LOCAL CONTENT KEY TO JOB SHELL’S OIL-SPILL DANGOTE BAGS MORE AWARDS CREATION AND DEVELOPMENT, CASE TO BE HEARD IN UK COURTS FOR CHAMPIONING AFRICA’S SAYS SANGSTER INDUSTRIAL GROWTH

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2 JULY 2021 Editor’s Note

According to the Managing Direc- In the finance sector, the TBI Africa tor, Shell Petroleum Development talks about the hope for the Nigerian Company of Nigeria and Country economy in the second half of 2021, Chair, Shell Companies in Nigeria, as it addressed issues such as CBN Osagie Okunbor, the passage of the monetary policy amongst others. PIB will address the uncertainties Moreover, the real sector exposes the that shroud investment decisions in ill treatment of Republic of Benin to the sector. Nigerian manufacturers, who export Okunbor said: “Just by removing this and import goods through the uncertainty that has been hanging land border, as over 4500 Nigerian over this industry for the past decade owned trucks are trapped due to DR. NJIDEKA KELLEY and half, it is a major milestone. I 100 percent duties charged. You think all of us in this sector believe will also see why the richest man the government deserves commen- in Africa, Alhaji Aliko Dangote midst various economic dations.” deserves to be honored across challenges facing the Nigerian It is also heartening that Senator the continent, how the Standards Acountry, ranging from double Albert Bassey, the Senate Committee Organisation of Nigeria, SON has digit inflation to multiplicity of taxes Chairman on Petroleum Resources demystified it product registration (frequently lamented by manu- and also member of the PIB com- processes. facturers), massive infrastructural mittee, said the host communities The transport sector spoke in de- deficit and most recently one foreign will take charge of the Host Com- tails the plans of the Federal Gov- exchange (FOREX) scarcity and ever munity Fund, secure oil assets and ernment to boost the economy rising exchange rate. operations in their areas. This is via airport processing zones, while However, the fragile economy seems expected to end the hostilities in the important role of the Navy in to have defiled every economic the host communities where offices, deep blue project is also packaged strategy that has been applied suc- assets and operations of oil com- in this edition. cessfully in developed economies as panies are often blocked for one The agri-biz speaks about various recovery plan, especially in face of demand or the other. challenges causing food insecuri- the 4th wave of Covid-19. A detailed assessment of Mallam ty, as well as the story on herders TBI Africa will continue to push Mele Kyari second year scorecard lament, farmers excited as govern- the Nigerian government and her as Group Managing Director, GMD ment completes irrigation project, economic planners to adopt policies of the Nigerian National Petroleum amongst others. that are practicable in the country Corporation (NNPC) is loaded in this These and many more are richly given its peculiar economic exi- edition. He was officially inaugu- parked for your consumption in this gencies that are not necessarily in rated as the 19th Group Managing edition and we are pleased you are tandem with the western world. Director of the Nigerian National glued to us. This edition is packaged with the Petroleum Corporation (NNPC), on cover dwelling on the attraction of July 8, 2019, though, his appoint- foreign direct investments (FDIs) into ment was announced much earlier the oil and gas sector, as the industry in June. operators agreed that the passage of When he took over, the astute geolo- the Petroleum Industry Bill (PIB) will gist, transparency and accountability boost the inflow of investments into campaigner of the industry never left the industry. To them, the PIB, which anyone in doubt as to the direction Dr. Njideka Kelley is also the owner has been in the National assembly he has chosen in order to pilot the and Principal Consultant of for the past decade and half, put in- corporation and the industry to an New Generation Consulting LLc, vestments on hold as investors were enviable position, both locally and 10101 Fondren Road not certain about the safety of their internationally. Suite 353, Houston Texas 77076 funds and investments. 3 CONTENTS JULY 2021

DESPITE PASSAGE, CONTROVERSY TRAILS PIB LOCAL CONTENT KEY TO JOB SHELL’S NIGER DELTA OIL-SPILL DANGOTE BAGS MORE AWARDS CREATION AND DEVELOPMENT, CASE TO BE HEARD IN UK COURTS FOR CHAMPIONING AFRICA’S SAYS SANGSTER INDUSTRIAL GROWTH 11

LOCAL CONTENT KEY TO JOB CREATION AND DEVELOPMENT, SAYS SANGSTER www.tbiafrica.com 19 JULY 2021 VOL.4 NO.3 N1000, $25, £10 ISSN: 2736-0210 REMOVING BARRIERS TO INFLOW OF INVESTMENTS INTO NIGERIA’S OIL INDUSTRY

SHELL’S NIGER DELTA OIL-SPILL CASE TO BE HEARD IN UK COURTS 25

ANY HOPE FOR ECONOMY IN SECOND HALF OF 2021?

27

BOOSTING ECONOMY VIA AIRPORT NIGERIAN MINING SECTOR UNDER SIEGE BY FOREIGNERS PROCESSING ZONES 51 44

DANGOTE BAGS MORE AWARDS PORTS CONGESTION: ETO HERDERS LAMENT, FARMERS FOR CHAMPIONING AFRICA’S EXCITED AS GOVT COMPLETES INDUSTRIAL GROWTH CALL-UP SYSTEM AS BEST SOLUTION 38 47 IRRIGATION PROJECT 54

PRINTED AND PUBLISHED BY: Syndicate Publications Limited (RC: 1368510) #1, Alhaji Shomade Alley Street, Obanikoro, Lagos Website: www.tbiafrica.com. Email: [email protected] Office Tel: 07089620095 EDITOR: Dr. Njideka Kelley, +17182194957, 07086167905. GRAPHIC ARTIST: Imekan Augustus 4 COVER JULY 2021

From left: Chairman, Senate Committee on Petroleum Resources (Upstream) and member of the PIB committee, Senator Albert Bassey Akpan; Managing Director and Chief Executive of Total Upstream Companies in Nigeria, Mr. Mike Sangster; Principal Consultant, Reservoirs and Facilities, Solutions Limited, Mrs. Oluseyi Afolabi (the moderator); Chairman and Managing Director, Chevron Nigeria/Mid-Africa Business Unit, Richard Kennedy; Executive Director, Business Development, ExxonMobil Nigeria, Mr. Oladotun Isiaka; and Managing Director, The Shell Petroleum Development Company of Nigeria Limited and Country Chair, Shell Companies in Nigeria, Mr. Osagie Okunbor, at the Industry Leaders Panel at Nigeria Oil and Gas Conference in . REMOVING BARRIERS TO INFLOW OF INVESTMENTS INTO NIGERIA’S OIL INDUSTRY For over a decade, the Nigerian oil and gas industry has suffered dearth of inflow of investment especially in the upstream arm of the industry. The amendment of the deepwater offshore and inland basin Act in 2019 further worsened a bad situation. But with the passage of the Petroleum Industry Bill (PIB) by both chambers of the National Assembly, which currently is awaiting harmonization, is there hope for inflow of the required investments in the industry? EMEKA UGWUANYI examines the issue and reports.

5 COVER STORY JULY 2021

or over a decade, no major If the right PIB is passed, it will and the stakeholders in the oil and gas investment has taken place in the largely address the problems industry. in the sector but noted that the upstream sector of the Nigerian issues of security especially at the F host communities, infrastructure He said: “This is also the first time oil and gas industry apart from Egina deficit, high cost of oil production, the executive, legislature as well as project. Investment in Egina was debilitating long contract cycle, among others stakeholders have come to terms and possible because it had been in the reached consensus, I think that simple works for over two decades since the understanding and partnership has field was discovered in 2003 though brought about the passage of the PIB the basic engineering studies began in by both chambers at the same time and 2008. the same day. It is was really heartening At the industry leaders panel during and now I start to wonder what the the Nigerian Oil and Gas conference industry will say again for not attracting and exhibition in Abuja in July, where the required investments into the the managing directors of oil majors to be addressed to ensure inflow of the country’s oil and gas industry. in Nigeria and the National Assembly desired investment into the sector. They “I believe that different versions of discussed the future outlook for also highlighted the need for regular this Bill, like expected, is flying all over investment in Nigeria’s energy sector, collaboration, stakeholder engagement the place but we don’t have to talk it was revealed that the passage of the and involvement in industry matters about that as members of the National Petroleum Industry Bill (PIB) will not between the government, National Assembly until the harmonization of totally remove the barriers preventing Assembly and the industry operators. the two versions of the Bill that have the inflow of investments into the been passed by the National Assembly. industry. Speaking on the passage of the PIB was Senator Albert Bassey Akpan who The two versions of the Bill, it would be To the industry leaders, if the right PIB is the Chairman, Senate Committee recalled, were worked on by the Joint is passed, it will largely address the on Petroleum Resources (Upstream) committee of the National Assembly, problems in the sector but noted that and member of the PIB committee. To therefore, the harmonisation will not the issues of security especially at the him, the feat attained by the National take long. To the investor, what he host communities, infrastructure deficit, Assembly in the passage of the PIB wants to see is how your law - the high cost of oil production, debilitating is as a result of the collaboration and clarity and fiscal incentives will drive long contract cycle, among others, need cooperation” between the executive the investments. By investments, we 6 COVER STORY COVEREnergy STORY JULY 2021

are looking at Nigeria in comparison about, let me say that just by removing with other climes where the investor We are working with the this uncertainty that has been hanging can put his money. I can assure you that operators to ensure that the host communities take charge of the over this industry for the past decade all the relevant stakeholders have seen funds and end hostilities in the Niger Delta region and half, it is a major milestone. I the analysis of what we have passed think all of us in this sector believe the and everyone is happy. One thing is government deserves commendation to pass the law and another is for the especially as Senator Bassey assured the law to achieve the desired objective. harmonization of the versions will be We carried along the operators of the done shortly and the Bill sent for assent industry, the international oil companies by the President and within the possible and Nigerian companies. We looked at shortest time, we will have the law. all their sentiments and interests and come up with what we think will move “For the players in the industry, you the country forward.” could almost not have a sensible discussion with your corporate He said the whole essence of the Bill is He assured that both chambers of organization on any investment to deepen the industry, upstream and the National Assembly will certainly decision without that uncertainty downstream, position and develop address all the grey areas extant in both element coming in. Because, the will our gas as investment resource, and versions of the Bill, harmonise them to ask under which law are we taking this create value for the Nigerian people. enable quick assent by the President, investment decision as you know the The Bill is transparent, and for the host so the industry will move forward industry operates projects on multi- community, we want to ensure they competitively. decades basis? There is almost no take their destinies into their hands, For the Managing Director, The Shell project you put forward that is less than as the host community funds will go Petroleum Development Company 10 years in terms of life-cycle. So, having straight to them. of Nigeria Limited and Country Chair, this law finally landed, is good for the “We are working with the operators to Shell Companies in Nigeria, Mr. Osagie industry and everyone that played a ensure that the host communities take Okunbor, he thanked the Executive part in this, needs to be congratulated.” charge of the funds and end hostilities – the Minister of State for Petroleum The other point is that I have been with in the Niger Delta region. With this, Resources, the Group Managing Director this PIB for the better part of my career the host community will ensure the of the Nigerian National Petroleum and severally when you mention it protection of the oil and gas assets in Corporation (NNPC) for their efforts, and outside Nigeria, people laugh and say their areas and there will be no more particularly the National Assembly for ” we have been through this before. One blocking of offices and operations as living up to their promise in passing the point I will make is that more than any the pace of development of their areas PIB imminently. time in the past, the industry has to be will be in their hands. We are so excited He said it has been 14 years and before consulted. All of us on this side of the about the passage of the PIB especially I delve into the specifics of the Host table have had cause to severally go as it happens in our own era.” Community Fund the Senator talked the National Assembly around with the 7 COVER STORY APRILJULY 20212020 executive arm, in particular the Minister of State for Petroleum Resources and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) to make our voices heard. We could never have agreed 100 per cent, otherwise it is no longer a discussion, but by and large, I will say certainly from my perspective, we are listening to where we still have one or two areas where we don’t entirely agree in the course of looking at specific projects we did but this has been a Bill that has been well articulated, and we have been well consulted. I will say that certainly on my part. So, for us hopefully, when we see the final version of the Bill that has been harmonized, it should largely meet our expectations. That remains my personal expectation. Collaboration processes between the executive, National Assembly, industry and other stakeholders “On the specifics of the Host Community is important and will give many element of the Bill, I think Senator Albert people the opportunity to contribute to the good of the Bassey made a very important point, industry which is, that our hosts play a central role particularly in our onshore of the Joint Venture (JV) operations. The host communities play a central role in the sustainability of our operations, not just in terms of protecting those assets that lie within their domains. “This is because, once one of those assets is breached in any sense, it is not actually see they do benefit significantly the Group Managing Director of NNPC just the environmental consequences from protecting and ensuring that deserve credit for getting the Bill to that you see, it is also the deferred oil that is produced safely gets to the this stage and we look forward to the production that result from this. I terminal. I think we will all be better for harmonisation of the final version of the can tell you that our most important it.” Bill. pipeline in the Delta – the Trans Niger “However, collaboration processes Pipeline (TNP) and the reconciliation The current Managing Director and between the executive, National factor, which is the difference between Chief Executive of Total Upstream Assembly, industry and other what you put into the pipe and what Companies in Nigeria, Mr. Mike Sangster, stakeholders is important and will arrives at the terminal, the reconciliation who was the Senior Vice President, give many people the opportunity to factor is around 56 per cent, which Investor Relations of the company, also contribute to the good of the industry. means 44 per cent of what goes into listed some of the issues that need to be that pipeline disappears. addressed. To him, besides the passage “The desire of the industry is to have of the PIB, there are some key issues that a Bill that will be a win-win for the “This is material not just for Shell but it should be addressed for the industry to industry and for the country. A Bill that is even more material for the country. attract the requisite investments needed will work for the industry and work for As you know, 90 per cent or more of in the industry. These, he said, include the country. oil that is produced in JV goes back to security, infrastructure,” cost, drastic this country either via taxes or royalties, reduction of contract cycle and some “Security is a major challenge and I among others. I’m talking about the net grey areas in the PIB, he believes, would hope the PIB will effectively address it after cost, so this country bleeds a bit. be addressed at the harmonization of as it contributes to the cost of doing business. Security is a huge challenge. “Therefore, if we get a bill right that the final copy of the Bill. incentivizes our host communities not Sangster said: “For the success in “Another is the issue of infrastructure. just to stop blockages of our offices navigating this Bill through the Government and industry regulators but very important to protect these National Assembly after many years, should deliberate around the critical oil and gas infrastructure within the National Assembly, the Minister development of infrastructure. This their domains when they can see that of State for Petroleum Resources and will encourage development of gas

8 COVER STORY COVEREnergy STORY JULY 2021

The Executive Director, Business Development, ExxonMobil Nigeria, There is need for increase in investments in production of Mr. Oladotun Isiaka, who represented oil and gas to maximise value from the resources. Government his Chairman and Managing Director, and the regulator need to work together to draw down cost of ExxonMobil Nigeria, Richard Laing, production to attain industry disagreed that the amendment to the production and domestic gas demand. optimization Deepwater Offshore and Inland Basin “Cost is another factor to be addressed Act is reason for dearth of investment in to attract investments. Nigeria has 37 the industry. billion barrels of oil reserves proven at the moment and optimistic two million He said the much he can remember, barrels of oil production daily. At this investments into the industry had level, it will take about 50 years to lift it. ceased in the last 10 years but expressed Energy transition is in the front burner hope that with passage of the PIB, to reduce carbon footprint, greenhouse harmonization and assent by the gases and save the climate and President, most of the issues stalling environment globally. Nobody knows inflow of investments into the oil and “How we managed the pandemic gas industry will be cleared. what demand for oil will look like in the effectively, keeping the protocols and future. ensuring production runs smoothly is The Group Managing Director, Nigerian “Therefore, there is need for increase in commendable. We need to give credit National Petroleum Corporation, NNPC, investments in production of oil and gas to our industry because it was extremely Mallam Mele Kyari, also disclosed that to maximise value from the resources. challenging for all of us globally. investment in Nigeria’s oil and gas Government and the regulator need industry has fallen by 30 per cent due to “Coming out from the pandemic, we global challenges. to work together to draw down cost are facing headwinds, supply/demand, of production to attain industry social and governance issues. Increasing Kyari stated this at the official optimization. We all need to look at how gas production is important because it opening of the 2021 Nigeria Oil and cost can be drawn down.” is a critical enabler. At Chevron Nigeria, Gas Conference. He pointed out The Chairman and Managing Director, we have been in the journey of gas that though the impact of the fall in Chevron Nigeria/Mid-Africa Business utilization and monetization for over 10 investment is presently not seen, it Unit, Richard Kennedy, said apart from years. We have reduced our gas flaring would manifest in the next few years, the key points touched by Osagie by over 95 per cent. noting that though finances for fossil and Mike, which include security, ” fuel investments are dwindling due to “The backdrop for attracting investment infrastructure and cost, the industry energy transition, Nigeria and other currently is complex, compelling and developing economies would depend needs to be applauded for managing competitive. The increasing switch to and navigating through the Covid-19 on hydrocarbon resources to power energy transition, moving to lower their economies in the coming decades. pandemic and keeping production carbon footprint, flare reduction and running. drawing down greenhouse formation, He said: “Energy transition is not about He said: “I congratulate the National among others. We have a lot of work to movement from fossil fuel to renewable, Assembly and the Executive for reaching do as an industry to optimise operation.” its creating the right balance and there this milestone in the passage of the PIB. is this common mistake that in 2050, When asked about the impact on fossil fuel will go away and we will be They did a fantastic and tremendous job deepwater investment, the amendment and it is exciting. We are looking forward dealing with renewables. That is not to the Deepwater Offshore and Inland true, it is very far from the truth. to the final harmonized version of the Basin Act in November 2019, which Bill. negatively affected the royalties and “For us as a developing country, energy “Apart from the high degree of other benefits of the oil companies, resource-dependent country, we know stakeholder engagement and and whether there is something the for sure that beyond 2050 that oil will be involvement, we have a lot of work operator companies want the National relevant for us. Today we are in deficit of ahead of us. Attracting investment Assembly to consider or harmonise, infrastructure, power and many other involves having a quality set of laws, Kennedy said, he believes the PIB will things but so much good works are policies and regulations. address issues in the Act. going on but the fact remains that there is deficit here. 9 COVER STORY APRILJULY 20212020

“All the engagements around electric The Senate Leader, Yahaya Abdullahi vehicle even in terms of carbon zero All the engagements around (APC, Kebbi North), would lead the electric vehicle even in terms of objectives probably is very questionable carbon zero objectives probably is conference committee of the Senate. if even it is the solution to carbon very questionable if even it is the Other members of the panel include, solution to carbon zero-emission, zero-emission, so many things are so many things are happening senators Sabo Nakudu (Jigawa North happening. East), Albert Bassey (Akwa Ibom), Danjuma Goje (Gombe), Opeyemi “Post realities will come up in the next Bamidele (Ekiti Central), five years and we will have to deal with (Anambra), and Gabriel Suswan (Benue). it but for us we know for sure that things have changed; financial institutions Lawan assured the conference have changed their priorities, some of committee would commence them have stopped lending to energy sitting immediately so that the borrowings, among other. National Assembly could transmit the harmonized Bill to President “Yes it may be for the moment, they may Meanwhile, the President of the Muhammadu Buhari for assent come back to the realities probably in Senate, had since the another five years but the reality today The House of Representatives beginning of July constituted a seven- is you can’t find easy financing for fossil harmonization committee is led by the member committee to harmonise fuel related businesses”. Majority Whip, Mohammed Monguno, the differences in the versions of the as chairman. Other members include However, despite the energy transition PIB, passed by both chambers of the Victor Nwokolo, Ademorin Kuye, policy, the demand for crude oil is still National Assembly. Kingley Uju, Tijjani Yusuf, Ibahim Hamza there, he added. “For every forecast The Speaker of the House of and Mansur Soro. that we have including updates from Representatives, Femi Gbajabiamila, many other institutions that are not Most prominent among the clauses to had also constituted a conference in this business, everybody says even be harmonised is the royalty to host committee to harmonise the if by 2050 we still have oil demand of communities in the petroleum sector. differences in the versions of the about 100 million barrels, you will see While the Senate approved three per Petroleum Industry Bill passed growth. cent, the House of Rep agreed on five by the Senate and the House of per cent. Representatives. ” 10 COVER STORY COVEREnergy STORY APRIL 2020

JULY 2021

DESPITE PASSAGE, CONTROVERSY TRAILS PIB After about two decades in the National Assembly, the Petroleum Industry Bill (PIB) was finally passed on July 1, 2021, amidst controversy, Olamilekan FAWAS reports.

ome Nigerians are still kicking against by the Nigerian Upstream Regulatory upstream sectors were part and parcel of some sections of the Petroleum In- Commission while the midstream and one industry. He added that many players dustry Bill as passed by the National downstream sectors would be under in the industry operated in more than one S the oversight of the Nigerian Midstream sector; hence having them constantly Assembly. and Downstream Petroleum Regulatory liaising with two different regulators is For instance, the creation of two different Authority. unnecessary. regulators for the industry, namely, the Nigeria Midstream and Downstream But according to a petroleum industry an- It is believed that the bill, if signed into law, Petroleum Regulation Authority and the alyst, Sadiq Alabi, this will breed confusion would be the solution to the myriad of Nigeria Upstream Regulatory Commission and cause regulatory disunity, as well as problems facing the petroleum industry in is seen as counterproductive. waste the country’s scarce resources. the country. The upstream sector is to be overseen He said the downstream, midstream and The bill also gives the minister of petro- 11 ENERGY JULY 2021 leum the power of a general oversight over the petroleum industry, even as the two agencies are required to report to him. Specifically, the minister is empowered to formulate, monitor and administer federal government’s policy over the petroleum industry. However, there are important deviations from the general powers of the minister as hitherto granted under the previous regime. For example, the minister’s former unfettered, sole discretion and power to grant or revoke oil licences have been curtailed. But he will continue to exercise a significant influence in the industry. Also worthy of note is the 1 per cent levy to be imposed on the wholesale prices of petroleum products in Nigeria. The Senate President, Ahmad Lawan intention of the PIB is to move away from regulated prices to those determined by market forces. However, a multiplicity of market forces would determine the prices to him, would not go away soon. of fuel and allied products. levies and charges may act to distort that He said oil would continue to be needed reality. Speaking on subsidy payment, the min- to power global economic growth to Another salient point is the commerciali- ister said the federal government would eradicate poverty, which is still prevalent sation of the Nigerian National Petroleum have removed subsidy long ago if not for worldwide. opposition. Commission (NNPC) as the Nigerian Na- He added that the stabilising role of the tional Petroleum Company Limited (NNPC He also said Nigeria would make a lot of Organisation of Petroleum Exporting Limited). revenue from crude oil, which, according Countries (OPEC) in oil market for the Section 53 directs that the minister would, within six months of the commencement of the PIB, incorporate the NNPC Limit- ed in the Corporate Affairs Commission DIAGNOSING PIB AND ITS IMPLICATIONS (CAC). The shares are to be held by the Ministry of Finance, incorporated on Amid unending controversies that have continued to trail the behalf of the federal government. Petroleum Industry Bill (PIB) passed earlier this month by the National Assembly, experts in leading consultancy firms have The bill provides that the ministers of petroleum and finance are to determine x-rayed the Bill, noting important changes and what it offers which assets, interests and liabilities of the country. The PIB awaits harmonisation by the legislature, the current statutory the NNPC are to be Olamilekan FAWAS reports. transferred to the NNPC Limited. Assets, interests and liabilities not transferred to the NNPC Limited would continue to be he efforts at passing the Petroleum taken a critical look at the document are held by NNPC until they are extinguished Industry Bill (PIB) cannot be forgot- convinced that while the PIB 2020 may or transferred to the government, upon Tten. This is, because, on three oc- appear set to address all industry issues which it would cease to exist. casions, at the National Assembly, under to the extent possible, it is imperative various leaderships, it failed to see the to ensure that the country does not just Section 58 indicates that the Board of light of day. This is why stakeholders insist pass any law but one that is competitive, the NNPC Limited is to be constituted that efforts of the Upper House leadership balanced, fair, reasonable and realistic. in accordance with the provisions of the in passing the Bill are commendable. Companies and Allied Matters Act (CAMA) For instance, a Partner & Head, Tax-En- and the company’s articles of association. But, since its July 1, passage, discordant ergy & Natural Resources and Managed tunes have continued to trail the docu- Services, KPMG, in Nigeria, Adewale Ajayi, Buhari’s assent will end subsidy – Sylva ment, as various interests groups have writing in his firm’s journal, noted that for The Minister of State for Petroleum Re- either criticised or rejected certain provi- the past 20 years, there have been various sources, Chief Timipre Sylva, said President sions in the Bill. attempts at reforming the industry. How- ever, none of the efforts, he contended, Muhammadu Buhari’s assent to the PIB Experts and other stakeholders that have would automatically end fuel subsidy as yielded result until the introduction of the 12 ENERGY ENERGYEnergy JULY 2021 importation of products to only players with local refining capacity. This clearly counters the provision of 205(1). “I think the provisions would create a duopoly in a deregulated price environ- ment, thereby destroying the Nigerian downstream industry as we know it today. It limits the importation of all petroleum products, including fuel, diesel, aviation fuel, lubricants, base oil (products which are already deregulated), to only players with local refining capacity. “In the near term, only the NNPC and Dan- gote will have domestic refining capacity for fuel, for instance, so they will be the only importers. This takes the industry back, so it could not have been the inten- tion of the bill.

Speaker, House of Representatives, Femi Gbajabiamila “Moving from a state-owned monopoly in a price-regulated market to a duopoly in benefit of all stakeholders would continue Experts speak a deregulated one is taking the industry to be required in the years ahead. But an expert in the industry, Jerry backward and exposing Nigerians to He said: “Nigeria as a key player in the in- Lazarus, said the passed PIB may spell exploitation and further hardship. This, dustry will continue to lend full support to doom. “I have some concerns about cer- in my humble view, is not reformatory,” the efforts of the organisation to balance tain provisions of the bill as it affects the Lazarus said. the oil market for the benefit of all. Nige- downstream. While the bill removed price He said that rather than seek to protect re- ria’s membership of the OPEC is very im- control on petroleum products in section finers, consumers should be protected by portant as it helps in strengthening shared 205, Senate’s version has a clause that con- liberalising and expanding supply sources, values and protecting the group interest strains market competition by restricting adding that it is the only way prices would in the light of the above narratives. be “market determined” and consumers pay fair value for the products they buy. According to him, the viability of local DIAGNOSING PIB AND ITS IMPLICATIONS refining is not determined or enhanced by locking out competition; it is rather the industry. This, he noted, has become PIB 2020. achieved by price deregulation, which has extremely crucial when it is considered been done in section 205. “The PIB started as an omnibus bill and that only four per cent of the $70 billion was later divided into four separate bills investments made in Africa’s oil and gas He further said: “This clause gives statu- before emerging in 2020 as a consolidated industry between 2015 and 2019 was for tory unfair advantage to private players bill. It is a fact that previous attempts at Nigeria, though it is the biggest produc- rather than through market competition. passing the PIB in 2009, 2012 and 2018 er and has the largest reserves on the Indeed, the law and the authorities have failed because of factors such as lack of continent. Besides, the National Bureau an obligation to protect the market (other ownership, misalignment of interests of Statistics (NBS) reports that only $53.5 players, including Nigerian entrepreneurs) between the National Assembly and the million or 0.55 per cent of total investment and the consumers rather than encour- Executive, perceived erosion of ministerial of $9.680 billion in the country last year age monopoly/duopoly by locking out powers, stiff opposition by the petroleum was made in the industry. competition. host communities and push back by Ajayi, therefore, maintains that if the coun- “This clause does not create a level-play- investors on the perceived uncompetitive try is to achieve her ambition of 40 billion ing field for all players in the sector, and provisions in those versions of the bill,” barrels of oil in reserves and four million can indeed destroy existing Nigerian Ajayi wrote in the publication. barrels of oil daily, there is the need to businesses that engage in importation of Can the PIB 2020 achieve these objec- attract new investments into the sector. other petroleum products like diesel, avi- tives? ation fuel and others, with the attendant loss of jobs and more economic misery for For Ajayi, one thing is clear – the govern- “The oil in the ground is of no use to the Nigeria and Nigerians. ment has tried to strike a balance between country if it cannot monetise it. Therefore, “Governments all over the world do not immediate revenue demands and the the PIB must lead to a massive transfor- need to attract long-term investment for create and encourage monopolies or mation of the industry and succeed in duopolies; that is why anti-trust laws are 13 ENERGY JULY 2021 enacted and enforced to protect indus- tries and consumers. Nigeria should not be doing the reverse. A case can always be made about protectionist policies for nascent or pioneer industries, but this is not the case with a long established, once-thriving Nigerian downstream. “This clause needs to be expunged from the PIB.” Economic and petroleum industry experts have also said the 30 per cent share of profits for the oil and gas exploration is too high at a time Nigeria is complaining of shrinking revenue. The experts said if 30 per cent was used solely for exploration at this time, other infrastructural development would suffer. Minister of State for Petroleum Resources, Timipre Sylva

An Abuja-based economic expert, Simon able energy. such venture at a time the government is Samson Galadima, said the 30 per cent of complaining of low revenues to finance its Suraj Oyewale also said exploration activ- oil revenue for exploration seemed like activities. a wild goose chase because that chunk ities required a lot of money with varying shouldn’t be used for that purpose at a degrees of success, but that is difficult to “It should also be noted that the base of time the world is moving towards renew- justify committing such amount of money this frontier exploration fund computation from potential government revenue to is not the full proceeds from sale of crude.

attracting the desired investment required Chapter 1 – Governance and Institu- in the Ministry of Finance Incorporated to reposition the industry. Hopefully, the tions (and Ministry of Petroleum Incorporated) provisions of the PIB will be enough to on behalf of the Federation to take over The key objective is ensuring good gov- stimulate the desired investment though assets, interests and liabilities of NNPC. ernance and accountability, creation of it has not addressed the issue of energy This structure is expected to pave the way a commercially oriented national petro- transition from fossil fuel to clean energy,” for eventual sale of shares to Nigerians. leum company, and fostering a conducive Ajayi submitted. business environment for petroleum Any assets, interest and liabilities not What has changed? operations. transferred to NNPC Limited will remain with NNPC until extinguished or trans- Dissecting the PIB 2020, Pricewaterhouse- Creation of the Nigerian Upstream ferred to the government after which Coopers (PwC), an accounting, tax and Regulatory Commission responsible for NNPC shall cease to exist. Transfer and sale audit consultancy firm, broke it down to the technical and commercial regulation of the shares are subject to approval by providing legal, governance, regulatory of the upstream petroleum operations; the government and endorsement by the and fiscal framework for the Nigerian and the Nigerian Midstream and Down- National Economic Council. petroleum industry and development of stream Petroleum Regulatory Authority host communities. responsible for the technical and com- NNPC Limited will earn 10 per cent of pro- mercial regulation of the midstream and ceeds of the sale of profit oil and profit gas The PIB, it further noted, contains five downstream operations in Nigeria. The as management fee while 30 per cent will chapters, 319 sections and eight sched- Commission and Authority are exempted be remitted to Frontier Exploration Fund ules dealing with Rights of Preemption; from the provisions of any enactment for the development of frontier acreages Incorporated Joint Ventures; Domestic relating to the taxation of companies or in addition to 10 per cent of rents on pe- Base Price and Pricing Framework; Pricing Trust Funds troleum prospecting licences and mining Formula for Gas Price for the Gas Based leases. Industries; Capital Allowances; Production Imposition of up to one percent levy on Allowances and Cost Price Ratio Limit; the wholesale price of petroleum prod- Chapter 2 – Administration Petroleum Fees, Rents and Royalty and ucts sold in the country (0.5 percent each The main objective is to promote the Creation of the Ministry of Petroleum for the Authority Fund and Midstream Gas exploration and exploitation of petroleum Incorporated. Infrastructure Fund) resources in Nigeria for the benefit of the In comparing notes from the previous Incorporation of a commercial and Nigerian people and promote sustainable efforts, PWC established 20 key changes profit focused NNPC Limited under CAMA development of the industry, ensure safe, to the PIB 2020, thus: within six months from commencement efficient transportation and distribution of the new law with ownership vested infrastructure, and transparency and 14 ENERGY Energy ENERGY JULY 2021 Indeed, oil will not simply vanish Osenzua said the major incentives of The base is profit of oil or gas, which is but consolidate and cost-opti- the bill would affect existing players and determined after removing royalty, cost mise as the world favours renew- reduce taxes and royalties in a bid to spur recovery and tax from the proceeds or val- able energy mix. While we try to remain relevant in the resource investment. ue of oil or gas. So it does not mean that market, it is time for Nigeria to government is committing 30 cents from grow beyond resources to the He said: “One silver lining is the disincen- every one dollar realised from the sale of manufacturing and service tive built in for gas flaring. Nonetheless, crude to this project. But 30 per cent of oil market more has to be done to incentivise gas profit or gas is still a huge financial com- development as key to powering the next mitment to one activity. So the governors decade of Nigeria’s fortunes. have a valid point on this,” Oyewale said. “Indeed, oil will not simply vanish but con- On the three per cent fund for host com- solidate and cost-optimise as the world munities, he said he would recommend favours renewable energy mix. While we an even lower rate for them. try to remain relevant in the resource market, it is time for Nigeria to grow be- Another petroleum industry expert, said, “But I must say that its passage brings yond resources to the manufacturing and Charles Osezua, also said the PIB may not certainty to decision making, which is service market. And natural gas is the link make a big difference as was originally critical for any investor. and engine for that growth.’’ envisioned by its authors. He, however,

accountability in the administration of Available funds are to be allocated 75 per borrowed is subject to the satisfaction of petroleum resources in Nigeria. cent for capital projects, 20 per cent as the commission that the fund was em- reserve and five per cent for administra- ployed for upstream operations and the Avoid economic distortions and ensure a tive expenses. However, a community will interest rates reflect market conditions. competitive market for the sale and distri- forfeit the cost of repairs in the event of bution of petroleum products and natural Royalties are payable at the rates of 15 vandalism, sabotage and other civil unrest gas in Nigeria; and avoid cross-subsidies percent for onshore areas, 12.5 percent causing damage to petroleum facilities or among different categories of consumers. for shallow water, and 7.5 percent for disruption of production activities. deep offshore and frontier basins, 2.5 The Commission is required to develop a Chapter 4 – Fiscal framework percent – 5 percent for natural gas. In model licence and model lease to include addition, a price-based royalty ranging a carried interest provision giving NNPC The key objective is to establish a pro- from zero to 10 percent is payable to Limited the right to participate up to 60 gressive fiscal framework that encourages be credited to the Nigerian Sovereign per cent in a contract. investment” in the Nigerian petroleum in- Investment Authority. dustry, provides clarity, enhances revenue Chapter 3 – Host communities devel- for the government while ensuring a fair Gas utilisation incentive will apply to opment return for investors. midstream petroleum operations and The main objective is to foster sustainable large-scale gas utilisation industries. FIRS to collect Hydrocarbon Tax of 15 per prosperity within host communities, pro- An additional five-year tax holiday will cent – 30 percent on profits from crude oil vide direct social and economic benefits be granted to investors in gas pipe- production, CIT at 30 per cent and Edu- and enhance harmonious co-existence. lines. cation Tax at two per cent, which will no Any company granted an oil prospecting longer be tax deductible. The Commission Chapter 5 – Miscellaneous provi- licence or mining lease or an operating will collect rents, royalties, and production sions company on behalf of joint venture shares as applicable while the Authority will The PIB repeals about 10 laws includ- partners (settlor) is required to contribute collect gas flare penalty from midstream op- ing the Associated Gas Reinjection three – five per cent (upstream Compa- erations. Late filing of tax returns will attract Act; Hydrocarbon Oil Refineries Act; nies) and two percent (other companies) N10million on the first day and N2million Motor Spirit Act; NNPC (Projects) Act; of its actual operating expenditure in the for each subsequent day the failure contin- NNPC Act (when NNPC ceases to exist); immediately preceding calendar year to ues. A N20 million fine is applicable to an PPPRA Act; Petroleum Equalisation the host communities development trust offense where no penalty is prescribed. Fund Act; PPTA; and Deep Offshore and fund. This is in addition to the existing Generally, expenses must be wholly, Inland Basin PSC Act. It amends the contribution of three percent to the reasonably, exclusively and necessarily Pre-Shipment Inspection of Oil Exports NDDC. The Fund is tax exempt and any incurred to be tax deductible. However, Act while the provisions of certain laws contributions by a settlor is tax deductible. a cost price ratio limit of 65% of gross are saved until termination or expi- Board of trustees and executive members revenue is imposed for hydrocarbon tax ration of the relevant oil prospecting of the management committee may in- deduction purposes, any excess cost licenses and mining leases including clude persons of high integrity and profes- incurred may be carried forward. the Petroleum Act, PPTA, Oil Pipelines sional standing who may not necessarily Act, Deep Offshore and Inland Basin No tax deduction for head office costs come from any of the host communities. PSC Act. while tax deduction of interest on monies 15 ENERGY JULY 2021 ASSESSING KYARI’S SECOND YEAR SCORECARD for the renewal of OML 125 and further AS GMD OF NNPC investment in the exploration of the lucrative field to boost the nation’s crude oil production. Recently, in May 2021, Mallam Kyari repeated a similar feat when he led the Corporation to sign a series of agreements with SNEPCo and other PSC partners to resolve the disputes around another deep offshore block, OML 118, leading to the renewal of that acreage with the prospect of a new $10billion investment in the development of the Bonga South-East Field. This will further boost the nation’s oil production. In furtherance of the goal of boosting the nation’s crude oil production, the Mele Kyari-led management has secured a number of alternative funding facilities for the NPDC and some of the Joint Ventures to facilitate further development of assets. These include: the N875.75million NPDC OML 65 Alternative Funding and Tech- nical Services package with CMES-OMS By Abisola THOMPSON 40billion barrels. To achieve that goal, the Petroleum Development Company, the he galvanized NNPC to rev up exploration $3.15billion Alternative Financing Package roup managing director of the work in the inland basins with the drilling with Sterling Exploration and Energy Nigerian National Petroleum of the Kolmani River II Well culminating in Production Company Limited (SEEPCO) Corporation (NNPC), Mallam Mele G oil find in commercial quantity in the Up- and other partners for the development of Kyari, had just marked his second year as per Benue Trough. The drilling of Kolmani NPDC’s OML 13. the chief driver of the oil and gas industry River III Well is ongoing with very high in the country. First oil of about 7,900bpd was achieved prospect of oil find. Seismic data collec- from the project on 1st April, 2020, He was officially inaugurated as the 19th tion is ongoing in the Bida and Sokoto while production is expected to peak at Group Managing Director of the Nigerian Basins. Plans are also afoot to re-launch 94,000bpd of oil and 542 million standard National Petroleum Corporation (NNPC), the exploration work in the Chad Basin. cubic feet per day (mmscfd) of gas within on July 8, 2019, even though, his appoint- All these are geared towards boosting four years. ment was announced much earlier in the nation’s crude oil reserves to meet the June. 40billion barrels target. Gas development When he took over, the astute geologist, Another goal set by Mele Kyari is to boost On gas development, the NNPC has fo- transparency and accountability cam- the nation’s oil production to three million cused heavily on the gas sector in keeping paigner of the industry never left anyone barrels per day. To achieve that target, he with the aspiration of the administration in doubt as to the direction he has chosen immediately set about resolving disputes to diversify the economy by transforming in order to pilot the corporation and the around a number of oil blocks that had the nation into a gas driven economy. industry to an enviable position, both led to production shut-in. A case in point In this regard, NNPC drove and achieved locally and internationally. is the resolution of the dispute involving the Final Investment Decision on the Shell and Belema Oil that shut in over So looking at his activities two years down NLNG Train 7 Project in December 2019. 30,000 barrels per day production in oil the road, his actions and strides vis-à-vis The project was on the drawing board for mining lease (OML) 25. That dispute was the key objectives he set out for himself at over 10 years. The project is expected to effectively resolved to restore production his inauguration would give a clear picture generate over $20billion of revenue to the in the oil block. of his achievements in the last two years. Government over the project’s lifecycle, He also led the Corporation to execute the 10,000 direct and 40,000 indirect jobs. Upstream Abo OML 125 Heads of Terms leading to The Corporation followed that feat up in Starting with the Upstream, one of the the resolution of the issues around most May 2020, at the heat of the Covid-19 pan- goals he set at his inauguration was to of the deep offshore Production Sharing demic, with the signing of the Engineer- increase the national crude oil reserves to Contracts (PSCs). This paved the way ing, Procurement and Construction (EPC) 16 ENERGY ENERGYEnergy JULY 2021 contract of the NLNG Train-7 project. The contract was signed with the SCD JV Con- sortium comprising affiliates of Saipem, Chiyoda and Daewoo. The execution of the EPC contract signals the effective commencement of the detailed design and construction phase of the multi-billion dollar project which, on completion, is expected to raise the NLNG production capacity by 35 per cent from the current 22 million tonnes per annum (MTPA) to 30 MTPA. Following the successful tiding up of preliminary works, the stakeholder of the company decided to carry out the ground breaking of NLNG train 7 project on 15th June, 2021, thus signaling the commence- ment of construction work on the project.

Under the watchful eyes of Mele Kyari, trucks per day into the domestic market. (USTDA) Grant and commenced the NNPC also successfully flagged-off the upgrade of 1350MW Abuja IPP project In order to provide an alternative to construction of the Ajaokuta-Kadu- development to World Bank Standard for Premium Motor Spirit (petrol) as the sole na-Kano (AKK) gas pipeline project on bankability. 30th June, 2020. The project which has automotive fuel and reduce the huge been described by the President as a importation bill of the product, he led Downstream NNPC to key into the Year /Decade of Gas game-changer is an integral part of the NNPC’s downstream operation is also initiative spearheaded by the Honorable Trans-Nigeria Gas Pipeline (TNGP) with experiencing the Kyari’s Midas touch with Minister of State for Petroleum Resourc- a capacity to transport about 2.2billion the introduction of Operation White which es to launch the Autogas initiative. It cubic feet of gas per day. has helped in streamlining petroleum executed a JV agreement with NIPCO to products importation, supply and distribu- The infrastructure designed to feed gas help in the marketing and distribution of tion across the country. into the AKK – the Escravos Lagos Pipeline the product to get as many Nigerians as System II (ELPS II) and Oben-Obiafu-Obri- possible to migrate to the use of gas as As the sole importer of petroleum prod- kom (OB3) gas pipeline are also being automotive fuel. ucts in the country, NNPC has succeeded aggressively executed and expanded to in keeping the nation well supplied. NNPC The NNPC boss heralded 2021 with a increase delivery capacity from 1.5BCF/D has emplaced a stable fuel supply system significant step in the direction of bringing to over 3.5BCF/D. The ELPS II has reached to guarantee zero fuel queues throughout the proposed Brass Gas Hub into reality. 96.34 per cent completion. the country in the last two years of Kyari. He led NNPC to take the Final Investment Through his doggedness and the share Decision (FID) with the Brass Fertilizer and The Corporation is in the process of desire to ensure Nigeria gets the highest Petrochemical Company for the $3.6bn strengthening the products distribu- value, he ensure that the Corporation to Brass Methanol Plant in Odioma, Bayelsa tion system by revamping the pipeline achieve a $300million reduction in the State. network through a Build, Operate and cost of the AKK Gas Pipeline contract via Transfer (BOT) model whose process is He followed that feat up a few weeks later contract renegotiation from the initial already at an advanced stage. $2.8billion. with the signing of a $260m financing agreement for the Assa-North Ohaji South The vision of revamping the pipelines is in In additional to the major strides in the (ANOH) Gas Project with Seplat. The proj- tandem with the Refineries Rehabilitation gas sector, the sector also witnessed in ect will deliver 300 million standard cubic Project to ensure that products evacuation late 2020 the commissioning of the Oredo feet of gas per day and 1,200 megawatts facilities are in top shape to support the Integrated Gas Handling Facility (IGHF) of electricity to the domestic market. operations of the refineries post-rehabili- and the Liquefied Petroleum Gas Storage tation in 2023. and Dispensing Unit. The facilities are On 22 April, 2021, NNPC executed a Gas wholly owned and constructed by the Development Agreement (GDA) for the Oil Keen on boosting petroleum products Nigerian Petroleum Development Compa- Mining Lease (OML) 143 with its partner, supply and distribution in riverine areas ny (NPDC) to address domestic gas supply Sterling Oil Exploration and Production of the Niger Delta, Mele Kyari led NNPC to challenges. The facilities currently deliver Company (SEEPCO). The project will boost sign an agreement with the Nigerian Con- over 200 million standard cubic feet of dry the nation’s gas production by 1.2trillion tent Development and Monitoring Board gas per day and 330 metric tonnes of Liq- cubic feet (tcf). (NCDMB) and Zed Energy for the con- struction of the N10.5bn Brass Petroleum uefied Petroleum Gas (cooking gas) which The Corporation also secured the United Products Terminal. The facility will serve as is equivalent of 16 units of 20tonnes LPG State Trade and Development Agency 17 ENERGY JULY 2021 a strategic reserve for the country as it is expected to provide a depot for 50 million litres of petroleum products, two way product jetty, automated storage and au- tomated bay for AGO, PMS, DPK and ATK. It will close the infrastructure gap in the distribution of petroleum products and also help to stop illegal refining activities. Refineries rehabilitation Another goal that the GMD set for his management at inauguration in 2019 was the rehabilitation of the refineries. He has made good on that promise by driving the rehabilitation project to an advanced level. On 6th April, 2021, he led NNPC to the books of the Corporation the way no transparency terrain is the successful com- sign the $1.5billion Engineering, Pro- other management before his has done. pletion of a controversy-free recruitment curement & Construction (EPC) Contract The key accomplishments in this regard exercise for 1,000 young graduate trainees Agreement with Tecnimont SpA, for the include: to rejuvenate the Corporation’s talent mix. complete rehabilitation of The publication of the 2018 and 2019 Stakeholders’ engagement Refinery. Audited Financial Statements of the Cor- Mele Kyari also promised at his inaugura- He led NNPC and the contractor, Tecni- poration and its 19 subsidiaries registered tion to upscale engagement with stake- mont SpA, to flag off construction work under the Companies and Allied Matters holders to ensure that stakeholders are on the Port Harcourt Refinery rehabilita- Act (CAMA) 1990 as amended alongside carried along in the Corporation’s opera- tion project. that of the National Petroleum Investment tions. He has kept faith with this pledge by and Management Services (NAPIMS) to He is in the process of making good his devoting time to honour invitations from provide clarity on Joint Venture finances. promise to introduce a new operational the relevant committees of the National The AFS were published in the Corpora- model for the refineries post-rehabilitation Assembly, holding periodic engagement tion’s website for all interested parties to with the call for bids for the Operations sessions with critical stakeholders includ- access and scrutinize. This is the first time & Maintenance (O&M) contract for the ing the media. the Corporation’s AFS were made public in refineries advertised recently in the media. such a manner. COVID -19 Interventions The O&M model would ensure that the re- fineries are managed by contractors with A major revelation in the Audited Finan- Following the outbreak of the Covid-19 requisite experience who would ensure cial Statements of the two years so far pandemic in early 2020, the Group that they are regularly maintained as and published is the 99.7% reduction of the Managing Director quickly realized the when due. Corporation’s loss profile from ₦803billion vulnerable position of Nigeria with regard in 2018 to ₦1.7billion in 2019. Following to condition of the existing healthcare WRPC and KRPC EPC contracting has this trajectory, the Corporation is likely system in the country. He rallied players in progressed to advanced stage with a to declare profit in the 2020 AFS which is all the sectors of the oil and gas industry certificate of no objection secured from billed to be released soon. to raise over N21billion to support the BPP on the award of the contract. Current- fight against the spread of the disease in ly awaiting FEC approval of award to the The Kyari-led management also sustained the country. most technically and commercially quali- the Publication of the Corporation’s fied globally reputable EPC Company. Monthly Financial & Operations Reports Under the leadership of NNPC, 26 per (MFOR) in line with the TAPE vision. NNPC cent of the fund was deployed for the Transparency remains the only national oil company provision of logistics and in-patient One of the issues the NNPC boss spoke that publishes its financial and operations support equipment such as ambulanc- passionately about during his inaugura- reports monthly globally. es, ventilators, isolation centres, among tion was Transparency and Accountability. others. He ensured that every state of the The GMD also led the Corporation to enlist He emphasized that transparency and Federation benefitted from the dona- with the Global Extractive Industry Trans- accountability would be the cardinal tions. parency Initiative as an EITI Supporting pillars of his management. He promptly Company which mandates places NNPC Twenty-one per cent of the sum was de- followed up his inaugural pronouncement in the group of over 65 extractive compa- ployed for the provision of medical con- with the launch of his management’s nies, state owned enterprises that commit sumables. These include drugs, sanitizers, strategic objectives two weeks later. He to observing transparency and account- masks, protective gears and equipment, christened it as Transparency, Account- ability standards defined by EITI. etc. These were also donated to all the ability and Performance Excellence (TAPE). states of the Federation. Since then, he has walked the transparen- Another key achievement of the NNPC cy and accountability talk by opening up under the leadership of Kyari on the 18 ENERGY ENERGYEnergy JULY 2021 ster stated that the policy had encouraged the International Oil Companies (IOC) to LOCAL CONTENT KEY TO JOB CREATION make more impact in-country. AND DEVELOPMENT, SAYS SANGSTER He stressed that Nigeria must remain com- petitive in the global energy market despite •COMMITTED TO ENVIRONMENT, WELLBEING OF OUR HOST COMMUNITIES the shifting focus to renewable sources of fuels. TotalEnergies is one of the leading oil majors in Nigeria’s oil and gas industry, and is committed to creating real value The Total Chief declared that the current for all stakeholders in fulfillment of its socio-economic and transition to carbon-free sources of energy environmental obligations. The company prioritises sustenance of would continue and urged the country to local content as key to job creation and development of Nigeria’s see the opportunities in the ongoing global oil industry. It is also committed to the environment and wellbeing development. of the people where it operates, OLAMILEKAN FAWAZ reports. Sangster who is also the Chairman of the Oil Producers’ Trade Section (OPTS), the umbrella body of major international and indigenous oil companies, and a sub-group within the Lagos Chamber of Commerce and Industry (LCCI), stated that as the world progressively starts to mitigate the impact of the pandemic, all stakeholders must work to ensure that the country remains attractive for investment. He pointed out that the world was start- ing to see signs of a resurgence of global economic growth, explaining that this will present Nigeria with new opportunities to develop its abundant natural resources. He added that 2020 accelerated momen- tum towards the energy transition and how there was substantial global reduction in demand for fossil fuels, saying that, “it’s clear to me that this trend will continue”. “So, I think this really is a perfect opportuni- ty for all the key actors, government regula- tors, national companies, private companies and all the suppliers to the industry to work together to ensure that Nigeria is compet- itive in the international landscape, and as an attractive destination for investment. s the government works to wean the He said: “The Industry has been proactive country of importation of unneces- with the Local Content Act. The Act has “It’s our hope, and indeed it’s our expecta- sary technologies and expatriates, aided the establishment of indigenous tion that this will help to identify and proffer A solutions towards ensuring the sustained the Managing Director of Total Upstream companies and creation of Jobs. The Egina Companies in Nigeria, Mr Michael Sangster, project is a good product of local content development of Nigeria’s resources, partic- had called for the sustenance of local con- and we are very proud of it because 70 per ularly gas. tent to help the growth of the oil and gas cent of the fabrication was done in-coun- “This is the decade of gas and I think this sector in Nigeria. try and they are quality and the facility is would consequently boost investor confi- working well.” Sangster stated this at the Chief Executive dence and attract investment to grow the Officers roundtable in Abuja, adding that He urged the government to invest a good industry for the benefit of all stakeholders the Local Content Act had helped them percentage of its revenue to support local and all Nigerians. So, the OPTS remains make more impact in-country. He explained content to help boost the economy that committed as a trusted partner of the gov- that the Nigeria oil industry became proac- would drive regional development. “We ernment and all stakeholders in the industry tive with the introduction of local content strongly believe that sustainability of the to move the industry forward,” he said. act, adding that with it should be sustained local content will help keep young people At the 2021 Nigeria International Petro- as efforts are being made to transit to busy,” he added. leum Summit (NIPS), Sangster used the cleaner energy. Giving insight into the local content, Sang- opportunity to congratulate the Minister 19 ENERGY JULY 2021 and assets will gradually depict our ambi- tion, investment will tend more towards renewables” She, however, allayed concerns that the name change and transformation to TotalEnergies would not result in job losses saying on the contrary it will have more positive impact as the company would constantly upskill its staff in tandem with the transformation. The Country Communication Manager, Dr. Charles Ebereonwu, assured that the company is in Nigeria for the long haul, maintaining that Total Companies in Nigeria will continue to be important part of the TotalEnergies Group. He noted that the company had embraced renewables with CSR: Total E&P, Lagos govt., commission oxygen plant in Gbagada, Lagos the project to ‘solarise’ its over 577 service stations spread across the country. of State, Petroleum, Timipre Sylva, for the for 2030.We will produce more renewable past successful summits, which he said have electricity and liquefied natural gas (LNG). The Executive Director, Corporate Services, been a platform for highlighting the strong We will also need new oil projects to offset TotalEnergies, Abidodun Afolabi, said the capabilities of the industry in Nigeria and the decline in output from fields currently in company would continue to collaborate the investment opportunities which are production while decarbonizing our hydro- with the Nigerian government. He ex- available. carbon production chain by avoiding and plained that TotalEnergies is transiting to reducing emissions and capturing residual new opportunities in the hydrocarbon He said: “Now, the theme of this year’s sum- emissions.” industry. “As you all have seen, we are a mit as we already have is, ”From Crisis to Op- new integrated energy company, you can portunities, New Approaches to the Future As regards downstream production, she see the new logo and name. This New Year of Hydrocarbons,” and I’m sure we can all said “We want to influence demand by of- development exemplifies the dynamics we agree this really resonates with everyone in fering customers decarbonized alternatives are adopting. “TotalEnergies want to see the room today, after a year full of all sorts of whenever possible. By 2030, the production industry maximise potential and deliver disruptions,” he noted. and sale of petroleum products will account optimal dividends to Nigerians and Africa, for around a third of TotalEnergies’ aggre- He recalled the oil price war at the begin- as a whole. “We are committed to make Ni- gate energy production and sales. ning of last year, then the pandemic which geria an attractive destination for business,” he said had some issues on oil demand and "This is slated to decline to below 20 per he said. its impact on the sector as a whole and the cent by 2050, and 55 per cent in 2020. TotalEnergies recently announced an in- entire value chain. Simply put, we are leveraging the energies vestment of about $60 billion in renewable of today to build the energies of the future, He said that efforts must be made to energy projects between now and 2030 as and 2020-2030 will be the decade of our improve on logistics and contract clarity, part of its ambitious moves to deepen its transformation into a truly broad energy among others, adding that the adoption energy transition space in the world. It is company with a lineup featuring oil, gas, of strategies that would reduce production also promising a robust midstream invest- electricity, hydrogen, biomass, wind and costs must also be prioritised. ment in Nigeria as the country unleashes solar.” gas investment initiative to harness the It would be recalled that Total companies “TotalEnergies intends to become a major potential in the gas industry. globally are now known be TotalEnergies player in the energy transition, and we have Group, to reflect its diversification into elec- The company’s executive general man- built a solid foundation on which to achieve tricity, hydrogen, biomass, wind and solar. ager, Bunmi Poopla-Mordi, said with the our ambition.” investment, her company hopes to grow its Giving insight into how the adaptation renewable capacity to 100million gigawatts The Executive General Manager, Total would unveil locally, Popoola-Mordi said: and five million biofuels. Country Services, Mrs. Bunmi Popoola-Mor- “The company is working together with She said her company was determined di, explained the steps that would mark local regulators to adapt the name change to reduce direct emission by 40 per cent the adaptation of the new name, logo and of the broad energy company we want to in 2030 and net zero in 2050 as part of its visual identity which she said is at the heart become. During this period, you will witness adherence to Paris protocol on climate of the company’s strategy to achieve carbon the following: Brand overhaul, Change from change. neutrality by 2050. our usual communication, Total service stations will gradually change to take on the Poopola-Mordi stated that the company She said: “Beyond our ambition for 2050, new logo, name and lifestyle, Total offices was also committed to partnership and sus- we have set precise, demanding targets tainable development in the fight against 20 ENERGY ENERGYEnergy JULY 2021 global corruption, poverty and environ- She said her company would not rest on its to combat the pandemic. The oil giant said mental degradation. oars in continually adding sustainable value it was also in discussion with the govern- to the country in line with its corporate ment on the procurement of COVID-19 She maintained that the company’s recent philosophy and ethos, while also striving to vaccines for Nigerians. name change was a game-changer, which maintain dominant position in the country’s followed ambitious trajectory since 1954 Mr Alex Aghedo, Executive General Manag- renewable sector. and defined its current state and aspiration er, Operations Support Services, Total E&P for global energy transformation Mrs Chinwe Ifechiga, CSR Manager, Total Nigeria, said: “Total and 30 other upstream Nigeria, disclosed that the downstream operators in Nigeria’s Oil and Gas Industry, She said the company was desirous of company had been carrying out various led by the Nigerian National Petroleum keying into the country oil and gas develop- programmes to support Nigeria’s youth Corporation (NNPC), donated N21 billion ment with its energy transition projects of and children and would not stop adding to the federal government’s COVID-19 which Nigeria would be one of the greatest value therein. According to her, some of the effort. beneficiaries due to its importance in global programmes include: Startupper Challenge, energy rating. “In the first phase, the donation covered Skills Acquisition Programme, Scholarship three thematic areas, namely, provision According to her, the name change to Scheme and the Learn, Experience, Artic- of medical consumables; deployment of TotalEnergies would not in any way alter ulate and Decide (LEAD) programmes for logistics and inpatient support services as any joint venture agreements between the students. well as medical infrastructure. company and co-investors nor some of its She disclosed that her company has been ambitious energy projects in Nigeria. “Total’s contribution was $3.2 million (N1.2 sponsoring 40 children yearly in four save billion).” She said the name change and the compa- our souls (SOS) Villages in Nigeria and had ny’s strides in energy transition represent executed several projects to better the lives According to him, the company also car- increased opportunities for Nigeria and of the children. ried out other interventions including the investors in exploration of natural resources donation of hospital beds, surgical ventila- She added that 54 youths from Koko, which she said would continue to be the tors, dialysis machines, and face masks to Delta State and 100 from have so toast of her company. the Lagos and Rivers State Governments. far benefited from the skills acquisition TotalEnergies has also promised to deepen programme such as welding and fabrica- Aghedo said: “In collaboration with the its contribution to national development tion, furniture making, catering, computer Lagos Ministry of Health and our partners, and attainment of the United Nations sus- studies and fish and crop farming. we decided to build and donate a medical tainable development goals (SDGs) through oxygen plant at the Gbagada General She noted that another 64 secondary its various Corporate Social Responsibility Hospital. We believe that this facility would school students were being given Total (CSR) programmes in Nigeria. be useful even beyond the COVID-19 education sponsorship in Koko, Delta State pandemic. Besides, the multinational oil company annually as part of the company’s contribu- disclosed that education, youth entrepre- tion to its host community. “It would not only help improve the state’s neurship and inclusion are instrumental capacity to care for COVID-19 patients She announced that the 2021/2022 Start- to achieving the SDGs and eradication of but also further strengthen capacity to upper Challenge, would soon begin, adding . manage other conditions associated with that the scheme offers young Nigerians oxygen deficiency.” Mrs Bunmi Popoola-Mordi, the Executive opportunities to transform their business General Manager, Total Country Services, ideas into fruition He said the facility was in the last stages of said her company would not shy away from construction and would be handed over to Total also contributed over N1.2 billion to being part of the socio-economic growth the Government very soon. the Federal Government’s COVID-19 effort of Nigeria through value adding Corporate Social Responsibility (CSR) project, driven by four pillars namely: road safety, youth inclusion, cultural dialogue and heritage as well as activities on climate change, coastal areas and oceans. She said the pillars had stood the company far apart from its contemporaries in Nigeria, adding that the company had since the 1980s designed tracking mechanism aimed at measuring the impacts of the projects on targets communities. According to her, the company also made impressive show in the thick of COVID-19 pandemic through huge donation and capacity building services to health officials to prevent spread of the scourge. 21 ENERGY JULY 2021 NNPC WEEKLY REVIEW: NNPC PRIORITISES SAFETY, PARTNERS FIRE SERVICE

By Abisola THOMPSON competence of staff and other workers on States crude oil inventories and as rising safety issues, stressing that only a well- COVID-19 infections threatens demand, trained and safety-conscious workforce but prices held on to most of their gains he Nigerian National petroleum Cor- could protect the assets of the company. from the previous session on expectations poration (NNPC) started its weekly that supplies will remain tight through “We decided to organize this programme activities with its subsidiary, the year-end. T because as we all know, NNPC is a com- NNPC Trading Company partnering with pany that believes in health, safety and The Market Intelligence Department of the federal fire service to ensure safety in environment. Currently, NNPC is pursuing NNPC’s London Office reported that in operations. goal zero in terms of HSE. So, we at the New York, the front-month Nymex West According to the Corporation, this is in NNPC Trading decided to key into the goal Texas Intermediate (WTI) September con- compliance with the goal zero initiative of zero to create awareness in our people on tract moved in lockstep and was also up the NNPC safety policy to ensure security the need to keep the environment safe,” 2.88 dollars per barrels, ending the session of lives of employees and the company’s she stated. at 70.30 dollars per barrel. operational facilities. Also speaking, the Executive Director, Lower price volatility had a soothing effect Speaking at a training programme organ- Operations & Commercial (EDO&C), Mr on the oil complex, with the oil volatility ised by the NNPC Trading Company in Muhammad Kudu Suleiman, reiterated index dialing down from 52.16 per cent to conjunction with the Federal Fire Service that the decision to involve all levels of 40.17 per cent in Abuja, the Executive Director, Shared workers was to ensure that everyone was Part of the price boost was likely a result Services (EDSS), Mrs Philomena Ikoko, said equipped with the right knowledge to of portfolio math, as some commodity the exercise was conducted at the instance take the right action in the event of any index-tracking funds may have simply of the company’s Managing Director, Mr emergency, stressing that safety does not rebalanced their positions to adjust for the Sade Lawal. know status. change in volatility levels. She said that it was to ensure that all staff Also the Branch Chairman of the Petro- Crude oil also tracked a broader shift in were equipped with relevant safety skills leum and Natural Gas Senior Staff Associa- market sentiment, although it did not re- for efficient and safe operations. tion of Nigeria (PENGASSAN), Mr Zachariah bound as much as equity markets. Despite Peter Azeez, extolled the management Ikoko pointed out that the partnership Organization of the Petroleum Exporting of NNPC Trading for prioritising the safety with the Federal Fire Service was to key Countries (OPEC-plus) providing more clar- and welfare of staff members. into the NNPC Management’s safety goal ity about its plans to increase production, zero aspiration of ‘no harm to persons, no In the same vein, the lead trainer and market concerns have shifted to the lack of harm to equipment and no harm to the Deputy Superintendent of Fire, Federal Fire demand thrust after the summer. environment’ in the company’s areas of Service, Mr Oduye Sunday, commended China’s crude appetite is cooling off and operation. the leadership of NNPC Trading for the the country has started to draw from its willingness to adopt the culture of safety in While appreciating the value of the strategic reserve in a bid to push prices the organization. company’s recently acquired Fire Safety lower and pressure the physical market. If certification, the EDS said her organization Still on the week under review, Oil prices prices move up again, India could also do was more interested in deepening the slipped after an unexpected rise in United the same to fend off a burst of domestic 22 ENERGY ENERGYEnergy JULY 2021 inflation. What you need to know AFRICA NEEDS $40BN YEARLY SPEND TO MEET A cursory look at the crude production ENERGY NEEDS –REPORT and refining capacity per capita and Gross is integral to supporting actions for faster Domestic Product (GDP) size across the achievement of the Sustainable Develop- globe shows that countries with higher ment Goals and Africa’s Agenda 2063.” refining and petrochemical capacity have higher GDPs. The report deplores the fact that Africa relies mainly on fossil fuels and biomes As at 2019, a resource deficient country instead of diversifying its primary energy like South Korea has 66 barrels of refined supply, given its plethora of resources capacity per 1000 citizens and Nigeria sits (renewable and non-renewable). at 2bbl per person. “Households use 86 per cent of biofuel and Between 2015 and 2019, Africa attracted waste energy for cooking, while the trans- a paltry five billion dollars of refining port sector consumes 78 per cent of oil. investment compared to 45 billion in the Natural gas is mainly used in the industrial Middle East and Europe in spite the clam- Vera Songwe sector.” our for decarbonisation and additional investment of 26 billion dollars. In his presentation, Anthony Monganeli By Meletus EZE Mehlwana, an ECA economic affairs officer, The NNPC under the Group Managing he United Nations Economic highlighted the “urgent need to invest in Director, Malam Mele Kyari, watch and Commission for Africa (UNECA) has electricity infrastructure, diversify electric- in line with the president mandate is estimated that the African continent ity supply and embrace modern renew- focused on rehabilitation of the existing T requires $40 billion annual spend to meet ables.” refineries, upgrading the terminal and her energy needs. Linkage products pipelines through Build In terms of prices, Mr. Mehlwana said Operate Transfer (BOT) strategy. In a study entitled “Energy Prices in Africa: “Levelised Cost of Energy (LCOE) or fossil Transition Towards Clean Energy for Africa’s power plants is more expensive” than wind By September 2022, part of the Port Industrialisation” UNECA disclosed that and solar. Harcourt Refining Company Limited 600 million people in Africa do not have is expected to commence supply of “Onshore wind costs $59 per MW while access to electricity and 900 million have utility solar PV costs $79 per MW. Mean- Petroleum Products to the downstream no access to clean cooking fuel. market. while, the cost of coal is $109 per MW and Meanwhile, electricity access rates in 24 natural gas stands at $74 per MW.” Like so many businesses across the world, countries are below 50 per cent. the Nigeria oil and Gas Industry and in He pointed out that “high energy produc- particular, the NNPC has taken a number According to UNECA executive secretary, tion costs, transmission and distribution of measures to Navigate through the tide Vera Songwe, at the launch of the report losses (18-25 per cent) means that utilities of this global pandemic so as to remain last week, “there is no way Africa can build need to be constantly bailed out and sub- afloat. a better continent if we do not make ade- sidies implemented for users.” quate investments in energy and ensure At this rate, and according to the SDG 7 The COVID-19 situation also made the affordable access for all,” urging countries NNPC to activate business automation tracking report, Africa will not meet the to ensure that there’s cost reflective pricing SDG 7 targets due to limited supply and process improvements to cut waste in her in the energy sector. contracts and cost reduction across all access to electricity. About $40 billion segment of its businesses and Operations. The report cites Liberia, Malawi, Central worth of investments per year are needed African Republic, Burundi, and South to meet the continent’s energy needs. As a corporate entity, NNPC’s vision is to Sudan as having stagnated or reversed in The report recommends that countries become an integrated energy company electricity access. Countries like Nigeria, focused on increasing production and must provide an enabling environment for DRC and Ethiopia reportedly have the crowding-in private sector investments in reserves, expanding the nation’s gas biggest electricity access deficits. sector footprints, enhancing local refining the electricity sector; apply cost reflective capacity and ensuring energy security for “Access to cheap and clean energy is an tariffs while paying attention to efficient the nation. essential component of Africa’s transfor- generation of electricity to lower the costs; mation and industrialisation,” said Oliver and provide incentives and mechanisms to The NNPC has emplaced the transpar- Chinganya, director of the African Centre increase the share of renewable energy in ency accountability and performance for Statistics (ACS), who moderated the the power systems. excellence (TAPE) philosophy in order to session. ensure the culture of openness, deliver on The study also highlighted the need for its commitments to varied stakeholders The ACS director said: “In the context of countries to introduce natural gas as a and entrench effectiveness and efficiency AfCFTA deployment and implementation, transitionary fuel to replace coal and facili- in all her operations. supplying economies with affordable fuel tate full deployment of renewables. 23 ENERGY JULY 2021 NIGERIANS GROAN AS COOKING GAS PRICES SURGE AGAIN By Meletus EZE

igerians have again bemoaned yet another increase in domestic gas Nprices, the fourth of such increases in two months. Finding in Lagos, Abuja, Kano, Kaduna, Port Harcourt, , Ibadan and few other cities across the country on Wednesday and Thursday showed that marketers of cooking gas have increased prices of various kilo- grammes (kg) of Liquefied Petroleum Gas (LPG) by about six per cent. In the past two months, filling a 12.5kg cyl- inder had increased from N4,200 to N4,500 to N4,700,N5000, and to N6000 up from between N3,600 and N3,800 in March. but 65 per cent of it is imported. official exchange rate. In May, gas filling plants sold 12.5kg at Essien said the CBN has no dedicated “In an attempt to unify the exchange N4,200 and increased to N4,500 in June and window for foreign exchange for cooking rates in recent times, the CBN recently N4,700 by early July and N5,000 this week, gas importers, hence the sourcing of foreign adopted NAFEX rate as the official rate mid-July. exchange at a high price which ultimate- and that effectively devalued Naira. From ly dictates the price the product gets to N306, the rate jumped to N380 some- Similarly, domestic gas users buying the consumers. time last year and is now above N410. clean fuel in various other kg cylinders like 3kg, 5kg, 8kg, 10kg, and 15kg have had to “We as marketers are also saying that the “So while the dollar price of upstream gas pay per cent more than what they paid for Nigerian Liquefied Natural Gas Company has not changed, the buyers need to pay them in March. (NLNG) and other gas producers should more Naira to get the gas,” Oyewale said. domesticate the production chain for He also said it is the same situation The National Bureau of Statistics (NBS) had cooking gas by dedicating sufficient with those that import the gas directly. said the average price for refilling a 5kg quantities for domestic consumption,” “About half of Nigeria’s LPG consump- cylinder of cooking gas increased by 0.56 he said. per cent from N2,057.71 in March 2021 to tion is imported, while the other half N2,069.21 in April 2021. Refilling a 5kg has He noted that the Nigerian Liquefied is produced or processed locally. As it been increased to N2,330. Natural Gas (NLNG) allocated only now costs more to import the gas, the 350,000 metric tonnes (MT) of gas to do- situation is the same with the imported Many Nigerians expressed sadness that mestic consumption out of its 4 million gas supply.” the government has left the poor at the MT annual production. mercy of marketers who increased prices But he said the increasing gas prices will arbitrarily. Daily Trust reports that the NLNG re- not make a mess of the government’s cently said it would increase its annual gas policy as the alternatives, especially A Lagos-based civil servant, Joseph Ajala, domestic allocation of cooking gas to kerosene, are also increasing in price. said that he will have to resort to a charcoal 450,000MT by 2021. stove for domestic cooking. Ajala said he An Abuja-based economic expert, Simon could no longer afford to fill his gas cylinder Also expressing his view on the increase, Samson Galadima, also said the gas price as LPG price keeps increasing almost every a Lagos-based petroleum industry increase would worsen inflation in the month. analyst, Suraj Oyewale, said the major country as the increase would be transmit- reason why prices of domestic gas ted to the prices of food. Also speaking, Abdullahi Al-Hassan, a increased in recent times is the foreign “It’d cost more. Furthermore, people will dry cleaner based in Abuja, called on the exchange regime. government to prevail on gas marketers to switch to alternative sources of energy and bring down the prices of gas. “Upstream gas contracts are usually the sector may experience a dip”, the expert priced in dollars, even for gas supply to said. But speaking on the increase, the Executive the domestic market. Due to the scarcity “The National LPG Expansion and Imple- Secretary of the Nigerian Association of Liq- of foreign exchange in recent years, gas mentation will likely suffer a setback. How- uefied Petroleum Gas Marketers, Mr Bassey suppliers have accepted payment in ever, it could help solve some problems like Essien, said Nigeria consumes about one naira by the gas processors and other shortage in supply, exchange rate playing a million metric tons of cooking gas annually, wholesale gas buyers, usually at the lesser role, among others,” he said. 24 ENERGY ENERGYEnergy JULY 2021 SHELL’S NIGER DELTA OIL-SPILL CASE TO BE HEARD IN UK COURTS

nglo-Dutch super major Shell parent company should be treated as ways and still no clean-up has taken has run out of time to appeal a the anchor defendant, enabling the place,” he said. UK court ruling earlier this year case to proceed to a judgment on civil A Leigh Day senior partner Martyn Day, which found that a five-year-old case law in the UK. who represents the Bille community, on environmental pollution in the added: "We are optimistic ... that we Niger Delta should be heard in the UK will be able to provide families and and not Nigeria. The claimants have yet to demon- communities impacted by Shell oil strate that Shell should be held In February, Shell’s lawyers failed to spills with a comparatively straightfor- responsible for events that took place convince the High Court in London ward route to justice. in Nigeria, on the merits of the case, over the jurisdictional argument that while they still need to prove that "The courts in this country have been the trial would be better decided in the supermajor owes a duty of care shown to be sympathetic to the plight Nigeria, although Shell was given and that, critically, this was breached, of our Nigerian clients — long may leave to appeal but declined to so. according to a source with knowledge that continue.” Leigh Day, the London-based law firm of the legal proceedings. Sabotage of pipelines representing the Ogale and Bille com- Introducing accelerate hydrogen munities in the Niger Delta, said last Commenting on the issue, Shell said: week: "Unprecedented oil pollution We're pleased to announce the “The spills at issue happened in com- claims against Royal Dutch Shell and launch of Accelerate Hydrogen - the munities that are heavily impacted its Nigerian subsidiary, Shell Petro- latest newsletter from Recharge and by oil theft, illegal oil refining and the leum Development Company (SPDC), Upstream. Sign up now for an unbi- sabotage of pipelines. will finally be heard in the High Court ased, clear-sighted view of the latest “Regardless of the cause of a spill, in London after the oil giant dropped developments in the fast-growing SPDC cleans up and remediates. It its attempts to avoid English jurisdic- hydrogen sector every week. also works hard to prevent these tion." Leigh Day partner Daniel Leader, who sabotage spills, by using technolo- By including the subsidiary in the UK is representing the claimants, de- gy, increasing surveillance and by proceedings, more documents about scribed the jurisdictional decision to promoting alternative livelihoods for Shell’s work in Nigeria are likely to be have the case held in the UK as “a sig- those who might damage pipes and made public, the law firm said. nificant win” for affected communities equipment. seeking to bring their case to trial. The High Court's February 2021 de- “Unfortunately, such criminal acts cision was grounded on the plaintiffs “Shell’s oil contamination remains in remain the main sources of pollution establishing an arguable case that the their drinking water, land and water- across the Niger Delta today." 25 ENERGYEnergy JULY 2021 PROPOSAL FOR REHABILITATION OF KADUNA AND WARRI REFINERIES NOW BEFORE FEC FOR APPROVAL

By Abisola THOMPSON facilities within the next three weeks.” payment for differential cost between the actual landing cost and pump he proposal for the rehabilitation According to him, the funds to be used price rate was affecting NNPC’s remit- of the Warri and Kaduna Refineries for the rehabilitation works would not tance to the Federation Account. Tare now before the Federal Execu- come from the federal government, tive Council (FEC) for approval, a source but instead, NNPC will instead secure “We are supposed to remit N120 bil- close to the Ministry of Petroleum bank loans and repay them through the lion to the Federation Account every Resources has said. facilities’ cash flows. month.” It is expected that as soon as the federal The same process will be applied to se- Speaking further he stated though executive council approves the propos- cure the purchase of a 20per cent stake pump price of petrol should have been al, activities leading to a major revamp- in the 600,000 barrels per day Dangote N256 per litre based on what the price ing of the two refineries would begin. refinery. Lenders are evaluating invest- was as at June 2021. However despite ment in this facility, which will start the current crude oil price, the federal The revamping of the strategic assets producing in 2022, he said. government through the NNPC is still are so critical to Nigeria’s a plan to meet paying the differential until an appro- its domestic fuel obligation in the coun- In the words of the NNPC boss, as the priate price is agreed upon by govern- try. The country currently import all her national oil company of the country we ment and Labour. Premium Motor Spirit or petrol needs. have the responsibility to guarantee energy security. Explaining the reason, NNPC also mull over construction of kaduna and Warri Refineries’ rehabilita- behind the investment, he stated that five condensate refineries, which will tion which are expected to be awarded it would be impossible for any country provide a cheaper alternative to pro- this month according to Mele Kyari, to watch a business of this magnitude duce light-end products. NNPC aims to Group Managing Director of the Nige- and sensitivity to run without the in- reach final investment decisions on two, rian National Petroleum Corporation volvement of a national company. which will have a combined 200,000 (NNPC) would be completed and would b/d of condensate refining capacity, start production almost at the same NNPC is also considering the con- within the next two months. time as the already awarded Port-Har- struction of five condensate refineries, court Refinery. which will provide a cheaper alterna- The Federal Executive Council approved tive to produce light-end products. a $1.5 billion for the rehabilitation of The Kaduna Refinery has capacity for NNPC aims to reach final investment the 210,000 b/d Port Harcourt refinery 110,000 barrels per day while Warri has decisions on two, which will have a earlier this year. capacity for 125,000 per day. combined 200,000 b/d of condensate He said though the Port Harcourt Re- The NNPC boss when he spoke to me- refining capacity, within the next three months. finery had a completion timeline of 40 dia outfits around June 29, 2021, said: months, crude oil refining would start “Kaduna and Warri Refineries’ rehabili- “They are cheaper and faster to con- there in 18 months January 2023. tation which will be awarded in July will struct and they will also take off the be completed and started production burden of the Opec+ crude output On under-recovery payment, Kyari almost the same time as the already restrictions,” Kyari said. said the payment for differential cost awarded Port-Harcourt Refinery. NNPC between the actual landing cost and aims to sign engineering, procurement Throwing more lights on the issue of pump price rate was affecting NNPC’s and construction (EPC) contracts for the under-recovery payment, Kyari said the remittance to the Federation Account. 26 Energy

JULY 2021

ANY HOPE FOR ECONOMY IN SECOND HALF OF 2021? With the economy still in a parlous state owing to a combination of factors customers that they are about to increase bordering on the complex and the superficial, analysts who have watched the interest rates on loans in response to the trend of events in the first half of the year are already predicting forlorn hope economic situation in the country. for the second half based on current economic fundamentals. According to informed sources including ndications are that an air of uncertainty exited recession last year. Nigeria’s annual account officers of some banks have hovers around the nation’s ecosystem inflation rate declined slightly to 18.12 started calling customers with consumer Iat this time. To say the least is to say the per cent in April 2021 from 18.17 per cent loans to expect an interest rate hike. This economy is in dire straits. From banks, in March, but remained well above the means customers with personal loans, fast moving consumer goods companies, central bank’s target range of 6-9 per cent, mortgage loans and other forms of loans telcos, services and others, the outlook is continuing a trend that began in 2015. should expect communication from their not exactly nothing to cheer about. banks that interest rates may rise soon. Meanwhile, latest data showed Nigeria’s CBN monetary policy economy advanced by just 0.5 per cent Nigeria has witnessed galloping inflation in the first three months of 2021, slightly in recent months jumping to as high as From available information, the Central faster than a 0.1 per cent rise in the 18.17 per cent in March before tapering Bank of Nigeria had voted unanimously last quarter of 2020, suggesting a slow to 18.12 per cent in April. to leave its monetary policy rate recovery. unchanged at 11.5 per cent during its Despite the rising inflation rate, the May 2021 meeting, as widely expected. How banks are responding to austerity central bank monetary policy rates (MPR), which is a benchmark for interest The move is expected to allow further Investigation by our correspondent, rate setting remains at 11.5 per cent. economic growth, despite persistent however, revealed that the deposit The Central Bank in its monetary policy inflationary pressures, after the country money banks are informing some of their committee meeting held last week 27 FINANCE JULY 2021

money supply has adverse effects on the people’s standard of living which has become a source of worry to Nigerians. “It has inflationary implications; it is not healthy for the economy because inflation erodes the value of people’s income and affects their standard of living. The value of a currency has a lot to do with poverty and welfare. We must be worried about the fast rate of money supply because inflation triggers poverty. “Inflationary environment elevates production costs with adverse impact on corporate profitability, thereby making it increasingly difficult for businesses and corporates to meet their debt obligations to lending institutions. Zainab Ahmed, Minister of Finance He suggested rationalisation of spending as a way out of excess reiterated its preference for cheaper credit borrowing, noting that borrowing to to the real sector of the economy citing its Inflationary environment elevates production costs with fund recurrent expenditure is inimical effect on spurring economic growth. adverse impact on corporate profitability, thereby making it to economic development. Lending rates had dropped over the last increasingly difficult for busi- On foreign exchange volatility, the one year following a CBN policy on open nesses and corporates to meet immediate past LCCI boss noted that market operations that crashed deposits their debt obligations to lending institutions the foreign exchange market faced rates market-wide. For example, as of liquidity constraints in the first half of June 2020, prime lending rate was as 2021, and that foreign exchange (forex) high as 15.92 per cent while maximum was inadequate to meet rising demand. lending rate was as high as 30.73 per cent. However, as of April 2021, CBN data “Several businesses and corporates indicate prime and maximum lending encountered difficulties in sourcing rates were 11.24 per cent and 28.64 per foreign exchange at the formal segment cent respectively. of the market and were forced to source the greenback at the parallel market. But while banks have mooted the idea He spoke at the Bi-Monthly Forum of increasing lending rates, savings “Foreign exchange illiquidity aggravates of the Finance Correspondents deposits rates remain at an all-time investment risk which could negatively Association of Nigeria (FICAN) held at low. CBN data also reveals ordinary impact asset quality in the banking its national secretariat in Lagos, as part one year fixed deposit averaged 5.78 system. of its capacity building programme. per cent, down from above 8 per cent “Foreign currency-denominated loans a year earlier. Savings deposit rates still Speaking on the topic: “Nigerian account for about between 30 per cent attract less than 4 per cent in interest economy in first half 2021 and outlook and 35 per cent of bank’s loan book. rates. for the financial services sector”, Dr. Foreign exchange volatility is associated Yusuf said the borrowing spree of the Borrowing a bad omen for economy with risks relating to asset quality and federal government was hurting the this time financial stability,” Yusuf said. economy as it escalates the already The immediate past Director-General high rate of inflation in the country. He said the current CRR environment of the Lagos Chamber of Commerce negates policy that mandates banks to He expressed concern that and Industry (LCCI), Dr. Muda Yusuf, lend at least 65 per cent of customer government’s excess borrowing has while speaking at a public forum, said deposits to the real sector and put pressure on the apex bank to excessive borrowing by the federal advocating for a flexible CRR policy that exceed the “5 per cent ceiling of actual government is a bad signal for a would reflect the actual level of a bank’s government” revenue for the preceding country already experiencing a drain in deposit at any time. year”, specified in the CBN Act. its revenue. “Also, the National Assembly has According to him, the fast rate of 28 FINANCE JULY 2021 passed the 2021 supplementary budget. The budget makes provision for vaccine procurement and security- related expenditures. Lawmakers have endorsed the move to raise $6.1 billion via the issuance of Eurobonds. “Improvement in current vaccination rate is expected to improve economic and business activities in the country, which is positive for the sustenance of growth recovery. “Inflation is expected to decelerate in the second half of the year on account of base effects and expectations of modest harvest, barring further exchange rate adjustment. “With the declaration in inflation rate, monetary policymakers would be further encouraged to keep policy parameters at current levels. Relative stability is anticipated in the foreign exchange market as CBN sustains its Godwin Emefiele, CBN gov intervention efforts,” he said. the year, it would be a year of two How COVID-19 factor slows economic Given the economic challenges occasioned by the Covid-19 halves; one with increasing yield and diversification pandemic, the ongoing efforts the other with decreasing yield. The of the federal government to Meanwhile, the Minister of Finance, achieve economic diversification current existing bond should command Budget and National Planning, Mrs. has been affected by a decline in premium pricing if this trend continues Zainab Ahmed, said she regretted that revenue, underlined by volatility into the year. In the same vein, the equity in global oil prices which is our all concerted efforts by the federal main source of foreign exchange space still provided ample opportunities government to achieve economic earnings for dividend hunters as traditional diversification have been affected companies that pay interim dividends by a decline in revenue due to the are expected to continue the trend challenges of the Covid-19 pandemic. and positive half-year results from the other listed companies on the exchange Ahmed, who spoke during a webinar should stimulate demand.” organised by the Securities and Exchange Commission (SEC) in Chief Investment Officer, Afrinvest Asset collaboration with the Ministry of Solid Management, Mr. Robert Omotunde Minerals Development, noted that the had predicted that the second half of facilitation of funding and provision of Government of Nigeria. It also has 2021 will see higher yields on federal structured market platforms such as the potential to create employment government’s bonds. the commodities exchanges portend and develop rural settings for other He made that projection at Afrinvest’s significant addition for the mining and benefits.” virtual seminar titled: “The investment solid minerals sector. Light at the end of the tunnel playbook for 2021,’ where other analysts She said: “Given the economic The Managing Director of Qualinvest also from the research and investment challenges occasioned by the Covid-19 Capital, a stockbroking and investment company discussed the investment pandemic, the ongoing efforts of banking firm, Teriba Adeboye stated, strategies for 2021. the federal government to achieve “The recent FGN savings bond may be According to him, “Overall outlook economic diversification has been an indication to where yield may be in terms of yield expectations is that affected by a decline in revenue, headed as we enter into the second half we think that demands are going to underlined by volatility in global oil of the year. The two years tenor yield overweigh the supply and because of prices which is our main source of declined by 54 basis points from 8.889 that, we expect that this upward trend foreign exchange earnings. per cent to 8.35 per cent, while the three would reverse at least for the first “The mining sector is strategically years tenor yield also declined by the four to five months into the year and based as alternative source for same margin from 9.889 per cent to 9.35 we believe we would now see a bit of per cent. ” revenue generation in the economic uptick towards the end of the year diversification plan of the Federal “As predicted at the beginning of Culled from The Nation 2919 FINANCE JULY 2021 AS ECONOMY BLEEDS, BANKS’ PROFITABILITY SOARS By Abisola THOMPSON he global economy, in the past year, buckled under the burden of the Tcoronavirus pandemic. From Europe to America, the numbers have been in the red, tail spinning the national economies to chaos. This left governments with the additional burden of sourcing additional resources to survive. While individuals groaned under the rising burden of jobs and income losses that have been intensified by the pandemic, the telecommunication and banking sec- tors have remained afloat, posting profits and breaking new grounds. Understandably, the pandemic holds an opportunity for telecommunication op- erators who have been saddled with the responsibility of bringing physically dis- tant relations, colleagues and associates to Recently, the European Central Bank (ECB) ing loans and advances imply that more virtual interaction, leading to a geometric warned that the industry would not see of the assets of the banks were channeled rise in the demand for data. profitability return to the pre-pandemic to non-core areas, a challenge the former For instance, Nigeria’s telecommunica- era till 2022. The frontline battle is how Director-General of the Lagos Chamber of tions’ exceptional performance lifted the banks can cover operational expenses Commerce and Industry (LCCI), Dr. Muda country out of recession in the fourth to be able to support businesses as the Yusuf, said has constituted a crisis in the quarter of 2020, after it contributed 12.45 global economy seeks to weather the real sector. per cent to the country’s Gross Domestic resurging COVID-19 storm. Speaking at a seminar organised by the Product (GDP). Telecommunications and But in Nigeria, the numbers still look very Finance Correspondents Association of Ni- information services, which have bene- good for the banks, which reflect histor- geria (FICAN), last week, Yusuf said much fited positively from the lockdown and ical data. A recent report by Coronation of banks’ assets are channeled to treasury restricted movement that started last year, Asset Management said the total average bills, while financial intermediation – the grew by 17.64 per cent in Q4 2020, over interest-earning assets of the six top banks core responsibility of banks – is aban- seven percentage rise from 10.26 per cent rose from N6.5 trillion in 2010 to N26.9 doned. He said the banks must focus on it recorded in Q4 2019. trillion in 2020 or by 311 per cent. their core mandate to support economic Telecoms firms across the globe have lev- growth. “The total gross loans of these banks rose eraged the socio-economic disruption of from N3.9 trillion in 2010 to N13.6 trillion Last year, Zenith Bank’s treasury bill COVID-19 to strengthen and increase their in 2020 or by 248 per cent. The positive portfolio increased by close to 60 per cent social relevance. As they contribute to the outliers for growth are Access Bank (grow- (from N991 billion to N1.58 trillion), its rising need to stay connected, they made ing quickly even before its 2019 merger loans and advances grew by merely 20.5 money and expanded their operations. with ), UBA and Zenith per cent to N2.78 trillion. Banks were similarly entrusted with the Bank,” the report said. responsibility of helping their customers Also, First Bank’s investment in securities to cope with the rising financial burden. According to 2020 financial statements as of December 2020 was N1.55 trillion as analysed by The Guardian, the total assets against N2.2 trillion total credits extended While telecommunications industry of the top five bank groups – Access, to its customers. posted huge profits from the increase in , Guaranty Trust the social relevance of their businesses, Bank, and Zenith Access Bank also grew its loan portfolio the banks recorded losses. Data from the – rose to N37.5 trillion last year, from the by over 70 per cent in the past three years, United Kingdom, for instance, suggest pre-pandemic value of N29 trillion, which a feat partly attributed to its merger with that a total of 4.4 million payment defer- translates to about 25 per cent growth the defunct Diamond Bank, with the rals had been sealed from the start of the year-on-year. figure hitting N3.6 trillion as of December pandemic and last October. Extending 31, 2020. Yet, securities and other assets into this year, banks in the UK, Europe Interestingly, customers’ loans to total as- weigh heavily on its book. and other regions are providing respite set ratio of the banks does follow a similar to borrowers who are too burdened with growth path; it declined from 38 per cent Besides, a larger proportion of banks’ total heightened financial challenges to honour to 33 per cent as it rose marginally from credit is extended to the exclusive public debt obligations. N10.9 trillion to N12.5 trillion. The shrink- and oil/gas while sectors that have direct impacts on the people were left in limbo. 30 FINANCE JULY 2021

Of the N20.4 trillion total industry credits Nigerians but it does not make it any way a transfer fee plus value-added tax (VAT). as of December 31, 2020, the government cheaper. Time has changed, so also is the Then, Chukwu is credited N9, 950 as N50 had N1.8 trillion. The amount was about true worth of a bank account holder. stamp duty is withheld by the bank for the 18 per cent increase from the N1.5 trillion remittance to the Federal Government. reported at the close of 2019. A customer is charged for every transfer, On both ends, SMS notifications –account after which she is notified that she has plug-in services by default – are sent The banks were also exposed to oil/gas been debited N26 service fee or whatever and the fees are debited against the two exploration to the tune of N3.9 trillion or amount applicable depending on the val- accounts involved. 19 per cent while agriculture, the coun- ue of transactions. Then, she is notified of try’s highest employer of labour, received both the transfer and the fees in separate There are other arbitrary and hidden N1.05 trillion. Out of the total net domestic messages, both of which attract N4 SMS charges that customers only get to know credit extended to the economy in Q1 this charges. about when their account statements year, the government took as much as 28 are audited, which, to the advantage of per cent, leaving other sectors to scramble A depositor is charged N1, 000 for a banks, rarely happens. for the balance. debit card, which attracts a monthly fee notwithstanding the usage status (used To widen the banking net, agency bank- The combined Profits after Taxes (PATs) of regularly or once in six months). When ing was conceived in 2017. Now, agency the five players analysed, which are clas- depositors withdraw at a third-party bank ‘bankers’ are also gradually assuming the sified as systemic important banks, also more than thrice a month, they are also status of a vampire, sucking dry the tradi- rose from N684 billion in 2019 to N719.7 charged. It used to be N100 per trans- tional cash dispensing channels of banks, billion. On average, the five banks’ por- action and later N65 until the National even in the cities. tability grew by five per cent in the same Assembly compelled the banks to reduce year most of their physical operations it to N35. Following the downward review, Sadly, banks seem to have channeled were shut down to contain the spread of most banks reduced the amount with- more resources to the agency model, COVID-19. drawable per time to N10, 000 so that the while pulling back on ATM service, leaving number of transactions can increase and those who need cash with no choice but From 2016 to 2020, the top five banks accruable incomes higher. to visit the roadside kiosks where cash made a total PAT of N3.3 trillion, with a is more readily (albeit in piecemeal) but year-on-year profit growth of between And if the poorly-serviced Automated charges higher. 3.7 and 24.7 per cent. Sadly, the economy Teller Machines (ATMs) scrape off the they service dipped into recession twice card’s security chip and render it invalid, Charges linked to digital and other offline in the same period. Two out of the five one is debited N1, 000 to replace it. In all transactions are numerous and growing. years, the GDP wobbled through negative of these, there are associated SMS and VAT And to encourage more depositors to growths. charges. embrace modern banking tricks, there is a penalty for cash above a certain threshold. Perhaps, Nigerians would bother less When Dele transfers N10, 000 to Chukwu This keeps more people going online and if there were no perception that banks via his mobile app, the former is charged increasing the volume of transaction fees. make huge profits off the sweat of the poor masses. After a protracted battle be- tween the telecoms and banks, the cost of MASTERCARD FOUNDATION SIGNS HOST COUNTRY AGREEMENT WITH NIGERIA Unstructured Supplementary Service Data By Shile GIWA in Nigeria currently focuses on three (USSD) pegged at N6.98 per transaction key economic sectors, including agricul- has been passed to depositors. he Mastercard Foundation has ture, creative industries, and the digital signed the Host Country Agreement “Please be informed that you are now economy with additional sectors being Twith Nigeria. The pact will enable the considered to further increase opportu- required to pay a fee of N6.98 to your Foundation to empower 10 million young nities for youth. mobile network provider for every bank- people in Nigeria to access dignified and ing transaction carried out on all USSD fulfilling jobs, 70 per cent of whom will be The Mastercard Foundation is working banking platforms. This means that when young women. with a range of partner organizations you send money to anyone using USSD, a to realize its goals in Nigeria, including fee of N6.98 will be charged to your bank Speaking during the signing ceremony Enterprise Development Centre (EDC) of account, which is in turn remitted in full held at the Ministry’s office in Abuja, the the Pan African University, the Interna- by your bank, to your mobile network pro- Minister of State, Ministry of Budget and tional Institute of Tropical Agriculture vider,” a message to already overcharged National Planning, Prince Clem Agba, (IITA), Sahel Consulting Agriculture & customers had informed. noted that the Mastercard Foundation’s Nutrition Ltd, Jobberman, and Babban Young Africa Works in Nigeria strategy is Gona. Despite warning that the charge would aligned with the national development threaten financial inclusion, the fee has plan of the Federal Government. “We have formed partnerships with been passed on as one of the numerous several organizations and are working to- fees banks impose on depositors. For Speaking at the ceremony, the Nigeria gether to leverage each other’s strengths,” Nigerians, the USSD is another burden too Country Head for the Mastercard Founda- Lawson said. ”Through our focus areas of many to bear for patronising the financial tion, Chidinma Lawanson, explained that agriculture, creative, and digital econo- system. The World Bank said the cost of the signing of the agreement has further mies, we have aligned with the Federal banking was a major reason behind the strengthened the Foundation’s commit- Government’s National Development high global unbanked population, 3.4 per ment to providing millions of young Ni- plan to ensure we reduce unemployment cent of who are Nigerians. gerians with work opportunities that will in the country and unlock the skills and meet their aspirations and full potential. Certainly, technology has made banking creative abilities of our youth, particularly services more comfortable for millions of Lawanson stated that Young Africa Works young women,” she added. 3119 FINANCE JULY 2021 tunities that abound in the state to seek to become business owners in diverse areas EMPOWERING SMES FOR ECONOMIC DEVELOPMENT such as hospitality for which the state is The Small and Medium Scale Enterprises (SMEs’) access to finance and well known, fashion, agriculture, furniture train entrepreneurs to play their statutory role is vital. For Akwa Ibom making, ICT, among others. State, a pointer to the government’s commitment to growing SMEs’ The government’s efforts at supporting sector is the existence of the Directorate for Microfinance and Enterprise the growth of the SMEs sector is aimed at Development, writes Meletus EZE. enabling it to contribute to the gradually changing status of Akwa Ibom from a pub- lic service to a private sector-driven state that would be Nigeria’s industrial hub and a major player in the economy of the West African sub-region. For instance, the Directorate for Microfi- nance and Enterprise Development, with responsibility to, among others, organises business advisory and training of start-ups in what is tagged, ‘My Entrepreneurship Goals Programme (MEGP) is a major pillar in empowering the SMEs. At one of such training that ran for three months, youths were trained and given ori- entation on businesses that are relevant to the development of the SMEs sector in the 21st Century. The curriculum of study for the programme was designed to develop Akwa Ibom State Governor, Udom Emmanuel small businesses through value addition. A major value addition to the growth of the SMEs sector is government’s commitment inding innovative solutions to unlock knowing the SMEs constitute the founda- to attracting start-up funding for young sources of capital for Small and Me- tion on which any economy rests. entrepreneurs. dium Enterprises (SMEs) and training F In fact, they are the engine room that pow- entrepreneurs should be one of the priori- According to Emmanuel, the Directorate ers economies around the world, including ties for every far-sighted government. for Microfinance and Enterprise Develop- the developed economies. A country that ment has been a channel for discovering Reason - SMEs play a major role in most seeks to have a strong economic base enterprising youths in the state through economies, particularly in developing must have a thriving SMEs sector. the Dakkada entrepreneurship and busi- countries. They account for the majority This understanding has been playing out ness campaign. of wealth worldwide and are important in Akwa Ibom State where, in the last six contributors to job creation and global This led to the formation of Dakkada years, Emmanuel has been developing the economic development. Multipurpose Cooperative Societies in all SMEs sector by empowering small busi- the 31 local government areas of the state, In Nigeria, most formal jobs are generated nesses and encouraging the setting up of as well as the Dakkada Business Forum. by SMEs, which create seven out of 10 jobs. new ones through various interventions The recruitment of over 18, 000 Dakkada However, capacity building for entrepre- that are aimed at supporting the state’s ambassadors is part of efforts to ginger neurs remains a key constraint to SMEs’ industrialisation efforts. the youth to participate in shaping the growth. It is also one of the obstacle facing His administration has been encouraging economic fortunes of the state. SMEs in emerging markets and developing the people of the state, especially the countries. Analysts said the failure of governments youth, to demonstrate the Dakkada spirit in Nigeria at the federal and state levels to Also, over 40 million SMEs exist in the by taking their destiny in their hands to match words with action has resulted in country, employing over 80 per cent of chart the course that would change their a situation in which there is a huge trust the country’s population and contributing socio-economic circumstances and, in deficit between the people and govern- about 50 per cent of the country’s Gross so doing, contribute to the economic ments. Domestic Product (GDP). development of the state and Nigeria as a whole. In fact, the SMEs sector is one area People are wont to view every govern- Akwa Ibom State Government has, where the philosophy is finding expression ment promise and action with skepticism however, taken major steps to address most through self-help. and, in some cases, cynicism, if not out- the challenges facing SMEs. Its Governor, right hostility. This doesn’t seem to be the Udom Emmanuel had unfolded various The youth are designing their destinies by case in Akwa Ibom, where Emmanuel has supports for operators of such businesses, taking advantage of the numerous oppor- proved to a man whose word is his bond, 3219 FINANCE JULY 2021 the reason he has endeared himself to the people of the state. HOW BITCOIN DIFFERS FROM GOLD Emmanuel announced, on assumption of office in 2015, his intention to industri- alise a state that was traditionally public service oriented. At that time, the state boasted of only one industrial establish- ment – Champion Breweries – which stood as a reminder of the Second Repub- lic era of the late Clement Isong, when the state was part of . By the time he was ending his first term, he had delivered about 16 functional industries. No government in Nigeria’s modern histo- ry had done that, whether at the federal By Meletus EZE nology, and it allows for the immovable or state levels. and unique record. With this technology, old’s market capitalization is investors enjoy security and easy access With every sector – industrialisation, around 11 trillion USD. That means to transaction information at any time. infrastructure, health, manpower de- Git’s the most precious metal velopment, power, agriculture, aviation, globally. No asset has also challenged Bitcoin’s decentralization means you can among others – littered with unparalleled its position within the global economy. participate in crypto exchange without achievements, the people of the state Initially, people used gold to back other any interference from the government have no difficulty trusting him to deliver currencies. Today, critics argue that early or banks. What’s more, Bitcoin allows for on every promise he makes. investors poorly did gold’s adoption to more privacy and anonymity. That be- the current economic system. But, this is cause you don’t have to disclose personal The enthusiastic response to the effort to a testament to the undying and strength information when sending or receiving establish a strong SMEs sector to support of this asset. Bitcoin. the administration’s industrialisation drive, especially by youths, is evidence of However, the emergence and increasing Volatility that trust. They see themselves playing popularity of the pioneer cryptocurrency, Bitcoin is a highly volatile digital asset. more active roles in their personal eco- Bitcoin, has sparked a debate about the And this causes concern among investors nomic emancipation and also contribut- possibility of a gold replacement. Some that want to use it as a haven asset. The ing to the sustainable development of people argue that Bitcoin could replace Bull Run that occurred back in 2017 is an the state. gold in its position within the global example of the volatility of this crypto- economy. That’s because Bitcoin had There is, at the moment, frenzy among currency. In 2017, Bitcoin’s price rose to outperformed gold several times since its the youth to participate in the ‘Ibom 3000 $20,000 per coin. Many people invested inception back in 2009. But how does this Project’, a programme the government a lot of money in this digital currency. cryptocurrency differ from gold? is putting in place to train a total of 3000 However, this coin’s value plunged to its entrepreneurs. The programme targets The driving forces stomach-churning low, leading to severe creation of over 14, 000 SMEs in industrial losses for the investors. Among the forces driving the increas- clusters to be set in the three senatorial ing Bitcoin’s price is the perception of Although the cryptocurrency has recov- districts of the state. The clusters will be its potential as a hedge against pos- ered, this incident drove many investors equipped to offer the kind of specialised sible inflation. The economic turmoil away. However, this cryptocurrency’s training that would enable entrepreneurs and devastation caused by the global value doubled a few months later. In to go into such sectors like agriculture, pandemic prompted large institutions addition to its volatility, Bitcoin is a specu- mining, ICT, hospitality, leather and raffia and small-scale investors to consider this lative asset. That means its value depends works, fashion, furniture, confectionary, digital asset. That’s because they think it on market news and whims. Changes in and bakery. can defend them against inflation during sentiments can cause significant changes It is quite remarkable that while the difficult economic times. in Bitcoin’s price. government works to create direct, paid Essentially, Bitcoin’s supply has a cap of 21 Nevertheless, Bitcoin’s volatility is a quality employment through establishment of million. And this differentiates it from fiat that attracts risk-seeking investors. That’s industries in different parts of the state, money that politicians can print at any because they can invest in this cryptocur- it also encourages the people to create time. As more individuals and institutions rency via a platform like cryptotrader and self-employment through entrepreneur- purchase Bitcoin, the cryptocurrency will make higher returns within a short period. ship. It must be noted, also, that every become scarcer. And this will push its Such trading platforms have also played a entrepreneur will be in a position to offer value upwards. significant role in bringing novice traders employment to others, as there is no kind and investors into the crypto trading of business that only one person can Additionally, Bitcoin depends on the industry. operate. blockchain, which is a decentralized tech- 3319 FINANCE JULY 2021

By Shile GIWA he Chairman of Heirs Holdings, RETURNS ON INVESTMENTS IN NIGERIA HIGH, SAYS ELUMELU Tony Elumelu, has reiterated the Tavailability of high returns on in- vestments in Nigeria for serious-mind- ed investors that are able to see the huge investment opportunities, instead of the negative sides of things. He spoke during a one-day investors’ webinar organised by the Bureau of Public Enterprises (BPE) in collabora- tion with and Nigerian Investment Promotion Commission. Elumelu, who is also the Chairman of the United Bank for Africa (UBA), spoke on the theme, “The Nigerian Business Environment, Prospects and Challeng- es.” Speaking about the experience of Heirs Holdings which has been invest- ing in critical sectors of the economy, he described the country’s business here and we do have high returns on ney, the founder of the Tony Elumelu environment as friendly. investment. We just invested in the Foundation (TEF) said: “The first was “I have been investing in key sectors Afam Power Plant and in the past few when we wanted to make our first for quite some time. I am an investor months we have been able to increase foray into the oil sector; we suffered in the financial services space and I am production by 241 per cent genera- and raised $2.5 billion and at some happy to be the Group Chairman of tion. This is the kind of experience we point we didn’t get all the authorisa- UBA. have investing in Nigeria,” he said. tion we needed and we lost quite a lot of money. “This is a business that was catalysed in Continuing, Elumelu said: “We invested Nigeria and today operates in 20 Afri- in the hospitality and real estate sector “My advice on this is that we need can countries servicing over 25 million and it is doing quite well. Occupancy to de-personalise these investment customers, with over 1,000 branches in the iconic Transcorp Hotels last week opportunities and focus on the impact across Africa. was over 100 per cent and we were in the investments would make. That Abuja last week to launch ‘Aura,’ the is how we should be thinking going “We have presence in London, Paris digital platform for accommodation, forward. and the only money-taking African and it was quite difficult for some of “Also, in the oil and gas space, we do bank in the United States. So, if the Ni- my colleagues to get space in the have serious security issue and the oil gerian investment environment is not hotel. hospitable, we would not be where we theft is very high and real. We have two are today,” he said. “That is the kind of experience you transportation pipelines in the Niger tend to have in Nigeria. We also invest- Delta Area.” In addition, he disclosed that Heirs ed in the oil and gas sector because we Responding to a question on the TEF, Holdings also has investment in power, agree that gas is the next frontier. a sector he described as critical in he said: “My colleagues, family and I driving economic growth and devel- “From these you can see that returns believe that at some point, the true opment. on investment are high and opportuni- legacy that defines all of us is how we ties are there for serious-minded inves- help others to equally become success- He expressed satisfaction over his tors who don’t only see the negative ful. investment in the country’s power sec- side, but those who see opportunities “I have seen what poverty can do and I tor, saying, “there is nowhere else you to invest in Nigeria.” can get the type of returns on invest- have also seen what economic oppor- ments that you get in Nigeria, especial- Speaking about some of the challeng- tunities can do for people. es investors face, he stressed the need ly in some of these critical sectors like “I have been a beneficiary of luck and to tackle oil theft and other security power. I felt at some point we should help to challenges. “In 2013, we invested in the power sec- democratise luck and create opportu- tor and at the end of that year we paid While narrating two of the challenges nities for people and that was what led dividend. So, we do see opportunities he had faced in his investment jour- to the founding of the TEF.” 34 FINANCE JULY 2021 NIGERIA SEEKS WTO’S EXEMPTION OF SMALL-SCALE FISHERS FROM SUBSIDIES By Abisola THOMPSON ongoing efforts towards sustainable development of the sector. he Federal Government, yesterday, called for the exemption of small “These unsustainable practices have re- Tscale and artisanal fishers from the sulted in rapid depletion of global marine scope of the fisheries subsidies discipline fish stocks,” he said. under negotiation at the World Trade Or- He added, “After 20 years of negotiations, I ganisation (WTO) by member nations. believe it is time for us to draw the curtain Minister of Industry, Trade and Investment, on the Fisheries Subsidies Negotiations. Adeniyi Adebayo, in his submission at the Nigeria would continue to support you one-day virtual meeting of the WTO Trade Madam DG and show requisite flexibilities Negotiations Committee (TNC) at the so we can collectively achieve balanced Ministerial Level on Fisheries Subsidies, af- outcomes consistent with SDG 14.6 and firmed Nigeria’s commitment and support our mandate. to the agreement to prohibit certain forms The Minister told the gathering that of fisheries subsidies that have resulted DG WTO, Ngozi Okonjo-Iweala Nigeria believed that the progress that in rapid depletion of global marine fish we have made so far, as contained in the stocks. Adebayo also said Nigeria would be happy to negotiate on appropriate special revised Draft Consolidated Text of 30th He said: “I wish to assure you of Nigeria’s and differential treatment provisions for June 2021, “provides a good basis that support and commitment to proactive- developing countries and least developed could take us to a successful conclusion; ly engage with all members towards countries. and we are happy to work on that basis achieving a balanced outcome in line with while ensuring that the mandate of the our mandate, “to conclude an agreement He stressed that the sustainable develop- negotiation is substantively achieved in a to prohibit certain forms of fisheries ment of the fisheries sector would be a balanced manner.” subsidies that contribute to overcapacity viable route to member states socioeco- He assured the WTO DG that in view of and overfishing, and eliminate subsidies nomic development given the sector con- the technicalities involved in the fisher- that contribute to illegal, unreported and tribution to food and livelihood security ies subsidies negotiations, as well as the unregulated (IUU) fishing, and refrain from improvement. urgency to expeditiously make progress, introducing new such subsidies, recognis- However, he noted that illegal fishing, “Nigeria’s participation would, from now ing that appropriate and effective special overfishing and overcapacity, as well as on, also involve engagement by senior and differential treatment for developing other unsustainable fishing and fish- officials from my Ministry and the Federal countries and least developed countries ing-related activities incentivised by Ministry of Agriculture and Rural Devel- should be an integral part of the WTO heavy subsidisation poses threat to the opment.” fisheries subsidies negotiation”. MONEY LAUNDERING: UK POLICE SEIZE $249.5 MILLION WORTH OF CRYPTOCURRENCY By Shile GIWA “While cash still remains king in the crim- Due to cryptocurrencies anonymous inal world, as digital platforms develop mode of transactions, the world’s biggest he British police said they have we’re increasingly seeing organised crimi- criminal groups seems to have made seized £180 million ($249.5 million) nals using cryptocurrency to launder their it a convenient and global nature for of an undisclosed cryptocurrency, as T dirty money,” Reuters quoted Graham laundering money, thus, placing them a part of a money laundering investigation McNulty, a metropolitan Police Deputy step ahead of the police, tax and security launched against organised crime groups Assistant Commissioner, to have said. forces. that moved into cryptocurrencies in order to clean their money. After the first haul was discovered, a Many countries are yet to come up with 39-year-old woman was arrested on sus- effective and efficient means of regulat- The latest seizure happened in less than picion of money laundering and has been ing the cryptocurrency space conceived three weeks after the London police interviewed under caution over the £180 to be money laundering den and a tool made a £114 million haul on June 24 as million discovery, according to the report. for terrorists. part of its money laundering investiga- tion. Joe Ryan, a Detective Constable, said: In the past weeks and months, the world’s “Today’s seizure is another significant most popular cryptocurrency, Bitcoin, By this, a cryptocurrency payload totalling landmark in this investigation which will has faced significant criticism and market £294 million ($408 million) has been continue for months to come as we hone sentiments across the globe that has reportedly seized so far under the money in on those at the centre of this suspected greatly influenced the market price of the laundering investigation. money laundering operation.” currency. 3519 FINANCE JULY 2021

“High inflation is hurts investment, it is HOW TO REDUCE INFLATIONARY PRESSURES – LCCI injurious to the welfare of the people and detrimental to the economy. By Olamilekan FAWAS “The main factors that have disrupted out- he Lagos Chamber of Commerce put in the economy are also heightened and Industry (LCCI) has urged the insecurity, exclusion of some critical in- Tgovernment to focus on reducing dustries from the official foreign exchange cost of energy, logistics and other variables window, trade policy issues, among to moderate the effect of inflation on others,” he said. Nigerians. Yusuf said other variables to be addressed The immediate past Director-General, included reviewing import tariff on LCCI, Dr Muda Yusuf, gave the advice in an selected inputs for production, stemming interview in Lagos. exchange rate depreciation, addressing TBi Africa reports that headline inflation, security problems and improving produc- according to the National Bureau of Statis- tivity across all sectors. tics (NBS) reduced marginally by 0.18 per He also urged the cent from 17.93 per cent izn May to 17.75 (CBN) to reduce its financing of fiscal defi- per cent in June. Dr Muda Yusuf cit to levels provided for in the CBN Act, saying fiscal deficit financing by the Apex Similarly, the food inflation sub index He listed high energy cost, which included Bank acted as a major inflation driver. dropped marginally by 0.45 per cent from the spike in the cost of diesel, electricity 22.28 per cent in May to 21.83 per cent in and aviation fuel, high transportation and “The infusion of this financing typically June 2021. cost of logistics, and high import tariff as increases money supply and aggravates Meanwhile, the month-on-month inflation major cost push factor influencers. inflation. maintained it upwards trajectory in June “Headline inflation of 17.75 per cent is still “It is high powered money and also char- with it accelerating marginally from 1.01 per a reflection of intense and persistent infla- acterised as inflation tax. cent in May to 1.06 per cent in June 2021. tionary pressure on the Nigerian economy. “Reports of interest payments of over 480 Yusuf said three principal drivers of “Even more worrisome is the incessant billion naira on ways and means financing inflation included, cost push factor, supply high food inflation, which was 21.83 per by the apex bank between January and chain disruptions and monetisation of cent in June. May 2021 is quite instructive,” he said. fiscal deficit or inflation tax. NIGERIA SPENT 97% OF REVENUE ON DEBT SERVICING IN 2020 – REPORT

By Shile GIWA spent on non-debt recurrent expendi- expenditure of N10.01 trillion rep- ture. resents 93 per cent performance, when ebt servicing obligations gulped compared with the budgeted amount “In 2020, Federal Government’s pro- 97 per cent of the Nigerian gov- of N10.81 trillion. Dernment’s total revenue in 2020, jected total revenue of N5.37trillion; a report has shown. however, the actual total revenue The report added that capital expendi- eventually stood at N3.42trillion. This ture keeps getting the short end of the According to BudgIT, a civic-tech represents a 63.71 per cent revenue stick, as only N1.60trillion was devoted non-profit organisation, of the N3.42 performance,” BudgIT said. to capital projects in 2020. trillion generated as revenue, Nige- ria expended N3.34 trillion on debt “The cost of servicing FG’s debt is “This is not acceptable!” the organisa- servicing. drowning Nigeria as the cost contin- tion said on Friday. ues to grow, gulping a total of N3.34tn “Recall that FG had a CAPEX plan The report said total expenditure (97%) from the total revenue.” stood at N10.01 trillion. (exclusive of transfers) of N2.69trillion, The Nigerian government’s revenue this means only 59.5 per cent (slightly “This means nearly all Federal Gov- from oil however recorded a significant over half) of the 2020 projection was ernment’s salaries, overhead & CAPEX boost of N1.41 trillion, surpassing the actualised. (Capital Expenditure) were financed oil revenue projections of N1.01 trillion. with loans & CBN support,” the civic “The budget of N428.03 for Statutory group said. Revenue in the non-oil sector stood at Transfers in 2020 was disbursed. How- N1.26 trillion as against the projections ever, there is no breakdown or imple- According to BudgIT’s “2020 Budget of 1.62 trillion. mentation report of how this money Implementation Analysis” report was spent/disbursed.” released on Friday, N4.65 trillion was The report said the government’s total 36 FINANCE JULY 2021 INFRACO TO COMMENCE OPERATIONS Q3 – EMEFIELE By Meletus EZE critical and moribund assets of the govern- ment is extremely essential. he Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, said the “Furthermore, these investments by the Infrastructure Corporation of Nigeria private sector in energy, road and rail T assets can significantly reduce the cost of (Infraco) Plc would commence full opera- tion by the third quarter. doing business in Nigeria while supporting increased investment of our economy,” Emefiele said this at the investors’ webinar Emefiele added. organised the Bureau of Public Enterprises, in collaboration with the Nigerian Exchange Also speaking, Group Chief Executive Group (NXG) and the Nigerian Investment Officer, NXG Plc, Mr Oscar Onyema, said the Promotion Commission. capital markets existed to enable efficient allocation of resources to spur growth and The governor said the corporation, recently development. approved by President Muhammadu Bu- hari, with a capital base of N15 trillion would Onyema who noted that tax was eliminated be fully operational before the end of third on stock market transactions in most juris- quarter. dictions around the world called for further extension of tax waiver on capital market Emefiele also said KPMG had been ap- According to him, investments in rail, road transactions. pointed as the transaction advisers for the infrastructure, manufacturing, agriculture Corporation. and other areas with significant potential He said the exchange would continue to are imperative to transform the growth reduce transaction costs and boost market “Work has indeed attained an advanced trajectory of the nation’s economy. participation for investors. stage and we have received the approval of the Chairman of the Steering Committee, “Giving the current funding constraints of The theme of the webinar was: “Show- the Vice President, Prof. Yemi Osinbajo, for the Federal Government, leveraging funds casing the investment opportunities in the approval of the appointment of KPMG from the private sector with the ability to Nigeria’s privatisation and economic reform as the transaction advisers and only recently provide operational and technologically programme.” we also obtained approval for the appoint- know how in improving the productivity of ment of asset managers. SENATE: WE’RE COMMITTED TO NIGERIA’S FINANCIAL SYSTEM STABILITY “So, following conclusions of these arrange- By Shile GIWA ments and further activities, I like to assure will be brought to the fore and its experiences, particularly since the all of us that the Infrastructure Corporation he Nigerian senate in Kaduna reiterated the commitment of the COVID-19 pandemic, would be shared of Nigeria is expected to begin full opera- and lessons are drawn. tion by the third quarter of 2021. T9th Assembly towards stabilising the country’s financial system, espe- “Strategies would be mapped out to “We believe that through partnership with cially in a distressed economy. further strengthen NDIC and reposition the private sector, Infraco will be able to Chairman, Senate Committee on it to contribute even more effectively leverage close to N15 trillion over the com- Banking, Insurance and other Financial to our economic recovery efforts. ing years to close the country’s infrastruc- Institutions, Senator Uba Sani (APC Ka- “NDIC is a strategic institution that the ture gap,” the governor said. duna Central), said this at the opening National Assembly must do all in its He noted that the apex bank, with key of a 3-day retreat for members of the powers to ensure it performs optimal- stakeholders such as the International Senate Committee on Banking, Insur- ly. As we all know, financial system ance and other Financial Institutions Finance Corporation and the Nigerian stability reinforces trust in the banking and NDIC organised by the NDIC. system. Sovereign Investment Authority, secured the approval of the president to establish According to the lawmaker, financial “Economic growth and development Infraco to raise private sector capital to system stability reinforces trust in the cannot adequately be achieved with- support investment in key infrastructure in banking system, hence, the need for out the complementary efforts of the Nigeria. stakeholders including the NDIC to institutional frameworks of the finan- painstakingly work in synergy to put cial system which NDIC is one of them. “I’m happy to acknowledge that the estab- the country’s economy on a more “It is therefore imperative to ensure lishment of the Infrastructure Corporation viable pedestal. the existence of a robust and pos- of Nigeria has generated a lot of interest “This retreat is timely as it will allow itive relationship between the key from both local and international private us to reflect deeply on the challenges players in the financial sector for the fund managers who are keen to work with of stabilizing the financial system in a achievement of steady and sustainable the promoters in deploying private sector distressed economy. economic growth and development”, capital to support investment in key infra- “The role of the NDIC in this process Sani said. structure in Nigeria,” he said. 3719 REAL SECTOR JULY 2021

angote is the single largest em- DANGOTE BAGS MORE AWARDS FOR ployer of labour, and the single Dlargest individual investor across the continent. His presence is prominent in CHAMPIONING AFRICA’S INDUSTRIAL GROWTH core areas of manufacturing, ranging from Alhaji Aliko Dangote, Africa’s richest man has consistently championed cement manufacturing, to vehicle assem- investment in over 14 countries on the continent and still warming up bling, construction, food and agro-allied for more investments in more countries. Charles OKONJI reports. processing, mechanized farming and value-chain, general food processing and packaging and most recently petroleum refinery. This is the single individual refinery in the world located in Lagos. Also, he is the largest fertilizer manufacturer in the world; Indeed, Aliko Dangote deserves to be honoured. Honours are conferred on men and wom- en of outstanding accomplishments. It does not matter the citizenship or the race but what the individual brings on board. Honours are also conferred on non-citi- zens who have contributed massively to a nation’s development. For a man to be conferred with the highest civilian honours by three nations is a seal of testament of his giant footprints in the transformation of such nations. Aliko Dangote, President/Chief Executive, Dangote Industries Limited currently is the only private sector operator in Africa with the highest number of national honours from three countries. His achievements are so remarkable in the whole of Africa to the extent that it attract- ed the highest honours ever conferred on a civilian from Presidents of countries where such investments are located. 38 REAL SECTOR JULY 2021 he business tycoon recently bagged Cameroon’s highest civilian honour, the National Order of Valour from the coun- try’s President Paul Biya. While conferring the award on him, President Biya said the honour was in recognition of his efforts in infrastructural development in the country and on the rest of the continent through his cement manufacturing plants. Biya commended Dangote for his indus- trialization strides, saying that this has provided thousands of direct and indirect employment in their various countries of operation in addition to boosting their economies. He urged Dangote to invest more in Cameroon’s manufacturing sector, saying his government is focused on pro- moting a business-friendly environment of his contributions to the Nigerian econ- Nigeria. to make the country more attractive to omy. This is the country’s second highest Speaking on building a global brand, investors. national honours, after the Grand Com- Dangote stated: “As Africa’s largest cement mander of the Federal Republic (GCFR). He expressed pride at Dangote’s various ef- manufacturer, we understand our cor- forts at promoting industrialization across He became the first person outside Gov- porate sustainability responsibilities. We Africa through the building of cement ernment and public office holders to have are focused on continually improving our plants in several African countries. bagged the award. social and environmental stewardship, so- cio-economic well-being, and health and The Cameroonian President was excited The GCON honours conferred on Dan- safety of key stakeholders. We are dedicat- that these plants have provided thousands gote, according to the then President of ed to ensuring progress in the communi- of direct and indirect jobs in Cameroon Nigeria, Goodluck Jonathan, was based ties and economies where we carry out our with the country’s economy smiling for it. on his contributions to Nigeria’s greatness, business. The Cameroonian president urged the via building a vast business empire which leading African investor to consider more provides employment to thousands of “We are also committed to fulfilling the investments in the manufacturing sector Nigerians. United Nations Sustainable Development Goals and are taking very concrete steps in his country, saying that there are numer- For Aliko Dangote, honours and awards are to own and drive these Global Goals in our ous business opportunities in the country like a second skin. The roll-call of honours business operations and across our value that are waiting to be exploited. include; Forbes Africa Person of the year chain. He maintained that his government was 2014; six times recipient of Forbes Most focused on promoting a business-friendly Powerful Man in Africa; CNBC’s top 25 Busi- “We relish our long membership with the environment to make the country more nessmen in the World who changed and United Nations Global Compact (UNGC). We attractive and an investors’ destination. shaped century; 2014 Time Magazine 100 continue to drive the UNGC’s ten sustain- Most Influential People in the World; 2015 ability principles, which further strengthen In 2013, the then President of Republic of Bloomberg Markets’ 50 Most Influential our business performance and sense of Benin, Boni Yayi, conferred on Dangote Individuals in the World; The Guardian Man responsibility to key stakeholders and the the country’s highest national honour, the of the Year 2015; 2016 African Business African economies where we operate. Grand Commander of the National Order Leader Award by Africa-America Institute “Our drive to support sustainable econom- of the Republic of Benin. and New African magazine 100 Most ic development and human capital ad- Influential Africans in 2015, 2017, 2018 and He described Aliko Dangote as a true son vancement is at the heart of our business. 2019 respectively. of Africa and deserved the award having We understand that these commitments proved his mettle in private sector. The business guru also got the Honorary require us to comply with national and He pointed out that the category of award Patron’s Award from Brevity Anderson for global sustainability standards, principles conferred on Dangote is reserved for pres- his contributions to the Global Hydrocar- and guidelines, including the Global idents and heads of state of his country, bon Industry and his investments in the Cement and Concrete Association (GCCA); saying that Dangote is the first person Nigeria’s downstream sector. the Nigerian Sustainability Disclosure Guidelines; the Nigerian Code outside government to bag the award Aside investments in Africa, Dangote have of Corporate Governance (NCCG); the bestowed on him for his business exploits also become a leader in philanthropy. He Securities and Exchange Commission (SEC) in the country. pledged $1 billion to the Aliko Dangote Code of Corporate Governance; and similar Foundation with additional $100 mil- In Nigeria, Dangote was in 2011conferred codes and standards that are applicable in lion partnership with the Bill & Melinda with the Grand Commander of the Order all our African markets.” of the Niger (GCON) award in recognition Gates Foundation to fight malnutrition in 3919 REAL SECTOR JULY 2021

Dangote, whose wealth is valued at over $20 billion by Forbes, is the wealthiest man in Africa with huge interests in cement, TRANSIT TARIFF: NIGERIAN EXPORT sugar, salt, agriculture, manufacturing, and petroleum. GOODS TRAPPED IN BENIN Dangote’s business units include Dangote As Nigeria is currently battling double digit inflation, with the Cement PLC, Dangote Sugar Refinery PLC, continuous rise in the general price level of goods and services, which NASCON Allied Industries PLC, Dangote has adversely pushed more Nigerians below poverty level, the transit Rice Limited, Dangote Academy, Dangote tariff imposed on transit goods by the neighbouring Republic of Benin, Oil Refinery Company Limited, Dangote has escalated the woes of many Nigerian manufacturers, leading to Fertiliser Limited, Dangote Packaging hug loss of revenue to the affected companies, Charles OKONJI reports. Limited, Dangote Ports Operations, Dan- gote Transport Limited, Dangote Sinotruk, Dangote Projects, Dangote Steel, Aliko ccording to our findings, Dangote Foundation and Dangote Con- goods belonging to Nigerian struction Limited. Amanufacturers being exported or imported through road across Benin His ongoing projects include building a Republic border, which was covered 650,000 barrels-per-day refinery, which by the region‘s trade treaty under will become the world largest single train ETLS of the Economic Community of refinery on completion. Dangote Petro- West African States (ECOWAS) and leum Refinery is expected to produce 65.4 now the African Continental Free million litres of Petrol (PMS), Diesel (AGO), Trade Agreement, AfCFTA are currently Aviation Jet fuel (ATF) and Kerosene (DPK) trapped at Seme border due to non- daily, when it becomes operational. This payment of tariff imposed by the high volume of PMS output from the Dan- Government of Benin Republic. These gote Refinery will transform Nigeria from goods were originally designated for a petrol import-dependent country to an other neighboring countries like Togo, exporter of refined petroleum products. Ghana and others. Imokhai Ehimigbai The refinery is being designed to accommo- However, the irrational decision by date multiple grades of domestic and foreign Benin Republic government to collect services because the founding fathers crude (including shale oil) and process these 100 per cent tariff on transit goods led of ECOWAS thought within them into high-quality gasoline, diesel, kerosene, to massive alteration manufacturers looking at ECOWAS as one community and aviation fuels that meet Euro V emissions gross earnings and pushing their to remove that tariff, so what we specifications, plus polypropylene. expenses higher than budgeted. This normally pay for goods originally made in West Africa that has ECOWAS It will include a crude distillation unit, devastating policy has been described by some economic and trade experts Trade Liberalisation Scheme (ETLS) is single-train residual fluid catalytic cracking maybe the VAT and very little tax from unit, diesel hydro-treating unit, continuous as violating trade agreements of the region and the continent. the neighbouring country you are catalyst regeneration unit, alkylation unit, exporting into. With the introduction and a polypropylene unit. The project will Throwing the first punch is the MANEG of this 100 per cent duty, goods of provide thousands of direct and indi- Chairman, Other African Countries and ECOWAS origin, that are transiting rect jobs and add value to the Nigeria’s Export Manager for Aarti Steel (Nigeria) Benin will pay import duty to Benin economic development. It will lead to Limited, Imokhai Ehimigbai, stated it government and by the time they get significant skills transfer and technology started quite some time ago, which was to their destination, they still have to acquisition opportunities in the country. the increase in what they called the pay these taxes to the government of road tariff for any good transiting Benin The fertiliser plant, Dangote Fertiliser, the that region, then you now see that the Republic to Togo and to Ghana. largest in West Africa with capacity to pro- duty of ETLS and ECOWAS have been duce 3.0 million Tonnes of Urea per year Ehimigbai noted that it is a fee they pay taken away which is not part of the has commenced production. The fertiliser to the Benin government, explaining agreement signed. It is not even called company is set to transfer the country’s that the tariff was initially hiked but duty, but VAT. agricultural sector. was reversed when the agents in Benin “Come to look at it, most of the complained and the government All these landmarks and limestones, manufacturing concerns in West Africa removed the transit fee. are here in Nigeria and most of these among other sterling achievements, pro- goods are coming from Nigeria with vide the perfect template and reasons for He said: “They started charging 100 little coming from Ghana and I also Aliko Dangote, the great African humanist per cent on goods transiting Benin understand that most of the goods and entrepreneur. The remarkable thing is which negates ECOWAS protocols coming from Ghana have also been that, this award trend is not over yet… of free movement of trade and stopped at Aflao border because of 40 REAL SECTOR JULY 2021 this information. So, I cannot actually Cadbury Nigeria Plc is a major player quantify because it is a huge loss for in the Fast-Moving Consumer Goods the manufacturers, huge loss to the (FMCG) segment of the Nigerian government of Nigeria. I think that economy, providing essential products this action by the Benin Republic is a as well as contributing to job creation retaliation to Nigeria's total stoppage has now suspended production. of importation of rice, because if you He called on the Federal Government look at rice importation from Benin for swift intervention as the number of republic and from my own experience, Nigerian trucks trapped at border has I observed that in the months of risen to about 4500 as at the time of June and July, you will hardly get a filling this report. warehouse in Benin Republic because those warehouses have been taken He said: “We appeal that you kindly over by Asians and Lebanese who are intervene in this matter, in view of the bringing in rice and then if you visit negative impact the policy is already such warehouses you will see them having on Cadbury Nigeria Plc and stock from the bottom to the roof top other Nigerian Companies. Also, with Thailand rice and the destination the policy negates the principles of of that rice is Nigeria and with the ECOWAS Trade Liberalization Scheme total ban on importation of rice, there (ETLS) of which the Company is a Dr Segun Ajayi Kadri is no revenue in Benin because their beneficiary.” ports to them is like oil to Nigeria. At African States (ECOWAS) which offers For Dr. MudaYusuf, former DG, Lagos present, the economy of Benin Republic unhindered market access to its member Chamber of Commerce and Industry, is almost in comatose because there is Countries and promotes economic LCCI the story has practically marred the no fund, so I am seeing this as a kind relations within the sub-region, such as ECOWAS dream of the founding fathers. of retaliation from the government of guarantee free movement of goods and Yusuf said: “What is happening to Benin Republic on Nigeria.” persons between member countries, Nigerian exporters stuck at the Benin absence of quantitative restrictions and On the part of Manufacturers border is a reflection of the weak total exemption from import duties and Association of Nigeria, MAN, the commitment of countries in the sub taxes. Director-General, Dr. Segun Ajayi-Kadiri, region to the policy of economic noted that the attention of the (MAN) “We understand that following protests integration. The protocols are violated has been drawn by one of its member, from the Licensed Customs Association, at will and with impunity. Practically all Messer Cadbury Nigeria Plc of the the Government of the Republic of countries in the sub region are guilty challenges encountered in importing Benin has suspended the new import of these violations at different times. their Cadbury 3 in 1 Hot Chocolate duty payment. Similarly, we gathered This is fate that the ECOWAS economic Drink from their sister company in that the Government is investigating integration protocol has suffered over Ghana, into Nigeria by Road. the operations and activities of the the years. Benin Customs Service with regard to Ajayi-Kadiri noted, “This development “Of all the regional economic blocs goods transiting through their corridor. is due to a new import duty payment in the continent, ECOWAS is the least It is unfortunate that trucks are still not policy that the Government of the integrated, yet it is one of the oldest, allowed to pass through the border.” Republic of Benin has imposed on founded 46 years ago. It is a sad goods-in-transit, in addition to the Currently, five trucks owned by Doolanc commentary. Non-Tariff Barriers have normal transit charges. Libral Nigeria Limited and Westrend practically marred the ECOWAS dream. “According to the new policy, every truck Limited International Logistics (Cadbury This is not a good omen for the AFCFTA. passing through Republic of Benin into Nigeria’s third-party transporters), with There is an urgent need to institute Nigeria, is now required to pay CFA 9 registration numbers below are affected an effective framework to address the million. This automatically translated by this policy: menace of non-tariff barriers. This is one of the biggest risks to AFCFTA.” to double payment as duty is usually The MAN chief reiterated that apart paid at the final destination of customs from the demurrage being incurred due According to the former DG territory. It should be noted that this to the suspension of the consignments, of the Lagos Chamber of anomaly has led to the suspension of all consignments transiting to Nigeria pending the resolution of matter. The S/N TRANSPORTER TRUCK REG NO LOCATION potential risk on cost of haulage of goods 1. Doolanc Libral Nig Ltd BDG 246 XV Aflao – Ghana enroute Republic of Benin, if the issue is 2. Doolanc Libral Nig Ltd JJJ 300 XQ Aflao – Ghana not urgently addressed would be severe. 3. Doolanc Libral Ltd SMK 20 XB Aflao – Ghana “ECOWAS Trade Liberalization Scheme 4. Westrend Ltd Intl Logistics LSV 333 XV Hilla Condji – Benin (ETLS) is a trade instrument designed by the Economic Community of West 5. Westrend Ltd Intl Logistics GCE 616 XY Hilla Condji – Benin 4119 REAL SECTOR JULY 2021 Commerce and Industry, LCCI, Dr. MudaYusuf, the act carried out at the border by Benin authorities is indication of weak compliance to the sub-region trade agreement. Yusuf said, “What is happening to Nigerian exporters stuck at the Benin border is a reflection of the weak commitment of countries in the sub region to the policy of economic integration. The protocols are violated at will and with impunity. Practically all countries in the sub region are guilty of these violations at different times. This is fate Muda Yusuf that the ECOWAS economic integration protocol has suffered commentary. an urgent need to institute an over the years. Of all the regional effective framework to address economic blocs in the continent, “Non-Tariff Barriers have the menace of non-tariff barriers. ECOWAS is the least integrated, practically marred the ECOW This is one of the biggest risks to yet it one of the oldest, founded as dream. This is not a good AFCFTA.” 46 years ago. It is a sad omen for the AFCFTA. There is PRODUCT REGISTRATION: SON DEMYSTIFIES PROCESSES, PROCEDURES Intending importers and manufacturers of products in Nigeria can now product to be faked. heave a sigh of relief as the standard Organisation of Nigeria (SON) “If one of the models of a given product has made clear the steps involved in product registration and preferred has a consumer complaint issue, rather answers to frequently asked questions, Charles OKONJI reports. than put on hold all the models of the product, the model in question (using the logo and number) will be put on his necessary step became inevitable registration of imported products only, hold while investigation is ongoing” Engr. as SON recognises the huge amount adding that the objectives are: To ensure Ugbaja said. Tof money the unsuspecting Nigerian that every product imported into Nigeria is masses lose daily to fake and substandard registered and issued a number and logo Steps products, especially the life threatening before they are sold in the Nigeria markets; The right steps to follow while registering ones. To ensure that only good quality products a product for certification with the are sold in the Nigeria markets; To ensure However, the Director-General of SON, standards body has been outlined to traceability of all products; To ensure Mallam Farouk Salim, at a workshop include; Application , Assessment of the that Nigeria is not a dumping ground for organized by the agency for Journalists Brands/Models, Issue Demand Note substandard products and to protect the with the theme, “Improved Synergy to to importers, Payment to TSA (Service consumers and ensure that they get value Promote Standardization,” held at the charge), Inspection/Sampling, Laboratory for their money.” SON’s Laboratory complex, Ogba, Lagos, and Issuance of Certificate of Product noted that simplifying the process and Benefits Registration. procedures of product registration will go a On the benefits of product registration to “With regards to the documents required long way in helping to sanitize the system the importer, the SON Director pointed before registration of products the agency of substandard and fake products. out that it protects the importer from listed the following; CAC Registration, Moreover, in a presentation, the Assistant people faking his products, especially if Trade Mark Certificate, Letter of Authority Director/Head Product Registration SON, the importer is the Brand owner or sole to distribute the products in Nigeria, Engr. Joseph Ugbaja, explained the scope distributor. Application Form, Laboratory Test Result of Product Registration, its objectives, and Evidence of payment (TSA receipt).” He stressed that the second benefit is that benefits to the importer and steps involved the Organisation will easily discover other Duration in the product registration. entities importing or selling the importer’s The duration of the registration processes, According to Engr. Ugbaja, Product products without permission and take according to Ugbaja, is six weeks from Registration is “a scheme that involves legal action against the offenders as the payment to issuance of certificate, adding unique logo will make it difficult for the 42 REAL SECTOR JULY 2021

L-R: Special Adviser to Director General, Standards Organisation of Nigeria (SON), Mr. Emeka Duru; Director General, SON, Mallam Farouk Salim; Director, Standard Development Directorate, SON, Mrs. Chinyere Egwuonwu and Deputy Director/ Head, Public Relations, SON, Mr. Bola Fashina during SON capacity building workshop for journalists in Lagos. that importers do not have to go to SON by clients whose registered products have in the Management Systems available Lekki office to make enquiries or register expired, remains one the major challenges for Training and Certification. The their products because there are desk faced by the Organisation,” he added. Management Systems became a full offices in ASPAMDA, Alaba, Computer Department By 2013 midwifed by Head of Despite the effective service delivery, Village, /Aluminium village, Dopemu Training. The Training is about becoming SON says it is not resting on its oars as in Lagos and in every state office of SON an Institute due to the need to focus on a the upgrade of its E-Product Registration nationwide. wider scale of Courses and collaborations portal for online registration is on- under this present management,” the Differences between Product going while it is constantly engaging Director-General stressed. Registration Certificate and Product the electronic and print media and Certificate other stakeholders creating public Impact of training services enlightenment and awareness. On the difference between Product The SON document reveals that its Registration Certificate and Product Further strategies to curbing the menace Training Services has done a lot in Certificate, the Agency explained that of substandard products sensitizing the consumers, equipping Product Certificate is associated with SON staff with knowledge tools and In furtherance to curbing the issue of SONCAP Certificate, while Product prepare the industrial sector for present menace of substandard products, the SON Registration Certificate is issued after and future challenges. has created various training centres across the completion of product registration the country, in this regard and equipped its Faruk explained that with the planned processes. training centres with modern international expansion and transformation of the According to the agency, it is important to standard gadgets for effective services. training unit into a training institute by note that successful importers are usually this present management, SON Training SON Training Services (STS) contacted by SON when the Certificate, Services will be able to provide training valid for 12months, is ready. SON training services offers a wide range to more participants in more parts of the of training courses to the industrial sector, country, stressing that SON has wealth of Challenges over product registration the consumers and its own staff. experience to teach the world. With regards to challenges encountered “To ensure international best practices are “We run several training programs by the agency in the course of registration, established, implemented and maintained concurrently, thereby achieving the Engr. Ugbuaja noted that some importers in Nigerian set ups, STS provides goal of becoming a reference point are not willing to have their products management systems training: Courses in for standards throughout the country. tested because of fear of failure/seizure various categories namely; Lead Auditors, One of the core values of SON is media while a few other importers are not willing Internal Auditors, Lead implementers, engagement. We want to let the to have their products registered, as they Implementers, and Transition. members of the press here represented want to evade any form of payment. today know that we recognise them and “The Training and Certification Unit was “As traceability remains one of the core value their works. We want to employ established in 1994 staring with the ISO objectives of product registration, some you to assist us in disseminating these 9000 series. importers prefer to operate from hideouts capacity building opportunities available and sell their products without registering The Training was separated from the in SON Training Services to the relevant them. Non-renewal of product registration Certification in 2003 due to expansion target audience. 43 JULY 2021

BOOSTING ECONOMY VIA AIRPORT PROCESSING ZONES The Federal Government recently announced the designation of four “The request was made so that the international airports as Special Economic Zones. Olamilekan FAWAS benefits of such zones can be accorded examines the impact of this policy on national development all , airport operators, aviation support companies, among others, that reside within the zones which the President noted, and approved. he Federal Government has Odaudu, the Director, Public Affairs, designated of four international Ministry of Aviation, said the approval “Some of the benefits include: harnessing Tairports as Special Economic was granted by President Muhammadu the socio-economic benefits derivable Zones (SEZ). The airports are Murtala Buhari. from civil aviation, generating revenues Muhammad International Airport, Lagos; for government and creating avenues He stressed that there were many benefits Nnamdi Azikiwe International Airport, to mobilise local and foreign direct in designating the airports as special Abuja (NAIA); Port Harcourt International investment for overall growth of the economic zones. “The Ministry of Aviation Airport, and the Mallam Aminu Kano economy,” he said. International Airport, Kano. in its desire to address issues concerning taxation, custom duties and fiscal issues He further said the designation was also Stakeholders said expanding air services in the Nigerian aviation industry, which expected to attract more international would lead to significant improvements in required a holistic solution, had requested and domestic airlines and world class service delivery and national economy in the Nigerian Export Processing Zone organisations into the Nigerian aviation general. Authority (NEPZA) to designate the four industry to fast track development of new major international airports under NEPZA infrastructure and facilities at the airports. Minister of Aviation Hadi Sirika who Act. announced the designation of the airports Sirika noted that the special economic via a statement issued by Mr James zones would also help to reduce the tax 44 TRANSPORTATION JULY 2021

burden on aviation companies to enable NAIA. These are things we achieved today,” he them compete internationally. said. Sani said that certification is carried He said the move would also create out every three years, adding that Sani further said the exercise had helped more efficient and business-friendly NAIA was certified in 2017 and was to identify some failures in the activities of trade environment comparable to other due for recertification. “Today, we have the airport, stressing that they would be countries, with less bureaucratic red tape just exercised our “Airport Emergency corrected. because of the associated fiscal incentives Programme. and packages. “So far, so good, we are going back to “It is part of our recertification process. NAIA assess ourselves inside the Emergency According to him, the operation of the was certified about three years back, so we Operation Centre with all the airports as special economic zones would are in the process of recertification of Nnamdi stakeholders. We have some observers also help to generate employment Azikiwe International Airport, Abuja. that oversight this exercise that will tell us opportunities and human capital the shortcomings and then we work on development. “This programme we experienced today them,” he added. was part of requirements to fulfill the The minister said it would further improve requirement by the CAA and we have just Deputy General Manager, Aerodrome the overall ease of doing business in done it. Rescues and Fire Fighter Department in Nigeria in line with Federal Government’s NAIA, Mr Rindap Nantim, who also spoke, commitments towards national economic “We tried to do this exercise to see how said the exercise offered opportunity to development. we can mobilise our human resources at experts in the department to display their the time of accident in an airdrome. We skills. “Another benefit is the generation of have fire and rescue department manning additional non-aeronautical sources the airport 24 hours,” he said. According to him, Federal Airports of revenue for the aviation industry, as Authority of Nigerian (FAAN) service is promised at the inception of the Buhari The manager disclosed that the exercise specially planned in such a way that any administration. was mainly about how to rescue victims fire fighter that reports to duty can carry from accident at the difficult terrains. out a check on equipment. “The government remains committed to the development of an investment- Sani said the exercise had helped to According to Nantim, the issue of lack friendly aviation sector that will not advance the usage of telecommunication of water is not applicable to airdrome as only make Nigeria a regional hub gadgets, adding that it had equally helped there is water everywhere. He added that for air transportation, but increase in demonstrating how stakeholders could the vehicles at the airport were designed its contribution to the national gross respond in real accident. to operate within given period of time. domestic product,” he said. “As an airport operator, we go into “The moment you arrived at the crash The Airport Manager, NAIA, Mr Mahmud Memorandum of Understanding (MoU) scene, in the first three minutes, if the man Sani, reaffirmed the commitment of with sister organisations in case of does not have required foremanships management team to intensify efforts to incidence or accident in the airport, so training, he uses the monitor to operate. sustain the standard and integrity of the that they can come to our rescue. airport. “That is less than a minute because the “With this exercise, we are able to see 10,000 litres capacity vehicle can exhaust Sani spoke in Abuja at an “Airport response of our stakeholders, which is in three minutes. Emergency Mock Exercise Difficult Terrain,” commendable. a process needed for recertification of “With the training, I think our men are “They are Teaching Hospitals, Air Force, better positioned. They have the response the airport, said the management would Fire Fighter Service, Police, Civil Defence, further make frantic efforts to ensure that capability to carry out their job very well NEMA, and Road Safety Corps. All of them even in rough terrain, “he said. Civil Aviation Authority (CAA) recertify have been mobilised and they are here. 45 TRANSPORTATION JULY 2021 IMPORTANT ROLE OF THE NAVY IN DEEP BLUE PROJECT By Dr. Bashir Jamoh Economic Zone up to the Gulf Guinea, safer he Nigerian Maritime Administration and more secure. and Safety Agency (NIMASA) has These are the C4i Centre of NIMASA, Falcon Tresponsibility for the promotion and Eye of the Navy and C3-Eye Centre of the development of indigenous commercial Nigerian Ports Authority. shipping in international coastal shipping trade; promotion of maritime security and Since April, this year, NIMASA and the Navy safety, as well as maritime labour, and pre- have been working to put in place an infor- vention of marine pollution. mation-sharing arrangement that would integrate the C4i Centre with the Falcon Eye The agency also provides national maritime for easy monitoring of activities at sea. search and rescue; air and coastal surveil- lance; directions and ensuring of compli- The involvement of the Navy in the Deep ance with vessel security measures, and Blue Project is very crucial to its success and inspection of ships for security and safety the achievement of the overall objective of purposes. stemming insecurity in the Gulf of Guinea. Apart from its contribution of the Falcon Eye The nation’s entire maritime space for which to the project’s platform, crucial assets like NIMASA is mandated to provide security the Special Missions Vessels and aircraft are and safety is fraught potentially with unique to be manned and commanded by naval and oftentimes unpredictable security Dr. Bashir Jamoh officers. challenges that require the use of arms to contain. But the agency does not bear arms, It is also important to mention that some of yet, cannot go to sea hoping to engage pi- involving it and the Navy, to ensure they the equipment being used for the project rates and other criminals in friendly discus- meet the standards required for certification are stored at the Naval base. sions. Any effort by an armless NIMASA to by the International Maritime Organization (IMO). There is a deliberate effort to increase fight insecurity in the Gulf of Guinea would the cooperation between the Navy and be tantamount to deliberately exposing its At NIMASA, priority attention is given to NIMASA’s Hydrography Unit with regards to personnel to danger. the training of the workforce. Educational charting the country’s waters and mapping There was the need to fill the gap created assistance is also extended to non-staff of out of wrecks, to ensure safe and unhin- by its inability to carry arms. It became the agency, including the Navy, whenever dered navigation in the waterways. necessary, therefore, to partner with a the need arises and there is opportunity. This is geared towards building capacity Since the signing of the cooperation, the security agency with deep knowledge of two agencies have continued to work the maritime environment and hands-on for the maritime sector. The inclusion of the Navy in this training is borne out of the fact hand-in-hand to bring about a safer and experience in dealing with sea criminals, to more secure maritime environment that enable NIMASA to execute the mandate as that it is not possible for NIMASA to achieve its mandate without the Navy’s support. would allow activities that are associated contained in the law that set it up. with water to thrive. The Navy has done an On Wednesday, April 19, 2017, NIMASA and Indeed, the relationship between NIMASA excellent job of providing the arms compo- the Nigerian Navy signed a Memorandum and the Navy predates the formal signing of nent of the fight against piracy and needed of Understanding for cooperation in the the MOU, which culminated in the setting security backup. up of the Maritime Guard Command that promotion of maritime safety and security; A total of 27 pirates were apprehended in prevention of marine pollution; search and is domiciled in the agency but manned by naval officers. the country’s waters last year, with the Navy rescue operation, as well as intelligence accounting for 10. Ten criminals – seven gathering. Other areas of cooperation There is, perhaps, no other area in which Nigerians and three foreigners – have so far are enforcement of actions that include the cooperation between the two agencies been convicted at the Federal High Courts anti-piracy, theft, illegal ship-to-ship transfer, is more manifest and potentially more im- in Lagos and Port Harcourt, courtesy of the illegal fishing and illegal bunkering, as well pactful on the country’s maritime security Suppression of Piracy and Other Maritime as rapid response to distress alerts. than the Integrated National Security and Offences (SPOMO) Act of 2019, which has The mandate of NIMASA and the Nigerian Waterways Protection Infrastructure, other- provided the legal teeth that are needed to Navy are interwoven. NIMASA is not an wise known as the Deep Blue Project, which fight piracy and other forms of crime in the arms-bearing agency, and therefore needs became operational in February and was Nigerian maritime space. the Navy in that regard. On its part, the agen- officially launched by President Muhamma- du Buhari on Thursday, June 10, 2021. The benefit of the cooperation between cy must provide the platforms for the Navy to NIMASA and the Navy will become more be able to discharge its mandate effectively The project is a security platform that inte- manifest in the continuous reduction of for the common objective of keeping the grates activities, through the use of technol- crime in the Nigerian maritime space as we country’s waters safe and secure. ogy, from assets owned by three different go along. agencies to make the fight against maritime The commencement of the cooperation Dr Jamoh is the Director-General and Chief saw NIMASA setting up the Maritime Guard crime a lot easier and more result-orient- ed, for the purpose of making Nigeria’s Executive Officer of the Nigerian Maritime Command, a centre for the harmonization Administration and Safety Agency of the training procedures and guidelines maritime space, including the Exclusive 46 TRANSPORTATION TRANSPORTATION JULY 2021 LAGOS PORTS CONGESTION: ETO CALL-UP SYSTEM AS BEST SOLUTION Nigeria is believed to have the most robust port infrastructure in the sub-region, but port users have continued to struggle with huge economic costs due to inef- ficiencies arising from unfavour- able export and import processes, Olamilekan FAWAS writes.

ver the years the Nigerian Ports Authority (NPA) has made sev- Oeral interventions to resolve the incidence of heavy vehicular and human congestion around the country’s seaports and off-dock terminals especially those within the Lagos axis where a large chunk of the nation’s external trade is processed.

After experimenting with a manual truck trucks, information navigation options for Allegations of forgery of transit e-tickets scheduling arrangement for over a year, truck owners/drivers on available parking and selling of tags to truck drivers by un- the NPA came up with an electronic truck spaces, as well as convenience and safety scrupulous TTP employees were rife, while call-up system in February, to tackle the for drivers at designated truck transit parks. cries of extortion by security operatives perennial traffic gridlock responsible for assigned to monitor traffic along the port the delay along the access roads leading to From available accounts, the roll-out of the corridor became increasingly strident. the country’s two busiest ports. electronic truck call-up platform proved to Those benefiting from the existing disor- be a game-changer with its instant posi- The truck call-up system, dubbed “Eto”, the der seemed determined to preserve the tive impact on the carriage cost of goods status quo. Yoruba word for “to schedule”, is now the at the two Lagos ports. only authorised pathway for cargo trucks But TTP and the manager of the “Eto” to access the port, including transfer of The haulage fee imposed on fully laden platform say that the challenges are being empty containers by shipping companies. containers from the Lagos Ports Complex, addressed frontally, with Chief Operat- to a destination within the Lagos NPA’s Assistant General Manager, Corpo- ing Officer of TTP, Temidayo Adeboye, area fell substantially in the week the “Eto” describing the “Eto” technology as the rate and Strategic Communications, Mr app was formally launched. Ibrahim Nasiru, in a statement, insisted right solution toward resolving the chaos that, “henceforth, all trucks doing business Similarly, carriage cost from Tin-Can Island and corruption around the movement of at the ports in Lagos will be required to Port to warehouses within Lagos State trucks, especially to the Lagos ports. park at approved truck parks until they are dropped progressively by the second “We deployed the right technology to called-up into the port through “Eto”, the quarter of 2021, according to the records. drive the process and it was a very reliable new application. However, in spite of the firm directive by system; it was organised, and guaranteed “The ‘Eto’ application will be responsible the NPA that non-compliance to the use of easy control of traffic. But as they say, for the scheduling, entry and exit of all “Eto” and its guidelines would result in de- when you fight corruption, it will fight trucks into the port with effect from 27th nial of access into the ports, impounding back. There were lots of money that were February 2021,” the statement said. of trucks and withdrawal of registration or changing hands and people were profiting operating license, investigation has shown from the chaos and weren’t happy when With the deployment of “Eto”, truck that some truck drivers and their collabora- TTP came on board,” he explained. companies, terminal operators and freight tors appear bent on derailing the system. agents are required to download the app, Determined to restore port users’ con- and then proceed to create an account to While the responsible trucking compa- fidence in the electronic truck call-up monitor the schedule and movement of nies continue to follow due process, the system as witnessed in the early days of its their trucks in and out of the port. actions of some desperate truck drivers roll-out, Acting Managing Director of the have become a big worry to the NPA. NPA, Malam Mohammed Bello-Koko’s first According to the managers of the e-call After the smooth process witnessed in the public action when he assumed office in up system, Messrs Trucks Transit Parks early weeks following the launch of the early May, was a visit to the Lilypond Termi- Limited (TTP), benefits to subscribers of “Eto” app, vested interests responsible for nal described as the theatre of operations “Eto” include increased returns on logistics the sorry traffic situation around the port for “Eto”. investment while maximising time per trip. began to push back. His mission was to re-assess the quality of Others include the easing of truck traffic Truck owners, allegedly in collusion with infrastructure and operational framework congestion and streamlining cargo state agents including NPA security staff, deployed by the system manager. movement activities, smart parking for began to willingly circumvent the process. Bello-Koko, while interacting with haulage 47 TRANSPORTATION JULY 2021 operators and drivers during his visit, XXXXXXXX assured them of NPA’s commitment to speedily resolve all teething challenges against the smooth implementation of the call-up system. He promised that both the online schedul- ing process and truck transit arrangement would be fine-tuned to check manipula- tion and other vices associated with the new arrangement. “We will ensure that the entire process is fully automated and secured to prevent counterfeiting, while priority will be given to export cargoes in line with the econom- ic diversification agenda of the Federal Government. “I have directed that action be taken im- mediately to improve the overall efficiency Having re-evaluated the implementa- affirm seriousness, some truck parks were of the truck scheduling system for the ben- tion of the call-up system along with a recently suspended for some infractions. efit of its subscribers,” the NPA boss said. thorough review of the feedbacks from industry stakeholders and users of the To ward off extortions, the new measures The improvements he demanded from TTP stipulated that after a ticket had been duly included immediate deployment of phys- app, Bello-Koko recently endorsed the implementation of additional measures issued, it is the responsibility of the truck ical infrastructure such as bollards, spikes owner/driver to secure it as no other law and automated barriers and the installation designed to correct deficiencies so far identified. enforcement agent is authorised to check of CCTVs at the port’s entry and exit points. driver’s call-up tickets. According to the new measures, henceforth, He also called for the hiring of quality and The truck status could be validated by law experienced human resources, improved a daily manifest will be generated by TTP for all trucks approved to access the port. enforcement officials using the manifest response time to customers’ demands, as published, and the truck’s registered and better information sharing with other The manifest will be shared with all cus- plate number, while LASG/LASTMA shall designated transit park operators. tomers (subscribers), while truck owners impound all trucks not on the manifest but To further ensure that the goal of “Eto” was will inform the drivers of trucks on the list/ hanging around port locations at any-time, not derailed, Bello-Koko met with the Lagos manifest to proceed to their various port without additional notice. State Governor, Mr Babajide Sanwo-Olu, to destinations according to their allotted time as stated in the manifest. Analysts have hailed the renewed zeal fine-tune strategies to curb indiscriminate for the success of the “Eto” app, especially parking and alleged extortion of truck driv- The manifest for each day’s movement will in view of the enormous impact of the ers by traffic and security operatives on the be circulated by 10 p.m. of the previous Apapa traffic situation on socio-economic access roads leading to the ports. day and all movements will be done strict- activities in Lagos. The NPA and Lagos State Government ly in accordance with approved time belt for each truck category. They have also commended the current resolved to collaborate more on enforce- efforts of Bello-Koko who, they recalled, ment of traffic rules by rejigging the The trucks that will be on the manifest are had played a major role in the concep- security architecture on the port access those that emanate (i.e. pre-gated out) tualisation and eventual roll-out of the roads which had been fingered as a major from truck parks approved by NPA/LASG, electronic truck call-up system while contributor to the delays and alleged while the status must show “left Pre-gate” serving as NPA’s Executive Director, extortions along the corridors. on the “Eto” dashboard. Finance and Administration. Arising from the meeting, it was agreed The new measures also stipulated that all They believe that the “Eto” initiative, if that henceforth, monitoring and traffic trucks must physically be situated in their effectively deployed, will bring an end enforcement within the port corridors respective truck park or pre-gates before to the intractable vehicular gridlock on would be round–the-clock. Sanwo-Olu being called out or pre-gated out, as appli- the access roads leading to the coun- also promised to engage owners of oil cable, with any truck or truck park found try’s two busiest seaports. tank farms and representatives of petro- not complying blacklisted, or shut down. leum workers’ unions to key into the “Eto” They, however, emphasised the buy- platform, to put an end to the indiscrimi- Vehicles not verified from such truck in of the port community, noting that nate parking of oil and gas trucks on the parks but are on the manifest shall not be such support was critical to success. port access roads. allowed into the port, while the responsi- bility for ensuring that all trucks reflected Executive Director, Maritime Industry The governor stressed that private in the manifest physically emerged from Advocacy Initiative, an NGO, Mr Sesan operators in the ports must play their the truck parks shall be that of the truck Onileimo, put it more succinctly. “The part toward ensuring that ports in Lagos parks and TTP. ‘Eto’ system must be supported to were transformed into logistics centres of succeed to keep the Nigerian port excellence. At the port end, TTP must ensure that only economy on the path of efficiency and trucks on the manifest gained access into growth; it is an intervention too good to the port while NPA provides security. To fail,” he said. 48 TRANSPORTATION TRANSPORTATION JULY 2021 Okonkwo, said before the end of the year, the carrier would have expanded its fleet SET FOR HIGHER ALTITUDE and consolidated efforts on the setting up With new carriers altering the stakes in the second half of the year, the of an Embraer Aircraft Maintenance Repair industry is expected to bubble with a flurry of activities as operators, avi- and Overhaul Centre at the Enugu Airport. ation agencies and other players scale up plans for industry’s rebound, Anambra to inaugurate cargo airport writes Meletus EZE Also, the Government would have inaugurated and began flights at its Passenger/Cargo Airport in Umueri, a sleepy community about half an hour drive from its capital Awka, the state capital. Industry watchers say the second half of the year portends uncertainty for the Asset Management Corporation of Nigeria (AMCON) backed carrier – NG Eagle Airlines, which has already acquired some aircraft and has embarked on demonstration flight preparatory for commercial kick off. But, aviation unions are squaring up to frustrate the emergence of the carrier over unresolved labour issues. Investigation by The Nation reveals that car- riers namely – Aero Contractors of Nigeria and , which are under receivership Minister of Aviation, Hadi Sirika by AMCON – would unfold interesting drama for industry watchers.

he global air transport sector is yet to Apart from , another major oper- While Aero Contractors is gradually pulling fully recover from travel bans, restric- ator – – would have consolidated out of the woods with more aircraft return- Ttions and other measures put in place flights with its two aircraft recently ing to flight operations and consolidation by some countries to escape the ravaging deployed in routes, even as the carrier on hitherto dormant routes, the remain- effects of the third wave of COVID-19 and would have its aircraft flapping its wings on ing part of the year holds promise for the the emergence of new variants of the some routes in the West African sub-region nation’s oldest carrier as its aircraft main- deadly disease. namely, Equatorial Guinea and Banjul, in the tenance arm is fast expanding with three hangars across the country. In Nigeria, the next six months will trigger Gambia. another round of optimism for airlines, New check-in system for Lagos Airport An official of the said the Aero’s ground handling firms, aeronautical agen- maintenance facility would consolidate cies and aircraft manufacturers as well as In the next six months, the epileptic check- operations as plans were already afoot to aircraft maintenance repairs and overhaul in system at the Lagos International Airport, secure approval for the expansion of its centres as they scale up efforts to make hitherto handled by SITA, would have hangar facility at the domestic wing of the good their lofty plans and projects for the switched optimally to another automated Lagos Airport. remaining part of the year. arrangement handled by another firm – RESA. Besides, Aero Contractors, another aircraft Significantly, experts have expressed opti- maintenance organisation – 7Star Global mism over the health of old and fledging Investigations revealed that the new inter- is another outfit to look at as it intends to carriers which will continue their delivery national terminal was constructed with the consolidate its prowess in fixing airplanes streak of relatively new airplanes. $500 million loan secured by the Federal in- country thereby saving the country mil- Government from the China Import Export lions of dollars spent by indigenous carriers Leading the pack of such carriers is Air Bank and would have been inaugurated in repairing their airplanes overseas. Peace, which would have received more and running optimally. than half of the 13 Embraer 195- E2 jets Its Chief Executive Officer, Captain Isaac purchased from Brazilian airplane manufac- Earlier this year, the Managing Director, Balami, said besides strides to be achieved turers. Federal Airports Authority of Nigeria (FAAN), by the MRO, the outfit will float a premium Captain Hamisu Yadudu, said it would host shuttle airline that will target niche and Besides delivery of newer planes, the carrier foreign carriers, as the 40-year-old facility high networth passengers on northern and in the second half of the year had consoli- undergoes a major facelift. other routes. dated flight operations on some of its either new routes or routes hitherto suspended In the airline sub sector, new carriers, name- The industry is on the verge of witnessing a because of the COVID-19 pandemic. ly – , Cally Air, Kanem boom in terms of aircraft maintenance that Air, Cardinal Airlines, , could save the country and the entire West In an interview, Air Peace Chief Operating Northeastern Shuttle Airlines Limited, and African sub-region over $1 billion yearly in Officer, Mrs Oluwatoyin Olajide, said the Mambila Airlines – would have resumed ferrying aircraft offshore for checks. In the carrier would have brought back many of its with their aircraft crisscrossing the skyline. coming months, more aircraft will be fixed airplanes stranded abroad while undergo- in-country. ing major maintenance checks. Chairman, , Dr Obiora 49 TRANSPORTATION JULY 2021 7Star Global Hangar Limited, an Aircraft policeman intends to ramp up its processes equipment. Maintenance Organisation (AMO), was and procedures on oversight over private/ A pall of uncertainty also hangs over granted licence by the NCAA to operate business jet operators. promises to deliver a national carrier, an all-inclusive Maintenance Repair and aircraft maintenance centre, aircraft leasing Overhaul (MRO) facility. The NCAA’s Director-General, Captain Musa Nuhu, had declared in an interview that company and an Aeronautical University Balami said 7Star will be focusing on aircraft the body would roll out a raft of regulations by the Minister of Aviation, Captain Hadi Maintenance Repair and overhaul (MRO), and measures that would streamline the Sirika, who observers say, has been long in describing it as quite exciting because operations of private jets. rhetoric and short in action. operations are starting with aircraft that are Stakeholders look forward to the interven- more often taken overseas for inspection. Private jet operations had come under the regulatory radar over allegations of non- tion of the NCAA in resolving agitation to Though lauded by industry watchers, compliance with the laws prescribed for review ground handling charges for indige- the carrier -7Star Global Airlines – is yet to their operations by the NCAA. nous operators. secure the important Air Operators’ Certif- The anticipated review in the rates for icate (AOC) from the Nigeria Civil Aviation The coming months also portend uncer- foreign carriers flying in narrow body and Authority (NCAA). tainty for owners of private jets who do not meet conditions set by the Nigeria wide body aircraft has become imperative The remaining part of the year, experts Customs Services (NCS) for the importation because Nigeria offers the lowest ground say, holds a lot of promise as the industry and relevant clearance required for such handling tariff in the sub region. TRANSPORTATION MINISTER TASKS INDIGENOUS CONTRACTORS ON DUE PROCESS IN CONTRACT BIDDING By Shile GIWA he Minister of Transportation, Mr Rotimi Amaechi, has urged indigenous Tengineering contractors to follow due process while bidding for contracts in the country. Amaechi gave the advice while inspecting the Lagos/Ibadan Standard Gauge Railway inaugurated by President Muhamadu Buhari on June 10. The minister said that respect for due pro- cess would enable them qualify for jobs in the ongoing construction of railway in the country. Minister of Transportation, Rotimi Amaechi He also urged Nigerian contractors to per- sonally apply and follow the slated require- seeking to attract more youths into the I am worried that it may take us to the end ments and stop applying through other NRC by working to improve conditions of of the year 2021. construction companies’ profiles. service. “I heard that they concealed the old adver- Amaechi attributed the breakdown of Abu- On the construction of the Port-Harcourt tisement to enable indigenous contractors ja-Kaduna railway route which commenced to Enugu standard gauge, Amaechi said to benefit. operations in 2016, to “lack of maintenance”. that the ministry was yet to get approval for procurement. “We are asked to go for another advert He added that the Managing Director of which will take between four and six weeks Nigerian Railway Corporation, Mr Fidet Okh- “We have to wait for the Department of after which the ministry will require two to iria, had informed him that the corporation Public Procurement to give us approval. We four weeks to tidy up.” was yet to receive spare parts ordered for. also need the Federal Executive Council to The minister said the second advertisement Amaechi said the ministry would ask the give us approval on the supervising engi- neers before commencement. for bid of contracts would affect commence- Chinese Civil Engineering Construction ment of work on the other approved rail Corporation (CCECC) to release some rolling “If the supervising engineers are not in projects in the country. stocks ordered for Lagos to Ibadan rail place to tick off the drawings, we cannot tentatively, for Abuja-Kaduna rail for quick consult the project because that is where Amaechi said that the Lagos-Ibadan train maintenance before the delivery arrived. we are and that is the challenges we are operations moved a total of 42,000 passen- gers in June. He said that access roads along the having with Kano-Makurdi and Port-Har- Lagos-Ibadan railway corridors had been court-Maiduguri rail project. “We expect the figure to increase in the completed. “As we are talking today, we have secured a coming months when the system com- mences operation of Lagos/Ibadan standard The minister said that government was loan facility for Lagos /Calabar, but we will not start until we contact the engineers and gauge railway,” he said. 50 TRANSPORTATION

JULY 2021 CEO

NIGERIAN MINING SECTOR UNDER SIEGE BY FOREIGNERS Indigenous companies in the nation’s mining sector are crying foul over what they termed the invasion of the mining space by foreigners. There has been a long battle between tax authorities and manufacturers in the country over what the later called multiple taxations of their businesses, which may have limited their space in the sector. In this interview with Charles Okonji, Managing Director of NISPO, an indigenous tile manufacturing company, Afam Mallinson Ukatu, says if the twin issue of multiple taxations and high cost of gas are not urgently addressed by government, more local manufacturing companies are likely to exit the economy. 51 FINANCECEO JULY 2021 perators in the Non-Metallic Foreigners are partially taking Another issue that needs urgent Mineral Producers Sub-Sector of over our manning sector; they have attention is the infrastructural level of almost taken over our mining and Othe Manufacturers Association supply activities. They have taken the country, though we are seeing road of Nigeria (MAN) have raised alarm that over the supply chain and logistics rehabilitation here and there, but would because of the cheap funds they get foreigners have taken over the mining from their countries this be sustainable? activities in the country. It is a common knowledge that the The National Chairman of the sector, Mr. cost of not just clearing a container at Mallison Ukatu, raised the alarm over the the Wharf has gone up, but the cost weekend during a courtesy call by the of transportation has gone up from Commerce and Industry Correspondents N70,000 where it used to be to take Association of Nigeria on him in Lagos. a container from the sea port (Tincan Island) or Apapa seaport to the same Ukatu frowned that the sector has been neighbourhood of Lagos to between invaded due to lack of policy to protect Ukatu said: “It is obvious that a N350,000 and N450,000. It is obvious the sector, adding that the future of the manufacturer produces and still loses that the cost of local transport from one sector is at the mercy of these foreign money and you are still expected end to the same Lagos has gone up nationals that access cheap funds from to pay your tax. There should be a more than what we pay as freight from their countries of origin. system whereby you are evaluated china to Nigeria. “Foreigners are partially taking over our by the tax authorities just like China, I am using this means to call on the manning sector; they have almost taken USA and other countries. There is authorities to revolutionaries the power over our mining and supply activities. what they keep as special rebate for sector, because what we spend in They have taken over the supply chain manufacturing companies, because this providing our own power is outrageous, and logistics because of the cheap funds is what encourages people to go into and this is telling much on our cost of they get from their countries and also manufacturing. Without manufacturing, production and if they want this country the encouraging policies they have. there wouldn’t be any way for high to move forward, they need to address What I wish to see is when made in rate of unemployment to reduce. the issue of power because the present Nigeria goods are being manufactured Government can only provide about 10 state of power in the country is worse by Nigerians and not made in Nigeria per cent of the total job requirement than yester years. goods manufactured by the Chinese,” of the population, manufacturing can Ukatu stressed. generate over 60–70 per cent of the Access to loans needed employment.” “ He said: “As the new National Chairman In Nigeria today, a lot of private of Non-Metallic Mineral Producers Sub- Poor infrastructure businesses have closed down due to Sector of the Manufacturers Association of Nigeria, I am calling on the Federal Government to put in place the proper policy that will drive the sector. There are lots of illegal miners in the sector thereby causing hazards to the nation as a whole, as well as affecting our activities in the sector. “We need policies that will make the sector competitive enough so that we would also have what to bring to the table especially now that the country has signed the African Continental Free Trade Agreement (AfCFTA), otherwise Nigeria will lose out. Again, there have been a long battle between tax authorities and manufacturers in the country over multiple-taxation of our businesses and if it is not urgently addressed by government, more manufacturing companies are likely to exit the economy.” He urged the government to look into the issue of value added tax (VAT), saying that taxes are being paid on your turnover. 52 FINANCECEO FINANCECEO JULY 2021 inability to access funds. This is because the cost of funds is always high, not just that it is at double digit but sometimes TOTAL REMOVAL OF FUEL SUBSIDY WILL LEAD TO FREE as high as over 30 per cent, which is not healthy in a country like ours where MARKET ECONOMY –CHIDUME the manufacturer has to provide all the requirements to produce. Again, if you even have the opportunity of accessing the loan at a very high cost, they will request for collaterals that you may not be able to provide. The intervention funds accessed from Bank of Industry (BoI) was N1 billion, and we were able to secure the loan and we managed it to enable us pay back the facilities. We are again doing another expansion on the tiles factory, and BoI is still there for us and we are doing everything possible to get it right. On a final note, I will encourage investors By Charles Okonji “Oligopoly is a situation where you have one person not just monopolizing and you to know that there is huge market for foremost industrialist has stated that won't have a choice, you also don't have a total removal of petrol subsidy will the product. There is no time that you room for questioning what you are buying, impact positively on the Nigerian would enter into this business that A while Monopoly is where an individual who economy, explaining that it will lead to a you will not make profit. It is a matter monopolizes a product, but in oligopoly, free market economy where the forces of of being focused and determined. For because the product they sell has no demand and supply determine product instance I started with my pilot plant and alternative.” prices. my target was to produce 3,000 square HRH identified forex as the major problem His Royal Highness, Igwe Dr Oranu Chris meters, and we got some people who most manufacturers are battling with in the Chidume, Eze Ana-Ukwu, Eze Igulube had been into tiles manufacturing to country at the moment and forex scarcity of Omor who is also the Chief Executive give us the technical know-how, when is making them unable to bring in raw Officer (CEO) Krisoral Group of Companies we started. materials, a situation that always obstruct says if subsidy is removed from locally the production process. The machines brought to us were unable consumed fuel, the policy will bring about to do what we expected, and we were a regime of free market where prices will “The implications of you manufacturing producing between 1,800 and 2,000 be determined by the forces of demand products that depend on foreign input or square meters a day, which is contrary and supply.. raw materials is enormous in terms financial cost and time. The implication is that when to our expectation, but we were able to Chidume stressed that when the market you finally produce, the products won't be break through with that, because there becomes a free one, the market forces able to compete with foreign products and was no tiles manufacturer then, apart of demand and supply will come to play, that is why you see many factories closing adding that for that to happen, monopoly from the two that have been in existence down in the country. in the past 20 years. So for that, with in the industry must be abolished, because the small ones, we were able to survive, without competition, market forces cannot “The way out is that the government should while the big ones were still doing their confidently come into play. stop importing fuel. If we stop importing fuel, the amount of money we use in import- business. So, I will encourage the young According to him, “I will advise that if ing fuel will go into our foreign reserve and entrepreneurs coming up not to be Nigeria wants to remove subsidy, they by the time we have fuel at a competitive must encourage those that have obtained afraid of what the future holds for them. price, it will also earn us forex and if we have refinery licenses to give time lines of when forex, it will force down the demand and The most important thing is that you they must get their refineries operation. have to work hard as an entrepreneur supply of foreign currencies, including the to be in the system, and one day, the “When you have four refineries working dollar and the economy would be stabilized. and you remove subsidy, it will allow the opportunity would come for you to “Concerning the PIB, I will state that the bill forces of demand and supply to come to expand. Starting a business with huge is yet to be unbundled and if they unbun- play and that will also encourage com- dle the bill, we should be able to see the amount of money is not the issue, petition and if you remove fuel subsidy implications on our day to day demand and because some people started big but without creating an enabling environment supply of petroleum products so it needs could not make it while some others where those that obtained licenses will to be unbundled as the bill is right now, started with little, today; they are big set up their plants, otherwise we will have if we go by it, it is going to create another employers of labour. So, the story of how a situation an oligopolistic market set in unhealthy competition which everyone is which will not be healthy for the econo- much you started with or how much you complaining about so they have to unbun- my because it will cause inflation in the are going to start with is just a mindset. dle it,” He emphasized. economy. 53 JULY 2021

HERDERS LAMENT, FARMERS EXCITED AS GOVT COMPLETES IRRIGATION PROJECT There were mixed feelings in the agriculture sector in Kano and Jigawa commitment of President Muhammadu Buhari’s plan to diversifying the economy, States as the federal government handed over 289 hectares of farmland ensuring food security and assuring the to farmers under the Garri Irrigation Project, reports Olamilekan uplift of 100 million Nigerians out of pover- FAWAS. ty within 10 years. Project

hile farmers are jubilant over the year, adding that farmers would cultivate The Garri Irrigation Project was reportedly irrigation project, cattle herders rice and other crops thrice, annually. conceived by President Buhari when he said it has blocked their cattle’s was head of the defunct Petroleum Trust W The governor said from the 8,000 hectares Fund (PTF). The project was flagged off routes. of irrigated farmlands, including that of then but was abandoned by succeeding The Minister of Water Resources, Suleiman Hadejia Emirate, the states will produce administrations. Adamu, and Governor Muhammad Badaru 150,000 tonnes of rice annually. of Jigawa State performed the handing The irrigation project is located about 70 over ceremony in Roni LGA of Jigawa State. “Farmers don’t need water pumps and kilometres north of Kano, between Kano generators to wet their farmlands which, and Jigawa States. At the event, Mr Badaru said the future is obviously, increase the cost of production. bright for communities adjoining where With this development, farmers can use The project area covers five local govern- the dams and irrigation projects are sited, the canal for watering their farms which ment areas namely: Dambatta, Makoda adding that the project would boost ag- will make the price of food affordable for and Kunchi in Kano State; Roni and ricultural activities and ensure year round all,” Mr Badaru said amidst cheers from Kazaure in Jigawa State. farming. hundreds of locals who turned out for the The project has a net irrigable area of event. He said the irrigation projects, which cover approximately 2,114 hectares subdivided 2, 114 hectares of farmlands, will ensure On his part, the minister, Mr Adamu, said into eight sectors. availability of water supply throughout the the irrigation project is in line with the The contract works consist of Garri and 54 AGRICBIZFINANCE JULY 2021 Marke Dams rehabilitation, Cross Dam, Main and Distributary Canal, main and collector drains irrigation fields and associ- ated structures. Sector 1 and 2 of the irrigation project have been handed over to the farmers while sector 4 is completed, tested and ready for handover. Work in Sector 3 and 5 are ongoing. Herders appeal for demarcation of cattle routes But the Chairperson, Miyetti Allah, a Fulani sociocultural organisation, in Roni local government area of Jigawa State, Ayuba Shu’iabu, told reporters that the project was commendable but lamented that it blocked cattle routes in the area. “We are grateful to God for the work done in this area, we are all happy for the devel- opment but we are also hoping that the government will eventually look into this We are hoping that they will revisit and lives. But with this project, I won’t go any- cattle routes blockage and mark out routes create the cattle routes because both the where again. Instead, I will remain here and for the herders,” Mr Shu’aibu told reporters farmers and the herders are under the work and earn money,” Mr Mu’azu said. on the sidelines of the event. authority of the government,” the octoge- The farmer, however, acknowledged that, Mr Shu’aibu said: “As you can see it your- narian said “the project is yet to reach our location self, the celebration here is one-sided, the Abubakar Maishanu, an octogenarian, but we are coming down here where the herders are not satisfied with the project corroborated the stance of his kinsmen. government handed over the irrigated because there was no provision for them. He said the irrigation project will create areas and work for money, pending the “We are appealing to the governor (Mr wealth for the residents of the area but completion of the work. Badaru) to provide for cattle routes and appealed to the government to provide “We are are also appealing to the gov- grazing areas for our livestock. cattle routes. ernment to empower the farmers with “Initially, there was a provision for that but When contacted, the Executive Secretary, fertiliser and other farming inputs,” Mr the irrigation project has taken up all the Farmer and Herders Board, in Jigawa, Mu’azu said. areas in favour of the farmers,” the Miyatti Rabiu Miko, said “the government always Isyaku Abubakar, a farmer from Kunchi Allah official said. demarcates cattle routes in any area allo- cated to farmers, and this project with not Local Government Area of Kano State, Also, Adamu Ibrahim, a herder from Kunchi be an exceptional. said for them, the irrigation project was local government area of Kano State, said a “continuation of the good works of “farmers have cultivated all the grazing Farmers interviewed at the event said President Buhari”. He said he was not routes in his area”. they considered the project a shower of surprised because the president initiated blessings and thanked President Buhari the project. Mr Ibrahim, however, said the irrigation for initiating the project and ensuring its project is yet to reach his location. He completion. “I can recall vividly when he supervised begged the authorities to ensure that the the water dam when he was heading the cattle routes are identified before and after Usman Mu’azu, a farmer from Makoda LGA PTF and promised to utilise the dam for the project. in Kano, said farmers have started har- the economic development of the area. vesting tomatoes, onions, maize, rice and However, after the PTF was disbanded, Umar Ado, 86, another herder from one other consumables in the irrigation section the project was abandoned,” Mr Abubakar of the adjoining communities in Makoda already handed over to the farmers by the said. LGA of Kano, said: “They have encroached federal government. all the cattle routes with the project. “We are are grateful to the governors of That means that we have to be stagnant “As I speak to you now, on Sunday we have Kano, Jigawa, Abdullahi Ganduje and without going out with our livestock for planted rice in one area and that was after Muhammad Badaru, for their support in rearing. harvesting onion on the same farm. initialising the project. “We are fully in support of the irrigation “This irrigation project was long agitated “The irrigation project will surely empower project because it empowers the residents for, we are happy that this administration our youth economically and reduce rural but the problem is that we don’t have came and actualised our dreams of many urban migration,” Mr Abubakar said. routes to move about in the event farmers’ years and residents have started reaping Perennial clashes between herders and crops have germinated. That is is the obsta- the fruit of the project farmers over land leading to loss of lives, cle of the project for us. “Initial, we used to migrate to Kura LGA has been one of the thorny security crises “The government knows better than us. area and some other parts of Katsina State the federal government has battled with to work on farm plantations to sustain our over the past few years. 55 AGRICBIZFINANCE JULY 2021 WHEN UN DEP SEC-GEN AMINA MAKES CASE FOR TRANSITION TO RANCHING about people’s cultures, this is about liveli- During a recent visit to her native state of Gombe, the Deputy-Secretary hood, and that’s about life and so when you General of the United Nations, Amina Mohammed, paid a visit to a want to transition from one life to another, ranch where she called on stakeholders to involve both herders and you take the people along. You don’t force farmers in the process of finding sustainable solutions to clashes it, you don’t proscribe it; you do it with between them, Abisola THOMPSON reports. them. And I think that’s a very good way of younger people engaging with our older people to see that transition.” She said: “I think it is a good thing here is to see that families have allowed, even though maybe reluctantly, their children to go to school. And it is still the children who can have the skill that will help to enhance the ranching and farming too. And then I think we begin to see the end of the crisis.” She corroborated the National Bureau of Statistics report in Quarter 1 of year 2021 which shows that the agriculture sector contributed 22 per cent of Nigeria’s econ- omy. “Well, that’s where we want to go. The trans- formation of the food system is essential if we really want to talk about a healthier and more prosperous country. The contribution to the food system includes livestock. So, Amina Mohammed with farming and livestock, we can move away from just one line of product of oil which we now we a stranded asset because he Deputy-Secretary General of the how to transition from open grazing to it’s no longer of the future. So, getting a United Nations, Amina Mohammed, ranching. green economy includes livestock and paid a visit to a ranch where she called T “This is a local farm and it’s good to expe- farming and that’s what we should get back on stakeholders to involve both herders and to, to recover from these tensions that we’re farmers in the process of finding sustainable rience what the realities are and of course having in the country.” solutions to clashes between them. my brother started it as an endeavour to show that it’s possible to move from graz- She commended the owner of the farm, As stakeholders discuss grazing and ing to non-grazing. But these are challeng- Alhaji Yerima Abdullahi, for his efforts at ranching in the search for sustainable es one has to learn lessons from. We can demonstrating the possibilities of the solutions to the incessant herders-farmers feel from the policy and know really how transition from open grazing to ranching. crises in Nigeria, the international diplomat we do the transition from open grazing to said, however that the transition from this non-grazing initiative,” she added. During his tenure, former President Good- grazing to ranching would require some luck Jonathan approved N100 billion for Asked how migrating from the rudimentary investments, stressing that it would be a ranching, as a way to solve the farmers/ system of grazing to ranching would help wonderful endeavour. herders conflict but the fate of that fund in addressing the herders/farmers crises in remains unknown today as the crisis “Possibilities are there, but it is going the country, Amina said until the warring continues to fester. to take some time; it’s going to require parties are involved in what would be the investments, it’s going to take the gov- future for farmers and herders, the crisis The Buhari administration stepped in ernment and other partners to really see would remain unresolved. to address the situation but all the this becomes one that’s done not with the nation has witnessed is policy somer- “Well, I think the farmers/herders crisis in the herders but also with the farmers,” she said saults. First, it came up with a grazing country has a lot of unresolved issues over during her visit to Jamilatu Farms which reserves policy, but it was met with the years. When you have two constituen- has embraced ranching in Gombe State. stiff opposition from the South. Then cies that have been living in harmony over the government opted for Ruga and “And I can see from this that you can’t just the years but as climate changes and popu- later changed the name to Livestock do it from the cattle; you also have to have lation grows, the tensions over land come in Transformation Plan but nothing came other livestock. So, the livestock policy in and we really don’t seem to be doing some- out of it. the country really has to be robust if we’re thing about it possibly 10, 15, 20 years ago. to see a transition to what the government So the crisis before it can be resolved, needs Weeks ago, whilst featuring in an inter- wants to do with open ranching.” both parties participating in what would be view with Arise TV, President Muham- created as a future for everyone. madu Buhari made a statement on the She said she was elated by what she saw, recovery of grazing routes as a measure though acknowledged that there’s the “You can’t just come and say this is the way to address the herder/farmer clashes in need to learn from the challenges and things should be done overnight. This’s the country. 56 FINANCE AGRICBIZFINANCE JULY 2021 dant of food in the country. If they follow this technique, they can grow SACK FARMING TECHNIQUE AS ELIXIR FOR FOOD SECURITY quite a range of vegetable crops, which will help food security of households. They can even generate additional income from it. “It will not only contribute to food security at family level, it can also contribute to their incomes. There are so many examples and success stories of this kind of farming in many parts of Africa. Though the technique is not new, but it’s be- coming popular now, especially in urban areas.” According to Abdulahhi, if done well, sack-farming method is very good because there are some special crops – vegetable and fruits crops that can be grown through this kind of agriculture system. He noted that if Nigerians adopt it in a very modern and scientific way, regular incomes could be generated on regular basis. s many Nigerians begin to ers can keep their plants hydrated show interest in Agriculture with less water. “In fact, some people are growing as a veritable tool of securing onions and tomatoes indoors, not A Urban dwellers who live in rented just in their compounds but even a decent livelihood and revitalising the economy, getting expansive houses are best placed to undertake inside their rooms. So, the benefits farmland to actulaise this, especially sack farming. They can grow vege- are there, the advantages are there, in urban areas has constituted a big tables in sacks on verandahs, either the security is there and there are a challenge. for their own consumption or for lot of information on it.” sale to earn extra income. They can But since initiative is always driven also do it for both purposes. Abdulahhi said if many Nigerians can by necessity, sack farming is being adopt the farming system in addition adopted in the place of endless According to experts, it is a very to other kinds of farming like green- search for land. good option for landless households house technology and other types of to ensure food and nutrition secu- farming, “definitely this will help the This challenge has given rise to the rity. It is also a solution for people country to achieve food security.” adoption of sack farming - an ini- who have land with low soil fertility tiative that has given a new vista to or too rocky to support cultivation The Chief Executive Officer of Food those who preferred to toe the line of crops. and Fruits International Company, of farming, either to get quick cash Mr. Shuaib Mubarak, a researcher or for subsistence purpose. One of the advantages of this meth- and crop expert, based in Abeokuta, od is its portability, as well as high Ogun State, told The Guardian that Sack farming is a method of growing productivity at low cost. With this dwarf crop farmers are currently crops in soil-filled sacks or poly- method, the container, soil prepa- adopting the planting method. thene bags, containers or plastics. ration and other requirements are taken care of. The sack garden are “The idea of sack farming is getting It involves filling of bags with soil, filled with soil mixed with farmyard prominence because it’s easy to manure, and pebbles for drainage, of compost manure, cow dung or put into practice. The method only and growing plants on the top and chicken droppings to nourish the required a small amount of space; in holes in the sides. The sacks allow soil. even people who don’t have suffi- people to grow food in places with cient space can cultivate crops of limited access to arable land and An Agricultural Extension Specialist/ their choice with minimal stress. water. Rural Sociologists at the Ahmadu Bello University (ABU), Zaria, Kaduna “Aside the use of pots and flower Crops like tomatoes, onions, cab- State, Dr. Yusuf Abdulahhi, said the vase, sack farming is suitable for bages, pepper, mushrooms, vegeta- adoption of the farming technique dwarf crop cultivation. The meth- bles and many more blossom with would help food security of house- od has created employment and this method. holds. generated income for both rural and urban dwellers, and has proved to The sack method allows a freer flow He said: “If people can grow crops in be a good way for farmers to adapt of water to the roots and retains their domain with little containers to the effects of climate change,” he moisture more efficiently than tradi- filled with soil, there will be abun- said. tional methods, meaning sack farm- 57 AGRICBIZFINANCE JULY 2021 125 NIGER FARMERS BENEFIT FROM FADAMA COVID-19 STIMULUS PACKAGE – COMMISSIONER By Meletus EZE “The project development objective is to be able to buy you a ram or rice or whatev- protect livelihoods and food security of er you may need for the Sallah, but it will be he Niger State Government said it poor and vulnerable families and facilitate a mistake for you to sell it. had selected 125 farmers to benefit recovery of local economic activity in all Tfrom the FADAMA COVID-19 Action participating states across Nigeria. “This is because Sallah is just one day, but if Recovery Economic Stimulus (N-CARES) to you go ahead to plant these seeds and use increase food production in the state. “The agricultural livelihoods and food the other inputs, it will benefit you greatly security support under the N-CARES will by lifting you and your family from the he Commissioner for Agriculture and Rural include investments and policy measures to current level you are in,” he said. Development, made this known in Minna mitigate impacts on agricultural livelihoods, while inaugurating the 2021 distribution of enhance their resilience to economic shocks Earlier, Dr Hassan Kontagora, FADAMA inputs to N-CARES beneficiaries. and facilitate faster recovery to lay the N-CARES Coordinator in the state, stated that each beneficiary would be supported “The FADAMA has selected 125 farmers to foundation for agricultural value chains to generate more and better jobs,” he said. with four 50kg bags of NPK fertilisers, two benefit from its COVID-19 N-CARES and in- 50kg bags of urea fertilisers, four litres of crease food production in the state,” he said. The commissioner cautioned the benefi- herbicide, a litre of pesticide and 25 to 50kg Jikantoro said that five farmers from each of ciaries against selling the agricultural inputs of rice, maize and sorghum seeds, depend- the 25 local government areas of the state they were given, to purchase foodstuff and ing on the farmer’s enterprise. rams for the forthcoming Sallah. were selected to benefit under rice, maize “In short, we are distributing 37.5 metric and sorghum value chains, adding that the “It will be a mistake for you to sell the inputs tonnes of NPK and Urea fertilisers, 3.8 goal of the N-CARES programme was to given to you to buy food and ram for the metric tonnes of rice, maize and sorghum increase food security and safe functioning Sallah celebrations. seeds, 500 litres of herbicides and 125 litres of food supply chains. of herbicides,” he said. “A bag f rice, sorghum or maize paddy may

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