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Tag: Operators

  • N150b USSD debt: Operators blame political interference

    N150b USSD debt: Operators blame political interference

    Telecom operators have blamed the lingering debts estimated at about N150 billion that arose between the banks and operators from the use of the Unstructured Supplementary Service Data (USSD) on political interference.

    USSD are a series of codes which allow users without smartphones or data/internet connection to do mobile banking.

    Chairman, Association of Licensed Telecoms Companies of Nigeria (ALTON), Gbenga Adebayo, who spoke at the ongoing Nigeria Telecoms Indigenous Content Expo (NTICE 2023) with “Harnessing Indigenous Content for Economic Growth; Networking to boost Investment” as theme at Landmark Events Centre, Lekki, Lagos, therefore urged the new Minister of Communication, Innovation and Digital Economy, Mr Bosun Tijani, to preserve the independence of the telecoms sector under the Nigerian Communications Commission (NCC).

    ALTON is the umbrella body of all telecom operators in the country. Its members include the four carriers of MTN Nigeria Globacom, Airtel Nigeria, 9mobile and other players in the sector.

    Adebayo also raised the alarm over the unsustainable end user pricing for services in the telecoms sector in view of the cost of doing business, especially now that fuel subsidy has been yanked off.

    Read Also: Minister gives eight-month ultimatum for Abuja light rail completion

    He added that in the not too distant future, electricity subsidies would go. “We must look at a more realistic pricing for the services we offer because the current pricing is not sustainable,” he said.

    Also speaking on the occasion, the Executive Vice Chairman (EVC) of NCC, Prof Umar Danbatta acknowledged that in spite of the asphyxiating business operating environment, tariff has remained what it used to be.

     “It is also important to note that while Quality of Service and Quality of Experience in telecommunications services in Nigeria have continued to improve, tariffs have remained stable notwithstanding the increase in cost-of-service provision to the telecom operators. In order to sustain and further improve Quality of Service and Quality of Experience in telecommunications services in Nigeria, we must embrace indigenous content and value creation within the telecoms value chain, otherwise, increase in telecoms tariff will be inevitable,” Prof Danbatta said.

    Adebayo recalled that the USSD agreement was basically a commercial contract akin to buying and selling in which case if there’s no payment for services, no supply would be made.

    He said the industry would have resorted to the terms of the contract when the banks refused to pay but the matter was taken to the political space with the interventions of the minister and Central Bank of Nigeria (CBN) which have made the matter drag for so long.

    Represented by Executive Commissioner, Technical Services at Ubale Maska, the EVC said the Commission is fully committed to the drive of the Federal Government to place the economy on a sustainable pedestal through all the necessary policies put in place.

    Prof Danbatta said: “When we created the Nigeria Office for Development of Indigenous Telecoms Sector (NODITS) as a Special Purpose Vehicle under the Commission to drive the National Policy for Promotion of Indigenous Content in the Nigerian Telecommunications Sector in July 2021, the Office was given four areas of focus: manufacturing, human capacity, research & development (R&D) and software & services development for the telecoms sector.

    “NTICE is one of the achievements of NCC through NODITS because it has served not only to promote Pillar number 5 (Strategic Partnering) of the Strategic Management Plan SMP 2020- 2024 of the Commission but has also become the flagship indigenous content event for the industry.

    “The Commission has also incentivized the manufacturing of Corrugated Optic Duct (COD) that will be used to protect our fibre infrastructure from the incessant cuts experienced by our service providers. The Commission is equally committed to continuously supporting Micro, Small and Medium Enterprises (MSMEs) and Innovators to promote our talented young persons and ventures through Angel Investments, R&D support, exposure to investors and sponsorship to local and international tech events.

     “Another key achievement of our policies is the ban on importation of wholebody SIM cards which was announced at the maiden NTICE event last year.

    “This ban has not only eased the burden on our demand for foreign exchange but has also created business in excess of N55 billion for the local SIM card manufacturers in Nigeria which in turn has created direct and indirect jobs.”

    He said Nigeria, with its rich history of innovation, resilience, and creativity as well as her diverse culture, talents, and perspectives has birthed solutions that uniquely cater for her challenges and aspirations. The NTICE 2023 platform is a celebration of these achievements, a testament to the Nigerian spirit of ingenuity.

    “NTICE is also a place to nurture and support the burgeoning talent pool within Nigeria. By showcasing indigenous innovations and providing opportunities for young entrepreneurs, we are not only nurturing our local talents but also encouraging a culture of entrepreneurship and creativity that will propel Nigeria onto the global stage of technological leadership.

    “Having recognized the persistent digital divide that exists within our nation, let us seize the opportunities presented by NTICE 2023 to bridge this gap by advocating for accessible technology and ensuring that the benefits of innovation are extended to every corner of Nigeria. This inclusivity is crucial in driving equitable growth and empowering communities to be active participants in the digital revolution.

    “We note that in a world that is increasingly interconnected and digital, the concept of technological sovereignty holds immense significance. This event stands as a beacon of Nigeria’s commitment to taking charge of its technological destiny. By promoting indigenous content, we are not only fostering economic growth but also asserting our autonomy and self-reliance in the digital realm,” Prof Danbatta said.

  • ‘Operators ‘ll support NAICOM on recapitalisation’

    With the wind of recapitalization blowing in the insurance industry, operators will support the National Insurance Commission (NAICOM) to grow the sector, the Chairman of the Insurance Industry Consultative Council (IICC), Mr. Eddie Efekoha, has said.

    Efekoha, who is also the Chairman, Chartered Insurance Institute of Nigeria (CIIN) and Managing Director, Consolidated Hallmark Insurance Plc, spoke at the 2019 IICC Media Retreat in Ijebu Ode over the weekend.

    While applauding NAICOM for setting a new pace of recapitalization in the financial sector, he assured that operators will not go against the regulator because the consequences are too grievous.

    He said shareholders seem not happy with the recapitalization requirement, but there is a limit at which operators can control other stakeholders like the shareholders and investors.

    He said that while they cannot stop them from speaking their minds, whatever they have said do not represent the operators’/managers’ decision.

    He said:“The wind of recapitalization is blowing. We recently heard that Ghana insurance industry has commenced recapitalization and the Central Bank of Nigeria (CBN) just last week also came up with its own plan. I think the NAICOM should be commended for setting the pace.

    Read Also: Motor insurance a must, says Insurers Committee

    “I can assure you that as operators, we will not go against our regulator because the consequences of that are too grievous. However, there is a limit to which operators can control other stakeholders like the shareholders and investors. We cannot stop them from speaking their minds, but whatever they have said do not represent the operators’/managers’ decision.

    “The reasons NAICOM gave for the recapitalization exercise are the same reasons CBN is giving which are the issues of exchange rate and capacity. If these are the main reasons for the recapitalization exercise, the truth of the matter is that the exchange rate that applied in 2005 to 2007 is not the same in 2018 and 2019. Secondly, if the exchange rate has changed, our ability to retain businesses has weakened. Should we enhance it? The answer is yes.”

    In the same vein, the president, Institute of Loss Adjuster of Nigeria (ILAN), Alhaji Femi Hassan, said ILAN is excited about the recapitalization to take place.

    “We are eagerly waiting for it to take place, because it will enable the operators to put some structures in place that will help to grow the industry. I know the operators want this recapitalisation to take place, but the investors who have put their money into the insurance companies are the ones kicking against it, but nevertheless, I am optimistic that in the long run, every party will see reason”, he added.

  • Operators lament influx of substandard tricycles 

    The Chairman, Coalition of Federated Association and Capital Territory Tricycle and Motorcycle Riders, Dealers and Operators, Comrade Thomas Ali Danjuma  yesterday lamented the influx of substandard tricycles (kown in common parlance as Keke) into the country.

    He alleged that the first batch of Keke that  was brought into the country   by DAG was good, stressing that the distributor and manufacturer have been pouring substandard Keke into the country.

    He spoke in Abuja, lamenting that even though the distributor and the manufacturer gave one year warranty, they have not kept to their promise.

    He said: “DAG in partnership with Indian manufacturing firm manufacture of Keke, they have their agents all over Nigeria; the first batch of Keke was very good and durable but subsequently they started refurbishing and repackaging old keke to Nigeria market.”

    But DAG chief, Mr. Fildous Ahmad Ahmad, said he is  unaware that the firm is flooding the local market with substandard Keke.  He assured The Nation that he will speak with Comrade Danjuma  and get back.

     

     

     

  • Operators to deliver mixed-use luxury estate in Lekki

    SOME  operators in the real estate sector are to deliver a mixed-use development in the Lekki area of Lagos.

    The upscale estate, known as Ostia Island, is man-made reclaimed, and is expected to redefine luxury.

    According to the developers, the estate seeks to provide 100 hectares in line with the Lekki  Master Plan.

    Senior Partner, Samson Agbato Consulting, consultants to the project, Samson Agbato, said it would be a live, work and play community on completion.

    He said: “Ostia Island is a site and services project. We are trying to create an environment to live, work and play with a renewable and sustainable energy.

    “We want to create an atmosphere that is pure for the people who are living there. We understand global warming and pollution and a lot of other things that are wrong with the environment. So, Ostia Island is going to be designed to be conscious about these things; the water people drink and air they breathe in. We are channelling these into real estate development to ensure that people who live there remain healthy.”

    He said though the island would be developed on 100 hectares, but that the promoters were seeking investors in about 10 hectares.

    “We have commercial, residential area and recreational area. So, there is a lot investors can do with the land they buy. An investor can build anything they want as long it complies with the planning and building code; every investors must also conform to the plan of the island, especially the renewable energy. There is provision for instalmental payment,” he said.

    According to him, Ostia Island will be a residential and business development area with facilities  to make it a community. These include a mall, police station, medical, educational, recreational facilities, religious houses, and a jetty.

    On the objectives of the estate, Agbato said it would provide more reclaimed land for sustainable development.

  • NAMA to operators: no going back on cashless payment

    The Nigerian Airspace Management Agency (NAMA)   will not go back on the adoption of the treasury Single Account (TSA) for its transactions, its Managing Director, Captain Fola Akinkuotu, has said.

    He spoke at a meeting with agents and representatives of operators of non-scheduled flights.

    The meeting, which held at  the agency’s headquarters in Lagos, discussed, among other things,  how to address concerns, which may arise from the cashless payment system.

    Akinkuotu said TSA is a Federal Government’s policy that demanded compliance from all stakeholders.

    He appealed to the operators to embrace the new system as the entire world is going cashless, assuring them that the new system would yield them positive results.

    “This is an innovation that would not only improve and sanitise the nation’s financial system but also ensure accountability and transparency in the long run. If we desire an aviation industry that is globally competitive, we have to imbibe global best practices,” Akinkuotu said, noting that the risks associated with the old system of carrying cash around have made it not fashionable.

    Explaining further, the NAMA helmsman advised that all financial transactions must be done  into the NAMA TSA account domiciled with the Central Bank of Nigeria (CBN).

    He emphasised that the era of paying cash to Deposit Money Banks (DMBs) for delivery to the CBN had become history.

    Speaking on behalf of the non-scheduled operators, the Managing Director of Sunrise International Air Support Limited, Mr. Sunny Ebisue, expressed gratitude to NAMA for organising such a forum, saying that it had shed more light on some of the grey areas that attended the new payment system.

    He however called on the agency to sustain such interaction with operators to keep them abreast with new developments.

    It will be recalled that in a circular, dated November 7, 2018, the Office of the Accountant-General of the Federation dated November 7, 2018 warned Ministries, Departments and Agencies (MDAs) and other government entities to desist from maintaining accounts with banks without the President’s approval, saying that all affected Federal Government-owned and controlled MDAs and other entities must close DMB accounts, in local or foreign currency and transfer them to the TSA sub-account at the CBN.

    As part of the resolutions at the meeting, an operator or its representatives is to open a domiciliary account for its financial transactions with NAMA  using a smart phone.

    A representative can also open a domiciliary account, transfer an amount of foreign currency in advance into NAMA account at the CBN to enable it debit the operator, any time it does business with the agency.

  • Operators to govt: fix faulty radios at airports

    Members of National Air Traffic Communicators Association of Nigeria (NACAN) have called on the Federal Government to, as a matter of urgency, fix malfunctioning  radio equipment at some airports across the country.

    They said the epileptic state of radio communication at some airports was making it difficult for pilots to communicate with some aeronautical stations at certain times of the day.

    Speaking in Lagos last weekend, NACAN,  President, Nkambo George, said this members were left with no choice but to communicate with telephones, which ought to be a back up and not primary source.

    Read also: Four new airports ‘ll sustain economic growth, says Buhari

    “We resorted to telephone, using our close user group telephone lines, which ought to be back up. It’s more or less the major equipment we are using now in most communication centres except for Lagos, Kano, Abuja and Port Harcourt, where the system  is still functional,” George said

    According to NACAN boss, the southern network with high frequency radios deployed as stop gap to assist high frequency modules from frequency to frequency, is causing  delay in messages on account of the epileptic network.

    He said: “Normally messages are not supposed to be delayed, when you receive a message, it ought to go. International Civil Aviation Organisation recommends that aeronautical telecommunications messages should be sent out between three and five minutes of receipt. So, you receive a backlog of messages in some centres as a result of equipment malfunction.”

    On manpower, Comrade Nkambo said the Nigerian Airspace Management Agency (NAMA) management  has stepped up efforts in the training of its personnel, urging it to improve on its human capital development.

    Nkambo said about 40 of its members were undergoing training at the Nigerian College of Aviation Technology (NCAT) in Zaria while 16 graduated about two months ago. He, however, noted  that 28 were yet to be trained.

    According to Nkambo, the airspace agency needs to take proactive steps in handling ageing workforce as  new communications personnel have not been engaged  in the department in the past two decades.

    With serious implications for the agency, he said the government needs to embark on recruitment of between 20 to 50 communications personnel every year to fill existing gaps.

    Nkambo disclosed that with 27 communications personnel retiring next January from NAMA, the agency will be adversely affected as newly recruited personnel do not have sufficient experience.

    On his plans for NACAN in the next three years, the president revealed that the association will diversify, noting that there were some big stations where Hajj operations took place such as Bauchi, Kebbi, Jalingo and Dutse airports without the communicators department.

    He spoke of plans to deploy equipment in the affected areas.

    In a swift reaction, a representative of NAMA Managing Director, Captain Fola Akinkuotu, at a NACAN conference in Benin City, Ayodele Otitolaye said the provision of relevant technology was important for professionals to perform their roles.

    Otitolaye said NAMA will continue to provide modern facilities required to perform the task of Air navigational services.

    According to him, the issue of inadequate manpower due to aging workforce was being addressed gradually across all sections of the agency.

  • Operators intensify push for payment of EEG backlog

    The backlog of exporters’ claims under the Export Expansion Grant (EEG) scheme stands at over N1 trillion. This represents accumulated payments for 2016 and 2017, according to the Nigerian Export Promotion Council (NEPC). To remain in business, create jobs and contribute to economic diversification anchored on non-oil export, real sector operators and stakeholders have intensified the push for prompt settlement of outstanding bills. They urged the National Assembly to expedite action in approving money proposed by the Presidency to offset the bills. FLORENCE ANYA reports.

    Nothing would gladden Mrs. Mojisola Adenekan’s heart than to see her processed nuts and oil export business blossom into a vibrant, large scale enterprise. To her, the starting point to making this happen is for the National Assembly to promptly approve the payment of the backlog of exporters’ claims under the Export Expansion Grant (EEG) scheme, which stands at over N1 trillion.

    The budding entrepreneur said prompt settlement of the outstanding bills would trigger increased activities in the non-oil export sector. She added that offsetting the bills incurred under the EEG scheme was important so as not to hamstring entrepreneurs, who have already incurred huge expenses in respect of the scheme managed by the Nigerian Export Promotion Council (NEPC).

    The Federal Government introduced the EEG scheme in 1986 through the Export (Incentives and Miscellaneous Provisions) Act (amended in 1992) to stimulate non-oil exports by cushioning the effects of infrastructural deficiencies and reducing the overall unit cost of production. It was also meant to increase Nigerian products’ competitiveness in the international market place.

    The EEG, which is administered by the NEPC, ranges from 10 per cent to 30 per cent of the Freight On Board value of the products being exported. But the scheme was suspended in 2014, following allegations of widespread abuse and accumulation of significant liability on the Negotiable Duty Credit Certificate (NDCC).

    Before the suspension, the incentive was granted in form of NDCC utilisable by exporters for payment of import and excise duties. The NDCC has since been replaced with the Export Credit Certificate (ECC), which can be used to settle all Federal Government taxes such as Value Added Tax (VAT), companies income tax etc.

    Under the revised guideline for EEG scheme, the ECC can also be used to purchase Federal Government bonds. Others include settlement of credit facilities by the Bank of Industry (BoI), Nigeria Export-Import Bank and Central Bank of Nigeria (CBN) intervention facilities; settlement of liabilities owed to the Asset Management Company of Nigeria.

    In issuing the revised guidelines, government said it was of the view that the objectives of the EEG were still relevant, more so at a time when diversification was touted as the only way to build a sustainable economy.

    The effective date of the revised guidelines was January 1, 2017, albeit, exports made between the time the scheme was suspended and its reintroduction are covered under the new guidelines.

    The ECC is similar to the defunct NDCC, which was granted to beneficiaries and used as a negotiable tax credit. However, unlike the NDCC, which was transferable from trader to trader without restrictions on title and tenure, the ECC is only valid for two years after issuance and transferrable only once within this period.

     

    Why EEG was suspended

    It can also be used to purchase government bonds and repay government credit facilities. But the former Minister of Finance, Mrs. Kemi Adeosun had justified the stoppage of the EEG policy, saying it was seriously abused.

    Adeosun, who responded to enquiries by members of the Nigerian Economic Summit Group (NESG) on the status of the export grant during the group’s leadership’s visit  her office in Abuja, said the decision to halt the scheme was in order.

    The former Minister said although her predecessor in office halted the policy’s implementation, she believed the decision was in order going by harvests of startling revelations on the abuse of the export grant.

    “We have people exporting stones, describing them as high valued goods, collecting an import credit and using that to import fish. We do need to look for how to support export, but we have to be very realistic in the recommendations we are coming up with,” Adeosun said.

    However, in response to industry demand and alignment with its economic diversification policy, President Muhammadu Buhari in his 2017 Budget Speech in December 2016 announced that the EEG would be revived and administered as tax credits.

    Subsequently, the Minister of Industry, Trade, and Investment, Dr. Okechukwu Enelamah, indicated that certificates issued under the EEG scheme would be called ECC in lieu of the erstwhile NDCC. He also said the scheme had been reviewed to prevent it from being abused by exporters.

    Enelamah said for instance, that under the new arrangement, the backlog of exporters’ claims would be settled with a tax credit rather than import credit. According to him, the EEG was expected to resume in 2017, with the settlement of outstanding claims to exporters.

    Executive Director and Chief Executive Officer, NEPC, Mr. Segun Awolowo, had put the outstanding claims at over N1 trillion, representing accumulated payments for 2016 and 2017. He said the payment is expected to commence as soon as the National Assembly gives its approval.

    Adenekan and indeed, other real sector operators, particularly those in the export business, are urging the National Assembly (NASS) to expedite action in approving the money proposed by the Presidency to offset the bills incurred under the EEG scheme. This, according to Adenekan, would enable entrepreneurs consolidate on their business plans.

    She said the export business could be very costly sometimes. “Usually, you are expected to pick orders from different locations, for which you spend so much money to execute. And when you do not get the returns on your investments immediately, your business could be grounded,” the exporter of processed nuts said.

    She added:“Sometimes, it is not easy to get bank credit. And when you do, it is on high interest rate. Besides, the total money required by the export business is huge. If you do not get reimbursement fast, your business could be grounded.” She urged a quick response by the concerned authorities.

    General Manager, Sagenta Nigeria Enterprises, a textile and garments processing company, Mr. Godwin Odhiare, also lent his voice to the growing call by the real sector operators on the NASS to promptly approve the payment of the backlog as a way of triggering increased activities in the export sector and contributing to on-going diversification drive.

    He said the Buhari-led administration needed commendation for initiatives targeted at boosting exports. “Anyone, who is genuinely interested in the Nigerian export business would appreciate the administration for the initiative,” Odhiare said, adding that members of the legislature should complement this gesture by quickening the process of releasing the money.

    The textile manufacturer said although, the current administration revived the scheme,   but it does not end there.  “What would gladden the heart the more is to see that the proposal has been endorsed by the NASS and the monies paid.

    “There is a proverb that he who wears the shoes knows where it pinches. It is those, who spend money in exportation that would understand the burden of not being settled on time. There is need to ensure that noble initiatives involving our export sector are implemented to the latter,” he said.

    According to Odhiare, many exporters who have been nursing the idea of expanding their operations are being held back by the outstanding payments since, according to him, the monies involved is huge.

    “The export market is competitive. Many of us are proud to be flying the nation’s flag in that area and we would appreciate every assistance the authorities could give,” he emphasised.

    Also, the Chairman, Export Group of Manufacturers Association of Nigeria (MAN), Chief Ede Dafinone, passionately appreciated the Federal Government for reviving the EEG, especially with the expansion of the use of the Export Credit Certificate (ECC).

    “As a result of this expansion, our members will be able to transfer the ECC to a third party and use it to settle all Federal Government taxes as well as purchase of government bonds and settlement of credit facilities by development banks and liabilities of the Asset Management Company of Nigeria,” he said.

    Dafinone admitted that 2017 was tough for members of the group due to shortage of foreign exchange, high cost of energy and funds, multiple levies and taxes, as well as smuggling, which unleashed untold constraints on manufacturing operations.

    “Also, since the collection of the unutilised NDCC by the Federal Government, no payment has been made, which put our members in a difficult position with their banks. I hope government will commence full payment of the new EEG soon,” he said.

    Similarly, Leather Worth Nigerian Company General Manager, Mazi Jerry Ugwu, said many exporters are appreciative of the initiative that promotes Nigerian made products. He, therefore, warned against anything that would negatively affect it.

    “I will appeal to members of the NASS not to look at this particular issue from the point of view of politics. This is one area in which Nigeria’s image is being publicised abroad while at the same time bringing revenue. The exporters should be paid promptly,” Ugwu said.

    He said hunger does not know politics, and that once Nigerians have means of survival there would be reduction in crime. He added that issues concerning the economy, especially those capable of creating jobs should always be given priority in the interest of the larger society.

    “You can imagine what would happen when such an amount is released. It would be ploughed back into the economy and more jobs would be created,” Ugwu said.

    He equally appealed to exporters not to relent, but continue to do their beat in helping to create awareness about the ability of Nigerian businessmen to showcase their products internationally, create jobs and add value to the economy.

    “For me, entrepreneurs, who are involved in selling Nigerian products are ambassadors. They should be supported in whatever way possible,” the Managing Director of Gold Trade, a small and medium enterprise, Mr. Olajide Ayomide, told The Nation.

    He added that entrepreneurs are wealth creators. “They produce, pay tax locally, and pay tax internationally. They bring a lot of ideas from what is happening internationally. In fact, they are doing a great job and the government needs to back them,” Ayomide said.

  • NCC: operators risk losing out to digitalisation

    The Nigerian Communications Commission (NCC) has warned operators to shape up in order not to lose grip of the market as digitalisation takes centre stage across the world.

    Its Executive Vice Chairman/CEO, Prof Garba Dambatta, who gave the warning in Lagos, said emerging digital age offers opportunities for individuals and organisations to grow.

    “By this, we are talking of knowledge-based economy against resource-based economy when most information is in a digital form especially when compared to the time when computers were not used. Digital age offers the use cutting-edge technologies that improve efficiency, effectiveness and competitiveness of any person or organisation that leverages latest technologies to achieve their operations.

    “In the 21st century economies, digitisation is throwing up dynamics that are re-writing the rules of competition and efficiency with incumbent companies most at risk of being left behind,” he said.

    He said a recent study by Accenture indicates that while the digital technologies underlying these competitive thrusts may not be new, they are being used to new effect.

    The report, according to him, also staggered the growth of information that is accessible as never before-from proprietary big data to new public sources of open data. Analytical and processing capacities have made similar leaps with algorithms scattering intelligence across digital networks often lodged in the cloud. Availability of smart mobile devices and access to the interest, he said make information and computing power accessible to users around the world.

    He said: “As these technologies gain momentum, they are profoundly changing the strategic context affecting the structure of competition, the conduct of business and ultimately, the performance of across industries.

    “Invariably, trends such as automation of processes by public and private organisations, big data, artificial intelligence, internet of things (IoT), e-commerce and block chain technology, cloud computing among others now characterise the current digital age. The utmost aim of all these digital tools is to redefine how services are delivered to the consumer,” he said.

    According ot him, local and foreign direct investments totalling about $70billion have come into the economy while its sectoral contribution to the gross domestic product (GDP) now stands at about 9 per cent.

    Dambatta, represented at the ICTEL Expo organised by Lagos Chamber of Commerce and Industry (LCCI) by Director, Consumer Affairs Bureau at the NCC, Felicia Onwuegbuchukwu, said as at the end of May, there were over 162 million active connections and over 100million internet users in the country with teledensity standing at over 116 per cent.

    He said the next frontier to deepen digitiusation all over the world is through the development of broadband or high-speed internet access.

    “To achieve this, the Commission has been working tirelessly with different stakeholders not only to encourage pervasive broadband infrastructure but also to address challenges hindering the achievement of this goal,” he said.

    He said the NCC is focused on bringing efficient, qualitative and affordable ICT platforms within the reach of every Nigerian, whether individual or corporate, adding that Commission is doing this through the focused implementation of its 8-point Agenda and Federal Government’s Economic Recovery and Growth Plan (ERGP) and the ICT Roadmap to drive synergies which would expand opportunities for disruptive technology innovation and national competitiveness.

  • Operators seek shipping policy review

    THE Federal Government has been urged to review the nation’s shipping policy so that foreign companies will stop benefiting from it at the expense of their local counterparts, stakeholders have said.

    The policy, they said, could hinder Cabotage Act implementation. They urged the Minister of Transport, Rotimi Amaechi and the Director-General, Nigeran Maritime Administration and Safety Agency (NIMASA,) Dr Dakuku Peterside to lead the campaign for the review of the policy to generate employment and boost revenue generation.

    Speaking on the sideline of a forum organised by importers and clearing agents in Lagos, Sea Logistics Managing Director, Mr. Rufus Olanipekun said foreign shipping lines would continue to exploit the country because of the selfish interest of a few and lack of shipping policy that identifies the strategic challenges of the maritime sector.

    Olanipekun said there had been lapses in enforcing the Cabotage Act and domesticating all international treaties and conventions that relate to the maritime sector.

    He regretted that the Cabotage regime was yet to be implemented to meet stakeholders’ expectations.

    Olanipekun also said there was a gap between the Act and the system, which is yet to empower indigenous operators to take advantage of the law.

    Another stakeholder and JM Investment Chairman, Mr James Joseph, said conspiracy had hindered the Cabotage Law implementation.

    Its implementation, he said, would have been easier, but for conspiracy between some government officials of and foreign ship owners.

     

  • Why operators are kicking against alcohol, tobacco tariff hike

    The upward review of excise duty on alcohol and tobacco kicked off Monday. The government envisaged that the new rates, which will be spread over a three-year period, will raise revenue and reduce the health hazards from tobacco-related diseases and alcohol abuse. But local manufacturers are kicking, insisting that the policy will hurt investments and trigger massive job losses. They are calling for a reversal to save the nation’s fledgling manufacturing industry, writes Assistant Editor CHIKODI OKEREOCHA.

    The new excise duty regimes on locally produced alcoholic beverages and tobacco products, which kicked off last Monday may have set the stage for a major confrontation between the Federal Government and local manufacturers.

    Already, members of the Distillers and Blenders Association of Nigeria (DIBAN), a sectoral group of the Manufacturers Association of Nigeria (MAN), are literarily up in arms, calling on the Federal Government to halt the implementation of the hike and hold genuine consultation with stakeholders in the wines and spirits market.

    DIBAN Chairman Patrick Anegbe did not mince words when he said the policy’s implementation must be reversed to save the jobs of over 25, 000 Nigerians and over 250, 000 connected Small and Medium Enterprises (SMEs) staff. “Our industry investment of over N420 billion is being threatened by the recent upward review of excise duties on locally produced wines and spirits,” he added at a press conference on “The new hike in excise duty on alcoholic beverages” organised by the group in Lagos, on Wednesday.

    The Federal Government may have inadvertently drawn the battle line between it and local manufacturers particularly distillers when its upward review of excise duty on local alcohol and tobacco came into force on Monday, after a 90-day grace to local manufacturers. Under the new rates, approved in March by President Muhammadu Buhari, beer and stout will attract 0.30 per centilitre this year and 0.35 per centiliter in 2019 and 2020. Wine will attract N1.25 per centiliter in 2018 and N1.50 per next year and 2020. Also, N1.50 per centiliter was approved for spirits in 2018, N1.75 next year and N2 in 2020.

    Similarly, in addition to the 20 per cent ad valorem rate, each stick of cigarette will attract N1 specific rate (N20 per pack of 20 sticks) in 2018; N2 specific rate per stick (N40 per pack of 20 sticks) in 2019, and N2.90k specific rate per stick (N58 per pack of 20 sticks) in 2020. The excise duty hike on both products, according to Minister of Finance, Mrs. Kemi Adeosun, would be spread over a three-year period to moderate the impact on prices of the products.

    With the implementation of the new excise duty regime, it was envisaged that Nigeria’s cumulative specific excise duty rate for tobacco, for instance, would be 23.2 per cent of the price of the most sold brand, which is still lower than Algeria, South Africa and The Gambia, which have 38.14 per cent, 36.52 per cent and 30 per cent.

    Mrs. Adeosun had in March said peer country comparisons carried out showed that Nigeria was behind the curve in the review of excise duty rates on alcoholic beverages and tobacco.

    She said the Tariff Technical Committee (TCC) recommended the slight adjustment in the excise duty charges after cautious considerations of the government’s fiscal policy measures for the year and the reports of the World Bank and the International Monetary Fund (IMF) Technical Assistance Mission on Nigeria’s fiscal policy.

    The minster added that the effect of the excise duty rates adjustment on trade and investment was also assessed by the Federal Ministry of Trade and Investment, which adopted the recommendations of the TTC.

    She also said the new excise duty regimes were in line with the Economic Community of West African States (ECOWAS) directive on the harmonisation of member-states’ legislations on excise duties.

    The ECOWAS Council of Ministers had at its 62nd and 79th Ordinary Sessions in Abuja in May 2009 and December 2017, issued directives on the harmonisation of the ECOWAS Member-States’ Legislations on Excise Duties.

    The directives, The Nation learnt, sought to harmonise member-states’ legislations on excise duties on non-oil products and also stipulate the scope of application, rate of taxation, taxable event and amount.

    The overall objectives of the review of the excise duty rates for tobacco and alcohol, according to Adeosun, were to raise government’s fiscal revenues and reduce the health hazards associated with tobacco-related diseases and alcohol abuse.

    But some experts, stakeholders and local manufacturers particularly distillers are not swayed. For instance, as far as Anegbe is concerned, the policy was a purely IMF sponsored agenda camouflaged as a health concern. He said DIBAN, under the auspices of MAN, therefore, rejects what he described as “the new astronomical hike in excise duty being selectively imposed on the local spirits and wine industry.”

    According to Anegbe, the new duty on local wines and spirits translated to an increase of over 500 per cent, from the current average of N30 per litre to N150 per litre in the first year and N200 per litre subsequently. “This translates to an increase from current average duty of N270 to N1, 350 per case (carton) in the first year and N270 to N1, 800 per case (carton) from the second year,” he lamented.

     

    The fears, the worries

    Anegbe expressed fears that if the implementation of the new duty is sustained, there will be massive job losses arising from low demand of local products. He also said it will lead to the collapse of the indigenous wines and spirits segment and pave way for the complete takeover of the market by imported and smuggled brands.

    Besides, the spillover effect, he said, will be massive as key sectors of the economy and businesses such as packaging industries, bottles, cartons, labels, cork, laminates, glue, ink, printing, laboratory, marketing, consulting, and media, among others, will suffer.

    The DIBAN Chairman also argued that the imposition of exorbitant duties on locally manufactured goods contradicts government’s objective of growing local industries and shoring up revenues. He said, for instance, that the massive staff lay off, which is sure to hit the sector, will take its toll on revenue generated by government on Pay As You Earn (PAYE) taxes, which is estimated at N60 billion per annum.

    “At 600mn litres and N200 per litre, government is asking for N120 billion in tax whereas the industry does not even generate up to half of that in sales. Therefore, jacking up the duty by 500 per cent overnight will deter businesses and investors from investing in Nigeria,” Anegbe said, adding that many foreign investors have seen a huge market in Nigeria’s alcohol industry, which is estimated at over $2 billion.

    As if the negative impacts of the policy were not bad enough, the DIBAN chief said there was no prior engagement or consultation with indigenous producers of wines and spirits before adopting the new excise duty. “The Association made unsuccessful frantic attempts at getting the attention of the Minister of Finance to hear us put before migration from the current ad valorem to the specific scheme,” he said.

    Some development experts have come down hard on the new policy, describing it as wrongly-headed and counter-productive. For instance, Business Renaissance Group President Mr. Omife Omife said the policy could affect investments in the manufacturing sector. He, therefore, called on the Federal Government to reverse the policy.

    “Nothing should be done to endanger the sector. It is apparent that the announced astronomical increase in excise duty is bound to endanger the sector if not reviewed and rescinded,” he said.

    Omife warned, for instance, that with the new tariff regime, firms in the sector would face high risk of possible shutdown, especially in the low price segment, which accounts for 78.65 per cent volume of the spirits and wines segment.

    He noted that the new excise duty would also penalise average Nigerians as they would no longer be able to afford the new prices that include the exorbitant excise duty.

    The expert also pointed out that given the challenges of border control and illicit market, the attractiveness of the price increase driven by higher duty would result in smugglers bringing in unregistered and untaxed products. This, he said, would result to loss of revenue to the government.

    “The astronomical increase in the tariff is counter-productive and will lead to massive job loss, turn the country into a dump yard for foreign products, further pauperise Nigerians and stifle growth in an otherwise resilient sector of the economy,” Omife argued.

    Prior to the take off of the policy, the Senate also kicked, insisting that the tariff hike will hurt local distillers of beverages.

    In a motion titled, “Urgent Need to Review the Proposed Excise Tariff Increment in Order to Save Local Distillers of Beverages from Looming Extinction,” Senator Benjamin Uwajumogu (APC, Imo North) said with the tariff increase, the fate of the industry hangs in the balance.

    Uwajumogu, argued, for instance, that the beverage industry, which is one of the oldest surviving sectors, employs about 250, 000 Nigerians and that one of the consequences of the tariff hike would be the potential loss of these jobs.

    He added that direct and indirect job losses would further worsen the deteriorating unemployment situation in the country with the attendant social consequences.

    “The tariff increase will kill the fledgling industry, which is presently fragile and may wreak incalculable damage on our economy.

    “It will also lead to increase in smuggling activities, huge capital flight across borders to more investor friendly countries, with the attendant danger of increase in restiveness amongst the citizenry under enormous socio economic pressure,” Uwajumogu said.

    The Senator also said the negative impact on the economy, which is still emerging from recession, would further destroy the chances of the economy for full recovery, warning that an investment portfolio exceeding N420 billion was under real threat of extinction.

    However, there are some stakeholders who feel that the new tariff regime was a welcome development. For instance, the policy bodes well with religious organisations, local and international Non-Governmental Organisations (NGOs), who have been vigorously campaigning for the control of what they termed as the “tobacco epidemic” and the need to discourage alcohol abuse.

    Some of them believe that Nigeria lacks very stringent policies or measures on the production and marketing of tobacco and alcohol. They argue that the country requires vigorous and multi-pronged strategies in the control of the two products beyond the “Drink Responsibly” and “Smokers are Liable to Die Young” themes commonly used by brewers and tobacco companies, in their marketing campaigns.

    This was why the duty hike gladdened the Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN). ERA/FoEN in a statement by its Head of Media and Campaigns, Philip Jakpor, said the group’s Deputy Executive Director, Akinbode Oluwafemi, lauded the Federal Government for the review.

    He also went a notch higher, calling on the Federal Government to match its rates with that of other countries across Africa, noting that the new rates still fell short of the more aggressive but very effective recommendations of the World Health Organisation (WHO) in Article 6 of the Framework Convention on Tobacco Control (FCTC), which is 70 per cent excise on tobacco products.

    Will government bow to superior economic arguments and reverse the policy? Are morality and health concerns enough reasons to sustain the policy? Therein lies the dilemma.