The Nation Newspaper

Tag: infrastructure

  • ‘We must invest more in infrastructure, services’

    Mr. Adediran Adetunji, a fellow of the Nigeria Institution of Estate Surveyors & Valuers, is the Principal Partner of Diran Adetunji & Associates, an Abuja-based estate surveying firm. He speaks on the roles of surveyors in the growth of the economy, quackery, building collapse and other challenges facing the construction sector and the way forward. OKWY IROEGBU-CHIKEZIE met him.

    Who is an estate surveyor and valuer?

    To be known and addressed as an estate surveyor and valuer, you must have been trained and certified, qualified through a process called election into the professional membership of the NIESV, registered with the regulatory body,  the Estate Surveyors and Valuers Registration Board of Nigeria (ESVRBON) to practise estate surveying and valuation in Nigeria. ESVARBON is the only body with the statutory power to register and empower people to practise the profession of Estate Surveying and Valuation in Nigeria. The empowerment primarily comes through the official stamp and seal issued by ESVARBON, with his registration number inscribed on it, because it is not transferable, and with which he validates all Valuation reports that emanate from him, or which he undertakes. Without this, his official report of valuations is of no effect. An estate surveyor and valuer is daily engaged in the following endeavours among several others; valuation of all assets, project management, estate agency and brokerage, property management, land administration and real estate consultancy.

    How does an estate surveyor impact the economy?

    First and foremost, let us look at the crucial issue of employment.  Estate surveyors and valuers are employers of labour, and as employers of labour, we complement government’s efforts, thereby assisting to reduce unemployment. We have over 1,000 practising firms and each of the firms trains and employs personnel, both professional and administrative. By doing this, we have made significant contributions to the nation’s economy.

    The roles of estate surveyors and valuers in social and economic development of Nigeria cannot be overemphasised. Their roles centre mainly on land and all structures on the land, making both the rural and urban dwellers to require our services, particularly in the areas of management and development of estates, determination of values of all descriptions on properties, carrying out feasibility studies and the appraisals of investments’ proposal and schemes affecting land and buildings. We offer professional advice to clients on real estate matters in other not to be misguided or misled in buying, selling and leasing of land and landed properties.

    This is one of the most difficult tasks estate surveyors and valuers handle, but it has helped the clients to take wise and appropriate decisions. We advise clients on sales and purchase of land and landed properties bought or sold, help clients to investigate title documents of the land and landed properties to be purchased, help clients advertise their land and landed properties to prospective buyers and act in the best interest of clients in land matters. We play tremendous roles in revitalising the national economy and are actively involved in stimulating and sustaining the economic growth of the nation.

    Estate surveyors and valuers have played visible roles in internally generated revenue and economic development by providing valuation database for the assessment and collection of property taxes through property rating at the local government level and property registration and  administration by the state government. As land administrators and land economists, estate surveyors and valuers have always played vital roles in the formulation of development master plan at all levels, in addition to identification of urban and rural issues and concerns in carrying out infrastructural development schemes in the country. In a nutshell, we act as land economists for infrastructural development schemes. The list is endless.

    Would you say that members of your professional body are equipped to provide best real estate services in line with modern trends?

    Training is a lifelong process, what sociologists call socialisation, a process whereby you start learning from birth and stop at death.  The way it goes with our profession is this; after obtaining a degree in Estate Management or related courses from the tertiary institution, you register with The NIESV as a probationer or graduate member, you are required to go through a mandatory two year period of tutelage in an estate surveying and valuation firm, under the supervision of an estate surveyor and valuer of a minimum of five years professional qualification to put you through practical trainings in the core areas of the profession. Then you must write and pass your professional qualifying examinations, provide evidence of two years practical training in your Log Book and Diary, interviewed for professional competence by a team of senior members, and if you pass the interview, you are admitted into the professional membership of the institution.

    Thereafter, you go for another round of professional competence interview with the ESVRBON, who gives you the stamp and seal to practise if it is satisfied with your professional competence. You can see that it is a detailed and rigorous process, spanning years. One cannot come out of this process successfully and remain lacking in the knowledge of the profession. Meanwhile, his training continues through attendance of Mandatory Professional Development programmes put in place to further equip him with modern trends in the practice of the profession. He is also required to join at least three faculties in the Institution, and encouraged to join one or two international real estate bodies to which our institution is affiliated. So, our members are sufficiently trained to provide best real estate services.

    Quackery is still a challenge in your profession. Why do you think people patronise quacks?

    There is no profession that is free of quackery. There are quacks in the medical profession; does it mean people don’t have confidence in the doctors, to the extent of playing risks with their lives in the hands of untrained people? A few months ago, a man was arrested within the premises of the Lagos High Court. He claimed to be a lawyer, and had been representing clients in the court, but he was actually a quack. So, quackery is not peculiar to our profession, and it has nothing to do with the competence or otherwise of our members. I think it is largely due to ignorance or lack of awareness. Even the Holy Bible says my people perish due to lack of knowledge. Ignorance of who is a professional Estate Surveyor and Valuer, ignorance of the risks involved in engaging a non professional, and putting several millions of naira in his custody. Many unsuspecting and innocent people have cried in the hands of quacks. So, quackery has nothing to do with competence of our members. Be that as it may, we are not resting on our oars in the fight against quackery. The law is there, and as many are found to have crossed the line would be handled legally. Then we have stepped up our advocacy drive to create awareness for our profession, professional services, and the dangers in dealing with non professionals for real estate services. We are seeing and getting positive results, and kudos must be given to the current administration in our institution for that.

    Is there any other challenge confronting your professional body?

    One challenge confronting our profession which I will keep talking about is the absence of data. We require data for effective professional services. We are in a technology-driven world. Data is essential, data is critical. As a professional estate surveyor and valuer, it is not good enough to give clients advice that is not methodically based- an advice that you cannot defend. Projections hinge on veritable information, which is data. In the absence of data, verification becomes a problem. I have heard of 17 million housing deficit for instance, but my question is; how did we arrive at the figure? We need to take the important issue of data generation, maintenance and storage with all level of seriousness. In advanced countries, when you need information on a property in a place like Maitama, all you need to do is to go to your device and goggle the rate of different types of property; it will give you the information with all required details. To be able to serve our clients better, we need data. To be able to increase the integrity and proficiency of our discipline, we need data. Without data, we will continue to operate within the rudimentary practice of Estate Surveying and Valuation whereby you give a client an advice or information without basis, and there will be no transparency. Estate Surveying and Valuation profession requires you to carry out some bits of analyses, bits of economics, bits of science, and markets analysis in order to come out with something credible, defendable and something that will assist the profession. We just have to work on this requirement in the interest of the profession.

    How relevant was “A city that works” as the theme of the just- concluded annual conference of NIESV to the Nigerian society?

    As a result of rapid urbanisation, in the last two centuries, about half of the entire world population now lives in cities, and the visible fallout of this could be seen in numerous commuters traveling towards city centres for employment, entertainment, and edification. Structures, institutions, infrastructures are developed overtime, progressively and continuously in the developed countries of Europe and America to meet the demands of the ever increasing population of the cities and the urban settlements. Some of us have travelled to cities across the world, and we have seen how their cities work, we have seen the cohesion in their structures, institutions and systems. But in Nigeria, while the population of the cities is rapidly increasing, there has been no corresponding increase in the provision of facilities which would support the growth and increase, particularly in the very important and crucial aspects of housing, infrastructures, tourism, agriculture and agro allied industries and transportation. You should not be surprised that we are lagging behind in growth, development, industrialisation and every aspect of life, but increasing in crime, social malaises, poverty, ignorance and diseases. The situation must be arrested if we really want to meet up with the most prosperous economies in the world. We must begin to invest more in infrastructure, transportation, communication, technology, education, social services and utilities. Government alone cannot shoulder the responsibilities, no single government agency or any one organisation can create meaningful change working alone. Change in our society requires residents, philanthropy, the private sector and government working together to address pressing problems.

    There must be collaboration between the government, private sector and with the professionals, particularly the Estate Surveyors and Valuers. This is how our cities can work; this is what bothers us as professionals and this is what we re-emphasised to the government. The special guest of honour, Mr. Babatunde Raji Fashola, the Federal Minister of Power, Works and Housing spoke on the importance of data, law and order, and other key issues without which a city cannot work. Discussions on what a model city should be and how it should work, taken into consideration our peculiarities was incisive, instructive, educating and insightful. To drive home our point, aims and objectives, we invited dignitaries, speakers and discussants from government and the private sector to the conference, and not only that, a communiqué will be forwarded to the government.

    How would you compare real estate practising firms in Nigeria with foreign ones?

    The world is fast changing and changing very rapidly. The 21st century would definitely be driven largely by technological changes and artificial intelligence. In the not too distant future, electric cars will become prominent in Europe, America and even Asia. Fuel would no longer be required to power cars. You must also have heard of the unmanned aerial vehicles, otherwise known as drones which have been used commercially now since the early 1980s. The point I am trying to make is that practices in the developed countries, are driven and enabled by technology, unlike in Africa and Nigeria, where we are still largely manual in our ways of conducting business. Failure to embrace partnerships and mega practices by professionals, not only in our profession, is also matter of concern to many of us. In the developed world, businesses thrive more because they embrace partnerships; they collaborate and form big conglomerates. And their businesses endure, even long after the demise of the founders. As a professional body, it is important for us to take a critical look at the situation and see where we must start aligning to changes in order to improve on our services and mode of operation. Ground breaking discoveries are coming out on a daily basis with a lot of challenges for us, particularly in this part of the world. We must strategise and fashion out ways of aligning our nation and our profession alongside, if we want to remain relevant.

    Where do you see Estate Surveying and Valuation practice in the country in another 50 years?

    I see a standardised, scientific and technology driven profession, where the practitioners are thoroughly professionals both in training and provision of quality services.

  • ‘Infrastructure is driving force for economic prosperity’

    Minister of Power, Works and Housing, Mr Babatunde Fashola yesterday described infrastructure as the driving force for economic prosperity of nations.

    According to him, the nation’s backwardness can be attributed to past “wrong choices’’.

    Fashola spoke in Lagos at the City Hall during the BRF Gabfest, tagged BRF2GABFEST.

    The theme was: “Where Are the Jobs?’’

    The minister said infrastructure defined the quality of development, citing the United States, United Kingdom, United Arab Emirates (UAE) and China as examples of some countries whose economies were infrastructure-driven

    President Muhammadu Buhari-led administration, he said, is focusing on infrastructure development needed for rapid economic growth and tackling unemployment.

    Fashola reiterated that decay in infrastructure and some of the backwardness in the development of the nation were as “a result of some bad choices’’ leaders made in the past.

    Giving a brief history of the nation, which according to him, is repeating itself, he said the nation’s airports and sea ports which used to be the best in the 70s and 80s have depreciated due to long years of neglect.

    He lamented that the air and sea ports, roads, rail and other infrastructure were not improved upon and became overstretched due to years of neglect.

    The present administration, he said, has recorded achievements in the area of job creation across Nigeria due to the current infrastructure development drive of the Federal Government.

    “It shows that if you are developing infrastructure, you are tackling issues of job creation. Roads are currently being constructed in 14 universities in the country, as well as in every local government in the nation,” he said.

    He also listed other ongoing and completed roads, power and housing projects in the country which had created millions of jobs and were still creating more for those in the construction value chain.

    Fashola said the economy was shifting from paper qualification to practical skills exhibition.

    He urged Nigerians to take advantage of the diversification of the economic opportunities provided by the Buhari administration to make impacts in agriculture and other sectors.

    The minister also called for some control of the nation’s population, which if left unchecked, is going to slow development.

  • NIQS praises govt on tax for infrastructure

    The Nigerian Institution of Quantity Surveyors (NIQS) has praised the Federal Government for signing the Executive Order No. 007 of 2019. The order has to do with Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme.

    The Executive Order number 007 is aimed at enabling private companies to build infrastructure such as roads in the country and be rewarded with tax credits in return and was signed by President Buhari on January 25.

    The President, NIQS, Mr. Obafemi Onashile, in a chat with media men, said this initiative makes Nigeria the first country in Africa to look into providing critical infrastructure through the use of fiscal policy such as tax breaks, rather than the usual government direct funding or lease and concessional arrangement through the private sector.

    “The NIQS wishes to commend the President Muhammadu Buhari for this bold step and initiative which the NIQS had clamoured for in the past few years. This confirms that this government is listening and ready to think outside the box in finding workable solutions to infrastructure and housing problems in Nigeria,” he said.

    Onashile, while commending the President Buhari for this bold step and initiative, said it represents what the NIQS had clamoured for in the past few years.

    “This confirms that this government is listening and ready to think outside the box in finding workable solutions to Infrastructure and housing problems in Nigeria. This initiative could also make social housing provision easy, especially the multi-family type of housing.

    However, to make the Order a success, Onashile charged the Federal Government to include quantity surveyors in the proposed management committee to be saddled with the responsibility of overseeing the implementation of the Order. He explained that the Quantity Surveyor, as financial, contractual and administrative experts in engineering infrastructure and construction projects, have a lot to contribute to its success.

    “Members of the NIQS identify with the new and innovative project delivery method. The QS, being professionals focused mainly on finance and completion of projects only, with no conflict of interest in project designs or supervision, can surely bring a lot of expertise to bear in ensuring the success of the Order 7,” Onashile stated.

    Consequently, the institution, he said, would like to enjoin the Minister of Finance to consider very importantly the inclusion of numerous quantity surveyors in the Management Committee as stipulated in the signed Order.

    Expressing the institution’s concerns, the NIQS President said the body is concerned about getting professionals that would creditably monitor and verify the construction and the total development costs such that the country would not be shortchanged from its income that was being used on her behalf, just as it is worried about professionals that would set the cost yardsticks to be used to determine the volume of infrastructure a private company must deliver in a year to equate to pre-determined tax level.”This innovative Order while very good in principle could however fail due to many possible abuses and some lacunae that the NIQS has observed and which needed to be tightly closed from exploitation. Investor companies are to pay taxes yearly, so how is the quantum of the project delivered in year by an investor being equated to estimated tax liability for the year? If an investor company is not making sufficient financial injection into the project, how can this be quickly detected because the implication is that such company is not paying tax as and when due,” Onashile said.

    He warned that infrastructure delivery contracts are peculiar and require certain basic components of construction procedures to assure a smooth administration that cannot be exploited to the detriment of the government. “It is not the typical “business contract of sale” that lawyers draw up. It requires construction law expertise – quantity surveyor,” he said.

    The body urged the government to extend the Order on road infrastructure development and refurbishment investment tax credit scheme to the housing industry to close the gap in the sector.

  • NIQS praises govt on tax for infrastructure

    The Nigerian Institution of Quantity Surveyors (NIQS) has praised the Federal Government for signing the Executive Order No. 007 of 2019. The order has to do with Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme.

    The Executive Order number 007 is aimed at enabling private companies to build infrastructure such as roads in the country and be rewarded with tax credits in return and was signed by President Buhari on January 25.

    The President, NIQS, Mr. Obafemi Onashile, in a chat with media men, said this initiative makes Nigeria the first country in Africa to look into providing critical infrastructure through the use of fiscal policy such as tax breaks, rather than the usual government direct funding or lease and concessional arrangement through the private sector.

    “The NIQS wishes to commend the President Muhammadu Buhari for this bold step and initiative which the NIQS had clamoured for in the past few years. This confirms that this government is listening and ready to think outside the box in finding workable solutions to infrastructure and housing problems in Nigeria,” he said.

    Onashile, while commending the President Buhari for this bold step and initiative, said it represents what the NIQS had clamoured for in the past few years.

    “This confirms that this government is listening and ready to think outside the box in finding workable solutions to Infrastructure and housing problems in Nigeria. This initiative could also make social housing provision easy, especially the multi-family type of housing.

    However, to make the Order a success, Onashile charged the Federal Government to include quantity surveyors in the proposed management committee to be saddled with the responsibility of overseeing the implementation of the Order. He explained that the Quantity Surveyor, as financial, contractual and administrative experts in engineering infrastructure and construction projects, have a lot to contribute to its success.

    “Members of the NIQS identify with the new and innovative project delivery method. The QS, being professionals focused mainly on finance and completion of projects only, with no conflict of interest in project designs or supervision, can surely bring a lot of expertise to bear in ensuring the success of the Order 7,” Onashile stated.

    Consequently, the institution, he said, would like to enjoin the Minister of Finance to consider very importantly the inclusion of numerous quantity surveyors in the Management Committee as stipulated in the signed Order.

    Expressing the institution’s concerns, the NIQS President said the body is concerned about getting professionals that would creditably monitor and verify the construction and the total development costs such that the country would not be shortchanged from its income that was being used on her behalf, just as it is worried about professionals that would set the cost yardsticks to be used to determine the volume of infrastructure a private company must deliver in a year to equate to pre-determined tax level.”This innovative Order while very good in principle could however fail due to many possible abuses and some lacunae that the NIQS has observed and which needed to be tightly closed from exploitation. Investor companies are to pay taxes yearly, so how is the quantum of the project delivered in year by an investor being equated to estimated tax liability for the year? If an investor company is not making sufficient financial injection into the project, how can this be quickly detected because the implication is that such company is not paying tax as and when due,” Onashile said.

    He warned that infrastructure delivery contracts are peculiar and require certain basic components of construction procedures to assure a smooth administration that cannot be exploited to the detriment of the government. “It is not the typical “business contract of sale” that lawyers draw up. It requires construction law expertise – quantity surveyor,” he said.

    The body urged the government to extend the Order on road infrastructure development and refurbishment investment tax credit scheme to the housing industry to close the gap in the sector.

  • Infrastructure boost for Osun new town

    The dream of creating new towns in Osun State got a boost as elders in Osogbo, the state capital,  mobilised indigenes in the Diaspoara to buy into the new project.

    At a Tripartite meeting  among Osun New Towns and Growth Areas Development Authority, Osogbo Progressives Union and the developer, Akeeb Investment Limited, Osogbo Progressive Union President, Ambassador Razak Siyanbola, assured  Oranmiyan New Town management that indigenes, both at home and in the Diaspora, would support the project.

    The  Oranmiyan New Town streches from Abere to Fountain University and part of Owode. According to the managers, when completed, the new town would have all the facilities a modern  city like Dubai has.

    The new town, which has 2,572 hectares (6340Acres) of land, is located within Osogbo, the state capital territory; in the precincts of the state Secretariat and the Osun Osogbo Grove. It is made up of seven neighborhoods and has a 42-meter right-of-way main boulevard, which cuts across six neighborhoods. Already, over 2, 000 applicants have submitted their forms for the scheme, while a few have received their allocations.

    Speaking on behalf of others elders, Siyanbola said he was ready to stake his credibility for the project. “We will now bring our credibility online now because  we have personally seen it.”

    The elders, who were not oblivious of the problems those in the Diaspora face as regards building houses and estate, said with  what was on ground at the Oranmiyan New Town there is nothing to be afraid off. When The Nation visited the site, workers were busy at different locations, constructing culverts and drainage.

    Speaking on the project, spokesperson for Osogbo Progressive Union (OPU) Mr. Oyesiku Adelu said: “It is commendable looking at the way the place has been opened up.  I want to commend the determination of the state government of Osun, which has invested so much into this project.  We hope that many people from the state, particularly from Osogbo, will patronise this project because obviously, the government still needs to recoup its money and one of the way to re coup the money is to get people to buy into it.”

    The Nation was at a meeting where  the managements of the projects; Osun New Towns and Growth Areas Development Authority, representing the Osun State government and the developer of the projects, Akeeb Investment Limited, addressed some grey areas such as the project credibility, payment term, and the size.

    The project, which started in 2014 by Ogbeni Rauf Aregbesola’s administration,  was initially sold for N3, 000 per square meter and the least that a subscriber could get was 1,000 square metres, which is a bit above two plots. Right now, the land is currently  being sold for N6,500 per square metre.  According the Head of Administration of Osun New Towns and Growth Areas Development Authority, Mrs Caroline Abiona. “For those, who have cash between now and the end of January, we are selling for N6,500 at minimum of 1,000 square metre which is about 6.5 million naira.  The 1000 square metre is equal to 2 plots plus.  But it is going to be N10,000 per square metre after January,” she said.

    Unlike what obtained in the past, Abiona said subscribers are expected to show commitment before getting their allocation letters.  “There is the need for initial deposit even before the allocation letter is given, you will see where you will buy, but you must make commitment so that we will know that you’re ready to buy.  If there is no commitment, we will not treat your form until you say you’re ready. We cannot afford to give you an allocation letter and you witholding it and another person comes with cash and we don’t have land to give to that person,” she added.

  • Power, infrastructure should take centre stage

    Members of the Organised Private Sector (OPS) contended with the typical constraints of the business environment in 2018. The high interest rate, weak GDP growth, dearth of infrastructure, particularly power supply, among others, resulted in high production cost and slowed down the manufacturing sector’s capacity utilisation. But, operators are optimistic of a better outing in 2019, because of the huge emphasis on infrastructure development, especially power, as well as Nigeria’s potentially robust economy with a large market, abundant natural resources and a productive population. CHIKODI OKEREOCHA and OKWY IROEGBU-CHIKEZIE report.

    The economy’s fragility was in full glare in 2018, but prospects of a better outlook this year are also too obvious to ignore. For a start, the recovery of oil price for most part of last year, no doubt, boosted Nigeria’s macro-economic fundamentals. But the momentum was rather short-lived.

    This followed a sharp drop in oil price to $54 per barrel, from a peak of $86 in early October. This, understandably, posed a risk to the nation’s macro-economic stability, leaving operators in diverse sectors, especially members of the Organised Private Sector (OPS) worried.

    The Director-General of the Lagos Chamber of Commerce & Industry (LCCI), Mr. Muda Yusuf, put the situation in perspective. He said the economy remained fragile with the high dependence on oil for revenue and foreign exchange earnings.

    He said although oil revenues increased with recovering oil prices in 2018, the impact on the economy was subdued by the huge foreign exchange commitments to petroleum product importations and the inherent subsidy.

    The LCCI chief also said the high debt service obligations were also major constraints to the economy’s growth. ”With the limited progress in the ongoing effort to diversify government revenue sources, the performance of the oil and gas sector would remain a critical factor that would shape the outlook for the economy in 2019,” he said.

    Yusuf in his projection for 2019 added that given the challenging economic conditions, key policy reforms would be imperative to support and sustain macro-economic stability.

    He listed the envisaged reforms that would put the economy on the path of sustainable recovery in 2019 to include, among others, a foreign exchange management framework that reflects the market fundamentals, the acceleration of the economic diversification agenda, normalisation of Lagos ports environment, the oil and gas sector reform and especially the Petroleum Industry Bill (PIB).

    Others are the reduction in the cost of governance at all levels; improvements in the domestic revenue to reduce volatilities of government revenues, among others.

    It is easy to see why the LCCI was pushing these far-reaching reforms. It was borne out of the economy, particularly the manufacturing sector’s lack-lustre performance in 2018 and hopes that if the reforms are conscientiously implemented they are the much-needed tonic to galvanise the manufacturing sector this year.

    For instance, capacity utilisation in the manufacturing sector slowed to 54.6 per cent in 2018, from 57.14 per cent in 2017, while the aggregate local sourcing of raw materials by the sector also dropped to about 57.87 per cent in 2018, from 63.21 per cent in 2017.

    The LCCI and indeed, other members of the OPS, including Manufacturers Association of Nigeria (MAN), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), as usual, contended with the typical constraints of the business environment.

    Some of them include high interest rate, weak Gross Domestic Product (GDP) growth, weak consumer demand, deficient infrastructure, particularly power, traffic gridlock on Lagos port roads and insecurity in some parts of the country.

    For instance, the perennial power supply shortage remained a pain in the neck of operators. According to Yusuf, the power situation posed severe challenges to the private sector operators, impacting adversely on productivity. He said throughout last year, the Chamber received complaints across sectors about high energy costs especially high expenditure on diesel, higher cost of and scarcity of gas, and payment demand by electricity distribution companies (Discos) for power that was not supplied.

    The LCCI DG further stated that the epileptic electricity supply took its toll on the bottom line of investors and Small and Medium Enterprises (SMEs). In fact, some real sector companies, according to him, reported that they spend as much as 20-25 per cent of their total operating cost on provision of alternative power supply and payment to Discos. He also said the provision of power was at the heart of ease of doing business in Nigeria.

    Apart from inadequate power supply, other issues that contributed in forcing the industrial sector’s contribution to the GDP to decline from 24 per cent in first quarter 2018, to 21.97 per cent in third quarter 2018, included poor patronage of Made-in-Nigeria products, high inventory build up, which forced manufacturers to reduce volume of production; overlap and harassment of manufacturing companies by the regulatory/monitoring agencies at the federal and state governments with overlapping functions.

     

    The hopes, the expectations

    For NACCIMA and MAN, the capital expenditure component of the 2019 budget and government’s efforts to improve power supply by expanding the energy mix hold immense promises.

    For instance, the National President of NACCIMA, Iyalode Alaba Lawson, said steady and reliable power supply was crucial to the sustained growth of the manufacturing sector.

    “The power sector is of keen interest to the private sector especially to manufacturers. Though the power sector has had a boost in the area of generation, we are concerned about the issues of “stranded power” and the hampered capacity to distribute due to obsolete and inadequate transmission and distribution equipment,” she said.

    She therefore, called for more urgent steps to resolve these challenges especially in the areas of metering, reduction in estimated billing, transmission and distribution.

    “We nonetheless welcome the innovative solutions being put in place to resolve the issues surrounding power, such as the Nigerian Electricity Regulatory Commission mini-grid regulation and the Energising Economies Initiative (EEI) of the Rural Electrification Agency,” Lawson stated.

    She also said the capital component of the 2019 budget, if religiously implemented, will be the elixir to sustainably put the economy on the recovery track. “The Chamber looks forward to the prompt passage and implementation of the programmes and capital projects outlined in the 2019 budget,” Lawson said.

    The NACCIMA chief, who applauded the Federal Government and the National Assembly for the concerted efforts in ensuring that the budget cycle returns to the January to December period, however, wants government to redouble fforts in promoting agriculture to ensure food security and promote import substitution.

    The Federal Government, she also said, must redouble its efforts in improving infrastructure, such as power, roads and rails, as well as its efforts at improving the ease of doing business. These will bring about positive change in the manufacturing sector (as Nigeria is still a net importer in manufactured goods,” she added.

    She, however, expressed concern with regards to the $60 per barrel crude oil price benchmark on which government budgeted revenues are based, given the well known burst and boom cycle of crude oil prices and volatility of the crude oil market. “Indeed, the oil price is hovering around $53 per barrel in the past few days, this portends serious problems for the effective implementation of the budget,” she said.

    Lawson added that although, President Muhammadu Buhari had in his speech to the National Assembly given assurances that the administration will continue to monitor the international oil price situation and will respond to any changes in the international oil price outlook for 2019, NACCIMA was of the view that government should begin  to create contingency plans to source alternative non-debt funding for its budget expenditure.

    MAN also aligned with NACCIMA, urging the Federal Government to revisit the assumptions of the 2019 budget, particularly crude oil production and price. “The crude oil price has a $60 per barrel benchmark, while oil production has a 2.3 million barrel per day projection. These assumptions should be revisited to reflect present economic realities,” the Association said, in its review and projection for 2019.

    According to MAN, this was necessary to achieve sustainable economic growth and budgetary objectives of the fiscal proposals for this year. MAN also recommended that government ensure an upward review of education and health allocations before appropriation. It also called for caution in the country’s rising debt profile in view of the associated services charges and future economic burden that it would exert on the nation.

    Manufacturers further called for the cutting down on government recurrent expenditures to reduce fiscal deficit, borrowing and service charges. It also canvassed shedding the current borrowing size of the government in the domestic financial market so as not to completely crowd-out the private sector.

    To reposition the manufacturing sector for increased productivity and competitiveness in 2019, MAN also recommended the commencement of the implementation of the harmonised taxes and levies and to allow the Joint Tax Board (JTB) monitor and enforce compliance by states and local governments.

    The association also urged the government to re-classify the manufacturing sector into strategic gas users from the current commercial gas user’s classification. Besides, the Federal Government, it advised, should continue to entrench better foreign exchange rate management while allocation should tilt more to the industrial sector, including the SMEs, among others.

    Perhaps, as signs of better things to come this year, the Federal Government has announced the allocation of N42 billion allocation for the development of the Special Economic Zone Projects across the geopolitical zones to drive manufacturing/exports.

    Other major policy interventions that have positioned the sector for better performance this year include the N15 million allocation for the recapitalisation of Bank of Industry (BoI) and Bank of Agriculture (BoA); N10 billion grant to BoI to subsidise interest rate charged on loans to SMEs.

    More importantly perhaps, members of the OPS believe that Nigeria remains a potentially robust economy with a large market, abundant natural resources and a productive population. Many of them encouraged by Nigeria’s 180 million population and a growing middle class with spending power are eager to invest in Sub-Saharan Africa’s largest economy, with GDP size of $405 billion.

    However, as promising as this year may be, the possibility of a slowdown in economic activities may not be ruled out. Being an election year, the performance of the economy in 2019 would, to a large extent, depend on the transparency and credibility of the election.

    The fear is that distractions from political activities may slow down infrastructure spending and the performance of the manufacturing sector being a sector whose operations rely heavily on infrastructure.

    Besides, there are fears that inflation rate might slightly increase due to electioneering spending, resulting from heightened political activities and lack of proper policy coordination.

  • Infrastructure upgrade, stricter regulations top aviation agenda

    There were many challenges in the sector’s march to full potential last year; 2019 promises to be better. Such optimism, experts say, is not unconnected with the readiness of regulators as well as operators to unfold new proposals aimed at boosting a regime of infrastructure upgrade, enforcement of stricter civil aviation regulations and a robust human capital development, writes KELVIN OSA OKUNBOR.

    Optimism. This captures the hope of stakeholders in the industry in 2019.

    Already, industry players, regulators, agencies, concessionaires and others are setting agenda that will shape the industry in the months to come.

    Such expectations, experts say, are hinged on the several unaccomplished targets in the industry in 2018. One of such was the dashed hope of flagging off a national carrier, even after an elaborate process that saw the Minister of State Aviation, Hadi Sirika leading a delegation to Fanborough Air Show, in the United Kingdom to unveil the name and logo of the proposed carrier.

    To ensure a successful aviation year, experts insist that the sector should be driven on the wheels of policy reforms, sound regulatory  framework and operating environment, as well as concerted efforts to consolidate on massive infrastructure upgrade, which should not be limited to airport and air navigation equipment alone.

    In particular, stakeholders want the government to focus on replacement of aeronautical facilities to promote flight safety.

     

    Robust civil aviation regulations

    A major area experts want the government to focus in 2019 is to entrench strict enforcement of civil aviation regulations by the Nigerian Civil Aviation Authority (NCAA) on both scheduled and unscheduled airlines. Such  clamour, they said, is predicated on the rise in the number of incidents involving operators, which recently came under the hammer of the regulator.

    They said the NCAA may have gone to sleep in the discharge of its oversight duties concerning both technical and economic audit of airlines.

    In an interview, a member of Aviation Round Table and Centurion Securities Chief Executive Officer Group Captain John Ojikutu (rtd) said the NCAA should step up its game.

    He said there was the need to overhaul the authority to make it alive to its duties.

    He said if the NCAA is more active in 2019, reports of incidents and accidents would be reduced.

    Besides Ojikutu, other experts including Managing Director Sabtre Travel Solutions Gbenga Olowo, said the sector would instill more confidence if the regulator has a bite, rather than issuing a string of regulations for operators to comply.

     

    Uncompleted airport terminals

    On the infrastructure front, stakeholders say the government should accelerate the completion of some international airport terminals in Lagos, Enugu and Kano.

    The timely completion of these terminals funded by the $500 million loan provided by the Chinese Import-Export Bank will bridge the gap in airport infrastructure.

    In particular, they said the completion of these facilities will not only put Nigeria in the league of nations with modern airport infrastructure, but will make air travel seamless, safe and comfortable.

    The Association of Nigerian Aviation Professionals (ANAP) General Secretary, Comrade Abdulrasaq Siedu, said the Federal Airports Authority of Nigeria (FAAN) should ensure that the terminals were completed in  time before the government paid back the loan.

    Industry watchers said the timely completion of the new International Terminal at the Murtala Muhammed International Airport (MMIA), Ikeja, Lagos would resolve challenges of congestion in the existing terminal, which is overstretched after many decades.

    The agitation to complete the new terminal aligns with many years of clamour by groups  and  experts who have argued that the existing terminals are almost outliving their usefulness. They were inaugurated 40 years ago.

    Experts say the completion of the new international terminal will not only facilitate the pursuit of a hub status for Nigeria in West and Central Africa, but position the country as a transit airport into other countries.

     

    Infrastructure revolution

    In an interview, Airline Operators of Nigeria (AON) Executive Chairman, Captain Nogie Meggison said for Nigeria to become a hub in Africa, the government must pursue an aggressive infrastructure revolution to make its airports attractive to airlines, passengers and other investors who are keen to invest in the sector.

    Meggison said it would not be out of place for the government in 2019 to complete the new international airport terminal in Lagos to compete with the new terminal at the Kotoka International Airport in Accra, Ghana.

    Also, Air Peace Chairman Allen Onyema said the government should not only complete international airport terminals undergoing construction, but invest in airports to enable them attract airlines.

    Onyema said FAAN should focus on expanding check-in and screening facilities at the General Aviation Terminals (GAT) at the domestic wing of the Lagos Airport to reduce the burden airlines and passengers’experience.

    Besides, he said the aeronautical agencies, including FAAN and Nigerian Airspace Management Agency (NAMA), should improve on the provision of air-field lighting system and other flight navigation facilities at the airports to enable airlines utilise their aircraft maximally.

     

    Unviable  Airports

    To advance beyond what experts call the triangular routes – Lagos – Abuja and Port Harcourt – stakeholders say FAAN and NCAA should, as a matter of urgency, put  policies in place in 2019 to attract airlines to flying into many unviable airports.

    These are aerodromes with limited flights, either for poor landing facilities or low passenger patronage.

    Part of the strategies to achieve this year, they said, should include but not limited to, waivers on landing and parking fees for aircraft and lower taxes and charges for operators that find them suitable to fly into.

    Among this legion of aerodromes are airports built and managed by state governments. They are: Asaba, Kebbi, Dutse, Katsina, Bauchi, Uyo and Jalingo.

     

    Abandoned cargo terminals

    Significantly, experts  say the government should focus energy on abandoned cargo airport terminals conceived in 2011 under the President Goodluck Jonathan administration.

    These projects, which have since been abandoned, were conceived to boost the non-oil sector as a huge foreign exchange spinner.

    The proposed perishable cargo terminals were earmarked for Abuja, Akure, Calabar, Ilorin, Jalingo, Jos, Kano, Lagos, Makurdi, Minna, Owerri, Port Harcourt and Uyo.

    These airports, which are in proximity to food baskets, were supposed to be developed with international standard perishable cargo facilities to enhance their operations.

    If the government accords priority to these projects, it will position Nigeria to key into the  over N250 billion yearly air freight export market in Africa.

    Experts said this would  put Nigeria on the same pedestal with countries, such as Kenya, South Africa, Benin, Cote d’Ivoire, Ghana, Senegal, Ethiopia, Tanzania and Egypt, which  are trading in commodities, including  fruits, fresh fish, vegetables and flowers.

    A cargo expert, Herbert Udenka told The Nation that there was the need to adopt a strategy to tackle the problem.  “The strategy is, therefore, to create the much-needed storage infrastructure in view of the large volume involved and to facilitate the evacuation of agricultural produce to domestic markets in conformity with international standards.

    “The development of Economic Free Trade and Export Processing Zones will be targeted alongside cargo airports and agro-allied industrial clusters, based on local opportunities and the state’s competitive and comparative advantage in agriculture production.

    “The aviation sector is establishing closer co-operation with Federal Ministry of Agriculture and state governments for concerted and strategic focus to these efforts.”

     

    Labour controversies/industrial harmony

     To advance the sector, experts said stakeholders must deepen the processes of resolving lingering labour controversies through arbitration to achieve industrial harmony.

    Without such harmony, the desired attraction of private sector investment could be lost, as capital does not stay in an environment of industrial unrest.

    In particular, experts caution that frequent threats by aviation unions to shut down the airspace should be properly managed and affected organisations think out of the box to resolve lingering impasse in 2019.

    Notably, is the altercation among unions, some concessionaires, helicopter and ground handling firms.

    Experts say, FAAN and NCAA must evolve measures to douse the palpable tension in the sector, where infractions between operators, agencies and other firms throw the industry into confusion; sometimes threatening safety and security.

     

    Ground handling companies

    Though very few, the ground handling firms – Skyways Aviation Handling Company (SAHCO) Plc and Nigerian Aviation Company (NAHCO ), Aviance Plc – should consider rejigging their tariff structure and operational architecture to attract more clients at a time airlines and freight operators were grappling with a myriad of challenges.

    In the year, operators and watchers in the air cargo sub-sector look forward to automation of revenue for cargo processing and other strategies to make their operations viable.

    Besides, diversification, which the new NAHCO Plc Managing Director, Mrs Tokunbo Fagbemi, is mulling over, there is an urgent need for players in the cargo, passenger and ground handling business to adopt a technology that will block leakages and improve efficiency to enable them remain in the business.

  • Infrastructure: aviation requires $1.8tr

    The global aviation industry requires $1.8trillion to expand and modernise aviation infrastructure to cater for the anticipated increase in passenger and freight air traffic demand by 2030, a report by Global Investment in Aviation released at the weekend, has shown.

    This outlook and other challenges in the investment landscape, will dominate discussions at a summit scheduled for next month at the International Dubai Festival City. The summit, it was learnt, is   an initiative of the United Arab Emirates  General Civil Aviation Authority (GCAA), established to create a leading, safe, secure and sustainable civil aviation system in the country.

    The discussions on how to draw investments into  infrastructure modernisation were propelled by a report published by the International Air Transport Authority (IATA), suggesting that  the global aviation will have to cater to over 14 trillion passenger traffic and 466 billion tons of freight traffic by 2034. The projection indicated an increase of 14.5 per cent revenue per kilometre per annum.

    The body said growth in global aviation industry will generate at least 99 million jobs and contribute $5.9 trillion in Gross Domestic Product (GDP), about 122 per cent increase from 2014.

    However, investigations revealed that the positive outlook in the industry has come with big challenges.

    To achieve this growth, large amount of investment must flow to modernise and expand the quality of aviation infrastructure over a long period.

    Investments, the report indicated, must focus on passenger’s improvement and freight capacity, generating gains such as reduction in travel time and improvement of service predictability and reliability, and maintaining public confidence that aviation is safe, secure, and environmentally responsible.

  • ‘Africa’s economic growth driven by large infrastructure developments’

    Africa’s economic outlook has remained positive since 2016 after the commodity price plunge the previous year, which slowed down the continent’s growth. The recovery of commodity prices and the acceleration of cross-border cooperation have since played a part in the recovery of the region’s economy.

    As Bloomberg Editor-in-Chief Emeritus Matthew Winkler says, Africa’s economic growth is currently driven by large infrastructure developments happening in multiple countries.

    Winkler spoke during the recent 2018 Africa Business Media Innovators Forum in Livingstone, Zambia.

     

    What is the state of Africa’s economy?

    Winkler: We’re at an inflection point. There are 36 economists whom we talk to at Bloomberg and their estimate is that Africa’s economy will grow at 3.1% in 2018, which is still behind the world average of 3.8%. It is afterwards, though, when the growth will take off exponentially. Looking ahead to 2020, the size of the African economy will expand significantly growing at 3.8%, beating the estimated world growth of 3.2%. This will be the first time Africa has outperformed the world in growth since 2014.

     

    What is driving this growth?

    Winkler: Ethiopia is the largest contributor to this growth, with 10.9% GDP growth for 2017 beating every member of the emerging markets – and will exceed that over the next three years. Ethiopia’s  growth is being driven by the large volume of Chinese investment coming into the country.  Last year alone, Ethiopia absorbed almost half of the US$7billion in foreign investment for East Africa. Its role in the region is becoming very similar to the one Japan played in the 1960s in Asia. This is proof that business-friendly policies can trigger progress. Ethiopia’s total trade with China was more than $5-billion in 2017 – a 74% increase from five years ago. While its trade with Saudi Arabia, its second-biggest trading partner, was $2.1billion – a 14% increase from half a decade ago.

     

    What about the bond market?

    Winkler: Globally, the bond market has been very treacherous of late, losing 1.7%. The benchmark US Treasury market lost 2.9% against growth in the EMEA bonds of 2.7%.

    Mozambican government bonds gained 28%, second behind Iraq in total

    returns, while Angola (third) grew 28% as well. Ghana generated 23% returns, Ethiopia 19% and the Democratic Republic of Congo 17%. The positive returns are due to extraordinarily high growth in the emerging and frontier markets, as countries in the developed world drop interest rates in the aftermath of the global financial crisis. Now global investors are chasing for yield and the winners are these countries because that is where the returns are.

     

    How does Africa rank in terms of return on investment and what are the continent’s most rewarding sectors?

    Winkler:  In 2017, the 600 major companies domiciled in Africa produced 170% total return in their stocks. The emerging market gained 16%; the frontier market which is a bit riskier than the emerging market gained 7%; while world equities, the combination of everything, grew 19%.

    The three best-performing industries were communications services (821% total returns), industrial (327%) and financial (230%).

    Zimbabwe’s Econet Wireless is one of the leaders, producing total returns of 649% to shareholders over the last two years against the group average of 8%. Its revenue increased by 34%. Its growth is 17 times its global peers and it is currently the second fastest growing telco in the world. While Kenya’s Safaricom was the second-best African performer with a 29% gain. Its growth is five times that of its peers. Safaricom’s recently released half-year earnings reported a 70% spike in revenue and a profit increase of 148%.

     

    The telecommunications industry appears to dominate the rest, why is this so?

    Winkler: There’s a story here – analysts say Econet’s sales will increase 24% in the coming year, eight times their world competitors. Safaricom will grow 9% or the three times their world competitors.

    All these companies are linking what people do in their homes and in their businesses with what they do on their mobile platforms and that’s why the telecommunications industry remains attractive.

  • Nigeria needs over $3b for oil, gas infrastructure

    Nigeria will  need more than   $3 billion to fix oil and gas infrastructure

    in the next 20 years,  Oilserve Group’s Managing Director, Dr Emeka Okwuosa, has said.

    He said the money would be used

    to repair and build infrastructures that would put the power, petroleum and allied sector in shape.

    In a paper titled: “Infrastructural Development: A Key to Economic Growth and Development In Nigeria” and delivered at the 48th convocation ceremony of the University of Nigeria, Nsukka,  he said the investment would also help to optimise the collective contributions from operators in oil and gas, power, maritime and other sectors of the economy.

    According to him, the World Bank ranks Nigeria lowly as viable destinations for doing business in Africa, adding that the poor state of the nation’s infrastructure has nullified the reports.

    “The 2017 World Economic Forum (WEF) Report ranks Nigeria, out of 137 countries, as follows: Roads Quality: 127th, Airport Quality: 125th,  Electricity Supply: 132nd, education system: 120th,  Math & Science: 118th, Innovation: 112th. How do we respond to these negative and retrogressive occurrences,? he asked.

    According to him, Nigeria needs to invest over $3 billion on  infrastructure in the next 20 years,  in order to fix into the ranking done by the World Bank.

    Okuwosa said:  ‘’Where can we source for this funding? It is evident that government alone can not provide these resources, he asked.

    He advised Federal Government to  leverage  on the private sector capital to fix the infrastructure and the economy in particlar, stressing that the government must develop public-private partnership to move the country forward.

    He said that government can play a key role in the economy, by creating an enabling environment needed to grow the power and oil sector of economy.

    Okwuosa said that the National Sovereign Wealth Fund should act as a catalyst for the provision of funding needed for development.

    He said the government and the private sector must, as a matter of urgency respond to these deficiencies in the economy by accelerating infrastructure development.

    “By this, I specifically refer to power, roads, rail, ports and telecommunication (especially broadband technologies).Also equally important and in alignment, is the development and implementation of the legal and regulatory frameworks and environment and all other related processes that will enhance the ease of doing business in Nigeria.’’ he said.

    He said the total value of Nigeria’s infrastructural stock (road, rail, power, airports, waterways, telecoms, and seaports) represent only 35 per cent of Gross Domestic Products (GDP).

    “ In consideration and comparison to other peer emerging markets countries whose average is 70 per cent of GDP, Nigeria is way below expectation for an appreciable development for economic growth and prosperity,’’ Okwuosa added.

    He said that the massive underinvestment in infrastructural development had been the result or bane to achieving the nation’s vision of becoming a top 20 economy by the year 2020.

    The Oilserv helmsman said that in reality, the present infrastructural deficit in Nigeria would continue to adversely impact on its economic growth.

    According to him,  the purpose of the lecture is to expose the reasons why this potential has remained relatively unachieved.

    This, he said, was apart from the widely held opinion that Nigeria had the potential to become a major power and player in the global economy by virtue of its human and natural resources endowments.