The Nation Newspaper

Tag: sector

  • USAID moves to strengthen agric sector

    USAID moves to strengthen agric sector

    The United States (U.S) Agency for International Development (USAID) has launched two new partnerships with Babban Gona and Hello Tractor, highlighting the U.S. government’s agricultural and private sector strategy and promoting the development of agriculture.

    Under this $2 million two-year partnership, it is anticipated that access to smart tractors will increase. There will also be improved seeds and and profitable markets for over 45,000 smallholder farmers across seven states and the Federal Capital Territory (FCT).

    During a ceremony at the U.S. Embassy, Deputy Chief of Mission Maria E. Brewer described the partnership as a co-investment in public goods.  “Innovation and entrepreneurship hold the key to unlocking Nigeria’s agriculture potential, and the U.S. government will continue to provide support in this direction,” said Mrs. Brewer.

    Under the Feed the Future initiative, USAID partners with the private sector to support smallholder farmers in Nigeria. Through these partnerships, USAID addresses development and business challenges by increasing access to improved agricultural inputs and mechanisation, better quality technical advisory services, and expanding market opportunities for smallholder farmers.

    These partnerships capitalise on the untapped potential of youth in agriculture and help build the capacity of young entrepreneurs to help grow their businesses, create secure jobs, and boost economic growth in Nigeria.

    Babban Gona is a company that addresses the challenge of smallholder farmers by forming strong cooperatives called Trust Groups, which enable maize, rice, and soybean farmers to gain access to new markets and sell at premium prices.

    The company provides member-farmers with services designed to optimise crop yields, production costs, and prices of agricultural outputs.

    This business model helps to increase profitability of smallholder farmers and contributes to household food security and improved livelihoods.

    Through the deal with USAID, Babban Gona will create positive impact for 20,000 smallholder farmers. On the other hand, Hello Tractor, which recognises the need among smallholder farmers for consistent and sustainable mechanisation services, designed a versatile Smart Tractor with eight attachments to serve their needs throughout the farm production cycle.

    Each tractor is fitted with technologies, which enable Hello Tractor to pair farmers in need of services with a Smart Tractor owner nearby via text messaging. The technology allows small landowners access to affordable tractor services to increase their productivity, while Smart Tractor owners are given the opportunity to earn additional income with their machine.

    Through the partnership with USAID, 24,500 smallholder farmers will gain access to tractor services. The partnership expects to train 100 youth entrepreneurs on the business of owning and maintaining a fleet of Smart Tractors.  In addition, some 15 young technicians will benefit from trade skills to repair Smart Tractors.

  • Forex policy ‘ll save real sector, says MAN

    Forex policy ‘ll save real sector, says MAN

    Manufacturers Association of Nigeria (MAN) Vice President Alhaji Ali Madugu has hailed the new foreign exchange (forex) policy, describing it as the “much needed intervention” to save the manufacturing sector.

    Madugu, in a telephone chat with The Nation from Saudi Arabia, he said the new forex policy is the only way manufacturers can access forex for their raw materials, spare parts and machines.

    Although he agreed that the policy translates to an indirect devaluation of the naira, he argued that the initiative will make the real sector to survive even with a very poor margin.

    According to the MAN chief, the policy presents an opportunity for every sector of the economy to redefine itself, even as he maintained that the policy presents an avenue for the country to find her way out of the economic crunch.

    He, however, cautioned that unless Nigerians are able to substitute their dependence on imports, develop local raw materials and patronise locally made products, the naira will continue to lose its value.

    He said the desired impact of the policy on the economy could only be felt if it is made sustainable. This, he explained, would mean that government should ensure that the dollar influx into the country can be improved on and maintained.

    Similarly, a former Vice president, African Development Bank (AfDB), Chief Bisi Ogunjobi, agreed with Madugu’s submission. According to him, the sustainability of the forex regime will depend on the initial inflow of forex into the market- as this will to a large extent determine its success or otherwise. This, he added, will also be dependent on the availability of the dollar in the market.

    “I am convinced that in the next few weeks, the positive impact of the budget will set in and will further help the forex regime to attain stability and probably shore up the strength of the local currency sooner that we think,” Ogunjobi said.

  • ‘Lagos hospitality sector can generate $3b yearly’

    The hospitality industry in Lagos State can generate over $3 billion yearly if the government addresses the security and infrastructure challenges facing the sector, the Managing Director/Chief Executive Officer, International Maximum Resources & Chemical Industries Limited, Prince Madugba Raphael, has said.

    He said a feasibility study by a firm commissioned by his company showed that tourism/hospitality business in Nigeria, especially in Lagos, is very lucrative, adding that Lagos alone is capable of earning over $3 billion yearly, if the government can fix the energy sector.

    Madugba said unlike other sectors, the hospitality industry is the most adversely affected by the crisis in the energy sector. “It (energy crisis) affects us more than any other sector. In the banking sector, their generators will be on from probably 7 o’clock till 10 o’clock and they power down.

    “The ATMs (automated teller machines) operate with solar. But the hospitality business is 24/7 run on electricity. You don’t power down. Even if it is one guest you have, he expects you to put on the generator for him and he is right, because you have already told him that you have 24-hour electricity supply. So, it’s affecting the industry in every area; it affects profit margin because of the cost implication,” he said.

    He said because of the crippling effects of high cost of operations due to lack of electricity, hotel owners have been forced to adjust. “Sooner or later most of us, who claim that we will give you light 24/7, will have to adjust because it’s difficult to survive in a situation where you buy diesel at N180 per litre,” he said, noting that 50 litres, which probably cost N6, 000 before now go for as high as N9, 000.

    “It’s difficult to do business in Nigeria. The environment is not friendly. If you want to begin any business, you must have nine lives to survive; it all depends on your determination, the zeal and energy you put into it.  In the course of that you will lose money, because there are a lot of people that will come to extort you. But if you don’t give up you will get to the Promised Land,” Madugba said.

  • Power sector lies

    In the past few months, the electricity distribution companies (DisCos) have been all over the place, trying to justify why they cannot discharge their obligations to customers. It is heartrending that instead of effective service what we are getting from the DisCos are excuses on why they cannot ensure uninterrupted power supply. The coming of the DisCos, we had thought, would end the power crisis, but unfortunately, Nigerians are today cursing the day the sector was privatised.

    The sector was privatised because the public utility running it was inefficient and ineffective. The Power Holding Company of Nigeria (PHCN) like the National Electric Power Authority (NEPA) and Electricity Corporation of Nigeria (ECN) before it was like any other government agency, which was managed to fail. Though set up with tax payers fund, it was not run to make profit but to service the needs of those in power.

    The affluent and the influential were also favoured. All they needed to do when they had no light was to call the power  minister or the PHCN chief executive and pronto their supply will be restored whether or not they are owing. Then, some institutions, corporate bodies and individuals used light without remembering to pay their bills. It was convenient for them not to pay because there was no mechanism to check them. The problem with our power sector was self inflicted. We preferred to run the sector on the basis of man know man and ended up destroying it.

    Power is life; it is the engine of economic development. Without regular power supply, a nation cannot but be at the bottom of the development index. This is why I am pained by the excuses the DisCos are giving for their inability to meet the people’s needs. The promoters of these DisCos are not from the moon; they have been in this country ever since the days of ECN, NEPA and PHCN. They know what we went through in the hands of these public utilities. It is not an experience worth recalling here.

    The DisCos are supposed to wipe away our tears by ensuring regular power supply, but they are compounding our problem. What we are getting from them are cock and bull stories about why they cannot do their jobs. The stories they are telling us are not new. They are the same old stories that we are aware of and which they too must have heard about before investing in the sector. Their investment was a matter of choice. They could have decided not to put their money into the business because of its many challenges. But having decided to invest in it they have no choice than to deliver because we are paying for their services. They are not supplying us light for free. They know what to do to those using light without paying.

    But in punishing those people they should sift the wheat from the chaff. What is the point in disconnecting those not owing along with the debtors? That is the height of injustice and there is nowhere in the world that such a thing will happen, except in our country. Elsewhere, creditor-customers would have sued the DisCos for breach of contract. Why should we not enjoy the service that we are paying for just because some people are owing? The people are tired of hearing them blame  gas pipelines’ vandals for their inadequacies. An advertorial by the Association of Nigerian Electricity Distributors (ANED) says the DisCos should not be blamed for what it calls ‘’lack of electricity’’.

    Reason : vandalism of gas pipelines, according to the ANED, is equal to shortage of gas. Shortage of gas= low generation of electricity. Low generation of electricity= low distribution. ‘’We’’, it concluded, ‘’cannot give what we don’t have’’. Vandalism of pipelines did not start today; it predates the coming of the DisCos on November 1, 2013. So, it is something they knew about before buying into the power sector. Why did they take the risk when they knew that it is an endangered sector? Why did they invest in the business when they knew that vandals and militants can blow up the pipelines at any time under one guise or the other? How did they plan to handle this huge problem before investing in the sector? Or didn’t they consider such a scenario before their huge investment? If they didn’t that says a lot about them as businessmen.  Again, they should stop complaining about being owed. This too did not start today. It started long ago and they must have been aware of it before they acquired PHCN.

    The DisCos are the architects
    of their troubles. They knew
    of the sector’s enormous problems before buying into it with their eyes wide open, but they were more interested on the return on investment (ROI), which they have calculated in their minds’ eye will be in billionfold of whatever they spend. This calculation seems to have backfired and they are taking it out on customers through tariff hike and crazy bills. Many customers are not complaining about the tariff hike, what irks them is that they are not getting value for their money. The people are sick and tired with the way they are being treated by these DisCos. Will the government call them to order before things get out of hand?

     

    Ali: Forever The Greatest

    When the kid from Louisville, Kentucky in the United States (US), hit the world boxing stage in the sixties with his razor sharp tongue, many would have thought that he would soon burn himself out and become history. But he went on to dominate the game for almost 30 years, clinching the world boxing heavyweight title three times. Muhammad Ali captured the world’s imagination like no other boxer in history. He was as fast on his feet as he was with his mouth. It was a delight to watch Ali fight. He fought with his fists and mouth. As he pounded his opponent with his fists, he followed up by taunting him. Many times, he ran into trouble because of his costly remarks, but there was no stopping Ali. ‘’The man who will beat me has not been born’’, he once said. “I am The Greatest”, he also boasted and the world accepted him as such. Ali was master of his trade. His passage last Friday after a 32-year battle with the Parkinson’s disease showed that he was a fighter to the end. The world mourns as the Champ’s funeral rites hold today and tomorrow in Louisville. Adieu, The Greatest.

  • Low investor confidence worries private sector

    The confidence level of investors and private sector operators  in the economy is waning, the Director-General of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, has said.

    Speaking with The Nation, he said except urgent and decisive action was taken, with direction given to the economy, investors will shy away from the economy and this will spell doom for the nation.

    While commending the purported truce between the executive and legislature on the budget, Yusuf said it is coming almost late, with the better part of the year gone.

    While commending the Town Hall Meetings by the government, Yusuf regretted that it was not inclusive.

    “We learnt traditional rulers, youths and market women were present, but we wondered how they missed out on the Central Bank of Nigeria whose Foreign Exchange (forex) policy is crippling the Organised Private Sector (OPS) and manufacturers,” he said.

    The LCCI helmsman said, for instance, that some manufacturers are currently having issues of credibility and integrity with their suppliers abroad because of challenges of remittances as a result of CBN’s policy.

    He despite this, government organised a Town hall meeting without inviting CBN. “We expected an all-inclusive participation with entrepreneurs, investors, Nigerian National Petroleum Corporation (NNPC) and members of the private sector to make it more robust,” Yusuf pointed out.

     

  • Expert seeks bank for power sector

    The Group Managing Director of CFL Group of Companies, Mr. Lai Omotola, has canvassed the establishment of a finance development bank for the power sector to address the frequent changes in electricity tariff.

    He said the recently approved 45 percent increase in tariff by the Federal Government was not the answer to the crisis in the power sector.

    Omotola attributed the increase to the failure of indigenous companies that bought the nation’s power assets to source for the technical partners that could bring in some equities.

    During an interaction with reporters in Lagos, he said Nigerian banks provided over 80 per cent of the $2.6 billion that was used to purchase the power assets in 2013 on short tenor loans.

    He said: “It would have been the other way round and the sector would have been virile, had the investors been mandated to bring in foreign investors who would bring in their equities in terms of the capital mix, about 60 percent equity.”

    He explained that most of the funds were sourced from the banks. It is debt, which is now creating a little bit of pressure on our financial system.We find a situation whereby the Nigerian banks are the major, if not the sole financiers of the acquisition of the power assets.

    “There are two factors with the Nigerian banks. One is high interest rate. Two is the tenure of their funds. These factors mean that commercial banks by their very nature cannot finance the electricity industry. They can only serve to raise working capital incentive. What we find is that the Nigerian banks are financed in dollar-dominated terms.

    “Already, the interest rate has gone on the high side. Even, the value of dollar to naira had doubled over the space of two years. The resultant effect is that the accounts of our indigenous companies are not doing well with our banks.

    “If their accounts are not doing well with the banks, the ability of the companies will be stalled. Also, the ability of the indigenous companies to pay loans will be stalled. Finally, the ability of the indigenous companies to generate additional funding will be stalled,” Omotola said.

    He said the Nigerian banks could only finance projects for about two or three years after which the banks would want to see their funds coming back, so our banks are not suited to fund the power sector. He faulted a statement credited to the Minister of Power, Works and Housing, Mr. Babatunde Fashola that no bank would want to fund the power industry because of the low tariff, which makes it not bankable before the current controversial increase.

    Omotola challenged Fashola to name the bank he was referring to, noting that if Fashola was referring “to Nigerian banks, the business model of the indigenous companies will not work. The interest rate and fund tenure will not make it work.”

    He urged the Federal Government to set up a finance development bank that is strictly meant for development projects such as power projects. If our indigenous banks will play any role, it will be in the area of providing working capital. For these indigenous companies in power sector to survive, they need very low interest rate with very long-term loan, he said.

  • How to solve oil sector crisis, by workers

    How to solve oil sector crisis, by workers

    How can the oil industry’s problems be solved? It is by the collective efforts of its stakeholders, say oil workers.

    According to the workers, under the aegis of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), the sector’s problems too many for an individual, group or government to solve.

    Its President,  Mr. Francis Johnson, told The Nation: “What we (oil workers) want is an all-inclusive stakeholders’ meeting so that Nigerians will hear the position of the Nigeria Labour Congress (NLC); PENGASSAN; National Union of Petroleum and Natural Gas Workers (NUPENG); civil society; government and all other interest groups.”

    According to Johnson, no responsible union enjoys protests as they are the last resort where dialogue fails.

    “All what we want is for everyone to agree to work as one indivisible entity in the interest of Nigeria, so that the benefits from the oil and gas industry can come to all Nigerians,” he said.

    He identified some of the industry’s problems to include crude oil theft, pipeline vandalism, backlog of joint venture cash calls, poor state of refineries, corruption in the importation of petroleum products, subsidy payment to marketers and abuse of Nigerian content policy.

    Others are the status of the Petroleum Products Pricing Regulatory Agency (PPPRA), Petroleum Equalisation Fund (PEF), and interfering role of the Nigerian National Petroleum Corporation (NNPC) in the performance of their mandates.

    On the restructuring of the NNPC, the PENGASSAN chief said the concern of his members was not to oppose what would bring the greatest benefits to all Nigerians, but to ensure that due process was followed and all interest groups were carried along.

    The main grouse of the oil workers on the re-structuring of NNPC, according to him, was the government’s insistence on carrying out the exercise without their involvement, despite that they would be involved in the implementation of the decisions taken.

    He added that the government could not go ahead with the restructuring of NNPC without first laying a solid foundation by removing all issues capable of posing problems or frustrating the exercise.

    He cited the NNPC Act of 1977 that set up the corporation, arguing that as a legal entity established by the Act of the National Assembly, there was no way the government would think of unbundling it without first either repealing or amending the Act.

    Johnson said the unions were concerned about the way the government was going about the restructuring, which suggested that it did not know what it wanted to do.

    “Initially, the minister spoke about unbundling NNPC and when there was so much pressure from the National Assembly over the issue, the Minister of State turned around to say the government was not unbundling, but restructuring or reorganising NNPC.

    “There is no way the unions or anybody would be against any decision that Nigerians are convinced would yield benefits to the people, provided such decisions are open, honest transparent and with sincerity of purpose,” he said.

    The PENGASSAN chief said there must be consistency in policy formulation and implementation. He said there must be an informed consensus on all issues.

    “There must also be a buy-in by everyone. All interested parties must be on the same page. Everyone must understand the direction the industry is heading,” he added.

    He further said it was not too good for the country that the oil and gas industry, the economy’s mainstay, would show such inconsistency in the way policies are formulated and implemented.

    “We seem to be moving one step forward today and two steps backward tomorrow,” he said.

  • Expert seeks bank for power sector

    Expert seeks bank for power sector

    The Group Managing Director of CFL Group of Companies, Mr. Lai Omotola, has canvassed the establishment of a finance development bank for the power sector to address the frequent changes in electricity tariff.

    He said the recently approved 45 percent increase in electricity tariff by the Federal Government not  not the answer to the crisis in the power sector.

    Omotola attributed the increase to the failure of indigenous companies that bought the nation’s power assets to source for the technical partners that could bring in some equities.

    In an interaction with reporters in Lagos, he said Nigerian banks provided over 80 per cent of the $2.6 billion that was used to purchase the power assets in 2013 on short tenor loans.

    He said: “It would have been the other way round and the sector would have been virile, had the investors been mandated to bring in foreign investors who would bring in their equities in terms of the capital mix, about 60 percent equity.”

    He explained that most of the funds were sourced from the banks. It is debt, which is now creating a little bit of pressure on our financial system.We find a situation whereby the Nigerian banks are the major, if not the sole financiers of the acquisition of the power assets.

    “There are two factors with the Nigerian banks. One is high interest rate. Two is the tenure of their funds. These factors mean that commercial banks by their very nature cannot finance the electricity industry. They can only serve to raise working capital incentive. What we find today is that the Nigerian banks are financed in dollar-dominated terms.

    “Already, the interest rate has gone on the high side. Even, the value of dollar to naira had doubled over the space of two years. The resultant effect is that the accounts of our indigenous companies are not doing well with our banks.

    “If their accounts are not doing well with the banks, the ability of the companies will be stalled. Also, the ability of the indigenous companies to pay loans will be stalled. Finally, the ability of the indigenous companies to generate additional funding will be stalled,” Omotola said.

    He said the Nigerian banks could only finance projects for about two or three years after which the banks would want to see their funds coming back, so our banks are not suited to fund the power sector. He faulted a statement credited to the Minister of Power, Works and Housing, Mr. Babatunde Fashola that no bank would want to fund the power industry because of the low tariff, which makes it not bankable before the current controversial increase.

    Omotola challenged Fashola to name the bank he was referring to, noting that if Fashola was referring “to Nigerian banks, the business model of the indigenous companies will not work. The interest rate and fund tenure will not make it work.”

    He urged the Federal Government to set up a finance development bank that is strictly meant for development projects such as power projects. If our indigenous banks will play any role, it will be in the area of providing working capital. For these indigenous companies in power sector to survive, they need very low interest rate with very long-term loan, he said.

  • Expert seeks finance devt bank for power sector

    The Group Managing Director of CFL Group of Companies, Mr. Lai Omotola, has canvassed the establishment of a finance development bank for the power sector to address the frequent changes in electricity tariffs.

    He said the recently approved 45 percent increase in electricity tariff by the Federal Government not  not the  answer to the crisis in the power sector. Omotola attributed the increase to the failure of indigenous companies that bought the nation’s power assets to source for the technical partners that could bring in some equities.

    Omotola in an interaction with reporters in Lagos, stated that Nigerian banks provided more than 80 per cent of $2.6 billion that was used to purchase the power assets in 2013 on short tenor loans.

    He said: “It would have been the other way round and the sector would have been virile, had the investors been mandated to bring in foreign investors who would bring in their equities in terms of the capital mix, about 60 percent equity.”

    He explained that most of the funds were sourced from the banks. It is debt, which is now creating a little bit of pressure on our financial system. We find a situation whereby the Nigerian banks are the major, if not the sole financiers of the acquisition of the power assets.

    “There are two factors with the Nigerian banks. One is high interest rate. Two is the tenure of their funds. These factors mean that commercial banks by their very nature cannot finance the electricity industry. They can only serve to raise working capital incentive. What we find today is that the Nigerian banks are financed in dollar-dominated terms.

    “Already, the interest rate has gone on the high side. Even, the value of dollar to naira had doubled over the space of two years. The resultant effect is that the accounts of our indigenous companies are not doing well with our banks.

    “If their accounts are not doing well with the banks, the ability of the companies will be stalled. Also, the ability of the indigenous companies to pay loans will be stalled. Finally, the ability of the indigenous companies to generate additional funding will be stalled,” Omotola said.

    He said the Nigerian banks could only finance projects for about two or three years after which the banks would want to see their funds coming back, so our banks are not suited to fund the power sector. He faulted a statement credited to the Minister of Power, Works and Housing, Mr. Babatunde Fashola that no bank would want to fund the power industry because of the low tariff, which makes it not bankable before the current controversial increase.

    Omotola challenged Fashola to name the bank he was referring to, noting that if Fashola was referring “to Nigerian banks, the business model of the indigenous companies will not work. The interest rate and fund tenure will not make it work.”

    He urged the Federal Government to set up a finance development bank that is strictly meant for development projects such as power projects. If our indigenous banks will play any role, it will be in the area of providing working capital. For these indigenous companies in power sector to survive, they need very low interest rate with very long-term loan, he said.

  • Ooni Ogunwusi and agric sector

    SIR: I must confess I knew next to nothing about the new Ooni of Ife, Oba Adeyeye Ogunwusi, Ojaja II, until his emergence as the monarch of the ancient town of Ile-Ife.

    Of all his actions so far, the one that really catches my fancy is his renewed efforts to draw attention to the ailing agriculture sector in the country. While speaking to reporters during a recent visit to Aso Villa, the monarch expressed a strong conviction that cocoa and other agricultural produce can take Nigeria out of its present economic predicament.  He said: “I am working with the minister of agriculture. We have assembled over 200,000 youths within 30 days. We are encouraging them to go back to the farm”. He further informed that while crude oil price continued in its downward slide, cocoa price has gone up by over 100 per cent.

    Going down memory lane, the Ooni recalled that during the colonial era, Nigeria used to be the largest exporter of cocoa in the world. According to him, since the farmlands and personnel are still available, nothing stops us from replicating same feat again. To demonstrate his resolve to walk the talk, he revealed an ambitious plan he termed “a positive indicator for the nation’s economy’ which is hinged on empowering the youth to embrace agriculture by offering five acres of land per youth in addition to other technical and financial supports.

    Over the years, the export potential of cash crops such as cocoa, groundnuts, cashew among others, have seriously diminished. It is sad that Nigeria is no longer a key exporter of cocoa, groundnuts, rubber and palm oil. Ironically, these were the produce that the nation’s founding fathers built the prosperity of the country upon.  It is incredible how a nation that was once the biggest poultry producer in Africa now has its total output reduced from 40 million birds annually to about 18 million. Agriculture has suffered from years of neglect, poorly conceived government’s policies as well as lack of basic infrastructure.

    Despite the fact that agricultural production rose by 28 percent during the 1990s, per capita output rose by only 8.5 percent during the same decade.  Consequently, agriculture has not been able to keep pace with Nigeria’s rapid population growth as evident in the sad reality that Nigeria, which once exported food, now relies heavily on imports to sustain itself.  Contented with its newly found oil wealth, succeeding governments in the country simply allowed investment in agriculture to decline to a ridiculous state. The prospect of the sector, nevertheless, still reflects in its being accountable for over 26.8% of GDP and two-thirds of employment in the country.

    To reverse the drift, we must appreciate the potentials of the sector as a catalyst for economic and industrial transformation.  There is a need to recreate a modernized professional and commercial farming sector, supported by improved infrastructure and research into high performance seeds and livestock. To encourage the teeming army of unemployed youths in the country to take to agriculture, government should make access to loans for agriculture much easier while large scale farming powered by mechanized infrastructures should be the central goal.

    Equally, local food production needs to be encouraged by making inputs available, giving farmers access to more farmland, providing micro credit at subsidized cost, supporting adequate processing and storage, providing market facilities, and discouraging import of produce with local substitutes through tariffs. It is also important that a significant portion of the country’s annual budget be set aside for the development of the sector. This can be achieved if we reduce expenses on frivolous ventures.

     

    • Tayo Ogunbiyi,

    Lagos State Ministry of Information and Strategy, Alausa, Ikeja.