The Nation Newspaper

Tag: production

  • OPEC June meeting to review oil production cut deal

    Organisation of Petroleum Exporting Countries (OPEC’s) next meeting in June will be a chance to review its oil production cut agreement, but the group, according to Kuwait’s Oil Minister Bakheet al-Rashidi,  will continue with cuts through 2018.

    While it will be discussed in June, a decision on whether to extend the deal into 2019, will be taken later this year, Rashidi told newsmen on the sidelines of the Kuwait Oil and Gas Summit.

    OPEC, with 10 non-OPEC allies, led by Russia, are in the midst of 1.8 million barrels per day (b/d) production cut agreement aimed at drawing down crude oil inventory levels and creating market stability, so that upstream investment can occur to meet the projected increases in demand.

    Saudi Arabia and Russia are leading discussions on extending the OPEC/non-OPEC coalition’s alliance.

    OPEC Secretary-General, Mohammed Barkindo, who spoke  at the same event, added that Organisation for Economic Cooperation and Development (OECD) commercial crude oil inventories had fallen to less than 50 million barrels over the five-year average, compared to about 340 million barrels in 2014. This trend, he said, is expected to continue in the coming months.

    Oman’s Oil Minister, Mohammed al-Rumhy, who signed the cuts as a non-OPEC producer, warned that the group should not consider its job done yet. “We have not reached the steady state conditions yet and the game is not over. The uncertainty monkey is still on our shoulder and it’s not the time to offload that,” he said at the same conference.

    Oil rose on Tuesday, boosted by investors’ growing concern over the potential for disruptions to crude supply, especially in the Middle East. Brent crude oil futures were up by 10 cents at $71.52 a barrel, while United States (US) crude futures gained 9 cents to be $66.31 a barrel.

    Traders said oil markets were receiving general support due to the risk of supply interruptions, including a potentially spreading conflict in the Middle East, renewed US sanctions against Iran and falling output in crisis-hit Venezuela.

    “With so many potential supply disruptors in play and few signs that the current market upheaval will end any time soon, traders continue to pay the geopolitical risk premium,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.

  • Dangote targets self-sufficiency in food production

    Dangote targets self-sufficiency in food production

    Africa’s richest man Aliko Dangote has promised to make Nigeria self-sufficient in food production.

    He spoke in Lagos at the Awards for 77 customers of Dangote Foods, comprising of Dangote Flour Mills, Dangote Sugar Refinery and NASCON Allied Industries.

    At the award night held at the Expo Centre of Eko Hotel Victoria Island Lagos, 11 winners emerged from each of the geopolitical regions while the others were picked from the national category.

    A total of 23 distributors won awards from Dangote Sugar Refinery, 27 from Dangote Flour Mills and 27 from NASCON Allied Industries.

    Dangote said: We are firm believers in the vast economic potential of Nigeria. This has informed our desire to invest massively in some states across the country.

  • More oil, revenue for Nigeria as Egina nears production

    More oil, revenue for Nigeria as Egina nears production

    After 14 years of discovery, the Egina oil field located offshore Nigeria in oil mining lease (OML) 130 and operated by Total Upstream Nigeria Limited (TUPNI), is set for first oil in the last quarter of this year. The floating production, storage and offloading (FPSO) vessel berthed at the SHI-MCI, LADOL shipyard for integration of some topside modules fabricated at the shipyard located LADOL Free Trade Zone (FZE) in Lagos. EMEKA UGWUANYI examines the project and its benefits to the economy.

    On January 24, about 2.30pm, the floating production, storage and offloading (FPSO) vessel that will produce the 200,000 barrels per day (bpd) Egina oil field located offshore Nigeria in oil mining lease (OML) 130 berthed at the SHI-MCI, LADOL shipyard in Lagos, Lagos State.

    The stopover was designed to enable the integration of the six modules fabricated at the LADOL shipyard to the vessel. The modules include water injection, chemical injection and crude oil discharge package, among others. These modules were fabricated in Nigeria as part of Nigerian Content (local content) input into the Egina project. The integration in Nigeria was also meant to further boost local content and indigenous capacity and skills development, hence, it was not shipped to Samsung Heavy Industry (SHI) shipyard in Goeje, South Korea, where the vessel was built.

    The fabrication and integration of some substantial parts of the Egina FPSO in Nigeria will remain a historical landmark that opened a new vista in Nigeria’s upstream operations especially in deepwater oil exploration and production. The Federal Government should ensure no oil firm goes below the Egina project’s performance. The quantum of fabrication undertaken by Nigerian companies for the FPSO underscores the denial of value creation in the economy and skills development of the locals over the years. The milestone is even more pronounced as a global multinational, Total, is involved, disproving years of perception that Nigeria and Nigerians lack requisite skills and the environment for such a huge capital intensive project to be carried out.

    Considering what this project stands for in Nigeria’s oil and gas space, now and for the future, the Federal Government needs to ensure the security of this vessel while the integration of the six modules fabricated at LADOL lasts and ensure the arrival at its final destination, the integration of the remaining components and commencement of operation. Besides, there is a projection that oil price will remain between $60 and $70 per barrel through 2018, therefore, the field will commence operation when oil price is fairly good.

    The Managing Director/Chief Executive, Total Upstream Companies in Nigeria, Mr. Nicolas Terraz, speaking at a ceremony to mark the arrival of the Egina FPSO at the SHI-MCI Yard, LADOL Island in Lagos, said it was a truly historic day, as it is the first time that a deepwater FPSO is being berthed at a quayside in Nigeria for lifting and integration of six large topside modules, which were fabricated locally.

    “To put the significance of this moment in perspective, here are a few Egina records – the Egina FPSO is the largest ever installed in Nigeria, it is also the largest FPSO built so far by the Total and 12,500 tons of equipment will be lifted and installed on the FPSO,” he said. Bear in mind that 15,000 tons were fabricated in Nigeria.

    He further noted that the crane at the LADOL quayside was the biggest crane ever erected in  the country.

    He said: “But beyond these facts and figures, it is important to point out that the integration of the FPSO topside modules here is a game changer for the industry in terms of Nigerian Content. These activities here are a visible and concrete demonstration of our commitment to make meaningful contributions to the development of local capacity and they are the product  of collaborative work between Total, Nigerian National Petroleum Corporation (NNPC), Nigerian Content Development and Monitoring Board (NCDMB) and our OML 130 partners – CNOOC, SAPETRO and Petrobras.

    “The project was launched amidst considerable risks. But today, it stands as a testimony to our continued commitment, belief and faith in the future of Nigeria.

    “None of this would have been possible without the support of partners and key stakeholders. And for this, I wish to extend the profound appreciation of Total to the Nigerian Ports Authority (NPA); the Department of Petroleum Resources (DPR); the NNPC; NCDMB; National Petroleum Investment Management Services (NAPIMS) and our partners.

    “I also wish to thank the Nigerian authorities that have been involved in ensuring a safe and secure passage for the FPSO. And here, I must thank, in particular, the Nigerian Navy; the Nigerian Immigration Service; the Nigerian Customs Service and the Nigerian Maritime Administration and Safety Agency (NIMASA).

    “I must also express our sincere appreciation to the Management and staff of Samsung Heavy Industries (SHI) and LADOL. Ours is clearly a partnership that creates great results and we are very delighted with how far we have come on Egina. We look forward to a successful completion of the next chapter of the Egina story.

    “To our own staff working on the Egina Project, please accept the heartfelt appreciation of the Management on this milestone. We are in the final stretch of the project and we are counting on you to sustain the momentum and safely lead us to First Oil on schedule and on budget.

    ‘’Let me conclude by pointing out that our plan is to complete the topside installation works in six months and sail away to the Egina Field in July. And to make this phase of the project a success, I wish to appeal to all our partners to continue our legacy of achievements.”

    For the Managing Director, Nigerian Ports Authority (NPA), Ms Hadiza Bala Usman, it was the first time the NPA and the country would be handling vessel of such  size. “This is the first time the NPA and by extension, Nigeria, would be handling any vessel of this size, we therefore, congratulate Total, LADOL Free Trade Zone and Samsung Heavy Industry for the synergy from which this venture emerged.

    “We recognise that the magnitude of this project presented the NPA with the opportunity to, once again, showcase our unrelenting efforts at building capacity to meet the needs of customers across board. We are grateful for this unique partnership and look forward to more of such.

    “This project put a demand on the NPA to facilitate the berthing of the FPSO for the completion of its construction at Lagos Harbour. It also furthers the Federal Government’s local content policy with multiplier effects evident in employment opportunities, capacity building, technological transfer, cost saving, reduction in capital flight as well as the attraction of oil and gas hub to Nigeria for the sub-region.

    ‘’The FPSO project is an attestation to the constant infrastructural and operational preparedness of the NPA. At the NPA, we are conscious of the inherent opportunities that challenges present and successful berthing of this huge vessel testifies to our capacity to provide improved services to the oil and gas industry,” Usman said.

    The General Manager, Projects and Operations,  Nigerian Content Development and Monitoring Board, Paul Zuhumben, who represented the Executive Secretary of Board, Simbi Wabote, praised the efforts of Total and partners for the milestone achieved and assured of the Board’s support at all times. He, however, noted that Egina project created a lot of employment for Nigerians but the issue is where will all these people be engaged on completion of the project. The question called for an appeal to Total and other international oil companies to quicken the development of  their undeveloped assets to retain these people in employment.

    The Egina project has a total budget of $16 billion covering all activities of the project including the field development and the FPSO.  Six out of the 18 topside modules of the FPSO were fully fabricated in Nigeria and will be integrated on the FPSO at SHI-MCI yard, Ladol Free Zone Lagos, within the next six months. After the integration, the vessel will commence its final sail-away to the Egina field.

    The FPSO has a length of 330metres, width of 61 metres and depth of 33.5 metres with storage capacity of 2.3 million barrels and it is the deepest offshore project undertaken by Total Group.

    The buoy, manifold, pressure vessel, crane pedestal, flare tower, piles and risers, among others, were all done in Nigeria by different companies with a multi-disciplinary field operations team of about 280 persons offshore and onshore. Over 15 local companies won one contract or the other resulting in 24 million man-hours job in Nigeria, 560,000 man-hours of human capacity development, fabrication 60,000 tons of equipment and training of 250 Nigerians in-country and abroad.

    The field will increase Nigeria’s oil output by 10 per cent at first oil.

  • Cashew body demands more EPZs to boost food production

    The  National Cashew Association of Nigeria(NCAN) National Publicity Secretary, Mr. Sotonye Anga, has canvassed  increased spread of Export Processing Zones to replicate the impacts the initiative has had in states they have been situated.

    According to him, the EPZs have attracted so much in collective capital investments as tax holidays to make it more attractive to investors seeking to carry out high capital ventures.

    He explained that EPZ model was the softest landing for those coming to invest in the country because most of the processes are arranged and many other incentives exists.

    He encouraged creation of a favourable policy environment for innovation and enabling conditions for agric entrepreneurship, and a focus on building infrastructure, including roads, and electricity.

    He explained that a blend of efforts are needed to produce tangible economic result, including modern infrastructure development, seamless access to energy, market access for food products and increased foreign direct investment can play a catalytic role in fostering industrialisation.

    According to him, EPZs will help in creating demand for farmers produce, better remuneration, increasing level of processing and value addition, reducing wastage and creating opportunities and benefitting many farmers and youths.

    He stressed the need   for the development of an integrated logistics sector, adding that high logistics cost reduces the competitiveness of Nigerian goods, both in the domestic as well as the export market.

    According to him, the development of logistics would give a boost to both the domestic and the external demand, thereby encouraging manufacturing and job creation. This will, in turn, be instrumental in improving the country’s gross domestic product (GDP), he added.

     

  • Fertiliser import boosts food production

    The increase in fertiliser importation between January and early this month led to a boost in local rice production, The Nation has learnt.

    The Federal Government was said to have imported one million tons of fertiliser (about 20 million 50 kilogramme (kg) bags of fertiliser) through the Lagos and Tincan Island ports between January and the first week of this month.

    Findings showed that both ports took delivery of 254,157 metric tons of the product valued at N27.95billion from eight vessels.

    Some farmers said the fertiliser imported from Morocco and Europe was sold to them at N5, 500 per bag.

    The last batch of 157, 000 tons scheduled for the last three months arrived the country and was cleared, while the last vessel, V. Sanderling berthed at ENL Terminal few days ago with 43, 180 tons.

    Since the beginning of the year, the country was said to have received at least 957,000 metric tons of the product from ENL Consortium Terminal at the Lagos Port and JosepDam Terminal in Tincan Island Port.

    The fertiliser was ferried to the seaports by Orient Tiger laden with 19, 892 tons; SFL Humber, 37,800 tons; Nord Mumba, 3,570 tons; Desert Calm, 46,200 tons; Team Tango, 13, 199 tons; Silver Lake, 25, 000tons; Skala Wolid,  31,246 tons;  Atlantic Tramp, 36,250 tons and Ionian Eagle, 41,000 tons.

    Also, between last May and June, some 343,657 metric tons of Muriate of Potash (MOP) arrived Lagos and Tincan Island ports, while 359,006 tons of Nitrogen Phosphorous and Potassium (NPK) were imported into the country between July and November.

    Last year, the Federal Government signed a Memorandum of Understanding (MoU) with Morocco to import NPK and some companies in Europe MOP.

    Following the agreement, the government promised that one million tons of NPK and MOP fertiliser would be exported in five batches of 200,000 metric tons before the end of the year as part of efforts to find solution to food shortage and to further reduce the price of food in the country.

    In the MoU, government explained that it would control 40 per cent shares, while IML Limited, a consortium of private local investors, would hold the remaining 60 per cent equity stake.

    Following the massive importation of the products, the Minister of Budget and National Planning, Senator Udoma Udo Udoma, said recently that the Federal Government would further reduce the price of fertiliser to cut down the price of locally produced rice.

  • Ogun launches Mitros Rice to boost food production

    Ogun launches Mitros Rice to boost food production

    The Ogun State government yesterday launched its brand of Ofada rice, which is produced, processed and bagged in the state.

    Governor Ibikunle Amosun said the 50 kilogramme (kg) of the rice would be sold to the public at N11,500.

    The state’s rice farm is located at the rice-friendly Egua land in Yewa South Local Government Area while the processing and packaging facilities are sited in Asero, Abeokuta, the state capital.

    Also, Central Bank Governor Godwin Emefiele, Kebbi State Governor Abubakar Bagudu, Ogun State Deputy Governor Yetunde Onanuga, Amosun’s wife, Olufunso, traditional rulers and top government officials witnessed the launch of the rice, christened Mitros Rice.

    Amosun said the rice production would boost food supply, reduce dependence on imported brands while the mill would create jobs for farmers.

    The governor said rice farmers in Ogun State would no longer need to search for milling facilities, adding that they would benefit from high-quality processing at the mills.

    He regretted that one of the biggest tragedies of the nation is its dependence on imported foodstuff to feed the population, despite the abundant arable land and labour force in the country.

    According to him, this has exerted pressure on foreign reserves and the value of the naira with attendant outsourcing of agricultural work to foreign lands.

    Amosun said: “For us in Ogun State, we cannot afford to sit back and watch our people suffer unnecessarily due to food insecurity. The availability of food is synonymous with the survival of the society as a whole.

    “Our past efforts at tackling poverty in all ramifications will amount to nothing if concerted efforts are not taken to ensure food security to people at all income levels. This is why today is a significant day, not just for Ogun State but for Nigeria as well.

    “The Mitros Rice Mill, the first of its kind in Ogun State, will create jobs for our farmers. From now on, they will no longer need to travel far and wide in search of milling facilities.

    “With this mill, they will not only benefit from high-quality processing of their output, but they will also enjoy guaranteed off-take.

    “This not just about the inauguration of a new processing factory – and all its benefits: processing capacity, direct and indirect jobs, economic growth, and so on – it is also about the unveiling of a new narrative for Ofada rice.

    “The new and improved Ofada rice, which this mill will produce, will not only feed our people but we are confident that it will generate foreign exchange for us as a nation.

    “Indeed, today’s inauguration of our own home-grown rice specie, Mitros Rice in Ogun State, could not have come at a more auspicious time.

    “For one, we are talking about ensuring food sufficiency and diversification of the economy from its overdependence on crude oil earnings.”

    Also, Emefiele hailed the state government for the rice production initiative.

    Emefiele said the apex bank was ready to give credit facility to farmers at five per cent interest rate as part of Federal Government’s strategies to increase food production and ensure self-sustainability across the land.

    The CBN chief noted that when farmers were assisted with credit facilities at one digit interest rate, Nigeria would be able provide food for the people, create jobs for the youths, conserve foreign exchange and grow the economy.

    He said: “A country that does not take agriculture seriously is naturally an unserious country. I am happy today that under the leadership of President Muhammadu Buhari, we are taking agriculture very seriously. That is the reason we at the CBN have made it a responsibility to say we would continue to support any effort and anybody in an attempt to grow our agricultural sector.

    “In doing this, we provide food for our people; in doing this, we provide jobs for our people; and in doing this, we grow our economy. For me, this goes a long way to conserve our foreign exchange.

    “We would no longer be spending foreign exchange to import agricultural produce. We would eat what we produce; we would produce what we eat. Now, having supported so far what I call primary agriculture, the farmers would see to it that we grow rice and cassava. We do some of those primary agricultural practices.

    “The next stage: we would begin to consider how we process the food, how we harvest the rice, how we mill the rice.

  • Kachikwu: Nigeria can maximise OPEC’s exemption with low production cost

    Kachikwu: Nigeria can maximise OPEC’s exemption with low production cost

    Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has said Nigeria can make the most of her exemption from oil production cap agreed by member countries of the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC countries, by working hard to reduce the cost of producing a barrel of oil from her fields.

    At the OPEC-member countries’ 173rd meeting in Vienna, and the third meeting of the OPEC and  non-OPEC allies where a decision was made to extend the oil production cut, Kachikwu explained that Nigeria was losing its competitiveness among other oil producers with its high production cost.

    According to him, the country produced oil at between $23 and $24 per barrel, and that it was not competitive compared to other producers, such as Saudi Arabia and Iran. He noted that this would have to come down for her to maximise the output exemption.

    “The next battle for me is cost, because at the end of all these, it doesn’t matter what the volumes are if we do not get our cost to a point that is reasonable and comparative to the high performing OPEC members – Saudi Arabia, and Iran, it doesn’t matter what numbers anybody gives us, we are blowing it, and that is why you see me shouting all the time about cost,” Kachikwu said.

    He further said: “I will have to work with the NNPC, all the parastatals and oil companies to keep driving those numbers down because quite frankly, even if I have a million barrels and I am producing at $15 a barrel, if you do a simple calculation, you will find out that your returns are about as good as you doing two million barrels and producing at $30 a barrel.

    “So, cost is key for us to enjoy the benefits of the exemptions that we have. We have come down from an all-time of $28-29, and now about $23-24, but that is nowhere near where we should be. We need to be edging towards $18-15, and that is going to be the big work for next year.”

    The minister also talked about the government’s plans for the sector in 2018, indicating that other than driving down production costs, development of gas would take a priority position in its itinerary for the industry.’’

    He explained: “We have our eyes on gas, and have passed the gas policy at the FEC. We just passed the gas commercialisation programme, we are focused very heavily on gas.’’

  • NNPC, Chevron seal $1.7b deal to raise oil, gas production

    NNPC, Chevron seal $1.7b deal to raise oil, gas production

    Nigerian National Petroleum Corporation (NNPC) and Chevron Nigeria Limited (CNL) have signed the second and final phase of an Alternative Financing Agreement that will increase crude oil production by about 39,000 barrels per day.

    The agreement, which was signed in London at the weekend, is also expected to achieve an incremental peak production of about 283 million standard cubic feet per day (MMSCFD) of gas.

    NNPC Group Managing Director Dr. Maikanti Baru, who signed on behalf of his corporation, said the increment to be achieved by the agreement would spread “over the remaining life of the asset (until 2045)”.

    The corporation’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, in a statement yesterday, said the project, which is about 92 per cent completed, will cost about $1.7 billion, with $780 million expected to be funded by a third-party.

    The project will produce natural gas liquids and condensate extracted from the Sonam and Okan fields located in OML 90 and 91 in the Niger Delta.

    Baru described the deal as a step in the right direction, which would grow the nation’s daily production and support the Federal Government’s strategic domestic gas-to-power aspirations, while aligning with NNPC’s 12 Business Focus Areas (BUFAs).

    He said the project would also include the completion of the Sonam non-associated gas (“NAG”) well platform and Sonam living quarters platform; drilling of seven wells in the Sonam field and the Okan 30E NAG well; as well as the completion of the 20″ x 32Km Sonam pipeline and Okan pig receiver platform and development of the associated facilities.

    “As we speak now, the facilities are 100 per cent completed while wells are 40 per cent executed,” Baru stated.

    “In carrying out the project, the NNPC/CNL JV adopted a two-staged financing approach. Stage 1 which provided $400 million sourced from Nigerian commercial banks (NCBs) achieved financial close on 1st August 2017, Stage 2, (signed today), is set to provide $380mn from international commercial banks (ICBs).

    “Out of the US$780mn total financing for both stages, Chevron’s co-lending totals US$312mn while NNPC’s portion of the total facility stands at US$468mn,” the statement said.

    Baru explained that it was aimed at plugging NNPC’s shortfall in funding JV cash call obligations, including settlement of pre-2016 cash call arrears.

    “It will also enable full funding of NNPC’s JV obligations to restore investors’ confidence and stimulate further Foreign Direct Investments (FDIs) as we are beginning to witness,” he noted.

  • Becoming a production nation

    Nigeria has descended into a nation that imports the most basic of agricultural and manufactured goods and services. This nation that imports goods that is within its ability to produce I am hereby describing as a consumption country. This is a country with a large population of poor people that has taken an affectation to luxury manufactured goods for which it has neither the financial capacity to pay for, nor the industrial capability to produce. Prior to 1986, Nigeria earned more than half of its revenue from agricultural commodity exports – mainly cocoa, groundnuts, palm oil, and palm kernels. In 1955, 98 percent of Nigerian exports were primary commodities, 92 percent in 1975, and 98 percent in 1985. During that period Nigeria imported secondary products such as chemicals, machinery, and transportation equipment to facilitate the production of the export commodities. However, since 1986, at the introduction and failure of Structural Adjustment Programme, Nigeria transformed to a consumption nation. Today, Nigeria imports virtually all goods under the earth including agricultural products, plant and machineries, clothing, fertilizer, aluminium, automobiles, pharmaceutical products, sanitary products, building and construction materials, iron and steel. By 2009, the country spent $42.1billion on the importation of machinery, heavy equipment, consumer goods and food products from UK, France, Germany, China, USA, and South Korea. These countries from which we import I describe as production nations.

    How did these countries become producers and Nigeria a consumer? The production country empowers a company to invest say X000 dollars to establish a factory to manufacture a certain product (say steel) within its own national borders. To make one ton of steel, the company needs iron ore, limestone, coal and a few other minerals mixed together at very high temperature similar to making a good soup whereby you need pepper, onions, tomato, salt and so on. The difference here is that the latter is “cooked” at a much lower temperature compared with the steel “cooking pot” which we call a blast furnace. This furnace works at about 1000 degrees centigrade. This factory therefore needs electricity constantly. To bring all these raw materials together for processing, several companies employing hundreds of workers are required to be in place mostly within the country. Each will invest its money to mine these materials from the ground, pay for labour (thereby create more employment and feed families). These companies require a network of transportation (road, railways and waterways) to move all these goods additionally employing more people prospering more families. On and on it goes. This X1000 dollars suddenly triggers thousands and millions of dollars in investment, create several jobs, and get more skills trained.

    Downstream, these employees must eat, live in a house, and wear clothes; so companies and farms to provide these goods and services are established. For example farms release cassava which is converted not just to garri but industrial starch. Palm oil refined, cocoa to chocolate, shea butter to beauty products and so on. That steel plant, a foundry, machine tools or Aluminium plant, all form the basis to build the machines to carry out these other activities. By now this X000 dollars has now triggered a huge multiplier effect and suddenly hundreds of millions of dollars’ worth of primary production are added to the Gross National Product (GNP) of our country. Imagine this activity recreating itself in thousands of locations on different scales and sizes within the national borders of Nigeria. This is how production nations get rich.

    However, when a consumption country like Nigeria decides to its spend its meagre oil money in another country, the activities we just described and the flow of money as well as the employment created all go to the country from where we are importing designer clothes, private jets, cars, toothpick, fish, jam, starch and so on. That country gets rich and Nigeria becomes poor. When oil prices fall as happened recently, our shame was multiplied. People lose jobs and families cannot feed. This is why we call production nations advanced and rich; and why consumption countries like Nigeria, despite oil remains poor and backward.

    The industrialized nations export what they manufacture after buying commodity like the iron ore above from Nigeria, Liberia or Angola for example. No matter how much crude petroleum oil, bauxite (for making aluminium) or iron ore a country exports to the production country, the latter will gradually become wealthy and the commodity-exporter will forever be underdeveloped and manufacture product-importing. Commodities and minerals have a lifespan; they get exhausted!! The reason a producer multiplies wealth is as follows: one ton of bauxite is about US$50-60. When converted to aluminium, this product sells for US$138,000 (1 Kilogram is $138)!!! One ton of iron ore is about $50-65 but once converted to steel, a ton of wire steel is US$790.

    Production nations have become very rich by selling manufactured goods like cars, steel, computers, and smart phones to ignorant but boastful people like us, Nigerians. Nigerians know (I think some folks memorize these names) the latest brand of cars, watches, phones but we have no clue how these are made and the implication of our profligacy is that the army of poor people among us swells by the day. This is why we are at the mercy of oil price volatility. This is why imbalance in trade expands the inequality gap between these rich countries and our poor country. These wealthy countries understand the secrets of wealth creation; they sell us products to be consumed, because we do not care for tools to produce them by ourselves.

    This is why we destroyed Ajaokuta Steel, Delta Steel, Aluminium Company of Nigeria without as much as a thought. I recall as a young engineer when our board members visit for “board meeting” in Ajaokuta in the 1980s, once they leave, they take away the vehicles made available for their temporary stay never to be returned, the company was always broke each time they visited!!! In our ignorance we have helped perpetuate the monopolization of the tools of production in other countries while our appetite for consumption got out of control. We are reaping the whirlwind of corruption sowed decades back. Our children will reap the evil wind of the current mindless consumption economy unless we change course now.

    Today the countries with which we started the race for development have left us far behind; by my estimate we are now 30-40 years behind South Korea and China and falling behind the recently war-torn countries of Asia like Vietnam. Today some companies started about the same time as ASC like POSCO of South Korea produces over 35 million tons of steel per year; Tata of India, 23 million tons, ArcelorMittal SA has become the largest producing over 98 million tons per year. Nigeria produces ZERO because we have no primary steel producer. China is now second to the USA in global wealth (GDP) because it turned itself into the “factory of world”; China produces 50% of global steel.

    Myriad sectors in Nigeria have gone into decline due to company re-location to other countries like Ghana. Cases of industrial closures have become common in Nigeria; according to MAN, over 800 manufacturing companies shut down their operations in Nigeria between 2000 and 2008. Most of the firms relocated to Ghana largely because of constant power outages and excessive taxation. The likes of Cadbury, Unilever, Dunlop, Michelin, Booth Pharmaceuticals and many other pharmaceutical companies left the country over the last decade. The abnormal becomes normal and we just shrug.

    The history of our missed opportunities reads like a horror story and is depressingly sad. The investments that collapsed (steel, aluminium, paper plants, and so on) were of strategic importance to the Nigerian economy and were expected to provide the foundation of several spin-off enterprises providing widespread employment. The fertilizer companies were expected to contribute to increased agricultural productivity and supply of food. The machine tools company was expected to service the informal sector as well as the large and small-scale industries whose contributions to the economy were enormous while the paper mill was expected to facilitate literacy in the country. There are many more examples of large technological projects that failed in Nigeria. Clearly, the failure of these strategic projects contributed significantly to the poor state of the Nigeria’s jobless growth today.

    But we can make the choice to change our ways. I believe in the Nigerian spirit. Can we give ourselves just 10 years of redemption season, and total dedication to excellence in order to rebuild our ruined industrial landscape?

     

    • Professor Oyelaran-Oyeyinka is professorial fellow, United Nations University, and former Director, Regional Officer for Africa, UN-HABITAT.

  • Transforming food production through technology

    Technology is making farming exciting. It is addressing many challenges of would-be farmers, DANIEL ESSIET reports.

    Technology is opening vast untapped potential for farmers, investors, and entrepreneurs to improve the efficiency of food production and consumption. From farming to promoting efficient food supply chain, technology is bringing major benefits to the sector.

    One organisation bringing change to agriculture is Growsel. This is because it offers opportunity to those looking to get involved in agriculture, an opportunity to invest in food production either as farmers or investors.

    Founded by digital entreprenuer, Mr. Jerry Oche, Growsel provides an online meeting point for investors and farmers to work towards a fruitful harvest, where the investor can get from between 15 and 30 per cent of his investment as profit. The farmers, on the other hand, can now have quick access to funds for their farming projects and get exposed to best global agricultural practices, as the company does not seem to be taking chances with quality and the implementation of standard farming practices.

    According to the company, prospective farmers, who registered at the platform, are  screened to ensure that they meet up with the basic accreditation standards stipulated for every local farmer. Some of these include being a member of their local associations and getting a recommendation from other farmers, as well as the local ruler or chief. After a farmer has been approved and registered on the Growsel platform, insurance professionals from partner insurance companies will assess the farm and the appropriate insurance cover that would cover the risk exposure of the farm, and subsequently issues the farmer a policy. Growsel ensures that best practices are complied with by providing the farmers with improved seeds and seedlings, fertilisers, tractors and other farm inputs that would be needed to make the most of each farm project within a given farming season.

    Also, seeds are sourced from experts at the International Institute of Tropical Agriculture (IITA) and are estimated to produce a certain amount of yield, which should guarantee increased returns for farmers and the investors’ profit. In addition, measures have been put in place to ensure that the investor gets the agreed profit, boasted that the seeds used for cultivation are of an enhanced variety.

    With over 150 farmers currently on the platform, and a pull of investors, Growsel is revolutionising agric business in Nigeria, and is still calling on more investors and farmers to join the process.

    When a farmer requests for funding once his registration is complete, the Growsel’s farm location managers moves out to carry out a proper verification of the farm and the farmer, during which an endorsement of the farmer by other farmers and local chiefs or leaders in the community where the particular farm is located, would be required.

    On the other hand, an intending investor would need to sign up on the platform, after which a welcome email would be sent to him or her. Once signed up, an investor can browse through the site to see which farm projects he/she would be interested in. A certificate, showing ownership of a particular farm project, will be issued to the investor once he/she selects a particular farm project to invest in. Afterwards, investors can monitor activities on their farm projects via their dashboards.

    The most interesting thing about all this is that with as low as 50,000 naira, anyone can be an investor on Growsel, with a guaranteed return on the investment at end of the crop cycle.

    FarmCrowdy is an agric-tech platform, which creates middle class Nigerians with small scale farms in order to boost food production.

    On how it works, partners on the platform can sponsor any farm of their choice including maize, poultry (broiler), cassava and tomato farms. The partners then get bi-weekly updates about their farm progress, including pictures and videos from the farmers. Also, Farm Partners can visit their farms if they wish to at any point in time to learn about the farmer they’ve partnered and the farm products they are working on. The organisation has a website that people can visit to buy off maize, rice, cassava, poultry farms. Investors can sponsor  a farmer  and up take the produce at the end of harvest.

    Chief Executive Officer, FarmCrowdy, Onyeka Akumah, explained that unlike the out grower model that gives input and allows farmers to just go and do all the work, what they  do with the input is that the farmer gets money coming from the sponsors, so the sponsor holds them accountable to make sure that the farmer does the work. On their part, the organisation holds the farmers accountable to make sure they deliver what the off-taker wants, so that they can get harvest at the end of the day that the off-taker will buy, and then they will sell and pay the sponsors back in return for their money.

    According to him, his organisation is partnering International Institute of Tropical Agriculture (IITA) and others to train farmers to farm while and improve yields.

    Right now, the organisation is handing sponsorship, which is the investment that goes into the farm and the production. The other area they are getting involved in is the logistics of moving the produce to the off-takers and the marketing of the value chain to off-takers.  FarmCrowdy was launched in September last year. The company has attracted over 1000 farmers already.

    Akumah said the organisation has acquired   500 hectares of maize farm in Jos, 280 hectares of rice farms in Edo State, Saboginda-Ora, among other investments.

    Another technology is Cellulant  that worked with the Federal Government to launch an e-wallet programme to aid  farmers directly redeem government subsidised seed and fertiliser vouchers from retail shops and in effect double their income.

    While Cellulant is “transforming” itself to a mobile payment company, Agrikore its agric-focused arm, monitors the implementation of agricultural schemes where every farmer can access financial services, productivity enhancing technologies & best practices, access to markets for inputs and access to output markets, all enabled via the mobile phone.

    Co-Founder of Cellulant Corporation, Mr. Bolaji Akinboro, said the technology, which originated from  Nigeria, is the gift of Cellulant to humanity. According to him, the  technology gives small holder farmers access to agricultural inputs of improved varieties/breeds, fertiliser, and agro-chemicals, making it the backbone of increased productivity and profitability of value-added chains.

    After the success they  recorded in Nigeria, Akinboro  said the Afghanistan government gave Cellulant  to introduce the e-wallet system to  its small holder farmers.

    According to him, the  e-wallet system provides a holistic system to link the farmers to agricultural inputs supply chain, finance and markets through integration with mobile network operators, input markets, extensions services, financial service providers, commodity market, and insurance service providers.”

    Since its launch in 2011, Cellulant’s E-wallet has facilitated the distribution of over $1 billion in fertiliser subsidies to farmers under the Growth Enhancement and Support (GES) programme, a component of the Agricultural Transformation Agenda (ATA) of the Federal Government of Nigeria.

    “Over and over again we have seen Africans, through various innovations, prove that the impossible is made possible when the needs of the consumers are at the centre of the solutions provided. GES is certainly a testimony to this. Delivery of a programme of this scale and at this speed is a first for Nigeria considering that the entire agro-dealer network had to be rebuilt from the scratch,”said Akinboro.