The kick off of the first phase of the National Wreck Removal Exercise has signalled the ridding of the waters of over 3, 000 wrecks and derelicts. In this report, OLUWAKEMI DAUDA looks at how the Nigerian Maritime Administration and Safety Agency (NIMASA) is promoting safety at sea and suggests the way forward

It has been in the works. But penultimate Friday, the Minister of Transportation, Rotimi Amaechi, came to Lagos to put his teeth to it: kicked off the removal of wrecks from the seas.

Disatisfied with the degradation and the rate at which the Lagos coastline was being washed away, the Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Bashir Jamoh, sought and got the nod of the Federal Executive Council (FEC) to clear wrecks and derelict vessels on the coastal waters and those underneath.

 A shipwreck

A shipwreck is what remains of a ship that has either wrecked, sunk or beached. Causes of shipwrecks include bad weather, poor design, fire, improper stowed cargo, navigation and other human errors leading to collision with another ship, the shoreline or an iceberg. The United Nations (UN) estimates that globally there are more than three million shipwrecks on the ocean floor. Lagos State is a major culprit.

 What the law says

The Nairobi Convention puts the onus of removing wrecks on the ship owner but the obligation has been neglected, forcing the government to use some of its resources for evacuating the wreaks.

Consequently, stakeholders said it would not be appropriate to blame NIMASA as certain processes are expected to be followed just like in other countries. For example, the Nigerian Environmental Impact Assessment Decree of 1992, and the Federal Environmental Protection Agency Decree of 1992 were amended in 1999 to take care of some of these challenges.

The Managing Director, Sweet Investment Services, Mr Tayo Adebari, who commended NIMASA in evacuating wrecks, urged the Lagos State government to join hands with the agency to save lives, properties, the environment and the eco-system.

“It is unfortunate we don’t adopt a preventive approach to issues in our country. If Jamoh fails to do this, there could be consequences on the population and the environment. The government and head of agencies must support NIMASA to ensure that Lagos is not washed off due to tidal pressures, especially now that the number of wrecked ships and abandoned vessels on the coastline and the Lagos water is huge,’’ Adebari said.

Areas affcted: Lagos, others

Communities always affected by the abandoned vessels include Marine, Apapa, Liverpool, Tin Can, Ilado, Ilashe, Mile2, Ojo, Oko Afa, Alpha Beach, Lekki, Eleko, Badagry and others along the Lekki coast.

Investigation also show that the problem is not peculiar to Lagos, but also has become a common phenomenon where there is a deep sea port such as Warri, Calabar, Port Harcourt, Bonny, Onne.

Expert reacts

Lagos is vulnerable because the state from Epe to Badagry is sitting on the lagoon.

The former Rector, Maritime Academy of Nigeria (MAN), Oron, Akwa Ibom State, Mr Olu Akinsoji, in a paper he presented to a special panel on Shipwrecks and Coastal Erosion with a focus on the Lagos coastal community, at the 2010 Lagos State Summit on Climate Change, said over 77 wrecks littered the Lagos coastline alone.

According to Akinsoji, 77 ship wrecks were above the water in Lagos in 2002;12 vessels were in layby condition as at August 2004;132 vessels were awaiting berth on the West Mole of the coast; while 12 vessels were washed ashore by 2010.

“There is a cumulative effect whereby sand accumulation by one ship adds to the other, resulting in the incursion of water as the wrecked ships are very close to each other. The recurring shipwrecks on the Lagos water has resulted in the erosion of choice beach lands, including coastal plants like coconut trees on the beaches. Lagos loses billions of naira to these erosions, accelerated by the shipwrecks and abandoned vessels, as strong waves can remove over one metre of land within 24 hours,” a resident, Mr Seyi Agbato, said.

Effects of wrecks

Shipwrecks and abandoned vessels on the waters provide hideouts for criminals. For instance, abandoned vessels have constituted a base for pirates, sea robbers and miscreants to attack legitimate vessel operators and fishing trawlers. This has threatened vessels, maritime trade and investment worth of several billions of dollars. Fishing trawlers have lost more than N25 billion to piracy and sea robberies.

The clog on maritime routes and waterways is increasing concerns and fears of investment in the maritime sector. Like other actors and stakeholders, the management of Nigerdock Nigeria Plc expressed worries about heaps of shipwrecks and abandoned vessels on the routes and waterways because they provide hideouts for pirates and sea robbers.

All vessels plying the water ways are supposed to be registered with NIMASA so that owners of abandoned and wrecked ships can be contacted in times of need.

Investigations, however, show that most of the vessels neither have legal documents nor are registered with NIMASA hence the reason the agency cannot trace most of the owners.

There are reports that some vessels come into the country without the knowledge of NIMASA and the Nigerian Navy. If this is true, then it means that such vessel owners do not observe international best practices, and the agencies must find appropriate means of sanctioning them.

The derelict ships that are plying the waters should not have been registered in the first instance. Most ships that cannot be registered in Ghana or even Togo are brought to the country.

According to operators, the coastal environment has become a dump site for old ships from other parts of the world. They noted that due to lapses in the enforcement of environment protection laws, owners of faulty ships find it convenient to abandon them on Lagos waters.

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Experts called on the Federal Government to adopt a policy framework that would discourage vessel owners from abandoning their ships and claiming insurance.

Call for enactment and enforcement of laws

A maritime lawyer, Mr Felix Agbaje, said: “Some people take insurance from insurance companies abroad. They dump the ships on the coasts of Nigeria because they are supposed to spend money on decommissioning the ship. When a ship has served its life time, you are supposed to take it to a dockyard and dismember it, recycle the metals, but they avoid such expenses, make money from insurance and they dump in the Nigeria where nobody cares.

“Nigeria has no legislation or enforcement of legislations that help people to remove ship wrecks. So, people find Nigeria a favourable ground to dump their ships that are no longer in use.

“The laws need to be amended, the Oil Spill Detection Response Agencies need to be empowered to be able to enforce investigations and fund it for themselves.

In other cases, we have absence of laws, we have various laws that do not create the necessary environmental remediation or restoration processes.The laws need to be amended, fines need to be punitive, hefty and they need to deter operators from destroying the environment,” he said.

What Amaechi said

“I want to congratulate NIMASA because it was the DG’s idea that we remove wrecks. My job was to get the cabinet’s approval, which I did. I am very delighted to be here to flag off the wreck removal exercise because this will improve the safe navigation of vessels on our waters.

“I have heard the NIMASA DG saying that I am giving the Rail sector more attention than the Maritime sector. Maybe people have forgotten that when I first arrived, I kicked against the collection of huge charges from vessels by a private firm at an anchorage, but the maritime sector joined the private firm to fight against me.

“This firm will charge a ship $2,500 for the first day in its anchorage, and ask the ship to wait for 30 days so that other ships can arrive. While waiting, the ships pay $1,500 per day from the second day to the next 30 days. I kicked against these arbitrary charges, but the maritime industry players joined the firm to fight against me. Do you people really expect me to stay in such a sector?

“Maritime industry players wrote a petition against me to the Presidency that I own the Deep Blue project contract. I asked Mr President, how much is Deep Blue project? It is $195million. Lagos-Ibadan rail contract is $2billion, so which one should interest me more? $195million or $2billion?

“I was fighting these arbitrary charges because it is the ordinary Nigerians that will pay for the huge charges this private firm is collecting from ships to stay in its anchorage. I told Mr President that it is either I am sacked as a minister or that private firm contract is terminated.Today, the rest is history.

“Look at the maritime sector, how many practitioners there are united. It is only in the Nigerian maritime sector that we have ship owners that don’t own ships. If I have to deal with ship owners that don’t own ships, why won’t I focus on the rail where all the coaches, tracks and wagons belong to the government because I am part of the government?

“When I first came as Minister, the first place I focused on was the maritime sector. I took some operators to Singapore because the Cabotage Act says for vessel acquisition, Nigerians should own 60 per cent stake while the remaining 40 per cent stake should be owned by a foreign investor. I praise the National Assembly for passing this law because they wanted to encourage indigenous ownership of ships. When we got to Singapore, the foreign investor said his 40 percent funding is ready, till today, we are still looking for the 60 per cent indigenous stake.

“If I have my ways, I will push that the Cabotage Act be amended because it is due to the 60-40 percent ownership structure that has ensured that we don’t have any Nigerian flagged ships.

“Maritime sector has a lot of problems. I am the first Minister to fight against these problems without being removed after my first term as minister.

“As I told Mr. President, the entire budget of the maritime sector is maybe N700billion. Let’s break it down, NPA is maybe N400billion. NIMASA is N100billion, the rest agencies have N200billion, everything in total comes to N700billion. Lagos-Ibadan rail alone as of today is N1trillion. So, should I bother my head where they will chop it off or focus on where the poor masses will benefit from?”

“This creative venture of clearing our waters of wrecks and derelicts, apart from guaranteeing better safety of navigation, opens up the prospects of many new investments in the maritime industry.

“This would tremendously help the Federal Government’s economic diversification drive and enhance Nigeria’s standing within the global maritime community.

“It was the NIMASA DG’s idea that we should remove wrecks from our waters,” Amaechi added.

 What Jamoh said

“These wrecks inhibit the operation of shipping companies, which constantly strive to increase efficiency in order to remain in business.

“As a result, most of the shipping companies usually avoid operating or investing in areas where navigational hazards are identified due to high insurance premium charges.”

He said with the elimination or reduction of the costs in insurance,survey and charting of wrecks, the cost of shipping would drop, to the benefit of mariners and other stakeholders in the maritime industry.

 Benefits of the wreck removal exercise

Jamoh said further: “It is pertinent to state that the benefits that would be derived upon completion of the exercise extend to other areas of maritime core functions, such as search and rescue services, Cabotage monitoring, as well as prevention and mitigation of marine pollution.”

NIMASA is charged with ensuring safety and security at sea as well as regulating the industry in line with international laws and conventions, principally, the International Convention for the Safety of Life at Sea (SOLAS) Convention of the International Maritime Organisation (IMO).

“In line with this mandate and in recognition of the importance of the safety of navigation in Maritime Administration, the agency has established the need for removal of critical wrecks along the Badagry Creek,” Jamoh said.

The NIMASA chief had said during a Ministerial Retreat organised by the Federal Ministry of Transportation (FMOT) in August that arrangements had been concluded for the recycling of wrecks and derelicts that would be recovered during the wreck removal exercise.

The speed of industrialisation in Africa has been sluggish and unimpressive. No thanks to low industrial capacity utilisation, weak manufacturing base and dwindling export of manufactured products within and outside the continent. But at a high-level roundtable discussion on industrialisation in Africa, with the theme, ‘Industrialisation in Africa: Positioning African industries for economic transformation and continental free trade,’ experts came up with robust policy actions, which, if implemented, will change Africa’s de-industrialisation narrative. Assistant Editor CHIKODI OKEREOCHA reports

The statistics are unflattering. For instance, Africa’s share of world output was 3.0 per cent in 2019, according to World Bank Data. The three per cent was less than India’s 3.1 per cent and equals South Korea’s three per cent for the year. It was also almost incomparable with China’s 28.7 per cent and America’s 16.8 per cent for the same year.

In addition, Africa’s 26 per cent share of exports of manufactures to total exports on the continent is far dwarfed by what obtains in most other regions of the world such as the South Asia’s 71 per cent, America’s 60 per cent and European Union (EU’s) 79 per cent.

What these imply is that Nigeria and other countries in Africa evidently lack a virile manufacturing base with the capacity to move their economies from primary production to manufacturing export. Yet, appreciable manufacturing capacity and competitiveness are widely acknowledged as key components of any viable industrial agenda.

In fact, most developed economies achieved enduring growth and development through advanced manufacturing capability. But, with Africa’s weak manufacturing base, low industrial capacity utilisation and declining export of manufactured products within and outside the continent, it is hardly surprising that her rate of industrialisation has been painfully slow.

It was against this backdrop, especially in the context of the start of trading under the African Continental Free Trade Area (AfCFTA), that experts and stakeholders from the public and private sector across Africa and beyond gathered in Lagos, Nigeria, last week, to brainstorm on policy actions to change Africa’s narrative of de-industrialisation.

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This was the roundtable discussion on industrialisation in Africa with the theme: Positioning African industries for economic transformation and continental free trade. The event, which was physical and virtual, was at the behest of the Manufacturers Association of Nigeria (MAN) to celebrate its 50th Anniversary.

Expectedly, the roundtable proved a veritable platform for experts to, among others, reconsider industrialisation in Africa and review the progress made thus far, identify where the continent missed it and suggest drivers for recovery, have robust conversation on how to address supply side constraints and reset the pillars of industrialisation, and highlight the benefits of promoting private sector driven industrialisation with emphasis on Micro, Small and Medium Enterprises (MSMEs).

Other issues included discussion on how to deploy raw materials development and industrialisation as enablers of economic transformation; suggest ways of developing the continental industrial value chain that is less dependent on external supplies to avert the challenges experienced during the outbreak of COVID-19 pandemic; and suggestions on country-specific strategies for up-scaling industrial output.

Highly interactive and participatory, Vice President, Prof. Yemi Osinbajo, who was special guest of honour, set the ball rolling when he said given the limitless opportunities offered by the AfCFTA for Africa’s industrialisation, there was the need for authorities across the continent to take the right actions including the protection of local industries and improving value chains in order to actualise them.

The AfCFTA seeks to create a common consumer base and market worth over 1.2 billion and $3 trillion. According to United Nations Economic Commission for Africa (UNECA), it will also escalate business to business spending in manufacturing, projected to reach $663.3 billion by 2030, which is $1.3 billion more than it did in 2015 and thereby improve the volume of trade within and outside the continent.

For these to happen, Osinbajo said: “We must take policy actions to create an environment in which businesses can thrive. To start with, we must adopt the right type of macroeconomic and industrial policies. It is important for African governments to provide a stable macroeconomic environment that avoids and smoothens out volatility in prices, sharp deteriorations in the current account and budget deficits, and of course, rapid accumulation in debt burdens.”

The Vice President, however, said while these should be avoided, the problem was seldom the occasional spikes in macroeconomic variables, but rather rapidly changing and fluctuating conditions that make it difficult for the private sector to make informed business decisions.

He also said on the industrial side, policies like tariffs, quotas, subsidies, and non-tariff barriers which protect the continent’s infant industries so that they can create jobs and enable learning are vital.

“Well-negotiated Rules of Origin (RoO) are important in the context of the free trade agreement as they are key to preventing trans-shipment and the deflection of trade.

“Without them, firms from non-state parties could set up simple labelling operations in one member state with a view to shipping already finished products to another member state without really adding any value,” he added.

RoO is key for trade in goods, as they are used to determine the country of origin of a product for the purpose of international trade. Osinbajo said it was important for MAN to involve itself in an advisory capacity to government negotiators as parties to the free trade deal go further into the RoO negotiations.

The Vice President also harped on the need for manufacturers to become competitive in order to withstand stiff competition from imports. He said while manufacturing industries must be nurtured and supported, they cannot remain infants forever.

“One of the ways to increase the competitiveness of African industries is to develop and deepen regional value chains wherein production systems starting from conception and design right through to supply of raw materials, processing, transport, storage, marketing, and sales take place within our countries and continent,” Osinbajo suggested.

He also stated that for Africa to see the kind of manufacturing activity it desires, there was the need to develop a strong infrastructural base, pointing out that extensive, cheap, and affordable infrastructure was vital for the success of African economies.

“We must build a network of roads, bridges, and rail that will facilitate the movement of goods and people just as we build the electricity plants to power our factories and the broadband networks that lubricate modern business.

“It would also be essential in the interim to develop sites with dedicated infrastructural and regulatory structures like Special Economic Zones and Shared Facilities for small businesses,” he added.

Osinbajo listed other requirements to stimulate manufacturing to include deepening the ecosystem for domestic and regional value chains; easing payments across borders. He said, for instance, that it was essential to develop and deepen inter-regional and continental payments systems.

“It is particularly important in this regard to rapidly operationalise the effort by African Export-Import (Afreximbank) to establish a Pan-African Payments and Settlement Platform.  This will go a long way in creating the desired continental payments system and also in facilitating cross-border informal trade, which is estimated to be about $93 billion per annum,” he said.

However, to position Nigerian industries to lead the economic transformation of the country and the continent at large, Minister of Industry, Trade and Investment, Otunba Niyi Adebayo, said all stakeholders should come up with specific measures and initiatives to improve the cost competitiveness of players in the sector.

“Cost competitiveness is a major challenge of the manufacturing sector,” Adebayo said, pointed out, however, that his ministry was working hard to improve the situation in various ways, one of which was through collaboration with the Ministry of Petroleum Resources to lower the cost of gas, which is critical to the production of energy for the sector.

The Minister also said industries need to align themselves with the country’s industrialisation programme, which overall aim was to drive job intensive growth of the economy by increasing domestic activities, especially local production through the domestication of key selected products, namely automobile, palm oil, dairy products, sugar, cassava starch and Cotton Textiles and Garments (CTG).

On his part, President, Dangote Group, Alhaji Aliko Dangote, said for the continent to develop globally competitive manufacturing industries, it must produce either higher quality or at cheaper cost or ideally, both. Noting that this is clearly not easy given that others have been at it for many years, he said: “It will be better to start by being locally competitive. That is the approach adopted by the Asian Tigers.”

Dangote, who pointed out that initially, protection and incentives will be required to support the local firms, however, said that as they learn, they can then become more efficient over time until they are able to compete globally.

“Governments must at the same time continue to remove the hurdles to competitiveness (e.g., poor infrastructure, unfriendly regulations, electricity, access to affordably finance, etc.),” he added.

The industrialist also advised that given the potential benefits of AfCFTA, its managers and other actors involved should speed up its implementation, as there are some issues, which still need to be addressed.

He further said: “It would also be good for them to study the reasons why the previous trading blocs did not enable intra-Africa trade to exceed 15 per cent of total trade and what can be done differently. These problems don’t suddenly disappear under AfCFTA.

“If I have to spend $10 on port charges to export cement while someone in Europe spends $3, then the European company already has a $7 cost advantage relative to an African producer

“Similarly, if I spend $8 per unit of gas while someone in America spends $3, then they already have a $5 cost advantage. By the time you look at a number of these examples you will easily be looking at a $20 cost disadvantage

“It is, therefore, vital for governments to continuously focus on removing barriers to competitiveness. That is the real ease of doing business, not how many days it takes to register a company.”

For Vice Chairman, China Africa Business Council, Chief Diana Chien, “Clearly, Africa has great potential that needs to be harnessed, and we are determined to make that happen. As people from China, which is the world’s largest manufacturing powerhouse, producing nearly 50 per cent of the world’s major industrial goods, we know how far Nigeria and this great continent can go.”

Small and Medium-scale Enterprises (SMEs) are the economy’s backbone, providing livelihood to many people, including the poor and the low-skilled. To tap into the immense potential in SMEs, the Lagos State Government is offering incentives to operators in this segment of the real sector to boost entrepreneurship and drive industrialisation. The ultimate goal is to revive the state’s economy and provide jobs for youths, writes DANIEL ESSIET.

The devastation caused by the COVID-19 pandemic and its variants has underscored the benefits of having a robust small-scale manufacturing sector.

Experts believe that if Nigeria had vibrant Small and Medium Scale Enterprises (SMEs) before the outbreak of the virus, its devastation on businesses and the economy would probably not have been on this scary scale. They also believe that if the manufacturing sector must gain traction, emerge competitive and drive industrialisation, the economy must be populated by vibrant SMEs.

To realise these, the federal and state governments are striking strategic and synergistic partnerships aimed at equipping the youth with the tools they need to set up and run their business and contribute to economic transformation.

Essentially, the partnerships involve bringing together a diverse community of young leaders, entrepreneurs, investors, corporates, policymakers, and creatives to brainstorm on how to get the youth engaged engagement in small scale manufacturing.

Indeed, across the country, SMEs play an important role in development, contributing a large part to national output and generating employment and growth.

The Lagos State appears to be leading the renewed public sector push to catalyse collaboration that seeks to support high-tech manufacturing with SMEs on the driver’s seat.

The state’s recent sealing of a strategic partnership deal to help SMEs across sectors unlock their growth potential and connect the wider business community, according to those conversant with details of the partnership, promises to change the state’s SME landscape.

One of the highpoints of the strategic partnership approach the state adopted to empower SMEs was the ‘Entrepreneurship Mentorship Forum’ organised by its Ministry of Wealth Creation and Employment. It was themed ‘Globally competent, globally competitive.’

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The Commissioner for Wealth Creation and Employment, Mrs. Yetunde Arobieke, noted that the pandemic has revealed the vulnerability in global supply chains, prompting increased attraction towards transformation of the manufacturing base over the long term.

Mrs Arobieke said the Ministry has been partnering the private sector to instill the mindset, values, practical skills and connections young people need to be change makers.

She noted that there was no better time to galvanise youths towards creating solutions than now hence, the Lagos State Government was paving the way for a brighter and sustainable future for all by getting more sand small businesses into micro production. According to her, this will allow substantial scope for growth in domestic manufacturing.

This approach, The Nation learnt, bodes well for Lagos, Nigeria’s commercial capital. According to the commissioner, Lagos is one of the states experiencing significant growth in population. It is also at the core of the country’s economic growth.

And one fundamental change brought on by these is the accelerating trend towards e-commerce and online shopping.To Mrs Arobieke, therefore, enhancing the capacities of entrepreneurs and small businesses in the state was crucial to their response to their customers’ demands using the online platforms.

The commissioner noted that the world had become more inter-connected and interdependent, making it imperative for the government to increase efforts on a global scale by training and equipping the youth to combat societal problems and challenges.

“We have stepped up efforts by infusing various programmes and implementing policies, some of which the state Governor, Babajide Sanwo-Olu, has put in place; today’s programme is packaged to challenge and inspire our teeming vibrant youths whose success will largely be shaped by how globally competent and globally competitive,” she said.

She said the youth need the awareness, skills and knowledge to understand, navigate and flourish in this increasingly global economy. “This includes what we often refer to as ‘soft skills,’ such as problem-solving, adaptability, work ethic, and the ability to communicate in a business setting because they integrate academic knowledge with technical skills in real-world settings.

“Work-based learning programs, in particular, really help youths get acclimated to these behavioural skills.There must be conscious and concerted efforts to up-skill and retool ourselves to ensure that we are on track with global trends and standards to enhance the competence of tradesmen and artisans,” the commissioner said.

In doing these, the state government believes that the deployment of collective facilities will make SMEs and artisans benefit from economies of scale, including sharing infrastructure and processing machines. Consequently, development of hubs is being prioritised because it is pivotal to investment and innovation.

Today, Lagos is among cities with hubs where development funding and collaboration across industries are given priority attention. And food is the star product of the micro enterprises in Lagos, providing a viable future with enhanced quality of life for everyone. The steadily increasing demand in the region for processed food products is driving companies in the sector to expand and modernise manufacturing methods.

Lagos parades many micro and medium enterprises, which are producing canned products from cassava, maize, peanuts, coconut and cassava. The commissioner said the government was working with youths dedicated to solving food and agricultural production challenges to help them come up with solutions. She stressed that getting more entrepreneurs to be involved in manufacturing and industrial activities was necessitated by urban expansion and the surging demand for jobs.

She noted that boosting the competitiveness of SMEs supports inclusive growth of the economy as well as promotes innovation and competitiveness through knowledge and technology transfer. According to her, SMEs are the backbone of the economy, providing livelihood to many people, including the poor and the low-skilled.

Today, the approach is enterprise training and entrepreneurship growth, with the state government establishing a sound institutional framework for training for entrepreneurship and for SMEs to be successful.This involves competent public and private training institutions partnering with the government with training programmes that meet the demands of enterprises.

According to the commissioner, the plan of the state government was to provide a holistic package of services targeting artisans, youth and SMEs in clusters in high-potential sectors. She outlined the services to include upgrading managerial skills, giving information on market trends, mentoring and providing access to networks.

She stressed that the ministry initiated the capacity building scheme, which was meant to up-skill the artisans to meet modern business realities and position them to be more globally competitive and productive. Because of the current economic volatility, the government, she said, was rolling out timely measures in support of industries, and in particular, SMEs, with focus on stabilising the economy and relieving people’s burden.

The commissioner said the government was allocating resources for the development of innovation and technology (I&T) and re-industrialisation, as well as the grooming of the local talent pool in the long run. This will forge new industrial sectors and job opportunities on a more diversified basis.

SMEs have been under immense pressure to keep up with the pace of change and become resilient against the effects of the COVID-19 crisis. However, much help has come the way of SMEs to enable them innovate, transform and ensure they emerge stronger from the crisis. For instance, the government, the commissioner said, has supported firms in the areas of financing, adding that the Lagos State Employment Trust Fund has given loans to many SMEs.

She said the government’s goal was to open up new opportunities for the growth of small manufacturing and the services sector. She added that as a major impetus for economic and social development, SMEs make contributions to increasing employment, improving people’s livelihood and promoting entrepreneurship and innovation.

The Permanent Secretary, Ministry of Wealth Creation and Employment, Mrs. Kafayat Ajenifuja, said the government was building an ecosystem sustained by contributions from entrepreneurs, investors, companies and other stakeholders.

According to her, there are efforts to keep an eye on the future and funnel innovation, connect youths with opportunities on the market and then help them scale up. To continue to survive, she said SMEs have continued to take advantage of technological progress to grow and become the mainstay of the manufacturing sector.

Head of Entrepreneurship in the ministry, Mrs. Taiwo Abiose, said trainees were supported by guidance, counselling, and employment services for career development..

Experts shared best practices in supporting and encouraging the SMEs to join the technological revolution. The experts agreed that multi-stakeholder partnerships were central to facilitating innovation and creating resilience in SMEs. They emphasised the need to channel investment into the SME sector to make them ready to participate in the economy.

Consultant to the state Ministry of Wealth Creation and Employment, who is Chief Executive, W-Holistic Business Solutions, Mrs. Lanre Oniyitan, said many SMEs were not dynamic. According to her, SMEs have to be entrepreneurial and adaptable to achieve competitiveness.

Chief Executive, Nextgen Farms, Miss Kofo Durosinmi-Etti, urged entrepreneurs to identify and adopt models to spearhead growth and competitiveness.

From Lagos to Johannesburg to Nairobi to Cairo and other major African markets, African stock markets may soon collapse the walls and open up for a synchronised market that allows everyone to trade and deal across the countries, through a simple push of button. Deputy Group Business Editor, Taofik Salako reports on the ongoing process to link up African stock markets.

Major African securities exchanges have reached advanced stage in an ambitious project to de-compartmentalise cross-border trading in Africa-listed securities and leverage technology to create a single pool of Africa-listed securities, accessible to all across the continent.

Investors of all ilks and worth and issuers of all grades will have access to hundreds of companies in a continental pool limited only by the fund of the investor and size of the issuer.

Such that an average investor in ‘Kutuwenji’, the proverbial remotest town in Nigeria or Duse in Northeast Kenya can create a portfolio, including South Africa’s Sonangol, Nigeria’s Dangote Cement, Kenya’s Safaricom, Mauritius’ MCB Group, Egypt’s Suez Canal Authority and Morocco’s Groupe Maroc, among others, and be part of the continental wealth creation, irrespective of geographical, demographical and financial groupings.

Under the auspices of African Securities Exchanges Association (ASEA) and African Development Bank (AfDB), major stakeholders in the African securities markets have agreed to set up order-routing technology platform for routing orders and trade confirmations between stockbrokers across Africa’s major exchanges.

The cross-border trading project, known as African Exchanges Linkage Project (AELP), included major African exchanges. They are Nigerian Exchange (NGX), Casablanca Stock Exchange, The Egyptian Exchange, Johannesburg Stock Exchange, Nairobi Securities Exchange, Stock Exchange of Mauritius and Bourse Régionale des Valeurs Mobilières (BRVM). The stock exchange for eight African countries under the West African Economic and Monetary Union (WAEMU) are Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.

With all the major African stock markets in the loop, the project is designed to scale up to all African stock markets, including the emerging markets. The AELP is aimed at unlocking pan-African investment flows, promoting innovations that support diversification for investors, and addressing depth and liquidity in the markets. It is funded by a grant from the Korea-Africa Economic Cooperation (KOAFEC) Trust Fund managed by the AfDB.

With the AELP Link, investor’s orders in one market will be channelled by a domestic stockbroker to a stockbroker on the foreign market where the security is listed, to enter into that market for execution in the foreign market. Africa-listed securities to be accessed through the AELP Link include all securities that are available for cross-border investors.

The platform will enable investors to trade on Africa’s most promising and profitable businesses and global leaders as well as corporate and government bonds, Exchange Traded Funds (ETFs) and derivatives; where these are listed on the participating exchanges and the sponsoring stockbroker provides access. The AELP Link is expected to boost pan-African investment flows and bring more liquidity to African markets.

The order-routing system contract has already been awarded to DirectFN, a global information technology (IT) firm experienced in capital markets solutions across the Middle East and many emerging and frontier markets. DirectFN was awarded the contract after a competitive bidding process that attracted applications from top international suppliers in 18 countries.

The impending takeoff of the continental link will not only boost and simplify existing cross-border transactions largely dominated by some fund managers but open up the entire African marketplace to the vast majority of average investors, professionals and market operators.

Official reports had indicated that cross-border trading between the seven leading African stock markets for the 15-month period ended March 31, 2020 totalled $1.6 billion with a strong potential for increase over the next period. Cross-border deals in 2019 stood at $1.1 billion while more than $500 million were traded in first quarter of 2020.

Cross-border deals are transactions that involve more than one financial jurisdictions or involving many stock markets and national regulatory authorities. Already, within the seven major exchanges under the AELP, there are more than 1,050 companies listed, including Africa’s most promising, profitable and dominant companies in addition to hundreds of sovereign bonds, corporate bonds, exchange-traded funds (ETFs) and derivatives.

The continental order-routing link will also help to address several concerns by African fund managers on cross-border trading. A survey of African fund managers had shown that regulation, market data, prices, efficiency of execution and commission, quality of companies and investment opportunities, corporate, social and governance criteria and availability of research were some major concerns of cross-border traders and fund managers.

Ahead of the take-off, leading African stockbroking groups have signed an agreement to establish a common group that will help to facilitate seamless securities dealings and transactions across African capital markets. This will help to create and enhance common professional rules and standards and greatly influence the commonality of trading and investment rules across the African markets. Stockbrokers or securities dealers are widely regarded as the main professional group in the stock market, as they interface between investors, issuers and regulators.

Securities and stockbroking associations from Nigeria, Egypt, Kenya, Mauritius and Morocco signed a Memorandum of Undertaking (MoU) to establish African Stockbrokers and Securities Dealers Association (ASSDA) in Botswana, Southern Africa. WAEMU was also part of the agreement while ASEA was an observer. The ASSDA is expected to foster Pan-African investment and trading of securities, and support the realisation of the AELP.

Membership of ASSDA include associations of registered stockbrokers or securities dealers or associations whose members deal in securities in one form or another as approved by the Governing Council of ASDDA. The AfDB and ASEA shall also serve as observer members of ASSDA.

Among the objectives of ASSDA is the deepening of financial markets in Africa by encouraging and supporting measures that shall enable and facilitate trading and settlement of securities through stockbrokers and securities dealers across exchanges in Africa.

ASSDA also supports the overarching goal of boosting Pan-African investment flows, promoting innovations that support diversification needs of investors in Africa, and helping address the lack of depth and liquidity in Africa’s financial markets. ASSDA shall also be the umbrella and advocacy body that shall engage with regulators, exchanges, other Pan African bodies and governments in seeking to find solutions that shall facilitate trading in securities across Africa.

President, African Securities Exchanges Association (ASEA), Dr Felix Amenounvé said the award of the contract for the order-routing system was a big step towards free movement of investments across Africa and free flow of capital.

He said the aim of the project is to open new opportunities for individual and institutional investors to invest productively into Africa’s growth story.

“The Exchanges continue to support African enterprises and governments to raise long-term capital for African jobs, business growth, infrastructure and development,” Amenounvé , who is also the Chief Executive Officer of the BRVM said.

Chief Executive Officer, Nigerian Exchange (NGX) Limited, Mr. Temi Popoola, said NGX was optimistic the milestone contract would further hasten efforts at capital market integration across Africa.

“The work of the AELP is significant, as it will serve to ultimately boost Pan-African investment flows, promote innovations that support the diversification needs of investors in Africa, and help address the lack of depth and liquidity in Africa’s financial markets. We, therefore, take this opportunity to commend the efforts of ASEA and AfDB, and reiterate our continuing support of the AELP,” Popoola said.

Managing Director, DirectFN, Dr Walid Al Ballaa, said innovative technology and focus to bring digital maturity in building digital relationships across African markets will create positive impact on the overall African economy.

He added that DirectFN was equally excited to assist in realising the goals across the participating African Exchanges and to enable the African capital market ecosystem digitally to create positive impact on the overall economy.

Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Chief Onyenwechukwu Ezeagu said the decision to establish ASSDA was taken at a roundtable organised by the African Development Bank (AfDB)  in Abidjan on April 24, 2019, for the African Exchanges Linkage Project (AELP).

He explained that the AELP was an initiative of ASEA and AfDB to enable and facilitate cross-border trading and settlement of securities across participating exchanges in Africa.

Group Chief Executive Officer, Nigerian Exchange (NGX Group) Plc, Mr. Oscar Onyema, while evaluating importance of initiatives such as AELP, said African stock markets need to develop capacity to meet the growth financing need of the continent.

He said integration projects such as AELP are important initiatives that have the potential to unlock demand among issuers and boost liquidity, thus deepening the funding capacity of the African markets.

“Building the African financial market is our collective responsibility, hence we must seek out knowledge that empowers each of us to remove impediments such as outdated systems and trading practices that impede the ability of African exchanges to handle sizeable capital inflows,” Onyema had said.

The linkage of African stock exchanges is also expected to serve as a major complement to the African Continental Free Trade Area (AfCFTA), which aimed at integrating African economies and creating a continental market for African goods, products and services.

But many analysts have expressed concerns on the possibility of political influence as a mitigating factor for the linkage, given the tenuous institutional governance in many African countries. However, there is strong optimism that the collective vision and agreement so far will moderate political interference and drive the project to fruition.

Imagine a portfolio of Africa’s largest and most profitable companies, equities and bonds issued by highest-grade African companies, sovereign bonds by African governments and the limitless opportunities to tap into emerging markets across the continent. All these without the hassles of national laws, divergent processes and costs. That is the future, the nearest future.

The announcement that the Central Bank of Nigeria will unveil its digital currency is a demonstration of the monetary authority’s proactive disposition in seeking to align the economy with global practices and payment systems, reports Group Business Editor, SIMEON EBULU

With July, the second month in the middle of the year racing to an end, the days and weeks and months are closing in to when the Central Bank of Nigeria (CBN) plans to unveil its much awaited digital money. The CBN Director, Information Technology, Rakiya Mohammed said in early last month that Nigeria’s digital currency would be launched by the end of the year.

Mohammed, an Information Technology specialist, spoke at an online briefing at the end of the Bankers Committee’s meeting. She said the CBN has for over two years been exploring the technology to engage the upcoming development, affirming that before the end of the year, the apex bank will be addressing the issue frontally and possibly unveil a pilot scheme to provide this kind of currency to Nigerians.

She said when the scheme eventually comes on stream and becomes operational, the currency would complement cash notes, stating that the need to make remittances travel easier from abroad to Nigeria was one of the  reasons the apex bank is introducing the digital currency. Mohammed assured that the digital currency would be accessible to all Nigerians.

“just like everybody has access to cash, everybody will also have access to the CBN’s digital currency,” she said, adding that the decision by the apex bank to come up with its own digital currency, has been in the works for upwards of 24 months, a long enough time to identify latent risks and plug any envisaged, or potential loopholes.

While admitting that there are risks associated with the proposed digital currency, Muhammad, nevertheless, assured that the emergence of the CBN digital currency will not cause any disruption, or hiccups, as it is expected to operate alongside other virtual currencies.

Cryptocurrency trading

The road to what will eventually become the nation’s e-currency started on a somewhat bumpy terrain following the CBN’s reaction to the overly interest shown by Nigerians in cryptocurrency trading, including bitcoin. The trade gained ascendancy in the very short time that it debuted in Nigeria.

The concern raised by many that bitcoin, or cryptocurrency trading does not come under any form of official or monetary regulation fueled tears that allowing the trade to fester could result in loss of capital and investor funds if things went awry.

The same consideration may also have informed the CBN’s initial decision to forbid Deposit Money Banks  (DMBs) allowing their platforms to be used for any payments or money transfers for crypto currency dealers, including bitcoin. In a circular to banks and financial institutions in February, this year, the CBN directed the stopage, or facilitation of payments for cryptocurrency transactions.

It also authorised banks and financial institutions to identify and close forthwith accounts associated with individuals or entities that carry out transactions in cryptocurrencies and others operating cryptocurrency exchanges. In lending credence to the directive, the CBN Governor, Godwin Emefiele, said cryptocurrencies were being used to facilitate scams and money laundering, which, according to him, were highly inimical to the economy and could further weaken the naira.

Expectedly, the central bank’s position was acquiesced to by the various anti-graft agencies – Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and the Nigerian Financial Intelligence Unit (NFIU).

Accordingly, EFCC helmsman, Abdulrasheed Bawa, agreed that cryptocurrencies were avenues through which criminals laundered the proceeds of crime and illicit financial transactions, stating that the commission had recovered proceeds of cryptocurrencies  worth about $20 million from cybercriminals. His ICPC counterpart Bolaji Owasanoye, followed suit, saying cryptocurrencies could be employed to fund insurgencies.

Owosanoye was more categorical, pointing out that the #EndSARS protest against police brutality, which rocked the country in April, was largely financed through cryptocurrency.

The anti-graft agencies revealed that they  have some cases linked to cryptocurrencies but have been unable to track the suspects, admitting that it would be difficult to solve cases involving cryptocurrencies as their arrowheads were unknown.

Acting in alliance with the apex bank’s directive,  the Securities and Exchange Commission (SEC) suspended the approval of cryptocurrencies and related products in Nigeria.This volte-face came after its earlier indication to accept bitcoins. It, however, said it would allow their operators remaining in business only if such digital currencies are operating bank accounts within the Nigerian banking system.

Reactions

But a flurry of reactions from within and outside the cryptocurrency community trailed the directive of the apex bank, causing fears that the ban could adversely impact fintechs and hinder the rising potential of the economy.

Considering the growing global popularity of the cryptocurrency phenomenon, which is being used in over 100 countries, and Nigeria’s rating as the second-largest user of virtual currencies globally, the CBN directive only succeeded in stirring anxiety in the cryptocurrency community.

The criticism against the regulator’s stance was so strident, it prompted a reaction from the number two man, Vice President Yemi Osinbajo. He counselled that rather than impose a blanket ban o cryptocurrencies’ transactions, the situation actually called for a more robust regulatory framework that addresses the concerns raised about the cryptos without killing the potential of digital currencies in Nigeria. Osinbajo’s advice may have prevailed afterall and possibly informed, or influenced the CBN’s volte face in announcing the now awaited digital currency anytime before December 31, 2021.

Mohammed said: “In terms of human and institutional engagements, Nigeria is certainly behind the scale and the scope of what other countries in Asia, including China, Singapore and  Europe and other nations are doing,” adding: “It’s, however, not about doing it first, but rather doing it right.”

Operability

The Central Bank digital currencies would operate just like the money you see when you check your bank accounts online, Mohammed said, adding that the ‘digital Naira’ would be issued by the Central Bank of Nigeria and held directly in citizens’ digital wallet.

Instead of printing physical money, the CBN would use electronic coins or notes. The digital wallet would be accessible through smartphones. The government/monetary authorities could also decide whether they want citizens to create direct accounts with the CBN or operate the digital currency through Deposit Money Banks (DMBs) or commercial banks.

Benefits

One benefit CBDCs could provide is in lowering the cost of cross-border payments. It’s  still 10 per cent or more on the average to send money from one country to another because of our antiquated corresponding banking system and the inefficiencies in our payment system. This particularly really hits people on the economic margins who probably work overseas and are trying to send money to their relatives across borders.

Digital currencies offer numerous advantages. As payments in digital currencies are made directly between the transacting parties without the need of any intermediaries, the transactions are usually instantaneous and at low-cost. This fares better compared to traditional payment methods that involve banks or clearing houses.

Digital currency-based electronic transactions also bring in the necessary record-keeping and transparency in dealings. The CBN listed the benefits of the proposed digital currency to include macro management and growth, cross border trade facilitation, financial inclusion, monetary policy effectiveness, improved payment efficiency, revenue tax collection, remittance improvement, and targeted social intervention.

Others are expansion of the financial technology (fintech) ecosystem through enhanced operational efficiency, opportunities for fintech start-ups in building services/products like financial inclusion that will contribute to the economic growth, and the creation of a new system complementing the traditional payment system.

Nigeria, according to recent reports, is at about about 60 per cent in financial inclusion and, against its 80 per cent target at the end of the year, steps should be taken to raise the bar of the nation’s financial inclusion. The CBN is of the view that its proposed digital currency would enhance the inclusion drive and reduce the cost of cash management, while at the time enabling innovations in the nation’s financial market.

Challenges

No doubt, there are downside risks in the CBDCs, and the one that come to the fore, especially in Nigeria, is power outage. For instance, if there is a dependence on CBDCs (but that is not the case as yet) and there is suddenly a massive power outage, it could jeopardise the entire system.

The other issue and the most feared which can compromise and rubbish the concept, is if there is a hack as is commonly being experienced in other businesses, even in the advanced countries.

The safetynet obviously would be for the CBN to continue to allow the traditional banking system to co-exist with the digital currency, or e-Naira and other forms of currencies as the case may be.

There are other concerns that have to do with bank-runs during economic instability. In such eventuality, the citizenry will resort to the CBDCs as the safer option to store their funds since they are being held with the CBN which is not likely to go under, but the MDBs would feel the heat and this could cause instability to the overall financial system.

Privacy may also become a huge issue, depending on how the digital currency is designed. There is a danger that the CBN may end up creating a central data. So, caution should be advised as payment data is really sensitive and gathering it in one place is really dangerous and they need to think about how that data would be protected and whether or not that data collection is necessary

Enlightenment

To say there’s need to embark on a massive and widespread enlightenment prior to the introduction of the CBN e-currency, is an understatement. Given the literacy level, not just of formal education, even fintech availability and adaptation, coupled with the huge and pervading  practice of cash-based transactions and the informal nature of buying and selling in our markets, streets, just name it, for this concept to permeate all strata of the society will be an uphill task.

Notwithstanding the CBN’s objective of creating a digital currency that will help promote the cashless policy, the banking sector regulator should also be ready to undertake massive and diverse awareness programmes to ensure that its novel digital currency model will and can function for all classes of Nigerians.

Agriculture plays a major role in development. There are international and local efforts to make it drive economic recovery, create employment and put food on the table at stable prices, DANIEL ESSIET reports.

The agric-food sector is key to growth in Africa. It contributes millions of dollars yearly to economies on the continent and employs millions of residents.

While the sector’s performance is critical to households’ well-being, analysts say it also boosts government revenue.

For instance, the Food and Agriculture Organisation (FAO) noted that while the African Continental Free Trade Area (AfCFTA), representing a market of 1.2 billion consumers, holds the potential to lift millions of people out of poverty and end chronic food insecurity in Africa, its success rests on the agriculture sector.

As economies in Africa have emerged from COVID-19, stakeholders believe it is important that policymakers provide the most conducive conditions for the agri-food industry to rebuild itself. That, according to them, would allow the industry to continue to provide the benefits it has been delivering over decades.

At the High-Level Virtual Dialogue-Feeding Africa: Leveraging existing and successful innovations, organised by the African Development Bank (AfDB), International Fund for Agriculture (IFAD), Consultative Group for International Agriculture Research (CGIAR) and Forum for Agricultural Research (FARA), experts sought better strategies that could boost food production domestically.

They also canvassed initiatives that encourage the utilisation of automation and digitalisation in the agriculture sector, especially among small and medium enterprises as well as individual farmers.

True, a coalition of multilateral development banks and development partners pledged over $17 billion in financing to tackle rising hunger and improve food security.

Also, 17 African heads of State agreed to commit to boosting agricultural production by doubling productivity levels, through the scaling up of agro-technologies, investing in access to markets, and promoting agricultural research and development.

Of the amount pledged, more than $10 billion came from AfDB, which said it would invest $1.57 billion on scaling up 10 selected priority commodities over the next five years.This will help countries achieve self-sufficiency. Another $8.83 billion from the bank will go towards building strong value chains over the next five years. This will include programmes to create opportunities for young people – particularly women.

Having appreciated the magnitude of the challenges bedeviling the sector, AfDB’s President Dr. Akinwumi Adesina said a stronger partnership was necessary to support distribution of emerging technologies and innovations to millions of farmers scattered across the continent.

AfDB, IFAD, FARA and the CGIAR System Organisation pledged to work with African leaders to transform and modernise Africa’s food production.

For them, enhanced productivity, integrated value chains and economies of scale were at the heart of Africa’s food security challenge.

While transformation of the food systems has become critical to achieving the Sustainable Development Goals (SDGs), Chief Executive, Wandieville Media, Yewande Kazeem, emphasised that achieving this would not be possible without encouraging young people to take leading roles in the campaign.

She talked about her experience when she visited and engaged with entrepreneurs and youths across the continent. Her words: “They all have the same challenges. They need access to finance. Farmers need support to process nutritious foods. Finance to invest in appropriate technologies to scale and increase business efficiency.”

Addressing African Presidents on empowering youths at the event,   Kazeem, called for functional plans to lure youths to drive innovation as part of the long-term initiative to strengthen the sector.

As the continent looks to developing a new sector of agri-technology, she urged the government to bring youths into high-tech farming and research and development.

According to her, good innovation climate, strong talent base, reputation for food safety and strategic positioning would help Africa to recapture a big   slice of the food industry.

As new generation of technopreneur farmers is emerging, she expects institutes of higher learning to introduce more courses to equip students with skills for the sector.

She said: “Our youths are hardworking, creative, innovative, smart and ready to work. We just need a business-friendly environment. We see the potential and opportunities that exist in the continent. We are ready to feed Africa and the rest of the world. The world is ready for Africa; the question is: are we ready for the world?”

Another point, she noted was that women farmers are ‘essential’ for future. She maintained that there are still barriers in the way and a lack of support for their entry into the profession.

In Nigeria, analysts say, agriculture has the potential to advance the country’s growth.

This, according to them, was achievable provided there was increased adoption of new technologies by farmers across all sectors.

In support of this, stakeholders  had come up with several initiatives geared towards improving food security and championing agricultural development.

One of such interventions is the yearly Research-Extension-Farmers-Input-Linkage-System (REFILS) exercise organised by Institute of Agricultural Research and Training (IART), a subsidiary of Obafemi Awolowo University (OAU).

It focused on farm productivity, harvest and post-harvest losses, trade performance, quality of produce, small-scale processing and farm and value chain operations – at both an institutional and production level.

IART has been deploying technology to assist the scaling up of production of food crops.

Currently, losses in the nation’s agriculture, both in terms of quantity and quality are high ranging from 20-40 per cent mainly because of poor harvest and post-harvest management.

There have been efforts by local food value chain experts, working alongside the Federal Government to drive agricultural transformation aimed at boosting the country’s economy.

Meanwhile, last month the 2020/2021 Annual-In-House Review Exercise/33rd Southwest Zonal Research Extension Farmers Input Linkage System (REFILS) workshop held in IART, Oyo State. It brought together the agricultural developments programmes, farmers, private organisations and researchers in Southwest for an evaluation of research output and impacts on the region.

Stakeholders looked at converting agriculture from a supply-driven to a demand-oriented sector that could compete in the national and international markets through vertical integration rather than horizontal expansion of value chain activities.

Nevertheless, Nigeria faces the onslaught of climate change. Speaking at the event, the Vice Chancellor (VC), Obafemi Awolowo University, Ile-Ife, Osun State, Prof. Eyitope Ogungbenro Ogunbodede, stressed the need to build climate resilience and leave countries and communities more vulnerable to future shocks.

Ogunbodede, who is Chairman, IART, spoke about climate change as one major threat with changes to weather patterns and extremity having adverse impacts on food crops productivity and challenging the livelihoods of farmers.

He noted that the Southwest and other parts of the country had been vulnerable to the impacts of severe weather-related events and food insecurity.

With climate change affecting food production, he continued, that it was time to focus on making food markets more resilient to climate shocks.

He urged researchers to rise to the challenge by developing technologies to mitigate the effects of extreme climatic events on agriculture and rural livelihoods.

He added that a multi-stakeholder approach is vital to addressing food security and rural livelihoods.

According to the Vice Chancellor, efforts must be put in place to find solutions to the incessant clashes among farmers and herdsmen, as   “climate change, COVID-19 pandemic coupled with the clashes between farmers and herdsmen required a new approach so as to tackle food insufficiency in the country”.

“The issues of climate change, friction between farmers and herdsmen and indeed COVID-19 pandemic have affected agricultural research and productivity and required a new approach to research and development,” he said.

Director-General, Oyo  State Agribusiness Development Agency (OYSADA), Dr. Debo Akande, emphasised the need for inter-sectoral cooperation and coordination, including greater participation of the private sector, research and development institutions, farmers and non-governmental organisation as key to agricultural transformation.

Akande said agribusiness entrepreneurship remains the potential driver to the economy and poverty alleviation in the country.

He said IAR&T, being one of the foremost National Agricultural Research Institutes in Nigeria, is living up to its mandate in enhancing farming systems and developing improved technologies and outstanding improved varieties of many common staples.

He said agriculture is taking its position as an important contributor to the economy with a strong awareness of the entrepreneurship potentials in the agricultural sector, generally referred to as agribusiness.

“Agribusiness entrepreneurship remains one of the most important potential drivers of the economy and is closely related to poverty alleviation.

“Decades of policy reform, agricultural restructuring, and the growth of vertical integration within the food and agri-business industries have reshaped the sector greatly, unveiling its enormous potential and creating a leeway in tackling the problem of poverty both in rural and urban areas,” he said.

At the forum, Lagos State Agricultural Development Authority (LSADA) got the ‘Outstanding Agricultural Development Agency of the Year’ award. It was presented by the Director-General, Oyo State Agricultural Development Authority, Dr. Debo Akande.

Receiving the plaque from the institute, the Programme Manager, LASDA, Dr. Olalekan Pereira-Sheteolu, said the award, which came barely days after the launch of five-year Agricultural Development roadmap by the Governor, Mr. Babajide Sanwo-Olu, would spur the authority to greater accomplishments.

He said the recognition could not have been possible but for the ongoing overhauling of the entire agricultural value chain by the governor.

The Programme Manager, however, thanked Mr. Sanwo-Olu for his support and for making the award a reality. He dedicated it to staff members, who have worked to move the agency to an enviable position.

Sheteolu said the agency has been involved in the implementation of interventions that would improve sector performance out.

These include improvement of rural infrastructure for market access, increasing food supply, technology dissemination and adoption and   complying with commitments on enhancing agricultural development.

According to him, LASDA is focus on long-range development is intended to help defeat hunger and poverty, mainly by creating more opportunities for small-scale farmers in the rural areas to earn a good living.

He reiterated that the priority for the agency is increasing agricultural productivity on small farms by helping farmers to explore  advantages of superior feeds, fertiliser use, pesticide integration into markets, rural roads, credit facilities, among others.

For long, rent payment default and its associated legal challenges are pain in the neck of property owners and their tenants. However, experts in the property market have weighed in on the matter, recommending a mix­mode in rental payment to allow some tenants pay monthly while others yearly, as opposed to the prevailing upfront payment. According to them, this option is a win-win arrangement for both parties, as it will deliver value to property owners and reduce tension between them and their tenants. It will, on the other hand, guarantee convenience and ease of payment for tenants. Assistant Editor OKWY IROEGBU-CHIKEZIE examines the option.

For landlords, the fear of recalcitrant tenants,particularly those who default in paying their monthly or yearly rent, is, perhaps, the beginning of wisdom.

This is more so because rental laws, according to some industry operators, appear to be skewed in favour of tenants, as court processes to resolve a stand-off between a landlord and a tenant drag for years, allowing the later stay almost indefinitely without payment, to the detriment of the landlord.

In view of the foregoing, experts are  canvassing an option of mix­mode in rental payment, which allows some tenants a more flexible option of paying monthly while others yearly. They believe, for instance, that a mix­mode in rental payment is a win-win arrangement that will solve the recurring problem of rent payment default by tenants and its legal challenges.

Report of a survey

And it took a survey inaugurated by Proptech Platform’s new product, Rent Small Small, a property technology platform to improve home-seekers’ rental experience and increase home-owners occupancy rate, to push this option to the front burner.

According to the survey, 88 per cent of Nigerians prefer to pay their rents monthly. Proptech Platform co-founder and Chief Executive Officer (CEO) Tunde Balogun said eight out of 10 Lagosians would rather pay their rent monthly as opposed to  yearly payment.

The survey, which was accessed by The Nation, polled 1,389 adults about their renting patterns and preferences. It found that 851 of these people who are between 20 and 40, are working class professionals seeking to occupy one bedroom, two bedroom and studio apartments.

“Naturally, it is easy to assume that  Nigerians would like to pay their rents upfront for one or two years in some cases as it has always been the pattern, considering that it is what the landlords want,” the survey said.

Balogun, however, said: “This time, it is amazing to see that a lot more Nigerians want something different from the norm. In Nigeria, where it appears to be commonplace for families to experience pressures ranging from sourcing annual house rent, paying annual/quarterly school fees to footing basic bills, it is not surprising that this cycle is not one that millennials want to continue as adults.”

The Proptech chief brought the reality of the survey nearer home, when he said: “I do not believe that funds that have not yet been worked for should be tied up as rent for a year. When people can rent monthly, it makes it easier for them to pay their bills, make investments, take vacations and make plans for long-term projects.”

Since  its launch  in 2018, Rent Small Small survey has been revolutionising the property rental industry by eliminating discrimination, which renters face and provide flexible payment plan, including monthly plans. It is a proof that the property technology platform is on the right track towards reorganising the rental market.

Indeed, since its inception, the platform has remain focused on providing ease of access and affordable housing units for youths, providing flexible payment options which resonate with young professionals and organising the rental market to create a level-playing field for stakeholders.

Balogun confirmed this much when he told The Nation that the platform’s model is unique as it allows verified tenants to find property on-the-go within their budget, and pay rent flexibly. “We provide first of its kind rent insurance for property owners against rent default,” he added.

Rent payment default, which Balogun’s Rent Small Small, appears determined to eliminate, or at best, reduce, is, arguably, one of the knotty issues in the rental market. It has continued to pitch landlords against their tenants, sometimes resulting in protracted court cases that appear to leave landlords with the short end of the stick.

This is because the rental laws in the country, according to some operators, are skewed in favour of tenants. Court processes to resolve disagreements over rent payment defaults between landlords and tenants drag for years, allowing the later stay almost indefinitely without paying.

Some of the cases drag in courts, forcing some landlords to resort to illegal means of quitting their recalcitrant tenants by obtaining illegal court rulings through the backdoor. This gave rise to what is commonly called Jankara court rulings in local parlance, where tenants are served court papers to quit their apartments without their knowledge.

Now, Balogun and indeed, other experts believe that a mix­mode in rental payment would reduce or eliminate the frictions between landlords and their tenants over rent defaults.

Experts react

The founder, Tenants and Landlord Rights Initiative, Valentino Buoro,  said some landlords are not careful enough to observe that the rents they set for their property, which might appear high, are not attainable by employees, but business men or corporate executives.

He observed that there are tenants who have a penchant for changing accommodation like their dresses.

“Their reasoning is: ‘We have been in one apartment for too long, fed up and wants an upgrade. But they fail to realise that it is an upgrade in some other person’s property and not theirs. So, they move from a two-room apartment into a three-bedroom apartment in a choice environment or perhaps even move up to a duplex,” Buoro said.

He, however, said economically, such tenants were unable to sustain this, though they might be able to pay at the beginning.

According to Buoro, a lawyer, in this scenario, the landlord would be left with no other alternative but to evict the tenant, though the processes of for doing so are not easy. “You have to give the requisite valid notice to quit, go to court and go through the entire process,” he said.

The expert cautioned landlords to be circumspect in the kind of lawyers they hire as, according to him, not all lawyers know much about landlord and tenant rental matters. He  warned that if the case was bungled in the trial process and it went the other way and the court gave a judgment, the defaulting tenant might not be evicted easily.

“In this case, the court can order the tenant to pay the rent and he may still not be able to do so. The only option that will be left for the landlord is to continue with the lawyer to find alternative avenues to get his money,” Buoro said, cautioning that any option must be legally backed.

He advised that the best thing to do is to ask the lawyer representing the landlord to either  go peacefully or by any steps available. He said: “From my experience, it will appear that a lot more tenants will be able to pay their rent if it’s paid monthly. When you ask for yearly rent in advance, what you are asking a tenant to do is to live his economic life in advance.”

Bruno maintained his position that monthly payment is best for the landlords and the tenant. According to him, if monthly rentals payment is embraced, landlords  can also plan and save.

In his words: “It’s not fair that a landlord cannot save  to meet their needs, but they expect a tenant  to pay in advance, particularly when he is  on  salary and you want him to pay in advance. It doesn’t look alright. Let there be options. In the worst case scenario, let the tenant confirm if he will be able to pay in advance or monthly.

“l will advocate a mix-mode in a sense that some tenants will pay monthly while others will pay yearly since all fingers are not equal.”

Buoro, however, stated that before this could work, there must be a buy-in by the government and the corporate world.  He explained that the government could set up an agency to which landlords who demand yearly rent would encourage their tenants to pay by monthly instalments so that by the end of the year that agency would give them the lump sum.

He explained: “More appropriately, what l have in mind may not be a government agency, but a private initiative either by way bank or insurance organisation that has this kind of portfolio where tenants will pay into  monthly, then the landlords, in turn, will make their claims yearly with commission or sums being paid to that financial organisation or agency for keeping that money in store for the landlord.

“Banks can easily do this. It is just to brand it, however, they want it and the landlords will ask their tenants to pay their rental into it so that at the end of the year he gets his annual sum.”

But, Buoro asked: “What will likely happen when the tenant dies and the family prefers to relocate or if the tenant loses his job and wants to relocate? How many landlords will be ready to refund such sums?”

He said if a landlord took a monthly tenancy, he would ensure that the tenant paid him before he left. Even if it is one month advance rent, he said it was easier to manage than one year. “It is also possible that quarterly advance rent may make more sense than the one year.

“We know that there are so many needs competing for attention in the life of a man and that one year looks like six months, especially when it comes to savings. Before you know it, a year is gone and you are supposed to fish out a sum that you don’t ordinarily own,” Buoro added.

NIESV PRO’s position

Although the National Publicity Secretary, Nigeria Institution of Estate Surveyors & Valuers (NIESV), Saheed Makinde, he believes in yearly rental because it aids real estate investments and security of occupancy to the tenants, among others, he notes that monthly rental, on the other hand, discourages real estate investors and  puts tenants in a state of insecurity in terms of occupancy or tenancy among others.