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Tag: infrastructure

  • Nigerian logistics infrastructure: Challenges & prospects

    Nigerian logistics infrastructure: Challenges & prospects

    Abstract

     

    For organisations and companies to be competitive in a globalised  market, they need to move their products and services around the globe so as to meet customer demands and needs. In the light of this, competitiveness cannot be delinked from efficient infrastructure chief of which a competitive logistics transport system is crucial.  Thus, the importance of efficient infrastructure and logistics transport system to economic development cannot be over flogged if countries and organisations want to attain economic prosperity in a now globalised world.

     

    Introduction

    Infrastructure is defined as part of a structure; material or economic base of a society or an organisation.  Therefore, infrastructure can be seen as the basic structure that fosters the good performance of cities’, states’ or countries’ essential services.  In this sense, for a country to have a good logistics infrastructure system in the different modes of transportation, constant investments from both public and private sectors are needed.

    Organisations, especially in a competitive and globalised world, require infrastructure compatible with their needs and demands, in order to transmit their products and services to different producers and demand centres in different parts of the globe.

     

    Infrastructure as a

    competitive factor

    Infrastructure as defined above can be understood as the basic structure directly responsible for the efficient functioning of the transport, education, healthcare, sanitary, security, communication, energy systems and others that support a country’s economic development. Thus, the fundamental factors to competitiveness are established by economic performance, government, business and infrastructure efficiency.

    We will look at the different segments of infrastructural requirement for a virile logistics system.

     

    Transport infrastructure system

    The existing transport infrastructure in Nigeria for obvious reasons is affecting the economic performance and organisations competitiveness.  The transport infrastructure in Nigeria consists of the following modes: road, rail, maritime, pipelines and air.  From available statistics, the bulk of cargo transported round Nigeria makes use of the road system. The pipeline system basically is used to transport oil, gasoline, diesel, natural gas and others, the air system are probably the less used in comparison with rest.

    We will discuss them under the following headings:

    Maritime/shipping;

    Rail transportation;

    Inland waterways

    Road transportation.

     

    Maritime/shipping:

    One of the major challenges facing Nigeria at present is that it has no meaningful participation in the shipping industry on which Nigeria depends, both for exports and Imports.   Practically all Nigerian Exports are shipped “Free on Board” (FOB), while its Imports are shipped ‘Cost Insurance Freight’ (CIF).  The oil rigs in Nigeria waters and the vessel which service them are owned and controlled by foreigners.  Even the vessels involved in coastal trade and Inland Waterways covered by the Cabotage Act are mostly controlled by foreign Ship owners.

    Statistics show that Nigeria pays over $2 billion in freight each year to foreign ship owners either to export oil or to import finished goods.  Presently Nigeria derives no benefit from the freights incurred.  From available records the value of vessels engaged in the three areas of Nigeria’s shipping business namely: offshore rigs and support vessels, coastal cabotage trade and import and export trade, amount to well over $20 billion.  The consensus is that if Nigeria can gain a foothold in its Shipping Industry, the potential would be enormous:

    Job creation;

    Foreign exchange earning;

    Wealth creation;

    Indigenous shipping capacity.

     

    Rail transport:

    The problems of Nigerian railways are many including insufficient locomotives, rolling stock, poor working capital, obsolete signalling and communication equipment, narrow gauge system, poor financial and managerial support base and lack of political will.  Government needs to re-launch the 25year strategic rail vision for Nigeria, change from narrow to standard gauge, strengthen the curves and gradients of the existing narrow gauge and professionalize the management structure.  In spite of the conscious efforts at ensuring prompt and timely maintenance of assets, the main constraint of effective infrastructural assets management in the Nigerian Railway Corporation remains inadequate funding by successive governments resulting in:

    • Poor infrastructural assets management
    • Delays in accident clearance resulting from non-availability of needed materials and tools.
    • Poor mechanization of track maintenance
    • Inadequate number of inspection vehicles
    • Delay in the rehabilitation of washout sites in the North Eastern section of the NRC (between Bauchi – Gombe)
    • Lack of adequate maintenance spare parts for locomotives and rolling stocks

     

    Inland waterways

    transportation

    The Nigeria Inland Waterways Network is reputed to be one of the longest in the world spanning over 3000 kilometres.  It consists of 50 Rivers, including Rivers Niger, Benue, Cross River, Kaduna, Imo, Ogun, Sokoto and Lakes in Oguta and Chad.  However, this great transport resource is still underutilized.

    Development and utilisation of Inland Waterways in Nigeria will improve logistics to a large extent, which explains recent efforts by the government to dredge the River Niger by the Nigeria Inland Waterways Authority.

    The authority says successful conclusion of the dredging project indicate great economic benefits to Nigeria and populations along the waterways.

     

    Road Transportation:

    Since 1960, Nigeria’s road transportation infrastructure has enjoyed the largest outlay of foreign investment compared with other modes and remains the preferred option for door to door linkage.  Until recently our policy initiative on road infrastructure development, funding, maintenance and even operations have been the sole responsibility of the various tiers of government.  The on-going initiative in encouraging private sector participation in the transport chain and logistics optimisation is encouraged.

    Generally, a holistic strategy involving the overall improvement of not only the road mode, but also the rail, water, and air modes are developed.  In this connection a blue print should be evolved instead of the current sub-sectoral and uncoordinated approach.

    It is also recommended that the private sector should be involved in the planning and development of transportation as part of the Public Private Partnership initiative of the present Government.

    Other Infrastructure Issues:

     

    Logistics education

    The key to corporate growth and profitability in years to come is to provide top customer service at lowest overall logistics costs.  This requires logistics professionals, with analytical and technology skills, supply chain knowledge, practical down-to earth logistics experience and line management leadership. There is a demand for top quality logistics professionals at all levels, including analysts, line supervisors, sales professionals, managers, directors and vice presidents. Salaries range from entry-level positions in the high twenties / low thirties to senior executives, earning well into the six-figures.

    A broad base of business skills, knowledge of the logistics process, and relevant work experience will give you ample opportunity to begin your career with a manufacturer, retailer, logistics service provider or other organization. One could begin at an operator level e.g. stock controller, fork-lift truck driver or warehouse operative. One might even begin as a management trainee, analyst or first level supervisor, and as one demonstrates management capabilities, one can assume positions in logistics or in other arms of the organization.

    One key to success in this field is flexibility. In logistics you will work closely with people throughout your company – manufacturing, marketing, finance etc. Depending on the size of your company, your initial responsibilities may include one or more of the logistics functions. Some positions will require you to specialise in a specific area of logistics. There are numerous opportunities and career paths in this field it is up to you to seek them out and develop appropriate skills to be successful

    Infrastructures are very important to any country in terms of attracting investment and business and to organizations when it is time to decide where to locate an investment, build a factory, establish a regional office, etc.

    How easy a country is to travel to and the modernity and efficiency of its air and seaports is always something a company and its executives need to consider.

    Logistics in the developed countries is very efficient because they have highly developed infrastructure.

    For instance, the United States, Japan, Canada and EU nations all have highly developed national highway systems, port facilities, state of the art air freight handling, and sophisticated information systems, advanced communication facilities, elaborate rail and multimodal transportation.

    Intelligent distribution and logistics aims to change the nature of the trade-offs in supply chain management by:

    • Improving the visibility of planning and control information across the supply chain, and hence improving the quality and speed of decision making;
    • Improving the robustness of logistics processes, making them less variable and more accurate;
    • Creating novel transportation solutions for distributing goods.

    Efficient supply chains for private industry are often very dependent on many public infrastructure assets.

    The overall logistics infrastructure of a nation can be evaluated on the basis of ten categories of major metropolitan indices including:

    Transportation and distribution industry,

    Transport and distribution work force,

    Road infrastructure,

    Road congestion,

    Road conditions,

    Interstate highway access,

    Vehicle taxes and fees,

    Railroad access,

    Water port access

    Air cargo access.

     

    Transportation and distribution industry – This category attempts to get a feel for the depth and strength of the metro-wide transportation and distribution industry and includes the number of companies in the metro area engaged in the transportation and warehousing  industry sector, along with the annual revenue generated by the transportation and distribution industry sector.

    Transportation and distribution work force –  This category attempts to get a feel for the depth and cost of the metro-wide transportation and distribution work force and includes the total annual payroll of companies in the transportation and distribution industry sector, the total number of employees, the average salary and the transportation and distribution revenue per employee.

    Interstate highway access – This category focuses on the interstate highway infrastructure and includes the number of interstate highways that pass through the metro area, as well as the number of interstate auxiliary routes such as bypasses, etc.

    Road conditions – This category includes the average roughness of the metro area’s roads, as well as the percentage of bridges that are obsolete or structurally deficient.

    Road congestion – Whether a metro area has adequate roads depends upon the amount of traffic using those roads. This category includes such things as roadway miles per capita, total miles of freeways, average daily freeway traffic and average daily traffic per freeway lane.

    Road infrastructure – This category attempts to look into the future in terms of keeping up with an adequate road infrastructure. It includes public roads mileage, capital outlay for roads and bridges, highway maintenance per mile and spending for highway law enforcement.

    Vehicle taxes and fees – This category includes highway user taxes and fees, as well as motor fuel excise taxes.

    Railroad access – This category includes the number of railroad carriers that service a metro.

    Water port access – This category includes total tonnage for all ports located within the confines of the metro area.

    Air cargo access – This category includes the number of air courier companies, as well as the total air cargo tonnage for the metro.

    Due to the rapid advancement of technology such as pervasive or ubiquitous wireless and internet networks, connective product marking technologies like RFID and emerging standards for the use of these defining specific locations using Global Location Number(s), the basic supply chain is rapidly evolving into what is known as a Supply Chain Network.

    All organisations have or can purchase the components to build a supply chain network, it is the collection of physical locations, transportation vehicles and supporting systems through which the products and services are managed and ultimately delivered.

    Investing in a country’s physical infrastructure can contribute to economic growth, improve human welfare and has considerable potential for directly reducing poverty.

    Yet current investment in the poorer developing countries, whether internally or externally sourced, is insufficient to fund infrastructure needs, leaving logistics at unacceptable levels.

    Although the public sector will remain the major provider of infrastructure services in most developing countries for the foreseeable future, an increasing number of those countries are now considering ways of attracting increased private sector investment and Nigeria is not left out here.

    This article will be followed with another crucial one on THE URGENT NEED FOR A NATIONAL LOGISTICS POLICY.

     

    • Dr Madu can be reached on ceo@multimix-academy.com

     

  • Intellect and infrastructure 

    Intellect and infrastructure 

    •First-generation universities must lead the way in facilitating
    rehabilitation and expansion

    Perhaps nothing so completely symbolises the decline of Nigeria’s tertiary education sector than the infrastructural decay that has become so rampant in the country’s first-generation universities.

    Led by the venerable University of Ibadan, and including Ahmadu Bello University, Obafemi Awolowo University, the University of Lagos, and the University of Nigeria, Nsukka, these institutions are confronting development challenges that have caused them to stray from their avowed aim of cutting-edge research, relevant and committed teaching, and beneficial community service.

    While it is true that the dearth of facilities, poorly-paid and badly-motivated staff and burgeoning student populations are formidable problems, the obsolete, crumbling and decrepit infrastructure, which characterises all of the nation’s oldest universities, stands out as the most urgent problem. For one thing, poor infrastructure is the biggest single issue they all face. For another, many of their other difficulties are in one way or another related to the infrastructural challenge.

    The terrible condition of student hostels is a case in point. In their early years, first-generation universities were renowned for the elegance and comfort of the student housing that was on offer. Today, far too many of them are now degraded by filth and overcrowding. Recently, one school witnessed the embarrassing spectacle of enraged students displaying bedbug-riddled mattresses for the world to see. Similar tales can be told of lecture theatres and classrooms, libraries, laboratories and sports facilities.

    Funding is at the core of the infrastructural problems the first-generation universities face. Severe shortfalls in financing, accompanied by the explosion in student intake, have put enormous pressure on existing facilities. Increases in student fees and other charges have been implemented against fierce student opposition, and are not enough to cover the cost of infrastructural rehabilitation and expansion.

    Successive negotiations between the Federal Government and the Academic and Staff Union of Universities (ASUU) have failed to solve the problem, mainly due to the former’s bad faith and lack of funds.

    It is time for Nigeria’s first-generation universities to lead the way in the adoption of creative and viable long-term solutions to the problem of infrastructural decay. In seeking to do this, they must build on their acknowledged strengths, of which the two most important are their reputations and their alumni.

    Despite the depredations of recent years, first-generation universities have built global reputations as centres for excellence in several disciplines. Ibadan’s contributions to African History can never be forgotten. The same is true of ABU’s path-breaking research in Theatre for Development and Public Administration, OAU’s study of African Languages and Political Science, UNILAG’s scholarship in Education, Mass Communication and Medicine, and UNN’s giant strides in Literature and the Natural Sciences.

    In essence, they all possess a residual credibility that they can build on, most profitably in creating more durable ties with corporate organisations based in the country, with the aim of facilitating scholarships, the endowment of professorial chairs and sponsorships of research programmes.

    First-generation universities can count many of Nigeria’s most distinguished and influential individuals as ex-students, and must do more to ensure that they contribute meaningfully to their respective alma mater. The odd commemorative fund-raiser is simply not enough; it must be honed to a science.

    If the benefits of reputation and alumni are to be properly exploited, the universities will have to undergo a comprehensive reconfiguration of their administrative, accounting and bureaucratic processes to meet the highest ethical and performance standards. No one willingly donates to a perceived cesspool of incompetence, laziness and corruption.

    When Nigeria’s oldest and most distinguished universities are able to make verifiable progress in meeting their infrastructural challenges, their achievements will have a salutary effect on tertiary education in particular and education as a whole.

  • Africa needs N100b for infrastructure, says AfDB

    Africa needs N100b for infrastructure, says AfDB

    Africa needs about N100 billion  yearly to address its infrastructural challenges, the President, African Development Bank  (AfDB), Dr. Akinwunmi Adesina, has said.

    Adesina, who spoke in Lima, Peru, at a $90 million financing arrangement  for an airport project in Egypt, drawn from the Africa Growing Together Fund (AGTF),  said the amount of resources in Africa to deal with that is about  N50 billion a year. “So there is gap,” he said, adding that  a new Africa Delivery Vehicle called Africa 50 has being inaugurated to help raise funds to close the gap.

    The AfDB chief noted that power was critical to achieving economic growth in the continent, stressing that the absence of power infrastructure would leave the sub-region underdeveloped.

    “There is no way Africa can move to the top of the global economy value chain without power. That is why we have developed a new energy initiative for Africa 2025. Africa is tired of being in the dark and I am optimistic that most of our development challenges would be addressed, if there is sufficient power to run the economies,” Adesina said.

    He added that countries at the peak of the global economic pyramid “are those that are competitive and are at the top of the value chain.”

    The AfDB president said “Africa does not belong to the bottom of this value chain”.

    Adesina stated that it was high time Africa moved to the top of the value chain through the creation of a  more robust and resilient economy.

    “So our role at AfDB and as a bank, is to help Africa add value to every single commodity it is producing, be it cotton, agricultural raw materials, solid minerals, or oil and gas.  We will help Africa to export textiles instead of raw cotton, processed coffee, rather raw coffee and cocoa powder in place of raw cocoa,” he said.

    The $90 million loan is the first  project by AfDB to be financed using the AGTF resources and marks the first publicly-financed transport sector loan in Egypt.

    The project consists of development of new terminal building (financed by Islamic Development Bank), new runway and new control tower.

    Through this project, the Egyptian aviation authorities will be able to raise the passenger handling capacity of the airport by an additional 10 million passengers per year to reach 18 million per annum.

    Adesina said this will further boost Egyptian economy’s competitiveness and increase foreign currency earnings and create hundreds of thousands of direct and indirect jobs for its citizens.

    The Egyptian Minister of International Cooperation, Dr. Sahar Nasr, said the loan would play a crucial role in improving the country’s economic competitiveness, particularly in a period of transition.

    She said the agreement stands as one of the best partnership that the Egyptian government would be having with the Peoples’ Republic of China, pledging her government would do everything at its disposal to ensure its proper implementation.

    China said it was impressed with the project and hoped that the $2 billion fund, the first approved for the Africa Growing Together Fund, will be utilised for the purpose for which it was assigned through massive job creation for the people of Egypt.

     

  • Invest pension assets in infrastructure, British economist urges Fed Govt

    Invest pension assets in infrastructure, British economist urges Fed Govt

    PenCom chief: we’ll build investment template for infrastructure development

    A PORTION of the more than N6 trillion pension assets should be invested in infrastructure by the Federal Government, a British economist and Chief Economic Adviser to Mayor of London, Mr. Gerard Lyons, has advised.

    Gerard gave the counsel yesterday at the ongoing “World Pension Summit Africa Special’’ in Abuja even as the Director-General of the National Pension Commission (PenCom), Mrs. Chinelo Anohu-Amazu, hinted of a plan by the government to develop a sustainable blue-print  for the investment of the pension funds by next year.

    Stressed the need for the emergence of a stream of infrastructure projects in the country, the Briton  said the country should focus on hard, soft and institutional infrastructure, which in turn would help address social infrastructure deficit.

    His words: “Hard infrastructure opportunities include broadband and transport such as road and rail as well as housing and energy.”

    According to him, soft infrastructure entailed building the needed skills and education, while institutional infrastructure was linked to openness and transparency, adding that building of strong institutions would usher in the confidence for greater investment stability and ultimately lead to the entrenchment of rules and regulations.

    He said that Nigeria should be proud of the progress made by PenCom since the introduction of the Contributory Pension Scheme (CPC) in 2004.

    The PenCom chief said the development of an investment template will be the achievement from this year’s summit as the commission gained the development of investment guideline from last year’s edition, which was also held in Nigeria.

    She implored participants, especially those from other African countries to take into cognizance the ESG principle for the continent to be able to bridge the infrastructure gap.

    Her words: “I want us to take into cognizance the issues that we have talked about at this summit particularly, the mindset that we bring to the issues that are facing not just Nigeria, but the African continent.

    “I want us to believe and develop a principle that we can achieve all that we need to achieve if we work towards it and not close our mind that we cannot do it. I am applying the same principle to the issue concerning investment and infrastructure. We have to do it and our job is to find out how and mitigate all that are associated to it.

    “I also want us to note the ESG principles. It is something we should look into very closely as a continent. Africa has a deficit in infrastructure. There is a huge gap. We haven’t built roads, power, transportation among others and in thinking of how we are going to do all these; we have to look at the ESG principles.

    “Presently, we have a clean slate and we must not waste it. The West is redoing things that they have done wrong but we have not done any as a continent and we need to bring it to the front burner. As a takeaway from the last summit, Nigeria, for instance, said it will develop a new investment guideline and this has been done. One thing we are taking away from this summit is that by the time we gather again next time, we would have developed sustainable pension principles for investment.”

    Mrs. Anohu-Amazu also urged the participants to look into micro pension plan

    She said: “I know there is no particular way of going about them but it is about doing everything we can and continually trying to make sure we achieve all we set out to do.

    “It is not about increasing the size of pension assets but about ensuring that each and every member of the society has a retirement benefit plan whether they have a formal job or are working for themselves. It is about having something to put away for your old age.”

  • Community clears refuse, bemoans lack of infrastructure

    In line with the seven-day ultimatum given by the Permanent Secretary of the Federal Capital Territory (FCT) Mr. John Chukwu to all area councils chairmen to evacuate refuse in their domains, Kuje is wearing a new look after the exercise.

    Some residents of the council who spoke with journalists during the evacuation exercise,  praised the council’s environmental department for its continuous efforts in sanitising the area despite the challenges of infrastructures faced by the people.

    One of the residents,  Mr. Godwin Jacob, also commended the Permanent Secretary for the clean-up directive,  saying that despite the previous effort from the environmental department to clean up the area,  there were some areas that lacked proper cleaning. But that has been taken care of by the department during the clean-up exercise.

    Jacob,  who said that environmental sanitation has become a tradition in the area,  because of the effort been put in by the present head of department to ensure a clean and healthy environment, lamented that almost all the major feeder roads in the council have gone bad,  without the effort of the present administration to rehabilitate them.

    “However,  apart from the area of proper environmental sanitation,  we have not seen any adequate infrastructures on ground,  especially  good roads. The truth is that we have not felt the impact of this administration since it took over from the last administration, and we wonder what he is doing with the allocation that he is getting from the federal government, “ he said.

    The Head of Environmental department in the council,  Mr. Abdulrazak Abdulkarim who spoke with journalists attributed the problem of irregular sanitation exercise  by the council to funding,  saying that the leadership of the council is always committed to ensuring a clean and healthy environment for the people of Kuje to live in.

    Abdulkarim further called on the people of Kuje to imbibe the habit of proper waste disposal,  in order for it to be easy for evacuation when the environmental department wants to evacuate them to their permanent dump sites,  saying that when wastes are dumped indiscriminately,  they end up making the environment look unkempt and unhealthy.

    He further cautioned scavengers against spreading refuse on the roads when they are properly disposed,  explaining that most times when waste are properly disposed at designated dump sites,  scavengers are the ones that spread the refuse to the roads and make them constitute nuisance to residents.

  • Sanusi urges Fed Govt on infrastructure growth

    Sanusi urges Fed Govt on infrastructure growth

    Former Central Bank Governor, and Emir of Kano, Sanusi Mohammed 11,  has advised the Federal Government to adopt a holistic approach in resolving infrastructural problems in order to move the country forward.

    He said infrastructural development should not be limited to road construction, but extended to other sectors, such as health and education to achieve meaningful socio-economic growth.

    Sanusi, in a statement  while giving his approval to the forthcoming 2015 Nigeria Infrastructure Public Private Partnership Summit  billed to hold in the last quarter of this year, said the development of social infrastructure, especially health and education is critical to the wellbeing of the people.

    In the statement entitled: ‘Emir of Kano, Sanusi Mohammed 11 Welcomes Focus on Social Infrastructure at the forthcoming Infrastructure Private Public Partnership (PPP) Summit,’  said  this during a visit to his palace in Kano, by the Summit Planning Team headed by A. B. Mahmoud, a Senior Advocate of Nigeria (SAN).

    He said the non-implementation of several recommendations from previous successful Summits by past Governments, has affected infrastructural developments in Nigeria, urging the team to ensure that the summit provides solution to  problems relating to infrastructural gaps among others,  besetting the growth of the country.

    His words: “I understand the critical role infrastructure plays in developing our economy, and in particular, the need for Nigeria to address the key social infrastructure deficit particularly in education and health that will deliver a better quality of life not just for the elite, but for those in society for whom access to one thousand naira could make the difference between losing a child and obtaining the medication and treatment that could save a child’s life”.

    In his response, the leader of the delegation, Mahmoud, said the summit would put in place a roadmap that would make government at all levels work together to develop critical infrastructure through public private partnerships.

    Also, Gori Olusina Daniel, partner and Africa Regional Director at Adams & Moore, said the summit would focus on four critical sectors– Power, Health, Transport and Education, in order to align with the Federal Government’s development priorities.

    Olusina, also a member of the delegation, said: “This summit is about charting the way forward in four critical sectors and establishing a private sector led Community of Practice, working in collaboration with government across all levels that will ensure the successful implementation of these roadmaps”.

  • Our infrastructure challenges, by Kuje residents

    Residents of Kuje area council of the Federal Capital Territory (FCT) bemoaned their lack of basic amenities in their community, calling on chairman of the council Shaban Tete to respond to their needs.

    One of the residents, Mr. Joshua John who spoke with Abuja Review said nothing much has changed for the better in the council since Tete took office.

    He said, “The good thing about this administration is endless promises without fulfilment. We have not seen anything that has been constructed and commissioned by this administration that can improve the living standard of Kuje people, apart from the market that was recently commissioned.

    “The leadership of the council led by Mr. Shaban Tête promised us potable water supply and rural electricity when he assumed office; now it is going to three years and nothing has been done in any community. The people are still suffering from water shortage and living in darkness.

    “Kuje roads that were constructed by previous administrations are going bad on a daily basis, mostly the roads that lead to the town when coming from Lugbe; also the road that leads to the General Hospital. In fact, almost all the roads in Kuje town are becoming dilapidated and inaccessible. The council cannot even maintain them.”

    Grace Oba, another resident, lamented: “We voted for him [Tete] because of the promises he made to us to make the council like other developed councils like Abuja Municipal Area Council (AMAC). But, since the present administration, things have gone worse in this council. We spend most nights in darkness in this council. We need things to change for the better.

    “We are appealing to him to make his promises a reality by correcting so many things that are going wrong in the council, before Kuje town becomes like one of the communities in the hinterland where there are no access roads, water and electricity. Very soon another election will commence, and the people are waiting and watching to hear more promises.”

     

  • ‘Infrastructure devt key to industrialisation, job creation’

    The development of the nation’s science and engineering infrastructure base holds the key to job creation and industrialisation, President/Chairman of Council,  Institute of Business Development (IBD), Mr. Ifeanyi Obibuzor, has said.

    Speaking at the “First International Business Development Summit for Africa” in Lagos, Obibuzor said the acquisition of endogenous capability in science and engineering infrastructure would create jobs through the proliferation of industries. It would also enable the country produce basic necessities of life including, but not limited to food and shelter, he added.

    The summit with the theme, “Business development in Africa: Regional integration for sustainable comparative advantage” was aimed at bringing together experts, intellectuals, captains of industry, and government officials across Africa to brainstorm on how to harness the continent’s abundant human and natural resources for development.

    Registrar/Chief Executive Officer, IBD, Mr. Paul Ikele, said: “We have a lot of resources; we have the manpower, but we are not harnessing it,” adding that it was the first international business development summit. He said last year’s summit was focused on Nigeria, but the Institute decided to focus on Africa this year because “Africa is the next level of the world. We want to bring Africans together; lets us know what we have and then plan on how to develop them.”

  • ‘Reduce production cost, improve infrastructure’

    ‘Reduce production cost, improve infrastructure’

    The Association of Food, Beverage and Tobacco Employers (AFBTE) has urged the Federal Government to help reduce the cost of production and improve infrastructure to promote industrialisation and create employment in the country.

    Addressing the 35th Annual General Meeting (AGM) of the AFBTE, its President, Paul Gbadebo, identified high cost of manufacturing as a barrier to competitiveness of local products, saying it makes imported products manufactured at lower costs more attractive to consumers.

    He deplored the state of infrastructure, especially  power supply, the road network and rail service, urging  the government to invest in infrastructural development.

    He identified other factors necessary for improvement of the economy to include enforcement of corporate governance and best practices, combating corruption and ensuring access to long-term credit for genuine manufacturers and reduction of bank lending rates

    He urged the government  to ensure the security of our borders to guard against illegal imports, tackling insurgency in the Northeast, checking multiple taxation and streamlining activities of regulatory agencies.

    Gbadebo called on manufacturers to brace up for challenges that may arise from the devaluation of the naira and dwindling oil revenue.

    AFBTE’s  Executive Secretary, Aderemi Adegboyega, identified impunity,  high handedness and insensitivity on the part of regulatory agencies as factors affecting the manufacturing.

    “The kind of things we want the government to do include creating a situation where multiple taxation would be avoided.  Regulatory agencies should be supporting our businesses.The government  should ensure that our raw materials are sourced at prices that are reasonable.  We should be able to source finance from the banks at cost that will be helpful to the manufacturers,” he said.

    In his address, the Lagos State Governor, Mr Akinwunmi Ambode, while admitting the difficulty of doing business with the government, said his administration was creating a conducive atmosphere for businesses in the state.

    He sought collaboration with manufacturers, noting that the establishment of the Office of Overseas Affairs and Investment (otherwise known as Lagos Global) on inception of the administration as one of the measures aimed at driving investments in the state.

  • Fitch affirms telecom’s infrastructure giant at ‘B’ rating

    Witch Ratings has affirmed telecom infrastructure group Helios Towers Nigeria Limited’s (HTN) Long-term Issuer Default Rating (IDR) at ‘B’ with a stable outlook. HTN’s rating reflects the political and macroeconomic uncertainty of the Nigerian market (Nigeria, rated ‘BB-’/Negative) as well as the company’s revenue visibility and strong growth prospects.

    HTN has managed to contain the impact of the recent weakness of the naira on its financial performance. Underlying EBITDA in dollar is growing due to strong underlying demand, operational efficiency gains and the falling cost of diesel. HTN’s market position has changed as competing tower companies in Nigeria have grown significantly by acquisition. Short-term prospects are unlikely to be diminished but HTN is going to be a fairly smaller player in a more fragmented market where competitive intensity may weigh on growth and profitability. Potential HTN is the second-largest independent telecommunications tower operator in Nigeria with a portfolio of 1,202 towers at end-December 2014.

    Fitch expects HTN to continue growing strongly in line with the telecommunications market in Nigeria, which is seeing rapidly increasing demand for mobile and broadband. HTN is realising economies of scale and improving its free cash flow (FCF) and leverage profile by activating its dormant towers and increasing its tenant base and the number of co-locations per tower.

    Management’s focus on improving operating efficiency also contributed to significant EBITDA margin expansion in 2014.

    Revenue Visibility HTN benefits from a visible revenue stream driven by long-term lease agreements, which comprise embedded contractual escalators and, in some cases, cost pass-through mechanisms. Following the shift from CDMA to GSM operators, over 75 per cent of revenues are derived from three major GSM players, MTN, Etisalat, and Airtel, which are all backed by investment-grade parents.

    As at end-December 2014, the average remaining life of all tenancy agreements was 4.7 years, and HTN had total contracted revenues of $299m. Changes to Competitive Environment HTN’s market position is protected by high barriers to entry, switching costs, and quality of service. However, an agreement between Airtel and American Tower Corporation for the sale of Airtel’s towers in Nigeria will lead to the introduction of a fourth independent tower operator. Also, competing tower operator IHS has agreed to purchase around 11,000 towers from Etisalat and MTN.

    HTN is thus set to become a fairly smaller player in a more fragmented market, which may dampen growth prospects in the medium-term. FX Headwinds HTN currently has around 51 per cent of its revenues denominated in dollar, with the remaining 49 per cent denominated in naira.

    The devaluation of the naira relative to the dollar reduced revenue growth in 2014 and 1Q15. HTN is also exposed to a FX mismatch as all its debt is in Dollars.