The Nation Newspaper

Tag: direct investment

  • Microfinance Bank: Untapped window of foreign direct investment

    Nigeria in the last 18 months has battled the sharp drop in foreign exchange inflow following the fall in crude oil price and the unhealthy general global economic outlook.

    The development among other things in recent times forced the Central Bank of Nigeria (CBN), to adopt some monetary policy measures to safeguard the nation’s foreign reserves and remain economically viable within the committee of nations’.

    Some of the proactive measures include a stop in accessing foreign exchange from the official market for the importation of about 40 items, among other things.

    JP Morgan, an international economic rating agency also raised its concerns about the nation’s foreign exchange liquidity profile among other things and threatened to delist Nigeria bonds from the emerging market bourse.

    Although the CBN has reassured Nigerians on the nation’s strong economic fundamentals, Mr Alex Enyinnah, Vice-President, African Microfinance Transparency (ATM), said the concerns were unfortunate.

    The concerns raised about Nigeria’s foreign exchange liquidity profile, Enyinnah argued, would not have arisen if attention was paid at the other potent sources of earning foreign exchange outside crude oil.

    In a fresh voice towards diversification, Enyinnah said that Microfinance banks and institutions remains one of the newest and potent vehicles for attracting added new foreign inflows.

    According to Enyinnah, who is also the Director of Programmes, at Grooming People for Better Livelihood Centre, a microfinance institution, Nigerians have failed to effectively buy into the global trend of empowering micro-businesses, youths and women.

    “Our late entry in the multi-dollar global business of empowering micro-businesses, entrepreneurs’, poor representation and interaction at international microfinance banks and institutions meetings robbed us of huge foreign inflows.

    “We initiated the policy in microfinance banking some years back but the operators refused to take advantage of the international convergence of financers to attract foreign funds through direct equity participation, loans and grants for microfinance banks and institutions,” Enyinnah said.

    The ATM Vice-President also insisted that Nigeria’s huge population of 170 million leveraged the nation in attracting investments targeting the empowerment of the rural poor, women and micro and small entrepreneurs’.

    While insisting that microfinance banks and institutions can attract more than 300 million dollars, geared toward poverty alleviation, he also floated a caveat that would make global financers to cavort and shift attention to Nigeria.

    According to the Grooming Centre director of operations, “Nigeria will only benefit from the pool of global funds, if operating microfinance banks and institutions internalise international micro-banking best practices and develop its micro-banking human capital.”

    Expanding the submissions of Enyinnayah, Grooming Chief Executive Officer, Mr Gowin Nwabunka, said microfinance banks in Nigeria must develop peculiar strategies of meeting the needs of micro and small businesses.

    The strategies, as suggested by Nwabunka, must be driven by a vision and mission that understands and appreciates micro and small businesses in Nigeria.

    According to him, the recent growth of microfinance banks and institutions operations in Nigeria, especially in the urban centers, makes it imperative for operators to define standards and establish code of operational conduct or ethical standards.

    Nwabunka insisted that contrary to other opinions, transparency and shared confidence between the masses and microfinance banks provides major link to economic growth, food security, youths and women empowerment.

    The other gains of microfinance banks in an emerging economy like Nigeria, he said, are robust health provisions, education and general well-being.

    But the unresolved issues surrounding the poor management of most microfinance banks and institutions in Nigeria, Nwabunka also said, challenged Grooming Centre into bridging the gap through capacity building and strategic operational development.

    To him, “our added mission as a microfinance institution is to prepare and reposition interested  microfinance banks to attract the attention international finance organisations.’’

    • Egbunike writes for News Agency of Nigeria (NAN)

     

     

     

  • Parks of jobs

    Parks of jobs

    In line with the local content policy, the Nigerian Content Development Monitoring Board (NCDMB) plans to establish industrial oil and gas parks in Niger Delta, raising hopes of jobs for skilled and unskilled workers, writes AKINOLA AJIBADE.

    Next year, Nigeria will join the league of countries that own oil and gas parks to manufacture components of equipment used in the sector.

    The United States (US), China and United Arab Emirates (UAE),  among others, have built such parks to fast-track the growth of the industrial sector of their economies.

    According to the Head, Strategy and Policy Development, Nigerian Content Development Monitoring Board (NCDMB), Abdulmalik Halilu,  no fewer than 50,000 jobs would be created from the initiative.

    Skilled,  unskilled and  semi-skilled  workers in constructing the factories are expected to benefit. Skilled and unskilled professionals in the build environmment such as tilers, bricklayers, carpenters, plumbers, masons and others would be employed.

    Also to be hired are supervisors, factory hands, electricians, messengers. In the administration department, human resourse professionals, accountants, clerks, desk top officers, clients’ executives, marketers and others would also be employed.

    According to experts, the multiplier effects of this initiative will spiral on the economy as domesticating the production of oil and gas equipment would save further capital flight and boost the gross domestic product (GDP).

    Halilu said the initiative would open new vistas for skilled workers such as  mechnical engineers, electrical/electronics engineers, geologists and others.

    According to him, the  unskilled workers are welders, drivers, and office assitants. While the engineers and geologists would would supervise the operations of the parks, drivers would handle logistics activities at the parks. They would be saddled with the responsibilites of transporting the manufactured equipment to the oil companies that  place order for them.

    The Federal Government plans to build the parks in  Ondo, Edo, Imo, Delta, Abia, Rivers, Cross River, Akwa Ibom and Bayelsa states.

    He said  oil and gas industrial parks is an initiative spearheaded by the board to boost local content policy, enhance cost and efficiency of local supply chain without compromisng the standards.

    It is also designed to attract social and infrastructural facilities to oil producing communities, deepen research, innovation and reduce capital flight by making operators patronise locally- made industrial equipment.

    Others are technology acquisition, domicilisation of capacity training and creation of employment opportunities.

    He said oil and gas parks would provide employment opportunities for people in the nine states that are designated for the project.

    He said: ‘’The parks would be spread across the nine oil-producing states. Each state will provide 3,000 direct and indirect jobs. Based on this, we are expecting 27,000 jobs from the nine states. More jobs are coming. Skilled, semi-skilled and unskilled workers would be employed in the parks. There would be youth employment, and engagement of community entrepreneurs in oil and gas value chain. Also, wealth distribution arising from park activities will restore peace in the oil producing communities.”

    He said the parks would help oil and gas operators access equipment, increase the sector’s contribution to the GDP and boost the government’s industrialisation policy.

    The first phase of the project entails building of primary infrastructure such as shop floors, warehouse and road network before the first quarter of next year.

    “The infrastructure would support manufacturing of components of equipment the operators needed to stimulate growth. The moment infrastructure is on ground, it would easier for the parks to take-off, and create jobs for people. “There would be youth employment, engagement of community entrepreneurs in oil and gas value chain and wealth distribution. When this happens, there would be peace in the oil producing areas,’’ he added.

    Last month, the Ministry of Petroleum Resources unveiled plans to establish oil and gas industrial parks in Niger Delta.

    Petroleum Minister Mrs. Diezani Alison-Madueke said $100million would be invested in the project. Construction work would begin before December this year.  The minister said the parks would provide 50,000 jobs, increase productivity, and reduce dependence on importation of equipment used by oil producing and services companies in the region.

    Also, the Executive Director, NCDMB, Ernest Nwapa said job creations is one of the major objectives of the parks. Nwapa said the parks will create jobs for Nigerians, apart from providing inputs to harness hydrocarbon resources in the country. He said more jobs would be created through the local content policy, adding that the Board has initiated projects to build local capacity by ensuring that people get chance to demonstrate their skills for growth.

    He said the agency has flagged off projects such as construction of shop floors, pipemills and others to boost local participation in the industry, adding that they would generate employment opportunities.

    Nwakpa said: “Localisation of equipment used in the oil and gas industry will create employment opportunities and reduce capital flight in the country. Given the initiatives in the industry, the prospects of bringing more Nigerians into employment is high. One of the mandates given to the Board is to promote local initiatives and make the industry competitive.’’

    He said the parks would attract foreign Direct Investment (FDI) to oil producing states and facilitate new business opportunities. This, he said, would create job’ opportunities for the people living in those states.

    The Chief Executive Officer, Frontier Nigeria Limited, Mr Femi Dada said the more indigenous operators participate in the industry, the greater the employment opportunities that would open to Nigerians. Dada said creation of an enabling environment would help in developing the capacity of local operators.

    He noted that there are a lot of opportunities to be tapped in the industry, adding that the country has vast oil and gas wealth that could create jobs and grow the economy if properly harnessed. He said the government’s decision to encourage local participation in the sector is good and capable of opening up employment avenues for the growing army of the jobless.

    He urged companies to invest in gas plant to improve power supply, and economic activities.

     

  • ‘Nigeria remains preferred investment hub’

    Nigeria has emerged as a strong destination for investments in telecoms and retail mainly due to the large population which accounts for 20 per cent of sub-Saharan Africa’s. This has also made the country a key market to multinationals, the Africa Global Business Forum (AGBF) report has said.

    The reportshowed  that Nigeria’s foreign direct investment (FDI) has exceeded $6billion mainly in the energy sector, adding that owing to the investment in oil and gas, the economy will remain robust but will not be sufficient for a sizeable improvement in living standard.

    According to the report which was conducted ahead of the AGB forum scheduled for October in Dubai, the Dubai Chamber of Commerce and Industry, in collaboration with the Economist Intelligence Unit (EIU), said it developed this detail to highlight economic and investment potential in sub-Saharan Africa.

    “The growth is expected to continue until 2017 owing to the investment in the oil and gas sector. Non-oil growth will be robust, led by telecoms, trade and infrastructure,” AGBF noted.

    The report stated further that aside Nigeria, Ghana offers a relatively business-friendly environment, adding however that poor infrastructure remains a major obstacle. “For retailers, Ghana has the potential to become the gateway to West Africa’s 250million consumers,” it stated.

    According to the study, Ghana’s market opportunities are moderate while mining communities and tourists in coastal towns and the much anticipated growth in population – expected to double in 20 years – will contribute to the development of the retail sector.

    “Ghana’s GDP growth will average 7.5 per cent annually until 2017, driven by the expansion of gold mines and burgeoning oil and gas sector,” it stated.

    Also, the study stated that tourism in Tanzania is a vital source of revenue and the economy remains dependent on agriculture and mining.

    Real GDP growth is expected to average 7.1 per cent up to 2017, assuming tourism, agriculture, trade and investment pick up while growth in construction will be robust, led by investments in the gas industry and infrastructure projects.

    FDI exceeds $2billion and is expected to increase by 20 per cent per year up to 2017. Mining is the largest source of FDI followed by telecoms and construction. Agriculture has also been targeted by the government as a source of future FDI.

    With strong development of Kenya’s economy, the country has developed into a market-led hub for East Africa’s telecoms, retail and tourism sectors, AGBF study showed.

    But the country’s growth is expected to pick up to 5.1 per cent a year on average as banking, telecoms and the middle class continue to develop with prices of food and oil, and drought threat remain key risks.

  • Nigeria gets N8.5 trillion foreign direct investment

    The Federal Government said yesterday that N8.5 trillion worth of Foreign Direct Investments (FDI) have been attracted to the country.

    The investments are to be spread over five years, the Minister of Trade and Investment, Dr Olusegun Aganga, announced yesterday in Abuja.

    He spoke to State House reporters with Environment Minister Hajia Hadiza Mailafia and Presidential spokesman, Dr Reuben Abati, after yesterday’s Federal Executive Council (FEC) meeting. Aganga said the United Nations Conference on Trade and Development (UNCTAD) has put Nigeria’s foreign direct investment for 2012 at $8.9billion.

    Stressing that Nigeria has become the most sought after investment destination in Africa, Aganga said the country currently exports 177 commodities to 103 countries, with the United States, Brazil, Netherlands, India and France topping the list.

    The products, he said, included oil and solid minerals, raw hide, cocoa and by-products, sesame and cashew nuts, noting Lagos, Kano, Ondo, Ogun and Oyo as the top five exporting states.

    Assuring that his ministry was doing more to attract more investments and increase export from Nigeria, he said that the recorded trade in Africa puts Algeria, South Africa, Cote d’Ivoire and Ghana as Nigeria’s biggest trading partners.

    Aganga, who pointed out that trade accounts for 18.1 per cent of Nigeria’s GDP, said that over 3000 exporters have been trained in areas of labelling and packaging.

    But he maintained that Nigeria needs a strong industrial base since it is the best approach developed nations adopted to transform their economies and not by just exporting mere raw materials.

    According to him, with the increasing investments, about 2.5 million direct and indirect jobs have been created in the textile and cement industries since he assumed office, while trade units have been created in Nigeria’s foreign missions.

    Aganga said: “Our foreign investment drive is bringing results with foreign investment commitments hitting 8.5 trillion naira and this is going to be for the next five years.”

    “According to the United Nations Conference on Trade and Development UNCTAD, we attracted 8.9 billion dollars worth of foreign investments last year, the largest in Africa and this also makes us one of the best investment destinations in the world.

    “We now have an integrated trade and investment policy which was lacking for a long time.”

    President Goodluck Jonathan yesterday also despatched a special committee headed by the Director General, Bureau for Public Procurement (BPP) to assess the progress of erosion control contracts in the Southeast.

    Other members of the team are representatives at the level of directors from the Ministries of Works, Land, Environment, Water Resources, the Office of the SGF and the Ecological Office.

    Speaking at the briefing, the Minister of Environment, Hadiza Malafia, said: “One other issue that came out of Council today was the concern expressed by Mr. President about erosion devastation in the Southeast.

    “Mr. President has directed that the committee led by the Director General of Bureau of Public Procurement should proceed immediately to visit erosion sites in the Southeast with a view to ascertaining the seriousness of the contractors.

    “This team of experts from the various departments of government will assess the state of execution and completion of the various projects, look at ways of better management of the projects as well as advise government on the prioritisation of the projects.”

    She went on: “One point that was made very clear by Mr. President is that unserious contractors involved in any of these projects will have their projects determined and may be prosecuted if they are found culpable.

    “All of these again is in ensuring that we are better prepared ahead of the rainy season and that proactive steps are taken to ensure that needless hardship is avoided”.

    The Special Adviser to the President on Media and Publicity, Dr. Reuben Abati, who moderated the briefing of the Council meeting, which focused on the achievements and challenges of the Ministries of Trade and Investment and Environment in the last one year in line with the performance contracts signed with President Jonathan, said the President will on Monday begin the centenary celebration at the Banquet Hall of the Presidential Villa, Abuja.

    The celebration, he said, would focus on the unity, strength and achievements of the country in the last century.