The Nation Newspaper

Category: Issues

  • A nation and its fuel saga

    Despite being Africa’s largest oil producer, Nigeria imports petroleum products. According to the Nigerian National Petroleum Corporation (NNPC), the country spent N2.068 trillion on fuel importation between January and September 2017. Corruption, importation hiccups and infrastructure challenges, among others, have combined to cause products shortage. Energy Correspondent AKINOLA AJIBADE examines the intricacies of fuel supply.

    The problem has defied solution. Despite widely reported efforts by the authorities, industry operators and stakeholders to find lasting solution to the lingering crisis in the downstream sector of the nation’s oil and gas industry, where protracted fuel scarcity has continued to unleash untold hardship on Nigerians, it has refused to abate. Rather than do so, fuel scarcity has emerged, arguably, as Africa’s largest oil producer’s worst nightmare.

    Since December last year when the latest round of fuel scarcity hit the country, robbing Nigerians of a blissful, hitch free yuletide, the situation has yet to improve, months after. Checks by The Nation revealed that the product is still largely unavailable in some parts of the country. Fuel queues have yet to disappear completely from some service stations across the country, particularly where the product is being sold at the regulated price of N145 per litre.

    Findings by The Nation showed that petrol, also known as Premium Motor Spirit (PMS), is still being sold at between N165 to N180 per litre in some parts of Lagos, Nigeria’s commercial capital. In the southeast, particularly Owerri, the Imo State capital, the products is being sold for as much as between N200 per litre in some filling stations, a development, which lent credence to the fact that the product is still unavailable, at least, in sufficient quantity.

    Curiously, the scarcity of the product and its attendant high cost have persisted despite widely reported interventions by the Nigerian National Petroleum Corporation (NNPC). Its Group General Manager, Public Affairs, Udu Ughamadu, has never stopped telling angry Nigerians that it has been supplying more fuel with a view to reducing the burden the situation has foisted on consumers across the country.

    For instance, he said the country imported fuel worth $4.6 billion in December last year in order to ensure that enough fuel was distributed in the country. According to him, the December intervention helped the government to ascertain the level of fuel needed in the country during emergency period.

    Ughamadu said the country consumes between 39 to 40 million litres of fuel per day and loses N774million daily to  activities who smuggle petroleum prodcuts  to neighnouring countries, in order to make more money.     Although, he stressed that the government has ensured that the supply go round the country in order to prevent scarcity, the expected succour has, however, refused to come the way of Nigerians as the problem has persisted.

    The attendant anger and frustration may have forced the NNPC to dish out several reasons the Africa’s largest oil producer has remained yoked by protracted fuel scarcity. It listed some of the factors responsible for the problem as rising cost of importation, diversion and delay in clearing fuel cargoes at the ports, among others.

    According to Ughamadu, NNPC remains the sole importer of fuel into the country, a situation, which he said was a heavy burden on NNPC’s shrinking purse. He said, for instance, that NNPC imports fuel at N181 per litre and sells the product at N145 per litre. “At N181 per litre of fuel, the Corporation is paying subsidies on fuel that it is importing into the country,” he complained.

    “It is not convenient for NNPC to import fuel at N181. You can see that the difference between the landing cost of N181 per litre and the official pump price of N145 per litter is N36.

    “If the Corporation, which is owned by the government is not comfortable with the rising cost of importation of fuel, how much more the  private operators, especially marketers that are complaining of not having enough funds to import fuel into the country?”he asked.

    The Nation, however, learnt that the problem goes beyond cost of importation. According to the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, dearth of infrastructure is at the core of the problem. To him,  the lingering fuel scarcity was caused by lack of sufficient fuel reserves.

    He said with sufficient fuel reserves, the government could have a fall back option to supply fuel in the event that there is fuel scarcity in the country. He also said the speed at which cargoes were cleared at the ports was low, a development which affects distribution of  the product across the country, coupled with the decision by some marketers to divert petroleum products to neighboring countries.

    Speaking at a meeting of the joint committee of the Senate and House of Representatives, recently, Kachikwu blamed the fuel scarcity on saboteurs, adding that they have been undermining government’s efforts  to improve fuel supply through imposing illegal charges on truck owners.

    “The causes were: first, diversion was very key and second, there were logistics issues. Once those diversions began Apapa Wharf was a problem to be able to move things due to bad roads. Lack of sufficient reserve in our system also made us unable to respond to the supply gap arising largely from the fact that private sector pulled out from supply,”he said.

    He continued: “There has been a loose enforcement on diversion of fuel in the country and we have not been able to police our depots adequately.” The Minister also added that the disparity in the landing cost has prevented private marketers from importing petroleum into the country.

     

    Scarcity self-inflicted, say stakeholders

    While the Minister’s and the NNPC’s explanations may sound plausible, a common thread that runs through them is perhaps, an attempt to ignore the more fundamental challenge of lack of political will by successive governments to holistically address the country’s lack of local refining capacity. The thinking of not a few stakeholders, particularly marketers, is that the lingering fuel crisis is a subset of the problems in the nation’s oil & gas industry.

    For instance, the Secretary of Major Oil Marketers Association of Nigeria (MOMAN), Mr. Femi Olawore, did not mince words when he said fuel scarcity persists in the country because the Federal Government has failed to resolve issues that border on the operation of the refineries.

    According to him, the four refineries put together produce below 100 per cent, despite the decision by the Federal Government to fix them. He was specific that efforts by the governments to rehabilitate the refineries, coupled with huge some of money sunk into them, have yielded little efforts as the refineries have failed to process enough crude to serve the country’s needs.

    Independent Petroleum Marketers Association of Nigeria (IPMAN), Chairman in Southwest,  Alhaji Debo Ahmed, agreed with Olawore. He described the refineries’ condition as worrisome. According to him, the refineries produce below capacity, which made the government to resort to fuel importation.

    “The four state-owned refineries namely, Warri, Port Harcourt 1&2 and Kaduna refineries are partially operating. They operate between 30 per cent to 40 per cent and sometimes 50 per cent, and these figures are too small for the country to achieve fuel sufficiency,”Ahmed pointed out.

    The IPMAN Chairman was emphatic that “fuel scarcity will continue to exist in Nigeria as long as the Federal Government fails to put in place measures to solve the problems facing the refineries once and for all”.

    He also said the cost of importing fuel into the country was high, adding that the development has made it impossible for the marketers to have fuel in their outlets. He told The Nation that marketers are not comfortable with the rising cost of importation of fuel into the country.

    The disparity in the price at which fuel is being brought into the country, he said, was as a result of the needs and destinations of the refiners abroad. “The refining companies abroad have different prices and often times, the prices are determined by the capacities and locations of their plants.

    “If a refinery offers a litre of fuel at the rate of $350, another firm may charge lesser amount to refine fuel, while the price may be higher in another firm. By the time marketers add other costs to the cost of refining the product, the cost becomes unaffordable to the marketers,”he said.

    Ahmed also explained that the problems in the industry are inter-dependent because they relate to one another. For instance, he said if a problem exists in the exploration arm of the industry it has cumulative effects on other arms such as production, refining and distribution of petroleum by-products such as petrol, diesel and kerosene.

    Ejigbo Satellite Depot IPMAN Chairman, Alhaji Alanamu Balogun said the government has cut down fuel supplies to marketers, following the scarcity of fuel, which gripped the country during the Christmas and New Year period.

    He said the NNPC could not afford to supply the product in sufficient quantity to meet the needs of over 170 million Nigerians. According to him, getting fuel to buy has become a serious problem, especially in the Northern and Eastern parts of the country. This is because the NNPC has drastically reduced the supply of fuel to the marketers, due to scarcity. “This explains why many people cannot, as usual, go to petrol stations and get the product easily,” he said.

    Also, Executive Secretary, Depot and Petroleum Marketers Association of Nigeria (DAPMAN), Mr. Femi Adewole, said the removal of subsidy and failure by the Federal Government to pay the subsidy arrears owed marketers were responsible for the fuel scarcity, which gripped the country in December 2017 and extended to early 2018.

    He said the government owed marketers $2 billion, about N500 billion in subsidy arrears. He accused government of hurting the marketers by refusing to pay the subsidies owed them, adding that marketers are unable to import fuel because of government’s failure to pay the subsidies.

    Adewole said: “We (marketers) have made our submission to the government that the fuel scarcity was as a result of removal of subsidies, non-payment of the arrears and the price of crude that remained in December following the hurricane Katrina in the month of September-October. As a result, prices of crude went up and marketers lost the ability to import fuel at N145 per litre.”

    Reliable industry sources confirmed to The Nation that the Federal Government indeed, moved to sort out issues around payment of subsidies with a view to reducing the burdens of importation of fuel on marketers, especially those that belong to MOMAN and DAPMAN).

    The government was said to have fulfilled its own side of the bargain with regards to an agreement reached with the marketers to pay them subsidies. However, the government at a point stopped the payment, following the discovery that the subsidies were allegedly being diverted to other uses by some marketers. This made the affected marketers to stop importation of fuel.

     

    Obsolete facilities

    are pains in the neck

    Balogun added that apart from the fact that the demand for fuel outweighs supply, there is also the problem of obsolete facilities at depots, as many of them cannot boast of enough tanks to store products supplied to them by the NNPC.

    His words: “Fuel scarcity persists because NNPC cannot supply enough fuel to the depots because the facilities are moribund. Imagine a situation whereby marketers are coming from Abuja, Ilorin, Ibadan, Ore and other depots to load in Ejigbo.

    “Before, Ejigbo depot was loading 120 trucks or more a day. But the depot is now loading below 60 trucks a day. Out of the 60 trucks, the depot will give Ore depot two or three trucks, give Ibadan two trucks and other depots around.”

    He said at the end of the day, Lagos is left with 30 or 40 trucks, which according to him, are not enough to meet the consumers’ needs.

     

    Consumers groan

    As the scarcity persists, some consumers have been screaming blue murder, describing the situation as a national embarrassment. For instance, a commercial bus driver, Mr. Sunday Ojuolape, lamented how he struggled to get fuel for his 18-seater bus.

    Ojuolape, a resident of Abule-Egba, a Lagos surburb, said the fuel situations have not improved despite assurances by the authorities in the Ministry and the NNPC that the scarcity was being addressed. He said many of the fuel stations are complaining of not having enough fuel in their dumps.

    The commercial bus driver kicked that because of the product scarcity, he had to pay more to get fuel.  “And to make matters worse, any attempts to pass the burden on to passengers is being resisted, leading to constant quarrels,”he said.

    A marketer in Ilorin, who declined to be mentioned, said fuel is scarce in the ancient city. He said it has become difficult for him and his colleagues to get enough fuel to sell, adding that the issue is making it difficult for their business to survive.

     

    Importation digs

    hole in govt’s purse

    Beyond consumers’ lamentations, the huge capital flight caused by unbridled importation of petroleum products, especially fuel, has remained a serious blight on government’s efforts to turn the economy around.

    According to Kachikwu, Nigeria spent a whopping N2.068 trillion on the importation of petroleum products within a nine-month period, from January to September 2017, rising by 14.32 per cent from N1.809 trillion recorded in the same period in 2016.

    According to data obtained from the National Bureau of Statistics (NBS) foreign trade statistics for third quarter 2017, of the total petroleum products imported, N1.541 trillion was spent on PMS importation.

    A breakdown of the country’s petroleum products importation on a quarter-on-quarter basis showed that N757.397 billion, N707.475 billion and N602.889 billion were spent on the importation of the commodities in the first, second and third quarters respectively, compared to N434.39 billion, N598.36 billion and N776.947 billion recorded in the first, second and third quarters of 2016 respectively.

    NBS said in the third quarter of 2017 alone, the country spent N476.755 billion on petrol importation, representing 20.30 per cent of total imports in the same period, while gas oil importation accounted for 2.42 per cent of the country’s total importation with N56.752 billion.

    Nigeria produces about 1.8 million barrels of oil daily, but imports an average of between 2 billion litres to 4.2 billion litres of fuel monthly. The thinking is that if the huge petroleum products import bill is halted by fixing the refineries, the money could be channelled into fixing infrastructure, which has been a pain in the neck of operators in various sectors of the economy.

     

    Way forward

    Apart from the need to urgently fix the refineries, not a few industry stakeholders have called for full deregulation of the downstream sector of the oil & gas industry. Some of them, who spoke with The Nation, argued that deregulation brings more players into the production, exploration, refining and trading of petroleum products.

    For instance, Integrated Oil and Gas Limited Chairman, Capt. Emmanuel Ihenacho (rtd.), said deregulation will have the long-term effect of making fuel available in the country. He said any attempt by the Federal Government to fully deregulate the down-sub-sector of the oil and gas industry will revolutionise the industry by opening the door for more players.

    He, however, applauded the government for allowing private investors to invest in refinery operations, adding that the idea would help in improving domestic consumption of fuel as well as bringing more revenue to the government.

    “Dangote Petrochemical Refineries is coming on stream in 2019 to refine 650,000 barrels of crude per day. This is not only huge, but it will also afford Nigeria the opportunity to export processed petroleum products to neighbouring countries. The development will in no distance future help the country achieve self sufficiency in fuel usage,” Ihenacho said.

    He also expressed optimism that the establishment of modular refineries will re-invigorate the sub-sector, as it is going to open door for more operators in that segment of the industry.

    “By allowing people to be licensed as modular refinery operators, the government is trying to improve on the quality and volume of refined petroleum products in the country,” Ihenacho pointed out, adding that the initiative will also galvanise other economic activities in the country.

    Ahmed could not agree less. He said modular refineries are the way out of the lingering fuel scarcity in the country. He, therefore, urged the government to bring more investors into modular refinery activities.

    Sound recommendations, no doubt, but it remains to be seen how government responds to them. What is clear, however, is that until and unless government summons the political will to address these issues, the problem of fuel scarcity in the country will remain.

  • Kia records 195,962 sales in February

    Kia Motors Corporation announced its February 2018 global sales figures for passenger cars, recreational vehicles (RVs) and commercial vehicles, recording a total of 195,962 units sold, decreasing 9.1 per cent from 2017.

    In February, sales in Korea totaled 37,005 units, representing a decrease of 5.5 per cent compared with the same month last year.

    The company’s overseas sales also dropped by 9.9 per cent compared to the previous year, posting 158,957 units.

    The decline in both Korea and overseas markets were largely due to the timing difference of the Lunar New Year (which fell in February 2018 vs. January 2017)

    Kia’s best-selling model in the overseas markets during February 2018 was the Sportage compact SUV with 32,845 units sold. The Rio was the second best seller with 30,183 units sold, followed by the K3 compact sedan (known as ‘Forte’ in some markets) with 21,961 units sold.

    The company plans to gain new momentum by revealing All-New Ceed, Ceed Sportswagon, and upgraded Optima at 2018 Geneva International Motor Show.

  • Nigeria’s start-up system: Challenges, opportunities

    Nigeria’s start-up system: Challenges, opportunities

    The Nigerian start-up ecosystem has seen tremendous growth with the emergence of business incubators and technology hubs. DANIEL ESSIET looks at its “achievements and challenges.

    Technically-grounded entrepreneurs are transforming lives. Whether in the fields of e-commerce, virtual reality, or fintech, tech-entrepreneurs have disrupted the way Nigerians communicate, make purchases, order food and commute. Most of these changes are for the better.

    When award-winning social entrepreneurs,  Seun Onigbinde and Joseph Agunbiade,  birthed  BudgIT, a civic  organisation  in  2011, they disrupted the way Nigerians  communicated with the nation’s budget. As  tech entrepreneurs they knew how to harness technology to solve societal problems.

    BudgIT employed a wide range of technology-based tools to simplify the  budget and public expenditure for citizens, consequently raising standards of transparency and accountability in  government.

    Nigerians were enlightened on their rights to access and understand public budgets and demand that budgets be efficiently implemented for the good of the people.

    To support this, they developed Tracka, a  project-tracking tool that allows citizens monitor developmental projects in their communities. Since BudgIT online platform came into existence, the change has been for the better.

    But the exciting journey started in Yaba, Lagos State, at Co-creation Hub (CcHUB) Nigeria’s  first Tech-In Governance competition, when  an open call was made for Nigerians to submit creative ideas that had potential to transform citizen participation in governance.

    At the time, co-founder of BudgIT, Onigbinde, worked as a strategy analyst at First Bank Nigeria. He made a last minute decision to enter the competition with an idea to transform public sector data, especially the budget, to a more engaging format.

    Onigbinde met and was paired with his co-founder, Joseph Agunbiade, at the competition. After a brief pause following the Tech-in Governance competition, Onigbinde and Agunbiade set to work on the first iteration of the platform to showcase at CcHUB’s launch in September 2011.

    Onigbinde recalled that “it was a funny black website with just three circles and a bit shameful, but they were encouraged by the CcHUB team that it was good enough to start”.

    BudgIT joined CcHUB’s pre-incubation programme and officially launched in September 2011, with a press launch set up for them by CcHUB.

    BudgIT’s growth skyrocketed during the Occupy Nigeria movement in January 2012. It was a time that saw Nigerians interested in government spending. It was a key opportunity that BudgIT seized by creating the “Budget cut” application.

    According to Onigbinde, the CcHUB community played a big role in the app’s creation. “We leveraged the CcHub community because we did not have a tech team to build the app,” said Onigbinde. The application attracted 4,000 users in 60hours and BudgIT’s followership grew in large numbers within a short time. They became the fact checker of Nigeria’s budget on social media and the success of the app remains one of BudgIT’s key achievements.

    In the course of its three years of operation,     the BudgIT website recorded one million hits with over 250,000 unique visitors in 2014.     More than 4,000 data requests from online visitors were processed in 2014.    BudgIT has gone on to raise over $500,000 from various foundations/organisations such as Indigo Trust, OSIWA, MacArthur Foundation, United States Department, amongst others. It recently received a $400,000 investment from Omidyar Network.

    Staff numbers increased from the original two co-founders to 14 as at December 2014. In addition, an Advisory board has been set up consisting of six members, including co-founder, CcHUB, Bosun Tijani. BudgIT is now independently located on the 3rd Floor, 13 Hughes Street, Alagomeji Junction, Yaba, Lagos.

    They have graduated from CC hub’s incubation programme. It is one of the numerous success stories of business incubation movement. Onigbinde is one of hundreds of tech entrepreneurs getting a boost to change the social scene  with entrepreneurial support.

    In five years, more than 10 business incubators have emerged all over the country to help entrepreneurs develop entrepreneurial skills and provide tailored support for early-stage, high-growth businesses and ideas.  These include  Fate Foundation incubator, Enspire Hub,  Blue Hub,  StoneBricks Hub, CoLab, nHub, Ventures Platform, Civic Innovation Lab, BD Hub, Tangent Eco-Innovation Hub, Founders Hub,  Start Innovation Hub, Roothub, OlotuSquare, Delta State Innovation Hub, Focus Hub, Strategic Hub, ROAR Nigeria Hub, Wennovation Hub, iDEA Hub, ,Leadpath, Passion incubator, Impact Hub Lagos, Hebron Startup Labs and Project Enable Africa Hub.

    As a result of their activities, Nigeria is among the top five startup communities in Africa.  The number of startups they are nurturing is increasing year on year.

    From mobile applications to e-commerce platforms, tech entrepreneurs are looking to digitise traditional business operations. These success stories were  not possible without two important skill sets — entrepreneurial business acumen and technical expertise. These are what business incubators provide incubates.

    CC hub is among incubators and technology hubs creating a healthy startup ecosystem. It is Nigeria’s first open living lab and pre-incubation space designed to be a multi-functional, multi-purpose space where work to catalyse creative social tech ventures take place.

    Co-founder and Chief Executive of Co-Creation Hub Nigeria (CcHUB), ‘Bosun Tijani, said the hub is a place for technologists, social entrepreneurs, government, tech companies, impact investors and hackers in and around Lagos to co-create new solutions to the many social problems.

    Incubates at CC HUB and other business incubators across the country bring in plenty of raw business ideas. While in the incubators, they are accorded opportunities to share their plans and gain insight on how those ideas can be turned into commercial ventures.

    There, they are connected with business people, where they are guided in the stages of starting a real business, as opposed to learning about it from a textbook.

    In the course, incubates identify problems and explore solutions in relation to business. Most of the incubators provide acceleration, incubation, mentoring, meet up, entrepreneur cafés, pitch contests and demo day.

    One incubator making waves is Start Innovation Hub based in Uyo, Akwa Ibom State capital. Its Founder/CEO, Hanson Johnson, said business incubation centres provide environment where startups are nurtured, ideas are developed and helped to get to market faster.

    His words: “They provide a real sense of community, allowing companies in the same or relevant fields to cluster, network and even collaborate. Incubators provide access to mentorship, funds, education and training resources in various technology and business field of interest.

    “A successful entrepreneur never stops learning and an incubation centre offers access to learning opportunities through workshops, bootcamps, hackathons and conferences. You also have access to a network of industry leaders and business experts that you may not have access to as a startup founder working alone. These industry leaders may offer one-on-one coaching and mentorship that can prove invaluable to brand new startup founders dealing with the rigours of business startup and ownership for the first time.

    “Joining an incubation centre gives you an opportunity to meet other entrepreneurs, share ideas and collaborate on similar projects. It also provides a platform to learn from each other’s mistakes and achievements for a better future.”

    He said through the incubator, aspiring entrepreneurs and tech startups are given an opportunity to present their business ideas or solutions to the management, which can help them to pilot their solutions and ready them for market commercialisation.

    Niger State Industrial Parks Development Agency Director-General, Dr. Abdulmalik Ndagi, whose agency is solely responsible for the development of industrial park and industrial clusters in the state, said clustering entrepreneurs  within an incubator creates an entrepreneurial ecosystem of networks and ready pool of technically-grounded talents.

    An expert on business incubation, Ndagi, said   full-service incubators provide their clients flexible space and affordable rents, shared business services, business development training and coaching, financial assistance, and the opportunity to network with peers.

    According to him, incubators are responsible for providing support across a startup’s life cycle, while accelerators are focused more on growth and acceleration of the startup.

    Particularly, for those entrepreneurs staying within government technology incubators, Ndagi said incubates benefit from governmental support for innovation.

    According to Ndagi, the value of local entrepreneurs and young start-ups is also well-recognised by enterprises. That is why a lot of big corporates  are setting up funds to nurture entrepreneurs.

    West African startup specialist, Rich Tanksley, said business incubation centres are having impact on the digital innovation and entrepreneurship ecosystem in Nigeria. He said: “They are helping to build an ecosystem and enabling environment, but it’s up to the individual entrepreneurs still to grow their businesses.”

    For Co-ordinator, Business and Alumni Support Services, Fate Foundation, Fatai Olayemi, the logic behind incubators is to help inexperienced entrepreneurs by providing mentoring, business advice, networking opportunities, facilities and funding they need to get their businesses off the ground.

    According to him, most incubators use funding as a success metric, which is a somewhat flawed criterion.  He explained that the challenge of most startups is not funding, but management skills, adding that the goal of incubation should be   to build organically grown and self-sustaining businesses without so much emphasis on financing.

     

    Services of business incubators and technology  hubs

    In Nigeria, business incubators and  technology hubs  take a variety of forms and provide different types and levels of support.

    On the whole, they can be great places to help an entrepreneur establish and grow an emerging business. While majority of them are basically incubators providing support resources and services to businesses just getting off the ground including coaching, shared services and facilities, free or subsidised space and networking opportunities, there is a new group known as  accelerators,  which  focus on supporting the rapid growth of early-stage businesses through capital, coaching, networking and other support.

     

    Shared business services

    According to experts, what a full-service incubator offers is a collection of shared business services, which represents the kind of resource pooling that makes incubators a unique and effective business creation tool. They generally include reception and telephone answering; access to a copy machine, facilities for conferences and meetings; security.

     

    Business development assistance

    All the functioning incubators offer seminars and workshops at little or no cost that include training in skills or core competencies necessary for successful entrepreneurship: bookkeeping, marketing, strategy, computer information systems, legal considerations, and human resources management.   Business development assistance is also provided via mentoring and coaching.

    CC hub supports incubate entrepreneurs with top-quality programmes based on evidence-based entrepreneurship. Their programmes are designed to help entrepreneurs develop a scalable business model and accelerate growth in the marketplace.

     

    Financial assistance

    Most of the incubators help new businesses develop a business plan attractive to traditional lenders and coach them on how to present it. Beyond this, they promote privately managed funds focused on providing emerging companies the capital, mentoring and connections to help them grow.

     

    Networking

    Perhaps the simplest and most beneficial form of networking is the exchange of neighbourly advice and the sharing of information and knowledge among incubator tenants.

     

    Mentoring

    Most people, who run incubators have never started or run a business, so having a mentor is very important in creating perspective, inspiration and raw guidance. Incubators nurture aspiring entrepreneurs and start-up businesses by providing collaborative advisory, mentoring and technical assistance.

     

    Skills Development

    The mission of business incubators is to inspire entrepreneurs and help them turn their big ideas into innovative businesses. Inside such  facilities are  collaborative workspace for knowledge-sharing, and learning. The majority of incubators have a speaker series to support this. While there are skills development events, incubates learn new skills naturally.

     

    World Bank

    The World infoDev helps innovative ventures and facilitates a global network of business innovation centres that assist early-stage entrepreneurs—offering mentoring, facilities, and seed funding in the mobile innovation, climate technology and agribusiness sectors.

    The Acting  Head of Department, Business Administration, Faculty of Management and Social Sciences, Ibrahim Badamasi Babangida University, Lapai, Dr.  Abdulwaheed Salihu, said World Bank InfoDev  training for would-be incubation managers, which  held in Minna, Niger State,  will  enhance the skills of business incubation practitioners.

     

    Challenges

    Most business incubators face a number of challenges. Although tasked with developing small and medium-sized enterprises (SMEs), business incubators often lack the necessary skills to contribute fully to the development of SMEs.

    Given that most of the management staff in business incubators may not come from an entrepreneurial background, they seldom possess the ability to meet the skills requirement of their clients.

    According to Ndagi, an  international certified  trainer in business incubation, there was  need for specialised incubator management training to expose new entrants to best practices in incubation management.

    According to him, the training will enhance managers’ understanding of business incubator models, how to finance an incubator, monitoring and evaluation of startups, mentoring programmes and more.

    According to Johnson, the major challenges are power and internet. In Nigeria, he noted that  cost of doing business is higher because of lack of basic infrastructure such as  power, good roads and the internet. “This is where business incubation centres are filling the gap by providing a collaboration platform for entrepreneurs to share resources,”he added.

    He explained that talent is scarce. “For me, the best way to solve a problem is to face it. We need to keep on training and employing the right skill sets. Entrepreneurs alone will not be able to address the lack of right skill sets to manage business incubation centres. Government should update their curriculum to reflect what is needed in the field as at today and also support the activities of business incubation centres,”he said.

    Addressing a forum in Lagos, Co-founder of Lagos-based startup incubator/accelerator, Passion Incubator, Olufunbi Falayi, observed that the model most incubators operate on is fundamentally flawed. He explained that incubators fail to do the up-front diligence in assessing the market potential of ideas that entrepreneurs bring to them, meaning the vast majority of companies that enter incubators are doomed to failure and won’t make it through the “valley of death”.

    He explained that his incubator is taking a much different approach to admitting startups. According to him, the model is to find an idea, assess it, build it quickly and see it through the pre-incubation process.

    On the issue of the right skills set to manage emerging business incubation centres and technology hubs, Tanksley counseled that “existing centres should focus on training other centres instead of just training entrepreneurs. “A deep understanding of the journey of a product from concept to sales and the challenges each entrepreneur faces on the way. Each entrepreneur has a different challenge and brings a different skill set to the table. The incubator manager should be able to help them fill in the gaps,”he said.

    Tanksley stressed the need for new business incubation managers to join AfriLabs, the  largest network of over 50 technology and innovation hubs across Africa.

    According to Dr Salihu, Nigeria  is a good example of a dynamic economic ecosystem, which presently needs to organise and interconnect all innovation stakeholders.  This is to enable them to more proficiently face all the challenges and opportunities that may arise in the future.

    Without doubt, he said, human resources represent an essential component of an innovation ecosystem and a clear driving factor for entrepreneurship and economic growth.

    According to him, Nigeria enjoys a majority of young, dynamic potential entrepreneurs with no fear of falling and, on the contrary, ready and prepared to stand up again.

     

    Real estate entities just offering

    executive suite

    Sadly, some firms have decided to become incubators. Many incubators assume that cheap real estate, co-working spaces, used furniture, plus a phone and Internet connection equate business incubation. To experts, many of these incubators are not more than a real estate entities offering executive suite services.

    To watchers, effective incubators should provide funding, business counseling and management assistance to incubates. These business services, according to them, differentiate functional incubators  from real estate services.

     

    Prospect

    Over the last five years, there have been many advances in terms of entrepreneurship and innovation, mainly because of the strong institutional commitment and the collaborative actions among the private sector, academia and the government, all of which have combined to make Nigeria a successful entrepreneurship example.

    Recent years have seen the rise of special incubators designed to support the development of micro industries. They bring together companies that are in the same business, but are not necessarily competitors.

    Salihu said the growth of business incubators is going to enhance the potential of the innovation ecosystem with stimulating ideas and a strong innovative mindset.

    According to him, the government, as well as private sector needs to support local entrepreneurs to play an essential role in this evolution to make Nigeria ready for future economic challenges.

     

    Govt’s Technology

     Incubation Centres

    There are 27 Federal Government-owned  incubation centres in the country. At the government’s technology incubation centres,  new businesses are given free accommodation  for three years.

    During this period, the businesses are exempted from taxation. At the centre, equipped with fabrication and testing facilities, young tech entrepreneurs can be mentored.

    For instance, at the Lagos Centre in Agege,  many young Nigerians have benefited from the centre, graduating in beads production, anti-bacterial hand wash, starch, multipurpose liquid soap, leather shoes, air fresheners, herbal bathing soap and body cream making, among others. They are also ex-participants, who are involved in the production of unripe plantain flour, bean flour, soya flour, spices, packaged pure honey and fruit juice production.

    At the centres, access to experts across all engineering and management disciplines  is easy. Businesses in the incubator fall within some stages – conception, where a first-cut assessment of the strategic environment is made, to development, where feasibility and go-to-market strategies are explored and ultimately commercialised, where profitable market opportunities are exploited and the focus is on growing the venture.

     

  • Women accountants mark 40

    The Society of Women Accountants of Nigeria (SWAN) is 40. To mark the anniversary, the society will tomorrow hold a symposium with the theme: Restoring an enduring value system for our nation at the Muson Centre, Lagos.

    Expected at the event are Minister of State, Budget and Planning, Hajiya Zainab Ahmed, Chief Folake Solanke (SAN) and Prof Ayodele Atsenuwa, Dean, Faculty of Law, University of Lagos, among others.

    SWAN was founded on April 28, 1978 as an umbrella body for female members of the Institute of Chartered Accountants of Nigeria (ICAN). Its aim is to assist ICAN in the protection of its charter and status as well as promote the interest of female members of the institute. It also aims to promote and maintain high standards of efficiency and professional conduct among its members.

    SWAN promotes the continuing education, intellectual growth, professional knowledge and support leadership aspirations of its members within and outside the profession

    Over the years, SWAN has been supporting ICAN with its corporate social Responsibilities (CSR). In addition to encouraging the girl-child to take up accountancy as a profession, SWAN also gives female accountants a platform to be of service to the institute.

    It organises yearly Open Day, career talk, business talk, quarterly luncheon and revision programmes for them. It also grants yearly scholarship to students in support of ICAN.

    The anniversary celebration started on October 17, 2017, with a talk session entitled: Women in Leadership held at Abuja Sheraton Hotels. It was  followed by a career talk at the ICAN Centre, Amuwo Odofin, Lagos, on January 31, for secondary school pupils to prepare them for choosing accountancy as a career.

    A quiz competition for secondary school pupils will hold on February 15 in Lagos.

    The Anniversary Ball, SWAN documentary and SWAN Prize Awards are billed for  Eko Hotels and Suites on Victoria Island on April 21.

    Other programmes lined up for the anniversary include a book launch, scholarship awards and donation to charity, after which a Jumat and church thanksgiving services would round off the programmes on April 27 and 28.

  • High hope as govt tackles building collapse

    High hope as govt tackles building collapse

    Can this year be devoid of building collapse? Yes, says the Lagos State Building Control Agency (LASBCA). “It’s  a tall order, ” others say. However, while some stakeholders and experts agree with the agency, they, nonetheless, insist that certain measures have to be put in place to attain this feat. MUYIWA LUCAS examines the impact of this agency in the built environment. 

    NO fewer than 81 buildings collapsed in the last five years across the country, with Lagos State accounting for most of the incidents, according to the Building Collapse and Prevention Guild (BCPG).

    The list includes a three-storey at 24, Daddy Aladja Street, Oke Arin on Lagos Island, which collapsed on May 29, 2017 during renovation. On July 22, 2017, another building went down at 7, Saidu Okeleji Street, Meiran in Agbado Oke -Odo Local Council Development Area (LCDA). On July 25, a building at No 3, Massey Street, Lagos Island, collapsed in the morning, during a rainstorm. The structure was initially planned for a three-storey before another floor was added to it.  Another three-storey  crashed at Saka Oloro Street, Ilufe Road, Alaba International Market, Ojoo on August 28, 2017.

    Other notable incidents are the September 12, 2014, Synagogue Church guesthouse in the Ikotun-Egbe area of the state, and the March 8, 2016 collapse of a five-storey at the end of Kushenla road in Ikate Elegushi, Lekki, belonging to Lekki Gardens.

    Indeed, building collapse has remained worrisome to many stakeholders and the government. This is mainly because of the lives lost during such incidents, the financial setback as well as the psychological impact on the citizenry.

    This is why states, especially Lagos, have provided guidelines on land use designation to guarantee orderliness in development. It is believed in some quarters that the Ministry of Physical Planning and Urban Development‘s (MPP&UD’s) response to requests for planning information ensures that the public is adequately informed on land use zoning, permissible use, plot size, building coverage and height, setback, airspace and parking requirements, among  others, for potential developments.

    Although there were some incidents in the state last year, stakeholders agreed that they were not as significant as the preceding years. BCPG immediate past President, and first Vice President, Nigerian Institute of Building (NIOB), Mr. Kunle Awobodu, explained that the reduction could be traced to some steps taken by the government, through the Lagos State Building Control Agency (LASBCA). One of such, he said, was the recruitment of 395 construction professionals, mostly young graduates, to improve on the monitoring capacity of LABSCA.

    Through this agency, the government intends to transform the building and construction industry by enhancing skills, promoting professionalism as well as improving design and construction capabilities, reducing building collapse to zero and, most importantly, achieving safe, secure and habitable buildings in the state.

    Managing Director, Tavote Nigeria, a design, construction and maintenance firm, Mr. Joseph Muagba, expressed confidence that given the drive in LASBCA, building collapse would soon be reduced drastically, if not eliminated. He explained that unlike in the past where the industry battled with structural integrity issues, drawings that pass approval test were now adequately vetted by the agency to ensure that they were of standard. The agency’s officials, he said, are strict with compliance to government’s regulations.

    “No doubt they (LASBCA) have added value as an institution. They have also simplified the process of getting approvals and enforcement of standards. They have recruited and trained a lot of people to carrying out enforcement and compliance. They are courteous and dedicated people.  However, sometimes, there are unnecessary interference from the Ministry of Environment as their responsibilities are duplicated,” Muagba, an engineer, told The Nation.

    Although he revealed that working with the agency initially was not ‘cordial,’ a development he blamed on resistance to change, for him, the birth of the agency is  welcome, as it has made engineers more relevant in the built environment than they used to be.

    Muagba explained that though it is not yet uhuru, LABSCA was the government’s response to the lawlessness in the private construction industry and other critical happenings which needed to be standardised. “LASBCA’s coming is gradually standardising the building industry in Lagos state. For instance, one of the rules now is that apart from having an approved drawing and project board on site, an engineer must be present on site. Additionally, the engineer’s visit to the construction site is to ensure compliance at every stage and a certificate of habitation is issued on completion before the house is certified for occupation. This has created jobs for engineers and professionals in the industry, as well as ensuring standards and integrity of a building,” he explained.

    Curbing the past

    While new buildings are easy to monitor and enforce compliance on during construction, worrisome is the state of old structures which were built pre-LASBCA. Awobodu warned that barring any shoring or stability mechanism, sub-standard buildings constructed in the past would eventually fail, leading to collapse.

    LASBCA General Manager, Mr. Lekan Shodeinde, explained that the agency was  aware of this threat. This, he said, was why the regulator embarked on a cleansing of old buildings across the state, last August. By September, after due notice to distressed property owners, the agency embarked on the demolition of buildings prone to collapse on the Lagos Island. In that exercise, 57 buildings out of the 114 identified, were removed in the first phase, following the approval of Governor Akinwunmi Ambode.

    Explaining the process leading to demolition, Shodeinde said before his agency demolish any building, the owner is required to conduct a “Non-Defective Test”, within three weeks and the result sent to the agency. Non- compliance with this will be deemed to mean that the building is distressed. The LASBCA boss explained that the choice of starting the demolition on the Lagos Island was premised on the preponderance of more distressed structures already identified in the area. He regretted that owners of such buildings had ignored advice by the government to remove the structures themselves, necessitating the agency’s proactive steps to avoid a disaster, which may result if the buildings fall off by themselves.

    Commenting on the cost implication of the demolition and the ownership of the land after such exercise, Shodeinde explained that the land still remains the property of the owner. The property owner, he said, is, however, required to pay the state government the cost of demolition, which will be communicated to the property owner in writing.

    “We are rendering a service to the property owner and not to confiscate the land because the building has not collapsed. We just remove the structure and communicate the cost to you, if you refund the cost to the government within 90 days the land is still yours; but if after 90 days of demanding the refund of money and there is none, or we do not get a correspondence from the land owner, the land then stands forfeited to the government,” Shodeinde explained.

    Solution vs Prevention

    Awobodu, though supports the exercise, says the solutions to building collapse should be a two-pronged approach. firstly, he said such should be derived from its causes. “If competent professionals are backed by the law to handle construction, from design through to post-construction stages, there would be less crisis in the building construction sphere of the country. The responsibility of appropriate designs should rest on qualified architects and engineers while that of the building production management should be borne by the professional resident builders,” Awobodu said.

    Importantly, he explained that the agency needs to focus more on what people are building, especially at the foundation stage because that is where most developers get their buildings wrong. Besides, he is convinced that the focus should be on prevention rather than finding solution after collapse because being proactive is better.

    Shodeinde agrees. He said his agency works  with other sister agencies/ministry, including the Lagos State Emergency Management Authority (LASEMA), Lagos State Ambulance Services, and Lagos State Physical Planning Permit Authority (LASPPPA) to make the buildings in the state secure, liveable and habitable. LASPPPA is the agency that issues building permit.

    Equally, he said as a form of its best practices regime, it expects owners and developers to conform to basic rules and regulations of the agency before the commencement of any new development/special project, amendment to existing buildings, renovation of buildings; before commencement of any forms of demolition, installation of renewable source of energy, maintenance that involves erection of scaffolding, renovation, rehabilitation, re-engineering improvement of any building , converting the use of any building, commencement of building construction, obtaining certificate of completion and fitness for habitation and verification and certification of General Contractors’ All Risk Insurance policy for buildings under construction as well as existing ones.

    Furthermore, the LASBCA boss explained that the agency has also put in place a whistle-blowing avenue, which he reckons will go a long way in checking unscrupulous acts in the industry. Whistle-blowing mechanism, he said, is a partnership to save lives and also an avenue where the agency advises people to expose what is not being done right in the industry. “Whistle-blowing is an avenue to give us whatever information on any structure, be it construction or reconstruction, that is structurally defective,” Shodeinde said. He urged the public to call the agency’s toll free lines to give information of deviation from approved permits and approvals and other atrocities on sites capable of jeopardising safety.

     Public reaction

    For Mrs. Adijat Adekunle, a 72-year-old fish seller on Lagos Island, the demolition of a three-storey at 152, Adeniji Adele Street, Lagos Island, belonging to the Aroba family is a welcome development, given the danger it posed to people in the area. Also, a student of Kwara State Polytechnic, Mr. Babatunde Afolabi, of 3, Ajanaku Street, Lagos Island,  commended the state government’s effort on the demolition. He told The Nation that the demolished building was “too weak and could pose a danger to the lives of the people on the street”.

    A retiree, who pleaded for anonymity because he resides on the same street housing the demolished building, said the structure, built in the 1990s, belonged to the Adeseye family. According to him, it was clear from the time of construction that the building had structural integrity issues. Hence, according to him, it was a welcome development that the building was pulled down by the government.

    At 54 Aroloya Street, Lagos Island, a 40-year-old barber and father of one, Mr. Bolaji Abdulahi, who has lived in the area for 15 years, explained that the house, belonging to the Olokodana family, had long been vacated by the tenants because of its state. He revealed that entreaties by the community to the children of the owner to either renovate the house or pull it down fell on deaf ears. So, the LASBCA initiative of pulling down the house was okay.

    But it has not been all praises for the agency. Some residents and perceived owners of demolished buildings on the Lagos Island were bitter with LASBCA for asking them to pay for the demolition. Although they refused to be identified with their buildings for what they termed “security reason”, they said the cost charged for the demolition was too high.

    A man in his late 50s, who identified himself as ‘Sesan’, however  described it as ridiculous when the government expected him to pay to reclaim his family land after losing a property. To him, it amounted to double loss. “How can they expect us to pay N250, 000 to get the land back?” he asked rhetorically. Findings by The Nation revealed that the payment for the demolition starts from N100, 000, depending on the type of building.

    According to Sesan, the charge was ridiculous, given that all LASBCA did was to use hammer to break the buildings in pieces and not pulling them down. “As you can see, the buildings they claim to have demolished are still standing; they only used hammer to break them in bits. So, is this what they expect us to pay such huge amount for? They are simply after revenue generating. If they had brought tractors to level the buildings and asked us to pay such amount, then it would have been a different ball game,” he lamented.

    Zero tolerance for collapse

    Shodeinde revealed that his team was working hard at ensuring that not a single building would collapse this year. This, he said, was why no stone was being left unturned to achieve this feat. The LASBCA boss told The Nation that the agency has begun combing every nook and cranny of the state to identify and  arrest structures that are either defective or may fail. The new strategy will include identifying intransigent and contraventions of building laws. The government, he said, would not hesitate to remove any illegal or unsafe structure to prevent loss of lives.

    Last week, the agency demolished 21 buildings erected illegally on the government’s land around Ogudu area of Lagos. The buildings, located on a swampy land, are not habitable and residents never got the government’s approval for such illegal development.

    “We will ensure that buildings in Lagos State are designed, constructed and maintained to high standards of safety to avoid loss of lives and properties through our building regulatory system. We aim to achieve zero percent building collapse, strict adherence to international best practices; we also intend to comb the entire state to remove distressed buildings after giving enough notices to owners and developers,” he assured.

    Re-invigoration

    Shodeinde is unfazed by the public reaction to his agency, especially after a structure has been removed. To him, such reaction is a confirmation that the agency is discharging its duties as prescribed by the law establishing it. Besides, he shares Muagba’s views that people are averse to change, not liking to leave their comfort zone even in the face of hazard to their existence.

    Rather, he said, he and his men were coming out stronger to enforce compliance with building laws. LASBCA, he further revealed, “is coming out heavily than before” on defaulters. For instance, he revealed that henceforth, defaulters, after prosecution, would have their names published in national newspapers, irrespective of their standing in the society. Also, where deaths of human beings are recorded in a collapsed building, the owner of such property will forfeit the land to government and also face prosecution.

    Shodeinde warned that the agency’s monitoring team and officers are combing the state for any on-going construction without appropriate permit; distressed/abandoned or soon-to-collapse building.

    More than ever, he said the game is up for defaulters who had taken delight in breaking the government’s seal on their premises as they will face the law.

    Contraventions

    Contraventions, according to LASBCA include development of property without an evidence of planning permit; development and use of structure without obtaining certificate of completion and fitness for habitation as prescribed by the law; use of non-professionals (quacks), and building without approval.

    Shodeinde advised that public to contact LASBCA at least seven days prior to commencement of construction at the site, adding that after two years of not commencing construction, any approval given will need to be resent for assessment and approval.

    Moving forward

    The agency, determined to achieve its dream of “no building collapse this year” says it has now become mandatory for owner/developer must apply to her for final inspection and issuance of a certificate of completion and fitness for habitation. This can be done via a simple written note to the technical team in charge of issuance of certificate and final stage inspection will be arranged between the engineers/architects (construction team) and the building control officers. Equally, developers must fully comply with development permit granted, Urban and Regional Planning and Development Law 2010, Building Codes and Building Regulations. The services of relevant professionals must also be engaged, including the usage of standard materials, and observance of health and safety prevention on site.

    Awobodu agreed with the position of the agency He added that nations with effective building codes hardly have cases of building collapse. The NIOB chief is convinced that if the National Building Code could be passed into law and abided by, the frequency of substandard construction would be very low.

    He wants more monitoring of sites by government officials, as this will ensure the conformity of building construction with the approved building plan.

    Stakeholders, like Awobodu and Muagba, are convinced that while the agency has done quite well in the delivery of its mandate, more can still be achieved with more public sensitisation.

     

  • Analysts rule out forex regime change as naira stabilises

    Analysts rule out forex regime change as naira stabilises

    The monetary policy authorities have executed exchangerate policies that are successful in many ways, and have grown greatly in confidence, analysts at FBN Capital, an investment and research arm of FBN Holdings have said.

    According to them, the economic managers are not under pressure to change tack, especially as it concerns official rate for priority transactions.

    “Forex has has become widely available. Manufacturers have it, as do middle class Nigerians with bills to pay outside the country and offshore portfolio investors. Further, its price is stable, and the Central Bank of Nigeria (CBN) even thinks it should fall,” the analysts said in an emailed report released on Monday.

    They believe that with the ongoing drop in inflation figures, the monetary authorities may try rate cut, which will be the first since July 2016.

    “On the monetary easing on falling inflation, we expect the first rate cuts since July 2016 in response to slowing inflation in first half of 2018. Positive base effects are coming into play, and we see easing of 150basis points over the full year,” they said.

    Also, the naira at the weekend, closed flat at N363 to dollar in the parallel market. It has remained at that position for nearly three weeks, market data on exchange rate position have shown.

    This raises hope that the era of forex volatility may have given way to long-term stability as the CBN continues to meet demands at the retail end of the market.

    At the official rate, the naira has also remained at about N306.05 to the dollar for nearly six months, although only few sectors can access funds at this rate.

    Traders insist that the naira will remain stable this year as the CBN continues its regular dollar injections into the forex market.

    Series of dollar injections into the economy totalling about $8 billion since February have helped the CBN to achieve long-term naira stability and curb volatility in the forex market.

    The CBN has in the last nine months sustained its weekly dollar interventions in the forex market, a large part of it go into the interbank market, bureau de change (BDCs), Retail Secondary Market Intervention Sales (SMIS), wholesale spot and forwards auction segments, agricultural, airlines, petroleum products and raw materials and machinery sectors, among others.

    The dollar injections were made to enable stakeholders in these segments secure enough forex for their operations, and in the process boost naira’s stability.

    Noteworthy, the gap between official and black market rates started to shrink since last February 20, when the CBN resumed dollar interventions in key segments of the economy. Industry sources said the CBN has injected over $8 billion in the last nine months into key segments of the market.

  • Adeola praises NDIC over banking stability

    Managing Director/Chief Executive Officer of Sterling Bank Plc Yemi Adeola has praised the Nigeria Deposit Insurance Corporation (NDIC) for its contributions to the safety of the  banking system.

    Adeola spoke during a courtesy call and  introduction of Sterling Bank’s new Managing Director/CEO Abubakar Suleiman to the corporation.

    He noted that NDIC is renowned for the excellence of its bank examiners and its quality reports.

    The Sterling Bank team was received by NDIC Managing Director/Chief Executive Officer (MD/CEO) Umaru Ibrahim along with the two Executive Directors (EDs) of the corporation, Prince Aghatise Erediawa and Mrs. Lola Abiola-Edewor.

    Adeola informed the NDIC management that the procedure for the selection of the new CEO of the bank was rigorous and ably handled by the reputable consulting firm KPMG. While expressing the hope that the visit would further strengthen the excellent relationship between the bank and the corporation, the bank also briefed the corporation on the future outlook of the bank, which includes the planned expansion of its Non-Interest Banking (NIB) window.

    He informed the NDIC management of the plan by Sterling Bank to apply for a licence for a stand-alone NIB soonest, adding that the decision was informed by the feasibility studies conducted by the bank, judging from the potential market and financial resources of customers expected to embrace NIB. The meeting also provided a platform for the discussion of the prospects and opportunities in the Nigerian Banking system along with challenges.

    Ibrahim thanked the bank’s management for the visit and promised to sustain the cordial relationship. He expressed the hope for the appointment of capable hands into the banking system to improve the performance of the sector. He assured Suleiman of his support to ensure the growth of the bank.

     

  • ETLS: Conduit for palm oil’s smuggling

    ETLS: Conduit for palm oil’s smuggling

    The conception of the Economic Community of West African States (ECOWAS) Trade Liberalisation Scheme (ETLS) was to facilitate trade within the sub-region. But this window is being used by unscrupulous elements as a veritable channel for perpetrating their crimes against the economy. Correspondent OLUWAKEMI DAUDA reports how ‘importers’ are shortchanging Nigeria’s revenue earnings and putting the nation’s industries in dire strait.

    Palm oil is an edible oil derived from the palm fruits from the African oil palm tree. Oil palms are originally from Western Africa, but can flourish wherever heat and rainfall are abundant, especially in the Tropical climate. Today, palm oil is grown throughout Africa, Asia, North America, and South America, with 85 per cent  of its global production and export from Indonesia and Malaysia, which on record took the first seed from Nigeria.

    In early 60s, Nigeria was the largest producer of palm oil in the world with a market share of 43 per cent. According to stakeholders in the agricltural sector of the economy, Nigeria last year, sadly now had a world share of 2.9 per cent, with Indonesia leading by 33 million metric tonnes, Malaysia, 19.8 million metric tonnes; Thailand, 2 million; Colombia, 1.108 million metric tonnes and Nigeria, 970,000 metric tonnes.

    Before the advent of crude oil, Nigeria was the number one producer of the commodity in the world as palm oil contributed about 65 to 70 per cent of her total revenue. But the story is not the same today, as stakeholders alleged that some government officials are working against massive production of palm oil to enrich their pockets from imported ones.

    Allegation of officials of Federal Ministry of Finance conniving with importers to shortchange the government

    At the stakeholders’ meeting held by the Federal Ministry of Finance ( FMoF) in December, last year, it was unanimously agreed that no company must be allowed to import large quantity of Crude Palm Oil ( CPO) and refined products under Economic Community of West African States (ECOWAS) Trade Liberalisation Scheme (ETLS).

    But speaking with The Nation, a senior official of the Federal Ministry of Agriculture, who craved anonymity alleged that some companies, in connivance with some senior officials of the Federal Ministry of Finance,  are planning to import palm oil from Cote D’Ivoire, using ETLS  as a decoy to evade duty and enrich their pockets at the detriment of the nation, its people and the economy.

    The official said: “We are aware and sad to inform you, alert Nigerians and the Federal Government  that some top officials of the Federal Ministry of Finance are conniving with importers to import palm oil from Cote D’Ivoire to evade duty and kill local industries.

    “Investigation conducted by the Federal Ministry of Agriculture revealed that  Cote D’Ivoire has no excess CPO to export and that is why Ghana is importing massively from other countries. What they intend to do is to destabilise the enduring palm oil policy environment and upturn the gains Nigerian palm oil industry has achieved in the five to 10 years,” the official said.

    The Federal Ministry of Agriculture, the official said, is concerned about the damning and screaming reports about massive importation of palm oil into the country through the sea ports and the land borders inspite of the Central Bank of Nigeria’s (CBN) policy.

    CBN’s policy and 35% duty

    The current tariff regime of 10 per cent duty and 25 per cent levy on importation of palm oil and the inclusion of palm oil in the list of commodities that do not qualify for the Central Bank of Nigeria ( CBN) forex allocation, official said,  have been protecting the local  industries like Okomu Oil Palm Company Plc; Presco Plc; WSNL; Aden River Estate; IMC; JB Farms; Agripalm; National Palm Produce Association of Nigeria (NPPAN), and the Oil Palm Growers Association of Nigeria, representing the interest of small scale producers that account for about 80 per cent palm oil production in the country. The 35 per cent tarrifs imposed by the government, the official said, would not be paid by those that are planning the palm oil through the ETLS scheme despite the fact that palm oil industries are bouncing back in the country to meet the local need.

    Moribund oil palm plantations coming back to life

    Investigation conducted by The Nation revealed that some of  the moribund oil palm plantations across the country are now bouncing back and some fringe states such as Kogi, Kaduna and Nasarawa are also into genuine palm oil business to boost the diversification efforts of the current administration.

    Diversification efforts of the government

    Findings revealed that the plan to import 95,000 Metric Tonnes ( MT) and 60,000MT of of crude palm oil, with 50,000 MT of Palm Faty Acid  Distillates under the ETLS by a company (name withheld) in connivance with officials of the Federal Ministry of Finance, may sabotage the economic diversification efforts of the Federal Government because all palm oil producing countries in West Africa also import crude palm oil from Malaysia, Indonesia and other countries.

    “Therefore, the ongoing attempt to import palm oil under the guise of ETLS  must be thwarted by President Muhammadu Buhari administration. No official of the government must be allowed by President Buhari to give  official stamp to smuggling and commit economic sabotage against Nigerians and her people. The interest of all Nigerians and not the privilege view should be paramount,” the official of the Federal Ministry of Agriculture said.

    Nigeria is now a net importer of palm oil:

    Nigeria is now a net importer of palm oil. According to IndexMundi, a data portal, the domestic palm oil produced in 2014 was 930,000 MT. The growth in oil palm has regretably stagnated at 930,000 MT since 2013. Palm oil consumption in Nigeria amounts to 2.0 million MT per annum. The unconfirmed official figures state that the shortage in oil palm industry is estimated to be around 1,070,000 MT annually.

    The official of the ministry of agriculture said the importers are using the figure to deceive the government to import what the country has the potential to produce locally despite the current exchange rate.

    High exchange rate:

    Investigation has revealed that despite the high exchange rate, Nigeria imported over 450,000 tons of crude palm oil valued at N116.3billion ($323.1 million) last year. The shipment was increased by 12 per cent as global price hit $718 per metric ton.

    The price of the commodity, which was $663 per metric ton in July, was increased to  $718  per ton in November last year, based on  high demand  by indigenous manufacturers.

    Vessels berted at Lagos ports

    Findings from the Nigerian Ports Authority (NPA) have revealed that Apapa Bulk Terminal Limited (ABTL) at Lagos Port Complex took delivery of 4,000 tons from Lady Dahlia in the first week of November, while Hamour Endurance also shipped 5,000 tons  to JosepDam terminal, Tincan  Island Port, Lagos.

    In August last year, three vessels berthed at the Lagos Port Complex and Tincan with 32, 483 tons of the essential commodity.

    At ABTL were GSW Forward and Marios G ships, laden with 16,300 tons and  11,483 tons respectively. Another ship Theresa Success, investigation showed, also offloaded 5,000 tons of the product at JosepDam terminal in Lagos.

    Findings also revealed that between January and April last year, 50,010 tons of the commodity was shipped into the country.

    According to imvestigation at the Lagos Port, SeaPrice ship discharged 15,000 tons in January; Chemtrans Havel ship, 10,700 tons in February; Star Ploeg ship, 16,400 tons in  March and  Mid Nature ship, 8,000 tons in April last year.

    New cargo protection service

    Following the surge and high demand for palm oil by Nigeria and Ghana last year, a shipping line, CMA CGM in August last year, imposed a new cargo protection service for shipments of the commodity into the country.

    The protection service attracted an automatic prepaid surcharge of $10 per container. It would be recalled that the shipping line noted that the surcharge was a new tailor-made cargo protection service for palm oil shipments from Indonesia and Malaysia.

    However, the company said all palm oil exporters would be compensated with up to $10,000 in the event of loss or damage of cargo during transportation.

    It added that export from Indonesia and Malaysia ports to other Africa countries would attract a prepaid surcharge of $10 per 20 feet container and $10 per 40 feet container.

    Palm oil and CBN’s forex allocation promoting local production

    Plantation Owners Forum of Nigeria (POFON) has blamed importation and smuggling of palm oil into the country as factors crippling local production in Nigeria.

    Speaking at a joint press conference in Lagos on stemming the tide of rising crude palm oil imports into the country,  POFON Chairman, Mr. Emmanuel Ibru, said the 35 per cent tariff on importation of palm oil and the inclusion of palm oil in the CBN’s list of commodities that do not qualify for foreign exchange allocation have been responsible for growth in the sector as well as protecting the industry from saboteurs.

    Ibru alleged that some West African countries are importing palm oil destined for Nigerian market, which he said, would deprived the country its revenue in the form of duties from such imports based on the ECOWAS scheme.

    ECOWAS Trade Liberalisation Scheme (ETLS)

    Investigation has revealed that majority of companies operating in Nigeria import from the ECOWAS states at zero duty. But the level of production in the ECOWAS states is not high enough to support the quantity of crude palm oil (CPO) imported in those states, but rather, some companies are importing through the ECOWAS states and bringing it in through informal channels without paying any duty to government. More than 50per cent of total import in Nigeria is from ECOWAS at zero duty. These are areas that the government must turn its search light on to ensure that all imported CPO pass through the right channel and the payment of the 35per cent duty to increase government revenue.

    Ibru criticised the ETLS, describing it as an indirect application for waivers by importers of crude palm oil and other prohibited items. He challenged the government to be resolute in its promise not to grant import waivers. Noting that Nigeria produces enough palm oil for local consumption, the POFON Chairman called on stakeholders to tackle the issue of non-competitiveness to take the industry to greater heights.

    “According to reports, some companies have been importing palm oil illegally into Nigeria under the disguise of the West African Trade Liberalisation Scheme and this is tantamount to economic sabotage,”Ibru said

    Customs to conduct forensic audit of all imports

    Findings have shown that major importers of CPO: Nigeria and Benin Republic, import 450,000MT and 470,000MT of palm oil per annum, respectively. Security sources claim that most of Benin Republic’s CPO imports find their way into Nigeria through informal channels as Benin exports close to 390,000 MT of palm oil annually. Thus, actual shortage of CPO could be as high as 940,000 MT if the exports from Benin Republic are taken into consideration.

    Ibru called on the Nigeria Customs Service to conduct a forensic audit of all imports, including ETLS imports to identify the defaulters and get them to make refunds to the government, empahsising that if duties were paid, it would not be profitable to import palm oil.

    On his part, POFON Executive Secretary, Mr. Fatai Afolabi, lamented that traders and importers fought to remove palm oil from the Import Prohibition List, a situation that has seen a consistent increase in importation over the last 10 years.

    No accurate data from government agencies

    Ibru regretted that the National Bureau of Statistics (NBS), the Federal Ministry of Agriculture and Rural Development (FMARD) and other relevant government agencies have not been able to provide data on the industry, forcing stakeholders to rely on data provided by foreign agencies such as Index Mundi, whose data are sometimes outdated. Noting that Nigeria requires 450,000 tonnes to make up for her annual production shortfall, he lamented that Nigeria imports more than the shortfall, making the country a dumping ground for imported palm oil.

    No West African country has the capacity to export palm oil into Nigeria

    Afolabi stressed that no West African country has the capacity to export palm oil into Nigeria, adding that Nigeria is a major importer of oil from Malaysia.

    The POFON Secretary blamed the high cost of local production on security, poor infrastructure, stipends for traditional rulers by producers, transportation costs, poor electricity supply, community development by producers, a situation, which he said makes locally produced oil less competitive in price.

    Shortchanging Nigeria and Nigerians

    While commending government’s transparency in the implementation of its policies, he, however, urged the government to take a holistic look at the objectives of the ETLS to ensure that the country is not being shortchanged.

    In his address, President, National Palm Produce Association of Nigeria (NPPAN), Henry Olatujoye, accused businessmen of setting up refineries in countries close to Nigeria used as channels through which rejected oil from other parts of the world, especially Malaysia are exported to Nigeria.

    He noted that POFON had in 2015 reached an agreement with the CBN on the imposition of a 35 per cent duty on all imports, removal of waivers on oil imports and the exclusion of crude palm oil from the ETLS.

     Importers use  paucity of production data to deceive government

    National President, National Palm Produce Association of Nigeria (NPPAN), Henry Olatujoye, an engineer, said  domestic and industrial consumption of oil in the country stands at 2.8 million tonnes annually, while production stands at 1.8 million tonnes. He accused Indian investors of taking advantage of the paucity of production data to deceive government into allowing imports, adding that such investors falsely labelled Nigerian oil as expensive and of poor quality.

    The NPPAN President noted that Nigeria is the fifth largest producer of palm oil in the world after Indonesia, Malaysia, Thailand and Colombia, and that local production has been on the increase in recent years in the country.

    POFON is an umbrella body of private investors in plantation agriculture, especially oil palm in Nigeria. Its members include NPPAN, the Oil Palm Growers Association of Nigeria (OPGAN) and other major palm oil producers.

    Support from government

    For Nigeria to meet the shortfall in local usage of crude palm oil and be self-sufficient, Nigeria needs about 300,000 hectares of land. This no doubt is huge and requires the support of government through its Ministry of Agriculture by providing suitable and adequate land for willing investors to invest in large estate plantations in the country.

    Over $20 billion required

    The road to being self-sufficient is a long one as whopping $10billion will be required and a minimum of 20 years of palm tree planting at a very large scale and after 20 years demand will be much more than it is, so investment for plantation needs to be much higher and at the same time, the government needs to allocate that much land for plantation, which is not likely to happen soon.

    It is important for the government to realise that local prices are much higher because of high reliance on local plantation. These high prices are passed on to the consumer. For now, importation of palm oil serves as the best alternative to the low quantity produced in the country, pending the development of large estate plantations.

    Public health

    Findings have shown that desperate  food producers use non quality imported palm oil thereby jeopardising public health and safety. This is the more reason the Federal Government must encourage local production and ensure that the 35 per cent tariff on the importation of the commodity is met by all importers.

    Palm oil as a consumable item

    Majority of palm oil is consumed by food industry and the remaining  used by the non-food industry. Foods, such as seasoning cubes, vegetable oil, biscuits, chips, margarines, shortenings, cereals, baked stuff, washing detergents and cosmetics, thrive on palm oil. Based on the need for availability of sufficient oil palm in the Nigerian market, the Federal Government needs to encourage local farmers to end the illegal importation and smuggling of palm oil into the country.

  • Savings Bond opens grassroots investment window

    Savings Bond opens grassroots investment window

    The first Federal Government Savings Bond auction for the year began on January 8 and ended January 12. The two and three-year bonds, due in January 17, 2020 and January 17, 2021, were offered at 11.098 per cent and 12.098 per cent per annum respectively. The Debt Management Office (DMO) said the attractive yields and tax-free nature of the bonds are incentives for grassroots investors, writes COLLINS NWEZE.

    For investors, both local and foreign, returns on investments remain key consideration at all times. The high yields that come with investing in the monthly Federal Government Savings Bond have continued to excite investors interested in building sustainable wealth.

    More interesting is that grassroots investors with N5,000 and above have opportunity to invest in the bond, an area that was previously left for the rich.

    The first Savings Bond auction for the year commenced on January 8 and ended on January 12. The 2-year Bond, due January 17, 2020 and 3-year Bond due January 17, 2021, were offered at 11.098 per cent and 12.098 per cent per annum respectively.

    Analysts said savings bonds in Nigeria like any other place are debt securities issued by the government to help fund development projects. They are debt instruments offered by sovereigns to mobilise resources from the general public, especially individuals and small savers.

    The bond offer helps to stimulate and deepen the savings culture among households, assists in the diversification of funding sources for the government and establishes benchmarks for other issuers. It equally encourages financial inclusion across the social and economic strata.

    The attractive yield curve and tax-free nature of the bonds remain the incentives to bring more grassroots savers into the financial services net.

    Managing Director, Afrinvest Limited, Ike Chioke, said the bond is targeted at low income earners to encourage savings and earn more income (interest) when compared to their savings account with banks.

    He disclosed that in order to create incentive for retail subscribers to participate in the new market segment, the DMO tweaked the market structure for the Federal Government Savings Bonds to a minimum subscription of N5,000.00 (additional investments in multiples of N1,000) and a maximum of N50 million.

    In an emailed report to investors, Chioke said income from savings bond are tax free and has a competitive fixed interest rate to be paid every quarter, while it is also considered liquid as it would be tradeable on the Nigerian Stock Exchange.

    Continuing, he said the Savings Bond Certificate can be used as collateral for loan, just as the bond offers guaranteed return and encourages financial inclusion among low income households. It also enables individuals to enjoy those benefits, which accrue to high net-worth investors in the capital market.

    “Afrinvest Securities Limited has been appointed as one of the agents designated through the Nigerian Stock Exchange (NSE) to offer this service to their clients. To invest in savings bond through Afrinvest Securities Limited, you would be required to fill the subscription form (and submit KYC documents), also indicating the amount you want to buy,” the report said.

    The Debt Management Office (DMO) led by its Director-General, Ms. Patience Oniha, said the offer is backed  by the full faith and credit of  the Federal  Government and charged upon the general assets of Nigeria.

    According to the DMO, the bond also qualifies as securities in which trustees can invest under the Trustee Investment Act. It also qualifies as government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for Tax Exemption for Pension Funds among other investors. The bond is listed on the Nigerian Stock Exchange and qualifies as a liquid asset for liquidity ratio calculation for banks.

    Analysts praised the DMO for introducing the Savings Bond into the securities market for retail investors and taking the instrument to the grassroots. The DMO plans to sustain investor’s interest in the product through public sensitisa-tion of the  gains of investing in the Bond, which has a competitive fixed interest rate with its income exempted from taxes.

    According to the DMO, the savings bond will help broaden the country’s funding base. The Bond is targeted primarily at retail investors to enable them contribute to the development of the country, while also earning good returns on a safe investment in a sovereign instrument.

    The FGN Savings Bond was launched by the DMO in March 2017 and is issued every month through stockbroking firms trading on the NSE. The Bond is promoting the savings culture in the country and enhancing financial inclusion.

    Since its introduction in March, the bond has attracted a lot of new investors to the FGN Securities market with its attractive features. The income earned on the bond is exempted from taxes and it can be traded in the secondary market at the Exchange.

    Also, the DMO has in recent months taken the bond campaigns to Abuja, Ibadan, Kano, Onitsha, among other cities. The DMO also took the bond campaign to traders within the Federal Capital Territory, Abuja.

    Speaking at the Gudu District Market, Director, Portfolio Management Department, Oladele Afolabi, told traders that the Federal Government was committed to promoting a good savings culture among Nigerians. He said the DMO would sustain the campaign to encourage more people invest in the bond. “We are here to let you know that what the Federal Government is offering is real. Government wants you to save and earn good interests on what you save. Saving with your government is the best way to save,” Afolabi said.

    The traders were told that the Savings Bond belongs to the people, hence, the decision to involve ordinary Nigerians on the streets, in the markets, churches and mosques.

    The Gudu market outing was the first of many other awareness initiatives that the DMO would be undertaking to have Nigerians invest in the bond.

    Gudu Amalgamated Traders Association Chairman, Chief Bond Nnamani, urged his members to seize the opportunity offered by the DMO to have additional savings, especially one guaranteed by the full faith of the Federal Government.

    The Federal Government issues the Savings Bond every month in tenors of two and three years with a minimum subscription of N5, 000. Interest on the Savings Bond is tax free.

    The one-day advocacy and sensitisation workshop in Ibadan was attended by trade union leaders, associations in the Southwest region, where the benefits of investing in the bonds were emphasised.

    The DMO said all interested Nigerians can subscribe through stockbroking firms trading with the NSE and accredited distribution agents licensed by the DMO.

    The bond, the DMO said, would empower every Nigerian economically and is principally for retail investors with a view to providing opportunity for them to contribute to national development as it improves the savings culture in Nigeria.

    A financial expert, Charles Odinaka, said the FGN Savings Bond complements the Central Bank of Nigeria (CBN’s) financial inclusion project.

    He said CBN’s financial inclusion vision was aimed at enabling the Nigerians know, understand and develop the ability to evaluate financial products/services so as to lower the number of financially-excluded persons within the population from 46.3 per cent to 20 per cent by the year 2020.

    “In addition, financial inclusion enables financial service providers understand the needs of their customers, products and associated risks. The financial inclusion in Nigeria and would continue to work towards this aspiration by extending FGN Savings Bonds to under-banked businesses, communities and individuals across the country.

    “Specifically, the FGN Savings Bonds give investors ease of access to investment opportunities. The investors in the bonds will ultimately become drivers of the economy and eventually contribute their quota to the economic growth of the nation. I foresee a situation where all members, youths, students, traders, name it, operating in the economic space or playing field, do not have difficulty in investing their money because of the benefits that come with the bonds,” he said.

    On his part, CRC Credit Bureau Limited Managing Director, Tunde Popoola said the government is in need of funds to stimulate and keep the economy running more effectively.

    “The bond is capable of boosting savings culture among Nigerians. And it has been brought down to between N5,000 and N50 million, which is affordable to many Nigerians. The funds raised can be deployed into infrastructure funding. We are going to be interested in the next phase of the offer to determine its modalities of implementation. We need to see detailed guidelines for its implementation,” he said.

    For the government, the savings bond will help to increase access to funds available for investment in the economy thereby facilitating gross capital formation and economic growth. It will equally enable the individual to enjoy those benefits, which accrue to big investors in the capital market.

  • Job scammers on the prowl

    Job scammers on the prowl

    Many unsuspecting job seekers have fallen victims of fraudsters. The perpetrators, who trawl various online platforms and offices disguised as employers or recruitment agents, ply their trade by cashing in on Nigeria’s rising unemployment rate. TOBA AGBOOLA reports on the growing menace of job recruitment scam.

    Joseph Imodu, a job seeker, is angry and frustrated. When The Nation met him, last week, he said he was yet to come to terms with how he was swindled of N200,000 allegedly by some officials who assured him of placement in the Nigerian Navy. Imodu said sometime last year, he was approached in Benin, Edo State, by some people who claimed they had connections with the police.

    He was told that there was an online recruitment going on for cadets. “I was made to pay a deposit of N70,000, out of a total of N135,000 as fee required for facilitating the process, Imodu said, adding that after paying the fees, some of the applicants were assembled at Imaguero Girls College, Benin City, to write the recruitment examination.

    But before the exams, Imodu said he and other job seekers were made to part with another N10,000 each. This, according to him, was to ensure they scaled through the recruitment exercise. He said, thereafter, they were asked by the ‘coordinator to wait for a Short Message Service (SMS) within the next 24 hours, which was supposed to inform them of the outcome of the exams as well as the next stage.

    But as it turned out, it was the end of communication between him and the supposed recruitment agents. Listen to Imodu: “After waiting for about three days without any message, some of us tried frantically to reach out to our contact persons on the phone, but none of such calls were answered.

    “When I decided to go back to the website where we initially filled the registration forms, the site had been scrambled. Then it finally dawned on me and most of us that we had just been scammed.”

    Adeniyi Olatunji, a graduate, also got his fingers burnt when he sought to secure a job through a flyer distributed on the roadside, advertising non-existent job vacancies in the banks.

    “The flyers stated that banks were recruiting and in an effort to put food on my table, I called a man whose name was Steve as written on the flyer as Human Resources (HR) person. I was asked to send my Curriculum Vitae (CV) to his email,” Olatunji, a resident of Lagos, said.

    He told The Nation that few weeks after, he got a message that his name was shortlisted for an interview. Excited by what seemed a prospect of getting a job, Olatunji promptly called the HR to explain the interview process.

    But it was at this point that his travails started. Apparently aware of his desperation to get the job, the HR demanded the payment of N30,000 for consultancy and another N50,000 for an insider to help him get the job. Olatunji said he paid the money by borrowing from friends and family.

    He, however, lamented that trouble started when, after making the payments, the mobile phone numbers of the HR could no longer be reached. And to make matters worse for the visibly angry unemployed Olatunji, he had to start rallying round to refund the borrowed money.

    The ugly experiences of Imodu and Olatunji clearly mirror the growing menace of job recruitment scam in Nigeria. For instance, the President of the Human Capital Providers Association of Nigeria (HuCaPan), Neye Enemigin, confirmed that some people have been smiling to the banks by extorting money from unsuspecting job seekers.

    Enemigin said the fraudsters perpetrate their nefarious acts by promising to secure employment for job seekers. “This is very rampant during recruitment by government agencies. The extortionists are either insiders (employees of the recruiting organisations) or outsiders who claim to be connected to the top echelon of such organisations,” he revealed.

    The HuCaPan president alleged that in some states across the country, people pay up to N100,000 to secure a teaching job in public primary schools.

    He added that in government agencies, a job seeker could be asked to part with as much as N30,000. “In cases where they are successful, the job seekers do not complain because they believe that the job was worth the price,” he stated.

    Enemigin said the menace of scammers in the labour market has become one of the major challenges to the HR profession in the country. He noted that many unemployed youths fall victim to the fraudsters due to lack of job opportunities in the country.

    He narrated his experience about a young man who came to his office as head of HR in a well-known company to resume work with a forged employment letter of the company’s name given to him by one of the scammers.

    Enemigin was right. In the recent past, there have been many cases of fake recruitment exercises into the government agencies such as Nigerian Customs Service (NCS), Federal Road Safety Corps (FRSC), Peace Corps of Nigeria (PCN), Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian National Petroleum Corporation (NNPC), among others.

    Recall, for instance, the impersonation of the PCN in January 2017. This started with unconfirmed reports of how the PCN allegedly compelled job seekers to pay a fee of N48, 000 to be enlisted into the Corps instead of the usual fee of N1,500 for its official recruitment form.

    In a swift reaction to this scam, the management of PCN openly disassociated itself from the N48,000 being allegedly claimed. The scam was exposed shortly after a Nigerian newspaper published a news story titled: ‘In Desperation, Job Seekers Pay N48, 000 To Enlist In Peace Corps.’

    Another recruitment scam that ate  deep into the social media and email marketing space were messages and posts that claimed that the Nigeria Customs Service (NCS) was recruiting. Ironically, screenshot of the NCS website showed that there were no available vacancies at the Service.

    To lure more unsuspecting victims into the web of deceit, the perpetrators of this scam went as far as reeling out specific vacancies that require being filled. Another deceptive tool used are fake success stories and referrals from those who claim to have received help from inside sources within such fake firms.

    Basically, the scam is in two broad phases. First, the victims are scammed into believing there are existing vacancies within the companies whereas no such vacancies exist. The second phase of the scam opens up when members of the public being erroneously made to believe that the scam is real via documentation that seemingly look real.

    The scam recruiters go as far as creating a story of how they can influence the process of getting the candidates into the service, riding on the influence of a certain retired military officer or influencial person.

    According to a victim, “They keep on forwarding messages in social media with an email address saying that all interested candidates should forward their CVs through an e-mail.

    The victim, who claimed anonymity, went ahead to explain how the process works: “If you send your CV, they will send you an application form to print out, fill and scan back to their e-mail.

    “Once you do that they will send you an interview form telling you that you are invited to attend an interview, and before going to the interview a sum of N10,600 is required to be deposited into their account.”

    Although government agencies release statements denouncing such fake or non-existent recruitment exercises, the scam thrived over a period of time, long enough for unsuspecting members of the public to fall victims.

    The fake agents allegedly charge the desperate job seekers between N10,000 and N300,000, based on the agreement and nature of the so-called job.

     Rising unemployment fuels recruitment scamming

    Experts particularly those in the nation’s human capital space believe the current state of the economy is largely responsible for the growing menace of job recruitment scams in the country.

    To them, the economic downturn, which may have been worsened by the nation’s growing unemployment rate, especially amongst the youth has forced many people to turn to job scamming for survival, as many of them have sprung up online and in offices parading themselves as employers or recruitment agents.

    According to the experts, recruitment scam occurs when a fraudster poses as an employer or recruiter, and offers attractive employment opportunities, which require that the job seeker pays money in advance. To lure unsuspecting victims into the web of deceit, the perpetrators of this scam go as far as reeling out specific vacancies that require being filled.

    The experts argue that the growing unemployment in the country remained a major contributory factor. For instance, figures from the National Bureau of Statistics (NBS) showed that unemployment has risen by 189.1 per cent, from 5.5 million in the first quarter of 2015 to 15.9 million in the third quarter of 2017. It added that the figure is likely to increase this year.

    The NBS stated that in the first quarter of 2015, the unemployment figure was 5.5 million whereas in the second quarter, it hit six million. In the third and fourth quarters of 2015, the figures were 7.5 million and eight million, respectively.

    In the first quarter of 2016, the rise continued to 9.4 million and in the second quarter of the same year, it went up again to 10.6 million. Also, in the third and fourth quarters of the same year, the figure maintained its rise to 11.6 million and 11.5 million, respectively.

    Last year, the unemployment figure was 11.9 million in the first quarter and in the second quarter, the figure hit 13.5 million. In the third quarter of the same year, the figure skyrocketed to 15.9 million.

    Recall that the NBS has warned that the number of unemployed people in Nigeria would increase in the fourth quarter of 2017. The bureau made this prediction in its third quarter unemployment report, which was recently released on its website.

    Sadly, the rising employment situation has compelled many job seekers to seek refuge in agents who in turn charge exorbitant rates or reach an understanding to share a certain percentage of their salaries as the case may be when the jobs click.

    Also, a few months ago, it was gathered that kidnappers had begun to send text messages inviting their victims for job interviews but they hold them hostage as soon as they turn up at the addresses given to them by the abductors and then demand huge sums of money as ransoms from the victim’s family.

    Also, research has shown that most job recruitment websites in Nigeria are operated by Internet fraudsters. Several recruitment firms are in the business of advertising non-existing job vacancies, with the aim of getting unsuspecting applicants to pay some fees, which are usually known as “registration” or “subscription” fees.

    Others are in the business of printing fake vacancies and phone numbers of scam recruiters on posters and circulating such around various locations.

    This ugly phenomenon has become a highly lucrative industry for its perpetrators as more and more people seek to obey their survival instinct by keying into anything that presents itself as an opportunity for them to earn an honest living.

    Experts’ view

    Experts say that this trend has triggered aggressiveness in the youth who deploy short-term means of making ends meet, while many others resort to advanced fee fraud, touting, gambling and other anti-social vices.

    They said while many who work for security officials at garages extort money from motorists and transporters, a large number of the unemployed youths have taken to corporate begging in the streets.

    Checks revealed that the fraudsters are becoming more sophisticated in the way they operate and it is becoming more difficult to differentiate between them and genuine recruiters.

    The Lagos State Chairman of Nigeria Labour Congress (NLC), Comrade Idowu Adelakun, urged youths to be wary of such scams as there are some signs to watch out for.

    Hear him: “Never part with your money. The golden rule is, any job offer that requires that you pay a fee in advance is probably fake. Most reputable companies will absorb the costs themselves.

    “Another sign is if the recruiter offers to train you for the job in return for money, NEVER pay them any money. No legitimate company or recruiter will ask for any payments upfront.”

    Enemigin also advised job seekers to carefully go through job sites such as Naijahotjobs.com, Ngcareers.com, joblistnigeria.com. hotnigerianjobs.com, latestnigerianjobs.com, jetheights.com, gblcareers.com, naijajobslink.com, jobberman.com, http://naijaguardianjobs. blogspot.com/, jobsmaster.com.ng, jobrapido.com.ng and nigeriabestjobs.com, among other genuine sites, rather than collect flyers on the road.

    “HUCAPAN is making moves to end quackery among recruiters through collaboration with Federal Ministry of Labour to organise monitoring teams to eradicate job scammers from the country,” he said.

    A HR Consultant at Systems Intellegenz Limited, Dolapo Jenrola, described the development as “worrisome.” She said: “The presence of fake recruitment agencies casts a shadow on the credibility of real HR firms. The more they are allowed to fester, the less people would want to trust or deal with organisations that provide real recruitment services.”

    Jenrola lamented that unfortunately, the trend is growing every day, with little or no efforts by the relevant authorities to checkmate such development. “The government should do a lot more to arrest the situation at this stage before it becomes intractable,” she recommended.

    To stop job scammers

    Experts say that it is bad enough that Nigerians are meant to grapple with high rates of job losses and the despondency that comes with such. They, however, note that it would amount to double jeopardy on the lives of such people to leave them to the antics of fraudsters, who lay in wait to fleece them of whatever it is that their lives are hanging on.

    They, therefore, listed a number of ways to avoid fake jobs and recruitment scams. Some of them include doing a thorough search on the hiring agency or organisation, visiting their websites to confirm if there are legitimate vacancies.

    They also recommend that as the year progresses, job seekers should steer clear of organisations that use free email accounts like Gmail and Yahoo instead of corporate email accounts, and also avoid being too desperate to notice the tell tale signs of a recruitment scam.