The Nation Newspaper

Tag: Economy

  • MPC: how to steady economy amid falling oil prices

    Increased weaknesses in the global financial markets, falling oil prices, continuous capital flow reversal and moderate currency depreciations, especially in the emerging markets where Nigeria plays were the thrust of deliberations at the just-concluded Monetary Policy Committee (MPC) meeting. COLLINS NWEZE writes on the committee’s appraisal of developments in the domestic financial markets in the face of declining oil prices.

    Nigeria’s worst economic storm seems over. That was in January 2016 when crude oil price touched $25 per barrel (pb), with little hope that it would rebound.

    More than 95 per cent of Nigeria’s foreign exchange (forex) earnings come from crude oil exports. Nearly three years after, the prices have risen significantly, touching $60 per barrel  last Friday.

    But Friday’s figure was far below the over $80 per barrel recorded about three months ago and that explains the worry at last week’s Central Bank of Nigeria (CBN)-led Monetary Policy Committee (MPC) meeting held in Abuja.

    Analysts said crude oil market volatility has soared in the second half of 2018, with prices touching a four year high dropping to current levels.

    Analysts were calling for $100 oil but now seem to think prices will drop to as low as $40 per barrel.  While inventory build-ups and oil traders continue to impact prices in short term, it is the Kingdom of Saudi Arabia actions in December, a potential hike in United States interest rates and a rumbling trade war between China and the US that will really move the market.

    The MPC members said volatility in crude oil prices showed elevated financial fragilities and policy uncertainties, the gradual erosion of rule-based multilateral trading system, tighter financial conditions with latent disruptive portfolio adjustments, increased capital flow reversals with potentials for heightened exchange rate depreciation and some volatility, fiscal fragilities and increased debt burden, geo-political tensions and increasingly depressed aggregate demand in some countries.

    These factors will continue to shape developments for the rest of 2018 and into 2019.

    The MPC also noted that monetary policy in most advanced economies, particularly the US, continued on a path of normalisation in view of strong wage growth and declining unemployment.

    The committee noted the positive outlook for output growth, evidenced by the Manufacturing and Non-manufacturing Purchasing Managers Indexes (PMI), which stood at 56.8 and 57 index points, respectively, in October

    2018, indicating expansion for the 19th and 18th consecutive months.

    “This was attributed to the stability in the foreign exchange market, implementation of the 2018 capital budget and the on-going intervention of the Central Bank of Nigeria (CBN) in the real sector of the economy. However, the recent incidence of flooding across the country and the impact of herdsmen attack on farming communities could affect output growth for the rest of the year,” it said.

    Overall, the Committee believes that, even though output recovery remains fragile, the effective implementation of the 2018 capital budget, relative improvements in power supply, progress with counter-insurgency in the North- East and sustained intervention by the CBN in the real sector, will improve the investment climate and reduce unemployment. Consequently, the MPC reaffirmed its support for all initiatives designed to stimulate domestic output growth.

    The Overall Outlook and Risks

    Forecasts of key macroeconomic variables indicate a positive outlook for the economy in fourth quarter of 2018. The Committee expects that the effective implementation of the Economic Recovery and Growth Plan (ERGP) and the

    2018 budget, improvements in the security challenges, enhanced flow of credit to the real sector and stability in the foreign exchange market will redirect the economy on a path of inclusive and sustainable growth.

    Besides, increased production in the oil and the non-oil sectors are also expected to drive output growth in the medium term. The Committee, however, acknowledged the downside risks to this outlook to include: reduced portfolio inflows, weak of fiscal buffers, low domestic credit, and sluggish aggregate demand.

    “The inflation outlook suggests continued but moderate inflationary pressure to the end of 2018, based largely on increased consumer spending for the Christmas festivities, election-related expenditure and increased pace of implementation of the 2018 Federal government budget. Improvements in the security, increased harvests as well as a stable exchange rate are expected to moderate the rise in inflation”.

    Overall, the outlook for the economy remains positive with a growth projection of 1.75 per cent in 2018.

    The Committee assessed the macroeconomic environment in 2018 and noted the modest stability thus far achieved in domestic prices, output growth and the financial system. The Committee noted that the economy was on the right path but some key sectors continued to experience significant challenges. The MPC, however, expressed concern about the tepid growth expectations and growing uncertainty in the global financial markets arising from the poor reception of the Brexit deal by British politicians, continuing trade war between the US and her major trading partners, as well as the commencement of US sanctions on Iran.

    The Committee believed that although the domestic economy was recovering modestly from recession, however, the recovery was tepid and efforts should be stepped up to strengthen aggregate output and demand.

    In this regard, the Committee urged the CBN to deepen and broaden access  to finance to high employment elastic sectors with particular emphasis on small and medium scale enterprises.

     

    Financial stability indicators

    The MPC noted the improvements in the financial stability indicators, including non-performing loans, capital adequacy and liquidity ratios of the Deposit Money Banks (DMBs).

    It urged the CBN to sustain its surveillance over the Banking industry by taking prompt corrective measures to further improve stability in the system. The committee also called on the fiscal authorities to build significant buffers to strengthen the efficacy of monetary policy.

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  • We are focused on securing nation, stabilising economy – Buhari 

    President Muhammadu Buhari on Friday in Abuja said his administration will work harder to improve on the gains recorded in securing the country from the onslaughts of terrorists and criminals, and ensuring that Nigerians enjoy a better livelihood by stabilising the economy.

    The President, who received Tijjaniyya Shura Council at the Presidential Villa, said the government continues to review its interventions and projections on security and the economy, with the hope of bringing peace and improved economy to all.

    Read Also:Boko Haram’ll soon be history, Says Buhari

    The President in a statement by the Senior Special Assistant on Media and publicity, Garba Shehu, also commended religious bodies and Nigerians for the encouragement shown to the administration through prayers.

    According to him, a peaceful and prosperous country is realisable with collective vision and shared effort.

    “I am grateful for the prayers and words of encouragement,’’ he said,

    “Nigeria’s unity is strong and must be sustained. It is instructive to note that Nigeria preceded all of us in age, and we must do our best to keep the country together.’’

    In his remarks, leader of the Tijjaniyya, Sheikh Ibrahim Shiekh Maihula, said, “our desire is to live in a country that is peaceful and economically vibrant, and we will keep praying for you and members of your administration.’’

    Shiekh Maihula said peace and economic prosperity were not negotiable for the unity of the country, urging the president to remain focused and steadfast in pursuing the policies he had outlined.

     

  • Ports’ gridlock: Economy losing over N2.5t, says LCCI

    The Lagos Chamber of Commerce & Industry (LCCI), Centre for International Private Enterprise (CIPE) and the Organised Private Sector (OPS), have said the economy is currently losing about N600 billion in customs revenue, $10 billion on non-oil export and about N2.5 trillion corporate earnings across sectors.

    LCCI President,  Babatunde Paul Ruwase, who spoke at the launch of  “Maritime Ports Reform in Nigeria: Executive Summary and Recommendations,” in Lagos yesterday said, industrial capacity utilisation currently stands between 38-40 per cent, saying  about 40 per cent of businesses located around the Lagos ports environs have either relocated to other areas, scaled down operations, or completely shut down.

    He said the condition of the ports  have huge adverse implication for job creation, tax revenue and real economic activities, with estimated downside effect of about three per cent on the country’s GDP.

    Ruwase said the report highlighted a worrisome level of deliberate resistance by some Ministries, Departments and Agencies (MDAs) to implement and enforce enabling regulations, including the 2017 Presidential Executive Orders relating to ports.

    On their concerns, he regretted that 65 – 80 per cent of import clearance and export processing time, are caused by delays induced by MDAs as majority of the cargoes take between 5 – 14 days to clear, while some take as long as 20 days or more to clear.

    He said about 5,000 trucks currently seek access to the Lagos ports on daily basis, while the port and its access roads were designed to take about 1,500 trucks daily.

    He said the situation as deplorable as it is, has led to : “ Astronomical increase of trucks transport cost by 200 to 500 per cent over the last two years, longer cargo dwell time, disruption of production schedules of manufacturers, as raw materials are not delivered to factories in good time.

  • ‘We need to inject capital into economy’

    There is need for financial market participants to work closely with the regulators and government institutions to create enabling environment that promotes capital inflow into the economy. President, Financial Market Dealers Association of Nigeria (FMDA) Samuel Ocheho, speaks with COLLINS NWEZE on the opportunities in the financial market, how technology can help in deepening the market and the group’s 2018 financial markets conference holding this week in Lagos.

    How would you assess the financial market in Nigeria and the impact it is having on the economy?

    There is room for Nigeria’s financial market to play a greater role in driving sustainable economic development through stronger financial intermediation and inclusion and the effective transfer of capital. This would require the financial market participants to work hand in hand with regulators and governmental institutions to create the enabling environment. Technology can also be a positive disruptor and accelerator for deepening the financial market in Nigeria.

    What role are the 2019 elections likely to play in the market?

    Elections, particularly in emerging markets, introduce a level of uncertainty into markets. Amid this uncertainty, investors would naturally take a cautious stance, choosing to sit on the side lines until the outcomes of the elections are known. In this instance, investors have downplayed any major risk coming out from the elections. Those who have been in Nigeria for long have seen opposition taking over from incumbent, a President dying in office and his Vice taking over and a host of others. There is not much anxiety from an election stand point.

    What reactions are we likely to expect from foreign portfolio investors as the elections approach?

    Nigeria’s democracy and elections have received a level of credibility from the international community particularly with the peaceful handover in 2015 after the incumbent lost the election. As such, while we would expect that investors may be cautious in a period of uncertainty, we do not anticipate significant sell-offs on the back of the elections.

    It is more likely though that money market and fixed income investments with maturities closer to the election will not be rolled over and subsequently outflowed. Additionally, surveys have shown that actions of Central Banks and other global issues such as trade wars and tightening in developed markets have a stronger influence from a foreign investor perspective.

    What opportunities do you see in the Mutual Funds market and are those opportunities being explored especially by grassroots investors?

    Largely reflective of the level of financial inclusion and literacy in the country, Nigeria’s mutual fund penetrations remain low at 0.3 per cent of Gross Domestic Product (GDP) compared to a global average of 15 per cent. The 10 per cent per annum growth in the value of mutual funds over the last five years nonetheless highlights the depth of opportunity for the industry.

    Growth in middle class, urbanisation and increasing use of technology should support higher penetration of mutual funds in Nigeria over time. Mutual funds clearly provide a platform for less savvy investors, especially people at the  grassroots, to invest in the capital market. The professionals that manage the funds have access to more real time information that may be out of reach for those at the grassroots. We do not have information for Mutual funds penetration to grassroots. However, a number of fund managers have reduced initial subscription values to as low as N5,000, which makes it possible for grassroots investors to participate.

    What advice do you have for local and foreign investors in the economy?

    The investment opportunities in Nigeria remain elevated. We are still a growing country with so much need for infrastructural development. The yields in the country are also high and forex rate has remained largely stable.

    My advice to investors is that there would always be one form of noise or the other as it is with African economies and emerging markets as a whole, but the opportunities and expected returns far outweigh the risk in the country in my view.

    What role does Financial Market Dealers Association (FMDA) play in the financial sector. Can you tell us about the group’s vision and what its priorities are?

    The Financial Markets Dealers Association of Nigeria is an association of licensed Deposit Money Banks (DMBs) operating within the Nigerian Financial Market. It emphasises on regulatory policy engagement/advocacy and professional ethics in the financial markets. The association builds capacity, identifies, supports and develops, where necessary possible financial market infrastructure, human capital and promotes professional and ethical standards in treasury activities in Nigeria.

    The FMDA has contributed to the development of the financial sector by collaborating with the government and financial markets regulatory bodies in formulating policies on monetary issues as well as creating awareness of financial markets products through education, technical advice and networking events.

    It has a vision of promoting efficient market practices by encouraging high standards of conduct and professionalism. The association’s priority among others is to contribute to the growth and development of our financial markets as well as the protection of the interest of its members in the exercise of their dealing/trading activities including its value chain.

    FMDA will be organising the 2018 Financial Markets Conference in Lagos on September 21.  Can you tell us about the objectives of the conference and what is it meant to achieve?

    The association is putting together a forum where players in the Nigerian financial market can share ideas and experiences to improve and stimulate economic growth. Consequently, we are bringing together investors in the manufacturing, agriculture, Fast Moving Consumer Goods (FMCG), areas that we typically refer to as the real sector, portfolio investors and policy makers to engage one another. We want a forum that will not be another talk shop, but an environment where practical ideas are shared that can influence our economy positively.

    Why did you chose the theme: “The Nigerian Financial Market – A Catalyst for Sustainable Economic Growth” for the conference?

    Nigeria’s wealth of potential remains largely unlocked amid a relatively dearth of financial capital. We needed to create the opportunity for knowledgeable minds in the industry to address the challenges and opportunities that exist in the Nigerian financial market and how that can be channeled towards sustainable economic growth. The real sector remains a veritable source of growth for the Nigerian economy, hence, the association’s drive to contribute its own quota to ensuring that capital is unlocked into the economy.

    Previously, we were seeing a lot of new listings in Nigeria. What is holding the companies back from listing?

    Investors are clearly looking for more quality names to invest in. When you talk to both domestic and foreign portfolio investors they are frustrated about the limited depth of the Nigerian equity market from a liquidity perspective and limited growth in market liquidity. The introduction of new listings addresses that concern. Nevertheless, issues such as compliance and information sharing, dilution of control, market depth, regulatory requirement, cost associated with interacting with investors might be challenges. However, there are a number of non-listed public companies that have shares trading on the NASD but at very limited volumes.

    Are there other measures that can boost listing in the market?

    I suppose the main reasons companies list is to improve access to equity capital. Hence a company with little need for that may not have a compelling reason to list. Additionally, there are a number of companies that have listed overtime, but have shown to be value-traps and have underperformed materially due to extremely weak performance and a poor competitive advantage. Hence what the market needs is more quality names with strong growth potential and that can deliver returns to shareholders. In terms of encouraging more listings, a simple approach could be to legislate listings as part of the reforms in sectors such as oil and gas and power. However, market regulators could allow some concessions for listed companies, thereby making it more attractive to be a listed company.

    Which segment of the market are investors likely to get the highest returns in the next six months?

    Six months is a very short horizon when you are talking about investments. Beyond buying treasury bills where duration risk is limited, six months sounds more like speculating which is not necessarily bad if one can spot/ interpret trends appropriately. Nevertheless, over the long-term, research has shown that equities offer better real (inflation adjusted) returns than fixed income.

    Finally, what are the measures you think operators and regulators should put in place to ensure that investors’ money is secured?

    Operators are enjoined to put in place sound and robust risk management policies and also abide by the policies put in place. It is one thing to have good policies in place and it is another thing to continue to condone breaches without proper remedial actions in place. Ultimately, regulators should continue to ensure that the financial system stability is achieved.

  • Huawei: ICT has transformative power on economy

    Chinese technology firm, Huawei Technologies, has said information communications technology (ICT) has the transformative power to boost sustainable socio-economic development. It argued that  governments have  vital roles to play in creating a favourable environment for the development of the industry.

    This was contained in a position paper launched at the just concluded International telecommunications Union (ITU) Telecom World 2018 in Durban, South Africa.

    In the position paper titled: Telco: Investment, Innovation and Competition in ICT Infrastructure, Huawei said the development trends of ICT  observed around the globe and their potential social economic development spurred by ICT are enormous. It said it arrived at the conclusion after conducting a regression analysis based on a data set of 125 countries for the period 2010 to 2016. It said every 16-20 per cent increase in ICT investment brings one per cent growth in gross domestic product (GDP). It stressed that in order to fully unleash the potential of ICT in promoting economic growth and societal well-being, governments have a critical role to play in supporting investment in ICT infrastructure, encouraging ICT innovation, and in guiding and regulating ICT competition.

    At the launching ceremony, Houlin Zhao, ITU Secretary-General, said government should make ICT policy not just sectoral but national. The development of ICT and relevant infrastructure cannot be realised by solely relying on participants in the ICT ecosystem. Instead, it requires support and guidance from governments.

    He said: “Our objectives are clear: connecting the unconnected, providing people with more advanced technologies, developing new applications, and facilitating other ecosystems. And to succeed in this endeavor, we need more innovative public-private partnerships.”

  • How illicit trade hurts economy, real sector

    The adverse effect of illicit trade is unquantifiable. It is taking a toll on the economy and the operations of manufacturers. From loss of huge tax revenue and income to the government and manufacturers to damage to long built brand reputation and serious health risks to consumers, illicit trade may have become a hard nut to crack. But, at a roundtable in Lagos, experts brainstormed on how to curb the trade. CHARLES OKONJI reports.

    For standards regulatory authorities, revenue generating agencies, consumers and private sector operators, particularly manufacturers, the fear of illicit trade (IT) is, perhaps, the beginning of wisdom.

    Despite measures so far put in place to halt, or at least minimise the booming trade in the production and distribution of consumer goods that violate the rules and regulations governing the relevant industry and regulatory authorities in Nigeria, IT has refused to abate.

    Rather, the trade, which covers a wide range of goods and brands, ranging from electronics, apparel, alcoholic drinks to vehicles and auto parts, drugs, arms, pharmaceuticals, cigarettes, counterfeit currencies, as well as humans, appears to have assumed a life of its own, leaving sour taste in the mouths of various stakeholders in the economy.

    For instance, it has continued to force a reduction or loss of huge tax revenue to the government. Genuine manufacturers and other local businesses are also groaning over the reduction in market share. Many local businesses whose profitability has nosedived as a result, have also been screaming blue murder over the colossal damage foisted on their brand image by the thriving IT.

    Consumes appear worse hit, as the proliferation of fake and substandard goods have virtually taken over from the genuine ones, posing serious health risks to end users. Because IT thrives in the underground economy, the unwholesome business naturally does not reflect in the country’s Gross Domestic Product (GDP).

    These must be why experts and economic analysts describe illicit trade, which permeates virtually every product category and industry, as avoidable economic cankerworm, which is not only destroying businesses in the country, but also militating against Nigeria’s economic growth and development.

     

    The imperatives of curbing IT

    Globally, illicit trade accounted for between eight per cent and 15 per cent of global Gross Domestic Product (GDP) valued at $12 trillion in 2015, according to the World Economic Forum.

    A Senior Research Officer, Initiative for Public Policy Analysis (IPPA), Mr. Olusegun Sotola, also said, according to the United Nations estimate, more than $1billion is illicitly traded in small arms alone in Africa, fuelling the increasing conflict and criminal activities in the region.

    Sotola, in his opening remarks at a policy roundtable discussion titled: “Business environment & excise duty: Maximising economic opportunities through effective anti-Illicit trade enforcement” said IPPA was of the view that illicit trade was largely policy induced, while tax and tariff, for example, often create perverse incentives for illicit trade.

    He explained that the essence of the forum was to show the underlying factors responsible for the growth of illicit trade, the danger associated with it and the economic dis-incentives it creates for local industries, the accompanying revenue loss it has caused the government and undermining healthcare delivery.

    A Senior Research Fellow at IPPA and don at the University of Aberdeen, United Kingdom (UK), Dr. Olajide Damilola, said Nigeria’s absence in the world ranking on IT as captured by the Global Illicit Trade Index (GITEI) was worrisome.

    GITEI is the global body rating countries on illicit trade. Nigeria’s absence in GITEI’s ranking, according to Damilola, was as a result of unavailability of data. He said the paucity of data was even more precarious because the trade could be causing serious harm to the economy unnoticed and a big scare to prospective investors.

    The expert said as an emerging economy laden with socio-economic obstacles, the challenges of doing business in Nigeria were many and they affect the growth of the economy as well as make it difficult to attract investors and successful investment.

    “The challenges range from multiple infrastructural inadequacy, policy inconsistencies, corruption, insecurity, bureaucratic bottlenecks, infringements on rule of law and sometimes a lack of political will to implement business friendly policies,” Damilola said.

    The Senior Research Fellow stated: “In such an adverse environment, companies operating legally as net economic contributors deserve government encouragement and protection of their goods and services from losing commercial viability to illicit perpetrators.”

    According to him, Nigeria needs to urgently work on the critical factors encouraging IT in order not to compound the economy’s problems. He listed some of the factors to include government policy, supply and demand of illicit products, transparency and trade environment and customs enforcement.

    In addressing the problem, Damilola advised that certain questions must be answered to properly direct policy at the fight.These include government action or inaction that creates incentives for illicit trade to thrive in the country.

    He added that there was the need to ask the following questions: “How do we benefit from illicit trade compared to the costs? What categories of GITEI should Nigeria aim to improve upon?”

    Other industry operators and experts who spoke at the roundtable agreed that a holistic approach was required to curb the trade, which also involves strategies beyond the Nigeria’s jurisdiction.

    Some of them noted that illicit trade is a global phenomenon whose solution should be global in nature, adding that the preferred global approach to combating the trade, which Nigeria should be part of, should be aimed at international cooperation and harmonisation of laws and regulations beyond borders.

    While citing the global fight against money laundering as a typical example, they, however, cautioned that in opting for this approach to the fight against illicit trade ravaging the economy, Nigeria should not rush into signing the controversial African Continental Free Trade Area agreement (ACFTA).

    The AfCFTA was designed to create a continental trade bloc of 1.2 billion Africans, with a combined Gross Domestic Product (GDP) of about $3 trillion. It was adopted by the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union (AU) in Addis Ababa, Ethiopia, in January 2012.

    The agreement was seen as an important milestone in promoting Africa’s regional integration and helping to increase intra-African trade, which was at 16 to 17 per cent, by more than 52 per cent, worth about $35 billion per year.

    AfCFTA commits African countries to phasing out tariffs on 90 per cent of goods, with 10 per cent of “sensitive items” to be phased out incrementally. It will also liberalise trade in services, while also signaling a step towards building strong regional value chains.

    Forty-four out of 55 African leaders ratified the AfCFTA at an Extra-ordinary Summit of the AU Assembly in Kigali, Rwanda, on March 21. Nine other AU members, including Nigeria and South Africa, delayed accent to the treaty.

    President Muhammadu Buhari was earlier scheduled to travel to Kigali to ratify the trade deal, which is easily the largest trade agreement since the World Trade Organisation (WTO) in 1994. But he backtracked on the opposition of the OPS who said they were not consulted.

    But at the IPPA roundtable, a Consultant with the United Nations Industrial Development Organisation (UNIDO), Dr. John Isemede, said the government must not succumb to pressures to sign the agreement until some identified gray areas are taken care of.

    Isemede, a former Director- General of Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), said there was the need to explore the salient issue of Nigeria’s comparative advantage in such an arrangement to avoid making the country a dumping ground for goods and services.

    His words: “The country is already overloaded with imports. I am not saying the Federal Government should not sign at all, but to put the necessary infrastructure on ground, something to sell, something to offer before rushing into the agreement.

    “The tea you sip comes from Kenya, the Titus fish you eat every day comes from Morocco, there is Shoprite here and there owned by South Africans. The majority of the products sold is imported from South Africa and with the South African Airline. What is Nigeria bringing to the table and what are we going to sell?”

    According to the UNIDO consultant, the government should review the membership of the 20-member committee to review the proposed agreement to allow the OPS take centre stage. The government, he added, should also fix infrastructure by getting the transport sector especially the rail system up and running.

    Isemede also said more local industries must begin to think more of export, while the government should consider the coming back of Commodity Board to optimise the nation’s comparative advantage.

    “You know that the Nigerian market is the target of AfCFTA because of its size. To me, signing ACFTA without putting the necessary things in place and without more involvement of the OPS is like a landlord handing over his Certificate of Occupancy (C of O) to the tenant,” he warned.

    It is easy to see the connection between the thriving IT and Isemede’s insistence that Nigeria must tread with caution over the controversial AfCFTA. The thinking of some experts is that, if Nigeria throws its doors wide open in the spirit of the proposed trade liberalisation deal, perpetrators of IT might cash in on the situation to continue their trade.

    The thinking is that combating the influx of prohibited goods and the harm they cause to the economy may have already become a hard nut to crack by the authorities. And this was why the Buhari administration is struggling with whether or not to sign the ACFTA deal.

    Although the Federal Government has said African countries are targeting the Nigerian market for the implementation of ACFTA, it was being careful by not hastily signing the agreement for the good of the economy. But pressures are still mounting from some quarters for the government to soft pedal.

  • Event professionals boost Nigeria’s economy with $50b annually

    If there is anything that the Nigerian economy needs at the moment, then it must be a boost. Experts in different fields have therefore been looking for ways to do this and push the nation’s economy ahead.

    One sector that has helped to do this over the years is the Association of Professional Party Organisers and Event Managers of Nigeria, (APPOEMN). At a recent event, they declared that professionals in the event management industry contribute over 50 billion dollars to Nigeria’s economy annually.

    APPOEMN made this known as it plans to hold its annual conference, The Event Industry Conference, themed Collaboration, come September 2018.

    According to APPOEMN public relations director, Bose Abisagboola, the industry has continued to contribute to the Nigeria’s economy directly as well as provide employment for Nigerians, who can be gainfully employed in the different fields of the economy.

    Abisagboola claims that event management is an industry that employs the largest number of graduates in Nigeria, spanning across the fields of music, comedy, entertainment, information and communication technologies, catering and other service providers in the industry.

    In the build up to TEIC 2018, APPOEMN held the nomination party where 200 nominees were revealed on July 26th, 2018 for the 35 category award that will be presented to the best in the industry come September.

    This year’s master class will hold on 27th September. The After Party themed Wild Wild West will take place on the same day.

    The 2018 seminar will hold on 28th September and the grand finale, the Dinner & Awards Night, will hold on 30th September.

  • Security, economy, migration to dominate Merkel’s visit

    Security, economy and migration will dominate discussions during the German Chancellor’s Angela Merkel visit, Nigerian Ambassador to Germany, Yusuf Tuggar, has said.

    Merkel is on a three-day trip to Africa, beginning with Senegal yesterday, where she was scheduled to meet Senegalese President Macky Sall and leaders of civil society groups.

    Merkel’s delegation is expected to include experts in electrification, digitalisation, infrastructure and energy management.

    Tuggar said the German leader would be accompanied by German business owners.

    The envoy, who briefed reporters ahead of today’s visit, stressed the significance of the visit, which is coming a day after the United Kingdom Prime Minister, Theresa May’s visit.

    He said: “One of the challenges we have faced over the years in the area of Small and Medium Scale business is how to attract small scale businesses from Germany to our country.

    “This is in line with the Economic Growth and Recovery Plan of the Federal Government. At the moment, the German government is also doing everything to push out its Small and Medium Scale businesses to take their place in an increasingly globalised world.”

    Tuggar said members of the business delegate are to sign a Memorandum of Understanding with companies.

    “Nigeria wants to take advantage of the areas Germany has comparative advantage.

    “German companies are interested in the Nigerian agriculture sector through NIRSL. This is about how to strengthen our agricultural sector to create prosperity for Nigerians, especially for young people.”

    Another issue that may receive attention during Merkel’s visit is security. According to Tuggar, Nigeria and Germany have been collaborating on security for a while now.

    He said: “As the Internally Displaced Persons (IDPs) are beginning to return to where they were displaced, huge fund is required. Nigeria cannot do it alone. The support of the global community is needed to resettle them.

    “After this visit, Oslo ‘2’ will follow. This is about how to mobilise global support for rehabilitation process in the Northeast.”

     

     

     

     

     

  • Economy: Automobile investments to the rescue

    The equipment include: Auto-Electrical Works; Building Construction/Bricklaying, Block-laying and Concreting Works; Electrical Installation; Mechanical Engineering Craft Practice; Motor Vehicle Mechanic Works; Radio, Television & Electronics Works; Refrigeration & Air-conditioning Works; Vehicle Body Building & Repair/ Auto-mobile Maintenance and a Laboratory Equipment for Technical Drawing Department.

    The construction and fitting of a knowledge resource centre will serve the needs of the students and teachers at the college. For Governor Obaseki, the need to develop a robust, well-modelled, well-organised, adequately monitored and quality technical and vocational education and training with appropriate national and international certifications will go a long way in building a solid foundation that will drive industrial growth in the state.

     

    Global view of the sector

     

    The automotive industry is regarded in any economy as a major instrument for economic growth and development. It serves as an important stimulus for other types of manufacturing activities such as iron and steel, rubber, plastics, electrical equipment, road construction, transportation, urban and rural development.

    The industry is the cornerstone for establishing a self-sustaining economy and upgrading the standard of living both in the developing and developed economy. Only a few other industries cover such a wide range of technology and manufacturing processes, or use so many different raw materials, tools, machinery and equipment like the automobile industry.

    In the 1970s, the Federal Government established six Automotive Assembly Plants (AAPs), namely: Peugeot Automobile Nigeria Limited (PAN) Kaduna in 1975; Volkswagen of Nigeria Limited (VWON) Lagos in 1978; Anambra Motor Manufacturing Limited (ANAMMCO) Emene Enugu (1980); Steyr Nigeria Limited Bauchi; National Truck manufacturers (NTM) Kano and LeyLand Nigeria Limited (LNL) Ibadan.

    Today, all the plants are moribund due to corruption, paucity of funds, government policy and the penchant of Nigerians for used vehicles. Determined to revamp the industry, the administration of President Muhammadu Buhari introduced the Nigerian Automotive Industry Development Plan (NAIDP). Through the NAIDP, 54 automobile assembly plants have been registered, 30 of which have become operational.

    The NAIDP is a strategic government intervention programme designed to revive the automotive industry and attract additional investment for massive employment locally.  The success of the programme is anchored on two specific actions which require government interventions.

    Efforts are being made to support Nigerian car users, haulage firms and bus companies to acquire new automobiles built locally, but, the cost of most automobile loans high (at above 20 per cent). To address the issue, NAIDP is engaging some foreign and local financial institutions in discussions for implementation of Vehicle Finance Scheme (VFS).

    A lower interest rate offe to Nigerians can only be achieved only if government injects intervention funds specifically for the scheme. The financial institutions might be unable to give low interest rate attractive enough to encourage borrowing for vehicle purchases.

     

  • Economy: Automobile investments to the rescue

    To the Federal Government, turning the economy around is a task that must be accomplished. It has adopted an automotive policy that will restore assembly plants, develop local content and reduce pressure on the balance of payment. Edo State Government has keyed into the diversification strategy by sealing a $500 million auto assembly plant deal with Chinese investors. COLLINS NWEZE writes on the deal’s expected impact on the economy.

    WHERE is global focus on the automobile industry. The sector is being watched with keen interest as an engine of growth with capacity to generate employment opportunities.

    Besides, it is viewed as a sector that can encourage the growth of other satellite industries, enhance technology transfer and serve as catalyst for the expansion of the economy. And the Federal Government is not leaving anything to chance. It is beaming the searchlight on the sector as part of ways to diversify the economy from oil.

    As a matter of fact, the government plans to revamp the automobile policy and set up auto parks to promote the sector, the Minister of Industry, Trade & Investment, Okechukwu Enelamah has disclosed.

    Speaking at the Nigeria-German Business Forum in Lagos, the minister said the government will also grant fiscal incentives, including a five-year tax holiday for pioneer foreign businesses.

    “Revamping the auto policy is in the works. The auto-policy is being finanalised and signed into law,” he said, adding that the turnaround in auto-industry will happen very soon.

    According to the minister, the government will continue to support foreign companies operating in Nigeria through fiscal incentives.

    Many states are already helping the government to explore business and economic opportunities in the automobile industry.

    Edo Automotive Industry Investment Forum

    The administration of Governor Godwin Obaseki recently organised the Edo Automotive Industry Investment Forum as part of efforts to link the vast economic opportunities in the global auto industry.

    The forum was in line with the state’s economic diversification strategy, in addition to the $500 million auto assembly plant deal between Edo State Government and Chinese investors.

    At the forum, the first of its kind in Benin City, were 36 chief executive officers of leading global auto brands and component suppliers. They include representatives of BMW, NISSAN, Toyota, Volkswagen, Ford, Bosch, Jaguar, and Deloitte, a consulting company as well as Uber.

    Others were representatives of the global auto makers, including: Graffiti SA, Nissan, Toyota, Deloitte, Gauteng Infrastructure Financing Agency (GIFA), Automotive Industry Development Center, DataDot Technology, Standard Bank of South Africa, International Finance Corporation and Afropulse Group.

    The meeting between the Edo State government and chief executives of German, Japanese, American, British and other European car manufacturers, was premised on the emerging investor-friendly climate in the state and how the companies can leverage on the Benin Auto Park’s proximity to the Benin Industrial Park.

    The forum offered the opportunity to unveil the state government’s agenda for the auto sector and the opportunities for investors. The prospective investors had the opportunity to visit the auto trading site on Sapele Road and the future trading site at the Industrial Park, also on Sapele Road.

    It also featured a session on the state government’s blueprint for the automotive sector which includes job creation for Edo people, the local sourcing of car components amid an environment of high exchange rate regime and volatility, which makes local sourcing of components cost-effective.

    In his presentation, Chairman and Managing Director of Volkswagen South Africa, Thomas Scheafer, said: “We have the mandate of our parent companies to be here. What we are trying to do in Nigeria is to reach out in a brotherly fashion and say to you, ‘come on, let’s get this done.’ For years, we have been discussing with the government. But, now, we are committed to finding out ways on how to get Nigeria to where it should be and play its role on the continent.

    “Edo State will be the nucleus for us as Nigeria as a large automotive industry that is worth exploring. Nigeria is good for at least two million cars a year. That will multiply the jobs on the continent. So where does it start?

    Speaking on Governor Obaseki’s commitment to driving the state’s diversification as a major pull, he said: “We invested in Rwanda, one of the smallest countries on the continent. Why? Because they have great policies and because they wanted to create employment. In Rwanda, we put our money where our mouth is. We are ready to invest in Nigeria and today, we are happy with what we have seen in Edo State and the commitment of the governor.”

    Director, Sales/Operations, Nissan South Africa, Jim Dando, said the automotive industry was excited about the wave of diversification in Nigeria, particularly in the automotive sector, noting that it was great news that Edo State government was taking the lead.

    He said: “We have been discussing the industrialisation of Nigeria for some time now. With the previous government, we were able to create an industrial and automotive policy. What we need to do now is to put the automotive policy in place and drive it with states like Edo.”

    To the Director-General of the National Automotive Design and Development Council, Jelani Aliyu, the Benin Auto Park has at least two scenarios for growth, “with this support by the state government, I see the state becoming a hotbed for automobile sales. The first instance will see the state grow from supplying used cars to brand new cars. Also, we see the influx of automobile component makers, who are also here.”

    Obaseki told investors that the state has a thriving automotive market that services the Niger Delta market, parts of the North and even South Western Nigeria, as “Benin City boasts of a stock of not less than half a million cars. We want the companies to work within and even go beyond what the national automotive council provides.

    According to Aliyu, across the globe, the automotive industry plays both strategic and catalytic role in economic development with its contribution to the Gross Domestic Products (GDP).

    For instance in South Africa, the auto industry alone contributes seven per cent of GDP as it is considered as critical component of the economy where it generates 350,000 jobs translating as the second largest employer of labour. The industry also boasts of a market of 600,000 new cars with zero importation with 12 per cent of exports.

    In Egypt, it employs directly and indirectly, 600,000 people in and attracted an investment of over $5 billion. It is the second source of foreign exchange after the Suez Canal.

    The auto industry plays extensive role in driving the growth and development of Small, Medium and Micro-Enterprises (MSMEs) with respect to automotive parts, components and services and the attendant job creation. The Benin Auto Park will contribute to the plan by the Obaseki-led administration to support the growth of over 20, 000 micro, small and medium enterprises in addition to the creation of over 50, 000 associated jobs in the next four years.

    During a visit to auto dealers on the Benin-Sapele Highway by participants at the forum, a dealer with Idris and Sons Motors told the delegation that the corridor hosts at least 100 dealers, with thousands of vehicles in their inventory.

    Road to industrilisation

    Building an industrialised society demands a great deal of work. Aside the need for strong, supportive structures that drive innovation and mechanisation of process, there is also the unyielding vision of a leader to drive the process and ensure that in the long run, the vision is sustained.

    Hence, many industrial societies are sustained by formidable structures and institutions that ensure not only ample supply of human resources but also drive innovation among the populace.

    So, in a case where the focus is to ramp up manufacturing, it is only logical to groom the manpower, attract investors, and create the enabling environment for everyone to work harmoniously with the right policy framework.

    In Edo, Obaseki has his eyes on the ball. With a daunting vision to recast the state as an industrial hub in Nigeria, he is pulling every available string to attract investors, build local capacity and create wealth for the state and its people.

    The governor’s vision for driving industrial growth and development revolves around the belief that local capacity development is essential. This conviction informed his prioritisation of Technical and Vocational Education and Training (TVET), which according to him, is the bedrock of the vision to transform Edo into an industrial hub.

    To achieve this, the government under his watch, has embarked on the construction of workshops, classrooms, laboratories, resource centres and purchase of top-of-the-range equipment for the Government Science and Technical College (GSTC), in Benin City, formerly known as Benin Technical College.

    The reconstruction work will equip the college with requisite equipment for world-class technical and vocational education and training. The redesigning of the college is aimed at developing local capacity for the companies that are setting up in the state.

    As part of the state’s industrialisation drive, the rehabilitation of the college will provide a facility for model technical education to produce critical technical manpower for industries making in-roads into the state, in the wake of a spike in investments by manufacturing companies, among others.

    As part of the reconstruction work, nine existing buildings will be refurbished, while four classroom blocks, two workshops, a specialist training centre as well as general site for works and services, will be constructed.

    The college will be fitted with equipment that would enable students obtain skills and knowledge in various aspects of vocational education to enable them act as drivers of the industrialisation policy in the state in line with global trends.

     

    •To be Continued