NLNG TRAIN 7: ENHANCING DEEP BLUE PROJECT: NIGERIA’S NCDMB DRIVING IN-COUNTRY NIGERIA’S ECONOMY, SAVING MASTERSTROKE AGAINST PIRACY VALUE CREATION, CAPACITY AND THE ENVIRONMENT CAPABILITY GROWTH

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JUNE 2021 VOL.4 NO.2 N1000, $25, £10 ISSN: 2736-0210 ENERGY TRANSITION: IS NIGERIA PREPARED FOR THE PARADIGM SHIFT? •SHELL’S OVER 270 STAFF & 900 CONTRACTORS KNOW FATE JULY END AS MASS SACK LOOMS Energy JUNE 2021

2 Energy JUNE 2021 Editor’s Note users electronically. One company presently present, Nigeria has raised over N362bil- does this in Nigeria. The firm had developed lion through the issuance of three rounds a solution that allows companies, agents, of Ijarah Sukuk to finance road infrastruc- distributors and vendors to top up airtime ture across the six geo-political zones. accounts of their members of staff or cus- Moreover, the finance sector also talks tomers with any payment denomination on on how the CBN has granted Lotus Bank any of Glo, Airtel, Etisalat and MTN. Licence to commence non-interest This edition tells that since inception in 2010, banking in the country, and explains how the implementation of the Act has resulted Emefiele’s 7 years in office has helped CBN in 35 per cent of in-country value retention catalyse Nigeria’s economic recovery. compared to the less than five per cent value Similarly, the Agri-biz speaks on the pa- retention before the NOGICD Act. rameters of Utilising sustainable practices “Before the Act, we had annual spend of to enhance productivity of smallholder $20 billion with little or nothing retained women farmers, as studies have shown in-country. Today, I can confidently say that that small scale farmers, with less than two DR. NJIDEKA KELLEY we spend over $6 billion in-country annually. hectares of land under cropping, are the “We have two world-class pipe mills and five ones producing the larger percentage of o sooner did world jubilate that the impressive pipe coating yards. About 40 per food consumed by Nigerians. dreaded COVID-19 Pandemic vaccine cent of marine vessels used in the oil and gas The agri-biz corroborates the contribu- has been discovered and the world N industry are owned by Nigerians. We have tions of Solidaridad West Africa – Nigeria, leaders procured it for its citizenry, one four (4) active dry-docking facilities in Port a solution-oriented Civil Society Organisa- would have thought that the story is over. Harcourt, Onne, and Lagos. In cable manu- tion that inaugurated a Multi-Stakeholder Surprisingly, the second and third wave facturing, all cables required in the oil and gas Platform (MSP) for Sustainable Climate surfaced which deadlier than the first. sector are all manufactured in-country. Smart Oil Palm production among com- Nevertheless, the global economy is In the finance sector the World Bank stated munities in Kogi. gradually bouncing back, as various that Nigeria can implement economic and More so, the Senior Climate Specialist, governments across the globe released revenue reforms which would raise the Africa and County Technical Lead, Nigeria, funds to lubricate the various sectors country’s revenue to N10 trillion in 3 years Dr Sam Ogallah, who inaugurated the of the economy that creates jobs and and raise tax to GDP ratio to seven per platform in Lokoja, said the effort was utilities which invariably cushions the cent. Senior Public Sector Specialist at the part of the National Initiative on Sustain- attendant effects experienced during the World Bank on Domestic Revenue Mobil- able Climate Smart Oil Palm Smallholder lock-down. isation, Mr Rajul Awasthi, expressed that (NISCOPS) project. Moreover, TBI Africa will keep advising in the long term, reform of the tax system Consequently, the Inspiring story of 31-year all to continue to observe all laid-down will be a necessity to stimulate post-pan- old building N2.5bn largest rice mill in safety rules. demic investment and economic growth as policy reforms with revenue growth Kaduna was told. Falau is a young man with In this edition, the energy sector speaks enhancement are needed for Nigeria to a mission to establish Kaduna’s largest rice on how the role of the Nigerian Content increase revenue generations. mill. He is already positioned to achieve this Development and Monitoring Board dream before the end of the year. (NCDMB) is putting Nigeria on global He explained that as Nigeria tries to build In the transportation, fascinating detailed map as a country with the requisite back better after the COVID-19 crisis, the story of Deep Blue project: Nigeria’s master- personnel decked in the right skillsets, approach to revenue mobilisation needs stroke against piracy was told. capacities and capabilities that can to be more strategic, not just taxing more, compete in part of the world. In view of but taxing better; not just how much to While in the real sector, the need for full the outstanding records by the Board, collect, but how to collect, what to collect, implementation of AfCFTA was analysed. and from whom. stakeholders in the oil and gas sector These, among other reports, are assem- have hailed the broad specializations and Awasthi harped that Internally Generat- bled in this edition and will certainly make depth of Nigerian Content initiatives under ed Revenues (IGR) should be intensified delightful reading to you - our readers. Keep the leadership of the Executive Secretary as efforts are needed to improve States’ a date with us every month. of the NCDMB, Engr. Simbi Kesiye Wabote. collection of PIT and other taxes such To them, Wabote who is still on the saddle as the property tax, while the Federal with the core mandate to create in-country Government should address policy and value through viable and robust strategic compliance gaps in VAT as Nigeria has development of capacity and capabilities much greater revenue potential from VAT has performed creditably. than currently achieved, as citing that the It also speaks on how Electronic Vouch- total additional VAT potential could be N3.1 trillion or more. er Distribution (e-Pin distribution) has Dr. Njideka Kelley is also the owner and become a secure end-to-end prepay He elucidated that one of the success Principal Consultant of system, enabling mobile operators to stories of the Islamic Finance Market in New Generation Consulting LLc, supply airtime to corporate, distributors, Nigeria since 2014 has been the Sukuk 10101 Fondren Road dealers, agents and through to the end bond issuance in the nation, noting that at Suite 353, Houston Texas 77076 3 CONTENTS JUNE 2021

NCDMB DRIVING IN-COUNTRY NLNG TRAIN 7: ENHANCING DEEP BLUE PROJECT: NIGERIA’S NCDMB DRIVING IN-COUNTRY NIGERIA’S ECONOMY, SAVING MASTERSTROKE AGAINST PIRACY VALUE CREATION, CAPACITY AND VALUE CREATION, CAPACITY AND THE ENVIRONMENT CAPABILITY GROWTH CAPABILITY GROWTH 11

NLNG TRAIN 7: ENHANCING NIGERIA’S ECONOMY, SAVING www.tbiafrica.com THE ENVIRONMENT 18 JUNE 2021 VOL.4 NO.2 N1000, $25, £10 ISSN: 2736-0210 ENERGY TRANSITION: IS NIGERIA PREPARED FOR THE PARADIGM SHIFT? •SHELL’S OVER 270 STAFF & 900 CONTRACTORS KNOW FATE JULY END AS MASS SACK LOOMS

CONSEQUENCES OF UNFRIENDLY BUSINESS ENVIRONMENT ON NIGERIA’S INTERNATIONAL TRADE 25

STAKEHOLDERS LIST INVESTMENT OPPORTUNITIES IN NON-INTEREST CAPITAL MARKET ECOSYSTEM 31 DEEP BLUE PROJECT: NIGERIA’S WAYS GOVERNMENT POLICIES CAN ATTRACT FDI MASTERSTROKE AGAINST PIRACY 50 40

56 THE NEED FOR FULL RAILWAY TO CURB N140B WEEKLY IMPLEMENTATION OF AFCFTA UTILISING SUSTAINABLE PRACTICES LOSS TO GRIDLOCK AT LAGOS PORTS 36 TO ENHANCE PRODUCTIVITY OF 48 SMALLHOLDER WOMEN FARMERS 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 JUNE 2021

Timipre Sylva, Minister of State, Petroleum Sarki Auwalu, Director, DPR Mele Kyari, NNPC GMD ENERGY TRANSITION: IS NIGERIA PREPARED FOR THE PARADIGM SHIFT? •SHELL’S OVER 270 STAFF & 900 CONTRACTORS KNOW FATE JULY END AS MASS SACK LOOMS Energy transition - the trend in global energy space, is sweeping through the oil majors with more funds increasing allocated to renewable energy. Although aimed at a more habitable global environment with minimal greenhouse gas emissions, the energy transition policy has its drawbacks – job losses. For most of the developing economies that are still heavily dependent on fossil fuels for income and to drive their energy needs, the transition is another difficult journey to embark on. EMEKA UGWUANYI takes holistic look at the programme and reports.

5 COVER STORY JUNE 2021

Ben Van Beurden Chad Holliday

nergy transition, according to energy production and consumption to “The International Energy Agency (IEA) S&P Global’s ESG Solutions, refers renewable energy sources. Switching forecasts the world’s total renewable- Eto the global energy sector’s from nonrenewable energy sources based power capacity to increase 50 shift from fossil-based systems of like oil, natural gas, and coal to per cent between 2019 and 2024. In energy production and consumption renewable energy is made possible response to this shift, utilities have - including oil, natural gas and coal, to by technological advancements and begun a rapid energy transition away renewable energy sources like wind and a societal push toward sustainability. from coal. While some market observers solar, as well as lithium-ion batteries. Spurred by structural, permanent expect that transition to slow, pressure changes to energy supply, demand, and is mounting on power generators to To the Solutions firm, the increasing prices, the energy transition also aims retire existing assets that depend on penetration of renewable energy into to reduce energy-related greenhouse coal supplies and build out other forms the energy supply mix, the onset of gas emissions through various forms of of power generation. Many major oil electrification and improvements in decarbonization. companies are accelerating spending energy storage are all key drivers of the on and diversifying into renewable energy transition. “After years of depending on regulation and low carbon energy in response to for growth in the sector, renewable Regulation and commitment to growing concerns over climate change. energy sources have become a decarbonization has been mixed, but powerful and cost-effective source of “Generating power from renewables the energy transition will continue to electricity. The costs of both solar and is only part of the energy transition. increase in importance as investors wind have fallen so drastically that in Mass introduction of electric prioritize environmental, social and some regions of the United States and transportation infrastructure and governance (ESG) factors. in the United Kingdom and Europe, energy storage, coupled with greater “As more investors and companies wind power has become cheaper usage of technologies to improve seek greater clarity and confidence than traditional high-carbon energy energy efficiency, are also driving in accounting for long-term climate resources. As costs continue to fall and this movement. As the average risks and opportunities, businesses are wind and solar become mainstream, cost of lithium-ion batteries has adapting to the "energy transition" — a the renewable energy sector will only fallen drastically on a mixture of transformation of the global energy keep growing and solidify as a strong manufacturing economies of scale and sector from fossil-based systems of investment opportunity. technology improvements, companies 6 COVER STORY COVEREnergy STORY JUNE 2021 and consumers alike are increasingly turning to electrification for power risks to the company, it also brings The Shell Energy Transition opportunities for us to prosper and to transportation, making the transition to Strategy publication aims to help investors and wider society build on our positive contribution to electric vehicles (EVs) one of the largest gain a better understanding of potential areas for electrification,” the how Shell is addressing the risks society. Our strategy, as outlined in this and opportunities of the energy report, is designed to minimise those company said. transition risks while enhancing our ability to Major concern here is whether Nigeria profitably lead as the world transitions is prepared for this change, although to an energy system that is aligned with major industry players including the goal of the Paris Agreement.” the Minister of State for Petroleum Resources, Chief Timipre Sylva, assured Beurden said: “Our target to become at this year’s Nigeria International a net-zero emissions energy business Petroleum Summit (NIPS) that Nigeria by 2050, in step with society’s is prepared to key into the energy progress towards the goal of the Paris transition but it is always easier said Agreement on climate change, is at the than done. heart of our energy transition strategy. Oil majors’ commitment “That means continuing to reduce our decarbonisation strategy, capital total absolute emissions to net zero Of all the oil majors, Royal Dutch Shell allocation and approach to climate- by 2050. We have set our net-zero leads in the energy transition agenda. relate policy and advocacy. target, and our short- and medium- The oil giant has since unveiled its term carbon intensity targets, so that “We will publish an update to our energy transition strategy programme. they are fully consistent with the more Energy Transition Strategy publication The Shell Energy Transition Strategy ambitious goal of the Paris Agreement. publication, which is aimed at making every three years until 2050. Every year, it become a net-zero emissions energy starting in 2022, we will also seek an “We will work with our customers to business concern by 2050, has been advisory vote on our progress towards change and grow demand for low- made public. Shell said the decision is our plans and targets.” carbon energy products and services, sector by sector, using the strength of in step with society’s progress towards Chad Holliday, Royal Dutch Shell our business relationships, knowledge the goal of the UN Paris Agreement on Chair and Ben Van Beurden, the Chief and expertise. climate change. Other companies are Executive Officer, in Energy Transition keeping their strategies to their chest Strategy, published earlier this year, “We will increasingly offer low-carbon but noted they have begun to allocate ” products and solutions, such as confirmed the oil plans to reach net- greater budget to their renewable zero emissions by 2050. The Strategy biofuels, charging for electric vehicles, energy projects. TotalEnergies is one of aims to reduce net carbon emissions by hydrogen and renewable power, as such companies. between six per cent and eight per cent well as carbon capture and storage and In its Energy Transition Strategy by 2023 when compared to 2016 levels nature-based offsets. In this way, we publication, Shell explained how it is and the target jumps up to 20 per cent expect to build low-carbon businesses transforming its business and working by 2030, 45 per cent by 2035, and 100 of significant scale over the coming to become a net-zero emissions energy per cent by 2050 in step with society’s decade” progress towards the goal of the UN business by 2050, in step with society’s The drive for energy transition was Paris Agreement on climate change. progress towards the goal of the UN further boosted after a landmark Dutch Paris Agreement on climate change. Holliday said: “Shell is the first energy court ruling recently. Last month a “The Shell Energy Transition Strategy company to submit its energy transition Dutch court ruled in favour of Shell’s publication aims to help investors strategy to shareholders for an advisory lead in energy transition programme, and wider society gain a better vote. We will publish an update every though the court ordered it to reduce understanding of how Shell is three years until 2050. Every year, greenhouse gas emissions by 45 per addressing the risks and opportunities starting in 2022, we will also seek an cent by 2030 from 2019 levels, which of the energy transition. It shows how advisory vote on our progress towards is significantly faster than its current we intend to navigate the transition our plans and targets. transition strategy. profitably, and in line with our purpose “The vote is purely advisory and will Impact of energy transition – to power progress together with not be binding on shareholders. We Shell announced last year it would more and cleaner energy solutions. Our are not asking shareholders to take cut as much as 9,000 jobs across it energy transition strategy is a key part responsibility for formally approving or operations worldwide, which is more of Shell’s Powering Progress strategy, objecting to Shell’s energy transition than 10 per cent of its global workforce. which aims to accelerate the transition strategy. That legal responsibility The jobs cuts are anchored on of our business to net-zero emissions, lies with the Board and Executive reorganization that seeks to transform it in step with society. It describes our Committee. climate targets, customer-focused into an energy company that produces “While the energy transition brings fewer greenhouse-gas emissions as well 7 COVER STORY APRILJUNE 20212020 as adapting to the realities of the effects of COVID-19 pandemic on businesses worldwide. Data from the websites of Shell Global and Shell Petroleum Development Company (SPDC) show that Shell employs 83,000 people worldwide, while its Nigerian operation – SPDC employs about 2,700 people of whom 97 per cent are Nigerians. According to Shell 2021 Briefing Notes inits website, “Shell Companies in Nigeria (SCiN) empower their employees and develop talent for the future. SCiN invest in people with strong technical and leadership capabilities, giving them the tools and accountability to deliver. “SCiN directly employ around 2,700 people and more than 9,000 contractors in Nigeria. The majority of Shell’s staff (97 per cent) are local Nigerians. “SCiN also believe in developing Nigeria’s talent of the future. The Shell Petroleum Development Company of Nigeria joint venture (SPDC JV) and Shell Nigeria Exploration and Production Company (SNEPCo) fund secondary and tertiary education scholarships. These scholarships have provided opportunities to thousands of Nigerian children in a country where demand for schooling far exceeds supply. “SCiN also invest in affordable and accessible health care to help improve the well-being of the communities where we operate. SCiN operate to high international standards when it comes to safety, governance, the environment and our impression on neighbouring communities. “To achieve this, we encourage strong leadership that empowers employees They aim to achieve no harm to people With the energy transition programme, to act responsibly and we work with and no leaks across operations. “ attention and funding are shifting to all partners to set mutually agreed renewable energies. In other words, all Also, the Shell Petroleum Development objectives and implement strategies. the benefits that derive from extraction Company of Nigeria joint venture (SPDC of hydrocarbon in Nigeria will also “Safety and security remain top JV) focuses on oil and gas production begin to shrink with its attendant priorities and SCiN apply international in the Niger Delta. The joint venture has negative impacts on economic and standards in Nigeria. They work closely the largest acreage in the country and social wellbeing of Nigeria. with communities, civil society, local operates a leased area of 31,000 square businesses and joint venture partners, kilometres. It produces more than half a Already, investigation has shown that as well as federal and state government million barrels of oil per day on average the over 10 per cent job cut will be agencies to promote a secure and safe with capacity to produce more. evenly distributed across its operations environment. 8 COVER STORY COVEREnergy STORY JUNE 2021

globally indicating that the over 10 per had earlier said investments in new McKay, stated that the sector has found cent of its Nigerian workforce will go. fossil fuel projects would need to itself having to supply oil and gas to a stop if the world would reduce global world in which future demand – and Going by the figures obtained, over warming to 1.5 °C. The Guardian had price – are highly uncertain. 10 per of the 2,700 staff and 9,000 reported that such development contractors will lose their means of According to her, the range of possible put planned $150 billion oil and gas income. This means that over 270 staff outcomes was dizzying but the world projects in Nigeria at risk. will lose their jobs in Nigeria, while over would need oil and gas supply for 900 contractors will also go. The new report released by WoodMac decades to come, and the scale of the said that energy transition represents industry will remain enormous. TBI Africa investigation reveals that $14 trillion worth of uncertainty for currently Shell Nigeria Companies in As the environment for oil gas gets upstream oil and gas. The experts noted Nigeria have begun to merge some tougher, WoodMac said delivery and that while oil and gas has been alluded offices to trim down the size of the discipline would remain paramount in to as a risky business, growing tension workforce, some have been penciled all aspects of the upstream value chains pushing for energy transition has down for exit, while some have as the macro environment for oil and worsened the concern. voluntarily chosen to go (voluntary gas gets tougher. retirement). The workforce reduction The experts predicted rapid fall in oil “Performance against budgets and cuts across all cadres of staff including demand if the world acts decisively to timelines has improved dramatically management staff. limit global warming to 2°C by 2050 but since the last downturn. The industry that gas demand and price would be TBI Africa further gathered that needs to remain relentless in its push more resilient. implementation of the job cut exercise to improve efficiency, drive down costs will begin mid-July (this month) and “While this range of outcomes has and deliver projects flawlessly. Oil and completed by end of July staff members major implications for the oil and gas gas companies need to send a strong would know who stays and who has industry, in either scenario there is still signal to stakeholders that they can be gone. a huge amount of upstream value on reliable stewards of capital,” the report the table. noted. Experts’ views on energy transition “Using its global lens asset-by-asset Wood Mackenzie Research Director, Experts at a global research body, Wood modelling, Wood Mackenzie estimates Angus Rodger, added that “Only Mackenzie, in a report predicted further the range of pre-tax future valuations exceptional and low-cost projects woes for the oil and gas sector, stating for upstream is a staggering $14 trillion will work in all demand scenarios. He that the pressure from energy transition – from $9 trillion to US$23 trillion. On a predicted that the cost of capital and could wipe as much as $14 trillion from post-tax basis, operators’ share of this the cost of doing business in oil and gas the upstream sector of the petroleum economic rent ranges from $3 trillion to will increase. industry. $9 trillion,” the research noted. “Oil and gas companies must The International Energy Agency (IEA) Wood Mackenzie vice president, Fraser

Osagie Okunbor, MD Shell Nigeria Bayo Ojulari, SNEPCo MD 9 COVER STORY APRILJUNE 20212020

Electric car recharge station. improve their environment, social TotalEnergies said it has concluded climate challenges. We are moving and governance (ESG) credentials. plans to invest about $60 billion in forward together toward new energies. renewable projects to be financed over Energy is reinventing itself, and this “The bond of trust with stakeholders a period of 10 years with Nigeria set to energy journey is ours. must improve. For the biggest players, receive part of the funds to accelerate new energies will play an increasing “Our ambition is to be a world-class the energy transition. role, but this is not an option for many player in the energy transition. That industry participants. They will need The Executive General Manager, Total is why Total is transforming and to cut Scope one and two emissions to Country Services, Mrs Bunmi Popoola- becoming TotalEnergies. This new reduce their exposure to increasingly Mordi, disclosed this in a virtual press name and new visual identity embody expensive debt,” the report said. briefing in Lagos. Popoola-Mordi said the course TotalEnergies has resolutely Total had on May 28, 2021, transformed charted for itself. The report further noted that into TotalEnergies as an active player investment would shift to gas, a TotalEnergies is a broad energy in the global energy transition and development that would signal the oil’s company committed to producing and is committed to combating climate long supremacy. providing energies that are ever more change, adding that the oil firm has a affordable, reliable and clean.’’ “The industry will have to figure out target of reducing its carbon emission the conundrum of weaker economics by 40 per cent in 2030 with the goal of The Country Communications Manager, if the giant gas projects the world getting to zero carbon emission by 2050. Total Companies in Nigeria, Mr. Charles needs are to happen. The returns on Ebereonwu, said TotalEnergies is in However, Popoola-Mordi said developing a barrel of oil are currently Nigeria for the long haul despite being TotalEnergies would continue to invest higher, with oil-production and cash- in Nigeria for over 60 years. He noted in oil, natural gas, electricity, hydrogen, flow profiles delivering more value that Nigeria was key to TotalEnergies biomass, wind and solar. She noted that upfront. Gas prices are lower than oil transition due to its abundant gas as part of the transition for the oil firm, prices on an energy-equivalent basis; resources and sunlight for solar TotalEnergies would soon commence that relationship will have to invert as it projects. the rebranding of all its filling stations does in our AET-2 scenario to make this across the country to reflect the new He said 77 TotalEnergies filling stations happen,” said Rodger. name, logo and direction. had been solarised already, adding that Also, Total changed its name to the company would also key into the She said: “Energy is life. We all need TotalEnergies as the company moves to Federal Government’s Decade of Gas it and it’s a source of progress become one of the world’s top five in Development initiative to further drive to contribute to the sustainable renewables by 2030. the objective. development of the planet facing 10 COVER STORY COVEREnergy STORY APRIL 2020

JUNE 2021

NCDMB DRIVING IN-COUNTRY VALUE CREATION, CAPACITY AND CAPABILITY GROWTH Since the Nigerian Content Act came into effect in 2010, the nation’s petroleum industry has witnessed tremendous development particularly in the past four years, courtesy of the Nigerian Content Development and Monitoring Board (NCDMB), hence the clamour for extension of the Act to other sectors of the economy. EMEKA UGWUANYI looks at the Board’s feats in the recent years.

he role of the Nigerian Content Between 2010 and now, the petroleum in- In view of the outstanding records by the Development and Monitoring Board dustry has undergone marvelous transfor- Board, stakeholders in the oil and gas sector T(NCDMB) in putting Nigeria on global mations with significant achievements. The have hailed the broad specializations and map as a country with the requisite person- feats achieved by NCDMB have compelled depth of Nigerian Content initiatives under nel decked in the right skillsets, capacities some countries in Africa to seek the Board’s the leadership of the Executive Secretary and capabilities that can compete in part of model for application in their oil and gas of the NCDMB, Engr. Simbi Kesiye Wabote. the world cannot be overemphasized. industries. To them, Wabote who is still on the saddle 11 ENERGY JUNE 2021 with the core mandate to create in-country value through viable and robust strategic development of capacity and capabilities, has performed creditably. The stakeholders noted that the deliber- ate utilization and promotion of Nigerian human and material resources as well as services to further the attainment of sustainable development in the Nigerian oil and gas industry, and creation of sectoral linkages to boost industry contributions to the growth of Nigeria’s National Gross Domestic Product (GDP). The is Board competently building human capacities in key technical areas of the Nigerian oil and gas industry, they said, and Simbi Wabote expressed hope that the skills being devel- operators, with the final product exported rapid market penetration and coverage, oped will serve several other key industries back to Nigeria. Telecoms operators were said agents would be equipped with of the economy. also producing recharge cards abroad, free transaction terminals such as mobile The Executive Secretary has engaged in thereby giving jobs that could have been phones, mobile Point of Sale terminals, series of capacity building and job creation done by Nigerians to foreigners. desktop PoS terminals and netbooks. initiatives to grow local content in-country. The country lost a lot of foreign exchange “Consumers do not require bank accounts, The Board has collaboratively conducted (forex) in the process and the number of debit cards or credit cards. Upon cash trainings, which met international stan- unemployed Nigerians continued to rise. payment to the agent, they can purchase dards, got all the international certifications Today, local production of recharge cards the services or create a mobile wallet from and affiliations. That is what we want has turned the table around. A lot of Nige- which they will be able to carry out such because the oil and gas industry does not rians produce recharge cards in paper form transactions. Banking services are, therefore, accept mediocrity or unqualified people to and resell to final users. brought to the unbanked.” work onboard, the stakeholders added. This, however, had taken a new shape now. Prior to the enactment of the Nigerian Oil For a sector such as the oil and gas to Some small businesses recharge phones and Gas Industry Content Development Act praise the achievements of the Content using Point-of-Sales terminals. All they (the (NOGICD Act) in 2010, less than five per cent Board shows that it is on course and plays small businesses) need to do is to establish of the annual Nigerian oil and gas Industry to the rule of the game. The sector is such a business relationship with service provider spend was retained in-country. that rarely compromises standard, quality acting as an intermediary between the and safety. Therefore, for it to buy into the Wabote, however, said the enactment of telecoms operator and the final consumer. initiatives of the Board is a big testament the NOGICD Act in 2010 which led to the that the capacities and capabilities offered Electronic Voucher Distribution (e-Pin establishment of Nigerian Content Devel- by indigenous firms are and personnel are distribution) has now become a secure end- opment and Monitoring Board (NCDMB) of international and industry standards, to-end prepay system, enabling mobile restored hope to the Nigerian oil and gas although, some experts are of the view that operators to supply airtime to corporate, industry as no nation can survive under the there are still rooms for improvement. distributors, dealers, agents and through to negative trend of capital flight, loss of jobs the end users electronically. and community discontentment. Players in the construction and telecoms sectors are pressing for extension of One company presently does this in The Board according to him, has two key Nigerian content to that space having seen Nigeria. The firm had developed a solution mandates which are: to develop local the transformation and value creation it that allows companies, agents, distributors capacities and capabilities along the oil and brought to the petroleum sector. and vendors to top up airtime accounts of gas value chain without compromising their members of staff or customers with standards and, to monitor compliance and The Board has also domiciled mechanical any payment denomination on any of Glo, enforce the provisions of the NOGICD Act. maintenance certification, technical and Airtel, Etisalat and MTN. theoretical aspects of maintenance of He said since inception in 2010, the imple- engines, turbines, compressors and pumps “The technology is instant and hassle-free, mentation of the Act has resulted in 35 per which is of international standard. and the customer or company will get a cent of in-country value retention com- discount on any amount using the system. pared to the less than five per cent value Similarly, some years ago, nobody knew The company would set up a multi-level re- retention before the NOGICD Act. that Nigerians could be part of the value tail channel, comprising of distributors and chain in the phone recharge business. At “Before the Act, we had annual spend of agents, to enable consumers to recharge a time, a bulk of the business was taken $20 billion with little or nothing retained airtime (pin and pin-less top up). To ensure abroad by Nigerian telecommunications in-country. Today, I can confidently say that 12 ENERGY ENERGYEnergy JUNE 2021 we spend over $6 billion in-country annual- 2010, he explained. ly. “We have two world-class pipe mills and About 40 per cent of marine five impressive pipe coating yards vessels used in the oil and gas In the area of Service Level Agreements, industry are owned by Nigerians. SLA, the Board has signed SLA’s with OPTS, About 40 per cent of marine vessels used in We have four (4) active dry- docking facilities in Port Harcourt, IPPG, and NLNG thus covering about 98 per the oil and gas industry are owned by Nige- Onne, and Lagos cent of industry operators. The benefit of rians. We have four (4) active dry-docking the SLA was evident in the Board’s re- facilities in Port Harcourt, Onne, and Lagos. cord-breaking timely approvals of the NLNG In cable manufacturing, all cables required requests for the Train-7 project. in the oil and gas sector are all manufac- tured in-country.” he said. Industry operators are aware of the 15-day rule in which they can take any request Currently, over 50,000 direct jobs have been forwarded to us as approved if they get no created on the back of implementation of response from the Board after 15 working the NOGICD Act, with over 76 operating days and in line with its 10-Year Strategic companies and over 8,000 oil and gas Content Development Fund entrusted in Roadmap, the Board aspires to attain 70 service companies pulling their weight in its care. per cent Nigerian Content level by the year the industry. 2027. Wabote also added that the Egina FPSO Wabote said: “Our indigenous operators which is the largest in the world was inte- The Board is also in the process of complet- are responsible for 15 per cent of our oil grated in the SHI-MCI yard in Lagos, which ing the construction of oil and gas industrial production and 60 per cent of our domestic confirms that the only infrastructure in West parks spread across four states complete gas supply while in fabrication, Nigeria can Africa for FPSO integration is available in with the provision of infrastructure and handle fabrication of more than 120,000 Nigeria. utilities to enhance local manufacturing and tonnes per year. partnership for the local manufacturing of Other achievements include STEM Educa- 1.2million composite LPG cylinders per year In cable manufacturing, all cables required tion training for 1,500 teachers in Bayelsa in the oil and gas sector are all manufac- with the 1st phase scheduled for commis- and Katsina States; Completion of thirty ICT sioning by the end of this year; tured in-country, while 10 million training Labs in nine states; Completion of sea-time manhours have been delivered via our hu- training for 20 marine cadets in internation- It is also in partnership for the establishment man capacity development programmes. al waters with another batch of 40 cadets of additional modular refineries in Bayelsa The NCDMB boss said the trainings were enrolled. and Edo States and the construction of responsible for indigenous workforce to 300 million standard cubic feet per day The Board also” completed The GSM training (MMscfd) gas gathering hub for gas supply sustain oil production at the peak of the scheme for 3,500 participants in Kano, Bau- COVID-19 pandemic lockdown. into the OB-3 pipeline as well as ongoing chi, Yobe, and Cross River States, upgrade of partnership to deepen LPG utilization in Listing other achievements, he said in the two Vocational Technical Colleges in Akwa the North with the roll-out of LPG bottling last four years the Board has completed and Ibom and Enugu States; got approval for plants and depots in ten Northern States of commissioned its 17-storey headquarters the $50million Nigerian Content Research & Kano, Kaduna, Katsina, Bauchi, Nassarawa, building complete with 1,000-seat auditori- Development Fund. Zamfara, Niger, Plateau, Gombe, Jigawa um and multi-level car park and completion “We launched NOGTECH-HACKATHON states and Abuja. of 10 Megawatts (MW) power plant at and ENACTUS-STIC to nurture innovation “As we journey towards the 70 per cent Ni- Elebele Bayelsa State for supply of electricity amongst our young minds; to the new headquarters building and the gerian Content level target, we will continue oil and gas park in Bayelsa State “We have made steady progress in the to utilize industry platforms and fora like this implementation of Project 100 to grow to connect with our stakeholders to provide The power plant is equipped with three gas capacities and capabilities of indigenous oil clarity on our mandate and ways to address powered generators of 4800kva each. and gas service providers. any constraints of the industry. In addition the Board completed and We have engaged the services of seven The local content development drive un- commissioned the 5,000 barrels per day (7) Third Party Monitors to expand the leashes an array of opportunities in the oil (bpd) Waltersmith Modular Refinery as well coverage of our compliance and monitor- and gas industry,” he said. as the launch of the $200million Nigerian ing efforts to additional thirty (30) operators Content Intervention Fund which was Since its establishment, the NCDMB has in the upstream, midstream, and down- been very active in driving Nigerian con- recently increased to $350million with addi- stream,” Wabote also added. tional products for Working Capital and for tent, as set out in the Local Content Act, in Women in Oil and Gas and Forensic Audit of Additionally, it has harmonized its Marine the Industry. Set out below, are some of the NCDF Remittances with the recoveries close Vessel Categorization standards with that of initiatives which have benefitted the Nigeri- to $100 million. NIMASA and NIWA, reinvigorated the Nige- an shipping and oil services sectors: rian Content Consultative Forum (NCCF) by The Board has also successfully exited Marine vessel utilisation scheme (the creating the Diversity Sectorial Group and Scheme) appropriation since 2018 and intend to the Gas Value-Chain Sectorial Group. This is maintain self-funding status through the in line with Section 58 of the NOGICD Act of In 2013, the NCDMB issued the Marine prudent management of the Nigerian 13 ENERGY JUNE 2021 Vessel Categorisation Procedure which the Nigeria Content Plan (with an estimated subsequently established the Scheme. If you don’t comply and we do value of $1 billion) for NLNG’s Train 7 project. our best to engage you, the The Scheme seeks to encourage construc- board will have no other option In April 2020, the NCDMB approved the but to take you before the court tion of vessels in Nigerian yards, promote where sanction would be applied Nigerian Content Compliance Certificate ownership of marine vessels by Nigerian (NCCC) and Approved Vendors Lists (AVLs) entities, stimulate flagging and registration (which include all the likely Nigerian of vessels in Nigeria and deepen Nigerian vendors, foreign vendors and community manning of marine vessels. vendors for each scope of work) for the kick- off of the Nigeria LNG Train 7 Project. Further to the Scheme, NCDMB issues, every quarter, a report on categorization Under the Nigeria LNG Train 7 Project, some of registered marine vessels providers in of the local content opportunities available the Industry. The basis for categorization of to the Nigerian shipping and oil services marine vendors is the extent of their com- sectors include procurement, logistics, pliance with requirements and documents services companies who intend to refinance equipment leasing, catering, insurance, to be uploaded on the Nigerian Oil and Gas performing loans advanced by commercial hotels, office supplies and haulage. Industry Content Joint Qualification Con- banks for asset acquisition (such as rigs and Rig utilisation strategy tent (NOGIC) – i.e. a databank of available marine vessels) and indigenous oil and gas capabilities which is the sole system for services companies with contracts from In December 2018, the NCDMB issued the Nigerian content registration and pre-quali- international oil and gas companies (“IOCs”). Rig Utilisation Strategy with the purpose of fication of contractors in the Industry. providing the necessary incentives that will In 2018, the first facility from the NCI Fund lower the barrier for entry and encourage Under the Scheme, Nigerian marine vessel was advanced to BGAM Services Limited Nigerian Companies to venture into rigs owners and vessels built in Nigeria are for the acquisition of a multi-role ballistic contracting and if need be providing the prequalified to participate in tenders based security vessel (with protective machine appropriate guarantees that will ease the on a set of criteria established by the Board, gun panels, electronic fuel monitoring acquisition of rigs and other technologies, thereby reducing the long period hitherto system and deck command centre for services associated with rigs activities in the taken to pre-qualify vendors and ultimately security personnel) that would work with onshore, swap and offshore sectors of the shorten the cycle time for contract award in the Nigerian Navy to secure offshore oil and Industry. the Industry. gas operations. The Rig Utilisation Strategy supersedes the Failure, delay, and/or refusal on the part of FPSO integration in Nigeria NCDMB’s earlier Offshore Rig Acquisition any operator, project promoter, contractor ” Strategy which did not record the desired or other stakeholders in the industry, to With NCDMB’s intervention, the first on- outcome of increased ownership in rig comply with the Marine Vessel Categorisa- shore Floating Production Storage Offload- assets. tion Procedure attracts sanctions from the ing vessel (“FPSO”) integration facility in NCDMB. Africa, SHI MCI yard, was completed in 2016 6. Mediation of the Sea Trucks Group (“STG”) at the Lagos Deep Offshore Logistics Base and West African Ventures Limited (“WAV”) Nigerian content intervention fund (NCI (LADOL), Lagos, Nigeria. Dispute fund) In 2018, a portion of the topside fabrication After two and a half years of a protracted In 2017, the NCDMB launched the $200 and integration of the largest FPSO in the commercial dispute, with dire conse- million NCI Fund, which is funded from world, producing two hundred thousand quential effects on the availability of key the Nigerian Content Development Fund (200,000) barrels per day, the EGINA FPSO, marine assets in the Industry, STG and WAV established by the Local Content Act. The was successfully completed in Nigeria at the amicably resolved their issues following NCI Fund is managed and administered by aforesaid facility. the intervention of the NCDMB and the the Bank of Industry Limited (BOI) and it has National Petroleum Investment Manage- products which offer, inter alia, attractive Following the success of the EGINA FPSO ment Services. single digit interest rate and a maximum project, NCDMB has also prescribed that tenor of five (5) years. new projects, like the upcoming Zabazaba NCDMB’s pivotal role in the mediation of Deepwater project (being developed by the dispute, which had taken on an interna- Some of the products provided by the NCI Nigerian Agip Exploration Limited in part- tional dimension, as STG was an internation- Fund to the shipping and oil services sectors nership with Shell Nigeria Exploration and al company and WAV a Nigerian company, include: Production Company Limited (“SNEPCO”) was a clear marker to the international (a) Asset acquisition facility: This is targeted and Bonga South West Aparo Deepwater community that Nigeria was committed at indigenous oil and gas production and project (being developed by SNEPCO), must to protecting international investments services companies who intend to acquire carry out their FPSO topsides fabrication notwithstanding the Local Content Act. rigs and marine vessels for use in the and integration in Nigeria. Project 100 Initiative Industry. NLNG Train 7 project In January 2019, the Ministry of Petroleum (b) Loan re-financing facility: This is targeted Sometime in March 2019, the Nigeria LNG Resources in conjunction with NCDMB, at indigenous oil and gas production and Limited (“NLNG”) and NCDMB signed off launched an initiative tagged “Project100” 14 ENERGY ENERGYEnergy JUNE 2021 organised by the Nigerian Bar Association Section on Business Law (NBA-SBL) and NCDMB themed: “NOGICD ACT-Strides: Challenges and Opportunities”, Umar dis- closed that the engagement with NBA-SBL is one of the stakeholders’ engagement mechanisms geared towards bringing out the activities of the board, seeking under- standing and engaging people on what the board is doing. He also stated that through collaboration, stakeholders’ engagements and education, there would be an understanding between the board and its stakeholders, which has lawyers as critical stakeholders. “If you don’t comply and we do our best to with the view to providing institutional and contracts awarded for, the use of vessels, or engage you, the board will have no other financial support to 100 indigenous oil and provision of services, in the Industry. This option but to take you before the court gas service companies offering seismic, approach has been proposed by some IOCs where sanction would be applied. Either marine, engineering and drilling services. who believe same would reduce the need the contract is cancelled or you pay five per for tenders and encourage investment in cent of the contract value as a fine. We keep To date, NCDMB has selected sixty (60) asset acquisition by Nigerians. doing our best and we hope we will make beneficiaries of Project100 with the aim of progress with time. developing them, in collaboration with the (c) Longer tenors (current tenor is 5 years) Nigerian national Petroleum Corporation for loans obtained under the NCI Fund. “Before the act, things were done in a differ- (NNPC) and NAPIMS, into globally competi- Whilst the current tenor is a break from ent way, after the act, we try to change the tive actors that will create high impact in the the mould, it is imperative for the NCDMB way things are done. In the past, you had Industry and Nigeria as a whole. to note that the average tenor for ship ac- businessmen, portfolio, service companies quisition facility for a new vessel, issued by that would take a job in Nigeria and out- Recently, the NCDMB requested NLNG commercial banks in leading international source the entire job out of the country but to consider Project100 beneficiaries and shipping centres, is between 8 to 10 years. now we insist that jobs be done in Nigeria, engage them, following NLNG’s assess of This ties with the above proposition for by Nigerians using Nigerian goods or Nige- their capabilities, in the execution of its Train longer tenors for vessel contracts. rian services. There would be challenges but 7 project and other related services. those who understand what is good for the (d) reduced interest rate for its intervention From the above, there is no gainsaying country are compliant,” Umar explained. funds. Just as the NCDMB, in order to spur that the NCDMB has undertaking laudable business continuity in the Industry follow- In his remarks, the chairman NBA-SBL, Ayuli initiatives towards the development of the ing the COVID-19 pandemic, reduced the Jemide said the section noticed that the industry, in its implementation of the Local interest rate (from 8 percent to 6 percent) Nigerian content for lawyers was not really Content Act, which enactment was in itself (as well as mortarium and tenor extensions) being enforced, so the body has been in en- commendable. At this juncture, the NCDMB for loans already advanced by the NCI Fund, gagement with the NCDMB and part of that has climbed a great hill but as Mandela said, I believe the interest rate for the interven- engagement is to create awareness about “there are many more hills to climb…. for tion funds can be fixed between 4 percent the activities as it pertains to lawyers. the long walk is not ended.” and 6 percent. According to him, the NBA-SBL entered a I therefore implore NCDMB to consider the Afun is a leading commercial lawyer – strategic partnership with the NCDMB in following, as part of its 10-Year Strategic experience includes, cross border advisory, a bid to enforce the Nigerian content for Roadmap which was issued in 2017, for the financing (including leases) and claims in lawyers. future: the Nigerian shipping & oil services and Jemide who stated that this is just the (a) Procurement of the removal, or at least a energy sectors beginning of many more events between substantial reduction, of import duty paid The Director, Legal Services, Nigerian Con- the section and the NCDMB assured that on vessel acquisition and importation of tent Development and Monitoring Board the partnership will help open constant en- vessel parts as well as steel for the repairs of (NCDMB), Muhammed Umar, has said that gagements with the NCDMB that would be vessel – these have a significant effect on the success of any good law such as the Ni- a huge success, such that the NBA-SBL can the cost of acquiring and maintain vessels gerian Oil and Gas Industry Content (NOG- always go to the NCDMB when it has com- in Nigeria. This is further instructive as com- ICD) Act cannot be hinged on the elegance plaints about its activities or the regulations. mercial aircraft and spare parts imported for of its form or content but the commitment use in Nigeria attract no import duty and His words: “The long-term gain is to work of all stakeholders to make a success of it, in Value Added Tax. with the NCDMB to ensure the Nigerian spite of any observed limitations. content development for lawyers is properly (b) Procurement of longer tenors for Speakg during a one-day symposium enforced. This will improve thousands of Ni- 15 ENERGY JUNE 2021 Nobody has been able to take us to task on it because meet the SLA that we signed.” He also hinted that the Board’s efficient service delivery contributed significantly to securing the approval for the NLNG Train 7 contract within a year as against the usual three-year contract approval cycle in time past. He assured that the Board will focus on continuous improvement of its processes and activities He said the milestones for NCDMB aim to achieve by 2027 lies on the Board key goals to drive the industry’s Nigerian content level to 70 per cent, create 300,000 new jobs and attain in-country retention of USD 14 billion •L-R: Executive Secretary, Nigerian Content Development and Monitoring Board, Engr. Simbi Kesiye out of USD 20 billion in annual industry Wabote; Minister of State for Petroleum Resources; Chief Timipre Sylva; Group Managing Director, Nigerian National Petroleum Corporation, Mallam Mele Kyari and representative of ZED Energy Lim- expenditure, with active participation of ited, Mr. Onesi Obendi, displaying the shareholders agreement signed on the construction of Brass Petroleum Products Terminal Limited (BPPT) in Abuja. Nigerian companies upstream, midstream and downstream along the oil and gas value chain. All of this will be materialised gerian law firms and Nigeria’s Gross Domes- environments in the world. Lawyers are by 2027. We have been working on these tic Product, (GDP). We will keep engaging to very relevant in this area. So, there are a lot targets for the last 10 years. make enforcement successful. of opportunities for Nigerian lawyers and this partnership will help to drive that,” he Speaking on the extent local content been “The NCDMB under the leadership of Simbi explained. an anchor of resilience during the pandem- Wabote has been very forward-looking ic, the Executive Secretary said the "When and dynamic. Following the leadership, the The NCDMB chief said after signing the Covid-19 struck, it did not affect oil and gas director, legal services, Muhammed Umar NCDMB SERVICOM Service charter at production in Nigeria. Despite the fact that has also been very dynamic. It is of great the Board’s headquarters in Yenagoa in most expatriates left the country, locals pleasure that the NBA-SBL is partnering presence of senior official of the SERVICOM were able to sustain production. with the NCDMB on this event. office. However, said the pandemic dealt a severe “At the end of this, we would have docu- He mentioned that the Board is passionate blow to the price of oil, and subsequently mented outcomes and these outcomes will about service delivery, and this is evident in the demand for it dwindled as lockdowns form the basis for other discussions that will the diligent and professional way the staff materialised. Interestingly enough, our help Nigerian content policies in Nigeria.” discharge their statutory responsibilities industry showcased an impressive level of to the oil and gas industry and execute all Also speaking at the event, Akintunde Ad- resilience, evidenced in the FID on NLNG Board’s activities. elana, director, Monitoring and Evaluation, Train 7, along with the commissioning of NCDMB explained that the NCDMB is a gov- He asserted that as part of the Board’s other projects during this period. Local ernment agency responsible for the growth efforts to continuously improve service capacity managed to fill in the gap left by of local capacity in the oil and gas industry delivery, it provides appropriate budgetary multinationals. Deliberate local content ef- and by extension, the entire economy. provision to train the staff to improve their forts in the Nigerian oil and gas sector have skills and competencies. made it resilient. Adelana stated that part of NCDMB‘s mandate was to create that linkage to other According to him, “we want to be the num- In addition, Covid-19 has taught us that sectors in the economy. “Establishing a ber one government agency in the country, we can do much more when it comes to board is a legal instrument, which is in the and we are working towards it. To achieve developing capability. It also showed us Nigerian Oil and Gas Industry Development this, we are investing in our people, our that we are lacking investment in R&D and Act, 2010 and a legal instrument of such service delivery and the turnaround time in new technology. The needs in this space are magnitude is a great role for lawyers. So, at everything that we do.” huge and for this reason we are focusing this point, we need lawyers to support the on R&D for manufacturing equipment, Wabote mentioned that the Board signed interpretation of the act and also to drive which will end up being cheaper for our a Service Level Agreements (SLAs) with compliance in the industry in terms of im- oil and gas sector. The pandemic was an key stakeholders in the oil and gas sector plementation of the provisions of the act. eye-opening experience that accentuated to ensure promptness and effectiveness in the importance of local content and shook “Lawyers play key roles in the activities of the delivery of its statutory responsibilities. the foundations of globalisation. the oil and gas industry; putting together He said: “At some point we challenged the contracts here and there, interpreting oil and gas industry that we have a 15-day On the key positions local indigenous com- the acts because this is a global industry rule that anything they send to us and they panies acquiring in the market, Wabote said and there are a lot of legal documents do not get a response within 15 days, they that although it’s true that some IOCs have arising from oil and gas business in several should assume that it has been approved. divested from oil and gas assets, Nigeria sectors of the economy and in several 16 ENERGY ENERGYEnergy JUNE 2021 remains a very important and attractive hy- drocarbon destination despite its numerous challenges. At the same time, we are wit- nessing a phenomenon where more and more local companies are gaining market share, thanks to the building up of capacity and capabilities. What’s more, most of the IOCs are divest- ing assets because they believe that local companies have developed sufficient skills to produce crude oil on land and swamp areas. As of today, over 15% of the total production in the country comes from indigenous companies and we are going to see a lot more of this as IOCs will eventually L-R: Chief Executive Officer, Rungas Group, Mr. Lanre Runsewe; Executive Secretary of Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote; Minister of State drift towards deepwater offshore, where for Petroleum Resources, Chief Timipre Sylva and Chairman, Rungas Group, Ambassador Shuaibu they have an edge with technological and Ahmed at the groundbreaking ceremony of Rungas ALFA composite cylinders manufacturing facility at Alaro City, Free Trade Zone, Epe Lagos on Friday financial strength. Furthermore, the energy transition also seriously. Another USD 30 million was impact, not only in the industry but also in comes into play, as seen in major multina- deployed as working capital and capaci- the nation’s GDP – creating jobs, enhancing tionals shifting their rhetoric towards green- ty-building facility for PETAN [Petroleum industrialisation, increasing the retention er and cleaner forms of energy. To a greater Technology Association of Nigeria] member of industry spending and substituting or lesser extent, IOCs are trying to manoeu- companies. imports. Even turning five of the 100 into large players would be a success. That is the vre into the renewables game. Yet if fossil The NCI Fund has five key products: philosophy. fuels remain attractive, it will be possible for manufacturing, asset acquisition, contract local companies to progress and prosper. financing, loan refinancing and community The Board started Project 100 in January Wabote highlighted the impact Nigerian contractor financing. The Women in Oil and 2019, appointing 60 companies, and in Content Intervention (NCI) Fund targeted, Gas Intervention Fund was added after the February 2021 the second phase conclud- noting the NCI Fund is one of the most pandemic struck as another element of ed with a new batch of 40 newly selected transparent funds managed in Nigeria. Insti- capacity building. It has been very success- beneficiaries out of 609 applications. It has tuted in 2017, the USD 350-million NCI Fund ful and all those who borrowed money been a huge success. have begun paying it back in line with their is managed by the Bank of Industry, which On NCDMB’s contribution to domestic agreement. In addition, in April 2020 as facilitates on-lending to qualified stakehold- modular refining, Wabote stated that part of the NCDMB’s response to mitigate ers in the Nigerian oil and gas industry. You NCDMB is a regulatory agency, but we the economic impact of the pandemic, our see, one of the key factors when developing are also entrusted with building Nigeri- Governing Council approved a reduction of local capacity is having adequate fund- an capacity. Our vision is to catalyse the the interest rate from 8% to 6% per annum ing, as without it local companies cannot industrialisation of Nigeria through the for all loan products. flourish. This has been an issue in Nigeria oil and gas sector. To do that, we focus on because while in other countries local com- Addressing the rationale and importance government initiatives. For instance, the panies get negative interest rates, here they behind Project 100, he said, Project 100 is country has struggled to establish modular get double-digit ones, making it difficult an initiative of the Ministry of Petroleum Re- refineries, so we felt we needed to prove to compete in the global arena. The NCI sources alongside the NCDMB to holistically that the modular-refinery phenomenon is Fund provides the opportunity for indige- support 100 wholly indigenous small-scale viable. Consequently, we are working on nous firms to borrow money at single-digit oil and gas companies and bring them to four modular refineries as equity investors: interest rates. the next level. The aim is to enhance their Waltersmith, Atlantic, Azikel and Duport. capacities, support them financially through The fund started with USD 200 million, As for Waltersmith, we are involved as an the NCI Fund and help them find opportu- which was all lent to indigenous companies equity investor with the rationale that once nities in the industry, in collaboration with striving for capacity development. As of they are stable, they will have the right NNPC and its subsidiary NAPIMS [National May 2020, around 94 per cent of the NCI to buy us out. The facility was commis- Petroleum Investment Management Fund had been disbursed to 27 beneficia- sioned in December 2020 with a capacity Services]. Let us take the example of Korea ries. Additionally, the NCDMB has received of 5,000 bpd. Likewise, we are equity with Samsung or Daewoo: These started as new applications from 100 companies for investors in the Duport refinery, which is small companies that were supported by nearly triple the size of the original fund. expected to be commissioned later this the government, and now they are global Given this appetite, we increased it to USD year with a capacity of 2,500 bpd. We are conglomerates. We aim to do something 350 million. Within that is a special fund of also planning the commissioning of the similar. USD 20 million dedicated to encouraging Atlantic refinery next year, and the Azikel women’s participation in the oil and gas The goal of the project is to push 100 refinery we expect will come on stream in sector; gender parity is something we take companies the extra mile to create a big early 2023. 17 ENERGY JUNE 2021 NLNG TRAIN 7: ENHANCING NIGERIA’S ECONOMY, SAVING THE ENVIRONMENT

President Muhammadu Buhari on June 15 virtually flagged off the construction oil price.” of Nigeria LNG’s Train 7 project marking another giant step to Nigeria’s However, before the award of the EPC economic prosperity. The Train 7 project was almost botched having been contract, the letter of intent (LoI) had been on the discussion table for over 12 years before getting green light. EMEKA signed in September 2019. UGWUANYI examines the economic benefits of the project. Commenting on the EPC deal, the Manag- ing Director and Chief Executive Officer of reen light for the execution of Train endorsement that the project had become NLNG, Engr. Tony Attah, remarked that the 7 project of the Nigeria Lique- a reality. However, the commencement of EPC contracts represents yet another mile- Gfied Natural Gas Limited (NLNG) construction of the project, which could stone in NLNG’s journey towards achieving beamed when on December 27, 2019, have begun last year, was put on hold due its vision of being a global LNG company, shareholders of the Nigeria Liquefied to the COVID-19 pandemic. helping to build a better Nigeria. Natural Gas Limited (NLNG), including the But in May 2020, another significant step “With the award of the EPC contracts to Nigerian National Petroleum Corporation was taken by the shareholders of the com- our preferred bidders (SCD JV), we are (NNPC), Shell, Total and Eni took the Final pany when a joint venture led by Italy's guaranteeing that our country remains Investment Decision (FID) on the Train 7 Saipem - the SCD JV Consortium, compris- significantly on the global list of LNG project. This was after 12 years of delay. ing affiliates of Saipem, Chiyoda of Japan, suppliers. At a point, stakeholders in the oil and gas and South Korea's Daewoo- won the En- This singular act clearly demonstrates our industry gave up hope on the actualisation gineering, Procurement and Construction shareholders’ determination and resolve to of Train 7 and thought it has gone the ways (EPC) contracts for Train 7. Saipem has a 60 sustain the economic dividends that NL- of Olokola and Brass LNG projects. About per cent stake in the venture. NG’s monetisation of our vast natural gas five years ago, Train 7 was considered to be At the contract award signing ceremony, reserves offers our great country Nigeria” broken into two Trains – 7&8, owing to its Saipem’s chief executive officer, Stefano size and to make the funding easier. He expressed confidence in SCD JV Con- Cao, said: “The investment decision by Ni- sortium’s proven competence, adding that However, the plan later changed and it has geria LNG Limited, which includes several the demonstration of an understanding to be implemented as a single Train. There- important energy companies, demon- of NLNG’s business philosophy by the fore, it was not surprising to see airs of joy, strates that natural gas, in whose value consortium will positively influence the excitement and fulfillment among the chain Saipem has a recognized leadership, execution of the Project and ensure zero shareholders immediately the Train 7 FID will be pivotal to the energy transition. harm to people, environment and host was taken. It was mission accomplished “The award of this contract contributes communities. after many years. to increase the portion of non-oil-related The Group Managing Director, Nigerian The decision, which was hailed by oil and backlog and confirms the overcoming of National Petroleum Corporation (NNPC), gas industry stakeholders, signalled a huge the link between Saipem’s share value and 18 ENERGY ENERGYEnergy JUNE 2021 which catalysed the development of float- Mallam Mele Kyari, said the actualisation would help open a floodgate of oppor- ing production, storage and offloading of the FID of Train 7 would open win- tunities for more of such investments, (FPSO) integration facility in Lagos. dows of opportunities for the economy, which could boost the economy and adding that it is an affirmation that Nigeria create prosperity for the over 200million He explained that the expected job explo- remains a prime foreign investment desti- Nigerians, who are the shareholders of the sion from Train 7 is banked on the Nigerian nation. Corporation. Content Plan, which provides for 100 per cent engineering of non-cryogenic areas The Managing Director of Shell, who was “We need to do more, and we can do in-country. The total in-country engineer- represented by Mr. Henry Bristol, the Man- more,” adding that the actualization of ing man hours is set at 55 per cent, which aging Director of Total, Mr. Mike Sangster Train 7 has opened the gateway for doing exceeds the minimum level stipulated in and the Managing Director of ENI, who more great things. “We will work with our the NOGICD Act. was represented by Mr. Peter Costello, partners to bring in more projects that will expressed the commitment of their firms add value to this country in the upstream, “It will also provide great opportunities for to the realisation of the Train 7 project. and particularly in the gas processing the utilisation of local goods and services Today, Train 7 project has become a reality sector,” he said. in addition to enhancing and developing new capacities and capabilities for the with the flag off by President Muhamma- The NNPC chief thanked President local supply chain. du Buhari on June 15. Muhammadu Buhari for giving him the Train 7 project utmost support to the project. He thanked “There will be 100 per cent local procure- the investment partners and the man- ment of all LV cables and HV cables, all The Nigeria LNG Train 7 project comprises agement of the NLNG for their tenacity in non-cryogenic valves, protective coatings, the construction of a complete LNG train staying committed to the project despite and all sacrifice anodes. 70 per cent of all and an additional liquefaction unit with a the challenges, adding that the President’s non-cryogenic pumps and control valves total capacity of 8 million tonnes per an- desire was to drive the NLNG to establish will be assembled in-country. num (MTPA), plus other associated utilities Train 12 soonest. and infrastructures. “Other spin-off opportunities would Train 7 would boost the production capaci- include logistics, equipment leasing, insur- NLNG’s General Manager, External Rela- ty of NLNG’s current six Trains and increase ance, hotels, office supplies, aviation and tions, Eyono Fatayi-Williams, confirmed its competitiveness in the global LNG haulage,” he added. this, noting that the project is expected to market, he added. increase the capacity of NLNG’s current six- Wabote pointed out that the increased train plant by 35 per cent from the extant The Minister of State for Petroleum number of NLNG Trains would also provide 22 million tonnes per annum (MTPA) to 30 Resources, Chief Sylva, stated that Train huge business opportunities for local MTPA. 7 would contribute to maintaining the businesses to build capabilities in the country’s status as a gas exporting nation. maintenance of LNG plants, especially in The Train 7 project, which would bring He said: “Nigeria has more gas reserves cryogenics. total capacity to 30 MTPA, will include a liq- than crude oil, and we have much to gain The project would also catalyse other uefaction unit, an 84,200-m3 storage tank, from sustaining our LNG exports to a upstream gas supply projects required to a 36,000-m3 condensate tank, and three market that has a growing demand for the keep the LNG train busy and make strand- gas turbine generators. It will be the latest commodity as the preferred fuel for indus- ed gas fields in the shallow and deep in several expansion projects the Bonny trialization and power generation.” Island plant has undergone since it began offshore in the area economical. The NCDMB Executive Secretary said Train commercial operation in 1999. Also, the $1billion Nigerian Content Plan 7, like other forthcoming major projects in (NCP) for the Train 7 project signed by Economic benefits of Train 7 project the oil and gas sector, must leave a legacy NCDMB and NLNG, according to Wabote, According to the Nigerian National Petro- facility, just like Total’s Egina deepwater, leum Corporation (NNPC) Group Man- aging Director, Mallam Mele Kyari, NLNG operates a unique business model that is profitable, adding that the stakeholders are proud to be part of this exceptional Ni- gerian brand that stands out in the global market. Kyari said the Train 7 project will gener- ate $20billion in revenue to the Federal Government’s coffer, provide 10,000 direct and 40,000 indirect jobs to Nigerians. “This could not have come at a better time to help government deliver on its promises,” he added. The NNPC boss said the Train 7 project 19 ENERGY JUNE 2021 economic development in Nigeria. “It is a well proven fact that there is a correlation between the amount of natural gas that is used and consumed in-country and the level of economic development of any nation. “Indeed, it is said that every $1 of gas that is consumed in-country contributes an extra $3 to the GDP. It can create thousands of jobs that can absorb a significant chunk of our teeming mass of unemployed youths.” Environmental benefits of Train 7 project From left: NNPC GMD, Mele Kyari; NLNG Board Chairman, H.M. Dr. Edmund Daukoru; Mrs. Oma Attah; NLNG MD, Tony Attah; Rivers State Deputy Governor, Dr. (Mrs.) Ipalibo Harry Banigo; the To oil and gas industry stakeholders, Amanyanabo of Grand Bonny Kingdom, H.M. King Edward Asimini William Dappa Pepple III, Per- besides the potential huge income and ekule XI; NLNG GM, External Relations & Sustainable Development, Eyono Fatayi-Williams; and NLNG Deputy MD, Sadeeq Mai-Bornu, at the NLNG’s Train 7 groundbreaking Ceremony in Bonny. employment generation that are anticipat- ed from Train 7, the project is an answer to in volume supply to the global market as was to ensure that work scopes of the calls for the utilisation and monetisation of a result of Train 7 will keep NLNG and the project with capacities in-country must be the country’s huge gas resources. To them, country on top of the suppliers’ chart as done in Nigeria. the sub-optimal exploration and utilisation world LNG demand grows. The NCP is also to aid the maximisation of of the nation’s natural gas has become a Nigerian content deliverables in the proj- Attah stated that the value network of the major issue for concern. Train 7 project would be about $12bil- ect by giving first consideration to indige- Notwithstanding the low utilisation, Nige- lion, including the net cost of the project, nous goods, services and human resources ria is still among world’s major gas flaring estimated in the region of $5 billion and as well as opportunities to Nigerian firms. nations, and also the world is gradually additional spend at its operational base in moving away from fossil fuels, which calls Under the Nigerian Content Plan for Train Bonny, Rivers State. 7, the NCDMB introduced a provision that for aggressive and maximum monetisation would ensure that a lead engineering, pro- “It is also about the upstream develop- of the nation’s natural gas for use in devel- curement and construction (EPC) bidder ment, which is the real gas that will come opment of other sectors of the economy. to us. That also is a huge investment of $5 that has built capacity in-country is not According to data from the Department of to $6 billion. So, potentially, the full value disadvantaged with regards to cost. Petroleum Resources (DPR), flared gas in network is almost $12 billion.” Attah also Nigeria can attract $3.5 billion investments The scope of work on the Train 7 project said the NLNG has monetised over 5.96 tril- and enough to generate 2.5 gigawatts includes in-country and out of country lion cubic feet (Tcf) of associated gas (AG), (Gw) of power or produce 50 million bar- work. They are “design, engineering, which would have otherwise been flared rels of oil equivalent (boe). procurement, expediting, transportation, thus helping to build a better Nigeria. management, construction, installation, The DPR noted that the flared gas can Managing Director, Dormanlong Engi- pre-commissioning and start up support produce 600,000 metric tonnes of liquefied neering Limited, Dr. Timi Austen- Peters, and acceptance testing of an expansion to petroleum gas (LPG) yearly, produce 22 said: “Train 7 would create many multiplier the NLNG facility.” million tonnes of carbon dioxide (CO2), feed effects, including increased processing, two-three liquefied natural gas (LNG) trains The NCP is a key outcome of the Service Lev- export of LNG and domestic utilisation and generate 300,000 jobs, among others. el Agreement (SLA) the Board signed with LPG in Nigeria. There are thousands of jobs the NLNG in May 2017. The SLA committed to be created along the entire value chain. It further said gas flared in 2018 was as the two organisations to timely approvals With a project of this nature, the entire high as 324 billion standard cubic feet and compliance with the Nigerian Content. landscape of Nigeria’s economy would (bscf), while about 888 million standard Managing Director, Nigeria LNG Limited, change for better.” cubic feet of gas was flared daily in 2017, adding that it identified about 178 flare Engr. Tony Attah, said the benefits of gas The Deputy Managing Director, Falcon gas sites or points spread across the Niger to the country will increase on the back Corporation, Mrs Audrey Joe-Ezigbo, said Delta in onshore and offshore oil fields. of this Train 7 project. He added that Train natural gas is key to unlocking the coun- 7 will stimulate the inflow of more than try’s economic potential, therefore, the According to the Nigerian National Petro- $10billion Foreign Direct Investment into actualisation of Train 7 is a major milestone leum Corporation (NNPC), oil and gas firms Nigeria as part of the project scope; create to the oil and gas industry and Nigeria’s in 2018, flared a total of 282.08 billion stan- more than 12,000 direct jobs and addi- economy. dard cubic feet of natural gas, which was tional 40,000 indirect construction jobs; put at a financial loss of about N234 billion. and develop Nigerian local capacity and Mrs Joe-Ezigbo said: “The gas industry is businesses. He also stated that the increase one that has significant prospects, and the It is in view of the huge financial losses, potential to transform the landscape of health and environmental hazards caused 20 ENERGY ENERGYEnergy JUNE 2021 by flared gas that the Federal Government created the Nigerian Gas Flare Commer- cialisation Programme (NGFCP) to capture ANALYSTS DECRY IMPACTS OF WORSENING all flared gases. NLNG’s operations have helped to reduce ELECTRICITY ON POVERTY the country’s gas flaring volume from 65 per cent to below 12 per cent. It also supplies about 40 per cent of the yearly domestic liquefied petroleum gas (LPG) (cooking gas) consumption. Attah confirmed this at the Nigeria LPGA and LPG Summit in Lagos, saying: “Our operation has helped to reduce about four trillion cubic feet of previously flared nat- ural gas, thereby improving Nigeria’s gas flaring profile from about 65 per cent per cent in 1999 to less than 25 per cent today.” The NLNG chief also said: “We have also undertaken the role as a major influencer of the domestic LPG market in Nigeria, dedicating 350,000 metric tonnes of liquefied petroleum gas (LPG), also called cooking gas, to the market; an effort that By Meletus EZE tric Power Sector Reform Act, 2005. focuses on deepening the penetration of cooking gas to support environmental he poor state of electricity supply in “It will also equip them with skills to iden- and human protection through the use of Nigeria may continue to increase the tify and prevent unwholesome business cleaner energy.” Tpoverty rate and frustrate attempts practices. In addition, it will help establish by local and international organisations beneficial relationships between consum- Recently, the Company announced an in empowering the citizen, analysts under ers and Electricity Distribution Companies increase of that commitment from 350,000 the Association for Public Policy Analysis in Nigeria, to enhance productivity and tonnes to 450,000 tonnes. (APPA) said in Abuja. efficient management of scarce resourc- es,” Okorie said. NLNG history The group equally insisted that most elec- The NLNG was incorporated on May 17, tricity end users were being denied their The initiatives tagged: “National Elec- 1989 to harness the country’s vast natural rights given the poor level of consumer tricity Consumer Protection Education gas resources and produce Liquefied protection in the country fuelled by the Programme (NECPEP) and Electricity Natural Gas (LNG) and Natural Gas Liquids lack of awareness and education that Consumer Protection Education Pro- (NGLs) for export. The establishment of would have provided needed information gramme (NASMECOP)” with necessary NLNG is backed by the NLNG Act. to the citizens on their rights. support is expected to assist in the erad- ication of poverty in the country, ensure President of the association, Princewill The company is owned by four sharehold- sustainable growth and development, Okorie, stated that there was a need to ers, namely, the Federal Government, rep- empower women and youths and lead to ensure that licensees perform to standards resented by NNPC (49 per cent); Shell (25.6 the achievement of Sustainable Develop- set by the Electric Power Sector Reform per cent); Total Gaz Electricite Holdings ment Goals (SDG) four, seven, eight, 12 Act, 2005, through training and educa- France (15 per cent) and Eni International and 17. N.A. N.V. S.àr.l (10.4 per cent). tional programmes, thereby ensuring that the government’s objective of delivering Okorie said: “Adequate and affordable Its subsidiaries are Bonny Gas Transport power for increased productivity, consum- Electricity will be required for realisation (BGT) Limited and NLNG Ship Manage- er satisfaction, community development of the above SDG goals while exploitation ment Limited (NSML). and increased revenue for investors was through fraudulent estimated billing and With six trains, NLNG’s plant on Bonny achieved. non-compliance with regulatory proce- dures will lead to non-actualization of the Island in Rivers State, produces 22 million In a letter filed to key public and private lofty SDG goals. tonnes yearly (MTPA) of LNG, and five entities over the development, Okorie MTPA of NGLs (LPG and Condensate) said the group had prioritised the need “For example, the 11 electricity distribu- from 3.5 billion standard cubic feet per to advocate sensitisation of citizens by tion companies (DISCOS) across Nigeria day (Bcf/d) of natural gas intake. NLNG’s training Small and Medium Enterprises, were said to have received a total sum of seventh train will shoot up its production which is under the umbrella of SMEDAM N542.73billion out of N816.15 billion they capacity to 30 million tonnes per annum to acquaint them with the provisions of sent as bills to their consumers in 2020”, (MTPA) of LNG. consumer protection component of Elec- he said. 21 ENERGY JUNE 2021 GAS, NIGERIA’S HOPE FOR ECONOMIC DEVELOPMENT, SAYS SYLVA By Meletus EZE According to him, the Federal Government is now paying greater attention to gas he Minister of State for Petroleum development because it provides a bigger Resources, Chief Timipre Sylva, has linkage to the economy than crude oil. Tdescribed the country’s gas expansion programme as a highway to economic “Gas is produced and it can be transformed prosperity and development. to fertiliser and fertiliser can fertilise our agricultural sector. Sylva said this when he featured on NAN Forum, the flagship interview programme “Also, the gas that is produced can be of the News Agency of Nigeria (NAN), to transformed into petrochemicals, and highlight the achievements recorded in the petrochemicals can be transformed into oil and gas sector since he assumed office everything that we need in life including about two years ago. the plastic on the camera, phones, even the clothes we wear. He noted that the Federal Government em- braced the gas expansion programme hav- “Petrochemicals come from gas, and gas ing realised that the country had abundant can be transformed to methanol, and this in Nigeria have access to cheap fertilis- gas resources and that there was a need to is the basis of chemical and pharmaceuti- er what it would do for our agriculture focus on it as a bridge to renewable fuels. cal industries. without anybody doing anything else,” “Last year we declared 2020 the year of gas “So you can imagine if we harness our Sylva said. because we realised that we need to focus gas resources and do a fertiliser blending The minister noted that employment on gas as a bridge to renewable fuels and plant based on gas, then produce the generation from gas alone is immeasur- we have abundant gas resources, so we fertilisers and send them to the farmers. able going by the number of people that need to take advantage of it,” he said. “And you can imagine if all the farmers would be affected in the value chain. NDEP APPROVES N7 DIVIDEND oremost Independent Integrated meeting all its obligations, attaining new operations for the Review year, according Energy Company, Niger Delta Explo- milestones and ended the year in profit to the Chairman, was the 15th Anniversa- Fration & Production (NDEP) Plc, held albeit modestly with staff strength intact”. ry of first oil production from its Ogbele its 26th annual general meeting on June Marginal Oil field which had produced “We rose to the challenges posed by 29, 2021, in Lagos, where its shareholders 20 MM bbls of oil, 95 BScf of Gas and over COVID-19 and the prolonged lockdown” approved a dividend per share of N7.00, 160MM litres of Diesel as at 2020 year-end. he said, “The Board and Management care- the Company’s 15th year of consistent fully monitored industry developments He also announced DPR’s approval for dividend payment. and took steps to reposition NDEP and its the introduction of Hydrocarbon to the For the second time, the AGM was held subsidiaries while sustaining efficiency and Train of its Ogbele Refinery which he said virtually due to the COVID-19 pandemic ensuring company survival”. With a Profit would make the full-fledged refinery “the and was held in compliance with Health after Tax of N1.6 billion for the Company first of such privately owned and operated & Safety protocols as well as the relevant and N16.8 billion for the Group, he added in Nigeria.” regulatory guidelines. that NDEP entered 2021 “on a solid finan- NDEP Plc is a foremost Independent cial foundation”. The Chairman of NDEP, Mr. Ladi Jadesimi, integrated Energy Company. Through in his statement, said though the dividend He announced the appointments of Mr. its wholly-owned operating Companies, of N7.00 was significantly lower than its ‘Gbite Falade and Mr. Adegbola Adesina Niger Delta Petroleum Resources Ltd record N17 per share for the preceding as the Group Managing Director/Chief (NDPR), ND Gas Ltd and ND Refineries year, it was a prudent approach based on Executive and Chief Financial Officer of Ltd – it owns a range of assets including the effects of the COVID-19 Pandemic, and the Company, respectively and thanked its flagship asset, the Ogbele Oil and Gas reflected NDEP’s solid fundamentals and the pioneer Managing Director/CEO, Dr. Field with a fully self- managed Flow commitment to its growth strategy and ‘Layi Fatona, for coming out of retirement Station, the soon-to-be commissioned cash preservation. to hold fort until Mr. Falade’s appointment. Refinery with 11,000 bbl/d processing Both appointments were ratified by the capacity, a 100MM Scf/d gas processing He said that despite the effect of the Shareholders at the AGM. plant, and a Joint Venture in South Sudan Pandemic on business operations in 2020, with Nile Petroleum. NDEP “demonstrated its resilience by Among the highlights of the Company’s 22 ENERGY ENERGYEnergy JUNE 2021 hevron Nigeria Limited (CNL) has urged for closer ties and CHEVRON URGES CLOSER TIES, PEACE C peace from host communities in Ilaje Local Government Area of FROM HOST COMMUNITIES IN ONDO Ondo State to enable sustained de- velopmental projects in the area. The CNL Managing Director, Mr Rick Kennedy, made the call on Sunday at the Annual General Meeting (AGM) of the Ilaje Rural Development Commit- tee (IRDC) held at Ode-Ugbo in Ilaje LGA of the state. IRDC is a Community-Based Organ- isation (CBO) established in 2005 to support oil exploration companies in bringing succor to residents of host communities. There was a Global Memorandum of Understanding (GMoU) between NNPC/CNL and the state government which gave birth to IRDC. It allowed oil communities the op- portunity to own and manage vari- ous projects solely funded by the oil giants. Kennedy, represented by Mr Esima- je Brikinn, General Manager, Policy, Government and Public Affairs of the company, also noted that its partner- ship with oil communities had been Rick Kennedy, CNL Managing Director cordial since the establishment of the IRDC. in an atmosphere of peace that is distributed food items, organised free According to Kennedy, since 2005, the conducive for business activities. medical outreach and as well conclud- ed skills acquisition training for 80 NNPC/CNL have contributed millions “We also need to work together women and young girls. of dollars to IRDC which have been to checkmate the activities of oil used to implement various projects thieves and vandals who are respon- “We have completed and commis- on education, healthcare, economic sible for most of the pollution in sioned two solar powered mini grid activities and general welfare of resi- the waterways because we support energy cabins to supply electricity to dents of host communities. global efforts to reduce flaring and 200 residents in Awoye and Odofado “This is a tough time for oil and gas carbon emissions.” Kennedy said. communities and the joint Mother and Child hospital project is almost industry globally. Earlier, Mr Roland Akintoye, IRDC’s completed. “Nevertheless, Chevron takes its Chairman, while rendering his ac- role as corporate citizen in Nigeria count of stewardship, noted that “All of these wouldn’t have been pos- seriously and remains active in many GMoU stood out as the most reliable sible without the support of commu- projects that promote health, edu- platform for sustainable development nities, our sponsors and other devel- cation, economic development and in the oil-rich communities. opment partners, we are very grateful. committed to terms of the GMoU. He said that IRDC was able to commis- “In our efforts to be committed to the “However, now more than before we sion the IRDC permanent secretariat, policies and principles of IRDC which seek more cooperation of all stake- awarded scholarships to 330 students are transparency, accountability, in- holders as the company take steps to of secondary and tertiary and distrib- tegrity and sustainability, the AGM is ensure sustainability of the business uted note and text books to primary held to account for our stewardship to in the face of current business chal- and secondary schools. stakeholders,’’ Akintoye said. lenges. He said that IRDC distributed fishing The occasion was graced by govern- “It is important to note that the ben- gears and safety kits to fishermen and ment functionaries, politicians, tradi- efits of GMoU can only be sustained fisher women in eight communities, tional rulers and other stakeholders. 23 ENERGYEnergy JUNE 2021 NNPC WEEKLY ACTIVITIES HIGHLIGHT ENERGY SECURITY By Abisola THOMPSON he weekly activities of the Nigerian National Petroleum Corporation T(NNPC) started on a cheering note as the Federal Government assured the Corpo- ration of maximum security as it returns to the Chad Basin for exploratory activities. President Muhammadu Buhari gave the assurance during his recent visit to Borno State, following the improvement of securi- ty in the area. The president tasked the NNPC to expedite action towards the delivery of 50 mega- watts power plant in the state to ensure the prompt restoration of electricity to Maidu- guri and its environs. Still on a cheering note, the House of Representatives Committee on Upstream commended the National Petroleum In- vestment Management Services (NAPIMS), a corporate Service Unit of the NNPC for efficient management of the nation’s Joint Mele Kyari, NNPC GMD Venture Operating Agreements with the International Oil Companies in Nigeria. levels of around 60million litres. pledged their support to fight smuggling. Rep Musa Adar, Chairman of the Commit- tee, who gave the commendation during a “We will all agree that smuggling is not a The NNPC Gas and Power Investment recent oversight visit by the committee in business that should be condoned because Company (NGPIC), a wholly owned sub- Lagos noted that NAPIMS had demonstrat- even for deregulated petroleum products sidiary of the NNPC, launched an initiative ed capacity and efficiency in the manage- it brings extra cost burden on this country tagged “Hazard Hunt Awareness” aimed at ment of the nation’s hydrocarbon resources. both in terms of safety and security of sup- curbing harmful incidents in and around ply and in securing of foreign exchange. the workplace. Speaking earlier, Group General Manager, NAPIMS, Mr Bala Wunti, urged the National “It even constitutes more burden to this NGPIC is a subsidiary of the NNPC with the Assembly to pass the Petroleum Industry country when the product involved is a responsibility to promote domestic gas Bill (PIB) to create a competitive oil and gas regulated product like Premium Motor utilisation and maximise value from invest- industry for the country. Spirit (PMS). ments across the LNG and power value chains as well as the gas-based industries. Also in the week under review, NNPC struck “We all know that our daily consumption a partnership deal with the Economic is not up to 60million litres. We all know The event which was held at the NNPC and Financial Crimes Commission (EFCC), that, and that is why we have to pull it Towers Abuja saw the Chief Operating Department of State Services (DSS), Nigeria down. We will pull it down by every means Officer, Gas and Power, Yusuf Usman, Police Force (NPF), Nigeria Customs Service necessary,” Kyari said. saying that the initiative was in line with NNPC Top Management’s drive towards (NCS), and the Nigeria Security and Civil He said NNPC would commence Ad- Defence Corps (NSCDC). becoming a company of global excel- vanced Cargo Declaration in line with lence. The deal with was struck with other relevant global best practices to tackle the menace. “Safety is an aspect that we in the oil and downstream and upstream stakeholders EFCC Chairman, Abdulrasheed Bawa, said in the petroleum industry was to curb gas industry should pay serious atten- the Commission would work with NNPC tion to for sustainable operations. smuggling and crude oil theft which had to ensure perpetrators of the act were negatively impacted the nation’s economy. brought to justice. “The Hazard Hunt Initiative which we are launching today, is an awareness pro- The Group Managing Director of the NNPC, The Major Marketers Association of Nigeria Malam Mele Kyari, said the move was at the gramme to help us to promptly identify (MOMAN), Depot and Petroleum Products unsafe acts and conditions so that we instance of President Muhammadu Buhari Marketers Association of Nigeria (DAP- who had ordered a stop to crude oil theft can curtail incidences and accidents in PMA) and the Independent Petroleum our operations,” Usman said. and illicit truck-out of petroleum products Marketers Association of Nigeria (IPMAN), to other countries. assured NNPC of total support towards the Earlier in his remarks, the Managing Kyari said the president had urged the fight. Director of NGPIC, Mr Salihu Jamari, who was represented by the General Man- Corporation of every stakeholder to ensure The Nigerian Association of Road Transport that the daily national petroleum products ager, Commercial, Mr Justin Ezeala, said Owners (NARTO), Petroleum Tanker Drivers that the initiative was a result of research consumption which shot up to 102million (PTD) and all the other stakeholders also litres in May was brought down to realistic and consultations with stakeholders. 24 Energy

JUNE 2021

CONSEQUENCES OF UNFRIENDLY BUSINESS ENVIRONMENT ON NIGERIA’S INTERNATIONAL TRADE Unfriendly business environment foisted on Nigeria by insecurity has continued compared to N8.61 trillion recorded in the to take its toll on the country’s foreign trade, Olamilekan FAWAS examines the corresponding quarter (Q2) of 2019. development. According to the report, Nigeria’s total export during the second quarter of 2020 nsecurity and excessive bureaucratic government’s own statistics. nosedived by 51.7 per cent to stand at bottleneck created by some government N2.22 trillion, representing a significant fall agencies and the activities of selfish For instance, Nigeria recorded a 10.3 per I cent decline in foreign trade in 2020, when compared to N4.59 trillion recorded local businesses have all resulted to lack according to the National Bureau of in second quarter of 2019 and N4.08 of significant improvement in Nigeria’s trillion recorded in the second quarter of foreign trade. Statistics (NBS). According to the report, the value of total imports in 2020 stood 2018. In the oil and gas business for instance, at N19.898 trillion or 17.3 per cent higher The report also showed that Nigeria’s total both local and international operators than the N16.96 trillion recorded in the foreign trade recorded a decrease of 27.3 had come to the conclusion that previous year. per cent when compared to N8.59 trillion Nigeria’s operating environment is the recorded in previous quarter (Q1 2020). most difficult among the oil-producing Total exports, according to the report, also countries. dropped by 34.8 per cent from N19.19 In September 2020, Nigeria recorded trillion in 2019 to N12.522 trillion in 2020. its lowest foreign trade with the United According to Vanguard report, the difficult Within 2020, Nigeria’s total foreign trade States since 2015, slumping to N1.5 trillion operating environment has led to a slump as of September 2020 compared to N2.1 in the country’s foreign trade, according to also dropped by 27.46 per cent year-on- year in second quarter of 2020, when trillion recorded in September 2019. 25 FINANCE JUNE 2021

The challenges of the operating zones across the country. Industries (SHI) as one of the South Korea environment were said to have been giants operating in Nigeria. aggravated by the disruptions caused by Otunba Adebayo is one of the few the COVID-19 pandemic. ministers in the administration of Indeed, since SHI came to Nigeria about President Muhammadu Buhari who a decade ago, it has demonstrated Nigeria’s dwindling international trade have exhibited unbridled passion to woo its capacity to transform the Nigerian and the recent alarm raised by the foreign investors in line with President economy by local manpower Nigeria’s Minister of Industry, Trade and Buhari’s agenda. development, which could boost the Investment, Otunba Niyi Adebayo, that country’s Gross Domestic Product (GDP). the volume of trade between Nigeria But while Adebayo and his likes are and South Korea plunged by 74 per cent making strenuous efforts to attract SHI has proved its mettle and invested within a two-year period, should be an eye foreign direct investments (FDIs), some heavily to demonstrate that it is in Nigeria opener to the Nigerian government and other officials of government and their for a long-term. its agencies. collaborators among local investors have embarked on deliberate efforts to scare But despite its record-breaking In a statement issued in Abuja, the foreign investors in a bid to wade off achievement in the development of Egina minister specifically stated that the competition. oil field, the uncertainty in Nigeria’s oil and volume of trade between both countries gas industry has discouraged investors dropped from $5million in 2018 to Foreign investors are not insulated from from launching more projects that could $1.3million in 2019. the adverse effects of the activities of utilise the expertise of SHI. these predators who use their local The minister said Nigeria and South Korea political contacts and connections Foreign investors operating in some of the shared strong economic and investment to engender unfriendly government country’s free trade zones are worst hit by ties with over 20 Korean companies policies that do not only destroy existing the activities of these local operators who presently operating in Nigeria. investments but chase away potential connive with some corrupt government investors. agencies to seize investors. Adebayo named some of the companies to include: Samsung Heavy Industries While other countries like Senegal and Free trade zones are areas in which (SHI) and Hyundai Heavy Industries (HHI). Cameroon have opened their doors to businesses are exempted from the normal foreign investments and skill transfer tax regime applicable in Nigeria. He also called on foreign investors to take to create quality jobs in their countries, In return, the Federal Government expects advantage of the Nigeria’s involvement in some foreign firms in Nigeria are being the African Continental Free Trade Zone such companies to boost national exports, strangulated to death without any create jobs and help in diversifying the (AfCFTZ) to invest in Nigeria so that they soothing words. would have access to the large market on country’s economy by bringing in new the African continent. South Korea, for instance is well- activities. positioned to help Nigeria build Adebayo told his visitors to encourage But companies operating at LADOL capacity but unfortunately, the enabling free zone in Lagos are being suffocated foreign investors to invest in the new environment has not been created. special economic zones established by the with excessive charges and other acts ministry in each of the six geographical The minister cited Samsung Heavy of hostility by the free zone managers. 26 FINANCE FINANCE JUNE 2021

For instance, an American pipe-coating period LADOL locked out one of the major for investments. company, Africacoat was forced to exit investors in the zone, denying it access to Nigeria by operators of LADOL. its investments in the zone. Investors in the Nigeria’s free trade zones (FTZs) recently threatened to divest from While other free zones nationwide It took the intervention of government the zones over a proposed reform by the are championing the struggle to woo agencies, and the courts for LADOL to Federal Ministry of Industry, Trade and investors, LADOL has since the past seven lift the blockade and allow the investors Investment (FMITI). years engaged its tenants in protracted access to their facilities in the free zone. litigations, leaving investments to suffer. A recent statement signed by the In the present world of internet, other Director of the Snake Island Integrated The operating environment at the zone international businesses read all these Free Zone, Lagos, Yusufu Abdullahi, on is characterised by open hostility against negative reports about LADOL’s open behalf of the investors, alleged that the investors. display of brazen hostility against its ministry had concluded plans to transfer partners, and this painted Nigeria in a bad the supervision of the free zones from This open hostility against Korean light and made it a wrong destination for the Nigerian Export Processing Zones investors got to its peak in April 2019 Korean businesses during the period. Authority (NEPZA) to the Oil and Gas Free when an officer of the Nigeria Security Zone Authority (OGFZA) located at Onne and Civil Defence Corps (NSCDC), Mr. Apart from the unfriendly posture of the Port in Rivers state. Innocent Oshemi, guarding LADOL shot likes of LADOL, business activities at the and killed a fellow officer and wounded Apapa ports in Lagos, which account for The investors are suspicious of the a Korean staff working at the fabrication 70 per cent of international trade in that government’s decision, describing the and integration yard of SHIN located in corridor, are also affected by gridlock. proposed reform as “a ploy to destroy the free zone. multi-million naira private investment in This gridlock also hurt multilateral trade the free zones”. The LADOL’s armed security guard was between Nigeria and other countries, said to have gone berserk around the SHI- including South Korea, adversely. They alleged that FMITI had directed MCI yard, killing his colleague during an NEPZA to transfer five selected free zones argument, and shooting a Korean SHI-MCI Insecurity is also increasingly affecting (Dangote Industries Free Zone, LADOL employee operating a crane within the investors’ appetite for Nigeria’s operating Free Zone, Snake Island Integrated Free yard at the time. environment. Zone, Tomato Industrial Park, and Olokola Another issue of great concern to Oil and Gas Free Trade Zone) regulated by This kind of incident was capable of the authority to OGFZA. scaring away any actual or potential investors is government’s policies. investor from any operating environment. Government should be sensitive to the It is not clear why investors made the The incident, no doubt, must have dealt a operating environment and refrain from threat but the onus is on the government great blow to trade between Nigeria and making policies that could undermine to restore the confidence of these South Korea because no investor will like investments. investors in its activities. to invest in an unsafe environment. All policies must be geared towards Though NEPZA has not implemented It was not surprising that the slump in trade improving the country’s Ease of Doing this directive, it is imperative for the between South Korea and Nigeria occurred Business. government to bring all the parties during 2018/2019, exactly around the time An operating environment that is to a negotiating table for the sake of the ugly incident occurred. characterised by policy inconsistences, protecting investments. The dwindling trade between Nigeria political interference and policy John, an analyst, writes from Abuja and South Korea also occurred during the somersault is not a preferred destination 2719 FINANCE JUNE 2021 REFORMS CAN RAISE NIGERIA’S REVENUE TO N10TR IN 3 YEARS, SAYS WORLD BANK By Shile GIWA N6 trillion. These key areas include excise reforms through policy measures, prop- erty tax reforms by updating/completing he World Bank has stated that Ni- property records and Value-Added Tax geria can implement economic and (VAT) administration and plugging com- Trevenue reforms which would raise pliance gaps. the country’s revenue to N10 trillion in 3 Others are Personal Income Tax (PIT) years and raise tax to GDP ratio to seven revenue-raising measures and access to per cent. data and rationalising tax expenditures in Senior Public Sector Specialist at the World Corporate Income Tax (CIT). Bank on Domestic Revenue Mobilisation, According to him, revenue mobilisa- Mr Rajul Awasthi, disclosed this at a virtual tion can be sequenced into immediate, media summit in Abuja. medium and long term. He added that According to the News Agency of Nigeria, in the short term, Nigeria could enhance he added that in the long term, reform excise rates on “sin goods” and establish of the tax system will be a necessity to excise on petrol and diesel at a token stimulate post-pandemic investment and rate, while in the medium term, empha- economic growth as policy reforms with World Bank Group President: David R. Malpass sis could be placed on rationalising tax expenditures and in the long term, it revenue growth enhancement are needed of that year. for Nigeria to increase revenue genera- could improve revenue from cross bor- tions. “Safeguarding and mobilising revenues der transactions and other international was necessary but needed to be designed tax measures. “As Nigeria tries to build back better after so that investment, growth and jobs do “Internally Generated Revenues (IGR) the COVID-19 crisis, the approach to not suffer. revenue mobilisation needs to be more should be intensified as efforts are needed strategic, not just taxing more, but taxing Also, reprioritising public spending to to improve States’ collection of PIT and better; not just how much to collect, but protect critical development expenditures other taxes such as the property tax,” he how to collect, what to collect, and from and supporting economic activity and said. whom,” he said. access to basic services and providing re- “The Federal Government should address lief for poor and vulnerable communities policy and compliance gaps in VAT as He added that Nigeria’s revenue sources were essential,” he said. had been further hit hard by COVID-19 Nigeria has much greater revenue poten- and in 2020 Nigeria recorded its deepest He said there were key areas of reform tial from VAT than currently achieved,” he quarterly contraction since the 1980s, but to improve revenue mobilisation as they added, citing that the total additional VAT exited the recession in the fourth quarter had the potential to raise N4 trillion to potential could be N3.1 trillion or more. SUKUK: DMO PLANS TO EXPAND INVESTOR BASE IN NIGERIA WITH FUTURE ISSUANCES ne of the success stories of the investments in the road infrastructure been significant awareness created in the Islamic Finance Market in Nigeria across the six geo-political zones in the media on the value of this segment of Osince 2014 has been the Sukuk country. the non-interest finance and how it can bond issuance in the nation. support economic development". Oniha described the feedback from At the moment, Nigeria has raised over investors as remarkable with a 105 per She said the 10 year (2015-2025) capital N362billion through the issuance of three cent subscription (2017) , 132 per cent market master plan already recognized rounds of Ijarah Sukuk to finance road subscription (2018) and 470 per cent sub- non-interest financial product, and the infrastructure across the six geo-political scription (2020) showing their confidence Nigeria Exchange Limited and FMDQ zones. in the potentials of the Sukuk market. Securities has been supportive of new products. Recently in an interview, the Director-Gen- According to her, the three Sukuk eral of the Debt Management Office issuances has changed the nation's The product according to her is supported (DMO) Nigeria, Patience Oniha, assessed socio-economic landscape as the public is by guidelines in the fixed income mar- the progress that has been made through aware and have invested massively in the ket that also has non- interest banking the Sukuk issuances between 2017 and market. provisions. 2020. The DMO boss said: "In addition to raising She said, there is need to have a bigger According to her, the Sukuk issuance is an money for the government, investors and more diversified base of investors initiative of DMO to raise local borrowing are happy with the fact that the Sukuk is for all the products, especially the areas which has been successful since inception project-tied and they can see the projects where government has huge investment in 2017. She said there have been huge the funds are deployed for. There has in infrastructure. 28 FINANCE FINANCE JUNE 2021

By Meletus EZE he Central Bank of Nigeria (CBN) CBN GRANTS LOTUS BANK LICENCE TO has granted a non-interest banking Tlicence to Lotus Bank Limited. COMMENCE NON-INTEREST BANKING Lotus Bank seeks to pursue the mission of creating value and growth for all through digital innovation and best-in-class cus- tomer experience for Nigerians. Founded and chaired by Mrs. Hajara Ade- ola, who is also the Founder and Manag- ing Director of Lotus Capital (the pioneer of non-interest finance in Nigeria), the Bank is commencing operations on a sol- id foundation of experienced leadership and a strong Advisory Council of Experts (ACE). Lotus Bank is managed by a team of sea- soned professionals and financial experts led by the Managing Director/CEO, Mrs. Kafilat Araoye who has over 25 years of CBN governor, Godwin Emefiele commercial banking experience. is the provision of innovative solutions With its flagship branch located at Ade- According to Araoye, Lotus Bank's focus that drive ethical prosperity for all stake- tokunbo Ademola Street, Victoria Island, and guiding principle are 'to deliver an holders. We pride ourselves on digital Lagos, the bank will open its doors to alternative option to interest-based bank- solutions that provide our customers with customers from July 2021. ing and to cater to the needs of not just the convenience of unlimited access to the banked but also the under-banked Globally, non-interest banking is worth our services and products," she added. and unbanked population. Non-Interest 2.23 trillion USD and is expected to grow banking is geared towards supporting Mrs. Araoye further stated, "Our prod- to about 4 trillion USD by 2024. This the real sector and Lotus Bank aims to ucts and service offerings will include type of banking is recommended to all improve financial inclusion in the country. non-interest Business Financing, Deposit Nigerians who desire to be involved in the In addition, the bank will operate trans- Products (current, savings and investment ethical and non-speculative business. parent pricing models as is the norm in accounts) and personal financing. The Lotus Bank is the first non-interest bank to non-interest banking.' bank aims to be a socially responsible commence operations from South-West, organization that will satisfy its customers "Our values are deeply rooted in partner- Nigeria with a focus to serve people of all across all touch points." ship. A critical component of our mission faiths. AYO TERIBA ADVISES FG TO LIBERALIZE THE SERVICES SECTOR By Abisola THOMPSON try to compile a list of all national assets Speaking further, Teriba decried the fact through the creation of an asset Registry that Nigeria had no single entity that he Federal Government of Nigeria has that would provide the primary data base had been listed in its capital market, been tasked to liberalize the country's for the creation of a national deal room for which would assist in unlocking liquid- service sector to enable it attract large T prospective foreign and local investors. ity. scale foreign direct investments (FDIs). Teriba noted that this would require Nige- With added liquidity by way of foreign An economist and public policy special- ria to leverage the capital market to privat- investment inflows, Nigeria would find ist, Dr. Ayo Teriba, made this point at the ize state-owned enterprises (SOEs) and it easier to fund infrastructure projects, Economic Associates one-day quarterly assets which would help in determining invest in human capital development, conference, that dwelled on develop- the tradable market value of such assets. and transform city centers and improve ments in the Nigerian economy and the national security. economic outlook for the country in 2021 The economist cited the example of Sau- and beyond. di Arabia that liberalized its State-owned The financial economist added that oil company 'Saudi Aramco' through "Nigeria needs to take the bold step According to Teriba it was time for Nigeria the capital market, and established a of connecting its local assets to global to learn from emerging economies like market value of over $1trillion for the liquidity, because liquidity leads to sta- Brazil and India, by opening up critical Saudi-owned international oil major. bility and stability would drive growth". service sector areas like power (especially transmission), petroleum services (the He acknowledged that the world had He emphasized the need for Nigeria to pipelines), and the railways system (trans- shifted to the "Age of Deal Making", think more strategically about encour- portation) to unlock hitherto dormant stressing the need for the both federal aging foreign direct investments (FDIs) economic opportunities. and state governments to create the and provide an enabling environment environment for increased local deal for improving the size of diaspora remit- He believed that it was time for the coun- counts. tances. 2919 FINANCE JUNE 2021 million active mobile subscriptions (75 per cent of the population). “Mobile technol- AFRICAN DEMOGRAPHICS CHANGING ogy provides an important platform for the delivery of a broad range of financial services, including micro-savings prod- RAPIDLY, FORCING A RE-THINK OF PENSIONS ucts,” says Gondo. African pension funds currently have ap- proximately US$350billion of assets under management. Gondo says that although slow, a progressive rebalancing of this capital away from domestic fixed income to equities and alternative investments is underway. “They are attuning their asset allocation to the changing social and eco- nomic environment.” In most Organisation for Economic Co- operation and Development (OECD) and many non-OECD countries, bonds and eq- uities remain the two predominant asset classes for pension funds. For the selected Gerald Gondo pension funds within the 2020 Bright Africa Pensions research, South African, Botswana, and Namibian asset allocations By Abisola THOMPSON inevitable demographic transition.” reflect greater allocations to equities than OECD countries. For the rest of the African A major issue governments face is that countries, however, the picture continues 85.5 per cent of Africa’s working popu- frica has long been known for its to illustrate a skew to fixed income. lation are informally employed. This is youthful population, and while the according to the International Labour Regulation continues to be the single most continent will continue to have the A Organisation (ILO). Not only are informal important determinant of asset allocation largest youth cohort in the world, they’ll workers difficult to target, they also con- decisions in African countries. However, live longer than their forebearers. This is ac- tribute minimally, if at all, to overall tax col- there are cases where regulation has cording to the latest Bright Africa pensions lection. “Clearly, this presents limitations to changed, but the market has not followed. research from RisCura, a global investment traditional long-term savings products, like In Kenya, for example the upper limit for firm. pensions,” Gondo says. exposure to private equity of 10 per cent In fact, longevity expectations have was established in 2016. As of June 2020, To avert fiscal and social stress, policy- changed dramatically, thanks to better the total allocation to private equity ac- making on pensions and social security nutrition, medical advances and overall cording to the published statistics from the in Africa needs to quickly move to enable improvements in the general standard of Retirement Benefits Authority (RBA) was affordable, convenient, and secure mi- living. less than one per cent. cro-pension products to be established. “The estimates for the elderly are astound- The prospect of a seismic growth in the Nigeria, where only 10.5 per cent of the ing, which is putting enormous pressure elderly population on the continent and workforce is formally employed, has al- on governments and pension funds to the fact that over 85 per cent of working ready done so. The country’s National Pen- deliver some form of social security,” says Africans are employed informally pose sion Commission (PenComm) launched Gerald Gondo, Business Development unique challenges to the African pension a micro pension scheme in 2019 for the Executive (Africa) at RisCura. fund industry. However, progress is being informal sector and employees of organi- made in tackling these issues. Regulators Estimated at 13.1 million people aged 65 sations with less than three employees. are reviewing legislations, governments or more in 1975, this figure increased to Gondo says that technology (fintech) is are experimenting with unique solutions 41.3 million people in 2015 and is expect- proving to be a key enabler of financial such as micro-pensions, assets allocations ed to reach 150.6 million people in 2050 inclusion and pension provision in Africa. are changing to allow for greater long- and 652.4 million people in 2100. Countries like Rwanda are demonstrating term growth and across the continent, the “Africa will continue to have the largest that it is possible to bring national identi- high rate of mobile penetration is being youth cohort on the planet – but they’ll fication systems and high mobile phone viewed as a significant opportunity to live longer than their forebearers, and will penetration together to foster financial innovate. need retirement income,” Gondo says. “It is inclusion and a broad-based adoption of “The road ahead will be thorny, and no critical for savings to take place for this co- savings products. doubt full of delays, but awareness of the hort and more importantly, for that savings As of 30 June 2020, the Rwanda Utilities problems is there, coupled with firm inten- to sustainably grow in tandem with this Regulatory Authority (RURA) recorded 9.8 tions to solve them,” Gondo concludes. 3019 FINANCE FINANCE JUNE 2021 STAKEHOLDERS LIST INVESTMENT OPPORTUNITIES IN NON-INTEREST CAPITAL MARKET ECOSYSTEM By Abisola THOMPSON takeholders in the capital market sub-sector have listed non-interest Sfinance opportunities in Nigeria’s capital market, urging corporate entities and investors to explore the investment window. They spoke at the maiden edition of Islamic Finance webinar series hosted by WebTV (digitalTV powered by Proshare) in Lagos on investment opportunities in Nigeria’s Non-Interest Capital Market (NICM). Mrs Bukola Akinyele-Yisau, WebTV, Islamic Finance Weekly Programme Anchor, said this in a statement made available in La- gos. Akinyele-Yisau said the webinar was an avenue to enlighten corporate entities and investors about non-interest finance opportunities in Nigeria’s capital market, while addressing salient issues affecting the growth of the market. deepen the market. erment. She added that it was essential to enable Abbas said the commission would con- Head, External Affairs, FMDQ Group, Mrs stakeholders deliberate on avenues of tinue to promote enabling regulations Adaeze Uzor-Kalu, in her presentation synergy to grow the industry. to make Nigeria the regional hub for said Nigeria was one of the pioneering non-interest finance in Africa through nations that established an Islamic Fi- The statement quoted Mr AbdulKadir collaboration with market stakeholders to nance Regulatory framework in the West Abbas, Head of Department, Securities introduce regulations that provide level African region. and Investment Services, as saying that playing field for all participants. the Securities and Exchange Commission Uzor-Kalu said the total global Sukuk (SEC) was committed to the growth and He said that SEC would foster partner- market from the debt market perspective development of NICM. ships for capacity building to build an had reached 715.2billion dollars in Q1, innovative and efficient NICM. 2021 which was three per cent higher Abbas, in his the keynote address, added than amount in Q4, 2020. that the growth of NICM in the country According to him, the commission will had been fueled by the increase in Sukuk embrace digitisation to support innovative On prospects for developing Islamic bond issuances amidst a growing appe- products and developing a dynamic fair, finance through the debt capital market, tite for the instrument by local investors. transparent and an efficient market where she stressed the need for a standardised investors and businesses in Africa could and robust regulatory framework for Speaking on the Capital Market Master invest and raise sharia-compliant capital. Sukuk issuance. Plan (2015-2025) developed by the com- mission, he said the goal was to ensure On his part, Mr Tesleem Akosile, who Uzor-Kalu also called for government and that the NICM sub-sector represented 25 represented the Managing Director of regulatory incentives to drive participa- per cent of the overall market capitalisa- TajBank, Mr Norfadelizan Abdulrahman, tion in the Islamic finance sector. said there were enormous opportunities tion by 2025. According to her, there is the need for for non-interest banks to collaborate heightened awareness on Islamic Finance Abbas explained that Sukuks would rep- with other stakeholders to build a vibrant and build capacity in key institutions and resent 15 per cent of total debt issuances Islamic finance ecosystem. outstanding by 2025. increased primary markets issuances of He identified areas like wealth manage- Sukuks and Islamic commercial papers. He noted that in 2004, SEC joined the ment as a means to develop products She explained that Islamic financing was IOSCO joint committee on the Islamic for high-net-worth individuals and critical to improving financial inclusion Capital Market in Nigeria which led to other classes of citizens, thereby driving as it takes account of Shariah-complaint the development of several initiatives to financial inclusion and economic empow- market players. 3119 FINANCE JUNE 2021 FG, STATES’ OWE N33.11TN IN EXTERNAL, DOMESTIC DEBT IN Q1 — NBS debt indicated that N12.47 trillion or 37.67 per cent of the debt was external, while N20.64 trillion or 62.33 per cent of the debt was domestic. “The Federal Government’s domestic debt stock alone was put at N16.51 trillion, while States and the Federal Capital Territory (FCT) domestic debt stock were put at N4.12 trillion. “Lagos state accounted for 12.31 per cent of the total domestic debt stock with N507.3 billion, while Jigawa State, with N31.7 billion, has the least debt stock in this category with a contribu- tion of 0.77 per cent to the total domes- tic debt stock”, the report said. Although the domestic debt stock for 35 States and the FCT were as at 31 March, 2021, that of Rivers was as at Yemi Kale, Statistician General of the Federation December 30, 2018. By Meletus EZE Bureau of Statistics (NBS). To arrive at the figures, data was sup- he Federal and State Governments The NBS, who stated this in its “Nigerian plied administratively by the Debt Man- owe N33.11 trillion in public domestic and foreign debt for quarter agement Office (DMO), while the NBS Tdebts, as at March 31, according to one, 2021 (Q1 2021)”, added that upon verified and validated it, the report said latest figures released by the National disaggregation, the nation’s total public AFDB TO SPEND ADDITIONAL $2BN ON AFCFTA RELATED INFRASTRUCTURE By Shile GIWA related infrastructure to further deepen He said the AfCFTA was “very important” regional integration.” and expressed the bank’s commitment to he African Development Bank (AfDB) give all it takes to its success. has said it expects to spend an addi- He stressed that the AfCFTA must be an Ttional two billion dollars on African industrialised and manufacturing zone for The AfDB president recalled that the bank Continental Free Trade Area (AfCFTA) relat- high valued manufactured products for provided 4.8 million dollars to help estab- ed infrastructure over the next two years. wealth creation. lish the AfCFTA Secretariat in Ghana. The President of the AfDB, Dr Akinwumi He said the bank was driving its industri- He also recalled the 40 billion U.S. dollars Adesina, said this in a virtual media brief- alisation strategy to support value chains the bank spent on infrastructure develop- ing at the end of its 2021 Annual Meetings and help Africa build its manufacturing ment across Africa from 2016 to 2019. of the bank. Adesina said the AfCFTA was capacity. a massive opportunity for the African con- He reiterated the bank’s investment of tinent to grow its economy and further three billion dollars in the pharmaceuti- deepen regional integration. cal industry and the work on textile and “For the potential to be realised fully, it is garments supported by its private sector very important for the private sector to group. play a big role and the AfDB is supporting “We are supporting the development the AfCFTA to do that. of the special agro industrial processing “You cannot trade if there is no infrastruc- zones that will allow African countries ture to trade; roads, rails, ports, highways. industrilise their agriculture and add value Those are the things the AfDB has been to every product they produce. doing. We did not wait for the AfCFTA. “Regional value chains that are well sup- “The work of the bank is at the core of ported with infrastructure and will allow driving regional integration for Africa. In Africa unlock its capacity in all of those the next two years we expect to spend an areas.” Akinwumi Adesina additional two billion dollars on AfCFTA 32 FINANCE FINANCE JUNE 2021 REPOSITIONING NIGERIAN MSMES FOR AFCFTA By Shile GIWA he Africa Continental Free Trade Area (AfCFTA), officially came into force Ton Jan 1, 2021 to deepen economic integration on the continent. This followed Africa’s low intra-regional trade volume in relation to other conti- nents like America, Europe, and Asia. The agreement also seeks to eliminate tariffs on 90 per cent of goods while also enabling micro, small, medium, and large businesses to penetrate new markets and establish strong cross-border supply chains with trade partners on the continent. Zainab Ahmed, Minister of Finance Recent reports by the World Bank indicate that the agreement would boost regional phasised. This, he said, was because the association, for close to two years, had engaged mem- income by seven per cent, increase wages Director-General, Lagos Chamber of Com- bers on the subject through consultations, for women and lift 30 million people out of merce and Industry, (LCCI), Dr Muda Yusuf zonal sensitisation workshops, sectoral extreme poverty by 2035. noted the nationwide sensitisation by the meetings and series of webinars. The National Action Committee of AfCFTA, federal government Action Committee in the first quarter of the year, flagged off on AFCFTA. He, however, said that a great He said there had been high level inter- a sensitisation drive to enlighten Nigerians deal of work was still required to create the actions with top echelons of the AfCFTA on the benefits the trade agreement and desired level of awareness. Secretariat, African Union, Africa Export- Import Bank, and other relevant national the need for full participation. This, according to him, is due to the size of Ministries, Departments and Agencies. Six months into the take-off of the AfCFTA, the country and investors’ population. These, according to him, brought to fore however, some believe many Nigerian Yusuf said that there was the need for the need for a number of steps mem- Micro, Small and Medium Enterprises (MS- better targeting for desired outcomes to ber-companies must take to benefit MEs) can do better with more awareness be realised, with emphasis on international maximally from the agreement. on its intricacies and the technical know- trading and investing community. how, to maximally exploit its benefits. He cited the need to begin to accelerate He said the percentage of MSMEs that export diversification by targeting prod- MSMEs, relevant to the Gross Domestic undertook international trade was possibly ucts which are largely demanded on the Product (GDP) growth as well as em- less than 10 per cent. ployment generation, are believed to be continent but were mostly sourced from the major drivers of development in any “The truth is that most MSMEs are domes- outside as one of such steps. tic market focused and most exporters are economy as they form the bulk of business The MAN DG also called for the re-align- not necessarily the producers. activities. ment of production processes with agreed Notable are the various interventions of “The language of dissemination of the rules of origin for product lines, to ensure the Federal Government and the Central AFCFTA message should be accessible, qualification for the preferential tariff that Bank of Nigeria (CBN), such as the reduc- especially to the MSMEs through the sim- AfCFTA seeks to build. plification of terms and terminologies. tion in interest rates on CBN’s facilities from Ajayi-Kadir stressed the need to continue nine per cent to five per cent, and creation “There is also need to ensure a balance in to develop capacity in the understanding of N50billion intervention fund for house- the use of the traditional media platforms of AfCFTA Rules of Origin and the trade holds and MSMEs. and the digital platforms. remedy mechanisms and skills required to effectively participate in the continental Others include the creation of N1.1 trillion “Government needs to commit more value chain. intervention fund for manufacturing sector resources to the AFCFTA sensitisation (drug sub-sector inclusive), and temporary campaign,” he said. “We must also begin to embark on capac- and time-limited restructuring of tenor ity building on export trade logistics and Director-General, Manufacturers Associa- and loan terms for businesses affected by modalities for shipment amidst huge infra- tion of Nigeria (MAN), however, Mr Segun the pandemic. structure deficit prevalent on the conti- Ajayi-Kadir, said that more than 50 per nent, and adopt market entry strategy that The need to reposition MSMEs with con- cent of manufacturers, most of which were best suits their products, giving adequate text-specific awareness mechanisms and MSMEs, were knowledgeable about the attention to culture of the people in the education can, however, not be overem- workings of the agreement. 3319 FINANCE JUNE 2021 target market. “We need to improve on product pack- REMITTANCES TO THE RESCUE aging to engender increased market A period of crisis like the COVID-19 pandemic is not the best time for penetration, with MSMEs ensuring quality countries to expect diaspora remittances. Although remittances were assurance before products are shipped to initially stalled by the pandemic, the World Bank report says the flows final destination. later rebounded to play crucial role in supporting economic activities across nations. The ‘Naira for Dollar’ initiative in Nigeria, Roshan Digital “Although price competitiveness of Nigeri- Account in Pakistan, or two per cent cash incentive in Bangladesh an manufactured goods remain a chal- have yielded significant benefits to the countries, writes Abisola lenge, stakeholders in the MSMEs group THOMPSON. must adopt the best pricing strategies by ensuring efficiency in their production and logistics processes. t the onset of the COVID-19 every $1 sent from the diaspora. The policy “There is also the need for capacity build- pandemic, funding and sending also means that the cost of transferring $1 ing in the area of paperwork because there Adiaspora remittances became al- is reduced by about N5. most impossible for Nigerians abroad and is tendency for a failed transaction and The global bank report says the role of citizens of other nations across the globe. ultimately losses when the documentation digital financial services in helping the is faulty, hence, the need for pre-export Job losses and severe curfews needed to remittance industry navigate through the and post-export documentation. curb the spread of the illness resulted in disruptions and risks of the crisis under- “Appropriate familiarisation with payment reduced incomes, restricted mobility, and scores the importance for authorities systems like Letter of Credit, bill for collec- disrupted operations of service providers and donors to prioritise legal reform and tion, Open Account and Advance Payment in many countries. market interventions. is also required as there will be need for Remittance services were not deemed The report explained that in recognition of sourcing of funds to pay local suppliers essential, and many were forced to close. the important role that remittances play and getting payment from the buyer after Even those who managed to continue as an enabler of growth and prosperity, shipment,” he said. providing services faced higher costs and the World Bank inaugurated weekly pulse Executive Secretary, Nigerian Association unexpected expenses to meet the require- surveys and pricing analyses to monitor of Small and Medium Enterprises (NASME), ments of “the new normal.” the situation in the international remittanc- es market in April and May, last year, with Mr Eke Ubiji, on his part, stressed the need But the new World Bank report by Oya the objective of identifying challenges and for inclusion of MSME stakeholders in Ardic, Senior Financial Sector Specialist making recommendations to address the government’s enlightenment and sensi- of the bank, says remittance flows later crisis. tisation advocacy, to engender grassroot rebounded and have played a crucial participation. role in supporting economic activities as Another contributor to the report, Senior Ubiji urged governments of countries that countries developed new policies to keep Payment Systems Specialist, World Bank, had already ratified the agreement to build them coming. Hemant Baijal, explained that despite the odds and initial projections, remittance an intra-African rail transport system to holis- For example, the introduction of the flows rebounded quickly after a sharp tically address transportation infrastructure Roshan Digital Account in Pakistan, the decline at the start of the pandemic. By gaps acting as barrier to trade for MSMEs. ‘Naira for Dollar’ initiative in Nigeria or the the end of last year, remittance flows were two per cent cash incentive in Bangladesh He also advocated the use of non-formal, down by only 1.6 per cent globally from seems to have yielded benefits in the short and highly simplified means of information early in the year, far less than what was run. transmission to players in the MSME space. projected at the start of the pandemic, and “The onus is on government and relevant Central Bank of Nigeria (CBN) Governor, less than the decline in volumes experi- organisations to have a way of passing this Godwin Emefiele said the bank’s ‘Naira enced during the financial crisis of 2008. relevant information to the players, even at for Dollar’ initiative gives N5 incentive for the grassroots. “Countries must also holistically address basic infrastructure, especially transporta- tion, through the creation of an intra-Afri- can rail network system just as Kenya has built to Uganda. “As it stands, we are landlocked and cannot move anywhere. Many MSMEs may not be able to fly their products, but with con- necting railing system to link the whole of Africa to one another, trade barriers would be addressed. 34 FINANCE FINANCE JUNE 2021 a monetary reserve. NIGERIAN GOVERNMENT PLANS Advantages of CBDCs TO LAUNCH DIGITAL CURRENCY The Central Bank of Nigeria won’t adopt new technology if it isn’t in the best interest of Nigerians. This means that CBN has successfully scrutinized the advantages, disadvantages, and risks of having a CBDC. The central bank of Nigeria is tasked with the protection of the financial security of Nigerians. Some advantages of the CBDCs includes: Interoperability; Increase technical and functional opportunity; and Reduction in the cost of having to mint and print physi- cal currency. There will be a more efficient means of set- tlement since there will be no need for inter- mediaries. Increase in financial inclusion of citizens since it will become very easy and By Shile GIWA 2009 when the first cryptocurrency called cheap to create an account. Bitcoin was created. entral Banks in the world were active- Reduction in fraudulent activities, counter- ly against the use of cryptocurrency People liked the idea of Bitcoin decentral- feit money in circulation, and armed rob- Cfrom its inception. Recent develop- ization and anonymity and saw it as an bery since there will be increased oversight ments show that most central banks now opportunity to make transactions without of movement of funds. see the need to drive their traditional fiat the close monitoring of the government or currencies from physical to digital, thereby any other third party. People learned how And the most important advantage for the creating a digital form of currencies like to mine bitcoin, buy Bitcoin and use it for central bank is increased transparency. The Dollar, Naira, Pound, Euro and Rand, among transactions and also as a store of wealth. government can monitor transactions of others. its citizens and the citizens can monitor the Central Banks across the world saw it as a transactions of the government. “We are committed and I can assure every- threat to their currencies and then, some body that digital currency will come to life countries issued a ban on it. However, people Disadvantages of CBDCs even in Nigeria.” That was the statement still buy Bitcoin regardless of their govern- It is almost certain that what has an ad- made by the governor of the central bank ment ban and since one of its benefits is ano- vantage must surely have a disadvantage. of Nigeria on Digital currency. This clearly nymity, the government couldn’t find out. Same for the CBDC, there are surely some shows that Nigeria is also joining the train While countries were banning it, China disadvantages and they include: It might re- of countries attempting to create their own found a way around it. They mint cash digi- sult in heavy centralization by the Nigerian digital currencies. tally eliminating the need for bills and cash government; There will be close monitor- It is no news that earlier in the year, the CBN thereby turning their legal tender into a ing of Nigerians transactions; The use of issued a ban on the trading of cryptocur- series of codes. This was a very smart move CBDCs might widen the gap between the rency and digital currency in Nigeria. Now, by the Chinese government. Instead of the rich and the poor; A huge percentage of a few months later the governor of the CBN government telling its people not to buy Nigerians are not versatile with technology; has stated that Nigeria has room for digital Bitcoin they provide a close alternative for The number of people with a bank account currency since it will be launching hers. them which has the same function as the is less than half of the population of the cryptocurrency with little differences. country; and It can result in massive pumps In this article, we will be discussing things and dumps. you should know about the Central Bank Interestingly, Nigeria is also planning to Digital Currencies (CBDCs), their advantages follow suit by creating its digital currency The relationship between Bitcoin and and disadvantages, and their relationship which is scheduled to be released before CBDCs with Bitcoin. the end of 2021. Should you still find out how to buy Bitcoin Introduction to CBDCs CBDC is an acronym for the Central Bank or even actually go ahead to buy Bitcoin Digital Currency. It uses a digital token and when there is the alternative of the Central Thousands of years ago, trade by barter was electronic record to represent the virtual Bank Digital Currency? Well, this brings us to the acceptable way to make transactions. form of the fiat currency of a country. Unlike the similarities between Bitcoin and CBDCs. Thereafter, the coin was used as its substi- Bitcoin and Altcoins, CBDCs are centralized, Both are indeed digital currencies that can tute, the Chinese then invented the first monitored, and issued by the Central Bank be stored electronically and be used to paper currency which was used for many of the country. It has the same functionality carry out transactions remotely. However, years till the late 19th century where there as the traditional fiat which includes the an important difference between the two is were so many attempts to create the first store of value, unit of account, and will have decentralization. cryptocurrency but wasn’t successful until 3519 REAL SECTOR JUNE 2021 THE NEED FOR FULL IMPLEMENTATION OF AFCFTA The commencement of African Continental Free Trade Area in January some issues that ideally should have been 2021 was greeted with much encomium by industry players, However, addressed before the commencement of Nigeria seems to be missing out from the largest trading arena of 55 AfCFTA are still inconclusive. countries, with over 1.5 billion people and a prospective Gross Domestic Product (GDP) of about $3trillion. This position is no longer palatable “These issues need to be quickly addressed to most player who now seek full implementation.of the agreement for to ensure Nigeria’s maximum benefit from optimum benefits.Charles Okonji examines. the first mover advantages that come with a trading arrangement like AfCFTA. It is in this light that we recommend the following Why Push For Total Implementation ensure that Nigerian businesses harness actions for the Government: Confirm the level of readiness of Nigeria for AfCFTA and ome have argued that totally imple- its full benefits. AfCFTA will certainly be an important strategy in its quest to ensure provide the following: The agreed Rules of menting AfCFTA, is the only way the Origin & its manual, clarify the role of regu- country could tap from the huge bene- Nigeria's economic influence on the conti- S nent; taking note that Nigerian businesses lators, procedures for financial transactions fits presented by the trade agreement. are already strongly rooted in many African on the Pan African Payment System and the Throwing the first punch, the newly countries. mode of operation of the Trade Observato- installed President of National Associa- ry that will guide trading; tion of Chambers of Commerce, Industry, In furtherance to NACCIMA calls, the Manu- facturers Association of Nigeria (MAN), has List documents and procedures for export Mines and Agriculture (NACCIMA) Ide John under the AfCFTA Regime and Provide Udeagbala stated that the full implementa- raised some important issues, that since tion of AfCFTA commenced in January 2021 the commencement of actual trading, is in line with the realization of a dream discourse has been centered on what conceived in 1963 during the establishment should be done to ensure that the private of Organization of African Unity (OAU), now sector in Nigeria quickly occupies a vantage African Union (AU). position in AFCFTA implementation at the Continental level; what measures should "This is a giant leap towards increasing be taken to insulate the private sector from intra-African trade and creating collective the potential backlashes of AfCFTA; and wealth. It is also a bold step to take Africans how the economy, particularly the man- out of poverty. This is why we have focused ufacturing sector can be positioned to for on it. We are delighted at the work of the beneficial trade in the Continental wide National Action Committee on AfCFTA since Free Trade Area. its establishment and have been part of its sensitization activities, through the NACCI- In a document made available to TBI Africa MA committee on AfCFTA. by MAN, “We observed that since the official commencement of trade on January 1, We will continue to advocate for the full 2021, information on vital aspects of trade H.E. Mr. Wamkele Mene, Secretary General, implementation of the agreement and under AfCFTA are not readily available and AFCFTA 36 REAL SECTOR JUNE 2021

Apart from COVID-19, reaching MAN DG said; “Federal Government set up 50 percent intra-African trade, a National Action Committee on AfCFTA and hopefully above that, which has widely consulted our stakehold- depends on our capacity to accel- erate regional value chains and ers and what I feel remains to be seen is the the manner and pace in which readiness plan that is all encompassing and we implement the agreement we must also ensure that we have a well-co- ordinated approach to addressing issues that may emerge from the implementation of AfCFTA. Nigeria cannot afford a situation where we have discordant tunes, where we do not have a focus on what to do in the event that there are infractions." Commenting on the level of preparedness, the Industrial Policy and Competitiveness MAN DG faulted level of preparedness of Advisory Council to consider and validate the AfCFTA of secretariat in Accra, stressing the need for the whole continent to be Ide Udeagbala, President of NACCIMA Competitiveness and Sustainability Plan for Nigeria as a proactive response to AfCFTA prepared, especially the secretariat in Accra specimen of relevant application forms, and the resultant Global reaction; Direct to prepare for the implementation of the import and export documents; Share the that the meetings of the National Technical AfCFTA in a Covid-19 environment. regulation on AfCFTA Special Economic Working Groups on Trade in Goods and “When we were drafting this agreement, Zone (as provided for in Article 22 of the Services Committees should hold regularly we did not envisage that we are going to Framework Agreement) with the national to receive progress report, share experience implement it in an environment such as position; Provide the agreed schedule on implementation realities and make this, so there is need for us to be ingenious, of Tariff Concessions for Trade in Goods appropriate recommendations." there is need for us to take into account all to be used for trading under AfCFTA and Worries of local manufacturers the logistics, supply chain disruptions, all the the approved tariff dismantling calendar; Covid-19 protocols that would affect trade Share information on strategies in place to Mainstream manufacturers have lament- between nation's and across borders. So we balance offensive market access priorities ed unpleasant business conditions and need to be able to see how we are going to with defensive safeguard interests and to massive infrastructural deficit as it lead to implement all of these so that we do not at empower SMEs to participate in AfCFTA; unhealthy competition, due cheaper cost the end inadvertently promote the spread Provide national positions/strategies on of electricity,” lower cost of funds amongst of this disease which is of a global concern. safeguarding of the Balance of Payment, other incentives experienced in other par- I think all put together with the budget,” infant industry protection, conditional ticipating countries. Ajayi-Kadiri stressed. exceptions to liberalization and rules & According to Dr. Segun Ajayi-Kadiri, Director procedures for settling disputes as provided Opportunities in AfCFTA General, Manufacturers Association of Ni- for in Article 26, 23, 25 and 29. geria (MAN), noted that Nigeria should not TBI recalls that Wamkele Mene, Secretary “Invite MAN and other relevant private sec- be apprehensive about the AfCFTA, adding General, AfCFTA Secretariat outlined both tor organizations to regional and continen- that MAN did conduct a study and the the short and long run tools for the regula- tal meetings on AfCFTA as provide for by government was aware of the things they tion of the trade agreement. the Framework Agreement. This is because, clearly need to do in order to get the econo- Mene said, “We have short and long-term contrary to practice, we have not received my and especially the manufacturing sector tools. A short-term tool is that our Heads of invitation to join the Nigerian delegation ready to trade in the continental market. State agreed to establish trade corridors to to all the meetings held in the last nine (9) months neither do we have the reports of such engagements. Constitute the Na- tional Rules of Origin administration Board that will superintend the implementation of RoO, validate the process (application and registration) of issuing the Certificate of Origin; Establish the National Trade Malpractices Investigative Council with representation from relevant stakeholders in the public and private sector and put in place national legislative and institutional framework for Trade Remedy Infrastruc- ture (as provided for in Article 22) to see to the implementation of other relevant Articles like 16-19. These are perquisites for seamless trade; Convene the meetings of 3719 REAL SECTOR JUNE 2021 enable the transit of what the African Union must be put in place to ensure true and eco- Centers for Disease Control and Prevention nomic independence of Africa. (Africa CDC) refers to as “essential goods” or “We must remember that Nigeria has germ-killing products such as soaps that are always been part of the evolution and essential to combat the pandemic. These trajectory of the Agreement, which received products get priority transit through the a boost through the 1991 Abuja Treaty.” borders, particularly in landlocked coun- NACCIMA DG stressed. tries. Second, the African ministers of trade are exploring the possibility of reducing Capacity and competiveness duties on these essential products so that Nigerian manufacturers have always been they become affordable and accessible to confronted by the fears that the Nigerian people. This is a temporary measure. business terrain has always been hash to In the long-term, it is our view that accel- operators, thereby seeing it as a problem to erating Africa's industrial development is competitiveness in the African market. very important for reconfiguring our supply Ambassador Olukanni agreed that there are chains, establishing regional value chains fears about Nigeria’s capacity to effectively and boosting the manufacturing of essen- Ajayi Kadri, DG, MAN compete due to problems in the country’s tial value-added products. manufacturing sector which is beleaguered investment is important and we can take and struggling for reasons we all know. "AfCFTA has an objective of reaching 50 advantage of it under the AfCFTA, because percent intra-African trade between now we can now invest in other neigbouring Af- “But even at that, we have shown the and the year 2030. There is not much time rican countries, by complying in their laws. capacity to compete. Some of our manu- remaining. Apart from COVID-19, reaching We must focus on impact investment that factured products such as Cement, Soap, 50 percent intra-African trade, and hope- solves an existing problem as well as gen- Agric products and some pharmaceutical fully above that, depends on our capacity erating income as well for the investors. We products can compete under the AfCFTA. to accelerate regional value chains and the must see opportunities that are available by We need to stand up to be counted and manner and pace in which we implement problems that are confronting us," he stated. reposition ourselves and I am delighted to the agreement." know that this is already going on. This was In his contribution Ambassador Ayo Olu- why NACCIMA started the AfCFTA Dialogue Relaying the opportunities accruable to kanni, Director General National Chamber Series to educate and sensitize its members Nigeria in the trade, Mr. Francis Anatogu, of Commerce, Industry, Mines and Agricul- on the nitty-gritty and details of the Agree- senior special assistant to the President on ture (NACCIMA) who spoke to TBI Africa on ment, including major issues such as Rules Public Sector Matters and Secretary of the the country’s involvement in AfCFTA, noted of Origin and Tariff Concessions. National Action Committee on AFCFTA, that the continental trade is an opportunity observed that for Nigeria to trade under Af- for the Nigerian businesses to leverage on “We should also realise that the AfCFTA is a CFTA, it must have stable environment that the areas where it has advantages. not a 100-metre dash. It is a marathon and would support businesses to flourish. this is the beginning. It will take some time He noted that NACCIMA supported that before full and complete trading come on "It remains on us as Nigerians to know the Nigeria must continue to play its part in the stream. There are still areas of the Agree- landscape that's leading us to what we historic Continental Trade Agreement, adding ment on which negotiations are still going call AFCFTA. If we think we'll succeed in that Nigeria has been part of it from inception on and yet to be completed. The most AFCFTA, by importing from abroad and in 1963 when OAU announced that an African important thing is to help develop capacity circulating it, we're making a mistake. Our Continental Economic and Trade Agreement focus should be on industrial revolution of our private sector operators to compete. and production of what the country will Our Banks and financial institutions which consume. We must realize that we have dominate the banking sectors in West Africa to be involved in things that'll reduce our and other African countries are in a way important bills. We have to build on other already trading defacto in context of the infrastructure and manage our borders AfCFTA. And I am sure other sectors, if prop- properly. We can't trade under AfCFTA with erly guided and supported strategically, an unprotected border and circulation of can and will be able to effectively compete fake products." and harness the opportunities under the Agreement,” he stressed. “The space is large and a lot of things are lacking in our neighbouring countries In his submission, the immediate past yearning for us to take advantage of. Nigeri- Director General of Lagos Chamber of an businesses must go out as our banks are Commerce and Industry (LCCI), Dr. Muda going out doing great in our neighbouring Yusuf, disclosed that AfCFTA will present countries. We should be the major ben- both opportunities and risks for Nigerian eficiaries of AfCFTA. We already have the businesses, adding that it will certainly capacity to take over the African market. Dr. Muda Yusuf, former DG, LCCI lead to some significant disruptions in the Intra Africa investment or Africa to Africa business environment. 38 REAL SECTOR REAL SECTOR JUNE 2021 But with Dr. John Isemede, the story is a bit the proposed 20 trillion. This is because the budget of UK's budget on BBC that is cov- different as he says, irrespective of the fact trade within Africa is only 15 per cent, within ered all over the world, it runs into billions, that Ghana has the secretariat does not Asia is 52 per cent, within Europe is 72 per the French CFI on TV 2. How much has mean they have advantage over us. Prior to cent and within America is 70 per cent. The the Nigerian government committed to that, trade within Africa is only 15 per cent, button line is that Nigeria should not think any media house, newspapers, televisions trade within ECOWAS is 5 per cent, and that AfCFTA is just a single project. It is a and radio on sensitisation? Who are the when you look at AfCFTA, with 55 countries journey; it is a process that started in 1957, people assigned by the government and they are 1.2 bullion people, and 1.2 tril- which we were looking at it as agenda 2063. on the sensitisation of AfCFTA. What we lion dollar market is what we are looking at. It is between now and 2063 that the whole are looking at is not just a transaction, thing would have fully taken shape.” because it is a process, and research must Hs said; “Within three years, if Nigeria is able have to be carried out immediately for us to put its house in order, it will have a great- Isemede noted, “What we need now is to identify our market. er percentage share of the market out of sensitisation because if you consider the BOOSTING FOOD PRODUCTION, CALL FOR CONCERN Acute shortage of food occasioned by Covid-19 pandemic and In line with food security actualization, incessant insecurity ravaging the country has caused a spike in the Osun State Government provided 1,000 prices of food items across the nation. The upward movement in hectares of land for farming to boost inflationary trend has not helped matters either. In this report, Charles agricultural productivity and ensure food Okonji examines ways to boosting food production to tame the tide. sufficiency in the state. Speaking to the press, Commissioner for Agriculture and Food Security, Adedayo Adewole who disclosed this recently, during an inspection visit to the land in Ife South Local Government Area of the state, noted that out of the 1,000 hectares of lands made available by the state, 400 hectares have been cultivated for the plantation of cocoa, cassava, and other agricultural products. He said; “The initiative targets over 200 farmers who would be allocated the 400 ploughed lands in Ife south and Ifon-Osun in Orolu LGA. The government of Osun had also cleared over 23 hectares of land in Ifon-Osun town for tomato plantation, farmers leaving around with interest will be allocated these lands. s part of efforts towards reversing Ibrahim noted; “I understand that “This is a way of making agriculture the tides, several stakeholders Nigeria is the first country in the world more lucrative and attractive to farmers Ahave come up with various strat- to commercialise this variety of cowpea especially the younger generation. On egies. and hitherto, yield losses of 70-80 per this first phase, we are looking mainly for cent are commonplace due to pod-borer cocoa and cassava farmers to populate Firstly, The All Farmers Association of infestation on cowpea. But the devel- the entire 1000 hectares and priority will Nigeria (AFAN) came up with a program opment and release of SAMPEA 20-T be given to people from Ife. that will benefit 8 million Nigerian farm- completely mitigates this phenomenon,” ers and their families which will benefit “We have been carrying the traditional the AFAN president told the audience at directly for cultivating the recently rulers and other community stakeholders the launch. launched pod borer resistant cowpea along to ensure their full participation in variety called SAMPEA 20-T. Advising famers, he said; “Embrace the the allocation process and in identifying variety and vigorously cultivate it to the real farmers. The objective is to serve AFAN President, Kabiru Ibrahim, who dis- become prosperous as well as make as a catalyst for diversification process by closed this to journalists at the unveiling Nigeria food sufficient. I have personally the government, in line with our clear vi- of SAMPEA 20-T in Kano recently, stated tried the variety on a small portion of my sion to turn our state to food basket of the that 12.5 million hectares of land will be farm and can attest to its potential to take South-West zone. Aside the 1000 hectares dedicated to the production of the new the Nigerian farmer out of poverty as well of land that we are working on in Ife, variety across Africa where many millions as contribute immensely to the quest for we have equally cleared 23 hectares in consume cowpea on daily basis. food security in Nigeria.” Ifon-Orolu for tomato production.” 3919 JUNE 2021

be taken to save the country’s colossal losses, hence the need to secure its DEEP BLUE PROJECT: NIGERIA’S territorial waterways from piracy and attacks by militants. That concern came to an end on June MASTERSTROKE AGAINST PIRACY 10 when President Mohammadu Until recently, Nigeria had the inglorious reputation of being rated num- Buhari inaugurated the Integrated ber one in maritime insecurity in the Gulf of Guinea, and in the whole Security and Waterways Protection world, Olamilekan FAWAS writes. Infrastructure, popularly known as the Deep Blue project. The project initiated by the Federal recent report by the International Indeed, piracy was proving too costly Ministry of Transportation and Chamber of Commerce (ICC) for Nigeria and the Gulf of Guinea, as Federal Ministry of Defence is being Aand International Maritime it was projected that Nigeria alone implemented by the Nigerian Maritime Bureau (IMB) rated the Gulf of Guinea would lose up to $600 million in export Administration and Safety Agency the world’s piracy hotspot, and that it earnings due to threats to its fishery (NIMASA). accounted for 43 per cent of all piracy sector. incidents in the first three months of With the Deep Blue project, Nigeria 2021. More than 67 fishing companies have sent signals to the international relocated from Nigeria, while others are maritime community that it is no longer The report also stated that the Gulf of shutting their operations as a result of business as usual in tackling piracy and Guinea continued to be dangerous for piracy in Nigeria’s territorial waters. other maritime crimes in its territorial seafarers, accounting for all 40 kidnap waters and the Gulf of Guinea. crew incidents, as well as the sole crew It suddenly dawned on the Federal fatality. Government that a drastic step must Director General, NIMASA, Dr Bashir Jamoh, said the project was the 40 TRANSPORTATION JUNE 2021 final piece of the agency’s strategy for combating the menace of piracy and sea robbery in not just Nigeria’s territorial waters but also in the Gulf of Guinea. He said the Deep Blue project comprised two special mission vessels, three special mission helicopters, four unmanned air drums, 17 fast interceptor boats, 16 armoured vehicles, over 600 specialised trained personnel for the maritime security unit and the C4i centre. He said since the assets were deployed in mid-February, the country had gradually experienced a decline in piracy attacks on its territorial waters. Major General Bashir Magashi (Rtd) Rotimi Amaechi The Minister of Defence, Major General Bashir Magashi (Rtd) described the C4i removed and we shall now focus on for the maritime sector to thrive and intelligence centre as the heart of the indigenous participation of maritime contribute to the diversification of the project. trade,” he said. Nigerian economy. He said with the operation of C4i and Amaechi is confident that the Deep According to him, the Deep Blue the entire project, piracy in the nation’s Blue project has laid the foundation for project is a critical step towards the exclusive economic zone (EEZ) and a robust maritime sector, paving the realisation of the maritime security in the entire maritime space would be way for a smooth transition to Nigeria’s the region and underscores Nigeria’s addressed. post oil economy. commitment to providing the necessary framework, resources and Magashi stated that with the Deep Blue He said he evaluated the transportation cooperation with other nations and project, safety was guaranteed in the requirement of the country and the maritime users. maritime sector and this would attract overall state of the Nigerian economy in Foreign Direct Investments (FDIs) to the 2015 and realised that the development “This assemblage of security assets is country. of the maritime sector was the future of coming at a critical time when global the Nigerian economy. discretion is centered at piracy activities The Minister of Transportation, Mr and the new dimensions it has taken in Rotimi Amaechi, pointed out that the “This is in view of the worldwide the Gulf of Guinea. assets of the Deep Blue project were decline in fossil fuel requirements huge, expensive and very sensitive, due to climate change, and oil “Water accounts for over 80 per cent which should be run efficiently in a sector uncertainty created by the of transportation environment of the sustainable manner. oil revolution in America. And this global economy, and so concerted has consequences for oil dependent efforts are needed to address the He, therefore, tasked the project’s Nigerian economy. intended security challenges. management team to work out the framework for maintenance and “Based on these facts, I developed “Therefore, the flag off of the Deep Blue sustainability of the project. an agenda to secure the channels of project marks an important milestone in maritime drift, reduce shipping cost this regard and our collective efforts to “The scope of the Deep Blue project and expand indigenous participation tackle the security challenges in the form covers Nigeria’s exclusive economic in the sector in order to increase it’s of piracy and militants crimes in Nigeria zone, which is zero to 200 nautical miles contribution to the revenue and gross and the Gulf of Guinea,” the President off the coast. domestic product of the nation. said. “But with the approval given by Mr Amaechi said the contract for the With the Deep Blue project, the world President for NIMASA to take over the Deep Blue project was signed on July is now acknowledging Nigeria’s active operations of the Secure Anchorage 27, 2015 between the federal ministry engagement with global and regional Area in Lagos from a private company, of transportation and Homeland initiatives to end piray. OMSL, a quick operational adjustment Security International Agency, and had to be made. the implementation of the project The Secretary-General of International commenced in early 2018. Maritime Organisations (IMO), Mr Kitack “Some of the assets have been Lim, said IMO appreciated the contribution deployed to the area and we are President Muhammadu Buhari is of the Nigerian government to ensure safe expecting to see results there and also elated that the Deep Blue project has and secure maritime operations in the Gulf thinking of deploying the assets to become the benchmark for maritime of Guinea. Bonny. security in the West and Central African region. “The thorn on seafarers, in shipping and on “The unnecessary security cost borne the region and the illicit maritime activities by shipping companies running into He believes that the project will including piracy is grave. The unfortunate millions of dollars annually has been facilitate a conducive environment situation must not be allowed to persist,” 41 TRANSPORTATION JUNE 2021 AIB-N SEEKS ONSA, NCAA CLEARANCE TO OPERATE DRONES IN ‘NO FLY ZONES’ By Meletus EZE he Accident Investigation Bureau (AIB) is seeking clearance from Tthe Office of the National Security Adviser (ONSA) and Nigerian Civil Aviation Authority (NCAA) to operate the acquired drone in 'no flying zones'. The Commissioner of AIB Mr Akin Olateru Mr Kitack Lim made this known in his presentation on Drone Essence in Accident Investigations said Lim. at the drone technology conference exhi- bition – Dronetecx 2021 in Lagos He explained that the Deep Blue project marked a major milestone for the world TBI Africa reports that a no-fly zone is a Mr Akin Olateru to address piracy in the Gulf of Guinea, geographic location over which aircraft and that the launch of the project cannot fly. These aircraft can include than desired time and keeping in mind reflected Nigeria’s determination to lead manned aircraft, unmanned aircraft sys- that most aviation accidents occur around the fight against piracy, not only in its tems (drones) or both. the airport area. national waters but in the Gulf of Guinea. Olateru said since drones had been "This limitation will hamper our ability to President, Shippers Association of Lagos programmed not to operate within the deploy the drones as soon as we arrive at (SAL), Rev. Jonathan Nicole, said the zone unless unlock codes were obtained, the accident sites in the restricted zones. Deep Blue assets were long overdue as adding that its request to ONSA for perma- "Since the drones are programmed not safeguarding the country’s maritime nent unlock authorisation did not receive to operate within the zone unless unlock space was very important. favorable response. codes are obtained. Our request to ONSA “We know that in shipping trade, we He explained that the newly acquired four for permanent unlock authorisation did need to protect not only the vessels but MAVIC-2 Pro and one Matrice 300 RTK DJI not receive favorable response,” he said. also the commodity carried, so the first drones was for the purpose of pioneering Olateru also said that another challenge of mandatory requirement is that there the use of it for accident investigation in drone deployment by the bureau would must be free flow of traffic on our high the West African sub-region. be the need to maintain currency require- sea. Olateru explained that the clearance ments by providing the necessary training “They know that they have invested for the usage was currently undergoing to the pilots. so much in this project so they should certification process by NCAA to authorise He also said that as the drone and camera ensure its sustainability,” he said. it operate the drones. technologies develop rapidly, the need From the postulations of virtually all the The commissioner, however, added that for constantly upgrading the drones and strategic stakeholders, the Deep Blue because of drone regulation process, it the software components cannot be project will not only curb the menace cannot operate its drones at accident sites over-emphasised. of piracy in Nigeria’s territorial waters, in close proximity (five miles) to the airport According to him, these do not come but will also help diversify the country’s areas, which were tagged as ‘no-fly-zone’ cheap considering that you require high resource base. without clearance. speed processing computers, large mem- “The drone regulation by the Nigerian Civil ory and storage to render the hundreds of Aviation Authority is at work-in-progress images taken in a single operation. level, which rarely separate between com- Olateru said despite these challenges, mercial drone operators and non-commer- Drone technology was a veritable tool cial/ recreational operators. at accident sites as they are good for “The implication is that a government capturing the scene before people start agency like the AIB cannot operate its disturbing it. drones at accident sites in close proximity He added that they could be used to (five miles) to the airport areas. help search for missing wreckage and to "These areas are tagged as no-fly-zone perform final flight path reconstruction/ unless cleared on case-by-case basis by visualizations. the Office of the National Security Adviser Olateru said in aircraft accident investi- (ONSA) and the NCAA. gation, gathering and documentation of “Obtaining the needed clearances upon the evidences at accident sites were of Dr Bashir Jamoh occurrence of an accident will take longer paramount importance for accurate inves- tigation to take place. 42 TRANSPORTATION TRANSPORTATION JUNE 2021 the shutdown because the global industry NIGERIA’S MRO UNDER CAPACITY: was grounded and almost every aircraft needed some form of maintenance after six months of not taking to the skies. IS GOVERNMENT DOING ENOUGH? Air Peace particularly lamented it had taken Nigerian airlines spend about N23billion to N25billion annually on several of its Boeing aircraft out for C-Check aircraft maintenance for serviceable aircraft owned by at least nine before the pandemic hit and this coupled scheduled operators due to the lack of an established Maintenance with the lockdown forced a suspension on and Repair Overhaul (MRO) facility and this creates a big hole in their aircraft maintenance and this leading them pockets; a factor tied in to their safety and economics, simply put: their to reduce capacity by 30 per cent affected survival, Abisola THOMPSON reports. its operations. Nigeria has at least 65 serviceable aircraft flown by various scheduled operators all of which must have C-Checks after every 18 months or a particular flight cycle (every takeoff and landing) and to carry out comprehensive C-check on an aircraft ranges between $1m and $2m (N470million and N940million), depending on the scope of work. This is coupled with the fact that Nigerian airlines spend about N23billion to N25billion annually on aircraft maintenance providing justification for a viable MRO or multiple ones given that the country’s aviation space is now diversifying from the usual Boeing aircraft to other brands including the Embraers, ATRs, Dash-8s and others. Senator Hadi Sirika In January, the Federal a Government igerian airlines spend princely own and third party aircraft, the Aero MRO through the Ministry of Aviation amounts between N23billion does not have the capacity to compete announced the consortium of AJ Walters and N25billion yearly on aircraft with the big boys in the MRO sub sector or Leasing Limited, Egypt Air Maintenance N & Engineering (EGME) and Glovesly Pro maintenance. This amount is spent on to handle every airline in the country. serviceable aircraft owned by at least nine Project Limited as preferred bidder to scheduled operators due to the lack of The gap has further led others, including Air establish the MRO in Abuja. Peace, Dana Air and new entrants United an established Maintenance and Repair The Public Private Partnership (PPP) Build Overhaul (MRO) facility in the country. This Nigeria Airlines to express interest, once land is available, to establish same facility in Operate and Transfer ( BOT) model is development depletes their pockets but supposed to have capacity to service both because it is a factor tied in to their safety other parts of the country, all these leaping out because of huge cost faced by the wide body and narrow( jet and turboprop) and economics, or simply put their survival, aircraft however like other projects it is it is indispensable. airlines and the submission probably that no one is looking out for their interest and still in the works and fears are by the time On many occasions government has if they are to survive, they need to fend for this comes on stream, most operators intended and reneged on that intention themselves. might have gone done due to the cost to save them from the current chokehold of operations coupled with charges from they are into by establishing an MRO for the Minister of Aviation, Senator Hadi Sirika, other government agencies. country, from the national hangar project Meanwhile, six years after announcing Many have argued still that the penchant conceived in the 90s to an agreement the establishment of an MRO as a key to start things anew instead of negotiating signed with Lufthansa to build one in Abuja component of growing the industry, and existing structures and build on them to in the 2000s, it would seem the talk about one of this administration’s key plans in make them better is one of the reasons why hangars are hardly new to Nigerians. aviation, Senator Sirika is still foot-dragging, the nation’s aviation sector is all motion and Up until now these dreams are still in the thus pushing these airlines to look inward barely movement. as cost of maintenance is strangling them. pipeline and the latest promise by Senator The fact that the Asset Management Hadi Sirika the Minister of Aviation has been One of the key things to note is how Corporation of Nigeria (AMCON), a federal no different so far. lack of an MRO affects the industry and government owned organization, owns an Due to this gap noticed, Aero Contractors what happened after nations relaxed the Aero that has perfected its maintenance in 2016 established its own MRO facility shutdown on flying when the world started of the classics makes one wonder why the in its hangar in Lagos to maintain Boeing emerging from the COVID-19 Pandemic. government does not key into this and 737-classics, Embraers and NGs as well Airlines from Africa and many in Nigeria make it better instead of starting a project as some turbo props and smaller jets but who had aircraft being maintained out of that is yet to see light after six years. despite carrying out several C-Checks for its the country could not get them back after While all these are being considered, there 43 TRANSPORTATION JUNE 2021 is also a failure to mention an already existing $100million aircraft hangar at the Victor Attah International Airport In Akwa Ibom State, a situation that has over the years saddened Mr. Nick Fadugba who is Chairman of AfBAA, who in 2017 wondered why Nigerian airlines have not pooled resources together to grow themselves through mutual symbiosis by establishing a one stop shop for MRO also using the Ibom Hangar. His argument then was that instead of ferrying their aircraft to Europe, Nigerian airlines can ferry it to Akwa Ibom, spend less transit time, less time waiting and save foreign exchange (forex). The fact that so far, the national MRO is not programmes as far back as the 80s, but $1million, by the time you do that, you will available and government is not looking at for the instabilities of governments and realise that we are losing about $300million its already existing structures to kick start its policies, the project remains in the as capital flight annually. If you have an any process, most stakeholders are looking tunnel and never to see the day lights as MRO in Nigeria, that will remain in the at what the nation is losing due to the lack long as it remains with the government country. Without a sustainable MRO and the of a well-supported MRO here in Nigeria. administrators. government looking at it, we will continue Reactions to be in a quagmire as we are having right He said: “What is trending in the commercial away. Engr. Lookman Animashaun, who spoke on aviation sector globally today is public the MRO situation, said: “Nigeria doesn’t have private partnership. Government cannot Group Captain Ojikutu on his part said: “Cost an MRO now because we are not serious regulate and still be sole operator aircraft of aircraft offshore maintenance is and has about having it. Most of the things they are and maintenance at any level. The delay always been exorbitant. It ranged between doing are politics and they are telling people in getting an MRO set up in the country $500,000 and $2million depending on what they want to hear at a particular time. can only be either there is no clear the required level of maintenance. If you Honestly, I must tell you that we are playing to understanding among those responsible imagine about 50 aircraft in a year for the gallery. If truly we are serious as a nation, for policy administration in government whatever level and at average of $500,000 we should have gotten MRO now. We should or between them and those in the private to $1million for an aircraft, you might be have built on what we had in Nigeria Airways partnership. looking at total average of $25million to then, rather than liquidating it. Don’t let us $50million. “Government cannot be thinking of talk about the liquidation of Nigeria Airways concession of a part of commercial aviation “The question to ask; do these airlines and anymore. That has passed. and still want to keep another; again, aircraft operators make such earnings “But, I must tell you that without you cannot be a regulator of the industry annually in returns to the CBN or we still sustainable MRO in the country, the and still be sole operator; either it excised must find money for them from the public industry will continue to experience capital itself from the ventures or be minority reserve? That is the dilemma of our country flight and what we are experiencing now, shareholder of not more than 20 per cent; in distress and now bleeding.” which is the moment the aircraft is due for foreign technical and financial investors 30 Chief Executive of ONEDOT Aviation, heavy maintenance, it will be taken out, per cent; credible Nigerian investors 30 per Captain Oludotun Ogunyemi, who spoke there is no foreign exchange to carry out cent and the balance of the 20 per cent for to Nigerian FLIGHTDECK in 2016, said the maintenance, the aircraft will remain the Nigerian public. then that putting all airlines’ maintenance there and the next we are going to hear Capital flight together will be saving the country forex, about the aircraft is that it can’t be sent to capital flight ferry cost, on time efficiency Nigeria. That is one of the reasons we are Animashaun did a rough calculation for the aircraft as well as saving ground time having low capacity in the industry as at of monies taken out of the country for which will increase profit of the airlines. today. maintenance annually and stressed that without a viable MRO the nation will remain As we speak, there are no major MRO facilities The focus of federal government or any in a quagmire. in West Africa coupled with the fact that Africa individual should be MRO facilities now. If as a whole controls a paltry four per cent of they should do this, nobody will regret it He said: “Let’s do the calculation. The the MRO market with Ethiopian Airline MRO, because there is work for them throughout minimum you can do a C-check now for South African Airways Techincal, Tunis Air the year. This is the country where the any airline is $1million; there are some Technic, Air Algiers, Egypt Air Maintenance and weather has been so nice to us, unlike in C-checks that can even go as high as Engineering and Royal Air Maroc controlling Europe without good weather. It is good for $2million, depending on the way and that four per cent market share. us to have an MRO now. manner the aircraft is maintained. Let’s keep to the minimum of $1million. The breakdown of the MRO market in 2018 Also Aviation Safety Round Table Initiative also indicated that North America had 30 (ART) Scribe, Group Capt. John Ojikutu, “Let’s say on the average, each airline per cent, Asia- Pacific 28 per cent, Europe stated that building an aircraft maintenance has three aircraft, the number of aircraft 26 per cent while Middle East and South depot has been on the government scheduled airlines we have, multiply it by America has six per cent each. 44 TRANSPORTATION TRANSPORTATION JUNE 2021 US$250M PRIVATE INVESTMENT FOR NATIONAL AIRLINE: HOW FEASIBLE IS 24 MONTHS EXECUTION? The release of the Aviation Development Roadmap by the Ministry of three airlines it owns through Asset Manage- Aviation in reaction to the questions being asked about the project has ment Corporation of Nigeria (AMCON)? opened the possibility for more questions especially on how feasible the And in this new normal where investors are national carrier is given the current administration has a year and eight cutting their losses world over due to the dip months to go and with the competing demands in this COVID-19 era in air travel majorly caused by the virus and including security, health and other important areas, how viable is it all? the apathy presented by the strict protocols Olamilekan FAWAS reports. causing travelers to shun physical for virtual meetings, who will want to invest as the sit- uation is now, when they were wary before ederal Government recently in a firmed this at the three day public hearing on the covid-19pandemic? document released by the Ministry of aviation agencies at the National Assembly The Managing Director, Flight and Logistics FAviation, gave an update on the pro- Complex in Abuja. Solutions, Amos Akpan told TBI Africa that posed establishment of the national carrier The document said: “The national carrier to get private investors to invest $250million indicating that it aims to raise US$250million in establishing a national airline will be a (N102.75billion) from private investors to project will be private sector driven, with the government holding not more than five per difficult task for the present government for start the airline between now and 2023, numerous factors such as return on invest- barely 24 months away. cent of the shares. The private sector consor- tium may comprise reputable international ment (ROI), business environment and other The Ministry in the document on the Avia- airlines (such as Qantas), leasing companies, latent factors. tion Development Roadmap of the present aircraft manufacturers (OEMs), financial and “To get private investors to invest $250mil- administration explained that the project institutional investors.” lion in establishing a national airline will be development phase has been complete with However, the ministry’s response which was a difficult task for the present government. the development of the outline business Why? Investors have factors they consider case (OBC) and subsequent issuance of borne out of criticism over the delay in the actualization of the national carrier project before they invest. They will consider if there compliance certificate by the Infrastructure will be returns on that investment, and when Concession Regulatory Commission (ICRC). despite monies allocated to the venture as well as other five projects listed in the road- will they recoup such returns? They will con- The Ministry also explained that the next map seems to have opened a new vista for sider the suitability of the environment and phase would be the placement of request for questions to be asked of the government. why choose that environment amongst the qualification (RFQ) in local and international available options. The due diligence and risk media. This includes the fact that with a short time assessment analysis will be carried out. left for the present administration to round “The next step will involve the commence- off, and the lack of continuity in government “The actual setting up of the national airline ment of procurement phase by placing at all levels, will 24 months be enough to gar- requires putting enormous infrastructures advert for RFQ in national dailies and foreign ner private investors to bring in $250million in place. Considering above factors, it will be media. $250million approximately is to be for the project? Will said monies be enough extremely difficult to establish and operate raised to start up the airline by private inves- to even kick start a viable national carrier? As national airline in one year and eight months. tors,” the document stated. well as why would government be investing My advice to this administration is to build in a new carrier when it has no fewer than enabling environment for investment first. Minister of Aviation, Senator Hadi Sirika, con- The right environment will attract investors. “By illustration; there is need to set up and run cargo Operations to take advantage of the increasing international cargo market. Does NCAA have trained inspectors on the B767 or A330 freighters? The simulator that government bought for the B737 classics; are they installed? Are our pilots having their simulation training there? We need to address the issue of MRO. Should we invest to increase the existing facilities and capacity in Aero Contractors? Or partner with the existing infrastructure in Victor Attah airport, Uyo to make it functional and serve the air- craft in the region? Training for skills is critical in Nigerian industry aviation today. “Positioning to attract investment is more critical now. If the gestation of investment runs into the next government coming at 2023, will it affect the agreements estab- 45 TRANSPORTATION JUNE 2021

lished with this government? Nigerians still buying outright. And you can start and use ing this national carrier direction it is either experience discriminatory aircraft leasing the $250million dollars for some other things. the join AMCON or they invest in our private agreements and insurance program. We are carriers,” he said. still trying to effect the implementation of no “But the issue here right now is not about duty on aircraft spare parts. the $250 million, it is about the viability of NG Eagle Aircraft this project. Why should the government “The forex regime is yet to accommodate be starting an airline now when AMCON Group Captain John Ojikutu (Retired) who re- airline operators. Interlining and cooperation another agency of the government has three acted to the new document making rounds is still at discussion of concept stage. Let’s fix airlines on its stable? Why should the govern- questioned the kind of national carrier the the platform or foundation first before we ment want to start a new airline with the use government planned to set up with the sum can build or launch on it. of private investors when we have over 23 of money it plans for private investors to airlines and more are still coming in from oth- bring to the table. Air peace Embraer E195-02 er investors? So is it that the national carrier He said: “Private investors will include foreign Head of Research at Zenith Travel, Olumide will be more projected than those who are in and local; how much is $250million in a Ohunayo, told Nigerian FLIGHTDECK that the industry already that have been sweating national carrier or how many aircraft would there is no amount too small for a national over the years? that buy? How much would government carrier if there is high credibility and contact “Again, we were given N27billion for investment of 10 per cent be in the national with lessors, aircraft manufacturers and other palliatives to support the covid-19 issues in carrier? If we want a national carrier let it be airlines; however, this is something that histo- the industry, N5billion was released to an now or we better go for a flag carrier and ry shows the country has not had. industry that is operating and N22 billion government take a rest from the journey was kept for a project at its infancy. What I see it started in 1993 when the national carrier He, however, said the money was not the became government airline. issue as the major concern was why gov- now is we must have a national carrier than ernment who has three airlines on its stable the necessity for having it. “A restart in 2017 has yielded no fruitful result is still trying to invest in a fourth instead of “There are three conditions where you must with government attempt alone to inject investing in the industry that is already oper- have a national carrier, one, where the indus- $300million. What really do we want from ating at monumental costs. try is at its teething stage and there is virtually the national carrier? If we don’t know what we are looking for, we can never find it. Peace Mr. Ohunayo gave three conditions where no airline then the government can establish it was important for government to step in a national carrier and we did this to Nigerian Recall, same national carrier project chris- and establish a national airlines implying that airways then, Again, when the major airline tened the Nigeria Air was unveiled in July none of those conditions which may have collapses, If you want to save jobs and restore 18, 2018 in Farnborough, United Kingdom played out in the past is currently in play air transportation then government can without any aircraft flying until the project present day. step in with an airline to save the country was suspended indefinitely in September 19 like when Arik was going down with Aero same year by the Federal Executive Council He said: “There is no amount that is too small they had to step in through AMCON and at (FEC) for the lack of feasibility of the project. to use to start an airline depending on your that point that would be a national carrier contact and level of credibility. You can prob- because it is owned by government . However, the Minister of Aviation, Senator ably have contacts with other airlines and Hadi Sirika, is still insistent that the project leasing companies and some manufacturers “The third is when aircraft are not available remains on course and consistently em- by virtue of your business line in the past, to operate; we have 23 airlines so what is our phasized the determination of the present almost every credit facility would be given to issue? All we need is to strengthen them. If government to deliver Nigeria a low-cost, you to have some aircraft since you are not the government is still strong enough head- competitive national airline, five years on. 46 TRANSPORTATION TRANSPORTATION JUNE 2021 AIR PEACE’S ACQUISITION OF BRAND NEW AIRCRAFT HAS REDEFINED AVIATION – NCAA BOSS By Meletus EZE he director-general of Nigerian Civil Aviation Authority (NCAA), Capt. Musa TNuhu, has described the acquisition of a brand new aircraft by Air Peace as a milestone in Nigeria’s aviation industry. Nuhu who noted that what is happening in the industry was a paradigm shift from happenings in the past, also lauded the Air Peace chairman, Allen Onyema, for acquisition of the new aircraft. Nuhu who stated this at the Nnamdi Azikiwe International Airport, Abuja, to mark the delivery of Air Peace’s third brand new E195-E2 aircraft out 13 being awaited, emphasised that the beauty of the aircraft delivery was not just that the aircraft is new but that the airline picked the right kind of aircraft befitting the market. Capt Nuhu, NCAA DG “Today is another milestone and a paradigm breaks even with low passenger figures; your to the entrepreneurs, as without such shift and this is something that I have not maintenance cost is low; your operational cost people, all this will not be possible. We need seen since my days at Nigerian Airways when is low. Another factor is that the new aircraft is entrepreneurs like Onyema,” Nuhu asserted. they were purchasing the right aircraft for absolutely great for the environment; it does the right routes. Air Peace is not only buying less pollution. I am really proud that I am DG TBI Africa recall that just recently Air Peace aircraft, but also buying the right-size aircraft when this paradigm shift is happening. took delivery of its third brand new E195-E2 for the Nigerian market. jet out of the 13 ordered from Embraer, with “We are all here to work together to grow five more to be delivered before 2021 runs “The Embraer aircraft is the right aircraft; it the industry and we have to give kudos out. PROCUREMENT OF N1.7BN MOBILE CONTROL TOWERS TO BE DEPLOYED AS CONTINGENCY -SIRIKA By Abisola THOMPSON be used because flights cannot be stopped “They are so equipped, so modernized, so because of failure. ederal Government’s has said that its efficient and so very alive. It has everything just procured N1.7 billion mobile air According to Sirika, the mobile towers like that a control tower should have, it has Ftraffic control tower will be deployed to every other investment in aviation is geared real time weather, we have all of that Lagos and Abuja and other locations where towards safety and may not be something approach and departure procedures and the Nigerian airspace lacks conventional passengers would see but readily plays a everything else and overflight that ensures control towers as contingency in case they vital role in getting them from point A to smooth flight operations and air traffic are required according to International Civil point B safely. management. Aviation Organization Annex 11. He said: “The cost of these two mobile He thanked President Muhammad Buhari Minister of Aviation, Senator Hadi towers is N1.7 billion and it is geared for his generosity stating, “So I am glad that Sirika, who made this known while towards improving safety of our operations NAMA has been proactive on this request commissioning the two mobile control which we take as key activity here in our and that Mr. President has been gracious towers procured on behalf of the Nigerian ministry. The intent and purpose of the and generous enough yet again to allow Airspace Management Agency (NAMA) said ministry and what we are doing is to ensure us do this procurement and spend this the procurement is aimed at handling traffic safety and efficiency of our sector without amount of money in the interest of safety. during unusual difficult times. degrading and de-emphasizing issues of He further added that during emergency security and comfort. This mobile control towers procurement situations such as pandemics the mobile are in compliance with the Nigerian Civil “How very safe you depart point A and tower can be deployed. Aviation Regulation Part 14 that requires land at point B is our primary concern “In addition, the managing director of NAMA Air traffic management contingency and is of primary importance. So this is an is reminding me of the fact that during strategies and plans and in compliance extension to that intent and purpose and unusual times such as pandemics, this will with ICAO Annex 11 that requires Air traffic so the amount of 1.7billion has been spent come in handy when you have to create management to have a contingency plan in to procure these mobile towers, we would physical distancing and so on and so forth an event of degradation, an event of failure use it in Lagos and Abuja and if need be we or when you have to operate in difficult or an event of any issue affect the use of a would take them to locations where they circumstance; this is the solution to that." control tower there will be a contingency to do not have conventional control towers. 47 TRANSPORTATION JUNE 2021 RAILWAY TO CURB N140B WEEKLY LOSS TO GRIDLOCK AT LAGOS PORTS

By Shile GIWA would enhance evacuation of cargo Ibadan with ease and back to the port with from the port via rail. export cargo. I wish they could develop ith the commissioning of the a Transit Container Depot at Ikeja for $1.5 billion Lagos-Ibadan railway Akinola said: “Terminal operators are Industries to pick up their containers. Then, Wproject that links the Apapa happy with the railway project. Recall Lagos port will ease up a bit,” Nicol said. seaports, about N140 billion that were that a few years ago, one of the terminal hitherto lost to gridlock on roads will now operators at Apapa Port reconstructed The Manager, Port Projects, Port of Antwerp be drastically reduced. the rail line into the port enabling the International, Belgium, Philippe Droesbeke, haulage of containers twice a week during a visit to Lagos recently, said Stakeholders, who spoke to The Guardian from the port to the north. With the multimodal connection (adoption of road, on the development, said the rail commissioning of the new rail line by rail and waterways for transportation) is connection to the port would aid the the President on Thursday, we expect one of the solutions to the congestion at smooth movement of cargoes in and out of to see more cargo exit the port via the Nigerian ports, urging the country to shift the ports. rail. This will contribute to taking some from it’s over-dependence on roads for President of Dangote Group, Aliko Dangote, pressure off the road. cargo evacuation to rail and waterways. had estimated that the nation was losing “Recall that terminal operators have He stated that the Port of Antwerp handles about N140 billion weekly to traffic been using barges also to reduce over 140 million tonnes of cargoes yearly, gridlocks on the access road to Nigeria’s pressure on the road. We, therefore, but deploys a multimodal approach for busiest seaports in Apapa, Lagos. look forward to seeing tank farms and cargo evacuation with rail carrying 50 For over a decade, evacuation of cargoes manufacturing concerns put their cargo percent, barges responsible for 40 percent, from the seaports has become a clog in the on barges and on the new rail line to while the roads only handle 10 per cent. wheel of progress of seaborne trade that reduce the number of trucks on our roads. The Nigerian Railway Modernisation contributes over N34 billion to the country’s Project, Lagos-Ibadan section with economy. “All stakeholders must support the extension to Lagos Port at Apapa starts After several tactics and deployment of efforts of government and terminal from Lagos, the largest Port City operators to facilitate the exit of cargo technologies, the gridlock has proved to be The length of the mainline is 156.8 km a monster getting stronger with no end in from the port and decongest the road,” he said. with 6.51km extension to Apapa Port. It sight. But the unexpected happened within connects three important states in the 24 hours when President Muhammadu President, Shippers Association of Lagos, south-west region namely Lagos, Ogun and Buhari visited that area – the gridlock Jonathan Nicol, said the rail connection Oyo states. disappears overnight, only for it to resurface was a good development to aid the a day after. movement of cargoes for shipping, The project adopts China Railway Standard, with a designed speed of 150 Km/h. It is a During the commissioning, Buhari calling for proper maintenance and upgrade. double-track standard gauge railway, using described it as another milestone in diesel traction and an automatic blocking revitalisation of railway projects to boost He said: “It is an excellent development. system. economic activities in Nigeria. The Minister of Transportation, Rotimi Amaechi has delivered. It is now left The project will enhance the decongestion A spokesperson for terminal operators of the Lagos Seaport and increase under the aegis of the Seaport Terminal for those in charge to sustain the infrastructure. the throughput capacity for better Operators Association of Nigeria (STOAN), development of the port with a positive Bolaji Akinola, said the new development “Goods can now be transferred to influence on the Lagos region. 48 TRANSPORTATION TRANSPORTATION JUNE 2021 WHY SEAPORT OPERATIONS APPEAR ‘INEFFICIENT,’ BY TERMINAL OPERATORS By Meletus EZE ollowing the allegations of inefficiency at the ports, the Seaport FTerminal Operators Association of Nigeria (STOAN) has disclosed that the dilapidated port access roads, among other factors, are major hindrances to smooth port operations. The terminal operators said that opera- tions inside the port terminals across the country are well organised and profes- visited Lagos “shows that security oper- “The trucks that have direct business to sionally coordinated by the concession- atives know what to do to deliver us all do at the port are less than half the num- aires. from the pains we suffer daily from the ber of trucks you see on the road. The gridlock.” other half consists of petroleum tankers Spokesman, STOAN, Dr. Bolaji Akinola, heading to petroleum jetties/tank farms in a statement, disclosed that the major He said: “In 2019, when the president and trucks owned by some Apapa-based challenges facing port operations in visited Lagos, the otherwise intracta- manufacturing concerns such as Hon- the country are dilapidated port ac- ble Apapa gridlock disappeared. The eywell, Flour Mills and Dangote, among cess roads, poor traffic management gridlock also disappeared on June 10, others. and manual examination of cargo by 2021 when the president visited Apapa Customs. to commission the rail line and the Deep “A few days ago, the Acting Managing Blue project. It was not terminal oper- Director of Nigerian Ports Authority He said terminal operators, like other (NPA) Mr Mohammed Bello-Koko said business entities in Apapa, are victims of ators that cleared the road; it was the same security operatives that manned NPA counted about 30 checkpoints the “dysfunctional state and chaos” on mounted by security and traffic man- the port access roads. the road that cleared it. How did they make it happen? Can they continue to agement officials on the roads in Apapa. According to Akinola, “The port termi- do so, on daily basis, what they did on “The truth is that those who mount nals are well organised and efficient. those two occasions of Mr President’s these illegal checkpoints are profiting Concessionaires have done very well visits? from the chaos they deliberately create. to ensure efficiency in their various Meanwhile, Bello-Koko, during on-the- It has nothing to do with terminal oper- terminals. The major problem is the road. ators. We cannot control the activities of Terminal operators do not have any role spot assessment visit to the TinCan Island Port highlighted some impedi- these government officials. Only govern- to play or responsibility to bear on the ment can call them to order,” he said. road. We don’t own the road; we don’t ments to the smooth flow of traffic and control the roads, and we don’t control effective security, within and around the Akinola said private terminal operators happenings on the road. We cannot con- port complex. at the seaports invested N538 billion in trol the security agencies saddled with While visiting the Sunrise Bus-Stop area port development from 2006 when the the responsibility of managing traffic on of the Apapa – Mile 2 highway that ports were concessioned to December the road.” had become a failed passage, he noted 2017. He said the ports have become much more efficient than they were He said terminal operators, more than that the poor road situation within this corridor (the major artery in and out of before the 2006 port concession, “but any other entity in the logistics chain, those who thrive in chaos desperately do bear the brunt of the Apapa traffic the Tin Can Island Port) remains a huge concern to NPA. want to cast aspersion on the conces- congestion because it hampers the evac- sion exercise because orderliness does uation of cargo from the port. He observed that some of the internal not benefit their pockets”. “The business of terminal operators is to roads within the Port Complex are in a state of disrepair, but assured that the Meanwhile, Bello-Koko, during on the keep trade moving. We don’t make mon- spot assessment visit to the TinCan ey from cargo sitting at the terminal. Our Authority, in concert with other relevant agencies of Government and the Nation- Island Port Complex highlighted some profitability is in the volume of cargo we impediments to the smooth flow of handle. So it is in our best interest for car- al Assembly would mobilise resources as soon as possible to fix such roads. traffic and effective security, within and go to leave the port as soon as possible. around the port complex. Unfortunately, those who profit from the “It should be noted that the problem chaos on the road make it difficult for with the roads leading into and out of While visiting the Sunrise Bus-Stop area trucks to move freely to evacuate cargo Apapa is caused by bad roads, numer- of the Apapa – Mile 2 highway that from the port,” he said. ous checkpoints mounted by security had become a failed passage, he noted that the poor road situation within this Akinola said the fact that the roads were agencies and rickety trucks. If these three issues are addressed and adequate corridor (the major artery in and out of cleared and rid of the notorious traffic the Tin Can Island Port) remains a huge anytime President Muhammadu Buhari parking lots provided for trucks, the gridlock would become history. concern to NPA. 49 JUNE 2021 Political Economy

WAYS GOVERNMENT POLICIES CAN ATTRACT FDI Nigeria has enormous resources, most of which are yet to be fully exploited. It has been reported that apart from oil, Nigeria’s other natural resources include natural gas, tin, iron ore, coal, limestone, niobium, lead, zinc and arable land and are worth billions of dollars. Olamilekan FAWAS examine how govenment's policies can attract investment

t is an aberration to deny the fact that tremendous opportunities for foreign direct Iinvestment (FDI) exist in industries such as agriculture, natural resources, tourism, con- sumer goods, textiles and entertainment. Two of the largest banking and financial ser- vices institutions in the world, HSBC and UBS, have recently closed their local representative offices in Nigeria. There is also trouble brewing elsewhere in Nigeria’s business world that’s prompted fears about the climate for foreign direct invest- ment in the country. Foreign direct investment is an investment made by a firm or individual in one country into business interests located in another country. For instance, Nigeria’s government in Sep- tember accused HSBC of money laundering President Muhammadu Buhari after an analyst working for the lender said a second term for President Muhammadu fell to $1 billion in the first half of 2018, from instance an American business establishing Buhari may stall economic recovery in Africa’s $1.48 billion in the first half of 2017. a physical business presence in Nigeria). biggest oil producer. Many emerging economies like China, Brazil, Foreign direct investment is crucial for any There are also tensions between Nigeria’s Vietnam and India have built their growth on economy. So, how can Nigeria attract and FDI flows. central bank and the South African telecom keep the right kind of investment from global company MTN. In 2015, MTN was fined about companies? Compromise will be key, both for The trick is to attract “quality foreign direct in- $5bn for failing to cut off unregistered SIM the government and foreign firms. vestment” that links foreign investors into the cards. This was later reduced to $1.7 billion local host country economy. The International after a long legal dispute and the intervention Why foreign direct investment? Growth Centre, a British-funded research cen- of South Africa’s then President Jacob Zuma. Foreign direct investment is often preferred tre that aims to promote sustainable growth Recently, the central bank has ordered MTN to to exporting. That’s because while exports in developing countries, characterises “quality” repatriate $8 billion it said has been taken out merely involve moving goods from one here as contributing to: of the country illegally. country to another, foreign direct investment decent and value-adding jobs and enhancing actually involves an investor establishing for- the skill base of host economies; Analysts are concerned that the Nigerian gov- eign business operations or acquiring foreign ernment’s attitude towards MTN and the two business assets. transfer of technology, knowledge and know- banks may erode the confidence of foreign how; boosting competitiveness of domestic direct investors. Their fears seem to be well This often includes establishing ownership or firms and enabling their access to markets. founded: foreign direct investment in Nigeria controlling interest in a foreign country (for 50 POLITICAL ECONOMY JUNE 2021 What Nigeria can do declare their taxable income for the preceding six years. In return, defaulters would enjoy There are few things Nigeria can do to boost immunity from prosecution for tax offenses, FDI. For starters, it must play fair. Foreign tax audit, waiver of interest until December 31, and domestic businesses should be treated 2017, penalties, and the option of spreading equally. They should be open, transparent and payment of outstanding liabilities over a max- dependable conditions for all of firms. imum period of three years as may be agreed Another area that needs attention is infra- upon with the relevant tax authority. structure. Businesses need easy access to In October 2017, the Nigerian Investment ports, an adequate and reliable supply of Promotion Commission (NIPC) published the energy and relative certainty that the country Compendium of Investment Incentives, which will be good to invest in. Good institutions also restated some of the incentives available to promote FDI. investors in specific industries. The industries The government should encourage partner- and incentives are outlined below: ships between foreign and local businesses. • Agriculture/Agro-Allied Industry: Investors Foreign firms might be familiar with global in this sector will enjoy capital allowance of good business practices, but local firms will Zainab Ahmed, Minister of Finance 95 percent, and are exempt from payment be more familiar with the indigenous context. of minimum tax. In addition, they may carry This synergy could be very beneficial. forward their losses indefinitely while also en- corrupt. A more diverse portfolio that catered It is also critical to note that Nigeria gets its joying a rebate of 10 percent on import duty, to the needs of ordinary Nigerians would have regional governments involved: there are and 20% levy on husked brown rice. nullified this claim. many regions in Nigeria, and these regions • Solid Minerals: Investors are entitled to ex- all have unique opportunities and challeng- Foreign firms must also work closely with emption from payment of companies income es. Our latest research shows that when the credible and strategic local firms, and be will- tax during the first three years of operation. central government of Nigeria ran out of ideas ing to enter into dialogue with the Nigerian and foreigners wanted to exit the agricultural government where necessary. This is crucial • Manufacturing: Investors who borrow from sector, the regional government of Kwara especially as administrations may change banks under the Agricultural Credit Guarantee state stepped in to create a positive business or government policy may evolve. Dialogue Scheme for cassava production and process- climate based on the cooperation of local could ensure that all parties are on the same ing are entitled to a 60% reduction on interest banks, community members, and the foreign- page. payable after liquidation of the loan. Investors ers themselves culminating in the Shonga in sugar processing will enjoy a rebate of 5% farms public-private venture. Act local, think global on import duty and 5 percent on the levy on raw sugar imported for local processing. This has kept the firm in Nigeria. It’s also It’s unfortunate that these banking institutions have decided to leave Nigeria. Hopefully both Investors who carry out approved manufac- brought private investors to the table, bolster- turing activities in an Export Processing Zone ing the firm and the local economy. the Nigerian government and other foreign investors can learn from this. (EPZ) are exempt from all taxes, levies and Nigeria should also tap into its huge diaspo- rates, and may export up to 100 percent of ra. There are many Nigerians living outside The main takeaway for both foreign investors their products from the EPZ into the Nigerian the country who understand its challenges. and governments involved in foreign direct customs territory. They should be encouraged to help, or asked investment is that it would be prudent for all parties to act locally but think globally. • Tourism/Hospitality: 25 percent of income to work with their networks to invest in the generated from tourism, if deposited in a country. A rundown of all the major frameworks reserve fund to be utilized within five years What foreign firms can do recently passed in Nigeria to improve the busi- (for building and expansion of new hotels, ness environment and stir investment, leaving conference centers and other facilities for Foreign firms also have a role to play. They the recession in the country's rearview mirror. tourism), is exempt from tax. can enhance their success in Nigeria (and elsewhere on the African continent) in several Nigeria's GDP grew by 0.55 percent in • Oil & Gas: Investors are entitled to investment ways. signifying the end of the country's recession tax allowance that is 50 percent of the charge- that it had been experiencing since 2015. able profit for the duration of their production First, they need a long term strategic plan. This Statistics from the National Bureau of Statistics sharing contract. Also, investors who carry means thinking carefully about what sectors indicate that the major contributors to this out activities in the Oil and Gas Free Zone are or activities to target. Many foreign firms come development include agriculture, mining and exempt from all taxes, levies, and rates. Such to developing countries when things are rosy quarrying, and manufacturing. The federal investors may export up to 100% of their but leave when conditions change. They don’t government of Nigeria (FGN) also employed products into the Nigerian customs territory. properly consider that solving such problems various initiatives to improve the environ- In addition, they will enjoy a 75 percent duty will gain them a competitive advantage in the ment for businesses. These initiatives seek rebate on raw materials processed in the Oil long run. to increase investor confidence in Nigeria's and Gas Free Zone. economy, drive local and foreign investment, If they stay and follow a learning curve, foreign and ultimately improve the economy. Key Furthermore, investors engaged in mining, firms will better understand the local business policies and initiatives introduced by FGN for wholly export trade, manufacturing, and context. They’ll also gain credibility among this purpose are highlighted below. agriculture, with a turnover of less than NGN1 ordinary people and possibly get more cus- million, will be entitled to pay company tomers and support that way. Taxation income tax at the rate of 20 percent instead of 30 percent, for the first five years in which the In the same vein, foreign businesses should Nigeria's tax to GDP ratio, at 6 percent is one turnover is less than that amount. create local solutions that meet ordinary peo- of the lowest in the world. In a bid to improve ple’s needs. The banks leaving Nigeria have this, FGN introduced a tax amnesty pro- In August 2017, 27 industries were added to been accused of only catering to the needs gram in June 2017. The program provides a the list of industries eligible for pioneer status of wealthy Nigerians, who are perceived as timeframe of nine months for tax defaulters to incentive (PSI), which exempts qualifying 51 POLITICAL ECONOMY JUNE 2021 industries from paying income tax for an initial on road infrastructure as tax credit against the period of three years, which may be renewed total tax payable over a three-year period. for a maximum additional period of two years. Some of the newly-included industries are Impact of Initiatives coal mining and processing industries, steam The initiatives introduced by FGN will help to generator manufacturers, railway locomo- increase investor participation in various sec- tives, textile machine manufacturers, apparel tors of Nigeria's economy. It is expected that and leather producers, plastics and rubber there will be more reforms applied to sectors, machine manufacturers, e-commerce service and sustained implementation of the reforms providers, and real estate investment vehicles will drive greater economic growth. under the Investments and Securities Act. Nigerians Opinion on Investment Opportu- Additionally, with the introduction of the 2017 nities in-country Revised Guidelines for Export Expansion Grant Scheme, the Export Credit Certificate can now Adeola Adeoye, an lbadan based said Foreign be used to settle all federal government taxes. Direct Investments remain a major source of industrial growth and development as well It is noteworthy that FGN signed a double as a major source of technological transfer for taxation agreement (DTA) with Singapore in developing economies in particular. For these August 2017, which now awaits ratification. benefits and more, such countries provide Also, the DTA between Nigeria and Spain has policy frameworks that must of necessity, recently been ratified. This is in addition to the Godwin Emefiele, CBN gov encourage inflow of direct investments by for- long-standing DTAs with 13 other countries eign investors. The starting point is to have an that have been in operation. tionals in order to make the process easier and accessible industrial policy which must be re- faster than the manual process of visa applica- Access to Credit vised over time. There must be a national plan tions. The visa is valid for a single period of 14 of long-term nature, where foreign investors The Credit Reporting Act 2017 was passed by days and can be obtained on arrival in Nigeria. can see where they come in and at what point FGN to improve access to credit by providing a Infrastructure the plan will be implemented. Nigeria has no framework for credit reporting, licensing, and long-term national plan and medium-term regulation of credit bureaus. The act ensures • Electricity: Power supply remains a chal- plan. Beside these two requirements, the that credit providers have access to accurate lenge in Nigeria. A recent report from the issues of multiple taxation, unstable exchange and reliable credit information on prospective World Bank shows that 80 million Nigerians rate, obsolete land use law, infrastructure defi- borrowers. To this end, it sets standards and lack access to electricity while millions more ciencies, particularly power and ad hoc policy conditions for the establishment and oper- are poorly served. As electricity generation variations have to be resolved. There is the ation of credit-rating agencies. This law will capacity presently stands at 7,000MW, there is need for the state and federal governments enable credit providers to evaluate the credit a wide margin between demand and supply to work together to harmonise Foreign Direct history of a borrower before making decisions of power in Nigeria. In a bid to address this, the Investment (FDI) policies. More importantly, on whom to grant credit. It will also boost the Nigerian Electricity Regulatory Commission the Ministry of Trade and Investment should willingness of financial institutions to grant (NERC) introduced regulations geared toward be visible in the advertising sphere explaining credit facilities to more enterprises in need of encouraging investments in power projects. the areas of investment needs in Nigeria to such facilities. Two important regulations in this regard are the rest of the world. Also, those who are able the Mini-Grid Regulations (MGR) 2016 and to generate their own power, which can be Access to Foreign Exchange the Eligible Customer Regulations (ECR) 2017. added to the national grid estimates, should To improve foreign exchange (FX) availability, MGR enables investors to obtain permits to be encouraged and compensated with tax the Central Bank of Nigeria (CBN) introduced set up facilities for generation and distribution rebate. The Federal Government can also ban some policies to boost liquidity in the market of electricity within particular geographic loca- the importation of products whose parts can and ensure timely execution and settlement tions. ECR permits certain classes of consum- be assembled here in Nigeria. of eligible transactions. The Investors & Export- ers to purchase power directly from electricity generators (e.g. independent power plants) For Victor Wesley in Ilorin, there are various ers (I&E) window, for example, was introduced factors foreign investors consider before in April 2017. This window is market-driven, as at prices to be negotiated by the parties. Both regulations allow a structure under which con- making an investment decision in a country. dealing parties determine exchange rates on a These factors, when present and favourable, willing-buyer-and-willing-seller basis. tracts for supply of electricity are not subject to tariff control by NERC, thereby assuring may strengthen the economy of our country Only invisible transactions (e.g. loan and inter- the generating companies a return on their and will also aid the investors in expanding est repayments, dividends/income remittanc- investment. FGN also introduced incentives their investment to other locations within es, capital repatriation, software subscription for development of renewable off-grid the country. For our country to attract and fees and technology transfer agreements, and power projects. Notable among these is the retain FDIs, the Federal Government must so on), bills for collections, and trade related Rural Electrification Agency capital grant, for be willing to adopt an economic policy of payment obligations are permitted on the funding of off-grid renewable energy projects liberalisation, privatisation, and globalisa- window. For other transactions, investors can in unserved and underserved communities. tion. Another factor that foreign investors access FX through CBN interbank market. The fund is granted as a one-off subsidy and is consider is the stability of the government of According to FMDQ OTC Securities Exchange, in the range of 50–75 percent of the required a country. Nigeria has been able to achieve the total value of transactions traded at the capital, or USD10,000–USD300,000, whichever this so far since the inception of democratic I&E Window between April 2017 and Decem- is less. government rule without any threat from ber 2017 amounted to approximately USD26 the military. Ensuring a stable government billion. • Roads: FGN introduced the Road Trust Fund will reduce or eliminate the fear of business (RTF) in October 2017 to increase private takeover by government and will enable for- Immigration sector participation in the provision of roads. eign direct investors to expand. The Nigerian FGN has introduced an online platform for Under RTF, participating companies are en- government must also have flexible policies processing of visas on arrival for foreign na- titled to recover 100% of capital expenditure that encourage business growth for foreign 52 POLITICAL ECONOMY POLITICAL ECONOMY JUNE 2021 direct investors. For instance, a foreign direct investor should be allowed to generate power to favour the smooth running of his invest- ment. Proactive measures such as expansion of seaports, provision of cargo facilities, and development of connectivity around the perimeter of the country will attract foreign direct investments. The exchange rate stability is another factor that our government needs to work on because the commercial viability of any foreign direct investment is based on exchange rate stability. Concession and taxa- tion is must also be looked into and uniform tax policies adopted in line with international best practices. A heavy excise duty, sales tax or customs excise duty will prevent foreign direct investment. For foreign investors to feel comfortable, moderate tax policies must be encouraged. A foreign investor’s long-term goal will include diversification, therefore the Federal Government must be able to provide foreign investors opportunities to exploit the market and expand. This will also help to reduce the cost of production and product diversification. On the matter of labour and logistics, Nigeria must encourage provision of labour especially adequate skilled labour in technical areas.Return on investment is anoth- er factor that attracts foreign direct investors. This is the ability to keep making profits from the investments made; unless the return on investment is substantially higher than what is other nations of the world. The level of eco- key performance indicator for the managers obtainable in other countries, they will not be nomic activities often measured by the Gross of our economy. encouraged to invest. The sustainability of the Domestic Product remains a critical indicator. return is also very important and should in- Globalisation has ensured that the world is a While Sola Folorunsho views that " crease over a period. The Federal Government big market place. Today, labour and capital are, Yes, there are several ways that the govern- must encourage avenues to achieve all these, largely, freely mobile. Investment inflow can ment can encourage and sustain Foreign if it wishes to attract foreign direct investment. be direct or otherwise. It is largely desirable Direct Investments. Let’s look at privatisation. The importance of security here cannot be that investment inflows are direct as it signals Privatisation has two fundamental objectives; overemphasised; the country must be safe higher confidence in the economy being it aims at realising the government funds from attacks by insurgents, armed criminals, invested in and eliminates shock associated invested in the public enterprises and also ethnic clashes and religious crisis. with hot money. A foreign direct investment selling the enterprises to private investors Alero Richards in Lagos said government is an investment in the form of a controlling with the wherewithal to tremendously grow should ensure that failures of the past resulted ownership in a business in one country by those enterprises. from fraudulent processes by the Bureau Pub- an entity based in another country. It is thus distinguished from a foreign portfolio invest- But the 1999 to 2015 experiences of Nigerian lic Enterprise (BPE).Make it easier for people to privatisation have been that of underselling come here and bring in direct foreign invest- ment by a notion of direct control. For the government to attract and retain investment, the federal enterprises to buyers who not ment by making it difficult for people to bring only failed in many cases to operate the in finished goods and the problem will be it must develop investment-friendly policies and ensure consistency.Our exchange rate businesses or enterprises but also did not solved. If you look at China in the 1970s and grow them in post-privatisation.They actually early 1980s, the Chinese did not allow people policy in the past few years demonstrates the significance of consistency in policies. dismantled the enterprises’ production take in finished goods. They made it easier plants and sold them. That is not the way to instead for people to go there to manufacture Investors are dispassionate. They are driven by gains. While investment risks are a given, encourage FDIs. It’s either the government consumables.Why can’t investors be encour- departments that handled the privatisation aged to come here and do the same? I am not investors’ desire clarity of economic policies in the nations they invest in. Macro-econom- and the government advisers were altogeth- talking about goods for export; what about er incompetent or lacking in integrity or both what we consume locally. Why not make it ic variables are the key drivers of investment. The Federal Government must be proactive, as they sold the public enterprises to rogues. easier for Americans, Chinese and Japanese to The second way to go is for the government come here and process our oranges, mangoes transparent and ensure relative stability. While the government remains the biggest to show commitment to providing massive and other raw materials and turn them into infrastructure such as roads and power.Back to consumables? This is the way to go. stakeholder in the economy, it must boost confidence and continually ensure that the the issues we had with privatisation, I believe Also, Adeyemi baased in Lagos said economy remains attractive for investment that the Bureau of Public Enterprise must be inflow.It is by no sheer coincidence that strengthened and there should be post-trans- Governments of sovereign nations all over performing economies have huge foreign action review and forensic audit. Where the world strive to attain economic prosperity. investment in their portfolio. To boost the there are issues with buyers not operating This is achieved through a vibrant economy economy, raise GDP through improved and growing the enterprises, the enterprises that engages her workforce, produces what level of economic activities, attracting and should be retrieved and resold. No privatised it has comparative advantage and export to retaining investment inflow must remain a enterprise should be allowed to fail. 53 AGRICBIZFINANCE JUNE 2019

JUNE 2021

GROWING AGRIBUSINESS THROUGH VALUE-ADDED PROJECTS The government should make efforts to boost agribusiness through “a platform for the Federal Government’s in- some value-added projects. This was the highlights of the National tervention, to end ghost schemes and other Council on Agriculture and Rural Development (NCARD) seminar in unscrupulous practices in the agricultural Abuja, Abisola THOMPSON reports. industry”. Nanono noted: “A major hallmark of our agricultural interventions is inclusiveness. or the Minister of Agriculture and Rural floods and insecurity’. We have catered for the youth, women, and Development, Mohammad Nanono, many demographic considerations in our The Minister said the government had Nigeria’s agricultural resources could implementation strategies. As a stop-gap F established a portal to capture the biodata intervention, we launched the Agric for Food contribute to its growth and development of farmers to assist them. like oil, if well managed. and Jobs Programme, originally conceived Nanono stated: “Although we initially set as an input loan for smallholder farmers Speaking at the 44th Meeting of the out to capture the data of 2.4 million farm- across several commodities, including maize, National Council on Agriculture and Rural ers across the country, the results from the rice, cotton, groundnut, sorghum, cowpea, Development (NCARD), he reiterated that exercise have encouraged the Economic soybean, sesame, cassava and oil palm.’’ the government was working on some Sustainability Plan Team to expand the data agric projects that would create value. He further said: “The scheme brought into a capture to 10 million farmers.” partnership with the Central Bank of Nige- The event’s theme was ‘Nigeria’s agriculture The Minister stated that the database will be ria, Commodity Association and Agricultural and food security in the face of COVID-19, Platform Companies for effective facilita- 54 FINANCE AGRICBIZFINANCE JUNE 2021 tion. This, we believe, will not only improve production significantly but also aid in the off-taking of produce while providing input at a reduced price due to economy of scale.” The Minister also said seven states have set aside 19 grazing reserves for the implemen- tation of the National Livestock Transforma- tion Plan (NLTP). “Seven of these 10 states have also ear- marked about 19 grazing reserves for the implementation of the NLTP, with a total land size of approximately 400,00 hectares,” he said. He said the NLTP, when fully imple- mented, will bring an end to the crisis. NCARD also approved the implementation of the National Agricultural Technology and Innovation Plan (NATIP), the new policy of the Ministry under Nanono. It is a four-year blueprint designed to help Nigeria’s post- Minister of Agriculture and COVID-19 pandemic economic recovery. Rural Development, The policy will replace the Agriculture Mohammad Nanono Promotion Policy (APP) launched in 2016. Another highlight of the meeting was the processing industries and builds networks towards creating the industry of the future. for raw material supply, thereby creating approval of the mainstreaming of bioforti- He said the government understands the markets and building sustainability. fication of agricultural produce, following a challenge facing the agriculture industry proposal submitted by the Ogun State Agri- He said the state has been found worthy by but it is already seeing positive examples culture Commissioner, Dr Adeola Odedina, international partners led by HarvestPlus to of the transition towards building a more who reiterated the commitment of the host the Seventh Nutritious Food Alliance efficient food system. state government to address food security. – a yearly fair that brings together stake- According to him, the urban population holders from the public and private sectors, He noted that the state was providing seeds is putting pressure on the food system to locally and internationally, from November of improved and nutritious varieties to farm- adapt. This, he noted, would require a food 18 to 20 in Abeokuta. ers and working with relevant agencies and system that is more efficient, better able partners to facilitate technical and financial Odedina said Ogun State has identified to meet consumer expectations, more assistance to small holder farmers. technology use in farming, processing, and profitable, and more resilient in the face of His team also collaborates with food logistics, where steps were being made macro-economic pressures. CSO INAUGURATES MULTI STAKEHOLDERS’ PLATFORM FOR SUSTAINABLE OIL-PALM PRODUCTION IN KOGI By Shile GIWA and the next 30 years if things are not done who owns the land? We have seen this play differently,” he said. out in various communities. olidaridad West Africa – Nigeria, a solution-oriented Civil Society Organi- He noted that aerial photos and images “So the essence of this MSP is to be able Ssation, has inaugurated a Multi-Stake- taken in the course of the study had shown to meet with the people who are the cus- holder Platform (MSP) for Sustainable sustained degradation of the ecosystem. todians of the land and see how we can Climate Smart Oil Palm production among help with re-orientating and sensitising communities in Kogi. “We compared the land use, vegetation them, build their capacities so that they and land cover as at 1949 and projected it can see and do things differently,” Ogallah Senior Climate Specialist, Africa and County to 2039. added. Technical Lead, Nigeria, Dr Sam Ogallah, who inaugurated the platform in Lokoja, “We now see that by 2039, most of what we He said the studies also revealed that said the effort was part of the National have now will become rare as there would farmers had limited knowledge of best Initiative on Sustainable Climate Smart Oil be no vegetation again (due to lack of management practices and were over- Palm Smallholder (NISCOPS) project. proper planning of settlement areas among whelmed with issues of non-application other degrading human activities,” he said. of improved planting materials and ineffi- Ogallah said the setting up of the MSP was cient palm-oil processing facilities. informed by the result of the studies the He said that Solidaridad also conducted organisation conducted in 2019 in the oil- analysis on Gender Inclusion and Gender Realising the enormity of the situation, palm sector in Oil-palm Producing States of Participation in the oil palm value chain and he said the organisation decided to take Nigeria, including Kogi, Enugu, Akwa-Ibom discovered a lot of biases against women a Multi-Stakeholder approach involving and Cross Rivers States. and youths from the report. people from different backgrounds with direct or indirect interest in oil-palm, to look “We conducted climate vulnerability “Access to land for women and youths is also an issue. Favourable land tenure system at the issues, brainstorm and address them analysis studies that gave us a red alert on holistically. what we are likely to face between now is also an issue. Who has the right to land, 55 AGRICBIZFINANCE JUNE 2021 in the use of compost manure which she learnt at the training. “As soon as I applied the lessons in agri- culture practices, I began to earn higher income from improved productivity. “I am now able to send my children to school as well as to take care of my personal needs,” she said. Mrs Rukayat Ibrahim from Apa community said her experience was similar to that of Babatunde. Ibrahim noted that the sustainable farming practice had turned her to a queen among her contemporaries, who had no opportu- nity of attending the exercise. “The moment I began to apply the techniques, I became a queen before my colleagues because I begin to recover from the losses,” she said. Ibrahim added that the training also UTILISING SUSTAINABLE PRACTICES TO ENHANCE exposed her to rights and responsibilities between the rights holders and the duty PRODUCTIVITY OF SMALLHOLDER WOMEN FARMERS bearers as it related to agriculture practices. Sharing the same sentiment, Mrs Rashidat By Olamilekan FAWAS on respecting, promoting, protecting and Dauda from Ipetu community, said she was fulfilling the rights of the poor and excluded nearly dispirited at a point from the farming tudies have shown that small scale people, by focusing on their empowerment. farmers, some with less than two business because her time and efforts were Shectares of land under cropping, are The NGO, few years ago, organised a train- not reasonably justified by the output. the ones producing the larger percentage ing for the women on how to mitigate the “For instance, anytime I harvested cassava, of food consumed by Nigerians. impact of climate change by improvising the produce would be meager, which also with inorganic materials to improve on agri- applies to maize, guinea-corn and others. It has also been observed that peasant cultural productivity at a near zero cost. women constitute a large chunk of this “I was advised to always apply fertiliser and farming population. While relating her experience in agribusi- pesticide, but where was the money to pro- ness, Mrs. Iyabo Babatunde from Gbago cure them?” asked Dauda, who said she had However, the prominent role of these community in Asa Local Government Area, been a farmer for more than 25 years. farmers in the agricultural value-chain in recounted her perpetual yearly shortage She boasted she could conveniently make the country still faces heaps of challenges from farming due to lack of requisite knowl- organic fertiliser from yam peel, cow dung leading to problems in output of crops and edge on sustainable practices. profit realised from sales. and compost among others, thereby Babatunde said the situation affected her hastening the growth of her crops when Some agronomists observed that the situa- output and consequently earned her abys- applied. tion will persist unless smallholder farmers mally low income, the earning which was “When I put this into practice, it increased employ sustainable farming practices to always insufficient to meet her ends, needs, my harvest across all crops, tubers and protect land, water, soil and genetic resourc- and sponsorship of her children’s education. es or, precision farming practices. vegetables. It was a huge surprise to all of us “Until we were trained, I never realised how that benefitted from the training. The experts argued that except the farmers much I have missed in the business. The “On pest control, we were tutored on how adopted practices that were more resilient challenges were too many for me because to soak cassia leaves (botanically known as to natural occurrences, they would not be I was bereft of better farming techniques. Cassia fistula, golden shower, or Indian la- able to produce enough food to feed their This invariably affected my production burnum) in large volume of water and add families or meet public demands. yearly. little detergent or kerosene to it for usage. The claims of these experts are largely “I was also restricted to subsistent farming “I applied it on my farm. Ever since, I do not substantiated by the experience of some system where I could only produce to feed have recurring problem of pest disturbance. smallholder women farmers in Kwara State, my family and rarely, able to make surplus but this was before they gained knowl- for sale because of low yield. “All these among other factors cumulated in edge on climate resilience and sustainable the bumper harvest I now experience each agriculture practices, courtesy of the Centre “This training, however, changed the narra- farming season and the ensuing improved for Community Empowerment and Poverty tive,” she said. earnings. Eradication (CCEPE). Babatunde said since she could not afford “We have extended the training to our con- CCEPE is the state-based Non-Govern- to buy inorganic fertiliser to enhance the temporaries for them to enjoy the benefits,” mental Organisation (NGO), which focuses growth of her crop, she quickly found solace Dauda explained. 56 FINANCE AGRICBIZFINANCE JUNE 2021 HOW EMEFIELE CHANGED THE NARRATIVE IN AGRICULTURE SECTOR ment of the Anchor Borrowers Programme (ABP), a programme meant to provide farm inputs in kind and cash to small-holder farmers (SHFs) to boost agricultural produc- tion which had been neglected through years since Nigeria discovered that huge cash comes from crude oil. The ABP launched in November 2015 by President Muhammadu Buhari is re-writing the sour narrative on local agriculture. ABP is a low-interest loan scheme which gives ample room and flexibility for pay- ment. Interest was as low as nine percent but with the advent of the COVID-19, the interest has been adjusted to as low as five percent. The loans are disbursed through any of the Deposit Money Banks (DMBs), Development Finance Institutions (DFIs) CBN governor, Godwin Emefiele and Microfinance Banks (MFBs), all of which By Meletus EZE the period. This was about $9.28 million the programme recognises as Participating worth of food per day in the period. Financial Institutions (PFIs). he Nigerian government is looking to plug a 2017 budget deficit that it fore- The result reveals that although the country Categories of farmers captured under this cast at 2.3 trillion naira, or 2.2 percent had a positive trade balance (on the programme include those cultivating cere- T als, cotton, roots and tubers, sugarcane, tree of GDP following a revenue shortfall caused aggregate) annual food import bill was in by the decline of output and price of oil, its multiples of five times of the export. crops, legumes, tomato and livestock. main export. At that same time, Nigeria was also Because of this new push by CBN in the area Recently the Central Bank of Nigeria (CBN) spending about $5 billion annually on the of agriculture, the nation has witnessed a through its Anchor Borrowers Programme importation of textiles, money that would leverage and quantum leap in agricultural (ABP) unveiled its first rice pyramids in South have been ploughed into the development produce. Rice, yam, sundry grains, poultry West Nigeria, specifically in Ekiti State. of infrastructure. and livestock among others have enjoyed increased production with some farmers The unveiling is a follow up to the one A report by the Global Economic Sympo- exporting their produce. done in Kebbi and Gombe states where the sium (GES), also suggested a steady rise apex bank also unveiled 13 rice pyramids in prices of rice between 2006 and 2014, With this has also come a significant which housed 50kg bags of rice numbering which indicated that Nigeria had been improvement in the value chain. More and 200,000. consuming more rice than it had been more farmers have upped their game by producing. producing in the farm and processing for It is not only rice, recently in Katsina State, the table. the bank working with Maize Association of “When I assumed office, I felt that that Nigeria (MAAN) also unveiled the first maize was not acceptable,” Emefiele said while Through the ABP, the CBN governor did pyramid in Nigeria. justifying his policy thrust in the agricultural not only change the script from the old sector. unimpressive order, he gave force of action These exercises clearly show that Nigeria to its performance. is on the match towards self-sufficiency in “My immediate question was: can we not food. produce these ourselves? After all, only a The CBN ban on the importations of scores few decades ago, Nigeria was one of the of goods, some of which can be described This is a clear departure from what the sit- world’s largest producers and exporters of as low-hanging products for Nigerian uation was before the present governor of many agricultural products like palm oil, entrepreneurs and Emefiele’s determina- CBN, Mr. Godwin Emefiele, assumed office cocoa and groundnuts.” tion to follow the ban through showed the in 2014. character and the will of a central banker He said that food importation fueled do- committed to rescuing his local economy As at 2014, Nigeria was spending N1.3 mestic inflation, depleted foreign reserves, trillion worth of foreign exchange on the from the treacherous vagaries of a global- displaced local production and created ised marketplace. importation of food. This was despite the unemployment. huge investment made in agriculture by the So far, according to CBN, the programme immediate past administration. “With the fast depletion of rice reserve in the has financed over 3.1 million farmers to the country, it was obvious that Nigeria could That was even an improvement, between tune of over N492 billion for the cultivation not afford to sustain rice importation. We all of 3,801,397 hectares across 21 commod- 1990 and 2011, Nigeria imported an aver- know that import dependency especially age of ₦1.923 trillion worth of commodities ities through 23 Participating Financial on commodities of comparative advantage Institutions in the 36 states of the Feder- per annum. In essence, the nation imported was neither acceptable nor sustainable.” about ₦1.0 billion worth of food per day in ation and FCT, from the inception of the It was this stand that informed the establish- programme till date. 57 AGRICBIZFINANCE JUNE 2021 The bid to revolutionise millet production and bring it back to the INCREASING MILLET PRODUCTION IN NIGERIA plate is being driven by enhanced seeds all over the world, Shile GIWA reports.

he world’s millet market value is projected to surpass $12 billion by T2025, according to the Global Market Insights Inc, a United States-based research organisation. Apart from this, the global millet consump- tion has been forecast to surge between this year and 2024. This is driven by the growing use of millet for snacks, which include flakes, cookies and chips. iron-biofortified pearl millet to provide He reiterated that ICRISAT had played a role a convenient and cheap source of iron in ensuring availability of quality seeds of Besides, the non-food use of millet has for people. This follows the fact that the pearl millet in Nigeria. increased significantly, especially as animal nutritional content of the food basket is de- feed ingredient and as raw material in creasing and the risk of nutrient deficiencies A lead agronomist for Flour Milling Associa- breweries and starch industries. According may be severe among children and women. tion of Nigeria (FMAN), Tijani Abdullahi, noted to estimates, about 60 per cent of the millet that improving nutrition in the North would production is for non-human consumption. With support from HarvestPlus, scientists depend on reviving millet and other crops. However, in recent years, there is a renewed at ICRISAT have used conventional plant breeding techniques to develop biofortified According to Abdullahi, millet remains a demand for millet as food for health-con- staple of millions of Nigerians. His words: scious urban consumers. varieties of pearl millet combining high iron content with high yield. “The key millet production areas in Nigeria The Millet Market – 2019–2024 by Research- are Borno, Yobe, Jigawa, Bauchi, Kebbi, AndMarkets.com projects that cultivation Iron pearl millet (IPM) varieties are aimed at Sokoto and Zamfara States.” providing more dietary iron to rural farming of millet, known for high nutritive value, Making investments in increasing pro- will increase, following changing climate communities in arid and drought-prone regions where few other crops thrive. ductivity, processing technologies and a patterns and rising salinity that have forced price guarantee for millet crops, according governments to take alternative measures ICRISAT’s Country Representative, Nige- to him, will help to make the grains and and encourage crop diversification; and ria, Dr. Hakeem Ajeigbe, noted that the products available at affordable prices to farmers are following suit. renewed focus on boosting the produc- the common man. According to the International Crop tion of millet and highlighting its benefits, was critical to reducing over-reliance on He added that improving security had be- Research Institute for the Semi-Arid Tropics come critical as most of the areas dominant (ICRISAT), more than 90 million people in more-commonly grown crops, boosting diverse diets and food security. for millet production had some security Africa and Asia depend on millet, and 500 challenges, hindering farmers to produce. million in more than 30 countries depend Acknowledging the role of millet in on sorghum as a staple food. However, in responding to nutritional, challenges, he Abdullahi has had an extensive work ex- the past 50 years, these grains have been stressed the need to increase the cultivation perience with farmers in Kano and Jigawa abandoned in favour of developing more of climate-resilient millet for balanced and states. In the last two years, he has collab- popular crops such as maize, wheat, rice, healthy diets. orated with the farmers for the cultivation and soybeans. Consequently, there is a and introduction of drought-resistant crops campaign for the development and wider Ajiegbe said farmers in 13 states received in the North. adoption of high-yielding varieties. improved seeds of sorghum, pearl millet, cowpea and rice as a part of an initiative He believes support for crop diversification For instance, the Food and Agriculture to cushion the pandemic’s impact on food initiative would improve food supply in Organisation (FAO) has called for action to systems. the North with better varieties of millet make millet a priority for achieving food and released to farmers. nutrition security, particularly in contrib- The states were selected based on the importance of sorghum and millet as food In recent years, Nigeria has been experienc- uting to Sustainable Development Goals ing a fall in millet. The decline is not only (SDGs) 2, 3, 12 and 13. crops and access of partners to needy small- holder farmers. due to the reduction of cultivated areas, Following this, national and regional but also the production challenges. development plans in Africa, according Particularly on pearl millet, he noted that following awareness on the existence of Last year, analysts estimated millet pro- to analysts, rely on millet to ensure food duction in Nigeria to be two million metric and nutritional security for the population. improved varieties, the adoption rate had increased. tonnes. The production volume stood at 5.2 Scientists say they can survive even under million metric tonnes in 2010. However, the extreme drought conditions. This is because His words: “Return on investment (ROI) was production volume experienced a decrease millet is grown mostly on drylands, where higher for farmers who adopted improved by 75 per cent compared to 2010, going other crops cannot be grown. technologies (83 per cent) than for those from 5.2 million metric tons to 1.3 million At present, there are efforts to promote who did not (43 per cent).” metric tonnes. 58 FINANCE JUNE 2021 ADVERT RATES HARD COPY RATE N= K Inside Front Cover 580,000 00 Back Cover 610,100 00 Inside Back Cover 551,850 70 Half Page Front Cover 320,175 50 Half Page Back Cover 300,750 00 Quarter Page Front Cover 175,950 85 Quarter Page Back Cover 160,800 65 Full Page 515,700 50 Half Page 265,000 90 Quarter Page 143,250 75 Centre Spread 1,450,270 00 WRAP AROUND Full Wrap 10,000,000 00 Full Front Page 6,000,000 00 Half Page Front 4,500,000 00 ONLINE ADVERT BANNER 1 Month 3 Months 6 Months SIZE/LOCATION Leader board: Top.Header N650,000 N950,000 N1,500,000 Banner - (728x90px) Bottom N600,000 N850,000 N1,000,000 Banner - (728x90px) (Home page) Sidebar N800,000 N900,000 N1,700,000 Ad - (500x250px) Article Top Ad - (468x60px) N150,000 N450,000 N500,000 Ads on every article) Article Inline Ad - N150,000 N350,000 N400,000 Banner - (468x60px) Article Bottom Banner - (468x60px) N150,000 N350,000 N450,000 (Ads on every article) 59 JUNE 2021