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Tag: diversify

  • NNPC chief urges firms to diversify

    The Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru, has called on stakeholders in the oil and gas industry to explore other areas to boost economic diversification.

    Baru spoke at the 2018 Nigerian Annual International Conference and Exhibition (NAICE) of the Society of Petroleum Engineers (SPE) Nigeria Council titled: Diversification of the Nigerian Economy:  The Oil and Gas Industry as an Enabler held in Lagos. He identified the reliance on oil and gas as responsible for the economic recession experienced in the country recently.

    The NNPC chief also urged the stakeholders to look for ways to create alternative funding for exploration activities in Nigeria.

    He said: “This obvious lack of proactive action unfortunately exposed the country to economic shock occasioned by the global economic crises that culminated in the recession experienced recently, adding the theme was in line with the vision of the present administration of energising the national economy through robust sectoral development.”

    He said with oil reserves of about 37 billion barrels and 199 trillion cubic feet of gas reserves, the country was well positioned to generate resources and accelerate developments.

    According to him, once this is achieved, Nigeria should be self-sufficient in providing general services, agriculture and manufacturing, among others.

    Baru stated that the reform by the NNPC has centered on third party financing for Joint Venture (JV) operations, hence there is need to look for ways to design an alternative funding for exploration activities in Nigeria.

    “I extend NNPC’s gratitude to our local banks, international lenders and Schlumberger representing the local service providers, for their continued faith in Nigeria and their support in providing funding. It is quite an exciting time ahead in the Nigerian oil and gas industry. The industry is financing both the development and infrastructure through alternative funding means.

    “The case in point is the Ajaokuta-Kaduna-Kano (AKK) pipeline that is being done under contractor financing with about $3billion. NNPC appreciates the cooperation of its partners and government financiers to move the industry forward. Our goal remains value delivery for all.

    “So far, the financing is centred on production, I will like to see the industry to concentrate and develop innovative ways on how to finance exploration. This, I believe, will be the big take-away from this workshop as it appears this is an area that is high and tough. Can we create an industry pool that will be funding for exploration? This is a worthy idea that we should look into. I hope that deliberations in this conference will dwell on other areas that I might have left out today.

    “We required an incremental annual capital funding of minimum of $7million  to cover the gap and to ensure growth, it was also clear to us that we cannot leave funding gap without looking out giving the outlook of government expenditures and strategic focus.”

    The Speaker, House of Representatives, Mr. Yakubu Dogara, represented by Sejus Ogun, said the country needed to pursue and develop an enabling environment that would promote transparency in the oil and gas sector.

    Dogara said the Legislature had given tacit support to ensure that the industry was run in a more transparent way, adding that the House of Representatives had demonstrated the support through accelerated passage of the Petroleum Industry Governance Bill (PIGB) now waiting for presidential accent. He also assured that the remaining three other bills would receive the desired attention as the legislators were concerned and willing to provide the investment climate to drive the industry.

    The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, represented by Mr Johnson Awoyemi, said the industry required a robust legislation that would help in the ongoing Federal Government transformation.

    Kachikwu  said the Federal Executive Council (FEC) had demonstrated commitment towards strengthening the industry by giving approval to the oil and gas policies. He urged the conference to come up with suggestions and strategies that would engender transparency, reduce contracting cycle issues, bring about cost reductions and accelerate development across the value chain.

    The Chairman, SPE Nigeria Council, Mr Chikezie Nwosu, called for immediate action to leverage the opportunities presented by the industry to develop other sectors. Nwosu regretted that the country had moved slowly in the quest to take advantage of the sector to fully transform the economy.

    He said government should not lose focus of the opportunities in the National Gas Policy, “as gas is critical to support such agenda.”

  • ‘Why we want to diversify helicopter business’

    A further boost for the helicopter segment of the aviation industry was last week recorded in Lagos. A new kid on the bloc,  Tropical Arctic Logistics Limited (TAL), made a daring entry into the segment, promising to revolutionalise the business by playing in the off-shore logistics section. With this, the firm hopes to diversify the business and and revolutionise the logistic value chain.

    Part of the strategies to achieve its objective, according to the firm, is to put in place a template that combines effective equipment utilisation and deployment of indigenous expertise  to have a competitive edge.

    TAL President and Chief Executive Officer, Emperor Chris Baywood Ibe, disclosed this last week in an interview with The Nation.

    According to Ibe, the firm is set to invest over $150 million on  acquisiction of six AW139 Helicopters to enable it change the narratives of the business.

    He said though the attrition rate of helicopter operators is not high in Nigeria, many operators are yet to understand the trick of the trade.

    According to Ibe, TAL carried out a forensic study of why other operators were not doing well in the business before it ventured into the hugely capital intensive sector.

    He said the firm has invested hugely in  human capital by attracting the best hands in the sector to drive the brand.

    The growing interest in the offshore  segment, he said, is the motivation behind the huge investment, especially given the limited number of operators in the industry that is high capital intensive and technically demanding.

    He said TAL has acquired the equipment: AW139, which it considered appropriate for the clients it looked forward to offer services other than in the oil and gas sector. They include excutive spot charter, banking industry, medical emergency evacuation and allied services as well as executive private aircraft charter.

    He spoke of plans by TAL to commence scheduled domestic services to revolutionise the operational landscape.

    Ibe said his desire to venture into domestic schedule operations was propelled by the lack of capacity of existing operators, which he accused of using the wrong business model.

    He queried why  operators running domestic flights should utilise bigger aircraft instead of Embraear business jets, adding that the unsuitability of equipment is responsible for the collapse of many domestic carriers.

    He said: “We did not rush into this business; we have done our business feasibility studies. In the last five years, we have carried out a study on why many airlines have failed and from the post mortem, we can say, the use of equipment, in terms of aircraft size and type is key.

    “Why should a domestic operator use a Boeing 737 aircraft for a fifty minutes flight? This does not make any commercial sense, operators should consider using Embaear business jets, for its convenience, fuel economy and less crew utlisation. This is the reason we want to venture into domestic scheduled services.”

    Speaking further, he said: “We are considering starting scheduled service operations. But we are going to use the right aircraft types and not B737 that airlines are using. It makes no sense operating B737 for 50 minute flight.”

    Ibe said the firm will save huge money by ensuring that it carries out in-house maintenance of its aircraft with assistance from its technical partners.

    He said the firm paid huge premium on safety and security because of its desire to venture into offshore helicopter logistic operations.

    According to him,  the company’s operational safety policy for  onshore and offshore operations is one of the key attributes which will achieve tremendous resonance among stakeholders.

    “This is one of the reasons why Tropical Arctic Logistics is poised to achieve incomparable heights in customer service standards,” he added.

    Ibe noted that Tropical Arctic Logistics has benefitted tremendously from the unrivalled knowledge and experience of its human capital.

    TAL, he said,  will carry out operations in accordance with the Nigerian Content Monitoring Development Board (NCMDB) policy to develop local capacity. “Indeed, apart from the technical support from our off-shore partners, Rose Aviation, based in the Republic of Ireland, TAL is a company by Nigerians and for Nigerians with international best practices.

    ”In line with our major focus on safety and efficiency, Tropical Arctic Logistics Limited  crew are certified Federal Aviation Administration (FAA) European Aviation Safety Agency ( EASA ) trained personnel in alignment with the industry and country of operation regulatory requirements,”he said.

    The firm, Ibe said, will   continue to  evaluate the business dynamics and monitor the relevant sectoral indices in order to achieve optimal growth and profitability.

    “However, we wish to assure all stakeholders that this is just the beginning of even better and greater accomplishments for the company.  The management and staff are passionately committed to implementing the transformational agenda as envisioned by the board of directors in achieving unparalleled safety records.

    “We have, therefore, positioned our company for leadership in this sector, an unparalleled feat for a company founded just five years ago. We are poised to pursue the local content policy by ensuring we carry out in house maintenance of our equipment.

    “This is achievable because our aircraft pilots and engineers have the competence to achieve this feat. We have learnt from the mistakes of other operators, and have carried out a comprehensive business plan  to guide us. We will take relevant steps to mitigate such trend,” he said.

    On diversifying into offshore helicopter operations, Ibe said: “We have looked around and could see that the future of this business is in the offshore segment of oil and gas. Though, it is technically driven, we are convinced we have the right skills set to drive the business whether it is deep water oil pipelines, marine vessels and allied services.”

  • Diversify the economy now, says FUNAAB VC

    Diversify the economy now, says FUNAAB VC

    The Vice-Chancellor, Federal University of Agriculture, Abeokuta (FUNAAB), Ogun State, Prof Felix Salako, has joined the call on Federal Government  to move away from  oil resources and embrace agriculture, as a sustainable route to national development.

    The Vice-Chancellor stated this while declaring open the facilitation and communication skills training programme that was organised in Abeokuta, Ogun State capital by the Cassava, Adding Value for Africa II (CAVA II) Nigeria Project, for Agricultural Development Programmes’ (ADPs) extension officers and procurement staff of large-scale cassava producers.

    Salako, observed that “We are having new generation of extension officers. All of you sitting here are young, seeing your faces; I think we are meeting new generation of extension officers. And I hope you are really going to be the catalyst that would push the nation forward in terms of using agriculture as an alternative to crude oil export. It is dawning on everybody now – whether we like it or not – we are running into trouble with oil. What may even make oil to be useless in the fact that people are already thinking of alternative source of energy, even for running cars. The training could not have come at a better time than now”.

    Salako added that “We are ready to partner to strengthen the skills of workers; extension agents in particular, using participatory and adult-learning methodology, to enhance timely and sustained supply of cassava root by small medium farmers. We are confident that the completion of course will make you better and help in building your capacity to aid effective facilitation and communication with farmers. As extension officers, you need to step up your roles and duties in contributing to the development of our nation. You need to develop good relationship with farmers and subsequently, use these skills to connect yourself. And one thing that has come to fore these days is that farmers did not trust agriculturists anymore. You must be ready to convince the farmer, even to listen to you”.

    “So, you need a lot of effort to be able to convince farmers about innovation these days and this is where I think you have Herculean tasks, being agricultural extension agents. I want to tell you that the information and feedbacks we get from farmers are not that good. The Vice-Chancellor noted that it was crucial to put together the training, aimed at enhancing facilitation and communication skills of participants in having better knowledge of life-changing management, saying that this approach of engaging both extension agents of the state ADPs and procurement executives of cassava-processing factories would definitely achieve the desired results.

    The Country Manager of CAVA II (Nigeria) and the Deputy Vice-Chancellor (Development) Designate of FUNAAB, Professor Lateeef Sanni, recalled that the issue of inconsistency in the supply of raw materials was a major and critical point for the survival of large scale industries, noting that sourcing for raw materials of between 250 and 450 tonnes of cassava required quite a lot of work. “We are aware that you have different locations where you source for raw material but at present, there are some issues we have itemised in the last two years – right quality, right quantity and right time of supply – which should be urgently addressed”, he stated.

    “The major problem is that the farmers themselves have informed us that some of the extension officers or procurement officers are delaying their payments, which is attitudinal and that’s why we felt its better we bring in a consultant that will interact with you on facilitation, communication and sustainable engagement”, he disclosed. Meanwhile, to further boost agricultural production, CASSAVA 2017TECH Conference was earlier hosted by CAVA II (Nigeria), in conjunction with FUNAAB and other development partners, to bring together actors involved in cassava processing-equipment manufacturers, fabricators, financiers, scientists and engineers in West and Central African countries, to discuss latest development in the cassava industry.

  • Govt urged to diversify into forest conservation

    The Nigeria Conservation Foundation (NCF) has called on the Federal Government to consider the exploration of forest conservation.

    The body urged the government to bridge the legal framework gap in assigning economic value to individual species of the ecosystem, having witnessed severe exploitation over the last 60 years without replanting.

    President, NCF Board of Trustees, Izoma Asiodu, made this call  at the 14th Memorial Lecture in honour of Chief S. L. Edu, in Lagos.

    The lecture had as theme: “Economic valuation of Nigeria’s forest.”

    According to Asiodu, to mitigate the  effect of dwindling oil price, Nigeria could diversify the economy by looking in the direction of agriculture and solid minerals as enable alternative income.

    And with the abundance of forests, Asiodu said it is the responsibility of the NCF to guide decision makers on the economic valuation of such forests to stimulate the necessary investments for its protection and restoration, and by extension, preserving the ecosystem.

    The gradual extinction of forestry, he added, leaves a damaging impact both economically and in terms of human lives.

    The guest lecturer, Labode Popoola, a Professor of Forest Economics, said conservation of forestry has multifarious uses, ranging from environmental functions to economic, socio-cultural services, scenic and landscape functions. “There are wide varieties of other goods and services produced in the forest and a variety of other tree configurations on farms ranging from livestock fodder and quality water, to recreational, aesthetic and environmental benefits,” he said.

    Popoola noted that the rate of deforestation is about 3.5 per cent yearly, equivalent to a loss of 350,000 hectares of forest land. He lamented that some state governments encroach on protected area status of forest estates without regard for the environment and the laws establishing such estates.

    “The state Forestry Departments have been unable to curtail the spate of requests to establish large-scale oil palm and other plantations in forest estates. The unfortunate impression that has thus been created is that the forest estate exists as a land bank for other sectors as demands continue to rise nationwide.

    “Nigerian forests and forestry are thus at crossroads in spite of the huge potential for contribution to the economy, social and environmental sustainability,” he said.

  • Why we must diversify the economy

    SIR: The need for diversification of the nation’s economy has never been more imperative than now, especially with the dwindling oil prices in the international market. Unless urgent steps are taken to diversify the nation’s economy, there is a great economic danger ahead of us.

    Just about few months ago, many state governments were unable to pay workers salaries and meet other recurrent expenditure due to a sharp fall in oil revenue. A situation where states had to borrow to pay salaries is the worst case scenario of how bad an economy can be.

    As a way of preventing the re-occurrence of the embarrassing situation above, I propose the following ways through which the country’s economy can be diversified.

    Agriculture if given the needed attention is capable of creating about 70 per cent of jobs for the unemployed youth. Agriculture being a sector that requires a large labour force can help create employment for the large unemployed able-bodied men and women in the country.

    Government partnership with private investors in agriculture which stands at about N1.23 billion now can grow four-fold to N4.9 billion between this year and 2019 if President Muhammadu Buhari’s policies do not threaten the investments already in the sector. Many foreign and local investors will invest more in this sector of the economy if the policies are right.

    The entertainment sector is also a very viable sector for diversification of our mono-economy. The Nollywood for instance employs a large chunk of unemployed Nigerians and also generates significant revenue for the government. Therefore, to fully utilize the potentials of this sector, there is need for government support through creation of the necessary enabling environment for the industry and players in the industry to thrive. The government must make and enforce laws to eradicate or reduce high level of piracy in this sector. This will help maximize the benefits in this sector to the country vis-à-vis our Gross Domestic Product (GDP).

    The manufacturing sector is another very important sector that can rake in a lot of revenue for the government and provide jobs for the teeming unemployed youths in the country. Instead of depending on oil whose price is not determined by the country but the international market, it will be better we look inward into the manufacturing sector to fully maximize the benefits of that sector of our economy. There are however several challenges confronting this important sector of the economy ranging from multiple charges by government agencies to sourcing for foreign exchange.

    Granting tax holidays and waivers to infant industries and provision of good roads network, electricity, healthcare facilities etc will help boost this sector and grow the nation’s economy.

    According to the United Nations World Tourism Organization (UNWTO), “tourism is one of the fastest growing economic sectors in the world.” In 2013, International Tourism generated $1.4 trillion in export earnings. The total tourism receipt in Africa for the year is estimated at $34 billion. A World Bank report shows that Africa’s tourism could create 3.8 million jobs. In 2012, tourism contributed three per cent to Nigeria’s GDPand 2.8 per cent of total employment.

    Nigeria has what it takes to succeed if it makes intentional efforts to prepare the tourism sector to generate more earnings and create more jobs. The tourism industry at present generates annual revenue of about N80 billion. The Nigerian Tourism Development Corporation (NTDC) needs to do more to develop the tourism sector.

    The less we depend on oil, the better for us as a nation. A situation where about 90 per cent of the country’s revenue comes from the oil portends great danger for the economy. The diversification option offers a way out.

     

    • Umoru Abdulkadir Ileonikhena

    Iju-Ishaga, Lagos.

  • Buhari urged to diversify economy, tackle corruption

    Buhari urged to diversify economy, tackle corruption

    The Diocese of Badagry, Church of Nigeria (Anglican Communion) has urged President Muhammadu Buhari to diversify the economy to reduce dependence on oil.

    It said the new administration must tackle corruption ‘as a matter of urgency’, urging the National Assembly to give priority to a speedy passage of the Petroleum Industry Bill (PIB) into law ‘to help us solve various issues emanating from the petroleum sector’.

    In a communiqué issued at the second session of its fourth synod held at the Cathedral Church of St. Thomas, Badagry and signed by the Lord Bishop, Rev. Babatunde Adeyemi; Chancellor, Justice S.O Hunponu-Wusu and Lay Secretary Mrs. O. A. Akinliba, the synod observed that “the state of the economy is very poor and recommended a diversification to other sources of revenue such as agriculture and solid minerals. Over-dependence on crude oil should be discouraged as any fall in price affects the economy”.

    The church said private companies should be encouraged to build additional refineries while existing ones should be privatised to help fight fuel scarcity.

    On electricity, the synod said: “Power generation should be improved on by harnessing other sources such as solar, coal, wind, etc. Prepaid meters should be installed in homes to ensure that users pay only for what they consume”.

  • Jonathan to Bayelsa: diversify your economy

    Jonathan to Bayelsa: diversify your economy

    President Goodluck Jonathan has urged the Bayelsa State government to diversify its economy, instead of depending on oil and gas alone.

    The President, who was represented by Vice President Namadi Sambo spoke at the first Bayelsa State Investment Forum at the Banquet Hall, Yenagoa.

    The forum with the theme “Unlocking Bayelsa’s economic potential: Opportunities and Challenges”, attracted investors from Europe, Asia, Africa.

    Also in attendance were the Minister of Petroleum Resources, Diezani Alison-Madueke; Chairman, Nigerian Railway Corporation, Alhaji Bamanga Tukur; Minister of Trade and Investment, Olusegun Aganga and others.

    Jonathan said: “Bayelsa must diversify its economic base. It should not focus on oil wealth. It must pay attention to agriculture, coastal landscape for tourism, maritime industry and new housing estates.

    “The desire by the government for development will be supported by the Federal Government.”

    To realise the economic potential, he said there was a need for the people to place unity above partisanship.

    He insisted that peace was required to ensure the state’s development, adding that the Federal Government was determined to maintain peaceful co-existence in the country.

    “Bayelsa should place unity above partisanship and internal division in its planning and development,” he said.

    The President recommended agriculture as a sector waiting for development in the state.

    He said: “The government itself should place the business of agriculture and education on high priority; focus should also be given to infrastructure; these are the major keys for development.

    “I will also like to urge the government to redouble efforts in securing peace and security in Bayelsa and in the Niger Delta.”

    Governor Seriake Dickson said the state would promote investment in the state.

    He said the forum was organised to present the opportunities available to the world.

    “Bayelsa is a virgin bride waiting for a groom; our land and sea are very ripe for business.

    “I welcome all investors and I must assure you that we have a conducive environment for a growing economy.”

    The Chief Judge, Justice Kate Abiri, said quick dispensation of justice would provide an enabling environment for investment.

    She said: “Bayelsa will not allow any corrupt investors in the state. We will do all we can to allow justice and your business must be in line with the much desired economic growth of the state government.”