The Nation Newspaper

Category: THE CEO

  • Meet entertainment entrepreneur, Collins Osazuwa Oviawe

    Meet entertainment entrepreneur, Collins Osazuwa Oviawe

    Our Reporter

    Collins Osazuwa Oviawe is a record producer, influencer, music mogul, singer, songwriter and a renowned record label executive. He is also the CEO of PlayNation RichGang, an entertainment company – with divisions ranging from music to lifestyle events.

    Widely known as Governor Of Africa (GOA), Osazuwa was born August 5th, he hails from Edo State in Nigeria where he attended his elementary school and also went to the University preparatory secondary school (UPSS) after which he proceeded to Delta state University where he studied Finance & Accounting.

    With the knowledge about finance that he garnered in university, paired with his passion for music – GOA has been able to capitalize on not only the artistic area of the industry but the business side as well. With a career spanning more than 9 years, GOA has found himself fulfilling many roles. One of these being the business coordinator of Club Joker, in Benin City.

    Collins Osazuwa Oviawe aka Governor Of Africa

    This role saw him being responsible for booking celebrities and being the go-to for anything lifestyle and entertainment in the city. Merging his love for music and business, he was able to combine the two and came up with the idea of hosting the Bikini Splash Pool Party. With its first two successful editions having taken place in Benin, Nigeria – it only made sense to expand its reach, and this led to the launch of the event in Cape Town South Africa. He saw a need to reimagine the way we bring back the summer, and did this by introducing a fresh vibe which was the first of its kind to grace the mother city.

    With a number of hit records, GOA is an influential key player in the industry as he currently works with various A-List artists and producers from both home and abroad.

    For those who enjoy African sounds, or who admire the African influence on music today, it is important to get familiar with GOVERNOR OF AFRICA (GOA).

    He brings a renewed energy, and a fresh set of eyes and ears to a space bursting with talent and creativity. The delicate arrangement of good artistry, talented creatives and the financial backing to give Africa’s young talent the head start they deserve brings to fruition something that the world is yet to see – that Africa is where it’s at.

  • Omagbemi, artiste-entreprenuer, with a class

    Omagbemi, artiste-entreprenuer, with a class

    Agency Reporter

    Many musicians are happy just creating music and enjoying the lifestyle that being a famous musician provides.

    However, a lot of pop, rap & rock stars have interests beyond music, including a passion for entrepreneurship.

    Wisdom Amatoritsero Omagbemi is one of those impressive musician-entrepreneurs who has made a name for himself in the music business, first as a producer and then as a trap solo artist.

    Since achieving success, Omagbemi has taken his career in his own hand and created an entrepreneurial empire that has sprung forth from his own creativity and hard work.

    The 25-year-old, who hails from Warri/ Sapelle in Delta, attended the Agbharo Grammar school where he completed his primary education and went on to attend the Delta State Technical College before embarking on his music career.

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    He is indeed one of those artists who believes that being good in business is the most fascinating kind of art.

    Known for his music as well as his entrepreneurial strides, Omagbemi is said to have toed the path of his father who is also an entrepreneur based in South Africa.

    He made his first entry into the business world with a partnership deal with Chat2Cars – a registered automotive venture in South Africa that provides a platform where both car dealers /private (sellers) and car buyers find a middle ground to transact easily.

    Being a natural business person, Omagbemi is also known for his progressive attitude towards producing trap music.

    He fell in love with music at tender of 13 and has since recorded mainstream success while operating privately.

  • I always expect challenges in my business, says Celebrity Jeweler

    I always expect challenges in my business, says Celebrity Jeweler

    Celebrity Jeweler, Godson Umeh is the brain behind GODSONTHEPLUG; an independent British-Nigerian Jeweler. In this interview, the young and successful entrepreneur shares the inspiration behind starting his jewelry business and other issues.

    If we were in the 90s, would you still take the bold step to invest in the jewelry business?

    Yes. Jewelry business back then was the main thing and at that time, you would hardly come across fake jewelers but today, it’s a whole new story.

    What inspires you?

    Everything about fashion and putting smiles on the faces of my clients around the world inspires me. When I sleep at night, my dreams would always be about the piece I should make next. I love what I do because getting to see beautiful and stunning things almost all the time is wonderful and satisfying. Getting to start my own brand as an entrepreneur definitely wasn’t easy and I wasn’t expecting it to be, but thinking of the freedom that comes with it and being my own boss is awesome, nothing inspires me more than this.

    What’s your target market in the jewelry fashion industry?

    My target is conquering the world in general with my brand name. But first of all, we start from my immediate space.

    At what point did you figure out you would go into jewelry business?

    When I was much younger I always loved to sell unique pieces or anything at all to my friends, this combined with my passion for fashion made me go into the fashion industry.

    Being a jeweler, what is your major goal?

    My main goal is satisfying my customers and making sure there is a sense of satisfaction when they see what I have made for them. Making sure my clients look exquisite is part of my deal, knowing how to produce what your client wants is key to successful business. I definitely have bigger plans for my brand. I have plans on going global; especially in the United States, Nigeria and other parts of the world. You’re never fully dressed without a piece of accessory here and there.

    What has challenged you the most since you joined the industry?

    I wouldn’t really call any challenge “Major”.

    Are you a big risk taker?

    Yes, I love to take risks, I don’t always mind the outcome because to me, no regrets, only lessons.

    How would you say the general economy has affected the fashion industry and vice versa?

    The economy has greatly affected Fashion due to the situation of the country. You virtually pay for everything you do and to my greatest knowledge that is not what it’s meant to be but I put everything to God to take control. The fashion industry has at least been a source of employment for many, thereby reducing unemployment rate around the world.

    What was your growing up like?

    I was born and raised in Reading, United Kingdom, though my parents originally hail from Anambra. I also schooled in the UK and I left school at 16. I am the second of three siblings and both my parents are alive. As at 20, I had already started selling stuff to my friends, anything at all they needed they called me for it, that was how my brand name ‘Godson The Plug’ came about. I’ve always had the zeal to be in the fashion industry, especially jewelries. I work round the clock, that is I do not have a particular time off, I just keep working because I love what I do.

    What’s your history with football?

    Yes, I did have a history with football but I had to follow my heart which is to become a celebrity jeweler. Notwithstanding, I still love football.

    What’s your relationship with your customers, especially the major ones you have worked with?
    I have a very wonderful relationship with them because I tend to satisfy and make them really happy. Sometimes we even have fun together. I have had the opportunity to work with a couple of prominent individuals and we have built a good relationship base from the onset. I’ve worked with the likes of Lateysha Grace, Raheem Sterling of Manchester City Club, Eva Apio, Jayden Bogle, Owen Otasowie, Jonathan Panzo and Trevor Chalobah. They have always trusted and believed my delivery.

    What’s your prediction of the fashion economy in 5-years?

    The fashion economy is growing, trust me, in the next five years we will even have more major jewelers around the world. But then, 5-years for me, I know my brand will be one to be reckoned with all over the world.

    What are your last words for people around the world?

    Like Burna Boy’s mum did while representing him at an international award show, she said; “Every black person should remember you were Africans before becoming anything else.” I also wish to encourage every young individual to keep striving because the end of the tunnel is brighter than the road leading to it. The business experiences and lessons I’ve gotten so far have brought me massive growth. So, wherever I see myself tomorrow, I know God placed me there. My dedication and sacrifice to work, plus grace, keeps me going.

  • ‘Conceive an economy without oil revenue’

    ‘Conceive an economy without oil revenue’

    COVID-19 has thrown up unprecedented challenges in all facets of human endeavours. The development is also a source of concern for industry and key players both in the public and private sectors. The Director-General, Lagos Chamber of Commerce & Industry, Dr. Muda Yusuf, in this online interview with Assistant Editor OKWY IROEGBU-CHIKEZIE, reflects on a wide range of issues and proffers the way forward

    What is your take on the economy given the slump in oil prices?

    Oil price is one of the most difficult variables to predict. No analyst foresaw the current plunge. There are too many inponderables around oil price. This is the reason it is not good for an economy to be too dependent on primary commodities.  Of course, this is a conversation we have had over the decades, but nothing fundamental has been done to address the structural issues needed to diversify the economy. What is best at this time is to conceive of a  economy without oil revenue and construct an economic management model based on that premise.

    It is instructive that a review of the 2020 budget is being undertaken.  Even the review of the oil benchmark to $30 per barrel has been overtaken by events. Oil price is now in the $20 per barrel threshold. The review is inevitable given the collapse of the underlying assumptions of the budget. Beyond the budget, there are other dislocations that would result from the current oil price shock- these include weakening of investor’ confidence; generation of speculative pressures on the currency, depreciation of the naira exchange rate, pressures on foreign reserves which has profound macroeconomic implications, tumbling stock prices, heightened inflationary pressures on the back of currency weakening and increase in production and operating costs for businesses.

    Others are weakening of purchasing power with adverse implications for the welfare of the citizens, higher fiscal deficit, weak capacity to implement the budget, high risk of capital flow reversals, resurgence of round-tripping in the foreign exchange market, if the CBN forex management model remains unchanged and escalation of project costs in both the private and public sectors.

    What should be the role of the government at this time?

    Urgent steps should be taken, through appropriate policy choices, to attract equity domestic and foreign private sector capital for infrastructure financing. The government needs to look beyond tax credit in its quest for complementary funding sources for infrastructure. We should look more in the direction of equity financing. But for this to happen, the policy and regulatory environment must be right.

    Also, idle non-revenue yielding assets of government should be sold to generate liquidity, while the foreign exchange market should be liberalised (as much as possible) to attract forex inflows into the economy. In addition, Public-Private-Partnerships should be bolstered to attract private capital into the critical sectors of the economy and urgent steps should be taken to reduce the production costs for oil producing companies to make the sector more competitive. Public-Private Dialogue should be deepened to harness quality ideas on how to navigate through the shocks in the economy, as well review the spending structure of government and the cost of governance.The ballooning recurrent expenditure, in the face of declining revenue, is a cause for concern.

    How do we situate the Central Bank of Nigeria’s stimulus package?

    A stimulus package of N3.5 trillion is staggering and unprecedented. There were additional policy measures announced by the CBN to cushion the effects of the coronavirus on the economy. It is an initiative that is laudable.  But effective targeting is important to achieve the desired outcomes. Certainly, it would have positive enterprise level impact on businesses that can access the facility. It will impact their liquidity and operating cost.

    Other complementary measures announced by the apex bank include a one-year moratorium on CBN intervention facilities; interest rate reduction on intervention funds; creation of N50 billion credit facilities for SMEs; restricting and refinancing opportunities for existing facilities; activation of N1.5 trillion InfraCo project for building infrastructure; N100 billion facilities for pharmaceutical companies and healthcare practitioners and N1 trillion loans to boost local manufacturing and production across sectors.

    It’s also important to ensure seamless access to the funds, especially by small businesses [without compromising the security of the funds].  Many SMEs have complained in the past about difficulty of access to the intervention funds

    However, like in most economic challenges, monetary intervention can only fix a fraction of the problem.  There are fundamental macroeconomic issues that investors would still have to contend with.  These are issues around the impact of the coronavirus pandemic on crude oil price, exchange rate depreciation, depletion of foreign reserves, inflationary pressures, stock market slump and general investors sentiments. These are critical drivers of investors’ confidence.  Unless the external sector normalises, there is very little domestic policy responses can do to fix these disruptions, especially in the light of the vulnerabilities of the economy.

    The interventions are focused largely on the supply side of the economy.  However, a supply side stimulus needs a complementary demand side fortification otherwise there would be the unintended outcomes of unsold inventories build up.  It is therefore, important to bolster purchasing power of citizens which has been decimated by the slump in economic activities. Both fiscal and monetary measures are imperative to make this happen.  Meanwhile, we await the guidelines that would spell out the details of how the facilities would be managed.

    How about the health sector?

    The health sector component of the fund is particularly laudable because the most critical issue at the moment is the fixing of the looming public health crisis.  Therefore, focusing on the health sector is perhaps the most important thing to do at this time. This is a time to prioritise measures that can deliver quick wins.

    What are the clear implications of COVID-19 for the global economy?

    Dislocations in the global economy given the slump in global output, turmoil in global financial markets as fears of the pandemic wiped out over $8 trillion in the market value of listed firms globally, reduction in global oil consumption as economic activities slowed down, resulting in falling oil prices, disruption of global supply chains, the aviation industry, manufacturing, trade volume and many more. Many corporates are increasingly revising their earning forecasts downwards.

    And what about the domestic economy?

    Weakening oil prices, induced by the pandemic, leading to the downward review of the 2020 budget, disruptions in business and economic activities as companies and businesses shut down operations, following lockdowns and mobility restrictions. Aviation, hospitality, SMEs, manufacturing sectors are among some of the worst hit in the current situation.

    There is the worsening fiscal and external position of the country in the light of lower receipts from oil exports, depreciation of the naira exchange rate across various market windows, adverse impact on Nigeria’s trade, as the major trading partners in Asia and Europe are grappling with the challenge of lockdowns.

    How should businesses respond to this situation?

    Organisations should adopt flexible business models to ensure tight control on costs and non-revenue generating segments of the business and review their supply chain and focus on import substitution and backward integration as much as possible.It’s also important to leverage technology in business processes for efficiency and cost effectiveness, and broaden the scope of remote working for employees.

    How does the concept of Working from Home fit at this time?

    Working remotely can be very cost effective and efficient. One of the major benefits of this current experience is the fact that it compels many companies to adopt the remote working model for their operations.  There are some operations that could work well with this model.  Am sure after the pandemic disruptions, many firms would embrace the practice or culture of working from home. Things have to evolve.  In a cosmopolitan city like Lagos, this practice needs to be imbibed by many organisations. It would reduce the traffic congestion on Lagos roads.  It is also good for the welfare of the workers because it saves them the stress of driving through the sometimes-horrific Lagos traffic.

    What role should government agencies play in promoting investment at this time?

    Agencies of government need to be more investment friendly.The recent initiatives of the government on the Ease of Doing Business is in consonance with this proposition.  They should be facilitating investment growth rather than seeing themselves as revenue generation agencies. They should also consider the limitations faced by investors, especially the SMEs in the economy. Regulators should be seen to support the efforts of government to promote investment, rather than become a burden on business.  Regulatory agencies need to be better funded by government to reduce their dependence on fees, fines, levies for the running of the agencies.  This arrangement often stifles investment and economic diversification efforts. Many regulatory agencies depend on the fees and levies imposed on business to run their operations.  This should not be the case.

    Isn’t the talk about economic diversification more urgent now than ever?

    The only way to reduce exchange rate volatility is to diversify the economy in a sustainable way. Three critical factors are crucial to driving economic diversification in the economy. These are the quality of infrastructure, policies and institutions. It is crucial to get these key parameters right. It is equally critical to ensure proper alignment among these key variables to ensure sustainable diversification.

    This policy factor has many dimensions – monetary policy, forex policy, interest rate policy, tax policy, trade policy, procurement policy and investment policy.  Each of these policies has a major role to play in the economic diversification process.  The policy mix must be right for the desired outcomes to be achieved.

    The monetary policy for instance should be designed to drive domestic investment through a moderation of the monetary tightening stance of the CBN.  This is needed to moderate interest rate in the economy.  It is difficult to drive domestic investment at current levels of interest rate which is well over 25 per cent for most economic players.The economy needs investment, especially domestic direct investment to drive diversification.  Happily, this is beginning to change with the recent policy measures introduced by the CBN and the various interventions in the development finance space.

    The foreign exchange policy is another very important policy component which impacts on economic diversification. A forex regime that perpetuates a rent economy would not serve the cause of diversification.  It creates opportunities for arbitrage, corruption, resource misallocation, impedes the inflow of investment, and create transparency issues in the allocation of forex. The multiplicity of rates is inimical to sustainable economic diversification. Inappropriate forex policies could impede the inflow of foreign exchange into the economy and contribute to the weakening of the currency. It is also important to avoid a forex policy regime that penalises domestic production and incentivises imports. Such policies inadvertently undermine the country’s drive towards self-reliance.

    How appropriate are government’s palliatives and their administration?

    There is a major problem with the appropriateness of the palliatives announced by the President. The school feeding programme for instance is not relevant at this time.  All schools are closed already.  There is the issue of the currency of the database of the vulnerable people. It was compiled few years ago.The segment of the vulnerable that should be targeted at this time are the urban poor, many of them are in the slums of Lagos, especially, and other states on lockdown. This was the expectation around the palliatives that was anticipated in the wake of the pandemic and eventual lockdown. The pre-COVID-19 pandemic palliatives should be markedly different from what should happen at this time. There is need for a comprehensive review of social intervention programme to bring it in alignment with the social crisis resulting from the Coronavirus pandemic.The context has changed; therefore, the intervention model should change as well.

  • ‘Why young entrepreneurs are not making enough money’

    ‘Why young entrepreneurs are not making enough money’

    Everistus Onwuzurike, Chief Executive Officer, Eleo Watches Nigeria has said most entrepreneurs are not making enough money in their businesses as they should because they are either not solving enough problems, or they are solving the right problem the wrong way and for the wrong people.

    He made this know during an interview session on Saturday.

    According to him, money is the reward for solving problems and to be able to solve enough problem, and the right problems for people, you must master the art, not only of solving specific problems but also of knowing what a good and quality solution should be.

    He said: “As an entrepreneur, you are solving specific or diverse problems for your customers; your ability to provide solutions to diverse problems is a potential for more income. That is why at Eleo watches we don’t just solve the problem of providing quality and affordable wristwatches to our customers but we also solve the problem of helping our customers repair or service their old wristwatches and also giving advises where and when needed.”

    The wristwatch boss advised entrepreneurs to think of value chains they can add to their businesses to help create and add more value and income to their businesses.

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    Highlighting the objectives of his company, Everistus noted that Eleowatches is committed to delivering durable wristwatches for majority of Nigerians seeking an affordable alternative to highly priced timepiece. He strongly believes that one doesn’t have to break the bank to look stunning, and same goes for owning a quality and beautiful wristwatch.

    Speaking on his future plans, he mentioned that they are planning on having their own wristwatch production factory so that wristwatches can be produced locally here in Nigeria. He mentioned that there is a master plan for this business which is time sensitive and they intend to conquer the fashion industry which is a viable industry by becoming a hub for quality and affordable “made in Nigeria” wristwatches.

    On how he stays motivated, he said he always put the big picture in front of him. He also explained that the big picture is to own a wristwatch brand of his own soonest.

    “The big dream is to be a hub for quality watches. As an entrepreneur, I don’t frown at my losses; I am not always discouraged when I lose out in a business. I believe I am the only entrepreneur that celebrates his losses. I do this because it paves way for me to get better and improve in areas that made us lose.

    “According to John Maxwell, sometimes you win, sometimes you learn.” He said.

  • It’s great pleasure being Africa’s Youngest CTO – software guru Trillbjm

    It’s great pleasure being Africa’s Youngest CTO – software guru Trillbjm

    Oyemonlan Benjamin Oseoje, popularly known as Trillbjm is the founder and CEO of popular online low-budget fashion retail, Fashionnova Nigeria.

    Trillbjm is also recently joined Patricia, the fintech company that facilitates cryptocurrencies transactions.

    Well, this did not come as a surprise to the business community as the move was seen by many as a natural progression for the budding techpreneur who already has a reputation as a crack software engineer.

    Trillbjm explains how it feels to be acknowledged as the youngest CTO in Africa.

    He said: “Indeed a great pleasure to be Africa’s youngest CTO, However, these sort of acknowledgments come with great responsibilities. As for me, it’s an opportunity for me to constantly Do The Most. I have so many tech entrepreneurs, software developers, and other tech-inclined professionals who look up to me regularly, I have to constantly be in the forefront driving the wide adoption of technology in this part of the world. I am also burdened with the responsibility of ensuring the pathway of the next generation of tech enthusiasts.”

    Aside from being CTO of Patricia, Trillbjm is also the founder and cofounder of businesses.

    He tells us about those businesses and why he chose those lines of businesses as an entrepreneur.

    He stated further: “I happen to be the co-founder of Billerpay; A bill payment and remittance platform for Africans using cryptocurrency. I came up with this idea because I knew there was a problem with paying bills, subscriptions and remitting payments across Africa due to payment restrictions, regulations and other challenges. So I decided to make it decentralized by building a platform facilitated by the blockchain to solve the idea of paying bills effortlessly across Africa.”

    Obviously, Trillbjm’s magical growth isn’t surprising to many, as the young multiple-business owner, considered Elon Musk and Mark Zuckerberg his business role models.

  • ‘Skill acquisition panacea to youths’ illegal migration’

    Joseph Ntung Ari is the Director- General/Chief Executive of the Industrial Training Fund, an organisation saddled with manpower development and skill acquisition in Nigeria. In this interview with TOBA AGBOOLA, he shed light on how the Fund has been supporting the government’s initiatives on job creation, migration of Nigerian youths and how to address the problem, among other issues. Excerpt:

    How has the agency been able to key into the Federal Government’s initiatives to tackle unemployment?

    In recognition of our efforts to tackle unemployment, the Federal Government recently commissioned the Fund to come up with multi-faceted job creation strategies that would lead to a lasting solution to this hydra-headed problem of unemployment. The report is currently undergoing consideration by the Presidency.

    The proposal showed that in the area of agriculture, which is the major pre-occupation of Nigerians and a key focus of the Next Level Agenda, a total of 150,000 direct and indirect jobs will be created along the agricultural value chain. The target will be achieved through the implementation of the programmes such as the Vegetable Value Vantage (TRIPLE V), Livestock Production (LIPRO) and Women Driven Agric Mechanisation Programme (WODAMP). In the construction sector, over 18 million direct and indirect jobs will be created for Nigerians using two main initiatives, that is the Mass Housing Development Projects (MAHODEP) and the Infrastructural Maintenance of Government Structures (IMOGS). The transport sector will also contribute over 800,000 jobs through the Rural Transportation Empowerment Programme (RUTEP) and the Mega City Travel. For the services sector, about 200,000 Nigerians will be equipped with skills in Auto-Diagnostics and Services (ADASE), Environmental Waste Management (EWAM), Renewable Energy Services (RES), Creative Arts and Digital Media Programme (CADMEP) and Service Hubs (SE-HUB). In all, a total of about 20 million direct and indirect jobs will be created through these initiatives.

    For the beneficiaries, you must resolve to make the most of the opportunity provided by ITF skills acquisition programmes and should also ensure that you use the start-up kits that will be presented to you, not only put food on your family tables but also make meaningful contribution to the Nigerian economy. Similarly, parents and guardians have to begin to see hands-on skills as vocations and as real alternatives that could lead to a meaningful life. The era of white-collar jobs for all by government is well and truly over. The perception that hands-on skills are dirty and a preserve of the illiterate and never-do-wells in our society must change. Parents and guardians must therefore encourage their wards to acquire skills.

    One of the mandates of the Industrial Training Fund is for the youth to be self reliant in terms of skills acquisition, what is your organisation doing to stem this development?

    Solution to the rising migration of Nigerian youths lies in skill acquisition. We are disturbed by this ugly trend and reports of mass casualties on the high seas, enslavement and other harrowing misfortunes being experienced by Nigerian youths seeking to migrate to Europe. The ITF is appealing to stakeholders to collaborate with ITF in order to equip more Nigerians with skills for employability and entrepreneurship. Equipping Nigerians with relevant skills is not only in line with the Federal Government’s efforts to create jobs, but would stem the current wave of migration, especially by the youth. I keep wondering why the mass migration despite the fact that several surveys by the ITF and other organisations have revealed that skills gaps exist that were being filled by foreigners. It is with a view to equipping Nigerians with skills to fill these existing vacancies that the ITF has embarked on a number of initiatives and expanded existing programmes to ensure that more Nigerians are empowered with skills to check unemployment and promote entrepreneurship. Some of the programmes include the National Industrial Skills Development Programme (NISDP), Passion to Profession, Training on Wheels Using Mobile Training Units, the Women Skills Empowerment Programme (WOSEP), the Technical Skills Development Project (TSDP) as well as the Vulnerable and Indigent Youth Empowerment Programme (VIYEP) amongst several others.

    The National Industrial Skills Development Programme (NISDP) has been on for some time now. What have been the achievements so far?

    The National Industrial Skills Development Programme (NISDP) is one of the numerous skills acquisition intervention programmes introduced and implemented by the ITF, to facilitate the achievement of the Buhari administration’s policy on job and wealth creation. It focuses on skills acquisition to create jobs to stem rampant unemployment and breed a new generation of entrepreneurs, in order to transform the economic landscape of the country. Within the last three years, the ITF, through the NISDP and other skills acquisition programmes, equipped over 450,000 Nigerians nationwide with skills for employability and entrepreneurship.

    Several thousands of these beneficiaries were from all the states and were equipped with requisite skills in various trades and crafts. They include welding and fabrication, plumbing and pipe-fitting, tailoring, aluminum, tiling, Plaster of Paris (PoP) as well as photography that were carefully selected based on their potential to directly impact the economy of the state and the country in general. Except for Gombe State, all the beneficiaries from the other states were empowered with start-up packs to start their businesses.

    This year, we have also commenced the implementation of the 2019 NISDP and other skills acquisition programmes in Gombe State and other States of the Federation and the Federal Capital Territory (FCT) under the 2019 Skills Intervention programmes.

    What is the ITF doing in view of the renewed effort by the Federal Government to unlock the MSMEs sub-sector?

    I would say that as the leading capacity building institution in Nigeria, we perhaps had realised the importance of the MSMEs earlier, and commenced a number of initiatives that are targeted at driving the sub-sector. Our target is to ensure that our trainees become entrepreneurs rather than employees. Similarly, in the ITF reviewed vision; strategies for mandate actualisation, a home grown four-year plan that management unveiled on my assumption of duty, the development of MSMEs sub-sector occupy a prominent place. The plan has quick wins, medium and long term goals. These are efforts that the ITF is undertaking. The presidential charge is, therefore, a validation of our efforts and shall spur us to do more.

    What do you consider to be the most significant impediment to a vibrant MSMEs sub-sector?

    During the inauguration of the National Council on MSMEs, the Vice President, Professor Yemi Osinbajo, identified access to finances, access to markets, weak business development, dearth of technical skills, lack of infrastructure and insufficient market information as major obstacles to the growth of the sub-sector. From our interactions with operators, the Vice President captured the core of their problems. The questions that immediately come to mind are these: Why does it take so long for a potential operator to secure loans in Nigeria for instance, as compared to his colleagues in other countries? Why is it so difficult for him or her to secure financing or even register their business? These challenges the Federal Government has promised to solve, but what I think is the most formidable obstacle is the absence of the right skills by most operators in the sub-sector. Most of them are poorly educated and lack the basic knowledge of running a business and source financing. Some are even bereft of the skills to keep records.

    It is with these in mind that all our training, particularly those targeted at the MSMEs have business management elements. Under the NISDP, a three-month skills acquisition programme that is directly targeted at instilling the youths with skills for employability and entrepreneurship, several weeks of the programme are dedicated to teaching trainees how to develop business plans, source financing, basic accounting and general requirements  for management of a successful business. To my mind, this is the reason why most graduands of the scheme today are successful entrepreneurs

    Under the Technical Skills Development Project (TSDP), which the ITF implements in collaboration with the Nigeria Employers’ Consultative Association (NECA) for the training of middle level manpower and potential entrepreneurs, business education is also a significant component of the one year training programme. The same elements have been introduced into other short term technical skills acquisition programmes. This is even as we have stepped up our engagement programmes with MSMEs. All these are geared towards strengthening the sector as we believe that having access to capital and a bankable proposal are not certainties that you will be successful in your business without the requisite technical and managerial skills.

    In the light of the Federal Government’s emphasis on MSMEs, do we see the ITF doing more?

    Yes, beyond the vice president’s charge, there are obvious problems in the national economy that will be helped, or even perhaps be solved by a vibrant MSMEs sub-sector.

    Take unemployment as a case in point, as I had earlier mentioned, the MSMEs are the highest employers of labour in the country even in the state they are today, with the ease of financing, better information systems and the right technical skills, they are likely to employ more.  The MSMEs are clearly the most veritable vehicle for job creation, national growth and development. As an institution vested with the mandate to train Nigerians, we have no choice but to do more. In recognition of this, we have concluded plans to expand our existing initiatives, especially those targeted at capacity building for MSMEs.

    The Technical Skills Development Project (TSDP) will also be expanded to more centres from its present 16 while stepping up our MSMEs advisory services. In addition, we have commenced two new initiatives called Women Skills Entrepreneurship Programme (WOSEP) and the Graduates Re-Skilling Programme.

    ITF seems to have its hands in so many things. What is the core mandate of the Fund?

    The mandate of the Industrial Training Fund imposes on us the responsibility to provide and promote the acquisition of skills in order to generate a pool of qualified Nigerians to man all sectors of the national economy. This is the mandate we have been charged with, and have pursued all through the years of our existence. The MSMEs is one sub-sector that has been given critical consideration in this pursuit. Our emphasis on the development of the MSMEs is premised on the belief that they are the engines of growth of any economy – be they developed or developing. Most of the countries that are today considered part of the first world like Brazil, China, India and Singapore to mention but a few, rode on the back of a vibrant and strong MSMEs sub-sector to be what they are today. In most countries, they (MSMEs) are the highest GDP earners and highest employers of labour.

    In Nigeria, for instance, it contributes about 48.7 per cent to the GDP and employs over 59 million Nigerians. It is, therefore, a critical sector that could only be ignored at our own peril, especially now that the country is striving to create jobs and combat unemployment, ensure the environment for inclusive growth and generally diversify the economy.

    What are the dynamics and innovations you have brought into the system, especially on the image of ITF since your primary assignment then were to sell ITF to the world?

    As the Head of Public Affairs, I introduced the re-branding philosophy, which saw members of staff re-oriented to provide quality service to clients of the Fund. The policy also engaged external stakeholders, thus paving the way for increased support and collaboration for smooth implementation of the ITF Act. I was also at different times the Director of Administration and Human Resource Department, Corporate Planning Department and the Director Business Training Development Department at the ITF Headquarters. Also, a onetime Chairman of the Fund’s Training and Research Committee, (T&RC) of Management. All these before my appointment in 2017 as the Director General of the Industrial Training Fund. I started as a journalist and still cherish this background; I am still a member of the Nigeria Union of Journalists (NUJ), a member of the Nigerian Institute of Management, member of the Advertising Practitioners Council of Nigeria (APCON), a Fellow of the Corporate Administration Institute and a Fellow of the Nigerian Institute of Public Relations (NIPR). Recently, I concluded my two terms as a member of the institute’s

    Who is Sir Joseph Ari and what is your background like?

    I have a very humble background; I am a holder of the West African School Certificate, Diploma in Broadcast Journalism, Post Graduate Diploma in Journalism and Post Graduate Diploma in Management. I also hold a degree in Law (LL B (Hons.), a Masters Degree in Law LLM, and Masters Degree in Business Administration (MBA).  My work career spans a period of over three decades, covering different spheres of disciplines and human endeavour.

    What are your work experiences, before you got to this level?

    For my earlier background in journalism, I started as a broadcaster from the scratch at the Plateau Broadcasting Corporation as a news reporter/presenter; had a stint with the Federal Radio Corporation of Nigeria, Lagos as a newscaster and subsequently moved over to the Nigerian Television Authority (NTA) as a News Editor/Caster.  My work career took me to the National Insurance Corporation of Nigeria, (NICON) where I was the Public Relations Manager, North. From there I came home and was appointed as the Director of Press and Public Affairs to two Governors of Plateau State before another appointment as the Sole Administrator and later General Manager of the Plateau Publishing Company, (PPC) Jos.

    Thereafter, I was reassigned to the Plateau Radio Television Corporation, (PRTVC), as General Manager.  To date, I remain the first Plateau citizen to have headed the two state media outfits at different times. When I was thinking that I had completed the cycle of public service at the state level, I was appointed Permanent Secretary in charge of Government House Administration; a position I held until the Federal Government appointed me as a Deputy Director in the Department of Public Relations, External Affairs and Publicity of the Industrial Training Fund, ITF, a grade ‘A’ Federal Government Parastatal under the Federal Ministry of Industry, Trade and Investment.

     

  • ‘AfCFTA will aid Nigerian food products ‘penetration into Africa’

    BY DANIEL ESSIET

    The Chief Executive, Agricultural and Rural Management Training Institute (ARMTI), Dr Olufemi Oladunni, sees export at the forefront of the nation’s improved foreign exchange. He supports discussions focused on maintaining Nigeria’s competitiveness within the global trade and export finance market. He shares his thoughts with DANIEL ESSIET

    How can the nation’s agriculture sector take advantage of the US-China tensions?

    United States in particular, is a market of great interest and opportunity for many Nigerian exporters. From the strong historical ties to the current and future opportunities, there definitely is lots of focus on that part of the world from Africa. If the current trade conflict continues, both countries will eventually look out for new trade partners.  That therefore, offers a great market opportunity to the agricultural sector of the rest of the world (including Nigeria) in both countries. To compete at that level however, the nation’s agricultural sector needs to be more productive and meet set international standards.

    In which export markets do you see the strongest demand for Nigeria’s agro products?

    Nigeria’s agricultural products will do well in almost every export destination in as much as set standards are adhered to and the products are competitive in terms of price. Meanwhile, countries that host large population of Africans and Nigerians are most likely to have the highest demand for Nigeria’s agro products. Most agro companies remain solely focused on their domestic market, despite expanding global opportunities and a national campaign to promote exporting. As a result of this unrealised potential, these businesses forgo greater profitability, diversification, and other competitive advantages derived from engaging internationally. We lose a primary source of sustainable, high-wage job creation and economic growth. Our exporters have to undertake international market assessments to identify needs and opportunities. They then applied that intelligence to take actions that would generate the greatest return in helping their businesses increase exporting. Export is key to boosting foreign earning, so we need to focus on agro exports. Whether big or small businesses, the leadership should seek to increase revenues and employment and promote overall economic competitiveness, they must adapt to rapidly changing global realities that are shifting the focus of demand for Nigerian produced goods and services. Our biggest exports to the world, in volume terms, are products such as agri-foods.

    Do you see Africa Continental Trade Agreement providing an opportunity for Nigerian food products to expand into the continental economy?

    Yes, it does provide market opportunity for the Nigerian food products. Beyond that however, the perceived ‘chronic oversupply’ of food in Nigeria is only a periodic thing. This happens only at the harvest season of each commodity. The huge supply at the harvest of each commodity is not an all-year run thing because of poor/ low efficiency in the post-harvest handling of food commodities in Nigeria. To take advantage of the opportunities that the Africa Continental Trade Agreement presents, Nigerian agricultural sector needs to improve in value addition to food commodities and ensure strict adherence to global and regional food safety standards. I believe there are a lot of local firms with proven capacity for success in exporting a range of goods and services, but they underachieve as a whole. The continental trade agreement will provide an opportunity for Nigerian food products to expand into Africa.

    Do Nigerian products have satisfactory access to international markets, particularly in Europe?

    No. This is due to a number of factors including: low productivity, non-competitive pricing, and non-adherence to food safety regulations often leading to rejections. There should be increased investment further along the value chain to enable the development of value-added products that are more internationally competitive and respond to consumer demand. For exporters to Europe, the presence of pathogenic micro-organisms remains the single most notified food safety issue. We need to address issues such as chemical contaminants, mycotoxins and pesticide residues. We need to strengthening the capacities to meet international food safety requirements and in infrastructure to provide an enabling environment for value chain development. Ultimately, increased public expenditure in agriculture and agricultural research is needed to improve productivity and build the resilience of the agricultural sector so that producers are better prepared to meet international trade requirements.

    What measures should be put in place to boost the market competitiveness of Nigerian agricultural exports?

    The government and the private sector have made concerted efforts to keep trade volumes on a consistent upwards trajectory over the past decade. However, the country remains in trade deficit in some fronts with exports faltering in recent years as a result of external challenges such as low global commodity prices. The Government is explicitly targeting increased foreign direct investment (FDI) inflows, deploying a multi-pronged strategy to attract new investment. Measures include a wide-reaching tax reform programme, easing restrictions on FDI across several sectors. But we need to do more to boost agro exports.

    Government should work with the private sector to help stimulate innovation for sustainable agri-food systems and produce better and safer food while preserving natural resources and biodiversity. Our  growth will be propelled by prioritisation of agriculture as a key contributor to development and the fast-paced adoption of new technologies to boost the sector. But we have not seen growth in irrigation. We have to harness technology to expand irrigation to farmers who traditionally relied on rainfall to water their crops. This will boost productivity and income for farmers by helping them extend the growing season and become more consistent in their production.

     

    One of the drivers of growth in the agricultural sector will be the expansion of irrigation. The area under irrigation has not increased significantly for a long time. Farmers need access to quality input, irrigation facilities, farm and processing machineries, functional infrastructure, including power, dam, roads and strict adherence to set global food export standards. It is time for Nigeria to become a strong exporter of food products.

    How do you account for the lack of processing of agricultural raw materials on the spot in Nigeria?

    Food processing has a huge potential to unlock economic growth. We have capacities to process meats, confectionary, canned fruits, vegetables, dairy products, noodles, bread, and other baked goods. While we domestically produce poultry, pork, and eggs we need for food manufacturing industry, we still smuggle poultry. The vast majority of dairy products are also imported. There is need to use the sub sector to help the industry accelerate progress towards food security and improved nutrition. We   can be competitive and businesses flourish in the current ecosystem if investments are focused on acquiring processing machineries. The machines are costly. The processing industry face infrastructure challenges, such as power, water supply and roads. There is the issue of  epileptic power supply, high cost of raw materials due to low productivity at the production level, inadequate technical know-how/ skills, short supply of low cost simple technology processing machineries,  non-competitive product pricing compared with commodities traded internationally.

    What challenges does the limited availability of water present to agricultural producers?

    Enormous. It has largely limited agriculture in Nigeria to a rain-fed activity. Farmers therefore, have more idle time during the dry season. This brings about negative impacts/ outcomes on the productivity, competitiveness and overall profitability of the sector. Water resource management is a challenge for the sector. Nigeria relies on rain-fed land for 80 percent of its agricultural needs.

    In what way is agricultural development crucial to the achievement of the SDGs?

    The Sustainable Development Goals (SDGs) are a collection of 17 global goals set by the United Nations General Assembly in 2015 for the year 2030. The SDGs are part of Resolution 70/1 of the United Nations General Assembly, the 2030 Agenda. SDGs goals are: No Poverty. Zero Hunger. Agricultural development is a critical nexus to the achievement of a good number of the SDGs. Agricultural development is a sound strategy to combat poverty (Goal 1), eradicate hunger (Goal 2), ensure good health and well-being (Goal 3), promote industrial growth (Goal 9), reduce inequality (Goal 10), etc. The challenges to feed Nigerians sustainably are huge. With the Sustainable Development Goals, Nigeria and the rest of the global community has adopted a compelling vision with ambitious goals. I believe we need to reshape agriculture and food system to better feed Nigerians and deliver sustainable development.

    In your opinion, what are the main obstacles for rural development policy?

    There are many obstacles at different levels. The challenges of addressing rural poverty, whilst also feeding a growing population are profound. These include poor social amenities and infrastructure, inadequate access to market, rural-urban migration, non-participatory approach to development, insecurity, lack of provision of public goods and disabling business environments. Access to finance is a main bottleneck for rural development. We need to provide incentives for people to live and prosper in rural areas. We not only need to ensure that food production is a stable and profitable occupation, but also that other income generating activities exist in rural areas. The rural people should have access to basic services, such as schools, education and health care among others.

    How can Nigeria’s agriculture sector be made more attractive to foreign investment?

    The Nigeria’s agriculture sector has been growing at a steady pace. For us to facilitate a strong agricultural sector means investing in the infrastructure and creating predictable regulations. If this is fully utilised, farmers could meet the food needs of the country. We need to embrace pro-private sector policies such as offering tax incentives to new agri­businesses. Such measures will go some way to making agribusiness an attractive investment prospect, for foreign investors. What investors need is a guaranteed market by controlling importation of food commodities; easy access to land (including acquisition of certificate of occupancy); functional infrastructure (power, roads, water, etc.)

    How’s infrastructure and logistics affecting the ability of growers to compete in terms of exports?

    Whether, small or big farmers-those using two acres and more, they all need infrastructure to pack and grade their produce in line with market requirements. That is why the government and the stakeholders like us are calling for investment in logistics. Increasing efficiency in logistics   will make it easier for farmers and producers to access both local and international markets. It is costly right now because of wasted time and cost markups at each step along the way .This makes our produce uncompetitive by the time it reaches its destination. Poor infrastructure and logistics have largely limited the productivity of producers. These have increased percentage of post-harvest loss and impeded producers’ access to more profitable markets. Hence, they cannot compete favorably in the international market.

    What recommendations would you make to policymakers in order to fully exploit agricultural resources?

    The government and the private sector must work together to create stronger value chains in agribusiness. Stakeholders need funding to increase the scale of the entire value chain.

     

    To achieve this will require funding the development of infrastructure, power, roads, and irrigation facilities among others. The other thing is to ensure the local market is protected from being used as a dumping ground for agricultural products from more developed economies. Our population is on the up. More people will need feeding. The agricultural industry is looking for researchers to drive growth in productivity. This will require increased funding for research to make the industry ready for the future. We must do everything to assist local producers to meet up with the requirements/standard of the export market.

    Could you summarise the main work of the Institute?

    ARMTI provides management training, consultancy and advisory services. The Institute also conducts applied management research, special and diagnostic studies; and disseminates management information. Overall, the Institute contributes to policy development which will enhance better management of the nation’s agricultural and rural sector.

  • ‘Govt must cut domestic loans to reduce debt service’

    By Simeon Ebulu

    The cost to Nigeria of maintaining its external and domestic debts is now a matter of serious concern, not only to the government, but also to the citizenry. With a budgetary provision of 25 per cent for debt servicing alone, experts fear its just a matter of time before the country sinks into a debt trap. The Director-General, West African Institute for Financial and Economisc Management (WAIFEM), Dr. Baba Yusuf Musa, in this interview with Group Business Editor, SIMEON EBULU, on the sidelines of the just-concluded International Monetary Fund/World Bank Group Annual Meetings in Washington DC, points the way out of Nigeria avoiding a debt conondrum.

    You have these debts at this level, but we also discovered that our revenue profile is also going in the opposite direction. So, how do we balance that if we’re accumulating debts and revenue is plummeting?

    What I’m saying is that when you want to look at the level of volatility, or the concern that everyone is making regarding the level of public debt in Nigeria, when you look at it against the Gross Domestic Product (GDP), of course, you’ll see that we are highly sustainable. But the moment you want to look at it against revenue, then you see that Nigeria is at a very high risk. Of course, in the World Bank’s classification we are considered as a country of moderate risk of debt distress. But technically, the best way to assess Nigeria’s debt profile is to look at it against the revenue because you need the revenue to pay the debt service, you don’t pay the debt service with the GDP. When you look at it, the link between the GDP and the capacity to repay, it doesn’t really tell the story, but when you look at it against the revenue, that’s when you see that our debt situation requires some moderation.

    What’s the way out?

    The first solution that one could suggest is to increase the level of our revenue mobilisation. The tax to revenue ratio in Nigeria against African countries or Sub – Saharan African countries, when you look at it, we are among the countries that have the lowest level of tax to GDP ratio. And the sub – Saharan African average or the low income countries’ average is around 22 percent, that of Africa is on the average about 15 per cent, but Nigeria is still in the single digit; I think it is about eight per cent. That means we really have a gap in that area. Now, we have instituted so many reforms of taxation but I think in my view, we need to really look at it deeper than the way we have been approaching it. It is not enough to just tell … for instance, say the Nigerian Customs Service, say you are increasing their target from X amount to X plus something amount, that every year you are giving them a higher target. I think the target is good enough but it is not sufficient condition.

    The linkage is, if we block the leakages, the leakages should be enough to raise the revenue that we require in Nigeria, and we might not really have the need to borrow once we have a net revenue that we can mobilise domestically. It is also a measure of sustainability, so we have a big window which we can increase, and once we use that window and raise our tax to GDP ratio, even if it is to a level of ten percent or twelve percent, I believe the amount of surplus that we would have would drastically reduce the domestic borrowing that we’ve been having over the years. So, one of the strategies would be for us to look inwardly and see how we can increase the mobilisation of tax within the country. Many analysts feel that we should have a register of not only civil servants but the informal nature of our economy, we need to have a register of those businesses so that we can capture them in the tax net. But beyond the informal sector who are involved in the day-to-day businesses, there are other areas where we can also, at least mobilise some greater revenue.

    Now, how many landlords actually pay rent in the capital cities, if we are to say the truth, how many of them actually pay tax … They are quite a few that actually pay tax. I know in Lagos they have made effort, at least to capture an element of those ones, but beyond Lagos, how many states have those kind of institutional arrangement, there are very few states. No wonder you see that Lagos is the state that has the highest Internally-Generated-Revenue in the nation. So, I think if we can adopt the strategy of Lagos, many more states can mobilise the domestic revenue, and in fact, the Federal Government would also have some relief.

    Is it not worrisome that both the federal government and the states are piling up debts at the same pace and time?

    I think that when you look at the quantum of debt of the states vis-a-vis the federal government, the states are still far lower than that of the Federal Government. Although, with the states, I think the level of indebtedness vary from state to state. But as you rightly pointed out, when you compare their strengths in terms  of revenue mobilisation, even with the little quantum of debt that they have, you still find that their sustainability is  a bit of a concern. Now the issue is that in Nigeria, no state is allowed to borrow externally, all of them are allowed only to borrow through the central government. So, what happens is that the central government borrows and then lends it at the same time, and before a state borrows, the Ministry of Finance and the Debt Management Office usually conduct a debt sustainability analysis to see if the state has the capacity to pay those debts. Now, but that relates more when it comes to issuance of domestic bonds by the state. So, the institutional arrangements for borrowing or issuance of bonds by the states, for now, looks good enough because it requires that every state that wants to issue domestic bonds must undergo the debt sustainability analysis, they also have to tie it to projects. Besides that also, the consortium of banks that normally sell the bonds on behalf of the states or mobilise the debts on behalf of the states also take part in the monitoring of the states. So, as far as analysts are concerned, I think they feel that is good enough, but, do we have those kind of arrangements at the central level? That is where the question is, because, in the case of the central government, bonds are issued by DMO on behalf of the central government, and once the revenue is mobilised, except for the project ones- which are tied directly to the project, those other ones go straight into the general pool of the federation account, and the traceability of those ones to the  project poses a bit of a concern.

    How do we classify some of these external loans?

    Now, you see, when you talk about external loans, there are three categories of loans from external sources. There are loans that we consider as multilateral loans. Those are the loans that you obtain from multilateral institutions like World Bank, the African Development Bank, Asian Development Bank, Islamic development bank, and all the multilateral institutions. And even among the multilateral institutions, there are some that we group into two. There are those that are called concessional loans, there are some that are call semi-concessional loans. The concessional loans are the ones that we obtain from the world bank, we also obtain part of it from the African development bank. Those ones are borrowed at much cheaper rates compared to the semi-concessional loans. The concessional loans usually with the current rate, we obtain them at about 0.5 percent interest, and it Is to be paid over a 35-year period, and so those ones are loans that are considered as concessional loans; But the semi-concessional loans are cheaper than commercial loans, again, those ones are paid over a period of 15 to 25 years. So, they are the preferred loans.

    The World Bank as I mentioned provides it, multilateral institutions also provide those set of loans.

    That is the first category of the loans. The second ones are the commercial loans. The commercial loans are those ones that we obtain through the London club, which are commercial loans that Nigeria goes and sometimes obtain them, usually, I think the last ones we got it I think at 8.5 percent or so, and it is to be paid over 15 years period. So that is the second category of the loan. The third ones are the bilateral loans. Now the bilateral loans are in two forms. There are those ones that you obtain from the Paris club, and there are some that you obtain from the non – Paris club, which are the ones we are talking about from China, NEXIM Bank, from India and some other countries. So among these three categories of loans, the most preferred type of loan is the one that you obtain from the multilateral institutions. Basically, they are cheaper, those ones are also project tied. The only disadvantage of them is that their disbursement proper is usually slow so you don’t get them as fast as the commercial loans and as fast as the bilateral loans.

    The advantage of those loans is that they are traceable to projects. Their disbursements are slow because they have a tight condition, that they do not give the money to the countries except the countries utilise the money. For instance, they monitor. The world bank would monitor the utilisation of the loans. They give the money in trenches. So, the probability of misusing them is actually very low.

    Like the proposed $3billion loan for power projects?

    So, if Nigeria is obtaining that kind of loan from the world bank, be rest assured that the money would be utilised for that; for the purpose of what it is meant for. And these are loans that are as cheap as gifts because you are paying it over 35 years, you are paying the interest as low as under one percent, of course you have five years of grace, so you don’t even start repaying the loan until after five years. So, those are the kind of loans that if a country can obtain, they should be the preferred loans. The second category which is the commercial loans are the loans that you obtain but sometimes they are tied to projects, but many times they are not tied to projects. Those are the ones that many analysts are concerned about. But the worst ones are the ones that relate to the Paris club. If you recall our experience with the Paris club creditors where we had to pay so much to get debt relief, and those ones are not project tied, so the probability of obtaining those kind of loans and utilising them for other things is higher than the multilateral loans. Now we have also quite some amount of money that we borrowed from the other bilateral or the  non-Paris Club, principally China; those ones are also project tied.

    The World Bank has expressed concern about Nigeria’s borrowing from China. Why?

    Now, I had the same concern when I saw that we were borrowing from the Chinese creditors. But most recently when I went through some of the documents I realised that the loans are actually project tied and they also improve on the disbursement pattern. Most of the loans that we obtained from China at this moment are being monitored well for the projects that they are tied to. So, I think the perception that we had, the previous perception prior to the creation of the Debt Management Office. But after the creation of the DMO in the year 2000, I think the government tried to build a much robust, or better institutional arrangement at least to monitor the utilisation of the loans that we’ve been having. So, in terms of external borrowing, it appears that the government is utilising the money properly and they are all project tied.

    Why is the domestic quotient of Nigeria’s debt becoming problematic?

    If you look at the amount of domestic debt that we have, it is about $56.6 billion as at June, which is twice the amount of money that we have borrowed externally. The interest rate that we pay on the domestic loan is far above that of the external. The average interest rates that we pay in the external debts at this moment is below seven percent (I think five percent), if you add the multilateral debt and the commercial debt together it’s below seven per cent. Average interest rates that we pay on domestic debt now is above 17 per cent, I think they are in the range of 20 per cent.

    Now, if you look at the total debt service that we paid annually over the last three years, we have been paying over N1.3 trillion in debt service which I think is too huge and is not in a sustainable path. If you add the N1.7 trillion that we paid in 2018, and then we paid about N1.5 or N1.4 trillion in 2016, then we paid almost N1 trillion in 2015. When you add the total, it is more than the $3 billion that the Federal Government is taking from the world bank. So I think our strategy should be that the federal government should find a way of reducing the domestic debt. Some of us have recommended that we should re-profile the debt. Re-profiling the debt means you borrow at cheaper rates from external and then clear up the domestic debt so that your debt service would drastically fall from 17 per cent to perhaps less than 10 per cent; to a single digit, to reduce the burden that you pay in terms of debt service.

    Now, Nigerians are concerned about external borrowing following the experience that we had prior to 2005 when we received debt relief. But as I mentioned to you we have a good institutional arrangement for a public debt management, and the public debt has changed from the way it used to be. Now we do what we call active debt management. What it means is that even if we borrow externally, we are not going to hold the debt to maturity. So what it means is that at any point in time, you look at your portfolio, you try to balance your portfolio against the existing macro condition and the constraints that you have. So you can borrow from the external at this moment when the interest rate is generally low, offset the domestic market where you are paying high interest, and as you progress you do not need to hold the debt to maturity. So what you do is that if you reduce your domestic exposure and of course reduce your debt service payment, you can then reduce interest payments because what is happening now is that the high interest rates which Nigeria experiences even in the domestic market are as a result of the central government borrowing. The central government borrowing drives the interest rates, when the central governments stops borrowing, we would see that interest rates would start crashing. We have seen it among almost all ECOWAS countries, where governments reduce borrowing, interest rates crash.

    Same thing in Nigeria, when you look at the portfolio of the domestic, more than 80 percent of it is owned by the commercial banks, they are the ones buying the interest. So, if I’m a bank manager at this moment, I can lend out my money to the central government which is almost risk free and earn 17 per cent, why do I need to lend to the real sector.

    So it is in that regard that we look at it and say that even the domestic borrowing that we are doing is crowding out the private sector, because the banks feel it is easier for them, and cheaper to lend to the government rather than lending to the real sector. So with this arrangement that we have, we see now that the government is crowding out the private sector.

    Your interest reduction strategy is at variance with the government’s propensity to continue borrowing?

    No but, you see, obviously, at any point you have to have a strategy as a government. Given the current debt situation that we have, our strategy first should be to reduce the interest payments that we’ve been making, or that we’ve been paying over the years. Once we reduce the interest payments, we would at the same time increase revenue, so the need to borrow would be reduced. But then going forward, you tie your borrowing to projects that are commercially viable, that will be able to pay back whatever we borrow. So our strategy should be to borrow only for projects that have commercial value that can pay back the loan.

    There’s been calls for diversification of the economy. In what context do you think this would be impactful?

    Diversification implies that we would increase our revenue. By diversification what we are saying is that we are not going to remain with a single source of revenue which is the oil, but rather other sectors would also start providing, or at least contribute revenue to the nation. That will also ultimately reduce the need for us to borrow.

    What is the underlying factor behind the Beneficial Ownership Register?

    You know we are signatories to the current account liberalisation policy Once you are signatory to current account liberalisation, at the Central Bank, you allow free flow of fund into the country and out of the country but at the same time, there’s this financial taskforce against money laundering which require that when money is coming in or when money is going out, you have to have a trace of origin and I think one of the issues that was raised when the mutual evaluation came to Nigeria, you know we have this mutual evaluation that West African countries do among their countries, against money laundering. The prerequisite is to have that register that shows that if money is flowing into the country, you know the trace of where it comes from, otherwise laundered money can easily be filtered into the country, if someone also steals you can also take it out. One of the requirement of meeting the theft recommendations is to have the register to obtain and know who is sending what, otherwise if you just allow any money to come in without knowing it’s trace of origin, then it would be difficult and the United States has been raising that issue for a very long time. They have closed a lot of correspondence banking to Liberia, Sierra-Leone and the Gambia. Right now  most of the money in those countries, they cannot receive and cannot be sent out because of the sanctions that the United states put in regards to this. So I think Nigeria is taking preemptive actions to ensure that at least we know any money that comes in and at least we can account for it.

  • Restoring Niger Delta ecosystem requires joint efforts

    Belemaoil has upped the ante on how oil firms should impact their communities. Its Corporate Sustainability Responsibility is model. The firm’s Ag. Managing Director, Pedro Diaz in this interview with Group Business Editor, SIMEON EBULU, underscores Belemaoil’s approach in leaving its footprints on its operational areas, including approaches to restoring the environment from years of oil exploration, among other issues.

    There has been some interesting developments around OML 25. What has changed?

    OML 25 is a Unitised Block which BELEMAOIL is part of, we have interest of 10.7 per cent. The interest that we do have is to support the  federation in its activities to increase oil  output. That Block has 35,000 barrels potential into the tank and for a long time, there has been a conflict between the local host community in which Belemaoil is part. So we offer facilitation to allow the former Operator to reactivate operation.

    What we do basically is to mentor the current Operator to understand the way and how we have been successful in operating OML 55 under the Belemaoil Model which is engaging the host communities to participate within the main activities that the oil extraction is associated with. So that is pretty much the support that we have given and in the future, we would see how much we can support the Operator.

    The host communities expressed so much joy that the issues that surrounded the stoppage of production along that line have been resolved, and even went beyond the euphoria of the moment to say that they don’t mind if in the event of any disengagement, that Belemaoil  should be given the Right of first refusal, so in my own judgement that means the community has bought into your model in the area?

    There has been a very strong reason behind that, for the fact that in the last 40years, the previous operator has been extracting reserves and wealth from the area, and with their evident result on ground and Belemaoil  has only been operating in OML 55 for three years, and you can visit the area associated with the host communities and see the results for yourself. We have not only been  promoting the peoples’ development,we have also been developing different infrastructure.

    It is a pity that communities in that area  have not enjoyed portable drinking water. It is not the same as having a bore hole, a real pure treated water which Belemaoil has done along with NNPC as JV Operator. So basic things like supporting the local students and promoting and giving some scholarships, and helping widows in general, integrating the local entrepreneurs to the operation that allows Belemail to be estimulator  within the local communities and to be a good neighbour.

    That for me dovetails into the issue of restiveness in the Niger delta. What’s your take?

    Again, you know if the people don’t have a source of income, they see the resources coming out, they definetly would be doing the things that are not really productive, but if you give them the opportunity to work in  activities that are not really high skilled, but you assure them a source of income, they would be occupied doing productive activities. We have trained some of them in  maintenance of wellheads with our contractors, so every time we hire a specialist contractor  we allow them to join some people so they can get trained in their abilities, so in the future they may be able to get a job. Basically, we don’t want to ignore the presence of the communities in our operation.

    That is heartwarming. There are issues around these communities that border on Corporate Sustainability Responsibilities that are germain  for some of us who have a link to the Niger Delta. How did you manage to become so acceptable in your host communities?

    The main reason is the spirit that the Founder of the company has. He is a man from the soil and from the very  beginning, he wanted to change the narrative of the oil extraction in the region. The other aspect that is also important to mention, is that the foreign operators are not necessarily maintained for the rest of the life of the assets, they are inclined to minimizing cost and maximizing revenue. We are looking more to maintaining the activity allowing the service to be sustainable, but at the same time looking more  to developing the infrastructure and assist the people that surround us, so if the  people have a better level of life, at the same time they also have jobs, the narrative would be different.

    So in another side, you will expect the community to be friendly enough to support us on the crude theft activity, bunkering activity which is a day-by-day criminal activity in the Niger Delta.

    That is interesting. One thing that excites me is your name -BELEMAOIL

    It means ‘LOVE’. The meaning  of Belema is love, and we want to walk-the-talk by giving love to the people and at the same time receive love from the people and maintain harmony in the activity, but in the past it was completely different, it used to be ‘them and us.’ We want to be completely together extracting the oil from the Niger Delta.

    This seems to me to be a distinctive approach from the IOCs, right?

    Well, you just said that they are International Oil Companies. They go to countries and this is not the first country. Nigeria is matured enough, it has 60-plus years  of history exploiting the oil, and it allows local labour force to be able to have enough skills to mature in handling the business, not to mention that indeed there is need sometimes to have some individuals that add value with their experience, because a lot of Nigerians travel abroad and work overseas and eventually they would see the attractiveness of the business and they would return. You know there is nothing better than being at home and supporting the business at home. So in a nutshell I would say that the opportunity for more local indigenous companies has come, and less and less participation of the international companies.

    You just kick started my next question. How friendly is the environment for Belemaoil to thrive and for other indigenous oil companies to join?

    I would say that, we don’t have friction at all, the relationship is very cordial, we have proven that in three years. We haven’t had any shut down or unrest, we have been able to manage any  particular crises, we are conducting right now a massive seismic campaign which involves a massive area and we will continue to perform with no stoppers, it is happening successfully. The climate is very cordial.

    I want to ask you about the support, if any that you have received from the Nigerian Content Development and Management Board?

    We have received interactions with them, but we have our own community development group along with the Army and Navy, which has maintained the harmony in the region, but the robbers are still around, they have not been eliminated completely, but that is something that is being taking care of. The crude theft and bunkering is there.

    I want you to be more specific on the Content Development Board.

    Belemaoil in essence, has added more and more to the local labour force. And we have been promoting not only training, so they monitor us in the local content.

    I want to say that our level of contracting and participation is, maybe in the neighbourhood of well over 70 plus percent. So we only bring materials from abroad that are not manufactured here, or services that we don’t have here or are very little.

    I know you said you started about three years ago and it’s quite a short time for one to do an extensive assessment, but that notwithstanding, what’s the level of support you are giving to your contractors?

    Well, we have maximized the support to local contractors. Those contractors that are not involved, maybe because they don’t have proven evidence that they are qualified. But for as long as they comply with regulations of contracting and follow the procedures, we would give opportunities to all of them, especially contractors from the area which is beneficial for the company based on our module.

    However, it is important to mention that Belemaoil has gone beyond the Niger Delta. It has been giving support to communities in the north. We have built water facilities in the north, we have built roads, mosques and also university facilities. We have participated and we have donated ambulance and so many other activities just to share the benefits of the extraction of oil.

    Let me bring you to how impactful a company should be to its community. I guess you must have stayed long in the Niger Delta or heard about it. Look at the state of infrastructure of the area, vis-a-vis the volume of contribution in terms of revenue to the national wealth. How does it compare?

    That is work in progress. We are trying to change the narrative like I mentioned. But in the past, you have not looked after their infrastructure and basically you have abandoned the oil and gas sector to develop the areas in the capital cities, but not in the rural areas. So I think we have passed a message and there is a return from that. The return is evidence that there is no stopping liberation or disturbing pressure and that allows us to have a steady revenue for the federation.

    So imagine two years with these facilities that were shut down, how much money represent 35,000 barrels per day for all that period of time. So I am pretty sure that the money gotten in that period of time would have been able to settle many needs that the Belema community and surrounding neighborhood may have.

    I will come back to that, but let me go to the environment. I read your Mission Statement whilst coming in which says your company wants to be producing in an environment that is economically friendly and socially responsible. Have you kept fate with that?

    It may be a recurring statement, but Belema is committed to the environment as part of its commitment to the society. The local host community is a fishing community and the fishing activity has been impacted by the exploitation of oil and it has reduced the fishing activity. What we are trying to do basically (this is in progress), is to change the extraction mode.

    The gas utilisation is to eliminate the flare, producing methanol for the kitchen and diesel for the boats and we would export gas to the local market. And for the produced water, instead of continiung with the production mode that was in place before, or by design, we are changing that to process water at very little pollution level and we are implementing a disposal mechanism to eject the water back to the reservoirs. As we speak we are making studies to do that to return the water, not to the swamps or the sea, but to the reservoir.

     Again, this is a good approach, but let’s talk about the harm that has been done. What efforts, (not only Belemaoil) but the industry made  to clean up and address the harm?

    To mitigate the harm, it will take a joint effort. There are new technologies, but to attack the result of so many years – for now is to stop the contamination associated with the oil activity and then we would focus on remediation – and that has to be done in  conjunction with the oil operators, because as you know, we are a business and the company needs to be allowed to succeed. So if the foreign operators maintain their activities in-country, they need to take their share of the responsibilities too

    Is there any serious cooperation in the industry right now?

    Well, that is a role NNPC as a major stakeholder will play. To integrate the indigenous and international operators to create a joint effort to maximise the repair of the damage resulting from all these years.

    We hope they do it well. Can I ask the challenges you have faced so far?

    One of the major challenges I would say, is crime. The other major challenge is aging of facilites. We inherited facilities that require high maintenance to promote professionalism. This can be a message to the regulators to ensure that any asset that they are handing over, or relinquishing to the local indigenous operators must comply with a minimum level of professional maintenance. So when the indegenous company takes over, there isn’t huge amount of money to be spent on maintenance in order to take the asset to acceptable level and defer the revenue

    It’s like you buying a used car, but in this case the exploration has been paid for. It’s a challenge that we face.

    let me ask you about sustainability of some of the corporate social actions taken. Sometimes you throw a bit of activity at the people and you move on. How sustainable are the things you are doing for the communities?

    Well, we have our complete team that maintains and supports the continuity on scholarships from the very beginning and we plan to integrate the scholars with the working force of the organisation. We don’t have the size, or resources to receive high recipients of our scholars but we definitely will suppory them when they graduate from their discipline.

    On the infrastructure side, we follow up the execution and do not allow incomplete projects. So we would execute the projects and ensure that the projects are completed and after that we monitor the performance to ensure the people benefit in the long run. Just to mention that we have also taken over some of the activities done by previous operators and we have provided generators and supplied diesels. In the past, generators were given but no diesel, so we supplied diesel and maintenance. So we have taken over operations and activities from others and made them work.

    Before I move on, it’s important to know whether these activities were part of your original programs or were they imposed on you by the communities?

    Well, it is a little bit of both. We received requests from the communities through meetings where they expressed their needs and based on our discretion and ranking of needs, we accommodated – definitely power, water, services that are intricate part of the human being. We also have done medical campaigns for vision, dental and the paediatricians to do vaccinations. Those are areas that were not taken care of before. We have done also food distribution campaigns in the Christmas time and in the IDPs in the North, we also have provided some support for feeding.

    It’s already becoming obvious from studies and from the resources that have been  discovered so far, that Nigeria is basically more a gas-based nation than fossil fuel. Is this true?

    Well, the survey is around 70 per cent gas resource and we are developing the assets and field development plan based on that. So, yes indeed we’ll have some oil associated, but our plans are to explore the gas and the associated potential.

    How long do you think this will take to be actualised?

    Well, we have a plan for five years for now that will allow us to integrate our gas to the network, the domestic network. We also do have a plan for monetising our gas.

    The other issue I want to talk about is refining. You know that Nigeria is the 6th largest oil producer globally. How is it that we can’t refine oil for domestic consumption?

    Well the Federal Government has embarked on the campaign to rehabilitate local refineries, the private sector’s also doing that and we’re not there yet, but it is possible that in the long run we look into that, but at this stage we’re focusing more into the production development plan. What we’re doing is changing the crude handling scheme  and bringing a floating installation ship that will allow us to stop using the Bonny Terminal and that would help us reduce losses associated with the liability of using Joint Venture services.

    Are you speaking in the context of FPSO?

    It’s not going to have processing FPSO, it’s similar but it’ll receive dry crude oil. It will work as a terminal in front of the Nigerian waters, about 20-35kms in the ocean and we plan to start operation, maybe early next year.

    That’s a very cherry news, it’ll cost a lot of money?

    Well, it’s the amount of losses that we have by the unreliable operation of the Nembe Creek Trunk Line (NCTL)  that justified the investment.

    That brings me to the issue of pipeline vandalism and oil theft. How are you going to overcome that?

    Well it’s work in progress. Everyday  Belemaoil has included the surveillance programs with local communities, so we provide the people with local contractors to hire people to provide surveillance to our facility. That has resulted in important reduction of the crude theft, not 100 per cent though. However because we’re the only ones doing it, we’re connected to the main strong line and the others are not necessarily doing it, the crude theft associated with the joint line is  distributed among the injectors. That is an area of concern.

    Can you make a projection of the future of the oil and gas industry?

    Well my vision is oil is going to be there for a long time, but the business is not necessarily going to be there. So the plan is to accelerate the production and develop the areas that the economic development occurs because the new alternative energy are there- the sun, the wind and others. We need to explore as much oil as possible now because we don’t want to end in 2050 with a lot of reserve not being able to sell. There’s goingg to be some market for countries like India, China and some African countries that would be consuming, the price would be very low, but to sell very high. That’s the message that we need to produce oil today.

    I asked that question because for Nigeria, the concern is that we’re making so much money from oil now, but we’re not really seeing the plough-back effect,  the multiplier effect of its impact on the other sectors of the economy. So if we can’t do that now like you’re projecting 50 years from now or less, where does that place us?

    It all goes down to the management and the wealth. You see countries like Dubai, even the Middle East they have identified the formula of how to convert the wealth from the oil into the economy. In my point of view, it’s something that is more dependent on the people of each individual country that have to drive that. You can see countries that have very huge potential in the oil that are in very sad situation and it’s just because of the mismanagement.

    I want to sign off with this question. Within your locale of operation, how are you actualising this, so that in five years short term, 10 years medium term, 20 years the people in the oil bearing communities, even though they are not directly involved in oil business, will find alternative sources of income and have the benefit of the resource that God blessed them with?

    Well just to give you an example. Belemaoil is committed to following the mandate from the Presidential Office to relocate its main office and operational facilities to the host community. So we’re going to have office in Kula, Idama and that will allow us to have physical presence and will stimulate the local activities.

    We plan to develop the Belemaoil Pacific Island which is going to be a building with not only accommodation, but offices. It’s a new development that in the future will  definitely stimulate the economic sector in the area. You need to develop the area to stimulate that. In Idama we plan to have presence so instead of operating by remote we plan on operating from the area. Those are activities that are in the plan, then we do have a complete set of projects for the host communities and along the time, more and more projects would be executed and would definitely stimulate the role of the local people within the sector.

    Who are you?

    Who is Pedro Diaz! I’m somebody from Venezuela. I’ve been in the Oil and Gas sector for 36years, worked for the state company of Venezuela for 20years. For the last 16years plus, I’ve been around the world in different roles, worked in the Middle East for 10years and US, Columbia, Argentina, Mexico, mainly in the gas processing production project management. I go where the oil leads. My family lives in the US and I left my country 17years ago.