The Nation Newspaper

Category: Business

  • MAN disputes NACCIMA’s claim on 800 shut firms

    MAN disputes NACCIMA’s claim on 800 shut firms

    ‘Real sector’s contribution to GDP about 4%’

    Did 800 companies close shop in the country between 2009 and last year?

    This puzzle remains unravelled as the Manufacturers Association of Nigeria (MAN) and the Nigerian Association of Chambers of Commerce , Industry, Mines and Agriculture (NACCIMA) are expressing divergent views on the issue.

    At a zonal workshop on economic diversification organised by the Revenue Mobilisation Allocation and Fiscal Commission(RMAFC) in Asaba, Delta State,on September 11, NACCIMA President, Dr Ademola Ajayi said the companies closed shop because of the harsh operating business environment .

    Ajayi said more than half of the surviving firms had been classified as ailing , thereby posing danger to the survival of the manufacturing industry.

    He blamed the continued decline in the manufacturing sector on political and economic factors, citing poor infrastructure and epileptic power supply as impediment to the industry.

    “The manufacturing industry as a whole operates on more than 70 per cent of energy it generates; using generators and operating these generators greatly increases the cost of manufacturing goods,” he said.

    Other problems in the sector , he said, include incessant increase in the price of petroleum products , multiple taxation , smuggling and inadequate access to finance, both local and abroad.

    But MAN President Mr Kola Jamodu said the association was not aware of the closure of the firms.

    Explaining at the presentation of the blueprint for “The accelerated development of manufacturing in Nigeria”, in Lagos, Jamodu said while the business environment could be said to be harsh, the government is supporting the manufacturing sector through reforms including intervention funds.

    According to him, government is committed to good governance and sustainability of the current reforms, which have improved the sector.

    Jamodu said manufacturing contributes a paltry four per cent to the Gross Domestic Product (GDP), adding that in other developed countries the sector’s contribution to the GDP averages 46 per cent.

    Transforming the sector to a dynamic and virile , he said, is part of the strategy of Vision 20:2020, which envisages long-term intensification of the industrialisation process and movement towards a knowledge- driven economy.

    According to MAN’s projection, the sector’s contribution to GDP can leap-frog to between 15 and18 per cent in three years if the recommendations in its blueprint are considered and implemented. The blueprint is based on an integrated approach that addresses sector-specific issues and recognises the important role of manufacturing, particularly Small and Medium Enterprises (SMEs) in employment generation.

    He said: “The articulation of this blueprint is to provide government with proposals on policies that, if implemented, could help to position the manufacturing sector for greater performance and fast-track the realisation of the national vision of becoming one of the top 20 economies by 2020.”

    Jamodu said the sector still faced a number of challenges which had whittled down its productive capacity and hampered its job creation potential.

    Jamodu said although some critical aspects of the agenda had been adopted, the public presentation of the report was aimed at ensuring that the trend of positive activism is sustained in the implementation of all measures needed to restore manufacturing to its rightful position.

    He said actions that would enhance the productive capacity and capacity utilisation of the various sub-sectors of manufacturing needed to be taken to ensure that the sector played its role of job creation, poverty reduction and economic development.

    He said: “The current administration in the country is working on some of the addressed problems. We are all concerned about the fortune of manufacturing because it is the only sector, whose prospect can determine the fortunes of the people and the economy. A healthy manufacturing sector means more jobs for the people, and less poverty in the land.”

    A research economist with MAN, Mr Toyin Durowaye, in a presentation, said the imperative of a research-based analysis of the problems of the sector could not be overemphasised in view of the sector’s importance.

    He said manufacturing, as a critical sector, needed deserved attention because of its central role in economic repositioning.

    “The only way to solve problems in a sustainable way is to encourage manufacturing to thrive. Manufacturing is the only sector that has the capacity to generate the most jobs and ensure economic turnaround,” he said.

  • India to spend $46b on trade to Nigeria, others

    India to spend $46b on trade to Nigeria, others

    About 20 Indian information technology (IT) firms are due in the country to deliberate on further areas of investment at the Information Technology Association of Nigeria (ITAN) summit.

    The development is expected to push bilateral trade between the nations and other African countries to over $46 billion.

    According to the President , ITAN, Mrs Florence Seriki, the objective of the yearly event, which also serves as a statement of need, is to sustain the creation of a platform for local ICT organisations to synergise and collaborate with key international ICT players to bridge the gaps in competitive capacity development of local enterprises.

    It would also create education opportunities, influence policy formulation and promote the Nigerian industry, she added.

    She said the meeting identifies with Federal Government’s transformational agenda for the ICT sector and the association’s stance of building international partnership to grow the industry.

    Mrs Seriki said this year’s theme is Empowering and resuscitating local IT entrepreneurs via local content development and funding.

    She said local IT entrepreneurs deserved private and public sector support in terms of increasing their demand for goods and services, and engendering adequate partnerships to promote local content.”

    Mrs Seriki said India and Nigeria enjoyed healthy diplomatic relations, noting the enhanced economic and trade relationship between the two countries. She said Indian software and several ICT companies have a very strong presence in Nigeria.

    The Minister of Communication Technology, Mrs Omobola Johnson, will be the special guest of honour, while key speakers at the forum include President, National Association of Computer and Software Companies of India (NASSCOM), India, Som Mittal and the Managing Director of the Bank of Industry (BoI), Ms Evelyn Oputu.

    Also to attend the event as special guests are the Indian High Commission in Nigeria, and the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr Ernest Nwapa.

    “The ITAN, NASCOM CEOs forum offers a strong plank for industry leaders of the two countries to explore ways of mutually growing businesses particularly as it concerns the ICT sector,” Mrs Seriki stated.

    NASSCOM is the premier trade body and the “Chamber of Commerce” for the IT – BPO industry in India and ITAN is the premier trade industry group for ICT companies in Nigeria.

  • Chamber to attract FDI at trade fair

    Chamber to attract FDI at trade fair

    The Lagos Chamber of Commerce and Industry is to complement government’s efforts at attracting foreign investment.

    The chamber has concluded arrangements for Business-to-Business (B2B) meetings between indigenous and foreign exhibitors, seeking trade opportunities and partnerships at this year’s Lagos International Trade Fair.

    According to a statement by the Director-General, Mr Muda Yusuf, this is in line with the theme of the 2012 Fair: Promoting trade for sustainable economic transformation, and renewed drive by government and interest groups to showcase and promote the economy’s potential.

    He said the chamber shifted the venue of the fair from the Lagos Trade Fair Complex this year because of ongoing construction on the Lagos-Badagry Expressway. The expansion of the road posed huge challenges to commuters and participants at the fair last year.

    “Already, feedback from registered and potential exhibitors, especially from abroad, indicates satisfaction with the shift of the fair to the Tafawa Balewa Square, which is easily accessible from most parts of Lagos. It is envisaged that this year will witness an increase in participation of exhibitors and visitors.”

    Last year witnessed participation by exhibitors from eleven countries, including Canada, Egypt, Pakistan, Indonesia, China, Taiwan, Singapore and India. Others were Ghana, Republic of Benin and Cameroun. Enquiries have also been received from the United Arab Emirates and Malaysia this year.

  • Mexico invests over N8b in Nigeria’s agro-allied industry

    MEXICO has so far invested about N8 billion in the agro –industrial sector in the economy, with prospects of creating 7,500 direct jobs in the country.

    The Mexican Ambassador to Nigeria, Marco Antonio García Blanco, made this known on the anniversary of the 202 Independence Day celebration of the Central American country, held in Abuja.

    Recalling a Memorandum of Understanding (MoU) signed between Mexico and Nigeria, the envoy disclosed that his Embassy in Nigeria has reduced requirements to issue visas to prospective travelers to his home country to just one day of the application.

    He said: “We already have the opportunity to exchange trade mission and Mexico started to invest in Nigeria $54 million (N8 billion) in the first two projects at the agro-industrial sector that will create 7,500 directs jobs in this country.

    “The Mexican Embassy is fully committed to continue to work together with the Government of Nigeria in the process of building a more active, strong and successful bilateral relationship with benefits to both nations.”

  • SON embarks on e-registration of products

    TO simplify the process of products registration, the Standards Organisation of Nigeria has introduced e-registration on its website.

    This innovation is aimed at ensuring that genuine manufacturers and dealers experience less difficulty in getting their products registered.

    According to the agency, the move is also to ensure the success of its campaign of zero tolerance for substandard products, which the agency has carried to the various sectoral groups and parts of the country since July 2011, when it was launched

    On the e-registration, the Director-General, Dr Joseph Odumodu, in a statement, said the strategy is targeted at arresting the sale and production of unwholesome and substandard products. Besides, he said, it would make registration of consumer products compulsory for manufacturers before such could be displayed on shelves.

    Explaining the import of the initiative, he said the process would involve the launch of product identification marks on products within the category under review, stressing that any product without proper identification marks would not be allowed to be sold in the country.

    He said: “This is something we believe would help the manufacturers, the dealers and SON. It is all in the bid to ensure safer products, safer Nigerians and a healthier economy.”

    Odumodu said the agency was leveraging opportunities and platforms to make its work easier for the regulator and the larger society.

    He reaffirmed the determination of the agency to reduce the prevalence of substandard products from 60 per cent to about 30 per cent in three months. He added that the new scheme would involve products already in the market, including electric bulbs, stabilisers, tyres, electric fittings, generators, building materials and toys.

    Listing the advantages of e-registration, Odumodu said: “It would assist us in developing a data base of consumer products in the country. The scheme will enhance traceability in our compliance monitoring activities that is making it easy for us to trace any product and its manufacturer anytime the need arises.”

    He said in addition, the new scheme, apart from protecting consumers would also create employment and wealth.

  • Manufacturing growth rate in Nigeria, others drop

    REPORT by the United Nations Industrial Development Organisation (UNIDO) on manufacturing production in the second quarter of 2012 shows the growth rate of output in Nigeria and other developing countries has dropped to the lowest level since the beginning of 2011.

    According to UNIDO, while the manufacturing industry in developing economies largely resisted the effects of financial volatility during the recession of 2008–2009, the ongoing second recession of the world economy since 2010 has affected industrialised and developing countries.

    UNIDO predicts that the growth of manufacturing value added (MVA) in developing countries will slow to 4.5 per cent in 2012, down from 5.4 per cent in 2011.

    The report stated that among the industrialised countries, there were positive developments in North America and East Asia.

    “The MVA of North America is expected to grow by 1.7 per cent in 2012, while East Asia’s industrial production could grow by 4.1 per cent. However there are concerns that the impact of declining MVA in Europe may spill over to these regions.

    It added that the prolonged crisis in Europe and uncertainty about growth prospects in the U.S. have negatively affected industrial production in developing countries.

    It said the decline in demand in external markets has slowed the growth of export-oriented manufacturing industries in many developing countries, and, in some of them, domestic demand, too, has dropped due to the perceived growth uncertainty at the global level.

    The UNIDO report also presents growth estimates by manufacturing sector. Due to the decline in demand in industrialised countries, production growth of consumer goods, especially wearing apparel and consumer electronics, has slowed or declined in developing countries.

  • Creating the Northern edge

    Many public officials find themselves walking a tight rope where Nigeria’s geo-politics is concerned. Geopolitical zones different from the ones they

    hail from usually accuse them of one wrong or the other in the discharge of their duties. The reason for this is not farfetched Nigeria is a country of diverse cultures, idiosyncracies, religions, political inclinations and ethnic groups. Of recent, Minister of Aviation Stella Oduah has come under the attack of such political jingoists.

    These faceless individuals like destructive locusts in season have set out to obliterate the efforts of the Minister in the North, but unknown to them the transformation is in full motion and cannot be truncated. Oduah is not oblivious of the place of the North, especially since it forms the core of the historical perspective of the aviation industry in the country, with the landing in 1925 of a Royal Air Force (RAF) aircraft and the subsequent construction of the Kano aerodrome.

    It is this profound understanding that inspired her to refurbish Hajj terminals in Kaduna and Kano states. Anyone who understands Islam knows that hajj is one of the fundamental tenets of Islam -it is Allah’s injunction for every adult Muslim, if they can afford it, to perform hajj, at least once in a lifetime. The hajj terminals are an integral part of hajj activities as this is where pilgrims stay at times before being airlifted to Mecca.

    These structures have been transformed to comfortable, standard terminals to serve much more than a waiting edifice for pilgrims. Certainly this wouldn’t have been the case if the Minister was a bigot as some people are painting her. However, the misinformation and outright selective perception pales in comparison to the recent allegations against her of preventing international airlines from landing at the Nnamdi Azikiwe Airport in Abuja.

    Her traducers added she diverted such planes to Enugu. Haba! If  these individuals were not blinded to the fact, they would have known that profit from ventures guide the airplanes and not the service they provide to geopolitical zones.

    These are guided by comprehensive commercial agreements; the Minister’s duty is to regulate their business conduct in Nigeria but not to dictate to them where or where not to fly to…this can and should only be decided by the strength of traffic that plies the location.

    On the Emirates and Etihad issue, the minister made a strong case for the decentralisation of the operations of these airlines from Lagos and in line with international practice, presented commercially convincing data showing the possible commercial benefits that the airlines can get if they start operating from Lagos, Kano and Enugu.

    The airlines were convinced to look at these suggestions and even went a step further to sign some agreements. One should not also forget the recent project embarked upon by the Nassarawa State government led by Governor Umaru Al-Makura , which is constructing an aerodrome in Lafia and a cargo airport in Karshi.

    These projects being located in the North central part of the country, will no doubt boost the economic potentials of the region and ensure that a cargo hub is established thereby decentralising the movement of goods and services.

    The Cargo airport will serve as a second runway for the Nnamdi Azikiwe International Airport, Abuja. This project enjoys the backing of Oduah, who is encouraging Nigerians irrespective of tribe or creed to invest in the aviation sector.

    This is why it is rather disheartening that a stakeholder in the aviation industry like Hon. Rufai Chanchangi, the Vice Chairman of the Aviation Committee in the House of Representatives is overlooking all these to call for the Minister’s resignation. It is glaring that the lawmaker did not do proper investigation before reaching his conclusion; for if he has done so, he will be praising the minister not condemning her.

    What is expected from people like him are words of encouragement for the minister, especially at a time like this when the bulk of airport terminals undergoing reconstruction are located in the North. As the minister struggles daily to make Nigerian skies one of the most viable and safest in sub-sahara Africa she should be supported to achieve her objective so that the North and indeed Nigeria can be better off.

    Yakubu Dati writes from Abuja

  • NLC, experts to Reps: don’t tamper with CBN’s autonomy

    NLC, experts to Reps: don’t tamper with CBN’s autonomy

    Experts including the organised labour yesterday warned that attempts to tamper with the Central Bank of Nigeria (CBN) autonomy by either compelling it to submit its budget to the National Assembly for scrutiny and approval or use of the ongoing controversy over the currency overhaul to whittle down its power, will have a disastrous consequence for the economy.

    As a result of the public outcry against the planned introduction of N5,000 banknote, which is part of the currency overhaul proposal approved by President Goodluck Jonathan last December, the house of representatives on Tuesday muted the idea of scrutinizing the CBN budget, which would be an infringement of its autonomy.

    The Senate, also asked President Jonathan to stop the N5,000 banknote.

    But experts including Managing Director, Financial Derivatives Company Limited, Bismark Rewane; the Director General of the West African Monetary Institute (WAMI), Dr. Joseph Nnanna; a Senior Advocate of Nigeria (SAN), Koyinsola Ajayi, and Vice President of the Nigeria Labour Congress (NLC), Comrade Isa Aremu, urged the lawmakers not use the controversy surrounding the N5,000 banknote to cut the powers of the CBN. They warned that the economy will suffer if the legislators succeed.

    Rewane, who noted that there are empirical evidence globally that the economy suffers when the autonomy of the CBN is removed, said once the lawmakers have powers to approve the budget of the CBN, it means that they have finally succeeded in taking away its autonomy.

    “There are empirical evidences that the more independent the Central Bank is, the better the economy of the country performs. Take a look at countries such as Switzerland and Canada, which are some of the countries where the Central Banks are completely independent. The economies of these countries are very strong and that is why they are not affected by the Eurozone crises.

    “I want to assure you that once the CBN autonomy is infringed on, the economy will suffer. What the legislators are trying to do will be judged by history,” Rewane said.

    Dr Nnanna also said that once the autonomy of the CBN is compromised, it will not be able to respond effectively and promptly to macro-economic and monetary policies.

    He said once this happens, the mandate of the CBN, which is to grow the economy and maintain price stability will also be compromised.

    “Consequently, both the economy and Nigeria will suffer. If inflation rises, those with fixed salaries will suffer and if monetary policy suffers, growth will also suffer and employment will be affected.

    “Go and check, you will find out that the Nigerian economy performed better when the CBN was independent. When it was reporting to the Ministry of Finance, the economy did not do well at all,” he said.

    Similarly, Comrade Aremu advised that the controversy over the N5,000 banknote should not be used to tamper with the CBN’s autonomy.

    “We have crossed bridge with last two public hearings of the ad-hoc committees, where it was agreed that the principle of the CBN autonomy must be defended as it is done in other countries. We have a right to debate and engage the CBN but the autonomy of the CBN is what we must defend. Let us play the ball and not go for the leg. Going for the leg will not be a fair game,” he said.

    Ajayi also said the threat to amend the CBN Act if executed, will be a very bad precedence. “Although Senate said it was not consulted on the currency overhaul, and now it wants to amend the CBN Act to get involved in key policy issues of the regulator. This means that the powers it claims it has over the CBN is not true.

    “The actions of the legislators portend disaster for the economy. The currency overhaul role of the CBN is not for the legislators to decide. Their insistence on getting involved in the policy is an assault on the constitution. It is a dangerous trend,” he said.

    Going by the CBN Act, it is the apex bank’s primary responsibility to effect changes in the nation’s currency with the approval of the President.

  • Agric ministry eyes $6b ethanol production investment

    Agric ministry eyes $6b ethanol production investment

    Plans are on-going to secure a $6billion foreign investment for the production ethanol in the country, the Minister of Agriculture and Rural Development Dr. Akinwumi Adesina has said.

    The Minister, who spoke at the signing of a cooperation agreement with Tony Elumelu Foundation in Abuja, said the initiative was part of efforts to use Public Private Partnership (PPP) to drive the agricultural sector in realising the Agricultural Transformation Agenda (ATA) of the Federal Government.

    He said that the ethanols are to be produced through large scale plantation of sugarcane. Sugarcane ethanol is a type of ethanol fuel used for vehicles and produced from sugarcane.  Brazil is the world’s leading producer of sugarcane ethanol.

    Adesina said: “We are presently having talks with an investor who is ready to setup an ethanol producing plant value at $6 billion from sugarcane plantation. There will be two plants in the north that will be used for about 100, 000 hectares each for sugar cane. This is to show you that we are getting a lot of foreign direct investments and local investments.”

    The Minister explained that the production will be different from what is expected from other farmers, which according to him, will create employment and further increase the production of ethanol in the nation.

    Speaking on the partnership with the Elumelu foundation, Adesina stated the ministry is to partner with the foundation to establish seed venture capital fund.

    The fund according to him, will be used to setup seed venture for the farmers, which will enable them run their farm businesses professionally.

    In his remark, Elumelu stated that the foundation believes in the agricultural agenda of the federal government.

    He said government can only be successful in its project implementation when inputs from private sectors are considered.

    Elumelu noted that the agricultural sector is capable of creating jobs, increasing the Gross Domestic Product (GDP) as well as boosting the nation’s economy.

    Present at the event was the Group Managing Director of UBA, Mr. Stephen Oduoza, who revealed that banks have also disbursed N200 billion to support farmers in the country.

    According to him, UBA has decided to reduce its total lending rate to 7 per cent.

  • BoI, Akwa Ibom pool N5b loan for entrepreneurs

    BoI, Akwa Ibom pool N5b loan for entrepreneurs

    The Bank of Industry (BoI) the Akwa Ibom state government have signed a Memorandum of Understanding (MoU) to provide N5 billion soft loan for lending to entrepreneurs and training of small-scale business people in the state.

    Akwa Ibom Governor, Godswill O. Akpabio signed the MoU for the State Government while the Managing Director of Bank of Industry, Ms. Evelyn Oputu signed for the bank, according to a statement from Akwa Ibom.

    Addressing journalists yesterday, the Special Adviser on Industrialisation and Akwa Ibom Industrial and Investment Promotion Council (AKIIPOC), Mr. Senas Ukpanah said the effort was in line with Governor Akpabio’s electioneering promise to promote industrialisation policy in the state.

    Ukpanah hinted that the Federal Government would support the loan scheme with N2.5 billion while the state Government would put N2.5 billion for lending to investors.

    Meanwhile, Governor Akpabio has pledged to partner the bank in order to create entrepreneurship and capacity development in the agro-allied sector.

    Akpabio, who stated when Ms. Oputu paid him a courtesy visit at Government House, Uyo, pledged to enter into a MoU with the bank.

    He stated that his administration would provide land for interested investors, adding that the state budgeted N20 billion soft loan this year to partner the private sector in establishing industries in the state.

    Earlier, the Managing Director of BoI had congratulated the Governor on the provision of quality infrastructure in the state.

    She lamented that the entrepreneurship programme was at the lowest level, attributing low patronage of industries in the country to lack of infrastructure.

    The BoI boss stated the bank would do a lot of training of small-scale business people and provision of facilities to them, calling for proper utilization of funds by the prospective beneficiaries