The Nation Newspaper

Tag: Nigerian economy

  • Nigerian economy doesn’t favour publishers

    Nigerian economy doesn’t favour publishers

    In the wake of the electronic age came new dynamics in the publishing industry, but are Nigerian publishers bracing up to the challenge? The Group Marketing Manager of Melrose Publishing, Mr Olumuyiwa Olugbenga Obafemi, in this chat with EVELYN OSAGIE shares what his company is doing to overcome the  problems in the industry and more. 

    How would you rate Nigeria’s publishing industry?

    Nigeria’s publishing industry is still a developing one because our economy is a developing one. It is not a function of how many years it has been but how many people are willing to invest there. Even the publishing companies that were major players at the early developing stage of the industry were formerly foreign-owned before they became indigenous, such as Longman Nigerian Plc now Learn Africa Plc, University Press Plc and Macmillan Publishers. It is expensive to have a publishing house in Nigeria. Although Melrose is 100 per cent Nigerian, it took a lot of courage for a group of people to put their resources together to achieve this because in establishing a publishing industry, you need a production team and the marketing team to drive the market. You also need to consider some major issues because the Nigerian economy doesn’t favour the publisher.  This is because an average Nigerian doesn’t read books, and when they are willing to read, the pirates are there to take the market away from you. We were growing up; owning Pacesetters novels or a Mills and Boon novels was a thing of pride. But kids these days would prefer owning a BB or very expensive phones to surf the Internet with. Parents should nurture reading culture in their kids from early age. Though it is quite difficult, I think it is a growing industry and we will get there.

    How do you deal with piracy?

    The best is to keep the piracy at bay, otherwise once they creep into your product, it would be difficult to stamp them out. There are some security features in our books that helped to keep them at bay. We are lucky that we print here in Nigeria; and we make boast to say that we are one of the few Nigerian publishers doing so. With it we have a bit of control over that. In terms of distribution, we are careful of who we deal with. I have to be sure you are credible, sincere and not a kingpin. I’d rather deal with the schools because the pirates will buy your books and reproduce it. Another thing we do is anti-piracy surveillance, which we, sometimes, do in partnership with government agencies that put a check on piracy in Nigeria. And at times, we do go out on your own and it is a very expensive venture.

    Who is the founder of Melrose Publishing?

    Melrose Publishing, which is four years old, is actually a consortium. It is being formed by a consortium of the major players in the industry bringing their ideas together to move the industry forward. We have Bromley Technology and Bromley Packaging, Melrose Books, which are literary and educational books. We have foreign and local authors and the classics. For the foreign, we have works of Robinson Crusoe, then, for the local authors, we have a long list that we have published, such as Child Soldier. Students fail English, especially questions on idioms and phrases. We’ve identified the market and have risen to meet the need. So, besides those, we have carved out for ourselves with our specialised dictionaries that are peculiar to us alone  dictionaries on idioms and phrases. We thought it wise to have dictionaries that would help students. We also have dictionaries for synonyms and antonyms, management and biology.

    Do you have partnership with publishers abroad?

    We are more of a local content company. While we are looking at the classics, we’d rather develop the local content. Nobody will tell our history more than the way we will tell it. We haven’t gotten to the point of selling rights.

    Do you commission authors for literary and educational texts?

    We commission authors for both literary and educational books. And some of our authors are members of the Association of Nigerian Authors (ANA); we also attend meetings and commission authors there and buy scripts. We know literary works are legacies that should outlive the author, and so we make it a point of duty to pay royalties. We showcase our authors by displaying their works at book fairs within and outside the country, such as the London Book fair and the just-concluded Nigerian International Book Fair. Nigerian authors are very talented. We showcase our authors abroad with the mind that they should also read ours as we read theirs. And for four years now, we have been featuring at the NIBF, one of Nigeria’s biggest fairs and a hub for stakeholders in the book industry.

    What are the challenges producing education books and literary text books?

    For the educational texts, I tell people there is no educational book that is 100 per cent but the moment an educational book has satisfied 80 per cent of what is required by the curriculum then it is good. For creative writing, we encourage people to have a reading culture. And promote this campaign we have donated books to schools and advised schools’ owners to have a reading club where pupils don’t necessarily need to buy all the books but can exchange books in readings clubs – what each has bought can read and exchanged by with another persons. Subsequently, we believe hosting book signing events for our authors would also help to promote our campaign. We are also working on some partnership with other companies. For instance, instead of putting a toy in a pack of noodles, why not put a book by a Nigerian author to encourage the reading culture in children.

    With the emergence of e-publishing and e-books, what is Melrose doing to tap into that industry?

    Education is dynamic. Nigeria is not an isolated country. Our students are meant to go outside to compete with their counterparts in the rest of the world. It is very important that we start acquainting them with the revolution in the education sector, such as the use of the Internet. At Melrose, we are forward looking. Melrose is a 21st Century Publisher with ICT-based publishing. It is not just your conventional publisher. The e-book innovation is what we started from day-one. Abroad the e-book thing is overtaking conventional publishing.

    In line with current trends, our books come with CD’s for nursery and primary pupils and we have the e-version of our books for secondary school students. And this has been before the computer-based texts for JAMB; and we have presented a proposal to JAMB on the innovation.

    We also do what we call ‘website support’.

  • The idiot’s approach to the Nigerian economy

    The minister is saying that the economic road ahead is going to be rougher for the 99% of the population living on the remaining 1% resources of the nation

    Minister of finance, Dr. N. Okonjo-Iweala, dropped a bombshell not long ago that oil prices were dropping in the world but that Nigerians should not fear because we were adequately covered: the budget had been planned on an oil price of seventy-nine dollars ($79). Then followed another bomb shell from a government quarter that said because oil prices were dropping, salaries may soon be affected. I wondered then why anyone would aim straight for people’s salaries out of all governmental spending as the first thing to bear the brunt of such a fall. Why not the colossal and largely unmerited legislative allowances? Why not the president’s lunch? Why should mine be the scapegoat?

    Anyway, then came the most recent bombshell from the minister: this month, the country will begin to witness the result of this oil price slide; so we should get ready for tougher times. And I thought, tougher times this month, eh? What about the tougher times the people of this country have been experiencing for decades as a result of little or no governmental intervention in their lives?

    Let me present this idiot’s perception of the Nigerian economy as observed in the people’s experiences. For decades now, I have watched in sympathy as my nearest and dearest neighbour in the house has agonised on the phone nearly every morning trying to describe for the repairman the latest sound coming out of the little generating set that supplies electricity to the apartment. I have usually heard the laconic reply of the repairman at the other end as he too often tried to place the fault in the complex machine he could not see but must repair, like a doctor making a phone consultation. You can expect some roughness, but you’ll get some pain remission, even if most times the patient and the doctor are talking at cross-purposes. For the generating set owner and the repairman, this has been a daily routine.

    As a matter of fact, it has been the daily routine for most men in Nigeria now. I think they would just wake up in the morning, greet everyone in the house and pick up the phone to call the generating set repairman. Whenever that one has failed to turn up because he is tired of tinkering with old sets, the owner must undertake the repair himself. He must sweat and puff to change the plug. He must puff and sweat to change the oil. He would then find that the plug has been placed in one remote, inaccessible or difficult-to-reach corner of the set as his hand and arm disappear into the machine, all the while crouching uncomfortably and hissing from both ends. The reason has been the absence of electricity supply whenever it has been needed.

    Did you read about the most recent (yes, the most recent because there have been many others) unfortunate incident where a couple lost all their children to a fire started by a candle because there was no electricity? Before that, there was another incident in which a young man had gone to kick his generating set and unknowingly answered a call on his phone at the same time. The explosion took his life. There are so many ‘before thats…’ that if I do not cut them, this page will be filled with the stories of many families that have perished from inhaling generator fumes while sleeping at night; factories that have folded up for unbearable overheads, etc. The relatively safer and cheaper public electricity system is not available to anyone for love or money.

    Any intercity wayfarer in Nigeria now is lucky to arrive home from his destination, even if all he is covered in is dust and not his blood. Not only are roads insufficient, they are in such disused states that Socrates would not walk on them in his sandals, much as he liked walking. Potholes deep enough to sink cars litter the roads from the weight of trailers, trucks and tankers owned by people in or close to government. Northern youngsters barely out of nappies are consigned to drive trailers longer than their villages and so do not have the experience and patience to prevent their trailers from lying down, coma-like, in the middle of the highways, causing days-old traffic jams. Other road users drive as if they are unaware that lives can be lost because there is no one to check them. How then can we move products cheaply, safely and fast across the states without the rail system?

    Those are just two examples, from my perception, that provide insight into this nation’s economy. For decades now, basic amenities (including energy, water, roads, etc.) have been provided by house owners, factory owners, manufacturers, etc. Yet, Nigeria is said to earn anything between twelve (12) to eighteen (18) billion Naira from oil PER DAY. This is in addition to the billions more generated unofficially through oil bunkering. It is not recorded, yet regarded. So, I ask you, who is to provide the enabling environment for the economy to grow: champagne swirling leaders?

    Just check the amount of money that has been released by the Ministry of Finance from the time of Gen. Obasanjo to the present for the revamping of the nation’s electricity project, and you’ll see that it did not come anywhere near ‘We the people…’ While you are at it, could you also check who was contracted to handle some of the nation’s highways – Ogbomoso-Oyo highway, Egbe-Kabba highway, and many more. This is so we’ll know who to curse when next we are on those roads. Those are the ones giving us rough roads, not oil price slide. Unfortunately, the government’s blind eye to these things makes the roads rougher for ‘We the people’.

    Right now, the country is not only regarded as the most corrupt nation in the world but also the most foolish. It is only a foolish country that awards its low achieving legislative arm of governance such allowances and emoluments that are higher than those of their counterparts in developed nations where people do real work, or light years ahead of the gross or net earnings of the nation. It is the more foolish when you remember that the country parades a poverty-afflicted population that is among the highest in the world. I just love the way some online commentator has succinctly described the situation: the government’s blind eye is putting 99% of the nation’s resources in the hands of 1% of the population. This means that the remaining 99% of the population must exist on the remaining 1% of the resources. Yet, I believe that the minister’s ratified audience is clear: she is saying that the economic road ahead is going to be rougher for the 99% of the population living on the remaining 1% resources of the nation.

    The shameful truth about Nigeria’s economy is that it has been left to run wild with little or no governmental intervention. Have you noticed that all the gains of the Gen. Obj. era in terms of forcing the country to look inwards and build her economy through self-reliance have been jettisoned out the window? Now, just about anything can be imported into the country; and that greatly discourages local participation in the economy. So, what economics are we really talking about?

    This is my idiot’s approach to Nigeria’s economy. There are many countries in the world without the resources that Nigeria has been blessed with. Yet, they are making do by exporting the products of their brains and what they can gather from social services such as provision of public utilities and infrastructures. Nigeria can do the same. Let us use the pittances we have left to prepare for this rainy day.

  • The calm before the storm

    The calm before the storm

    An iniquitous Jonathan government is fighting a rolling, uneven war against every sector of the Nigerian economy which they reckon is not with them

    In its most recent opinion on Nigeria, The Times made a staggering  mistake by suggesting that  President Jonathan could , sooner than later, ‘wake up to find he has lost his country’, like he did the Chibok girls, thereby implying that our dear president has been sleeping on duty. Rather than being soporific, our president has never been more active, busy in the map room, overlooking, strategising and, of course, commanding his demolition squad; a squad so busy and efficient, it is multi tasking in Adamawa, Nasarawa is to come, Edo, recently demolished Ekiti and now awaiting Wike’s mother-of-all mayhem in Rivers State now that Shekarau has taken over those massive duties as Coordinating Minister of Education. Had the president given a quarter of the time he devotes to  vanquishing  the opposition to nation-building, neither  the ‘Protectors of Nigerian Prosperity’, nor its cousin, ‘The Transformation Ambassadors’, would have looked so funny, thinking Nigerians merely  laugh whenever their  meaningless adverts, which stand Nigerian realities on the head, pop up on television.  Nor would The Times have had the effrontery, to brand our president a bad news president. For instance, when these jesters claim, without a census, that more are with  President Jonathan than those against him, I hope to God they count among these Hallelujah chorus, the hundreds of Nigerians  who had become internal refugees in their own country, uprooted from their  homes as a result of the unprecedented insecurity  enveloping the country. I hope they count the families and relatives of those killed in mutual hatred in Plateau, the Northwest and other parts of North central as well as the living dead in those most unfortunate parts of President Jonathan’s country. Nor must these protectors exclude the millions of Nigerian youth who do not know where the next meal will come from in a rebased, huge economy of astounding growth  of  seven percent plus, but no jobs. I equally hope they counted on Jonathan’s side, parents of the Chibok girls who must have happily signed up to be counted. And as for their neighbours in that part of the country threatening to approach Ba Kii Moon, they had better be advised to sign up if they do not want the Jonathan train to leave them behind.

    Rather than be pre-occupied with such things as so highly recommend the likes of the Philippines President Aquino Jnr. as statesmen, our president had pro-actively gone ahead to have in place zonal commanders for his demolition squad and as 2015 approaches, there is a healthy competition between and amongst the various zones, represented by geo-political divisions. Indeed, so fierce is the competition that both the North Central and the Southwest zonal commands have completely overshadowed the rambunctious South-south zone under the lead of our former Co-coordinating Minister of Education who, very successfully, managed the Academic Staff Union of Polytechnic, ASUP, strike which, to his credit, has now lasted for a year without the Jonathan government caving in.

    The demolition has also been all-embracing: financial/economic and through a judicious militarisation of enemy territory at critical times.  By these means,  an iniquitous Jonathan government is fighting a rolling, uneven war against every sector of the Nigerian economy which they reckon is not with them as if Nigeria is no longer practicing multi party democracy.  My way or the highway has overtaken every tenet of democratic governance and as long as there is money to be made, tonnes of it, both recruits and cheer leaders will be handy as well as those trying to escape the jaws of EFCC and imminent jail.  First, it was the federation account, deliberately and tactically mal-nourished by the duo of our most important female ministers. Monthly allocation to the states plummeted, by some account, by up to 40 percent, but pronto, friendly states were singled out and generously assisted, from the Ecology Fund to the tune of billions of naira. On the economic development level, they erect every conceivable obstacle on the way of a state like Rivers to access much needed development funds while in Lagos State they deviously ensured that the Ayobo-Ipaja Road could not be completed by asking the contractor to pay a stupidly humongous amount of money to the NNPC for pipe lines, whereas in a less inequitable environment, a government having such vital assets in an area would have facilitated that road’s completion. The result is that commuters, many of who are on the road to work as early as 5 am daily, are made to suffer excruciating traffic gridlock. As you read this, presidency agents and ‘agents provocateurs’ are actively at work in Adamawa where every conceivable subterfuge has been dredged up to oust a governor who has less than a year to go out of eight. In Edo State, birds of a feather are actively at work, stopping at nothing and under the unwavering protection of the police, to disrupt legislative duties in spite of court rulings. We await the reaction of this lawless lot to the most recent decision of the Appeal Court.  If our feelers are correct, the northern gang will soon be deployed on Nasarawa State just so we can all be ‘apes obey’.

    These machinations are obviously advancements on the old PDP rigging methods, especially under then President Obasanjo when they used to wait patiently for elections proper to fix them. These ones are smarter and more proactive.  For instance, why go into the dangerous business of ballot box snatching when you are awash with cash, there are rogue scientists worldwide and you can procure photo-cromic ink, even on an industrial scale at the drop of a hat?

    And of course, there is the army and the police to mercilessly deploy especially when you had been strategic enough to hand them over to a certain genre of individuals, men who could, and will do anything for power and money. Below then, is a summary of what President Jonathan did to Ekiti in the recent governorship election: the entire state was locked down for 48 hours with soldiers and police manning all the entry points? Armoured tanks, helicopters and other military hardware were moved to the state in astonishing numbers. The Inspector-General of Police sent in hi-tech security equipments including surveillance helicopters, armoured personnel carriers, mobile police men, even, dogs. For what? If President Jonathan did this in a governorship election, what will he not do during the presidential? Must he fight to the death? And to imagine that with their clever deployment of spurious science, they did not need a single police man more than were already available in the Ekiti State command. It was all, therefore, a make-belief but since we are no wizards in Ekiti – nor are we half as hungry as being egregiously made out on several for a waiting-to –survive-forever on an expired 2.5 kg bag of Thai rice – there was no way we could have known that the ballot paper had been tampered with and pre-programmed to activate allocated number of party emblems. Nor could the poor Youth Corps members used in carrying out the peripheral parts of this totally novel rigging method in Nigeria, have known they were being used, writing down the last three digits of certain ballot papers in each polling unit.

    Since there is no honour or moderation among thieves, INEC/PDP will again, like to repeat the Ekiti magic in the Osun election. My advice, therefore, to everybody who wants to vote APC, is to ensure he/she holds on to the ballot paper for at least 20 minutes after putting his imprint and wait to see if it will not  transfer to somewhere else, though there might be slight  modifications to that used in the Ekiti election. As happened when INEC quickly reversed itself over the PVC Readable machines for Ekiti election, I expect an agitated INEC/federal government would come out, Monday morning, telling us a voter can only spend three or so minutes. Voters must know that no soldier or policeman is empowered to stop them from voting. Please hold on to your ballot paper for at least 20 minutes.

    And should INEC continue with these outrageous rigging of elections, the American prediction for Nigeria, come 2015, may turn out a self-fulfilling prophesy. Let those who have ears, hear.

  • PIB: The ultimate lubricant of the Nigerian economy

    PIB: The ultimate lubricant of the Nigerian economy

    A care-free and seeming loose assertion by Sylvia Pankhurst that “wars will never come to an end” appears a most innocuous statement to make to an average reader of global political and economic trends.

    Pankhurst writing in 1922, a 27-page pamphlet titled: “The Truth about Oil War”, actually alluded the statement that ‘war will never come to an end’ to an anonymous capitalist.

    However radical Pankhurst and several other scholars on crisis in the oil business may appear to the world, the truth still stands that wherever there is oil, there is bound to be conflicts stemming from the astounding monetary gains that the oil business brings to investors.

    It is on this premise that the lingering controversy that has trailed the delay in the passage of the Petroleum Industry Bill (PIB) is understandable and must be dealt with without any further delay.

    As long as the PIB remains in coma, the logjam that has been witnessed in the oil industry would be sustained and painfully for the greater number of the citizens of this country, they shall be the weeping lot they have been.

    For those who have constituted themselves as opposition to this one document which for the first time in the long history of oil business in Nigeria seeks to put Nigeria in the same stead with established oil-producing and exporting countries of the world, they must be aware that it is trite legal principle that law is an agent of social change and the PIB in its various amended versions, aims at bringing about an optimal solution to change in the nation’s oil industry which has been accused severally of sluggishness.

    And for other citizens who are ignorant of the essence of the PIB, when it is passed into law, then and only then would the Nigerian petroleum industry have a direction from the upstream operation (exploration, development and production activities), the midstream (gas processing) down to the downstream activities of servicing, refining, distribution, transportation, marketing and retailing.

    Essentially, the PIB seeks to bring about major reforms in the industry and by so doing create a conducive environment for petroleum operations, tilt the conduct of exploitation and exploration of petroleum resources in the country in favour of Nigerians, optimise government revenue from the industry, deregulate and liberalise the downstream petroleum sector. In its acceding to the yearning of Nigerians, the Bill seeks to create efficient and effective regulatory agencies, promote the development of Nigerian content in the oil industry, and perhaps most critical at this phase of the country’s development, the PIB will drive at optimising domestic gas supplies for home use, power generation and industrial development, among other benefits.

    While the PIB establishes the Federal Government of Nigeria as the owner and manager of all petroleum resources, offshore or onshore, the government manages these resources on behalf of all Nigerians. Thus, irrespective of where oil is found, it belongs to the government of Nigeria.

    However, the PIB recognises for special consideration the localities where the resources are extracted and this is taken care of by the revenue sharing laws and certain provisions of the PIB like the Host Community Fund.

    For investors, whether local or foreign, the level of risks involved in any venture is of immense importance and there are such identifiable risks in the Nigerian oil industry such as there are in other countries where oil is found in commercial quantity.

    Such commercial risks will include cost overruns, delays and shortfall in project revenue caused by uncertain sales and prices. This is juxtaposed against established political risks like possible expropriation of assets, civil unrests, environment laws, tax policies, among several others.

    In the case of Nigeria, in recent times, militant unrest and price distortion of petroleum products have been clearly identified as project risks and the immediate response from the International Oil Companies has been the consistent reduction in their participation in the industry as they continue to sell off some of their oil blocks in the country.

    In spite of this seeming threat, efforts by the Nigerian government to establish a clear regulatory and fiscal regime, deregulation of the downstream sector and the establishment of a globally-acknowledged amnesty programme have appreciably addressed the issues of militancy in the Niger Delta region, hence projects financing of the petroleum industry in Nigeria are still quite reliable transactions and the responses of banks, local and foreign, to these are an attestation to this attractiveness.

    Despite the expressed fear of insecurity of investments and lives as a constraint for the IOCs and other investors in the Nigerian oil industry, the most critical area of opposition by the IOCs has been the fiscal area of the PIB.

    This is for obvious reasons as has been maintained by the Group Managing Director of the Nigerian National Petroleum Corporation, Mr. Andrew Yakubu, who has accused the IOCs of not wanting to let go of the incentive past they have enjoyed.

    “When we started the deepwater project, we had to give incentives to investors in order to encourage them. Now, the deepwater project is mature, we can’t continue to give such incentives.”

    Allaying fears expressed in certain quarters, the GMD of NNPC insists that the PIB would not in any way retard investment in Nigeria’s oil industry rather, the PIB, he assures, will provide a win-win situation for both Nigeria and the IOCs.

    Change, obviously, is the most difficult thing for humans to embrace and the fiscal arrangement in the PIB which is an overhaul of what used to be in practice is attracting criticisms and it is the most critical aspect of the Bill.

    This opposition insists that it will create a harsh environment that would materially change the economics of existing and new operations particularly in the deepwater sector.

    Without any doubt, the tax changes as contained in the PIB will favour increased government take from an average of 73 per cent to a projected 82 per cent and this figures are derived on the projections of a mid-size deepwater oil field with production of around 50 million barrels per annum and oil price benchmarked at US$75bbl.

    This opposition to the PIB in terms of the fiscal component is ideally an advantage to oil companies who could reap greater share from higher production and current high oil prices.

    In spite of what appears as increased returns to government, the Nigerian fiscal terms are considered lenient when compared to its peers, particularly those countries with the same geological character like Libya which operates 93 per cent government take and UAE Abu Dhabi which operates on an average of 94 per cent.

    And with the recent rise in oil prices, the global trend in fiscal terms is for governments to have built-in mechanisms of increased government share in windfall prices through increased royalty/taxes and linkages of royalty/tax rates to prevailing prices to ensure automatic adjustment in share to price increases.

    Why IOCs or any operator in the Nigerian oil industry would expect anything less from an industry Bill only exposes how overtly lenient the country has been with its investment climate and this is impacting negatively on its people.

    For a document that has travelled around for well over a decade, various changes have been made to the original document. Obviously, part of it has been the restructuring of the regulatory framework for the oil industry into separate regulators for the upstream, midstream and downstream sectors.

    Fiscal changes have also been introduced for the upstream, provisions for gas utilisations, refining/downstream sector reforms and most pronounced is the replacement of the joint venture (JV) agreements between NNPC and the producing companies which cover most of Nigeria’s onshore and shallow-water fields with the incorporated joint ventures (IJVs).

    What the PIB expects is that the IJVs as legal entities will be capable of raising loans commercially and repay them from generated income. As a result, the IJVs will operate independent of the often contentious government cash call obligations.

    Under the PIB, two layers of tax are introduced, namely the Nigerian Hydrocarbons Tax (NHT) and Companies Income Tax (CIT) which are applicable to both JV and PSC operations.

    While NHT replaces the Petroleum Profit Tax (PPT) and is set at 50 per cent for JV, 50 per cent for gas and 30 per cent for PSC, the CIT is introduced for all oil companies at the rate of 30 per cent on net profits.

    A minimum of 10 per cent withholding tax on dividends and education tax of 2 per cent on revenue existing under the current fiscal regime is retained.

    Meanwhile, the streamlined NHT ensures the abolishing of investment tax credits, investment tax allowances and the petroleum investment allowance (PIA) uplift on capital expenditures for existing arrangements and these are replaced with allowances for small oil fields and new gas finds, among other reforms.

    As a way of ensuring control and proper regulation of a more encompassing industry functions, the PIB establishes or restructures key agencies in the industry.

    They include petroleum technical bureau (PTB) as a special unit under the office of the Minister of Petroleum and charged with the responsibility of rendering professional support to the minister; upstream petroleum inspectorate (UPI) which will regulate technical and commercial activities in the upstream sector and will be responsible for issuing licences and permits because it is not profit-driven, it will not pay income tax.

    Others include downstream petroleum regulatory agency (DPRA), the petroleum technology development fund (PTDF), the petroleum equalisation fund (PEF), the national petroleum assets management corporation (NAPEMC) – this will be responsible for managing government investments in the upstream industry and will have subsidiaries to carry out different aspects of these activities.

    Another offshoot of the current NNPC will be the National Oil Company (NOC). The NOC will be listed on the Stock Exchange, meaning Nigerians can acquire its shares to as much as 30 per cent.

    Another PLC in the offing will be the National Gas Company (NGC), with certain employees, assets and liabilities of the NNPC to be transferred to it.

    Perhaps of most interest to most Nigerians is the Petroleum Host Communities Fund (PHCF) and in the PIB terms, for the fund’s sustenance, oil and gas-producing companies are required to contribute an amount (10 per cent of their profits after adjusting for Hydrocarbon Tax and Companies Income Tax) into this Fund.

    The funds will be used to develop the economy and infrastructure of the producing communities.

    And as a way of ensuring that the rights of these communities are matched by an equal obligation to the common good, the PIB provides that any community that still goes ahead to destroy assets of companies producing in its locality will forfeit its share of PHCF.

    Based on the above clarification which is far from being exhaustive given the elaborate contents of the PIB in its more than 200 pages, it cannot be said that the document is designed to benefit a small group of interest against over all national interest.

    Rather, its continued delay is only a result of self-centred, short-sighted and irreconcilable political interest of a few against the good of the majority of Nigerians.

    Suffice to say that when the PIB is eventually passed into law, which has become urgent given sporadic changes in the global oil industry, it would create more jobs for Nigerians since it will be an illegal act to employ foreigners for certain skills that can be sourced locally, as has become rampant in the current dispensation.

    Since the PIB also provides for preference of local materials sourcing against foreign, it will only encourage more jobs for indigenous contractors, especially those from the oil-producing regions.

    The precarious situation of gas utilisation in Nigeria is still a sour statement on our economy and resource management system and only a PIB which has taken this into cognisance will bail the nation out of this malaise.

    End of subsidy will become a reality with the deregulation of the downstream sector of the industry and in turn, increase in government revenue from oil industry will mean more funds for infrastructure development, among other value-adds.

    Given our background as a people and the near mishaps that we have suffered as a people due to the mismanagement in part of the oil resource, and in the spirit of the Nigerian centenary, the 7th National Assembly will only be doing this nation of over 160 million people proud by passing this PIB into law this early in the year.

    Anything short of this will only amount to an outright sabotage of a common patrimony.

     

    – Omoniyi, a journalist, writes from Abuja

     

  • AfDB writes off Nigerian economy

    AfDB writes off Nigerian economy

    How did the Nigerian economy fare last year? It did not do well, says the African Development Bank (AfDB).

    AfDB wrote off the economy, citing the economic growth, which it claimed did not translate into job creation or poverty alleviation, to buttress its stand.

    AfDB, in its latest report on African Economic Outlook (AEO), said unemployment rose from 21 per cent in 2010 to 24 per cent in 2011.

    In a swift reaction, the Presidency described the report as “false and political’’.

    Special Adviser to the President on Media and Publicity Dr Reuben Abati, said it was inconceivable that the report came barely a month after the United Nations (UN) gave an award to Nigeria for the government’s efforts at “reducing poverty significantly”.

    The AfDB report said: “The Nigerian economy slowed down from 7.4% growth in 2011 to 6.6% in 2012. The oil sector continues to drive the economy, with average growth of about 8.0%, compared to -0.35% for the non-oil sector.

    “Agriculture and the oil and gas sectors continue to dominate economic activities in Nigeria.

    “The fiscal consolidation stance of the government has helped to contain the fiscal deficit below 3.0% of gross domestic product (GDP). This, coupled with the tight monetary policy stance of the Central Bank of Nigeria (CBN), helped to keep inflation at around 12.0% in 2012.

    “The outlook for growth remains positive. Short and mid-term downside risks include security challenges arising from religious conflicts in some states, costs associated with flooding, slower global economic growth (particularly in the United States and China) and the sovereign debt crisis in the euro area”.

    The report added: “The economic growth has not translated into job creation or poverty alleviation. Unemployment increased from 21% in 2010 to 24% in 2011 because the sectors driving the economic growth are not high job-creating sectors (the oil and gas sector, for example, is a capital intensive “enclave” with very little employment-generating potential).

    “The major policy issue is employment generation, particularly among the youth, and inclusive growth.

    “The economic growth was not accompanied by a structural change of the Nigerian economy. The economy lacks diversification and agricultural production lacks modernisation.

    “To address this, the government is encouraging the diversification of the Nigerian economy away from the oil and gas sector.

    “ It is addressing the infrastructure deficit in the country and the development of the agricultural sector through modernisation and the establishment of staple-crop processing zones, with the value chain model to provide linkages to the manufacturing sector.”

    The AfDB, however, said the economic outlook was bright.

    It said: “The outlook for growth remains positive. Downside risks include security challenges arising from religious conflict in some states and slower global growth.

    “As economic growth is largely driven by capital-intensive sectors, it has not translated into sufficient job creation and poverty remains high.

    “As a result, Nigeria has a low Human Development Index (HDI). The country has made some progress towards attainment of the Millennium Development Goals (MDGs), albeit slowly and unevenly.

    “There is a high need to diversify the Nigerian economy into the non-oil sector. This would help expand the sources of growth and make it broad based, both socially and geographically.

    “Further development of agriculture, manufacturing and services could broaden growth, create employment and reduce poverty.”

    The News Agency of Nigeria (NAN) quoted Abati as saying that the Food and Agricultural Organisation (FAO), a UN body, at its 38th Session in Rome, Italy in June, gave an award to Nigeria as one of the nations that made significant progress in reducing hunger.

    The Minister of Agriculture, Dr. Akinwumi Adesina, he said, represented President Goodluck Jonathan at the ceremony.

    Abati said Adesina presented the award to the president during a Federal Executive Council (FEC) meeting, saying such a negative report from the AfDB a few weeks after the FAO award was “suspicious and laced with falsehood and political’’.