The Nation Newspaper

Tag: GDP

  • How water supports economy, by environmentalists

    Except the management of water resources is adequately addressed, all projections on poverty reduction and sustainable development will remain a mirage, environmentalists have declared.

    They spoke at the 12th Chief Shafi Edu memorial lecture organised by the Nigerian Conservation Foundation in Lagos at the weekend.

    Renowned climatology, Professor Olukayode Oladipo, who was the guest lecturer in his paper titled “climate resilient water resources management for poverty reduction in Nigeria”, said that water stress is already high in many parts of the country making improved management critical to ensuring sustainable development.

    According to him:”Water resources underpin our quality of life and our national economy. The sustainability of Nigeria’s economic growth and development will depend on what happens to its water resources.

    “Water is a key input to economic growth sectors and contributes to employment, job creation and gross domestic product (GDP), but the sector is highly vulnerable to climate change.

    “Water management can be a catalyst for a pro-poor economic growth, particularly at a local level, where it provides vital inputs into productive activities and creates opportunities for local entrepreneurs in supplying technologies, constructing facilities and providing services.”

    President of the Nigerian Conservation Foundation, Philip Asiodu, called on the government to implement policies aimed at combating the various environmental challenges in the country.

     

  • Firms partner on tree planting

    Firms partner on tree planting

    Bende Export-Import Limited, a local firm says it has entered into a strategic alliance with Bende Belcarbon Belgium and GSC Bende Belcarbon france to promote tree planting among producers and exporters of charcoal.

    The latest initiative to boost non oil export was disclosed in Lagos by the Managing Director and Chief Executive Officer of the Bende Export-Import Limited, Mr.Benjamin Kalu, at an interactive session with reporters.

    Kalu explained that the partnership between the three organizations was aimed at encouraging tree planting, recycling saw dust and coconut shell all aimed at growing the Gross Domestic Product (GDP) contribution of the non-oil sector to the economy.

    Indeed, he said the recently introduced recycling model has led to the production of charcoal without cutting down trees, but rather, through recycling saw dust and the use of coconut shell and palm kernel shell for charcoal production. On the other hand, he said exporters who now get their money on time have also commended this first major partnership between Europe and Africa in the business of charcoal. According to trio of CEO Bende Belcarbon Belguim, Mr. Afflisio Giovanni: “This is the kind of synergy we have always wanted as operators in the European market. We are happy we now have a reliable and environmental protection compliant partner in Bende Export Limited”. He said about 790 trees have been planted between August and October while the November figure is still being expected, urging the Federal Government to assist the firm with seedlings to boost its effort. Our exporters now take tree planting seriously, by working closely with the forestry regulators and more especially, we have started receiving good quality charcoal made from coconut shell, palm kernel shell and saw dust., “he said.He hinted that the firm has recorded successful tree planting exercise in Ugwueke In Abia State,Ogobia in Benue State, Iseyin, Ibiko Ilo, Ijio, Ilesa,Saki Okaka,Ibiko Ilo, Out with more distribution of seedlings ongoing. In a related development, Bende Export-Import Limited has sealed another major deal in the UK and will soon become the major exporter to the United Kingdom. According to a statement signed by the Abia State Governor, Uzor Kalu, the companies in the UK after two years, were impressed with the environmentally friendly business model of Bende export and has thus signed a major relationship agreement last week in London with the firm”This has moved the USAIDNEXTT,an agency of the United State supporting export from Nigeria to speed up their discussion on how best to partner with Bende Export in the area of transport of the agro commodities which ranges from Sesame seeds, cashew nuts, cassava, cocoa, ginger and so on from the farms to the sea ports,” he said.

  • Towards deepening gas market

    Towards deepening gas market

    The gas market has not been fully explored to optimise its economic benefits to the nation. Stakeholders in the gas sub-sector are seeking ways to increase its contributions to grow the nation’s gross domestic product (GDP), writes AKINOLA AJIBADE

    Nigeria, with 187 trillion cubic feet of proven gas reserves and an estimated 600trillion cubic feet of gas potential, has what its takes to play in the global gas market. The country’s natural gas has been designated the preferred fuel for power, and it is expected to deploy in the short term, 2.5billion cubit feet of gas to the sector by 2015. Also, Nigeria exports gas to Asia and other continents, and is expected to make the product another source of revenue generation. However, the country has battled myriads of problems associated with oil and gas production.

    From pollution associated with gas flaring, low production of Liquefied Petroleum Gas (LPG), shipment/ supply bottlenecks, to fluctuations in the prices of the product to poor consumption and the recent crisis between the Nigerian Liquefied Natural Gas (NLNG) and Nigerian Maritime Administration and Safety Agency (NIMASA), the list is endless. These have affected the industry’s growth and develoment.

    Last week, stakeholders gathered at Oriental Hotel, Lagos, for the third edition of the Nigerian Liquefied Petroleum Gas Association conference to discuss some salient issues affecting the sector. Some of the issues raised were how to deepen the market and further make operators harness the potential in it.

    According to the stakeholders, the market can be deepened by encouraging more people to use LPG otherwise known as cooking gas, autogas, and others.

    They said the country has huge gas reserves to its credit, arguing that regulatory, operational, and commercial problems must be addressed to deepen the market.

     

    Regulatory problems

    The Managing Director, Longview Gas Limited, Mr Femi Fanoiki, said overlapping of jurisdictions among agencies is one of the major problems besetting the growth of the gas sector. He said the need to separate the functions of agencies, such as the Department of Petroleum Resources (DPR), the Standards Organisation of Nigeria (SON) and the Lagos State Environmental Monitoring Agency (LASEMA), is imperative to move the sector forward.

    He said the three agencies are duplicating efforts by accessing the quality of gas used in the country. He said separating the roles of these agencies will hasten the delivery of gas to the end-users, adding that the development will also increase the patronage of the product and by extension, economic activities.

    Speaking on the theme, ‘Challenges in operating in the Nigerian LPG Sector,’ Fanoiki called for a simple and flexible method of accessing the quality of gas for growth.

    Also, the Chief Executive Officer, NLNG, Babs Omotewa, said operators needed incentives in form of tax waivers to maximise the potentials in the industry. In a paper, titled: ‘Domestic Production/ Supply: NLNG’s Perspective,’ Omotewa, said incentives will help stakeholders in the gas value chain to grow their businesses and further bring more people into gas usage net. Citing Brazil, India and Senegal, he said governments in those countries have provided incentives to gas operators, adding that the development has impacted positively on the industry.

     

    Infrastructure

     

    Omotewa said the dearth of infrastructure and its attendant problems have slowed down the growth of the sector, adding that addressing these problems will help in deepening the market. He said the creation of two additional Greenfield Liquefied Natural Gas projects at Brass and Olokola will help in growing the sector, adding that the shipment of gas from its NLNG’s Bonny Plant, Rivers State to Lagos must be sustained to deepen the gas market.

    He said: “There are 10 off-takers, otherwise known as big ships that move LPG from Bonny through the high sea where they stop for smaller vessels to take the product to Lagos. There is the need to increase the off-takers and the vessels to reduce transportation problems. When this happens, there would be prompt delivery of cooking gas to the oil marketing firms for onward distribution to consumers. ‘’

    He urged the government to allow direct importation of cylinders to enable more people access gas for domestic use. The development, he said, would help in deepening the LPG market in Nigeria and increase economic activities. Omotola said the market is wide enough to accommodate more operators, advising investors to tap the opportunities.

    ‘’Few years ago, we struggled to get seven firms in the market. But now we have over 200 firms that are contributing their own quota to the growth of the industry. “There is no reason Nigeria should not be consuming LPG in excess of one million tonnes if the right infrastructure are in place. Also, NLNG has increased the supply of LPG from 150,000 to 250,000 tonnes to deepen the market, ‘’ he added.

     

    Business model

    Nigeria operates a free-market system that allows business owners charge differential prices on goods or services rendered to people. The system, Fanoiki said, had affected the distribution and sales of gas to the end-users. He said base station gas owners, retailers, oil marketing firm sell gas in response with the market forces.

    ‘’Though it is good to have a free-market system, it should not be abused by people. There should not be arbitrary increase in the price of gas or its by-products. Product pricing mechanism must be put in place to check such practices,” he said.

     

    Strong advocacy initiatives

    The President, Nigerian Liquefied Petroleum Gas Association Association (NLPGA), Dayo Adeshina said an awareness programme is needed to deepen the market. He said advocacy issues should be tailored towards meeting the needs of stakeholders, especially the consumers. He said LPG usage in Nigeria is the lowest in West Africa, in spite of the increase in supply of the product from 70,000 metric tonnes in 2007 to 150,000 metric tonnes in 2013. He said a lot needed to be done in sensitising people on the use of gas for domestic and industrial needs.

    Adeshina said the Federal Government’s decision to drive the consumption of LPG to about one million tonnes yearly by 2015 might not be realised going by the slow rate of acceptability of the product. He said 19 states suffer from desertification caused by tree cutting and other unfriendly environment activities, stressing that one of the ways of mitigating the problem is optimal utilisation of LPG.

    The Managing Director, Chimons Gas Limited,Chibuike Lawrence Achigbu, said individual initiatives must be adopted to deepen the market. He said he leveraged on his membership of LPG Trade Group of the Lagos Chamber of Commerce and Industry to organise an advocacy programmes on gas. He said the development has helped orchestrate road shows to show the importance of LPG. He said the company is lobbying the governments on how to deepen the gas market and further encourage growth.

     

    Oil firms approach

    Oando Marketing Plc has signed a memorandum of understanding (MoU) with the National Association of Microfinance Banks (NAMB) to enable low income –earners buy its gas known as Oando’s O-Gas. Through this, people can approach any of the microfinance banks and get O-Gas 3-in 1 cylinder with an initial deposit of N200. Subsequently, they will be making N200 daily payment to the bank for 30 days until they complete the payment cycle for the cylinder.

    The company’s Head of Marketing Communication, Seun Soyinka said: “ The new initiative is consistent with OMPs (Oando Master Plan) to switch millions of Nigerians from the use of biomass to clean, efficient , affordable and sustainable LPG using Oando’s 3kg O-Gas , an integrated offering that comes with a cylinder ,burner and gas. “

    Chairman NAMB, Lagos State chapter, Valentine Whensu, said: “The partnership will boost the liquidity and the confidence level in MFB, because they provide all that is needed for their customers, by giving them loan, encouraging them to save, and taking care of their health which is very important in the life of every human being.”

  • Fed Govt saves N120b from ghost workers in MDAs

    Fed Govt saves N120b from ghost workers in MDAs

    The Federal Government has said it saved N120 billion from ghost workers in its Ministries, Departments and Agencies (MDAs).

    Dr Ngozi Okonjo-Iweala, the Coordinating Minister for the Economy and Minister of Finance, spoke in Lagos at the FBN Capital third annual investors’ conference.

    The minister said the figure was N20 billion higher than the N100 billion the government discovered in February.

    She said the government would continue to cover the leakages in the economy to reduce recurrent expenditure and promote the development of infrastructure.

    “The major problem that distorted current expenditure in the country was the across-the-board increase in salary in 2010,” Okonjo-Iweala said.

    The minister, who spoke on the theme: 2014 and Beyond: Managing Growth Prospects and Challenges, promised that the Federal Government would further reduce its recurrent expenditure in the 2014 budget.

    She said the government would continue with its fiscal consolidation to increase job creation and provide social amenities.

    Okonjo-Iweala said the nation’s gross domestic product (GDP) would be rebased to reflect the growth recorded by various sectors of the economy.

    She said the GDP growth of 10 per cent would remain government’s target in the years ahead.

    Olusegun Aganga, the Minister of Trade and Investment, said the Federal Government would maintain investor-friendly reforms to encourage Foreign Direct Investment (FDI) inflows.

    Aganga, who spoke on the theme: FDI Flows-Enhancing Nigeria’s Positioning and Competitiveness, stressed that the government would ensure the growth of all sectors to reduce dependence on petroleum.

    The minister said the government would concentrate on areas with competitive and comparative advantage to sustain growth, especially in agriculture development.

    He said Nigeria, with its rapid growth and potentials, would be among the world’s best 30 performing economies by 2050.

    The News Agency of Nigeria (NAN) reports that the conference, tagged: Tomorrow’s Nigeria Through Economic Empowerment, is a yearly event of FBN Capital Limited.

     

  • ‘Nigeria’s retail market contributes 3% to GDP’

    The launch of the Retail Council of Nigeria (RCN).

    The retail market, according to an official of the RCN, contributes three per cent to the nation’s Gross Domestic Product (GDP).

    Addressing reporters in Lagos, a member of the Board of Trustees (BoT) of the council, Haresh Keswani, said: “Organised retail has a direct relationship to economic growth. The United States and Britain have over 80 per cent each of the organised retail market’s contributions to their economic growth. In Japan and India, the organised retail market contributes about 66 per cent and 10 per cent to economic growth.”

    The RCN official noted that Nigeria’s three per cent was from the “unorganised” retail market in the country.

    According to him, 27 per cent of the global GDP is contributed by organised retail market.

    Keswani said: “Across the globe, the retail market employs 17.1 per cent of the workable population. In the U.S., it accounts for 14 per cent. Organised retail supports the development of various sectors across the economic environs of the country and it assists to conserve foreign exchange.”

    He added that an organised retail market would increase the revenue base for the government.

  • Fed Govt earns N8tr from oil

    Fed Govt earns N8tr from oil

    The Federal Government earned N8trillion from oil i last year,according to the Central Bank of Nigeria’s (CBN) yearly report released at the weekend.

    Analysis of the receipts indicated that oil revenue (gross) accounted for N8.02 trillion (19.8 per cent of GDP), representing 75.3 per cent of the total. It surpassed the 2012 budget benchmark of N6.6 trillion by 20.9 per cent, but was below the 2011 receipts by 9.6 per cent.

    A breakdown showed that, relative to the preceding year, revenue from crude oil and gas exports fell significantly by 22.2 per cent to N1.7 trillion. Similarly, receipts from domestic crude oil sales declined by 28.2 per cent to N1,874.2 billion, while revenue from petroleum profit tax (PPT) and royalties increased by 9.8 per cent to N4.36 trillion.

    Also, the Federal Government earned N10.65 trillion for the year. The earnings represented 26.3 per cent of Gross Domestic Product (GDP), earnings into the Federation Account substantially exceeded the N9.6 trillion budget benchmark for the 2012 fiscal year.

    The development was attributed to the buoyed receipts from oil and non-oil sources. The sum of N6.5 trillion was transferred to the Federation Account (net) after all deductions, and exceeded the target set in the 2012 budget.

    It said the fiscal operations of the Federal Government resulted in an overall deficit of N975.7 billion, or 2.4 per cent of GDP.

    Provisional data on state government finances indicated an overall deficit of N272.4 billion, while that of the local governments represented a deficit of N2.4 billion. Consequently, the general government consolidated expenditure was N10.09 trillion, or 24.9 per cent of GDP, while aggregate revenue was N8.9 trillion. This resulted in an overall deficit of N1.1 trillion, or 2.9 per cent of GDP, which was financed largely from domestic sources.

    About N1.1 trillion was deducted from gross oil receipts for the Joint Venture Cash (JVC) calls, N2.7 trillion in respect of excess crude /royalty proceeds and “others”, leaving a net distributable balance of N4.1 trillion for the three tiers of the government.

    The report said asset quality of the banks, as measured by the ratio of nonperforming loans to industry total, improved substantially as it declined from 4.95 per cent at end-December 2011, to 3.47 per cent at end-December 2012. The average industry liquidity ratio (LR) stood at 63.9 per cent, and exceeded the prescribed LR of 30 per cent, compared with 69.1 per cent at end-December 2011.

    It said on-site reviews were carried out on 1,196 Other Financial Institutions (OFIs). The exercise included the examination of 936 OFIs and the conduct of spot-checks on 260 bureaux-de-change (BDCs).

    The on-site examination of 791 MFBs showed that 68.3 per cent met the capital adequacy ratio (CAR) of 10 per cent, compared with 70.4 per cent in 2011. Six hundred and fifty-two MFBs or, 82.4 per cent, complied with the minimum liquidity ratio (LR) of 20 per cent as against 84.0 per cent in 2011. The average liquidity ratio of the institutions was 62.3 per cent, which exceeded the prescribed minimum LR of 20 per cent, compared with 84.0 per cent in 2011.

     

    However, the asset quality of the banks deteriorated as their portfolio-at-risk (PAR) ratio increased to 61.9 per cent, from 46.0 per cent in 2011. This was attributed to the fact that most of the institutions were yet to articulate and adopt appropriate risk management frameworks to mitigate the credit risks inherent in their operations.

  • MSMEs create 32.4m jobs

    The Micro, Small and Medium Enterprises (MSMEs) sector has employed 32.4 million Nigerians, and contributed 46.54 per cent to the nation’s Gross Domestic Product (GDP), the Director-General, Small and Medium Enterprises Development Agency (SMEDAN) Bature Masari has said.

    He told The Nation that the importance of entrepreneurship cannot be overemphasised as research has shown that MSMEs are critical to the growth and economic development of nations, contributing not less than 50 per cent of GDP on the average, income generation, wealth creation and poverty alleviation.

    “In Nigeria, according to the national survey on MSMEs by SMEDAN and NBS (National Bureau of Statistics), we have over 17.2 million MSMEs, employing 32.4 million Nigerians and nominally contributing 46.54 per cent of the nation’s GDP at the period under review,” he added.

    He said to reposition MSMEs for economic development, one of the strategies SMEDAN has adopted that needed to be sustained is strengthening entrepreneurship along the value chain of the typical business cycle.

    He said from start-ups, the body looks at the business conception/idea generation, project identification, feasibility study, business plan, sourcing for finance, programme execution and implementation, evaluation and control, sales/marketing.

    He said poor access to affordable finance, leading to inadequate working capital, remained the bane of the MSME sector, despite its potential as the engine of economic growth.

    According to him, despite SMEDAN’s efforts to partner with the Bank of Industry (BoI), businessmen in the sector still find it difficult to access funds due to high interest rates.

    Masari said if the sector was adequately funded, it would reduce the high rate of unemployment among the youth as well as increase the country’s gross domestic product.

    He said: “Nigeria is suffering because this is a sector that remains the engine of economic growth and a contributor to job and wealth creation, and poverty eradication but has been neglected.

    He said the MSMEs had transformed many economies, adding that urgent actions should be taken to address some of the challenges in the sector.

    He said: “Let’s get all hands on deck and stop paying lip service to matters affecting this all-important driver of economic growth.

    “The government must come up with good policies, with appropriate people to implement them, for Nigeria to have the sustainable economic development to be among the 20 top nations of the world by 2020.”

  • World Bank forecasts Africa’s growth

    World Bank forecasts Africa’s growth

    The World Bank has forecast a 4.9 per cent economic growth for Sub-Saharan Africa (SSA).

    According to the bank, almost a third of the countries in the region are growing at 6 per cent and more. It said African countries were now routinely among the fastest-growing countries in the world.

    This is contained in the bank’s new Africa’s Pulse, a twice-yearly analysis of the issues shaping Africa’s economic prospects.

    Sub-Saharan African growth, the report said, was buoyed by rising private investment in the region and remittances now worth US$33 billion a year.

    The report said: “Supporting household incomes gross domestic product (GDP) growth in Africa will continue to rise and pick up to 5.3 per cent in 2014 and 5.5 per cent in 2015.”

    Strong government investments and higher production in the mineral resources, agriculture and service sectors, the report said “are supporting the bulk of the economic growth.”

    As Africa’s growth rates continue to surge with the region increasingly a magnet for investment and tourism, the report said poverty and inequality remained “unacceptably high and the pace of reduction unacceptably slow.”

    Makhtar Diop, the World Bank Group’s Vice President for Africa, said “Sustaining Africa’s strong growth over the longer term while significantly reducing poverty and strengthening people’s resilience to adversity may prove difficult because of the many internal and external uncertainties African countries face.”

  • ‘GDP rose by 6.18 per cent in Q2 ‘

    THE nation’s economy grew by 6.18 percent in the second quarter of 2013, the National Bureau of Statistics, said in its new report at the weekend.

    A copy of the report, which was signed by the Statistician General of the Federation said: “On an aggregate basis, the economy, when measured in second quarter 2013, grew by 6.18 per cent in the second quarter of 2013, slower than the 6.56 per cent recorded in the first quarter of 2013 and 6.39 per cent recorded in the corresponding quarter of 2012.”

    The nominal GDP for the second quarter of 2013, the report said, was estimated at N9.115tn lower than N9.840tn estimated for the corresponding quarter of 2012 and N9.493tn recorded in the first quarter of 2013.

    It said while the oil sector experienced production challenges, the non-oil sector output increased in the second quarter of 2013.

    The bureau added that the non-oil sector growth was driven by growth in activities recorded in the agriculture, airlines, hotels, restaurants, building and construction sectors.

    It added: “The oil sector contributed approximately 12.9 per cent to real GDP in the second quarter of 2013, lower than the 14.75 per cent contribution in the first quarter of 2013, and the 13.86 per cent recorded during the second quarter of 2012.”

     

     

     

     

     

     

     

  • GDP rebasing’ll boost economy, says minister

    GDP rebasing’ll boost economy, says minister

    Stakeholders involved in the Gross Domestic Product (GDP) rebasing exercise must ensure that the figures they get at the end of the exercise are the true reflection of the economy, the Minister/Deputy Chairman, National Planning Commission (NPC), Dr Shamsuddeen Usman, has said.

    Usman, who gave the advice during a two-day Sensitisation Workshop on Nigeria’s GDP Rebasing Exercise in Abuja, noted that this was the only way to ensure sustainable economic development.

    He said the GDP measures the value of the total economic output at a particular period of time, and remains the single most universally accepted measure of economic output for international comparison.

    He maintained that the attainment of the nation’s Vision 20:2020, is dependent on the availability of reliable GDP estimates.

    He said: “It is critically important that the nation’s GDP estimates are accurate as possible, adequately capturing historical changes and developments over time, appropriately depicting the present realities and sufficient enough to serve as basis for future projections.”

    The Statistician-General of the Federation, Dr. Yemi Kale, said that the tentative figures of the rebased GDP will be released in December upon completion of the nine scheduled surveys, while the final figures would be announced next year at the end of the two major censuses planned as part of the rebasing exercise

    He restated the strategic importance of the project to national development, and canvassed stakeholders’ support for the exercise as an option for the realisation of the broad policy objectives of the Transformation Agenda, as well as those of the broader Vision 20:2020.

    Kale, who spoke elaborately on various initiatives by the National Bureau of Statistics (NBS) to improve the quality of the Nigerian statistical system, described the GDP rebasing project as coming at an auspicious time after over 23 years of the last exercise, designed to help in updating Nigeria’s GDP in a way that would reflect the accurate value added of the production of goods and services in all sectors.

    The International Monetary Fund (IMF) Senior Country Representative in Nigeria, Scott Rogers, said the effort to rebase the GDP, would help Nigeria’s efforts being targeted at using reliable and timely statistical data as economic tool for effective planning, and implementing of governments’ policies at national and sub-national levels.

    Commending the NBS for the initiative, the IMF chief was optimistic that the successful completion of the exercise would improve Nigeria’s ratings in terms of her economic capacity and opportunities.