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Tag: Oil

  • Forces against non-oil exports

    Forces against non-oil exports

    With the shift to non-oil sector, particularly manufacturing, following the falling oil prices, there is a clamour for the establishment of a National Quality Policy (NQP).  The policy’s final draft may be ready in March. It will, among others, increase the competitiveness of local products in the international market, reports Assistant Editor chikodi ekereocha. 

    The National President, Association of Systems Management Consultants, Mazi Coleman Obasi, is worried. The certified quality management practitioner is troubled that despite assurances by the authorities that the draft document for the proposed National Quality Policy (NQP) for Nigeria would be ready before the end of last year, nothing has happened. He wonders why the formulation and subsequent adoption of the document is delayed despite that the European Union (EU) voted 12 million Euros (about N2.5billion) last year for the establishment of a National Accreditation System.

    The fund is meant to support the enhancement of the national quality infrastructure to improve the quality, safety, integrity, and marketability of made-in-Nigeria goods and services.

    For Obasi, and indeed stakeholders in the sector, such intervention by the EU could not have come at a better time, considering that the administration is emphasising the non-oil sector in the face of the economic downturn caused by the plunge in oil prices.The development, which has since put the nation’s finances under pressure, is seen by some development experts as a blessing in disguise. Expectedly, it has forced the Federal Government to shift focus to the non-oil sector, which, experts say, is more inclusive and growth-oriented.

    Besides, the sector is characterised by high economic linkages and is also more sustainable. This was why the EU and other international technical partners decided to intervene in the hope of increasing the competitiveness of local products at the international market.

    Under the EU-funded National Quality Infrastructure (NQI) project, implemented by the United Nations Industrial Development (UNIDO), with the support of the Federal Ministry of Industry, Trade and Investment, the objective, according to the UNIDO Country and West Africa Director, Dr. Patrick Kormawa, is to improve the quality of products made in Nigeria for them to be sold internally and in the international market. He expressed the hope that the initiative will produce a legislation that will contain a NQP, and establish an internationally recognised National Accreditation Body (NAB) that will vet  regulatory agencies, such as the Standards Organisation of Nigeria (SON) and the National Agency for Foods, Drugs Administration and Control (NAFDAC).

    Kormawa, while announcing the EU’s commitment, said the initiative would help develop a National Metrology Institute (NMI) to ensure that instruments are of international standards, improve the capacity of members of the Organised Private Sector (OPS) to conform to standards and assessment bodies. It will also enhance the powers of the Consumer Protection Council (CPC) and other consumer organisations to sensitise consumers on quality standards and ensure improved consumer protection. But these never happened, which is why Obasi and other stakeholders are calling on the authorities to fast-track the establishment of an NQP.  “Quality is number one. It is the first thing that ought to be considered as the nation focuses on building a robust export-based economy,” Obasi told The Nation.

    Obasi is right. At present, locally manufactured products and services lack global quality certification. They are denied access to markets in developed economies, a situation that has been a pain in the neck of manufacturers, as their productivity and competitiveness continue to suffer. According to Obasi, Nigeria, despite being acknowledged globally as one of the largest consumer markets, is yet to be accredited by the International Accreditation Forum (IAF), the regulatory arm of the International Standardisation Organissation (ISO). He said countries, such as South Africa, Egypt, Tunisia, Kenya and Mauritius have since been accredited by the IAF, in line with global emphasis on quality.

    For Nigeria to be accredited by IAF, it must have in place an NQI, which refers to all aspects of metrology, standardisation, testing, quality management, certification and accreditation that have a bearing on conformity assessment. It requires the establishment of NAB, NMI, CPC, Standards Regulatory Agencies, Conformity Assessment Agency or Bodies, Quality Education and Competency Training and Certification Institutions. While the NMI is supposed to perform all the metrological and calibration, the conformity assessment agency on the other hand, certifies private companies, ensuring that their products conform to specific characteristics, increase consumers’ confidence and also create incentives for producers to upgrade their production processes.

    According to experts, the creation of these key systems and institutions will boost the competitiveness of locally made products at the international market and ensure the global acceptance of products and services from Nigeria. These key systems and institutions are what the NQP is supposed to support, but unfortunately, Nigeria, after 54 years of independence, still does not have an NQI, which is an important tool for the establishment and implementation of the NQP, which is expected to usher the economy into a new phase of growth and development.

    The Minister of Industry, Trade and Investment, Dr Olusegun Aganga, admitted this when he said the NQP would produce a broad-based system that would provide quality specifications for all manufactured products in the country. The Minister, who spoke at the inaugural meeting of the National Steering Committee (NSC) of the NQP, in Abuja, said the policy would re-engineer the quality infrastructure and the technical regulation regimes and help the Federal Government execute its economic plans.

    Incidentally, Aganga is the Chairman of the NSC, while the Director-General (DG) of SON, Dr Joseph Odumodu, is Secretary. The NSC, inaugurated last year by President Goodluck Jonathan, is charged with driving the establishment of the NQP. The broad-based inter-ministerial steering committeeis mandated to review and harmonise quality policies in Nigeria,prepare a draft NQP that is acceptable to stakeholders, and support the approval and implementation of the NQP.

    Odumodu also recognised that the policy is vital to national development because of its role in facilitating international trade. According to him, the lack of NQP had over the years made harmonisation of the available quality infrastructure difficult, thereby limiting the benefits, particularly in driving competitiveness and international market access. He said Nigeria’s standard operation was faced with many challenges with the attendant overlap of interests and activities, which sometimes result to disagreements.The cause of this, he pointed out, was the lack of NQP to hold the system and make it functional and efficient enough to earn global confidence. In other words, an NQP policy would set bases and rules for the players, harmonise the role of various players, and provide a commitment to complying with international standards.

    Odumodu further noted that until now, the determined efforts of the agency to curb the menace of substandard products have been marred by the absence of a national quality policy, adding that the policy would bring sanity to a system that is highly profitable to the actors. He noted that the new policy would  act as catalyst for local productivity and quick adaptation of best global standards and practices to enthrone quality culture, improved management and process systems and work environments, in addition to attaining efficiency and products competitiveness, reduce importation and increase exports.

    If everything goes as planned, the benefits of an NQP would start coming the way of Nigerians in the export business and the economy from March, this year when the draft document for the proposed policy is expected to be ready. Already, the final document is being edited in line with the time schedule drawn up by the steering committee, according to Dr. Paul Angya, chairman, Technical Secretariat of NSC. He told The Nation that between November and December, last year, the committee  toured the six geopolitical zones of the country with the draft quality document for validating and getting the nod of stakeholders.

    Angya said the committee visited Sokoto, in the Northwest; Minna, Northcentral; Lagos, Southwest; Enugu, Southeast, and Calabar, Southsouth. The final tour, according to him, was on December 13, last year, the Federal Capital Territory (FCT), and that in each  zone’s stakeholders endorsed the document.

    He disclosed that the coming general election is responsible for the delay in getting the final draft ready for presentation to the Federal Executive Council (FEC). He added that as soon as the elections were over, the document would be ready. “Now we are editing the final document, which will be ready by March this year for presentation to the FEC and subsequent passage by an Act of Parliament,” he said.

  • Goldman, SocGen cut oil price outlook

    Oil dropped to the lowest level in more than 5 1/2 years after Goldman Sachs Group Inc. and Societe Generale SA reduced their price forecasts.

    West Texas Intermediate decreased 4.7 percent to $46.07 a barrel, and Brent 5.3 percent to $47.43. Crude has to “stay lower for longer” if investment in shale is to be curtailed to re-balance the global market, according to Goldman analysts. Societe Generale said falling prices may force the shutdown of expensive crude operations in Canada and the U.S.

    “In a violent move like this it’s impossible to pick the magic number that’s the bottom,” Katherine Spector, a commodities strategist at CIBC World Markets Inc. in New York, said by phone. “I’m not going to pick a bottom. Prices will have to go to a level that inflicts maximum pain before the bottom is found.”

    Oil slumped almost 50 percent last year, the most since the 2008 financial crisis, amid a supply glut estimated by Qatar at 2 million barrels a day. The Organization of Petroleum Exporting Countries is battling a U.S. shale boom by resisting production cuts, signaling it’s prepared to let prices fall to a level that slows American output that’s surged to the highest level in more than three decades.

    A worker waits to connect a drill bit in the Permian basin outside of Midland, Texas.

    WTI for February delivery declined $2.29 to $46.07 a barrel on the New York Mercantile Exchange. It was the lowest settlement since April 20, 2009. Total volume was 34 percent above the 100-day average.

    Brent for February settlement dropped $2.68 to end the session at $47.43 a barrel on the London-based ICE Futures Europe exchange. It’s the lowest close since March 16, 2009. Volume for all futures traded was 57 percent higher than the 100-day average.

    “It’s hard to see what will end the move lower given how bearish sentiment is,” Michael Wittner, head of oil research at Societe Generale in New York, said by phone. “The very weak fundamentals are still being priced in.”

    WTI will trade at $41 a barrel and Brent at $42 in three months, Goldman said in a report distributed today, citing excess U.S. storage capacity and predicting inventories will increase over the first half of this year. It also cut its price estimates for six and 12 months.

    “To keep all capital sidelined and curtail investment in shale until the market has re-balanced, we believe prices need to stay lower for longer,” said Goldman analysts including Jeffrey Currie in New York. “The search for a new equilibrium in oil markets continues.”

    Societe Generale reduced its average WTI price for this year to $51 a barrel from $65, Wittner wrote in a Jan. 9 report. Brent will average $55 a barrel in 2015, down from a previous estimate of $70.

    “The price forecast cuts by both Goldman and Societe Generale reinforce the fears that have driven us down to these levels,” Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut, said by phone. “We’re hunting for a bottom, but it’s anyone’s guess where that will be.”

    The Brent-WTI spread closed at $1.36, the least since July 2013 as the demand outlook for U.S. crude surpassed that for barrels elsewhere. U.S. refineries have operated at over 90 percent of capacity for the last two months, according to the Energy Information Administration.

    “The strongest pocket of demand is here, with refineries operating at near 94 percent of capacity,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “The Mexican request for U.S. exports is also reducing the spread. This is a signal that more light, sweet barrels should be going that way.”

    The 40-year-old ban on most U.S. crude exports is set to be loosened after Mexico’s state-owned oil company asked for an exception. Petroleos Mexicanos said last week that it’s in talks with the U.S. Commerce Department to import 100,000 barrels a day of light crude to increase Mexico’s gasoline production and improve refining.

    Rigs seeking oil in the U.S. fell by 61 to 1,421, Baker Hughes Inc. said Jan. 9, extending the five-week decline to 154. It was the largest drop since February 1991, which also followed a slide in prices before the start of the Persian Gulf War.

    “This is a major change but we probably won’t see lower output this year,” Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania, said by phone. “We won’t see the ramifications of this and the lessening of the glut until 2016.”

    OPEC decided to maintain its collective output target at 30 million barrels a day at a meeting on Nov. 27. It’s competing for market share amid surging output in the U.S., where production expanded to 9.14 million a day through Dec. 12, Energy Information Administration data show. That was the most in weekly records that started in January 1983.

    Oil won’t return to $100 a barrel again, Saudi billionaire businessman Prince Alwaleed bin Talal said, according to USA Today.

  • Farmers not reaping from falling oil price, says don

    The fall in oil prices has not benefited farmers, a don has said. Prof  Ini  Akpabio, Dean, Faculty of  Agriculture, University of Uyo, (UNIUYO), blamed this on high cost of  production  and  middle-men.

    Akpabio  said  farmers were still suffering from high  cost of  transportation,  which  should have reduced if  there was a reduction  in fuel price.

    In most of the farming  areas, many small holders unaware of the falling crude oil price  and those who are informed are  at the mercy of agents that dominate the system.

    According to him, if fuel prices are falling, then it is possible farmers  will  see their  cost  of  production reduce.

    The   plight of farmers, he  noted,   is replicated across the  nation, since  the economy   relies on small farmers for 80 per cent of its food.

    According  to him, the  oil’s dramatic decline has not  been offset by currency weakness as  farmers  cannot  acquire  farming  machinery   and  could  cause  foreign investors to  retreat  from the  sector because  of fear of poor  return on investment.

    Also, while  the price of  agro export commodities,  such as   cocoa prices, had jumped by as much as 20 percent since October,  stakeholder said  cocoa farmers were  not  benefitting  as  most exporters are holding forward contracts entered into when a dollar exchanged for N160.  Nigeria is the fourth largest producer of cocoa in the world, after Ivory Coast, Ghana, Indonesia.

    Stakeholders  said   Nigeria  is    merely producing   and exporting   cocoa raw beans, without paying adequate attention to processing of cocoa to produce chocolates.

    For this reason, the exporters  receive three to six per cent of the final consumer price for a bar of chocolate.

    The  Executive  Director, Nigeria Export Promotion Council (NEPC) said   Nigeria should be processing chocolate instead of exporting it as raw beans. This requires investments in chocolate manufacturing companies and transforming the Export Enhancement Grant (EEG) to value addition.

  • ‘Oil price crash won’t derail us’

    Anambra State Governor Willie Obiano said yesterday that the dwindling oil price in the international market would not affect the progress of the state.

    He spoke at Awka in his New Year message, entitled: “Stretching to a New Height of Excellence”.

    The governor said the future of any society lied in its capacity to surmount challenges with determination and hope.

    “Although many experts have predicted a tough year for Nigeria in the face of plummeting oil prices, such forecasts will never dampen the aspirations of Anambra State.

    “With our enormous human and material resources, we shall not surrender our ambitions to dwindling oil prices in the international markets,” Obiano added.

    He told the people that his administration would triple the Internally Generated Revenue (IGR) from the present N1.1 billion.

    “The same determination with which we have pursued our security challenges is what we will bring to fight the leakages in our IGR.”

    The governor urged the people to pay their taxes, to enable the administration undertake capital projects and complete them in time.

    He promised to complete the three interchange and the six-lane stretch of road from Amawbia to Amansea in Awka, as well as Agulu Lake Hotel Resort and other road projects.

    “We shall inaugurate more projects, covering the four pillars of development of this administration and lay the foundation for an ambitious economic growth.”

    Obiano reiterated his administration’s commitment to continue the war against crime and build a new social and economic order, driven by strong family and community values.

    “We shall bring positive changes in our lives.”

  • Replacing oil with agriculture

    Revival of agriculture in Nigeria has not only been described as the new money-making sector, but has been tipped to replace the oil and gas sector.

    Over the years, petroleum has been the mainstay of the Nigerian economy with agriculture relegated to the background.

    While the administration aims to diversify the economy through its many agricultural programmes and the establishment of commercial farmers and agribusiness leaders known as Nagropreneurs, the government is certain that the effort will take Nigeria to lift the country to higher heights.

    In the new effort, Nigeria also plans to collect all the hoes, cutlasses and obsolete equipment in every part of the country and place them in a museum. The tools would be immediately replaced with tractors and other modern agricultural equipment.

    Seven young farmers were on parade during the Official Launch of the Youth Employment in Agriculture Programme (YEAP) and Fund for Agricultural Finance in Nigeria (FAFIN) at the Banquet Hall of the State House, Abuja last Tuesday to give their testimonies on how their businesses have been boosted in the last three years.

    At the occasion, President Goodluck Jonathan was not only described as the ‘Koko Master’ by Nigerian top musician, D’Banj, but he was also given award and referred to as Nigeria’s number one farmer.

    Recalling the past three years in the sector, Jonathan said that the implementation of the agricultural transformation agenda has created many jobs and led to the production of 21 million metric tons of food in the period, above its earlier target to add 20 million metric tons of food by 2015.

    Looking ahead, he said: “The Youth Employment in Agriculture Program (YEAP), which I am flagging off today, will further change the face of Nigeria’s agriculture. YEAP has been designed to create a new generation of 750,000 young commercial farmers and agribusiness leaders (Nagropreneurs) that will make Nigeria’s agriculture more efficient, profitable and competitive.”

    “They will become the CEOs of their own farms and agribusinesses, create jobs in the rural areas and reverse the trend of high rural to urban migration. They will help to change the mindset of the younger generation on agriculture.”

    “These Nagropreneurs will become models and champions for our newly launched National Agriculture Schools Initiative, as they project to younger school children, the image of agriculture as an attractive and wealth creating sector.” he said

    The Minister of State for Finance, Isa Yuguda, at the occasion, maintained that all statistics reeled out in the sector are verifiable and showed that the transformation agenda is working.

    But the only evidence the masses on the street want to see is for the increasing food production in the country to force down the prices of foodstuffs in the country in line with the forces of supply and demand.

     

    Paying last respect to Ashiru

    Members of the Federal Executive Council (FEC) might not have dressed in black or white cloths last Wedesday to mourn the former Minister of Foreign Affiairs, Amb. Olugbenga Ashiru, but it was a gloomy session when tributes was paid to him.

    Many good things were said about the deceased with no one in the Chamber recalling any negative thing or encounter with Ashiru who died in South Africa on the 29th of last month from brain tumor complications.

    Ashiru, who was said to have impacted positively on the Nigeria foreign policy during his tenure was relieved of the appointment on the 11th September, 2013 along with other 8 ministers.

    The former Minister of Information, Labaran Maku had told journalists then that the changes in the cabinet were due to the President Goodluck Jonathan’s commitment to delivering dividends of democracy to Nigerians by bringing in new hands and ideas and that it had nothing to do with the crisis in the Peoples’ Democratic Party (PDP) then.

    While 15 cabinet members inluding President Jonathan paid tributes to Ashiru during the sesson last week, only the Minister of Agriculture, Adesina Akinwunmi, who hails from the same state with the deceased, Ogun State, could not hold back his tears.

    Adesina, who referred to the deceased as his ‘Egbon’ (senior brother), was given the role to second the moton for one-minute silent in honour of the deceased.

    Struggling to hold back the tears, Adesina said: “His passing is a huge loss to the nation, Nigeria has lost an outstanding diplomat, one of its very finest, the one I amiably called the ambassador of ambassadors. As minister of foreign affairs, he represented Nigeria extremely well on the global stage, he is a giant in diplomacy, under him Nigeria got so many of international recognitions.

    “He was a senior brother, we shared the same name, Ayodeji. He was therefore my mentor, a friend, a wiseman I went to always for counsel. His doors were always open, his heart always open, warm at all times. I always enjoyed his presence in readiness always to help others. I called him Egbon (senior brother), he will in turn to my surprise call me Honourable minister. And the world of diplomacy is empty today because of his death. Sun re o, Egbon, sun re o! May your gentle soul rest in perfect peace.

    President Jonathan said; “So he worked very hard. He assisted me in terms of the foreign policies and so on and streamlined most of our relationship to most countries within and outside Africa. In terms of international values, I will say he worked very hard if you listen to others who have made comments. The UN is a typical example, Nigeria was voted back as a member of the Security Council within four years, it is a feat most countries has never attained.”

    “We would have had some problems with the World when the President of Sudan Omar Albashir came visiting during our centenary celebrations. He came in and the world was alerted, and they were looking at Nigeria. Although he left, still we had issues with the world but he had to move immediately with the Attorney General of the Federation and was able to calm the situation because of the personal relationship he had with the global players. We thank him for that.”

    “Today we have lost ambassador Ashiru God knows best why he took him at this time that his services are still needed by this great nation,” he said.

     

  • Oil falls below $66 on ample supply, rising stocks

    Brent crude oil slipped below $66 a barrel on Wednesday, just above a five-year low, on mounting signs of oversupply and lackluster demand as global economic growth falters.

    The price of the North Sea oil benchmark has fallen more than 40 per cent since June as new supplies of high-quality crude from North America have fed a glut of fuel in many parts of the world.

    Data from the American Petroleum Institute (API) on Tuesday showed U.S. crude oil inventories rose by 4.4 million barrels last week to 377.4 million barrels, compared with analysts’ expectations of a drop of 2.2 million.

    U.S. gasoline and distillate stocks also showed big builds, the API said.

    Brent futures for January LCOc1 fell to a low of $65.68 a barrel, down $1.16, before recovering slightly to trade around $65.90 by 0850 GMT (03:50 a.m. EST). The contract reached $65.29 on Tuesday, its lowest since September 2009.

    U.S. crude futures CLc1 were down $1 at $62.82 a barrel.

    “Almost all the news flow points to a weaker market,” said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt.

    “We have had very bearish API data with large stock builds across the board, and also a very bearish Short-Term Energy Outlook from the EIA, with a sharp reduction in demand growth forecasts for next year.”

    The U.S. Energy Information Administration cut its global oil demand growth estimate for 2015 by 240,000 barrels per day (bpd) to 880,000 bpd. It forecast oil demand growth this year would be around 960,000 bpd.

    Global oil demand has been capped by slowing economic growth in China as well as stagnation in many more-developed economies, particularly in Europe.

    “The fundamental picture hasn’t really changed, and that is one of supply outstripping demand growth for most of the year,” said Phin Ziebell, a senior analyst at National Australia Bank.

    “It’s an incessant march downwards, and it would be interesting to see where it bottoms out, but there doesn’t seem to be any sign of it so far.”

    Members of the Organisation of the Petroleum Exporting Countries (OPEC) are divided on how to respond to the global surplus and falling prices. The cartel may still hold an emergency meeting before its June gathering, Algeria’s energy minister said on Tuesday.

    Top oil producer Saudi Arabia blocked production cuts at the last meeting in November and has taken steps to shore up its market share.

     

  • Oil price fall: LCCI backs govt’s policies

    Oil price fall: LCCI backs govt’s policies

    THE  Lagos chamber of Commerce and Industry (LCCI) has thrown its weight behind the fiscal and monetary policy responses by the government to keep the economy afloat in the face of falling oil prices.

    In a statement, LCCI Director-General Mr. Muda Yusuf said the fiscal and monetary policy responses by the government and the Central Bank of Nigeria (CBN) were inevitable, stressing that some of the policies were long overdue.

    He said: “The economic situation has again underlined the critical imperative of economic diversification. An economy that is diversified has a better capacity to withstand shocks. At every turn in our advocacies, we have canvassed the need for the creation of an enabling environment to enhance the productivity of enterprises and consequently ensure economic diversification.”

    On the measures, he said they included fiscal and monetary policies taken to stabilise the macro-economic conditions to minimise dislocations.

    These, he said, include reduction in international travels and trainings by Federal Government officials, tax on luxury items, and review of oil price benchmark to $73 from $78 in the 2015 Medium Term Expenditure Framework (MTEF).

    Others are renewed commitment to fiscal prudence, upward revision of revenue target for Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service.

    Yusuf said on the monetary policy front, some items, such as electronics, finished goods, information technology, generators, telecommunications equipment, and invisible transactions, were excluded from the official foreign exchange window.

    The LCCI said the implication is that transactions involving the enumerated items would be funded at a higher exchange rate from either the interbank foreign exchange market or parallel market.

    He recommended that several budget heads needed to be further scrutinised to ensure cost effectiveness and better transparency in the management of public finance. According to him, they include the: consolidated revenue fund charges, service wide votes, presidential amnesty programmes, capital supplementation and debt services.

    Others are refreshments and meals, foodstuffs and catering, honorarium and sitting allowance, welfare packages, repairs and maintenance. All these budget heads have substantial amounts voted for them in the budget annually. Some of the provisions do not reflect the desired prudence in the management of public funds. Huge savings will be made if a proper scrutiny of the budget heads is made, he warned.

    Yusuf regretted that the biggest platform for corruption in the economy today is the management of subsidy on petroleum products. The pressure it exerts on the government treasury is enormous, he warned.

    He called for an accelerated reform of the oil and gas sector and the passage of the Petroleum Industry Bill (PIB), which he said will mitigate the challenge the subsidy management poses for government finance.

    Furthermore, he cautioned that the tax yield in the economy is not commensurate to the magnitude of activities taking place in the economy.

  • Oil price slump…tourism to the rescue

    Oil price slump…tourism to the rescue

    The global oil price slump has forced the Federal Government to resort to austerity measures. Experts have called on the government to market tourism to enhance economic development beyond the national mono-product economy, using the Osun State example for tourism marketing, writes ADEDEJI ADEMIGBUJI.

    With the plunge in the crude oil price in the international market,stakeholders have asked governments at all levels to look beyond oil and reposition the tourism industry for global competitiveness. The call was made at this year’s Brand Journalists Conference, which held in Osun State with the theme: “Tourism Marketing as Catalyst for Economic Development”.

    As the major source of revenue, crude oil prices have been on the decline globally, since June, nearing $83 per barrel, down to about $32, or 28 per cent from its high point earlier in the year. The Bonny Light, Nigeria’s reference crude, is being sold at about $83 per barrel. This has forced the government to announce austerity measure with the Minister of Finance and the Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, saying the country would from this month, start to feel the impact of the falling global oil prices.

    She noted that the country needed to prepare for tougher times ahead by reviewing its expenditures and building economic buffers through budgets that would be based on modest oil prices.

    However, stakeholders at the conference were of the opinion that this measure could have been avoided if tourism marketing had been taken serious by governments at all levels.

    The Nigerian Guild of Editors’ President, Mr. Femi Adesina, said the failure of the government to heed the clarion call on diversifying the nation’s economy by promoting tourism is one of the reasons behind the effect of oil price slump on the nation’s economy.

    “For years, running into decades, tourism has been identified as one of the veritable alternatives to oil as a major revenue earner for the country. Many countries of the world do not have natural resources, and depend largely on earnings from tourism. Israel, despite being beleaguered politically and surrounded by hostile neighbors, thrives on the marketing of its historical sites. All year round, tourists and pilgrims troop into Israel to visit sites venerated and considered holy by the major religions of the world,” he said.

    Citing the potential of the sector to boost the gross domestic product (GDP), he revealed that between 2003 and 2004, Australia’s inbound tourism consumption to GDP was $7.6 billion. “The same happens in many other countries of the world. But here in Nigeria, our potentials lie fallow, dormant and in most cases, untapped,” he explained.

    Adesina noted that some of the major barriers the government has allowed against tourism marketing are poor infrastructure, insecurity, poor health care and lack of political will to use oil proceeds to develop tourism in the country.

    As a result, Osun State Commissioner for Home Affairs, Culture & Tourism, Omo-Oba  Adetona Sikiru Ayedun said many of the barriers have led to diminished economic growth, reduced profitability in the travel and tourism sub-sectors, which many more countries are seriously adopting as a viable development option for income generation.

    He said the state government led by Ogbeni Rauf Aregbesola has set the target of N15bilion revenue from tourism by next year.

    He said: “Our vision is to tap into over $3 trillion revenue available globally through tourism. The Osun State government led by Ogbeni Adesoji Rauf Aregbesola targets N15 billion revenue from tourism by 2015. This projection is technically and consciously proved by our robust gains and interrelationship with tourism and culturally endowed nations like Cuba.”

    While addressing these challenges, he said the state government has aggressively improved infrastructures such as roads, power and security after a tour of Cuba where the government got exposed to the idea of marketing of tourism. “Our business visitation to Cuba has exposed us to ideas on how tourism and culture could be promoted as revenue earners for Osun State in particular and Nigeria in general. This is what we are doing and we are reaping benefits from the actions,” he said.

    The state Commissioner for Information and Strategy, Sunday Akere said some countries rely solely on tourism as the bedrock of their economy hence, the need for government to look beyond the curse of oil and market tourism as new economy driver.

    In repositioning a place as a tourism destination, Adesina, however, suggested certain critical factors that could be called irreducible minimums. They include:

    Marketing strategy

    Akere asked rhetorically: “Does as an army go to war without first formulating a strategy to combat the enemy? Does a soccer team enter the pitch for a competitive game without a strategy to rout the opponent? Does a pilot get into the airspace without first having a flight plan? So, can you not also reposition tourism destination without marketing strategy? How do we do it? When? Where? To which end? Who are the people that will do it? What are the resources needed? What are the tools to employ?”

    Adesina said all these are germane questions critical to finding answers to the challenges of marketing tourism. “But as said earlier, Nigeria is not lacking in recommendations and theoretical frameworks. A lot of them have been codified and outlined over the years, but are gathering dust in the shelves of our ministries, agencies and parastatals. Now is the time to dust them up, update them, and begin to run with the vision. But definitively, we must formulate what should be our national strategy for repositioning Nigeria as tourism destination,” he noted.

    Asking government to employ push and pull marketing strategy, Adesina said government should find out what motivates tourists in their choices of destination.  “These are called the push and pull factors, and Nigeria must necessarily take care of them, if she would take her place as one of the world’s favorite tourism destinations,” he explained.

    According to him, some of those push and pull factors include infractructure, security, cost and political stability.

     

    Infrastructure

    “Do we have the roads, the hotels, the tourist sites, the airline services, the water transport, and other means of mass transport that can support tourism? These Nigerian roads that have become death traps? Roads where you spend hours on end for journeys that should just take about half an hour? An airline industry where flights are delayed endlessly, or cancelled whimsically ‘due to operational reasons?’ Or waterways where ferries capsize at frightful intervals? All these are infrastructure that support tourism, and to move forward, Nigeria must devote a large chunk of its annual budgets to infrastructure upgrade,” Adesina said.

    Security

    He continued: “Can there ever be tourism in the face of massive insecurity characterised by insurgency, kidnappings, robberies on highways, and murders? Not at all. The tourist wants rest, recreation, relaxation, fun, and an experience of a lifetime. But he does not want to lose his life in the process. As long as Nigeria fails to solve the insecurity problem, so long will the tourism Eldorado elude her. Reports of insecurity, particularly of terrorism and kidnappings, elicit international attention. And Nigeria has a surfeit of those kind of reports now. It will affect our fortunes as a tourism destination, no matter how hard we market ourselves. Get security right, and the tourists will flock in.”

    Cost

    While noting that tourists want rest and relaxation, but they do not want to pay an arm and leg for it, Adesina said “costs of goods and services are rather prohibitive in Nigeria, compared to other countries on the continent, and even in the world”.

    He said despite the rebasing of Nigeria’s economy and rated as the largest in Africa, the impact on goods and services is still fetched. “Do you notice that our top hotels perhaps, charge the highest rates in the world? Do a comparative study, and you would see the truth in it. The tourist wants quality, but at reasonable prices. Some families save round the year, in order to take a holiday. Should they then land in the debtors’ prison after the holiday, because they have been completely fleeced of their earnings? For Nigeria to compete as a global tourism destination, government must work harder to keep the economy on an even keel, so that prices of goods and services can be stable, and within reach,” Adeshina explained.

    Political stability

    With political instability posing a threat to tourism growth, Adesina said it will be foolhardy for any tourist to visit a crisis-proned tourism destination such as Nigeria. He said: “Which tourist wants to visit a country in turmoil, or one that could disintegrate at the next hour? Not many. Which tourist wants to visit a country where lawmakers are seen on global TV being tear-gassed, and scaling dangerous fences to get access into parliament? Which tourist wants to visit a country where elections are followed by flares of violence, with many lying dead in the streets?” he asked, warning that Nigeria must get her politics right. “It has grave implications for tourism,” he warned.

    He, however, said “when tourists get all the above and more, what you get is loyalty, and return visits,” there will also be massive recommendations to other people, which will drive up traffic. “There is nothing better than a fulfilled tourist,” Adesina added.

    Why reposition?

    As oil prices continue to decline at the international market with global competitiveness in tourism sector across the globe, Adesina said it is a must for the Nigerian government to reposition tourism as a catalyst for economic development.

    “Why reposition? Is it by force? Well, it is by force. Without repositioning, we will not get the best that is possible from our tourism. There is now increasing worldwide competition, with each country putting its best tourism foot forward. Also, we must reposition because the preferences of tourists keep changing. What you offered a year or two ago may not suffice for today or tomorrow,” he said.

    Again, we must reposition because having a fixed image would not promote a destination effectively. That is why the world’s greatest brands keep coming out with different types of advertisements and promotions. Repositioning allows you to rejuvenate your tourism destination. It also allows you to know your client, his needs, motives, drives, purchasing behavior, and how you can respond appropriately,” he concluded.

     

  • Falling oil prices and raining day

    SIR: From Qatar to Kuwait all the way to Venezuela, and even in Nigeria, one sound rings clear on the balance sheets of these countries: revenue from oil is declining. The drastic fall of oil prices is making many of the oil producing nations tighten their belts and make adjustments in the national budget. This fall in revenue will surely necessitate a reduction in spending by oil producing nations across the world.

    Nigeria, which is presently battling lots of challenges, will also have her own share of cuts on spending. However, as price of oil goes on a freefall, Nigeria is being shielded by the Excess Crude Account!

    As a reminder, the Excess Crude Account (ECA) came to reality through Dr. Okonjo-Iweala during the Obasanjo era. ECA was envisaged to warehouse proceeds from oil revenue that shoots above the annual budget projections. The idea behind the establishment of the ECA then was that if oil price, like we are having now, or output unexpectedly falls, Nigeria will be under no pressure to forcibly borrow at high cost in order to fund revenue shortfalls.

    Seeing things in different light, the National Assembly, especially the House of Representatives, have been up in arms battling the Minister for this noble idea. It is amazing that the reps don’t take into consideration that numerous OPEC countries adopt comparatively much lower crude oil budget benchmarks than Nigeria.

    Members of the House Committee on Finance fail to understand the gains inherent in ECA. They fail to understand that the establishment of the ECA is actually empowered through Section 162(1) of the Nigerian Constitution, which provides that the federation shall maintain a special account into which shall be paid all revenue collected by the federal government.

    Likewise, Section 35(1) of the 2007 Fiscal Responsibility Act stipulates that “Where a reference commodity price rises above the predetermined level, the resulting excess proceeds shall be saved”.  In further justification of the rationale for the establishment of the ECA, the Minister cited Section 16(1a) of the 1999 Constitution, which stipulates that “…the State shall harness the resources of the nation, and promote national prosperity and an efficient, dynamic and self-reliant economy”.

    In spite of this constitutional justification for the ECA, the House of Reps didn’t fail every year to invoke Sections 59, 81 and 82 of the 1999 Constitution, as amended, which empower them to juggle the national budget’s estimate by constantly increasing the benchmark of the budget. They believe that the raining days is here and we must spend all that we earn at a go!

    In 2013, the benchmark was increased from $75 per barrel that the executive proposed to $80, while the Senate took a middle position and pegged its own benchmark for $78. In arriving at this decision, the House of Representatives posit that increasing the benchmark will reduce the budget deficit and domestic debts by as much as 66%. While opposing the position of the national assembly, Dr. Okonjo-Iweala warns that jerking the oil benchmark to $80 will affect Nigeria’s credit rating; make borrowing more expensive; lower the Foreign Direct Investment; impact negatively on macroeconomic stability, and the country will lose $20 instead of gaining $5.

    It is obvious that the Minister of Finance has made the right decision by establishing the ECA and ensuring that the account is constantly being enriched despite opposition from the National Assembly. Pray, what would have happened to the Nigerian economy in this season of economic uncertainty as the price of oil goes on downward path? The ECA is coming handy this season guiding against our nation going broke.

    • Abdullahi M. Seidu,

       Abuja.

     

  • ‘Cross River must think beyond oil’

    ‘Cross River must think beyond oil’

    Former Group General Manager of the Nigeria National Petroleum Corporation (NNPC), Prince Goddy Jedy-Agba, is a Peoples Democratic Party (PDP) governorship aspirant in Cross River State. He spoke with reporters in Lagos on his vision, blue print and chances at the primaries.

    Why are you contesting for governorship in Cross River State?

    In the past seven years Governor Liyel Imoke has been doing a good job governing our state but come May 29, 2015 he would handover the baton of leadership as our constitution demands. I want to be the recipient of the baton. This is not a decision I take lightly, but one that I arrived at after a careful and persistent consideration as well as the need for a servant leader who places people over politics and service above all else. I took the decision to run for governor of our state in 2015 under the platform of the People’s Democratic Party (PDP) after a great deal of thought. I consulted widely with my family, friends and close political associates in Cross River state and nationwide.

    I am running for governor because I believe I can add value to the governance of a state I love so much. My love for the state and its people knows no limit. I love the diversity, the can-do spirit, the communal life of neighbour-helping-neighbour of the people; and I believe in what Cross River state can be. And my passion to serve compels me once again to stand for what is right for all Cross Riverians, to make Cross River state what it can be. I offer myself as a Cross Riverian who is concerned about the widespread unemployment that is destroying the very fabric of our society.

    What is your assessment of Liyel Imoke Administration?

    I will say fantastic. Let me remind you that, in this democratic order, we started with the Donald Duke government and the Duke government could be described as a government that has laid that irreversible foundation for growth and development in Cross River State. What we’ve witnessed right now with the present governor is that he’s been able to consolidate and actualise the dream of the foundation of that growth and development. He has not faltered or wavered. He has been someone focused on the goals of the party and he has delivered. No matter what anybody has to say, he has performed.

    The perception is that the governor is not backing your aspiratuion. What is your view?

    Well thank God you said it’s a rumour. I don’t dwell on rumours; neither do I interact with rumour mongers. I will answer in this form. Most people don’t even know how to assess relationships. They assess it from what they hear from rumour merchants and political jobbers. My people have an idiomatic way of expressing it, they say teeth and tongue fight but they are always still together.Though its impossible for humans to exist without conflict but Governor Liyel and I do not have issues on any subject for that matter. Let us even look at the interest and future of our people and then situate our relationship within it. So,you mean if for whatever reasons, Governor Liyel doesn’t not just like my face, he will stop the good people of Cross River from benefitting from my wealth of experience? No. Not the Liyel that I know.He is a perfect gentleman and a man of honour and as far as I know him, he knows what is good for our state and we enjoy a very cordial relationship.

    The challenges of governance are enormous. What makes you think that you will make a better governor?

    My belief is that before our party can decide on a person that will carry the flag of the PDP, it would have been unanimously agreed that such a person is sound and competent enough to be the candidate. Beyond that, I bring cognate experience that is not shared by any other aspirant in Cross River. I believe strongly that the years that I have worked and the experience that I have shared with the top management staff at the NNPC gives me that competitive edge to be able to continue to drive the vision of Cross River State. If it is in terms of character, if it is in terms of capability, I possess all the good qualities that you can find in anybody that will want to become the governor of Cross River State. It’s more about the people and it has to be a people person. I know that’s where my strength is. A people person is one that can be a good caretaker of the resources of the people. That’s why I see myself as the best aspirant that you can muster right now.

    What about economic development? Do you have a blueprint that would buoy the economy of Cross River State?

    Of course. As a start, our dependence on crude oil as the main source of revenue, not only exposes our economy to foreseeable shocks, it endangers our security because unemployment is presently our greatest security risk. The petrol dollar made us to unwisely ignore every other sector particularly agriculture and tourism with its huge job creation potential, thereby robbing us of a source of massive employment for our teeming youths.

    This must change because there is the real possibility that revenue from oil could fall drastically in the very near future. The discovery of shale technology to produce synthetic crude oil from oil shale has the potential of making almost every country in the world an oil producer. The United States of America, which used to be Nigeria’s biggest customer, is no longer buying our oil. Australia, Brazil, Canada, China and Estonia are already using the technology to extract oil while Morocco and Jordan have announced plans to test the technology. Coupled with growing new discovery of crude oil in African countries such as Ghana, Ethiopia and Kenya, there could be oil glut in the international crude oil market that will inevitably result in falling of oil prices and revenue.  By acting decisively to restructure the economy of our state through massive investment in agriculture and rural economies, modernising and expanding our infrastructure including affordable housing, promoting tourism, entertainment and sports, assisting existing and moribund industries and encouraging new ones to set up agro-based industries, we can jump start job creation and achieve greater, more sustainable economic prosperity.

    What is your vision and what should the people of Cross River State expect from you?

    Like most Cross Riverians, I dream of a  Cross River  where those who want to work will find appropriate jobs and those who want to set up businesses can do so without bothering about the infrastructure that will enable them to succeed. I dream of a Cross River where our youths can look at us with hope and we see them as worthy future leaders. I dream of a Cross River where our tomorrow will always be better than yesterday. I dream of a Cross River where, where you come from and the languages you speak do not matter. I dream of a Cross River where the interest of all is paramount and not those of the few. I dream of a Cross River where you do not have to know a big man before you get what you deserve. I dream of a Cross River of equal opportunity and no discrimination.

    Don’t you think the electorate have heard more of words than actions from politicians?

    Well, there is always a turning point in the lives of people, I believe my being the governor of Cross River State will mark the turning point in the lives of every Cross Riverian. But I cannot claim ownership of knowledge. I believe that through collaborative and inclusive efforts and participatory governance, all Cross Riverians, working together as a state-wide team can make this dream a reality in our life time. And thanks to Governor Liyel Imoke’s forward looking decisions and investment in critical sectors of our state,we have the chance to build a better future for ourselves and our children

    What is your greatest fear?

    Fear? No. I have since conquered the fear of failure, which is the most common for most people. Only those who dare, stand the chance of climbing the ladder of success. I am not afraid of failure because I have used the strength of courage to succeed thus far and in this new calling, we are going to succeed. There are many of us in the race. We are all qualified. We are all good men and women who mean well for our state. But I can do a better job of transforming our state and taking it to the next level of development. I need the support of everyone in the party to make this happen. I also believe that my candidacy will ensure easy victory for our party in the governorship election and help our dear president, Dr. Goodluck Ebele Jonathan achieve a landslide victory in the presidential election with higher voter turnout in Cross River state than he achieved in 2011. The truth is that, I am ready to take up the unfinished business of building a Cross River state of our dream which began in 1999.