The Nation Newspaper

Tag: capital flight

  • ‘Offshore cloud hosting causes capital flight, others’

    Comercio Cloud Managing Director,  Mrs Aderonke Adeyegbe, has said when organisations decide to host their data in local public cloud, huge foreign exchange (forex) is saved and jobs created.

    Speaking on the sideline of the unveiling of the first enterprise public cloud platform in the country in Lagos, she said the public cloud platform was created for medium and large enterprises to provide the same services as Microsoft Azure and Amazon Web Services provide.

    She said: “There has been and there continues to be more world class data centres coming on to the market. It provides an adequate platform for us to build a public cloud platform. We use at least two of the data centres to provide redundancy and disaster recovery capabilities. Using VMware technology, we are able to move our cloud infrastructure from one location to another in the event of a failure with little or no data loss. From our local economy point of view, it reduces capital flight and encourages job creation in the country.

    “We could not have picked a better time to launch our public cloud platform because there are up to eight undersea cables available or coming on board to provide access to the outside world. The proliferation of undersea cables providers has increased competition and thereby reducing the cost of internet access. Currently, internet access is cheaper than the metro networks in Nigeria. Though the cost of connectivity is still falling and becoming more attractive, the deregulation of the right of way has allowed many companies to provide affordable access to fibre. There are also more world-class data centres to host cloud platforms available today with a few more being built.”

    According to her, there is a global clamour for cloud computing, adding that original equipment manufacturers (OEMs) are geared to providing support and services to this area of technology.

    She said with the challenges faced globally and especially in Nigeria, companies are looking to reduce their expenditure while trying to grow their business. Global best practice is that most chief information officers (CIOs) are moving to cloud platforms for data storage. With the reduction in recent times in the cost of accessing internet services, this service has not come at a better time with more world class data centres to host cloud platforms available today than ever before in Nigeria. It is not unnoticed that 70 per cent of CIOs worldwide are moving to the cloud this year and the total revenue from cloud computing tripling in the next two years, she said.

    Also, its Chief Technical Officer, Mr. Aderemi Adejumo, said the public cloud platforms offer enterprises the opportunity to move their IT expenditure from a capital expenditure (capex)  to operating expenditure (opex) as well as only pay for what they consume. He said it is a pay-as-you-go model to minimise expenditure and create great saving in total cost of ownership (TCO).

    According to him, the other great advantage is their time to market because in traditional computing, it takes between four and 16 weeks to request, get appropriate approvals and procure hardware before installing and configuration of the software. “In this current fast changing world, this is not acceptable and a great challenge. With our public cloud platform, the required hardware can be provisioned and available in less than 48 hours.

  • Nigeria loses $380b to capital flight

    Before the enactment of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act in 2010, most fabrications, engineering, and procurements in the oil and gas industry were done abroad, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Kesiye Wabote, has said.

    He lamented that this has led to an estimated capital flight of $380billion and two million jobs loss.

    Wabote, who spoke at the first national seminar for Justices and Judges on the Role of the Judiciary in the development of the Nigerian Local Content Law and Policy, organised by the Juris Law Office and NCDMB in collaboration with the National Judicial Institute (NJI), also warned that oil and gas firms that fail to comply with the provisions of the NOGICD Act will henceforth be dragged before the law courts by the NCDMB.

    He noted that the NCDMB had used administrative procedures to enforce the Act in the past eight years but will begin to prosecute cases of infringement in line with Section 68 of Nigerian Content Act. “We are changing gear in NCDMB from writing letters of non-compliance on infractions to actual prosecution of offenders who think they can trample on the law of the land on Local Content and get away with it.”

    Wabote said the Board delayed the prosecution option because it wanted to fully exploit the Alternative Dispute Resolution (ADR) methods, develop its operating guidelines and organise capacity building workshops on the NOGICD Act for the Judiciary. “After this workshop, we will begin to institute cases in the courts. If we don’t enforce the provisions of the Act, we will not be able to create employment opportunities for Nigerians from the activities in the industry,” he said.

    Giving details of the Board’s achievements, Wabote explained that most fabrication, engineering, and procurement in the oil and gas industry were done abroad prior to the enactment of the NOGICD Act in 2010 and it resulted in estimated capital flight of $380billion over the last 50 years. “Estimated job lost opportunities was in the region of two million. The narrative then was that nothing can be done in-country resulting in less than five per cent of in-country value addition,” he said.

    He added that much of the 28 per cent Local Content achievement recorded since the enactment of the Act till date were done using the passion and commitment of the various directorates in the Board.  “Our next big leap from 28 per cent to 70 per cent in-country value retention will require step change in the enforcement of the law to drive reversal of capital outflow,” Wabote said.

    He further solicited the support of the judges when interpreting the objectives and philosophy of the NOGICD Act if cases bordering on Local Content become subject of litigation. “We need the support of the judiciary to achieve our drive to create wealth for local businesses and jobs for our teeming populace in line with the law,” he said.

    The Local Content boss stated further that the target Nigerian Content level is meant to create 300,000 direct jobs and retain over $14 billion in-country out of the $20 billion yearly spend.

    In his keynote address, the Chief Justice of Nigeria (CJN), Justice Walter Onnoghen urged judiciary officers to always refer to the Nigerian Content Act when deciding matters related to oil and gas servicing and exploration contracts as such agreements must comply with the Act.

    He underscored the need for judges to keep abreast with developments in the Nigerian oil and gas sector. “The adjudicatory duty of a judge can only be performed optimally when he remains up to date with the emerging developments and trends in jurisprudence pertaining to the oil and gas sector,” the CJN said.

  • Capital flight: Local raw materials to the rescue

    Capital flight: Local raw materials to the rescue

    The importation of raw materials and products is projected to hit N36 billion by 2020. But, the Federal Government, through the Raw Materials Research and Development Council (RMRDC) is determined to reduce the huge import bill. Assistant Editor CHIKODI OKEREOCHA reports that the strategy being introduced by the agency will serve as a blueprint to stimulate global competitiveness in raw materials and ultimately reduce over dependence on importation.

    THERE is heightening clamour for the patronage of locally-made products. But, beyond satisfying the domestic needs, the locally-made products must be globally competitive and the raw materials, being the livewire of manufacturing, must be available in the right quality and price.

    Industry operators and experts believe that the more the raw materials are sourced locally, with substantial value addition, the better for Nigeria, which has set the diversification of the economy as its priority, through a robust manufacturing sector.

    Despite its rich natural endowment, sufficient enough to sustain large-scale industrial production, Nigeria remains in the web of a cycle of an import-dependent raw materials economy.

    If the words of Science & Technology Minister Dr. Ogbonnaya Onu are anything to go by, N49 trillion was spent on the importation of raw materials and finished products between 2000 and 2015.

    Unless the trend is reversed, another N36, 045 billion would have been spent between last year and 2020. The Raw Materials, Research and Development Council (RMRDC), an agency under Onu’s supervision warned that the importation of raw materials and products will deplete the federal purse.

    But, the ministry, including operators and stakeholders in the manufacturing sector, have unanimously agreed that such level of dependence on the importation of raw materials and products and the heavy financial haemorrhage it has foisted on the economy has become unsustainable and therefore must be halted.

    The is a consensus that funding the huge import bill on raw materials, most of which are available locally, is no longer economically viable, especially at this time when the economy is still struggling to recover fully from recession.

    Besides, the huge capital flight is said to be seriously hurting the nation’s industrialisation and job creation drive.

    To change the narrative, the RMRDC has come up with a drastic policy intervention with the development of the “National strategy for competitiveness in raw materials and products development in Nigeria.” The intervention is aimed at addressing the import dependent raw materials economy and enhancing her global competitiveness in raw materials and product development.

    The “First roundtable for industries and businesses on national strategy for competitiveness in raw materials and product development in Nigeria”, organised last week in Lagos by the Strategy Implementation Task Unit (SITU) of the RMRDC, was part of ways to implement the national strategy.

    At the Manufacturers Association of Nigeria (MAN) House, Ikeja, venue of the forum, the RMRDC Director-General, Dr. Hussaini Doko Ibrahim, said that the strategy document, which was prepared with the collective inputs of manufacturers, was on May 31 approved for implementation by the Federal Executive Council (FEC).

    Noting that the project will be successful only with the collaboration of industrialists, Ibrahim said the roundtable was to inform the business community and critical stakeholders on the progress so far made in the implementation of the strategy and how they can make inputs to ensure its success.

    In his keynote remarks, Abayomi Oguntade, a pharmacist and director, Bio-Resources Technology Development, Federal Ministry of Science and Technology, said the roundtable came at an auspicious time. He said the forum became imperative for the provision of veritable means of galvanising businesses towards successful implementation of the strategy.

    Oguntade said: “Your roles and responsibilities are enormous, especially on the need for you to refocus your business activities and resources towards utilization of Nigerian Research and Development (R&D) institutions’ commercialisable scientific breakthroughs.

    “The strategy provides ample knowledge on raw materials and products classification where individual industries must focus attention and which R&D and academic institutions should be relating with.”

    He challenged industrialists to brave the odds and make the necessary paradigm shift from over-dependence on imported raw materials and look inwards for innovation, competitiveness and attainment of sustainable indigenous industrial revolution.

    Oguntade assured that with the strategy in place, there will be a deliberate policy by government towards empowering the business community through incentives and conducive business environment, especially in upgrading logistics, infrastructural needs or policies of the business community.

    “The government will encourage commercialisation of R&D breakthroughs for Nigeria industries’ adaptation towards orderly utilisation of abundant potentials in the country.” he said, expressing government’s implicit confidence in manufacturers’ collective capacity to deliver on the strategy and reposition Nigeria among the league of globally competitive community.

    The strategy was the ministry’s attempt, through the RMRDC, to address the challenge of developing and implementing effective policies and strategies to diversify the economy, promote industrialisation and economic growth.

    Some experts believe the strategy was conceptualised and designed to guide the process of driving Nigeria’s competitiveness in raw materials and product development.

    The blueprint’s ultimate aim was to reduce the import of raw materials and products that the country has comparative and competitive advantages to produce, as well as ensure economic recovery and growth.

    This was why the evidence-based strategic framework contained a number of recommendations on the roles that government, in collaboration with the private sector, development partners and other stakeholders, can play to driving Nigeria’s competitiveness in raw materials and product development.

    “It’s a holistic strategy that if implemented, will lead to Nigeria’s industrialization. The strategy, which is home-grown, will put more money into the hands of Nigerian businesses, the Head, SITU, Mr. Henry Eteama, said.

    The National President, National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) Iyalode Alaba Lawson, described the forum as timely. According to her, it will help Nigeria attain sustainable socio-economic growth and development especially now that efforts are ongoing to help the full recovery of the economy from recession.

    The National Vice President, Northcentral, Nigerian Association of Small and Medium Enterprises (NASME), Auwal Ibrahim, government’s economic diversification and job creation efforts will not yield the desired result without halting Nigeria’s import dependent raw materials economy.

     

    Experts chart way forward

     

    For the intervention to achieve the desired result, the President, Miners’ Association of Nigeria, Sani Shehu, said it must address the issues around transportation infrastructure and market.

    Noting that members of the association are mostly small scale miners, Shehu said that most of the raw materials are bulky, requiring efficient transport infrastructure to move them to the plant for processing.

    Shehu said the issue of marketing must be enable private investors, particularly the small scale miners, break into the international market.

    He argued that without a sustainable market for their end product, whatever the miners produce, will never get to the international market, let alone improve their wellbeing and benefit the economy.

    The Director and Chief Executive Officer, Institute for Development Studies, University of Nigeria (UNN), Enugu State, Prof. Osita Ogbu, described the strategy document as “quite futuristic.” According to him, it clearly points the way forward as to what Nigeria must  do achieve its aim  on local raw materials sourcing and import substitution.

    In his presentation entitled: “Imperative of the national strategy for competitiveness in raw materials and product development in Nigeria: Prospects and challenges,” Ogbu, who chaired the forum, said the project will be successful only with the collaboration of the private sector.

    He also noted that the document was imperative in view of the urgent need to reposition the manufacturing sector to drive government’s on-going diversification. Ogbu said: “If you need to diversify, you must do so with the manufacturing sector. Manufacturing must contribute between 30-40 per cent to the Gross Domestic Product (GDP)”.

    He identified the manufacturing sector as the only sector that can lift millions out of poverty, create jobs and fast-track economic growth and development. Stressing that raw materials are at the heart of manufacturing, Ogbu added: “The more they are sourced locally, the better for us.”

    Prof Ogbu may have hit the bull’s eye as the prevailing high cost of imported raw materials due to the high exchange rate has been traced to an unending high production cost, which in turn, results to high cost of locally-made goods compared to imported ones.

    The cheaper price of imported goods has been traced to Nigerians’ crave for imported goods. The discouraging level of patronage has forced many local industries that could not stand the heat of the competition to close shops.

    Other experts argue that local sourcing of raw materials will empower manufacturers and encourage their expansion.

    Their belief is local sourcing of raw materials will bring about the employment of more hands.

    Millions of unemployed youths will take up gainful employment from a network of industries that will spring up in the production chain for conversion of raw materials from their primary forms to intermediate and final products.

    The government will achieve its diversification and job creation target as well as have more tax payers.

     

    Value addition

     

    All the basic raw materials to feed the industries are available locally. The snag, however, is that they are not available in sufficient quantity and quality. At present, most of the available local raw materials are said to be in unusable form, requiring value addition before they can be used by industries.

    The value addition, The Nation learnt, is done mostly by Small and Medium scale Enterprises (SMEs) because they are the off-takers, taking the materials from the unusable form to the next intermediate stage. It is the intermediate raw material that industries require.

    However, because of the low capacity of the SMEs to add value to available local raw materials, coupled with lack of access to capital to set up processing facilities, process technology and techniques, and spare parts, among others, they have not been able to fill the gap.

    The Nigeria Export Promotion Council (NEPC) was emphatic that increased value addition will do the magic. The Council noted that local raw materials in their natural forms do not have any value and would not attract any market demand without processing them to meet internationally accepted quality and standards.

    At present, most of the local raw materials are being exported and later imported back as finished products with the addition of certain additives at great cost. The Council spoke of the need by stakeholders to encourage local supply of raw materials to halt the huge foreign exchange being spent on the importation of raw material that can be sourced locally.

    Nigeria’s potentials for production of raw materials and products have never been in doubt as the country boosts of human and natural resources and good climatic conditions to support the production of agro-raw materials and products required by industries. The country is also blessed with abundant solid mineral deposits, awaiting exploitation as well as huge market.

    However, experts say that the nation’s potentials are being constrained by lack of infrastructure, especially electricity supply, weak bureaucratic institutions and corruption, among other.

    Some of them urged the government to encourage the drive for local substitution for raw materials through some sort of incentives and provision of infrastructure.

    With the RMRDC now riding on the back of the blueprint to force a paradigm shift from over dependence on imported raw materials and products to local raw materials utilisation and backward integration in areas where Nigeria has comparative and competitive advantages (agriculture and solid minerals), the manufacturing sector looks good to spearhead the industrialisation drive.

  • Senate tackles banks over oil firms’ $63b capital flight

    Senate tackles banks over oil firms’ $63b capital flight

    ‘Cash taken out under suspicious circumstances between 2009 and 2014’

    The Senate is investigating some banks for alleged collusion with some international oil companies (IOCs) to defraud the country.

    Over $62,909,716,417 is said to have been taken out of the country under suspicious circumstances between August 2009 and December 2014.

    The “Investigation of the pre-shipment inspection of export activities in Nigeria” is being conducted by the Senate joint committee on Finance, Trade and Investment, Gas, Petroleum Upstream, Banking, Insurance and other Financial Institutions, Judiciary, Human Rights and Legal Matters, and Customs and Excise.

    A document obtained by The Nation showed the banks were asked to submit copies of certified Nigeria Export Proceed (NXP) issued/or processed by them in respect of all crude oil and gas exported by Nigeria Agip Company Ltd, Chevron Nigeria Limited, Shell Petroleum Dev. Co. Nig. Ltd and their affiliates between April 1996 and December 2016.

    The banks are to submit all domiciliary accounts opened and /or closed within the period specified for crude oil and gas exported.

    Two banks – Citibank and Standard Chartered Bank – appeared at the investigative joint committee on Thursday. Other banks said to be associated with the export of oil and gas will also appear.

    A member of the committee, Senator Yusuf Yusuf (Taraba State), queried why funds brought into the country as oil export proceeds were wholly withdrawn a day after such proceeds were brought.

    He said the probe became necessary because the banks should have ensured petroleum products exporters did the right thing by obeying the guidelines and laws of the country.

    “It is worrisome that money comes in today, tomorrow the same amount goes out of the country. The practice runs through the statement of account submitted by the banks. The oil companies bring in $20 billion today and tomorrow $20 billion is taken out from the account – Yusuf said…

    “The banks are colluding with multinational oil companies to defraud the country. The government relies on the banks; the banks are now colluding with the multi-national oil companies.”

    He noted that it was obvious the country was not getting the correct export proceeds from oil and gas exports.

    The lawmaker, who insisted that banks had the responsibility to abide by the law, said it was worrisome no indications were made about who paid for oil exports.

    He noted that the committee was interested in why same company exports and pays for products without an indication of who actually buys the products and the corresponding bank.

    The Chairman of the joint committee, Senator John Enoh, said the committee was interested in ensuring that banks are not colluding with IOCs to flout the laws of the country.

    Enoh said the committee would take a critical look at the submissions made by the banks to come to terms with the true position of oil and gas exports proceeds processes.

    A document submitted to the committee, which was obtained by The Nation, showed that Citibank Nigeria operates domiciliary export proceed accounts for ENI Group (three accounts), Chevron Group (six accounts) and Shell Group (two accounts).

    The document also showed that Nigerian Agip Oil Company recorded a total export inflow valued at $15,372, 882,703.36

    Chevron Group recorded $44,020,596,289.99. Shell group made a total inflow valued at $3,516,237,425.79 giving total of $62,909,716,417 billion.

    The committee resolved to screen documents submitted by the banks before coming up with its recommendations.

    The committee expressed its determination to get to the root of pre-shipment inspection of export activities.

  • Senate tackles banks for $63b capital flight by IOCs

    •Lawmakers accuse banks of colluding with IOCs to defraud Nigeria

    The Senate is investigating some banks for alleged collusion with some international oil companies (IOCs) to defraud the country.

    Over $62,909,716,417 is said to have been taken out of the country under suspicious circumstances between August 2009 and December 2014.

    The “Investigation of the pre-shipment inspection of export activities in Nigeria” is being conducted by the Senate joint committee on Finance, Trade and Investment, Gas, Petroleum Upstream, Banking, insurance and other Financial Institutions, Judiciary, Human Rights and Legal Matters, and Customs and Excise.

    A document obtained by The Nation showed  the affected banks were asked to submit copies of certified Nigeria Export Proceed (NXP) issued/or processed by them in respect of all crude oil and gas exported by Nigeria Agip Company ltd, Chevron Nigerian Limited, Shell Petroleum Dev. Co. Nig. Ltd and their affiliates between April 1996 to December, 2016.

    The affected banks were also asked to submit all domiciliary accounts opened and /or closed within the period specified for crude oil and gas exported.

    Two banks – Citibank and Standard Chartered Bank – appeared at the investigative joint committee on Thursday while other banks said to be associated with the export of oil and gas will also appear.

    A member of the committee, Senator Yusuf Yusuf (Taraba State), queried why funds brought into the country as oil export proceeds were wholly withdrawn a day after such proceeds were brought.

    He said the probe became necessary because the banks should have ensure petroleum products exporters do the right thing by obeying the guidelines and laws of the country.

    Yusuf said: “It is worrisome that money comes in today, tomorrow the same amount goes out of the country. The practice runs through statement of account submitted by the banks. The oil companies bring in $20 billion today and tomorrow $20 billion is taken out from the account.

    “The banks are colluding with multi-national oil companies to defraud the country. The government relies on the banks; the banks are now colluding with the multi-national oil companies.”

    He noted that it was obvious the country is not getting the correct export proceeds from oil and gas exports.

    The lawmaker, who insisted that banks have the responsibility to abide by the law, said it was worrisome no indications were made about who pays for oil exports.

    He noted that the committee is interested in why same company exports and pays for products without an indication of who actually buys the products and the corresponding bank.

    Chairman of the joint committee, Senator John Enoh, said the committee was interested to ensure that banks are not colluding with IOCs to flout the laws of the country.

    Enoh said the committee would take a critical look at the submissions made by the banks to come to terms with the true position of oil and gas exports proceeds processes.

    A document submitted to the committee, which was obtained by The Nation, showed that Citibank Nigeria operates domiciliary export proceed accounts for ENI Group (three accounts), Chevron Group (six accounts) and Shell Group (two accounts).

    The document also showed that Nigerian Agip Oil Company recorded a total export inflow valued at $15,372, 882,703.36

    Chevron Group recorded a total inflow valued at $44,020,596,289.99. Shell group made a total inflow valued at $3,516,237,425.79 giving total of $62,909,716,417 billion.

    The committee resolved to go through documents submitted by the banks before coming up with its recommendations.

    The committee expressed its determination to get to the root of  pre-shipment inspection of export activities.

     

  • Senate summons Emefiele, Enelamah, MTN, others over $14b ‘capital flight’

    Senate summons Emefiele, Enelamah, MTN, others over $14b ‘capital flight’

    The Senate has invited South Africa’s MTN, Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, the Minister of Trade and Investment, Dr. Okechukwu Enelamah, four lenders and eight others to appear before it on October 20 for an “investigative hearing” on an allegation that MTN illegally moved $14 billion out of the country.

    The upper house last month agreed to investigate whether the telco wrongly transferred the money out of Nigeria between 2006 and 2016.

    The allegations first appeared in a motion proposed by Senator Dino Melaye to launch an investigation on the matter. It is coming as the country struggles with its first recession in a generation and chronic foreign currency shortages due to a slump in oil prices.

    MTN and Elenemah have denied any wrongdoing.

    The four lenders invited to appear before the Senate Committee on Banking, Insurance and Other Financial Institutions are Stanbic IBTC Bank, Standard Chartered Bank, Citibank and Diamond Bank, the committee’s chairman, Rafiu Adebayo Ibrahim, said in a statement yesterday. Also to appear before the committee is the Financial Reporting Council of Nigeria (FRCN),

    Citi and Diamond Bank declined to comment. A spokesman for Stanbic was unavailable and Standard Chartered said it would cooperate fully with law enforcement agencies.

    Other persons invited to appear include Dr. Pascal Dozie, Ahmed Dasuki, Gbenga Oyebode, Babatunde Folawiyo, Colonel Sani Bello and Victor Odili.

    Senator Ibrahim said the invitation to the affected persons and organisations emanated from a September 27 resolution of the Senate on alleged unscrupulous violation of the Foreign Exchange (Monitoring and Miscellaneous) Act.

    Melaye had accused Enelamah as one of the individuals that assisted MTN to move the cash out of the country through the incorporation of offshore companies in Cayman Island, Mauritus and the British Virgin Islands.

    Shares in MTN extended losses yesterday, falling 2.3 per cent to R110.67, partly on news of the hearing.

    The Senate move is likely to raise tensions between Nigeria and MTN.

    The allegation is coming months after the carrier agreed to pay a greatly reduced fine of N330 billion  ($1.1 billion) to end a long-running dispute over the size of the penalty imposed on it by the Nigerian Communications Commission (NCC) over its failure to disconnect active unregistered subscriber identity module (SIM) cards from its network. Total fine originally was set at $5.9 billion.

  • ‘We’ll save Nigeria $50b in capital flight’

    ‘We’ll save Nigeria $50b in capital flight’

    The Nigeria Shippers Council (NSC) has its job cut out for it. It is to make the seaports the hub for Africa. To do this, it must ensure that goods are not diverted to neighbouring countries’ ports. Can NSC succeed in this task? Yes, says its Executive Secretary, Mr. Hassan Bello, in this interview with Maritime Correspondent OLUWAKEMI DAUDA. NSC, he says, will end primitive cargo clearance procedure and stop capital flight.

    Why was the Nigeria Shippers Council (NSC) appointed port economic regulator?

    After the implementation of the Federal Government’s port reform, which led to the concession of terminals to private operators, the government noticed a disturbing vacuum in the maritime sector. The gap included absence of an economic regulator that will act as a referee in the industry. The government also noticed the inefficiency in the procedures and operations of agencies, service providers and users which were affecting and undermining Nigeria’s competitive advantage in international trade.

    These were what prompted the agitation for the appointment of a commercial regulator to oversee the activities of stakeholders, including providers and receivers of shipping services. Freight forwarders had, on many occasions, gone on strike to protest against service providers increasing charges arbitrarily and the deplorable system. They had argued that it was so because there was no regulator to check the activities of terminal operators and shipping companies, most of which are sister companies of the terminal operators. It was based on this that stakeholders applauded the Federal Government when it named the Shippers’ Council the Economic Regulator.

    What is your role as port economic regulator?

    Our role is to consult, coordinate, moderate and harmonise the various processes and procedures with a view to achieving operational efficiency at our ports. Where there is unreasonable resistance, we shall not hesitate to apply appropriate sanctions to ensure compliance. We shall remain open, independent, neutral and consultative; and all decisions will be based on the buy-in of stakeholders. We are also to assess options for competition; to decide on entry rules; to regulate. As a regulator, we are not lords, but coordinators. The ports will regulate itself with competition. It is important to ensure that quality service is affordable and in accordance with world standards. There should be a scientific way of setting up tariff and measuring quality of service. Specifically, our new role includes assessment of options for competition, deciding on entry rules, regulating pricing freedom and monitoring the outcomes through the competitiveness and efficiency in our ports based on a new port order and port community system we are introducing.

    How do you intend to discharge your new functions?

    That is why we are building capacity internally and restructuring NSC. For you to carry out your assignment and have effective structure, you must build capacity and that is what we are doing to be more educated, and more knowledgeable than the people we are regulating.

    What was the situation at the ports before NSC became the economic regulator?

    There were impunities and arbitrariness at the ports. People just woke up and increased their charges then. But now, you cannot do it. Many attempts have been made by the Nigerian Ports Authority (NPA), the shipping companies, terminal operators and others to increase their tariffs but they have not been able to do it because of our new role.

    Although we are not against increase in tariffs but our position is that we must look at it vis-a-vis the service being rendered and what is obtainable in other climes. There are scientific ways of doing it and that is the process we must follow. The freight forwarding charges are with us and we are looking at it with the aim of seeking the best way to implement it.

    What other steps are you taking?

    The NSC is looking for ways to improve the economy as far as port services are concerned. We are collaborating with the CBN, checking impunities, blocking revenue leakages and we are also blocking capital flight to attract Foreign Direct Investment (FDI).

    We will save the economy about $50 billion. We have confirmed the real amount people are paying for freight from Tin-Can to Apapa ports. Whereas the amount is “X”, but people will say it is “Y”. People inflate it and look for foreign exchange. This is waste. It is capital flight. This is not helping our ports.

    How do you think our ports can be restructured for greater business and efficiency?

    We need to boost export. If we boost export, you will see that the cost of doing business in our ports will go down. When ships are coming to the country, they are laden, but unfortunately, they go back empty. We must also reduce the dwell time of cargo and ensure that it is less than what we have now. We also need to strengthen the cargo clearance procedure, which to say the least, is primitive presently. The clearance procedures in our ports must be technologically driven, such that an importer would not need to go to the port to clear his goods. We must develop a system where goods can be tracked from the port of origin to the time it arrives the importer’s door step. This is our focus. By the time we implement all that we are doing now, Nigerian ports will never be the same again.

    What is the responsibility of NPA in that regard?

    The NPA as the landlord has some certain responsibilities to perform so that the terminal operators and the shipping companies will not transfer it to the shippers. This include the provision of tug boats, pilot cutters, dredging of the channels and the berth. NPA must provide common facilities leading to the terminals.

    How has NPA fared in the process?

    NPA, to be honest, has done well, and we are proud of the NPA. They have started implementing automation. We like their e-payment system. Before, it takes like four days before you can make payment. But now, it is done in a few minutes.

    What about Customs?

    We have to commend Customs for introducing the Pre Arrival Assessment Report (PAAR). This step has set the Nigerian ports on the path of better efficiency. But we need to do more.

    In what areas do we need to do more?

    The Federal Government needs to provide a conducive environment for the private sector to build new ports. These new ports to be built should be made to have capacity to accommodate larger ships than what the Apapa port can presently accommodate. This is because the bigger the ships, the better it is on the economy of scale. If we make our ports the center of activities, then we have arrived. But despite that, we need to be careful and that is why we have called on the operators of these ports to access the situation so that we don’t create another problem like the one we have in Apapa.

    What is your take on effective regulation?

    Effective regulation requires much more than just competent economic and financial analysis; it must also manage often complex interaction with the regulated firms, consumers, politicians, courts, the media, and a range of other interests. As a regulator, we need to be independent, transparent, legitimate and credible, bearing in mind that the transition to a competitive market is a major regulatory challenge. It is also necessary for us to ensure that the regulatory process is fair to all parties, by not taking arbitrary decision and by balancing the needs of stakeholders.

    What do you intend to achieve with the new port order and port community system?

    The objective behind the new port order is to reduce congestion at sea ports. We want a situation where over 70 per cent of in-coming cargoes are to be examined at off-dock terminals to end diversion of cargoes to ports of neighbouring countries. The planned new order will promote efficiency and reduce cargo dwell time and the ports’ cost of doing business. Under the port community system, ports business would become more attractive and boost our relationship with other agencies to generate more revenue for the Federal Government. The new port order is for service providers, users and all stakeholders in the maritime industry to enable them operate in line with global best practices and generate more revenue for the government. The order entails making the nation’s sea ports competitive, efficient and cost effective in delivery of services as well as making the ports user friendly. It will also lead to improvement in marine and terminal handling services delivery that will lead to reduction in the turnaround time of vessel and reduced cost of vessel operations.

    Based on the new port order, we are working with the CBN, Customs and other relevant stakeholders so that every payment made in the maritime domain is reflected on the platform. In doing this, we have designed a template and standard tariff system that will ensure 30 to 40 per cent reduction in cost to achieve harmony in tariff. This involves all service providers. The system harmonises every transaction in such a way that transfer of containers to off-dock terminal does not attract extra charge in terms of payment of royalty to the terminal operator. This new port order will eliminate all the wastages in the system so that the cost of doing business is reduced. Part of the arrangement is that the owner of the cargo should know when his cargo arrives to prepare him to make arrangements to clear his goods in good time. The new port order involves a situation where the cargo is scanned before it is stacked. As the ship is discharging, the cargo is also being scanned, and the image is used by the Nigeria Customs Service to commence clearing process in terms of segregating the cargo for whatever line of inspection, such as: green, yellow and red light, as the case may be.

    What are the benefits of the port community system?

    The port community system involves every player, what he does, timing of activity and cost of such activity. It is a command and control centre, which creates a nexus between all existing systems in the industry. It is a means of integration among all players to boost efficiency and transparency at ports. The objective of the system is to establish a framework that will promote the competitiveness of the nation’s sea ports beyond its neighbouring ports of Cotonou, Ghana, Togo, Cameroun and other ports in the sub-region. We are determined to enthrone an efficient port system that will facilitate trade, reduce the cost of doing business and lead to increased revenue generation for the government.

    What was the reason for the port reform and concession?

    Government’s reform agenda for the sector was targeted at improving; enhancing management capability of enterprises; creating a conducive institutional, legal and regulatory framework and developing private sector participation in financing, management and operations of port facilities. Other related objectives of the reform are to increase the efficiency of port operations, decrease the costs of ports services to the users, decrease the costs to the government for the support of a viable port sector, boost economic activity and accelerate development, and make Nigeria the hub for international freight and trade in West Africa.

    The ports concessioned to private terminal operators were to reduce cost. Cargo dwell time and the cost of doing business must come down for our ports to be competitive; it must be relative to operation and services that are being rendered by the terminal operators and the shipping companies. That is the mandate given to NSC as a port economic regulator and that is what we are trying to enthrone in our ports to boost the nation’s economy. Today, there are investments in our ports and things have improved since the concessioning.

    How do you assess port concession?

    We have had tremendous improvements in the port system, the indicators are there for everybody to see it, the turn-around time for ships has improved, we have more throughput and more tonnage. This means that Nigerian ports are efficient, and we are slowly gaining a competitive advantage. We must not forget that we are competing with other ports, the more cargo throughput we get, the more advantageous it gets to our economy, revenue to the concessionaires themselves and everybody. We are putting things in place at the Nigerian Shippers’ Council to ensure that the ports are competitive; our terminals must be competitive, and this means efficiency, cost reduction, less hassles, and friendly ports, so that they will be the preferred destination for shippers

    Almost nine years after port reforms, how far has it fared economically?

    It has fared quite tremendously, and I think the port reform is not short of being revolutionary. We have had so much achievements in the way we do things during the public monopoly; things have changed drastically, and there are indicators to show that the terminal operators, the shipping companies and other privatised sector of the economy have really pushed the maritime industry forward towards positive gains.

    The NPA has been able to supervise effectively as a landlord by providing common user facilities and even enhancing port operations through technology and automation and this is in the right direction. The Nigeria Custom Service is the leader in automation and technology, what is needed now is just a coordinator so that all these efforts could be harnessed towards the contribution of the maritime industry to the Gross Domestic Product (GDP) of Nigeria.

    This means economic realisation of transforming the gains as far as the economy is concerned; it means more revenue, more labour content and employment, provision of modern infrastructure, especially transport structure. This is the next stage and that is why the Nigeria Shippers’ Council is placed to co-ordinate, supervise, moderate and superintend all the efforts so that we can harness all the positive changes to the national economy. The terminal operators have threatened that reverting to 2009 tariff is the same as reverting the salaries of workers back to what is obtainable back then.

    What are you doing to reclaim over 300,000 metric tonnes of transit cargoes that were hitherto lost to ports of neighbouring countries?

    The plans to reclaim lost transit cargoes have begun to yield result as some landlocked countries are ready to transit their imports through Nigerian ports. We have always emphasised the issue of competition and efficiency. So, transit cargoes are won and lost through efficiency of a port. Long before Nigerian ports were concessioned, they were really inefficient; leading to some landlocked countries that patronised our ports had to resort to neighbouring countries to transit their cargoes. Even though the movement of their cargoes through ports of neighbouring countries does not make sense to them in terms of proximity, cost and other economy of scale factors, it is preferable that they have their goods imported through Nigerian ports. About a year or so ago, the Nigerian Shippers’ Council led a trade delegation to Niger Republic together with terminal operators and some shipping companies where Nigerian ports were marketed. We were able to convince the Nigerian private sector that it makes more economic sense to import through the Nigerian ports.

    What is your take on cargo dwell time?

    We are concerned about the dwell time on cargo. We don’t want cargo to stay very long in the port. Port is not a place of storage. As soon as cargo comes in, it is cleared. We encourage terminal operators to take their cargo away from the port for examination. We are happy we are getting cooperation from the Customs, the terminal operators and NPA. We commend NPA for introducing e-commerce, which means that payment which used to take five days is now done in minutes.

    How can the Apapa traffic gridlock be tackled?

    The solution to the issue as it is being canvassed is the multi-modal access to the port. Presently, there is only one significant mode which is the road mode, but a port should be linked with railway or rail lines; it should be linked with inland waterways, and pipelines; but here we rely heavily on the road, if we had tracks running, we wouldn’t be having all these problems. I think the management of the Nigerian Ports Authority is conscious of this and they are making deliberate efforts to solve the problem. However, you have to appreciate that the ports in Apapa are really over-stretched and they are city ports struggling with other road users that is why the Federal Government is deliberately encouraging another public private partnership in Greenfield development of deep sea ports in many places like Lekki and also in Badagry. When these things are done, Shippers’ Council will ensure that the mistakes of Apapa would not be repeated, we must ensure that these ports are well linked through road, inland waterways, through rail lines and so on.

    Importers and terminal operators are saying that cargo throughput has dropped; do you think the situation will improve?

    Yes. Things will improve, more so, now that we have new government that is trying to put the country in the right direction in place. With policy of the new government to block avenues for revenue leakages, the economy will grow strongly.  The drop in cargo throughput, I think these are part of the initial pangs of the foreign exchange fluctuations, and volatility in the oil market, but I believe these challenges will be overcome by the new government with all of us cooperating. Therefore, our concern now is for us to make our ports users friendly and have an export based economy whereby the ports will play a central role in the international trade.

    What are those things you want to see at our ports?

    We want to see a port that is friendly, a port that makes it easy to do business in Nigeria and make it competitive to other ports. We want to see a port where there is no human contact, we want to see a port, which is technology-inspired, we want to see automation, we want to see a port that is transparent, that is efficient, that is going to be the preferred destination for cargoes internationally

     

  • ‘How to prevent capital flight with financial reporting’

    ‘How to prevent capital flight with financial reporting’

    The Financial Reporting Council of Nigeria (FRC) last week organised a public hearing on the Draft National Code of Corporate Governance to promote transparency and accountability in financial reporting. In this interview with Senior Correspondent COLLINS NWEZE, FRC’s Chief Executive Officer Jim Obazee explains steps being taken by the council to ensure that companies follow best practices in their reports.

    Why is the Financial Reporting Council of Nigeria pushing for the National Code on Corporate Governance?

    When the World Bank carried its enquiry in 2004 on Nigeria reports on observers of standards and codes, it said Nigeria was using persuasive code and there are different ones in the country.

    They are actually sectoral and are not backed by law. You have the Central Bank of Nigeria (CBN) running one for the banks. We have the one that the National Insurance Commission is running for the insurance companies. We have the one run by the Securities and Exchange Commission (SEC), which is called SEC Codes.  We have the one that is used by Pencom for pensions, then very recently, the Nigeria Communications Commission issued one, though they said, it is effective in 2017.

    The moment they identified that our codes are persuasive; they also found out that it is imperative for Nigeria to have the Financial Reporting Council Act, where the Council will be in charge of corporate governance since they have been dealing with financial reporting.

    In the wisdom of the sixth National Assembly, they introduced section in the FRC Act which says there should be a Directorate, and inside the Directorate there should be one called corporate governance.

    Then, they introduced Section 50 of the FRC Act, where they gave us the duty to develop principles of corporate governance and promote public awareness about corporate governance principles and practices. They also introduced a section, where the Council shall have power to enforce compliance.  It then means that issuance of National Code on Corporate Governance is statutory, no longer persuasive.

    There is also need for unification of codes, and sectorial guidelines should not be in conflict with the national code. Government also ensured that it must be private-sector led and that other government agencies should also participate.

    Why are some people working against the code?

    I want to believe that working against the code is rather mischievous. The code is not an issue. What is in the issue is a draft that is calling for public comment. So, if you have anything against it, come and say it. If you said three quarters of the code should not be issued at all, come to the public hearing and say so. But to say that Nigerians should not be given an opportunity to speak about the Code is rather unfortunate.

    The persons that are working against it said they are shareholders of entities. But the shareholders association has given us a written comment that is supposed to be discussed.  It is not that the codes have been issued; it is a draft document that has been put on the table.

    The question is partially answered. But I need you to clarify, if there are specific provisions in the proposed code that are frightening some people?

    From what we received so far, some interest groups that have written, especially the big firms, are saying why do you want joint audit? This is because the draft code is saying, if your turnover is not less than N10 billion, or your market capitalisation is not less than N5 billion, you should have joint auditors.

    For the auditors, if one of them is an international firm, where one is an alien, the other one must be a Nigerian firm. And we said, the Nigerian firm must not have a partner that is an alien.

    Our agenda is not only to generate employment for Nigerians, but to also ensure that Nigerians are trained. Every government agency must pursue an agenda that says that Nigerians being trained are gainfully employed. They should have technical support.

    Are there other complaints?

    Some have also complained that no two family members should be on the board of a company. Yes, we have said so, but it could be argued. What if two of them have significant interest? If so, they should be affiliate directors, because if two of them are part of management there are chances they could be working together.

    Remember that corporate governance can be broken down into bank-based or insider system. There is also the outsider system, or wide dispersal system. What the later means is that funds are raised from debts or equity market. In the former, the funds are raised from the banks or insurance companies. The characteristic we see here is that, those who provide the funds will also be part of management.

    That is why you see companies put people on the board after they have brought the money. In this case, major owners are also part of management. The quarrel here is always between the majority and minority shareholders. The market does not serve as disciplinary measure. But there is the dispersal system. Here, the money is brought in by different people and the market is supposed to act as disciplinary measure. They can sack management by voting with their shares.

    But in Nigeria we have a mismatch. Funds are raised from the capital market, but it is manifesting the characteristics of a bank-based model. Corporate governance has to correct this. That means, if you are raising fund from the capital market, then shareholders should be able to discipline. And then, major shareholders should not be part of management.

    In which sector is the practice most rampant? Do you see it in the banking sector?

    It plays out in all sectors of the economy. It’s a mismatch, and needs to be corrected. You have to use corporate governance code to correct it. Investors will not be interested in your environment if they put money in your country and they are not able to discipline management.

    Despite the fight against fraud and internal malpractices, these practices are still prevalent in the sector. Could it be because of poor corporate governance?

    The malpractices that you see are not just resting on one leg, but we want corporate governance code to correct those things. Don’t forget that we are dealing with financial reporting. If a country does not have capability for strong corporate governance practices, capital will flow elsewhere. If investors are not confident in the level of financial disclosures, capital will flow elsewhere. If a country flouts accounting rules, capital will flow elsewhere.

    The important thing is that all enterprises in that country, will suffer the consequence even if there are companies getting it right. It is a multiplicity of issues. We deal with financial reporting issues, and also deal with corporate governance issues. Don’t forget that some people work on corruption economics. We are also fighting that as well.

    You are looking at financial statements of banks to see how they comply with the Banks and Other Financial Institutions Act (BOFIA) and FRC Act. Are you still reviewing those accounts?

    We are looking at their compliance level, but the National Code, took our sail. We never had a National Code for not-for-profit entities. We never had a National Code for public entities like Ministries, Departments and Agencies (MDAs) of government and state-owned enterprises. It was the private sector codes that we had persuasive code.

    Don’t forget that we are also looking at accounts of Federal Government entities. We are looking at accounts of Ministries, Departments and Agencies of government and government accounting is broken down into two. We have what we call Ministerial Funds, which are accounts maintained by Ministries, and they are largely cash accounts. And we have asked them to move in to International Public Sector Accounting Standards Accounts. The second one is proprietor funds, which is government business entities, whose financial reporting and operations are supposed to be similar to private sectors. Those ones are to prepare their accounts using International Financial Reporting Standards (IFRS).

    What of CBN, is it part of MDAs? Have you received CBN’s accounts?

    Well, CBN is not something that is not new to the press. The CBN and FRC issue. You know the 2012 account of the CBN is what has held us in court.

    What are you going to do, if the MDAs do not comply with the IFRS account standard?

    You know the options for penalising government institutions that are to provide accounts are even stiffer because government will take decisions on them. Such decisions include removing the Chief Executive Officers or Chief Finance Officer or Finance Director because government will see it that either they are misreporting, or there is fraudulent financial reporting. But for us, we are helping them to comply. As when they come to us, and tell us areas where they have challenges, we will listen to them and guide them. Our interest is that they should comply.

    Which MDAs’ accounts are you reviewing?

    It is their 2013 accounts. What is really taking people aback is the role of audit committees. You know 2014 is still passing through audit. You know if the audit committees have not cleared your accounts, the external auditors will not work.

    What are you likely to be looking out for in MDAs’ accounts? Are they the same thing you look out for in private companies?

    If you are reporting under IFRS and you are a fiduciary interest of government, or a proprietary interest of government we check the same thing as private entity because proprietary interest of government means that you are running the business of that entity like private sector entity.

    A fiduciary interest means that you are an agent of government holding money in trust. But in a Ministerial form, which is ministries, you definitely will be reviewed using the International Public Sector Accounting Standards, which has slight variations to IFRS.

    If you are a state-owned entity, we will also be looking at it differently. In Lagos State, we met with the Accountant-General, then we held a brief discussion with him, and we said that it was important that the governor would have to register with FRC. We looked at those who signed the account and we discovered that it is the Auditor-General and the Accountant-General. Now that of the Auditor-General is appropriate in the sense that we see the Auditor-General as the external auditor.

    That of the Accountant-General is important because we see him as the CFO. But who is Chief Accounting Officer of the state, it is the governor. He takes responsibility, so he is supposed to sign the accounts as well. But I must commend Lagos State. They were the one that even invited us to discuss the issue of registration and all that. All of these things are because of our activities.

    The CBN has been conducting stress tests on the banking sector, and the result is consistently showing weaknesses. Have you looked at the sector to find out the soundness or otherwise of it?

    The CBN need models to find out what is happening. But as far as we are concerned, we look at financial statements. It is from the financial statements that the weakness or otherwise will be found out. But not until we finish analysing their financial statements, we cannot speak with all sense of finality. And when we finish doing that, we will definitely speak on the subject matter.

    At that time, we will be speaking from our own perspective which is wider. That of the Central Bank is narrower because they are looking at regulatory compliance. We are looking at general purpose financial statements.

    We have also seen banks earnings dropping perhaps because of tougher regulation. What is your view on this?

    I don’t think it is so much regulation. What I think is that the financial reporting is now robust because of IFRS adoption in Nigeria. If there are disclosures, you must state how you arrive at your judgment and estimates. You have to disclose that. All your policies must be such that we must be able to trace them to the financial statements.

    A lot of malpractices have been cut down because of full disclosures. If you are disclosing fully, there will be no room for too many maneuvers. And IFRS closed that gap. If you are building your financial statement using high quality financial stands, there will be a lot of disclosures.

    That is why you see, their financial statements are bigger. So, whatever estimates you make, you must benchmark it, and explain the standard and tell us what would have happened, had it been prepared the other way round.

    With all of these disclosures, and strict financial reporting rules, banks no longer book in profits that never existed. Then, their definition of assets has changed as there must be economic benefits flowing into the company. So, you will not book what you don’t have. So, a number of things are now being done properly, because you have to report correctly.

    So, if that is the position, you cannot book a profit that did not exist. Nobody can be deceived today. Everything has to be put on the table. You can lie about everything, but cannot lie about your cash. That is why the first thing we start, in reviewing your account is the statement of your cash flows. Its cash inflow, and cash outflows, there is no room for accruals.

     

  • Over 75% of African reinsurance market lost to capital flight, says Africa Re GMD

    Over 75% of African reinsurance market lost to capital flight, says Africa Re GMD

    More than 75 percent of African reinsurance market share is placed outside the continent, Group Managing Director, Africa Reinsurance Corporation, Cornellie Karekezi, has said.

    He, however, listed lack of skills and capacity, low capital base and unhealthy competition as the problems hindering the growth of the African reinsurance market.

    He made this known at a briefing on the corporation’s new logo.

    He said stopping capital flight of insurance premium in the continent was tough.

    He noted that the mission of Africa Re is to foster insurance development by supporting, assisting and working with national insurance markets in the African Continent.

    He said: “When Africa Re was created as an initiative of the African Development Bank, following an agreement with member-states of the Organisation of African Unity (OAU), the idea was to bring together all states on the continent, provide capacity which was very rare at that time, bring capital and start doing what was being done by foreigners only.

    “At present, as an organisation, we have 10 per cent of the total reinsurance market share in Africa and if you combine capacities of all the other reinsurance companies, we may not do up to 25 per cent. We have tried our best, but we still have a long way to go,’’ he said, adding that there is lack of capacity to cover large risks like oil and energy, lack of capacity to cover mega projects and even special risks like airlines and aviation.

    The Africa Re boss pointed out that the continent is competing on not only capacities, but also ratings, adding that African solidarity had not grown much to support the continent’s development.

    “For us at Africa Re, we go through rigorous risk management initiatives so that we can be compared with other European companies. Sometimes you are refused to lead a treaty even though you might have the competence and the capacity because of some kinds of ratings. That explains why we have not retained the entire businesses emanating from the continent.

    He said most markets in the continent have very low capital base, and that this is undermining capacity to undertake big ticket risks. ‘’Except for eountries like Nigeria that has reasonably large capital, many of the other countries have very low capital requirement and this accounts for why a lot of the businesses emanating from the continent go offshore, he added.

    “Retention is largely driven by capital base, succession is high. Another major challenge is unhealthy competition, which is also affecting growth in most of the market. But Africa Re has continued to engage the market and the chief executive officers across the African market by organising trainings in all areas of the business for skills development as well as setting standard,’’ he said.

  • Capital flight on equipment import to hit $800m

    Nigeria’s capital flight of $400 million due to importation of oil and gas equipment may double in  the next few years if the importation continues, the Managing Director, Royal Niger Emerging Technologies, Anthony Okeke, has said.

    He said the country imports most of its oil and gas equipment and recorded over $400 million capital flight between 2008 and 20014 due to dependence on oil and gas technologies coming from the developed economies such as the United States and Germany.

    He said Nigeria’s failure to domesticate the production of equipment used in exploration and production would further increase its capital flight.

    Okeke said: “Over the years, the country has depended on foreign-made technologies to grow its petroleum industry.  The development made local and foreign oil companies to import equipment estimated to be over $400 million within six years (2008 to 2014). This money should be used for jobs’ creation, and accelerating of socio-economic activities.

    “Most of the local manufacturers are not ready to engage in production of key oil and gas equipment due to one reason or the other. When the majority of machinery are produced locally, the standards in the industry would be raised, and jobs would be created.  Also, the sector’s contribution to the Gross Domestic Product (GDP) would increase as a result of the initiative.”

    He noted that Nigeria has been involved in what it described as ‘technology transfer,’ an idea, he noted, would not bring the much-needed growth to the industry and the economy.

    “We need to see how to make operating environment conducive for bigger companies planning to come to do business in the country. When this is done, the local operators, would study and get the required knowledge from companies with better expertise and facilities,” he said.

    The Nigerian Content Development Monitoring Board (NCDMB) is planning to establish eight industrial parks. The parks, billed to be sited in Edo, Rivers, Akwa-Ibom, Cross River, Bayelsa states, among others, would  produce tools that would be use in the oil and gas sector.