The Nation Newspaper

Tag: investment

  • Nigeria needs N20tr investment to drive growth, says report

    Nigeria requires at least an investment of 20 per cent of the Gross Domestic Product (GDP) per annum, far above the investment level of 12.6 per cent of GDP this year, to drive growth. This translates to an investment of $55 billion, or N20 trillion, reflecting that the country would have to nearly double its current investment level.

    These findings are contained in an economic paper recently released by PwC Nigeria, titled: Boosting Investments: Nigeria’s Path to Growth, which estimated the size of investment needed to drive growth. It was authored by PwC’s Partner & Chief Economist Dr. Andrew S Nevin, and its Senior Manager & Economist, Adedayo Akinbiyi.

    To reach its conclusions, the paper conducted an extensive review of economic literature, and analysed a panel data of 13 emerging economies between 1991 and 2016. The analysis revealed that investment is the most fundamental driver of growth.

    According to PwC, growth in Nigeria has been relatively strong at an average of 5.6 per cent per annum over the past decade. It however, said that this has been fuelled by the oil boom and population expansion, rather than investments.

    Nigeria is projected to be third largest populated country in the world by 2050, with 399 million people. But PwC projected that Nigeria could emerge the 14th largest economy in the world by 2050, with GDP in Market Exchange Rate (MER) terms at $3.3 trillion.

    “To deliver sustainable growth with per capita gains, Nigeria will need to aggressively boost domestic and foreign investments over the next decade,” the report, which was made available to The Nation, said.

    The report observed that at moment, Nigeria’s investment rate ranks below peers. For instance, between 2007 and 2016, Nigeria’s investment share of GDP declined from 18.7 per cent to 12.6 per cent, reaching the lowest level in the past two decades.

    “In comparison to peers, Nigeria’s investment rate lags the average of 23.3 per cent recorded for sub Saharan African countries, and 28.9 per cent for the BRICS (Brazil, Russia, India, China, and South Africa),” PwC said.

    PwC Nigeria, which delivers quality in assurance, advisory and tax services, added that academic literature suggested a strong nexus exists between the level of investment and economic growth, citing China and India as examples of economies that have successfully attained investment-led growth.

    The firm noted that the foreign exchange regime remained key to stimulating investment and restoring growth. It stated, for instance, that if Nigeria’s N2.2 trillion capital budget for 2017 is channeled towards investments, it would only meet 11 per cent of the estimated funding to bring investment as a share of GDP to 20 per cent.

    The report said: “In Nigeria’s Economic Recovery and Growth Plan (ERGP), which aims to attain important infrastructure targets within the next three years, the government acknowledges its limits and emphasises the need for private investment to drive infrastructure development.

    Our report, which examined the ERGP, identified two critical factors for unlocking private investment namely, improving the business environment, and having a sustainable foreign exchange regime.

    “We note that the country has made some progress towards improving the business environment through several reforms, including a 60-day action plan implemented over the past six months.

    “However, more needs to be done, in particular, with respect to paying taxes, getting access to electricity and other infrastructure, which are critical to bolster investment.”

    While also noting that foreign exchange liquidity has improved in recent times as the Central Bank of Nigeria (CBN) allowed for more flexibility in the foreign exchange market, PwC however, argued that the existence of multiple exchange rates with significant variances posed a risk to investment.

    “In our view, a market-determined exchange rate, where all rates are harmonised, is fundamental to boosting domestic and foreign investments,” the report emphasised.

    In 2016, the economy slowed markedly, falling into a recession for the first time since 1991. Real GDP contracted 1.5%y/y, a reflection of the two-and-a-half year decline in export earnings, and fall in government’s revenues, which impacted consumer spending and investments.

    Perhaps, the most evident impact of the sharp decline in the oil price was in the currency market, with the NGN/USD depreciating 35.4 per cent in the official market and 47 .3 per cent in the parallel market during the year.

    Aside the depreciation of the currency, the illiquidity in the foreign exchange market impacted the business and investment environment, with Foreign Direct Investment (FDI) declining to an 11-year low, and a collapse in investment as a share of GDP to 12.6 per cent – the lowest level in the past two decades.

  • ‘I started my business without any investment’

    ‘I started my business without any investment’

    Olufemi Opeoluwa Oleowo is a designer whose label’s name is Olufemi Clothings. He also owns a boutique off Opebi. He is a graduate of the Lagos State University. In this interview, he says he has never in paid employment in his life, but his passion is putting food on his table.He talks to GBENGA ADERANTI 

    What were you doing before you started your outfit?

    I started out in the fashion business right after I finished from the university. I knew if I had tasted paid employment I would never have gone back to chasing my dream of owning a clothing line.

    Give me a brief background about Olufemi.

    Oluwafemi Clothings started right after I graduated from LASU. It’s a fashion line with the sole aim of providing high quality fashion garments at a very affordable price, I grew knowing that good fashion cost one arm and one leg.  All the clothes I loved were completely overpriced…we set out to change that with the Oluwafemi brand.

    Why are you in fashion business?

    I am in the fashion business because I

    want to make a difference. From my experience,  there no homegrown fashion brand that lives beyond 10 years…All the Nigerian designers I looked up to while growing up have faded or moved out of the business while the likes of Versace and Armani’s have moved on up the ladder

    Would you say your fashion business started from school? If yes; how did you manage the business in school?

    I was doing skeletal services while in LASU, just basically making clothes for friends and family and those clothes were almost sold for free….but it was a good foundation to get the business off the ground

    How much did you invest in the business initially?

    I started the business without any investment. All the money came from orders from customers

    How much does the business worth right now?

    Never really sat down to do the maths on the true value of the business, but we are definitely doing turnover in 6 figuresHow has the importation of foreign and used clothes affected your business, considering the fact the imported used shoes contributed to the death of Bata and Lennards?

    This  is a very interesting question,  The reality remains that people all over the world would always buy clothes imported into their country and as well as buying the local brands as well. The best strategy for remaining relevant in the fashion business in Nigeria is to stay creative and innovative.  Once you can keep coming up with new things you can always grab the customers’ attention.  We make most of our garments outside now {due to the cheaper cost of manufacturing}…..In the case of Bata and Lennards, it most possibly was a combined case of bad management and lack of innovation

    How would you describe your line of business in Nigeria?

    The fashion business in Nigeria is still very much in the infancy stage, so much needs to be done before we can claim to have a fashion industry. Quite a lot needs to be done

    How profitable is it?

    Fashion is a profitable business anywhere in the world, for as long as you know what you are doing and keep your eyes on the price, its very easy to be profitable in the fashion business…..

    How did your parents react to your decision to do fashion business, considering the fact that most parents would want their children to do white colar jobs?

    My dad is late so, I didn’t really get to see his reaction but I remember telling him at some point that I wanted to go to fashion school in London and he didn’t object….my mother was indifferent when I told her I wanted to work in the fashion business, I suspect that she felt I would give it up at some point to look for a white collar job.

    What is the effect of recession on your business?

    The recession has been a blessing…better sales than any other time

    Do you see Nigeria designs competing in the international market?

    The idea of Nigerian designs competing with those from abroad is not something I’m crazy about, I beleive we need to first conquer our own continent before we venture to move beyond

    If you had not been in this business, what would you have been doing?

    Photography, music or football

    Any regret being in this line of business?

    I regret not starting earlier in the fashion industry

    What are the challenges you are currently facing ?

    The same challenges every Nigerian business faces….zero infrastructure

    Where do you see your business in the next 10 years?

    We should have opened stores in other countries after conquering Nigeria.

  • N2.5b investment coming from YouWin Programme

    The relaunched YouWin! Connect Programme is set to mobilise up to N2.5billion yearly as equity investment in start-ups and early stage Small and Medium Enterprises (SMEs) through qualified fund managers under a co-investment model.

    A statement yesterday by the Director, Information Federal Ministry of Finance, Salisu Na’inna Dambatta , said the Federal Government has a renewed focus on key economic sectors in line with the Economic Recovery and Growth Plan (ERGP), with  emphasis on SMEs led growth in agriculture, energy, technology, manufacturing, industry and key services.

    Minister of Finance, Mrs Kemi Adeosun, said the revival of these sectors, coupled with increased investment in other sectors, less reliance on foreign exchange for intermediate goods, raw materials and greater export orientation, will improve macroeconomic conditions, restore growth in the short term and help to create jobs.

    She said this is in tandem with Federal Government’s understanding that SMEs are engines of growth to stimulate and sustain economic recovery, thereby making the strengthening of small-scale businesses and the promotion of industrialisation, priorities for economic recovery.

    The component of the relaunched initiative demonstrates government’s commitment to empower start-ups and early stage SMEs, providing innovative solutions to local challenges in Nigeria.

    According to the statement, fund managers would be expected to demonstrate a strong track record in investing in and advising early stage SMEs, with a knowledge of diverse sectors and a clearly defined investment strategy.This is to ensure that fund managers can actively and positively, contribute to improving business performance by bringing on-board their experiences and having skin in the game, by providing some of the required capital.

    YouWiN! Connect is an initiative of the Federal Ministry of Finance which aims to support young entrepreneurs as they Plan, Start and Grow their businesses.

    The initiative  seeks to promote entrepreneurship as a viable career option for young Nigerians This demonstrates Government’s commitment to empower start-ups and early stage SMEs, providing innovative solutions to local challenges in Nigeria.

    The Federal Government of Nigeria intends that additional impact of this scheme will include social inclusion, job creation, youth empowerment and improved human capital.

  • Investment window for Nigerians in Diaspora

    Investment window for Nigerians in Diaspora

    The Federal Government started an international road show for the sale of $300 million diaspora bond yesterday. It equally named Bank of America Merrill Lynch and Standard Bank of South Africa as joint lead managers, the Debt Management Office (DMO) announced. The bond, targeting Nigerians living abroad, is expected to give subscribers the opportunity to invest locally and help fund the government’s infrastructure development plans, writes COLLINS NWEZE.

    Nigeria needs huge investments, both locally and internationally, to realise its development agenda. The necessity to build good roads, provide affordable housing and uninterrupted power supply is pronounced daily.

    The Federal Government has realised that achieving these milestones require huge investments in the economy through bonds. It has also recognised the need to give Nigerians living abroad opportunity to invest in the local economy through Diaspora Bonds.

    To make this a reality, a Federal Government delegation, led by the Debt Management Office (DMO) Director-General, Abraham Nwankwo, yesterday began an international road show for the sale of $300 million diaspora bond.

    It is expected that a successful outing of the Diaspora Bond issuance will provide another source of relatively cheaper source of external financing, beside the conventional Eurobond, multilateral and bilateral sources, for the funding of critical infrastructure projects in the country.

    The road show started after government successfully registered the $300 million Diaspora Bond Issuance with the United States of America’s Securities and Exchange Commission (US SEC) and United Kingdom Listing Authority (UKLA).

    According to the DMO, the purpose was to open a window of opportunities to Nigerians in the Diaspora and ‘friends’ of Nigeria to contribute to national development through structured investment in the FGN securities market.

    It said the issuance of securities registered with the US SEC and UKLA will allow Nigeria to have access to the widest possible groups of investors around the globe, including those with preferences for registered securities, because the bond offering documents will be published on the SEC’s data gathering, Analysis and Retrieval system (EDGAR).

    By this offer, Nigeria will join South Africa as the only African country outside the G-20 that can issue retail securities directly to US and UK investors.

    According to DMO, the issuance will help attract foreign exchange into the country, serve as a viable way of diversifying government sources of funding, and a means of obtaining cheaper external financing.

    It will equally open a new and parallel source of liquidity for Nigeria in the commercial window of the International Capital Market relative to the Eurobond, since this will be targeting different classes of investors.

    It was in 2013 that the country unveiled plans to sell diaspora bonds worth between $100 million to $300 million to Nigerians living abroad. But the government at the time did not appoint a book runner to actualise the plan.

    According to the bond issuance plan, a road show started yesterday with meetings planned in Britain, Switzerland and the United States. “Nigeria has filed a registration statement for the Bonds with the United States Securities and Exchange Commission,” the statement said, adding that the Bonds would be listed in London. It gave no price expectations.

    Nigeria, grappling with its first recession in 25 years that was largely brought on by low oil prices and the impact of attacks on energy facilities in the Niger Delta, has set a budget of N7.44 trillion ($23.66 billion) for this year. More than 50 per cent of the N2.21 trillion deficits in 2017 budget will be funded through external borrowing.

     

    Diaspora remittances

    The World Bank Migration and Remittances Factbook 2016 showed that Nigerians living abroad sent home $20.8 billion in 2015. The figure, it said, is by far the largest volume of remittances to any country in Africa and the sixth largest in the world.

    “The United States is the biggest remittance sending country to Nigeria, followed by the United Kingdom. Nigerians will receive $5.7 billion in remittances sent from friends and family members in the US and $3.7 billion from the UK in 2015. Nigeria is also the third largest destination country for migrants from other African nations,” it said.

    It says a quarter of a billion people around the world are migrants, and over $600 billion in remittances are sent annually.

    The global lender says international remittances to developing countries reached over $441 billion in 2015, more than foreign direct investment and trice more than official aid flows. It says 34 per cent of all international remittances are sent between developing countries.

    It disclosed that remittances constitute more than 10 per cent of Gross Domestic Product for 25 countries. It insists that international remittances have been growing steadily and remain stable even during episodes of financial volatility.

    “In 2015, the number of international migrants surpassed 250 million, a quarter of a billion people, globally. International migrants now represent more than 3.4 per cent of the world’s population. South-South migration is now larger than South-North migration. Over 38 per cent of international migrants have migrated from developing countries to other developing countries. 14.4 per cent of international migrants are refugees,” it said.

     

    Eurobond offer

    Nigeria successfully raised $1 billion in February and $500 million in March from Eurobond sales and is planning more external borrowing to plug the gap in this year’s budget.

    “The Federal Republic of Nigeria announced the commencement of a global offering of its first Diaspora Bond. Nigeria has filed a registration statement for the Bonds with the United States Securities and Exchange Commission.

    “Application will be made for the Bonds to be admitted to the official list of the UK Listing Authority and to the London Stock Exchange plc (the “London Stock Exchange”) for the bonds to be admitted to trading on the London Stock Exchange’s regulated market,” the DMO said.

    “The bonds will be direct, general obligations of Nigeria, denominated in US Dollars. The international Joint Lead Managers are Bank of America Merrill Lynch and The Standard Bank of South Africa Limited and the Nigerian Joint Lead Managers are First Bank of Nigeria Limited and United Bank for Africa Plc,” it said.

    “There will be a series of investor meetings in the United Kingdom, the United States and Switzerland commencing on June 13, 2017. Pricing is expected to occur following the investor meetings, subject to market conditions,” it added.

    The Chief Executive Officer, Nextnomics Advisory, Dr. Temitope Oshikoya, said the government needs to borrow through bond issuance to fund the budget. He said the DMO will be involved in the process, adding that the practice where banks end up buying up the bonds instead of lending their deposits to customers is not the best for the economy.

    “It will be good to have more people invest in the local bond market. Banks are expected to lend to the private sector, instead of investing so much in the local bonds,” he said.

    Oshikoya explained that FGN Bonds serve as risk-free investment with tax-free income. The bonds provide relatively high and stable returns and the principal element (collected at maturity) can be used as collateral for securing credit facilities from banks.

    In his contribution, the Managing Director, CRC Credit Bureau Limited, Tunde Popoola, said the government is in dire need of funds to stimulate and get the economy out of recession, stating that domestic debts do not react to exchange rates, especially when the loans are repaid in the local currency.

    Popoola said: “The bond is capable of boosting savings culture among Nigerians. And it has been brought down to between N5,000 and N50 million, which is affordable to many Nigerians.”

    Currencies Analyst, Ecobank Nigeria, Olakunle Ezun, said there is need for Nigerians in Diaspora to invest in local bonds.

    “It is not advisable for government to print money to meet developmental needs. And it is advisable that the citizens invest in FGN bonds, which are safe, profitable and deepens the local bond market,” he said.

    To him, although the funds from the domestic bond market are more expensive than the international bond market, investing in the local bond market is in the best interest of the economy.

    The government bonds, he added, help the government fund its deficits in a non-inflationary manner while providing benchmark yield-curve for pricing other securities/bonds.

    It also engenders rational management of government’s fiscal and monetary operations.

    The DMO explained that a bond is a loan and the investor or holder of the bond is the lender. It said: “When you purchase a bond, you are lending money to a government, local government council, state government, federal agency or a corporation, known as the issuer. The government uses it to fund budget deficit, for instance, or to build roads, electric power stations, finance factories, among others.

    “When you purchase a bond, in return the issuer promises to pay you a specified rate of interest during the life of the bond and to repay the face value of the bond (the principal) when it ‘matures’.”

  • Firm mulls $20b investment in Nigeria

    An indigenous aviation firm, African Aircraft Leasing Company (AALC), plans to invest about $20 billion in the country to facilitate the leasing of aircraft for local operators. It is also contemplating the establishment of an aircraft maintenance repair and overhaul centre, spares logistics and supply, as well as provision of other aggregated services solutions.

    Its Executive Director, Spring Fountain Infrastructure Limited, Mrs Tokunbo Fagbemi, said the firm would partner the United States- based aircraft manufacturer, Boeing Corporation to roll out the services.

    Speaking yesterday at the agreement signing ceremony between Boeing and Spring Fountain Infrastructure in Lagos, she said the aircraft leasing firm, the first in Africa, would create window for local operators to access  200 Boeing aircraft in the next 20 years.

    Indigenous operators, including Air Peace, have described the aircraft leasing window as one of the best things to happen to Nigeria, given the hurdles operators face in their bid to get aircraft from foreign lessors.

    Its Chairman, Allen Onyema, said the partnership between Boeing and Nigerian operators will stimulate the growth of aviation, adding that the partnership between Boeing and Spring Fountain will help to build capacity in blocking gaps in local skills in diverse fields, ranging from piloting, aviation engineering, aviation economics and aviation law.

    Mrs Fagbemi said with an estimated passenger traffic of 19 million, the figures could increase to over 44 million, which would require more new airplanes to meet traveling needs.

    She said: “If Nigeria is to have 44 million passenger departures per annum, it will require over 100 aircraft to meet this propensity to travel, Nigeria will need more aircraft,” adding: “To boost its international, including intercontinental flight potential, the airlines have to improve in both the quality and quantity of the aircraft. In addition, the aircraft have to be brand new to be at par with competition within Africa at the least.”

  • Ayade, Chinese governor seal deal on trade, investment

    Ayade, Chinese governor seal deal on trade, investment

    In a continuation of his investment drive, Cross River State Governor Ben Ayade yesterday signed a partnership agreement with his counterpart in Shaanxi Province in China, Hu Heping, to bolster the injection of capital by Chinese business men into the Calabar Carnival, the power and solid minerals sectors.

    Shaanxi is a province of the People’s Republic of China.

    The China-Africa Development Fund, CAD Fund, in May 2016, signed a cooperation agreement with Shaanxi government in the capital Xi’an, the first of its kind with a provincial-level partner that aims to boost more investment in the African market.

    Hu Heping, governor of Shaanxi province, said the agreement had great significance for companies in Shaanxi, pointing the way for them to go abroad and accelerate their steps into Africa.

    According to the agreement, the two sides will establish Shaanxi Africa Industry Development Fund, which will help local companies in financing, project selection and loans for their businesses in Africa.

    “As a province with traditional heavy industry, including energy development and manufacturing, Shaanxi has a good number of companies which have an advantage in mining, oil exploration and large-scale equipment manufacturing. All those sectors are needed in Africa,” Hu said at the occasion.

    He added that the China Development Bank, together with CAD Fund which has nine years of experience in Africa-related investment, will help companies in Shaanxi gain more information and financial aid in their business expansion in Africa.

    Chi Jianxin, chairman of the fund, said there were unprecedented opportunities in China-Africa cooperation at present and the thing that Africa needed the most was capital.

    The bank allocated $3.2 billion in the CAD Fund for more than 80 projects, from infrastructure to agriculture to energy resources in 35 African countries including Nigeria.

    By the end of 2016, the bank hit its target of pooling $5 billion to go into the fund, aiming at further diversifying financial vehicles that facilitate Chinese investment in Africa.

    Ayade said: “It is the enormous opportunities that this fund avails Africa that Cross River State wants to tap into. We have the assurances of the governor and the people of Shaanxi that the favorable business climate in Cross River state will be utilised by Shaanxi.”

     

  • ‘Labour needs to should encourage investment’

    The Chairman of Obijackson Group, and an indigenous oil and gas conglomerate, Dr. Ernest Azudialu, has advised labour organisations in Nigeria to encourage attraction and protection of investments by local and international investors.

    He spoke during an interaction with reporters in Lagos when the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Lagos branch, planned to picket the company.

    PENGASSAN wanted to picket the firm when its members in Neconde Energy Limited, the exploration and production (E&P) arm of the Obijackson Group, demanded for transfer benefits and upward review of severance benefits to match those of multinational oil firms, such as Shell and ExxonMobil, following the relocation of the head office of Neconde to Warri from Lagos.

    Neconde is one of the 12 subsidiaries in the Group and is the operator of the oil mining lease (OML) 42 located in Delta State and to make the office and workers to be close to the operational area, the head office of the company was moved to Warri, which generated the demands of Neconde workers.

    Azudialu urged the labour to consider firms and the prevailing challenges in the sector and the economy.

    According to him, the management of Neconde despite the myriad of challenges it faced, ensured the workers’ salaries and benefits were paid, therefore, it would be unfair to stifle private firms that borrowed money from banks to create jobs for Nigeria and force them out of business.

    He said: ‘’We battled for the operationship OML 42 with our partner, the Nigerian Petroleum Development Company (NPDC) – an arm of Nigerian National Petroleum Corporation (NNPC). Since we bought Shell’s stakes in the oil field in 2012, the battle for operatorship lasted till this year. We were confirmed the operator of the asset in March.

    “As we were about coming out from operatorship battle, the oil price collapsed. At a point we sold oil at $29 per barrel. Amid fallen oil price, militants blew up the Forcados pipeline, which is the only means of transporting oil from the fields to the terminal on February 13, 2016. With this, the output from the asset estimated to produce 100,000 barrels per day (bpd) at the time of purchase dropped to 15,000bpd and at a point, production dropped to zero.

    “We were lifting our own share of the production with barges just to be able to pay our workers. Therefore, it is not fair to use a national union to bring down a private company. It is a wrong signal to any investor whether foreign or indigenous. The government is wooing investors to come to Nigeria and invest in order to create jobs, so labour should not frustrate this initiative.

    “As I speak with you, the $558million we borrowed from Nigerian banks and other international finance firms to acquire the asset have not been repaid in its entirety and we took another loan, which is almost the same amount, to repair the facilities and we are paying interests on these loans.’’

    The Managing Director, Neconde Energy, Frank Edozie, corroborated Azudialu. He said despite the challenges the firm faced from the time Shell’s stakes in the oil field was bought in 2012, it had placed the welfare of its staff a priority.

    He said at the time of purchase, the potential production from the asset was 100,000 bpd but on completion of the acquisition, production was about 52,000 bpd.

    Following the long battle for operatorship, attacks on oil facility especially the Forcados pipeline, production dropped to zero.

  • Labour needs to encourage investment, says Azudialu

    The Chairman of Obijackson Group, indigenous oil and gas conglomerate, Dr. Ernest Azudialu, has advised labour organisations in Nigeria to encourage attraction and protection of investments by local and international investors.

    He spoke during an interaction with reporters in Lagos when the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Lagos branch, planned to picket the company. Lagos PENGASSAN wanted to picket the firm when its members in Neconde Energy Limited, the exploration and production (E&P) arm of the Obijackson Group, demanded for transfer benefits and upward review of severance benefits to match those of multinational oil firms such as Shell and ExxonMobil following the relocation of the head office of Neconde to Warri from Lagos.

    Neconde is one of the 12 subsidiaries in the Group and is the operator of the oil mining lease (OML) 42 located in Delta State and to make the office and workers to be close to the operational area, the head office of the company was moved to Warri, which generated the demands of Neconde workers.

    Azudialu urged the labour to consider firms and the prevailing challenges in the sector and the economy. According to him, the management of Neconde despite the myriad of challenges it faced, ensured the workers’ salaries and benefits were paid, therefore, it would be unfair to stifle private firms that borrowed money from banks to create jobs for Nigeria and force them out of business.

    He said: We battled for the operationship OML 42 with our partner, the Nigerian Petroleum Development Company (NPDC) – an arm of Nigerian National Petroleum Corporation (NNPC). Since we bought Shell’s stakes in the oil field in 2012, the battle for operatorship lasted till this year. We were confirmed the operator of the asset in March.

    “As we were about coming out from operatorship battle, the oil price collapsed. At a point we sold oil at $29 per barrel. Amid fallen oil price, militants blew up the Forcados pipeline, which is the only means of transporting oil from the fields to the terminal on February 13, 2016. With this, the output from the asset estimated to produce 100,000 barrels per day (bpd) at the time of purchase dropped to 15,000bpd and at a point, production dropped to zero.

    “We were lifting our own share of the production with barges just to be able to pay our workers. Therefore, it is not fair to use a national union to bring down a private company. It is a wrong signal to any investor whether foreign or indigenous. The government is wooing investors to come to Nigeria and invest in order to create jobs, so labour should not frustrate this initiative.

    “As I speak with you, the $558million we borrowed from Nigerian banks and other international finance firms to acquire the asset have not been repaid in its entirety and we took another loan, which is almost the same amount, to repair the facilities and we are paying interests on these loans.

    The Managing Director, Neconde Energy, Frank Edozie corroborated Azudialu. He said despite the challenges the firm faced from the time Shell’s stakes in the oil field was bought in 2012, it had placed the welfare of its staff a priority.

    He stated that at the time of purchase the potential production from the asset was 100,000 bpd but on completion of the acquisition, production was about 52,000 bpd. Following the long battle for operatorship, attacks on oil facility especially the Forcados pipeline, production dropped to zero.

    “Currently, we produce only 15,000 bpd and we lift the oil with barges to the export terminal just to ensure that our staff salaries are paid. Our workforce has remained a key factor in the evolution of Neconde, and their wellbeing remains important to us. We are a people-centred organisation, so the value we place on employees is not just because we know that our continued existence is dependent on them, but mainly because every human being deserves a good life, and should be treated fairly.

    “For instance, a component of our strategic goal for the year is to achieve an estimate of 70,000bpd. This has led us to develop “barged production” as an alternative to crude evacuation using the Trans Forcados Pipeline which has been out of service since 13th February, 2016.  We have also undertaken some strategic steps, such as rehabilitation of Batan and Odidi Flow Stations to enable the achievement of our targeted peak gross production rate, revamping of Jones Creek and Egwa Fields for workover of existing wells and development of other infrastructure which includes refurbishing a gas Central Processing Facility (CPF) in Odidi as well as commencement of re-entry of Odidi, Jones Creek fields Egwa 1 & 2,” he added

  • Minister, NCC boss seek investment in ICT infrastructure

    Minister, NCC boss seek investment in ICT infrastructure

    Minister of Foreign Affairs Geoffrey Onyeama and Executive Vice Chairman of the Nigerian Communications Commission (NCC) Prof. Umar Dambatta have urged private sector operators to invest in Information and Communication Technology (ICT) to bridge the country’s infrastructure deficit.

    Onyeama and Dambatta said unless the huge infrastructure deficit in Nigeria and Africa was addressed, achieving the Smart Africa Initiative would be difficult.

    They spoke on the sideline of Transform Africa Summit 2017, in Kigali, Rwanda.

    The focus of the summit was developing “smart cities”.

    The initiative, aims at leveraging technology solutions to improve efficiency of cities, has seen Rwanda rolling out a number of them such as WiFi in public areas, public transport vehicles as well as cashless payment systems in public transport.

    The initiative is backed by 11 African countries and more nations are expected to join.

    Onyeama maintained that lack of infrastructure was one of the impediments that must be addressed for Nigeria and Africa to develop smart cities.

    The minister, who stressed the need for investment in the ICT infrastructure to achieve the goal, said the Public Private Partnership (PPP) was essential to driving technology in Nigeria.

    He said: “As it was said, there is no one technology that is necessarily going to overcome some of these challenges of infrastructure.

    “What it just requires and, I think this is what came out clearly, is partnership among government, the private sector and the academia.

    “And together, these three can begin to put in place all the building blocks to have smart cities, including in Nigeria.”

    Onyeama said Nigeria succeeded in the communication sector as a result of PPP.

    He said Nigeria in the last 20 years was able to engage the private sector into providing phone lines to about 100 million people as against the 400,000 telephone lines that were there to serve 150 million people.

    Dambatta stated that inadequate infrastructure was the problem facing Nigeria’s ICT development.

    He was concerned that the Smart Africa initiative would not be realised without necessary infrastructure, such as sufficient electricity supply.

    “As a regulator, I experience some challenges of how we can drive the smart initiative. One major challenge is that of infrastructure.

    “Nigeria has about a population of 180 million, equals to the population of all the countries in the sub-Saharan Africa.

    “Without adequate electricity supply, Africa would remain a dark continent,” he said.

  • ‘Investment in air ambulance services profitable’

    Founder, Flying Doctors, Nigeria, Dr. Ola Brown has advocated the need for Nigeria to develop its air ambulance infrastructure to ensure that patients can assess healthcare, saying this may help the government to save billions of dollars by concentrating expert resources and reducing healthcare spending.
    She lamented the high cost of healthcare in the country, saying thegovernment does not have enough money to build centres of medical excellence in every single state.
    She said if there cannot be a centre of medical excellence in every state, then Nigeria needs to develop its air ambulance infrastructure led by companies such as the Flying Doctors Nigeria Air Ambulance service, to ensure that patients can access healthcare.
    The Flying Doctors Nigeria has developed a cost-effective, commercial air ambulance solution that allows patients to be transported by air for less than the price of a ground ambulance. This cost pales in comparison to the cost of developing multiple hospitals which would be financially impossible to staff/equip and run on their current budget.
    Brown, in interview in Lagos, said the United Kingdom National Health Service (NHS) budget spends more than $100 billion per year covering 65 million citizens, while Nigeria’s entire budget, by contrast, is about $12 billion per year, over 60 per cent of which goes to recurrent government expenses such as salaries, travel, training, and perks.
    She lamented that there is less than $1 billion for health care in a country with a population of 170 million people.
    “Putting a state of the art hospital in every state of Nigeria would cost about $30billion, more than double our entire budget. Even if we had the money, we lack the resources in terms of doctors, nurses, support staff, maintenance engineers to ensure that these hospitals could function,” she said.
    She stated that the only viable alternative is to centralise the country’s healthcare system, with just one or two state-of-the-art centres that are home to Nigeria’s finest and most experienced medical practitioners. These centres, she reiterated, would receive the bulk of healthcare investment, allowing doctors to specialise effectively.
    She said:”Majority of sick people do not need to be in hospital; they can be managed effectively through primary care systems in the community. But the sickest patients need to be managed in very specialised hospitals by multi-disciplinary teams, supported complex, expensive equipment. The centralisation of the Nigerian healthcare will allow the best use our scarce resources; doctors and money.
    “Air ambulance services increase our ability to get the correct patient to the correct medical facility within the correct time frame. This is a system that is used all over the world.”