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  • Cost of healthy diet improves

    Cost of healthy diet improves

    The cost of maintaining a healthy diet in Nigeria saw a slight decline in August 2024, according to the latest report from the National Bureau of Statistics (NBS).

    The report revealed that the National Average Cost of a Healthy Diet (CoHD) per adult per day stood at N1,255 in August, representing a 0.8 percent decrease compared to the N1,265 recorded in July.

    The CoHD is a measure of the least expensive combination of locally available food items that meet globally consistent dietary guidelines.

    The NBS noted that this figure serves as a baseline, excluding transportation and meal preparation costs, to assess both physical and economic access to nutritious diets in the country.

    Regional and State Variations

    The NBS report highlighted significant variations in the cost of healthy diets across the nation’s regions and states.

    The South-West recorded the highest average CoHD at N1,554 per adult per day, followed by the South-South at N1,381.

    In contrast, the North-West had the lowest average, at N1,014 per adult per day.

    On a state level, Ogun, Lagos, and Rivers topped the list with the highest CoHD, costing N1,641, N1,615, and N1,572 per adult per day, respectively.

    On the other hand, Katsina recorded the lowest CoHD at N880, followed by Kaduna at N951, and Sokoto at N980.

    Long-term Trends in Food Costs

    The report noted that the CoHD in August 2024 was 28 percent higher than in March 2024, when it stood at N982.

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    Key drivers of this increase, it highlighted, include higher prices for food groups such as legumes, nuts, seeds, starchy staples, and vegetables.

     “On a month-to-month basis, the CoHD declined by 0.8 percent compared to the cost in July 2024,” the NBS report stated.

    This drop, it said, was largely due to a 14.5 percent decline in vegetable prices, providing some relief in the broader context of rising food costs.

    Animal-source foods remained the most expensive to include in a healthy diet, accounting for 37 percent of the total CoHD while providing just 13 percent of total calories.

    Fruits and vegetables, despite being essential components of a balanced diet, were among the most costly food groups in terms of price per calorie. They accounted for 11 and 14 percent of the total CoHD, respectively, while providing only seven percent and five percent of the total caloric intake.

    On the other hand, legumes, nuts, and seeds were the least expensive, contributing only seven percent to the overall cost of a healthy diet.

    These items, the Bureau said, remained affordable compared to other food groups, offering a relatively economical source of nutrition.

    The NBS report also pointed out that the CoHD has been rising at a faster rate than general inflation and food inflation in recent months.

    However, it clarified that the “CoHD and the food Consumer Price Index (CPI) are not directly comparable,” as the “CoHD includes fewer items and is measured in Naira per day, while the food CPI is a weighted index.

  • Cost of unending executive, legislature stand-off

    Cost of unending executive, legislature stand-off

    The relationship between the executive and the legislature is everything but smooth. Assistant Editor ONYEDI OJIABOR writes that the cat and mouse game between the two arms has neither been beneficial to the parties nor to the electorate who voted for change.

    RATHER than be to its advantage, the domination of the National Assembly by the All Progressives Congress (APC) is not in any way helping the ruling party.

    The admission of the frosty relationship between the executive and the legislature by President Muhammadu Buhari at the party’s National Executive Committee (NEC) underscores his frustrations.

    He told the party’s apex organ that the frequent friction between the Presidency and the lawmakers has slowed down the delivery of his campaign promises to Nigerians.

    The President’s confession, which confirmed the existence of the gulf between the two arms of government, has triggered more altercations in the past one week.

    Firing back in a veiled response, the National Assembly told Nigerians to blame the delayed passage of the 2018 Appropriation Bill on the refusal of Ministries, Departments and Agencies (MDAs) to furnish its committees with relevant information on their votes.

    But the Director-General of the Budget Office, Ben Akabueze, said the details of votes allocated to each MDA were clearly spelt out in the budget proposal presented to the joint session of the National Assembly on November 17, last year.

    Akabueze said: “Given the seriousness the presidency attaches to getting the 2018 budget passed so it could earnestly focus on achieving the goals set out in the Economic Recovery and Growth Plan 2017-20 (ERGP), which formed the basis of the budget, it had directed heads of ministries and extra-ministerial agencies to attend to any requests for meetings/information by the national assembly (NASS) with dispatch.

    “To the best of our knowledge, this directive has been complied with.”

    Many have warned that the festering executive/legislative feud, blowing open barely one year to the next general elections, could have dire consequences for the Buhari administration.

    Although they said that such friction is not alien to Nigeria’s political landscape, especially, when the ruling party has no comfortable majority in the National Assembly, “this is perhaps the first time it is being admitted that frequent clashes between the two arms of government have grown so large to slow down governance.”

    They urged the dramatis personae to smoothen all the rough edges to enable the electorate read the dividends of democracy.

    It is an open secret that since the inauguration of the Eight National Assembly on June 9, 2015, the arms of government have been locked in a cat and mouse game. The presidency and the lawmakers are rarely on the same page on issues of national importance.

    The crisis of trust stemmed from the contentious emergence of the leadership of the upper and lower chambers of the National Assembly. Contrary to the wish of the ruling party’s leadership, Dr. Bukola Saraki emerged Senate President and Ike Ekweremadu, a Peoples Democratic Party (PDP) lawmaker was elected Deputy Senate President.

    At the Green Chamber, Yakubu Dogara and Lasun Yusuff were elected as Speaker and Deputy Speaker.

     

    Budget impasse

     

    The non-passage of this year’s budget, three clear months after its presentation, has become worrisome to the government and the people.

    When the budget was presented in November last year, the assurance from the National Assembly leadership was that the proposal would be speedily passed so that its implementation could begin on January 1, 2018.

    That has not come to past. Three months into the year, the buck-passing and blame games continue.

    As the National Assembly accuses heads of MDAs of refusing to its committee’s invitations for budget defence, the agencies complain of frivolous invitations by the lawmakers.

    According to the lawmakers, the heads of the MDAs would rather prefer engagement outside the country than to honour the annual budget defence invitation. Some of the MDAs’ heads describe as frustrating the call for”unending budget defence sessions”.

    About 63 MDAs are yet to appear before relevant committees in the Seante.

    The Vice Chairman of the Senate Committee on Appropriations, Sunny Ogbuoji, alleged that the heads of the MDAs would rather  travel overseas than honour the lawmakers invitations to make clarifications.

    Ogbuoji said: “Since January, the Appropriations Committee’s doors have been opened to receiving reports from the sub-committees.

    “However, most of the sub-committees have a huge challenge with the MDAS because majority of the MDAS are not coming forward to interface with them.

    “Some of the ministers will tell you that they are travelling out of the country; because of that, the MDAs are not fully ready. So, we don’t have the reports yet.”

    A frustrated minister lamented that “budget defence sessions have been turned into more or less sessions of witch hunt.”

    Asked how MDAs are being witch-hunted, the minister declined to go into details “to avoid controversy.”

    It is difficult to say when the budget will be passed as the Senate has vowed never to pass the document without input from “recalcitrant” MDAs.

    Last year, the allegation of missing budget and budget padding almost ruined the implementation of the fiscal estimate. When the dust raised by the weighty allegations subsided, the budget was passed in May and signed into law in June. The implementation of last year’s budget was not more than 15 per cent in most MDAs. Governance was the worse for it.

    Will the 2018 Budget fare any better? Only time will tell, some observers said.

     

    The EFCC logjam

     

    The controversy trailing the nomination and confirmation of the Acting Chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, has become intractable.

    President Buhari nominated and forwarded Magu’s name to the Senate for confirmation twice. The senators rejected the request on both instances, latching on to a negative report submitted to it by the Department of State Services (DSS).

    For more than two years, Magu has been working on an acting capacity, following the insistence of the presidency that Magu remained its best man for the anti-graft job, contrary to the Senate’s recommendation for his sack and request for a fresh nomination.

    Perhaps, compounding the standoff was the presidency’s claim that it discovered that it was an error on its part to have forwarded Magu’s nomination to the Red Chamber for confirmation ab initio.

    The Senate demanded clarification from Vice President Yemi Osinbajo, who was credited to have said that Magu’s nomination did not need it confirmation.

    The Senate went further to pass another resolution not consider any presidential nomination that is not expressly listed in the constitution if the vice president failed to recant the statement credited to him.

    The upper chamber promptly suspended the screening, consideration and approval of a number of nominations for appointment already before it.

     

    Endless wait by boards’ appointees

     

    The faceoff is putting on hold the inauguration of not a few nominees into boards of federal agencies. Those that attempted to resume without confirmation were reprimanded and threatened with severe sanctions.

    Some of the nominations pending in the senate include that of the Central Bank of Nigeria (CBN) Deputy Governor Aisha Ahmad.

    The four members of the Monetary Policy Committee (MPC) of the CBN Prof Adeola Festus Adenikinju, Dr. Aliyu Rafindadi Sanusi, Dr. Robert Chikwendu Asogwa and Dr. Asheikh A. Maidugu have also not been cleared by the Senate.

    There must be quorum before the MPC can meet.

    Among the nominees who have been on the Senate’s waiting list for approval are: the Chairman of Code of Conduct Bureau (CCB), Mohammed Isa and nine members of the CCB board.

    The members include: Murtala Kankia (Katsina, Northwest); Emmanuel Attah (Cross River, Southsouth); Danjuma Sado (Edo, Southsouth); Obolo Opanachi (Kogi, Northcentral); Ken Madaki Alkali (Nasarawa, Northcentral); S.F. Ogundare (Oyo, Southwest), Ganiyu Hamzat (Ogun Southwest), Sahad Abubakar (Gombe, Northeast) and Vincent Nwanne (Ebonyi Southeast).

    The Director-General, National Pension Commission (NPC), Alhaji Ali Usman, the Chairman, Independent Corrupt Practices and other Offences Commission (ICPC) Prof Bolaji Owasanoye, are also awaiting Senate clearance and confirmation.

     

    Open bickering

     

    To show the depth of the mistrust between the two arms of government, the House of Representatives on March 1 took on the Minister of Solid Minerals & Steel Development, Dr. Kayode Fayemi, when it adopted a no confidence vote against him. What was at stake was a matter that should have been resolved without the show of strength.

    Many wonder why a Federal Government with comfortable control of the two chambers of the National Assembly cannot get anything done without muzzle-flexing.

     

    Elections timetable

     

    The Independent National Electoral Commission (INEC) has fixed presidential and National Assembly elections for Saturday, February 16, 2019 and governorship and State Assembly elections for Saturday, March 2, 2019.

    But, the National Assembly changed the arrangement, demanding that the National Assembly elections come first and the presidential poll last.

    Adopting the reordered sequence as contained in the House of Representatives version of the amended Electoral Act, the Chairman of the joint committee, Senator Suleiman Nazif (Bauchi North), put it to a voice vote.

    The 12-member committee unanimously answered in the affirmative to pave the way for the report to be presented to the two chambers for final ratification.

    Envisaging that the President may refuse to sign the amendment into law, the National Assembly is weighing the option of veto.

    The electoral umpired has vowed to apply its own timetable in its preparation for the forthcoming general elections, even as controversy continued to trail the reordering of the timetable by the National Assembly.

    Every previous step taken to patch the fractured relationship ended up creating more cracks, raising fears that creating a seamless relationship between the two arms may be a mission impossible.

    But, for how long will the executive and the legislature work at cross purposes? The unwholesome bickering between the two arms has benefitted neither of the arms, and those who voted for change, are collateral victims. There should be a limit to political fight.

     

  • ‘Cement is less than 20% of building cost’

    ‘Cement is less than 20% of building cost’

    The high cost of cement remains a huge problem, which seems to have defied solution. Reason: the country’s cement production capacity outweighs its demand. “I wouldn’t want to go into that…there is an emotional part of it and we tend to be emotional,” says the Chief Executive Officer of AshakaCem Plc, Rabiu Umar, in an interview with reporters during a tour of the company in Gombe State. He speaks on other issues, including the task of keeping the company afloat and its corporate social responsibility cases. MUYIWA LUCAS was there.

    Many people think the price of cement is high, considering that Nigeria produces more of the product than it needs. What’s your take on this?

    I wouldn’t want to go into that. It is very controversial because there is an emotional part of it and the real part of it. And typically, we tend to be more emotional. I don’t want to go into details but it is not quite true that all our raw materials are locally sourced. You can find out how much cement is in Chad and Niger in dollar and make the comparison.

    The price of cement is usually blamed for the prohibitive cost of housing. To what extent will you say cement influences housing affordability?

    Cement is less than 20 per cent of the total cost of building construction. So, you may want to ask what is the correlation between cement and the cost of building. The global average is six per cent; this is a verifiable and scientific information. Depending on the building practices, for instance, not everyone uses hollow blocks, some use the formwork. That way, there is a lot of saving. So, there are a lot of building practices that help to bring down price but when you look at the price of blocks and cement, the global average is six per cent. In Nigeria, it may be seven per cent but I don’t think it is up to eight per cent. Typically, people think if the price of cement is half of what it is today, it increases affordability or the number of people that can afford to build their own homes. In a sense, you can say yes, but it is only six per cent. The rest of the 94 per cent is in the finishing. You can build and finish the carcass of your building and you are just 30 per cent of the way including the concrete, beam and all. You find out that the cost of one door will probably build the walls. That is where most of the cost goes.

    How are government policies impacting on your business?

    I think there are two levels to it. Government policies in a sense have helped us to operate because without a framework, you cannot run. But is there room for improvement? Of course, there is. One of the key things that are really confusing is multiple taxation. There is the federal, state and local government tax regimes. And sometimes, when you stack up everything, it is a bit confusing to understand at what level it stops. Multiple taxation is one of the key drivers of business that every business owner talks about in the country. It also brings about uncertainty; you plan something you want to do this year and suddenly, something comes up that is not in your plan but can have an impact on your planning and result.

    What does the cement industry contribute to GDP?

    It depends on the level you take it from but between N18 and N20 billion a year, depends on the demand. It was a little higher the previous years but it dropped.

    How did the lull in the property market affect cement sales during recession?

    First of all, Nigeria went into recession and anybody who lives in Nigeria knows the impact. The cost of anything that has any correlation with foreign exchange has doubled. That is a reality. The income left after taking care of basic needs has gone down, and naturally, there is no way it won’t have an impact on certain sectors that are not immediate, like food. And then of course, the economic situation means that the market is not growing as fast as expected and I think that’s a publicly available information.

    How do you control your operations so that it doesn’t impact negatively on the environment?

    Cement business involves extracting things from the ground, but at the same time, we have a standard. LafargeHolcim has the largest building materials business in the world. Our policy is that if a country we are operating in has a lower operating standard than the one set by the company, then our company standard becomes what we use, and vice versa. So at any point in time, we make sure we are well within the standard that each location has. We have a very high standard; there are different regulatory agencies that we work with- the Ministry of the Environment, National Environmental Standards and Regulations Enforcement Agency (NESREA) and several others. The key concern here is the dust emissions and when it comes to coal, there is the acidity issue. And of course, before you even get licence to operate there must be an environmental management plan in place.  But beyond that we make sure we have an improvement plan. For instance, a few years ago, you know you are approaching AshakaCem when you find dusts on vehicles along the way, but today, that is not the case. It has reduced and we have the number to show for it. We hosted the former minister of environment sometimes ago to see what we are doing. Of course, there is always room for improvement but the most important thing is to ensure that the dust emission is lower than the limits set by the environmental plan.

    Lafarge has some affordable housing interventions in the Southern part of the country. What similar initiative do you have in the north?

    It is a national programme, not specific to any region. We are in the process of developing one in this region. Affordable housing comes in different shapes and forms. For instance, you may want to build houses in large scale. So, there is affordable housing and there is mass housing. So mass housing may not be the bottom of the pyramid but it allows more people to really have access to housing. And how does it work? You’re building this same structure in a thousand places and instead of using blocks you can use what we call the form work which is one of the things we are working on. We have done one in Ogun State, and we are taking people from the north to see how it works because the idea is to copy the model and ensure we can do it quickly and in a cost-efficient way.

    How are you coping with competition in the industry?

    The main thing we do is to focus on the customer and make sure we give them what they want. At the end of the day, cement goes everywhere. In reality, there is more than the demand but we are focused on making sure that our product does what it says it does. It is not about the technical aspect because at the end of the day, the customer can measure what he got from the product. Our focus is on making sure we are close to the customer and that we are giving him what he really needs. For instance, a blockmaker wants to work quickly and in as little time as possible, take the block and reuse the same wooden palette. So today, we have a particular product designed for that, it is called Superset; it is the fastest setting cement in the country and it means that segment will have preference. If you meet the big contractors, their needs are different from the regular trader who buys cement and resells. So, what we try to do is make sure we work with them from the beginning of a project to know what their needs are and I think that has worked for us thus far.

    How were you able to continue running your business at the height of Boko Haram hostilities in the North East?

    On November 4, 2014, our plant was attacked by the insurgents. Obviously, they were trying to find explosives. Exactly one month after that, there was another attack. Of course the default thinking was for the company to shut down during that period until things calmed down, but the management of LafargeHolcim took a decision to keep it open because as you may know, stopping and starting an operation of this magnitude is not really a day’s job. We have staff of 700 people working here and we live in a place that is more or less like an island. So, even if we shut down the operations, the staff are still here; you can’t have 700 people suddenly pack their bags to go somewhere.  Therefore, a decision was reached at a significant financial expense to keep the plant running and I think it was the right decision. It has shown that we have the resilience when it comes to keeping our operations running.

    Looking at the post-insurgent era, how are you contributing to the redevelopment of the Northeast region?

    To start with, we make cement and most of the destructions in the area were civil in nature- if you take out the psychological and socio-economic aspects. So, naturally, we are contributing in that regard. If you remember, there were more than two million people who were displaced by the insurgency and by virtue of keeping this operation running, we are helping to make sure there is enough economic activity in the area. Like I said, there are 700 people working here directly and probably another 2,000 people who do supply and other things. The average household in this part of the country is 10; so you can imagine what the company has done. A more direct approach is helping the communities acquire skills that can be useful in terms of social services and healthcare as well as education.

    In specific terms, how have you impacted on this community?

    We have an artisanship scheme, for example, that has intakes from the communities around here, and it is strictly created for them. Graduates of this scheme go on to set up their businesses. If you are a carpenter or a mason, we train you and you get the tools of the trade and can go into the community to start. At the same time, we absorb some of them into our firm. For instance, the second most senior person here on the industrial side, after the plant manager, is an indigene of Bajoga, (our host local government), who came through the artisanship programme- we took him to South Africa and also our sister plant in Calabar, Cross-River state, as the second most senior person there.  Let me clarify that we look at our contribution from the perspective of our operations rather than direct interventions. We have built classrooms, boreholes and a lot of things but we call those “business as usual” because they are basic things that we do. Building classrooms doesn’t mean that education will happen, so we do more sustainable activities in that regard.

    How else do you give back to the community?

    Giving back to the community comes in different forms and sizes. For instance, the focus we have as a company worldwide is healthcare, youth empowerment and education. These are things that everywhere you go in the LafargeHolcim world, though the style of implementation may differ, but these are the three core things. When it comes to healthcare, for instance, I can say directly, today on a daily basis we have a clinic that treats over 200 people from this community, every single day. Both consultation and drugs are free; it is one of the things we believe is important. In terms of youth empowerment and employment, we have in excess of 2,000 graduates since the beginning of the artisanship programme and every year, we keep taking them and we pay them for the two years that they are here on the programme. Over 90 per cent of the beneficiaries are of northern stock- 70 per cent are from the Northeast region. Gombe state indigenes account for 56 per cent of our staff strength, while most of the others are from communities around us. And when you look at education, we have two schools right inside AshakaCem premises and they have over 1000 students and 60 per cent of them are from the community and they don’t pay school fees. I think also beyond how much money we give the youths, there are also other exchange programmes that we have. A Polytechnic is about to start at Bajoga, the reason for citing the school there is because AshakaCem exists here. Polytechnics produce hands-on people, the plan is that we will partner with the school to do a lot of exchange programmes.

    Sometime last year, you singed MoU with some communities. How far have you gone with the implementation of that agreement?

    The implementation is ongoing. We ran into some misunderstanding. Everywhere you operate a mining activity, you must have a community development agreement which defines the basics of what you must do; but you don’t limit yourself to only what is in the agreement. We ran into some hitches but the agreement is being implemented while we are trying to do more. It is not everything we do that is in black and white. The medical thing I talked about earlier is not part of the plan but we do it. The MoU contains a five-year programme, but what we try to do is make sure that whatever we want to do within a year, we do it before the year runs out so that the community can start enjoying the benefit.

    This community is largely agrarian. Do you have plans to empower the community through farming as some sort of CSR?

    Absolutely! This is one project that we are doing; it is at the starting phase. We are starting an agricultural programme called Agri-ecology; it is all about mixed breeding- where one crop fights the pest of the other, for instance, leading to the creation of a high yield. It is also about taking the ecology of agric process back to its natural way. So, we are going to roll that out to empower our communities and help increase their yield by up to 30 or 40 per cent. It means they can generate more revenue from one piece of land. The other side of it is that it will help them to organise better distribution in terms of what they get from the produce. There has always been the issue of farmers not getting value for their labour, so, we are doing this to help them to get more value from their farming activities and turn it to an all year round thing. We are starting the pilot scheme this year with tomatoes because we hope to start with cash crops. The farmers won’t have to just wait for the rain. That’s what we are working on. The second part of  this scheme is linked to how we help control our carbon dioxide (CO2) emission. The Federal Government tries to encourage rice farming everywhere, so the rice husk, a by-product of rice processing can be used in our kiln. We call it geo-cycle. The idea is to take corn cubs and the rice husks to produce clean energy and at the same time clean the environment. The producer doesn’t go to the farm to produce rice husks or corn cubs but at the end of the day he makes more money in addition to what he makes from the produce because we buy it off him.

    What short term plans do you have to keep your customers in business?

    It goes back to what I said, it is basically the promise that the products will deliver. We get feedback from our consumers and work on that. That is what we do everyday; making sure they remain in business because that also helps us to remain in business.

    Five years from now where do you see Ashaka Cement Plc in terms of expansion?

    Where we see AshakaCem is as a more efficient business in the next five years and one of which is from the cost perspective. There is currently a project ongoing, we are building a power plant to be able to generate our own electricity. Today, we are relying on generators, and as you know, the cost of fuel whether low pour fuel oil (LPFO) or diesel is very high and has a high correlation to foreign exchange. We are building an N11billion, 16-megawatt coal-fired power plant to cater for our needs. That is one of the biggest plan that we have in terms of being able to reduce our costs because one of the biggest cost in cement production is the cost of energy. Inside the kiln, we have temperature running up to 1,400 degrees which is heat temperature required to melt steel. You can imagine the kind of heat we are talking about here and to generate that kind of heat, we need fuel.  The second is to unlock some of the existing potential in terms of capacity, over the years, you lose some efficiency and we are trying to gain back that efficiency. The other is, depending on how things go, we intend to increase the capacity of the plant by building new capacity.

  • Cost of 2019 election not ready, says INEC boss

    Cost of 2019 election not ready, says INEC boss

    Independent National Electoral Commission, (INEC) chairman Prof. Mahmud Yakubu yesterday told the Senate that the total cost of the 2019 general elections was not ready.

    Her said: “It is provisions of the amendment to 2010 Electoral Act after passage by the National Assembly  that will show the commission how  elections at primary level by the political parties will be conducted and monetary cost that it will entail on the part of INEC.”

    The INEC chairman spoke while defending the 2018 budget estimates of the electoral body before the Senate Committee on INEC.

    He told the committee that 85 staff of the 16,000 workforce of the electoral body died last year.

    Yakubu was reacting to a question about why budgetary provisions were made for sick bay at the headquarters of the electoral body.

    He said some of the deaths were recorded within its  premises.

    The committee screened additional eight nominees as Resident Electoral Commissioners . Those screened and approved on Wednesday are  Dr Usman Ajidagba from Kwara State , Baba Yusuf Abba from Borno State, Segun Agbaje from Ekiti State , Yahaya Bello from Nasarawa State, Mohammed Magaji Ibrahim from Gombe.

  • Kachikwu: Nigeria can maximise OPEC’s exemption with low production cost

    Kachikwu: Nigeria can maximise OPEC’s exemption with low production cost

    Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said Nigeria can make the most of her exemption from oil production cap agreed by member countries of the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC countries, by working hard to reduce the cost of producing a barrel of oil from her fields.

    At the OPEC-member countries’ 173rd meeting in Vienna, and the third meeting of the OPEC and  non-OPEC allies where a decision was made to extend the oil production cut, Kachikwu explained that Nigeria was losing its competitiveness among other oil producers with its high production cost.

    According to him, the country produced oil at between $23 and $24 per barrel, and that it was not competitive compared to other producers, such as Saudi Arabia and Iran. He noted that this would have to come down for her to maximise the output exemption.

    “The next battle for me is cost, because at the end of all these, it doesn’t matter what the volumes are if we do not get our cost to a point that is reasonable and comparative to the high performing OPEC members – Saudi Arabia, and Iran, it doesn’t matter what numbers anybody gives us, we are blowing it, and that is why you see me shouting all the time about cost,” Kachikwu said.

    He further said: “I will have to work with the NNPC, all the parastatals and oil companies to keep driving those numbers down because quite frankly, even if I have a million barrels and I am producing at $15 a barrel, if you do a simple calculation, you will find out that your returns are about as good as you doing two million barrels and producing at $30 a barrel.

    “So, cost is key for us to enjoy the benefits of the exemptions that we have. We have come down from an all-time of $28-29, and now about $23-24, but that is nowhere near where we should be. We need to be edging towards $18-15, and that is going to be the big work for next year.”

    The minister also talked about the government’s plans for the sector in 2018, indicating that other than driving down production costs, development of gas would take a priority position in its itinerary for the industry.’’

    He explained: “We have our eyes on gas, and have passed the gas policy at the FEC. We just passed the gas commercialisation programme, we are focused very heavily on gas.’’

  • ‘Building cost control not fully optimised’

    Nigerian Institute of Quantity Surveyors (NIQS) President Mr. Obafemi Onashile has said building cost control has not been fully optimised in the country.

    He therefore wants a reform. Onashile spoke on the sidelines at the Dinner/Awards nite of the Lagos Branch of the NIQS.

    The president said in terms of procurement in the construction industry, a lot more needed be done.

    “We are talking of civil engineering like power construction, power installation, mainly engineering works, we need to do more. Our impact is still not fully felt in these areas,” Onashile said.

    He assured that in the build up to the Procurement Act, awaiting the President Muhammdadu Buhari’s accent, the institute would play a major role leading up to the procurement in the country.

    This, he further explained, would be achieved by rallying round and partnering other professionals in the industry to reform the industry.

    “Our industry is running in adversarial manner and it is not too good for the nation. When all the professions come together, then we can be more effective and function. For now, building cost control is not fully optimised. Quality control is becoming an issue in the country and its beyond just one profession,” Onashile said.

    The NIQS chief said the better cost control in procurement at the Federal Government level is a testimony to the effectiveness of the head of the procurement bureau also a qauntity surveyor.

    Similarly, the Chairman of Lagos chapter of NIQS, Mr. Bamidele Mafimidiwo, told reporters that quantity surveyors were better off with the Procurement Act, arguing that it would ensure probity.

    He said when quantity surveyors are in strategic positions in the construction industry, you not only get value for your work,  you will also be able to save more on your projects as wastage are cut off.

    He is happy that quantity surveyors are taking key roles in the industry and that the country will benefit more.

    The awards, Mafimidiwo said, is a programme that caps the institute’s activities for the year. We have done a lot of programmes this year. This year’s dinner, he explained, is unique because of the award introduced.

    In all, 17 persons, including Lagos State Governor Akinwunmi Ambode, the first female president of NIQS, Mrs. Mercy Iyortyer, several private sector operators, among others, were given awards for their contributions to the industry.

  • PMB: Do something about cost of governance

    SIR: Nigeria is a country blessed with natural and human resources, a population of about 180 million and the largest economy in Africa.

    Nigeria produces about 2.2 barrel of crude oil daily and also produces thousands of graduates with qualitative and sound education every year. But unfortunately enough, we lack leaders that can harness all these natural gifts freely given to us by God. Mismanagement of resources is the order of the day and that is why we found ourselves today in a situation whereby social vices are rampant. Kidnappings, armed robbery, clashes between herders and farmers, oil bunkering, Niger Delta avengers and the most dangerous terrorist group, Boko Haram.

    In the 16 years of democracy in Nigeria, high cost of governance is the real enemy of Nigeria’s progress. It comes by way of excessive number of advisers, assistants and personal assistants to political office holders; huge salaries and allowances to political office holders; large number of official vehicles and unnecessary foreign trips of politicians and civil servants; security votes for governors; undisclosed extra budgetary expenditure and arbitrary increase in the number of government agencies.

    Federal lawmakers constitute 0.0002% of population but they receive sizeable amount of State funds expended on their upkeep. If these funds are judiciously distributed, it would have saved the lives of Nigerians who lost their lives at the Mediterranean Sea trying to get to Europe with the expectations of getting a better life. Nigerian lawmakers earn the highest salaries worldwide. The number of committees both at the Senate and the House of Representatives must be reduced. The Senate has 109 members with 67 committees while the lower chamber has 360 members with 96 committees. Compared with America, the US Senate has 100 members and the House of Representatives 435 members with only 21 committees each as well as four joint committees. Something needs to be done about this.

    Another problem is the pension for former governors. A governor who served his state for only a period of either four or eight years get pension for life while a career civil servant who served his /her state for good 35  years would end up with nothing compared with what a former governor would get.

    We voted for change where resources would be equitably shared; after two years of the Buhari administration, nothing has changed. We cannot have peace and security in our country unless these injustices are addressed. Our dear President Buhari, if these cannot be addressed by you, who can do it? If they are addressed, you would have left a legacy that would be remembered for years to come and your name would be written with a golden pen, and the future generations would not blame you.

     

    • Comrade Hasheem B Ahmad,

    <hashimbahmad@gmail.com>

  • $5.5b loan: Moody’s downgrade raises borrowing cost

    The Moody’s Investors’ Service downgrade of Nigeria’s long-term issuer and senior unsecured debt rating to B2 from B1 (with a stable outlook) means higher cost of international borrowing, top financial analyst Bismarck Rewane has said.

    In an email report, the Financial Derivatives Company Limited boss, said Moody’s action means that the Federal Government’s plan to raise $5.5 billion through Eurobonds sales within this fourth quarter will attract higher pricing.

    This will bring the total funds raised through the Eurobond–International Capital Market (ICM) by the Federal Government to $7 billion in less than one year. A total of $1.5 billion was previously raised in two tranches of $1 billion and $500 million.

    Moody also lowered the senior unsecured MTN programme rating and the provisional senior unsecured debt rating to (P)B2 from (P)B1. The rating outlook remains stable.

    In a report, Vice President – Senior Analyst Moody’s Investors Service, Lucie Villa, said Nigerian authorities’ efforts to address the key structural weakness exposed by the oil price shock by broadening the non-oil revenue base have so far proven largely unsuccessful.

    But in a swift reaction, the Federal Ministry of Finance (FMF), Central Bank of Nigeria (CBN) and the Debt Management Office (DMO) said the challenges that are highlighted in Moody’s rating are clear, and are being addressed by the government with the environment having improved significantly since the last period of assessment.

    Sub-Saharan Africa Economist, at Renaissance Capital (RenCap), Yvonne Mhango, said the plan to borrow $5.5 billion through Eurobonds will raise the country’s debt service to revenue cost beyond 62 per cent.

    She said capital releases for the 2016 budget continued into the first quarter of this year while public debt has increased by seven percentage points of Gross Domestic Product (GDP) since 2014.

    On the debt service/revenue, she said: “Nigeria’s debt service/revenue has risen sharply in recent years to 62 per cent as at June 2017 against 29 per cent in 2014. This largely reflects the Federal Government’s low revenue/GDP target of four per cent this year. The Federal Government plans a $5.5 billion Eurobond issuance before year-end 2017, as part of its efforts to lower local interest rates, by reducing domestic debt/total public debt to 60 per cent, against over 70 per cent today.”

    Mhango said budget performance in the first seven months of this year and debt developments showed there were no capital releases for the 2017 budget, because it was passed late. She said the Federal Government’s 2017 budget of N7.4 trillion was 6.2 per cent of GDP, and was signed by the executive, after being passed by the Senate in May.

    Of this, N3.1 trillion (2.5 per cent of GDP) was spent in seven months. “Expenditure in seven months was 30 per cent below the (pro-rata) target and was entirely made up of recurrent spending. There were no capital releases from the budget because of its late approval. However, capital releases did take place in seventh month, as the 2016 budget continued to be implemented into first quarter of this year,” she said.

    Mhango said revenue came in on target at N2.6 trillion (2.1 per cent of GDP) because of a one-off refund from the Paris Club. “When this is stripped out, there was a 20 per cent shortfall in revenue. Below-target spending – due to delayed capital releases – explains the small budget deficit for seven months of 0.8 per cent of GDP, by our estimate, as against the 1.5 per cent (pro-rata) target,” she said.

    She disclosed that the federation account revenue was one-third below target, and that three-quarters of the FGN’s planned revenue for this year is expected to come from the Federation Account, of which two-thirds will stem from oil revenue.

    She, however, said Nigeria’s public debt/GDP is low as against the Sub-Saharan African average of 45 per cent, but it has seen a strong increase in recent years, adding that since 2014, it has risen by seven percentage points of GDP to 16.4 per cent of GDP in June 2017, with 70 per cent of the increase due to domestic debt.

  • Counting the cost of Apapa gridlock

    Counting the cost of Apapa gridlock

    The deplorable state of access roads to the nation’s premier seaports in Lagos has become a pain in the neck for port users, residents and stakeholders in the maritime sector. Despite the huge revenue generated from the ports daily, successive administrations, curiously, have failed to muster the political will to fix the roads. Maritime Correspondent OLUWAKEMI DAUDA reports that the situation is taking a huge toll on businesses.

    The worsening gridlock along the road leading to Apapa and the Tin-Can Island ports in Lagos has thrown the Nigerian maritime sector into confusion.

    Apart from adding to the cost of doing business in the area, it has made the ports unattractive while hurting the trade facilitation programme of the Federal Government. It also  ridicles the status of Lagos as Nigeria’s  commercial nerve centre.

    To operators and stakeholders in the maritime sector, the deplorable state of access roads to the ports has exposed the complacency of successive administrations in resolving an major issue that stands in the way of boosting the nation’s economy and promoting the wellbeing of Nigerians through efficient use of the nation’s seaports.

    Some operators and stakeholders, who spoke with The Nation, wonder why the current administration has not considered it expedient to fix the access roads to the ports two years after mounting the saddle.

    They, therefore, called on President Muhammadu Buhari, the Federal Executive Council ( FEC), and the Minister of Power, Works and Housing, Mr Babatunde Raji Fashola  (SAN), to urgently fix the roads.

    For instance, one of the residents of Apapa who is also a  lawyer, Mr. Francis Adeyemo, bemoaned the deplorable state of the roads leading to the ports and urged the Federal Government to address the problem.

    His words: “The situation on the two major roads leading to the Lagos ports is so bad that motorists accessing the ports and adjoining areas get trapped in the traffic congestion for over six and seven  hours.

    “Workers, residents, importers, port users and other stakeholders going to and from work or businesses at the ports and its environ lose vital main hours translating to huge financial losses.

    Added to this is the toll on the health of the people plying the road from stress of sitting down for long hours in the tormenting traffic while inhaling dangeros fumes from vehicles.

    Adeyemo lamented that the problem is  taking a huge toll on users of the nation’s seaports because of the slow evacuation of cargo from ships berthing at the ports due to slow turnaround time for containerised trucks which are trapped in the gridlock in and out of the ports.

    Accordin  to him, the dwell time of ships has increased from three days to a minimum of 12 to 15 days now and the financial implication of the problem on shipping business is that importers and exporters are incurring extra cost to charter vessels and pay for insurance .

    “It is appauling that the Federal Government under Buhari and the Minister of Power, Works and Housing, Mr Fashola who is the immediate past governor of Lagos State allowed the traffic crises on the roads leading to the Lagos ports to degenerate to this shameful stage. This has eroded the competitiveness of the two  ports compared to the neighbouring countries,” Adeyemo lamented.

     

    Access  to the ports paralised:

    When The Nation visited the ports, last week, access to the two Lagos ports was virtually non-existent. Road and rail transit to and from the ports remained paralysed. This was in spite of efforts of the Managing Director of the Nigerian Ports Authority ( NPA), Ms Hadiza Bala Usman, to collaborate with the private sector to salvage the situation. “The work done so far by the contractors handling the Apapa road is far below stakeholders’ expectations. The contractors have done only about one per cent of the entire project.  We are not happy that the project is moving on a snail speed and that was not the promise made to us when the job was given to Dangote Group, a port user, who spoke with The Nation, said.

     

    Manufacturers’ cargoes trapped

    Clearing agents of some manufacturing firms said they are finding it tough at the Lagos ports to clear their consignments.

    Some of them told The Nation that their goods have been trapped because of the traffic gridlock on the roads and that they suffer unnecessary delay in moving their goods out of the ports.

    “This explains why goods from the nation’s  sea ports are some of the most expensive in the world because of the difficulties we face in clearing and moving them out.,” said Mr Kayode Ogunsanu.

    Ogunsanu said goods worth billions of naira belonging to eight firms and some news print belonging to some newspaper companies are trapped at the Tin Can Island and Apapa ports.. The delay, he said, has serious implication for the firms’ production, if the government fails to address the issue.

    “Already, the delay has led to the payment of huge demurrage to shipping companies and rent to terminal operators. It is also affecting  their targets for the last quarter of the year.

    “The firms’ agents are shuttling from office to office, in and outside the ports, to sped up clearing.

    “Importers and clearing agents are also in the same boat because banks are on their neck to service their loans and that is why we  are urging the Federal Government to exercise its power under Section 152 of CEMA to waive all demurrage and other charges on the affected goods.,” Ogunsanu  said.

    He lamented, for instance, that banks have been pursuing his principals for part payment, which was due last month and the demurrage is huge.

    Investigations revealed that over one million containers laden with various cargoes said to be worth over N3 trillion are currently trapped at the Lagos port complex due largely to the inability of importers to evacuate them on time because of the gridlock caused by the bad roads.

    Some sections of the road were blocked by the contractors carrying out the epileptic repair when The Nation visited the site at the weekend.

    The President, Association of Nigerian Licensed Customs Agents ( ANLCA), Prince Olayiwola Shittu, berated the government for not paying adequate attention to the road. He, however, gave kudos to NPA for the N1.8billion released so far by the agency to facilitate the work on the road.

    “The gridlock along the the port access road is not only a shame, but a national embarrassment.  It is a big threat to the nation’s economy and national security.

    “A situation in which massive volumes of imported cargo cannot be cleared or discharged has direct economic consequences. Port charges are mounting, importer credits are growing; the supply chain for both consumer goods and essential raw materials is disrupted,” Shittu said.

    He stated that although, the current management of NPA has shown its displeasure over the state of the road and released a huge amount of money for its repair, Nigeria’s image as a prefered destination has continued to get worse, just as her reputation for quick cargo clearance is sinking.

    “President Buhari needs to do something urgently about the road. We are tired of the slow space of the work. Government must not wait for the repairs on Warf road to be completed before normal port operations would be restored.

    “The road repairs and the decongestion of the port must be treated as clear national emergencies requiring the mobilisation of all known institutional resources to restore sanity in and around our ports,” Shittu said.

     

    Apapa was built with a plan:

    Apapa was built with a plan. It was designed to host commercial, residential, marine and other related business activities. Apapa has a Government Residential Area (GRA), with world-class  buildings that have manicured flowers and date palms bordering sturdy roads.

    Its Lagos Port Complex was  designed to have options for goods leaving the terminal  with freight either through roads or through the railway. To show its world class status, the former Premier of the Wester Region and the late sage of Ikenne Chief Obafemi Awolowo had his residenial house there. Hordes of heavy duty trucks were never meant to cause terror on the roads neither were it envisaged that those who promised good leadership like Awolowo would neglect the roads and deliberately kill the business activities in the area.

     

    NPA assures stakeholders:

    Few week ago, Usman and other stakeholders in the maritime industry expressed displeasure over the slow pace of work by contractors handling the Apapa Road when she visited the site.

    The two-kilometre road starts from the Lagos Port Complex,  Apapa to Ijora Bridge end of Western Avenue..

    Ms Usman directed the contractors to bring more equipment to site and increase the number of moles used to fast-track the completion of the road as specified in the terms of agreement with the Federal Government.

    Addressing reporters, after over three hours inspection on the level of work and the quality of job done so far by the contractors, she bemoaned the snail speed at which the contractors were carrying out the project.

    “The contractors have not been able to reach optimal performance. They are still within one to two per  cent completion. I have made them to understand that their level of performance is unacceptable. They need to increase the tempo of their work and deploy more efficiently. I have assured them that I am committed to seeing that relocation fund is released to them. But the level of the work as we have seen it now is not in the manner that we want. Therefore, we have made it clear to the contractors the equipment they need to complete their job on time,’’ Usman said.

    She said NPA will ensure that the two-kilometre road is completed within the period stipulated, adding that the concerns  raised would be resolved as the NPA has put in place a robust monitoring mechanism.

    Residents of the area and motorists, who expressed their delight over the visit  to the site, said there was the need for the total regeneration of the roads by the Federal Government.

    This was sequel to complaints by port users including  truck drivers and Apapa residents and its environ over the parlous state of many roads in the area and the inability of the contractors to mobilise enough equipment to site.

    Many of them expressed worries that not much has been done by the contractors to alleviate the sufferings of the people working or residing in Apapa. The slow level of the work done so far, stakeholders say, requires immediate government intervention.

     

  • $5.5b loan: Debt service cost to rise above 62%, says RenCap

    $5.5b loan: Debt service cost to rise above 62%, says RenCap

    The Federal Government’s plan to borrow $5.5 billion through Eurobonds will raise the country’s debt service to revenue cost beyond 62 per cent, Sub-Saharan Africa Economist at Renaissance Capital (RenCap) Yvonne Mhango has predicted.

    The investment and research firm analyst said the debt service/revenue stood at 29 per cent in 2014 fiscal year, even as plans to raise additional fund in the near term imply debt service costs will rise further, albeit at a slower rate.

    In a report released to investors yesterday, titled: Nigeria: Fiscal operations in Seven-month – Capital Expenditure-Light and Debt Service-heavy, she said capital releases for the 2016 budget continued into the first quarter of this year, while public debt has increased by seven percentage points of Gross Domestic Product (GDP) since 2014.

    On the debt service/revenue, she said: “Nigeria’s debt service/revenue has risen sharply in recent years to 62 per cent as at June 2017, against 29 per cent level in 2014. This largely reflects the Federal Government’s low revenue/GDP target of four per cent this year. The Federal Government plans a $5.5 billion Eurobond issuance before year-end, 2017 as part of its efforts to lower local interest rates, by reducing domestic debt/total public debt to 60 per cent, against the over 70 per cent today”.

    Mhango said budget performance in the first seven months of this year and debt developments showed there were no capital releases for the 2017 budget, because it was passed late. She said the Federal Government’s 2017 budget of N7.4 trillion was 6.2 per cent of GDP, and was signed by the executive, after being passed by the Senate in May.

    Of this, N3.1 trillion (2.5 per cent of GDP) was spent in seven months. “Expenditure in seven month was 30 per cent below the (pro-rata) target and was entirely made up of recurrent spending. There were no capital releases from the budget because of its late approval.” she said.

    Mhango said revenue came in on target, at N2.6 trillion (2.1 per cent of GDP) because of a one-off refund from the Paris Club. “When this is stripped out, there was a 20 per cent shortfall in revenue. Below-target spending – due to delayed capital releases – explains the small budget deficit for seven month of 0.8 per cent of GDP, by our estimate, as against the 1.5 per cent (pro-rata) target,” she said.

    She disclosed that the federation account revenue was one-third below target, and that three-quarters of the FGN’s planned revenue for this year is expected to come from the Federation Account, of which two-thirds will stem from oil revenue.