and the environment above money, it ought to show this in the formulation and enforcement of environmental laws.

    He said this bridge could be crossed by having uniform provisions for the environment and host communities in the extractive sector.

    According to him, this will eliminate parochial considerations and arguments that stymie progress in the sector, thus, allowing an unacceptable regime to persist.

    Bassey noted that the reasons the initial PIB could not be passed after eight years of negotiations and debates were still at play, adding that the unfortunate fact was that some of the contentious aspects of the Bill ought not to be seen as such.

    “The current approach has been to break the PIB into four bills and have them passed into law in bits. The troubling aspect of that approach is that the concerns of communities and the environment may be pushed to the back burners, while financial management issues take the front seat,” Bassey argued.

    Noting that the PIB is a good first step in reforming the industry, he said the delay in passing it into law was unacceptable. He attributed the delay to several factors among which are toxic politics and pressure from the International Oil Companies (IOCs) which, he said, had stated hat they would not accept laws that curb their excessive profits.

    Bassey also identified the pressure points as wrong perception by some legislators that provision of funds for communities meant more money to the oil-bearing states.

    “Actually, the PIB makes the offer of money to communities on one hand and takes it away on the other. It criminalises communities when it says that if oil facilities are tampered with then the communities, local govt areas and states would pay,” he said.

    He argued that communities were not the policemen of oil facilities.

    “The PIB speaks the old language of subsisting laws that free IOCs of responsibility where facilities are interfered with by third parties. That has made the claim of sabotage the favourite refrain of the oil companies even before incidents are investigated.

    ‘’The PIB fell into the same anti-people trap,” he said.

  • Ishaku: Mobilising Tarabans for hydro power revolution

    Ishaku: Mobilising Tarabans for hydro power revolution

    After more than 50 years on the drawing table, the Mambilla Hydro Electricity Power project has finally resurrected, courtesy of a new vision and commitment being jointly promoted by the Federal Government and the administration of Governor Darius Ishaku of Taraba State.  Taraba is the host state for the project while the Federal government is its main promoter and financier.

    At the national level, the project has become a regular agenda at the Federal Executive Council meetings. Top officials of the Ministry of Power, Works and Housing are also constantly working on various aspects of the implementation policy. On its part, Taraba State is pregnant with expectations. Ishaku has been on top of the campaign that is mobilizing people of the state to support the project while Chinese team of engineers is now regular visitors to Mambilla Plateau, the site of the project.

    Recently, a stakeholders meeting was held in Abuja with Governor Ishaku and Mr. Babatunde Fashola, (SAN) minister of Power, Works and Housing. Each of the two leaders was accompanied by a strong delegation of experts in all the departments of engineering and in hydro-electricity technology. The meeting which has greatly invigorated interests on all sides of the divide, came on the heels of a new positive attitude displayed by the Federal Government through the visit of President Muhammadu Buhari to China earlier in the year.  The President had used the opportunity of that visit to tie up the loose ends of the Memorandum of Understanding signed several years ago between Nigeria and China for the execution of the project.

    The Abuja meeting dwelt extensively on the need for all the critical stakeholders to play their roles and make desirable sacrifices where and when necessary, for the success of the project. Other critical issues such as environmental impact assessment, payment of compensation which the meeting decided will be made in the local currency were discussed. Governor Ishaku pledged his support and the support of the entire people of Taraba State for the project and noted that the state was fully mobilised to play its role as the chief host. A joint committee of the Ministry of Power, Transport and Housing and the Taraba State government was set up at the meeting to fine-tune plans for the smooth implementation of the project. It is to also help resolve all grey areas that may hinder progress. It is co-chaired by Governor Ishaku and Fashola.

    The Mambilla Hydro Electricity Power project has a long history. The idea was conceived in the 60s by Nigeria’s first set of political leaders. In the Second Republic political dispensation, the administration of President Shehu Shagari also Aexpressed a commitment to the project. Besides that, nothing really happened again until the coming into office of President Olusegun Obasanjo who, in 2007, awarded contracts for the project. That was the first major step towards the actualisation of the project. Even after then, there were no practical steps taken to execute the project. In 2013, the project suffered a setback with the cancellation of the initial Memorandum of Understanding. Later the administration of Presdent Goodluck Jonathan reviewed the project and even expanded its scope to generate 3050 MW instead of 2,600 MW. The administration also appointed three Chinese companies highly reputed in dam construction and hydro-electricity technology generally for the project.

    President Muhammadu Buhari’s visit to China earlier this year came as a laudable endorsement of the vision of his predecessors that gave birth to the idea and nurtured it until he took over the country’s mantle of leadership. That visit has put a stamp of urgency on the project and even the Chinese partners in the project are convinced about the administration’s commitment to the project. The Mambilla project is one of the best, if not the best, things that will happen to Nigeria’s desire for increased power generation and stability of electricity power. Any leader with the political will to execute this project would be writing his name in gold.  President Buhari seems to be that leader that the Mambilla Hydro project has been waiting for. Can he do it? And will he do it? Yes, he can and he should do it. If he does, Nigerians will forever be grateful to him for the courage and the determination that helped in curing an electricity power malady that had become a source of embarrassing national malaise.

    The Mambilla Hydro project is Africa’s biggest dam project for generating electricity. It will boost employment opportunities and facilitate national economic growth. Even though the Mambilla project is a national venture, the people of Taraba State will profit immensely from it and its ancillary plants and industries. It will attract most of its technical and non-technical hands from the state and this means a jump in economic activities and living standards in the state. The coming of the project will increase demand for houses, hotels and restaurants. It will dramatically alter the profile of the state by making it a bigger investment hub. Indigenes of the state cannot afford to be left out in the race for space in the huge market that the project is soon to turn their state into.

    It is for these reasons and more that Governor Ishaku is out mobilizing the people and campaigning for support for the project. A few days before his meeting with Fashola in Abuja, Ishaku had called a stakeholders meeting in the state. He used the meeting to educate the people on the benefits of the project and the need for them to support it. He advised the youths in the state, in particular, to tailor their choice of academic careers towards fields that are related to Hyro electricity because the project is coming with huge employment opportunities for such qualifications. He also cautioned the people against indiscriminate sale of lands on the Mambilla Plateau and its environs. Land in these areas will attract high demands and prices.

    The Mambilla project is what Nigeria needs to break the jinx of power instability that has become a kind of affliction. President Buhari seems determined to break this jinx this time round with the amount of commitment he has demonstrated so far. On his part, Governor Ishaku has pledged and practically demonstrated his commitment to the implementation of the project. There is no reason therefore for the project to fail to take off. The onus is now on the Federal Government, the financing agency, to ensure the take off of the project by committing funds to it. This project must not suffer from the torpidity that had crippled its execution in the hands of previous federal administrations for more than two decades.

     

    • Abulemo is an Abuja-based Public Affairs commentator

  • ‘Standardisation key to economic diversification’

    •Urges SONCAP managers on professionalism

    The Secretary to the Government of the Federation, Mr Babachir Lawal, has reiterated the central role of standards and quality assurance in the nation’s efforts to diversify its   economy   from   oil   to   other   areas   such   as   agriculture and   solid minerals for local consumption and export.

    Speaking in Abuja during a visit of the Director-General of the Standards Organisation of Nigeria (SON), Mr. Osita Aboloma, to the SGF in his office, Lawal said    SON’s   mandate to promote   standardisation   and   quality assurance activities in Nigeria are key to the nation’s diversification efforts, particularly with regard to the international acceptance of the country’s produce and other export commodities and products.

    Lawal said standards remain a key benchmark for facilitating trade and investment activities among nations. He enjoined the SON DG to work closer with all relevant   ministries   and   agencies   of   government   as   well   as   stakeholders   in   the organised private sector to reverse the trend of rejection of Nigeria’s produce export.

    The SGF also reiterated the full backing of the Federal Government for the fight against the influx and circulation of substandard products  in markets being  championed  by the  SON.

    He called for the support of the citizenry in the government’s fight against corruption in all facets of the nation’s life.

    In his response, the SON Director-General expressed appreciation to  President   Muhammadu Buhari through  the SGF   for  the   confidence  reposed   in  him  to   take   the SON to the next level by his appointment.

    He promised to deploy all available resources to reposition the organisation towards delivering on its core mandate.

    Aboloma assured the SGF of his preparedness to intensify the collaboration and synergy with other stakeholders in driving the success of the economic diversification efforts,  as   well   the   fight   against   the   circulation   of   substandard   products   through diligent prosecution of offenders.

    Also, Aboloma has urged the Independent Accredited Firms (IAFs), managers of SON off shore Conformity Assessment Program (SONCAP) to live up to expectations of Nigerians in the inspection of goods coming into the country.

    The SON chief who gave the charge at a meeting with the program managers in Abuja, said part of the mandate given to the managers, is to ensure that only tested and certified products are allowed into the country, saying anything less will not be accepted by SON and Nigerians.

    He said, “The Independent Accredited Firms made up of INTERTEK, SGS, COTECNA and CCIC were told that the diversification of the Nigerian economy has brought a lot to bear on the SON in the development of the non-oil sector, particularly in the area of agriculture and industry.

    “You have to do all within the mandate given to you by SON to ensure that Nigerian businesses are protected from the menace of substandard products from overseas. The issue of quality should be taken seriously, Quality increases income and affect the lives of the people including health.”

    Aboloma said the interest of Nigerians should be first above  every other interest, saying the change begins with me mantra of the federal government should be effective in us all.”

    The Director General noted that change and improvement are synonymous, adding that for any system to change, it must not be rigid, there must be room for constructive criticism for the system to move forward.

     

  • Controversy over proposed assets sale lingers

    Controversy over proposed assets sale lingers

    The controversy raised by Federal Government’s proposed sale of some national assets to cushion the effects of the recession has refused to abate. Despite clarification by Minister of Budget and National Planning Udoma Udo Udoma that government was considering selling only some non-critical assets, the debate still rages. Some argue that the idea is wrongly-headed, others say the government could sell part of the assets and retain some level of ownership. Assistant Editor OKWY IROEGBU-CHIKEZIE reports on the divergent opinions on the matter.   

    The desire of Minister of Budget and National Planning, Senator Udoma Udo Udoma, to put the economy back on track having been hit by a recession is not in doubt. However, if the proposed sale of some national assets is his idea of revamping an economy severely battered by recession, it is doubtful if he will get a smooth sail.

    Since the Federal Government, through the minister, announced the proposal, a groundswell of opposition has continued to trail it, with many Nigerians arguing that the proposed sale was wrongly-headed and will not be in the interest of citizen. Others, however, argue that the move will help raise capital and consequently improve the nation’s foreign reserves, calm investors and in the long run, stabilise the economy.

    Apparently to calm the controversy generated by the proposal, Udoma, last week, in Lagos, clarified that government was considering selling only some non-critical assets to raise fund.

    Apart from plans to generate immediate larger injection of funds into the economy through assets sale, the minister said: “The President’s Economic Management Team is working on advance payment of licences renewal, infrastructural concession, use of recovered funds, et cetera to reduce funding gaps and ensure implementation of fiscal stimulus/budget priorities.”

    However, not a few Nigerians have refused to be swayed by Udoma’s explanations. For instance, organised labour not only rejected the move, but also warned the Federal Government against yielding to calls to sell some national assets. Labour even vowed to resist the move.

    The Nigeria Labour Congress (NLC) President, Comrade Ayuba Wabba, said for instance, that an asset such as the Nigeria Liquefied Natural Gas (NLNG), which yields over $1 billion to the nation every year, is valuable asset, that should be treasured.

    Under the proposed sale, which government said was aimed at bridging the funding gap in the budget and also boost the nation’s dwindling foreign reserves, it planned to dispose part of its 49 per cent shareholding in NLNG, including some aircraft in the presidential fleet, as well as four refineries in Warri, Port Harcourt and Kaduna.

    Frontline industrialist Alhaji Aliko Dangote was one of those who advocated the sale of national assets to cushion the biting effects of recession on the economy, including NNLG, which is believed to the nation’s cash cow. But the idea, particularly the sale of NLNG, did not go down well with many Nigerians.

    For instance, Wabba argued that embarking on such venture would be fruitless. He recalled how sale of national assets in the past failed to add value to Nigerians because it was skewed in favour of only few individuals at the expense of the citizenry.

    “It is on record that dividends in excess of $1billion have been accruing to the national coffers annually from the gas company over the past 12 years. These calls are more worrisome when one considers the history of sovereign assets divestiture in the past.

    “Where are the proceeds from sale of assets in the power sector for instance? With the benefit of hindsight, it is obvious that these assets were distributed to favour individuals and surrogates of the ruling elite without any appreciable benefits to Nigerians,” Wabba said.

    The labour unionist has an ally in Dr. Dan Nkwocha, a lecturer at the Department of Sociology, Imo State University, Owerri. Describing the proposed sale as “wrongly-headed,” he said it would not benefit Nigerians, because government does not have the necessary policing structures and mechanism to ensure that the assets to be so disposed are managed and run efficiently for the benefit of Nigerians.

    Dr. Nkwocha pointed out that the experience of Nigerians with the sale of state-owned assets such as Power Holding Company of Nigeria (PHCN), Nigerian Telecommunications Limited (NITEL), and National Fertilizer Company of Nigeria (NAFCON) among others does not encourage Nigerians to support the proposed sale of more national assets.

    “Where are PHCN and NITEL?”, the university don asked, accusing investors who bought over the assets of “reaping from where they did not sow.” According to him, the new owners took advantage of government’s lack of effective policing agents to deny Nigerians the benefits of efficient and cost-effective services post-privatisation.

    He said, for instance, that despite the sale of the assets of the defunct PHCN a few years ago, Nigerians are yet to breathe a sigh of relief by way of improved electricity supply. He lamented that rather than enjoy improved electricity supply, “Nigerians have become victims of the rapacious profiteering antics of the new core investors who daily fleece electricity consumers for services not rendered.”

    While admitting that the economy is currently in dire straits, requiring measures to pull it out of recession, Nkwocha said rather than sell national assets, government should begin aggressive diversification of the economy by exploiting opportunities in the agric and solid mineral sectors, as well as encouraging manufacturing.

    The Trade Union Congress of Nigeria (TUC) also condemned the proposal to sell the assets, saying that the Federal Government should prepare for civil turbulence if it proceeds to sell the assets. According to the Congress, proponents of the idea are Nigeria’s enemies.

    “The TUC warns those calling for the sale of national shareholdings in NLNG and concession of the country’s airports to drop the idea if they do not want to incur the wrath of workers. Those suggestions are disgraceful and portray them as enemies of the state,” its President, Mr. Bala Kaigama, and Acting Secretary-General, Mr. Simeso Amachree, said.

    Before Udoma made his clarification, the Senate had unanimously rejected calls for the sale of strategic assets. Some of the senators alleged that it would impoverish the majority of Nigerians that are already traumatised by the parlous state of the economy.

    Specifically, the Deputy Senate President, Senator Ike Ekweremadu, said only non-performing assets should be sold. According to him, selling productive assets will be unfair to the next generation, pointing out that countries such as United Arab Emirates (UAE) and Saudi Arabia guard their assets jealously.

    Some of the non-performing assets, which Nigerians wanted sold, are aircraft in the presidential fleet. There have been reports, for instance, that in the past 15 months since President Muhammadu Buhari came into the saddle, government had spent a huge sum of N5 billion to maintain nine aircraft in the presidential fleet.

    Opponents of the proposed sale of assets argued that selling income yielding assets will be counter-productive. To them, it makes greater sense to sell the non-performing assets, which require a huge sum of money maintenance. They noted, for instance that selling five of the aircraft in the presidential fleet and other unproductive assets will help raise money, which can assist address some of the economic crisis bedevilling the country.

    Proponents kick their heels in

    Despite the overwhelming opposition against the proposed sale of some national assets, the Federal Government has some allies. The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the umbrella body for the organised private sector, is one of them. Its President Chief Edem Bassey was emphatic that “there is nothing wrong in selling national assets that are no longer useful or efficiently operated by Federal Government.”

    Governor of Central Bank of Nigerian (CBN) Godwin Emefiele also threw his weight behind the proposed sale. He said when the idea of selling the national assets was first conceived in 2015, it was reported that the move had the potential to yield a whooping $40 billion to the nation.

    Emefiele, however, said that with the current flexibility in the market, sales output from the assets could only yield between $10 billion and $20 billion at present. Nevertheless, he said the assets could still be sold, but with a caveat that the Federal Government could buy back such assets when the economy eventually recovers.

    Similarly, the former CBN Governor, now Emir of Kano, Sanusi Lamido Sanusi, said the option of selling the assets could be explored with the consciousness of preserving notable interests in such assets by making the sale transparent and also positioning it to yield expected value.

    Push for options takes centre stage

    Although, the Manufacturers Association of Nigeria (MAN) said it was not averse to the proposed sale of some national assets, government must maintain some of ownership in the assets should they be sold.

    “Dangote spoke our mind. We are not saying government should sell its shares completely in the NLNG, which is worth $15 billion. They can sell part of it and still maintain some level of ownership,” MAN President Dr. Frank Udemba Jacobs, said.

    The MAN president noted by maintaining some level of ownership, “Nigeria will generate money to beef up her foreign reserves and engender confidence in the investing community, both domestic and international.”

    Also speaking, the Acting Chairman, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Shettima Abba Gana, said selling the assets will be an unwise decision.

    Instead, he advised the government to secure loans from the International Monetary Fund (IMF) and subsequently deploy revenues realised from the assets to offset the loans over a period of 10 or 20 years.

    Abba Gana reasoned that after the loans would have been offset within a decade or two, the nation would still continue to enjoy the income from such assets. He cautioned that Nigeria should not sell valuable assets such as NLNG and other strategic national resources to meet short-term financial obligations.

    Similarly, the President, National Union of Petroleum and Natural Gas (NUPENG), Igwe Achese, said instead of selling the assets, the Federal Government should attract investors by building refineries and set the tone for economic recovery through short, medium, and long-term economic measures to alleviate the plights of traumatised Nigerians.

    Will government jettison the proposal and embrace these options? That is the big question. Although, it is yet to come out with complete list of assets to put on auction, and the modalities should it go ahead, what is clear is that the move would not be a jolly ride if it eventually makes up its minds to dispose of the assets.

  • Airbags: Toyota recalls fresh 5.8m cars globally

    Airbags: Toyota recalls fresh 5.8m cars globally

    Toyota Motor Corp on Wednesday said it was recalling about 5.8 million cars at home and abroad over potentially faulty air bag inflators made by Takata Corp.

    The company said in a statement in Tokyo, that the recalled cars included those used as replacement parts following a 2010 recall.

    It said the recalled covered airbags installed in cars produced between May 2000 and November 2001, and April 2006 and December 2014.

    Toyota’s latest recall includes the Corolla, one of the world’s best-selling models, and the Vitz or Yaris subcompact hatchback model.

    It affects about 1.16 million vehicles sold in Japan, about 820,000 cars sold in China and around 1.47 million cars in the European market.

    The recall extends to Central and South America, Africa, the near and the Middle East and Singapore, and also includes the Hilux pick-up truck and the Etios line of sedans and hatchbacks.

    Automakers worldwide are ramping up the industry’s biggest-ever recall after parts supplier Takata, under pressure from U.S. authorities, agreed earlier this year to declare more of its air bags as defective.

    The air bag inflators in question use a chemical compound which can explode with excessive force after prolonged exposure to hot conditions, and have been linked to at least 16 deaths globally.

    The move shows the complicated nature of the inflator recall, which began around 2008 and continues to expand.

    The latest recall includes about 20,000 cars which were fitted with replacement Takata inflators following an initial 2010 recall.

    The replacement parts are also seen to be at risk of exploding as they do not contain a drying agent.

    Transport authorities around the world now consider inflators without a drying agent to be unsafe and have ordered all of them to be withdrawn.

  • Report: Financial inclusion ‘still a challenge in Africa’s low income communities’

    Africa’s financial environment is as competitive as other developing and high income regions in some countries, but access to finance remains a challenge, according to the Institute of Chartered Accountants in England and Wales  (ICAEW).

    In its report, Economic Insight: Africa Q3 2016, the accountancy and finance body notes that whilst some countries have excellent financial soundness access to credit remains a challenge for many Africans.

    The report undertakes a comparative review of the financial systems and regulations in Africa relative to the sub-Saharan Africa (SSA) region. It compares indicators of the financial environment (including credit metrics, risk evaluation and monetary policy), as well as regulation and supervision standards.

    The report looks at the role financing can play in economic development across the continent, and likely developments in the cost of financing in the coming years. In 2016 rankings, Rwanda performed best in SSA in terms of getting credit, followed by Zambia, Kenya, Ghana, Mauritius and Uganda. This likely stems from the fact that Rwanda has made six reforms to facilitate getting credit during the 2010-16 period, strengthening borrowers’ and lenders’ collateral laws.

    However, Regional Director, ICAEW Middle East, Africa and South Asia, Michael Armstrong, notes that “financial inclusion remains low in Africa. According to him while many of Sub-saharan Africa’s population have access to a formal banking system, in low income communities the degree to which individuals can access financial services is limited, especially when considering the limited availability of private credit.  He observed the situation could have real effects on economic growth if it remains unchanged. Governments hoping to drive prosperity should consider how they can increase access to finance.

    Quoting a report “Making Finance Work for Africa (MFW4A)”, he said  in 2015 only 23 per cent of African households had access to formal or semi-formal financial services adding that that there is evidently significant variation between countries’ levels of financial sector development.

    The report notes that South Africa and Mauritius have the highest Private Sector credit extension (PSCE))to GDP ratios on the continent, with South Africa’s figure estimated at 150 per cent in 2015 while Mauritius’ ratio is estimated at around 104 per cent.