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Tag: manufacturing

  • ‘Manufacturing capacity utilisation contracted by 0.8%’

    ‘Manufacturing capacity utilisation contracted by 0.8%’

    Manufacturing capacity utilisation contracted further by 0.8 per cent in the fourth quarter (Q4) of last year from the -1.3 per cent drop witnessed in the preceding quarter. Manufacturing investment also dipped by 1.2 per cent from 3.5 per cent contraction recorded in Q3 of the same period.

    Save for sales volume, which recorded a favourable change during the period of review, rising slightly by 1.1 per cent compared to the 0.4 per cent decline witnessed in the preceding quarter, Manufacturers Association of Nigeria (MAN) CEO Confidence Index (MCCI) report said other key manufacturing indicators witnessed contraction.

    The MCCI serves as a gauge for assessing quarterly shifts in manufacturing activities, influenced by macroeconomic trends and government policies.

    MCCI is, therefore, the barometer used by MAN to garner the perceptions of CEOs of manufacturing companies on the impact of changes in the economy on manufacturing operations.

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    The MCCI report said volume of production dropped by 0.3 per cent in Q4  from a contraction of 3.2 per cent recorded in Q3 2024; production and distribution costs surged further by 18.2 per cent in the quarter under review, from the 20.1 per cent increase witnessed in the preceding quarter.

    Also, manufacturing employment declined by 0.7 per cent in Q4 2024 compared to 3.5 per cent contraction recorded in the preceding quarter, while cost of shipment rose by 11.6 per cent in Q4 2024 from the 17 per cent increase recorded in Q3 2024.

    MAN Director-General Mr. Segun Ajayi-Kadir said most of the key manufacturing indicators recorded lower adverse changes compared to the previous quarter because the indicators were diminished by the adverse effects of the prevailing macroeconomic reforms.

    He said during the survey, manufacturers identified and ranked the challenges facing their operations in order of severity.

    Ajayi-Kadir listed manufacturers’ top 10 challenges in Q4 2024 to include exorbitant electricity tariff hike & high cost of alternative energy; high exchange rate & forex scarcity; high cost and shortage of raw materials; multiple taxation; and government over-regulation & policy inconsistency.

    Others are high interest rate & low access to credit; poor road infrastructure & high cost of logistics; insecurity & political instability; low sales & low patronage by government agencies; and high inflation.

  • Manufacturing gets N74b to boost production

    Manufacturing gets N74b to boost production

    Development Bank of Nigeria (DBN) has disbursed N112 billion in loans to some 11,859 companies operating in key sectors of the economy.

    A breakdown indicated that a total of N74 billion was disbursed to about 3,696 end-borrowers in the manufacturing sector while N38 billion was loaned to 8,163 end-borrowers in the agriculture sector.

    Managing Director, Dr. Tony Okpanachi, gave the breakdown yesterday at the fourth DBN Annual Service Ambassadors Award ceremony in Abuja.

    According to him, the disbursements were part of DBN’s broader efforts to stimulate economic development by empowering sectors that are critical to Nigeria’s growth.

    He noted that the disbursements have had a profound impact on key sectors such as manufacturing and agriculture, which are priority areas for the growth of the economy.

    “These strategic investments underscore our drive to nurture sectors that are vital to the nation’s economic development.

    “We commend our participating financial institutions (PFIs) for their remarkable support, which has been instrumental in ensuring that MSMEs have increased access to financing and can achieve sustainable growth,” Okpanachi said.

    He said DBN has completed its initial five-year strategy with notable outcomes and is now set to embark on its next strategic chapter, which is characterised by ambitious goals for significant growth and scaling its operations.

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    “This strategic vision reflects our commitment to elevating our impact and expanding our reach in the coming years,” he added, urging stakeholders to look to the future with renewed optimism.

    He added that the awards ceremony recognised PFIs for their outstanding contributions in facilitating access to financing for micro, small, and medium enterprises (MSMEs) in Nigeria.

    Chief Operating Officer, Development Bank of Nigeria (DBN), Bonaventure Okhaimo, also stressed the bank’s impressive performance in 2023.

    He reported a 73 per cent increase in total loan disbursements compared to 2022, which contributed to substantial growth in key impact indicators.

    “The number of MSME end-beneficiaries increased by 81 per cent, disbursements to women grew by 80 per cent, and disbursements to youth saw a 60 per cent rise,” Okhaimo said.

  • Manufacturing key to growth, say footwear workers

    Manufacturing key to growth, say footwear workers

    The National Union of Chemical, Footwear, Rubber, Leather and Non-Metallic Products Employees (NUCFRLANMPE) has emphasised the need for strategic import policies to bolster production and drive  growth.

    According to its President, Comrade Goke Olatunji, manufacturing is critical to driving the country’s growth and ensuring a sustainable future for its people.

    At the 32nd  Industrial Relations Seminar in Ilorin, the  Kwara State capital, Olatunji said the economy was not favourable to businesses.

    His words: “Manufacturers are lamenting daily due to high cost of production as a result of high interest rate and electricity tariff, while petroleum products that are supposed to be alternative power generation are equally  costly.

    “The roads are bad while different forms of taxes are imposed on manufacturers.

    “It is a fact that manufacturing remains the surest way for economic growth and development.

    “We cannot continue to export our natural resources without adding value and expect our economy to grow and develop.

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    “The volume of exports and imports determines economic growth. Where import is greater than export as we experience in Nigeria, it weakens the local currency, causes inflation, man-power turnover, hunger and poverty which may likely trigger social unrest such as the recent end bad governance protest.”

    Olatunji said the economic down-turn also affected the industry, especially workers.

    “Workers on daily basis suffer from job losses due to redundancy, closure and relocation of factories.

    “A majority of them work under precarious conditions with poor salary and no incentives or motivation. The inflation and exchange rates are having negative effects on real value of naira. It may interest you to know that the dollar equivalent of the recently signed minimum wage of N70,000 is far below when it was N18,000. Let me appreciate our employers for agreeing to sign N87,000 in 2023 as minimum wage in our sector. I wish the narrative is changed from minimum wage to living wage.

    “It is, therefore, our resolve to educate our teeming membership on the workings of the national economy, thereby preparing them for issue-based  discussions in their day to day employers-employees relations,” he said.

    Speaking on the theme: “Building human resources capacity for effective industrial relations in an era of economic crisi”, Olatunji said it was drawn largely from the economic situation in the country.

    “The understanding of the state of our national economy will impact positively on industrial relations in our sector.

    “This will enrich discussions between the employers and employees, thereby promoting industrial peace and harmony,” he said.

    The keynote speaker, who is also the Executive Secretary of Chemical and Non-Metallic Products Employers’ Federation (CAMPEF), Mr. Femi Oke, said human resources are the life blood of an organisation.

    He said despite the application of technology in modern business management, human resources are still relevant and most adaptive resources of the organisation.

    “The strategic values of HR stem from the fact that apart from other resources employed in the course of production which are passive, human resources are endowed with discretionary decision-making power and thus have competitive advantage over the other resources,” Oke said.

  • Manufacturing capacity declined by 9.76% in Q1

    Manufacturing capacity declined by 9.76% in Q1

    • Investment dipped 5.16%

    Manufacturing capacity utilisation declined further by 9.76 per cent in Q1 from 3.81 per cent recorded in the preceding quarter (i.e. Q4 2023). Manufacturing investment also dipped further by 5.16 per cent in Q1 from 2.8 per cent contraction recorded in the last quarter of 2023.

    The downward trend in these two key manufacturing indicators, according to Manufacturers Association of Nigeria (MAN), underscored the negative impact of Nigeria’s macro-economic environment on the manufacturing sector in the quarter under review.

    MAN, in its MAN CEO’s Confidence Index (MCCI) Report, released last week, attributed the unfavourable changes in these two indicators and indeed, all the manufacturing indicators majorly to high and unstable exchange rate, prolonged forex scarcity, and escalated cost of energy.

    Other factors that forced the decline in the indicators included unstable import duty rate, high cost of borrowing and further rise in inflation. “All of these grossly escalated the cost of manufacturing operations and distorted the manufacturing value chain,” the Director, Research and Economic Policy, Dr. Oluwasegun Osidipe said.

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    Osidipe, who made these known while presenting the MCCI report to newsmen in Lagos, also said the afore-mentioned factors discouraged investments, increased job losses, and reduced manufacturers’ sales volume.

    The MCCI is an index constructed by MAN to measure changes in quarterly pulse of CEOs of manufacturing concerns in relation to changes in government policies and movement in macroeconomic indicators.

    Since 2019, the MCCI has effectively served as a veritable advocacy instrument for quarterly review of the performance and expectations of operators in the manufacturing sector.

    The MCCI has a baseline index of 50 points, which suggests a stationary point in the economy.  Therefore, any index point above 50 points indicates that manufacturers have confidence in the economy and improvement in manufacturing performance.

    However, any index point below 50 points indicates otherwise. So, the more the index point tends to 100 points, the higher the level of confidence in the economy and improvement in manufacturing activities.

    Even though, there was moderate improvement in the Aggregate Index Score (AIS) to 53.5 points in Q1 2024, up from 51.8 points in Q4 2023, indicating a slightly improved performance in the period and a growing confidence of manufacturers in the economy, all the manufacturing indicators especially capacity utilization and investment recorded unfavourable changes.  

    Osidipe, therefore, said the manufacturing sector should be at the front burner for economic policymakers as the sector is the most essential for sustained economic growth and shared prosperity.

    He attributed the sector’s subdued performance to some ongoing harsh economic reforms, which, according to him, compounded the long-standing challenges confronting the sector.

    “This is confirmed by the finding of this report, which reveals that forex scarcity, inadequate power supply, high inflation, rising energy cost, multiple taxation, policy inconsistency, exorbitant interest rate, poor infrastructure and high logistics costs are the top ten challenges depressing the sector’s productivity,” he said.

    Also speaking, MAN President Otunba Francis Meshioye said the manufacturing sector plays a pivotal role in the economic growth and development of the nation, noting that the MCCI report shed light on the current state of the industry, its challenges, and the opportunities that lie ahead.

    To advance the manufacturing sector in the coming quarters, Meshioye recommended stabilising the exchange rate and improving access to forex, promoting energy security, ensuring affordable lending rate and increased access to credit, and upgrading infrastructure.

    Others are addressing high and multiple taxation, ensuring food security, promoting local patronage of made-in-Nigeria products, addressing policy inconsistency and improving trading activities, etc.

  • ‘Rise in non-performing loans, stunted manufacturing worrisome’

    ‘Rise in non-performing loans, stunted manufacturing worrisome’

    • MPC members suggest way out

    Overdependence on the volatile oil sector, a stagnant manufacturing industry and a rise in non-performing loans (NPLs) might stifle economic growth, unless concerted corrective measures are taken.

    Members of the Central Bank of Nigeria (CBN’s) Monetary Policy Committee (MPC) called for balanced fiscal and monetary initiatives to combat the spiraling inflationary pressure without undermining the growth of the real sector.

    Most MPC members believe it is necessary to combat inflation, but cautioned that aggressive interest rate hikes pose a significant risk.

    According to most MPC members, higher borrowing costs can discourage businesses from investing and consumers from spending, further dampening economic growth.

    They reasoned that the apex bank must tread a careful path, balancing inflation control with the need to stimulate economic activity.

    CBN’s Deputy Governor in charge of Financial System Stability, Mr. Philip Ikeazor, described the imbalance between the exposure of the oil and manufacturing sectors and their poor contribution to growth as worrisome, even as NPLs continues to rise

    According to him, the reliance on oil exports leaves the country vulnerable to the whims of the global market with fluctuations in prices having dramatic impact on government revenue and overall economic performance.

    He said diversification into other sectors, particularly robust manufacturing, is crucial to create a more resilient economy.

    The apex bank director pointed out that the manufacturing industry, a key driver of job creation and innovation, is currently underperforming.

    He said such underperformance not only limits economic growth but also weakens the nation’s export potential.

     Ikeazor, in his contribution at the MPC meeting, outlined that rising input costs, such as raw materials and energy, coupled with underutilized production capacity, are creating a significant drag on the manufacturing sector.

    This is further evidenced by the projected contraction of the Purchasing Managers’ Index (PMI) in the industrial sector by a concerning 7.1 index points, the CBN deputy governor stated.

    Another source of worry for the CBN was the rising tide of NPLs on the books of financial institutions.

    These bad loans restrict banks’ ability to extend credit to businesses and consumers, hindering essential investments and economic activity.

    Resolving bad loans and improving lending practices are essential steps to ensure a healthy flow of credit throughout the economy.

    As another MPC meeting looms, the apex bank is expected to further hike the benchmark interest rate to combat inflation.

    Lydia Shehu Jafiya, Permanent Secretary, Ministry of Finance, argued that “to reduce public debt and deficit financing, the fiscal authority continues to deploy innovative technological solutions to improve non-oil collections and enhance measures to increase the rate of tax compliance, as well as increased collaboration with other stakeholders to broaden the tax bracket.

    “The recent increase in the Federation Accounts Allocation Committee (FAAC) reflects a positive shift in the nation’s revenue streams. The government remains strongly committed to fighting insecurity to enable improved agricultural harvests in farming communities and crude oil production in the Niger Delta.”

    She added that “efforts are also being made to end the smuggling of food to neighboring countries in a bid to address food scarcity. Overall, deciding on an optimal policy choice remains a delicate balance between output growth and low inflation.

    “In the outlined circumstance, I believe that the decisions taken at the February MPC are working their way through the economy and evidence at the next meeting would provide more insights for policy”.

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     She voted for a hold on the MPC Rate at the 22.75 per cent; an adjustment in the asymmetric corridor around the MPR by +100/-300 basis points; a retention of the Cash Reserve Ratio of Deposit Money Banks at 45.0 per cent; adjustment of the Cash Reserve Ratio of Merchant Banks from 10.0 per cent to 14.0 per cent; and maintenance of the Liquidity Ratio at 30.0 per cent.

    Murtala Sabo Sagagi suggested several key areas for the CBN to focus on. In research, he suggested the need for the CBN to understand the root causes of exchange rate fluctuations and how they impact inflation.

    Debt management, he said, is crucial due to the rising debt burden, which has surpassed international benchmarks. Effective strategies need to be formulated to manage debt and possibly reduce exposure to international indebtedness.

    To boost competitiveness, he advocated for collaboration between the bank and fiscal policy authorities, especially at the state level.

    “This collaboration should aim to attract diverse investments, including foreign direct investment, impact investments, public private partnerships, and Sukuk, particularly in sectors like agriculture, MSMEs, mining, and infrastructure,” he said.

    In the area of wealth creation, Sagagi urged the government to prioritise initiatives that promote MSME development as their formalisation remains vital for wealth creation.

    Rather than temporary solutions, these interventions should focus on fostering economic growth, creating jobs, and increasing tax revenues, he said.

    “Instead of palliative measures, MSME Development interventions and their formalization should be prioritised to generate economic growth, jobs and tax revenues,” Sagagi said.

    Bamidele Amoo argued that the balance of payments showed a surplus compared to the previous quarter, largely due to increased external reserves from third-party receipts, including higher diaspora remittances and a rise in capital inflows to $1.24 billion by February, up from $0.33 billion in January 2024.

    According to him, these capital inflows, primarily from foreign portfolio investments, especially in money market instruments and loans, underscored the importance of maintaining the current monetary tightening regime initiated in February by the MPC to ensure effective policy transmission in the Nigerian economy.

  • Expert seeks strategic approach to boost manufacturing industry

    Expert seeks strategic approach to boost manufacturing industry

    It is imperative to deploy a deliberate and strategic approach to encourage the growth of local factories and the manufacturing of goods instead of  construction of mere assembly. This was the position of Managing Director/Chief Executive Officer of Coleman Technical Industries Limited, Mr. George Onafowokan.

    Speaking with newsmen in Lagos, he noted that fostering a supportive environment and building local capacity, Nigeria can establish itself as a manufacturing hub and create more opportunities for businesses and economic growth.

     Onafowokan, who emphasised the need to  replicate  the success achieved in the petroleum industry in the manufacturing sector, noted that it was important to build human capacity and empower individuals within an organisation, adding that integrating capable team members and giving them responsibilities would enable them  perform their jobs effectively.

    He said his firm’s  collaboration with the Nigeria Content Development and Monitoring Board (NCDMB) was  instrumental in their success as it leveraged opportunities provided by local content law.

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     “The company has been working closely with the board since 2017, leveraging the opportunities provided by the local content law. Coleman has managed to break into the oil and gas industry, supplying cables to major companies such as NLNG, Shell, and Mobil. Their ability to provide cables that no other Nigerian company can produce has solidified their reputation as a trusted and innovative supplier in the industry,” he said.

     He added that the firm is poised to contribute to Nigeria’s economic growth through its robust export and plans  to supply markets in West and Central Africa, with further expansion into East Africa. 

     The CEO said through strategic growth and a vision to become the preferred choice for wires and cables in the country, the firm  gradually expanded its operations, diversified its product range and became the first in Nigeria and West Africa to produce high-voltage cables. 

     On overcoming setbacks and expanding its reach, he said: “When faced with business and economic setbacks, Coleman took proactive measures to ensure its survival and growth. The company underwent a restructuring process and minimised losses. By reducing its size and scrutinising positions, itwas able to mitigate the impact of the COVID-19 pandemic. Notably, the company managed to build two new factories without relying on foreign expertise, showcasing its resilience and commitment to in-country capacity enhancement.”

  • Manufacturing sector suffers decades of neglect

    Manufacturing sector suffers decades of neglect

    President, Manufacturers Association of Nigeria (MAN), Otunba Francis Meshiloye has lamented that the manufacturing  sector in Nigeria has suffered decades of negligence by successive administrations in the country.

    Meshiloye who described the sector as the key source and critical driver of nation’s wealth, decried poor growth trajectory of the sector in Nigeria.

    Meshiloye stated this yesterday in a paper presentation at the MAN-NIPSS strategic technical session holding at the institute in Kuru, Jos.

    According to him, the sector’s performance in Nigeria in the past years has been troubling,  characterised by a poor growth trajectory that contravenes the government’s own proposed target as stipulated in many of its development policy plans.

    “”For example, the Nigeria Industrial Revolution Plan aimed to grow the manufacturing sector by 10% in 2017, but this was largely unrealized.

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    “The neglect and poor performance of the manufacturing sector is part of the constraints preventing Nigeria’s economy from operating at its full potential.

    This, he added, has resulted in low job creation, poor infrastructure development, and low public revenue generation.

    He concluded that the Manufacturing sector is yet to get the much-needed attention from the government. The sector is plagued with multiple challenges

    “The essence of this workshop is to craft a joint policy-ready and implementations ready documents that will assist the new government to redress the challenges, boost competitiveness and enable the accelerated development of the manufacturing sector

    He therefore urged the federal government to highlight the current state and challenges of the manufacturing sector in Nigeria identify critical low-hanging fruits, short and medium terms policies for rebuilding the manufacturing sector.

    “Chart a realistic policy document to guide the new government on manufacturing sector development”

  • Distinguished experts driving innovation, sustainability in manufacturing, supply chain management across Nigeria

    Distinguished experts driving innovation, sustainability in manufacturing, supply chain management across Nigeria

    Sustainable manufacturing and supply chain management emphasize minimising environmental impact, conserving resources, and fostering social responsibility. In manufacturing, this involves energy efficiency, waste reduction, eco-design, and responsible material sourcing. On the supply chain front, businesses prioritise ethical sourcing, reduced transportation emissions, and circular models that encourage reusing, recycling, and remanufacturing. Emerging technologies such as automation, IoT, and blockchain are pivotal in enhancing efficiency and traceability within these systems.

    Here are some distinguished experts shaping the landscape of sustainable manufacturing and supply chain management in Nigeria, helping businesses mitigate risks, comply with regulations, and position themselves for future growth. These distinguished experts are driving innovation and sustainability in manufacturing and supply chain management across Nigeria, ensuring long-term growth and global competitiveness.

    Izin Akioya

    Izin Akioya is the Co-Founder and Editor-in-Chief of Supply Chain Africa. In 2020, she launched Ship Africa Global LLC to strengthen supply chain development across Africa and enhance global market access for local producers. Leveraging technology and strategic partnerships, the company bridges critical gaps in logistics, production capacity, and market entry knowledge.

    A staunch advocate for mergers and acquisitions, Akioya highlights their significance in the sustainability and success of African startups. With nearly two decades of experience across FMCG, consulting, advertising, and non-profits, she has built expertise in marketing communications, business development, strategy, and advocacy.

    She also leads Identiti LLC, a full-service marketing firm specializing in product ideation, brand design, e-commerce, content marketing, and corporate event management.

    As an author, Akioya explores themes of identity and self-improvement. Her works, including Mum, Find Love Again: Shame, Self-Love, Identity and Lili, address societal biases and celebrate personal transformation.

    Dr. Ola Brown

    Dr. Ola Brown actively fosters international trade relations between Nigeria, the U.S., and the U.K., serving on the British Business Group (Lagos) committee and leading the Healthcare Business Forum of the Nigerian-American Chamber of Commerce.

    Dr. Brown earned her medical degree from Hull York Medical School and holds a master’s in finance and economic policy from the University of London. She has further certifications from IE Business School in Spain and the University of Michigan. Recognized for her impact, she was named a Young Global Leader by the World Economic Forum and featured in Forbes’ 20 Young Power Women in Africa.

    She is driven by a mission to improve medical care in Nigeria, she established the region’s first indigenous air ambulance service. Flying Doctors has since grown into a tech-driven global marketplace for urgent and emergency medical services, primarily catering to the oil & gas, mining, and international insurance sectors.

    Beyond Flying Doctors, Dr. Brown established Health Capital Africa, a pan-African investment firm backing nearly 30 fintech and health tech startups. The company also oversees a pipeline of $800 million in healthcare, clean energy, and clean water projects across Africa.

    Olori Boye-Ajayi

    Olori Boye-Ajayi is a trailblazer in international trade and women’s empowerment. As CEO of Borderless Trade & Investments, she has led initiatives benefiting 80,000 African entrepreneurs, helping them seamlessly integrate into global markets.

    Her journey in export trade began in 2017 within the textile and apparel industry, where she established a sourcing and manufacturing hub facilitating exports to Australia, the U.S., and the U.K. Through her company, The Katie Wang Company, she connects African fashion suppliers and manufacturers with international buyers.

    Boye-Ajayi’s accolades include the International Woman of the Year award at Women4Africa UK. She has also pioneered the Borderless Trade Network, an ecosystem supporting 800 female entrepreneurs across Africa.

    Her influence extends to policy as she leads WINHer, a gender-inclusive investment program under the Commissioner for Trade and Investment of Vanuatu. Additionally, she serves as the MANSA Ambassador for AfreximBank, championing the inclusion of African SMEs in global trade.

    Olajumoke Agbelusi

    Olajumoke Agbelusi is an operations expert with over 15 years of experience in multinational FMCGs, including Unilever Nigeria, and Coca-Cola Hellenic Bottling Company. Her expertise spans manufacturing, quality management, supply chain optimisation, and process improvement.

    She has successfully led organisational transformations, enhancing manufacturing efficiency, cost reduction, sustainability, and operational excellence. A strategic thinker, she excels in problem analysis, execution of strategic initiatives, and change management.

    Agbelusi is passionate about global supply chain leadership and thrives in environments that value innovation, professional growth, and societal impact. Beyond her career, she is an avid reader and traveller who enjoys exploring new cultures and expanding her professional network.

    Adefunke Adeyemi

    Adefunke Adeyemi is a recognised leader in the aviation industry. She has served as Secretary General of the African Civil Aviation Commission (AFCAC/CAFAC), a specialized agency of the African Union dedicated to aviation matters.

    Passionate about Africa’s socio-economic transformation, Adeyemi advocates for enhanced air connectivity across the continent as a driver of growth. Her contributions have earned her global recognition, including being named one of the 200 Most Influential People of African Descent (MIPAD) in affiliation with the United Nations.

    She holds a law degree from the University of Lagos, Nigeria, a Master of Laws (LL.M.) from the University of Cambridge, UK, and an MBA from Nanyang Business School in Singapore, in collaboration with Wharton Business School and Berkeley Haas Business School.

  • Local meter manufacturing up by 100%

    Local meter manufacturers have increased production ca-pacity by 100 per cent to meet the Federal Government’s May 1 commencement date of the Meter Asset Provider (MAP) scheme. The government had given a-three-year window to close the metering gap of five million unmetered customers across the country.

    The MAP regulation provided for a local content policy to strengthen the government’s resolve to encourage participation of local entities in the sector. Section 9 of the Regulations stipulates that MAPs shall source a minimum of 30 per cent of their contracted metering volumes from local meter manufacturing companies. Further changes to the minimum local content thresholds shall be specified in the Nigerian Electricity Regulatory Commission (NERC) Local Content Regulations.

    “This position taken by the regulation is highly commendable as the participation of the local business entities in critical sectors of the economy is vital in increasing the capacity, sustenance and localisation of technical knowledge of the sector and minimising the appropriation of crucial resources that would have been spent to import such services,” NERC said.

    In response to this local content regulation, manufacturers said they have doubled their production capacity. Momas Electricity Meter Manufacturing Company Limited (MEMMCOL) Chairman, Kola Balogun, told The Nation on phone that they (meter manufacturers) have started massive production of meters to meet MAPs demand.

    He said local meter manufacturers have the capacity to exceed the 30 per cent local content inputs and urged the regulator to increase it to 70 per cent. Our expectation is that the regulator will also have a yardstick to measure the local content to ensure that capacity, skills and jobs are created in-country.

    He said MAP licensees and electricity distribution companies (DisCos) are relating with one another well. “We have signed memoranda of understanding (MoU) with five MAP licensees,” he said.

    On the number of meters to be manufactured by each manufacturer,  Balogun said it will depend on the agreement reached between MAP licensee and the meter manufacturer. He said meter manufacturers have scheduled themselves to ensure that they close all the missing links.

    According to him, manufacturers have concluded to commence three-shift production activities to close  the gap as directed by NERC. “We will be producing a minimum of about 70,000 meters monthly on three shift production operation. Manufacturers have taken bold steps to double production capacity and commenced recruitment of more personnel to fill in for the three shifts to be able to work round the clock to close the metering gap. We have been able to take youths off the street to start working with us. This would also boost the economy and growth of the country,” he said.

  • Stimulating SMEs, manufacturing through proper funding

    Banks are expected to reinforce their commitment to customers, businesses and brand essence through innovative services and quality product offerings. For 125 years of operation, First Bank of Nigeria Limited, has supported Small and Medium Enterprises (SMEs), manufacturing and other real sector operators through improved funding and digitised services, writes Charles Okonji.

    There is nothing that attracts bank customers as quality and timely services that meet or even surpass their expectations. For Small and Medium Enterprises (SMEs), obtaining low cost loans from their lenders could define the extent to which they grow their businesses.

    SME financing in Nigeria has been an age long problem that seems insurmountable. As such, many SMEs have gone underground due to their inability to access cheaper funds to grow and sustain their businesses.

    In this regard, First Bank of Nigeria Limited which is marking its 125 years of operation is bold to say the bank has continuously helped its customers to achieve their business and personal goals. Aside support for SMEs, its subsidiary, the FBN Holdings, established for investments in the services’ sector is hinged on contributing to building infrastructure and improving power generation through lending to investors and off-takers.

    FirstBank participated in financing the new Lekki-Epe Expressway, Tejuosho Shopping Complex, Aswani Shopping Complex, and several housing estates. There are infrastructure financing arranged by the debt solution of FBN Capital  – raising money for the acquisition and refurbishment of Egbin Power Station, acting as Mandated Lead Arranger for the funding of Accugas, a gas infrastructure company.

    Speaking during the anniversary flag hoisting held in Lagos recently, the bank’s Chief Executive Officer, Adesola Adeduntan, said the bank has continuously impacted the word with its business.

    He said: “This is a remarkable day as we officially flag off the commemorative activities marking the 125th Anniversary of our iconic pan-African institution. FirstBank clocks 125 years on March 31, certainly a big deal for us and our very supportive stakeholders. Today is a special day as we witness the hoisting of our 125th anniversary flag in celebration of this uncommon milestone in the annals of Nigeria’s history.’’

    Adeduntan explained that the flag symbolises the identity, impact, permanence and reverence of an institution.

    “As a long-standing institution, which even predates Nigeria as a unified entity, FirstBank is entrenched in the nation’s development; woven into the very fabric of society, with our involvement in every stage of national growth and development. At the amalgamation, independence and through the seasons ever after, we have been here marching hand-in-hand with you and our dear nation. We have enabled financial, technological, industrial and societal advancements, achieving very many firsts over time,” he stressed..

    According to him, the bank has been resilient and supportive through periods of rapid and radical changes, pioneered and charted the course in the financial industry and the nation at large.

    “The bank has been entrenched in the nation’s development for 125 years, and its significance as a nation builder and a national icon in its 125th year of existence cannot be overstated. “The bank has built an enduring brand that is immediately recognizable as one of dynamism, stability, longevity and innovation.

    “It is easily the foremost brand in the Nigerian financial landscape, with international footprints extending through the United Kingdom, France, China, Democratic Republic of Congo, The Gambia, Ghana, Guinea, Sierra Leone and Senegal. The FirstBank brand overcomes its challenges by retaining strong fundamentals and sturdy outlook.

    “Today, we celebrate 125 years of unbroken business operations in Nigeria; 125 years of supporting and enabling dreams; 125 years of resilience and relevance; 125 years of trust, safety and security; 125 years of long term value to all stakeholders; 125 years woven in the fabric of society and therefore, we dare say, 125 years beyond comparison,” he reiterated.

    Adeduntan disclosed that the bank supported host communities to promote sustainable development and putting customers First in all its business activities, saying that these are some of the many secrets of the banks long existence.

    “We are now building for the next 125 years and beyond; purposefully blazing the trail in our industry and ensuring that we maintain our leadership position,” he said.

    Adeduntan said despite the regulatory headwinds and business shocks, the fundamentals of the lender have remained very strong with the group’s asset quality.

    The bank through expanding due diligence on risk assets targeted towards profitable transactions, deepening of the effectiveness of the middle office through improved credit monitoring, collection support and  prompt identification of early warning signs in portfolios and by re-instituting a more conscious risk environment through training, coaching and enforcing stricter sanctions for non-performance, remained ahead of other lenders.

    It has also focused on loan and remedial management, voluntary reduction of Single Obligor Limit (SOL) and increased board oversight by significantly raising the bars of credit approvals through the Board Credit Committee to remain viable despite the daunting business environment.

    Stakeholders speak

    Speaking on the bank’s 125th anniversary, Richard Obire , Chairman, Board of Parkway Projects, a financial technology firm, said it requires resilience and adaptability for an institution in this environment to sustain operation for years.

    This according to him, is in addition to the banks capacity to have created an institution, without depending on one personality.

    “There have been several management successions. That speaks to the capacity to have built an institution. It is a legacy bank with tradition of excellence. They have managed to reborn themselves. When several new generation banks came and gave the bank a fight, it responded adequately,” he said.

    According to Obire, the bank had challenges like other institutions, but everything considered, the bank has done very well. He said the bank has been able to deal with its challenges and has leveraged technology to deliver efficient and seamless banking services to both the old and young.

    “FirstBank today, banks the old people, the young and the youths’ markets. The bank has done exceptionally well.”, he stressed.

    Also speaking, the Founder/Chief Executive Officer, Bank Customers Association of Nigeria (BCAN), Uju Ogubunka, said as the name implies, FirstBank has nothing to do with second or third, but remains the first.

    The bank, he said, has followed the sound principles of banking operation and continually complied with the rules of the game.

    He said the bank painstakingly choses its leadership, and management personalities and that has made to thrive.

     

    “The bank does not put just anybody into management position. It uses core professionals to run the business. The bank spends a lot of money in capacity building and human capital development of its over 20,000 workforce. Also, the bank has earned the confidence of the banking public,” he said.

    According to Ogubunka, the bank has built confidence and the customers deal with the lender based on that confidence.

    The bank’s deposit base, he said, is huge, which is not hot money but hard-core savings deposit, adding that the premium or spread on such deposit is good for the bank’s profitability.

    The Group comprises 12 subsidiaries, playing leading roles in investment banking and asset management, capital markets, insurance, Microfinance, private equity, mortgage and pension fund custodian services – making it one of the most diversified financial conglomerates on the continent.

    Adeduntan said: “Our heritage as the nation’s foremost and largest developmental financial institution is apparent in the Group’s contributions to economic growth and development. Our developmental philosophy is reflected in our business policy and is self-evident in the composition of our loan book as diversified in the nation’s major economic development sectors. These include agriculture, manufacturing, oil & gas, services and public sector, among others.

    “As a firm believer in the brand Nigeria and a pioneer in national development, we took a patriotic bet on the country in 2015, consistent with our century-long commitment to nation building as a fundamental pillar of sustainable business development. As at the time we took the measured risks, in line with business realities, it was universally acknowledged as bold business moves as well as a private institution’s obligation to support focused national development”, he stated.

    The bank chief said building an efficient organisation is at the thrust of the bank’s new strategies and management has reiterated its commitment to driving enhanced profitability through improved revenue generation, cost optimisation and shared services.

    This, he said will be achieved by exploring group shared services to optimise spends across subsidiaries and centralised data centres, optimising procurement to implement best practices, tightening budget controls and improving technology leverage and implementing an Enterprise Resource Planning/Management (ERP) framework to eliminate process redundancies.

    On the future of the lender, he said management recognises that an institution can hardly have an outlook beyond that of its operating environment.

    “The adverse impact on our loan book and the distortion occasioned by the shocks in the global market place notwithstanding, the silver-lining in all of this is that the bank’s fundamentals remain very strong and evergreen. The expanded breath of our service and product offerings through the Holding Company structure is expected to come to fore at a time when the commercial banking sub-sector is under significant pressure,” he said.

    According to the bank chief,  the challenging macroeconomic environment, the dwindling oil price and the resultant impact in the widening of the funding gap for the government present opportunity for project and infrastructure finance, debt capital raising and financial advisory offered by our Merchant Banking and Asset Management group.

    “Similarly, the insurance business of the Group continues to ramp-up in its growth trajectory, supported by the seamless integration of the acquired general insurance business. All of these are in addition to the effort of the Bank to fully integrate its West African operations to our FBN Bank (UK) Ltd to drive significant growth in trade finance,” he said.

    According to the lender, following a detailed model incorporating the bank’s future business growth strategy,  potential economic shocks and the current banking group capital adequacy ratio of 18 per cent, a healthy 200 basis points buffer to the regulatory minimum capital requirement for systemically important banks which came into effect in June, 2016, there are no immediate plans for any fresh equity raise.  The bank said it is implementing a priority approach towards capital allocation and optimisation.

    “Since launching in 1894, FirstBank has established itself as a brand of strength and dynamism, with the vision to be the leading international banking group in Sub Saharan Africa. Our brand is at the heart of the holistic experience we seek to deliver to our stakeholders perpetually, which is essential to retaining patronage and the competitive edge that keeps us at the coveted position of the market leader.”

    “Our brand interacts with our stakeholders and demonstrates an understanding of their busy modern lives or businesses, to support their aspirations. Hence, we have evolved over 125 years by respecting and upholding the shared heritage relevant not only to today’s modern Nigerians but also today’s modern world,” the bank said.