Micro, Small and Medium Enterprises (MSMEs) can propel the growth of the nation’s economy through jobs and wealth creation to alleviate poverty, the Director-General, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Mr. Bature Umar Masari, has said.
Bature, who was represented by Monday Ewans, stated this at the annual general meeting (AGM) of the Nigerian Association of Small and Medium Enterprises (NASME) in Lagos. He said SMEDAN policy priorities are to raise a broad-based awareness and appreciation for entrepreneurship, enable a regulatory environment that will support the sector and improve financial support for SMEs.
The outgoing president and chairman of NASME, Alhaji Garba Ibrahim, urged incoming council executive to address the challenges facing the sector, among which is inadequate power supply.
Ondo State Governor Olusegun Mimiko has advised artisans to use their skills to create wealth.
Mimiko spoke yesterday at a thanksgiving service of the State Artisans’ Group at the Act of the Apostle Church International in Akure, the state capital.
The governor, who described the artisans as the bedrock of the nation’s economy, urged them to work hard and utilise their skills to develop the nation.
He assured them of his administration’s continued assistance and support to the group, stressing that their cooperation was necessary for peace and development.
Mimiko said: “This year will be a year of prosperity and possibilities for Nigeria. The joy of the Lord is our strength. The joy is the assurance that God is with us even without fuel.
“In Ondo State this year, the joy of the Lord will abide with us but we must work hard. The possibility for our nation is infinite and God has endowed us”.
“Artisans are the bedrock of our economy but must work harder. God has given you your skill to create wealth and to live well. The government will strive hard to assist you. I’m bold to say that the prayers of the saints are upholding our nation.”
The General Superintendent, Apostle Zaccheus Adeboriota, urged Nigerians to make the word of God the pillar of their success and work in the fear of the Lord.
For many of the 36 states, these are not the best of times; 23 of them got N576 billion loans from banks. These loans have been restructured into long-tenored Federal Government of Nigeria (FGN) bonds. Nineteen got a N300 billion bailout to meet short term obligations. To the Debt Management Office (DMO), which worked with the Federal Government to restructure the loans, the economy must be diversified to shore up revenue bases, writes COLLINS NWEZE.
The fall in crude oil prices has affected the revenues accruing to all the tiers of government. It has not only led to significant reduction in the statutory revenue allocation due to state governments, but created a huge fiscal imbalance between revenue and expenditure.
For states which have borrowed from banks to pay salaries and settle other obligations, drop in revenues portend grave dangers until the Federal Government and Debt Management Office (DMO) stepped in to restructure the N576 billion debts overhang of 23 states.
•Dr. Nwankwo
Its Director-General Dr. Abraham Nwankwo said: “The fiscal implications of the fall in revenue on states include the fact that after deductions of contractual commitments, such as Irrevocable Standing Payment Orders (ISPOs) and other debt service obligations due to banks, little or nothing is left to run the affairs of the states.”
Speaking during the Association of Issuing Houses of Nigeria (AIHN) fourth quarter meeting in Lagos, he said there were accumulation of salary arrears, structured benefits and other contractual obligations.
“Salaries and pension arrears ranging from three to nine months and would require special intervention to achieve fiscal balance,” he said.
It was, therefore, expected that when, early July, this year, President Muhammadu Buhari approved a package of short-term stabilisation interventions which included the sharing of special revenue (N2.1billion) among the governments.
•Prof. Osinbajo
The Vice President, Prof. Yemi Osinbajo closely worked with the DMO team on the debt restructuring project.
Besides, the lending of between N250 billion and N300 billion by the Central Bank of Nigeria (CBN) to the states on long-term, single digit interest terms, there was also the implementation of a proposal by the DMO to restructure state loans from commercial banks to long-tenored FGN Bonds.
Dr. Nwankwo explained that while the first two measures produced cash directly on a one-off basis, the third indirectly made cash available by reducing debt-service outflow but on a continuous basis over a long-term and thereby continue to moderate the fiscal imbalance.
He said the restructuring of the loans was an immediate stabilisation measures to enable the governments, particularly state governments clear arrears of salaries, pension obligations and other short-term liabilities.
Dr. Nwankwo said DMO commenced the implementation of the strategic objective of assisting the states to develop debt management institutions and capabilities in the last quarter of 2007, as part of its five-year strategic plan.
The DMO chief, who spoke on the theme: “Restructuring States’ Short-Term Bank Loans Into Long-Term Federal Government of Nigeria (FGN) Bonds” said the fall in crude oil prices led to significant reduction in the statutory revenue allocation due to state governments. This created huge fiscal imbalance between revenue and expenditure of most states.
“We restructured what each state owed to the banks into FGN Bonds for 20 years. What that means is that instead of the states owing the banks, they now owe Federal Government, which now pays the banks,” he said.
CBN speaks on bailout funds
The CBN said 19 out of the 27 states of the federation have accessed the bailout funds, and are expected to repay the loans in 20 years.
Its spokesman, Ibrahim mu’azu, said the decision was approved by the National Economic Council (NEC) and that the beneficiary states which had benefitted from the workers’ salary bailout package are expected to deploy the funds to pay the workers’ salary arrears.
He said contrary to reports that Ogun State had accessed N20 billion, N18.9 billion was accessed. On the tenor of the bailout facility, he said all the states had a 20-year tenor except Ogun which opted for a 10-year tenor.
Earlier, states such as Kwara, Zamfara, Osun, Niger, Bauchi, Gombe, Abia, Adamawa, Ondo and Kebbi had applied for and received various sums from the bailout facility. Other states included Ekiti, Imo, Ebonyi, Ogun, Plateau, Nassarawa, Sokoto, Edo and Oyo which were granted in the week.
CBN Governor Godwin Emefiele earlier told the NEC meeting that 18 states – up from 11 as at last month – had benefited from the Special Intervention Fund aspect of the presidential relief package.
Impact of debt restructuring
Dr. Nwankwo said the debt restructuring boosted state cash flow, making it easier for them to meet their obligations. He said the debt restructuring also cut the interest paid on the loans between three to nine per cent.
He said the current drop in crude oil prices is different from what obtained in the past, because the prices are not likely to rebound soon.
Dr. Nwankwo said: “There is not going to be oil boom again. And the impact is that many states were unable to meet both their capital and recurrent obligations including workers salaries, pensions among others. A peculiar challenge is that all or most of the states borrowed from banks, which demanded irrevocable standing order against states’ incomes”.
He said although the banks had irrevocable standing order from the states, and were taking back their loans from states’ earnings, the possibility of sustaining that approach declines after the states’ income dropped by over 50 per cent over oil price decline.
He said all the states were affected by the oil price burst, prompting the Federal Government to decide on the way forward.
“If you are allowing crises in some states, it also means there will be crises in the entire economy,” he said.
He said the revenue decline has caused more than half of the 36 states to owe salaries adding that salaries and pension arrears ranging from three to nine months would require special intervention to achieve fiscal balance.
Dr. Nwankwo said the debt restructuring was to forestall a relapse into debt un-sustainability, as was experienced by the country before its successful exit from the Paris and London Club debts over-hang.
The step was also meant to redress the very weak debt management institutions, structures and practices in different states of the federation and achieve a more effective coordination of public debt management.
He said: “The fact that after deductions of contractual commitments, such as Irrevocable Standing Payment Orders (ISPOs) and other debt service obligations due to banks, little or nothing is left to run the affairs of the states. It also led to the accumulation of salary arrears, structured benefits, and other contractual obligations.”
On the economy, he said government has no choice than to diversify the economy away from oil. “There is still a broad resources base for diversifying and industrialising the economy. With appropriately structured financing, Nigeria should be able to programme a trajectory of long-term fiscal stability and self-sustaining growth,” he said.
DMO operations
The DMO commenced the implementation of the strategic objective of assisting the states of the federation to develop debt management institutions and capabilities since the last quarter of 2007, as part of its five-year strategic plan.
The goal was to forestall a relapse into debt un-sustainability, as was experienced by the country before its successful exit from the Paris and London Club debts over-hang. The strategy was to redress the very weak debt management institutions, structures and practices at the state levels towards a more effective coordination of public debt management. The DMO has also established Domestic Debt Data of States of the 36 states, with framework in place for regular updates.
The debt office has also helped in the passage by 18 states of appropriate laws (Fiscal Responsibility/Public Debt Management Laws) to govern debt management and engender fiscal discipline.
Restructuring states debts
The loans were secured with statutory allocations and Internally Generated Revenues (IGR), which are now inadequate to meet debt service obligations for most States – and leaves little or nothing for paying salaries and meeting other recurrent obligations.
From debt management perspective, the plausible short-term restructuring option would be to refinance the commercial bank loans with bonds of up to 20 years tenor. This makes the repayment schedules of the loans much friendlier to the current cash flow of the states, and hence, free up resources for paying salaries and other recurrent obligations.
He said 15 banks were involved and that the restructuring was effected using a re-opening of the FGN issued on July 18, 2014 and maturing on July 18, 2034. The pricing was based on the yield to date of the bond at a 30-day average, resulting in a transaction yield of 14.83 per cent.
He said the debt service burden after the elongation of tenor and reduction in interest rate has dropped substantially ranging from about 55 per cent for some states to about 97 per cent for others.
“Debt Service of the Bonds has been structured in the same way it would have been, if the States had accessed the market directly – with appropriate arrangement between the FG and each State concerned, on the collection and remittance of debt service obligations – but over a longer period,” he said.
Way out
Chairman of AIHN Victor Ogiemwonyi said diversification and industrialisation of the economy remains the answer to Nigeria’s economic woes. He said issuing houses also play a major role in growing the economy and called for collaboration between AIHN members and the DMO.
The DMO chief believes restructuring of bank loans to FGN Bonds could only contribute to short term fiscal stabilisation adding that measures for long term fiscal stabilisation are necessary.
He said government should explore opportunities in agriculture, manufacturing, solid minerals, petrochemicals. “Every state to work towards dependence on IGR, while considering federal allocation funds as exceptional inflows. There is also need for improved infrastructure like power, roads, railways, critical to support a globally competitive industrialisation,” Nwankwo said.
Despite the challenges facing the energy sector over the past decades, it still remains the nation’s cash cow, holding the key to unlocking the potentials that will make the country attain its aspiration of becoming one of the world’s 20 industrialised economies, writes EMEKA UGWUANYI.
Nigeria has made tremendous progress in the energy sector over the past 55 years despite the challenges in the sector. Starting from a production of 5,100 barrels of oil per day (bpd) in 1958, its current production stands at over two million bpd. Nigeria still leads in hydrocarbon development and remains the oil and gas hub in the Gulf of Guinea.
The nation’s oil output would have reached three million barrels, with reserves reaching 40 billion barrels if not for security challenges including militancy and issues of kidnapping, oil theft, pipeline vandalism and insurgency, as well as some constraining policies.
The oil and gas industry hitherto controlled by foreigners has gradually started to shift position. Indigenous firms and operators are increasingly participating in exploration and production (E&P) and in the service sector.
The divestment of oil blocks by the multinational oil firms such as Shell and Chevron, and the marginal field policy boosted local players’ equity in the E&P sector substantially. Indigenous stakes in the upstream are growing; the service sector is reasonably controlled by the locals, which is a development that should be encouraged.
Over the past five decades, over 20 oil fields have been divested by the international oil companies (IOCs), some marginal fields have been re-streamed, and this enhanced the contribution of indigenous firms to the nation’s total daily oil production, rising from zero to about 20 per cent now. In the downstream, over 95 per cent of the sector is controlled by Nigerians.
Because Nigeria produces high value, low sulphur content, light crude oils – Antan Blend, Bonny Light, Bonny Medium, Brass Blend, Escravos Light, Forcados Blend, IMA, Odudu Blend, Pennington Light, Qua-Iboe Light and Ukpokiti, its oil is the toast of refineries, despite the current lull in the international price of crude. To derive maximum value from the nation’s oil, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr Ibe Kachikwu said the Corporation will strive to secure long term contracts for the crude. According to him, the reason Nigeria’s crude sometimes doesn’t see buyers is because it is contractors that lift the oil and they (contractors) don’t have already secured buyers.
However, to address some of the sectoral issues, the Federal Government must tackle the contentious provisions in the Petroleum Industry Bill (PIB) including part of the fiscal regime, which is unacceptable to the multinational oil firms, and the 10 per cent Petroleum Host Communities Fund, which is meant for the development of oil producing communities, which Northern legislators vehemently opposed. These among others, are some of what have been stalling the passage of the bill believed to be the solution to some of the oil industry’s woes.
Some areas that need urgent attention and remedy include reduction of contracting period for projects. The contract cycle in Nigeria is among the longest in the world. Policies that will support renewed aggressive exploration should be encouraged without delay. Oil reserves and output are declining and need to be replaced. Natural gas exploitation and utilisation especially in the area of improving domestic consumption, and elimination of gas flaring need to be fast-tracked. There is also need to properly position the NNPC as a true national oil firm that can effectively compete with its contemporaries across the globe.
The oil and gas industry cankerworms including oil theft and pipeline vandalism, massive importation of refined products and the attendant subsidies, and fuel scarcity need urgent solution. Having been in oil exploration and production in the past 55 years, Nigeria is supposed to be a net exporter of refined petroleum products but today, it is the only country in the Organisation of Petroleum Exporting Countries (OPEC) that imports products for domestic consumption.
For the first since its establishment, the NNPC is undergoing drastic reforms to be positioned as an independent and profitable enterprise that can have capacity to borrow money from banks to run its operation. The Corporation chief Kachikwu has started sanitizing it, to create sustainable processes, reduce the size of the workforce and make it efficient, retire the aged members of staff and hire the younger energetic ones.
To enthrone transparency in the Corporation, Kachikwu said he would bring back the auditing firm, PricewaterhouseCooper to fully audit NNPC, as a step to making its books clear and reliable.
The gas sector is also being developed impressively. Previously all the associated gas was flared for lack of storage and utilization, but today, operators look for non-associated gas assets. The volume of flared gas has been significantly reduced. Many industrial concerns in Nigeria have switched to natural gas-as fuel to power their machineries for power generation to run their operations.
Nigerian Content Act
To substantially increase indigenous participation, ownership and control of assets in the upstream, the Federal Government passed the Nigerian (local) content into law in 2010. Many indigenous firms have been empowered through the Act and lots of capacities and capabilities have been developed by Nigerians.
Because access to funds constitutes a major challenge to indigenous players in the oil and gas industry, the Nigerian Content Development and Monitoring Board (NCDMB) that foresees the implementation of the Nigerian Content Act, created the Nigerian Content Development Fund (NCDF). The Fund as at the end of April, was above $540 million, and the Board said it is gradually growing to reach $700 million at the end of December this year.
The Fund started with only $50 million in 2010. “The projected growth chart was that by 2011, it would rise to $70 million and $150 million by 2012 and to $350 million by 2013 while we were looking at $450 million and $700 million by end of 2014 and 2015 respectively.
“Considering the current growth potentials of the Fund, we expect a continuous increase in its size and its capacity to attract other sources of funds both locally and internationally to support Nigerian oil and gas content development,” the Board said.
The Fund, according to the Board could have helped a lot of Nigerian firms if not because of the challenges encountered at its formative year. Banks were not willing to lend under the programme because some bankers demonstrated limited understanding of oil and gas business and the peculiarities; therefore, they gave all manner of conditions that could not be met by the emerging and growing Nigerian companies. This resulted in consistent delays in concluding transactions and often stalled some applications, but the story has changed today, the Board added.
Power
The power sector has undergone series of transformations and reforms but with little results. Over N5 trillion is estimated to have been spent on Nigeria’s power sector in the last 16 years. This figure includes expenditures on the defunct national utility, the Power Holding Company of Nigeria (PHCN) before it was unbundled into 18 successor companies – six generation, one transmission and 11 distribution companies.
Following the inefficiency of the PHCN and near total blackout in the nation, the Federal Government created the National Integrated Power Project (NIPP), which is supervised by a special purpose vehicle, the Niger Delta Power Holding Company (NDPHC) Limited. The NDPHC was created to fast-track the attainment of stable power supply in the country when all efforts, financially and technically pumped into the PHCN to make it efficient failed. The PHCN formerly the National Electric Power Authority (NEPA) was ranked as one of the most corrupt agencies.
The NIPP programme was conceived in 2004 and the NDPHC created in 2005. The project was also enmeshed in alleged that $16 billion embezzlement and was also engulfed in controversy and litigation because of the alleged unexplained utilization of the fund. In view of those issues surrounding the project, the government in power suspended the NIPP programme dismissing it as huge fraud and drainpipe but after two years, the suspension was lifted and the government continued with the project.
Following the alleged outrageous corruption in PHCN, the Federal Government began a process of privatisation of the power sector. The Federal Government on November 1, 2013, ceded 60 per cent equity of the distribution companies to the private sector, and 100 percent equity of some of the generation plants to the private sector. The privatisation was considered the most outstanding achievement of the government in recent time and a major milestone, by industry experts. The privatisation marked a gradual but total handover of the sector to the private sector. The 18 successor companies unbundled from the defunct PHCN have all been privatised except for the transmission company, which hopefully will be privatised with time.
However, the Federal Government also secured funds for the power sector from different international development organisations and companies to develop the entire value chain of the power sector. For instance, the development of some projects such as the Zungeru hydro electric power plant with installed capacity 700Mw was funded by such funds. The Federal Government in 2012 spent a total $377,723,701.31 plus ¥3,701,664,848,66 plus N44,007,398,398.00 equivalent to N162,990,364,379.30 to implement the project.
The Exim Bank of China shouldered 75 per cent of the project while the counterpart funding of $309 million was kept with the Ministry of Power. The project was being implemented by a Chinese consortium, CNEEC-Sino Hydro.
The Kashambilla hydro dam has reached about 95 percent completion and the construction of the Mambilla hydro dam is on course. The plant is targeted to generate 3,000Mw.
For renewable energy, there is an inter-governmental organisation: International Renewable Agency (IRENA) supporting countries in development of sustainable energy future. Besides budgetary allocations, interventions by different development organisations such as the European Union, JICA and GIZ directly undertake the projects they choose to work on. Last year, several supports from bilateral partners in form of loans such as $700million from the World Bank, $200million from JICA, $370million from African Development Bank, $500million from EXIM China and $1billion from Contractor financed Turkey Projects flowed in into the power sector development.
The African Development Bank also released a loan of $100 million to Transmission Company of Nigeria (TCN) for critical transmission projects. Last year, it was estimated that the TCN required about US$3.7billion to increase power transmission capacity, make the network more stable and reliable, and improve efficiency of electric power supply by reducing transmission technical losses.
The National Integrated Power Project (NIPP) programme has also seen the completion of 10 midsized power plants, which were being privatised before the privatisation process was stalled. The 10 power plants include Alaoji, Ihovbor, Egbema, Gbarain, Calabar, Geregu, Ogorode, Olorunsogo, Omoku, and Omotosho.
The NIPP projects are funded from the excess crude account, with the Federal Government contributing 47 per cent of the funds, while the 36 state governments contribute 35 per cent and the 774 local governments 18 per cent. As at May this year, about $11.1 billion has been committed to the project,
The introduction of the National Integrated Power Project (NIPP), helped to boost power generation, transmission and distribution. Currently, power output stands at above 4,600 megawatts (Mw), though inadequate but a huge improvement over about 2,000Mw a few years ago.
Governor Ifeanyi Okowa of Delta State has urged political appointees to be resourceful, adding that wealth creation is a priority.
Okowa made the call in Asaba, the state capital, during the swearing in of 13 commissioners and three special advisers.
The new commissioners, who were assigned portfolios, amidst thunderous ovation, are Peter Mrakpor (Attorney General and Commissioner for Justice); Dr Nicholas Azinge (Commissioner for Health); Barr. Ernest Ogwezzy (Commissioner for Culture and Tourism); Hon. Henry Sakpra (Commissioner for Special Duties, Governor’s Office); Mr Mofe Pirah (Commissioner for Oil and Gas]; Hon. Bright Edejeghro (Commissioner for Local Government and Chieftaincy Affairs ); Hon. Asupa Forteta (Commissioner for Youth Development); Chief Dan Okenyi (Commissioner for Lands and Survey); and Hon. Chika Ossai (Commissioner for Special Duties).
Others are Mr Oghenekaro Ilolo (Commissioner for Urban Renewal); Olorogun David Edevbie (Commissioner for Finance); Engr. Jude Sinebe (Commissioner for Higher Education); and Mr Patrick Ukah (Commissioner for Information); while the Special Advisers that were sworn-in are, Hon, John Ozegbe [Investment], Rt. Hon. Sam Obi [Inter Government Affairs and Special Duties] and Hon Bosin Ebikeme [Petroleum Matters].
The governor said: “As Governor, my priority is to grow the economy of this state and ensure that every person has a chance to pursue his or her dreams of success and achieve their full measure of happiness,” reiterating, “by accepting to serve as a Commissioner or Special Adviser in this government, you have accepted this responsibility.”
“The situation we find ourselves calls for drive, innovation, prudence and above all, ingenuity and resourcefulness in managing our assets and in our internal revenue generation process, because, we are confronted with serious economic challenges and it is incumbent on us all, especially, the political appointees, to rise up to the challenge with courage, determination and selfless service,” he said.
He added: “I implore you and indeed, all Deltans, to muster the can-do-spirit and problem-solving mentality that our people are known for; as Commissioners and Special Advisers, I enjoin you to treat the business of government as a business; every Ministry, Department and Agency of government under this administration is expected to be cost conscious in its operations and be alive to its revenue generating potential because in the face of dwindling receipts from the Federation Account, we cannot afford to do any less.”
Urging the appointees to shun sectionalism, nepotism and be diligent, honest, accountable and pay careful attention to the needs and aspirations of the people in their actions, Okowa said: “As a government, we are committed to creating the enabling environment for micro, small, and medium scale enterprises to thrive and flourish because, they are the heartbeat of any economy and I am confident that with deep thinking, creativity, fiscal discipline and the cooperation of all and sundry, we can put the current challenges behind us and lay a solid foundation of prosperity for this generation of Deltans and those coming after us.”
Quality starch processing business has become a money spinner with its usage by both food and non-food industries. DANIEL ESSIET reports.
Enterprises related to the transformation of food and agricultural commodities can provide employment and create business opportunities.
Experts said the industry is poised for huge growth and could emerge as a high-profit sector on the back of the scope it offers for value addition, particularly with the processing industry getting recognised as a high-priority area.
One of the areas is the starch production,which some business owners see as a massive business opportunity. Already, few Nigerians know the business has such potential. The Chief Executive/President, CassavaConsult Limited, Dele Ogunlade, is one of the early birds to discover this.
He said a lot of entrepreneurs are not exploring the full potential of starch business and its derivatives. This is because few local starch brands are finding prime shelf space in retail chains.
Ogundale, a former Chief Executive, Matna Foods Company Limited, in Akure, which has been in business for over a decade, said there are business opportunities for Nigerians to make money through starch processing as it has become a major ingredient in the production of infant foods, confectionary, glucose and alcohol.
Starch is also used in non food industries such as glues, oil well drilling, adhesives, paper sizing and bonding, textile sizing and strengthening.
To this end, he is determined to help Nigerians explore opportunities across the value chain and encourage more entrepreneurs to take to processing starch to increase their profits.
He is also ready to lead the way in demonstrating how businesses can work side-by-side with governments to promote economic development and tech-based modernisation across the rural areas.
Ogunlade said starch business can play a pivotal role in helping the government tackle unemployment rate. This is by teaching young people to start their own starch businesses, improve their standard of living and employ others, he noted that the demand for starch has increased due to extensive usage across industries such as food , beverages , medicine, cosmetics, pharmaceuticals and more.
For instance, starch and its derived products have become important components for paper and glue production, textile weaving and finishing and the fermentation industry, meaning increasing opportunities to create employment and income generating opportunities for youths and small farmers respectively .
As large as the market is, he maintained that it is impossible for small entrepreneurs to play in mass markets because they do not have the resources or capabilities to compete successfully in such spaces.
For those, who cannot afford up to N1million, he advised them to begin with the production of traditional starch, used for clothes or consumed at a local level. He said entrepreneurs at this level, can start cottage starch processing with N200,000.This notwithstanding, the business requires a lot of attendance, but it is easy for a small family enterprise to earn its living from producing native starch.
Beyond this, there is a market for modified starches and sweeteners. Buyers in this category include food processing , textile, paper and packaging, nutraceuticals and biopolymer industries.
The use of starch by the food industry is also fueled by the increasing campaign for application of natural substances in food production. For instance with the increasing demand for low fat and low calorie food, many food companies are replacing fats with gums and carbohydrates, such as starches.
To start a starch production business, the major consideration is water, power, transportation facilities and raw materials. The factory is supposed to be supplied with modern equipment known to have the highest production efficiency. Processors need access to, locally fabricated mechanised and high-capacity equipment, such as mechanical graters.
A lot of money, according to him, is needed to establish a modern cassava starch factory.
Also, the business should be located where there is a cluster of peasant farmers to supply sufficient cassava for production. Where this is not possible, the company may need to acquire large acres of land to cultivate cassava on a large scale for processing. Starch manufacturing requires special varieties of starch content. Together with the use of suitable cassava varieties, experts expect average industrial yield of starch extraction to exceed 24 per cent.
Companies which produce starch also venture into cassava flour and glucose syrup production.
The higher the starch content, the more money the farmer earns.
As a way of empowering struggling communities through entrepreneurship, he said small scale starch processing can help Nigerians achieve financial independence and break the cycle of poverty.
To this end, medium-scale factories, processing cassava into starch have also been established by local entrepreneurs near farming communities.
That is the true position of the $1 billion Sovereign Wealth Fund (SWF) deposit being managed by the Nigeria Sovereign Investment Authority (NSIA)?
Is the $1 billion deposit still intact and generating profits or depleted to a balance of $300 million?
The Sovereign Wealth Fund, which was set up by the NSIA Act, came into force in October 2012 and was created to receive surplus income generated from Nigeria’s excess oil reserves.
It is intended to invest the savings gained on the difference between the budgeted and actual market prices for oil to earn returns that would benefit future generations of Nigerians.
But conflicting reports indicating that all was not well with the fund came to the fore again last Thursday at the Presidential Villa, Abuja.
While the Managing Director of NSIA, Uche Orji claimed that the $1billion initial sovereign fund contributed by the government was intact and generated N15.7 billion profit last year, the Chairman of the National Economic Council (NEC)’s Ad-Hoc Committee on the management of the Excess Crude Account and related Federation Account issues and Edo State Governor, Adams Oshiomhole disagreed with the claim.
Oshiomhole maintained that he has evidence to prove that the $1 billion deposit has not only been depleted to $300 million, but that there were false claims that the fund was invested on other projects already funded from other sources.
Speaking with State House correspondents after meeting with President Muhammadu Buhari at the Presidential Villa on the 9th of this month, Orji said: “The government gave us $1billion which is the only contribution we have received and we made N15.7 billion profit last year from the contribution.
“We haven’t gotten additional fund from the govt but the fund is structured in a way that it can go through hard time.
“We all know that the oil price is volatile, it comes up and goes down but the
fund is structured in such a way that it can remain continuously profitable.
“The funds remains the fund from the government and the profit made.” He added
Orji’s position was deflated barely a week after by Oshiomhole last Thursday.
Oshiomhole said: “I reported to the media that the Sovereign Wealth people in their report to us, which I have in black and white, showed clearly that they have only $300 million left in the Sovereign Wealth Fund account.
“We have it in black and white and I can publish it if anybody wants to deny that because it was not submitted to me secretly. It was submitted at plenary of the committee.
“And then we asked, because I knew that the fund was $1 billion, what was done with $700 million. And they said they have made some investments.
“We asked them what they invested in and they said the second Niger bridge and partially in Kaduna-Abuja rail. That is what they said and I was not alone there.
“We were about five governors and it was a full plenary. But we know that the Kaduna-Abuja rail was funded with Chinese loan, which even Mrs. Okonjo-Iweala spoke about, when they said the loan from China was not used for Lagos, she said it was for Kaduna-Abuja rail.
“You media need to develop your own library and have your record so that when people speak from both sides of their mouths, you can replay back. Because sometimes it hurts me when political leaders and technocrats say one thing in the morning and they change the language the following day.” He said
Urgently beaming the anti-corruption searchlight of the present administration in that direction may be needed to unravel the true position on the matter. Its time to act now.
Lagos State chapter of the Trade Union Congress of Nigeria (TUC) has hailed Governor Akinwunmi Ambode for creating the Ministry of Wealth Creation and Empowerment.
Its Chairman, Comrade Akeem Kazeem, said the development would impact the citizens, urging the governor to appoint a personal assistant or consultant on labour matters in his cabinet.
He said: “Labour is also in support of the on-going restructuring in the state civil service. Round pegs are being put in round holes. Merit and excellence is now recognised and put into consideration in appointments in the state.’’
Kazeem noted that the advertisement for teachers and surveyors jobs was a positive step to reduce unemployment, urging the Federal and the state governments to embrace the idea.
“We commend the good work being done in the area of security and the marginal improvement in power supply, particularly in Lagos State. This trend should be sustained and improved upon,’’ he said.
Also, the Nigerian Medical Association (NMA) has criticised the claim by Joint Health Sector Unions (JOHESU) that government plans to sell off hospitals under the guise of public-private partnerships (PPP).
The association said the union was afraid of the work place discipline that private sector control would bring to hospitals.
Dr Joseph Ana, head of NMA’s clinical governance committee, accused JOHESU of backing its members to continue with their bad work ethics.
He said the private sector’s involvement in health would ensure corporate efficiency, discipline and resources which government alone cannot afford, if it is to deliver on its health promises.
The Peoples Democratic Party (PDP) has said that the Muhammadu Buhari led administration lacked the capacity to create and manage wealth.
The opposition party said it has noted the deliberate resort to “diversionary blackmail” and “overused excuses” by the ruling party to shy away from providing answers to the salient issue of unprecedented damage done to the nation’s economy in its 90 days in office.
A statement yesterday by PDP’s National Publicity Secretary, Chief Olisa Metuh, said the ruling All Progressives Congress (APC) should hide its head in shame for poor performance in the last 90 days.
This, the PDP added, that had resulted in the sudden economic retrogression, “the worst ever experienced by the nation”, stressing that the APC and the Presidency had continued to grope and look for excuses.
The statement read: “Discerning minds were appalled that instead of providing answers to issues of economic retrogression, the Presidency and the APC have resorted to wild allegations and insults to attempt to cover their ineptitude and divert attention from their list of bogus promises which they have no intention to fulfill.
“The PDP has severally expressed its support for a holistic fight against corruption and we have challenged the Federal Government to investigate and prosecute all corrupt persons irrespective of ethnic and political affiliations. We are therefore appalled that instead of getting serious with the challenges of governance, the APC is bent on inventing excuse for its crass incompetence to create and manage wealth, to the detriment of the nation.
“We challenge the APC and the Presidency to be honest enough to respond to issues instead of resorting to propaganda. Is the so-called mess clearing an answer for the adamant stance of the APC and President Buhari in running a government without a cabinet and precise fiscal policy direction, a strange totalitarian approach that have taken serious toll on the economy and the polity in general?
“Is it an answer to the resort to constitutional violations, abuse of financial regulations, halting of development projects and the pervading uncertainty that resulted in the retarding of domestic and foreign direct investments with attendant avoidable losses to Nigerians?
“What has the APC and the Presidency to say to the official report by the National Bureau of Statistics that while they are busy celebrating imaginary achievements, the economy is running aground with real Gross Domestic Product (GDP) plunging with about 2.35 per cent, with job creation dropping by 69 percent under their watch?
“Are we not already experiencing the consequences of abuse of rules such as the foisting of foreign exchange transaction restrictions in violation of the the Foreign Exchange Monitoring And Miscellaneous Provisions Act, otherwise known as Decree No. 17 of 1995?”
OGUN State Governor Ibikunle Amosun has urged investors to create wealth and job opportunities to better people’s lives.
He spoke when he received the management of Procter and Gamble Nigeria Limited in his office in Abeokuta yesterday.
The governor said while government would continue to foster peaceful co-existence between investors and their host communities, they should facilitate harmonious relationship with the communities through impacting social corporate responsibility.
Amosun said: “I must commend you for what you have been doing. But there are still a lot to be done and this is why we still need assistance from investors like you to create wealth and job opportunities that would better the lives of our people. And on our part, we will continue to render services that would make your operations and relationship with us and the people seamless and mutually beneficial,” he stated.
He solicited collaboration in the area of infrastructural development, particularly the construction of roads within the industrial areas of the state.
Amosun promised government’s readiness to give the necessary support that would further ease the operations of industries in the state.
The governor submitted that his administration would continue to give priority to developing and consolidating of roads in the industrial areas of the state, notwithstanding the dwindling federal revenue allocation.
The company’s managing director, George Nassar, pledged his organisation’s continued partnership with the government on the state’s development, “particularly provision of basic amenities in critical segments of the society”.
“This has been clearly demonstrated by the intention of the company to construct a three-room building block for Agbara Police Station and the donation of patrol/response vehicle to Agbara Police Command, also to aid policing in the state,” he added.
Nassar added that the firm planned to procure a 350 KVA sound proof generator to the state Ministry of Health, assuring that the donations would be completed by next month.
