The Nation Newspaper

Tag: policy

  • ‘We need new population policy’

    ‘We need new population policy’

    The recent motion moved by Hon. Babatunde Kolawole, a member of the House of Representatives from Akoko Southeast/Akoko Southwest Constituency, Ondo State, on the urgent need to control the population growth rate nearly tore the House apart. In this interview with LEKE AKEREDOLU, he speaks on why the government should pay more attention to population control. Excerpts:

    How will you assess the Eight Assembly so far?

    The 8th Assembly is doing okay. Though there was a little shaking at the beginning, the House is stable now. There is a legislative agenda in place, standing committees have been successfully constituted and inaugurated. They are up and running. And the Speaker, Hon. Yakubu Dogara has expressed the commitment of the 8th House to ensuring that Nigerians reap the dividends of democracy, through virile and people- oriented legislations. Issues such as security, unemployment and economic diversification are on the front burners. The Internally Displaced Persons, which are the offshoots of insurgency in the North- Eastern part of the country are receiving attention from the House so much so that it created a new Standing Committee for them. The House has even passed a resolution for the establishment of a Commission for the Development of the North East. If you also noticed, many of the motions brought by members are infrastructure related and have to do with things happening in their constituencies like roads, electricity, floods and so on. They are usually passed without debate because of its importance to the socio- economic activities of the people. It was under this grace that I was able to bring the motion for the rehabilitation of the Owo- Iyere-Ipele-Ago Alao-Owoani-Idoani- Ifira-Sosan-Isua Road which is a federal road and the Owo-Oba-Ajegunle-Akungba-Iwaro -Oke Oka-Okhia-Epinmi-Isua Road which is a state road in Ondo State. And the motion passed. This is to tell you that the 8th House is sensitive to the problems of the people and is doing its best to make things better.

    Can you shed light on the composition of committees in the House of Representatives?

    Like I said earlier, the committees have been successfully constituted, inaugurated and are up and running. But you are also aware that there were some disagreement over the constitution of the committees but by and large, the committees have been inaugurated. what is needed now is patience to allow the committees go full throttle. The House is barely needling six months of existence. Things are just taking shape. But nonetheless, from the morning, one can discern how the day would be, hence from the way the House is going, it is obvious that Nigerians should expect good things from the 8th House of Representatives.

    The motion you moved recently on Nigeria’s population provoked uproar in the House, why do you think high population is not an asset to the Nation?

    The truth is, I never said population is not an asset to the nation; it is an asset. But unbridled and unmanageable population has negative consequences. Everyone knows that. If at an estimated 166 million we are still adding about 5 million births per annum, there should be cause to worry. There is need to plan, otherwise, like the motion states, there would be pressure on the country’s finances and infrastructure especially roads, housing, education and  health. Also there would be a corresponding increase in unemployment, crime, poverty and so on.

    So, its was a great surprise that some members saw it as an attack on Muslims. That was not the intention or motive of the motion. The motion was simply asking that the Federal Government takes steps to manage the population, and that it directs the National Orientation Agency to educate Nigerians on the benefit of family Planning.

    The report by US-based Population Reference Bureau, PRB, is in public domain. and it states in its 2011 World Population Data Sheet, released in 2014 that Nigeria’s population would be 433 million by 2050 and that by that year, Nigeria will be the 3rd largest country in the world, bigger than the United States and next to only China which has 1.4 billion people and India’s 1.28 billion. That is really scary. So there is the need for urgent action by the government to forestall the fallouts of population explosion.

    What are your expectations from the Justice, Rules and Business and Population committees that are directed to look at the motion?

    I don’t anticipate any negative report from the relevant committees that is expected to further look into into this very important motion. This motion is about formulating a Policy that will ensure adequate planning for our present population and generations unborn. We will be falling short in the discharge of our duties as a   government if an enabling environment is not created for this teeming population to strive as it affects employment, security, infrastructure and the economy at large to mention but a few. You see, this is not just about Hon kolawole Babatunde, it is about Nigerians that have been thrown into a situation of hopelessness by the 16yrs of PDP misrule. We now have a government that has the political-will to translate masses-driven policies into action. I am not against any religion but passionate about our future as a country particularly as it affects the youths. We have seen this happen in developed countries and we cannot be left behind. There is no doubt that the committees will handle this task with the sincerity of purpose putting the interest of the Nigerian people first. I have the support of my colleagues, the change mantra is in place and change Nigerians must have.

    What is the state of the APC in Ondo State?

    APC is the party of choice in Ondo State. It is apparent that the yearnings and aspirations of the people are not being met. The visible desire of the people is for development, for jobs for the teeming youths who are the hopes of our future, for good healthcare services for both the young and elderly; for a responsible and responsive government; for qualitative and all encompassing education. The people of Ondo know that all these things are synonymous with APC. That is why APC is strong in Ondo and its the reason for the people wanting to be part of the change agenda. They want to be part of the party that can drive that change.

    Do you think the party will win the next governorship election?

    By the grace of God, APC is going to win the governorship election in Ondo State. Its not just talk though, we are prepared. The people desire change, we know their pains, we have the blueprint to eliminate this pain. And I believe Ondo State is tired of moving a step forward and five steps backwards. I am one of the numerous personalities that our amiable and Distinguished Senator, Prof. Robert Ajayi Boroffice mentored. Within the few months that I have spent in office, I have been able to further built the confidence of the good people of Akoko South East and South West in the new government. It is time for progress.

  • SMEDAN presents new MSMEs’ national policy

    SMEDAN presents new MSMEs’ national policy

    • Seeks stakeholders’ support

    The Small and Medium Enterprises Development Association of Nigeria (SMEDAN) is seeking the support of private sector operators on the implementation of the National Policy on Micro, Small and Medium Enterprises (MSMEs).

    Speaking at the presentation of the policy  in Kaduna, at the weekend, the Director-General/CEO, SMEDAN, Alhaji Bature Masari, said to ensure a seamless implementation of the policy, a detailed and robust framework has been developed, which enunciates the various responsibilities of relevant stakeholders on the implementation value chain.

    “With this first review of the policy, I sincerely believe that the MSMEs sub-sector in Nigeria has been given a further impetus to drive the national economy towards job creation, wealth creation and poverty alleviation. In this regard, I will request for the support and cooperation of all stakeholders towards the achievement of the MSMEs sub-sector of our dream in Nigeria through the implementation of the policy,” Masari said.

    He said the policy, which will be in place between this year and  2025 will be reviewed every four years. He sai it will facilitate and sustain a vibrant MSMEs sub-sector that will be the major driver of national economic growth and development including job creation.

    He added that this will be accomplished by accelerating the profitable expansion of existing MSMEs along the value chain, ensuring transition from micro to small enterprises, small to medium enterprises and medium to large enterprises, thereby enabling them to increase their contribution to Gross Domestic Product (GDP) and employment generation.

    Masari added that the policy outlines key objectives, strategies and programmes for driving the development of MSMEs. It also specifies several programmatic areas such as finance, institutional, legal and regulatory framework, skills development, technology, research and development, extension and support services, marketing and infrastructure and cost of doing businesses.

  • NECA urges consistency in auto policy

    NECA urges consistency in auto policy

    The Nigeria Employers’ Consultative Association (NECA) has expressed concern over calls by some individuals on President Muhammadu Buhari to jettison the National Automotive Policy.

    Its Director-General, Mr. Olusegun Oshinowo, said one of the greatest challenges the country has faced, which had stifled its sustainable development is policy inconsistency and lack of continuity.

    He said the time had come for the the government to put economic interest ahead of political considerations.

    “Government should imbibe the culture of adopting well-intentioned policies of past governments. The Automotive Policy is one of such that needs to be sustained,” he said.

    Oshinowo urged Buhari not to pander to the whims and caprices of those calling for policy reversals, adding that it would not be in the interest of the economy.

    He said: “Government should sustain and deepen the policy through its faithful implementation, without any waiver or threat of possible reversal, except for the recognition of certain categories of non-luxury heavy duty vehicles that cannot and will not be assembled in Nigeria.

    “President Buhari will do well by ignoring the clamour to lower import tariff on automobile products, as this will negatively impact on the policy. It will end up promoting importation, which is not in tandem with the contents and spirit of the automotive policy, to promote assembling in the country.”

    Oshinowo reiterated the need for the National Automotive Industry Development Plan to be backed by an Act of the National Assembly to ensure commitment and prevent reversal, thereby promoting backward integration and diversification.

    The National Automotive Industry Development Plan (NAIDP) was hailed as a welcome development when it was initiated. It was designed to stimulate growth in the automotive industry and the economy. It was also designed to be of immense strategic importance to the economy, being a critical employment multiplier.

  • Lessons from China’s one-child policy

     SIR:From time immemorial, African culture and tradition have primarily shown that a man’s social prestige is closely tied to the numbers of his human assets—wives, and consequently, children. Notably, while civilization and rationality have caused many regions in Nigeria to desist from this societal dogma; northern Nigeria seems to be keen on sustaining it, regardless of the security and economic tension in the country.

    Even before the rise of Boko Haram mayhem, the high population of out of school children as well as children with little or no parental attention has been a characteristic feature of Northern Nigeria. Child marriage has remained a trend and women give birth to as many children as possible even when there are limited resources to cater for them. The end result of this trend includes poverty, illiteracy, and under-development of the north, especially when compared with other region in the country.

    Thus, we must borrow a leaf from China’s former one child policy which was introduced to alleviate social, economic and environmental problems in China. Though, many have condemned this measure, arguing that economic prosperity is not driven by population size but by how a country invests in its human capital and manages its resources; it must be noted that a country needs to be skillful in human management too, otherwise catastrophe will abound.

    An instrumental family planning scheme should not be regarded as irrelevant any more. Although the advocacy to limit the number of children in Nigeria is no news, but so far, it seems to have very little impact. The Nigerian government must thus, improve its crusade on family planning, particularly in the North. There is a need for a more vibrant and active campaign against early marriage and for girl child education. To achieve this, orientation on the indispensable value of education should be organised in the rural northern region in order to sensitise rural dwellers on their roles in economic development especially through child birth control. The advancement of the Nigerian economy is not the responsibility of the government alone, but that of every Nigerian.

     

    • Tolulope Lawani,

      Lagos State.

  • Farmers seek new credit policy for agriculture

    Lagos State Federated FADAMA Community Association president, Alhaji Abiodun Oyenekan, has urged the Federal Government to evolve a new credit policy that will contribute to agricultural restructuring and boost food production.

    Oyenekan asked that farmers access to finance be improved to enable them buy agricultural machinery to increase their productivity and incomes.

    According to him, many smallholder farmers do not have access to modern agricultural machinery that can help increase their productivity and improve both food security and incomes.

    This is because they can’t afford new tractors. Without access to credit, he said they often have no choice but to continue farming without the benefit of modern equipment. He noted, however, that credit for agriculture is still facing difficulties, such as high interest rates and strict loan approaches.

    Right now, he explained that loans given by banks are not single digits and tend to be too expensive for rural smallholders to take advantage of financing, and they can rarely meet the rigid collateral requirements or pay back the loan within the typical short-term lending periods.

    Oyenekan said credit  for agriculture still faces difficulties, such as high interest rates and strict loan approaches. According  to him, restructuring the credit policy will lead to banks developing loans for agriculture, which include production and processing of agricultural products and processing and consumption, production of seeds in crop, livestock, fisheries, forests and supplying of products and services and lending for trade development in rural areas.

    Besides, he said there should be support for partnership and application of high technology in agricultural production; increasing competitiveness to contribute to sustainable development of the agricultural sector and enhancing the living conditions of rural residents and contributing to implementation of the national target programme of new rural areas.

    He said there are funding windows provided for farmers by the Central Bank of Nigeria (CBN) and the World Bank to boost government’s efforts to expand agriculture sector while providing food security and improved nutrition to the rural poor.

    For the agric sector to develop rapidly, he said the economy must support it’s demand for credit and expand business operation towards modernisation.

  • Forex policy: No respite for real sector operators

    Forex policy: No respite for real sector operators

    The  Central Bank of Nigeria (CBN’s) foreign exchange (forex) policy, which barred importers of 41 items that can be produced locally from sourcing forex through its interbank window is taking its toll on real sector operators. But hopes that the policy may be reviewed to lessen the burden of real sector operators may have dimmed following the apex bank’s refusal to shift ground, writes Assistant Editor OKWY IROEGBU-CHIKEZIE.

    Succour may be far from real sector operators particularly manufacturers who have been hoping for a review of the Central Bank of Nigeria (CBN) foreign exchange (forex) policy, which restricted certain items from accessing foreign exchange. The manufacturers may have had their hopes dashed by the apex bank as the CBN Governor Godwin Emefiele foreclosed a possible review of the policy, which manufacturers see as a disincentive to the manufacturing sector and the economy.

    At the International Monetary Fund (IMF)/World Bank Group meeting in Lima Peru, Emefiele dashed manufacturers’ hopes, saying the policy was not up for review and that the apex bank would continue to deny importers access to forex to bring in goods which can be produced locally. He explained that contrary to insinuations, the finance sector regulator has not banned any goods from being imported. “We have not banned any items. What we just did was to exclude them from accessing foreign exchange; items that can be produced in the country.

    “We think that because of the problems we’ve had, the drop in commodity prices and revenue accruing to the nation, and because we know that these items have been produced in large quantities in this country in the past, that provision still stands. The CBN is not reconsidering the ban, the exclusion still stands,” he stressed. The CBN chief added that since the policy came into force, he has been prompted from various quarters to even elongate the ‘excluding items’ list, but that the CBN would confine itself to the items presently in the restriction basket.

    The CBN inadvertently hit the raw nerves of manufacturers when in June this year it removed 41 items from access to its foreign exchange window on grounds that they could easily be produced in Nigeria rather than spend the country’s reserves on importing them. The list included rice, cement, clothes, textiles, toothpick, poultry products, meat and processed meat, margarine, palm kernel/palm oil and vegetable oils, private airplanes/jets, tinned fish, incense and wooden doors.

    Others are soaps and cosmetics, tomato/tomato paste, woven fabrics, table ware, kitchen utensils, furniture, plywood boards and panels, wood particle boards and panels, and glassware. Cold rolled steel sheets, galvanised steel sheets, wire mesh and steel nails were also on the list. The apex bank explained that the policy was aimed at encouraging local production of the items.

    However, CBN’s explanation apparently did not hit the right chord in the ears of real sector operators especially manufacturers most of who felt that the policy imposed additional burden on them and the economy generally. Specifically, the manufacturers argued, for instance, that some of them who need some of the raw materials and products restricted from the forex market as their primary products in the manufacturing process are adversely affected.

    In other words, manufacturers who require any of the 41 restricted items as inputs and raw materials for their production may have to simply shut their operations once their existing stock is exhausted.

    As far as Director General, Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, is concerned, CBN’s understanding of the manufacturing process of many of the sectors affected by the policy was “limited.”

    For LCCI and other real sector operators therefore, nothing short of a review of the policy or outright cancellation would gladden their hearts. And hopes that a review of the policy was in the offing came when Vice-President ’Yemi Osinbajo recently indicated the Federal Government’s readiness to adjust the controversial forex policy that pitched it against operators in the real sector. That was at the 43rd Annual General Meeting (AGM) of the Manufacturers Association of Nigeria (MAN) in Lagos.

    The Vice President however, said the cancellation of the policy was not an option. While noting that the CBN forex policy was introduced to boost local production and protect the nation’s manufacturing sector, he however, said there could be the need to rejig the policy towards ensuring that all the associated grey areas are properly looked at and any aspect of the policy that requires amendment resolved.

    Hear him: “We are going to have negotiations with the operators of the manufacturing sector to seek ways on how foreign exchange control can be eased to enable the items that are not eligible for foreign exchange to be covered.” While noting that the policy was as a result of the downturn in the economy caused by the falling oil prices, he said the nation deserved a robust foreign exchange reserve and would do everything to achieve that as a responsible government.

    Osinbajo’s hint of a possible adjustment of the policy once the economy improves was no doubt, a soothing balm on manufacturers and other operators in key sectors of the economy including maritime who have been lamenting that the policy has been taking a huge toll on their businesses. For instance, the revenue generation profile of the Nigeria Customs Service (NCS) is said to have suffered because of the exclusion of some items from forex transactions.

    The Apapa Area 1 Command of the NCS this week, announced a dip in its monthly revenue collection for September, collecting N23.3 billion.

    The figure was far below the N30.1 billion collected in August, according to a report signed by its Area Controller, Comptroller Eporwei Edike. The N7 billion decline was blamed on the exclusion of some items from foreign exchange transactions by the CBN.

    Despite this and other unintended negative consequences of the policy, the CBN said it would not shift ground. Emefiele, in defending the apex bank’s stance, argued that if there’s global economic slowdown, which has affected the growth and resilience of emerging and frontier markets, including Nigeria, and there is a drop in revenue receipts, which has  impacted negatively on everyone, “There’s need for the regulator to intervene to restore stability in the exchange rate regime.”

    He also said there is need to look for ingenuous ways of increasing the sources of foreign exchange, such as encouraging exporters to repatriate their proceeds and make more foreign exchange available to the real sector so as to grow the economy. He added that the reforms that commenced about two years ago, with respect to economic diversification and taxation, will be vigorously pursued with a view to increasing government’s revenue base.

  • Fed Govt loses N7b to CBN’s forex policy

    The exclusion of some items from foreign exchange (forex) transactions by the Central Bank of Nigeria (CBN) has affected the revenue generation profile of the Nigeria Customs Service (NCS).

    The Apapa Area 1 Command of the NCS yesterday, announced a dip in its monthly revenue collection for September. The Command said it collected N23.3 billion as revenue in September, far below the N30.1 billion collected in August,  according to a report signed by its Area Controller, Comptroller Eporwei Edike.

    The N7billion decline was blamed on the exclusion of some items from foreign exchange transactions by the CBN.

    The apex bank in July published a list of items for which forex will no longer be sourced from the banking system.

    The list  included rice, cement, clothes, textiles, toothpick, poultry products, meat and processed meat, margarine, palm kernel/palm oil and vegetable oils, private airplanes/jets, tinned fish, incense and wooden doors. Others are soaps and cosmetics, tomato/tomato paste, woven fabrics, table ware, kitchen utensils, furniture, plywood boards and panels, wood particle boards and panels, and glassware. Cold rolled steel sheets, galvanised steel sheets, wire mesh and steel nails were also on the list.

    Apapa Customs revenue collection showed that N12.6 billion went into the Federation Account in September, comprising import duty, fees and Common External Tariffs (CET).

    Under  the Non-Federation Account, the command generated N10.7 billion from five per cent Value Added Tax (VAT); seven per cent Port Levy, and 0.5 per cent Economic Community of West African States (ECOWAS) Trade Liberalisation Scheme (ETLS).

  • ‘Inconsistent policy threatens 11m non-oil sector jobs’

    Inconsistent policy is threatening the growth of non-oil exports, which employ over 11 million people, Executive Secretary of Organised Private Sector Exporters Association (OPEXA), Jaiyeola Olarewaju, has said.

    He told The Nation that statistics showed that non-oil exports, which are agro-allied, have declined by about 20 per cent.

    The growth in the sector between 2006 and 2013, he said, was being hampered by inconsistencies in the implementation of government policy, which are aggravating the already precarious job situation.

    “Non-oil exports showed remarkable growth from $1 billion in 2006 to about $3 billion in 2013 in foreign exchange. The bulk of non-oil exports which are agro-allied, employ over 11 million Nigerians, directly and indirectly thus boosting the agriculture income.

    “However, this growth is being hampered by inconsistencies in implementing the government policy on non oil sector. For instance, the extant policy on the Export Expansion Grant (EEG) and the utilisation of the Negotiable Duty Credit Certificates (NDCC) has been put on hold.

    “The recent statistics showed that the sector has declined by 10 per cent to 20 per cent, between 2014 and 2015, aggravating the already precarious forex situation. This is a threat to over 11 million direct and indirect jobs,” he said.

    Olanrewaju pointed out that the huge backlog of unutilised NDCC’s amounting to over N150 billion for over two years has paralysed the exporters’operations, adding that the liquidity crisis led to a fall in demand for agricultural commodities. Nigeria’s image as a reliable international trade partner, he said, has been affected.

    He asked the government to direct the Nigeria Customs Service to accept utilisation of NDCC for duty payment as per extant policy. The meeting of the inter-ministerial committee on EEG, Olanrewaju said, should be reconvened with the Organisation Private Sector (OPS), adding that  the Federal Ministry of Finance should treat the backlog of NDCC in a time-bound manner.

    “We (OPEXA) are convinced that the only way out for the country to disentangle itself from the shackles of mono-economy is to diversify its exports sector.

    “We will like to collaborate with government , all its agencies and other private sector organisation to further boost the expansion of non oil exports,” he said.

    Olanrewaju, former director-general of Textile Manufactures Association of Nigeria (TMAN), said manufacturers would still be in business if the quality of import could be controlled. Local products, he added, are of higher standard than imported ones

    Importers, Olanrewaju said, were fond of bringing low quality materials at ridiculous prices, making it difficult for locally manufactured products to attract patronage.

    “The truth is that we cannot compete because we are at 40 per cent disadvantage in terms of production cost. The foreign manufacturers don’t pay levies, taxes and other tariff to government to bring these items into the country. They only bribe their way. This is despite the fact that cost of production is low in the originating country.

    “All these are making imported textile to be cheaper in the market, and our products cannot compete with the cheap and low quality foreign products. So, they need to check the quality of imported products. If they fail to check smuggling of imported textile materials, this policy will eventually kill the local industry,” he said.

  • CBN dollar policy, cement and free trade zones

    The opportunity to be heard is a remarkable difference from what happened few weeks back when we all dressed to our various offices only to be told by our employees that our businesses has been decreed out of existence by the CBN. Not only were the channels of communication wrong, the powers to technically ban those 41 items were highly questionable. Such is the impunity and hostility that has beclouded our business environment and inhibited its growth. Today we live in an economic environment of confusion, policy summersaults and inconsistencies. In most cases, you see yourself standing face to face with, and against the law. We have gotten to a level where our law and the constitution say one thing, and our operators say a different thing.

    The Free Trade Zone is a creation of statute. Its activities are governed by Decree No 63 of 1992. Going by the provisions of this Decree, business enterprises within the zone enjoy some incentives and exemptions.

    Some of these incentives include exemption from all federal, state and Local Government taxes, duties, levies, VAT and foreign exchange regulations. This is clearly written in Section 26A of the decree setting up the free trade zone. By law, the free trade zone and the CBN are institutions of coordinate jurisdiction. Free Trade Zone enterprises are in theory, regarded as a country within a country. The CBN therefore has no legislative authority over the zones. The CBN in realization of this had washed its hands off the fiscal responsibilities of the zones until this recent attempt on the annexation and colonization of the zone. The status confers and imposes certain restrictions as well as obligations on mode, module and medium of exchange. For instance, companies within the zone are incentivised to import foreign currency of any amount and export 100% of same. They are exempted from the buying of forex from the CBN, among others, thereby affirming their quasi autonomy. This suggests that the only avenue open to the operators for the sourcing and procurement of forex was the free funds, or the BDC’s. Depositing and withdrawal of dollar cash was a way of life and has never been under the sledgehammer of the CBN.

    But the dollarization policy which is now being enforced across board and borders has laid comatose the operation of the Free Trade Zone, as the only foreign exchange window open to operators had been shut, padlocked and the key flung into the ocean.

    The immediate dire consequence of this unfortunate, ill-conceived policy is the suffocation of investments within the zone leading to business closure by investors and foreclosures by banks and other lending institutions. The fall out of this would be litigations arising from breach of contracts, mass retrenchment of workers, loss of revenue by government and loss of face in the international community, and of course, the short circuiting of technology transfers – which is a cardinal factor for the setting up of the Free Trade Zone.

    Why would CBN ban 41 items in the guise that they do not have sufficient dollar to fund their imports only to turn around to ban deposit of the same currency in our banks as a result of excess dollar?

    As the CBN continues to reap from where they did not sow with regards to foreign exchange regulations within the Free Trade Zones, one needs to remind them of the ripple effect of their actions. Secondly they need to observe the thin line that separates the various organs of government as contained in the principles of separation of powers.

    When the CBN cannot give long term loan to a young graduate to buy equipment and commence the production of toothpick, why would they stop the same boy from importing N10,000 toothpick from China where the investment climate is not only conducive but predictable? To do otherwise is impunity and starvation.

    To put up an average cement plant of one million to two million metric tonnes one requires a capital outlay of about $300 – $400 million. This used to be an average of N50 billion to N60 billion. To accomplish this, using the current exchange rate, an intending investor needs an average of N80 billion. It does not stop there: The ugly side of it is that as long as this policy remains, no Nigerian can ever invest again in the cement sector. How, you would ask?

    To put up an investment of this magnitude where banks’ lending is on short-term and double digit interest rate is practically impossible in an economy of today. Let us agree that you get a willing bank to help syndicate the financing, you would be required to put down an equity contribution of about 30%. This translates to about N24 billion. The implication is that you require 10 banks to syndicate your equity alone, and another 20 banks to syndicate the remaining 70%. This is impossible. In addition you need to have your market share and popularize your brand before any bank can take this huge risk on you. What is possible is what has been the practice where backward integration policy was designed for new entrants. These new entrants had attracted an investment of over $20 billion tied to various strategic trade partnerships. These investments are threatened by this dollarization policy.

    As a member of the Presidential Committee that produced the 2009 cement policy, our recommendation was that new entrants should be encouraged to embark on backward integration with some government incentives. This was how Lafarge, Dangote, Unicem, Flour Mills etc started. They formed strategic trade partners who signed technical and business agreements towards local investments. This is how the near success story we have today in the sector

    If we have a success story in cement, why are we buying a bag of cement at N2000 in 2015? In Asia, a bag of cement sells for as low as N350 a bag; in Europe it sells at N500 a bag; in neighbouring West African countries a bag of cement sells for between N1200 and N1400 a bag. When the lie of Nigeria being a net exporter of cement was told by several persons, in several quarters, including the former coordinating minister of the economy, some of us who know covered our faces in shame.

    In a recent survey, the World Bank predicted Nigeria’s cement consumption to be 45 million metric tons. Mind you, consumption is different from demand and supply. With a total installed-not production capacity of cement at over 20 million, Nigeria still has a huge demand gap of between 15 – 20 million metric tons.

    The reality of this deceitful situation will soon hit us when government solves the insurgency situation in the North-east and commences rehabilitation works; moves to fill the over 15 million housing deficit, tackles our huge infrastructural decay; and starts the cement – base road construction, by then, existing cement plants would have started growing old, I bet you, Cement may sell as high as N3000 in this country.

    In my honest opinion, government needs to open the cement space for investors of all sizes to come in. Monopoly should be discouraged. A limit should be set as to maximum investment an individual can invest in any sector of the Nigeria economy to create room for others’ participation. This would also ease credit tension and whittle down risk appetite of banks and other lending institutions.

    This what countries like China and India have done. In China, you have over 9000 functional cement plants and over 800 in India. China for instance, manufactures over 2.42 billion tons of cement per annum, representing 58.6% of global production. In reality Nigeria produces a little above 25 million. What the government of these countries did was to liberalize investment in the sector, encourage and incentivise investors.

    What the CBN Governor has done with the recent foreign exchange restriction on cement and 41 items amounts to a ban and criminalization of businesses.

    Governments world-over encourage investments; you don’t decree, you don’t frustrate, you don’t criminalize. A toothpick importer of today may be a Bill Gate or another Dangote of tomorrow.

    Being a paper presented by Ochiagha Ufomba at the Focus Group Discussion on Impact of CBN Foreign Exchange Policy organized by the Lagos Chamber of Commerce at Oriental Hotel Lagos.

  • ‘CBN’s policy ‘ll promote local self-sufficiency’

    The Managing Director,  Okomu Oil Palm Plc, Dr. Graham Heifer, has said the policies of the Central Bank of Nigeria (CBN) on forex only affected businessmen asking for waivers especially on palm oil.

    He said granting waivers by previous administration has affected oil palm production in the country negatively.

    Heifer who spoke with reporters said granting waivers was unfair because some people have to pay duty while others got waiver to bring in things and it affected the industry negatively.

    The Okomu Oil chief said the CBN policy offered local producers of oil palm to produce more as well as an opportunity for others to invest in the business.

    He said his firm has purchased 12,000 hectares of land in Ovia North East Local government Area of Edo State with a view to expanding production to meet market demands.

    He said: “We produce palm oil here locally and we have the market already. The CBN’s directive is good for us. It does not stop people from importing because some can still pay the duty but if you want to import now, you cannot (raise foreign exchange) through the CBN. You have to go to parallel market.