The Nation Newspaper

Category: Issues

  • Making the ports efficient, competitive

    Generally referred to as the ‘Gateway to the Economy’, the nation’s seaports remain critical to economic diversification. But, for the ports to play their critical role of driving diversification, operators and industry stakeholders say there is an urgent need to ensure that they become more economically efficient and competitive. They argue that efficiency ports will benefit the maritime industry and the economy more. Assistant Editor, MUYIWA LUCAS reports.

    It has become an annual routine, one filled with high hopes for the sector. However, the poser by the year end will be to what extent are these hopes realised? Last week, the Federal Government, through the Nigerian Maritime Administration and Safety Agency (NIMASA), released its maritime forecast for 2019/2020. Under the ambitious forecast, the government expects the maritime industry to contribute 10 per cent to the country’s Gross Domestic Product (GDP).

    The forecast, the second in the series, tagged: “Harnessing the Maritime and Shipping Sector for Sustainable Growth”, aimed at giving direction to investors and stakeholders in the industry in their planning and investment decisions as part of efforts to attract more foreign direct investment to the economy. Major plans covered by the forecast are the economic environment, the maritime industry (local and global), regulatory framework, and emerging opportunities and challenges.

    NIMASA Director-General (DG), Dakuku Peterside, who reckoned that the sector held high hopes for the country, revealed that the forecast will address how emerging trends in the global maritime industry would affect the Nigerian maritime sector as well as domestic factors that will influence the sector.

    “The maritime sector has the potential of contributing at least 10 per cent of Nigeria’s GDP in no distant future, as Nigeria has the biggest market in Africa; and generates about 65-67 per cent of cargo throughput in West Africa, and 65 per cent of all cargoes heading for these regions will most likely end up in the Nigerian market,” the DG said.

    The NIMASA DG also said the government has made consistent efforts to drive changes in the maritime and shipping sector through regulatory and infrastructural developments. He added that the main public bodies regulating the maritime and shipping sector had all keyed into the government’s strategies to reform the operating environment and improve on the country’s ease of doing business index, which has the potential of attracting more businesses to the maritime industry.

    A foremost freight forwarder, Lucky Amiwero, shares the views expressed by Peterside. He is optimistic of a bright year for most major ports. Looking into his crystal ball, Amiwero, who is the President, National Council of Managing Directors of Customs Licensed Agents (NCMDCLA), foresees a continued uptick in cargo for Apapa and Tin Can ports. He was, however, quick to caution that not all the ports will escape the pressures of rising volumes on infrastructure constraints.

    Perhaps realising the importance of maritime business to the economy, the Akwa Ibom State government, last year, announced the Power China International Group Limited Consortium (Bolloré-PowerChina Consortium) as the preferred bidder for the states’s Ibom Deep Seaport Project (IDSP). Upon its completion, the IDSP is expected to bring smart, world class port handling capacity to the doorsteps of Akwa Ibom State and serve the cargo handling demand of the West and Central African countries, including states in the Southsouth as well as Southeast regions of the country.

    The Secretary to the State Government, Emmanuel Ekuwem, expressed confidence of a boom in the state’s economy upon the completion of the project thus: “We are confident that the IDSP will be pivotal to the economic development of the state and the surrounding regions.”

    One measure to shore up the efficiency of the ports, according to Amiwero, is for the port managers to build up the refrigerated cargo ability and capacity of the ports, as well explore expansion plans for specialised cargoes.

    Vice President/Chief Executive Officer, ENL, Princess Vickky Haastrup, in an earlier interview with The Nation, argued that the maritime industry has not been given enough attention, notwithstanding that port is the gateway to  the nation’s economy.

    “When you come to Apapa, or Tin Can Island, you will know how well our economy is doing in terms of imports and exports. So, I don’t know why enough attention is not given to this sector; why we have such a decayed infrastructure. The access road to the port is impassable. Getting to the port is still a nightmare. It could take you four to five hours to even have access to the port operation,” she said.

    Stakeholders are of the opinion that if port operation is made smooth this year, and a proper enabling environment is provided, then the year will be more rewarding for the industry. One of the steps to ensuring such smooth operations is for government to take a critical look at the number of government agencies at the ports, which is viewed by majority as being an obstacle to operational efficiency. Some of these agencies include Nigeria Customs Service (NCS); Nigeria Food and Drug Administration Commission (NAFDAC); National Drug Law Enforcement Agency (NDLEA), Nigeria Agricultural Quarantine Service; Port Health; Nigeria Immigration Service; Police and Department of State Security Service.

    Haastrup described the existence of  plethora of agencies as “another bottleneck”. According to her, nowhere in the world does such number of agencies exist in the ports. “That’s not done anywhere in the world. I don’t know why NAFDAC is back. What is NAFDAC coming to do in the port? I don’t understand. They do not have to be present in the port unless they are called as the need arises. If it doesn’t arise, what are they coming for? Things like these, ultimately add to the delay in cargo clearance in the ports because everybody wants to feel important. Everybody wants to exert their authority. That’s how it’s been happening. We’re talking about ease of doing business,” she explained.

    Operators in the industry are convinced that if infrastructural dearth at the ports are addressed, and also ports and cargo operations decentralised, the port business in the country would be more beneficial to all involved in the industry.

    For instance, the Apapa port in Lagos, which began operations in 1970, was built with a capacity for 30,000 cargoes. Now, 49 years after, the same port harbours about 80,000 cargoes but without adequate infrastructural facilities to make it run effectively and efficiently.

    This development, stakeholders contend, makes it imperative for the government to ensure that ports in other parts of the country are positioned effectively for operations. Doing this will reduce the pressure on Lagos Ports. For instance, the Lagos ports, with a capacity utilisation of about 50 – 60 per cent presently, can shed some of this for the ports in the Southsouth – that is Warri, Port Harcourt and Calabar, with a combined capacity utilisation of about 25 per cent. This submission is important, considering the impact it will have on cargo movement, especially when the volume of cargoes transported by road to this region is considered.  Sadly, the Onne Port, which is fairly busy because of the oil and gas operations it handles also begs for good road infrastructure, just like its Lagos counterpart.

    The Association of Nigerian Licensed Customs Agents (ANLCA) Vice President, Kayode Farinto, regretted that Lagos Ports have become an embarrassment, especially when the revenue generated on daily basis from the place is considered.

    To make the ports perform better this year, Farinto said: “If the road is fixed, about 70 per cent of the problem of Lagos port has been solved.  The congestion on the sea and the road will be solved, and it will be better for all.”

    Yet, to exporters, the tariff charged and cost of clearing cargoes have become an important aspect that should be addressed if the industry is to be better positioned for business.

    A freight forwarder, who identified himself as Mr. Tony Okafor, bemoaned the cost of clearing cargoes and delivering same to their destinations, describing it as “ridiculous”.  “Our ports  is the most expensive in West Africa and coupled with the bank charges on the money loaned from the bank, everything is frustrating.”

    He lamented that given the parlous state of the roads around the ports, there is no cargo that does not go into demurrage  because the shipping companies will start collecting money immediately the cargo arrives at the port.

    Haastrup agreed: “When we talk about increase in cost of port business, everybody at one time shouted – terminal operators, but we have been proved right, that it was not terminal operators. You have NPA, NIMASA, freight forwarders, Customs Service, etc.  How many times has Customs Service increased charges? There is a wide gap between the Customs duty paid here and that in Benin Republic. Maybe we also need to see the Customs duty in Benin Republic and look at Customs duty in Nigeria. I’m not condemning the Nigerian government. I’m just trying to tell you that it’s not about terminal operators’ tariff. In Nigeria the duty on cars goes as high as 70 per cent, whereas the in Republic of Benin, it is like 10 per cent. That’s why you see a lot of smuggling because it is more convenient and far cheaper for people to go to Republic of Benin and try to smuggle into Nigeria. That’s why smugglers are mounting pressures on Customs Service because of that disparity and wide margin in Customs duty,” she explained, adding that NIMASA’s levy, compared to other agencies of such in Africa and in other parts of the world, remains high.

    Regulator’s intervention

    Transportation Minister, Rotimi Amaechi, informed stakeholders that the Federal Government had initiated reforms to facilitate the development of the “Blue Economy”, saying this involves the enactment of laws and domestication of relevant international instruments.

    These reforms, when implemented, will aid operations in and around the ports. For instance, over 40 per cent of the space at the Lagos Port Complex (LPC) and the Tin-Can Island Port occupied by empty containers, which do not augur well for port operations. In fact, one factor that stakeholders in the industry are unanimous on is the issue of holding bay. A holding bay is where containers are kept or stored after offloading their content.

    However, findings have revealed that many shipping companies do not operate holding bays, contrary to the terms of their licence. This has made stakeholders in the sector to submit that having such a facility and making it efficient, will prosper the industry this year and beyond.

    At the International Association of Port and Harbour (IAPH) Africa Region Conference held last September in Abuja, President Muhammadu Buhari aptly captured the importance of cargo evacuation thus: “After the issues of adequate security and transparency, the one other important factor deciding the competitiveness of ports is that efficiency with which cargoes are evacuated to and from the ports.”

    It is therefore, instructive that early this year, the Nigerian Ports Authority (NPA) has begun to enforce the delivery of all empty containers at designated shipping companies holding bays, to manage the traffic in and around the Lagos ports. The regulator also vowed to sanction truck drivers, who failed to comply with directive against bringing empty containers directly to the ports. The Authority has also advised shipping companies to stop using their terminals at the port to store empty containers and no truck driver or owner must be allowed by any NPA official and terminal operators to bring empty containers into the port after delivering goods to importers. The terminal operators are to also declare the number of empty containers in their terminals periodically.

    New incentives

    The Nigerian economy relies heavily on trade and over 70 per cent of the country’s external trade is routed through the Apapa habour. The poor state of access roads to the habour, home to the two biggest seaports in the country, has grown into a national nightmare with a paralysing effect on socio-economic life within Apapa, including the evacuation of cargoes from the Lagos and Tin Can Island ports respectively.

    Last December, NPA Managing Director, Hadiza Bala-Usman, arising from a meeting with stakeholders in the sector, rolled out a regime of palliatives to reduce the financial burden of shippers transacting business in the port, facilitate quick evacuation of cargoes and encourage faster return of empty containers to the port, among other benefits.

    For instance, effective from December 18, 2018, the rent-free period for cargoes stowed at the terminals was increased from three free days to 21 free days, for the next four months. The demurrage free period on return of empty containers was increased from five days to 15 days as well.

    To further ameliorate the hardship faced by cargo owners, shipping companies were directed to immediately deploy barges to evacuate empty containers from the port and take steps to clear the backlog of empty containers under their purview. In addition, terminal operators were advised to negotiate and grant waivers to consignees to facilitate the evacuation of these cargoes, and mitigate against huge financial loss for the terminal operator as well as the consignee.

     

    Intermodal Connectivity

    The NPA, it was gathered, is keen on establishing a seamless intermodal system that allows cargoes to be evacuated from the nation’s port by road, rail and inland waterways. This effort, it is said, would ultimately eliminate delays and make Nigerian ports globally competitive.

    It will be recalled that in 2013, there was an attempt to commence a scheduled freight service for the evacuation of cargo by rail at the nation’s premier port in Apapa. According to the Nigerian Railway Corporation, Apapa and Onne seaports are currently the only two connected by rail of the country’s six major seaports.

    But, despite being the cheapest mode of transport, the percentage of cargo evacuated by rail from the port, remains abysmally low, leading to the congestion experienced at the Lagos ports, since the huge volume of imports being evacuated are mainly by road.

    It is believed that having an efficient interconnectivity will improve the country’s economic competitiveness as targeted under the Economic Recovery and Growth Programme (ERGP). Hence, it becomes imperative that every port must have the compliment of rail infrastructure.

    The NPA projects that by the end of 2021, the ports will be linked by standard gauge railway across the main North-South trading route.

     

    Improved cargo clearance

    According to the NPA, the regulator, like other IAPH Member Ports, is committed to the provisions of the Convention on Facilitation of International Maritime Traffic (FAL) and  has adopted measures that would keep to a minimum, time spent for port traffic flow arrangements  such as loading and unloading; customs clearance; and provision of aids to navigation.

    Besides, the regulator, having succeeded in helping shippers to regain the right to choose the port to land their shipments, irrespective of the type and quality of the cargo, has also stepped up collaborative efforts with the Nigeria Customs Service (NCS) and other sister agencies on the implementation of the National Trade Platform (NTP).

    When achieved, the initiative is believed to have the capacity to revolutionise the cargo supply value chain in the country as it will make cargo clearance simpler, faster and more transparent. The project comprises the deployment of a National Single Window along with the provision of scanning services at all the ports.

    The NIMASA DG also disclosed that the government had made consistent effort to drive changes in the maritime and shipping sector through regulatory and infrastructural developments. He added that the main public bodies regulating the maritime and shipping sector had all keyed into the government’s strategies to reform the operating environment and improve on the country’s ease of doing business index, which has the potential of attracting more businesses to the maritime industry.

    If Dakuku’s assurances of NIMASA’s resolve to push for reforms that will help grow the maritime sector prevails, then government, stakeholders said, would have ensured that freight forwarders and all involved in the sector, are not frustrated in the process of carrying out their business, while the ease of doing business mantra would have been aided.

  • Sad tale of Nigeria’s diversification drive

    Nigeria’s push to leverage the non-oil export sector to diversify the economy, earn foreign exchange and create jobs has continued to flop. Apart from the sector’s poor performance in the last quarter, the recurring rejection of Nigeria’s key export-bound agricultural products at the international market is hurting the diversification drive. Experts and operators argue that unless government agencies improve the quality of export products and address the nation’s decrepit infrastructure, among others, the sector will not be sufficiently galvanised to contribute to economic diversification, Assistant Editor CHIKODI OKEREOCHA reports.

    Things are not looking up for Nigeria’s push to reposition the non-oil sector and diversify the economy. Prospects of leveraging the sector to give impetus to the country’s transition to a non-oil economy are bleak. Apart from the sharp drop in the volume of non-oil exports, the rejection of Nigeria’s export-bound agricultural products at the international market has yet to abate.

    According to data from the National Bureau of Statistics (NBS), the value of Nigeria’s non-oil exports dropped from a high of N577.62 billion in the first quarter of 2018 to N163.33 billion in the third quarter of the same year. It was a 71.72 per cent drop. The total non-oil exports, which stood at N577.62 billion in the first quarter, fell to N218.4 billion in the second quarter, before it further went down to N163.32 billion in the third quarter of 2018.

    According to the NBS, the non-oil exports used in the computation includes agricultural produce, raw materials, solid minerals, manufactured goods and energy goods. The Bureau was emphatic that export in the third quarter was still oil dependent, with the country earning N4.146 trillion from crude oil export during the quarter under review. “In the third quarter, crude oil remained the majority of total exports (85.4 per cent),” it said.

    The NBS added that non-oil products accounted for 3.4 per cent, while other oil products accounted for 11.20 per cent of total exports in the quarter under review. It, however, put the total value of Nigeria’s external trade at N9.025 trillion during the third quarter of 2018, compared to N6.90 trillion in the second quarter, representing an increase of N2.2 trillion or 30.7 per cent.

    The NBS report, which clearly shows that the non-oil sector is still grappling with formidable obstacles and is currently not in good shape to drive economic diversification, said total export component of this trade was N4.9 trillion. This represents an increase of 7.8 per cent over the second quarter of last year, and 35.7 per cent over the third quarter of 2017.

     

    A sector hit by export rejections

    As if the about 72 per cent drop in the value of Nigeria’s non-oil export trade is not enough setback for an economy still battling to recover fully from recession, requiring a vibrant non-oil sector as wedge, the continued rejection of the country’s export bound agricultural products by the importing countries may have added to the sector’s woes.

    Just last week, Vietnamese buyers rejected 37, 000 tonnes of Nigerian cashew because of the high price of the commodity. The Deputy Executive Secretary, Federation of Agricultural Commodity Associations of Nigeria (FACAN), Mr. Peter Bakare, said the product’s price volatility was due to lack of conducive business environment, which made the price of raw cashew from Nigeria to be higher than the price of finished product in the international markets.

    “The banks in Vietnam that usually provide the loans to their buyers for purchase complained that the prices of the finished products are less than the price of raw materials.

    “The Vietnam financial institutions, therefore, backed out of the business, stressing that it is not a profitable venture for its farmers, so the produce are stuck in Vietnam now,’’ Bakare said, adding that over 67, 000 tonnes of cashew were also still lying in the warehouse in Nigeria.

    For that cashew export misadventure, Nigeria lost about $79, 550, 000, about N28 billion. The price of processed cashew, according to operators, is about $2, 150 per ton at the international market.

    But the association’s President, Dr. Victor Iyama, blamed the botched cashew export business on Nigerian and foreign produce merchants who he accused of engaging in speculative buying in the Nigerian produce market. According to him, people were in the habit of rushing to the market and just paying any price on produce, no matter how high.

    The FACAN president also heaped the blame on foreigners who, according to him, come into the Nigerian market and overprice the produce because they want to get ahead of the competition. “It is a lesson for us that we should not just rush into the market and buy at any price we see, and escalate prices in the process,” he said.

    To prevent a reoccurrence, Iyama said: “The government needs to check the influx of foreigners into the Nigerian produce market. They come in because they have money and the moment they see somebody pricing produce, they go ahead and offer to pay a higher price. Eventually, the produce price becomes very high locally.”

    He also made a case for value addition on Nigeria’s export products. Hear him: “I am advocating that more of our cashew should be processed and consumed locally. Also, we should sell more of the processed ones instead of raw cashew.”

    While pointing out that cashew was not on the terminal market, so the price was subject to negotiation, Iyama said people could renege on the contract they made with the sellers, giving all kinds of excuses. “They can say, for instance, that the shipment came late, especially with the situation we are currently experiencing at the ports,” he said.

    For now, it may be difficult, according to Iyama, to put a figure to the loss suffered by operators as a result of the rejection of the 37, 000 tonnes of Nigerian cashew until the new cashew season when it will be possible to assess what was sold and leftover, as well as the profit and the losses.

    What is clear, however, is that the rejection of the consignment dealt a severe blow to Nigeria’s push to transit to a non-oil economy by riding on the crest of a vibrant non-oil export sector. This is so because cashew nuts have become Nigeria’s leading agricultural export product.

    According to the NBS, cashew nuts in shell is Nigeria’s leading agricultural export product for the second quarter of 2018, with an export value of N38.5 billion, from N5.03 billion in the first quarter of 2018.

    After losing the top position to sesame seeds since the third quarter of 2017, cashew nuts bounced back to the top of Nigeria’s agricultural export list with a growth of 665.4 per cent from the first quarter of 2018.

    Cashew nuts in shell also accounted for about N9.8 billion in the third quarter of last year, compared to about N38.4 billion in the second quarter of last year. The nuts were exported mainly to Vietnam and India in values worth N4.8 billion and N4.7 billion.

    The cash crop is grown in 19 states, including Abia, Anambra, Akwa Ibom, Benue, Cross River, Delta, Ebonyi, Edo, Ekiti, Enugu, Imo, Kogi, Niger, Nassarawa, Ogun, Osun, Oyo, Taraba and Kwara. And Nigeria, which produces 120, 000 tonnes of cashew nut yearly, also has the capacity to produce more.

    This must have been why cashew made the list of Nigeria’s 11 strategic products with high financial value to replace oil. Others include palm oil, cocoa, soya beans, rubber, rice, petrochemical, leather, ginger, cotton and shear butter.

    Under its Zero Oil Plan, which targets to replace oil as a major foreign exchange earner by boosting non-oil export, the Federal Government through the Nigerian Export Promotion Council (NEPC) had set an ambitious target of realising $100 billion revenue from non-oil export annually.

    Under the plan, which hopes to position the sector to contribute about 20 per cent of the nation’s Gross Domestic Product (GDP), the NEPC identified 22 priority countries as markets for Nigeria’s 11 strategic products with high financial value to replace oil.

    According to NEPC’s Zero Oil Plan, “Nigeria’s trade has been largely driven by exports of petroleum products, which contribute about 17 per cent to GDP, signifying about 90 per cent of total merchandise exports and more than 65 per cent of government’s income.

    NEPC Executive Director/Chief Executive Officer Mr  Segun Awolowo was emphatic that if Nigeria could effectively key into the council’s plan of taking advantage of the opportunities in the agricultural sector, there would not be any need to depend on oil revenue for survival.

     

    The yam export misadventure

    The botched cashew export business is not the only serious setback that has hurt Awolowo and indeed, the Federal Government’s plan to latch on agricultural produce export to wean Nigeria of its dependence on oil revenue for survival. The performance of the country’s widely celebrated yam export initiative has also not been sterling.

    For instance, the Chairman, Technical Committee on Nigeria Yam Export, Prof. Simon Irtwang, said Nigeria was unable to achieve 50 per cent of its target to export, about 5, 760 tonnes of yam, to different countries in 2018. “We are still targeting 5,760 tonnes for exportation this year, which was the same target last year,” he said, in Abuja.

    Although he noted that there were no cases of yam rejection at the international market in 2018, Irtwange, who is also the President, Yam Farmers, Processors and Marketers Association of Nigeria, said the committee was unable to do up to 50 per cent of last year’s target because of some difficulties and logistics problem, which the committee was vigorously trying to resolve.

    Irtwange specifically said the 1986 Export Prohibition Act and other logistics issues were hindering successful operations of yam exports in the country. Hear him: “……The challenge we are having is because there is an Export Prohibition Act in place. Once they (UK authorities) see our yams there, they will say it is contraband because they are aware of the ban on export of yam out of Nigeria because our country prohibits it.”

    He, however, noted that his committee had written to the Ministers of Agriculture and Trade about the Act to put pressure on the National Assembly (NASS) to revisit it. He said although, some efforts have been made at the NASS, his committee does not know where the Act is currently hanging at the NASS.

    Irtwange, however, appealed to the government to provide incentive for farmers to produce sufficient yams across the country this year, as this will encourage farmers to go into large scale farming.

    But it is doubtful if a rethink of the 1986 Export Prohibition Act by the NASS as canvassed by Irtwange would change Nigeria’s uninspiring yam export narrative. For one, the Act is only a fraction of the challenges facing non-oil exporters, especially agro- exporters.

    Other constraints said to be holding operators down include dearth of infrastructure, especially inadequate warehousing and storage facilities, which lead to huge post-harvest losses; difficulties in accessing foreign exchange for export; inefficient marketing arrangements which make it difficult for agro-exporters to market their products.

    Others include poor power supply, high port charges, lack of access to low-cost funds from banks, poor logistics and input support etc. The delay in the implementation of the reviewed Export Expansion Grant (EEG) is also said to have forced many exporters to stop using their money to export.

    The alleged failure of the relevant ministries and agencies to address these challenges is believed to be responsible for Nigeria’s continued poor outing in the non-oil export business, particularly yam export.

    At present, Nigeria is the biggest producer of yams in the world, accounting for 67 per cent of the tuber staple, according to the Minister of Agriculture and Rural Development,  Audu Ogbeh. But despite her supposed comparative advantage in yam production, Ghana, her less resource-endowed neighbour, currently accounts for about 94 per cent of total yam exports in West Africa.

    Ghana’s dominance of the sub-region’s yam export market also covers markets in the US, Canada, UK and Europe. Those knowledgeable in the dynamics of international agro export recall, for instance, that between 2005 and 2010, yam production in Ghana contributed about 16 per cent of the country’s GDP.

    Since then, the Government of Ghana has moved a notch higher, developing the National Yam Development Strategy and Yam Export Strategy. This was to increase her yam export from the current 35, 000 metric tonnes to as high as 400, 000 metric tonnes. It was on the strength of this strategy that the country targeted revenue of about $5 billion in 2018.

    However, while Ghana’s yam export trade, which is backed by robust regulation and guidelines, employs millions of her citizens, Nigeria’s first widely-celebrated attempt to earn a minimum of $8 billion annually from yam exports ended in a fiasco. Under her yam export initiative, which was flagged off on June 29, 2017, in Lagos, the first batch of 72 tonnes of yams was exported to Europe and the US.

    The shipment, which left the shores of Nigeria amid much fanfare, was in three containers of 24 metric tonnes each; one container went to the UK; the rest, US. Regrettably, however, three months after the shipment to the US, the authorities there rejected the yam, citing poor quality of the consignment.

    Although Ogbeh and other relevant agencies in the sector vowed to take drastic measures to halt the further rejection of Nigeria’s yams and indeed, other export-bound agricultural products, the failure of the Technical Committee on Yam Export to achieve its 2018 target and the rejection of Nigeria’s cashew export by Vietnamese buyers are indications that the country has yet to get its act right.

    Experts, who spoke with The Nation, said Nigeria’s recurring failure to adopt a quality management system approach towards improving the quality of her agricultural produce exports is largely responsible for the non-oil export sector’s woes particularly the yam export initiative.

    For instance, a Quality Management Practitioner and National President of Association of Systems Management Consultants, Mazi Colman Obasi, said Nigeria’s lack of a national quality infrastructure was responsible for her poor showing at the international commodity market.

    According to him, a national quality infrastructure is a system of institutions, which jointly ensure that products and services produced in the country meet predefined specifications. It also provides technical support to companies so they can improve their production processes and ensure compliance with regulations or international requirements.

    But as things are, Nigeria has yet to put these structures in place, otherwise Irtwange would not have suggested that because of the Export Prohibition Act, “It is even better to label our yams Ghana yam for it to be accepted in UK markets.’’

    Even the Standards Organisation of Nigeria (SON) Director-General, Mr. Osita Aboloma, echoed the same embarrassing sentiment when he reportedly said due to the global acceptance of yams from Ghana, Nigerian yams are usually relabelled Ghana yams and exported to the US from Ghana.

     

    Beans, cocoa also hit

    Cashew and yam are not the only agro-allied products from Nigeria to suffer rejection and fail to meet export target, respectively. Recall, for instance, that because of lack of national quality infrastructure, the European Union (EU) in June 2015 banned the importation of Nigeria’s dried beans on grounds that it contained high level of pesticides considered dangerous to human health.

    Although the relevant government agencies said they were working to get the EU lift the ban, the European body was not impressed by measures taken by Nigeria to resolve the issue. Accordingly, it extended the ban by another three years, citing the continued presence of dichlorvos (pesticide) in dried beans imported from Nigeria.

    While the authorities and operators in the non-oil export business were still ruing the EU’s extension of the ban on importation of dried beans from Nigeria by three years, the US also added to Nigeria’s woes when it banned the importation of Nigeria’s cocoa into its market. Again, lack of functional laboratories for testing and certifying products before export was cited as reason.

    The consensus of experts is that a vibrant non-oil sector was fundamental to economic diversification, rapid revenue base expansion, sustainable growth and employment generation. They, however, argue that Nigeria has consistently failed to get its act right by putting in place functional laboratories for testing and certifying products before export.

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

    According to Adhuze, “Quality standards have moved from physical standards to biological standards, but FPIS appears not be up to speed with this reality.” He recalled, for instance, that about five years Ghana suffered the same fate as Nigeria’s when over 2, 000 metric tonnes of her cocoa beans were rejected by Japan.

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

    Adhuze said Ghana, a country famous all over the world for its very high quality cocoa beans, rose to the challenge by putting in place appropriate and adequate measures to guarantee the quality of her cocoa products for export.

    He expressed disappointment that while Ghana’s standards regulatory authorities took steps to reverse the excessive agro-chemical residues found in their cocoa beans, Nigeria was unable to do so. The result, he said, was the harvest of import ban now threatening the non-oil sector, especially in the area agro-allied products.

  • Pre-paid meter: How solution became problem

    The implementation of a new metering programme aimed at closing Nigeria’s estimated 4.7 million metering gap is on. But, the new pre-paid meter regime, which essentially seeks to eliminate the hitherto obnoxious estimated billing system by Electricity Distribution Companies (DisCos), may have thrown up fresh challenges. From alleged extortion by DisCos to delay in getting the meters and the continued distribution of utility bills, despite using pre-paid meters, among other complaints, have got consumers screaming blue murder, AKINOLA AJIBADE reports.

    As at the end of August, last year, the number of registered electricity consumers stood at 8,292,840, according to the Nigerian Electricity Regulatory Commission (NERC). The Commission, which is the industry regulator, said out of this figure, only 3,592,168 consumers were metered, leaving a gap of 4,700,672, representing about 43 per cent, which needed to be closed.

    However, partly because of the huge capital investment of about N292 billion said to be required to close the metering gap, the Electricity Distribution Companies (DisCos) have failed to meet the five-year deadline contained in the Key Performance Indicators (KPIs) handed over to them by the Bureau of Public Enterprise (BPE) in November 2013 when the power sector was privatised.

    However, some electricity consumers argued that DisCos’ failure to provide meters, especially pre-paid, was deliberate and that the obnoxious, exploitative regime of estimated and arbitrary billing was DisCos’ ingenious way of recouping their investments in the acquisition of the assets of the defunct Power Holding Company of Nigeria (PHCN) under the privatisation.

    For instance, Consumer Advocacy Foundation of Nigeria President/ Founder, Sola Salako, refused to be swayed by arguments that lack of fund was responsible for DisCos’ inability to meter their customers. As far as she is concerned, estimated billing was DisCos’ major revenue generating source, which was why they were unwilling to meter their customers.

    This was also why the consumer rights activist and indeed, other electricity consumers, who feel short-changed by the service providers have continued their agitation for pre-paid meters. To them, the distribution, installation and use of pre-paid meter are the ideal option to enhance service delivery in the nation’s Electricity Supply Industry (ESI).

    According to them, the pre-paid meter option is a win-win for both electricity consumers and service providers. For instance, while it is a more efficient, convenient, and cost-effective way of monitoring, measuring and regulating energy consumption by customers, the system helps DisCos minimise their revenue collection losses by making sure that customers do not get away with their debts.

    It was in a bid to resolve the problems associated with the old analogue metering system that the Federal Government, through the NERC, gave the utility companies a matching order to meter their customers. This was through the implementation of a new metering plan, which was introduced in April 2018. It was to ensure that meters are distributed to electricity consumers effortlessly and that the 4.7 million metering gap was bridged.

    To further drive the scheme, the NERC moved a notch higher by providing a regulatory framework to guide the activities of Meter Asset Providers (MAPs). It also granted a ‘No Objection Rule’ to the MAPs, which ensured that the 11 DisCos engage their (MAPs’) services in order to achieve the three-year metering target prescribed by the NERC.

    The Nation learnt that about 115 MAPs were approved by the Commission. While some of them are local meter manufacturers, others are said will import the products from abroad. The MAPs are to collaborate with the 11 DisCos to adequately meter electricity consumers.

    Although, the MAPs are said to be warming up to commence full operations in the first quarter of this year, the ongoing distribution of pre-paid meters to customers, which started during the last festive season was mainly from the DisCos.

     

    New metering system, harvest of complaints

    While the new metering plan was aimed at addressing some of the observed problems associated with the old analogue metering system, the alleged shoddy implementation of the scheme may have turned the solution to a problem.

    Already, a plethora of complaints by angry electricity consumers is trailing the exercise. From alleged extortion by officials of the utility companies to delay in getting pre-paid meters, and the continued distribution of outrageous electricity bills despite using pre-paid meters, among others, it has been a tale of woes for consumers.

    A customer with Ikeja Electric (IE), Mr. Isaac Olatunji, for instance, said he could not understand why he has to pay for a pre-paid meter, which the government said is free. Olatunji, a resident of Ikorodu, Lagos State, said he applied for a pre-paid meter in Igbogbo Business Unit two years ago in order to cut down on his electricity bills.

    He, however, lamented that he was forced to cough up N25, 000 for a single-phase meter; N30, 000 for a double-phase meter; and N35, 000 for a three-phase meter. He said he was told that on completion of the payment, the firm would provide him with meter.

    Olatunji said upon inquiring from IE workers why he must pay such outrageous fees, he was told point blank that the directive to give meter to those, who paid the required fees, was from IE management at Alausa, Ikeja, and that there was nothing he could do about it.

    “The DisCos’ argument that that they don’t have funds to provide meters is untenable. They agreed and signed the Share Purchase Agreements (SPAs) with the BPE that meters would be provided to customers within a period of five years, which was between 2013 and 2018.

    “Now, the period has elapsed, Olatunji said, asking: “Whose fault is it for not providing meters to consumers? Is it consumers who are supposed to be metered freely or the DisCos?”

    Apart from DisCos’ alleged extortion, some customers, who have been lucky to get the pre-paid meters after parting with money and queuing up for days and weeks, complained that they were issued one meter to service different apartments.

    Perhaps, worse hit are residents of Egbeda and Iyana-Ipaja suburbs of Lagos, where, in some cases, it was a meter to four different customers occupying a block of flat. Some of them, who spoke with The Nation, companied that lumping many customers under one pre-paid meter has caused a lot of confusion and friction, even as it made the monitoring of its usage extremely difficult.

    As if this is not enough to infuriate the residents, many of them, particularly those in Shagari Estate, Ipaja Road, said they woke up on January 15, 2019 to see electricity bills posted on their doors and gates by IE. According to them, this was after they had started using the pre-paid meters given to them in December last year.

    Many of them, who decried the various outrageous amounts on the bills ranging from N5, 000 to N10, 000, wondered where and how IE arrived at the figures it inputted in the utility bills after the old analogue meters had been removed and all the pending or old bills cleared to pave way for the use of pre-paid meters.

    The Nation learnt that as part of the strategy to recover old debts, the DisCos ensure that they deduct a certain amount of money from each recharge or payment made on a new pre-paid meter until all outstanding debts are recovered. But, while electricity consumers are not bothered by this, the distribution of fresh bills to them was seen as overkill.

    This situation seemed to have confirmed the fears that DisCos are hiding under the pretext of providing pre-paid meters to recover debts. This is evident by all kinds of charges customers are made to pay before they are giving pre-paid meters, which officially is meant to be free.

    Before  now, DisCos officials were in the habit of moving from house to house to read analogue meters and distribute bills to customers. Of course, the obsolete and analogue technology was fraught with many challenges, one of which was inaccurate reading of meters, resulting in the issuance of what is commonly described as ‘crazy’ bills.

    This was what made Nigerians to insist that the pre-paid meter was the way to go. According to them, it is a better, safer, economical, and cost-effective technology-driven option to usher in a regime of transparent and efficient service delivery in the ESI.

     

    Operators harp on funding

    As desirable as the pre-paid meter is, funding to close the nation’s metering gap remains a challenge. This is so, considering the fact that since the privatisation of the power sector more than five years ago, inadequate funding has been given as one of the major problems inhibiting the sector’s growth under the new core investors.

    Perhaps, more importantly is the fact that private investors have been complaining of inability to access enough funds from banks for their operations due to the prevailing high interest rate in the country. This speaks to the seriousness of  inadequate funding, particularly in the provision of pre-paid meters to customers.

    Momas Electricity Meters Manufacturing Company Limited (MEMMCOL), Chief Executive Officer, Mr. Kola Balogun, put the situation in perspective. He said metering has remained a big challenge in the sector, and that stakeholders, including the government and operators’ inability to provide enough fund for meters was hurting the growth of the ESI.

    He said while meter manufacturers are struggling to raise the required investment capital for their operations, banks should, on their part, support them through the provision of facility at affordable rates. This, he said, was necessary in order to complement the Federal Government’s efforts to end the metering problem.

    Balogun, who pointed out that the new metering scheme requires huge capital investment to succeed, however, said manufacturers would find it a lot easier to provide meters once they get loans from banks at a single-digit rate.

    Similarly, Managing Director, Unistar Hi-Tech System Limited, a meter manufacturing firm, Mr. Taiwo Oladotun, urged financial institutions to encourage operators in the power sector to do business by providing them with funds needed for their operations.

    According to him, failure of the operators, including meter manufacturers to get enough capital operational capital amounts to inefficiency, advising lenders to help in accelerating growth of the economy.

    Oladotun emphasised that MAPs may not be able to sustain their operations if they are unable to access funds for their operations. According to him, the new metering scheme introduced by the Federal Government to allow electricity consumers access to pre-paid meters for requires huge capital.

    The Director, Planning and Advocacy, Association of Nigerian Electricity Distributors (ANED), Mr. Sunday Oduntan, brought the huge size of funding required to close Nigeria’s wide metering gap nearer home when he said the DisCos need N292 billion to close the N4.7 million metering gap.

    Oduntan said contrary to insinuations in some quarters that DisCos are not interested in metering their customers, the utility firms are indeed, working to close the metering gap. He, however, said getting the fund to improve meter deployment remains a challenge, which DisCos alone may not be able to surmount.

     

    Push for CBN’s intervention fund

    For operators in the sub-sector, the provision of intervention fund by the Central Bank of Nigeria (CBN) could be the tonic to significantly reduce the number of unmetered customers. Many of them have been calling on the apex bank to replicate its gesture of providing intervention fund for DisCos in the metering sub-sector.

    As Balogun argued, “Without CBN’s intervention in the new metering scheme, it would be difficult for the government to achieve the goal of providing meters to as many customers as possible.

    “Those in the business of manufacturing, supplying and installing meters may be idle, but once they have enough capital to work with, the issue of provision of meters to electricity customers will be solved.’’

    Balogun while noting that metering is a business that requires constant inflow of operating capital to succeed, said failure to guarantee the availability of enough funds to any of the operators in the value chain will affect investments down the line.

    Oladotun also urged the CBN to strengthen its support for the economy, stressing that as the country’s financial regulatory body, it has the duty to support critical projects particular power infrastructure in order to improve the economy.

    He insisted that metering is one of the critical areas in the electricity supply chain that deserves government’s consideration through the CBN. According to him, metering helps the DisCos to minimise their revenue collection losses by making sure that customers pay for the energy they consume.

    “What the sub-sector is advocating is CBN’s intervention by way of providing financial life-line to meter manufacturers. Now that the country is implementing a new metering programme, which is believed to be the most crucial and challenging period in the sector, operators need loans at single-digit interest rate in order to survive,” Oladotun said.

     

    DisCos react

    IE Chief Executive Officer, Mr. Anthony Youdeowei and his counterpart at Eko Electricity Distribution Company (EKEDC), Mr. Adeoye Fadeyibi, frowned at the exploitation of customers under the guise of providing pre-paid meters to them. They warned their customers against falling victims to the antics of those they described as criminals, who fleece unsuspecting customers.

    “I have been inundated with reports that IE has been collecting money from customers in order to provide meters. There is no iota of truth in the reports. Pre-paid meter is free. No customer must pay money for a meter. NERC is clear on this. It warned the DisCos not to charge anybody for meter. Any staff demanding money for meters must be reported to the company for appropriate actions,’’ Youdeowei said, for instance.

    Youdeowei told The Nation that pre-paid meter is free and that customers should be wary of criminals who are extorting money from them in order to provide them with meters. He said NERC’s directive on the issue was clear, which was that meters are free. NERC, he said, was strongly against collecting money to provide meters.

    According to him, the Commission’s tough stance on the matter was in line with the Federal Government’s resolve to move the ESI forward by proffering solutions to the myriad of challenges facing the operators, including funding, shortage of gas, irregular supply of electricity,  meters,  among others.

    The firm’s spokesman, Mr. Felix Ofolue, also reiterated that meters are free and that customers are not allowed to pay for it, except on exceptional cases. One of such cases, according to him, includes customers that are indebted to the company by owing arrears of bills. He said such customers are advised to clear their bills if they want to get pre-paid meters.

    Ofolue said the utility company introduced the strategy to collect its debts, noting that many customers owe huge amount of money.

    “The reports in some quarters that the management of IE directed its staff to collect money for meters are not true.

    “The issue of settlement of outstanding bills before meters are given to customers was a business strategy adopted by the management to recover its debts. There are cases where customers owe N200, 000 or more; so if such customers are given meters without being made to pay their debts, they would go scot free and the burden will be on IE,” he clarified.

    Similarly, General Manager, Public Affairs, EKEDC, Mr. Godwin Ihemudia, warned customers to be wary of people who collect money for meters. According to him, complaints have reached the company that some of its personnel are collecting money for installation from consumers who had been giving pre-paid meters free.

    “As long as meters are free, so also installation. If there are other back end equipment that are needed on the part of the customers, like Miniature Circuit Breaker (MCB) and cables, they should provide that on their own, while the firm does the installation,”he said.

    Ihemudia said EKEDC staffers are doing their official assignment by installing meters; therefore, they have no right to collect money from customers.

    He, however, advised customers to ignore whosoever demands money from them for procurement and installation of meters, adding that customers who bribe the staff of the power firms are those who are fond of by-passing meters.

  • Nigeria’s slow march towards renewable energy

    Nigeria is eyeing 30 per cent renewable energy by 2030. But, despite having bountiful renewable energy resources, the country has not made any significant addition from renewables to achieve the target and boost electricity supply. To analysts, the government’s weak commitment to proposed renewable energy policies and dearth of investments, among others, are curtailing the march towards renewable energy. Assistant Editor CHIKODI OKEREOCHA reports.

    Nigeria has never hidden her intention to change the outlook of her Electricity Supply Industry (ESI) by exploiting opportunities in renewable energy. With about 85 per cent of all power generation coming from gas-fired turbines, successive governments have articulated a number of policies and targets aimed at diversifying the country’s power generation mix via renewable energy sources.

    This was in the hope of significantly boosting electricity supply to homes and businesses. The whole idea was to latch onto such strategic policies and targets to move the country away from its age-long over-reliance on fossil fuels as the primary source of electricity generation.

    Consequently, the Federal Government put the right foot forward, at least, at the level of policy pronouncement, when it unveiled the National Policy on Renewable Energy and Energy Efficiency (NPREEE).

    The policy was developed by the then Federal Ministry of Power in 2014. Expectedly, it raised hopes of a robust ESI powered by an increased share of renewables in the national energy mix.

    For instance, under the policy, Nigeria targeted a total of 8,188 megawatts (MW) from Renewable Energy (RE) by 2020 on a medium term. The long term target was on the realisation of 23,134 MW by year 2030.

    Nigeria’s targets for renewable power capacity, The Nation learnt, include bio-mass, 50 MW by 2015; 400 MW by 2025; hydro-power (small scale), 600 MW by 2015; two gigawatts (GW) by 2025; solar photovoltaic (solar PV) (large scale, >1MW) 75 MW by 2015; 500 MW by 2025; wind power, 20 MW by 2015; 40 MW by 2025; Concentrated Solar Power (CSP), 1MW by 2015; 5MW by 2025.

    While re-stating government’s commitment to changing Nigeria’s power outlook by exploiting opportunities in renewable energy, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, (SAN), at a recent summit in Abuja, with the theme: Energy Option in a Low Cost and Low Carbon World, said that in all government targeted 30 per cent renewable energy by 2030.

    One of the renewable energy projects that held promises of a new dawn in the ESI was the signing 14 solar Power Purchase Agreement (PPAs) with 14 developers with the potential to deliver over 1,000 MW of solar power.

    There is also the Wind Plant in Katsina State. Government also started building the 700 MW Zungeru Dam. At least, 17 small and medium hydro power plants are also being developed across the country.

    While solar energy refers to the energy stemming from the light and heat harvested from the sun through photovoltaic cells or solar thermal concentrators, RE in the form of wind energy uses the airflow through wind turbines to generate electric power.

    But as ambitious as some of the proposed projects as well as previous renewable energy projects targeting solar and wind energy are, the Federal Government’s lack of political will and commitment to drive them is said to be responsible for why there hasn’t been any significant addition of renewables to the national grid to boost power supply.

    For instance, the Zungeru 700 MW hydro power plant now has a new completion date of 2019, according to Fashola. This was after the problems that stalled work on the project were resolved. The wind plant in Katsina State has also run into a hitch, following the kidnapping of the French national in charge of the project.

    The project was said to have been 97 per cent completed before it ran into a glitch. This is despite the fact that Nigeria boasts of vast opportunities for harvesting wind for electricity production particularly in the northern states, where wind is abundant throughout the year.

    For instance, Jos in Plateau State and Katsina in Katsina State have a lot of wind velocity to support wind-powered electricity. To further underscore government’s weak commitment to RE, especially solar energy, nothing has since been heard after the flag-off and commissioning of Operation Light-up Rural Nigeria projects in three rural communities of Abuja, namely Durumi, Shappe and Waru.

    While residents in these villages, who hitherto had never seen electricity, marked uninterrupted solar power supply for one full year, plans to replicate the projects in hundreds of communities across the country, while also encouraging the private sector to key into it for wider spread, are yet to bear fruits.

    Nigeria has also not fared better in biomass. Although, the option is increasingly becoming attractive as an alternative energy source, successive government’s promises to ride on the huge waste generated in major cities across the country such as Lagos, Kano, Port Harcourt, Enugu, Kaduna and Ibadan, among others, have not been kept.

    The plan, according to experts, was to aggregate these huge wastes and put more power plants here and there, and feed them directly to the country’s distribution network, which is embedded in generation and distributed power. But, unfortunately, government has failed to match its plans with actions.

    The challenge is that government has not demonstrated the political will to make investment into renewable energy more attractive to private investors. And two issues stand out in this regard namely, cheaper financing and lower taxes.

    For instance, the current Central Bank of Nigeria (CBN’s) benchmark lending rate of 14 per cent and commercial bank lending rate of 20-25 per cent are considered too high for investors who require capital to startup businesses such as in renewable energy.

    In contrast, the rates are substantially lower in other countries that have moved far in the development and usage of renewable energy such as China, US and India. While it is about 9.45 per cent per annum in India, for instance, the lending rates are at average of 4.3 per cent per annum in the US and China.

    The Renewable Energy Manager/Acting Manager, Bank of Industry/United Nations Development Programme (BoI/UNDP) Access to Renewable Energy (AtRE Project), Mr. Lawal Gada, noted that renewable energy finance is almost non-existent in Nigeria, adding that banks’ funding for renewable energy projects was inadequate.

    The BoI/UNDP AtRE is an intervention project aimed at expanding energy services for rural and peri-urban Micro, Small and Medium Enterprise (MSMEs). Its aim was to facilitate investment in renewable energy options and linkages for enterprise development. BoI is the implementing agency for the project.

    The lack of finance must have been why those pushing for increased uptake of renewable energy argue that since government has made some concessions, which enabled cheaper financing to sectors such as agriculture and manufacturing in order to encourage their growth, it should consider offering similar lower rates to power sector investors, particularly for those who are investing in renewable energy.

    However, apart from funding, Gada identified other challenges to include lack of standard for renewable energy products, technical know-how of industry players, awareness on positive impacts of renewable energy and sustainability of the projects.

     

    Why RE is a compelling option

    From a strategic and investment point of view, as well as from a technological and environmental perspective, renewable energy sources are acknowledged globally as viable option to diversify power generation mix and significantly boost electricity supply.

    This is particularly true for Nigeria, where a vast, but largely untapped potential in renewable energy resources such as solar, coal, wind and biomass has strategically positioned the country to leverage on the opportunities in renewable to tackle her persistent electricity crisis.

    Besides, RE bodes well for Nigeria’s desire to diversify her energy mix to reduce its natural gas dependence. At present, almost all of Nigeria’s energy consumption comes from non-renewable energy sources such as natural gas and oil, which is finite. About 85 per cent of power is said to be generated by gas fired plants.

    But the snag is that issues of pipeline vandalism and securing gas to power the thermal plants have become a herculean task. The nation’s unreliable gas supply infrastructure and pipeline vandals are said to have continued to compromise the distribution of gas to various plants across the country.

    From an investment point of view, RE also holds promises. Although, most renewable energy technologies have high up-front capital cost compared to conventional energy alternatives, renewable energy sources have low operational and maintenance costs; they are also more easily replenished.

    In other words, turning to RE might be expensive in the short term, due to the huge up-front capital investments and the transfer of technology and knowledge. But the consensus is that the long-term benefits far outweigh its short-term disadvantages.

    More importantly, with little service improvements to show for the handover of the power utilities to private sector operators under a privatisation exercise, the imperativeness of RE comes into bold relief.

    Recall that the power sector was privatised on November 1, 2013, with the formal handover of six generation companies (GenCos) and 11 distribution companies (DisCos) unbundled from state-owned Power Holding Company of Nigeria (PHCN) to private investors.

    Expectedly, there was high public expectation that the new owners would bring a rapid end to frequent power outages in Africa’s largest economy. But, five years down the line, electricity consumers are still agonising over the persistent poor electricity supply across the country.

    For instance, a team of experts at professional services firm PwC led by Utilities, Mining and Resources Leader, Pedro Omontuemhen, and Tax Partner, Moshood Olajide, observed that “end users in the power value chain are expressing an increasing sense of desperation for a  sustainable solution to their power challenges as the euphoria of the privatisation exercise dissipates.”

    The experts were quick to point out that “Power is a key driver of Nigeria’s industrialisation aspirations, hence the success of Nigeria’s planned economic and growth recovery is substantially hinged on improvements within the power sector.”

    Nigeria’s installed power generation capacity is put at 12,000MW. But as at December 26, 2018, the actual output stood at over 5,207.57MW, according to the Executive Secretary, Association of Power Generation Companies (APGC), Dr. Joy Ogaji.

    Fashola was more generous in his assessment of the ESI. Hear him: “We are producing more power than what we met; we are transmitting more power than what we met, and we are distributing more power than what we met.”

    According to him, his ministry met 4,000MW, but has added 3,000MW more, which translates to 1,000 MW per year. “We have improved on what we met, and that is unarguable and unimpeachable,” Fashola insisted, when he appeared on a television programme last week.

    The minister, who admitted that government has not gotten to its destination yet, however, said the agenda his ministry set for itself in 2015 to achieve incremental power was already yielding results. He added that based on government’s off grid and mini-grid policy, “…I see a very clear path to solving this problem (electricity crisis).”

    OPS, other consumers disagree. While Fashola may have come across as an incurable optimist, not a few consumers and business owners refused to be swayed by the minister’s claim of an improved electricity supply. They insist that the envisaged improvement in electricity supply has yet to manifest.

    For instance, the Director-General of the Lagos Chamber of Commerce & Industry (LCCI), Mr. Muda Yusuf, said the power situation continues to pose severe challenges to private sector operators, impacting adversely on productivity.

    He said throughout last year, the Chamber received complaints across sectors about high energy costs especially high expenditure on diesel, higher cost of and scarcity of gas, and payment demand by DisCos for power that was not supplied.

    “These continue to take its toll on the bottom line of investors. Small and Medium Enterprises (SMEs) and some real sector companies reported that they spend as much as 20-25 per cent of their total operating cost on provision of alternative power supply and payment to DisCos,” he said.

    While stating that the provision of power remains at the heart of the ease of doing business in Nigeria, Yusuf, however, noted the government’s efforts in addressing the perennial power supply shortage and deeper commitment to alternative sources of power including off-grid initiatives.

     

    Nigeria’s $9.2b mini-grid market beckons

    A recent report brought the enormous investment opportunities in RE nearer home. The report titled, Mini-grids in Nigeria: A Major Investment Opportunity, said Nigerians spend as much as $14 billion annually on off-grid power from small self-generators, which are inefficient and expensive ($0.40 kilowatts per hour (kWh) or ¦ 140/kWh or more).

    The report was an independent assessment of the Nigerian mini-grid market. It was the result of a partnership between Rural Electrification Agency (REA), the World Bank (Energy Team), and Rocky Mountain Institute (RMI).

    The report, which was accessed by The Nation, noted that a significant amount of the economy is powered largely by small-scale generators (10–15 GW) and that almost 50 per cent of the population has limited or no access to the grid.

    Consequently, there are high densities of power use, large latent demand, and a strong willingness to switch to more-effective alternatives.

    The report, therefore, said developing off-grid alternatives to complement the grid creates a $9.2 billion a year market opportunity for renewables, mini-grids and solar home systems that will save $4.4 billion yearly for Nigerian homes and businesses.

    Mini-grids, according to the Nigerian Mini Grid Regulation, are stand-alone power generation systems of up to 1 MW capacity that provides electricity to multiple consumers through a distribution network.

    Mini-grids offer an innovative, yet practical solution to rural electrification challenges. They can circumvent many of the problems with electricity from the centralised grid, while providing cost-effective power.

    Mini-grids can provide reliable and affordable energy to help factories manufacture, students study, and the Nigerian economy reach its full potential. And today, thousands of communities in remote regions can be cost-effectively served by mini-grids while providing investors a good return on investment.

    The mini-grid report, which highlighted Nigeria’s potential as the biggest and most attractive off-grid opportunity in Africa, projected that installing several hundred mini-grids can reduce costs by around 60 per cent in 2020.

    Although, Fashola said government has approved the mini grid regulations to guide registration and licensing for small consumers and off-grid developers to produce up to 100 kilowatts, the challenge of dearth of investments in the RE industry remains.

    Some of the factors identified as being responsible for this include lack of access to micro financing, high interest rates, poor business development skills by renewable energy system vendors and unsupportive climate for investments.

    Experts, therefore, say that government must prioritise policy options that can attract foreign direct investment into the country, as this not only encourage the production of energy from RE sources, but also create jobs and enhance the transfer of technology and knowledge to the local partners.

     

    RE in other countries

    Coal makes up to 30.3 per cent of the global energy primary needs and is used to generate over 42 per cent of the world’s electricity. The resource constitutes 93 per cent of the fuel used by South Africa to produce its electricity.

    The Rainbow nation is currently generating far above 40,000MW for a population of about 50 million people. At the time Nigeria launched its power sector road map in 2010, South Africa was already generating 40,000MW.

    It has since moved a notch higher, adding a little over 600MW to the existing 40,000MW. Wind power was responsible for producing 2,126 GWh of South Africa’s electricity in 2016, following the construction of a number of wind farms, most notably the Jefferys Bay and Cookhouse sites in Eastern Cape.

    South Africa’s Government also recently reaffirmed its commitment to renewable energy, with its Department of Energy signing agreements with 27 independent power producers (IPPs), effectively unlocking R56 billion that will be invested in renewable energy projects across the country, predominantly in rural areas.

    In all, South Africa envisages that by 2030, it will have an energy sector that promotes economic growth and development through adequate investment in energy infrastructure. The plan also envisages that by 2030, the country will have an adequate supply of electricity and liquid fuels to ensure that economic activities and welfare are not disrupted, and that at least 95 per cent of the population will have access to grid or off-grid electricity.

    The plan proposes that gas and other renewable resources like wind, solar and hydro-electricity will be viable alternatives to coal and will supply at least 20,000 MW of the additional 29,000MW of electricity needed by 2030.

    Countries in the Middle East and North Africa (MENA) region are also increasingly shifting their focus towards renewables (solar and wind resources) as a means of diversifying their power generation mix.

    According to a recent International Renewable Energy Agency (IRENA) report, the MENA region is anticipating renewable energy investment of $35 billion per year by 2020. It also predicted that RE prices will compete with fossil fuel by 2020.

    Indeed, declining renewable energy prices and increasing  energy demand  in  the region  are said to have provided  lucrative opportunities  for  stakeholders  to  increase renewable  energy production,  invest  in  long-term  competitiveness  and energy security.

    The report, which was accessed by The Nation, said among the MENA countries, Morocco has emerged as a role model for the entire region. It said the government’s target of 2GW of solar and 2GW of wind power by 2020 is progressing smoothly with the commissioning of Nour-1 solar project.

    Jordan and Egypt are also making steady progress in the RE sector. According to APICORP, currently, 2.4 GW of nuclear power facilities in MENA are complete, of which only 1 GW is operational, 5.4 GW is under construction, and a further 8 GW is planned by 2030.

    Will Nigeria borrow a leaf from these countries that have prioritised investments in RE? Will the authorities create the enabling business environment that will open the floodgate of investments into the RE development and usage? Will she provide the incentives to encourage states and local governments, as well as private sector operators to invest in the industry?

    While answers to these remain matter of conjecture, the consensus is that until and unless Nigeria exploits her RE potential, power output will remain below optimal. And this sub optimality will remain a significant constraint to economic activities in the country.

    More importantly, the realisation of the Federal Government’s 2017-2020 Economic and Recovery Growth Plan (ERGP) may be scuttled as a result of inadequate and unstable power supply in the country.

  • Still a long walk to food security

    One of the greatest challenges facing the world is how to guarantee adequate food for all. The challenge is worsened by natural incidences such as flooding, drought, hurricanes, increasing desertification and widespread strife across the world, leading to displacement of people and further destruction of farmlands and seafood. Worst hit by this challenge are people in the developing and third world.

    To close the gap in the provision of adequate food for Nigerians, analysts, agriculture experts and operators are of the view that the Federal Government and all stakeholders need to promote agriculture and allied industries by investing significantly in the sector, creating the environment and incentives that will attract investors and make access to finance easier for those in the agriculture sector.

     

    Stakeholders speak

    According to New Generation Consulting Managing Partner, Dr Njideka Kelley, the World Bank report on poverty and hunger defines food security as “access by all people at all times to enough food for an active and healthy life”. But Nigeria and Africa are nowhere near achieving food security and several factors are responsible for the food insecurity in Nigeria.

    Kelley, who is also the 2018 AfroAgric Expo Conference Convener, said governments’ unclear economic policy must first shift focus from an oil-based economy to an agricultural based one. In so doing policies that favour agriculture can come into play, ensuring that farmers are empowered to assure food security in their regions.

    She said farmers’ inaccessibility to funding is a major setback. If agriculture can be seen as a major economic driver, then farmers must be encouraged through government’s subsidies for grains, fertilisers, farm equipment, among others, adding that farmers’ inadequate education on food preservation, and the fact many rural farmers have no education and are completely helpless when it comes to food preservation, proper application of fertiliser is another challenge.

    Kelley said low mechanised system of farming is causing poor yield, because the rural farmers have not been empowered to be commercial farmers, they continue to practice subsistence farming, which can only produce poor yields. According to her, inaccessible roads from farm to market for farmers, who have sufficient yields at harvest are unable to transport the harvest to the market due to terrible roads sometimes cut in half by erosion.

    “Lack of organised farmers’ association to regulate prices and ensure profit is also an issue. Farmers are not organised properly into cooperatives and the ones already in cooperatives do not understand the power of teams so that they can regulate their prices and assure profits for farmers,” she added.

    Kelley said to overcome these challenges, the agricultural sector’s strategic objectives and priority activities should include increased production and productivity of staple food crops through a value chain approach for food security; promote commercial agriculture; promote and increase value-adding activities for agricultural products; increase the production and export of cash crops, and improve access to finance for farmers.

    “The Central Bank of Nigeria (CBN) noted that funding in the Nigerian agricultural sector is about two per cent of total lending by banks unlike six per cent in Kenya. The problem of financial inclusion is not peculiar to the agriculture sector, but to the Nigerian economy at large. For example, the CBN noted that about 83.9 per cent of money in circulation is being circulated outside the formal banking sector. This implies that other sectors seek financial services outside the banking system.

    “Also, Nwankwo and Nwankwo reported the result of a study carried out by Enhancing Financial Innovation and Access (EFInA) on access to financial service in Nigeria; 34.9 million (39.7 per cent) adults were financially excluded,” she said.

    To Mr Amos Eneyema, an agriculture expert, to conquer hunger and ensure food security, emphasis must continue to be placed on agriculture as a viable alternative to dependence on oil revenue as millions of citizens still go to bed hungry. Government must work assiduously with youths and banks to secure soft interest-free loans for subsistent or micro-farming nationwide and urgently. Policy makers must remove food production barriers while encouraging public investors’ participation. Improved seeds, chemicals, local farming tools, delivery and storage facilities, processing and packaging tools, among others, should be free and accessible.

    To World Bank Consultant, Prof. Abel Ogunwale, the government and private sector need to boost post-harvest loss technology to improve food security and reduce vulnerability of resource-poor farmers.

    Postharvest losses refer to grain, roots, fruits and vegetables that are lost or lose quality during processing, transportation or storage.

    According to the World Bank, improving post-harvest management (PHM) could avoid losses equivalent to the food needs of 48 million people in sub-Saharan Africa. Ogunwale said one of the biggest problems affecting the country’s agriculture and the agricultural market is post-harvest losses.

    He explained that the benefit of bumper harvests has been negated by insufficient storage capacity, resulting post-harvest losses, adding that farmers’ lack of awareness and access to appropriate technologies, have led to tremendous losses. According to him, there have been several post-harvest losses from the producer to the consumer, linked to lack of proper harvest practices, transportation and cold storage facilities.

    He stressed that technologies exist to curb food losses after harvests, and the first thing farmers need to do is to adopt them.

    He urged the government to engage the private sector to reduce post-harvest losses. This, he added, will be effective since the private sector may adequately fill the knowledge gap when it comes to understanding the use and importance of these technologies among farmers.

     

    Case for bio-fortified food processing

    To HarvestPlus Nigeria Country Manager, Dr Paul Ilona, there is need for the country to widely adopt bio-fortified food processing. According to him, the Nigeria bio-fortified food processing sector has potential to attract millions of investment and generate thousands of jobs in the agriculture sector. Bio-fortification, according to him, is defined as the enrichment of the natural content of selected micronutrients in crops.

    Ilona noted that bio-fortification has continued to generate employment around farming, including processing, packaging, distribution, marketing services, adding that it has created jobs for young people, especially those in rural areas. According to him, his organisation is initiating strategic partnerships that are needed to bring about the creation of value chains dominated by large processors and retailers. He explained that his organisation is promoting bio-fortified crops with special emphasis on iron, Vitamin A and Zinc.

    HarvestPlus, he said, has provided bio-fortified maize rich in vitamins apart from new technologies that can make or break a farmer’s livelihood. He said the organisation has worked with other stakeholders in Nigeria to develop supply chains for bio-fortified crops. Farmers are being linked to new technologies that could increase their livelihoods and improve the health of their families through better crops and better nutrition. He said it was a critical time to encourage new approaches to production that meets a country’s nutritional needs.

    To him, bio-fortification is transforming food sector and has potentially significant impact on the off-farm segment and the knock-on effect on farming households.

    Kunle Olawoyin, a farmer, said an insignificant percentage of the budget was allocated this year to the agriculture sector, which employs over 70 per cent of the population. To ensure food security, states and the Federal Government should increase investment in agriculture in line with the Malabo commitment of 10 per cent.

    A reasonable investment in small-scale agriculture, he said, is the best way to reduce rural poverty and hunger. Everyone should see farming as the way to go and not as occupation for the illiterate. According to him, average age of full-time farmers in Nigeria, who are engaged in subsistence farming, is put at 65 years and above. For any nation to overcome hunger or food shortage, the younger folks should take farming as a lucrative profession, and this must be well funded by the government to attract huge patronage. “Overcoming hunger in Nigeria is part of the government responsibility with a complementary support from the people. Beyond slogans, action must be put in place to achieve this through a collaborative government/private initiative.

    “Government cannot ask farmers to go back to the farms and then loose hungry cows after the crops. If this measure is put in place, by 2021 Nigeria would have achieved food security. And whosoever desires constant success must change his conduct with the times.

    “I believe this is the only government that made agriculture a priority rather than depending on oil to move the nation forward. All hands must be on deck to ensure that food security is addressed. We should patronise made-in-Nigeria food to grow our economy and create employment for Nigerians. Let 2019 budget give major allocation to agriculture to boost food production. Any money given to the farmers should be monitored to avoid diversion.

    “Although emphasis on agriculture has always been there, implementation is our problem, due to corruption. To lure the youths to the farm and get the desired results, irrigation farming, mechanisation, loans, seedlings’ varieties and pesticides, among others, must be made available to farmers by January or February, against early rains so as to avoid associated bottlenecks,” he said.

    According to Mr. Chika Gordon, a mechanised farmer in Abia State, the states and local governments should follow Federal Government policies of agricultural revolution boost food production in Nigeria instead of depending on foreign food. “We have fertile land to grow agriculture but our so-called leaders are so lazy because of oil. I wish these oil wells will dry, let me know whether everybody will not engage in agriculture to survive. Government should ban some agricultural imports in order to allow local production to grow, improve our economy and create employment and even infrastructure development.

    “Able-bodied youths both skilled and unskilled in both rural and urban areas idling away must be engaged in gainful farming urgently. Relevant financial institutions must issue monitored interest-free soft loans to identified youths for nationwide subsistence farming.

    “All our natural fruits, games and seeds, among others wasting away in the bush must be rescued, processed and preserved with indigenous technology for future use. Regionalised Marketing Boards must come into function now. Let each state specialise in mass production of agricultural products where it has comparative advantage, backed by interest-free loans and well-equipped millennium settlements to lure the idle youths back to the farms.

    “Good storage facilities, basic infrastructure and buy-back policies provided by governments at all levels will also go a long way,” he added.

     

    Farm inputs, technology and produce preservation

    At an agriculture exposition tagged: “Afro AgriExpo”, held at the International Conference Centre (ICC), Abuja, farmers, agriculture institutes and the academia, called on the government to show sincerity towards supporting rural farmers and developing the nation’s economy via agriculture. They said agriculture as an economy stimulator and trending technologies should be applied for agricultural development and sustenance.

    A representative of Jigna Farms Limited in Abuja, Ahmed Yero, said the prices of farm inputs have soared beyond expectation, noting that if government wants the sector to develop, farm inputs have to be affordable and accessible. To him, fertiliser should be accessible and affordable by all farmers, including those in the rural areas, adding that 50kg bag at N7,000, many farmers cannot afford it.

    A fish farmer, Dr. Jones Ozuzu, lamented how he lost 2000 fingerlings during a heavy down pour this year and could not get support from the government. He alleged that a lot of the loans being promoted, especially the Anchor Borrowers Programme (ABP) meant for rural farmers, have been allegedly hijacked by political farmers. He pleaded for sincere government’s effort in repositioning the sector.

    However, Nigeria Agricultural Insurance Commission (NAIC) Managing Director,  Mrs. Folashade Joseph, urged the farmers to insure their crops against eventuality. Joseph said NAIC spends more funds on awareness creation and training than payment of claims. Joseph, who was represented by her Deputy, Mr. Bashir Martins, said if Dr. Ozuzu had insured his farm, he could have approached the nearest NAIC office for compensation.

    Federal Institute of Industrial Research (FIIRO) Director-General, Prof Gloria Elemo, emphasised the need for rural farmers to be supported to increase their income and boost rural economy. She advised players in the agriculture sector to go beyond production of agricultural produce and exports and do value-addition. She identified the need to introduce technology into agricultural processing as well as local fabrication of needed equipment.

    Elemo, who was represented by FIIRO Director of Planning, Technology Transfer and Information Management, Dr. Oyedoyin Bolanle, explained that lots of innovations have been made to reduce post-harvest losses in the area of cereals, fish, grains, fruits, among others, to promote value addition. However, paucity of funds, she said, has denied the Institute the capacity to share the innovations among stakeholders, especially agropreneurs and rural farmers.

    “Today, agriculture in Nigeria is characterised by low productivity, land access constraints, limited adaptation of research findings and local technologies, poor and low irrigation development, high cost of farm inputs, poor access distribution, poor storage facility, poor processing technology development and general post-harvest losses,” she said.

    She disclosed that the Institute plans to partner the private sector to develop technologies that could convert raw agriculture produce to finished goods and promote value-addition. According to her, over 250 technologies have been developed, but only 50 of them are ready for commercialisation. “People are being trained on weekly basis on some of these technologies,” Elemo added.

    One of the partners, AfroAgriExpo, Mr. Sanni Uzo, said the Federal Government needs to really develop the agriculture sector to take its pride of place as the major contributor to Nigeria’s Gross Domestic Product (GDP). He advised the Federal Government to encourage subsistence farmers and see how it could integrate them into mechanised farmers. He restated commitment of the group to eradicate hunger and food scarcity by sharing ideas on modern farming practices. “Our intention was to bring these experts to be able to introduce their technological know-how. We even have bankers here who could have introduced easier ways to get finance. With their coming in, they will help us to advance cattle rearing, create ranches where we can breed cattle, do exports other than producing for individual needs and local consumption,” he said.

    He noted that though the impact for the expo has not been created, however, he pledged to renew drive to ensure the group achieves set objectives.

     

    Exporting more farm products

    At the Nigeria Agricultural Exporter Group (NAEG) Summit in Lagos, the founder, Captain John Okakpu, said Nigeria is among the world biggest producers of agro crops, but has not exploited much of its agro export potential.

    Okakpu noted that for Nigeria to export more farm and food products it must invest heavily in high-value crops and the government should learn from institutional coordination models of other countries, whose agro export sub-sector is performing at its best, and re-orientate farmers to be better agripreneurs. He said agro exports play a significant role in driving the economy and providing employment as well as developing agriculture-based industries. These make access to international markets crucial to sustaining economic growth.

    Okakpu said he has worked extensively on raising awareness on food safety and sustainability since his company, ABX World Nigeria Limited, earned Global Good Agricultural Practice (Global GAP) Farm Assurers Certification. According to him, Global GAP has licensed his organisation to offer training and certification to farmers. He said he has helped Anambra State achieve Global GAP Certification to enable it export agro produce, adding that Nigeria has the potential for a strong agro export industry, but has not been giving the sector adequate attention, which is surprising, given growing world market demands.

    He urged producers to access premium high value markets such as Europe and the United States, but noted that to do so, they must fulfill high standards on food safety and sustainability, worker health and safety. To  reposition the agro export sector, he  stressed the imperative of  addressing sanitary priorities, including improving laboratory infrastructure, establishing food safety standards, harmonising risk assessment tools, improving traceability of products and increasing coordination with international standard setting bodies.

    National Expert on Value Chain at United Nations Industrial Development Organisation (UNIDO), Dr. John Isemede, urged Nigeria to pursue trade and investment integration at multiple levels, including the Continental Free Trade Area. He stressed that concerted action was needed to restore export revenues and the sector’s reputation. He noted that many agencies/units, which have no business with inspections, carry out same on agro produce, adding that some exporters have lost money on produce said to have been tested.  Isemede, a former Director-General, Nigerian Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMA), said export is of tremendous importance to agricultural sector.

  • Nigeria’s bourgeoning diabetes drug business

    Nigeria has the highest incidence of diabetes in sub-Saharan Africa with about 10 per cent of its citizens said to be diabetic. With cases of diabetes expected to increase by 2030, experts have projected that the cost of treating and managing the disease may hit $59.3 billion yearly by 2030. While this has imposed a huge financial burden on those diabetic, it has also opened a new vista for local and multinational pharmaceuticals jostling to take advantage of the huge market created by the lifestyle disease. DANIEL ESSIET reports.

    The battle for market share is getting more intense. From local and multinational pharmaceutical firms to herbal providers and operators in the diabetic food market, the competition for the provision of bespoke solutions for the treatment and management of diabetes in Nigeria has gained increased momentum.

    While some organisations and their international partners have stepped up the development of a variety of micronutrient-rich foods to reduce the high incidence of diabetes, some herbal providers are deploying medicinal plants in the treatment and management of diabetes mellitus (DM).

    Local and multinational pharmaceutical firms, on their part, are introducing new technologies and innovations into Nigeria’s bourgeoning diabetes management business. This, The Nation learnt, was in a bid to improve prevention, screening, diagnosis, and treatment for both Type I and Type II diabetes.

    Some of them are also said to have moved a notch higher, providing blood-pressure kits, training staff in diagnostic methods, and hosting screening sessions. The activities of these operators may have literarily turned Nigeria into a battle ground for firms seeking to take advantage of the increasing cases of diabetes in the country to grow their market share.

    According to experts in the health sector, about 10 per cent of Nigerians are diabetic, making it sub-Saharan Africa’s highest incidence of diabetes. With cases of diabetes in the sub-region expected to grow by 2030, if Type 2 diabetes cases continue to increase, experts project that the cost of treating and managing the disease may hit $59.3 billion per year by 2030.

    As if this is not scary enough, a recent report by researchers from King’s College, London, University of Bristol, and Harvard University, said only half of the people with diabetes in populations in sub-Saharan Africa are aware that they have the disease, and only one in 10 (11 per cent) receive drugs they need.

    The report, which was accessed by The Nation, estimated that the economic cost of diabetes in sub-Saharan Africa in 2015, for instance, stood at $19.5 billion, which was equivalent of 1.2 per cent of the sub-region’s Gross Domestic Product (GDP). It added that on the average, countries in the region spend 5.5 per cent of their GDP on health.

    The report further said more than half of the economic cost of diabetes (56 per cent and about $10.8 billion) was on accessing diabetes treatment, including medication and hospital stays – and ­one half of these costs were out-of-pocket (paid for by the patients). It noted that this has put significant financial burden on people with diabetes.

    Ironically, the disturbing figure for Nigeria may have thrown up a huge and profitable market for local and multinational drug and food companies. Some of them are now adopting various strategies, including pocket-friendly prizes, low-cost manufacturing, and introduction of innovative products to woe customers.

    Others are said to be changing the rules of the game by lowering prices and localising products for treatment of the disease, while others are also engaging in-patient screening and counselling to prepare suitable market strategies and bringing appropriate solutions to the market.

    One of the big players in the market is Sanofi-Aventis Nigeria Ltd. Her dominance in the diabetes market is largely driven by her insulin product known as Lantus. This is hardly surprising, considering the fact that traditional Insulin is said to be the most popular drug category for diabetes treatment.

    Insulin accounts for about half of the market. Sanofi-Aventis Nigeria Limited Medical Director, Dr. Philip Ikeme, noted: “Nigeria has the highest incidence of diabetes in sub-Saharan Africa”, adding that this was why the firm identified diabetes as one of its core segments.

    To enhance Sanofi’s competitive edge in the bourgeoning diabetes treatment and management business, Ikeme said the company was exploring the possibilities of combining various therapies in a single pack for better patient compliance by partnering other providers as well as help combat the disease.

    Sanofi was founded in 1973 with its headquarters in Paris, France. The firm operates in two segments, pharmaceuticals and vaccines. The pharmaceutical segment offers diabetic devices such as SoloSTAR, ClikSTAR, JuniorSTAR, MyStar Extra meter, MyStar Connect to treat diabetes.

    ISN Products Nigeria Limited, another major operator, appears determined to give Sanofi a run for its investment in the diabetes treatment market. Encouraged by the alarming global figure of 400 million diagnosed cases of diabetes as at 2015, and forecast that the number will double in the next 25 years, the company said it has become imperative to do more to help the patients.

    Its Executive Director, Business Development, Mr. Felix Ofungwu, said ISN offers a self-care management programme for the diagnosed to help manage their condition against the background that no known cure had been found for the ailment. He said affected persons could still lead a good measure of life if the condition is well managed.

    Since 2015 when it opened its new office in Nigeria, Merck Nigeria, another major operator, has never looked back. The firm said its diabetes product line is relatively simple, with metformin and sitagliptin as main drivers.

    To further establish its presence in the market, the world’s leading manufacturer of pharmaceutical products recently re-launched its type 2 diabetes drugs, Glucovance and Glucophage in Nigeria.

    Merck Nigeria General Manager, Mr. Charles Ajibo emphasised that the re-launch of the products, Glucophage and Glucovance, which had hitherto existed and was being distributed by agents in Nigeria, was to emphasise the presence of the world’s leading healthcare product manufacturing firm in Nigeria.

    Glucovance contains a combination of glyburide and metformin. Glyburide and metformin are both oral diabetes medicines that help control blood sugar levels.

    The combined medication is used with a proper diet and exercise programme to control high blood sugar in people with type 2 diabetes. It may also be used with other diabetes medications.

    Another big player is Eli Lilly. For 140 years, the firm has worked tirelessly to develop and deliver trusted medicines that meet real needs. Its growing portfolio of medicines include treatments diabetes and other non-communicable diseases.

    Similarly, Novo Nordisk, a Danish firm, specialising in diabetes and obesity drugs, has been making inroads into the market. Its diabetes business accounts for a large chunk of its total revenue.

    The firm recently inaugurated a ‘Diabetes Campaign’ for low-income Nigerians to access routine screening, diagnosis and patient follow-up services in major cities across the county.

     

    Diabetic food providers intensify push

    The global diabetic food market is expected to reach $11.76 billion by 2025, according to a new report by Grand View Research, Inc. Rising demand for diabetic food in the medical sector is anticipated to fuel this market growth.

    Indeed, as the number of diabetic patients rises, naturally healthy foods, in both packaged and non-packaged formats, have taken the centre stage.

    With the increasing global focus on diabetic-friendly foods, some organisations in collaboration with their international partners are developing varieties of micro-nutrient-rich foods to reduce the high incidence of diabetes.

    Leading the pack is Harvest-Plus Nigeria. Its Country Manager, Dr Paul Ilona, confirmed that his organisation and its international partners were introducing crops with a high nutrition co-efficient in an attempt to reduce the incidence of diabetes and also create a culture of balanced dietary patterns.

    HarvestPlus, located in the International Institute of Tropical Agriculture (IITA), Ibadan, Oyo State, is an initiative that uses phyto-improvement to cultivate varieties of basic crops such as beans, cassava, corn, rice, sweet potato, among others, with high levels of zinc, iron and vitamin A, to noticeably increase a country’s nutrition.

    Indeed, World Health Organisation (WHO) data indicates that the combination of nutritionally deficient diets and physical inactivity are the main risk factors for non-communicable diseases, primarily cardiovascular and chronic pulmonary diseases, cancer and diabetes.

    Consequently, a medical analyst, Dr. Mike Idiong, said there are significant opportunities for new industry players to provide diabetics-friendly naturally healthy beverages, ready meals, confectionery, organic food, dairy food and bakery. He described the market opportunities for bulk, intermediate, and consumer diabetic foods as significant.

     

    Society for Family Health, herbal providers also

    The Society for Family Health (SFH) said it has signed an agreement with pharmaceutical firm, Novartis, to distribute a portfolio of up to 14 medications to treat chronic diseases at costs, as low as $2.21 (about N802) per patient a month.

    Medication for diabetes, blood pressure, hypertension and antibiotics are included in the Novartis access portfolio expected to go into effect in November.

    SFH also said it will provide patients the medicines through health facilities in a pilot scheme in eight states of the country, targeting a total of five million people.

     

    Herbals to the rescue

    The herbal medicine industry is also providing lower-cost alternatives for desperately needed medications, and production is said to be on the rise.

    According to experts, Type 2 diabetes is a largely preventable metabolic condition defined by insufficient insulin and insulin resistance.

    They pointed out that herbs and supplements should be seen as a complementary treatment option and should not replace medications.

    Herbal medicine is used widely in treating Type 2 diabetes. Various herbals such as Ginseng have been found to lower blood sugar, increase insulin sensitivity, and reduce high cholesterol.

    Already, a lot of herbal providers have emerged to deploy medicinal plants for the treatment and management of diabetic mellitus (DM).

    Some of the plants include Allium cepa (Onion), Allium sativum (Garlic), Aloe vera, Cinnamomum cassie, Coccinia indica, Gymmema slyvestre (Gurnar), and Momordica charantia (Bitter Melon), Catharanthus roseus (Madagascar Periwinkle).

    Others are Muurrayi komingii, Ocimum sanctum, Panax ginseng, Trigonella foemum-graecum (Fenugreek) Pterocarpus marsupium (Indian Kino) and Syzigium cumini.

    A survey of several medicinal plant research showed that the polysaccharides, sterols, terpenoids, alkaloids, saponins, flavonoids, amino acids and their derivatives are the most encountered bioactive principles that exhibite glycemic control in experimental animals.

    Most of the herbal firms are also selling green tea leaf extract for the treatment of the disease. It is claimed that green tea contains the bio-flavonoid epigallocatechin gallate (EGCG), which has been shown to be a safe and effective antioxidant, which can reduce the risk for Type 2 Diabetes Mellitus onset.

    So far, herbal products have proved highly effective against chronic diseases such as diabetes and hence the scope for its penetration in the global market as a major medicine is indeed, huge.

    For instance, the global herbal tea market is driven by increasing heath awareness and current fitness trend among individuals. Herbal tea, also known as tisane, is a drink containing infusion and decoction of herbs, spices, and plant material such as seed, leaf, root, etc.

    According to experts, herbal tea can be served as a hot or cold beverage. The wide range of sweetener availability in herbal tea such as honey, sugar, and fruit juices makes it more appealing to diabetic as well as health conscious consumers.

    Herbal tea has medicinal properties that help in preventing heart diseases, diabetes, lowering cholesterol level, anti-aging, improving digestion and immunity system.

    Increasing health consciousness among individuals and medicinal healing properties of herbal tea are major factors fuelling the growth of the global herbal tea market.

    Lack of caffeine content is another property, which is leading consumers to choose herbal tea over other conventional drinks. Herbal tea comes in variety of flavours like mint, rose, lavender, ginger, etc., making it appealing to end-users.

    A medical practitioner, Dr. Egbete Chimaobi, said some of the most commonly suggested natural remedies can be used to curb diabetes.

    “Remedies, such as ginger and a mix of cinnamon as the anti-inflammatory properties help prevent certain diabetes complications; bitter leaf also helps to reduce the blood sugar and avoid heart and kidney failure,” he said.

    Chimaobi added that Aloe Vera juice is also very effective and useful to a diabetic patient. According to him, regular intake would help stabilise the amount of glucose in the blood stream.

    He said: “The family and diabetes are two sides of a coin as diabetes like any other illness has a huge strain on families both financially and psychologically. It reduces productivity when the person affected is admitted and a working family member leaves work to take care of the patient.”

     

    Types of diabetes

    Diabetes is divided into three categories: Type 1, Type 2 and gestational diabetes. The later is rare and is associated with pregnancy, while Type 1 represents five per cent of all cases.

    On the other hand, Type 2 diabetes is a serious health condition in which blood sugar levels rise much higher than normal. The fundamental biological changes underlying type 2 diabetes are insufficient insulin production due to metabolic changes of aging and resistance.

    Most patients in Nigeria suffer from Type 2 diabetes, accompanied by related health complications such as high blood pressure, obesity and other ailments. Type 2 diabetes typically starts at the age of 40.

    Speaking at a forum, Lagos State Chairman, Diabetes Association of Nigeria (DAN), Hameed Biodun Afinowi, blamed the alarming increase in diabetes on unhealthy lifestyles of Nigerians.

    He, however, lamented that the government has failed to support diabetic patients in the country, as many patients are not only faced with the challenge of high cost management, but also poor healthcare delivery system.

    Afinowi said there is lack of medicines in hospitals, low patient education and a dis-functional laboratory for screening for diabetes complications.

    The nation’s poor healthcare delivery system may have inadvertently spurned a booming market for diabetes treatment and management. International and local firms have now recognised the rapid growth in demand for diabetes pharmaceuticals and the value that can be gained from conducting research locally.

    Not only is the demand on the rise, but the diversity of pharmaceutical products on diabetics is growing, as health service providers increasingly deal with non-communicable diseases including diabetes.

    Although, firms are trying to manage diabetes-related complications such as kidney and heart problems, the treatment market now comprises technologies, devices and therapeutics in relation to diabetes.

    In Nigeria, businesses are trying to keep pace with modern high-tech world in the treatment of diabetes. Firms are now promoting blood glucose meters (glucometres).

    Also, globally, there are diabetes Apps for Smartphones, encouraged partly by World Diabetes Foundation’s estimate that there would be 438 million people suffering from diabetes by 2030. The Foundation added that approximately 11.6 per cent of the global healthcare expenditure is shared by diabetes care.

    Already, Affiong Okon (not real name), is bearing the burden of this high cost. Okon had enjoyed good health since birth. Visiting the hospital has never been part of her growing up. The only time she used drugs, according to her, was when she had cold or fever.

    But her health status changed about 10 years ago when she was diagnosed with diabetes mellitus. Although, diabetes is said to be hereditary, she has no family history of the disease.

    Today, the exorbitant cost of managing her diabetes has drained Okon financially since she has to procure every item on her own with no assistance.

    She lamented that apart from the high cost of diabetes medication, she had to search many pharmacies in the neighbourhood before getting the drugs.

    For Okon and indeed, many Nigerians suffering from diabetes, it has been harrowing experience. Apart from the challenge of getting proper diagnosis, the lack of appropriate medical infrastructure has been a pain in the neck.

    Financial constraints have also made it extremely difficult for them to procure the basic diabetic management supplies.

    While these have created an opportunity for local and multinational drug companies and other service providers to storm the Nigerian market, it has, however, not been a walk in the pack for the operators.

    For one, the Federal Government still enforces long-established pharmaceutical regulations, which, for instance, require all pharmaceutical products, whether locally produced or imported, to be approved by the Ministry of Health before being placed on the market.

    Drug producers still complain of a long and bureaucratic approval process as one of the key challenges for the development of the country’s pharmaceutical industry. Also, producers still combat a high incidence of piracy and counterfeits, which are often difficult to track.

  • Wanted: Quality, standards to drive non-oil economy

    The Federal Government’s Zero Oil Plan seeks to liberate Nigeria from dependence on oil by stimulating the non-oil export sector. It targets non-oil export revenue of $100 billion annually. But, the implementation of the plan may have been off to a shaky start. No thanks to lack of laboratories for testing and certifying export-bound agro-allied products. Experts say there is a need for appropriate measures to guarantee the quality of export products, if the plan as well as other initiatives to drive the transition to a non-oil economy must succeed. Assistant Editor CHIKODI OKEREOCHA reports.

    If robust policy initiatives were to decide Nigeria’s productivity and competitiveness in international trade, her non-oil export sector would have been sufficiently stimulated to play its role of dislodging oil as a major foreign exchange earner. But, unfortunately, the implementation of most, if not all the initiatives, has continued to be undermined by the inability to meet the standards for export-bound agric products.

    Since 2015 when the present administration came on board, the non-oil sector has, indeed, been the focus for several initiatives designed to liberate Nigeria from her age-long dependence on crude oil for survival. The refocus on the sector came in the heat of the crisis in the international oil market where the price of Nigeria’s crude oil was crashing, requiring urgent rejuvenation of the non-oil export sector as a wedge.

    It was hardly unexpected. Nigeria depends on oil for 70 per cent of its revenue and 95 per cent of foreign exchange earnings, which was why the unprecedented fall in oil prices put her finances under pressure. But it also necessitated strident calls on government to speed up the development of the non-oil sector to mitigate impacts of falling oil prices.

    The Federal Government rose to the challenge, rolling out several initiatives aimed at pushing possibilities into the hands of operators in the non-oil export business and, ultimately, diversifying the economy and creating jobs. It put the right foot forward by the launch of two export financing programmes, known as Export Rediscounting and Refinancing Facility (RRF) and Non-oil Export Stimulation Facility (ESF).

    The N500 billion ESF and the N50 billion RRF were meant to support export-oriented companies with concessionary financing and boost the foreign exchange earnings of Africa’s largest economy. For instance, the purpose of the N50 billion RRF was to create a liquidity window in support of Deposit Money Banks (DMBs) to encourage them to provide more pre- and post-shipment finance to exporters.

    In other words, the ESF and RRF facilities were designed to redress the declining export credit and reposition the non-oil sector to increase its contribution to revenue generation and economic development. They were intended to help lower the costs of Nigerian exporters so that their products can be priced at a level where they can compete with other products around the world.

    The facilities were followed by the launch of the Micro, Small and Medium Enterprise (MSME) Clinic, an initiative of the Office of the Vice President in partnership with the Federal Ministry of Industry, Trade and Investment, as well as 11 other federal agencies. The project brings together key agencies to a series of business forums organised in different cities across the country where MSMEs can interact easier with them.

    Other initiatives that raised hopes of a new dawn in the sector include the inauguration of the Nigerian Industrial Policy and Competitive Advisory Council, which, according to Vice President Yemi Osinbajo, “will rescue and save our country and give it a real chance to be competitive in global business and commerce.” There was also the Presidential Enabling Business Environment Council (PEBEC).

    The PEBEC was established to further boost the performance of the real sector where many Nigerians are active in the non-oil export business. The vice president also signed three strategic Executive Orders to promote the patronage of made in Nigeria products, transparency and ease of doing business. The executive orders were aimed at eliminating the hurdles that stand in the way of a bigger and more productive private sector.

     

    ‘One-state-one-product’, zero to export training, also

    To grow the country’s non-oil export value, the Federal Government, through the Nigerian Export Promotion Council (NEPC), also unveiled “One State One Product (OSOP) initiative

    The idea was to have all states of the federation identify at least one strategic export product based on their comparative advantage, from which Nigeria can earn foreign exchange.

    However, states are not limited to choosing only one item. For example, Enugu State continues to successfully export pineapples into the European market, despite choosing other products for OSOP.

    The thinking is Nigeria is richly endowed with agricultural resources so, there was the need to encourage state governments to ramp up production so as to meet export targets in areas where the states are naturally endowed.

    There was the “Zero to Export Training Programme.” The scheme was focused on creating a new generation of Nigerian exporters through practical and theoretical training of business executives, bankers, civil servants and unemployed graduates among others in the export business.

    The initiative is anchored on a Public Private Partnership (PPP) arrangement with support from Deposit Money Banks, the Bank of Industry (BoI) and the Nigerian Export-Import Bank (NEXIM).

    “The zero to export programme was aimed at achieving specific objectives, which include the development of new exporters from zero knowledge to a point of export readiness, equipping exporters using practical hand-holding approach, field training and mentorship to build a new crop of indigenous exporters,” the Executive Director/Chief Executive, NEPC, Mr. Olusegun Awolowo, said.

    Awolowo, who spoke at the recent graduation of participants of the zero to export training in Abuja, added that the council’s Zero Oil Plan (ZOP) was its flagship programme aimed at mobilising public and private resources towards replacing oil as the number one source of foreign exchange.

    “The programme (ZOP) equally has a vision of growing non-oil exports from $1.2 billion in 2016 to $8 billion in 2019 and eventually $25 billion by 2025,” Awolowo said.

     

    Zero oil plan takes centre stage

    However, the ZOP would go down as perhaps, the most ambitious, pragmatic and comprehensive initiative to fast-track Nigeria’s transition to a non-oil economy. At least, on paper, the initiative was the NEPC’s magic wand for replacing oil as a major national foreign exchange earner.

    Under the ZOP, Awolowo said the Federal Government was targeting annual non-oil export revenue of $100 billion, about N30.5 trillion. Through the implementation of ZOP, he said the council hoped to grow non-oil export to reach about 20 per cent of the country’s Gross Domestic Product (GDP).

    A  document prepared by the council, showing how the plan is to be implemented, said while non-oil products are still exported to key destinations around the world from Nigeria, the priority of government was to concentrate on new export products to earn between 40 per cent and 50 per cent of what was earned from oil in the past.

    Consequently, the NEPC identified 22 countries as markets for the products. It also went a notch higher, identifying 11 products with high financial value to replace oil. The products are palm oil, cashew, cocoa, soya beans, rubber, rice, petrochemical, leather, ginger, cotton and shea butter.

    The ZOP document, which was accessed by The Nation read in part, “Nigeria’s trade has been largely driven by exports of petroleum products, which contribute about 17 per cent to the nation’s GDP, signifying about 90 per cent of total merchandise exports and more than 65 per cent of government’s income.

    “This revenue boom has been threatened by a sharp drop in the global price of oil particularly as a result of the United States’ introduction of the shale oil leading to severe economic stress. NEPC’s vision is to replace oil as a major national foreign exchange earner by growing non-oil export to $30bn in the next 10 years and eventually to $100bn annually based on its ZOP.”

    He was emphatic that if the country could key into the council’s plan by taking advantage of the opportunities in the agricultural sector, there would not be any need to depend on oil revenue for survival.

    He said the volatility in the oil market had made it imperative for the government to look inwards, adding that Nigeria could no longer depend solely on oil revenue for implementation of government’s programme. “We are targeting manufacturing and industry so that we can produce and export more,” Awolowo said.

    He was optimistic that the plan would be successful if stakeholders collaborated with the NEPC, noting that the council’s goal is for Nigeria to survive without selling oil.

     ZOP implementation begins

    The Federal Government about a fortnight ago, commenced the implementation of ZOP as set out in the Economic Recovery and Growth Plan (ERGP). The Minister of Budget and National Planning, Udoma Udo Udoma, who made this known in Abuja, even gave Nigerians more reasons to be expectant.

    The minister said in order to achieve the objective, government has set up a committee that would be working in close collaboration with state governments to promote the establishment of Domestic Export Warehouses and Aggregation Centres in each of the six geo-political zones of the country.

    “The Committee is also promoting Project MINE. The acronym ‘MINE’ stands for Made-in-Nigeria for Export. Under Project MINE, Special Economic Zones (SEZs) will be used as the mechanism for making Nigeria a pre-eminent manufacturing hub in Sub-Saharan Africa and a major exporter of Made-in-Nigeria goods and services regionally and globally,” Udoma gleefully announced.

    He also said the project has received the Federal Executive Council (FEC’s) approval, and has secured early commitments from domestic and foreign investors in textiles and garments industry as well as agro-processing sub-sector.

    Perhaps, to underscore government’s commitment, the Minister of Trade, Industry and Investment, Dr. Okechukwu Enelamah, said the Federal Government planned to spend N250 billion for the development of the SEZs across the six geo-political zones of the country in pursuit of the country’s industrialisation agenda.

    Enelamah, who made this known to newsmen at the end of a recent FEC meeting in the State House, said that of the N250 billion earmarked for the projects, N40 billion was contained in the 2017 budget while another N40 billion was contained in the 2018 budget.

    According to the minister, Projects Made in Nigeria Exports, otherwise known as Project-MINE initiative, was aimed at developing what he described as world class export-oriented SEZs. He pointed out that one of the factors leading to industrialisation was the development of SEZs.

    While stating that the FEC approved N2.655 billion to be paid to some consultants preparatory to the implementation of the projects, Enelamah listed places where the economic zones would be sited to include Lekki, in Lagos, Aba in Abia State and Funtua in Katsina State.

    He also said existing economic zones in Calabar and Kano would be elevated to world class standard, adding that pre-development work meant to herald the development of green field SEZ will also commence in Akwa Ibom, Benue, Ebonyi, Edo, Gombe, Kwara and Sokoto states.

    “The total budget of developing these zones would be in excess of N250 billion and it will include partners. This is going to be done through something called The Nigerian Special Economic Zones Company Limited, which is a public private partnership.

    “The Federal Government is going to own 20 per cent of that company and Afrexim Bank is going to be a shareholder and other investors like the Nigerian Sovereign Investment Authority and other international investors.

    “It is going to be developed in such a way that it will be world class. We are going to see rapid implementation now that Council approval has been obtained,” Enelamah explained.

    The SEZs will be coming on the heels of government’s plan to reactivate the Export Expansion Grant (EEG) Scheme and the Export Development Fund (EDF) Scheme, with the sum of N13.28 billion provided in the 2018 Budget.

     

    Many policies, little emphasis on quality and standards

    While the afore-mentioned policies are no doubt, laudable, forward-looking and are capable of turning around the fortunes of the non-oil export sector, Nigeria’s lack of a clear and coordinated approach to quality and standardisation for export-bound agric products is said to be the missing link.

    At present, export-bound products manufactured in Nigeria lack global quality certification. They are denied access to markets in developed economies. And the situation has continued to a pain in the neck of manufacturers, as their productivity and competitiveness continue to suffer.

    According to experts, standardisation will boost the competitiveness of locally made products at the international market and ensure the global acceptance of products and services from Nigeria. But unfortunately, Nigeria has no functional laboratories for testing and certifying products before export.

    For instance, a Quality Management Practitioner, Mazi Colman Obasi, told The Nation that lack of standardisation remains one of the greatest hurdles before Nigeria’s current efforts at growing the non-oil economy. He lamented that lack of a national quality infrastructure was damaging the nation’s economy and brand reputation.

    According to him, a national quality infrastructure is a system of institutions, which jointly ensure that products and services produced in the country meet predefined specifications. It also provides technical support to companies so they can improve their production processes and ensure compliance with regulations or international requirements.

    The lack of it, Obasi said, was not only partly responsible for Nigeria’s rising unemployment, but also why Nigeria is not globally competitive. “Until we have many companies that are accredited with ISO 9000 management systems certification, we are not going anywhere; we cannot export anything. Nigeria should work towards having a quality management plan,” he said.

    Former Acting Director-General of Standards Organisation of Nigeria (SON), Dr. Paul Angya, could not agree less. “A quality infrastructure for export trade is vital and a laboratory is the way to go. If we do not have the laboratory to test those products and to verify their standard conformity to the standards obtainable abroad, they cannot be exported overseas,” he said.

    Angya, who expressed concern over the lack of capacity to test and certify products in the country, lamented that Nigeria still depended on neighbouring countries, particularly Ghana, to verify compliance of suspected seized goods.

    “… Because our laboratory is yet to be completed, some seized goods have to go for testing in Ghana,” he said.

    He said the laboratory, located at Ogba, Ikeja, Lagos, would, when completed, ensure that locally-made products become exportable and acceptable anywhere in the world.

    Angya also said the facility, when completed, would aid the Federal Government’s drive for alternatives to oil export by more than 50 per cent. According to him, the facility will house about four different laboratories.

    “This laboratory is going to house about four different kinds of laboratories, which include the chemical, food and engineering laboratories and it is only when these laboratories are tested and accredited that we will stop taking our products to Ghana for testing,” he added.

     

    A catalogue of export rejections

    Nothing, perhaps, underscored Nigeria’s seeming helplessness in riding on the back of a vibrant non-oil sector to diversify the economy and create jobs than the recent use of sniper to preserve beans. The development, which went viral on social media, caught various standards regulatory agencies unawares. Save for moral suasion by the agencies, there has not been any concerted effort to trace and recall the batch of beans 2,2-dichlorovinyl dimethyl phosphate, otherwise marketed and known as Sniper, was used on.

    For instance, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, expressed displeasure at the use of chemicals for food preservation and fruit ripening, warning that it was detrimental to human health and the environment. Rather, he appealed to foodstuff and fruit sellers and other Nigerians to adopt natural means of preservation.

    Ogbeh, however, said his ministry would collaborate with the National Orientation Agency (NOA) and state ministries of agriculture to create more awareness on the need for citizens not to use chemicals for food preservation and fruit ripening.

    SON, National Agency for Food, Drug Administration and Control (NAFDAC), Consumer Protection Council (CPC), also condemned the practice, warning Nigerians against eating and buying foodstuffs and fruits preserved or ripened with chemicals.

    SON Director-General Osita Aboloma hailed the consumer, who reported a beans vendor for using a pesticide to preserve the produce on sale to the public.

    A statement signed by his Special Adviser and Head, Public Relations, Mr. Bola Fashina, said such individual and collective awareness by consumers was essential for standards implementation and enforcement.

    Aboloma urged Nigerians to take greater interest in their welfare by reporting to regulatory and security agencies any suspected unwholesome or life endangering products or practices.

    While NAFDAC advised that sale of grains or beans suspected to be preserved with chemicals be reported to the agency, the CPC, on its part, advised consumers to extensively parboil beans before consumption.

    CPC’s Director-General Mr. Babatunde Irukera added that consumers should make sufficient enquiries before buying beans. He said consumers should also sufficiently wash their food items before cooking.

    “Thorough washing of food items before consumption or preparation for consumption is a generally accepted method of protecting and promoting safety,” Irukera said, CPC recently confirmed by credible information that retailers, mostly in the open market, were using a pesticide to preserve beans.

    But a Lagos-based cashew exporter regretted that the nation’s standards regulatory authorities were caught napping. The exporter, who declined to have his name in print, said he expected the agencies to mobilise and move into some major markets across the country to take samples of beans, test them and possibly mop up any batch suspected to have been preserved with dangerous chemicals.

    He said although, it was not clear whether the beans said to be preserved with Sniper was meant for local consumption or for export, what was clear, however, was that no one knew how long the practice has been going on undetected and the exact quality of the product suspected to be preserved with chemicals that has gone into the market and consumed by unsuspecting Nigerians.

    The exporter lamented that despite the renewed focus on non-oil export to prepare Nigeria for life without oil, following the crisis in the oil market, the standards regulatory agencies are ill-prepared to help drive the process. He, however, said the agencies are grossly under-staffed and lack adequate funding to effectively monitor, test and certify products before export.

    According to the exporter, the failure to adequately fund the agencies and support them with enough trained personnel was responsible for the embarrassing setback Nigeria’s renewed push for non-oil export has continued to falter. He recalled, for instance, the European Union (EU) ban on the importation of Nigeria’s dried beans in June 2015.

    The EU had slammed a ban on Nigeria’s dried beans, citing the presence of high level of pesticides considered dangerous to human health. In June 2016, the EU extended the ban by another three years, citing the continued presence of dichlorvos (pesticide) in dried beans imported from Nigeria.

    This came after the Republic of Ireland returned five containers of beans exported from Nigeria. The products were said to have heaps of weevils.

    As if these were not enough to hurt Nigeria still struggling to boost non-oil export, the United States (US) banned Nigeria’s cocoa from its market. This was because the cocoa did not meet the US standard.

    Incidentally, beans and cocoa are among the 11 products the NEPC identified as having high financial value to replace oil. “The government is not serious,” the Founder, Centre for Cocoa Development Initiative, a Non-governmental Organisation (NGO), Mr. Robo Adhuze, charged.

    He said, for instance, that lack of seriousness by the Federal Produce Inspection Service (FPIS), the agency responsible for checking and certifying agro-allied products leaving the country, was robbing Nigeria of the benefits of a vibrant non-oil export-based economy.

    “Quality standards have moved from physical standards to biological standards, but FPIS appears not to be up to speed with this reality,” Adhuze said, recalling, for instance, that for some years, Ghana suffered the same fate as Nigeria’s when over 2, 000 metric tonnes of her cocoa beans were rejected by Japan.

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

    Adhuze said Ghana, a country famous for its very high quality cocoa beans, rose to the challenge by putting in place appropriate and adequate measures to guarantee the quality of her cocoa products for export.

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

  • Uneasy calm in insurance over states’ involvement

    The National Insurance Commission (NAICOM) has set next month for the commencement of the licensing of states to sell insurance products. The policy seeks to enforce compulsory insurance, deepen penetration and create jobs. But, the move has unsettled operators in the industry. Some of them, especially brokers, fear that states’ addition as insurance intermediaries may throw them out of business. OMOBOLA TOLU-KUSIMO reports.

    Operators in the insurance industry, especially brokers, may have been up in arms against the National Insurance Commission (NAICOM) over the industry’s regulator’s release of the guidelines for State Insurance Producers’ (SIP) policy operation, which grants states the licence to sell insurance products. This may have angered the brokers, who are apprehensive that the policy, which takes effect from January 1, next year, may throw them out of business.

    NAICOM appeared to have drawn the battle line with brokers and other insurance industry stakeholders when, last week, it released the guideline for the operation of the newly introduced SIP policy. The move, according to the Commission, was intended to enforce compulsory insurance and deepen its penetration in the country.

    Insurance penetration, according to experts,  is a measurement of insurance relative to the size and extent of a country. It is the extent of insurance services within an economy. Available records indicate 0.35 per cent penetration rate in Nigeria, while South Africa, a comparable economy, has a penetration rate of 15.3 per cent.

    To get NAICOM more worried about low insurance penetration, the brokers, despite generating 90 per cent of insurance businesses, are said to have offices mostly in the urban areas, neglecting the rural areas or the grassroots. This, in NAICOM’s thinking, meant that rural dwellers are denied access to insurance services.

    This reason, among others, must have been why, under the new SIP policy guideline released on November 20, 2018, states are allowed to sell the six compulsory insurance products in the country.

    They include Third Party Motor Insurance; Builders Liability; Occupiers; Health Care Professional Indemnity; Statutory Group Life Insurance and Workmen’s Compensation. They can also sell other insurance products subject to NAICOM’s approval.

    But as altruistic and patriotic as NAICOM’s policy may appear, the move obviously did not go down well with insurance brokers. Many of them feared that with the new arrangement, their days in the market may have been numbered.

    Their apprehension is perhaps, understandable. Before now, only registered brokers and agents are permitted by law to act as insurance intermediaries between the insuring public and insurers in the industry.

    Although, the Commission had opened more channels of distribution like bancaassurance, micro insurance, among others, to sell insurance to the people, the latest addition of states as intermediaries was seen by not a few brokers as an overkill.

    The brokers believe that beginning from January, next year, when states start selling insurance products across the country, their continued existence in the business will come under threat.

    The insurance brokers’ fears may have been exacerbated by the policy guideline, which permits the states to transact business only with approved insurance companies that have branches in the states.

    What this means is that brokers whose offices are mainly in the urban areas will lose out in states where they have no offices, let alone branches. To brokers, the fear of losing business in those states is real.

    Already, an Abuja-based Non-Governmental Organisation (NGO), Transparent Protection Ltd, has threatened to sue the Commission over the SIP policy. The solicitors to the NGO, Mike Onyeka, informed the Commission of its intention to sue via a letter titled: “Notice of Intention to Sue Pursuant to Section 51 of the National Insurance Commission Act, 1997.

    The letter dated December 3, 2018, read: “We refer to a recent publication by National Insurance Commission (The Commission) titled: “State Insurance Producer Operational Guidelines, 2018”, expected to come into effect on January 1, 2019.

    “The said guidelines are ultra vires the powers of the Commission as enshrined in the National Insurance Commission Act 1997 and Insurance Act, 2003, and we hereby give you notice of our client’s intention to sue the Commission…”

     

    Details of SIP policy

    NAICOM spokesman, Mr. Rasaaq Salami

    said the policy is expected to boost premium income generation and the sector’s contribution to the nation’s Gross Domestic Product (GDP).

    A breakdown of the guideline revealed that the SIP shall be the government agency so licensed by the Commission to provide intermediary services as defined by the guideline and remunerated in accordance with the provisions contained therein.

    The states are to employ insurance officers, who have a diploma certificate from the Chartered Insurance Institute of Nigeria or its equivalent to act as SIP on their behalf.

    Similarly, an undertaking shall be signed by an officer of the state government not below the rank of a Permanent Secretary that the state undertakes and agrees that the sum of N2 million shall be deducted from accrued commission to be earned by the licensed SIP before payment of commission is made to the coffers of the government.

    Under modes of operations, the SIP shall maintain a separate insurance unit or department for proper monitoring of the activities of the agency with the insurance officer reporting directly to the Chief Executive Officer of the licensed agency.

    The SIP shall enter into a memorandum of understanding (MoU) as may be approved by the Commission with approved insurance companies established in its jurisdiction for the purpose of the placement and management of insurance business.

    In the same vein, the SIP shall only transact insurance business with approved insurers, which list shall be approved from time to time by the Commission.

    The Commission further stated that the key responsibilities of the agent shall be to facilitate the enforcement of compulsory classes of insurance within the state jurisdiction by ensuring compliance

    The agent will also exercise on defaulters the power to penalise them according to the states laws; maintain proper records of individuals and organisations bound by the requirements of the compulsory classes of insurance and monitoring the compliance.

    Also, a licensed SIP shall have the authority to facilitate sale of the compulsory classes of insurance and for its principal, the state government. However, additional insurance products may only be distributed by the SIP upon approval of the Commission.

    While licensing and registration fee is N2 million, renewal fee- N1 million;  levy chargeable on SIP business shall be 1.00 per cent of gross commission.

    The guideline further stated that commission payable to SIP shall not exceed 75 per cent of the commission payable to insurance brokers.

    Payment of premium for insurance businesses conducted under the guidelines will be subject to the provisions of Section 50 (1) of Insurance Act 2003 on No-Premium, No-Cover and the various guidelines issued by the Commission where appropriate.

    Such premium payment, the guideline said, shall be made directly to the insurer or lead insurer as the case may be.

    The Commission warned that from the commencement of the guidelines, no SIP should function as an insurance intermediary unless a license has been granted to it by the Commission.

    It warned that violation of the provisions of the guidelines shall attract penalty in accordance with the provisions of the extant laws. All individuals and private organisations are, however, disqualified from obtaining a license as a SIP.

     

    NAICOM woos state governors

    The Commissioner for Insurance, Mohammed Kari, has been wooing the state governors, assuring them that the policy will boost their states’ Internally Generated Revenue (IGR).

    For instance, in his remarks during his visit to Kaduna State Governor, Mallam Nasir El’Rufai, Kari listed other benefits that would accrue to the states to include the provision of genuine insurance products to the government and people of the states.

    He also said the new insurance policy will create employment opportunities for indigenes of the states and free state governments from the burden of having to compensate victims from its scarce resources in the event of occurrence of mishaps or natural disasters.

    Kari said the Commission was seeking the support and collaboration of states in enforcing compliance with compulsory insurance while they establish a physical presence in the states.

    He said: “Notwithstanding Nigeria’s vast population, insurance had a mixture of myth, misunderstanding and ignorance defining it. Cultural issues and attitudes have continued to hinder the role of insurance in fast-tracking Nigeria’s economic growth.

    “In keying into the Federal Government’s Financial System Strategy, which envisions Nigeria of being a world’s top 20 economy by the year 2020, the Commission initiated the “Market Development and Restructuring Initiative” (MDRI) in 2009.”

    The Commissioner explained that the programme had, among  objectives, the promotion of public understanding of insurance, the building of confidence in the Nigerian insurance market, and the enforcement and monitoring of compulsory insurance in Nigeria in order to grow premium income for the benefit of the economy, thereby increasing insurance density and its contribution to GDP.

    “Having completed the first phase of execution, which was devoted to awareness creation across the six geopolitical zones, the Commission is now at the verge of kick-starting the second phase of the MDRI project, which is focused on implementation and enforcement of compulsory insurance across the country,” Kari said.

    The Commissioner added that he believed that the collaboration being sought with the states will open up several opportunities that will be to the benefit of the states as well as the industry when consummated. “We have developed a guideline that will make it easy for execution of the collaboration and partnership,” he stated.

    According to him, achieving a higher level of insurance penetration is the collective responsibility of all stakeholders. He, therefore, enjoined all to support this drive as the Commission forges ahead in creating an enabling and sustainable environment for insurance penetration through value creation.

    Blue Pearl Konsult Limited Managing Director, Mr. Chris Obi, said insurance firms are not doing enough to collect, study and work on customers’ pain points, because if they do, the impact of insurance business on the economy will not be so low.

    Speaking at the 2018 Almond Insurance Consumers’ Forum in Lagos, Obi said there are a host of other factors responsible for low penetration of insurance services in Nigeria. “Whatever they may be, we are face to face with a huge challenge and a huge opportunity, embedded, being reward for doing the right things that make all the difference.

    “On the long run, from research findings, insurance business is well correlated with economic growth in all countries, developed and developing. We have to agree Nigeria is grossly under insured in coverage and that alone is a great challenge and opportunity for national economic growth,” he said.

    According to Obi, it has long been known across the developed world that insurance contributes positively to growth and development. This, he said, is why developed countries always concern themselves with favourable policies, which create the best environment for insurance to operate, including making several insurance products mandatory for individuals, firms and government agencies.

    “The resulting massive fund, collected as premiums, explains why insurance commonly own banks, among other prime assets in developed countries. The reverse appears to be the case in Nigeria, where most banks own insurance companies. The advanced nations appreciate the positive link between insurance depth and economic growth,” Obi said.

    He added that the developed countries’ laws make allowance for even more penetration for the benefit of individuals, firms and government.

    “With insurance, an individual is assured continued enjoyment of his property even in the case of theft or material damage. With insurance, firms can engage in high risk investment and receive high returns mostly as a result of pooled risks. For government, insurance purchase mitigates the fear of natural disasters like fire, flood, among others,” the expert said.

     

    States show interest

    The Commission’s drive for insurance penetration through the policy may have hit the right chord with some states. Already, it has secured the consent for partnership from states such as  Ogun, Oyo and Kaduna.

    It was learnt from competent sources that some of the states have offered the Commission free plots of land to open branches to promote and deepen insurance in their respective states.

    For instance, in an address delivered by Oyo State Governor Senator Abiola Ajimobi at the opening ceremony of the Annual Education Seminar of the Chartered Insurance Institute of Nigeria, in Ibadan, he said insurance is beneficial to all.

    While announcing the state’s offer of a free plot of land to the Commission to build a branch, Ajimobi said the state has also decided to set up a Global Micro Insurance Agency, which will be private sector-driven and further demonstrate the state’s commitment to the insurance concept and its attendant values.

    Ajimobi said: “Insurance facilitates economic growth by investing premium funds, protecting individuals, industry and commerce, communities and nations from economic impact of losses, thus, removing the anxiety of losses.

    “In developed countries, many people and many companies use insurance services. For this reason, insurance is considered a major part of the service sector. Insurance also forms a vital part of the economy. In these countries, people trust insurance and therefore, insure all assets in insurance companies.

    “But in developing countries, insurance has not developed yet to its full potentials. This is largely due to problems such as misinformation about the industry and management deficiencies in insurance companies. But chief among these reasons is distrust of people for insurance.”

    The governor said it was, therefore, imperative for the industry and the practitioners to take practical steps towards addressing these issues. “There is the compelling need for the Institute to deal with the negative perception people have about insurance, some of which are being fuelled by primordial beliefs.

    “You also need to be deliberate in delivering quality service ….and superior value to your customers. I must add that adapting policies to the ever changing situations of your respective publics will surely advance the profession and its prospects nationwide. Also, high premium is a major disincentive for a lot of potential customers,” he added.

    Ajimobi further stated that it was necessary for the Institute to look for ways to introduce minimal premiums in order to make insurance products less elitist and more inclusive. “The more the merrier. We must also not overlook the menace of quack and fraudulent practitioners, who have given the industry a bad image,” he said.

    He said for them in the state, they appreciate the value of insurance and the need for their people to enjoy a certain degree of protection against the vagaries and vicissitudes of life. “Our government also understands the critical role that quality education plays in ensuring sustainable socio-economic development,” he said.

    The governor added that in these regards, the Oyo State Government has continued to make huge investment in the development of the health and education sectors. He said, for instance, it launched a N50 billion Healthcare Endowment Fund for the restoration and transformation of government hospitals and health centres in August last year.

    “At the same time, we established a Health Insurance Scheme, first in the country, which is an innovative strategy designed to ensure unfettered access to healthcare services by residents of the state, most especially the vulnerable class.

    “This scheme, which has recorded a huge success within a very short time, almost 60, 000 subscribers have already signed-on. It’s a system where contributors’ funds are pooled to deal with the financial burden of healthcare in times of need,” Ajimobi said.

    His Ogun State counterpart, Governor Ibikunle Amosun, has also embraced the Commission’s new SIP policy idea.

    While speaking at the 2018 Insurance Professionals’ Forum organised by the Chartered Insurance Institute of Nigeria (CIIN) in Abeokuta, Ogun State capital, Amosun assured that the state was ready to partner NAICOM and other industry operators.

    The governor, however, expressed hope that insurance professionals would find ways to position the industry to take its rightful place at the heart of the ongoing technological and economic re-engineering process.

    He stressed that as major players in the country’s economy, professionals must come up with robust ideas, improved and more practicable recommendations that can further entrench the industry as an effective cushion against probable shocks in the new non-oil economy.

    Amosun stated that without doubt, the public perception of insurance as a critical ingredient of not only business, but also life generally, was still an impediment to the growth of insurance practice in Nigeria.

    He, therefore, said it was imperative for the Institute to map out strategies to capture more businesses and more Nigerians into the insurance net.

     

    Operators kick

    Despite the Commission’s push to drive insurance penetration and the states governments’ commitments to partner it in this regard, operators, especially brokers, are not excited by the new policy. For instance, the President, Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Shola Tinubu affirmed that brokers are jittery over the policy.

    Tinubu said while it is premature for him to comment as the Council has called its relevant committee to look into the policy and come up with an official position, his members are already panicky. He said the policy will expose them to competition with states and other government agencies.

    His words: “Our fear majorly is the fact that the SIP guideline not only allows the states to sell compulsory insurance products, but also permits them to sell other insurance businesses if they so wish.

    “We are aware that the Commission is looking at how to deepen penetration. The Commissioner thinks that we need to get our distribution better and so if brokers are not expanding to the frontier, it has to do something. But whatever the Commission is trying to achieve should not kill other businesses.”

    Tinubu argued that making the states agents will not add anything more to the pool. “Maybe the Commission is thinking that perhaps if the state governments generate commission from the sales they make, they will be serious in entrenching insurance in their states. But I believe strongly that this is not the solution,” he emphasised.

    An insurer, who did not want his name in print, wondered how insurance companies with no branch in some states in the North for instance, will be bothered by the policy. He said insurers are more concerned with looking for money to raise their capital base than putting money to build new branches in the states.

    Another insurer accused the Commission of not seeking operators’ views before introducing the new policy guidelines. He said NAICOM failed to consider operators’ concerns before releasing the guideline.

    But, the President of the Association of Registered Insurance Agents (ARIAN), Mr. Ademola Fagbayi, thought otherwise. He said the association was in support of any industry initiative that will deepen insurance penetration and increase contribution to the GDP.

  • Tackling electricity crisis with biogas

    A gradual, but steady push to draw the right investments in biogas production may have taken the centre stage. Those promoting biogas which, essentially, is fuel generated from organic waste, are encouraged by the need to find an efficient, sustainable and cost-effective renewable energy solution to the nation’s perennial electricity crisis.

    To them, the biogas option is, perhaps, the much-needed tonic to resolve the twin challenge of disposal of livestock waste for smallholder farmers, and the provision of electricity to consumers in off-grid communities. They also believe that biogas is a cheaper and cleaner energy that can replace traditional gas and coal power.

    More importantly, with the capacity to generate $29.29 billion, about N4.54 trillion annually, the Chief Executive Officer, Avenam Links International Limited, Mrs. Nina Ani, said investment in biogas production has become a compelling proposition for farmers and innovators.

    She said yearly, agricultural, municipal, plant, sewage, green, food, and livestock wastes, among others, across the country, are estimated at 542.5 million tons and worth $29.29 billion about N4.54 trillion.

    Interestingly, existing and prospective agri-preneurs have seen the huge opportunity in biogas production. For instance, since she emerged thye first runner-up at the Total Nigeria Plc Africa Startupper Challenge 2016, the Team Lead, Zeta Prime Alternative Technologies, Miss Uzoma Eleke, has not looked back.

    The Total Nigeria Plc Africa Startupper Challenge 2016 provided the platform for Nigerian aspiring innovators to compete by showcasing their projects. Of 1,943 projects submitted and evaluated, three were selected, with Eleke as the first runner-up.

    Eleke has since been working on a prototype biogas project that can be used by smallholder farmers who are off grid. Already, she has successfully tested the first lab-scale prototype across major off-grid communities in Kuje and Bwari Area Councils of Abuja, the Federal Capital Territory (FCT). She is, today, one of the leading lights in the current push to explore opportunities in biogas.

    Eleke explained that her pilot anaerobic digester will produce methane (biogas) from fermented organic waste (biomass). Obviously, the budding entrepreneur, who is determined to become an electricity producer powered by biogas, has seen an opportunity in the construction of a centralised biogas plant that will utilise waste to produce energy and bio-fertiliser.

    Although funding is a major challenge in biogas production, Eleke and other entrepreneur who have in the biogas ring seem undeterred. Admitting that it is expensive to acquire biogas digesters, she, however, said investment in biogas is worth it in the long run.

    But Eleke is not the only proverbial early bird in what may have emerged as a promising investment opportunity in biogas. An agricultural firm, Ajima Farms, has already powered Rije Village in Kuje Area Council in Abuja, the Federal Capital Territory (FCT), with 20 kilowatts of electricity from biogas.

    The project, called Ajima Farms Biogas Digester Off Grid, was inaugurated by the United States African Development Foundation (USADF), led by its Regional Director, Tom Coogan, with project coordinator, Ajima Farms, Fatima Ademoh, and Reji Village Head, Ibrahim Kuyagwa.

    Ajima Farms was the inaugural winner of the USADF Off-Grid Energy Challenge, which was also conducted in eight other African countries. USADF gave a grant of $100,000 to Ajima Farms. The Foundation later expanded the funding with $50,000 for a second biogas project in Kuwizhi Village, in the same council area of the FCT.

    The grant was a shot in Ademoh’s arm. Exuding confidence, she explained that in the beginning, Ajima Farms was presented with two problems – the management of agricultural wastes and villages that were not connected to the national grid and could not access electricity.

    “We looked at how we can solve these problems. The wastes were not good for the health of the community; the gas released by these wastes into the atmosphere was 24 times more dangerous than carbon dioxide as a greenhouse gas,” she explained.

    According to Ademoh, the USADF-funded project had three components, which are energy generation, clean gas cooking solution and energy efficiency. “We have similar project at Kuwizhi with 10 kilowatts. That gave birth to the biogas project here in Rije village of Kuje Area Council,” she stated.

    She said Ajima Farms gathers the waste from the commercial farms around the village and also gets waste from the community. According to her, the village youths bring the wastes to site, secure and also operate the biogas generators.

    “There is a meter that regulates the consumption of power from the source of power supplied to consumers in the village through the pre-paid metering system we have, and is not the same with the power Distribution Companies,” she said.

    The budding agri-preneur was emphatic that with 45 per cent of Nigerians currently not connected to the national grid, which means they do not have access to electricity, investment in biogas remains a clean form of energy.

    She, therefore, called on government leverage on Public Private Partnership (PPP) to deploy this renewable energy option at a larger scale.

    The Nation learnt that since 2013, the USADF has funded over 70 entrepreneurs in nine countries, and has invested over $7.5 million in their enterprises.

    The West Africa Agricultural Productivity Programme (WAAPP-Nigeria) had also adopted Oriendu Village, a rural Community in Umuahia North Local Government Area of Abia State for the establishment of a biogas digester.

    The move, The Nation learnt, was in collaboration with the National Root Crops Research Institute (NRCRI), Umudike, Umuahia. It was meant to demonstrate to the adopted community alternative cheap source of energy for cooking and lighting in the rural areas, while also creating employment opportunities for residents.

    The NRCRI Director of Extension Services/WAAPP, Dr. Godwin Asumugha, said the technology is an alternative and cheap source of energy in rural areas, adding that already, more than 10 youths were being trained on how to establish the technology.

    He explained that the concept was introduced for developing, disseminating and evaluating technologies emanating from research institutes. The institutes are to conduct their demonstrations in the identified and adopted villages for adoption and impact, and impress on intending farmers and end users the viability of technologies being promoted.

    The NRCRI, WAAPP collaboration has been on since 2011. It was aimed at facilitating the dissemination of improved agricultural technologies, including biogas, amongst smallholder farmers.

    A small scale farmer in Ibulesoro Community in Ondo State, Mr. Adewale Zacchaeus, is one of those who have seized the opportunity in biogas. Five years ago, Zacchaeus had no light in his farm. He sold most of his produce as he couldn’t process them because of lack of electricity. His Ibulesoro Community was not connected to the national grid.

    Today, having embraced biogas, Zacchaeus story has changed. He now generates renewable electricity from cow dung. Thanks to the collaboration between the Federal College of Agriculture (FECA), Akure, Ondo State, and WAAPP-Nigeria in biogas production.

    While FECA used Zacchaeus’ place to demonstrate how to use cow dung to generate power with a modest biogas plant, WAAPP provided the much-need fund for the project. With the use of cow manure for the biogas technology, he and members of his family now enjoy free, but sustainable electricity all year round.

    In fact, on the strength of the FECA, WAAPP partnership, the entire Ibulesoro Community now uses animal wastes for electricity generation and cooking gas. The cow dung is sourced from various farms close by, with one cow producing over 30 gallons of manure a day.

    Before the project, Zacchaeus was spending several hours collecting wood for cooking and heating water in his farm. But the construction of a biogas plant in his home transformed his life and those of his family members. They are now freed from the daily drudgery, and they now have more time to spend on activities that generate income for the family.

    Zacchaeus has since moved a notch higher, becoming a skilled hand in the installation and maintaining of a biogas plant. Also, he is now being sought after by other members of the community wishing to install and maintain their biogas plants.

    The Provost, FECA, Dr. Samson Odedina, did not mince words when he said biogas technology offers farmers and rural dwellers the opportunity of generating electricity from animal waste, which can also be used as fertiliser. He said biogas plants are easy to build, operate, and maintain.

    He added that in countries dealing with changing rainfall patterns and off grid power challenges, biogas production can change the narrative and transform the lives of small farmers.

    Explaining how the innovative technology works, the provost said: “Biogas plants or digesters work by encouraging the breakdown of cow dung. The resulting methane gas can then be stored and burned as fuel.

    “Each day, the plant converts 200 kilogramme (kg) of dung a livestock produces into eight to 10 hours of power. It takes 30 kg of dung to generate one cubic meter of gas.  Livestock dung, comprising of excreta and urine is a vital, renewable and sustainable precursor for producing bio-fertiliser (farm yard manure) and biogas.”

    Odedina said the college was ready to assist farmers and households to use animal wastes for biogas production, adding that biogas production using cow dung will meet the kitchen energy requirements of most rural households in Nigeria.

     

    Electricity crisis makes biogas

    imperative

    To bring about efficient service delivery in Nigeria’s power sector, the Federal Government in November 2013 unbundled the defunct state-owned Power Holding Company of Nigeria (PHCN) into 18 successor companies and subsequently handed them over to private investors under a privatisation excercise.

    The Bureau of Public Enterprises (BPE), which midwifed the process, projected that the private investors who bought 60 per cent shares in the power assets would increase electricity generation capacity to 20,000 megawatts by 2018.

    In a Service Level Agreement (SLA) with the BPE, the 11 electricity distribution companies (DisCos) also agreed to roll out meters to ensure that customers are no longer exploited under the estimated billing methodology.

    The electricity generation companies (GenCos), on their part, said they will turn around the hydro power plants and other gas-fired plants and also expand their capacity to generate more power supply above 5, 000 megawatts (mw).

    But, five years down the line, none of these has happened. Rather than enjoy any significant improvement in electricity supply, Nigeria’s electricity generation capacity has worsened in recent years, setting the authorities and the investors on the war path with angry consumers.

    The gap between the country’s energy needs and current energy provision has continued to widen, as a country rich in oil and gas as well as hydro and solar resources currently generates between 3, 000 MW and 4,000MW.

    According to the US Agency for International Development, this generation capacity is less than a third of what is required to supply electricity to more than 190 million Nigerians.

    The crisis in the power sector, which appears to have defied solution, according to experts, has made the use of biogas a compelling proposition. The technology’s cheaper, cleaner and relatively easy operation and maintenance may have also added to its attraction.

    Besides, in the last 10 years, there have been increases in the demand for fuel in terms of transportation and power generation. This has so far been met largely from the nation’s stock of fossil fuel such as crude oil, which is finite in nature.

    Besides, fossil fuels are not environmentally friendly and are also expensive. This is why the use of alternative and more environmentally-friendly energy sources such as biogas is being advocated.

     

    How biogas operates

    Technically, the process of biogas generation, known as anaerobic digestion (AD), provides clean gaseous fuel for cooking and lighting. The digested slurry from biogas plants is used as enriched bio-manure to supplement the use of chemical fertiliser.

    According to experts, biogas systems take organic material such as animal dung and kitchen waste into an air-tight tank, where bacteria break down the material and release biogas – a mixture of mainly methane with some carbon dioxide.

    The biogas can be burned as fuel for cooking or other purposes, and the solid residue can be used as organic compost.

    The technology is believed to improve sanitation in villages and semi-urban areas by linking sanitary toilets with biogas plants. A family type biogas plant generates biogas from organic substances such as cattle dung and other bio-degradable materials such as biomass from farms, gardens, kitchens and night soil wastes.

    According to experts, using biogas saves farmers two or three hours per day from collecting wood and cooking. They said the avoidance of smoke from wood is a huge benefit to health and welfare, because of reduced incidence of respiratory and eye-related problems.

    Each biogas plant saves about four tonnes/year of CO2 (water) by replacing the use of wood. More importantly perhaps, the output residue from a biogas plant can be used directly on nearby farm as a fertiliser.

    Interestingly, Odedina said the college has developed capacities to help Nigerians set up family type biogas plants mainly for rural and semi-urban/households. He said the college trains farmers and students to use biogas technology to generate methane gas from cow dung and transfer it into cooking fuel.

    The plants, according to him, are well-designed and consist of an underground brick-built vessel with a ground level inlet for new feedstock and outlets for gas and residue. All materials used are available locally, except for the gas burners and High-density Polyethylene (HDPE) piping, which come from abroad.

    Odedina reiterated that sustainable energy through biogas could drive agricultural transformation. He said by implementing the cow dung energy project for farmers, the college envisaged a transformed agric industry that meets the needs of the rural and urban poor, small holder farmers.

    The Managing Director of Abuja-based consultancy JMSF, Richard Ogundele, said cow dung is the most important source of bio-fertiliser that can be used for generating energy. According to him, operators of farm ranches can invest in a machine called a digester that collects the cow manure into a pile.

    The mechanism is simple. Waste vegetables from the local grocery store, like lettuce, are added to the digester and the contents are mixed. The mixture serves as a good place for micro organisms to brew and the process produces methane gas.

    The methane gas is collected into an engine and converted into power. This power can then be used to heat homes and produce electricity. Ogundele said with large livestock operations growing in number through ranches, each produces thousands of pounds of animal wastes daily.

    With a lot of farms off grid, Ogundele said farmers can invest in biogas production. He pointed out that although, the technology is relatively scarcely used around the country, those that have invested in the digester are on their way to becoming self-sufficient in electricity supply and usage.

    He said apart from removing the need to pay electricity bills, the system protects the households from the problems of indoor air pollution, while also saving the cost of refilling LPG cylinders.

     

    Job creation capacity

    Odedina said biogas production can also create jobs in the farming communities. He said youths could be trained to set up and maintain biogas systems in their communities thereby reducing the country’s high unemployment rate particularly among the youths.

    He said the college would be ready to embrace more partnerships with organisations and experts within the renewable energy industry, donors and development partners to bring sustainable energy solutions to the agric sector, adding that the college will ride on the crest of  the knowledge to train Nigerians in the renewable energy industry.

    Farmers are also said to be partnering with organisations to implement projects to provide sustainable energy solutions for the agric sector. The projects include solar photovoltaic (PV), biomass energy, clean cook stoves, biogas, small hydro energy solutions for irrigation, food processing, agro-processing, and food production.

    But as attractive and promising as biogas may have become, experts say that government must address the issues of policy and funding, which, according to them, are the two major challenges inhibiting the right investments in biogas production.

  • UBA staff across Africa give back to communities

    UBA Foundation, the corporate social responsibility arm of the United Bank for Africa (UBA) Plc, has launched its Each One, Teach One initiative, hosting a huge impact day in Nigeria and across all its subsidiaries in Africa.

    The UBA Community Service presents an opportunity for UBA staff members to give a little of their time and skills to their communities. All across the continent, staff members of the pan- African bank were seen within their communities, teaching and assisting the less privileged.

    UBA Group Managing Director,  Kennedy Uzoka, who attended the event in Lagos, Nigeria,  expressed his excitement over the initiative, adding that as a corporate entity, UBA, through the Foundation decided to give back as a family, starting by impacting knowledge to students and participants.

    Uzoka, who is also the Chairman, UBA Foundation, said: “Our goal with this initiative is to help the under privileged and young children learn vocational skills that will assist them along the path to financial freedom as they start businesses of their own. We have therefore, created a platform to encourage people who have various skills and talents to pass this on to the younger generation.

    Continuing, he said: “Interestingly, we have over 15,000 staff across the UBA network and we know that if each of them can teach two people, then a lot of people would be impacted with a lot of skills within a very short period.’’

    After engaging in a group reading session with the students, Uzoka seized the opportunity of the event to educate the youth and the students present, on Financial Literacy, and the gains of savings and investing from a young age.

    “As a bank, we want students to inculcate the habit of savings, especially for the rainy day. It is important that you are cautious about the future, because nothing is guaranteed. Therefore, ensure that you bear this in mind when you receive your allowance no matter how little,’’ Uzoka said to the students who filled the Onikan Community centre in Lagos.

    The Chief Executive Officer, UBA Foundation, Mrs. Bola Atta, who threw more light on the initiative, stated that it is aimed at helping to impact lives positively and in a very meaningful way.