Category: Business

  • Making rural telephony a reality

    Making rural telephony a reality

    Over a decade ago, the Federal Government embarked on rural telephony, a brainchild of the International Telecommunications Union (ITU). After contracts were awarded for the project, the government suspended its implementation. With telecoms operators’ reluctance to roll-out services in rural areas, the need has risen for a rethink of the project, writes LUCAS AJANAKU.

     

    When she left Lagos for Obuno Village, near Igbo Ukwu in Aguata Local Government Area of Anambra State to celebrate the Yuletide, Omeihe Oluoma promised her friends and colleagues in school to keep in touch with them through the telephone.

    An undergraduate of Lagos State University (LASU), Ojo, Lagos, Oluoma was shocked when she got to the village and could neither make nor receive calls. “When I was leaving Lagos, I was full of excitement that I was going to spend the Yuletide with my people. I took my mobile phone along and made sure I did not forget the charger in Lagos. Since I was not going to be available, I felt I could keep in touch with my friends and colleagues in school both in Lagos and outside it. So, I made sure I had enough ‘credit’ on my phone,” she recalled.

    She was, however, disappointed when she got home, because she reach her friends.

    “After trying several times to make calls without success, I checked the screen of my mobile phone and discovered that there was no network signal at all on the phone. I asked my cousin who had earlier arrived ahead of me what the matter was. He was the one that told me that telephone services in the community still remain a luxury. He directed me to an uncompleted two-storey building where people queued up to make calls at a particular point where an operator’s network signal strayed into the community,” she said, adding that it was a nasty experience.

    Peter Okechukwu (not real name), a Lagos-based computer engineering technician based at Computer Village, Ikeja, had a similar experience to share. Like Oluoma, he had left Lagos for the Yuletide and had travelled with his three mobile phones. An indigene of Ikpa Eluama Village, Osina Town in Ideato Local Government Area of Imo State, he was shocked to find out that more than 10 years after the ‘telecoms’ revolution,’ his community was still living in the backwaters of civilisation.

    “I use virtually all the GSM service providers. When I got to the village, only one of the service providers was relatively constant. The others were flippant and very unreliable. As a matter of fact, the network signals of two of them (MTN and Etisalat) were only available about 1.00am. So, if any Short Message Service (SMS) was sent to you in the day, it will be delivered about that ungodly hour of the day (1.00am),” he said.

    According to him, MTN recently installed a Base Transmission Station (BTS) in the village, adding that the ability of MTN customers to enjoy the facility is contingent upon the contiguity of the customer to the Base Transmission Station (BTS). “You must walk close to the BTS before you can access the services of the firm. It is strange but it is just the truth,” he said.

    Even in Lagos, the commercial capital of Nigeria, some communities are either not served at all, or under-served. Olympic Agboola, a resident of Ajasa Community, a Lagos suburb, says telephone services in his community has been irregular. “It is magic to us in this community. Sometimes, there will be no signal at all. I think the capacity is still not sufficient. There is need for more investment on infrastructure,” he said.

    The experience of Oluoma, Okechukwu and Agboola are, but a few of what several thousands of rural dwellers pass through. For them, the telecoms revolution meant nothing as it has failed to bridge the digital divide.

    Nigeria is, no doubt, a huge country. According to recent figures from the National Population Commission (NPC), the country’s population stands at 167 million. It is against this backdrop and refusal of operators to invest in providing infrastructure to rural communities that the rural telephony initiative of the Federal Government becomes imperative.

    According to figures from the NCC, subscriber figures hit the 109 million mark at the twilight of last year. Majority of these subscribers live in the urban areas, while a huge number of the rural populace remains underserved, or not at all. Therefore, the next frontier for expansion is obviously the rural areas where there are still more than 58 million willing but unconnected potential subscribers.

    Executive Vice Chairman (EVC), Nigerian Communications Commission (NCC), Dr Eugene Juwah, said between 2001 and mid-2012, investment inflow into the nation’s telecoms industry increased from $.5million to over $25 billion.

    According to experts, community telephony will encourage the growth of the agricultural, extractive and manufacturing industries in the rural areas.

    Minister of Agriculture, Akinwumi Adesina, said the ministry is partnering with the Ministry of Communications Technology to make about 10 million mobile phones available to rural farmers in the country to boost food production. Through this initiative, tractors, fertiliser, seeds and other farming inputs will be transmitted to the farmers through an e-wallet.

    Launched in 2001, the first phase of the project was to cover 218 local government areas and provide over 636,256 Code Division Multiple Access (CDMA) lines in all the council areas to bridge the digital divide.

    The project was divided into three phases, and was estimated to cost $200 million. Key Communications Limited, Suburban Broadband Limited, Voicewares Network Limited, Gicell Wireless Limited and Hezonic Limited, were involved in the project, while the Memorandum of Understanding (MoU) concerning the project was signed with a Chinese firm.

    The implementation of the project would have complemented the ITU’s initiative to connect the world with technology by 2015. According to ITU, the Connect the World (Connecting the Unconnected) project by 2015 aims to mobilise human, financial, and technical resources for the implementation of the connectivity targets of the World Summit on the Information Society (WSIS) and the Regional Initiatives, adopted by member states at the ITU World Telecommunication Development Conference.

    The project was finally suspended in 2011. Aside the suspended rural telephony initiative, an intervention, like the Universal Service Provision Fund (USPF), established by the Communications Act of 2003, is geared towards promoting and facilitating ICT infrastructure in rural and under-served areas across the nation. It is expected to promote private sector investments, encourage competition, and give priority to self-sustaining programmes and projects. The USPF gets funding from the contribution of mobile operators who contribute 2.5 per cent of their profit to enable access to rural communities. With this kind of initiative, it is baffling why a large number of villages in the nation were yet to benefit from any form of telephony access.

    But the trend has been for telecoms operators and investors to put a higher rate of investments in the urban areas and a lower margin in the rural areas. To bridge this gap, telecommunications and Internet services need to be deployed more to the rural areas, since it’s certain that the next phase of the telecoms communications growth will come from the rural areas.

    Director, Regulatory Affairs, Etisalat Nigeria, Ibrahim Dikko, struck the right chord recently when he challenged the Federal Government to look for ways of funding the provision of telecoms infrastructure to rural areas as members of his constituency would not do that because of low returns on such investment

    “The government would have to find ways to subsidise rural infrastructure build, because operators most times, invest in areas that they consider commercially viable,” Dikko said.

    The Association of Telecoms Companies of Nigeria (ATCON) has urged the government to synergise with telecoms operators to resuscitate the moribund National Rural Telephony Project.

    Its President, Lanre Ajayi, said this was necessary since the government had been unable to implement the project while the rural communities had yet to feel the impact of the phenomenal growth in the telecoms sector.

    “The Federal Government should support telecommunications providers to reach the under-reached and unserved areas through the USPF. In the implementation of rural telephony, government should provide operators stable power supply, accessible roads and improved security of telecoms infrastructures.

    “Opening up the rural communities through integration into the national telephone networks will enhance exploitation of the economic potential of the communities and improve the standard of living of the rural dwellers,” Ajayi said.

    MTN, had in 2010, launched a rural telephony initiative in partnership with equipment vendor, Huawei, in Lagos. How this initiative has improved telephone penetration in the country is not clear.

  • More textile firms coming back

    WITH the aid of the Federal Government’s N150 billion intervention fund, many ailing textile companies are being revived, a textile magnate has said.

    Director-General of Nigeria Textile Manufacturers Association (NTMA), Mr Jaiyeola Olanrewaju, said more members of the group had accessed the fund.

    The firms, he said, were pumping the money with the business.

    The Cotton and Textile Intervention Fund was introduced by the Olusegun Obasanjo administration to help the textile sector whose fortune had shrunk when he assumed office in 1999.

  • Ex-NCC chief seeks interconnection clearing house

    A FORMER Nigerian Communications Commission (NCC)Commssioner, Steven Bello, has suggested the setting up of an interconnect clearing house to stop further interconnection debts.

    The Central Bank of Nigeria (CBN) introduced the Nigeria Banks Clearing Houses (NBCH) to facilitate the implementation of an effective and efficient payment system in the banking industry.

    Bello, who spoke in Lagos, said the problem that made the debt serious is the absence of “basic interconnect offer, stipulating all areas that should be covered by interconnect agreement.”

    He said lawyers who are not technically biased are responsible for drafting interconnect agreements, adding that to solve the problem, a technically-biased lawyer should sit side by side the engineers to fine-tune interconnect agreements.

    The disagreement from interconnection debts complicate the issues, he said, urging operators to do their home works.

    He said it was either the regulator introduced prepaid billing interconnection, or a clearing house for the telecoms industry similar to the banking industry clearing house.

    Bello warned that the interconnect debt, if not addressed, could “introduce inefficiency into the telecoms industry.”

    Telcos are owing one another about N20 billion, which arose from the non-payment of interconnection fees.

    According to industry sources, the Code Division Multiple Access (CDMA) segment for the telecoms industry accounts for the huge chunk of this debt.

    President, Association of Licensed Telecoms Companies of Nigeria (ALTON), Gbenga Adebayo, said the debts have added to the “distress” in the industry.

    He lamented that the debt crisis also contributed to service delivery.

     

  • How to stop capital flight, by Juwah, others

    Some telecommunications experts are canvassing the promotion of local content/patronage of indigenous original equipmentmanufacturers (OEMs), and domestication of infrastructure contracts to halt capital flight.

    The experts from the Nigerian CommunicationsCommission (NCC), Information Technology (Industry) Association of Nigeria (ITAN) and Nigeria Communication Satelite (NigComSat) said increasing local patronage would also halt capital flight, stimulate investments, create jobs and boost InformationCommunication Technology(ICT) sector’s contribution to the nation’s Gross Domestic Product (GDP).

    NCC’s Executive Vice Chairman/Chief Executive Officer, Dr Eugene Juwah, said the commission is pushing for indigenous companies to have significant role in the provision of services and supply of materials to the industry.

    Juwah, who spoke at a telecoms forum organised by the Association of Telecoms Companies of Nigeria (ATCON) in Lagos, said active participation of local companies in direct contract delivery to telecoms players had become a critical element to developing the telecoms industry on a sustainable basis.

    He said the telecoms industry has come a long way in the last decade, and that by allowing indigenous companies to have a space for active participation, would help in creating jobs as well as curbing yearly capital flight in the industry.

    “It is important for local companies to have significant role in the provision of services and supply of materials to telecommunications industry if we must develop the telecoms industry in Nigeria on a sustainable basis over the long term, and provide more employment opportunities for Nigerians,” he said.

    To Mrs Florence Seriki, Group Managing Director/Chief Executive, Omatek Ventures Plc, it is only when the Federal Government encourages local patronage of indigenous OEMs that production could be encouraged and jobs created for the citizens.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • Board probes  NPA’s N30b seaport contracts

    Board probes NPA’s N30b seaport contracts

    THE newly constituted Board of the Nigerian Ports Authority (NPA) headed by Chief Tony Aneinh is set to probe the N30 billion contracts for the management of seaport channels in and outside Lagos.

    A member of the committee, who told The Nation that the board was displeased with the procedures used in awarding the contracts, said the two channel management firms did not follow the relevant provisions of the Public Procurement Act.

    The Lagos Channel covers ports in the Western part of the country while Bonny covers ports in the south.

    Each of the channel managers, the source said, was given over N15billion for the project.

    Sources said the board would look into the allegation that the NPA management awarded the contracts to itself.

    He said: “Let me assure you and the government and Nigerians that the new board constituted by President Goodluck Jonathan will look into some of the major contracts awarded by the management of NPA and see if it runs against the  Public Procurement Act.

    “The board will also investigate how far the companies were able to carry out their jobs and the method adopted by the NPA management to ensure that it was not used as an avenue to siphon public funds.

    “We want to know why the ports outside Lagos are almost abandoned by importers despite the huge amount being spent on the management of their channels.

    “The decision of Mr President to appoint us was to bring sanity to the place, and we are set to do that. Those that have spoken against the re-appointment of our chairman should wait and see the wonderful job that would be done by the chief and his team.”

    Stakeholders in the industry had expressed their reservations over Anenih’s reappointment by President Jonathan. Other directors are Senator Florence Ita Giwa, Hon. Hamza Dan Mahawi, Senator Lekan Mustapha, Alhaji Aminu Baba Danagundi, Mr Austin Enyonnia Cosmos, and a representative of the Ministry of Transport.

    Prominent among those who condemned Anenih’s appointment is former leader of Niger-Delta militants, Alhaji Asari Dokubo.

    The source said the effort of the board to investigate the channel management contract is not unconnected with the public outcry, which greeted Chief Anenih’s re-appointment.

    In October last year, the Maritime Workers Union of Nigeria (MWUN) petitioned the Minister of Transport over alleged illegal activities of some shipping and multinational companies in the nation’s territorial waters.

    The union urged the Federal Government to investigate the activities of offshore operators, warning that it would shut ports operations if its request was not acceded to.

    It claimed that some shipping and multinational firms, such as Shell Development Company (SPDC) and others, who specialise in anchoring and operating vessels offshore, are contravening operations’ laws.

  • NDIC blames National Assembly for  non-amendment of Federation Account

    NDIC blames National Assembly for non-amendment of Federation Account

    The Nigerian Deposit Insurance Corporation (NDIC) has blamed the National Assembly for its continuous payments into the Consolidated Federation Account(CFA).

    Speaking to The Nation, NDIC’s Director of Research, Dr Ade Afolabi, said the corporation still pays into the account because the National Assembly has refused to amend the Act guiding the operations of the account.

    He said: “Eighty per cent of our reserves goes into the consolidated federation account annually. The issue has prevented us from meeting our obligations to the depositors of failed banks. Based on this, we have been seeking amendment of the Act guiding the Consolidated Federation Account. This will prevent us from making payment into the account. But the Act is yet to be amended due to certain bureaucratic bottlenecks.”

    He said the corporation is not sure whether the Act would be amended in the first quarter of this year or not.

    He said: “Though we have involved the Ministry of Finance on the issue, the amendment of the Act is still hazy. I think bureaucracy is stalling it.

    He debunked the claims that the NDIC is seeking World Bank support to strengthen insurance funds, adding that there was never a time the corporation met and discussed such issues with the bank.

    He said: “ The body does not need assistance of international donor agencies before it can meet its statutory obligations to depositors.

    “We have funds to meet our obligations to stakeholders, especially depositors of banks that have not only gone under but are on our list. We are seeking amendment of Consolidated Federation Account Act so that the government would exclude us from paying into the account. This will enable us to have more money in our reserves for operational needs.”

  • Investors to optimise values in Oando rights issue

    Investors to optimise values in Oando rights issue

    Investors, who may not be able to fully take up their rights under the ongoing rights issue of Oando Plc, will be able to trade their pre-allotted shares at premium at the Nigerian Stock Exchange (NSE), The Nation has learnt.

    The trading in Oando’s rights, which started on Friday, December 28, last year is expected to close on February 6, 2013.

    Oando, Africa’s largest integrated energy solution providers, said it had secured the approval of the NSE for trading in the rights. Oando is offering shares to pre-qualified shareholders at N12 per share. The stock, however, opened this week at N14 per share, giving a premium to rights’ shareholders.

    Feelers from the company meanwhile, indicated that the rights issue’s closing date may be extended due to public holidays that occurred during the offering time frame. The number of days to be approved by the Securities and Exchange Commission (SEC) is yet to be known since there has only been two public holidays since the offer commenced.

    Specifically, the value of the stock, since the commencement of the rights, has appreciated by 14.57 per cent. For those willing to sell the rights acquired at N12.00 was already selling for N12.22 on the opening date.

    However, shareholders, who wish to renounce their Rights partially or in full are advised to take advantage of the trading window and make money for themselves on the short-run.

    This simply means that instead of losing out for failing to take up the allotted right issue a shareholder can actually sell them to other interest investors. Furthermore, the company said that shareholders who trade their Right can still apply for additional shares.

    Looking at the status of the equity of the company, Oando had an initial authorised share capital of N4 million comprising four million ordinary shares of N1 each, and an issued and fully paid-up share capital of N4 million comprising of N4 million ordinary shares of N1.But the company’s authorised share capital is N5 billion comprising 10 billion ordinary shares of 50kobo each, of which N1, 137,059,069 comprising 2,274,118,138 ordinary share capital.

    Analyses of the shareholding structure of the company shows that Ocean & Oil Investments (Nigeria) Limited holds 241,816,962 or 10.63 per cent of Oando’s equity currently. Stanbic Nominees Nigeria Limited – Trading A/Cs has 261,544,386 units representing 11.50 per cent of the company’s outstanding share credit to it while the balance of 1,770,756,790 or 77.87 per cent is held by individuals and institutional investors.

    The origination of the rights offering, having set a long-term vision of becoming Africa’s leading integrated energy player in the oil and gas sector with a diversified revenue base, and as well put in place the right structure and management personals the only obstacle to achieving the dream appears to be lack of cheap funds. So in July 2009, at an Annual General Meeting (AGM) of the company, the board of the company purposed and got the shareholders authorisation to raise additional capital of up to N200 billion. The board was equally granted the authorisation to determine the method and terms of the capital raising exercise.

    The first step to execute this order was embarked upon in 2010 when the company raised N21.1 billion via right issue, leaving a head room of N179.9 billion. Now that the need for raising fresh funds has risen, the board is again offering 4,548,236,276 ordinary shares of 50kobo each at N12 per share.

    Existing shareholders are being offered an additional new two ordinary shares of the company for every one held previously. However, only members whose names appear on the register of the company at the close of business on Friday, October 19, last year are legible to participate.

    The offering, which opened on December 28, last year and will be closing on February 6, 2013, according to the offer prospectus, is a critical step towards the execution of its strategic expansion plans; optimising its balance sheet and improving its leverage position.

    The net issue proceeds, estimated at N52, 938,527,935.78, after deducting the total cost of the Issue estimated at N1, 640,307,376.22 representing 3.01 percent of the issue will be applied as follows: N27, 776,601,538.99 or 52 per cent refinancing of upstream assets. That amount would be use for the part-payment of a N60 billion syndicated loan facility championed by First City Monument Bank (FCMB) PLC to fund the acquisition of upstream assets and swamp drilling rigs. N23,700,000,000, representing 45 per cent, is expected to be used for the buying of Conoco Phillip’s Nigerian business assets for which a sales and purchase agreement has been signed by both parties. The balance of N1, 461,926,396.79 or three per cent will be ploughed back into the company as working capital.

  • States to get $1b from Excess Crude Account

    States to get $1b from Excess Crude Account

    To facilitate execution of more people-oriented projects in line with the administration’s Transformation Agenda, the President Goodluck Jonathan, has approved $1billion from the Excess Crude Account to be shared among the 36 states and the Federal Capital Territory (FCT).

    Chairman of Nigeria Governors’ Forum and Rivers State Governor, Rotimi Amaechi, made this known yesterday while speaking with State House correspondents at the end of the 45th National Economic Council (NEC) meeting.

    He said the President’s approval was conveyed by the Minister of State for Finance, Dr. Yerima Ngama, while briefing the CouncilPresided over by Vice-President Namadi Sambo.

    Ngama said the Excess Crude Account has a balance of $9.242 billion after $1billion was spent on subsidy payments.

    Abia State Governor, Theodore Orji, said the Council has also prevailed on states to buy into the activities of the National Agency for Prohibition of Traffic in Persons and Other Related Matters (NAPTIP).

    He said the Council considered a report presented by the National Planning Minister and Chairman of the Ad-hoc Committee, Dr. Shamsudeen Usman, on the need for states to buy in to the activities of NAPTIP to combat human trafficking.

    The recommendations of the report, he said, include the development and effective implementation of state level Trafficking in Persons Plans of Action, the development and strengthening of the States Social Welfare System’s for Child Protection and the provision of basic needs, including medical care, educational, vocational and recreational facilities for victims of trafficking.

    He listed others as mobilising and providing support for civil society organisations working on combat-trafficking and related issues, assisting and empowering identified victims of trafficking by providing educational grants, scholarships and other incentives and implementing the Child’s Rights Law in each state.

    Orji said the Council adopted the recommendations and directed the Minister of National Planning, the Attorney-General and Minister of Justice and Chief Executive of NAPTIP, to liaise with the states towards ensuring better collaboration in addressing the situation.

    He said the report recommended that Abia, Kogi and Ogun states should be treated as pilot cases in the bid to combat the scourge.

    Dr. Usman also briefed the Council on the status of the on-going implementation of the states’ GDP Computation programme embarked upon by the Commission, the National Bureau of Statistics (NBS), the Governors’ Forum and the states.

    Following the successful completion of the state GDP computation in the six pilot states, he said the NBS is working closely with the states’ Statistical Bureaux/Agencies to conduct the survey and publication of data on the GDP computation for six states , namely, Niger, Rivers, Gombe, Anambra, Kano and Lagos.

    The states’ GDP computation programme is being implemented in two phases, with the first phase covering the six pilot states in each of the geo-political zones due to be completed in April.

    The second phase is to cover the remaining states from April to December this year.

    Usman said the Council stressed the endorsement it gave the Roadmap when the matter was first presented to NEC in July, 2010.

    He urged the states to work closely with the National Planning Commission and the NBS to address the identified capacity and infrastructure related gaps in the states’ Statistical Bureau and Planning Commissions, to ensure the sustainability of the states’ GDP computation programme.

    The Council was briefed by a team from the Manufacturers Association of Nigeria (MAN) led by its President, Chief Kola Jamodu, on Multiple Taxation across the country at various levels and its effects on manufacturing and productivity.

    Jamodu said MAN sought a reduction in stamp duty, Value Added Tax (VAT), exemption on some raw materials, harmonisation of taxes and levies within the three tiers of government, outlawing of unorthodox means of collecting taxes and full automation of the entire tax administration system.

    After extensive discussions of the issues, the Council raised a committee to examine items and report to the Council by March.

    The committee is chaired by the Gombe State Governor, Ibrahim Dankwabo, with the Governors of Zamfara, Kogi, Abia, Rivers, Imo, Ogun and Lagos states as members..

    Usman, Attorney-General and Minister of Justice, the Chief Economic Adviser to the President, CBN Governor, Economic Adviser to the Vice- President, Secretary to the National Planning Commission and MAN President, are also members.

  • Okonjo-Iweala, two others to brief FEC today

    Okonjo-Iweala, two others to brief FEC today

    Three ministers, among them the Minister of Finance and Coordinator of the National Economic Council, Dr. Ngozi Okonjo-Iweala, are expected to give their stewardship at the Federal Executive Council (FEC) meeting today.

    The Nation learnt that Mrs Okonjo-Iweala will lead the Minister of Trade and Investment, Olusegun Aganga and that of Environment, Hajia Hadiza Mailafia, to state how they and their ministries have performed so far.

    The ministers will brief FEC on the progress and challenges of their ministries.

    The source said President Goodluck Jonathan is determined to review and assess the performance of the ministers and those found wanting may be shown the way out.

    This exercise, the source added, “is unique in the sense that the ministers will not only present their score cards to Mr President alone, but to their peers to ensure transparency and fairness.”

    The source said another issue that would be discussed at today’s meeting is the planned “suspension of inter-country child adoption in Nigeria.

    “The memo for this discussion will be presented by the Minister of Women Affairs and Social Development, Hajia Zainab Maina.”

    Child adoption across borders is generating a lot of furore between the United States of America and Russia, and Nigeria appears not to be left behind in the inter-country child adoption controversy.

    Also today, the FEC would discuss and possibly approve the establishment of a Youth Desk in relevant Ministries, Departments and Agencies (MDAs).

  • Minister unveils mining sector roadmap

    Minister unveils mining sector roadmap

    The Minister of Mines and Steel Development, Musa Mohammed Sada, is to present the developed Road Map that would chart the path for the resolution of the problems and challenges facing  the sector, tomorrow.

    The development of the road map will leverage on the advantage of the rising international and local commodity prices in the sector and the global resurgence of exploitation and exploration activities with the attendant huge investment in the sector.

    Deputy Director, Press, Marshall Gundu, said in a statement yesterday, the ministry  recognised the need for a roadmap that would chart the way for the country to attain its economic, social and environmental objectives through sustainable exploration and exploitation of the nation’s vast mineral endowment

    The exploration and exploitation of the nation’s available solid minerals resources is an important component of a diversified economy, he said.