The Nation Newspaper

Tag: Foreign

  • Foreign investors edgy over Nigerian stock market outlook

    Foreign investors edgy over Nigerian stock market outlook

    Foreign investors flowed out nearly a double of every penny they invested in the Nigerian stock market and Nigerian investors showed less enthusiasm amid concerns over the performance outlooks of dominant banking stocks.

    A latest report on foreign portfolio investment flow by the Nigerian Stock Exchange (NSE) indicated unusually high disparity between foreign portfolio inflow and outflow, which led to significant decline in net foreign investment in the stock market.

    According to the NSE’s report, recent filings showed that 66 per cent of the total value of foreign transactions were outflows- sale orders, a situation that led to about 42 per cent decline in net foreign investment in the stock market.

    The foreign portfolio investment report showed considerable month-on-month slowdown in both the total foreign transactions and foreign portfolio inflow while there was an increase in outflow during the period.

    The seven-month report for the period ended July this year, the latest available data, indicated that total foreign inflow stood at N31.81 billion as against outflow of N61.90 billion in July, showing the widest divergence between inflow and outflow so far this year.

    Total foreign transactions thus slowed to N93.71 billion in July as against N150.24 billion in the previous month. However, foreign investors remained dominant in stock market’s transactions with 62.53 per cent of the aggregate foreign-domestic transactions in July, an increase on 51.13 per cent recorded by foreign investors in June.

    With the outflow in July, net foreign investment declined from about N73 billion in June to N42.59 billion in July.

    Total foreign inflow had risen to N90.15 billion while outflow stood at N60.09 billion as total foreign transactions increased to N150.24 billion in June.

    Total foreign transactions in the market for the seven-month period stood at N676.25 billion, 50.73 per cent of aggregate transactions of N1.33 trillion by foreign and domestic investors during the period. Breakdown of foreign transactions during the seven-month period showed inflow of N359.47 billion as against outflow of N316.88 billion. Nigerian investors accounted for N656.85 billion over the seven months.

    Foreign investors had capitalised on general market optimism in July ahead of the release of the first half earnings reports of quoted companies to monetise and rebalance their portfolios. Nigerian equities had consolidated their bullish rally in July with capital gains of some N581 billion. Aggregate market value of all equities closed July at N12.007 trillion as against its opening value of N11.426 trillion for the month. The All Share Index (ASI), which doubles as benchmark index for all equities on the NSE and country index for Nigeria, also rose from month’s opening index of 36,164.31 points to close at 37,914.33 points, a month-month average positive return of 5.08 per cent.

    First-half report on foreign portfolio investment flow had shown that total transactions-including buy and sell deals, by foreign investors totaled N582.64 billion, accounting for 49.24 per cent of total turnover at the NSE during the period.

    The report had indicated that in most instances, foreign investors flowed in more funds than they took out, leaving the stock market with a positive net foreign investment of about N73 billion within the period. Foreign portfolio inflow stood at N327.66 billion as against outflow of N254.98 billion.

    Total turnover value at the NSE during the first half was N1.18 trillion with both foreign investors and domestic investors dominating transactions in three months each. But while foreign investors had maintained gradual and steady increase and decline in portfolio adjustments, indigenous investors showed large fluctuations.

    They dominated the market in the first two months and were supplanted by foreign investors in March and April. They regained dominance in May and were displaced by foreign investors in June.

    Foreign investors accounted for 36.89 per cent, 39.65 per cent, 52.78 per cent, 64.48 per cent, 48.68 per cent and 51.13 per cent in January, February, March, April, May and June.

    Portfolio transactions by foreign investors totaled N61.46 billion, N75.97 billion, N80.14 billion, N122.97 billion, N91.86 billion and N150.24 billion in January, February, March, April, May and June.

    The report underlined the structural outline of Nigerian investors, which was largely skewed in favour of institutional investors. For instance, institutional Nigerian investors accounted for 66.7 per cent or N95.78 billion of domestic investors’ turnover in June 2013 while retail investors contributed 33.3 per cent or N47.81 billion.

    The report had shown stronger momentum in foreign portfolio investments in the stock market as the 2013 first half report was substantially above six-month average over the past five years.

    Foreign investors staked about N4.08 trillion on quoted shares on the NSE between 2007 and 2012. Foreign investors had gradually and consecutively increased their investments in Nigerian equities from about 15 per cent of total market turnover in 2007 all through till a high of about 67 per cent in 2011.

    Foreign portfolios were particularly the main drivers of transactions on the NSE in the past two years, with foreign investors accounting for average of two-thirds of equity transactions between 2011 and last year.

    The report underlined the early positioning of the foreign investors, who had saw through the prospects of Nigerian equities amidst the downtrend and the rampant herd instinct of the domestic investors, who mostly usually look at recovering market.

    Foreign portfolio transactions increased from N615.6 billion in 2007 to N787.4 billion in 2008. These trimmed down to N424.6 billion in 2009 before rising consecutively to N577.3 billion and N847.9 billion in 2010 and 2011 respectively. Foreign portfolio trades stood at N808.4 billion in 2012. With these, the two-way flow of foreign portfolio investments showed that while foreign investors flowed in about N2.01 trillion during the period, they equally took away about N2.17 trillion.

    Market pundits said the investment flows at the stock market might underline concerns over the future earnings of banks, following a generally low fundamental performance in the first half. Most banks reported marginal growth in profit in the first half as they struggled with reduced income streams and high cost of funds and operations induced by new regulations by the Central Bank of Nigeria (CBN).

    Banks remain the dominant subsector at the NSE, although reduction in number of quoted banks and increased capitalisation of non-bank multinationals have reduced the hitherto overbearing influence of banking stocks on overall market situation.

    Managing Director, Cowry Asset Management Limited, Mr Johnson Chukwu, said the market situation at the stock market might not be unconnected with concerns over future earnings of banks given that banks have been the dominant stocks at the market.

    He said the lukewarm operational earnings of banks will reflect on their share prices as investors priced in expected muted performance into banks’ valuations.

    “There are 31 stocks that have been driving the market this year, banks account for 15 of these 31 stocks. So, if banks’ prices begin to go down, you are going to see decline in market performance and I think that is what we are seeing in the recent past,” Chukwu said.

  • Foreign reserves down to $46.8b

    Foreign reserves down to $46.8b

    The nation’s foreign reserves declined to $46.8 billion as at August 29. It lost $200 million from the $47 billion it entered the month with.

    Data obtained from the Central Bank of Nigeria’s (CBN’s) website, showed that the reserves were $47.7 billion on July 1, and dropped to $47 billion on July 15. The figures hit $47 billion on August 1.

    The foreign currency reserves were $68 billion in August 2008 before the global financial crises affected it. The CBN had consistently maintained that inflows into the reserves were not consistent with the oil prices, thus underscoring the need for tighter fiscal controls around oil revenues.

    The apex bank has also said there was urgent need to pursue policies that would foster macro-economic stability, economic diversification as well as encouraging foreign capital inflows.

    It said a higher rate of retention of oil revenues should facilitate the efforts at maintaining exchange rate stability as an antidote to imported inflation without excessive reliance on monetary tightening measures.

     

  • Firm to assist students get foreign scholarships

    Usually, students are the ones that seek out firms that can help them travel abroad for further studies. However, the reverse is the case with Avail International Consul Limited (AICL), which is seeking to help students get into secondary and tertiary institutions in the United Kingdom (UK), United States and Canada irrespective of the funds they have.

    Mrs Bola Agunbiade, the Chief Executive Officer (CEO), AICL, said in an interview with The Nation at the firm’s Ogba, Lagos office, that they can help brilliant students with good grades in their Senior School Certificate Examination (SSCE) attract scholarships from reputable institutions outside Nigeria.

    “There are several scholarship opportunities abroad that people are not even aware of. We want to be able to reach out to students, especially those who are intelligent who have come out in flying colours in their O/levels. They may not have the financial capability to travel abroad; however, there are opportunities for such students to get scholarship. It may be full scholarship, it might be tuition reduction,” she said.

    After evaluating their credentials, Mrs Agunbiade said the firm would help scholarship potentials to present their applications to the universities. She added that for the next two months especially, AICL would offer its services free to all categories of students in commemoration of its second anniversary. She said they would benefit from visa counselling, evaluation and tutorials.

    “We are inviting students and their parents to come in from June 26 all through July and the whole of August. We are looking at them going in for September. We are encouraging them to come here and it is going to be free. We are inviting them to celebrate our second anniversary.

    “We will evaluate their documentation, check credentials, see the ones that are really intelligent, assist to writing good personal statement because this is one of the requirements for scholarships and send the applications off to these institutions and see as many scholarship opportunities we can give out to these students for free. Those who can afford the fees and even those who already have admissions can come in we offer free counseling to them help them with their visa application, give them mock interview based on the likely questions they might be asked at the interview centres and embassies to ease the application process.“

    However, despite the firm’s enthusiasm to help potential students get admissions abroad, Mrs Agunbiade said it only assists those with genuine intention to study. She said if they go abroad for other reasons and misbehave, they spoil the country’s reputation.

    She added: “It is easy for me to tell if the student is genuine. Their parents may have money and just want them to travel. But by the time I talk to them, forgetting even their credentials, I can tell. They might not have the genuine intention to go abroad and really study and its not good for us because institutions come back and blame us that why did we send a student that is not serious.

    “I have about 40 schools in the UK and we have contracts. They make out rules and they insist we must send genuine students. If I have any doubt I tell them no I won’t process it.“

  • ‘Foreign earnings from honey higher than crude oil’

    The Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, has said that global foreign exchange earnings from honey production have grown above that of crude oil production.

    According to him, a barrel of honey attracts more foreign exchange than crude oil.

    He said that a barrel of crude oil is currently sold at $101 while a barrel of honey is sold at the international market for $1,539.

    Adesina, however, noted that the price is inclusive of extant royalties attached to sales of honey at the international market.

    He spoke at Abuja through the Deputy Director, Youth and Gender, Federal Ministry of Agriculture and Rural Development, Mrs. Karima Babangida, at the United States Agency for International Development (USAID) sponsored “Farmer-to-Farmer” (F2F) dialogue between honey producers and bee-keepers.

    The conference with the theme “healthy bees, healthy environment, healthy humans” was initiated to checkmate indiscriminate bush burning, vandalism of beekeeping facilities, honey theft and sundry challenges against sustainable honey production in Nigeria.

    It attracted over 100 key actors in the honey production value-chain, including Nigeria’s statutory security formations.

    Adesina explained that the ministry has initiated collaborative measures with honey producers to train youths and women on bee farming and honey processing, adding that the measure was in line with its ongoing Agriculture Transformation Agenda (ATA).

    “Under the Agriculture Transformation Agenda (ATA) of the ministry, apiculture is one of the highly rated agricultural enterprises that have the potential for creating job opportunities and wealth,” Adesina stated.

    He added: “In countries like Ethiopia, which has achieved the position of being the world’s 8th largest exporter of honey and the 4th largest exporter of beeswax, modern bee-keeping currently provides employment for over two million people and other countries like Tanzania and Kenya are actively promoting apiculture as a poverty-reduction tool.

    “The beauty of promoting bee-keeping in Nigeria is that it has one of the best honeys in the world arising from her comparative advantage to cheaply produce healthy honey in terms of abundant natural vegetation untainted by chemicals and genetic manipulation, favourable weather year round and all the materials needed to manufacture bee-keeping equipment are locally available.”

     

  • Why consumers are hooked on foreign goods

    Why consumers are hooked on foreign goods

    There are people who would choose indigenous products anytime, even if they fall within the same price range with foreign ones. Also, many patronise foreign products even if they are three times more expensive. Consumers purchasing habits, therefore, vary owing to some factors.

    Price is considered one of the most important factors affecting the consumers’ perception of a product. Once consumers perceive a price difference between local and foreign items, price differentials begin to affect their preference for local goods.

    In other words, if they notice that local items are more expensive than foreign ones, they go for the foreign ones.

    Mrs Cynthia Okpara is a teacher at Unique Laurel Preparatory School, Idimu. She said she only buys foreign cereals; she believes they are of better quality.

    “Kellogg’s cornflakes are made in the United States; they taste better than the Milo cornflakes, Nasco flakes and Good Morning flakes. Though more expensive, it gives good value for the money.”

    A high-priced item may be perceived of being high in quality because of the image created by manufacturers through advertising. Similarly, a global product may be perceived to be of superior quality as quality is believed to be a prerequisite for international acceptance.

    Shoppers consider quality when choosing between indigenous and international items.

    “A good quality product is durable, reliable and of good appearance and features,” said Mrs Mary Obire, a staff member of AIICO Insurance Company seen at Delightsome Gifts Concepts, Gbagada buying some household appliances.

    To some, their purchasing pattern depicts their social status. It is believed that people, especially the young ones, consider current fashions and trends while buying a product. Through television, consumers are becoming increasingly aware of the fashions and trends in other parts of the world. Hence, the fashions and trends dictate the preference of some individuals.

    But most people go for international brands rather than local ones. They feel proud when they buy imported items because, to them, it depicts class.

    Apart from just focusing on where the product is from, people consider other factors when buying. It has been noted that consumers are reluctant to buy goods made-in- less-developed countries as they perceive them to be low in quality.

    If a brand is perceived as globally available, consumers are likely to attribute a superior quality to it, because its international acceptance is seen as a sign o f its high quality.

    On one hand, consumers seem to value foreign brands and regard them as a status symbol. But they are often criticised for threatening the local differences leading to a loss of cultural identity.

    Some consumers believe that purchasing local goods promotes patriotism; they, therefore, accuse foreign brands of being a potential threat to a country’s economy and employment level. However, it is important to note also that a good item should have some unique proposition to satisfy a consumer needs.

    The attitudes and perceptions of consumers toward their choice of goods sometimes depends on categories, for example, electronic goods from Italy may be perceived as a poor quality but Italian clothing would be perceive as fashionable and high quality. And the Japanese electronic goods would be perceived with positive attitudes while their clothing will be negatively perceived.

    However, patriotic consumers believe that our local companies have a competitive edge over their foreign competitors because they are closer to consumers here and have a better understanding of what people want. They fear that buying foreign products may hinder the growth of local companies in the country.

    The Nation Shopping spoke with some shoppers to find out which product they patronise more and their experience of indigenous products.

    Mr Samson Shoile, who was at the Berger Bus stop, Lagos, said: “The problem with patronising indigenous products is that they are usually over-priced and of inferior quality. For example, furniture makers sell a set of living room chairs for about N250, 000 and above. It’s not as if they are of the best quality, and the finishing is likely to be shabby. If you check a foreign magazine on furniture, you will realise that what they offer for the same price or less is of a better quality. I don’t find this encouraging.

    Mr Alex Ndigwe told The Nation at Mowe Ibafo, in Ogun State: “I bought a Zinox laptop sometime ago for N80, 000 with very low specifications just because I wanted to buy a made-in-Nigeria product and it didn’t last a year. I could have bought HP or Acer at the same amount with higher specifications. Same with Hitv that is supposed to give Dstv a run for their money; instead it is more expensive with all their crappy stations. It is the same issue with Globacom Nigeria and MTN South Africa.” he said.

    Mrs Esther Aghelibe said: “If we want our local products to pick up in sales we need to force the issue; ultimately, it falls to the government to set trade tariffs to force the price of imported goods to go up so that buying locally made goods becomes attractive to people. For example, if there is a Nigerian car manufacturer that is not getting patronage, put tariff on importation of cars or parts so that people get to buy these cars.

    “The United States (US) did something like that back in the days when the Japanese manufacturers were dominating the electrical appliances market in the US. Most of our goods are better than all these Chinese products seen in every corner of the country. It’s just that we already have the mentality of buying imported goods even if it’s not worth it.”

     

  • Foreign currencies recovered from Alao-Akala’s cleaner

    Foreign currencies recovered from Alao-Akala’s cleaner

    A domestic worker in the home of former Oyo State Governor Adebayo Alao-Akala, Francis Kadibuwa, was yesterday paraded by the police in Ibadan for “burgling” his boss’ home.

    The 28-year-old Benionise confessed to the crime during an interview with reporters.

    He said he stole 18 Dollars, 790 Euro, 560 Pounds, 1,820 South African Rands and 35 Ghanaian Cedis from the house when his boss traveled.

    Kadibuwa said he also stole 28 pairs of shoes and jewellery belonging to his boss and his wife, Oluwakemi.

    A source said domestic workers at Alao-Akala’s Bodija home were arrested and quizzed after the burglary.

    The source said Kadibuwa told members of the Special Anti-Robbery Squad (SARS) to take him to Mrs. Alao-Akala. When they did, it was learnt that he confessed to the crime and asked for her forgiveness.

    Commissioner of Police Mohammed Indabawa said: “After a diligent and painstaking investigation, Kadibuwa, a cleaner in the house, confessed to be the culprit. In his confession, he absolved other workers and claimed he single-handedly planned and executed the burglary. He said he bought house breaking implements, such as hammer, saw-blade, two chisels and nail removers a week before the burglary, which he used to commit the crime between 1 and 3am on May 5, when the occupants of the house travelled to Ogbomoso.

    “He said he deliberately broke the fence and the ceiling of the apartment to give the impression that an outsider invaded the house. We recovered 13 pairs of gold jewellery and some foreign currencies from him. They were hidden inside the ceiling and at the back of a Jacuzzi. The suspect will soon be arraigned.”

  • Nigeria does not need foreign coach

    Nigeria does not need foreign coach

    SIR: Stephen Keshi helped save the Super Eagles with his recent Africa Cup of Nations (AFCON) championship win. Yet, news reportsrecently announced that the Nigerian Football Federation (NFF) was planning to repay Keshi by cutting his salary in half. The NFF has since clarified that it has not slashed Keshi’s salary, only the salaries of his coaching crew and backroom staff. Even without the chop to his own salary, the interference in his staffing setup must taste overwhelmingly bitter to the man who has now twice led Nigeria to the AFCON championship. Outside of the injustice of the NFF not even consulting Keshi prior to the dismissals, the situation also speaks to the inequality between foreign—a term most typically used to refer to European—coaches and African coaches. Would the NFF have dared to do the same to a foreign coach?

    Perhaps related to its all too frequent allegations of corruption, the NFF is undeniably broke. So it may have been forced to cut salaries regardless of the national origin of its coaching staff. But, the fact remains that foreign coaches in both Nigeria and the rest of the African continent are typically treated preferentially over African coaches. After winning this year’s AFCON, Keshi temporarily resigned in February because of NFF pressure to work with either a foreign coach or a foreign technical team. Clearly, the belief that African coaches are not good enough on their own is prevalent across Africa. And this opinion is dead wrong.

    Most African countries do not have the economic resources to attract Europe’s premier coaching staff. The European coaches that are imported by African nations tend to be overpriced for their qualifications. Those countries that can afford to pay exorbitant sums for Europe’s finest often find that high costs are no guarantee of success. Eric Gerets—once considered one of the top right-backs in Europe—couldn’t lead Morocco past the first round of the African Cup, despite receiving one of the highest coaching salaries (Sh 25 million per month) in Africa. Yet, African states continue to operate under the mistaken assumption that an imported coach will revolutionize their football program and bring them to victory. Uganda, one of the world’s poorest countries, nevertheless insisted on paying Bobby Williamson KSh 1.8 million per month for nearly five years, even though his teams were never able to qualify for AFCON.

    The exorbitant salaries of foreign coaches would be better spent improving and increasing youth development programs; thereby strengthening a nation’s available talent pool. By adopting a bottom-up approach, countries would make their players more attractive for recruitment in top-quality foreign leagues. Ultimately, rather than pouring money into an endless train of questionable foreign leadership, African nations should be reinvesting in their own.

     

    • Clare Finnegan,

    New Jersey

     

  • Foreign capital inflows hit $9b

    The aggregate foreign capital inflows were $9.1 billion in fourth quarter of 2012, External Sector Development Report released by the Central Bank of Nigeria (CBN) has stated.

    The report published on the CBN website at the weekend, said the figure rose by $3.4 billion in the fourth quarter when compared with $6.6 billion recorded in third quarter of last year.

    Further analysis showed that both Foreign Direct Investment (FDI) and portfolio investment inflows increased over their levels in the third quarter by 110.9 while investment inflows remained dominant in the aggregate foreign capital inflows. However, its share declined from 78.1 per cent in the third quarter to 66.2 per cent.

    However, the outward foreign capital flows increased from $0.91 billion in third quarter to $1.08 billion in fourth quarter due to the activities of the subsidiaries of domestic money banks in the West African sub-region.

    The CBN said foreign exchange inflows to the economy in fourth quarter stood at $32.24 billion compared with $31.23 billion in third quarter, representing an increase of 3.2 per cent. Total outflows amounted to $8.15 billion as against $8.67 billion. Consequently, a net inflow of $24.09 billion was recorded in 2012 compared with $22.56 million in third quarter.

    External reserves also increased from $40.64 billion to $43.83 billion during the review period, while the exchange rate remained relatively stable.

    “Despite these positive developments, the persistent deficit in the services account calls for proactive policy actions targeted at the development of services sub-sector and investment in human capital through vocational and technical education. The current attention being given to the agricultural sector should be sustained in order to reduce high import bills on food items. The major threats to external sector stability in the medium term are; the volatile nature of the short-term capital inflows, slowly rising external debts and non-diversification of the economy,” it said.

    The estimated current account position showed a lower surplus of $7.2 billion or 10.6 per cent of gross domestic product (GDP) in fourth quarter compared with $7.7 billion recorded in third quarter of 2011. It attributed the development to the increased out-payments on services while the widened services out-payments suggest the need to enhance the development of the sub-sector through adequate government support and development in human capital, tourism and health.

    “Relative to the level recorded in fourth quarter of 2011, the surplus in the current account in fourth quarter of 2012 increased by 188.2 per cent. Further analysis revealed that exports of goods declined by 0.8 per cent from its level in third quarter of 2012 as against an increase of 3.5 per cent over fourth quarter 2011,” it said.

     

  • Q1: Foreign portfolio investment drops by N140b

    Foreign portfolio investment dropped by N140billion or 39.3 per cent in the first quarter of this year, a report by Financial Derivative Company has revealed.

    Also, foreign exchange sales at the Wholesale Dutch Auction System (WDAS) fell from $6billion in the corresponding period of last year to $3.9 billion this year.

    In its April Economic Report, the company noted that the pressure on the naira in the forex market will persist but continued Central Bank of Nigeria (CBN) intervention to protect the local currency will also continue.

    The report said the Sovereign Wealth Fund has a N1 billion start-up capital. He said that Nigeria will also borrow in 2013 to support its infrastructural and other capital projects.

    FDC said the monetary policy stance of the CBN has been tightening in spite of rising inflation, adding that the reserves was $49 billion in first quarter and would cover 13 months of imports and payments for the country.

    The firm said hot money in the economy is unofficially estimated at $11 billion adding that capital inflows have been trickling in after the earlier gush in late 2012. He said the decline in the inflation from a peak of 12.9 per cent to nine per cent in January before climbing to the current 9.5 per cent was due to base year effects even though the core inflation rate declined in February.

    “The major threat to price stability remains the fear of fiscal dominance and high powered money. The possibility of a supplementary budget and electioneering spending in a politically polarized environment is a clear and pre-sent danger to the explicitly stated objective of keeping inflation below 10 per cent,” he said.

    He said the markets have already discounted the interest rate as a nominal anchor, rendering it as an impotent benchmark.

    “The treasury bill auction rates have declined down to 9.2 per cent per annum. The Bond yields have gone the same way. This disconnection between the market and the benchmark is partly because of the impact of T/Bill maturities and the huge federal government disbursement of N888 billion and N400 billion capital votes last week. We expect the market to continue the trend of interest rates declining slowly until the next meeting in May,” FDC said.

    The report said the Monetary Policy Rate, the benchmark rate by which the CBN determines interest rate, has remained at 12 per cent since October 2011 when it was increased from 9.25 representing 275 basis points raise.

    It said, the CBN was advised to sustain its efforts at finding other innovative ways to unlock the credit market and stimulate the economy adding that despite implementation of the cashless policy, 90 per cent of transactions are still cash-based.

    According to the report, poor corporate governance practices, undue exposure to the capital market, oil and gas sectors, poor risk management, distress signs through the banks’ frequent resort to the inter-bank market and the Expanded Discount Window (EDW) were defining issues before the reforms. There were also matters relating to inadequate disclosure and lack of transparency about banks’ financial positions, making the reforms inevitable.

    Rewane said emerging markets also facing serious inflationary threats, which could much higher in 2012.

    Unsecured lines of credit for Nigerian banks to become more expensive to support trade finance. For Nigeria, raising new money from the Euro bond market will be more challenging. He said the gap between inflation and short term interest rates narrowed, thereby helping to stabilize the naira and reduce the rate of external reserve depletion.

  • Foreign consultants?

    Foreign consultants?

    Nigeria’s unemployment challenges seem inconsequential to the Nigerian National Petroleum Corporation (NNPC) and its subsidiary, the Nigerian Petroleum Development Company (NPDC) that recently embarked on a wild goose chase of employing foreign consultants to manage their operations. In their view, the move will engender efficiency and quick service delivery in Nigeria’s oil and gas industry.

    Iyowuna Victor Briggs, Managing Director of NPDC, represented by Malam Hamidu Namtari, the company’s executive director, engineering and technical services division at the 1st NPDC Quarterly Contractors’ Forum in Benin City, Edo State, attributed the decision to the need to face the “challenges of the company’s rapid expansion and the need to effectively manage the large number of assets recently assigned to it.”

    It is doubtful whether NPDC would have embarked on the action without the approval of its principal, the NNPC. But, why would the corporation approve such a move at this point in time when the country is faced with serious graduate unemployment problems? The NNPC started, ab initio, as Nigerian National Oil Corporation (NNOC) on April 1, 1971 through Decree no. 18 of 1971. It is sad that the corporation has departed from its enabling mandate of training indigenous workers; and also that of encouraging indigenous participation in the development of infrastructure for the industry, among others, with its current emphasis on foreign consultants.

    Even after the name NNOC was changed to NNPC on April 1, 1977, the crucial statutory brief of the corporation on local manpower content development in the discharge of exploratory, production, refining, marketing, transportation, and distribution of petroleum products was not altered. Why should a subsidiary of a corporation that is saddled with this important responsibility go to the ridiculous level of employing foreign consultants to manage its operations? Exploration and management of oil by the corporation has spanned over four decades; so, the need for foreign experts to survive teething problems is no longer tenable.

    What has happened to the Local Contents Law? Could it be proved that no Nigerian exists with the requisite competence to handle efficiently the operations of the NPDC? If yes, what this means is that the NNPC has abandoned its responsibility of training indigenous manpower to handle such tasks.

    What is more confounding is that NNPC and its subsidiaries ought to be the driving force behind the country’s economic development. But they are all, sadly, pursuing neo-colonial employment policy that negates the contents of NNPC’s enabling Act. The NNPC, over time, has become renowned for being a cesspit of corruption necessitating its being treated with disdain by many Nigerians.

    The employment of the so-called internationally certified consultants to help upgrade its operations and strategies has confirmed the corporation as a laboratory for fraud. We ask again: what happened to successive budgets of the corporation meant for manpower training and development of Nigerians in requisite areas of operations in the oil industry? If by now NNPC and its subsidiaries still claim not to have competent, internationally recognised local manpower to tidy up its operations, then, there is something wrong somewhere with the entire corporation.

    We believe that NNPC and, by extension, its subsidiaries, have failed the competence and probity tests to manage the country’s oil exploration, marketing and revenue generation. The pointer is that not less than 20 per cent of the country’s revenue is wasted and unaccounted for by the corporation. Perhaps, the controversy over the phantom fuel subsidy would be unnecessary if NNPC is scrapped forthwith. We see no sense in the use of foreign consultants by these oil firms.