The Nation Newspaper

Category: Issues

  • Exploring models of efficient airport management

    Global trends in airport management are establishing relationships between ownership models and terminal efficiency. In Nigeria, the debate is on what model can bring about efficient, safe and secured airport terminals, KELVIN OSA-OKUNBOR reports.

     

    How to make airports effective and safe in Africa has become a talking point  among experts, professionals and other stakeholders in the sector.

    International aviation bodies, including International Civil Aviation Organisation (ICAO), Airports Council International (ACI) and International Air Transport Organisation (IATA), say global attention is being beamed on Africa and Nigeria in particular, because of its position as the next investments’frontier.

    With airports playing critical role in air transport infrastructure, especially by attracting economic prosperity to their domains, a global campaign is ongoing by African governments to invest more in their airports.

    To attract carriers, airports must be run effectively. They should charge minimum aeronautical fees in line with the global template.

    Africa has 731 airports and 419 airlines in a global industry where aviation supports about seven million jobs, generating over $80 billion economic activities.

    It is for these reasons that experts continue to canvass models of running airport economies in Africa, insisting that players think out of the box to consider ways and means of steering the industry onto the path of growth.

    To them, air transport services consolidation must be built on a strong base, utilising the best options to optimise both aeronautical and non-aeronautical revenue sources to propel growth.

    Though consensus is building on the desirability of airports in every corner across Africa as economic enablers, the model to be adopted to run such social infrastructure has pitched experts against one another.

    Are airports built for profits or mere catalysts to drive socio-economic activities? Are they stand-alone social infrastructure or projects meant to grow the gross domestic product of the economies in their domain? Are airports run as private or public investments?

    These were some of the issues on the table last week, when experts met at the Airport Business Summit and Expo Africa (ABSE) in Lagos to examine models for airports in the continent.

    To them, the increase in Africa air traffic has been consistent with increase of passenger traffic growth rates of 6. 3 per cent between 2016 and 2017 and 9. 9 per cent between 2017 and 2018. According to Summit statistics, projected growth for passenger traffic in Africa is expected to continue through 2035 on the average of 4.3 per cent yearly. The statistics said more people will travel in and out of Africa with inter-regional traffic expected to improve significantly.

    Setting the tone for discussions, the organiser of the summit, Mr Fortune Idu, said ABSE as a multi-sector event drew participants from industries with direct and indirect dealings with airports in the value chain, not limited to airlines, retail, security, safety, technology, hotels and others.

    He said the summit was critical as an important connector that will help airports’ operators make their cities and terminals attractive for airlines and investors by showcasing a one-stop information portal for passenger projections and facilities.

    Idu said the summit created a platform to assist operators, investors and the airport business community to find a common ground for prosperity.

    He said: “ The gap between operational cost of most regional airports and the revenue is very small, making the burden of concession and incentives huge. However, all other sub sectors within this chain look up to the airport to be the driving force for cost reduction, which will translate to a more affordable fare and increase in patronage. This expectation is real and the airport must address it by increasing its capacity to earn more and save more by providing efficient services management and operations.”

    According to Idu, the Federal Airports Authority of Nigeria (FAAN) structure is too large to achieve efficient running of airports.

    With over 26 airports under its management, FAAN, he said, cannot deliver because it was handling more than what it has the capacity to undertake.

    He canvassed FAAN’s unbundling into three entities, which he listed to include: Airport Development Authority; Airport Management Company and Federal Airports Property Company Limited.

    Idu said such model was already in place in other countries, including South Africa, Ghana, Egypt and others in Africa.

    The Airport Development Authority, Idu said, should have jurisdiction over security and airports’ regulation whereas the Airport Management Company should be strictly involved in the business of managing airports.

    Such entity, which should strictly busy itself with management of airport terminals, could be ambitious enough to consider managing airports in other African countries.

    The Federal Airports Property Company Limited, Idu said, should be saddled with managing  FAAN property.

    Such body, he said, will have business with management all airport land and the criteria for lease by concessionaires and other investors around the airport. If achieved, this model he said, will bring about right-sizing of existing personnel for capacity.

    In an interview, aviation consultant , Mr Chris Aligbe, said the way forward to effective management of airports remains their concession.

    Read Also: Why Nigerian airports are under-utilised, by Rep

     

    Aligbe said: ”Government should consider airports concession option. Without exploring the option of concession, it could be difficult to expand the airports because of issues of resistance to change by aviation workers. In doing this, the government must consider how to address issues of labour .’’

    Minister of Aviation Mr. Hadi Sirika had reminded stakeholders that there was no going back on  the government‘s plan to concession major international airports in Lagos, Abuja, Port Harcourt and  Kano.

    He said the process for their concession had been concluded, but he failed to mention the international firms that won the bid to concession the terminals.

    This development has continued to raise doubts among industry players and watchers.

    The government, however, seemed to have contradicted itself when in one breath it said some airports have been concessioned, and it is still investing in their upgrade and expansion.

    El-Mansur Atelier Group Chief Executive Officer, Tunde Oyekola, said despite the misgivings on how airports are managed, some state governments are not looking back in their bid to have airports in their domain as economic enablers.

    He said increasing investments in airport terminals have made it difficult for the government to hand them over to private investors.

    A representative of Intels Group, Nuhu Adams, canvassed the setting up of route development department in FAAN.

    According to him, there was need for airlines, banks and government agencies to collaborate to deepen air transportation.

    He examined the role FAAN could play in deepening the process of  route development, adding that financial institutions could assist by developing funding models for airport infrastructure and other projects critical to aviation development.

    He queried banks’ lack of interest in pushing for aviation project financing, observing that banks are running away from financing airlines because of low returns , poor corporate governance ethics and other infractions by owners and investors in that sub sector.

    Idu said airports’ concession is the way to go if aviation workers could trust that it would not lead to job losses, adding that if the process was transparently carried out, it could lead to a win win situation for all players.

    Besides unbundling the current airport authority, Idu said the way the government was investing more funds in aviation infrastructure, could be difficult, if the same government could give up the airports for concession.

    Some experts argued that if airports are built as economic enablers, the whole idea of trying to make money out of them sounds may not be counter productive.

    They cited how the Nnamdi Azikiwe International Airport has helped to open up the Federal Capital Territory in Abuja.

    They made the case for states governments investment in airports to open their corridors to economic activity.

    An aviation consultant, Mr. Tayo Ojuri advocated the development of a comprehensive agro-air logistics policy to encourage investors in the air logistics business.

    He said the opportunities that abounded in agro air logistics were not harnessed by stakeholders.

    He observed that cargo airports must be properly developed with the requisite infrastructure to attract investors and most especially, the farmers in the agro commodities to grow the industry.

  • Real sector burdened by high cost of borrowing

    Commercial banks’ double-digit cost of borrowing is hurting the real sector. It is discouraging productivity and investment. Manufacturers, particularly small scale enterprises, are also yet to heave a sigh of relief from the various single digit interest rate funding windows created for them by the Federal Government through the Central Bank of Nigeria (CBN). They are now calling for improved and sustained policy to reduce cost of borrowing. Assistant Editor CHIKODI OKEREOCHA reports.

     

    The campaign to force a reduction in the cost of borrowing to the real sector and also interrogate the performance of the various single digit interest rate funding windows available for the sector, particularly manufacturing, will surely top manufacturers’ policy advocacy this year.

    Indication that these will galvanize the advocacy machinery of the Manufacturers Association of Nigeria (MAN) and indeed, other members of the Organised Private Sector (OPS) emerged after manufacturers raised eyebrow that the double-digit rate at which commercial banks lend to the sector was discouraging productivity and investments.

    The Nation learnt that when the policy advocacy eventually kicks off, manufacturers will specifically be pushing that the Central Bank of Nigeria (CBN) improve and sustain the current policies aimed at increasing loans to the productive sector of the economy to stimulate national output.

    They will also be advocating the need for the CBN to review the guidelines of the various development funds put in place for the real sector to ensure that the terms and conditions are liberal enough to attract borrowing from the industrial sector.

    The stage for what promises to be a robust engagement between manufacturers and the Federal Government through its monetary authority, the CBN, was set after 82 per cent of Chief Executive Officers (CEOs) of manufacturing companies indicated that the double-digit rate at which commercial banks lend to the sector was discouraging productivity and hurting investment.

    This was contained in the Manufacturers CEOs Confidence Index (MCCI) for third quarter 2019, following which MAN said “It was imperative that it sustains the advocacy for policy measures that will lower the cost of borrowing to increase the sector’s productivity and competitiveness.”

    The association added that it will also be partnering the Federal Government to interrogate the performance of the various single digit interest rate funding windows available for the real sector.

    The MCCI gauges the pulse of the economy on quarterly basis. It deploys a set of diffusion factors, including business operating environment issues such as over-regulation, multiple taxes/levies, access to sea ports, local and raw-material sourcing, among others, to measure a quarterly perception and confidence of manufacturers in the economy.

    In addition to the set of diffusion factors for which information is generated on, the general macroeconomic ambience in terms of foreign exchange, lending rate, credit to the manufacturing sector etc. are also measured.

    A questionnaire structured with the diffusion factors, macroeconomic and business environment variables, and administered on the CEOs of MAN member-companies across the six geo-political zones of the country and the 10 sectoral groups of the association returned a disturbing verdict.

    It indicated that majority of respondents (82 per cent) disagreed that the rate at which commercial banks lend to the manufacturing sector encourages productivity in the sector. “This is evident in the double-digit cost of borrowing from the commercial banks even amidst measures by the monetary authority to reduce cost of borrowing in the country,” the report said.

    The index, which also added that the situation, discouraged investment particularly in the manufacturing sector, set the tone for manufacturers to push for a better deal from the commercial banks and from the various single digit interest rate funding windows put in place for the real sector.

    Indeed, at moment, commercial banks are said to charge as high as between 22 and 25 per cent interest on loans. Micro-finance Banks (MFBs) charge higher, insisting on between 30 and 40 per cent interest rates.

    The exorbitant interest rates charged by the commercial banks are said to be partly responsible for the shutting of many industries, while others simply relocate to neighbouring countries where they are sure of interest-friendly credit facilities.

    Worst hit by the prevailing unfriendly interested rate regime are Micro, Small and Medium Enterprises (MSMEs). The commercial banks are yet to change their perception about MSMEs; they are still wary of the risk of loan default by MSMEs so, they are reluctant to advance credit to the operators.

    There are 41 million MSMEs in the country, according to a national MSMEs survey carried out in 2017, by the sector’s regulatory agency, the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) in collaboration with the Nigerian Bureau of Statistics (NBS).

    However, the MSMEs, despite being acknowledged globally as the engine of economic growth because of their potential to create jobs, boost production, generate income and reduce poverty, are still plagued by a plethora of challenges among which is lack of access to credit.

    About 80 per cent of MSMEs are said to lack access to the financial market, according to a survey by the International Finance Corporation (IFC) and Mckinsey & Company, a United States (US)-based multinational management consulting firm.

    To close the financing gap in the MSME segment of the industrial sector and hopefully, boost the profitability and competitiveness of MSMEs in Nigeria, the Federal Government, through the CBN, launched the N220 billion Micro, Small and Medium Enterprises (MSMEs) Development Fund in August 2013, as well as other intervention funds.

    Read Also: Govt shuts cooking gas plants over ‘safety defaults’

     

    Access becomes an issue

    However, difficulties in accessing the N220 billion MSMEs Development Fund and other intervention funds meant for the sector have continued to stand in the way. The operators lament that it is easier for the camel to pass through the needle’s eye than to access the fund because of the stringent conditions and guidelines for accessing it.

    Under CBN’s guidelines, the fund, which attracts nine per cent interest rate, would be administered through private or state owned Micro-Finance Institutions (MFIs), Finance Houses, and Cooperative Finance Agencies.

    Such MFIs or micro-finance banks must pass CBN’s competency and proficiency tests in order to certify them capable of distributing these funds to MSMEs. State governments will be able to access up to N2 billion each for lending to eligible beneficiaries through Participating Financial Institutions (PFIs) in their states.

    In other words, the CBN will not be lending directly to farmers or businesses. What the fund does is a wholesale fund. It provides funding to the PFIs. MFIs or micro-finance banks can also come to the fund.

    The CBN will assess them, give them the money at low interest rate. The PFIs would undertake that they will lend at low rate of interest to micro-entrepreneurs, the low-income earners, farmers, artisans and the active poor who operate in the informal sector.

    Also, PFIs can only finance agricultural value chain activities, trade and commerce; cottage industries, artisans, among others.

    The apex bank in a bid to ensure that productive sectors of the economy attract more finance necessary for employment creation and diversification of the country’s economic base, also said a maximum of 10 per cent of the commercial component of the fund should be channeled to trading and commerce.

    Although, CBN requests that 60 per cent of the fund, representing N132 billion, be voted for providing financial services to women-owned businesses, PFIs would be required to submit periodic returns on disbursements as well as an analysis of the social impacts of the fund.

    The finance sector regulator will also undertake regular on and off site checks to ascertain the veracity of the reports received.

    That is not all. The CBN also demanded that borrowers provide 100 per cent near-cash cover in treasury bills or fixed deposit, a situation said to have made it difficult for most finance house operators to draw from the fund.

    Most of the finance house operators are therefore, reluctant to draw from the loan. In their own thinking, the CBN cannot force people to invest in treasury bills or keep fixed deposits because they want to borrow.

    Because of this, only commercial banks are said to be meeting the drawn-down policy and are accessing the loans. The snag however, is that this arrangement defeats the objective of setting up the fund.

    But an MSME operator said that the commercial banks are still being reluctant to grant the CBN intervention funds meant for the real sector because of risk of default.

    The operator, who declined to be mentioned, said the commercial banks prefer paying penalties to the CBN for deliberately withholding the funds or channeling them to other areas at the detriment of giving the MSMEs to use to run their businesses.

    However, as the President, Lagos Chamber of Commerce and Industry (LCCI), Mrs. Toki Mabogunje, explained, the intervention funds are available, but there are issues both on the side of the borrowers and the lender.

    “The lender complains that the borrowers are not bankable; that they are not meeting the criteria that the banks are asking them to meet in order to access the funds,” she told The Nation, adding that there are also issues around financial literacy.

    While also pointing out that some businesses themselves may not understand what is required for them to access these funds, Mabogunje said it was in an attempt to address issues around ease of access to the funds that the CBN came up with the idea of Moveable Collateral Registry, where a small business can use a moveable item as collateral to access the funds.

    “With Moveable Collateral Registry, you don’t have to have land and property; you can use your movable car, your freezer; women can use their jewelry; any kind of moveable asset you have can be used as collateral. So, the CBN is trying to encourage more people to register their assets in that registry so that they can use it as collateral for funds,” the lCCI boss explained.

    The National Collateral Registry of Nigeria is an initiative of the CBN, with support from the International Finance Cooperation (IFC), to improve access to finance particularly for MSMEs.

    It is a web-based system that allows lenders to determine any prior security interests, as well as to register their security interests over movable assets provided as collateral.

    The Collateral Registry facilitates the use of movable/personal assets as collateral that remain in possession or control of the borrowers and thereby improves access to secured finance.

    The web-based nature of the system offers remote access from the comfort of the borrower’s location even beyond normal business hours without visiting the registry office. It reduces and frees officials of the registry operations from paper burdens, manual reviews, searches and storage costs.

    Beyond the Registry, Mabogunje also said that at a certain level, at the micro level, that is the smallest of the small, up to a certain amount don’t even have to provide collateral.

    “What they need is a guarantor; they can provide two guarantors; you know how they use guarantor under federal policy, either they use civil servants, a military officer, a lawyer, a banker; there are certain people that will be accepted as guarantors,” she explained.

    According to the LCCI president, the matter is still being discussed and debated. “The funds are there, and we at the LCCI are also advocating for more simplification of that process so that there will be more access to the funds,” she added.

  • How to maximise Nigeria’s huge gas resources

    The Department of Petroleum Resources (DPR) says the country’s natural gas proven and unproven reserves stand at 200.79 trillion cubic feet (Tcf) and 600 Tcf, making it more of a gas province than oil. However, industry operators say until the right regulatory and fiscal policies are put in place, optimising the potentials of natural gas for development of the economy will remain a mirage, reports EMEKA UGWUANYI.

     

    The Nigerian Gas Association Workshop Report noted that Nigeria has large hydrocarbon resources, including natural gas, when compared to other producing countries.

    This resource, the report said, is of benefit as it has become and continues to be the fuel of choice in developed and developing countries.

    The distribution ratio of proven reserves between Associated Gas (AG) and Non-Associated Gas (NAG) is 50/50, Roger brown the report said, adding that the  natural gas industry is developing  as the country is only consuming a fraction of it, especially in meeting its internal energy demand.

    According to the report, gas development is constrained by the absence of fiscal policies; gas pricing mechanism; legal and regulatory frameworks; and inadequate finance.

    These uncertainties have had deleterious effects on the industry. Creating an enabling and reliable legal and regulatory environment will ensure the successful and sustainable development of the industry.

    A research by the Facility for Oil Sector Transformation (FOSTER) with objectives of improving the performance of the oil and gas sector in terms of efficiency and productivity, the report said, identified gas regulatory and pricing and proposed recommendations to the impending problems.

     

    Gas pricing challenge

    According to FOSTER, The end user gas price of US$3.85 per million standard cubic feet (Mscf) directive by the Minister of Petroleum Resources for textile manufacturers based on a distribution tariff of US$1.15 and marketing margin of US$0.50 fails to cover the scope and cost of last mile distribution companies and does not take into account the capital that has been invested to develop the distribution network.

    The extension of a special pricing arrangement to any arm of the industry should be preceded by an extensive consultation, in-depth research and an assessment of the consequences of such arrangements for the manufacturing industry to ensure that no element of the value chain is broken in the process.

    The National Gas Policy 2017 also recognises the importance of stakeholders being carried along in regulatory decision making. For example, the regulated tariff for monopoly infrastructure is to be based on a tariff methodology and model developed by the petroleum regulatory authority with input from stakeholders.

     

    Consequences of the directive

    According to players in the natural gas distribution chain, pursuant to the directive, the end user gas price of US$3.85/Mscf took effect from January 1, 2018.

    It is a retroactive price, which fails to take into account the cost of our services or the capital we have invested; therefore, it will have a crippling effect on our businesses and result in “gross value erosion for local and foreign investors who have already committed funds; creation of unanticipated liabilities for Local Distribution Companies (LDCs) as other manufacturing customers will expect back payments at the LDC’s expense based on policy-generated debts for 2018 (resulting from the US$3.77/Mscf difference between the US$7.62/Mscf price that was in effect during 2018 and the US$3.85/Mscf price in the Directive);  and potential future tax complications, levies and penalties against LDCs.

    Others are making LDCs face significant difficulty in meeting up with financial obligations to lenders for facilities expended towards gas infrastructure deployment, which ability to meet up with financial obligations was under severe strain as a result of the significant currency devaluation; and negative effects for contracts executed before the release of the directive.

    Also on capital recovery, the gas players said: “We have invested very significant capital to develop our extensive downstream distribution network.This capital is recovered through a portion of the end user gas price.  The directive, however, does not make any provision for capital recovery.

    This would grossly erode already constrained margins, meaning that we would never be able to recover our prior investment and would be unable to carry out any further development of the distribution network to promote further industrialisation.

    This will compound our already pressured ability to conduct Operations and Maintenance (O&M) at the right quality and safety standards in the normal course of business.

    “Additionally, the imperative to upgrade our distribution infrastructure as required from time to time demands fresh injection of significant capital.

    The provisions made for these at the initial investment decision phases have become grossly inadequate as a result of changes in macro and micro economic variables – currency devaluation, foreign exchange constraints and inflation, among others.

    Our capacity to meet these obligations would be greatly diminished as a result of inadequate margins espoused by the directive, and inability to accommodate all ongoing negotiations with small industries requiring marginal gas volumes.

     

    Investment protection and sanctity of contracts

    The supply of gas to customers in the textile and manufacturing sectors is based on commercially negotiated, legally binding contracts.

    The implementation of the directive would ignore the commercial agreement between parties and send a wrong signal to the private sector and foreign investors that contracts do not need to be respected or can be interfered with by the Federal Government.

    This will hinder further investment in the industry and other sectors given that policy risk is a first consideration during the investment appraisals.

    The report noted that the “LDCs are already feeling a strain on their investments as a result of the currency devaluation and the fact that any overseas costs, which the LDCs incur would be at NAFEX rate (about $1:N365) while the end user gas price is converted from US dollars to Naira at the CBN rate ($1:N306)’’.  A $3.85 end user gas price will compound this situation.

    The directive also creates the risk of disputes and litigation between commercial parties in the gas industry. Gas pricing in the gas value chain is based on investments made on established economics (as recognised by the Gas Policy) and the erosion of margins, which underpinned the investments would mean that there is the significant risk that suppliers or distributors of gas would be unable to continue to meet their contractual obligations on a sustainable basis.

    Directive at variance with Gas Policy and hinders development of the gas industry.

    Read Also: Shift to gas will knock out petroleum subsidy – Sylva

     

    According to the report, the Gas Policy is clear that to fully develop the industry, there is a need to move towards a deregulated market allowing for willing buyer-willing seller arrangements.

    This would help incentivise private sector investment in the various aspects of the gas value chain.  The Gas Policy also recognises that cost of service has to be taken into account in regulatory decision making.  The directive, however, fails to note the cost required to develop, operate and maintain gas infrastructure.

    A strict regulation of the gas price for the entire gas value chain is at  variance to the spirit of the National Domestic Gas Supply and Pricing Policy 2008 and the Gas Policy, which enshrine the government’s position on achievement of a market-led pricing approach and incentivising private sector investment in the gas industry.

    It would also deter much needed private sector and foreign investment in the Domestic Gas industry given that investors will be unwilling to invest in an industry where there is no certainty as to viability of the investment if the Federal Government can unilaterally make significant reductions to the pricing, which was used to assess the economic viability of the investment.

    Such directive shows there is no sanctity of contracts as commercial terms of commercially negotiated contracts can be significantly adjusted by the Federal Government at any time.

    “The US$3.85/Mscf end user gas price for the whole manufacturing industry would also mean the distribution companies would be unable to expand their networks (which would further promote industrial development) given that there would be no way to recover the investment.

    The positive impact LDCs have had on the development of our nation through our significant investments in the downstream gas sector must be emphasised.

    “Since the LDCs commenced commercial operations we have enabled the creation of hundreds of thousands of jobs (directly and indirectly); enabled contribution of over N565billion to Nigeria’s gross domestic product; developed over 250 megawatts (Mw) power generation capacity; displaced over 1,980kt of CO2 emissions through customers we have enabled to switch from diesel to natural gas; provided education-focused initiatives to several thousand students; and provided entrepreneurial training, capacity development and empowerment programmes and provided medical interventions for several thousand indigenes, it said.

    The report continued: “All these significant contributions would not have been possible without gas pricing, which supports the cost of service and enables the recovery of capital invested.

    The LDCs have also made a significant contribution to industrial development by being able to supply gas at a price which is at a discount of 30 per cent plus to the price of alternative fuels.

    Without an end user gas price that took into account cost of services and enabled recovery of capital invested we would have been unable to develop the gas infrastructure, which has enabled this industrial development.

    In facilitating industrial development, we have even gone as far as incurring the costs required to connect some customers to our network that did not pass the economics required for new connections (achieved through cross-subsidising with customers that passed the economics).

    “The overall effect of this strict regulation of the gas price in the manner set out in the directive is that the development of the gas industry would be significantly hampered when there is a need for our nation to move towards a gas-based economy.”

  • Universities urged to lead agric innovation in Africa

    By  Daniel Essiet

     

    Universities in Africa need to take a lead role in harnessing the power of technology and innovation to improve the continent’s agricultural systems, experts have said.

    They stated this at the Annual General Meeting (AGM) of the Regional Universities Forum for Capacity Building in Africa (RUFORUM), held at the University of Cape Coast in Ghana.

    With over 60 per cent of the continent’s population engaged in agriculture, the sector is expected to remain a key source of employment and livelihood for majority of the young people.

    Yet, without prioritising research and innovation spearheaded by institutions of higher learning, much of the agriculture remains rudimentary. Despite comprising a quarter of the world’s arable land, Africa remains a net importer of agricultural products.

    “Advancement in knowledge and skills is shifting how agriculture value chains are organised. Africa’s success to meet the Sustainable Development Goals (SDGs) will depend on the commitment to address these challenges,” said, the assistant director general and regional representative for Africa at the UN Food and Agricultural Organisation (FAO), Dr Abebe Haile-Gabriel.

    Read Also: ‘Innovation key to agricultural transformation’

     

    Haile-Gabriel said the African continent still lags behind in terms of generation and application of innovation and knowledge systems.

    Climate change and post-harvest loses, he said continue to remain big challenges for the continent, a problem which could be addressed if universities invested in finding solutions and the right technologies. Experts say incorporating innovation to agriculture could help boost food security and combat rural hunger and poverty.

    “Our universities and research institutions must be motivated to research more in the agriculture sector for sustainable growth,” said Haile-Gabriel.

    He added that FAO and RUFORUM are undertaking an initiative to place graduate students in six-month community based field attachments as a way of fostering knowledge transfer between the students conducting research and rural host communities.

    RUFORUM is a network of 121 African universities in 38 countries, which is coordinated by a secretariat hosted by Makerere University, to build capacity in agricultural research and development.

    The Executive Secretary of RUFORUM, Prof. Adipala Ekwamu, noted that with universities being seen as a catalyst for agricultural transformation, training scholars with the relevant skills was critical.

    RUFORUM, he said, is leading four initiatives aimed at strengthening higher education and Science, Technology and Innovation (STI) in Africa by promoting digital technologies for agricultural transformation, strengthening staff capacity and increasing pool of women scientists in African universities, increasing innovation and entrepreneurship capacity and building sustainable innovative technologies.

     

  • Boosting coffee production

    Coffee remains a big revenue earner in the world market. But Nigeria’s production has fallen to less than 60,000 metric tonnes yearly. Stakeholders are calling for efforts to reposition the industry to enable the country earn more foreign exchange, DANIEL ESSIET reports.

     

    There is more demand for coffee. It is one of the most widely consumed beverages around the world with an estimated 3.5million cups of coffee consumed worldwide daily. Euro Monitor International predicted that Nigerians would drink more than 1,000 tonnes of coffee this year.

    Similarly, Fitch Solutions reports that Nigeria is one of five coffee markets to watch.

    According to it, overall consumer coffee spend for Nigeria is set to  hit $286.8million (N117.6billion) in 2023.

    Despite this, farmers are not tapping the potential as the produce has seen a significant dip in production and export.

    As the world coffee output continues to increase, Nigeria’s production continues to dwindle, with the local demand of the coffee industry put at $60million.

    Analysts said the country produces less than  60,000 tonnes of coffee annually.

    Despite the fact that states such as Taraba, Plateau, Adamawa, Oyo, Osun, Ondo, Ogun, Edo, Kwara, Kogi, Niger, Kaduna, Benue, Cross River and Akwa Ibom, have potential to produce coffee, Nigeria is not tapping the great potential.

    According to statistics from Raw Material Research and Development Council (RMRDC), between 2010 and 2015, about N1.5billion worth of coffee products were imported into the country.

    Several factors have been attributed to the country’s dwindling production level, majority of which have forced farmers to abandon coffee for other crops to make ends meet.

    According to analysts, most of the coffee plots are also old and farmers have suspended major  activities on their  farms.

    The Secretary-General, National Coffee/Tea Association of Nigeria (NC/TAN), Dr Usman Hassan, said due to poor prices, some farmers pluck their tea, pound it locally and dry it on the ground to sell, saying: “This is not conventional but because of the demand for tea in Nigeria, it is still marketable.

    “Today, Nestlé is anchoring coffee production in Côte d’Ivoire. They bring this coffee to Lagos and process it and sell to Nigerians. They even have a platform on financing coffee production in Ivory Coast.

    “Why are they neglecting  Nigerian farmers? Coffee/tea alone can employ more than 20 million people if attention is given to it. Twenty-one states, including Abuja, can production coffee in Nigeria,” he stressed.

    To revamp the sector, President, Federation of Agricultural Commodities Association of Nigeria (FACAN), Dr Victor Iyama urged  the government to support massive coffee production and productivity improvement efforts throughout the whole coffee growing destinations.

    As it has potential for coffee production, he said the nation has set a goal of increasing coffee export to support its economic development.

    Speaking with The Nation, Iyama said various measures must be undertaken to boost coffee production. Among these, is working with coffee  farmers and others in the industry to meet the country’s goals through improved technologies of coffee seedlings.

    In addition, he said the government must endeavour to implement coffee seedlings improvement, supply the required inputs and carry out wide public mobilisation and awareness creation training.

    Concerned by the dwindling fortune of the industry, thousands of people in Central and West Africa are benefiting from Nestlé’s efforts to boost sustainable coffee from bean to cup. These include coffee farmers to salespeople. The company has, therefore, committed to provide sustainable farming, supply, production and consumption across its coffee supply chain.

    Nestlé agronomists also visit participants’ farms and teach them how to grow coffee more sustainably, based on Nescafé’s best farming practices.

    As part of the plan, by this year, the company is committed to provide farmers worldwide with over 27 million high-yielding, disease-resistant coffee plantlets, developed by the Nestlé Research and Development Centre in Abidjan.

    In line with this, the Inter-African Coffee Organisation (IACO) has joined forces with the Centre for Agriculture and Biosciences International (CABI) and the International Coffee Organization (ICO) to launch the $950 million ‘Africa Coffee Facility (ACF) to boost Africa’s coffee industry and achieve a 40 percent increase in high-quality exports worth $5 billion a year.

    The ACF is projected to transform Africa’s coffee production – currently 10 percent of the global coffee market – into a vibrant and resilient industry again.

    Coffee is a primary source of income for more than 12 million households in Africa and contributes a significant proportion of tax income in a number of these countries.

    IACO Secretary-General Dr Fred Kawuma said: “Africa produces some of the highest-quality and much-loved coffee in the world but its contribution to the global coffee trade has declined significantly since the 1970s when nearly a third of all.

    “The ACF is an ambitious fund, which seeks to attract private and public sector investment to transform Africa’s coffee industry from a subsistence to a commercial or entrepreneurial approach where millions of smallholder coffee farms will see their livelihoods significantly enhanced.‘’

    The first-ever Donors and Partners Conference has been held under the theme “Financing the African coffee value chain through the Africa Coffee Facility” was attended by development partners, bilateral donors, banks, foundations, private sector and the coffee farming community, among other stakeholders.

    Read Also: How to tackle rising food prices, boost production

     

    It is anticipated that the ACF,which will be hosted by Afreximbank, will also develop and promote domestic consumption of coffee set against the challenges of climate change and the need to empower younger farmers and women into the sector.

    Key aims of the ACF – over its 10-year tenure – will be to invest $500million on building a sustainable coffee supply, $100million on improving demand, market linkages and investments, $200million on putting in place climate change adaptation and environmentally resilient practices and $150million promoting knowledge management and dissemination.

    Partners and potential donors at the forum heard how Africa’s coffee value chain must see vast improvements in production and cooperative systems, many of which have either deteriorated or collapsed, in order to compete in the global market place.

    The Chief Economist, ICO, Dr Denis Seudieu, said: “Although many initiatives have been taken in some countries, many challenges still hamper the achievement of a sustainable coffee sector in Africa.

    However, there’s opportunity to move the African coffee sector from subsistence to an entrepreneurial one. This will enable our farmers to have sustainable income generation and a long-term security of their livelihoods.”

    Part of the ACF’s mission, in looking to improve the quality of Africa’s coffee free from crop pests and diseases, making it safe to consumers – an area in which CABI specialises.

    The Regional Director, CABI Africa, Dr Morris Akiri,  said: “CABI is delighted to be working in partnership to help create an African coffee industry which is resilient to climate change and strong enough to compete and succeed in a highly competitive and often volatile global market.”

    He added that the organisation will not only work to help put the latest knowledge and skills on coffee pest management into farmers hands in the field but also to disseminate information, skills and best practice along all points of the coffee value chain.

    It is expected that the initial funding of almost $1billion will be achieved in the first five years with more to follow as the fund gains momentum.

    The ACF plans to enable 50 percent of farmers to plant climate-smart materials as part of a strategy to see one out of every five coffee farmer adopting climate smart productive systems. By doing so, it is envisaged that farmers’vulnerability to weather events, such as floods and drought, will be reduced by 25 percent.

    CABI, working as partners of the ACF, brings a range of expertise along the coffee value chain including past experience of guaranteeing credit to coffee farmers in Ethiopia and Rwanda by improving processing practices by smallholders, boosting coffee production in Kenya and Malawi through a combination of new planting materials, improved fertiliser use and better pest control measures, and helping farmers to adapt to climate change.

  • Content Board trains 1000 science teachers

    By Emeka Ugwuanyi

     

    As part of its Teachers Development Training Programme (TDTP), the Nigerian Content Development and Monitoring Board (NCDMB) has trained over 1000 science teachers in secondary schools across the country.

    NCDMB Executive Secretary, Simbi Kesiye Wabote, stated this at the closing ceremony of the second phase of the training in Kastina State, where  270 teachers benefited from the programme.

    At the event organised with support from the state Ministry of Education, Waboote, who was represented by the agency’s Director, Planning Research and Statistics , Mr. Patrick Daziba Obah, promised that NCDMB would increase the pace of continuous development of teachers across the country.

    He explained that the Board’s sponsorship of the retraining programme was borne out of its desire to create new models in the quest for academic knowledge, adding that the training would enable their pupils to compete with counterparts elsewhere and position them in the knowledge of science, technology, engineering and mathematics (STEM).

    He expressed hope that the training of teachers would translate to better performances by their students in west African Examinations Council (WAEC), National Examination Council (NECO), Joint Admissions Matriculation Booard ( JAMB) and other national and international examinations and lead to better technical skills and craftsmanship.

    He charged the teachers to ensure that Katsina State emerges as number one in STEM Education and the pupils among the leaders in the quest for technological and industrial self-reliance.

    Wabote stressed that NCDMB was set up to ensure the development and utilisation of Nigerian materials, equipment and workforce in the oil and gas Industry and the realisation of this important goal required technical workforce, better trained administrators and personnel with essential skills.

    “The teaching method of yesterday is no longer sufficient for the challenges of today and so we have modified the design and delivery of this programme in response to your needs.

    This year, we have given you electronic tablets with all the reading materials and we have enough reasons to continue to advance the methods of learning,” he said.

    Read Also: Unqualified teachers: Honestly, we can’t blame them

     

    Wabote noted that NCDMB places high premium on capacity development, especially in the teaching of STEM education across secondary and tertiary institutions.

    “Our target is to train a minimum of 1000 science teachers each year and to upgrade and equip technical schools to provide infrastructure required for the acquisition of technical, digitisation and essential skills,” he added.

    He stated that NCDMB has started the upgrade and equipping of some technical and vocational schools and provided modular science laboratories, modern teaching aids and improved science and engineering infrastructure in some tertiary institutions.

    The General Manager Capacity Building Division, NCDMB, Dr. Ama Ikiru, explained that the Board organised a phase two of the programme in Katsina State because the state government was receptive of the initiative and collaborated effectively with the Board.

    The Commissioner for Education, Kastina State, Dr Badamasi Lawal, commended NCDMB for sponsoring the training, noting: “It is remarkable that an agency that is based in Bayelsa State will come all the way to train teachers in Kastina.”

    He noted that pupils from the state recorded an improved performance in the last WAEC and NECO examinations, an indication that the programme that begun in 2018 was making a positive impact.

    The event also featured presentations from some secondary school pupils and award of prizes to the best participating teachers from the five-week programme held during the last holiday.

  • Realising TCN’s 20,000Mw transmission target!

    The planned wheeling capacity of 20,000 megawatts (Mw) of electricity by the Transmission Company of Nigeria has met with mixed reactions.  While some stakeholders see the target as realisable considering that the Federal Government is working on various projects to improve the power sector, others see it as one of those bogus targets that will never materialise, reports AKINOLA AJIBADE.

     

    Penultimate week, the Transmission Company of Nigeria (TCN) unveiled plans to increase the country’s transmission capacity from 8,100Mw to 20,000 megawatts (Mw) of electricity by 2023.

    Announcing the plans during a stakeholders’ forum in Abuja, TCN Managing Director, Mr. Usman Mohammed, said the agency would achieve this goal through its policy tagged ‘Transmission Rehabilitation and Expansion Programme (TREM). The firm is unequivocal about its plans to help boost the country’s electricity industry by implementing some far-reaching measures in the transmission of power.

    TCN hopes to build more power transmission substations and improve the quality of the existing ones across the country by replacing faulty parts with new ones.

    Expectedly, the news was cheery as it brought a new wave of optimism to the sector, which has been struggling to transmit 4,000Mw.

    The announcement created divergent views among stakeholders in the sector. Some received the news with excitement as they believe transmission of 20,000Mw would revamp the sector, while others believe the increase has been long overdue as the transmission arm of the supply chain has been unable to operate optimally over the years.

    However, there is need to examine some salient issues in the sector to determine the readiness or otherwise of the capacity of TCN to tackle the hitches in electricity transmission.

     

    Stakeholders’ opinions

    According to the Managing Director, Powercap Limited, Mr Biodun Ogunleye, TCN has embarked on many infrastructural projects. It must have conducted feasibility studies on those projects to know its capacity before it said it is targeting 20,000Mw transmission.

    Ogunleye said: “The transmission agency must have carefully selected contractors for the job, knowing full well that the project is technical and requires enough expertise. TCN must have asked itself some questions before making huge declarations that transmission capacity would hit 20,000Mw by 2023.

    “TCN must have questions on whether the contractors would perform or not or whether the contractors hold allegiance to one political group or the other before arriving at a conclusion that it would improve the transmission capacity of the sector.

    Also, the agency must have discovered whether it has the capacity to build 10 power substations or more before making such pronouncement. On this basis, one can safely say that TCN is prepared to achieve that goal.”

    He said TCN has Right of Ways (RoWs) and loading centres across the country, stressing these RoWs and centres are not well utilised by the company.

    “Perhaps the nation’s transmission company is planning to maximise its potential by fully using its Right of Ways and Loading Centres to improve the transmission capacity of the power sector.  If that is the case, the country would not have a problem increasing its transmission capacity soon,” he added.

    Read Also: TCN targets 20,000 megawatts in 2021, says MD

     

    Ogunleye said TCN is engaging incremental business and not what he described as virgin business, considering that it has many ongoing projects across the country, which it can leverage to boost power supply.

    However, the former country’s President, International Association of Energy Economists (IAEE), Prof Adeola Akinnisiju, holds a different view. According to him, the issue of increasing transmission capacity to 20,000 Mw would amount to a tall order if TCN fails to consider the cost of investment in the transmission equipment before it ventures into it.

    He argued that there were changes in the economic variables globally, and that the changes differ from one economy to the other. This implies that the cost of investment in the transmission facilities in a country must be well-thought out, otherwise,  meaningful progress would not be achieved in that area.

    He said if the Federal Government is able to attract the much-needed investments into its power sector, the better it is for Nigeria, which has a generation capacity of 12,500 Mw of electricity and transmission capacity of 8,100 Mw of electricity but could not give this to electricity consumer due to dearth of infrastructure.

    He said it is the responsibility of every stakeholder to be involved in  promoting the growth of the sector, considering the critical situation in which the sector and the country is.

     

    Past efforts

    TCN has in the last two years inaugurated many transmission substations and more than 40 power transformers. The agency increased its wheeling capacity from 5,500Mw in 2016 to 8,100Mw early last year and is keenly interested in providing more facilities for the sector going by its actions in recent times.

    Funding

    Apart from the several interventions made by the Federal Government to strengthen the liquidity position of the sector and further make it capable of financing some of its projects, TCN is believed to have financial assistance from credible and international financial institu-tions. The African Development Bank (AfDB) is said to have provided facility for the the country’s transmission projects.

    Stakeholders said the financial assistance TCN has received would  help the company to perform its obligations in the power sector.

    TCN in the eyes of stakeholders

    The agency is seen as the weakest link in the electricity market going by the various blames, which it has attacted. These include the power generation companies (GenCos) that complained about the inability of TCN to take the power they produce, to the power distribution companies (DisCos) that accused the TCN of going wrong with their delivery of electricity to Nigerians.

    But the Executive Secretary, Association of Power Generation Companies (APGC), Mrs Joy Ogaji, declined comment, saying TCN would be in better position to answer the question.

  • Pension complaints and solutions

     

    Pension complaints

     

    LETU: Dear Omobola, My name is Eletu from Ilorin. This is my third letter to you without any reply or publication in The Nation. Even though I don’t miss the paper on Wednesdays. Please, help me.

    This is my complaint. I was born June 10, 1950. I joined Nigeria Custom Service on September 25, 1975. I retired October 25, 2017. I am on level 09/step 10. I was verified on December 6, 2017 at PTAD headquarters, Maitama, Abuja. Up till today, I have never received a kobo either pension, gratuity or any retirement benefit – 33 per cent arrears and other backlog of retirement arrears since then. I have travelled to PTAD headquarters more than 100 times. All I hear was, ‘wait a little’. But my question: Is wait till when? Is it until I die before they pay me? I have written several letters to President, Vice President and even to the Executive Secretary of PTAD.

    I have sold all the properties I acquired during my working years to treat my aged sick mother. Even my family is begging for what to eat. After I served my country, Nigeria for many years, is this how the government will repay me? How long will I suffer before I collect my pension and gratuity?

    I am on a sick bed. Save my family and I from suffering.

    Please appeal to PTAD to pay me. God will help you to help me.

    PTAD: Pensioner has been called and was asked to provide his UBA Bank Statement (Original, stamped and signed) from 2007 to date and to attach his verification slip.

    ABDULHAKEEM: My name is Abdulhakeem. I am the Next of Kin (NoK) to my late mother’s, (Halimat’s) benefits. I filed all necessary documents since June 2018, but nothing is forthcoming. I need the money to help the family. Please assist me. Thank you.

    PTAD: The NoK is unknown, neither do we know his contact number, MDA or account number.

    JEFF in care of MBA: Dear Omobola, I am writing on behalf of Mba, a state pensioner with federal share. I retired from service in September 2009 on grade level 15, step 9. I have done my verification and have done that which is expected of me, yet nothing is forthcoming. I have not been paid gratuity or pension. Kindly help me to get this my little entitlement.

    Read Also: Pension complaints and solutions

     

    PTAD: The pensioner was called several times but he did not pick them. He should provide us with his correct pension number or his account number to enable us resolve his complaint.

    ADIGUN: My name is Adigun and my PFA is First Guarantee.  The issue I want to discuss affects all contributory pensioners who were Osun State Government employees before they retired in 2016. None of them has received either gratuity or pension. The real problem we have is not known as we were being fed with lies by the various PFAs. Kindly deal into this and advise us on the way out of this predicament.

    PENCOM: The relevant Department would require the PIN of the complainant to assist them further.

    TOR: My complaint is on the non-payment of outstanding pension and gratuity.

    I retired from the Nigeria Immigration Service. I was in service when the National Pension Commission (PenCom) was introduced in 2004. By 2006, I registered with First Alliance Pension Limited, now ARM Pension Managers with a PIN 100####.

    Certificate of issuance was  delayed. This created anxiety prompting me to register with another pension manager, Stanbic IBTC Pension. I retired in May 2016. By December 29 of the same year, I applied for harmonisation of my pension managers to PenCom to facilitate the payment of my pension.

    PenCom replied me with a letter dated February 1, 2017. It  recognised the first PIN as a valid PIN, saying that of Stanbic IBTC was invalid.That ARM Pension Managers PFA would retain the first valid PIN on its data base while Stanbic IBTC Pension Managers would de-activate the second one.

    PENCOM advised that I should maintain Retirement Saving Account (RSA) PIN with ARM Pension for  pension transactions.

    It promised to reconcile both contributions, while that in the valid PIN (if any) would be refunded to the Federal Government through its accounts with the Central Bank of Nigeria.

    Kindly assist me solve this problem.

    PENCOM: Tor’s retirement benefits were paid into the second PIN with Stanbic IBTC.  He is advised to write  the Commission for proper treatment.

  • How to bridge skill gaps, increase GDP

    Technology has taken centre stage in the affairs men. From medicine, agriculture, education, and even modern warfare where drones are used to exterminate ‘enemies’ and many more, technology has become engine room of development. The Special Adviser to Lagos State Governor on Innovation and Technology, Tunbosun Alake, says Governor Babajide Sanwo-Olu is deploying multi-dimensional approach to fix the state,  LUCAS AJANAKU reports.

     

    Challenges

    We have looked through different areas of concern in Lagos State and as you know Sanwo-Olu’s administration has a broad agenda and technology is the pillar that all other pillars sit on.

    To advance in any of the areas whether it is health, education, transportation or agriculture, we need to implement the use of technology to get better results, be more efficient and more optimised.  There are a number of things we are doing to realise that.

    One of the first things we did was  the ‘Art of Technology’ that was hosted by Lagos State, in conjuction with Eko Innovation Centre. That event was to bridge the gap. What that means in essence is that we are bridging the gap between government and the innovation ecosystem.

    As we know, we have young people who are tech-oriented in Lagos. Looking at a place like Yaba, you know there are a lot of companies there, young people, startups.  So, it’s a new and broadened industry. The event was to bring people in that ecosystem and government to co-create solutions together.

    It’s not just enough for the government to be innovative.  The government must be seen to support innovation. The idea was to talk to the private ecosystem and ask them  the things that would help youths to become much more innovative in the state.

    So, the event was the gathering of enthusiasts, developers, venture capitalists, government agencies from different areas, for us to sit in a room and co-create what the next agenda should be.

    What should the government be doing to empower the ecosystem because we see that 80 per cent of the GDP is the private sector and we see that if we empower the private sector, they can create more and better jobs.

    So, we want to encourage this innovation and tech industry; we want it to be our next big industry, our next oil. We had to ask them their problems, the things we see in the industry,  the barriers that we can remove and because of that event, we came up with four main pillars that are contained in our innovation masterplan for the state.

     

    Pillars in masterplan

    The four pillars are: Access, Infrastructure, Funding and Talents. These are the broad areas that we are going to empower.

    In the area of access: Access to market, access to infrastructure, access to data. These are fundamental things that the ecosystem needs to remain innovative. We are looking at them one by one. Some of these programmes have already started.  One of them is called the Open Government Initiative.

    If you go across the world in the most developed climes,  government data is queried. You go to a platform,  you can query the government data on what exactly it is doing. Somebody asked us at one of our conferences: “Why is it that African governments hide data? It doesn’t help you develop. It doesn’t help you make better solutions.

    So, what we are doing is an open government initiative that would provide a platform where people can query government data, where developers can get critical data to build better products to serve the citizens. For instance, if you do not know the kind of traffic patterns we have in Lagos, how can you build a traffic solution.

    That’s one of the key areas we want to address. We want to address the availability of data. The more data we have, the more intelligent our products will be.

    Another is infrastructure. As the governor and the commissioner for science and technology have said, there’s a metro fibre project coming on stream from this year. And it’s going to have 3000km of fibre optic cable around the city.

    We are opening up the city, not only that, not only are we providing fibre optic cables, we are providing duct infrastructure.  What this does is that it reduces the cost of deployment for other fibre operators; so it’s not that the government is coming to take over the fibre market, we are reducing the cost for other operators so they can put in much more than the government.

    We need to empower the private sector, the players that are already in the private sector  to get to the market faster and that is part of the 3000km of fibre optic cables that we are building around the city. Phase two will be another 3000km, which would be in total 6000km of fibrotic cable and dots within the city.

    What this also does is that it opens new areas and not just provide infrastructure. Imagine providing fibre optic in Ikorodu, we can start another tech city there.  It’s by no accident that Yaba is what it is today. Yaba was a project initiated by the government, which MainOne laid the cable and now you have people flocking there.

    Government’s delibrate planning and implementation is very critical to the success of the economy. Government and the private sector need to work hand in hand to unleash the potentialities of this economy.  You know the government can not just be executing projects. We are empowering the private sector.

    Another thing we are looking at is to improve the talent pool. One area we are looking at is the developers space. We noticed that there are a lot of junior developers, the senior developers have been poached by more advanced countries, such as Canada, US and the UK.

    How can we have an assembling line of top notched developers in software development? You are only as good as the projects you work on. We need to give them complex projects to develop. So, we are looking at doing the open platform initiative, where the government can give complex projects to developers, the government gets back the products that these developers build and those developers also improve their skill level.

    In doing so, we are fulfilling two things: increasing the talent pool by giving the people things to work on so that their skills can be harnessed; we are also getting the products that they build and we empowering them through entreprenueship programmes like, Lagos Innovates that is run by the Lagos State Trust Fund.

    We can help some of the people that come up with the product to get their ideas and product to market. So, there will be acceleration programmes, funding events, all kinds of catalysts, to help them become industries. People always take gambles on new things.

    That’s why people like Thomas Edison and Nicholas Tesler in the US at the turn of the century, they were big financiers that put money into their new electric dynamos. It’s because of those gambles that we have electricity today.

    So, we must take calculated gambles on our young people who want to build amazing things for this nation.  We need to empower them with the right tools that are necessary.

    So, the open government platform is one of the areas where we can give this young people tools to build these products and help them to see the products to maturity and when this is successful they can hire people, jobs are created. So, you can see the cyclical effect of some of the things.

    Read Also: Push for Lagos smart city gathers momentum

     

     Project sustainability

     

    In terms of the sustainability of projects and plans we have in Lagos, that is something we are keenly addressing. What happens is that during the scoping session of a lot of these projects, either they are not scoped properly or the plans for continuity are not put in place, which is why we are coming up with a master plan and some of these plans and projects are going to be monitored by the private sector so that it doesn’t fall off a cliff.

    A  lot of the projects we are going to be doing, for example, the Smart city project is being implemented by a private sector player. There’s a monitoring committee that is composed of other private sector players, so that these projects have the continuity and we are also doing quite a lot of reforms inhouse to staff the right people to these projects so that the momentum is not lost.

    It’s all about the scoping. It’s about the personnel, the processes. As long as we follow up, there would be no abandoned projects. These are the things we’ve seen even from the last administration that we are re scoping and continuing because some of them are good from inception but maybe not properly scoped, so we are rescoping and providing the elements that wouldn’t let it fall off a cliff. Those are key elements of avoiding abandoned initiative.

     

    Smart city

    On the smart city masterplan, we are at the planning stage. The plans have been on for months and it’s a project that has been on for more than a year and you know if you plan properly, your execution will be seamless. We just went through the number of quality control value point that we have during the project execution.

    So exactly when things are not going right as planned, we already have plans and contingencies to move, either to get equipment much faster or second another contractor to make sure that the value point is executed.

     

    Drones

     

    The drones are tools that would be used in the Geographic Information System (GIS) project. The drones are to map the entire landscape in Lagos. Why is the mapping necessary? It’s because the land administration is a very critical thing to the state.

    This mapping makes land administration much more easier and efficient. For instance, if you approach the ministry of physical planning for the purchase of land, already the officers know the exact location your property is going to be and even the soil type that will be on your property.

    The drones are part of a much larger project. Those drones, once the maps are captured they are digitised and connected to different systems, such as health or emergency issues. Once the police have access to the map, they would be able to curtail criminal issues or disasters.

    The access to these mapped data of Lagos helps their operations much better. Drones are part of the larger GIS project that is going to make land administration, emergency services,  police services and health services better across the state.

    Some people use drones for other forms of business. Some use it for delivering goods, some use it to deliver blood to bloodbanks.

    NCC came up last week with the idea to license the usage of drones in the country. What is your take on it as a Lagos state government?

    I haven’t seen the mundality of the criteria for the licensing but I know there are some things you have to fulfil and there are different categories of drone uses. Until I study it before I can give you a more informed opinion. But from a personal standpoint, there are different uses for it.

    In Rwanda for instance, it is used to deliver critical medical supplies. I think there needs to a licensing regime, so we don’t have  discriminate use of drones.  I also think the licensing should be industry- friendly, so that legitimate users are licenced and business can run properly and more efficiently, critical health care gets to the people that need it at the right time and e-commerce services of the likes of amazon that are testing drone delivery, that enhances their business processes and customer satisfaction.

    It is important that the regulations from the NCC are industry-friendly. So, I totally support some kind of regulations of the drone use in the country.

     

    InfraCos

     

    The infracos initiative was basically implemented by the Federal Government and NCC. Based on my limited knowledge on it, it was regional infrastructure company that was suppose to lay communication critical infrastructure in different regions of the country.

    Why it wasn’t implementated could be because of planning or financing issues. It is important we create an enabling environment for our operators and we also provide the critical infrastructure needed.

    Once we implement the fibre optic cables around Lagos, we are going to be connecting primary health care centres  and schools for free because we are going to be increasing learning and innovation in schools. Primary health care centres need critical communication facilities to be able to run their services properly.

     

     Multiple taxation

     

    Let me correct a notion. I came from the private sector as well and now being in the public sector I understand both sides. The telecoms companies are not just cash cows, they are critical sources of infrastructure deployment across the state.

    At the same time, we need smart regulations so that companies will not take advantage of the citizens, so we need to balance the two.

    There’s an infrastructure regulatory agency (LASIMRA), which recently had a new general manager and a new deputy and their plan is to smartly regulate the infrastructure ecosystem so it does not cause inconvenience to the telecom operators but still leave the dividends both for the citizens and government as well because we need order and most telecoms company  are profit oriented and they focus on their own bottom line.

    You need a liberal regulator to balance things out that has a holistic view of the entire state and the citizen. That is why I believe this new regime LASIMRA has, I believe there would be a smart regulations, so that the telecoms companies expand to the needed areas.

    and also with the citenzry in mind and deploying smartly and according to the rules and regulations.

    Infrastructure is key but when the road was being constructed, alot of fibrotic cables were destroyed. Now the government is planning to lay private companies are also involved.  So what plans are in place to sensitise people so as to not disrupt services?

    I am quite hopeful of the new leadership of LASIMRA.  Lagos state wants to really stop indiscriminate deals of the road and infrastructure.  That’s why the first set of 3000km fibrotic cables would be a big strategy and that’s why we are laying dots that are like tunnels cover the cables.

    We are laying those docks so that other telecoms operators can just put the fibre in  the  already laid tunnels. So it’s a big one strategy that  would bring about minimal disturbance to the already laid infrastructure.

    When is the project covering 3000km fibre cables starting off in Lagos state?

    It’s definitely starting in 2020. We are at the planning stage that will engage a number of implementation partners that will be executing the project.  There will be a plan that would be

  • Making eastern ports attractive

    The Managing Director, Nigerian Ports Authority (NPA), Ms Hadiza Bala Usman, says the agency is changing the dynamics of the Eastern ports because of the intractable traffic gridlock in Lagos ports which has continued to hurt port operations. Stakeholders, including port users and investors, among others, are calling on NPA to do more to make the eastern ports  more attractive and thereby become alternatives to the congested Lagos ports, writes OLUWAKEMI DAUDA.

     

    Former President, Association of Nigeria Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu, echoed the frustrations of various stakeholders in the maritime industry when he said: “The dependence on the Lagos ports is no longer good for maritime trade. It is overburdening the city and its vibrant residents, as well as amenities, especially roads and bridges.”

    Shittu said the parlous state of the nation’s premier ports in Apapa, Lagos, which has been hurting businesses, has necessitated “the Federal Government, NPA and the Lagos State Government doing the right thing for the overall good of our port and the country at large”.

    To Shittu, the right thing to do is for the management of the Nigerian Ports Authority (NPA) to look towards the eastern ports, and develop them as alternatives to the nation’s premier ports in Apapa, Lagos.

    The ANLCA chief’s call, which resonates with not a few operators and other critical stakeholders in the industry, The Nation learnt, became imperative in view of the seemingly intractable traffic gridlock in and around Apapa ports, which has become a pain in the neck of the NPA, port users, investors and the city’s residents.

    More importantly, it was prompted by the existence of other viable, but largely under-developed ports outside Lagos, which in the thinking of industry operators and stakeholders, could be made attractive for business and reduce the pressure on the Lagos ports.

    For instance, apart from the Lagos ports, there are seaports at Warri, Koko, Onne, Port Harcourt, Calabar and Ibom Deep Seaport at Ibaka, Akwa Ibom State, which is still at the design stage. There are also numerous inland dry ports and fuel depots.

    Unfortunately, the main problem with these ports, The Nation learnt, is that the river channels leading to them are too narrow to accommodate large vessels. The shipping firms find it more convenient to take their vessels to Lagos than to the eastern ports because of the unending restiveness in the area.

    The situation, it was also gathered, worsened after the concession of the ports started in 2006. This was sequel to the withdrawal of the 30 per cent incentive granted vessel owners to use the eastern ports when the Federal Government controlled the ports.

    Apart from the Onne Port, most of the other ports servicing the Southeast, Southsouth and the Eastern flank of the North are virtually idle.

    The channels into these ports need to be dredged, their facilities need to be upgraded and incentives provided to enable them take up more of the nation’s maritime business.

    The fact that Lagos State government recently joined in the call for other ports in the eastern parts of the country to be revived to enable them take some of the load off Lagos and make living in the state more bearable for residents underscored the urgent need to turn to the eastern ports for succour.

    A maritime lawyer and consultant, Mr Oluwaseyi Muhammed, said because of fear of paying for  delays of vessels, shallow waters and activities of sea robbers, importers and clearing agents are not patronising the eastern ports.

    Muhammed said the challenges that have crippled the activities in the four eastern ports of Calabar, Warri, Port Harcourt and Onne have made trade facilitation and life difficult for the importers using the ports.

     

     Other challenges

    Apart from shallow channels, which make bigger vessels unable to access the port, decrepit port infrastructure is said to have led to the continued dwindling revenue fortunes of the NPA and other government agencies at the ports.

    While the Calabar Port suffers from shallow draught, the Onne Port is contending with insecurity, such as pirate attacks and sea-robbery.

    Other identified challenges include deplorable berths, dearths of finger mooring jetties to berth NPA crafts, lack of operational vehicles and fire hydrants at quays.

    Cargo handling equipment and the port quays areas are also inadequate to make trade facilitation efficient.

    Also, while high siltation at the Calabar Port has impeded safe navigation, the Port Harcourt Port suffered under pirate attacks, which made the port unattractive for foreign shipping lines.

    Because of the afore-mentioned challenges, no fewer than 754 vessels, it was learnt, deserted the eastern ports between 2013 and 2018 before the efforts of the NPA to make the port attractive for business.

    Specifically, some vessels that berthed at the ports reduced from 2,268 vessels in 2013 to 1,514 in 2016.

    According to the National Bureau of Statistics (NBS), some vessels that berthed at the Delta port fell from 609 in 2013 to 433 in 2016, while the Gross Registered Tonnage at the port also dropped from 8,687,160 in 2013 to 6,177,809 in 2018.

     

    High level of insecurity

    An importer, Mr. Robert Francis, said shipment of cargoes from China to Lagos, which used to cost about $1,500, costs between $4,500 and $5,000 because of insecurity and high salinity of the sea. He therefore urged youths in the area to give peace a chance to make the ports attractive and competitive.

    “In addition, vessels calling at Onne Port in Rivers State also slammed $45,000 (N16.2 milion) on importers for an average of six hours per night for delay to berth. The delay, which is estimated at $7,500 per hour, is said to be caused by incessant robbery and shallow port channels,” he said.

    Worried by the problems, Transportation Minister, Rotimi Amaechi, at the second stakeholders’ interactive session in Warri, explained that one of the factors militating against the success of the sector was insecurity in the Niger Delta region, which he said, was also hampering the growth and development of the region.

    He said Niger Delta was not working because of the people in the area. His words: “How many Lagosians are on the water in Lagos? None. The reason vessels will not come to the eastern ports is because there is no war insurance on vessels because of restiveness in the region.

    “War insurance means if the goods cost N10,000 in Lagos, it will get it N20,000 here because there is extra cost on it. There is insecurity in Lagos, but not as bad as it is in the eastern ports.”

    A senior government official, Mr. Chidi Izuwah, also expressed worry over the inability of vessels to sail out at night at Onne Port. He regretted that vessels cannot sail out of the port as it is done in Lagos Ports.

     

    Low utilisation of eastern ports

    NPA Managing Director, Hadiza Bala-Usman, regretted the low utilisation of the Eastern Ports. She said for the Eastern Ports to attract cargo, NPA has improved on infrastructure that would aid port transaction in the zone.

    NPA, she said, has awarded the contract for the dredging of Warri Port to make the zone attractive for business. Her words: “There is no need for shippers to en route their cargoes to places where they will find it difficult to reach their warehouses and end users.

    “There has been this issue of restiveness in the area, and no investor will like to toy with his or her goods, hence they prefer Lagos Ports where security is guaranteed unlike in the eastern ports.

    “Calabar Port is strategically located to service the Northeast and the Northwest, but the link roads to the area from Calabar are bad. Articulated vehicles cannot ply the route.”

    The Nation learnt that the Onne Port has been a source of concern to stakeholders, especially shipping companies. For instance, night voyage is absolutely prohibited at Onne Port due to insecurity fuelled by pirate attacks.

    The National Council of Managing Directors of Licensed Customs Agents (NCMDLCA) President, Lucky Amiwero, said Nigeria had lost its leadership position to other countries not only because of security lapses, but also because of shallow draft.

     

     NPA takes the gauntlet

    Aware of the perennial gridlock in Lagos and determined to change the narrative, the NPA management said it is working with professionals in the sector to make the eastern ports attractive for business.

    Last year, the NPA deployed equipment worth over $30 million in Onne Port, Rivers State. The measure, which was taken by Ms Bala-Usman, it was gathered, was to boost efficiency, security and make the port attractive for business. Onne Port Complex is one of the key ports under the NPA. It is situated on the Bonny River Estuary along Ogu Creek.

    Findings revealed that six pilot cutters, tug boats and 17 meter offshore patrol boats, have been deployed in the port to make it attractive and stem the cycle of criminalities at the port.

    Sources at Onne Port confirmed to The Nation that it cost the NPA more than $30 million to deploy the sophisticated equipment.

    One of the sources, a senior NPA official, however, condemned what he described as indiscriminate anchorage of vessels and urged the perpetrators to desist. He urged investors to take advantage of the strategic location of the port, located in one of the largest oil and gas free zones in the world.

    Apart from supporting exploration and production for economic activities, the free zone provides a logistic oil service centre for the oil and gas industry in Nigeria (Onshore and Offshore), while also providing easy access to the entire West African and sub-Sahara oil fields.

    The official, who declined to have his name in print, assured stakeholders and investors that adequate depth of the channel leading to the port would  be dredged to accommodate big vessels and guarantee adequate security.

    Shittu commended the NPA for repositioning the port for greater efficiency. He urged other stakeholders to collaborate with the NPA in its efforts to make the port a hub of maritime.

    Another stakeholder, Mr. Felix Abraham, said the deployment of the equipment has assisted the port in taking its rightful position as hub for the East and Central Africa sub-regions in oil and gas and has an advantage of accessibility and proximity to the Eastern commercial centres  like Onitsha, Nnewi and Aba, among others.

    “Activities, such as pipe coating, waste treatment and boat building, are provided by companies located in Onne. The port is highly industrialised with modern facilities and equipment that can stand the test of time anywhere.

    “It has one of the biggest habour mobile cranes in Africa (Liebherr 600) with a lifting capacity of 208 metric tonnes. Also, 220 Gmk 5220 grove twin cranes that have capacity of lifting single heavy duty cargo of 300 tonnes,” he said.

    The Olu of Warri, Ogiame Ikewoli 11, has also called on stakeholders in the Delta Ports to give maximum and unflinching support to NPA management so that the transformation the authority has brought to the region could be sustained.

    The paramount ruler pointed out that Calabar Port, which also has the same challenge of shallow draught, has been improved upon by the NPA with the use of Flat Bottom Vessels (FBV) to attract more cargoes to the port in Warri.

    Federal Government hands over Warri port to operator.

    As part of measures to make the eastern ports attractive for business, the Bureau of Public Enterprises (BPE) recently handed over Terminal B of the Warri Old Port to private concessionaire, Ocean & Cargo Terminal Services Limited.

    BPE Director-General Mr. Alex Okoh, who spoke at the handover ceremony, said President Muhammadu Buhari’s administration was committed to a private sector-driven economy.

    He also called on local and international businessmen to take advantage of the government’s open door policy to establish businesses in the country.

    Okoh said the Nigerian ports are the main gateway to the country and key to the Federal Government’s objective of diversifying and growing the economy.

    He pointed out that the objective of the government in port concession was to increase efficiency at the ports with the ultimate goal to modernise the ports and make them more competitive.

    The BPE boss said: “The objective is to increase efficiency in our ports, improve service delivery, upgrade and modernise facilities in the ports, reduce the cost of shipping and clearing of goods at the ports and relieve the government of the burden of financing the sector.”

    Read Also: Fed Govt’s strategy to decongest seaports, roads

     

    According to him, the concession is for a period of 25 years at an annual lease fee of $1,621,500, in addition to the entry fee and monthly throughput fee chargeable on the volume of cargo handled.

    Okoh assured that the implementation of the development plan for the concessionaire would be closely monitored by the relevant government agencies, including the NPA, the BPE and Infrastructure Concession Regulatory Commission to ensure compliance.

    Why importers prefer Lagos to other ports in the country

    Speaking with The Nation Usman said many importers prefer the ports in Lagos to those in other parts of the country because of roads and accessibility.

    She said Lagos ports are congested because most of the products imported into the country through them are consumed by residents of Lagos and neighbouring states.

    She also spoke on the steps being taken by the NPA to develop other ports in the country.

    “As a shipper, you decide where your cargo will go to. Quite a lot of cargo that come into the Lagos area are meant for the Lagos environment, Ogun State, the manufacturing hub, all those industries around and also some that are going to the north,” she said.

    “Then, the eastern port, we have Warri port which has a draft of 7.5 meters; we can’t go below that, that is the maximum we can go, we have NNPC pipelines that are buried there so we can’t dredge below that. Then we have the Burutu port, which is moribund.

    We are currently at an advance stage of its concession, we have just sent the outline business case to the Infrastructure Concession Regulatory Commission (ICRC), we have investors that are keen to do that as a solid mineral terminal.

    “Calabar port has a very widen and long channel, about 180km channels which requires for us to dredge it, to invest about N50 billion to dredge Calabar port. We looked at the revenue generation and traffic and realised that it doesn’t justify us to spend that amount.

    “So, we are exploring the use of flat vessel, in December 2018, we had flat vessel come to Calabar port. We have Onne port, Onne is functioning, it has about 10 to 11 meters draft. It was for oil and gas so designated but now it’s meant for all cargo types.

    “The other issue that people use to decide where there cargo goes to is also accessibility to the final destination. For example, if you want to take your cargo to Aba, the question is can articulated truck drive from Onne to Aba? Can articulated truck move from Onne to the north? So, those roads that lead from the ports to major towns also need to be passable by articulated trucks. We have written to the ministry of works and highlighted all these roads. We have told the ministry of works to prioritize the repair of all these roads so that they can take larger truck.”

    She narrated how the government of Adamawa imported items through Calabar because of proximity but could not access the port as a result of the situation of the roads.

    She also explained how she has consistently drawn the attention of the ministry of power, works and housing on the need to make the road accessible.

    “Calabar is the closest place to the north-east and north-central part of Nigeria, so you are able to take your cargo faster but there is no good road, there is a bad bridge along that road that prevents trucks from accessing the port. Recently, at the end of 2018, the minister of work awarded that road because I kept pestering him that he needs to award that road and bridge that doesn’t allow truck carrying containers,” she said.

    “Adamawa State government imported items through Calabar because its close, when they got to that bridge, they couldn’t pass, these are some of the challenges. Even if you go there, how did you get your things to your final destination?

    “In addition, there is the security challenge, people going to the eastern port are challenged because your vessel has to carry war insurance and you need to also hire additional security. So, there is that additional cost that discourage these people from going to the eastern port.

    The high rate of pirates operation makes it more unattractive, we have quarterly report from the office of the national security adviser which give details of the security challenges on the water way have reduced our harbour dues by 20 per cent and with that we have been able to have more ships calling more.

    In Porthacourt we had recently vessels that have never called and that came in  November last year in Porthacourt and that is something that you can see that because of our keen interest to bring in vessels we actually market and we have spoken with the vessels owners that what do you need and we made sure that  those things are made available.

    It is also good we add that in December, two vessels bathed in Onne and also the zise 370LOE that has never bathed in that area for container vessels. And that is also a way for us to ensure that we diversity and encourage the vessels call into this port locations by providing the necessary support we think that they need and with that particular Marskline two vessels calling in Porthacourt they are not bing into Porthacourt container vessels.

    “We also looked to ensure that the roads to the interland from ports are also navigable by articulated vehicles because the concern is if you take your cargo to Onne, the road from Onne to Onitsha, Aba navigable by articulated trucks. We have also written to the Ministry of Works so that all that roads in the Eastern Port that are connecting the port to certain commercial hubs the Ministry of Works has been working on awarding those road network to enable us conclude

    We have also written to the Ministry of Niger Delta on the to complete the road between the Onne port and the Port Harcourt is in a very bad state.

    The Minister of Niger Delta has committed by ensuring it is in the 2020 budget,” Usman said.